As filed with the Securities and Exchange Commission on April 27, 2004
Registration No. 333-_______
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
NOBLE INTERNATIONAL LTD.
(Exact name of registrant as specified in its charter)
Delaware 38-3139487
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Noble International Ltd.
28213 Van Dyke Road
Warren, Michigan 48093
(586) 751-5600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
-------------------------------------
Michael C. Azar, Esq.
Vice President, General Counsel and Secretary
Noble International Ltd.
28213 Van Dyke Road
Warren, Michigan 48093
(586) 751-5600
Fax: (586) 751-5601
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------------------
with a copy to:
Patrick D. Daugherty
Foley & Lardner LLP
150 W. Jefferson Street, Suite 1000
Detroit, Michigan 48226
(313) 963-6200
Fax: (313) 963-9308
-------------------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement, as determined
by the selling shareholders.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Title of Each Class of Amount to Be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
Securities to Be Registered Registered Price Per Share Offering Price Registration Fee
------------------------------------------------------------------------------------------------------------------------------------
4.00% Convertible Subordinated $40,000,000.00 100% (1) $40,000,000.00 $10,560.00 (2)
Notes
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Common Stock, par value $.001 (2) (2) (2) (3)
per share.......................
====================================================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended.
(2) Includes 1,562,500 shares of common stock that may become issuable upon
conversion of the notes, which is 125% of the 1,250,000 shares of common
stock currently issuable upon conversion of the notes based on an
initial conversion price of $32.00 per share. Pursuant to Rule 416 under
the Securities Act, such number of shares of common stock registered
hereby shall include an indeterminate number of shares of common stock
that may be issued in connection with a stock split, stock dividend,
recapitalization or similar event as well as pursuant to the conversion
rate adjustments described in the registration statement.
(3) Pursuant to Rule 457(i), there is no additional filing fee with respect to
the shares of common stock issuable upon conversion of the notes because
no additional consideration will be received in connection with the
exercise of the conversion privilege.
-------------------------------------
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
NOBLE INTERNATIONAL, LTD.
$40,000,000.00
4.00% Convertible Subordinated Notes due 2007
We sold $40,000,000 aggregate principal amount of 4.00% convertible subordinated
notes due March 31, 2007 in a private placement on March 26, 2004. The selling
security holders listed on page 18 may use this prospectus to resell their
Notes and the common stock issuable upon conversion or redemption of their
Notes. We are registering the Notes and shares for resale, but the registration
of these Notes and shares does not necessarily mean that the selling shareholder
will sell any of the Notes or shares.
The Notes
* The Notes bear interest at the rate of 4.00% per annum.
Interest on the Notes is payable on January 1, April 1, July
1, and October 1 of each year, beginning on July 1, 2004. The
Notes have a three year term and will mature on March 31,
2007, unless earlier converted or redeemed by us, or unless
extended for up to another three years at the holder's option.
* Holders may convert the Notes into shares of our common stock
at an initial conversion price of $32.00 per share, subject to
adjustment upon certain events. We have the right to convert
the Notes into shares of our common stock if at any time after
March 26, 2006 the weighted average price of our common stock
exceeds $64.00 for each of any 15 consecutive trading days,
and upon satisfaction of certain other conditions as set forth
in the Notes.
* If an event of default occurs under the Notes or if we
consummate a change of control transaction, Holders may
require us to redeem the Notes. The redemption price upon the
occurrence of these events would depend upon the event and the
price of our common stock at the time and would be between the
principal amount of the Notes, plus accrued and unpaid
interest, being redeemed and some premium over that amount.
* The Notes rank junior in right of payment to all of our
existing and future senior indebtedness. The Notes rank senior
to certain other indebtedness, and pari passu with our 6%
convertible subordinated debentures.
* The Notes are not listed on any securities exchange. If
requested in writing by the holders of Notes representing not
less than a majority of the aggregate principal amount of the
then outstanding Notes, we will use our reasonable best
efforts to apply for and effect the quotation of the Notes on
the PORTAL market.
Our Common Stock
* Our common stock is traded on the Nasdaq National Market under
the symbol "NOBL." On April 23, 2004, the last reported sale
price of our common stock was $32.24 per share.
-------------------------------------
Investing in the Notes and our common stock involves risks. See "Risk
Factors" beginning on page 8 for a discussion of these risks.
-------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the sale of the notes or the common stock
or determined that the information in this prospectus is accurate and complete.
It is illegal for any person to tell you otherwise.
-------------------------------------
_____________, 2004.
TABLE OF CONTENTS
Summary......................................................................1
The Company..................................................................5
Forward-Looking Statements...................................................8
Risk Factors.................................................................8
Use of Proceeds.............................................................16
Price Range of Common Stock.................................................16
Selling Shareholders........................................................17
Plan of Distribution........................................................19
Description of Notes........................................................21
Description of Capital Stock................................................34
Certain Material United States Federal Income Tax Consequences..............36
Legal Matters...............................................................44
Experts.....................................................................44
Where You Can Find More Information.........................................44
Incorporation of Certain Documents by Reference.............................44
ABOUT THIS PROSPECTUS
This prospectus is a part of the registration statement that we filed
with the Securities and Exchange Commission. The selling shareholders named in
this prospectus may from time to time sell the securities described in the
prospectus. You should read this prospectus together with the more detailed
information regarding our company, our common stock, and our financial
statements and notes to those statements that appear elsewhere in this
prospectus and any applicable prospectus supplement together with the additional
information that we incorporate in this prospectus by reference, which we
describe under the heading "Incorporation of Certain Documents By Reference."
You should rely only on the information contained in, or incorporated
by reference in, this prospectus and in any accompanying prospectus supplement.
We have not authorized anyone to provide you with information different from
that contained in, or incorporated by reference in, this prospectus. The common
stock is not being offered in any jurisdiction where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of the
prospectus or prospectus supplement, as applicable.
i
SUMMARY
This summary highlights selected information contained elsewhere in or
incorporated by reference into this prospectus. This summary is not complete and
does not contain all of the information that you should consider before deciding
whether or not to invest in the notes. For a more complete understanding of our
company and the notes, we encourage you to read this entire document, including
"Risk Factors," the financial information included in or incorporated by
reference into this prospectus and the documents to which we have referred.
Unless otherwise indicated or required by the context, as used in this
prospectus, the terms "we," "our" and "us" refer to Noble International, Ltd.
and all of our subsidiaries that are consolidated under accounting principles
generally accepted in the United States, or GAAP.
THE COMPANY
Noble International Ltd., through its subsidiaries, is a full-service
provider of tailored laser welded blanks for the automotive industry. Noble's
laser-welded blanks are manufactured from two or more blanks of varying
thickness and sizes welded together utilizing automated laser assemblies, and
are used by original equipment manufacturers or their suppliers in automobile
body components such as doors, fenders, bodyside panels, and pillars.
Noble operates four locations in Michigan, Kentucky and Canada. During
the first quarter of 2004, the Company opened a facility in Australia. Noble's
executive offices are located at 28213 Van Dyke Ave, Warren, MI 48093, and its
telephone number is (586) 751-5600. Noble's common stock is traded on the NASDAQ
National Market under the symbol NOBL.
1
THE OFFERING
The summary below describes the principal terms of the Notes. Certain
of the terms and conditions described below are subject to important limitations
and exceptions. The "Description of Notes" section of this prospectus contains a
more detailed description of the terms and conditions of the Notes.
Issuer Noble International, Ltd.
Notes Offered $40,000,000.00 in aggregate principal
amount of 4.00% Convertible Subordinated
Notes.
Maturity March 31, 2007, unless earlier converted,
redeemed, or repurchased. The holders of
each note have the right to extend the
maturity date for period not to exceed
three years.
Ranking The notes rank (i) junior in right of
payment to all of our existing and future
senior indebtedness (ii) equally in
right of payment with all of our
subordinated indebtedness, including our
6.00% convertible subordinated debentures
issued under an Indenture dated as of
July 23, 1998, between the Company and
American Stock Transfer & Trust Company,
as trustee, and (iii) senior to all
other indebtedness.
Interest 4.00% per annum on the principal amount,
payable quarterly in arrears on January
1, April 1, July 1, and October 1 of each
year, beginning on July 1, 2004.
Conversion Rights You may convert the notes into
shares of our common stock at an initial
conversion price of $32.00 per share,
subject to adjustment upon certain
events.
Mandatory Conversion We have the right to convert the notes
into shares of our common stock if at any
time after March 26, 2006 the weighted
average price of our common stock exceeds
200% of $32.00 for each of any fifteen
consecutive trading days, and upon
satisfaction of certain other conditions
as set forth in the notes.
Repurchase of Notes upon an Event You may require us to repurchase the
of Default at the option of the notes upon an event of default
Holder under the notes at a price equal to the
greater of (i) the product of (A) the
principal amount of the notes, plus
accrued by unpaid interest, being
redeemed and (B) 120% upon certain events
of default and 100% upon others, or (ii)
the product of (A) the principal amount
of the notes, plus accrued by unpaid
interest, being redeemed divided by the
conversion price then in effect and (B)
the closing sales price of our common
stock on the date immediately preceding
the event of default.
Change in Control You may require us to repurchase the
notes upon a change of control at a price
equal to the greater of (i) the
principal amount of the notes, plus
accrued by unpaid interest, being
redeemed times the quotient determined by
dividing the closing sales price of our
2
common stock immediately following
announcement of such change of control by
the conversion price, and (ii) 110% of
the principal amount of the notes, plus
accrued by unpaid interest, being
redeemed.
Use of Proceeds We will not receive any of the proceeds
from the sale by any selling security-
holder of the notes or the common stock
issuable upon conversion.
Trading The notes sole in the initial private
placement are eligible for trading in the
PORTAL system. The notes sold using this
prospectus will no longer be eligible for
trading in the PORTAL system. We do not
intend to list the notes on any national
securities exchange or in any automated
quotation system. Our common stock is
listed on the Nasdaq National Market
under the symbol "NOBL."
Anti-Dilution Protection Subject to customary exceptions, the
conversion rate of the notes is subject
to a broad-based weighted average anti-
dilution adjustment in the event that we
issue additional shares of common stock
(or warrants, option or other securities
convertible into common stock) at a
purchase price less than the then
applicable conversion price. The
conversion will also be subject to
proportional adjustment for stock splits,
stock dividends, recapitalizations and
the like.
Participation Rights The holders are entitled to dividends and
distributions made to holders of our
common stock to the extent that such
dividends or distributions exceed in any
twelve-month period from the date of
issuance of the notes until March 26,
2007, $0.48 per share. The holders are
entitled to such dividends and
distributions to the extent of such
excess, as if the holders had converted
the notes into common stock and held such
shares on the record date for such
dividends and distributions.
Purchase Rights and Other If at any time we grant, issue or sell
Corporate Events any options, convertible securities or
rights to purchase stock, warrants,
securities or other property pro rata to
the record holders of any class of common
stock, then the holders will be entitled
to acquire, upon the terms applicable
to such purchase rights, the aggregate
purchase rights which the holders could
have acquired if the holders had held the
number of shares of common stock
acquirable upon complete conversion of
the notes immediately before the date on
which a record is taken for the grant,
issuance or sale of such purchase rights,
or, if no such record is taken, the date
as of which the record holders of common
stock are to be determined for the grant,
issue or sale of such purchase rights.
Prior to the consummation of any
recapitalization, reorganization,
consolidation, merger, spin-off or other
business combination (other than a Change
of Control (as defined below)) pursuant
to
3
which holders of common stock are
entitled to receive securities or other
assets with respect to or in exchange for
common stock, we are required to make
appropriate provision to insure that the
holders will thereafter have the right to
receive upon a conversion of the notes,
(i) in addition to the shares of common
stock receivable upon such conversion,
such securities or other assets to which
the holders would have been entitled
with respect to such shares of common
stock had such shares of common stock
been held by the holders upon the
consummation of such corporate event or
(ii) in lieu of the shares of common
stock otherwise receivable upon such
conversion, such securities or other
assets received by the holders of common
stock in connection with the consummation
of such corporate event in such amounts
as the holders would have been entitled
to receive had the notes initially been
issued with conversion rights for the
form of such consideration (as opposed to
shares of common stock) at a conversion
rate for such consideration commensurate
with the conversion rate.
You should carefully consider the information set forth in the section
of this prospectus entitled "Risk Factors," beginning on page 8, as well as
other information included in or incorporated by reference into this prospectus
before deciding whether to invest in the notes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our historical ratio of earnings to fixed
charges for each of the five most recent fiscal years and our pro forma ratio of
earnings to fixed charges for fiscal 2003. The pro forma ratio gives effect to
the offering of the notes, which we completed in March 2004, and the application
of the net proceeds from the offering of the notes, as if each such event had
occurred on January 1, 2003.
Year ended December 31,
----------------------------------------------------------------------------------------
Pro forma year ended
1999 2000 2001 2002 2003 December 31, 2003
------------------ ---------------- ----------------- ----------------- ---------------- ----------------------------
4.56 1.27 3.68 3.43 4.24 4.00
For purposes of calculating the ratio of earnings to fixed charges:
(1) "earnings" represents income from continuing operations before
income taxes, plus fixed charges (excluding capitalized
interest); and
(2) "fixed charges" consists of interest expense (including
capitalized interest), amortization of debt issuance costs and
that portion of rental expense considered to be a reasonable
approximation of interest.
4
THE COMPANY
Noble International Ltd., through its subsidiaries, is a full-service
provider of tailored laser welded blanks for the automotive industry. Noble's
laser welded blanks are manufactured from two or more blanks of varying
thickness and sizes welded together utilizing automated laser assemblies, and
are used by original equipment manufacturers or their suppliers in automobile
body components such as doors, fenders, bodyside panels, and pillars.
Noble operates four locations in Michigan, Kentucky and Canada. During
the first quarter of 2004, the Company opened a facility in Australia. Executive
offices are located at 28213 Van Dyke Ave, Warren, MI 48093, tel. (586)
751-5600. Noble's common stock is traded on the NASDAQ National Market under the
symbol NOBL.
History and Business Development
Noble International, Ltd. ("Noble") was incorporated on October 3, 1993
in the State of Michigan. On June 29, 1999 Noble reincorporated in the State of
Delaware. Since its formation in 1993, Noble has completed over two dozen
significant acquisitions and divestitures (the "Acquisitions"). As used in this
prospectus, the term "Company" refers to Noble and its subsidiaries and their
combined operations, after consummation of all the Acquisitions.
In 1996, the Company completed the acquisitions of Noble Component
Technologies, Inc. ("NCT"), Monroe Engineering Products, Inc. ("Monroe"), and
Cass River Coatings, Inc. ("Vassar").
In 1997, the Company completed the acquisitions of Skandy Corp.
("Skandy"), Utilase Production Processing, Inc. ("UPP"), Noble Metal Forming,
Inc. ("NMF"), and Noble Metal Processing, Inc. ("NMP"). In November 1997, the
Company completed an initial public offering of 3.3 million shares of common
stock resulting in gross proceeds of $29.7 million.
In 1998, the Company completed the acquisitions of Tiercon Plastics,
Inc. ("TPI"), Tiercon Coatings, Inc. ("TCI"), and Noble Metal Processing-
Midwest, Inc. ("NMPM").
In 1999, TPI and TCI were combined with and into Tiercon Industries,
Inc. ("Tiercon"). TPI and TCI continued to operate as separate divisions of
Tiercon. On August 31, 1999 the Company purchased certain assets of Jebco
Manufacturing, Inc. ("Jebco").
In 2000, the Company completed the sale of Noble Canada, Inc. ("Noble
Canada") including Tiercon (the "Tiercon Sale"). As part of the Tiercon Sale the
Company sold Vassar and NCT. The Tiercon Sale comprised all of the operating
companies classified as the Company's plastics and coatings division.
In 2000, the Company completed the acquisition of Noble Logistics
Services, Inc. ("NLS-TX"), (formerly known as DSI Holdings, Inc. ("DSI")). In
addition, in 2000, the Company completed the acquisition of Noble Logistic
Services, Inc. ("NLS-CA"), (formerly known as Assured Transportation & Delivery,
Inc. ("ATD") and its affiliate, Central Transportation & Delivery, Inc.
("CTD")).
In 2000, the Company completed the acquisition of Pro Motorcar
Products, Inc. ("PMP") and its affiliated distribution company, Pro Motorcar
Distribution, Inc. ("PMD").
