As filed with the Securities and Exchange Commission on January 8, 2004
Registration No. 333-109375
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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WABASH NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 52-1375208
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1000 SAGAMORE PARKWAY SOUTH,
LAFAYETTE, INDIANA 47905
(765) 771-5300
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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MARK R. HOLDEN
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
WABASH NATIONAL CORPORATION
1000 SAGAMORE PARKWAY SOUTH,
LAFAYETTE, INDIANA 47905
(765) 771-5300
(name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
MICHAEL J. SILVER
AMY BOWERMAN FREED
HOGAN & HARTSON L.L.P.
111 S. CALVERT STREET, SUITE 1600
BALTIMORE, MARYLAND 21202
(410) 659-2700
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than the securities offered only in connection
with dividend or interest reinvestment plans, check the following box.[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC IS
EFFECTIVE. THIS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED JANUARY 8, 2004
PROSPECTUS
$125,000,000
WABASH NATIONAL CORPORATION
3.25% CONVERTIBLE SENIOR NOTES
DUE AUGUST 1, 2008
AND
6,510,416 SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THE NOTES
Holders of our 3.25% Convertible Senior Notes due August 1, 2008 named
herein may offer for sale the notes and the shares of our common stock into
which the notes are convertible at any time at market prices prevailing at the
time of sale or at privately negotiated prices. The selling holders may sell the
notes or the common stock directly to purchasers or through underwriters,
broker-dealers or agents, who may receive compensation in the form of discounts,
concessions or commissions.
The notes are convertible, at the option of the holder, into shares of our
common stock. The notes are convertible at a conversion price of $19.20 per
share, which is equal to a conversion rate of approximately 52.0833 shares of
common stock per $1,000 principal amount of notes, subject to adjustment.
We will pay interest on the notes on August 1 and February 1 of each year,
beginning on February 1, 2004, and at maturity. The notes will mature on August
1, 2008.
The notes are our unsecured and unsubordinated obligations and rank on a
parity (except as described below) in right of payment with all our existing and
future unsecured and unsubordinated indebtedness. In addition, the notes
effectively rank junior to any secured indebtedness we currently have and may
incur in the future to the extent of the value of the assets securing such debt
and effectively junior to our subsidiaries' liabilities.
Our common stock currently trades on the New York Stock Exchange under the
symbol "WNC." The last reported sale price on January 7, 2004 was $29.55 per
share.
The notes are currently traded in The Portal Market, a subsidiary of the
Nasdaq Stock Market, Inc.
INVESTING IN OUR COMMON STOCK OR THE NOTES INVOLVES A HIGH DEGREE OF RISK.
PLEASE CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 5 OF THIS
PROSPECTUS.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is , 2004.
In connection with this offering, no person is authorized to give any
information or to make any representations not contained in this prospectus.
This prospectus is neither an offer to sell nor a solicitation of an offer to
buy any securities other than those registered by this prospectus, nor is it an
offer to sell or a solicitation of an offer to buy securities where an offer or
solicitation would be unlawful. You may not imply from the delivery of this
prospectus, nor from any sale made under this prospectus, that our affairs are
unchanged since the date of this prospectus or that the information contained in
this prospectus is correct as of any time after the date of this prospectus.
TABLE OF CONTENTS
PAGE
----
About this Prospectus....................................... i
Forward Looking Statements.................................. i
Incorporation by Reference.................................. ii
Summary..................................................... 1
Risk Factors................................................ 4
Ratio of Earnings to Fixed Charges.......................... 9
Use of Proceeds............................................. 10
Selling Holders............................................. 10
Plan of Distribution........................................ 11
Description of the Notes.................................... 13
Description of Capital Stock................................ 25
Material United States Federal Income Tax Considerations.... 28
Legal Matters............................................... 31
Experts..................................................... 31
Additional Information...................................... 32
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission ("SEC") to enable selling holders, from time
to time, to sell the securities described in this prospectus in one or more
offerings.
This prospectus provides you with a general description of the notes and
common stock that the selling holders may offer. This prospectus may also be
accompanied by a prospectus supplement that may include additional risk factors
or other special considerations, and may also add, update or change information
in this prospectus. You should read both this prospectus and any prospectus
supplement together with the additional information described under the heading
"Additional Information."
When used in this prospectus, the terms "Wabash," "we," "our" and "us"
refer to Wabash National Corporation and its consolidated subsidiaries, unless
otherwise specified.
FORWARD LOOKING STATEMENTS
This prospectus contains and incorporates by reference "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking
statements may include the words "may," "will," "estimate," "intend,"
"continue,"
i
"believe," "expect," "plan" or "anticipate" and other similar words. Our
"forward-looking statements" include statements regarding:
- our business plans;
- completion of contemplated asset dispositions;
- our expected revenues, income or loss and capital expenditures;
- plans for future operations;
- financing needs, plans and liquidity;
- our ability to achieve sustained profitability;
- reliance on certain customers and corporate partnerships;
- shortages of raw materials, availability of capital;
- dependence on industry trends;
- the outcome of any pending litigation;
- export sales and new markets;
- acceptance of new technology and products; and
- government regulation, as well as assumptions relating to the foregoing.
Although we believe that the expectations expressed in our forward-looking
statements are reasonable, actual results could differ materially from those
projected or assumed in our forward-looking statements. Our future financial
condition and results of operations, as well as any forward-looking statements,
are subject to change and are subject to inherent risks and uncertainties, such
as those disclosed in this prospectus. Each forward-looking statement contained
or incorporated by reference in this prospectus reflects our management's view
only as of the date on which that forward-looking statement was made. We are not
obligated to update forward-looking statements or publicly release the result of
any revisions to them to reflect events or circumstances after the date of this
prospectus or to reflect the occurrence of unanticipated events.
Currently known risk factors that could cause actual results to differ
materially from our expectations are described in the section of this prospectus
entitled "Risk Factors" beginning on page 5. We urge you to carefully review
that section for a more complete discussion of the risks of an investment in the
notes and our common stock.
INDUSTRY AND OTHER INFORMATION
Unless we indicate otherwise, we base the information concerning the
transportation equipment industry contained in this prospectus on our general
knowledge of and expectations concerning the industry, our market positions and
market shares, which are based on estimates prepared by us using data from
various industry sources, and on assumptions we made based on such data and our
knowledge of the transportation equipment industry. We have not independently
verified data from industry sources. In addition, we believe that data regarding
the transportation equipment industry and our market positions within such
industry provide general guidance but are inherently imprecise. Further, our
estimates involve risks and uncertainties and are subject to change based on
various factors, including those discussed in the "Risk Factors" section
beginning on page 10 of this prospectus.
INCORPORATION BY REFERENCE
We are incorporating information included in reports and other filing we
have made with the SEC by reference, which means that we are disclosing
important information to you by referring to those publicly filed documents
containing the information. The information that we incorporate by reference is
considered to be
ii
part of this prospectus, and future information that we file with the SEC after
the date of this prospectus and before the termination of the offering will
automatically update and supersede the information in this prospectus. We
incorporate by reference the documents that we have filed with the SEC that we
list below; provided, however, that we are not incorporating any information
furnished under either Item 9 or Item 12 of any Current Report on Form 8-K:
- Annual Report on Form 10-K for the fiscal year ended December 31, 2002
(filed April 15, 2003);
- Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003
(filed May 13, 2003), June 30, 2003 (filed August 14, 2003) and September
30, 2003 (filed November 5, 2003);
- Current Reports on Form 8-K filed on July 29 and 31, and September 29,
2003;
- Definitive Proxy Statement, dated April 29, 2003, with respect to our
2003 Annual Meeting of Stockholders held on June 2, 2003;
- The description of our common stock contained in our Form 8-A filed on
October 4, 1991, including any amendments or reports filed to update such
information; and
- All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and before the
termination of the offering.
We will furnish without charge to each person to whom this prospectus is
delivered, upon written or oral request of such person, a copy of any and all of
the information that has been incorporated by reference in this prospectus (not
including exhibits to the information that is incorporated by reference unless
such exhibits are specifically incorporated by reference into the information
that this Prospectus incorporates). You should direct any requests for copies to
Wabash National Corporation, 1000 Sagamore Parkway South, Lafayette, Indiana
47905, Attention: Secretary, or by telephone to our Secretary at (765) 771-5300.
iii
SUMMARY
This summary contains basic information about us. It does not contain all
of the information that is important to your investment decision. You should
read the following summary together with the more detailed information contained
elsewhere in this prospectus or incorporated by reference into this prospectus
as described above under "Incorporation by Reference." To fully understand this
offering, you should read all of that information.
Wabash National Corporation is a Delaware corporation incorporated in 1991
and is the successor by merger to a Maryland corporation organized in 1985. Our
principal executive offices are located at 1000 Sagamore Parkway South,
Lafayette, Indiana 47905 and our telephone number at that address is (765)
771-5300. Our website is located at www.wabashnational.com. The information on
our website is not part of this prospectus.
OVERVIEW
We are one of North America's leaders in designing, manufacturing and
marketing standard and customized truck trailers and related transportation
equipment. Founded in 1985 as a start-up, we grew to over $1.4 billion in
revenues in 1999, and had over $800 million in revenues in 2002. Our revenues in
the nine-month period ended September 30, 2003, were approximately $668 million.
For the year ended December 31, 2002 and the nine-month period ended September
30, 2003, our net loss was approximately $56 million and approximately $55
million, respectively.
We market our transportation equipment under the Wabash(R) and DuraPlate(R)
trademarks directly to customers, through independent dealers and through our
factory-owned retail branch network. Our proprietary DuraPlate(R) composite
truck trailer, which we introduced in 1996, has achieved widespread acceptance
by our customers. In 2002, sales of our DuraPlate(R) trailers represented
approximately 80% of our total trailers shipped. We are also a competitive
producer of standardized products, and are seeking to become a low-cost producer
within our industry.
STRATEGY
We are committed to an operating strategy that seeks to deliver
profitability throughout industry cycles. We intend to achieve our goals by
executing on the core elements of our strategic plan:
- continue our transition from an organization focused on revenue to one
focused on earnings and cash flow;
- continue to provide differentiated products that generate enhanced profit
margins;
- continue to reduce our cost structure by adhering to continuous
improvement and lean manufacturing initiatives;
- continue to focus on our longstanding customer partnerships and create
new revenue opportunities by offering tailored transportation solutions;
- divest non-core assets; and
- delever the balance sheet to enhance financial flexibility and enable us
to capitalize on future market opportunities.
THE OFFERING
The following is a brief summary description of this offering. For a more
complete description of the terms of the notes, see "Description of the Notes"
in this prospectus.
Issuer........................ Wabash National Corporation
1
Selling Holders............... All of the notes and common stock are being
offered by selling holders named herein, and
the Company will not receive any proceeds from
the offering.
Securities Covered by this
Prospectus.................... $125,000,000 principal amount of 3.25%
Convertible Senior Notes due August 1, 2008 and
the shares of common stock issuable upon
conversion of such notes.
Maturity...................... August 1, 2008
Interest...................... The notes bear interest at 3.25% per annum on
the principal amount, payable semiannually in
arrears on August 1, and February 1, beginning
on February 1, 2004, and at maturity.
Conversion Rights............. Holders may convert their notes prior to
maturity, in multiples of $1,000 principal
amount, into shares of our common stock at any
time. Initially the notes were convertible only
after the occurrence of certain events, but as
of January 1, 2004 the conditions to conversion
were met.
For each $1,000 principal amount of notes
surrendered for conversion, holders will
receive 52.0833 shares of our common stock.
This represents an initial conversion price of
$19.20 per share of common stock. As described
in this prospectus, the conversion rate may be
adjusted for certain reasons, but it will not
be adjusted for accrued and unpaid interest.
Ranking....................... The notes are our senior unsecured and
unsubordinated obligations and:
- rank on a parity in right of payment with all
existing and future senior unsecured and
unsubordinated debt;
- will rank senior to any future subordinated
debt;
- are effectively subordinated to any secured
debt to the extent of the value of the assets
securing such debt; and
- are effectively subordinated to all
liabilities and preferred stock of our
subsidiaries.
See "Description of the Notes -- Ranking." As
of September 30, 2003, we had $147 million of
secured indebtedness and $130 million of
unsecured indebtedness.
Change of Control............. Upon a change of control event (as defined in
the indenture governing the notes), each holder
of the notes may require us to repurchase some
or all of its notes at a repurchase price equal
to 100% of the aggregate principal amount of
the notes plus accrued and unpaid interest. The
repurchase price is payable:
- in cash; or
- in shares of our common stock, at our option,
subject to the satisfaction of certain
conditions as provided in the indenture. The
number of shares of common stock will equal
the repurchase price divided by 95% of the
average of the closing sale prices of the
common stock for the five consecutive trading
days
2
ending on and including the third day prior
to the repurchase date.
Upon a change of control, certain of our
existing debt agreements would, and any debt
agreements we enter into in the future may,
prohibit us from paying the repurchase price in
cash unless prior to any such payment we either
repay our outstanding indebtedness subject to
such restrictions, refinance such debt on other
terms or obtain a waiver from such lenders. As
a result, we cannot assure you that we will be
able to pay the repurchase price in cash.
See "Description of the Notes -- Change of
Control Permits Purchase of Notes at the Option
of the Holder."
Use of Proceeds............... We will not receive any of the proceeds of
sales by the selling holders of any of the
securities covered by this prospectus.
Form.......................... The notes have been issued in book-entry form
and are represented by permanent global
certificates deposited with, or on behalf of,
The Depository Trust Company ("DTC") and
registered in the name of a nominee of DTC.
Beneficial interests in any of the notes are
shown on, and transfers are effected only
through, records maintained by DTC or its
nominee, and any such interest may not be
exchanged for certificated securities, except
in limited circumstances.
