As
Filed with the Securities and Exchange Commission on January 23,
2007.
REGISTRATION
NO. 333-128088
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
AMENDMENT
NO. 1 TO
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
|
FUELCELL
ENERGY, INC.
|
|
(Exact
Name of Registrant as Specified in Its Charter)
|
|
Delaware
|
|
(State
or Other Jurisdiction of Incorporation or
Organization)
|
|
06-0853042
|
|
(I.R.S.
Employer Identification Number)
|
|
3
Great Pasture Road
Danbury,
Connecticut 06813
(203)
825-6000
|
|
(Address,
Including Zip Code, and Telephone Number, Including Area
Code,
of
Registrant’s Principal Executive
Offices)
|
R.
Daniel Brdar
President, Chief Executive Officer and Chairman of the Board
FuelCell
Energy, Inc.
3
Great Pasture Road
Danbury,
Connecticut 06813
(203)
825-6000
|
(Name,
Address, Including Zip Code, and Telephone Number, Including Area
Code, of
Agent for Service)
|
Copies
of
All Communications to:
Richard
A. Krantz, Esq.
Robinson
& Cole LLP
Financial
Centre
695
East Main Street
Stamford,
Connecticut 06904
(203)
462-7500
Approximate
Date of Commencement of Proposed Sale to the Public: From time to time after
the
effective date of this registration statement.
If
the
only securities being registered on this form are being offered pursuant
to
dividend or interest reinvestment plans, please check the following box.
o
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 in connection with dividend or interest reinvestment
plans, check the following box. x.
If
this
form is filed to register additional securities for an offering pursuant
to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. o
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. o
If
this
form is a registration statement pursuant to General Instruction I.D. or
a
post-effective amendment thereto that shall become effective upon filing
with
the Commission pursuant to Rule 462(e) under the Securities Act, check
the
following box. o
If
this
form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act,
check
the following box. o
CALCULATION
OF REGISTRATION FEE
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Title
of Each Class of Securities to
Be Registered
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|
Amount
To
Be
Registered
|
|
Proposed
Maximum
Offering
Price
Per Share
|
|
Proposed
Maximum
Aggregate
Offering
Price
|
|
Amount
of
Registration
Fee
|
|
|
Debt
Securities
|
|
$
|
150,000,000(1)(2
|
)
|
|
100%(1)
(2
|
)
|
$
|
150,000,000(3
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)
|
$
|
17,655.00
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
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|
Preferred
Stock, $0.01 par value(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
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Common
Stock, $0.0001 par value(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
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TOTAL
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|
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|
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$
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17,655.00(6
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)
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(1)
There
are
being registered under this Registration Statement such indeterminate number
of
shares of common stock and preferred stock of the Registrant, and such
indeterminate principal amount of debt securities of the Registrant, as shall
have an aggregate initial offering price not to exceed $150,000,000. Any
offering of debt securities by the Registrant denominated other than in U.S.
dollars will be treated as the equivalent of U.S. dollars based on the exchange
rate applicable to the purchase of such debt securities at the time of initial
offering. If any debt securities are issued at an original issue discount by
the
Registrant, then the securities registered shall include such additional debt
securities as may be necessary such that the aggregate initial public offering
price of all securities issued pursuant to this Registration Statement will
equal $150,000,000. Any securities registered under this Registration Statement
may be sold separately or as units with other securities registered under this
Registration Statement. The proposed maximum initial offering price per unit
will be determined from time to time by the Registrant in connection with,
and
at the time of, the issuance by the Registrant of the securities registered
under this Registration Statement.
(2)
Not
specified with respect to each class of securities to be registered by the
Registrant pursuant to General Instruction II.D1 to Form S-3.
(3)
Estimated
solely for the purpose of calculating the registration fee pursuant to Rule
457(o) under the Securities Act of 1933. No separate consideration will be
received for any securities registered hereunder that are issued upon exercise,
conversion or exchange of debt securities or preferred stock registered
hereunder.
(4)
Including
such indeterminate number of shares of preferred stock as may from time to
time
be issued upon exercise, conversion or exchange of debt securities registered
hereunder, to the extent any such debt securities are, by their terms,
convertible into preferred stock.
(5)
Including
such indeterminate number of shares of common stock as may from time to time
be
issued upon exercise, conversion or exchange of debt securities or preferred
stock registered hereunder, to the extent any of such debt securities or shares
of preferred stock are, by their terms, convertible into common
stock.
(6)
Previously
Paid.
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 become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may
determine.
THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING
AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT
TO COMPLETION, DATED JANUARY 23, 2007
PROSPECTUS
[LOGO]
$150,000,000
Debt
Securities
Preferred
Stock
Common
Stock
We
may
from time to time offer and sell any combination of debt securities, preferred
stock and/or common stock described in this prospectus in one or more offerings.
The aggregate initial offering price of all securities sold under this
prospectus will not exceed $150,000,000.
The
securities may be offered to or through underwriters, through agents or dealers,
directly to one or more purchasers or through a combination of such methods.