On February 16, 2001, the Company acquired a 49% interest in S.E.T.
Steel, Inc. ("SET") for $3.0 million (the "SET Acquisition"). SET is a Qualified
Minority Business Enterprise, providing metal
5
processing services to original equipment manufacturers ("OEMs").
Contemporaneously with the SET Acquisition, the Company, through its wholly
owned subsidiary Noble Manufacturing Group, Inc. ("NMG") (formerly known as
Noble Technologies, Inc.), sold all of the capital stock of NMPM and NMF to SET
for $27.2 million (the "SET Sale"). On February 16, 2001, the Company received a
note for $27.2 million due June 14, 2001. On June 28, 2001, SET completed bank
financing of its purchase of NMF and NMPM and repaid the $27.2 million note to
the Company with $24.7 million in cash and a $4.0 million, 12% subordinated note
due in 2003. In addition, the Company guaranteed $10.0 million of SET's senior
debt. During the quarter ended September 30, 2001, SET repurchased the Company's
49% interest for $3.0 million. The Company received a $3.0 million, 12%
subordinated note due in 2003. On April 1, 2002, the Company converted its $7.6
million note receivable, including interest, from SET Enterprises, Inc. ("SET")
into preferred stock of SET. The preferred stock was non-voting and was
redeemable at the Company's option in 2007. The Company agreed to convert the
subordinated promissory note to preferred stock in order to assist SET in
obtaining capital without appreciably decreasing the Company's repayment rights
or jeopardize SET's minority status. Management believes that continued support
of SET furthers the joint strategic objectives of the two companies. On August
1, 2003 SET completed its acquisition of Michigan Steel Processing, Inc.
("MSP"), a subsidiary of Sumitomo Corporation of America ("SCOA"). As part of
the transaction, SCOA contributed 100% of the common stock of MSP in exchange
for 45% of the common stock of SET. In addition, the Company reduced its
guarantee of SET's senior debt from $10.0 million to $3.0 million for a period
of one year, after which the guarantee may be eliminated. The Company exchanged
its $7.6 million non-convertible, non-voting redeemable preferred stock
investment in SET for $7.6 million in Series A non-convertible, non-voting
preferred stock which provides an 8% annual dividend, and is non-redeemable by
the Company. The Series A preferred stock is redeemable by SET at its option. In
connection with the transaction, the Company was issued 4% of the outstanding
common stock of SET.
On June 8, 2001, the Company acquired a 51% interest in SCO Logistics,
Inc. ("SCOL"). SCOL is a provider of logistics management services to the bulk
chemical industry. On October 1, 2001 the Company sold its interest in SCOL to
the management of SCOL for $0.35 million.
On December 18, 2001, the Company, through its wholly owned subsidiary
NMG, purchased 81% of the outstanding capital stock of Noble Construction
Equipment, Inc. ("NCE") (formerly known as Construction Equipment Direct, Inc.
("CED")), for $0.35 million in cash and stock valued at $0.35 million along with
a call right to purchase the balance of the stock. On December 19, 2001, NCE
purchased certain assets and assumed certain liabilities of Eagle-Picher
Industries, Inc.'s construction equipment division for approximately $6.1
million in cash. On December 21, 2001, NMG exercised its call option and
acquired the balance of the stock of NCE.
On October 4, 2002, the Company completed a secondary offering of
925,000 shares of its $0.001 par value common stock. The net proceeds of $8.6
million were used to reduce the Company's long-term debt.
On December 31, 2002, the Company, through its wholly-owned subsidiary
NMG, completed the sale of NCE for $14.0 million in cash. The transaction
resulted in a gain of $0.174 million, net of tax. The proceeds were used to
reduce the Company's long-term debt. The Company completed the transaction with
an entity in which the Company's Chairman and certain other officers have an
interest. An independent committee of the board of directors of the Company was
established to evaluate, negotiate, and complete the transaction. In addition,
an independent fairness opinion regarding the transaction was obtained.
On March 21, 2003, the Company completed the sale of its logistics
group for approximately $11.1 million in cash and notes as well as the
assumption of substantially all payables and liabilities. The transaction
included cash of $2.0 million at closing, two short-term notes totaling
approximately $5.1 million, a $1.5 million three-year amortizing note and a $2.5
million five-year amortizing note. The two
6
long-term notes bear an annual interest rate of 4.5% and will be repaid in equal
monthly installments. On August 14, 2003 the Company and the buyer amended the
repayment terms of the remaining balance on the short-term notes. The amended
terms provide for repayment of the short-term notes by July 31, 2004 and for
payment of interest on the outstanding balance at an annual rate of 7%.
On October 17, 2003, the Company acquired substantially all of the
assets of Prototube, LLC ("Prototube") from Weil Engineering GmbH ("Weil") and
Global Business Support, LLC ("GBS") for $0.1 million in cash plus the
assumption of $1.2 million in liabilities. Prototube manufactures a variety of
products with applications in the aerospace, automotive, housing, oil and other
industries. Its products are roll formed or stamped from flat steel or a laser
welded blank, then, utilizing a proprietary technology, they are formed into a
tube and laser welded. Prototube's production process allows parts to be
produced in several different shapes including round, rectangular and oval from
various types and thicknesses of steel, as well as aluminum. In addition to
multiple thicknesses of metal, Prototube can create multi-diameter products and
join curved surfaces together by adjusting the output power of the laser.
The Company made the decision to exit the distribution (Monroe, PMP,
PMD and Peco Manufacturing, Inc. "Peco") business in the fourth quarter of 2003
and has classified this operation as discontinued. On January 28, 2004 the
Company completed the sale of the distribution business to an entity in which
the Company's Chairman and another officer have an interest for approximately
$5.5 million in cash. An independent committee of the board of directors of the
Company was established to evaluate, negotiate and complete the transaction. In
addition, an independent fairness opinion regarding the transaction was
obtained.
As of December 31, 2003 the Company's continuing operating subsidiaries
are organized into a single reporting segment operating in the automotive supply
business. This segment includes NMP, Noble Metal Processing - Kentucky, LLC
("NMPK"), Noble Metal Processing - Canada, Inc. ("NMPC") and Prototube.
On January 21, 2004, the Company completed the acquisition of Prototech
Laser Welding, Inc. ("LWI") for approximately $14.0 million in cash and the
assumption of approximately $0.7 million in subordinated debt and up to an
additional $1.0 million payable if certain new business is awarded to Noble
within the next twelve months. LWI, based in Clinton Township, Michigan, is a
supplier of laser-welded blanks (LWB) to General Motors.
7
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference statements that
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
We intend such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995, and we are including this statement for purposes
of complying with these safe harbor provisions. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions, including
those set forth under "Risk Factors" below.
Words such as "expect", "anticipate", "intend", "plan", "believe",
"estimate" and variations of such words and similar expressions are intended to
identify such forward-looking statements. We undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed in this report might not
occur.
RISK FACTORS
You should carefully consider the following factors and other
information included or incorporated by reference in this prospectus before
deciding to purchase our notes or our common stock. Any of these risks could
have a material adverse effect on our business, financial condition, results of
operations and prospects, which could in turn have a material adverse effect on
the price of our common stock or the value of our notes. In this case, you may
lose all or part of your investment.
Risks Related to Our Operations
We have a significant amount of outstanding indebtedness, which reduces the cash
available to finance our growth.
In order to finance our operations, including costs related to the
consummation of various acquisitions, we have incurred substantial indebtedness.
Our credit facilities are secured by substantially all of our assets as well as
the assets of our subsidiaries. In addition to certain financial covenants, our
credit facilities restrict our ability to incur additional indebtedness or
pledge assets. As of the date of this prospectus, we are in compliance with all
of the terms of our credit facilities. There can be no assurance, however, that
we will be able to comply with the terms of our credit facilities in the future.
At December 31, 2003, we have a $54 million credit facility (the "Credit
Facility") with a syndicate of banks led by Comerica Bank N.A. as agent,
expiring in July 2006. In January 2004, the credit facility was increased to $74
million primarily to facilitate the acquisition of LWI.
We used the proceeds from our $40 million private placement of our
notes in March 2004 to reduce our balance under the Credit Facility including
retirement of the term loan portion. As of the date of this prospectus, the
outstanding balance of the Credit Facility was $0. However, we are permitted to
draw on the line of credit portion of the Credit Facility, which would increase
our outstanding indebtedness.
We may not be able to meet our debt service obligations without using cash
resources, which could have a material adverse effect on our operations.
Our business is subject to all of the risks associated with substantial
leverage, including the risk that available cash may not be adequate to make
required payments. Our ability to satisfy outstanding debt obligations from cash
flow will be dependent upon our future performance and will be subject to
financial, business and other factors, many of which may be beyond our control.
In the event that we do not have
8
sufficient cash resources to satisfy our repayment obligations, we would be in
default, which would have a material adverse effect on our business. To the
extent that we are required to use cash resources to satisfy interest payments
to the holders of outstanding debt obligations, we will have fewer resources
available for other purposes.
Because we depend on a limited number of customers, the loss or insolvency any
significant customer could cause a significant decline in our net sales and
earnings.
Sales to the automotive industry accounted for all of our sales from
continuing operations in 2003. In addition, our automotive sales are highly
concentrated among a few major OEMs and automotive suppliers. Thus, the loss of
any significant customer could have a material adverse effect on our business.
As is typical in the automotive supply industry, we have no long-term contracts
with any of our customers. Our customers provide annual estimates of their
requirements; however, sales are made on a short-term purchase order basis.
There is substantial and continuing pressure from the major OEMs and Tier I
suppliers to reduce costs, including the cost of products purchased from outside
suppliers. If in the future we are unable to generate sufficient production cost
savings to offset price reductions, our gross margins could be adversely
affected.
We operate in a consolidating industry and face risks relating to recent and
future acquisitions.
The automotive component supply industry is undergoing consolidation as
OEMs seek to reduce both their costs and their supplier base. Future
acquisitions may be made in order to enable us to expand into new geographic
markets, add new customers, provide new products, expand manufacturing and
service capabilities and increase automotive model penetration with existing
customers. There can be no assurance that we will be successful in identifying
appropriate acquisition candidates or in successfully combining operations with
such candidates if they are identified. It should be noted that any acquisitions
could involve the dilutive issuance of equity securities or the incurrence of
debt. In addition, acquisitions involve numerous other risks, including
difficulties in assimilation of the acquired company's operations following
consummation of the acquisition, the diversion of management's attention from
other business concerns, risks of producing products we have limited experience
with, the potential loss of key customers of the acquired company, and the
ability of pre-acquisition due diligence to identify all possible issues that
may arise with respect to products of the acquired company. All these
acquisition risks could materially and adversely affect our financial
performance.
Failure to obtain business on new and redesigned model introductions would
adversely affect our automotive business.
Our automotive product lines are subject to change as our customers,
including both OEMs and Tier I suppliers, introduce new or redesigned products.
We compete for new business both at the beginning of the development phase of
new vehicle models, which generally begins two to five years prior to the
marketing of such models to the public, and upon the redesign of existing
models. Our sales would be adversely affected if we fail to obtain business on
new models, or fail to retain or increase business on redesigned existing
models, or if our customers do not successfully introduce new products
incorporating our products, or if market demand for these new products does not
develop as anticipated.
Our business is dependent upon the continuous improvement of production
technologies.
Our ability to continue to meet customer demands within our automotive
operations with respect to performance, cost, quality and service will depend,
in part, upon our ability to remain technologically competitive with our
production processes. New automotive products are increasingly complex, require
increased welding precision, use of various materials and have to be run at
higher production speeds and with lower scrap ratios in order to reduce costs.
The investment of significant additional capital or other
9
resources may be required to meet this continuing challenge. If we are unable to
improve our production technologies, we will lose business and possibly be
forced to exit from the particular market.
Our dedication of design and engineering resources could have a material adverse
effect on our financial condition.
Within the automotive industry, OEMs and Tier I suppliers require their
suppliers to provide design and engineering input during the product development
process. The direct costs of design and engineering are generally borne by our
customers. However, we bear the indirect cost associated with the allocation of
limited design and engineering resources to such product development projects.
Despite our up-front dedication of design and engineering resources, our
customers are under no obligation to order the subject components or systems
from us following their development. In addition, when we deem it strategically
advisable, we may also bear the direct up-front design and engineering costs as
well. There can be no assurance that our dedication of design and engineering
resources, or up-front design and engineering expenditures, will not have a
material adverse effect on our financial condition or results of operations.
Our operating results may fluctuate because we operate in industries that are
characterized by cyclicality and seasonality, the effects of which may have been
masked by our historical growth trend.
The automotive industry is highly cyclical and dependent on consumer
spending. Economic factors adversely affecting automotive production and
consumer spending could adversely impact our business. In addition, the
automotive component supply industry is somewhat seasonal. Our need for
continued significant expenditures for capital equipment purchases, equipment
development and ongoing manufacturing improvement and support, among other
factors, make it difficult for us to reduce operating expenses in a particular
period if our net sales forecasts for such period are not met, because a
substantial component of our operating expenses are fixed costs. Generally,
revenue and operating income increase during the second calendar quarter of each
year as a result of the automotive industry's spring selling season, which is
the peak sales and production period of the year. Revenue and operating income
generally decrease during July and December of each year as a result of
changeovers in production lines for new model years as well as scheduled OEM
plant shutdowns for vacations and holidays.
Our historical results of operations have generally not reflected
typical cyclical or seasonal fluctuations in revenues and operating income. The
acquisitions and divestitures completed by us have resulted in a growth trend
through successive periods which has masked the effect of typical seasonal
fluctuations. There can be no assurance that our business will continue its
historical growth trend, that it will continue to be profitable or that it will
conform to industry norms for seasonality in future periods.
Our unionized work forces and those of our customers present the risk of labor
interruptions.
Within the automotive supply industry substantially all of the hourly
employees of the OEMs and many Tier I suppliers are represented by labor unions,
and work pursuant to collective bargaining agreements. The failure of any of our
significant customers to reach agreement with a labor union on a timely basis,
resulting in either a work stoppage or strike, could have a material adverse
effect on our business. During 1999, production workers at our NMP facility in
Michigan elected to be represented by the UAW. A three year collective
bargaining agreement was entered into in September 2000 and expired in December
2003. In January 2004, we entered into a new five year collective bargaining
agreement, which expires in December 2008, with the UAW at our NMP facility in
Michigan. Although this plant has never been subject to a strike, lockout or
other major work stoppage, any such incident would have a material adverse
effect on our operating income.
10
We face an inherent risk of product liability exposure within our automotive
operations.
Within the automotive operations, we face an inherent business risk of
exposure to product liability claims if the failure of one of our products
results in personal injury or death. There can be no assurance that material
product liability losses will not occur in the future. In addition, if any of
our products prove to be defective, we may be required to participate in a
recall involving such products. We maintain insurance against product liability
claims, but there can be no assurance that such coverage will be adequate or
will continue to be available to us on acceptable terms or at all. A successful
claim brought against us in excess of available insurance coverage or a
requirement to participate in any product recall could have a material adverse
effect on our business.
Our operating results could be adversely affected by the impact of environmental
and safety regulations.
We are subject to the requirements of federal, state and local
environmental and occupational health and safety laws and regulations. Although
we have made and will continue to make expenditures to comply with environmental
requirements, these requirements are constantly evolving, and it is impossible
to predict whether compliance with these laws and regulations may have a
material adverse effect on us in the future. If a release of hazardous
substances occurs on or from our properties or from any of its disposals at
offsite disposal locations, or if contamination is discovered at any of our
current or former properties, we may be held liable, and the amount of such
liability could be material.
Our business is dependent on our key personnel.
Our operations are dependent upon our ability to attract and retain
qualified employees in the areas of engineering, operations and management, and
are greatly influenced by the efforts and abilities of Robert J. Skandalaris,
Chairman and Christopher L. Morin, President and Chief Executive Officer, as
well as our other executive officers. We have employment agreements with Mr.
Skandalaris, Mr. Morin and several other officers. We do not maintain key-person
life insurance on our executives.
We are subject to risks associated with international operations that could
adversely affect our business.