Trading....................... The notes are eligible for trading in the
Portal Market. Our common stock is traded on
the New York Stock Exchange under the symbol
"WNC."
Risk Factors.................. See "Risk Factors" and the other information
included and incorporated by reference in this
prospectus for a discussion of factors you
should carefully consider before deciding to
invest in the notes.
3
RISK FACTORS
You should carefully consider the risks described below in addition to
other information contained or incorporated by reference in this prospectus
before making an investment decision. Realization of any of the following risks
could have a material adverse effect on our business, financial condition, cash
flows and results of operations.
RISKS RELATED TO OUR SUBSTANTIAL INDEBTEDNESS
OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.
We are highly leveraged and have substantial debt in relation to our
shareholders' equity. As of September 30, 2003, we had an aggregate of $277
million of outstanding indebtedness. Although our recent sale of our unsecured
3.25% Convertible Senior Notes due August 1, 2008 and the completion of a three
year $222 million asset based debt refinancing strengthen our balance sheet, we
continue to be highly leveraged.
Our high level of debt could have important consequences to our investors,
including:
- we may not be able to secure additional funds for working capital,
capital expenditures, debt service requirements or general corporate
purposes;
- we will need to use a portion of our cash flow from operations to pay
principal of and interest on our debt, which will reduce the amount of
funds available to us for other purposes;
- we may be more highly leveraged than our competitors, which could put us
at a competitive disadvantage; and
- we may not be able to adjust rapidly to changing market conditions, which
may make us more vulnerable in the event of a downturn in general
economic conditions of our business.
RESTRICTIVE COVENANTS IN OUR DEBT INSTRUMENTS COULD LIMIT OUR FINANCIAL AND
OPERATING FLEXIBILITY AND SUBJECT US TO OTHER RISKS.
The agreements governing our indebtedness include certain covenants that
restrict, among other things, our ability to:
- incur additional debt;
- pay dividends on our equity or repurchase our equity;
- make certain investments;
- create certain liens; and
- consolidate, merge or transfer all or substantially all of our assets.
Our ability to comply with such agreements may be affected by events beyond
our control, including prevailing economic, financial and industry conditions.
In addition, upon the occurrence of an event of default under our debt
agreements, the lenders could elect to declare all amounts outstanding under our
debt agreements, together with accrued interest, to be immediately due and
payable.
RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
WE HAVE NOT GENERATED PROFITABILITY IN RECENT PERIODS.
The Company incurred significant net losses during the last three years and
during the nine months ended September 30, 2003. We have reported net losses of
$6.7 million, $232.2 million, $56.2 million and $55.5 million for the years
ended December 31, 2000, 2001 and 2002 and for the nine months ended September
30, 2003. The Company's ability to achieve and sustain profitability in the
future will depend on the successful implementation of measures to reduce costs
and achieve sales goals. While we have taken steps to improve cost performance,
lower operating costs and reduce interest expense, and have seen our sales
4
improve in recent periods, we cannot assure you that our cost-reduction measures
will be successful, sales will be sustained or increased or that we can achieve
a sustained return to profitability.
OUR INVENTORIES ARE NOT MANAGED BY PERPETUAL INVENTORY CONTROL SYSTEMS.
Systems and processes used to manage and value our inventories require
significant manual intervention and the verification of actual quantities
requires a physical inventory which is taken once a year. Breakdowns of these
systems and processes, and errors in inventory estimates derived from these
systems and processes, could go undetected until the next physical inventory and
adversely affect our operations and financial results.
AN ADVERSE CHANGE IN OUR CUSTOMER RELATIONSHIPS OR IN THE FINANCIAL CONDITION
OF OUR CUSTOMERS COULD ADVERSELY AFFECT OUR BUSINESS.
We have corporate partnering relationships with a number of customers where
we supply the requirements of these customers. Our success is dependent, to a
significant extent, upon the continued strength of these relationships and the
growth of our corporate partners. We often are unable to predict the level of
demand for our products from these partners, or the timing of their orders. In
addition, the same economic conditions that adversely affect us also often
adversely affect our customers. As some of our customers are highly leveraged
and have limited access to capital, their continued existence may be uncertain.
One of our customers located in Mexico is experiencing financial difficulties.
Although this customer, Grupo Transportation Maritima Mexicana SA (TMM), is
current in its payment obligation to us, the customer owes us $5.7 million
secured by highly specialized RoadRailer(R) equipment, which due to the nature
of the equipment, has a minimal recovery value. In addition, we have subleased
certain highly specialized RoadRailer(R) equipment to Amtrak, which is
experiencing financial difficulties. Due to the highly specialized nature of
this equipment, the recovery value of the equipment is considered to be minimal.
The unamortized lease value of this arrangement with Amtrak was approximately
$4.2 million as of September 30, 2003. In addition, we have approximately $9.3
million in finance contracts related to Amtrak recorded on our balance sheet.
The loss of a significant customer or unexpected delays in product purchases
could adversely affect our business and results of operations.
OUR TECHNOLOGY AND PRODUCTS MAY NOT ACHIEVE MARKET ACCEPTANCE, WHICH COULD
ADVERSELY AFFECT OUR COMPETITIVE POSITION.
We continue to introduce new products such as the DuraPlate(R) HD, and the
Freight-Pro(R) trailer. We cannot assure you that these or other new products or
technologies will achieve sustained market acceptance. In addition, new
technologies or products that our competitors introduce may render our products
obsolete or uncompetitive. We have taken steps to protect our proprietary rights
in our new products. However, the steps we have taken to protect them may not be
sufficient or may not be enforced by a court of law. If we are unable to protect
our proprietary rights, other parties may attempt to copy or otherwise obtain or
use our products or technology. If competitors are able to use our technology,
our ability to compete effectively could be harmed.
WE HAVE A LIMITED NUMBER OF SUPPLIERS OF RAW MATERIALS; AN INCREASE IN THE
PRICE OF RAW MATERIALS OR THE INABILITY TO OBTAIN RAW MATERIALS COULD ADVERSELY
AFFECT OUR RESULTS OF OPERATIONS.
We currently rely on a limited number of suppliers for certain key
components in the manufacturing of truck trailers, such as landing gear, axles
and specialty steel coil used in DuraPlate(R) panels. The loss of our suppliers
or their inability to meet our price, quality, quantity and delivery
requirements could have a significant impact on our results of operations.
DISRUPTION OF OUR MANUFACTURING OPERATIONS OR MANAGEMENT INFORMATION SYSTEMS
WOULD HAVE AN ADVERSE EFFECT ON OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
We manufacture our products at two facilities in Lafayette, Indiana, with
our primary manufacturing facility accounting for approximately 85% of our
manufacturing output. An unexpected disruption in our
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production at either of these facilities or in our management information
systems for any length of time would have an adverse effect on our business,
financial condition and results of operations.
THE LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
Many of our executive officers, including our CEO William P. Greubel and
CFO Mark R. Holden, are critical to the management and direction of our
business. Our future success depends, in large part, on our ability to retain
these officers and other capable management personnel. The unexpected loss of
the services of any of our key personnel could have an adverse effect on the
operation of our business, as we may be unable to find suitable management to
replace departing executives on a timely basis.
THE INABILITY TO REALIZE ADDITIONAL COSTS SAVINGS COULD WEAKEN OUR COMPETITIVE
POSITION.
If we are unable to continue to successfully implement our program of cost
reduction and continuous improvement, we may not realize additional anticipated
cost savings, which could weaken our competitive position.
WE ARE SUBJECT TO CURRENCY EXCHANGE RATE FLUCTUATIONS, WHICH COULD ADVERSELY
AFFECT OUR FINANCIAL PERFORMANCE.
We are subject to currency exchange rate risk related to sales through our
7 factory-owned retail distribution centers in Canada. For the nine month period
ended September 30, 2003, currency exchange rate fluctuations had a favorable
impact of $5.3 million on our results of operations. However, we cannot assure
you that we will continue to experience such benefits or that currency exchange
rate fluctuations will not have an adverse affect on our results of operations.
RISKS PARTICULAR TO THE INDUSTRIES IN WHICH WE OPERATE
OUR BUSINESS IS HIGHLY CYCLICAL, WHICH COULD ADVERSELY AFFECT OUR SALES AND
RESULTS OF OPERATIONS.
The truck trailer manufacturing industry historically has been and is
expected to continue to be cyclical, as well as affected by overall economic
conditions. New trailer production for the trailer industry as a whole decreased
to 139,658 in 2002 as compared to 140,084 units in 2001, 270,817 units in 2000
and 305,869 units in 1999. According to ACT, the current forecast for industry
shipments in 2003 is approximately 181,000 units. Customers historically have
replaced trailers in cycles that run from five to twelve years, depending on
service and trailer type. Poor economic conditions can adversely affect demand
for new trailers and in the past have led to an overall aging of trailer fleets
beyond this typical replacement cycle. Our business is likely to continue to be
adversely affected unless economic conditions improve. We cannot assure you that
the industry will achieve the forecasted sales for 2003 or that our unit sales
in the future will return to the levels experienced in the late 1990s and 2000.
SIGNIFICANT COMPETITION IN THE INDUSTRIES IN WHICH WE OPERATE MAY RESULT IN OUR
COMPETITORS OFFERING NEW OR BETTER PRODUCTS AND SERVICES OR LOWER PRICES, WHICH
COULD RESULT IN A LOSS OF CUSTOMERS AND A DECREASE IN OUR REVENUES.
The truck trailer manufacturing industry is highly competitive. We compete
with other manufacturers of varying sizes, some of which may have greater
financial resources than we do. Barriers to entry in the standard truck trailer
manufacturing industry are low. As a result, it is possible that additional
competitors could enter the market at any time. In addition, we believe that the
manufacturing over-capacity and high leverage of some of our competitors, along
with the recent bankruptcies and financial stresses that have affected the
industry, have contributed to significant pricing pressures.
If we are unable to compete successfully with other trailer manufacturers,
we could lose customers and our revenues may decline. In addition, competitive
pressures in the industry may affect the market prices of our new and used
equipment, which, in turn, may adversely affect our sales margins and results of
operations.
6
WE ARE SUBJECT TO EXTENSIVE GOVERNMENTAL LAWS AND REGULATIONS, AND OUR COSTS
RELATED TO COMPLIANCE WITH, OR OUR FAILURE TO COMPLY WITH, EXISTING OR FUTURE
LAWS AND REGULATIONS COULD ADVERSELY AFFECT OUR BUSINESS AND RESULTS OF
OPERATIONS.
The length, height, width, maximum weight capacity and other specifications
of truck trailers are regulated by individual states. The Federal government
also regulates certain truck tailer safety features, such as lamps, reflective
devices, tires, air-brake systems and rear-impact guards. Changes or
anticipation of changes in these regulations can have a material impact on our
financial results, as our customers may defer customer purchasing decisions and
we may have to reengineer products. In addition, we are subject to various
environmental laws and regulations dealing with the transportation, storage,
presence, use, disposal and handling of hazardous materials, discharge of
stormwater and underground fuel storage tanks and may be subject to liability
associated with operations of prior owners of acquired property. If we are found
to be in violation of applicable laws or regulations, it could have an adverse
effect on our business, financial condition and results of operations. Our costs
of complying with these or any other current or future environmental regulations
may be significant. In addition, if we fail to comply with existing or future
laws and regulations, we may be subject to governmental or judicial fines or
sanctions.
A DECLINE IN THE VALUE OF USED TRAILERS COULD ADVERSELY AFFECT OUR RESULTS OF
OPERATIONS.
General economic and industry conditions, as well as the supply of used
trailers, influences the value of used trailers. As part of our normal business
practices, we maintain used trailer inventories and have entered into finance
contracts secured by used trailers, as well as residual guarantees and purchase
commitments for used trailers. Declines in the market value for used trailers or
the need to dispose of excess inventories has had, and could in the future have,
an adverse effect on our business, financial condition and results of
operations.
RISKS RELATED TO AN INVESTMENT IN THE NOTES AND COMMON STOCK
OUR COMMON STOCK HAS EXPERIENCED, AND MAY CONTINUE TO EXPERIENCE, PRICE
VOLATILITY AND A LOW TRADING VOLUME.
The trading price of our common stock has been and may continue to be
subject to large fluctuations and, therefore, the trading price of the notes may
fluctuate significantly, which may result in losses to investors. Our stock
price may increase or decrease in response to a number of events and factors,
including:
- trends in our industry and the markets in which we operate;
- changes in the market price of the products we sell;
- the introduction of new technologies or products by us or our
competitors;
- changes in expectations as to our future financial performance, including
financial estimates by securities analysts and investors;
- operating results that vary from the expectations of securities analysts
and investors;
- announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures, financings or
capital commitments;
- changes in laws and regulations; and
- general economic and competitive conditions.
This volatility may adversely affect the prices of our common stock and the
notes regardless of our operating performance. The price of our common stock
also may be adversely affected by the amount of common stock issuable upon
conversion of the notes. Assuming $125 million in aggregate principal amount of
the notes are converted at a conversion price of $19.20, the number of shares of
our common stock outstanding would increase by approximately 6,510,416 shares,
or approximately 20.22%.
In addition, our common stock has experienced low trading volume in the
past.
7
THERE IS A LIMITED TRADING MARKET FOR THE NOTES.
There is limited market activity in the notes. Although the initial
purchasers of the notes are currently making a market in the notes, they are not
obligated to do so and may discontinue such market making at any time without
notice. In addition, such market making activity will be subject to the limits
imposed by the Securities Act of 1933, as amended and the Securities Exchange
Act of 1934, as amended. Accordingly, there can be no assurance that any market
for the notes will be maintained. If an active market for the notes fails to
develop or be sustained, the trading price of the notes could be materially
adversely affected. The notes are traded on the Portal Market; however, we do
not intend to apply for listing of the notes on any securities exchange.