We operate a production facility in Ontario, Canada, and have opened a
facility during the first quarter of 2004 in Australia. Our business strategy
may include the continued expansion of international operations. As we expand
our international operations, we will increasingly be subject to the risks
associated with such operations, including: (i) fluctuations in currency
exchange rates; (ii) compliance with local laws and other regulatory
requirements; (iii) restrictions on the repatriation of funds; (iv) inflationary
conditions; (v) political and economic instability; (vi) war or other
hostilities; (vii) overlap of tax structures; and (viii) expropriation or
nationalization of assets. The inability to effectively manage these and other
risks could adversely affect our business.
The Failure of SET Enterprises, Inc. could materially adversely affect our
financial condition.
In February 2001, we sold two of our non-core subsidiaries to SET
Enterprises, Inc., a qualified minority business enterprise providing metal
processing services to the automotive OEMs. We currently hold $7.6 million in
face value of 8% Series A non-convertible, non-voting preferred stock of SET. We
provide a guarantee of $3.0 million of SET's senior debt, which is scheduled to
mature in August 2004, incurred in connection with its purchase of our
subsidiaries, and we hold approximately 4% of SET's common stock. Due to the
amounts invested in our relationship with SET, the failure of SET's business
could materially adversely affect our financial condition if it resulted in our
inability to recover our investment in preferred stock and common stock, and
SET's inability to pay dividends, our accounts receivable, and to pay its senior
debt resulting in our requirement to perform under our guarantee.
11
Risks Related to the Notes
Because the holders of our senior indebtedness, including our senior credit
facilities, will have the right to receive payment in full before any payments
can be made in respect of the notes, our assets may not be sufficient to assure
repayment of the notes.
The notes are our general unsecured subordinated obligations.
Accordingly, the payment of principal, premium, if any, and interest on the
notes by us will be junior in right of payment of all our existing and future
senior indebtedness. As a result, in the event of our insolvency, liquidation or
other reorganization, all senior indebtedness and all secured indebtedness must
be paid in full before any amounts owed under the notes may be paid.
Moreover, we may not pay any amount owed under the notes, or
repurchase, redeem or otherwise retire the notes, if any payment default on our
senior indebtedness occurs, unless the default has been cured or waived, the
senior indebtedness is repaid in full or the holders of the senior indebtedness
consent to the payment. In addition, if any other default exists with respect to
senior indebtedness and specified other conditions are satisfied, at the option
of the holders of that senior indebtedness, we may be prohibited from making
payments on the notes for a designated period of time. For additional
information on the subordination terms applicable to the notes, and the amounts
of senior indebtedness to which the notes would be subordinated as of March 31,
2004, see "Description of the Notes--Subordination."
Your right to receive payments on the notes in the event of a bankruptcy,
insolvency or similar proceeding involving us will be effectively subordinated
to all of our secured indebtedness.
The notes are effectively subordinated to all of our secured
indebtedness to the extent of the value of the assets securing that
indebtedness. In the event that we are not able to repay amounts due under the
senior credit facilities, the lenders could proceed against the assets securing
that indebtedness. In that event, any proceeds received upon a realization of
the collateral would be applied first to amounts due under the senior credit
facilities before any proceeds would be available to make payments on the notes.
The value of this collateral may not be sufficient to repay the lenders under
the senior credit facilities, the holders of the notes and our other senior
subordinated indebtedness. In that event, holders of the notes will receive
less, ratably, than our senior creditors, or they may receive no payment at all.
We may incur more indebtedness.
We and our subsidiaries will be able to incur substantial additional
indebtedness in the future. Although some of the agreements governing our
outstanding indebtedness restrict us and our subsidiaries from incurring
additional indebtedness, these restrictions are subject to important exceptions
and qualifications.
Our debt agreements may restrict our ability, and the ability of some of our
subsidiaries, to engage in particular activities.
Our Credit Facility contains financial covenants that require us to
achieve certain financial and operating results and maintain compliance with
specified financial ratios. These covenants could limit our ability to obtain
future financing and may prevent us from taking advantage of attractive business
opportunities. Our ability to meet these covenants or requirements may be
affected by events beyond our control, and we may not be able to satisfy such
covenants and requirements. A breach of these covenants or our inability to
comply with the financial ratios, tests or other restrictions could result in an
event of default under the agreements governing our outstanding indebtedness,
including the notes.
We may not be able to repurchase the notes at the option of the holder or upon a
change of control, which may increase your credit risk.
12
Upon an event of default under the notes or upon a change of control,
the holders of the notes have the right to require us to redeem all or a portion
of their notes. The redemption price upon the occurrence of these events could
be a significant premium over the outstanding balance of the notes. However, we
may not have enough available cash or be able to obtain third-party financing at
the time we are required to make repurchases of tendered notes. Our failure to
redeem tendered notes at a time when the redemption is required by the notes
would constitute a default under the notes.
In addition, a default under the notes or the change in control itself
could lead to a default under other existing and future agreements governing our
indebtedness. If the repayment of the related indebtedness were to be
accelerated after any applicable notice or grace periods, we may not have
sufficient funds to repay the indebtedness and repurchase the notes.
The definition of change of control for purposes of the notes does not
necessarily afford protection for the holders of the notes in the event of some
types of highly leveraged transactions.
We may enter into some types of highly leveraged transactions,
including acquisitions, mergers, refinancings, restructurings or other
recapitalizations, that would not fall within the definition of change of
control for purposes of the notes, although these types of transactions could
increase our indebtedness or otherwise affect our capital structure or credit
ratings and the holders of the notes. The definition of change of control for
purposes of the notes also includes a phrase relating to the sale, lease,
transfer, conveyance or other disposition of "all or substantially all" of our
properties or assets. Although there is a limited body of case law interpreting
the phrase "substantially all," there is no precise established definition under
applicable law. Accordingly, our obligation to make an offer to purchase the
notes, and the ability of a holder of notes to require us to repurchase its
notes pursuant to the offer as a result of a highly leveraged transaction or a
sale, lease, transfer, conveyance or other disposition of less than all of our
assets, taken as a whole, may be uncertain.
You should consider the U.S. federal income tax consequences of owning the
notes.
Both U.S. and non-U.S. holders of the notes should consider the U.S.
federal income tax consequences of the purchase, ownership, conversion and other
disposition of the notes and the ownership and disposition of the common stock
received upon conversion of the notes. Investors considering a purchase of notes
should consult their own tax advisors with respect to the application of the
U.S. federal income tax laws to their particular situations, as well as any tax
consequences arising under the laws pertaining to any other U.S. federal tax
other than the income tax; the laws of any state, local or foreign taxing
jurisdiction; and any applicable tax treaty. Certain material U.S. federal
income tax consequences of the purchase, ownership, conversion and disposition
of the notes and our common stock are summarized in this prospectus under the
heading "Material United States Federal Income Tax Considerations."
There is no established trading market for the notes.
The notes are a new issue of securities for which there is no
established trading market. Although upon the request of the majority holders of
the notes we will use our reasonable best efforts to make the notes eligible for
trading in the PORTAL market, notes sold using this prospectus will no longer be
eligible for trading in the PORTAL market. We do not intend to apply for listing
of the notes on any other securities exchange or to arrange for quotation on any
automated dealer quotation system. As a result, a final active trading market
for the notes may not develop. If a final active trading market does not develop
or is not maintained, the market price and liquidity of the notes may be
adversely affected.
You may not be able to sell your notes or the common stock issuable
upon conversion of the notes at a particular time or you may not be able to sell
your notes or the common stock at a favorable price. Future trading prices of
the notes and the common stock will depend on many factors, including:
13
o our operating performance and financial condition;
o the interest of securities dealers in making a market; and
o the market for similar securities.
Historically, the markets for non-investment grade debt securities,
such as the notes, have been subject to disruptions that have caused volatility
in prices. It is possible that the markets for the notes and our common stock
will be subject to disruptions. Any such disruptions may have a negative effect
on you as a holder of the notes or the common stock issuable upon conversion of
the notes, regardless of our prospects and financial performance.
Risks Related to Our Common Stock
Future sales of our common stock could depress our stock price.
We cannot predict the effect that future sales of common stock will
have on the market price of the common stock. Sales of substantial amounts of
common stock, or the perception that such sales could occur, could adversely
affect the market price of the common stock. Approximately 22,233 of the shares
of common stock currently issued and outstanding are "restricted securities" as
that term is defined under Rule 144 under the Securities Act of 1933 and may not
be sold unless they are registered or unless an exemption from registration,
such as the exemption provided by Rule 144, is available. All of these
restricted securities are currently eligible for resale pursuant to Rule 144,
subject in most cases to the volume and manner of sale limitations prescribed by
Rule 144.
We may issue additional shares of common stock and thereby materially and
adversely affect the price of our common stock and the notes.
We are not restricted from issuing additional common stock during the
life of the notes. If we issue additional shares of common stock, the price of
our common stock and, in turn, the price of the notes may be materially and
adversely affected.
Future sales of our common stock in the public market could lower the market
price for our common stock and adversely impact the trading price of the notes.
We may, in the future, sell additional shares of our common stock to
raise capital. We may also issue additional shares of our common stock to
finance future acquisitions. Further, a substantial number of shares of our
common stock are reserved for issuance pursuant to stock options and upon
conversion of the notes and our outstanding convertible notes. We cannot predict
the size of future issuances or the effect, if any, that they may have on the
market price for our common stock. The issuance of substantial amounts of common
stock, or the perception that such sales may occur, could adversely affect the
market price for our common stock and/or the trading price for the notes.
Conversion or redemption of the notes into or with our common stock will dilute
the ownership interests of existing stockholders, including holders who had
previously converted their notes.
The conversion or redemption of some or all of the Notes into or
with our common stock will dilute the ownership interests of existing
stockholders. Any sales in the public market of the common stock issuable upon
such conversion could adversely affect prevailing market prices of our common
stock. In addition, the existence of the Notes may encourage short selling
by market participants because the conversion of the Notes could depress
the price of our common stock.
14
We may experience volatility in our stock price that could affect your
investment.
The price of our common stock has been, and may continue to be, highly
volatile in response to various factors, many of which are beyond our control,
including:
o developments in the industries in which we operate;
o actual or anticipated variations in quarterly or annual operating
results;
o speculation in the press or investment community; and
o announcements of technological innovations or new products by us or our
competitors.
Our common stock's market price may also be affected by our inability
to meet analyst and investor expectations and failure to achieve projected
financial results, including those set forth in this prospectus. Any failure to
meet such expectations or projected financial results, even if minor, could
cause the market price of our common stock to decline. Volatility in our stock
price may result in your inability to sell your shares at or above the price at
which you purchased them in this offering.
In addition, stock markets have generally experienced a high level of
price and volume volatility, and the market prices of equity securities of many
companies have experienced wide price fluctuations not necessarily related to
the operating performance of such companies. These broad market fluctuations may
adversely affect our common stock's market price. In the past, securities class
action lawsuits frequently have been instituted against such companies following
periods of volatility in the market price of such companies' securities. If any
such litigation is instigated against us, it could result in substantial costs
and a diversion of management's attention and resources, which could have a
material adverse effect on our business, results of operations, and financial
condition.
Our executive officers and directors control a significant percentage of our
common stock and these stockholders may take actions that are adverse to your
interests.
Robert J. Skandalaris owns and/or controls approximately 26% of our
outstanding common stock. As a result, Mr. Skandalaris is able to exert
significant influence over the outcome of all matters submitted to a vote of our
stockholders, including the election of directors, amendments to our certificate
of incorporation and approval of significant corporate transactions. Such
consolidation of voting power could also have the effect of delaying, deterring
or preventing a change in control that might be beneficial to other
stockholders.
Antitakeover provisions in our certificate of incorporation and bylaws and
provisions of Delaware law could delay or prevent a change of control that you
may favor.
Certain provisions of our certificate of incorporation and bylaws may
inhibit changes in control of us not approved by the board of directors. These
provisions include: (i) a prohibition on stockholder action through written
consents; (ii) a requirement that special meetings of stockholders be called
only by the board of directors; (iii) advance notice requirements for
stockholder proposals and nominations; (iv) limitations on the ability of
stockholders to amend, alter or repeal the bylaws; and (v) the authority of the
board of directors to issue, without stockholder approval, preferred stock with
such terms as the board of directors may determine. We will also be afforded the
protections of Section 203 of the Delaware General Corporation Law, which could
have similar effects.
15
USE OF PROCEEDS
The selling stockholders will receive all of the proceeds from the sale
of the notes and common stock issuable upon conversion of the notes. We will not
receive any of the proceeds from the sale of the notes or the common stock
issuable upon conversion of the notes offered by the selling stockholders under
this prospectus, but we have agreed to pay the expenses of preparing this
prospectus and the related registration statement.
We received net proceeds of approximately $38.4 million from our sale
of the notes to the initial purchasers, after deducting the estimated offering
expenses payable by us. We used the net proceeds of the offering to pay off our
term loan and reduce the amount outstanding under our revolving credit line.
PRICE RANGE OF COMMON STOCK
Our common stock is quoted on the Nasdaq National Market under the
trading symbol "NOBL." The following table lists, on a per share basis for the
periods indicated, the high and low closing sale prices for the common stock as
reported by the Nasdaq National Market:
Common Stock Price
Fiscal Year Ended December 31, --------------------
High Low
-------------------------------------------------------- ---------- --------
2002
First Quarter $ 14.50 $ 7.91
Second Quarter $ 16.00 $ 10.45
Third Quarter $ 11.69 $ 8.65
Fourth Quarter $ 11.10 $ 6.41
2003
First Quarter $ 8.89 $ 5.61
Second Quarter $ 8.78 $ 5.84
Third Quarter $ 12.14 $ 8.60
Fourth Quarter $ 23.22 $ 11.11
2004
First Quarter $ 28.60 $ 22.15
Second Quarter (through April 23, 2004) $ 32.24 $ 26.00
As of March 15, 2004, there were approximately 74 record holders and
approximately 2,350 beneficial holders of our common stock. On April 23, 2004,
the last reported sale price of our common stock as quoted on the Nasdaq
National Market was $32.24 per share.
16
SELLING SHAREHOLDERS
The notes were originally issued by us pursuant to a Securities
Purchase Agreement, dated as of March 25, 2004 by and among the Company and the
buyers party thereto in transactions exempt from the registration requirements
of the federal securities laws. The selling shareholders (which term includes
their transferees, pledges, donees or successors) may from time to time offer
and sell pursuant to this prospectus any and all of the notes and the shares of
common stock issuable upon conversion of the notes. We are registering the notes
and shares of common stock issuable upon conversion of the notes in order to
permit the selling securityholders to offer the notes and common stock for
resale from time to time. Unless set forth below, none of the selling
securityholders has had a material relationship with us or any of our
predecessors or affiliates within the past three years.
Any or all of the notes or common stock listed below may be offered for
sale pursuant to this prospectus by the selling securityholders 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 securityholders upon consummation of any
such sales. In addition, the selling securityholders identified below may have
sold, transferred, or otherwise disposed of all or a portion of their notes or
shares of common stock since the date on which the information regarding their
notes was provided in transactions exempt from the registration requirements of
the Securities Act.
The table below sets forth the names of each selling securityholder,
the principal amount of the notes that may be offered by such selling
securityholder pursuant to this prospectus and the number of shares of common
stock beneficially owned by such selling securityholders. The third column lists
the number of shares of common stock beneficially owned by each selling
securityholder, based on its ownership of the shares of common stock as of April
23, 2004, assuming conversion of all of the notes held by the selling
securityholders on that date, without regard to any limitations on conversion,
each to the extent known to us as of the date of this prospectus. The terms of
the notes provide that no selling securityholder may convert Notes for
common stock if such conversion or exercise would result in such selling
securityholder beneficially owning more than 9.99% of our outstanding common
stock. Unless otherwise indicated below, each selling securityholder has sole
voting and investment power with respect to its shares of common stock. The
inclusion of any shares in this table does not constitute an admission of
beneficial ownership for the selling securityholder.
The fourth column lists the shares of common stock being offered by
this prospectus by the selling securityholders. The fifth column assumes the
sale of all of the shares of common stock offered by the selling securityholders
pursuant to this prospectus.
The selling securityholders may sell all, some or none of their shares
in this offering. See "Plan of Distribution."