The liquidity of the trading market in these notes, and the market price
quoted for these notes, may be materially adversely affected by:
- changes in the overall market for convertible subordinated securities;
- changes in our financial performance or prospects;
- the prospects for companies in our industry generally;
- the number of holders of the notes;
- the interest of securities dealers in making a market for the notes; and
- prevailing interest rates.
THE NOTES ARE UNSECURED AND EFFECTIVELY SUBORDINATED TO ANY SECURED
INDEBTEDNESS WE HAVE AND MAY INCUR IN THE FUTURE AND THE LIABILITIES OF OUR
SUBSIDIARIES.
The notes are our senior unsecured obligations, effectively junior in right
of payment to our secured debt, to the extent of the assets securing such debt.
In addition, the notes are effectively junior in right of payment to the
indebtedness and other liabilities of our subsidiaries. See "Description of the
Notes -- Ranking."
In the event that we are declared bankrupt, become insolvent or are
liquidated or reorganized, any debt that ranks ahead of the notes will be
entitled to be paid in full from our assets before any payment may be made with
respect to the notes. Holders of the notes will participate ratably with all
holders of our other senior unsecured indebtedness, based upon the respective
amounts owed to each holder or creditor, in our remaining assets. Upon the
occurrence of any of the foregoing events, we cannot assure you that there will
be sufficient assets to pay amounts due on the notes. As a result, holders of
notes may receive less, ratably, than the holders of any secured indebtedness
that we may then have outstanding.
WE MAY INCUR ADDITIONAL INDEBTEDNESS RANKING EQUAL TO THE NOTES.
If we incur any additional debt that ranks equally with the notes,
including trade payables, the holders of that debt will be entitled to share
ratably with you in any proceeds distributed in connection with any insolvency,
liquidation, reorganization, dissolution or other winding-up of us. This may
have the effect of reducing the amount of proceeds paid to holders of notes, if
any.
WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS TO PURCHASE NOTES UPON A CHANGE
OF CONTROL AS REQUIRED BY THE INDENTURE.
Upon the occurrence of certain change of control events, each holder of
notes may require us to repurchase all or a portion of its notes at a purchase
price equal to 100% of the principal amount thereof, plus accrued interest. Our
ability to repurchase the notes for cash upon a change of control would be
limited by the terms of certain of our existing debt agreements and may be
limited by the terms of any debt agreements that we enter into in the future.
Currently, our existing debt agreements do not permit such cash payments. Upon a
change of control, we may be required immediately to repay the outstanding
principal, any accrued interest and any other amounts owed by us under our other
debt agreements. We cannot assure you that we would be able to repay amounts
outstanding under our debt agreements, or obtain necessary consents to
repurchase the
8
notes. Any requirement to offer to purchase any outstanding notes may result in
our having to refinance our outstanding indebtedness, which we may not be able
to do on terms favorable to us, if at all.
WE DO NOT EXPECT TO PAY CASH DIVIDENDS IN THE FORESEEABLE FUTURE.
Since December 2001, we have not declared or paid cash or other dividends
on our common stock and do not expect to pay cash dividends on our common stock
for the foreseeable future. We currently intend to retain all future earnings
for use in the operation of our business and to fund future growth. In addition,
the terms of our existing debt agreements restrict our ability to pay cash
dividends on our common stock. We are permitted to pay preferred stock dividends
on our outstanding Series B Preferred so long as no default or event of default
exists at the time of the distribution.
ARTHUR ANDERSEN LLP, OUR FORMER AUDITORS, AUDITED CERTAIN FINANCIAL INFORMATION
INCLUDED IN THIS PROSPECTUS. IN THE EVENT SUCH FINANCIAL INFORMATION IS LATER
DETERMINED TO CONTAIN FALSE STATEMENTS, YOU MAY BE UNABLE TO RECOVER DAMAGES
FROM ARTHUR ANDERSEN LLP.
Arthur Andersen LLP completed its audit of our financial statements for the
year ended December 31, 2001, and issued its report with respect to such
financial statements dated April 12, 2002. On March 14, 2002, Arthur Andersen
was indicted on, and on June 15, 2002 Arthur Andersen was convicted of, federal
obstruction of justice charges arising from the U.S. Government's investigation
of Enron Corporation.
On May 30, 2002, we dismissed Arthur Andersen as our independent auditors
and we appointed Ernst & Young LLP as our independent auditors for fiscal year
2002. We had no disagreements with Arthur Andersen on any matter of accounting
principle or practice, financial statement disclosure or auditing scope or
procedure. Arthur Andersen audited the financial statements that we include in
this prospectus as of December 31, 2001 and for the years ending December 31,
2000 and 2001.
Arthur Andersen has stopped conducting business before the SEC and has
limited assets available to satisfy the claims of creditors. As a result, you
may be limited in your ability to recover damages from Arthur Andersen under
federal or state law if it is later determined that there are false statements
contained in this prospectus relating to or contained in financial data audited
by Arthur Andersen.
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
We present below the ratio of our earnings to combined fixed charges and
preferred stock dividends for each of the years ended December 31, 2002, 2001,
2000, 1999 and 1998 and the nine months ended September 30, 2003.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
FOR THE YEARS ENDED DECEMBER 31,
NINE MONTHS ENDED --------------------------------------------
SEPTEMBER 30, 2003 2002 2001 2000 1999 1998
------------------ ------- -------- ------- ----- -----
(IN THOUSANDS)
Ratio of earnings to
combined fixed
charges and preferred
stock dividends...... -- -- -- -- 3.53 2.57
Earnings deficiency.... $56,217 $72,958 $276,708 $14,836 $ -- $ --
For the nine months ended September 30, 2003 and the years ended December
31, 2002, 2001 and 2000, earnings are inadequate to cover fixed charges and the
dollar amount of coverage deficiency is disclosed in the above table, in
thousands.
We present below the pro forma ratio of our earnings to combined fixed
charges and preferred stock dividends for the year ended December 31, 2002 and
the nine months ended September 30, 2003. The pro forma ratios have been
prepared to illustrate the impact of the asset divestiture and refinancings
described in
9
the recent developments section of the prospectus. The pro forma ratios give
effect to the transactions as if they had occurred as of the beginning of the
respective periods.
PRO FORMA RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2003 DECEMBER 31, 2002
------------------ -----------------
(IN THOUSANDS)
Ratio of earnings to combined fixed charges and
preferred stock dividends......................... 1.27 --
Earnings Deficiency................................. $ -- $68,623
For the year ended December 31, 2002, pro forma earnings are inadequate to
cover fixed charges and the dollar amount of the coverage deficiency is
disclosed in the above table.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the notes or common stock
by the selling holders.
SELLING HOLDERS
The notes were originally issued by us and sold to the initial purchasers
in a transaction exempt from the registration requirements of the Securities Act
of 1933 and were resold by the initial purchasers to persons reasonably believed
by the initial purchasers to be qualified institutional buyers or other
institutional accredited investors, in transactions exempt from the registration
requirements. Selling holders, including their transferees, pledgees or donees
or their successors, may from time to time offer and sell pursuant to this
prospectus any or all of the notes and common stock into which the notes are
convertible.
The following table sets forth information with respect to the selling
holders and the principal amounts of notes beneficially owned by each selling
holder that may be offered under this prospectus. The information is based on
information provided by or on behalf of the selling holders to us in a selling
securityholder questionnaire. Any or all of the notes listed below and the
common stock into which the notes are convertible may be offered for sale
pursuant to this prospectus by the selling holders from time to time.
Accordingly, no estimate can be given as to the amounts of notes or common stock
that will be held by the selling holders upon consummation of any such sales. In
addition, the information relating to ownership of notes by the selling holders
listed in the table below may change as a result of the acquisition, sale or
transfer, in transactions exempt from the registration requirements of the
Securities Act, of some or all of their notes since the date as of which the
information in the table is presented.
Information about selling holders may change over time. Any changed
information supplied to us will be set forth in prospectus supplements or
post-effective amendments, as may be appropriate. Holders of the notes or the
common stock into which the notes are convertible who are not named in the table
below will be
10
identified in a new prospectus that would be included in a post-effective
amendment to the registration statement of which this prospectus forms a part.
SHARES OF
PRINCIPAL AMOUNT COMMON STOCK SHARES OF
OF NOTES OWNED COMMON STOCK OWNED
BENEFICIALLY PRIOR TO THE SHARES OF COMMON AFTER COMPLETION OF
NAME OF BENEFICIAL OWNER OWNED AND OFFERED OFFERING(1)(2) STOCK OFFERED(2) THE OFFERING
------------------------ ----------------- -------------- ---------------- -------------------
[To be filed by pre-effective amendment]
All other holders of notes
or future transferees,
pledgees, donees,
assignees or successors of
any such holders(3).......
---------------
(1) Includes common stock into which the notes are convertible.
(2) Assumes a conversion price of $19.20 per share, which is equal to a
conversion rate of approximately 52.0833 shares of common stock per $1,000
principal amount of notes, subject to adjustment, and a cash payment in lieu
of any fractional interest.
(3) Assumes that any other holders of notes or any future transferee from any
holder does not beneficially own any common stock other than common stock
into which the notes are convertible. Holders of these notes or the common
stock into which they are convertible may not sell those notes or shares
under this prospectus. In order to offer those notes or shares under the
registration statement of which this prospectus forms a part, those holders
must be first named in a new prospectus that is a part of a post-effective
amendment to the registration statement.
None of the selling holders nor any of their affiliates, officers,
directors or principal equity holders has held any position or office or has had
any material relationship with us within the past three years. The selling
holders purchased the notes from the initial purchasers in private transactions
on August 1, 2003.
The conversion rate, and, therefore, the number of shares of common stock
issuable upon conversion of the notes is subject to adjustment under certain
circumstances and may increase or decrease. To the extent that the resale of any
common shares issuable as a result of a conversion rate adjustment would not be
deemed registered under Rule 416 pursuant to the Securities Act, we would file a
new registration statement to cover the resale of such shares.
PLAN OF DISTRIBUTION
The selling holders and their successors, including their transferees,
pledgees or donees or their successors, may sell the notes and the common stock
into which the notes are convertible directly to purchasers or through
underwriters, broker-dealers or agents, who may receive compensation in the form
of discounts, concessions or commissions from the selling holders or the
purchasers. These discounts, concessions or commissions as to any particular
underwriter, broker-dealer or agent may be in excess of those customary in the
types of transactions involved.
The notes and the common stock into which the notes are convertible may be
sold in one or more transactions at fixed prices, at prevailing market prices at
the time of sale, at prices related to the prevailing market prices, at varying
prices determined at the time of sale, or at negotiated prices. These sales may
be effected in transactions, which may involve crosses or block transactions:
- on any national securities exchange or quotation service on which the
notes or the common stock may be listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
11
- through the writing of options, whether the options are listed on an
options exchange or otherwise; or
- through the settlement of short sales.
In connection with the sale of the notes and the common stock into which
the notes are convertible or otherwise, the selling holders may enter into
hedging transactions with broker-dealers or other financial institutions, which
may in turn engage in short sales of the notes or the common stock into which
the notes are convertible in the course of hedging the positions they assume.
The selling holders may also sell the notes or the common stock into which the
notes are convertible short and deliver these securities to close out their
short positions, or loan or pledge the notes or the common stock into which the
notes are convertible to broker-dealers that in turn may sell these securities.
The aggregate proceeds to the selling holders from the sale of the notes or
common stock into which the notes are convertible offered by them will be the
purchase price of the notes or common stock less discounts and commissions, if
any. Each of the selling holders reserves the right to accept and, together with
their agents from time to time, to reject, in whole or in part, any proposed
purchase of notes or common stock to be made directly or through agents. We will
not receive any of the proceeds from this offering.
Our outstanding common stock is listed on the New York Stock Exchange. We
do not intend to list the notes for trading on the New York Stock Exchange, any
other national securities exchange or on the Nasdaq National Market and can give
no assurance about the development of any trading market for the notes.
In order to comply with the securities laws of some states, if applicable,
the notes and common stock into which the notes are convertible may be sold in
these jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states the notes and common stock into which the notes are
convertible may not be sold unless they have been registered or qualified for
sale or an exemption from registration or qualification requirements is
available and is complied with.
The selling holders may be "underwriters" within the meaning of Section
2(11) of the Securities Act. Selling holders that are broker-dealers and
underwriters, broker-dealers or other agents that participate in the sale of the
notes and common stock into which the rates are convertible are "underwriters"
within the meaning of Section 2(11) of the Securities Act. Any discounts,
commissions, concessions or profit they earn on any resale of the shares may be
underwriting discounts and commissions under the Securities Act. Selling holders
who are "underwriters" within the meaning of Section 2(11) of the Securities Act
will be subject to the prospectus delivery requirements of the Securities Act.
The selling stockholders who are affiliates of broker-dealers have confirmed
that they purchased the notes in the ordinary course of business and, at the
time of purchase, had no agreement or understandings, directly or indirectly
with any person to distribute the notes or the common stock into which the notes
are convertible.
The selling holders have acknowledged that they understand their
obligations to comply with the provisions of the Exchange Act and the rules
thereunder relating to stock manipulation, particularly Regulation M, which may
limit the timing of purchases and sales of any of the notes by the selling
holders and any such other person. In addition, Regulation M may restrict the
ability of any person engaged in the distribution of the notes to engage in
market-making activities with respect to the particular notes being distributed
for a period of up to five business days prior to the commencement of the
distribution. This may affect the marketability of the notes and the preferred
notes and the ability of any person or entity to engage in market-making
activities with respect to the notes.
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under
Rule 144 or Rule 144A rather than pursuant to this prospectus. A selling holder
may not sell any notes or common stock described in this prospectus and may not
transfer, devise or gift these securities by other means not described in this
prospectus.
On August 1, 2003, we issued and sold the notes to two initial purchasers
in transactions exempt under Section 4(2) of the Securities Act, and the initial
purchasers subsequently resold them to persons reasonably believed to be
qualified institutional buyers in a transaction exempt from registration in
reliance on Rule 144A of the Securities Act.
12
To the extent required, the specific notes or common stock to be sold, the
names of the selling holders, the respective purchase prices and public offering
prices, the names of any agent, dealer or underwriter, and any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement of which this prospectus is a part.
We entered into a registration rights agreement for the benefit of holders
of the notes to register their notes and common stock under applicable federal
and state securities laws under specific circumstances and at specific times.
The registration rights agreement provides for cross-indemnification of the
selling holders and Wabash and their respective directors, officers and
controlling persons against specific liabilities in connection with the offer
and sale of the notes and the common stock, including liabilities under the
Securities Act. We will pay substantially all of the expenses incurred by the
selling holders incident to the offering and sale of the notes and the common
stock.
DESCRIPTION OF THE NOTES
The notes were issued under an indenture between us and Wachovia Bank,
National Association, as trustee, dated August 1, 2003. The terms of the notes
include those provided in the indenture and this description of the notes also
includes a description of certain terms provided in the registration rights
agreement, which we entered into with the initial purchasers. As used in this
section, the words "we," "us," "our" or "Wabash" refer to Wabash National
Corporation.
While the following is a description of the material provisions of the
notes it is not a complete description of all terms and should be read in
conjunction with the notes, the indenture and the registration rights agreement.
We will provide you with a copy of any of the foregoing documents without charge
upon request.
GENERAL
The notes are our general unsecured and unsubordinated obligations and are
convertible into our common stock as described under "-- Conversion Rights"
below. The notes are limited to $125,000,000 aggregate principal amount and
mature on August 1, 2008, unless earlier repurchased by us at the option of the
holder upon the occurrence of a Change of Control (as defined below). The notes
are not redeemable prior to maturity.
The notes bear cash interest at a rate of 3.25% per annum from August 1,
2003, or from the most recent interest payment date to which interest has been
paid or duly provided for. We will pay cash interest semi-annually in arrears on
August 1 and February 1 of each year to holders of record at the close of
business on the preceding July 15 and January 15, respectively, beginning
February 1, 2004 and on the maturity date of August 1, 2008, to the holder to
whom we pay the principal. We may pay interest on notes represented by
certificated notes by check mailed to such holders. However, a holder of notes
with an aggregate principal amount in excess of $5,000,000 will be paid by wire
transfer in immediately available funds at the election of such holder. Interest
will be computed on the basis of a 360-day year comprised of twelve 30-day
months. Each payment of cash interest on the notes will include interest accrued
through the day before the applicable interest payment date (or purchase date or
conversion date, as the case may be). Interest will cease to accrue on a note
upon its maturity, conversion or purchase by us upon a Change of Control.
Principal will be payable, and the notes may be presented for conversion,
registration of transfer and exchange, without service charge, at our office or
agency in New York City, which shall initially be the office or agency of the
trustee in New York, New York. See "-- Form, Denomination and Registration"
below.
The indenture does not contain any financial covenants or any restrictions
on the payment of dividends, the repurchase of our securities or the incurrence
of indebtedness. The indenture also does not contain any covenants or other
provisions that afford protection to holders of notes in the event of a highly
leveraged transaction or a Change of Control of Wabash except to the extent
described under "-- Change of Control Permits Purchase of Notes at the Option of
the Holder" below.
13
CONVERSION RIGHTS
The holders of notes may, at any time prior to the close of business on the
final maturity date of the notes, convert any outstanding notes (or portions
thereof) into our common stock, initially at a conversion price of $19.20 per
share of common stock, which is equal to a conversion rate of 52.0833 shares of
common stock per $1,000 principal amount of notes. The notes were initially
convertible only after the occurrence of one of the conditions set forth below.
The conversion rate is subject to adjustment upon the occurrence of certain
events described below. Holders may convert notes only in denominations of
$1,000 and whole multiples of $1,000. Except as described below, no adjustment
will be made on conversion of any notes for interest accrued thereon or
dividends paid on any common stock. Notwithstanding the above, if notes are
converted after a record date but prior to the next succeeding interest payment
date, holders of such notes at the close of business on the record date will
receive the interest payable on such notes on the corresponding interest payment
date notwithstanding the conversion. Such notes, upon surrender for conversion,
must be accompanied by funds equal to the amount of interest payable on the
principal amount of notes so converted. We are not required to issue fractional
shares of common stock upon conversion of notes and instead will pay a cash
adjustment based upon the market price of the common stock on the last trading
day before the date of the conversion.
A holder may exercise the right of conversion by delivering the note to be
converted to the specified office of a conversion agent, with a completed notice
of conversion, together with any funds that may be required as described in the
preceding paragraph. Beneficial owners of interests in a global note may
exercise their right of conversion by delivering to the Depository Trust Company
(DTC) the appropriate instruction form for conversion pursuant to DTC's
conversion program. The conversion date will be the date on which the notes, the
notice of conversion and any required funds have been so delivered. A holder
delivering a note for conversion will not be required to pay any taxes or duties
relating to the issuance or delivery of the common stock for such conversion,
but will be required to pay any tax or duty which may be payable relating to any
transfer involved in the issuance or delivery of the common stock in a name
other than the holder of the note. Certificates representing shares of common
stock will be issued or delivered only after all applicable taxes and duties, if
any, payable by the holder have been paid. If any note is converted prior to the
expiration of the holding period applicable for sales thereof under Rule 144(k)
under the Securities Act (or any successive provision), the common stock
issuable upon conversion will not be issued or delivered in a name other than
that of the holder of the note, unless the applicable restrictions on transfer
have been satisfied.
CONVERSION RATE ADJUSTMENTS
The initial conversion rate will be adjusted for certain events, including:
- the issuance of Wabash common stock as a dividend or distribution on
Wabash common stock, generally in which case the conversion price will be
reduced by multiplying the conversion rate by a fraction the numerator of
which is the number of shares of Wabash common stock outstanding prior to
the date of determination of the dividend or distribution and the
denominator of which is the sum of the new Wabash common stock shares
issued and the shares used in calculating the numerator;
- subdivisions, combinations and certain reclassification of Wabash common
stock resulting in the increase or decrease in the number of shares
outstanding, generally in which case the conversion rate shall be
adjusted proportionately;
- the issuance to all holders of Wabash common stock of certain rights or
warrants to purchase Wabash common stock (or securities convertible into
Wabash common stock) at a price less than (or having a conversion price
per share less than) the current market price of Wabash common stock,
generally in which case the conversion rate shall be adjusted by
multiplying it by a fraction the numerator of which is the number of
shares of Wabash common stock outstanding plus the number of shares which
the aggregate offering price of the shares offered for subscription or
purchase (or the aggregate conversion price of the convertible securities
offered, if applicable) would purchase at the current market price, and
the denominator of which is the number of shares of Wabash common stock
outstanding plus the number of shares offered for subscription or
purchase;
14
- the dividend or other distribution to all holders of Wabash common stock
or shares of Wabash capital stock (other than common stock) of evidences
of indebtedness or assets (including securities, but excluding (A) those
rights and warrants referred to above, (B) dividends and distributions in
connection with a reclassification, change, consolidation, merger,
combination, sale or conveyance resulting in a change in the conversion
consideration pursuant to the second succeeding paragraph or (C)
dividends or distributions paid exclusively in cash), generally in which
case, unless we reserve securities for distribution to the holders of the
notes upon conversion of the notes, the conversion rate will be adjusted
by multiplying it by a fraction, the numerator of which shall be the
current market price of Wabash common stock prior to the dividend or the
distribution less the fair market value of the dividend or distribution
per share of outstanding common stock, and the denominator of which shall
be the current market price of Wabash Common Stock;
- dividends or other distributions consisting exclusively of cash to all
holders of Wabash common stock, generally in which case the conversion
rate shall be adjusted by multiplying it by a fraction the numerator of
which shall be equal to the current market price of Wabash common stock
less an amount equal to the quotient of (x) the amount distributed and
(y) the number of shares of Wabash common stock outstanding, and the
denominator of which shall be equal to the current market price; and
- the purchase of Wabash common stock pursuant to a tender offer made by
Wabash or any of its subsidiaries, to the extent that the same involves
an aggregate consideration that, together with any cash and the fair
market value of any other consideration paid in any other tender offer by
Wabash or any of its subsidiaries for Wabash common stock expiring within
the 12 months preceding such tender offer for which no adjustment has
been made, exceeds ten percent of our market capitalization on the
expiration of such tender offer, generally in which case the conversion
rate shall be adjusted by multiplying it by a fraction the numerator of
which shall be the shares of Wabash common stock outstanding at the
expiration of the tender offer times the market price after the
expiration of the tender offer, and the denominator of which shall be the
sum of (x) the fair market value of the aggregate consideration paid in
respect of the shares tendered and accepted for payment and (y) the
product of the number of shares outstanding at the expiration of the
tender offer and the current market price after the expiration of the
tender offer.
No adjustment in the conversion rate will be required unless such
adjustment would require a change of at least one percent in the conversion rate
then in effect at such time. Any adjustment that would otherwise be required to
be made shall be carried forward and taken into account in any subsequent
adjustment. Except as stated above, the conversion rate will not be adjusted for
the issuance of our common stock or any securities convertible into or
exchangeable for our common stock or carrying the right to purchase any of the
foregoing.
In the case of:
- any reclassification or change of Wabash common stock (other than changes
resulting from a subdivision or combination) or
- a consolidation, merger or combination involving Wabash or a sale or
conveyance to another corporation of all or substantially all of Wabash's
property and assets,
in each case as a result of which holders of Wabash common stock are entitled to
receive stock, other securities, other property or assets (including cash or any
combination thereof) with respect to or in exchange for Wabash common stock, the
holders of the notes then outstanding will be entitled thereafter to convert
those notes into the kind and amount of shares of stock, other securities or
other property or assets (including cash or any combination thereof) which they
would have owned or been entitled to receive upon such reclassification, change,
consolidation, merger, combination, sale or conveyance had such notes been
converted into Wabash common stock immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance.
We may not become a party to any such transaction unless its terms are
consistent with the foregoing. If a taxable distribution to holders of Wabash
common stock or other transaction occurs which results in any
15
adjustment of the conversion price, the holders of notes may, in certain
circumstances, be deemed to have received a distribution subject to U.S. income
tax as a dividend. In certain other circumstances, the absence of an adjustment
may result in a taxable dividend to the holders of common stock. See the section
of this prospectus entitled "Material United States Federal Income Tax
Considerations."
We may from time to time, to the extent permitted by law, reduce the
conversion price of the notes by any amount for any period of at least 20 days.
In that case we will give at least 15 days' notice of such decrease. We may make
such reductions in the conversion price, in addition to those set forth above,
as the board of directors deems advisable or in our best interests, which
determination will be conclusive.
CONDITIONS TO CONVERSION
The notes were not convertible until the occurrence of one of the
conditions described below. As of January 1, 2004, the condition described below
under "Conversion upon Satisfaction of Sale Price Conditions" was met and the
notes are now convertible, at the option of the holder, at any time prior to the
close of business on the final maturity date of the notes.
- Conversion upon Satisfaction of Sale Price Conditions. Holders may
surrender notes for conversion into shares of Wabash common stock in any
fiscal quarter commencing after September 30, 2003 if, as of the last day
of the preceding fiscal quarter, the sale price of our common stock for
at least 20 trading days in a period of 30 consecutive trading days
ending on the last trading day of such preceding fiscal quarter is more
than 110% of the conversion price per share of common stock on the last
day of such preceding fiscal quarter. Holders may also surrender notes
for conversion into shares of Wabash common stock if the sale price of
our common stock for at least 20 trading days in a period of 30
consecutive trading days ending on the last trading day prior to the
final maturity date of the notes is greater than 110% of the conversion
price per share of common stock on the last day prior to the maturity
date. If either of foregoing conditions is satisfied, then the notes will
be convertible at any time at the option of the holder, through the close
of business on the final maturity date of the notes.
The sale price of our common stock on any trading day means the closing per
share sale price (or if no closing sale price is reported, the average of
the bid and ask prices or, if more than one in either case, the average of
the average bid and the average ask prices) on such date on the principal
national securities exchange on which the common stock is listed, or if our
common stock is not listed on a national securities exchange, as reported
by the Nasdaq System or otherwise as provided in the indenture.
As noted above, this condition was satisfied in the fiscal quarter ended
December 31, 2003, and, as a result, the notes are now convertible.
- Conversion upon Satisfaction of Trading Price Condition. Holders may
surrender notes for conversion into shares of Wabash common stock
following any ten consecutive trading-day period in which the average of
the trading prices per $1,000 principal amount of notes for that ten
trading-day period was less than 95% of the average conversion value for
the notes during that period; provided, however, a holder may not convert
its notes if the average closing sale price of our common stock for such
ten consecutive trading-day period was between the then current
conversion price per share of common stock and 110% of the then
applicable conversion price per share of common stock. If the foregoing
condition is satisfied, then the notes will be convertible at any time at
the option of the holder, through the close of business on the final
maturity date of the notes.
The conversion value of a note is equal to the product of the closing sale
price for shares of our common stock on a given day multiplied by the then
current conversion rate, which is the number of shares of common stock into
which each note is then convertible. The trading price of the notes on any
date of determination means the average of the secondary market bid
quotations per $1,000 principal amount of notes obtained by us or the
trustee for $2,500,000 principal amount of notes at approximately 3:30
p.m., New York City time, on such determination date from two independent
nationally
16
recognized securities dealers we select, provided that if at least two such
bids cannot reasonably be obtained by us or the trustee, but one such bid
is obtained, then this one bid shall be used.