17
Aggregate Aggregate Number of Maximum Number of Beneficial
Principal Principal Shares Shares Registered Ownership
Amount of Notes Amount of Notes Beneficially Hereby(2) After the
at Prior to the that May be Sold Owned Prior Offering (3)
Offering to the
Offering (1)
Name
The Riverview Group LLC (4) $ 20,000,000 $ 20,000,000 625,000 781,250 -0-
Smithfield Fiduciary LLC (5) $ 7,500,000 $ 7,500,000 234,375 292,969 -0-
Mainfield Enterprises, Inc. (6) $ 7,500,000 $ 7,500,000 234,375 292,969 -0-
DKR SoundShore Oasis
Holding Fund Ltd. $ 4,250,000 $ 4,250,000 132,813 166,015 -0-
DKR SoundShore Strategic
Holding Fund Ltd. $ 750,000 $ 750,000 23,438 29,297 -0-
Total $ 40,000,000 $ 40,000,000 1,250,000 1,562,500 -0-
(1) The shares beneficially owned have been determined in accordance with rules
promulgated by the SEC, and the information is not necessarily indicative of
beneficial ownership for any other purpose. The information in the table below
is current as of April 23, 2004.
(2) We are registering 1,562,500 shares of common stock that may become issuable
upon conversion of the notes, which is 125% of the 1,250,000 shares of
common stock currently issuable upon conversion of the notes based on an
initial conversion price of $32.00 per share.
(3) Assumes the sale of all the notes and shares of common stock offered by this
prospectus. We are unable to determine the exact number of notes and shares that
will actually be sold pursuant to this prospectus.
(4) The sole member of Riverview is Millennium Holding Group, L.P., a Delaware
limited partnership ("Holding"). Millennium Management, LLC, a Delaware limited
liability company ("Millennium Management"), is the general partner of Holding.
Israel A. Englander ("Mr. Englander") is the sole managing member of Millennium
Management. The foregoing should not be construed in and of itself as an
admission by any of Holding, Millennium Management or Mr. Englander as to any
beneficial ownership of the shares owned by Riverview.
(5) Highbridge Capital Management, LLC ("Highbridge") is the trading manager of
Smithfield Fiduciary LLC ("Smithfield") and consequently has voting control and
investment discretion over the shares of common stock held by Smithfield. Glenn
Dubin and Henry Swieca control Highbridge. Each of Highbridge and Messrs. Dubin
and Swieca disclaims beneficial ownership of the shares held by Smithfield.
(6) Pursuant to an investment management agreement, Avi Vigder has voting
discretion and investment control over the shares held by Mainfield Enterprises,
Inc. Avi Vigder disclaims beneficial ownership of such shares.
18
PLAN OF DISTRIBUTION
The selling securityholders may, from time to time, sell any or all of
the securities offered by this prospectus on any stock exchange, market or
trading facility on which the securities are traded or in private transactions.
These sales may be at fixed or negotiated prices. The selling securityholders
may use any one or more of the following methods when selling the notes or the
shares of common stock:
o ordinary brokerage transactions and transactions in which the broker-
dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
securities as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the broker-
dealer for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling securityholders to sell a
specified number of such securities at a stipulated price;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling securityholders may also sell the securities under Rule 144
or Rule 144A under the Securities Act, if available, rather than under this
prospectus.
The selling securityholders may also engage in short sales against the
box, puts and calls and other transactions in our securities or derivatives of
our securities and may sell or deliver shares in connection with these trades.
Broker-dealers engaged by the selling securityholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling securityholders (or, if any
broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated. The selling securityholders do not expect these
commissions and discounts to exceed what is customary in the types of
transactions involved. Any profits on the resale of shares of common stock or
notes by a broker-dealer acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, attributable to the sale of
notes or shares of common stock will be borne by a selling securityholder. The
selling securityholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the notes or
shares of common stock if liabilities are imposed on that person under the
Securities Act.
The selling securityholders may from time to time pledge or grant a
security interest in some or all of the notes or shares of common stock owned by
them and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the notes or shares of common
stock from time to time under this prospectus after we have filed an amendment
to this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act of 1933 amending the list of selling
19
securityholders to include the pledgee, transferee or other successors in
interest as selling securityholders under this prospectus.
The selling securityholders also may transfer the notes and shares of
common stock in other circumstances, in which case the transferees, pledgees or
other successors in interest will be the selling beneficial owners for purposes
of this prospectus and may sell the notes and shares of common stock from time
to time under this prospectus after we have filed an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933 amending the list of selling securityholders to include the pledgee,
transferee or other successors in interest as selling securityholders under this
prospectus.
The selling securityholders and any broker-dealers or agents that are
involved in selling the notes and shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the notes and shares of common stock purchased
by them may be deemed to be underwriting commissions or discounts under the
Securities Act. The selling securityholders have advised us that they have
acquired their securities in the ordinary course of business and they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their notes or shares of
common stock, nor is there an underwriter or coordinating broker acting in
connection with a proposed sale of notes or shares of common stock by any
selling securityholder. If we are notified by any selling securityholder that
any material arrangement has been entered into with a broker-dealer for the sale
of notes or shares of common stock, if required, we will file a supplement to
this prospectus.
We are required to pay all fees and expenses incident to the
registration of the notes or shares of common stock. We have agreed to indemnify
the selling securityholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
20
DESCRIPTION OF NOTES
The following description is only a summary of the material provisions
of the notes and the registration rights agreement. We urge you to read the
notes and the registration rights agreement for all of the provisions that may
be important to you. You may request copies of these documents by writing to us
at the address shown under the caption "Where You Can Find More Information and
Incorporation by Reference." For purposes of this section, references to "we,"
"us," "ours" and "Noble" include only Noble International, Ltd., and not its
subsidiaries.
General
We issued the notes having a principal amount of $40,000,000.00 in a
private transaction on March 26, 2004. The notes are unsecured, subordinated
obligations of Noble and will mature on March 31, 2007, unless extended by the
holders at their option as described under "--Extension of Maturity at the
Option of the Holders" or earlier repurchased by us at a holder's option upon an
event of default under the notes as described under "--Repurchase of Notes at
the Option of the Holder upon an Event of Default" or upon a change of control
of Noble as described under "--Right to Require Repurchase of Notes upon a
Change of Control" or converted at a holder's option as described under
"--Conversion at the Option of the Holders" or converted at our option as
described under "--Mandatory Conversion at the Option of Noble."
Interest on the notes will accrue at the rate per annum shown on the
cover page of this prospectus and will be payable in arrears quarterly on
January 1, April 1, July 1, and October 1, commencing on July 1, 2004. Interest
on the notes will accrue from the date of original issuance or, if interest has
already been paid, from the date it was most recently paid. Interest on the
notes will be computed on the basis of a 365-day year and actual days elapsed.
The notes do not contain any restriction on the payment of dividends or the
repurchase of securities of Noble. Other than as described under "--Right to
Require Repurchase of Notes upon a Change of Control," the notes do not contain
any covenants or other provisions to afford protection to holders of notes in
the event of a highly leveraged transaction or a change of control of Noble.
Extension of Maturity at the Option of the Holders
The holder of each note shall have the right, in its sole discretion,
to require that the maturity date of such holder's note be extended for a period
not to exceed three years from the original maturity date, without the action of
any other person, by delivering written notice thereof to us at any time prior
to the original maturity date. The notice shall indicate the new maturity date,
as so extended, of the note. Within two business days of receipt of an extension
notice, we are required to inform all other holders of notes that we have
received such a notice.
Conversion Rights
Conversion at the Option of the Holders
A holder may convert any outstanding notes into shares of our common
stock at an initial conversion price per share of $32.00. This represents an
initial conversion rate of approximately 3,125 shares per $100,000.00 principal
amount of the notes. The conversion price (and resulting conversion rate) is,
however, subject to adjustment in limited circumstances as described below.
The holders are entitled to convert any portion of the outstanding and
unpaid Conversion Amount (as defined below) in increments of at least
$100,000.00 of principal (or such lesser amount if such amount represents the
remaining principal amount) into shares of our common stock at the Conversion
Rate (as defined below). We will not issue any fraction of a share of common
stock upon any conversion. If the issuance would result in the issuance of a
fraction of a share of common stock, we will round such fraction
21
of a share of common stock to the nearest whole share. We will pay any and all
taxes that may be payable with respect to the issuance and delivery of common
stock upon conversion of any Conversion Amount.
The number of shares of our common stock issuable upon conversion of
any Conversion Amount shall be determined by dividing (x) such Conversion Amount
by (y) the Conversion Price (as defined below) (the "Conversion Rate").
"Conversion Amount" means the sum of (A) the portion of the principal to be
converted, redeemed or otherwise with respect to which this determination is
being made, (B) accrued and unpaid interest with respect to such principal and
(C) accrued and unpaid late charges with respect to such principal and interest.
"Conversion Price" initially means, and subject to adjustment as provided
herein, $32.00.
If we shall fail to issue a certificate to a holder or credit the
holder's balance account with DTC for the number of shares of common stock to
which the holder is entitled upon conversion of any Conversion Amount on or
prior to the date which is five business days after the Conversion Date, then
(A) the Company shall pay damages to the holder for each date of such failure in
an amount equal to 1.0% of the product of (I) the sum of the number of shares of
common stock not issued to the holder on or prior to the second business day
following receipt of a conversion notice and to which the holder is entitled,
and (II) the closing sale price of the common stock on the second business day
following receipt of a conversion notice and (B) the holder, upon written notice
to us, may void its conversion notice with respect to, and retain or have
returned, as the case may be, any portion of the holder's note that has not been
converted pursuant to such conversion notice.
In the event that we receive notices from more than one holder for the
same conversion date and we can convert some, but not all, of such portions of
the notes submitted for conversion, we shall convert from each holder of notes
electing to have notes converted on such date a pro rata amount of such holder's
portion of its notes submitted for conversion based on the principal amount of
notes submitted for conversion on such date by such holder relative to the
aggregate principal amount of all notes submitted for conversion on such date.
We will not effect any conversion of notes, and the holders shall not
have the right to convert any portion of their notes, to the extent that after
giving effect to such conversion, such holder (together with such holder's
affiliates) would beneficially own in excess of 9.99% of the number of shares of
common stock outstanding immediately after giving effect to such conversion. For
purposes of the foregoing sentence, the number of shares of common stock
beneficially owned by the holder and its affiliates shall include the number of
shares of common stock issuable upon conversion of the note with respect to
which the determination is being made, but shall exclude the number of shares of
common stock which would be issuable upon (A) conversion of the remaining,
nonconverted portion of the notes beneficially owned by the holder or any of its
affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of Noble subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by
the holder or any of its affiliates. Except as set forth in the preceding
sentence, beneficial ownership shall be calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended.
We will not be obligated to issue any shares of common stock upon
conversion of the notes if the issuance of such shares of common stock would
exceed that number of shares of common stock which we may issue upon conversion
of the notes without breaching our obligations under the rules or regulations of
the Nasdaq National Market (the "Exchange Cap"), except that such limitation
shall not apply in the event that Noble (A) obtains the approval of its
stockholders as required by the applicable rules of the Nasdaq National Market
for issuances of common stock in excess of such amount or (B) obtains a written
opinion
22
from our outside counsel that such approval is not required, which opinion shall
be reasonably satisfactory to the holders of the notes representing at least a
majority of the principal amounts of the notes then outstanding. Until such
approval or written opinion is obtained, no holder shall be issued, upon
conversion of the notes, shares of common stock in an amount greater than the
product of the Exchange Cap multiplied by a fraction, the numerator of which is
the principal amount of notes issued to such holder and the denominator of which
is the aggregate principal amount of all notes issued.
Mandatory Conversion at the Option of Noble
If at any time from and after March 26, 2006, the weighted average
price of our common stock exceeds 200% of the Conversion Price as of the
issuance date for each of fifteen consecutive trading days and certain
conditions set forth below are satisfied or waived by the holder, we have the
right to convert all or any portion of the conversion amount of the notes at the
Conversion Rate. We may exercise our right to require conversion by delivering,
within not more than three trading days after such fifteen-day trading day
period, written notice to all holders of notes and the transfer agent (the
"Mandatory Conversion Notice"). The Mandatory Conversion Notice is irrevocable.
If we elect to cause a conversion of all or any portion of the
Conversion Amount of a note, then we must simultaneously take the same action
with respect to the all notes. If we elect to cause the conversion of notes with
respect to less than all of the Conversion Amounts of the Notes then
outstanding, then we shall require conversion of a Conversion Amount from each
of the holders of the notes equal to the product of (I) the aggregate Conversion
Amount of notes which we have elected to cause to be converted, multiplied by
(II) the fraction, the numerator of which is the sum of the aggregate principal
amount of the notes purchased by such holder and the denominator of which is the
sum of the aggregate principal amount of the notes and purchased by all holders
(such fraction with respect to each holder is referred to as its "Allocation
Percentage," and such amount with respect to each holder is referred to as its
"Pro Rata Conversion Amount"). In the event that the initial holder of any notes
shall sell or otherwise transfer any of such holder's notes, the transferee
shall be allocated a pro rata portion of such holder's Allocation Percentage.
The Mandatory Conversion Notice shall state (i) the trading Day selected for the
mandatory conversion, which trading day shall be at least 15 business days but
not more than 60 business days following the date the Mandatory Conversion
Notice is received by all holders (the "Mandatory Conversion Date"), (ii) the
aggregate Conversion Amount of the notes which we have elected to be subject to
mandatory conversion from all of the holders of the notes, (iii) each holder's
Pro Rata Conversion Amount of the Conversion Amount of the notes we have elected
to cause to be converted and (iv) the number of shares of common stock to be
issued to such holder as of the Mandatory Conversion Date.
Our right of mandatory conversion is subject to the following
conditions: (i) during the period beginning on the date that is six months prior
to the Mandatory Conversion Date and ending on and including the Mandatory
Conversion Date (the "Notice Measuring Period"), we shall have delivered shares
of common stock upon any conversion of Conversion Amounts on a timely basis);
(ii) on each day during the period beginning on the first trading day of the
Mandatory Conversion Measuring Period and ending on and including the Mandatory
Conversion Date, the common stock shall be listed on the Nasdaq National Market
or The New York Stock Exchange, Inc. and delisting or suspension by such market
or exchange shall not have been threatened either (A) in writing by such market
or exchange or (B) by falling below the minimum listing maintenance requirements
of such market or exchange; (iii) during the period beginning on the first
trading day of the Notice Measuring Period and ending on and including the
Mandatory Conversion Date, there shall not have occurred (x) the public
announcement of a pending, proposed or intended Change of Control which has not
been abandoned, terminated or consummated, (y) an Event of Default or (z) an
event that with the passage of time or giving of notice, and assuming it were
not cured, would constitute an Event of Default; (iv) on each day of the period
beginning on the date of delivery of the Mandatory Conversion Notice and ending
on the Mandatory Conversion Date either (x) the registration statement or
23
registration statements required pursuant to the registration rights agreement
shall be effective and available for the sale for all of the registrable
securities in accordance with the terms of the registration rights agreement or
(y) all shares of common stock issuable upon conversion of the notes shall be
eligible for sale without restriction and without the need for registration
under any applicable federal or state securities laws; (v) on each day of the
period beginning on the Mandatory Conversion Date and ending thirty trading days
thereafter either (x) the registration statements required pursuant to the
registration rights agreement shall be expected to be effective and available
for the sale of at least all of the registrable securities in accordance with
the terms of the registration rights agreement or (y) all shares of common stock
issuable upon conversion of the notes shall be eligible for sale without
restriction and without the need for registration under any applicable federal
or state securities laws; and (vi) we otherwise shall have been in material
compliance with and shall not have breached (unless subsequently cured by us
prior to the first trading day of the Notice Measuring Period), in any material
respect, any material provision, covenant, representation or warranty of the
securities purchase agreement, the registration rights agreement or any of the
notes.
Conversion Rate Adjustments
We will adjust the Conversion Price if we issue or sell any shares of
common stock, excluding shares of common stock deemed to have been issued or
sold by us in connection with any Excluded Security (as defined below), for a
consideration per share less than a price equal to the Conversion Price in
effect immediately prior to such issue or sale. In such event, immediately after
such issue or sale, the Conversion Price then in effect shall be reduced to an
amount (rounded to the nearest cent) equal to the product of (A) the Conversion
Price in effect immediately prior to such issue or sale and (B) the quotient
determined by dividing (1) the sum of (I) the product derived by multiplying the
Conversion Price in effect immediately prior to such issue or sale and the
number of shares of common stock deemed outstanding immediately prior to such
issue or sale plus (II) the consideration, if any, received by us upon such
issue or sale, by (2) the product derived by multiplying (I) the Conversion
Price in effect immediately prior to such issue or sale by (II) the number of
shares of common stock deemed outstanding immediately after such issue or sale.
"Excluded Securities" means any shares of common stock issued or issuable: (i)
in connection with any employee benefit, option or incentive plan which has been
approved by our board of directors, pursuant to which our securities may be
issued to any employee, consultant, officer or director for services provided to
our; (ii) upon conversion of the Notes; and (iii) upon conversion of any options
or convertible securities which are outstanding on the day immediately preceding
the issue date of the notes, provided that the terms of such options or
convertible securities are not amended, modified or changed on or after the
issue date of the notes.
If we at any time subdivide (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of our outstanding shares of
common stock into a greater number of shares, the Conversion Price in effect
immediately prior to such subdivision will be proportionately reduced. If we at
any time combine (by combination, reverse stock split or otherwise) one or more
classes of our outstanding shares of common stock into a smaller number of
shares, the Conversion Price in effect immediately prior to such combination
will be proportionately increased.
If any other similar event occurs but not expressly provided for by
such provisions in the notes (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights with equity
features), then our board of directors will make an appropriate adjustment in
the Conversion Price so as to protect the rights of the holder under the notes.
If our common stock is converted into the right to receive other
securities, cash or other property as a result of a reclassification,
consolidation, merger, sale or transfer of assets or other transaction, each
note then outstanding will, without the consent of any holders of notes, become
convertible only into the kind and
24
amount of other securities, cash and other property that such holder would have
received if the holder had converted its notes immediately prior to the
transaction.
Subordination and Ranking
All payments due under the notes shall (i) rank equally with our 6.00%
convertible subordinated debentures, (ii) be subordinate in right of payment to
the prior payment of all existing and future Senior Indebtedness and (iii) be
senior to all other Indebtedness of Noble and our subsidiaries, other than
Senior Indebtedness and our 6.00% convertible subordinated debentures. So long
as the notes are outstanding, we are prohibited from, and are prohibited from
permitting our subsidiaries to, directly or indirectly, incur or guarantee,
assume or suffer to exist any Indebtedness which shall rank senior to the notes
other than Senior Indebtedness. So long as the notes is outstanding, we are
prohibited from, and are prohibited from permitting our subsidiaries to,
directly or indirectly, allow or suffer to exist any mortgage, lien, pledge,
charge, security interest or other encumbrance upon or in any of our or our
subsidiaries' property or assets, subject to certain permitted liens. If an
Event of Default has occurred and is continuing or would result from engaging in
the following activities, we are prohibited from, and shall not permit any of
our subsidiaries to, directly or indirectly, redeem, defease, repurchase, repay
or make any payments in respect of, by the payment of cash or cash equivalents
(in whole or in part, whether by way of open market purchases, tender offers,
private transactions or otherwise), all or any portion of any Indebtedness,
other than Senior Indebtedness or our 6.00% convertible subordinated debentures,
whether by way of payment in respect of principal of (or premium, if any) or
interest on, such Indebtedness.
The payment of the principal of, premium, if any, and interest on the
notes will, to the extent described in the notes, be subordinated in right of
payment to the prior payment in full in cash of all our Senior Indebtedness now
outstanding or later incurred.
No payment on account of principal of, premium, if any, and interest on
the notes and any other payment payable with respect to the notes shall be made,
and no portion of the notes shall be redeemed or purchased directly or
indirectly by us, if at the time of such payment or purchase or immediately
after giving effect thereto, (i) a default in the payment of principal, premium,
if any, interest or other obligations in respect of any Senior Indebtedness
having either an outstanding principal balance or a commitment to lend greater
than $7,500,000.00 ("Designated Senior Debt") occurs and is continuing (or, in
the case of Senior Indebtedness for which there is a period of grace, in the
event of such a default that continues beyond the period of grace, if any,
specified in the instrument evidencing such Senior Indebtedness) (a "Payment
Default"), unless and until such Payment Default shall have been cured or waived
or shall have ceased to exist or (ii) we shall have received notice (a "Payment
Blockage Notice") from the holder or holders of Designated Senior Debt that
there exists under such Senior Indebtedness a default, which shall not have been
cured or waived, permitting the holder or holders thereof to declare such Senior
Indebtedness due and payable, but only for the period (the "Payment Blockage
Period") commencing on the date of receipt of the Payment Blockage Notice and
ending on the earlier of (a) the date such default shall have been cured or
waived, or (b) (x) in the case of a Payment Blockage Notice delivered by any
Designated Senior Debt solely based on the occurrence of an Event of Default
under the notes (i.e., based on the triggering of the cross default provisions
of such Designated Senior Debt solely as a result of an Event of Default under
the notes) (a "Cross Default Payment Blockage"), the 180th day immediately
following our receipt of such Payment Blockage Notice, and (y) in all other
circumstances, the 270th day immediately following our receipt of such Payment
Blockage Notice. We shall resume payments on and distributions in respect of the
notes, including any past scheduled payments of the principal of (and premium,
if any) and interest on the notes to which the holders would have otherwise been
entitled but for the case of a Payment Default, within five (5) business days of
the date upon which such Payment Default is cured or waived or ceases to exist
(and if payment is made within such time period, any Event of Default with
respect to such nonpayment shall be cured). In addition, notwithstanding clauses
(i) and (ii), unless the holders of Designated Senior Debt shall have
25
accelerated the maturity of such Senior Indebtedness or there is a Payment
Default, we shall resume payments on the notes within (5) business days after
the end of each Payment Blockage Period (and if payment is made within such time
period, any Event of Default with respect to such nonpayment shall be cured). In
any consecutive 365-day period, there shall be (i) no more than three Payment
Blockage Notices given in the aggregate on the notes, irrespective of the number
of defaults with respect to Designated Senior Debt during such period, and (ii)
at least 90 days during which no Payment Blockage Period shall be in effect.
The holders of all Senior Indebtedness will first be entitled to
receive payment in full in cash of all amounts due or to become due on the
Senior Indebtedness, or provision for payment in cash or cash equivalents,
before the holders of the notes will be entitled to receive any payment in
respect of the notes, when there is a payment or distribution of assets to
creditors upon our total or partial liquidation, dissolution, winding up,
reorganization, receivership, assignment for the benefit of creditors,
marshaling of assets, bankruptcy, insolvency, or similar proceedings.
We may make regularly scheduled payments of the principal of, and
interest or premium on, or any other payments on, the notes if at the time of
the payment, and immediately after giving effect thereto, (i) there exists no
payment Default or a Payment Blockage Period and (ii) we are otherwise permitted
to make the payments under the notes.
As of March 31, 2004, we had approximately $1.8 million of Senior
Indebtedness outstanding to which the notes would have been expressly
subordinated and $2,208,000 of outstanding indebtedness that would have ranked
equally with the notes. We expect from time to time to incur additional
indebtedness and obligations that will constitute Senior Indebtedness. The notes
do not limit or prohibit us from incurring additional Senior Indebtedness or
other indebtedness.
In addition, our subsidiaries are separate and distinct legal entities
and have no obligation to pay any amounts due on the notes or to provide us with
the funds to satisfy our payment obligations. As a result, the notes will be
effectively subordinated to all existing and future indebtedness and other
liabilities of our subsidiaries.
"Senior Indebtedness" means the principal of (and premium, if any), interest on,
and all fees and other amounts (including, without limitation, any reasonable
costs, enforcement expenses (including reasonable legal fees and disbursements),
collateral protection expenses and other reimbursement or indemnity obligations
relating thereto) payable under the agreements or instruments evidencing, any
unaffiliated, third-party Indebtedness of Noble and our subsidiaries, whether
now existing or hereafter arising (together with any renewals, refundings,
refinancings or other extensions thereof), which is not made expressly
subordinate in right of payment to the Indebtedness evidenced by the notes,
provided that the aggregate amount of such Senior Indebtedness (taking into
account the maximum amounts which may be advanced under the loan documents
evidencing such Senior Indebtedness) does not as of the date on which such
Senior Indebtedness is incurred exceed the product of (i) 2.5 and (ii) EBITDA.
Without limitation of the generality of the foregoing and subject to such limit,
Senior Indebtedness shall include our obligations to our current senior secured
lender, Comerica Bank and any participants with Comerica Bank in such
Indebtedness, and the Comerica Bank obligations are designated as Senior
Indebtedness. We may from time to time designate by written notice to the
holders of the notes the obligations, in addition to the Comerica Bank
obligations, which constitute Senior Indebtedness, and, provided that, at the
time that the Senior Indebtedness is incurred (or a commitment to lend any
Senior Indebtedness is made), our aggregate Senior Indebtedness does not exceed
the limitation, Senior Indebtedness so designated shall continue to be Senior
Indebtedness notwithstanding any subsequent decline in our EBITDA.
26
Mandatory Redemption
Except as set forth below under "--Repurchase of Notes at the Option of
the Holder upon an Event of Default" and "--Right to Require Repurchase of Notes
upon a Change of Control," we are not required to make mandatory redemption of,
or sinking fund payments with respect to, the notes.
Repurchase of Notes at the Option of the Holder upon an Event of
Default
Promptly after the occurrence of an Event of Default (as defined
below), we are required to deliver written notice via facsimile and overnight
courier to the holders of the notes. By delivery of written notice, each holder
of notes may require that we repurchase all or a portion of the holder's notes
at a purchase price equal to the greater of (i) the product of (A) the
Conversion Amount to be redeemed and (B) the Redemption Premium (as defined
below), and (ii) the product of (A) the Conversion Rate with respect to such
Conversion Amount in effect at such time as the holder delivers the written
notice and (B) the closing sales price of our common stock on the date
immediately preceding the Event of Default.
"Redemption Premium" means (i) in the case of the Events of Default described
below in paragraphs (i) - (vi) and (viii) - (xi), 120% or (ii) in the case of
the Events of Default described in Section (vii), 100%.
Each of the following is an "Event of Default":
(i) failure of the applicable registration statement required to be
filed pursuant to the registration rights agreement to be declared effective by
the SEC on or prior to the date that is 60 days after the applicable
effectiveness deadline (as defined in the registration rights agreement), or,
while the applicable registration statement is required to be maintained
effective pursuant to the terms of the registration rights agreement, the
effectiveness of the applicable registration statement lapses for any reason
(including, without limitation, the issuance of a stop order) or is unavailable
to any holder of the notes for sale of all of such holder's registrable
securities (as defined in the registration rights agreement) in accordance with
the terms of the registration rights agreement, and such lapse or unavailability
continues for a period of 10 consecutive trading days or for more than an
aggregate of 30 trading days in any 365-day period (other than days during an
allowable grace period (as defined in the registration rights agreement));
(ii) the suspension from trading or failure of our common stock to be
listed on the Nasdaq National Market or The New York Stock Exchange, Inc. for a
period of five consecutive trading days or for more than an aggregate of seven
trading days in any 365-day period;
(iii) our failure to convert the notes within certain time periods upon
exercise of a holder's conversion rights;
(iv) at any time following the tenth consecutive business day that the
holder's authorized share allocation is less than the number of shares of common
stock that the holder would be entitled to receive upon a conversion of the full
Conversion Amount of the holder's note;
(v) the failure to pay to any holder any amount of principal, interest,
late charges or other amounts when and as due under the notes, the securities
purchase agreement, the registration rights agreement or any other agreement,
document, certificate or other instrument delivered in connection with the
transaction, except, in the case of a failure to pay interest and late charges
when and as due, in which case only if such failure continues for a period of at
least five business days;
(vi) any uncured default under, redemption of or acceleration prior to
maturity of any Indebtedness of us or any of our subsidiaries other than with
respect to the notes and our 6.00% convertible subordinated debentures;
(vii) certain events of bankruptcy, insolvency and reorganization by us
or any of our subsidiaries;
27
(viii) final unsatisfied judgments aggregating in excess of $500,000.00
are rendered against us or any of our subsidiaries and not bonded, discharged or
stayed within 60 days;
(ix) a breach of any representation, warranty, covenant or other term
or condition of the securities purchase agreement, the registration rights
agreement, the notes, or any other agreement, document, certificate or other
instrument delivered in connection with the transactions contemplated thereby,
which continues for ten consecutive business days;
(x) any breach or failure in any respect to comply with the provisions
of the note relating to the ranking of the notes, the incurrence of senior
indebtedness or liens, and restricting certain payments; or
(xi) if either (x) the Total Debt to Total Capitalization Ratio exceeds
..55:1.00, or (y) the Total Debt to EBITDA Ratio exceeds 3.50:1.00.
"Contingent Obligation" means any direct or indirect liability, contingent or
otherwise, with respect to any indebtedness, lease, dividend or other obligation
of another if the primary purpose or intent in incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such liability
that such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.
"EBITDA" means, for any period for any person, the net income (or net loss) of
such person and its consolidated subsidiaries, determined in accordance with
GAAP, plus (i) any provision for (or less any benefit from) income taxes, (ii)
any deduction for interest expense, net of interest income and (iii)
depreciation and amortization expense, and as adjusted for the following items
(to the extent that they are reflected in net income or net loss): elimination
of: (w) all extraordinary gains and losses determined in accordance with GAAP,
(x) gains and losses from sales or dispositions of property and equipment or
other fixed assets, (y) all non-recurring income and expense items not incurred
in the ordinary course of business to the extent included in the determination
of net income for the relevant determination period and (z) foreign currency
transaction gains and losses, to the extent included in the determination of net
income for the relevant determination period. All determinations of the
components of EBITDA shall be made in accordance with GAAP and shall be derived
from our then most recently filed annual report on Form 10-K or quarterly report
on Form 10-Q, as applicable, and shall be calculated based on the four calendar
quarters preceding the date of such calculation.
"GAAP" means United States generally accepted accounting principles,
consistently applied.
"Indebtedness" means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services (other than trade payables entered into
in the ordinary course of business), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments, (D) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property
or assets acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property), (F) all monetary
obligations under any leasing or similar arrangement which, in connection with
generally accepted accounting principles, consistently applied for the periods
covered thereby, is classified as a capital lease, (G) off-balance sheet
liabilities retained in connection with asset securitization programs, synthetic
leases, sale and leaseback transactions or other similar obligations arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
consolidated balance sheet of such person and its subsidiaries (except for the
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lease of our facility in Kentucky), and (H) all indebtedness referred to in
clauses (A) through (G) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, lien, pledge, charge, security interest or other encumbrance upon
or in any property or assets (including accounts and contract rights) owned by
any person, even though the person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (I) all
Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (A) through (H) above.
"Total Capitalization" means, at any time, the sum of (i) the sum of all amounts
(without duplication) which, in accordance with GAAP, would be included in our
stockholders' equity (excluding unrealized gains or losses pursuant to GAAP) as
required to be reported in our then most recent consolidated balance sheet, and
(ii) Total Debt.
"Total Debt" means, on any date, the outstanding principal amount of all
Indebtedness of Noble and our subsidiaries of the type referred to in clauses
(A), (C), (D), (F) and (G) of the definition of "Indebtedness" along with any
Contingent Obligation in respect of any of the foregoing.
"Total Debt to EBITDA Ratio" means, as of the last day of any quarter, the ratio
of (i) Total Debt outstanding on such day to (ii) EBITDA on such day.
"Total Debt to Total Capitalization Ratio" means, as of the last day of any
quarter, the ratio of (i) Total Debt outstanding on such day to (ii) Total
Capitalization on such day.
Right to Require Repurchase of Notes upon a Change of Control
No sooner than 15 days nor later than 10 days prior to the consummation
of a Change of Control (as defined below), but not prior to the public
announcement of such Change of Control, we are required to deliver written
notice thereof via facsimile and overnight courier to the holders of the notes.
"Change of Control" means the occurrence of one or more of the
following events:
(i) the consolidation, merger or other business combination (including,
without limitation, a reorganization or recapitalization) of Noble with
or into another person (other than (A) a consolidation, merger or other
business combination (including, without limitation, reorganization or
recapitalization) in which holders of Noble's voting power immediately
prior to the transaction continue after the transaction to hold,
directly or indirectly, the voting power of the surviving entity or
entities necessary to elect a majority of the members of the board of
directors (or their equivalent if other than a corporation) of such
entity or entities, or (B) pursuant to a migratory merger effected
solely for the purpose of changing the jurisdiction of incorporation of
Noble);
(ii) the sale or transfer of all or substantially all of our assets; or
(iii) a purchase, tender or exchange offer made to and accepted by the
holders of more than the 50% of the outstanding shares of our common
stock.