- Conversion upon Occurrence of Specified Corporate Transactions. If we
are party to a consolidation, merger or binding share exchange or a
transfer of all or substantially all of our assets and, as a result,
holders of our common stock would be entitled to receive stock, other
securities, other property or assets (including cash or any combination
thereof) with respect to or in exchange for our common stock, a note may
be surrendered for conversion at any time from and after the date which
is 15 days prior to the anticipated effective date of the transaction
until 15 days after the actual effective date of such transaction, and at
the effective date, the right to convert a note into common stock will be
changed into a right to convert it into the kind and amount of
securities, cash or other assets of Wabash or another person which the
holder would have received if the holder had converted the holder's notes
immediately prior to the transaction. If such transaction also
constitutes a change of control of Wabash, the holder will be able to
require us to purchase all or a portion of such holder's notes as
described under "-- Change in Control Permits Purchase of Notes at the
Option of the Holder."
RANKING
The notes are our senior unsecured and unsubordinated obligations. The
notes rank on a parity in right of payment with all of our existing and future
senior unsecured and unsubordinated indebtedness. However, the notes are
effectively subordinated to our existing and future secured indebtedness as to
the assets securing such indebtedness. As of September 30, 2003, we had total
indebtedness of $277 million (of which $147 million was secured indebtedness).
In addition, the notes are effectively subordinated to all existing and
future liabilities of our subsidiaries. Our cash flow and consequent ability to
meet our debt obligations depends in part on the earnings of our subsidiaries,
and on dividends and other payments from our subsidiaries. Under certain
circumstances, contractual and legal restrictions, as well as the financial
condition and operating requirements of our subsidiaries, could limit our
ability to obtain cash from its subsidiaries for the purpose of meeting debt
service obligations, including the payment of principal and interest on the
notes. Any rights to receive assets of any subsidiary upon its liquidation or
reorganization and the consequent right of the holders of the notes to
participate in those assets will be subject to the claims of that subsidiary's
creditors, including trade creditors, except to the extent that Wabash is
recognized as a creditor of that subsidiary, in which case its claims would
still be subordinate to any security interests in the assets of that subsidiary.
CHANGE OF CONTROL PERMITS PURCHASE OF NOTES AT THE OPTION OF THE HOLDER
If a Change of Control occurs, each holder of notes will have the right to
require us to repurchase all of that holder's notes, or any portion of those
notes that is equal to $1,000 or a whole multiple of $1,000, on the date that is
30 days after the date we give notice at a repurchase price equal to 100 percent
of the aggregate principal amount of the notes to be repurchased, together with
interest accrued and unpaid to, but excluding, the repurchase date. Instead of
paying the repurchase price in cash, we may pay the repurchase price in shares
of our common stock if we so elect in the notice referred to below. The number
of shares of common stock a holder will receive will equal the repurchase price
divided by 95 percent of the average of the closing sale prices of the
applicable common stock for the five trading days immediately preceding and
including the third day prior to the repurchase date. However, we may not pay in
common stock unless we satisfy certain conditions prior to the repurchase date
as provided in the indenture.
Within 15 days after the occurrence of a Change of Control, we are required
to give notice to all holders of notes, as provided in the indenture, of the
occurrence of the Change of Control and of their resulting repurchase right. We
must also deliver a copy of our notice to the trustee. To exercise the
repurchase right, a holder of notes must deliver prior to or on the repurchase
date irrevocable written notice to the trustee of the
17
holder's exercise of its repurchase right, together with the notes with respect
to which the right is being exercised. A "Change of Control" will be deemed to
have occurred when the following has occurred:
- our common stock (or other common stock into which the notes are
convertible) is no longer traded on the New York Stock Exchange or the
Nasdaq National Market;
- any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), acquires the beneficial ownership (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly,
through a purchase, merger or other acquisition transaction, of 50% or
more of the total voting power of the total outstanding voting stock of
Wabash other than an acquisition by us, any of our subsidiaries or any of
our employee benefit plans;
- Wabash consolidates with, or merges with or into, another person or
conveys, transfers, leases or otherwise disposes in one or a series of
related transactions of all or substantially all of its assets to any
person, or any person consolidates with or merges with or into Wabash,
other than:
- any transaction (i) that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Wabash's
capital stock and (ii) pursuant to which holders of Wabash's capital
stock immediately prior to the transaction have the entitlement to
exercise, directly or indirectly, 50% or more of the total voting power
of all shares of Wabash's capital stock entitled to vote generally in the
election of directors of the continuing or surviving person immediately
after the transaction; and
- any merger solely for the purpose of changing Wabash's jurisdiction of
incorporation and resulting in a reclassification, conversion or exchange
of outstanding shares of common stock solely into shares of common stock
of the surviving entity;
- during any consecutive two-year period, individuals who at the beginning
of that two-year period constituted the board of directors of Wabash
(together with any new directors whose election to such board of
directors, or whose nomination for election by stockholders, was approved
by a vote of a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason
to constitute a majority of the board of directors of Wabash then in
office; or
- Wabash's stockholders pass a special resolution approving a plan of
liquidation or dissolution and no additional approvals of stockholders
are required under applicable law to cause a liquidation or dissolution.
However, a Change of Control will not be deemed to have occurred if:
- the daily market price per share of Wabash common stock for any five
trading days within the period of 10 consecutive trading days immediately
after the later of the Change of Control or the public announcement of
the Change of Control (in the case of a Change of Control under the
second bullet point above) or the period of 10 consecutive trading days
ending immediately before the Change of Control (in the case of a Change
of Control under the third bullet point above) shall equal or exceed 110%
of the conversion price of the notes in effect on the date prior to the
Change of Control or the public announcement of the Change of Control, as
applicable; or
- all of the consideration (excluding cash payments for fractional shares
and cash payments made pursuant to dissenters' appraisal rights) in the
transaction or transactions constituting the Change of Control under the
second and third bullet points above consists of shares of common stock
that are, or upon issuance will be, traded on the New York Stock Exchange
or the American Stock Exchange or quoted on the Nasdaq National Market
and as a result of such transaction or transactions the notes become
convertible solely into such common stock.
The definition of Change of Control includes a phrase relating to the
conveyance, transfer, lease or other disposition of "all or substantially all"
of Wabash's assets. There is no precise established definition of the
18
phrase "substantially all" under applicable law. Accordingly, the ability of a
holder of notes to require us to repurchase such notes as a result of a
conveyance, transfer, lease or other disposition of less than all of Wabash's
assets may be uncertain.
Our right to pay the repurchase price in common stock is subject to our
satisfying various conditions, including:
- the registration of the common stock under the Securities Act and the
Exchange Act, if required; and
- any necessary qualifications under applicable state securities law or the
availability of an exemption from such qualification and registration.
If such conditions are not satisfied with respect to a holder prior to the close
of business on the repurchase date, we will pay the repurchase price of the
notes to the holder entirely in cash. Such cash payment currently is not
permitted under our existing debt agreements. We may not change the form of
consideration to be paid for the notes once we have given the notice that we are
required to give to holders of notes, except as described in the first sentence
of this paragraph.
We will comply with the provisions of any tender offer rules under the
Exchange Act that may then be applicable, and will file any schedule required
under the Exchange Act in connection with any offer by us to purchase notes at
the option of the holders of notes upon a Change of Control. In some
circumstances, the Change of Control purchase feature of the notes may make more
difficult or discourage a takeover of us and thus the removal of incumbent
management. The Change of Control purchase feature, however, is not the result
of management's knowledge of any specific effort to accumulate shares of common
stock or to obtain control of us by means of a merger, tender offer,
solicitation or otherwise, or part of a plan by management to adopt a series of
anti-takeover provisions. Instead, the Change of Control purchase feature is the
result of negotiations between us and the initial purchasers.
We may, to the extent permitted by applicable law, at any time purchase the
notes in the open market or by tender at any price or by private agreement. Any
note so purchased by us may, to the extent permitted by applicable law, be
reissued or resold or may be surrendered to the trustee for cancellation. Any
notes surrendered to the trustee may not be reissued or resold and will be
canceled promptly.
The foregoing provisions would not necessarily protect holders of the notes
if highly leveraged or other transactions involving us occur that may adversely
affect holders. Our ability to repurchase notes upon the occurrence of a Change
of Control is subject to important limitations. Under our existing credit
agreements, we would not be permitted to repurchase notes for cash unless prior
to any such payment we either repay our indebtedness subject to such
restrictions, refinance such debt on other terms or obtain a waiver from such
lenders. In addition, the occurrence of a Change of Control would likely cause
an event of default under the terms of certain of our existing debt agreements
and could cause an event of default under the terms of any debt agreements we
may enter into in the future. Further, we cannot assure you that we would have
the financial resources, or would be able to arrange financing, to pay the
repurchase price for all the notes that might be delivered by holders of notes
seeking to exercise the repurchase right. Any failure by us to repurchase the
notes when required following a Change of Control would result in an event of
default under the indenture. Any such default, in turn, would cause a default
under certain of our existing debt agreements, and may cause a default under any
debt agreements we may enter into in the future.
EVENTS OF DEFAULT
Each of the following would constitute an event of default under the
indenture:
(1) our failure to pay when due the principal of or premium, if any,
on any of the notes at maturity or exercise of a repurchase right or
otherwise;
(2) our failure to pay an installment of interest (including
liquidated damages, if any) on any of the notes for 30 days after the date
when due;
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(3) failure by us to deliver shares of common stock, together with
cash instead of fractional shares, when those shares of common stock, or
cash instead of fractional shares, are required to be delivered following
conversion of a note, and that default continues for 10 days;
(4) failure by us to give the notice regarding a Change of Control
within 15 days of the occurrence of the Change of Control;
(5) our failure to perform or observe any other term, covenant or
agreement contained in the notes or the indenture for a period of 60 days
after written notice of such failure, requiring us to remedy the same,
shall have been given to us by the trustee or to us and the trustee by the
holders of at least 25% in aggregate principal amount of the notes then
outstanding;
(6) in the event of either (a) our failure or the failure of any of
our significant subsidiaries to make any payment by the end of the
applicable grace period, if any, after the final scheduled payment date for
such payment with respect to any indebtedness for borrowed money in an
aggregate principal amount in excess of $10 million, or (b) the
acceleration of indebtedness for borrowed money of the company or any of
our significant subsidiaries in an aggregate amount in excess of $10
million because of a default with respect to such indebtedness, without
such indebtedness referred to in either (a) or (b) above having been
discharged, cured, waived, rescinded or annulled, for a period of 30 days
after written notice to us by the trustee or to us and the trustee by
holders of at least 25% in aggregate principal amount of the notes then
outstanding; and
(7) certain events of our bankruptcy, insolvency or reorganization.
The term "significant subsidiary" means a subsidiary, including its
subsidiaries, that meets any of the following conditions:
- Wabash's and its other subsidiaries' investments in and advances to the
subsidiary exceed 10% of the total assets of Wabash and its subsidiaries
consolidated as of the end of the most recently completed fiscal year;
- Wabash's and its other subsidiaries' proportionate share of the total
assets (after intercompany eliminations) of the subsidiary exceeds 10% of
the total assets of Wabash and its subsidiaries consolidated as of the
end of the most recently completed fiscal year; or
- Wabash's and its other subsidiaries' equity in the income from continuing
operations before income taxes, extraordinary items and cumulative effect
of a change in accounting principle of the subsidiary exceeds 10% of such
income of Wabash and its subsidiaries consolidated for the most recently
completed fiscal year.
The indenture provides that the trustee shall, within 90 days of the
occurrence of a default, give to the registered holders of the notes notice of
all uncured defaults known to it, but the trustee shall be protected in
withholding such notice if it, in good faith, determines that the withholding of
such notice is in the best interest of such registered holders, except in the
case of a default in the payment of the principal of, or premium, if any, or
interest on, any of the notes when due or in the payment of any repurchase
obligation.
If an event of default specified in clause (7) above occurs and is
continuing, then automatically the principal of all the notes and the interest
thereon shall become immediately due and payable. If an event of default shall
occur and be continuing, other than with respect to clause (7) above (the
default not having been cured or waived as provided under "-- Modifications and
Waiver" below), the trustee or the holders of at least 25% in aggregate
principal amount of the notes then outstanding may declare the notes due and
payable at their principal amount together with accrued interest, and thereupon
the trustee may, at its discretion, proceed to protect and enforce the rights of
the holders of notes by appropriate judicial proceedings. Such declaration may
be rescinded or annulled with the written consent of the holders of a majority
in aggregate principal amount of the notes then outstanding upon the conditions
provided in the indenture. However, if an event of default is cured prior to
such declaration by the trustee or holders of the notes as discussed above, the
trustee and the holders of the notes will not be able to make such declaration
as a result of that cured event of default.
20
Overdue payments of interest, liquidated damages and premium, if any, and
principal shall accrue interest at 5.25%.
The indenture contains a provision entitling the trustee, subject to the
duty of the trustee during default to act with the required standard of care, to
be indemnified by the holders of notes before proceeding to exercise any right
or power under the indenture at the request of such holders. The indenture
provides that the holders of a majority in aggregate principal amount of the
notes then outstanding through their written consent may direct the time, method
and place of conducting any proceeding for any remedy available to the trustee
or exercising any trust or power conferred upon the trustee.
We are required to furnish annually to the trustee a statement as to the
fulfillment of our obligations under the indenture.