The definition of Change of Control includes a phrase relating to the
sale, lease, transfer, conveyance or other disposition of "all or substantially
all" of the assets of Noble and its subsidiaries, taken
29
as a whole. Although there is a developing body of case law interpreting the
phrase "substantially all," there is no precise established definition of the
phrase under applicable law. Accordingly, the ability of a holder of notes to
require Noble to repurchase such notes as a result of a sale, lease, transfer,
conveyance or other disposition of less than all of the assets of Noble and its
subsidiaries, taken as a whole, to another person or group may be uncertain.
Prior to the consummation of any Change of Control, we will secure from
any person purchasing our assets or common stock or any successor resulting from
the Change of Control a written agreement (in form and substance satisfactory to
the holders of notes representing at least a majority of the aggregate principal
amounts of notes then outstanding) to deliver to each holder of notes in
exchange for the notes, a security of the acquiring entity evidenced by a
written instrument substantially similar in form and substance to the notes,
including, without limitation, having a principal amount and interest rate equal
to the principal amounts and the interest rates of the notes held by such
holder, and satisfactory to the holders of notes representing at least a
majority of the principal amount of the notes then outstanding. In the event
that an acquiring entity is directly or indirectly controlled by a company or
entity whose common stock or similar equity interest is listed, designated or
quoted on a securities exchange or trading market, the holders of notes
representing at least a majority of the aggregate principal amount of the notes
then outstanding may elect to treat such person as the acquiring entity.
At any time during the period beginning after the holder's receipt of a
the notice of a Change of Control and ending on the date of the consummation of
such Change of Control (or, in the event a Change of Control notice is not
delivered at least 10 days prior to a Change of Control, at any time on or after
the date which is 10 days prior to a Change of Control and ending 10 days after
the consummation of such Change of Control), the holder may require us to redeem
all or any portion of the holder's notes by delivering written notice thereof to
us, which notice shall indicate the amount the holder is electing to redeem;
provided, however, that we are not under any obligation to redeem all or any
portion of the notes or to deliver the purchase price for the repurchased notes
unless and until the applicable Change of Control is consummated. The portion of
the note subject to redemption pursuant shall be redeemed by us at a purchase
price equal to the greater of (i) the product of (x) the Conversion Amount being
redeemed and (y) the quotient determined by dividing (A) the closing sale price
of the Common Stock immediately following the public announcement of such
proposed Change of Control by (B) the Conversion Price and (ii) 110% of the
Conversion Amount being redeemed. Redemptions shall have priority to payments to
stockholders in connection with a Change of Control.
The effect of these provisions granting the holders the right to
require us to repurchase the notes upon the occurrence of a Change of Control
may make it more difficult for any person or group to acquire control of us or
to effect a business combination with us. The repurchase right resulted from
negotiations between Noble and the initial purchasers. It is not part of any
plan by management to adopt a series of anti-takeover provisions and Noble has
no present intention to engage in a transaction that would result in a Change in
Control, although it is possible that Noble may decide to do so in the future.
In addition, the repurchase feature may not necessarily afford you protection in
the event of a highly leveraged transaction, including acquisitions, mergers,
refinancings, restructurings, recapitalizations and other similar transactions,
involving Noble. We could in the future enter into these types of transactions
that would not necessarily constitute a Change of Control but would increase the
amount of our Senior Indebtedness or other indebtedness. Moreover, we cannot
assure you that sufficient funds will be available when necessary to make any
required repurchases.
If a Change of Control occurs and the holders exercise rights to
require us to repurchase notes, we will comply with the tender offer rules under
the Exchange Act with respect to any repurchase to the extent applicable. To the
extent that the provisions of any securities laws or regulations conflict with
the Change of Control provisions of the notes, Noble will comply with the
applicable securities laws and regulations and
30
will not be deemed to have breached its obligations under the Change of Control
provisions of the notes by virtue of the conflict.
The term "beneficial owner" will be determined in accordance with Rules
13d-3 and 13d-5 promulgated by the Securities and Exchange Commission under the
Exchange Act or any successor provision, except that a person shall be deemed to
have "beneficial ownership" of all shares that the person has the right to
acquire, whether exercisable immediately or only after the passage of time.
If the date of repurchase upon a Change of Control hereunder is on or
after an interest payment record date and on or before the associated interest
payment date, any accrued and unpaid interest due on such interest payment date
will be paid to the person in whose name the note is registered at the close of
business on such record date.
Mechanics of Repurchase of Notes
In the event that a holder has sent a redemption notice upon the
occurrence of an Event of Default or upon a Change of Control, the holder shall
promptly submit its note to us. In the event of a redemption upon the occurrence
of an Event of Default, we are required to deliver the applicable redemption
price to the holder within five business days after our receipt of the holder's
notice of its intent to redeem. In the event of a redemption upon a Change of
Control, we are required to deliver the applicable redemption price to the
holder concurrently with the consummation of such Change of Control if such
holder's notice of its intent to redeem is received prior to the consummation of
such Change of Control and within five business days after our receipt of such
notice otherwise. In the event of a redemption of less than all of the amount of
a holder's note, we are required to promptly cause to be issued and delivered to
the holder a new note representing the outstanding principal which has not been
redeemed.
In the event that we do not pay the applicable redemption price to the
Holder (or deliver any common stock to be issued pursuant to a notice of
redemption) within the time period required, at any time thereafter and until we
pay such unpaid redemption price (and issue any common stock required pursuant
to a notice of redemption) in full, the holder shall have the option, in lieu of
redemption, to require us to promptly return to the holder all or any portion of
its note representing the amount that was submitted for redemption and for which
the applicable redemption price (or any common stock required to be issued
pursuant to a notice of redemption) (together with any late charges thereon) has
not been paid. Upon our receipt of such notice, (x) the notice of redemption
delivered by the holder shall be null and void with respect to such amount, (y)
we shall immediately return the holder's note, or issue a new note to the holder
representing such amount and (z) the Conversion Price of the holder's note or
such new notes shall be adjusted to the lesser of (A) the Conversion Price as in
effect on the date on which the notice of redemption is voided and (B) the
lowest Closing Bid Price during the period beginning on and including the date
on which the notice of redemption is delivered to us and ending on and including
the date on which the notice of redemption is voided. The holder's delivery of a
notice voiding a notice of redemption and exercise of its rights following such
notice shall not affect our obligations to make any payments of late charges
which have accrued prior to the date of such notice with respect to the amount
subject to such notice.
Upon our receipt of notice from any of the holders of notes for
redemption or repayment as a result of the occurrence of an Event of Default or
upon a Change of Control, we are required to immediately forward to all holders
by facsimile a copy of such notice. If we receive one or more notices of
redemption during the seven business day period beginning on and including the
date which is three business days prior to our receipt of the first holder's
notice of redemption and ending on and including the date which is three
business days after our receipt of the first holder's notice of redemption and
we are unable to redeem all principal, interest and other amounts designated in
such notices of redemption received during such seven business day period, then
we are required to redeem a pro rata amount from each holder of the notes based
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on the principal amount of the notes submitted for redemption pursuant to such
notices of redemption received by us during such seven business day period
We will be required to give notice on a date not less than 20 business
days prior to each repurchase date to all holders at their addresses shown in
the register of the registrar, and to beneficial owners as required by
applicable law, stating, among other things, the procedures that holders must
follow to require us to repurchase their notes.
Holders may submit their notes for repurchase to the paying agent at
any time from the opening of business on the date that is 20 business days prior
to each repurchase date, or, if such day is not a business day, the next
succeeding business day, until the close of business on the repurchase date.
For a discussion of the tax treatment of a holder exercising the right
to require us to repurchase notes, see "Certain Material United States Federal
Income Tax Considerations--U.S. Holders--Sale, Exchange or Retirement of the
Notes for Cash"
Participation Rights
The holders are entitled to such dividends paid and distributions made
to the holders of our common stock to the extent that such dividends or
distributions exceed in any twelve-month period from date of issuance of the
notes until March 26, 2007, $0.48 per share (as adjusted for any stock splits,
stock dividends or recapitalizations). The holders are entitled to such
dividends paid and distributions made to the holders of our common stock to the
extent that such dividends or distributions exceed $0.48 per share (as adjusted
for any stock splits, stock dividends or recapitalizations), in each such case
to the extent of such excess as if the holders had converted the notes into
common stock and had held such shares of common stock on the record date for
such dividends and distributions.
Rights upon Issuance of Purchase Rights and Other Corporate Events
If at any time we grant, issue or sell any options, convertible
securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of common stock, then the holders
will be entitled to acquire, upon the terms applicable to such purchase rights,
the aggregate purchase rights which the holders could have acquired if the
holders had held the number of shares of common stock acquirable upon complete
conversion of the notes (without taking into account any limitations or
restrictions on the convertibility of this notes) immediately before the date on
which a record is taken for the grant, issuance or sale of such purchase rights,
or, if no such record is taken, the date as of which the record holders of
common stock are to be determined for the grant, issue or sale of such purchase
rights.
Prior to the consummation of any recapitalization, reorganization,
consolidation, merger, spin-off or other business combination (other than a
Change of Control) pursuant to which holders of common stock are entitled to
receive securities or other assets with respect to or in exchange for common
stock, we are required to make appropriate provision to insure that the holders
will thereafter have the right to receive upon a conversion of the notes, (i) in
addition to the shares of common stock receivable upon such conversion, such
securities or other assets to which the holders would have been entitled with
respect to such shares of common stock had such shares of common stock been held
by the holders upon the consummation of such corporate event or (ii) in lieu of
the shares of common stock otherwise receivable upon such conversion, such
securities or other assets received by the holders of common stock in connection
with the consummation of such corporate event in such amounts as the holders
would have been entitled to receive had the notes initially been issued with
conversion rights for the form of such consideration (as opposed to shares of
common stock) at a conversion rate for such consideration commensurate with the
Conversion Rate. Provision made pursuant to the preceding sentence shall be in a
form and substance
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satisfactory to the holders of the notes representing at least a majority of the
aggregate principal amount of the notes then outstanding.
Voting Rights
The holders of the notes shall have no voting rights as the holders of
the notes, except as required by law.
Modification and Waiver
The holders of a majority in principal amount of the outstanding notes
may, on behalf of the holders of all notes, at a meeting duly called for such
purpose or the written consent without a meeting, change or amend the notes,
provided such change or amendment is consented to by us, which consent may be
granted or withheld in our sole discretion.
Governing Law
The notes are governed by and construed in accordance with the laws of
the State of New York.
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DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
Our certificate of incorporation authorizes up to 20,000,000 shares of
$.001 par value common stock. As of March 31, there were 8,949,079 shares of
common stock issued and outstanding.
The holders of common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders and are not
entitled to cumulate votes. The holders of common stock are entitled to receive
ratably such dividends as may be declared by the board of directors out of
legally available funds. Upon our liquidation, dissolution or winding up, the
holders of common stock are entitled to share ratably in all assets that are
legally available for distribution after payment of all debts and other
liabilities, subject to the prior rights of any holders of preferred stock then
outstanding. The holders of common stock have no other preemptive, subscription,
redemption, sinking fund or conversion rights. All outstanding shares of common
stock are fully paid and nonassessable. The shares of common stock to be issued
upon completion of this offering will also be fully paid and nonassessable.
PREFERRED STOCK
Our certificate of incorporation authorizes up to 150,000 shares of $10
par value preferred stock. Shares of preferred stock may be issued in one or
more classes or series at such time and in such quantities as the board of
directors may determine. All shares of any one series shall be equal in rank and
identical in all respects. There were no shares of preferred stock issued and
outstanding as of the date of this prospectus.
Our board of directors has the authority, without action by the
stockholders, to designate and issue preferred stock in one or more series and
to fix the rights, preferences and privileges of each such series, any or all of
which may be greater than the rights of common stock. It is not possible to
state the actual effect of the issuance of any shares of preferred stock upon
the rights of holders of the common stock until the board of directors
determines the specific rights of the holders of such shares. However, the
effects might include, among other things, restricting dividends on the common
stock, diluting the voting power of the common stock, impairing the liquidation
rights of the common stock and delaying or preventing a change in control of
Noble without further action by the stockholders. We have no present plans to
issue any additional shares of preferred stock.
6.00% CONVERTIBLE SUBORDINATED DEBENTURES
On August 10, 1998, we closed a private offering of 6% convertible
subordinated debentures for gross proceeds of $20.76 million. As of March 31,
2004, the aggregate outstanding principal amount of the 6% convertible
subordinated debentures was approximately $2.2 million. These debentures
were issued under an Indenture dated as of July 23, 1998 (the "Indenture")
between the Company and American Stock Transfer & Trust Company, as trustee. The
following description is only a summary of certain material provisions of the
Indenture. We urge you to read the Indenture in its entirety because it, and not
this description, defines the rights of the holders of the debentures. The
debentures mature on July 31, 2005 and interest is payable on January 31 and
July 31 of each year; provided, however, that for the first three years, in lieu
of cash interest, additional debentures were issued. During 1999, 2000 and 2001
we issued $1.2 million, $1.1 million and $1.0 million, respectively, in
principal amounts of additional debentures as payment of interest.
The debentures are our unsecured subordinated obligations, which may be
redeemed by us during the twelve months beginning July 31, 2002 at 102.5% of the
principal amount (plus accrued interest) and at 101.5% and 100.5% during each
12-month period thereafter.
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The debentures are convertible into common stock at a conversion price
per share of $14.3125 (subject to adjustment under certain circumstances, but
not as a result of this offering).
Beginning January 31, 2004 and on each July 31 and January 31
thereafter, we are required to redeem for cash 25% of the outstanding principal
amount of the debentures through the maturity date. In addition, upon a change
in control of Noble, each holder of our convertible subordinated debentures has
the right during the 45-day period following notice thereof from us to require
us to repurchase all or a portion of such holder's debentures at a cash purchase
price equal to 100% of the principal amount of such debentures, plus accrued and
unpaid interest to the date of repurchase.
ANTI-TAKEOVER PROVISIONS OF THE DELAWARE GENERAL CORPORATION LAW AND CERTAIN
CHARTER PROVISIONS
We are subject to Section 203 of the Delaware General Corporation Law.
In general, Section 203 prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years following the date the person became an interested
stockholder, unless (with certain exceptions) the business combination or the
transaction in which the person became an interested stockholder is approved in
a prescribed manner. Generally, a "business combination" includes a merger,
asset or stock sale, or other transaction resulting in a financial benefit to
the interested stockholder. Generally, an "interested stockholder" is a person
who, together with affiliates and associates, owns (or, in the case of
affiliates or associates of the corporation, within three years prior to the
determination of interested stockholder status, did own) 15% or more of a
corporation's voting stock. The existence of this provision would be expected to
have anti-takeover effects with respect to transactions not approved in advance
by the board of directors, such as discouraging takeover attempts that might
result in a premium over the market price of the common stock.
Our bylaws eliminate the right of stockholders to act by written
consent without a meeting unless such written consent is unanimous. In addition,
stockholders are not entitled to cumulative voting in the election of directors.
The authorization of preferred stock makes it possible for the board of
directors to issue preferred stock with voting or other rights or preferences
that could impede the success of any attempt to change control of Noble. The
foregoing provisions of our certificate of incorporation, our bylaws and the
Delaware General Corporation Law may have the effect of deferring hostile
takeovers or delaying changes in control of management of Noble.
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CERTAIN MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain material U.S. federal
income tax aspects of the acquisition, ownership and disposition of the notes,
and our common stock into which the notes may be converted. This summary is
based upon current provisions of the U.S. Internal Revenue Code of 1986, as
amended (the "Code"), existing and proposed Treasury Regulations promulgated
thereunder and current administrative rulings and court decisions, all as in
effect on the date hereof. All of the foregoing are subject to change or
differing interpretations at any time, possibly with retroactive effect, and any
such change or different interpretation could affect the continuing validity of
this discussion. We have not requested a ruling from the Internal Revenue
Service (the "IRS") on the tax consequences of owning the notes or our common
stock. As a result, no assurance can be given that the IRS will agree with the
views expressed in this summary, or that a court will not sustain any challenge
by the IRS in the event of litigation.