CONSOLIDATION, MERGER OR ASSUMPTION
We may, without the consent of the holders of notes, consolidate with,
merge into or transfer all or substantially all of our assets to any other
corporation organized under the laws of the United States or any of its
political subdivisions provided that:
- (i) Wabash shall be the surviving or continuing corporation or (ii) the
entity or person formed by or surviving any such consolidation, merger or
asset transfer shall be a corporation organized and validly existing
under the laws of the United States, any State thereof or the District of
Columbia;
- the surviving corporation assumes all our obligations under the indenture
and the notes pursuant to a supplemental indenture in form and substance
reasonably satisfactory to the trustee;
- at the time of such transaction, no event of default, and no event which,
after notice or lapse of time, would become an event of default, shall
have happened and be continuing; and
- certain other conditions are met.
Although such transactions are permitted under the indenture, certain of
the foregoing transactions occurring could constitute a change in control of
Wabash, permitting each holder to require us to purchase the notes of such
holder as described above.
MODIFICATIONS AND WAIVER
The indenture (including the terms and conditions of the notes) may be
modified or amended by us and the trustee, without the consent of the holder of
any note, for the purposes of, among other things:
- adding to our covenants for the benefit of the holders of notes;
- surrendering any right or power conferred upon us;
- providing for the assumption of our obligations to the holders of notes
in the circumstances required under the indenture as described under
"-- Consolidation, Merger or Assumption;"
- reducing the conversion price, provided that the reduction will not
adversely affect the interests of holders of notes; or
- curing any ambiguity or correcting or supplementing any defective
provision contained in the indenture; provided that such modification or
amendment does not adversely affect the interests of the holders of the
notes.
Modifications and amendments to the indenture or to the terms and
conditions of the notes may also be made, and past default by us may be waived
with the written consent of the holders of at least a majority in aggregate
principal amount of the notes at the time outstanding. However, no such
modification, amendment or waiver may, without the written consent or the
affirmative vote of the holder of each note so affected:
- change the maturity of the principal of or any installment of interest on
that note (including any payment of liquidated damages);
21
- reduce the principal amount of, or any premium or interest on (including
any payment of liquidated damages), any note;
- change the currency of payment of such note or interest thereon;
- impair the right to institute suit for the enforcement of any payment on
or with respect to any note;
- except as otherwise permitted or contemplated by provisions concerning
corporate reorganizations, adversely affect the repurchase option of
holders upon a Change of Control or the conversion rights of holders of
the notes;
- waive a default or event of default in the payment of principal of or
interest or liquidated damages, if any, on the notes (except a rescission
of acceleration of the notes by the holders of at least a majority in
aggregate principal amount of the notes and a waiver of the payment
default that resulted from such acceleration);
- except as permitted by the indenture, increase the conversion price or
modify the provisions of the indenture relating to conversion of the
notes in a manner adverse to the holders; or
- reduce the percentage in aggregate principal amount of notes outstanding
necessary to modify or amend the indenture or to waive any past default.
FORM, DENOMINATION AND REGISTRATION
The notes are issued in fully registered form, without coupons, in
denominations of $1,000 principal amount and whole multiples of $1,000.
Global Notes: Book-Entry Form. Except as provided below, the notes are
evidenced by one global note deposited with the trustee as custodian for DTC,
New York, New York, and registered in the name of Cede & Co. as DTC's nominee.
The global note and any notes issued in exchange therefor are subject to certain
restrictions on transfer set forth in the global notes and in the indenture and
bear a restrictive legend. Record ownership of the global notes may be
transferred, in whole or in part, only to another nominee of DTC or to a
successor of DTC or its nominee, except as set forth below. A Noteholder may
hold its interests in the global note directly through DTC if such noteholder is
a participant in DTC, or indirectly through organizations which are direct DTC
participants. Transfers between direct DTC participants will be effected in the
ordinary way in accordance with DTC's rules and will be settled in same-day
funds. Noteholders may also beneficially own interests in the global notes held
by DTC through certain banks, brokers, dealers, trust companies and other
parties that clear through or maintain a custodial relationship with a direct
DTC participant, either directly or indirectly. So long as Cede & Co., as
nominee of DTC, is the registered owner of the global note, Cede & Co. for all
purposes will be considered the sole holder of the global note. Except as
provided below, owners of beneficial interests in a global note will not be
entitled to have certificates registered in their names, will not receive or be
entitled to receive physical delivery of certificates in definitive form, and
will not be considered holders thereof. The laws of some states require that
certain persons take physical delivery of securities in definitive form.
Consequently, the ability to transfer a beneficial interest in a global note to
such persons may be limited. We will wire, through the facilities of the
trustee, principal, premium, if any, and interest payments on the global note to
Cede & Co., the nominee for DTC, as the registered owner of the global note. We,
the trustee and any paying agent will have no responsibility or liability for
paying amounts due on the global note to owners of beneficial interests in a
global note. It is DTC's current practice, upon receipt of any payment of
principal of and premium, if any, and interest on the global note, to credit
participants' accounts on the payment date in amounts proportionate to their
respective beneficial interests in a note represented by a global note, as shown
on the records of DTC, unless DTC believes that it will not receive payment on
the payment date. Payments by DTC participants to owners of beneficial interests
in notes represented by a global note held through DTC participants will be the
responsibility of DTC participants, as is now the case with securities held for
the accounts of customers registered in "street name."
If you would like to convert your notes into common stock pursuant to the
terms of the notes, you should contact your broker or other direct or indirect
DTC participant to obtain information on procedures, including
22
proper forms and cut-off times, for submitting those requests. Because DTC can
only act on behalf of DTC participants, who in turn act on behalf of indirect
DTC participants and other banks, your ability to pledge your interest in the
notes represented by global notes to persons or entities that do not participate
in the DTC system, or otherwise take actions in respect of such interest, may be
affected by the lack of a physical certificate. Neither we nor the trustee (nor
any registrar, paying agent or conversion agent under the indenture) will have
any responsibility for the performance by DTC or direct or indirect DTC
participants of their obligations under the rules and procedures governing their
operations. DTC has advised us that it will take any action permitted to be
taken by a holder of notes, including, without limitation, the presentation of
notes for conversion as described below, only at the direction of one or more
direct DTC participants to whose account with DTC interests in the global notes
are credited and only for the principal amount of the notes for which directions
have been given.
DTC has advised us as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Securities Exchange Act of 1934, as amended. DTC was created
to hold securities for DTC participants and to facilitate the clearance and
settlement of securities transactions between DTC participants through
electronic book-entry changes to the accounts of its participants, thereby
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing corporations
and may include certain other organizations such as the initial purchasers.
Certain DTC participants or their representatives, together with other entities,
own DTC. Indirect access to the DTC system is available to others such as banks,
brokers, dealers and trust companies that clear through, or maintain a custodial
relationship with, a participant, either directly or indirectly. Although DTC
has agreed to the foregoing procedures in order to facilitate transfers of
interests in the global notes among DTC participants, it is under no obligation
to perform or continue to perform such procedures, and such procedures may be
discontinued at any time. If DTC is at any time unwilling or unable to continue
as depositary and a successor depositary is not appointed by us within 90 days,
we will cause notes to be issued in definitive form in exchange for the global
notes. None of us, the trustee or any of their respective agents will have any
responsibility for the performance by DTC or direct or indirect DTC participants
of their obligations under the rules and procedures governing their operations,
including maintaining, supervising or reviewing the records relating to, or
payments made on account of, beneficial ownership interests in global notes.
According to DTC, the foregoing information with respect to DTC has been
provided to its participants and other members of the financial community for
informational purposes only and is not intended to serve as a representation,
warranty or contract modification of any kind.
Certificated notes may be issued in exchange for beneficial interests in
notes represented by the global notes only when the depositary for a global note
has notified the Company that it is unwilling or unable to continue as
depositary for such note and the Company fails to appoint a successor depositary
for such note within 90 days.
GOVERNING LAW
The indenture and the notes are governed by, and construed in accordance
with, the law of the State of New York.
CONCERNING THE TRUSTEE
Wachovia Bank, National Association, as trustee under the indenture, has
been appointed by us as paying agent, conversion agent, registrar and custodian
with regard to the notes. National City Bank is the transfer agent and registrar
for Wabash's common stock. The trustee or its affiliates may from time to time
in the future provide banking and other services to us in the ordinary course of
their business.
The indenture provides that, except during the continuance of an event of
default, the trustee will perform only such duties as are specifically set forth
in the indenture. In case an event of default shall occur (and shall not be
cured) and holders of the notes have notified the trustee, the trustee will be
required to exercise its
23
powers with the degree of care and skill of a prudent person in the conduct of
such person's own affairs. Subject to such provisions, the trustee is under no
obligation to exercise any of its rights or powers under the indenture at the
request of any of the holders of notes, unless they shall have offered to the
trustee security and indemnity satisfactory to it.
The indenture contains certain limitations on the rights of the trustee,
should it become our creditor, to obtain payment of claims in certain cases or
to realize on certain property received in respect of any such claim as security
or otherwise. The trustee is permitted to engage in other transactions,
provided, however, that if it acquires any conflicting interest, it must
eliminate such conflict or resign.
REGISTRATION RIGHTS
We agreed, at our expense, to file with the SEC this registration statement
on Form S-3 covering resales by holders of the notes and the common stock
issuable upon conversion of the notes, of which this prospectus is a part. Under
the terms of the registration rights agreement, we agreed to use our reasonable
best efforts to:
- cause the registration statement to become effective before March 28,
2004; and
- keep the shelf registration statement continuously effective under the
Securities Act until the earliest of (i) the second anniversary of the
issue date; (ii) the date on which the notes or the common stock issuable
upon their conversion may be sold by non-affiliates of us pursuant to
paragraph (k) of Rule 144 (or any successor provision) promulgated by the
SEC under the Securities Act; (iii) the date as of which all the notes or
the common stock issuable upon their conversion have been sold under Rule
144 under the Securities Act (or any similar provision then in force) and
(iv) the date as of which all the notes or the common stock issuable upon
their conversion have been sold pursuant to the shelf registration
statement.
We also agreed to provide to each registered holder copies of the
prospectus, notify each registered holder when the shelf registration statement
has become effective and take certain other actions as are required to permit
unrestricted resales of the notes and the common stock issuable upon conversion
of the notes. A holder who sells those securities pursuant to the shelf
registration statement generally will be required to be named as a selling
securityholder in the related prospectus and to deliver a prospectus to
purchasers and will be bound by the provisions of the registration rights
agreement, which are applicable to that holder (including certain
indemnification provisions).
The specific provisions relating to the registration described above are
contained in the registration rights agreement which was entered into on the
closing of the initial offering of the notes.
TRANSFER AND EXCHANGE
A holder may transfer or exchange notes in accordance with the indenture.
The registrar and the trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents, and we may require a
holder to pay any taxes and fees required by law or permitted by the indenture.
We are not required to transfer or exchange any note for which a holder has
delivered a Change of Control repurchase notice.
The registered holder of a note will be treated as the owner of it for all
purposes.
NO RECOURSE AGAINST OTHERS
None of our directors, officers, employees, stockholders or affiliates, as
such, shall have any liability or any obligation under the notes or the
indenture or for any claim based on, in respect of or by reason of such
obligations or the creation of such obligations. Each holder by accepting a note
waives and releases all such liability. The waiver and release are part of the
consideration for the notes. This provision does not constitute a waiver of any
person's compliance with the federal securities laws or the Securities and
Exchange Commission's rules and regulations.
24
DESCRIPTION OF CAPITAL STOCK
Our certificate of incorporation authorizes 100,000,000 shares of capital
stock, 75,000,000 of which are designated as common stock and 25,000,000 of
which are designated as preferred stock. The following descriptions summarize
the material terms and provisions of our authorized and outstanding capital
stock. For the complete terms of our capital stock, please refer to our
certificate of incorporation and bylaws that are filed as exhibits to our
reports incorporated by reference into this prospectus. The General Corporation
Law of Delaware, as amended, may also affect the terms of our capital stock.
COMMON STOCK
Our certificate of incorporation provides that we have authority to issue
75,000,000 shares of our common stock, par value $.01 per share. At September
26, 2003, there were 25,834,530 shares of common stock issued and outstanding.
In addition, 1,823,660 shares of common stock were issuable upon exercise of
stock options outstanding on that date. The outstanding shares of common stock
are fully paid and nonassessable.
VOTING RIGHTS
Each holder of common stock is entitled to attend all special and annual
meetings of the stockholders and to vote upon any matter, including, without
limitation, the election of directors. Holders of common stock are entitled to
one vote per share.
LIQUIDATION RIGHTS
In the event of any dissolution, liquidation or winding up of Wabash,
whether voluntary or involuntary, the holders of common stock and holders of any
class or series of stock entitled to participate with them, will be entitled to
participate in the distribution of any assets remaining after we have paid all
of our debts and liabilities and have paid, or set aside for payment, to the
holders of any class of stock having preference over the common stock in the
event of dissolution, liquidation or winding up, the full preferential amounts,
if any, to which they are entitled.
DIVIDENDS
Dividends may be paid on the common stock and on any class or series of
stock entitled to participate therewith when and as declared by the board. Due
to restrictions under existing covenants in our debt agreements, we are not
permitted to pay dividends on our common stock without waiver of these
restrictions by our lenders.
OTHER RIGHTS AND RESTRICTIONS
The holders of common stock have no preemptive or subscription rights to
purchase additional securities issued by us, nor any rights to convert their
common stock into other securities of Wabash or to have their shares redeemed by
us. Our common stock is not subject to redemption by us. The rights, preferences
and privileges of common stockholders are subject to the rights of any series of
preferred stock that we may designate in the future. Our charter and bylaws do
not restrict the ability of a holder of common stock to transfer his or her
shares of common stock. When we issue shares of common stock upon conversion of
the notes, the shares will be fully paid and non-assessable.