This discussion is a summary for general information only and does not
consider all aspects of U.S. federal income taxation that may be relevant to the
acquisition, ownership and disposition of the notes and our common stock by a
prospective investor in light of his, her or its personal circumstances. For
example, this discussion does not address the U.S. federal income tax
consequences to investors subject to special treatment under the U.S. federal
income tax laws, such as:
- dealers in securities or foreign currency;
- persons that have elected the mark-to-market method of
accounting;
- banks, thrifts, insurance companies, regulated investment
companies or other financial institutions;
- tax-exempt organizations;
- persons that are subject to the alternative minimum tax;
- persons deemed to sell the notes under the constructive sale
provisions of the Code;
- persons that hold the notes or our common stock as part of a
"straddle," "hedge," "conversion transaction," "synthetic
note transaction" or other integrated transaction;
- persons who received the notes as compensation
- persons that have a "functional currency" other than the
U.S. dollar; and
- partnerships and other pass-through entities (or investors
holding interests in partnerships or pass-through entities)
that hold the notes or our common stock.
In addition, this discussion is limited to the U.S. federal income tax
consequences to persons who are beneficial owners of the notes or our common
stock and who hold the notes or common stock as capital assets within the
meaning of Section 1221 of the Code, i.e., generally, property held for
investment. Moreover, this discussion does not describe any tax consequences
arising out of the U.S. alternative minimum tax law, the tax laws of any state,
local or foreign jurisdiction or, except to a limited extent under the caption
"Non-U.S. Holders," any possible applicability of the U.S. federal gift or
estate tax law. This discussion also assumes that the IRS will respect the
classification of the notes as indebtedness for U.S. federal income tax
purposes.
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ALL PROSPECTIVE INVESTORS ARE ADVISED 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.
U.S. HOLDERS
For purposes of the following discussion, a "U.S. Holder" is a
beneficial owner of a note or our common stock that is, for U.S. federal income
tax purposes:
- a citizen or resident of the U.S., including an alien
resident who is a lawful permanent resident of the U.S. or meets the
"substantial presence" test under Section 7701(b) of the Code;
- a corporation (or other business entity treated as a
corporation for U.S. federal income tax purposes) created or organized in the
U.S. or under the laws of the U.S. or any State thereof or the District of
Columbia;
- an estate the income of which is subject to U.S. federal
income taxation regardless of its source; or
- a trust, if (1) a U.S. court is able to exercise primary
supervision over its administration and one or more U.S. persons have the
authority to control all substantial decisions of the trust or (2) such
trust was in existence on August 1, 1996 and has a valid election in effect
under applicable Treasury Regulations to be treated as a U.S. person.
Interest on the Notes. Interest on a note will be taxable to a U.S.
Holder as ordinary interest income at the time it accrues or is received in
accordance with such holder's method of accounting for U.S. federal income tax
purposes. If we do not comply with our obligations under the registration rights
agreement, such non-compliance may result in the payment of predetermined
additional interest amounts. If there were more than a remote likelihood that
such additional interest would be paid, the notes could be subject to the rules
applicable to contingent payment debt instruments, including mandatory accrual
of interest in accordance with those rules. We believe, and this discussion
assumes, that the likelihood of such an event occurring is remote. Our
determination that such possibility is remote is binding on a holder unless the
holder explicitly discloses to the IRS that it is taking a different position on
its tax return for the year during which such holder acquires the note. However,
the IRS may take a contrary position from that described above, which could
affect the timing and character of both income from the notes and our deduction
with respect to the potential additional payments. You are urged to consult your
tax advisor concerning the appropriate tax treatment of the potential additional
payments in the event we fail to comply with the registration rights agreement.
Sale, Exchange, or Retirement of the Notes for Cash. Upon the
disposition of a note by sale, exchange, redemption or repayment or other
taxable disposition, and subject to the market discount discussion below, a U.S.
Holder generally will recognize gain or loss equal to the difference between (i)
the amount realized on the disposition (i.e., the amount of cash and the fair
market value of any property received in exchange for the note, but not
including any amounts attributable to accrued but unpaid interest which, if not
yet taken into income, generally will be taxable as ordinary income) and (ii)
the U.S. Holder's adjusted tax basis in the note. A U.S. Holder's adjusted tax
basis in the note generally will equal the cost of the note (net of accrued
interest), increased by any market discount or decreased by any amortizable bond
premium, in each case provided that the holder elected to accrue the amounts
thereof for U.S. federal income tax purposes.
37
Such gain or loss will generally be capital gain or loss and will be
long-term capital gain if the note is held for longer than one year. The
deductibility of capital losses is subject to certain limitations.
Market Discount. If a U.S. Holder purchases a note at a price that is
less than its stated redemption price at maturity then, subject to a de minimis
exception, the note will be deemed to carry "market discount." Subject to a
limited exception, these provisions generally require a U.S. Holder that
acquires a note having market discount to treat as ordinary income any gain
recognized on the disposition of that note to the extent of the accrued market
discount on that note at the time of maturity or disposition, unless the U.S.
Holder elects to include such accrued market discount in income over the life of
the note.
The election to include market discount in income over the life of the
note, once made, applies to all market discount obligations acquired on or after
the first day of the first taxable year to which the election applies and may
not be revoked without the consent of the IRS. In general, market discount will
be treated as accruing on a straight-line basis over the remaining term of the
note at the time of acquisition, or, at the election of the U.S. Holder, under a
constant yield method. If a constant yield election is made, it will apply only
to the note with respect to which it is made, any may not be revoked. A U.S.
Holder that acquires a note at a market discount and does not elect to include
accrued market discount in income over the life of the note may be required to
defer the deduction of all or a portion of the interest on any indebtedness
incurred or maintained to purchase or carry the note until maturity or until the
note is disposed of in a taxable transaction.
Amortizable Premium. If a U.S. Holder purchases 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 generally may elect to amortize that
premium from the purchase date to the note's maturity date under a constant
yield method that reflects semiannual compounding based on the note's payment
period. Amortizable premium, however, will not include any premium attributable
to a note's conversion feature. The premium attributable to the conversion
feature is the excess, if any, of the note's purchase price over what the note's
fair market value would be if there were no conversion feature. Amortizable bond
premium is treated as an offset to interest income on a note and not as a
separate deduction and has the effect of reducing the holder's basis in the
note.. The election to amortize premium on a constant yield method, once made,
applies to all debt obligations held or subsequently acquired by the electing
U.S. Holder on or after the first day of the first taxable year to which the
election applies and may not be revoked without the consent of the IRS.
Conversion of Notes Into Common Stock. A U.S. Holder's conversion of a
note solely into our common stock generally will not be a taxable event, except
with respect to cash received in lieu of a fractional share of our common stock.
A U.S. Holder generally will recognize gain or loss upon the receipt of cash in
lieu of a fractional share of our common stock, measured by the difference
between the cash received and the U.S. Holder's tax basis attributable to the
fractional share. The fair market value of our common stock received with
respect to accrued and unpaid interest will be taxed as a payment of interest
(as described above).
A U.S. Holder's adjusted tax basis in our common stock received upon a
conversion of a note will be the same as the U.S. Holder's adjusted tax basis in
the note at the time of conversion, reduced by any basis allocated to a
fractional share and increased, for a cash method holder, by the amount of
income recognized with respect to accrued interest. The U.S. Holder's holding
period for the common stock received will include the holder's holding period
for the note converted, except that the holding period of any common stock
received with respect to accrued and unpaid interest will commence on the day
after the date of conversion.
38
Repurchase of the Notes at the Option of the Holder. If a U.S. Holder
of a note exercises its redemption right to require us to repurchase a note and
we deliver our common stock in full satisfaction of the repurchase price (other
than the portion of the repurchase price, if any, attributable to a fractional
share or to accrued but unpaid interest, which will be paid in cash), the
exchange of the note for our common stock should be treated in the same manner
described above under "U.S. Holders -- Conversion of Notes Into Common Stock."
If a U.S. Holder receives a combination of cash and our common stock
upon the exercise of either a redemption right or a conversion right, the U.S.
federal income tax consequences to the U.S. Holder are unclear. There are
several possible tax treatments, the two most likely of which are:
- a partial taxable sale of the note resulting in gain or loss
to the U.S. Holder and a partial tax-free conversion of the note under which the
U.S. Holder would apply the principles described above under both "U.S. Holders
-- Sale, Exchange, or Retirement of the Notes for Cash" and "U.S. Holders --
Conversion of Notes Into Common Stock," respectively, based upon a proration of
the note between the amount of cash and the fair market value of our common
stock received; or
- a recapitalization under which the U.S. Holder would
recognize gain, but not loss, on the repurchase equal to the lesser of (a) the
amount of cash received (other than in respect of a fractional share or in
respect of accrued but unpaid interest) and (b) the amount of gain realized
(equal to the excess, if any, of (i) the amount of cash the holder receives
(other than in respect of a fractional share or of accrued but unpaid interest)
plus (ii) the fair market value of common stock the holder receives over (iii)
his, her, or its tax basis in the note).
Any U.S. Holders of notes who receive a combination of cash and our
common stock should consult their tax advisors as to the U.S. federal income tax
consequences to them.
If a U.S. Holder of a note exercises his, her or its right to require
us to repurchase a note and we deliver cash in full satisfaction of the
repurchase price, the repurchase will be treated the same as a sale of the note,
as described above under "U.S. Holders -- Sale, Exchange or Retirement of the
Notes for Cash."
Constructive Dividends. If at any time we make a distribution of
property to our shareholders that would be taxable as a dividend for U.S.
federal income tax purposes (for example, distributions of evidences of
indebtedness or assets, but generally not stock dividends or rights to subscribe
for our common stock) and the conversion rate of the notes is increased, such
increase may be a deemed distribution to a U.S. Holder of the notes under
Section 305 of the Code and the Treasury Regulations issued thereunder. If the
conversion rate is adjusted in other circumstances and such adjustment has the
effect of increasing the holder's proportionate interest in our assets and
earnings, it may be also treated as a deemed distribution to the U.S. Holder.
Any deemed distribution will be taxable as a dividend as described in "Our
Common Stock" below.
Our Common Stock.
----------------
Dividends. Distributions paid on our common stock received upon the
conversion of a note, other than certain pro rata distributions of common
shares, will be treated as a dividend to the extent paid out of current or
accumulated earnings and profits (as determined under U.S. federal income tax
principles) and will be includible in income by the U.S. Holder and taxable as
ordinary income when received. Under recently enacted legislation, dividends
received by a noncorporate U.S. Holder may be subject to U.S. federal income tax
at lower rates than other types of ordinary income if certain conditions are
met. U.S. Holders should consult their own tax advisers regarding the
implications of this new legislation in their particular circumstances. If a
distribution exceeds our current and accumulated earnings and profits, the
excess will be first treated as a tax-free return of the U.S. Holder's
investment, up to the U.S. Holder's
39
adjusted tax basis in our common stock. Any remaining excess will be treated as
a capital gain from the sale or exchange of our common stock.
Sale or Other Disposition of Our Common Stock. Gain or loss realized by
a U.S. Holder on the sale or other disposition of our common stock received upon
the conversion of a note generally will be recognized as capital gain or loss
for U.S. federal income tax purposes, and will be long-term capital gain or loss
if the U.S. Holder held the common stock for more than one year. The amount of
the U.S. Holder's gain or loss will be equal to the difference between the U.S.
Holder's tax basis in the common stock disposed of and the amount realized on
the disposition. The deductibility of capital losses is subject to limitations.
Further, a U.S. Holder who sells the stock at a loss that meets certain
thresholds may be required to file a disclosure statement with the IRS under
recently promulgated Treasury Regulations.
Backup Withholding and Information Reporting. A U.S. Holder of a note
or common stock may be subject, under certain circumstances, to information
reporting and backup withholding at the then applicable rate (currently at a
rate of 28%) with respect to payments of interest and dividends on, and gross
proceeds from a sale, exchange, redemption or other disposition of, a note or
common stock. These backup withholding rules apply if the U.S. Holder, among
other things: (i) fails to furnish a social security number or other taxpayer
identification number ("TIN") certified under penalties of perjury within a
reasonable time after the request therefor; (ii) furnishes an incorrect TIN;
(iii) fails to properly report interest or dividends; or (iv) 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 U.S. Holder
is not subject to backup withholding.
A U.S. Holder of a note or common stock who does not provide his, her
or its correct taxpayer identification number also may be subject to penalties
imposed by the IRS. Backup withholding is not an additional tax. Any amount paid
as backup withholding is creditable against the U.S. Holder's federal income tax
liability, provided the requisite information is provided timely to the IRS.
Certain persons are exempt from backup withholding, including corporations and
tax-exempt entities, provided their exemption from backup withholding is
properly established. U.S. Holders of notes and our common stock should consult
their tax advisors as to their qualifications for exemption from backup
withholding and the procedure for obtaining such exemption.
We will report to the IRS and to the holders of the notes and our
common stock the amount of any payments of interest on the notes and dividends
on our common stock made by us, as well as the amount of any tax withheld with
respect to the notes or our common stock, during the calendar year. The
information reporting requirements may apply regardless of whether withholding
is required.
NON-U.S. HOLDERS
The following discussion is limited to the U.S. federal income and U.S.
federal estate tax consequences to a holder of a note or our common stock that
is a beneficial owner and that is an individual, corporation, estate or trust
other than either a U.S. Holder, a person subject to rates applicable to former
citizens and long-term residents of the United States or a foreign or domestic
partnership (a "Non-U.S. Holder"). In addition, this discussion does not address
the U.S. federal income tax consequences to Non-U.S. Holders subject to special
treatment under the Code, such as "controlled foreign corporations," "passive
foreign investment companies," "foreign personal holding companies" and foreign
corporations that accumulate earnings to avoid U.S. federal income tax. Non-U.S.
Holders should consult with their own tax advisors to determine the effect of
federal, state, local and foreign income tax laws, as well as treaties, with
regard to the notes or our common stock.
Interest. Generally, interest income of a Non-U.S. Holder that is not
effectively connected with a U.S. trade or business will not be subject to U.S.
tax if the interest qualifies as "portfolio interest."
40
Generally, interest on the notes will qualify as portfolio interest if the Non-
U.S. Holder (i) does not actually or constructively own 10% or more of the total
combined voting power of all classes of our stock entitled to vote, (ii) is not
a "controlled foreign corporation" with respect to which we are a "related
person" within the meaning of the Code, and (iii) is not a bank receiving
certain types of interest; and (iv) either (A) the Non-U.S. Holder certifies,
under penalties of perjury, on a properly executed IRS Form W-8BEN (or any
successor form) prior to the payment of interest that such holder is not
a U.S. person and provides such holder's name and address or (B) a financial
institution holding the notes on behalf of the Non-U.S. Holder certifies, under
penalties of perjury, that it has received an IRS Form W-8BEN (or successor
form) from the Non-U.S. Holder or the beneficial owner and provides us with a
copy. If a holder holds the note through certain foreign intermediaries or
partnerships, such holder and the foreign intermediary or partnership may be
required to satisfy certification requirements under applicable Treasury
Regulations.
If a Non-U.S. Holder does not qualify for the portfolio interest
exemption as described above and the payments of interest are not U.S. trade or
business income, payments of interest will be subject to U.S. federal
withholding tax, unless a U.S. income tax treaty applies to reduce or eliminate
withholding. Except to the extent that an applicable income tax treaty otherwise
provides, a Non-U.S. Holder generally will be taxed on a net income basis in the
same manner as a U.S. Holder if such Non-U.S. Holder is engaged in a trade or
business in the U.S. and interest on the note is effectively connected with the
conduct of such trade or business. If such Non-U.S. Holder is a corporation, it
may be subject to an additional 30% branch profits tax (unless reduced or
eliminated by an applicable treaty on its effectively connected earnings and
profits from the taxable year.
Conversion into Common Stock. A Non-U.S. Holder's conversion of a note
into our common stock will not be a taxable event. However, to the extent that a
Non-U.S. Holder receives cash in lieu of a fractional share upon conversation or
is deemed to receive accrued and unpaid interest, any such gain and/or interest
would be subject to the rules described below in "Sale, Exchange or Redemption
of the Notes or Common Stock" and above in "Interest".