25
LISTING
Our common stock is listed on the New York Stock Exchange under the symbol
"WNC."
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is National City
Bank.
STOCKHOLDER RIGHTS PLAN
In November 1995, our board adopted a Stockholders Rights Plan (the "Rights
Plan"). The Rights Plan is designed to deter any potential coercive or unfair
takeover tactics in the event of an unsolicited takeover attempt. It is not
intended to prevent a takeover of Wabash on terms that are favorable and fair to
all stockholders and will not interfere with a merger approved by the board of
directors. Each right entitles stockholders to buy one one-thousandth of a share
of Series A Junior Participating Preferred Stock at an exercise price of
$120.00. The rights will be exercisable only if a person or a group acquires or
announces a tender or exchange offer to acquire 20% or more of our common stock
or if we enter into other business combination transactions not approved by the
board of directors. In the event the rights become exercisable, the rights plan
allows for our stockholders to acquire stock of Wabash or the surviving
corporation, whether or not Wabash is the surviving corporation, having a value
twice that of the exercise price of the rights. The rights will expire December
28, 2005 and are redeemable for $.01 per right by our board under certain
circumstances.
LIMITATIONS OF DIRECTOR LIABILITY
Delaware law authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of directors' fiduciary duty of care. Although Delaware law
does not change directors' duty of care, it enables corporations to limit
available relief to equitable remedies such as injunction or rescission. Our
certificate of incorporation limits the liability of directors to us and our
stockholders to the full extent permitted by Delaware law. Specifically,
directors are not personally liable for monetary damages to Wabash or its
stockholders for breach of the director's fiduciary duty as a director, except
for liability for:
- any breach of the director's duty of loyalty to Wabash or its
stockholders;
- acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
- unlawful payments of dividends or unlawful stock repurchases or
redemptions; and
- any transaction from which the director derived an improper personal
benefit.
INDEMNIFICATION
To the maximum extent permitted by law, our bylaws provide for mandatory
indemnification of directors and officers against any expense, liability or loss
to which they may become subject, or which they may incur as a result of being
or having been a director or officer. In addition, we must advance or reimburse
directors and officers for expenses they incur in connection with indemnifiable
claims.
We also maintain directors' and officers' liability insurance.
PREFERRED STOCK
Our certificate of incorporation authorizes our board from time to time and
without further stockholder action, to provide for the issuance of up to
25,000,000 shares of preferred stock in one or more series, and to fix the
relative rights and preferences of the shares, including voting powers, dividend
rights, liquidation preferences, redemption rights and conversion privileges. As
of the date of this prospectus, we have classified shares of Series A Junior
Participating Preferred Stock in connection with the establishment of our
stockholder rights plan, as described above, and we have issued rights that are
in some cases exercisable for
26
shares of Series A Junior Participating Preferred Stock. There are no shares of
our Preferred Stock outstanding on the date of this Prospectus.
BLANK CHECK PREFERRED STOCK
Our board is authorized to issue preferred stock in one or more series and
to fix and designate the rights, preferences, privileges and restrictions of the
preferred stock, including:
- dividend rights;
- conversion rights;
- voting rights;
- redemption rights and terms of redemption; and
- liquidation preferences.
Our board may fix the number of shares constituting any series and the
designations of these series. We have issued rights that are in some cases
exercisable for shares of our Series A Junior Participating Preferred Stock.
The rights, preferences, privileges and restrictions of the preferred stock
of each series will be fixed by a certificate of designations relating to each
series. The certificate of designations relating to each series will specify the
terms of the preferred stock, including:
- the maximum number of shares in the series and the distinctive
designation;
- the terms on which dividends will be paid, if any;
- the terms on which the shares may be redeemed, if at all;
- the liquidation preference, if any;
- the terms of any retirement or sinking fund for the purchase or
redemption of the shares of the series;
- the terms and conditions, if any, on which the shares of the series will
be convertible into, or exchangeable for, shares of any other class or
classes of capital stock;
- the voting rights, if any, on the shares of the series; and
- any or all other preferences and relative, participating, operational or
other special rights or qualifications, limitations or restrictions of
the shares.
Voting Rights. The General Corporation Law of Delaware provides that the
holders of preferred stock will have the right to vote separately as a class on
any proposal involving fundamental changes in the rights of holders of that
preferred stock. This right is in addition to any voting rights that may be
provided for in the applicable certificate of designations.
Other. Our issuance of preferred stock may have the effect of delaying or
preventing a change in control. Our issuance of preferred stock could decrease
the amount of earnings and assets available for distribution to the holders of
common stock or other preferred stock or could adversely affect the rights and
powers, including voting rights, of the holders of common stock or other
preferred stock. The issuance of preferred stock could have the effect of
decreasing the market price of our common stock.
27
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of certain U.S. federal income tax
considerations relevant to holders of the notes and common stock into which the
notes may be converted. This discussion is based upon the Internal Revenue Code
of 1986, as amended, which we refer to as the Code, Treasury regulations,
Internal Revenue Service, or IRS, rulings and judicial decisions now in effect,
all of which are subject to change (possibly with retroactive effect) or
different interpretations. There can be no assurance that the IRS will not
challenge one or more of the tax consequences described herein, and we have not
obtained, nor do we intend to obtain, a ruling from the IRS with respect to the
U.S. federal income tax consequences of acquiring, holding, or disposing of
notes or common stock. This discussion does not purport to deal with all aspects
of U.S. federal income taxation that may be relevant to a particular holder in
light of the holder's circumstances (for example, persons subject to the
alternative minimum tax provisions of the Code or a holder whose "functional
currency" is not the U.S. dollar). Also, it is not intended to be wholly
applicable to all categories of investors, some of which (such as dealers in
securities or currencies, traders in securities that elect to use a
mark-to-market method of accounting, banks, thrifts, regulated investment
companies, insurance companies, tax-exempt organizations and persons holding
notes or common stock as part of a hedging, conversion, constructive sale,
constructive ownership, or integrated transaction or straddle under the Code)
may be subject to special rules. The discussion also does not discuss any aspect
of state, local or foreign law or U.S. federal estate and gift tax law as
applicable to the holders of the notes and common stock into which the notes may
be converted. In addition, this discussion is limited to purchasers of notes who
are U.S. Holders (as defined below) who will hold the notes and common stock as
"capital assets" within the meaning of Section 1221 of the Code.
ALL PROSPECTIVE PURCHASERS OF THE NOTES ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES AND THE COMMON STOCK IN THEIR
PARTICULAR SITUATIONS.
As used herein, the term "U.S. Holder" means a beneficial owner of a note
or common stock that for United States federal income tax purposes is (a) a
citizen or resident (as defined in Section 7701(b) of the Code) of the United
States (unless such person is not treated as a resident of the U.S. under an
applicable income tax treaty), (b) a corporation formed under the laws of the
United States or any political subdivision of the United States, (c) an estate
the income of which is subject to U.S. federal income taxation regardless of its
source or (d) in general, a trust subject to the primary supervision of a court
within the United States and the control of a United States person as described
in Section 7701(a)(30) of the Code.
If a partnership (including for this purpose any entity, domestic or
foreign, treated as a partnership for U.S. tax purposes) is a beneficial owner
of the notes or common stock into which the notes may be converted, the U.S.
federal income tax treatment of a partner in the partnership will generally
depend on the status of the partner and the activities of the partnership. As a
general matter, income earned through a foreign or domestic partnership is
attributed to its owners. A holder of the notes or common stock into which the
notes may be converted that is a partnership and partners in such partnership
should consult their individual tax advisors about the U.S. federal income tax
consequences of holding and disposing of the notes and the common stock into
which the notes may be converted.
INTEREST/ORIGINAL ISSUE DISCOUNT
Interest on the notes will generally be included in a U.S. Holder's gross
income as ordinary income for U.S. federal income tax purposes at the time it is
paid or accrued in accordance with the U.S. Holder's regular method of
accounting.
In general, if the terms of a debt instrument entitle a holder to receive
payments other than fixed periodic interest that exceed the issue price of the
instrument, the holder may be required to recognize additional interest as
"original issue discount" over the term of the instrument. Furthermore, if the
amount or timing of any additional payments on a note is contingent, the note
could be subject to special rules that apply to contingent debt instruments.
These rules generally require a holder to accrue interest income at a rate
higher than the stated interest rate on the note and to treat as ordinary
income, rather than capital gain, any gain recognized on a sale, exchange or
retirement of a note before the resolution of the contingencies. In certain
28
circumstances, holders of our notes could receive payments in excess of stated
principal or interest. If we do not comply with our obligations under the
registration rights agreement, such non-compliance may result in the payment of
predetermined additional amounts in the manner described in the section
"Description of the Notes -- Registration Rights." We do not believe that the
notes should be treated as contingent debt instruments because of these
potential additional payments. Therefore, for purposes of filing tax or
information returns with the IRS, we will not treat the notes as contingent debt
instruments or as having original issue discount. Our position in this regard is
binding on U.S. Holders unless they disclose their contrary position. If the
notes were treated as contingent debt instruments, the consequences described
above would apply. In the event that we pay liquidated damages, the holders
would be required to recognize additional taxable income.
MARKET DISCOUNT
The purchasers of notes may be subject to the "market discount" provisions
of the Code. Market discount on a note will generally equal the amount, if any,
by which the principal amount of the note exceeds the holder's acquisition
price. Subject to a de minimis exception, those provisions generally require a
holder of a note acquired at a market discount to treat as ordinary income any
gain recognized on the disposition of such note to the extent of the "accrued
market discount" at the time of disposition. Market discount on a note will be
treated as accruing on a straight-line basis over the term of such note or, at
the election of the holder, under a constant-yield method. If a note with
accrued market discount that has not previously been included in gross income is
converted into common stock, the amount of such accrued market discount
generally will be taxable as ordinary income upon disposition of the common
stock received upon conversion. A holder of a note acquired at a market discount
may be required to defer the deduction of a portion of the interest on any
indebtedness incurred or maintained to purchase or carry the note until the note
is disposed of in a taxable transaction, unless the holder elects to include
market discount in income as it accrues.
PREMIUM
If a U.S. Holder acquires a note for an amount that is greater than the
note's stated principal amount plus accrued interest, the amount of such
difference is treated as "amortizable bond premium" for U.S. Federal income tax
purposes. A U.S. Holder may elect to amortize such premium from the purchase
date to the note's maturity date under a constant-yield over the remaining term
of the note. Any such premium is not amortizable, however, to the extent it
reflects the value of the conversion privilege of the note. Amortizable bond
premium is treated as an offset to interest income on a note and not as a
separate deduction and has the effect to reducing the holder's basis in the
note. An election to amortize bond premium applies to all taxable debt
obligations held by the U.S. Holder on the first day of the first taxable year
to which such election applies or thereafter acquired by the U.S. Holder and may
not be revoked without the consent of the IRS.
CONVERSIONS OF NOTES INTO COMMON STOCK
A U.S. Holder generally will not recognize any income, gain or loss upon
conversion of a note into common stock except with respect to cash received in
lieu of a fractional share of common stock. Cash received in lieu of a
fractional share of common stock should generally be treated as a payment in
exchange for such fractional share rather than as a dividend. Gain or loss
recognized on the receipt of cash paid in lieu of such fractional share
generally will equal the difference between the amount of cash received and the
amount of tax basis allocable to the fractional share. The adjusted tax basis of
shares of common stock received on conversion will equal the adjusted tax basis
of the note converted (reduced by the portion of adjusted tax basis allocated to
any fractional share of common stock exchanged for cash). The holding period of
such common stock received on conversion will generally include the period
during which the converted notes were held prior to conversion.
The conversion price of the notes is subject to adjustment under certain
circumstances. Section 305 of the Code and the Treasury regulations issued
thereunder may treat the holders of the notes as having received a constructive
distribution, resulting in ordinary income (subject to a possible dividends
received deduction in the case of corporate holders) to the extent of our
current and/or accumulated earnings and profits, if, and to the extent that,
certain adjustments in the conversion price (particularly an adjustment to
reflect a taxable
29
dividend to holders of common stock) increase the proportionate interests of the
holders of notes in our assets or earnings and profits, whether or not such
holder ever exercises its conversion privilege. Therefore, U.S. Holders may
recognize income in the event of a deemed distribution even though they may not
receive any cash or property. Moreover, if there is not a full adjustment to the
conversion ratio of the notes to reflect a stock dividend or other event
increasing the proportionate interest of the holders of outstanding common stock
in our assets or earnings and profits, then such increase in the proportionate
interest of the holders of the common stock generally will be treated as a
distribution to such holders, taxable as ordinary income (subject to a possible
dividends received deduction in the case of corporate holders) to the extent of
our current and/or accumulated earnings and profits. Adjustments to the
conversion price made pursuant to a bona fide reasonable adjustment formula
which has the effect of preventing dilution in the interest of the holders of
the debt instruments, however, will generally not be considered to result in a
constructive dividend distribution.
SALE, EXCHANGE OR OTHER TAXABLE DISPOSITION OF THE NOTES
Each U.S. Holder generally will recognize gain or loss upon the sale,
exchange (other than by exercise of the conversion privilege) or other taxable
disposition of notes measured by the difference (if any) between (a) the amount
of cash and the fair market value of any property received (except to the extent
that such cash or other property is attributable to the payment of accrued
interest, which amount will be taxable as ordinary income to the extent not
previously included in gross income of the holder) and (b) such holder's
adjusted tax basis in the notes. A U.S. Holder's adjusted tax basis in a note
generally will equal the holder's cost of the note, increased by any market
discount previously included in income by the U.S. Holder and reduced (but not
below zero) by any amortizable bond premium that the U.S. Holder has taken into
account. Any such gain or loss recognized on the sale, exchange or other taxable
disposition of a note (except to the extent of any accrued and unrecognized
market discount, which will be taxable as ordinary income) generally will be
capital gain or loss and will be long-term capital gain or loss if the note has
been held for more than 12 months at the time of the sale or exchange. Certain
U.S. Holders (including individuals) are eligible for preferential U.S. federal
income tax rates in respect of long-term capital gains. The deductibility of
capital losses is subject to certain limitations under the Code.
If, upon a change of control, a holder requires us to repurchase some or
all of the holder's notes and we elect to pay the repurchase price in shares of
our common stock, the redemption may qualify as a recapitalization for U.S.
federal income tax purposes if the notes qualify as "securities" for those
purposes. Although debt instruments with a term of five years or less, such as
the notes, generally are not considered "securities," the matter is not free
from doubt. If the redemption qualifies as a recapitalization, a U.S. Holder
would not recognize any income, gain or loss on the holder's receipt of our
common stock in exchange for notes, except to the extent the stock received is
attributable to accrued interest. If the holder receives cash in lieu of
fractional shares of stock, however, the holder would be treated as if he
received the fractional share and then had the fractional share redeemed for
cash. The holder would recognize gain or loss equal to the difference between
the cash received and that portion of his basis in the stock attributable to the
fractional share. The holder's aggregate basis in the stock (including any
fractional share for which cash is paid) would equal his adjusted basis in the
note. The holder's holding period for the stock would include the period during
which he held the note. If the redemption does not qualify as a
recapitalization, a U.S. Holder will generally recognize capital gain or loss
equal to the difference between the amount realized by the U.S. Holder and the
U.S. Holder's adjusted tax basis in the note as described above.
OWNERSHIP AND DISPOSITION OF COMMON STOCK
Distributions, if any, paid on the common stock, to the extent made from
our current and/or accumulated earnings and profits, as determined under U.S.
federal income tax principles, will be included in a U.S. Holder's gross income
as ordinary income (subject to a possible dividends received deduction in the
case of corporate holders) when received. In the case of a non-corporate U.S.
Holder, such dividend income will generally be taxable at a reduced rate in any
taxable year beginning before January 1, 2009. To the extent, if any, that a
U.S. Holder receives distributions on shares of common stock that would
otherwise constitute dividends for U.S. federal income tax purposes but that
exceed our current and accumulated earnings and
30
profits, such distributions will be treated first as a non-taxable return of
capital, reducing the U.S. Holder's basis in the shares of common stock. Any
distribution in excess of the U.S. Holder's basis in the shares of common stock
generally will be treated as capital gains. Gain or loss realized on the sale,
exchange or other taxable disposition of common stock will equal the difference
between the amount realized on such sale, exchange or other taxable disposition
and the U.S. Holder's adjusted tax basis in such common stock. Subject to the
discussion under "Market Discount" above, such gain or loss generally will be
capital gain or loss, and will be long-term capital gain or loss if the U.S.
Holder has held the common stock for more than twelve months. Certain U.S.
Holders (including individuals) are eligible for preferential U.S. federal
income tax rates in respect of long-term capital gains. The deductibility of
capital losses is subject to certain limitations under the Code.
INFORMATION REPORTING AND BACKUP WITHHOLDING
A U.S. Holder of notes or common stock may be subject to "backup
withholding" at a rate currently of 28% with respect to certain "reportable
payments," including interest payments, dividend payments, proceeds from the
disposition of the notes or common stock to or through a broker and, under
certain circumstances, principal payments of the notes. These backup withholding
rules apply if the U.S. Holder, among other things, (a) fails to furnish a
social security number or other taxpayer identification number, or TIN,
certified under penalties of perjury within a reasonable time after the request
therefor, (b) fails to report properly interest or dividends, (c) under certain
circumstances, fails to provide a certified statement, signed under penalties of
perjury, that the TIN furnished is the correct number and that such holder is
not subject to backup withholding or if (d) the IRS provides notification that
the U.S. Holder has furnished us with an incorrect TIN. Any amount withheld from
a payment to a U.S. Holder under the backup withholding rules is creditable
against the U.S. Holder's U.S. federal income tax liability, provided that the
required information is furnished to the IRS. Backup withholding will not apply,
however, with respect to payments made to certain U.S. Holders, including
corporations and tax exempt organizations, provided their exemptions from backup
withholding are properly established.
We will report to the U.S. Holders of notes and common stock and to the IRS
the amount of our "reportable payments" for each calendar year and the amount of
tax withheld, if any, with respect to such payments.
The preceding discussion of certain U.S. federal income tax consequences is
intended for general information only and does not constitute tax advice.
Accordingly, each investor should consult its own tax adviser as to particular
tax consequences to it of purchasing, holding and disposing of the notes and the
common stock, including the applicability and effect of any state, local or
foreign tax laws, and of any proposed changes in applicable laws.
LEGAL MATTERS
Hogan & Hartson L.L.P., Baltimore, Maryland has passed upon certain legal
matters in connection with the notes and the common stock.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual report on form 10-K for the year
ended December 31, 2002, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
consolidated financial statements are incorporated by reference in reliance on
Ernst & Young LLP's report, given on their authority as experts in accounting
and auditing.
Our consolidated financial statements as of December 31, 2001, and for each
of the two years in the period ended December 31, 2001, have been audited by
Arthur Andersen LLP, independent public accountants, as stated in their report
incorporated herein.
31
On May 30, 2002, we appointed Ernst & Young as our independent public
accountants to audit our financial statements for fiscal year 2002. The decision
to change auditors was not the result of any disagreement between Arthur
Andersen and us on any matter of accounting principle or practice, financial
statement disclosure or auditing scope or procedure. For a discussion of certain
risks associated with Arthur Andersen's audit of our consolidated financial
statements, see the section of this prospectus entitled "Risk Factors -- Risks
Related to an Investment in the Notes and Common Stock."
ADDITIONAL INFORMATION
Because we are subject to the informational requirements of the Exchange
Act, we file reports and other information with the Commission. Reports,
registration statements, proxy and information statements and other information
that we have filed can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain copies of this material from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at rates prescribed by the Commission. The public may obtain information
on the operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. The Commission also maintains a web site that contains reports,
proxy and information statements and other information that is filed
electronically with the Commission. This web site can be accessed at
http://www.sec.gov.
We have filed with the Commission a registration statement on Form S-3
under the Securities Act with respect to the securities offered under this
prospectus. This prospectus does not contain all of the information in the
registration statement, parts of which we have omitted, as allowed under the
rules and regulations of the Commission. You should refer to the registration
statement for further information with respect to us and our securities.
Statements contained in this prospectus as to the contents of any contract or
other document should be read in conjunction with the relevant contract or
document filed as an exhibit to the registration statement. Copies of the
registration statement, including exhibits, may be inspected without charge at
the Commission's principal office in Washington, D.C., and you may obtain copies
from this office upon payment of the fees prescribed by the Commission.
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TABLE OF CONTENTS
PAGE
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About this Prospectus................. i
Forward Looking Statements............ i
Incorporation by Reference............ ii
Summary............................... 1
Risk Factors.......................... 4
Ratio of Earnings to Fixed Charges.... 9
Use of Proceeds....................... 10
Selling Holders....................... 10
Plan of Distribution.................. 11
Description of the Notes.............. 13
Description of Capital Stock.......... 25
Material United States Federal Income
Tax Considerations.................. 28
Legal Matters......................... 31
Experts............................... 31
Additional Information................ 32
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WABASH NATIONAL CORPORATION
$125,000,000
3.25% CONVERTIBLE SENIOR
NOTES DUE AUGUST 1, 2008
6,510,416 SHARES
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
, 2004
------------------------------------------------------
------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses to be paid by the
Company in connection with the distribution of the securities being registered
hereby. All the amounts are estimates, except the Commission registration fee.
The selling stockholders will bear the cost of all selling commissions and
underwriting discounts with respect to the sale of any securities by them.
Securities and Exchange Commission registration fee............. $ 10,113
Legal fees and expenses ........................................ $ 250,000
Accounting fees................................................. $ 120,000
Printing and miscellaneous expenses............................. $ 120,000
---------
Total........................................................... $ 500,113
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's board of directors to grant, indemnity to directors
and officers under some circumstances for liabilities incurred in connection
with their activities in such capacities (including reimbursement for expenses
incurred). Article TENTH of the Company's Certificate of Incorporation provides
that it will indemnify its directors and officers to the fullest extent
permitted by law and that directors shall not be liable for monetary damages to
the Company or its stockholders for breach of fiduciary duty, except to the
extent not permitted under Delaware General Corporation Law. In addition, the
Company's Amended and Restated Bylaws provide that any director or officer who
was or is a party or is threatened to be made a party to any action or
proceeding by reason of his or her services to the Company will be indemnified
to the fullest extent permitted by the Delaware General Corporation Law.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------ -------------------
4.01 Specimen Common Stock Certificate (2)
4.02 Shareholder Rights Agreement dated November 7, 1995 (3)
4.03 First Amendment to Shareholder Rights Agreement dated October 21, 1998 (4)
4.05 Second Amendment to Shareholder Rights Agreement dated December 18, 2000 (5)
4.06 Indenture for the 3.25% Convertible Senior Notes due August 1, 2008, between the Company, as issuer,
and Wachovia Bank, National Association, as Trustee, dated as of August 1, 2003 (1)
4.07 Registration Rights Agreement for 3.25% Convertible Senior Notes due August 1, 2008, dated as of
August 1, 2003 (1)
5.01 Opinion of Hogan & Hartson L.L.P. (6)
12.01 Statement of Computation of Ratios of Earnings to Fixed Charges (1)
23.01 Consent of Ernst & Young LLP (7)
23.02 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5.01) (6)
24.01 Powers of Attorney (1)
25.01 Statement of Eligibility of Trustee on Form T-1 (1)
99.01 Purchase Agreement for the 3.25% Convertible Senior Notes due August 1, 2008, dated as of July 28, 2003 (7)
-------------------
(1) Previously filed.
(2) Incorporated by reference to the registrant's registration
statement on Form S-1 (No. 33-42810) or the registrant's registration
statement on Form 8-A filed December 7, 1995 (Item 3.02 and 4.02).
(3) Incorporated by reference to the registrant's registration
statement on Form 8-A filed December 7, 1995.
(4) Incorporated by reference to the registrant's Form 8-K filed on
October 26, 1998.
II-1
(5) Incorporated by reference to the registrant's Amended Form 8-A
filed January 18, 2001.
(6) To be filed by amendment.
(7) Filed herewith.
The registrant undertakes to provide to each shareholder requesting the same a
copy of each exhibit referred to herein upon payment of a reasonable fee limited
to the registrant's reasonable expenses in furnishing such exhibit.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities and Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lafayette, State of Indiana, on January 8, 2004.
WABASH NATIONAL CORPORATION
By: /s/ Mark R. Holden
_______________________________
Mark R. Holden
Senior Vice President and Chief
Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT IN THE CAPACITIES AND ON THE DATE INDICATED.
DATE SIGNATURE AND TITLE
---- -------------------
January 8, 2004 By: /s/ William P. Greubel
-----------------------------------------
William P. Greubel
President, Chief Executive Officer and
Director
(Principal Executive Officer)
January 8, 2004 By: /s/ Mark R. Holden
-----------------------------------------
Mark R. Holden
Senior Vice President and Chief Financial
Officer (Principal Financial Officer and
Principal Accounting Officer)
January 8, 2004 By: /s/ John T. Hackett*
-----------------------------------------
John T. Hackett
Chairman of the Board of Directors
January 8, 2004 By: /s/ David C. Burdakin*
-----------------------------------------
David C. Burdakin
Director
January 8, 2004 By: /s/ Ludvik F. Koci*
-----------------------------------------
Ludvik F. Koci
Director
January 8, 2004 By: /s/ Martin C. Jischke*
-----------------------------------------
Dr. Martin C. Jischke
Director
* pursuant to a power of attorney
By: /s/ Mark R. Holden
---------------------------
Mark R. Holden
Attorney-in-Fact
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EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------ -------------------
4.01 Specimen Common Stock Certificate (2)
4.02 Shareholder Rights Agreement dated November 7, 1995 (3)
4.03 First Amendment to Shareholder Rights Agreement dated October 21, 1998 (4)
4.05 Second Amendment to Shareholder Rights Agreement dated December 18, 2000 (5)
4.06 Indenture for the 3.25% Convertible Senior Notes due August 1, 2008, between the Company, as issuer,
and Wachovia Bank, National Association, as Trustee, dated as of August 1, 2003 (1)
4.07 Registration Rights Agreement for 3.25% Convertible Senior Notes due August 1, 2008, dated as of
August 1, 2003 (1)
5.01 Opinion of Hogan & Hartson L.L.P. (6)
12.01 Statement of Computation of Ratios of Earnings to Fixed Charges (1)
23.01 Consent of Ernst & Young LLP (7)
23.02 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5.01) (6)
24.01 Powers of Attorney (1)
25.01 Statement of Eligibility of Trustee on Form T-1 (1)
99.01 Purchase Agreement for the 3.25% Convertible Senior Notes due August 1, 2008, dated as of
July 28, 2003 (7)
-------------------
(1) Previously filed.
(2) Incorporated by reference to the registrant's registration
statement on Form S-1 (No. 33-42810) or the registrant's
registration statement on Form 8-A filed December 7, 1995 (Item
3.02 and 4.02).
(3) Incorporated by reference to the registrant's registration
statement on Form 8-A filed December 7, 1995.
(4) Incorporated by reference to the registrant's Form 8-K filed
on October 26, 1998.
(5) Incorporated by reference to the registrant's Amended Form
8-A filed January 18, 2001.
(6) To be filed by amendment.
(7) Filed herewith.
II-4