Dividends on the Common Stock. Distributions made with respect to our
common stock that are treated as dividends paid as described above under "U.S.
Holders - Dividends" and "U.S. Holders - Constructive Dividends" (excluding
dividends that are effectively connected with the conduct of a U.S. trade or
business by such holder and are taxable as described below) paid to a Non-U.S.
Holder of our common stock generally will be subject to U.S. withholding tax at
a 30% rate, subject to reduction under an applicable income tax treaty. In order
to obtain a reduced rate of withholding, a Non-U.S. Holder will be required to
provide a properly executed IRS Form W-8BEN certifying its entitlement to
benefits under a treaty. Such form must be updated periodically. A Non-U.S.
Holder that is claiming the benefits of an income tax treaty also may be
required in certain circumstances to provide a TIN or certain documentary
evidence issued by foreign governmental authorities to prove residence in the
foreign country. A Non-U.S. Holder who is subject to withholding tax under such
circumstances should consult his, her or its own tax adviser as to whether such
holder can obtain a refund for all or a portion of the withholding tax. Except
to the extent that an applicable income tax treaty provides otherwise, a
Non-U.S. Holder will be taxed in the same manner as a U.S. Holder on dividends
paid (or deemed paid) that are effectively connected with the conduct of a U.S.
trade or business by the Non-U.S. Holder. If such Non-U.S. Holder is a
corporation, it may also be subject to a U.S. branch profits tax on such
effectively connected income at a 30% rate (or such lower rate as may be
specified by an applicable income tax treaty). Even though such effectively
connected dividends are subject to income tax and may be subject to the branch
profits tax, they will not be subject to the U.S. federal withholding tax if the
holder delivers a properly executed IRS Form W-8ECI (or successor form) to the
payor or the payor's agent.
Sale, Exchange or Redemption of Notes or Common Stock. Subject to the
discussion below concerning backup withholding, a Non-U.S. Holder generally will
not be subject to U.S. federal income or
41
withholding tax on gain realized on a sale or other disposition of common stock
received upon a conversion of a note, unless:
(i) the gain is effectively connected with the conduct by such Non-U.S.
Holder of a trade or business in the United States;
(ii) subject to certain exceptions, the Non-U.S. Holder is an
individual who holds the note or common stock as a capital asset and is present
in the United States for 183 or more days in the taxable year of the disposition
and certain other conditions are met;
(iii) the Non-U.S. Holder is subject to tax pursuant to the provisions
of U.S. tax law applicable to certain U.S. expatriates (including certain former
citizens or residents of the U.S.); or
(iv) we are or have been a U.S. real property holding corporation
within the meaning of Section 897 of the Code at any time within the shorter of
the five-year period preceding such sale, exchange or disposition and the period
the Non-U.S. Holder held the common stock and the note, or certain de minimis
ownership rules do not apply. We believe that we are not, nor do we anticipate
becoming, a U.S. real property holding corporation for U.S. federal income tax
purposes.
Federal Estate Tax. Any note held (or treated as held) by an individual
who is a Non-U.S. Holder at the time of his death will not be subject to U.S.
federal estate tax, provided that the individual does not actually or
constructively own 10% or more of the total voting power of all of our classes
of stock entitled to vote and income on the notes was not U.S. trade or business
income. However, our common stock held by an individual who is a Non-U.S. Holder
at the time of his death will be included in the gross estate of the Non-U.S.
Holder for U.S. federal estate tax purposes unless an applicable estate tax
treaty provides otherwise.
Information Reporting and Backup Withholding. We must report annually
to the IRS and to each Non-U.S. Holder any interest or dividends that are that
is subject to withholding or that is exempt from U.S. withholding tax pursuant
to an applicable income tax treaty, or any payments of portfolio interest.
Copies of these information returns also may be made available under the
provisions of a specific treaty or other agreement to the tax authorities of the
country in which the Non-U.S. Holder resides. Under certain circumstances, we
will have to report to the IRS payments of principal.
Treasury Regulations provide that the backup withholding tax (currently
at a rate of 28%) and certain information reporting will not apply to payments
of interest or dividends with respect to which either the requisite
certification that the Non-U.S. Holder is not a U.S. person, as described above,
has been received or an exemption otherwise has been established, provided that
neither we nor our paying agent have actual knowledge, or reason to know, that
the Non-U.S. Holder is a U.S. person or that the conditions of any other
exemption are not, in fact, satisfied.
The payment of the gross proceeds from the sale, exchange, redemption
or other disposition of the notes or our common stock to or through the U.S.
office of any broker, U.S. or foreign, will be subject to information reporting
and possible backup withholding unless the Non-U.S. Holder certifies as to its
non-U.S. status under penalties of perjury or otherwise establishes an
exemption, provided that the broker does not have actual knowledge, or reason to
know, that the Non-U.S. Holder is a U.S. person or that the conditions of any
other exemption are not, in fact, satisfied. The payment of the gross proceeds
from the sale, exchange, redemption or other disposition of the
42
notes or our common stock to or through a non-U.S. office of a non-U.S. broker
will not be subject to information reporting or backup withholding unless the
non-U.S. broker has certain types of relationships with the United States (a
"U.S. related person"). In the case of the payment of the gross proceeds from
the sale, exchange, redemption or other disposition of the notes or our common
stock to or through a non-U.S. office of a broker that is either a U.S. person
or a U.S. related person, the Treasury Regulations require information reporting
(but not back-up withholding) on the payment unless the broker has documentary
evidence in its files that the owner is a Non-U.S. Holder and the broker has no
knowledge, or reason to know, to the contrary.
Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules may be refunded or credited against the Non-U.S.
Holder's U.S. federal income tax liability, provided that the required
information is provided to the IRS.
All certifications described above under the heading "Non-U.S. Holders"
are subject to special rules with respect to reliance standards, under which
certifications provided by holders may not be relied on under certain
circumstances (for example, if we, our paying agent, or the broker had actual
knowledge or reason to know that the certification is false).
THE PRECEDING DISCUSSION OF THE MATERIAL U.S. FEDERAL INCOME TAX
CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE NOTES OR OUR
COMMON STOCK IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY,
EACH INVESTOR IS URGED TO CONSULT HIS, HER OR ITS OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF THE NOTES
AND, WHERE APPLICABLE, OUR COMMON STOCK, INCLUDING THE TAX CONSEQUENCES UNDER
FEDERAL, STATE, LOCAL OR FOREIGN TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
APPLICABLE LAWS.
43
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus
will be passed on for us by Foley & Lardner LLP, Detroit, Michigan.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 2003 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report (which report
expresses an unqualified opinion and includes an explanatory paragraph relating
to changes in accounting for the impairment or disposal of long-lived assets and
goodwill in 2002) which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational reporting requirements of the
Exchange Act. In accordance with the Exchange Act, we file reports, proxy
statements, and other information with the Securities and Exchange Commission.
You can inspect and copy these reports, proxy statements, and other information
at the Public Reference Room of the Securities and Exchange Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Please call the
Securities and Exchange Commission at 1-800-SEC-0330 for further information on
the operation of the public reference rooms. Our Securities and Exchange
Commission filings are also available on the Securities and Exchange
Commission's web site. The address of this site is http://www.sec.gov.
We have filed with the Securities and Exchange Commission a
registration statement (which term includes all amendments, exhibits, and
schedules thereto) on Form S-3 under the Securities Act with respect to the
shares offered by this prospectus. This prospectus does not contain all the
information set forth in the registration statement because certain information
has been incorporated into the registration statement by reference in accordance
with the rules and regulations of the Securities and Exchange Commission. Please
review the documents incorporated by reference for a more complete description
of the matters to which such documents relate. The registration statement may be
inspected at the public reference facilities maintained by the Securities and
Exchange Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and is available to you on the Securities and Exchange
Commission's web site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by
reference into this prospectus the information we file with the Securities and
Exchange Commission, which means that we can disclose important information to
you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus, and information we file
later with the Securities and Exchange Commission will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made by us with the Securities and Exchange
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until
the sale of all of the shares of common stock that are part of this offering.
The documents we are incorporating by reference are as follows:
- our Annual Report on Form 10-K for the fiscal year ended December
31, 2003;
44
- our Current Reports on Form 8-K as filed with the SEC on February 3,
2004, March 15, 2004, March 26, 2004, and April 9, 2004;
- the description of our common stock contained in our Registration
Statement on Form 8-A filed on November 6, 1997 and any amendments or
reports filed for the purpose of updating such description; and
All documents that we file with the Securities and Exchange Commission
pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act subsequent
to the date of this registration statement and prior to the filing of a
post-effective amendment to this registration statement that indicates that all
securities offered under this prospectus have been sold, or that deregisters all
securities then remaining unsold, will be deemed to be incorporated in this
registration statement by reference and to be a part hereof from the date of
filing of such documents.
Any statement contained in a document we incorporate by reference will
be modified or superseded for all purposes to the extent that a statement
contained in this prospectus (or in any other document that is subsequently
filed with the Securities and Exchange Commission and incorporated by reference)
modifies or is contrary to that previous statement. Any statement so modified or
superseded will not be deemed a part of this prospectus except as so modified or
superseded.
You may request a copy of these filings at no cost (other than exhibits
unless such exhibits are specifically incorporated by reference) by writing or
telephoning us at the following address and telephone number:
Noble International Ltd.
28213 Van Dyke Road
Warren, Michigan 48093
(586) 751-5600
Attention: Michael C. Azar, Esquire
45
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4.00% CONVERTIBLE SUBORDATED NOTES
AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES
NOBLE INTERNATIONAL, LTD.
_____________, 2004
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14.-Other Expenses of Issuance and Distribution.
Securities and Exchange Commission filing fee................$ 10,560
Accounting fees and expenses.................................$ 10,000
Legal fees and expenses......................................$ 90,000
Miscellaneous................................................$ 14,440
Total expenses..........................................$ 125,000
All of the above fees and expenses will be paid by the Registrant. Other
than the Securities and Exchange Commission filing fee, all fees and expenses
are estimated.
Item 15. Indemnification of Directors and Officers.
Section 102 of the Delaware General Corporation Law ("DGCL"), as amended,
allows a corporation to eliminate the personal liability of directors of a
corporation to the corporation or its stockholders for monetary damages for a
breach of fiduciary duty as a director, except where the director breached his
duty of loyalty, failed to act in good faith, engaged in intentional misconduct
or knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase in violation of Delaware law or obtained an improper personal
benefit.
Section 145 of the DGCL provides, among other things, that a corporation
may indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding (other
than an action by or in the right of the corporation) by reason of the fact that
the person is or was a director, officer, agent or employee of the corporation
or is or was serving at the corporation's request as a director, officer, agent,
or employee of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgment, fines and
amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding. The power to indemnify applies
(a) if such person is successful on the merits or otherwise in defense of any
action, suit or proceeding or (b) if such person acted in good faith and in a
manner he reasonably believed to be in the best interest, or not opposed to the
best interest, of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
power to indemnify applies to actions brought by or in the right of the
corporation as well, but only to the extent of defense expenses (including
attorneys' fees but excluding amounts paid in settlement) actually and
reasonably incurred and not to any satisfaction of judgment or settlement of the
claim itself, and with the further limitation that in such actions no
indemnification shall be made in the event of any adjudication of negligence or
misconduct in the performance of duties to the corporation, unless the court
believes that in light of all the circumstances indemnification should apply.
Section 174 of the DGCL provides, among other things, that a director who
willfully or negligently approves of an unlawful payment of dividends or an
unlawful stock purchase or redemption may be held liable for such actions. A
director who was either absent when the unlawful actions were approved or
dissented at the time may avoid liability by causing his or her dissent to such
actions to be entered in the books containing the minutes of the meetings of the
board of directors at the time such action occurred or immediately after such
absent director receives notice of the unlawful acts.
Our certificate of incorporation provides that, pursuant to Delaware law,
our directors shall not be liable for monetary damages for breach of the
directors' fiduciary duty of care to us and our stockholders. This
II-1
provision in the certificate of incorporation does not eliminate the duty of
care, and in appropriate circumstances equitable remedies such as injunctive or
other forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to us or our stockholders, for acts or omissions
not in good faith or involving intentional misconduct or knowing violations of
law, for actions leading to improper personal benefit to the director and for
payment of dividends or approval of stock repurchases or redemptions that are
unlawful under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.
Our bylaws provide that we must indemnify our directors and officers to the
fullest extent permitted by Delaware law and require us to advance litigation
expenses upon our receipt of an undertaking by a director or officer to repay
such advances if it is ultimately determined that such director or officer is
not entitled to indemnification. The indemnification provisions contained in our
bylaws are not exclusive of any other rights to which a person may be entitled
by law, agreement, vote of stockholders or disinterested directors or otherwise.
We also have insurance on our directors and officers, which covers
liabilities under the federal securities laws.
Item 16. Exhibits.
The exhibits listed in the accompanying Exhibit Index are filed or
incorporated by reference as part of this Registration Statement.
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 and 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;
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Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required
to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 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 provisions set forth or described in
Item 15 of this Registration Statement, 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 of 1933 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
has duly caused this Form S-3 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Warren, and State of Michigan, on this
23rd day of April, 2004.
NOBLE INTERNATIONAL LTD.
By: /s/ Robert J. Skandalaris
------------------------------------
Robert J. Skandalaris
Chairman of the Board of Directors
and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints Robert J. Skandalaris and Michael C. Azar, and each of
them individually, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any Rule 462(b)
Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Signature Title Date
--------- ----- ----
/s/ Robert J. Skandalaris Chairman of the Board of Directors and Director April 23, 2004
------------------------------------
Robert J. Skandalaris
/s/ Christopher L. Morin President and Chief Executive Officer (Principal April 23, 2004
---------------------------
Christopher L. Morin Executive Officer)
/s/ Jay J. Hansen Chief Financial Officer April 23, 2004
---------------------------
Jay J. Hansen (Principal Accounting Officer)
/s/ Mark T. Behrman Director April 23, 2004
------------------------------------
Mark T. Behrman
/s/ Van Conway Director April 23, 2004
------------------------------------
Van Conway
/s/ Lee M. Canaan Director April 23, 2004
---------------------------
Lee M. Canaan
/s/ Stuart I. Greenbaum Director April 23, 2004
------------------------------------
Stuart I. Greenbaum
/s/ Daniel J. McEnroe Director April 23, 2004
------------------------------------
Daniel J. McEnroe
S-1
Signature Title Date
--------- ----- ----
/s/ Jonathan P. Rye Director April 23, 2004
------------------------------------
Jonathan P. Rye
/s/ Thomas L. Saeli Director April 23, 2004
------------------------------------
Thomas L. Saeli
/s/ Anthony R. Tersigni Director April 23, 2004
------------------------------------
Anthony R. Tersigni
S-2
EXHIBIT INDEX
Exhibit
-------
Number Document Description
------ --------------------
(3.1) Certificate of Incorporation, as amended (Filed as Exhibit 3.1 to
Registrant's Registration Statement on Form S-1, No. 333-27149,
and incorporated herein by reference).
(3.2) Bylaws, as amended (Filed as Exhibit 3.2 to Registrant's
Registration Statement on Form S-1, No. 333-27149, and
incorporated herein by reference).
(4.1) Form of Convertible Subordinated Note (incorporated by
reference to Exhibit 4.1 to the company's Current Report on Form
8-K filed March 26, 2004 (File No. 001-13581)).
(4.2) Registration Rights Agreement, dated March 25, 2004, by and among
the company and the investors named on the signature pages
thereto (incorporated by reference to Exhibit 4.2 to the
company's Current Report on Form 8-K filed March 26, 2004 (File
No. 001-13581)).
(5.1) Opinion of Foley & Lardner LLP (including consent of counsel).
(10.1) Securities Purchase Agreement, dated March 25, 2004, by and among
the company and the investors named on the signature pages
thereto (incorporated by reference to Exhibit 10.1 to the
company's Current Report on Form 8-K filed March 26, 2004 (File
No. 001-13581)).
(12.1) Statement regarding computation of earnings to fixed charges.
(23.1) Consent of Deloitte & Touche LLP.
(23.2) Consent of Foley & Lardner LLP (filed as part of Exhibit (5)).
(24.1) Power of Attorney relating to subsequent amendments (included on
the signature page to this Registration Statement).
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