See
“Plan of Distribution.”
This
prospectus provides a general description of the securities we may offer.
Each
time we sell securities, we will provide specific terms of the securities
offered in a supplement to this prospectus. The prospectus supplement may
also
add, update or change information contained in this prospectus. You should
read
this prospectus and the applicable prospectus supplement carefully before
you
invest in any securities. This prospectus may not be used to consummate a
sale
of securities unless accompanied by the applicable prospectus
supplement.
We
will
use the net proceeds received from the sale of the securities by the Company
for
general corporate purposes.
Our
common stock is quoted on the Nasdaq Global Market under the symbol “FCEL”. No
public market currently exists for the other securities offered hereby. The
applicable prospectus supplement will contain information, where applicable,
as
to any other listing on any securities exchange of the securities covered
by the
prospectus supplement.
Our
principal executive offices are located at 3 Great Pasture Road, Danbury,
Connecticut 06813, and our telephone number is (203) 825-6000.
Investing
in our securities involves risks that are described in the “Risk Factors”
section beginning on page 3 of this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
The
date
of this prospectus is __________, 2007.
TABLE
OF CONTENTS
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Page
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FORWARD-LOOKING STATEMENTS
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ii
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ABOUT
THIS PROSPECTUS
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ii
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FUELCELL
ENERGY, INC.
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1
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RISK
FACTORS
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3
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RATIO
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED
DIVIDENDS
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15
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USE
OF PROCEEDS
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15
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DESCRIPTION
OF DEBT SECURITIES
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15
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DESCRIPTION
OF CAPITAL STOCK
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24
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PLAN
OF DISTRIBUTION
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36
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DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
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38
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LEGAL
MATTERS
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38
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EXPERTS
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38
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WHERE
YOU CAN FIND MORE INFORMATION
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38
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INCORPORATION
BY REFERENCE
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39
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FORWARD-LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference into this prospectus
contain forward-looking statements that are based on current expectations,
estimates and projections about our industry, management’s beliefs, and
assumptions made by management. Words such as “anticipates,” “expects,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” and variations of such
words and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
are
subject to certain risks, uncertainties and assumptions that are difficult
to
predict; therefore, actual results may differ materially from those expressed
or
forecasted in any forward-looking statements. The risks and uncertainties
include those noted in “Risk Factors” above and in the documents incorporated by
reference. We undertake no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission utilizing a “shelf” registration process. Under this
shelf registration process, we may sell any combination of the securities
described in this prospectus in one or more offerings up to a total dollar
amount of $150,000,000. This prospectus provides you with a general description
of the securities that we may offer. Each time we sell securities under this
shelf registration, we will provide a prospectus supplement that will contain
specific information about the terms of the offering. The prospectus supplement
may also add, update or change information contained in this prospectus.
If
there is any inconsistency between the information in this prospectus and
any
prospectus supplement, you should rely on the information in that prospectus
supplement. You should carefully read both this prospectus and any prospectus
supplement, including documents incorporated by reference herein, together
with
the additional information described in the section entitled “Where You Can Find
More Information.”
We
have
not authorized any dealer, salesman or other person to give any information
or
to make any representation other than those contained or incorporated by
reference in this prospectus and the accompanying supplement to this prospectus.
You must not rely upon any information or representation not contained or
incorporated by reference in this prospectus or the accompanying prospectus
supplement. This prospectus and the accompanying supplement to this prospectus
do not constitute an offer to sell or the solicitation of an offer to buy
any
securities other than the registered securities to which they relate, nor
do
this prospectus and the accompanying supplement to this prospectus constitute
an
offer to sell or the solicitation of an offer to buy securities in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. You should not assume that the information
contained in this prospectus and the accompanying prospectus supplement is
accurate on any date subsequent to the date set forth on the front of the
document or that any information we have incorporated by reference is correct
on
any date subsequent to the date of the document incorporated by reference,
even
though this prospectus and any accompanying prospectus supplement is delivered
or securities sold on a later date.
FuelCell
Energy, Inc.
General
We
are a
world leader in the development and manufacture of fuel cell power plants
for
ultra-clean, efficient and reliable electric power generation. Our products
are designed to meet the 24/7 baseload power needs of commercial, industrial,
government and utility customers. To date, our products have generated over
150
million kilowatt hours of electricity and we have units operating at over
50
locations around the world.
Our
executive offices are located at 3 Great Pasture Road, Danbury, Connecticut
06813. Our telephone number is (203) 825-6000. We maintain a web site at
the following Internet address: www.fuelcellenergy.com.
The
information on our web site is not part of this prospectus.
Unless
the context otherwise requires, references in this prospectus to “FuelCell,”
“we,” “us” and “our” refer to FuelCell Energy, Inc.
As
used
in this prospectus, all degrees refer to Fahrenheit (oF),
and
kilowatt and megawatt numbers designate nominal or rated capacity of the
referenced power plant. As used in this prospectus, “kilowatt” (kW) means 1,000
watts; “megawatt” (MW) means 1,000,000 watts; and “kilowatt hour” (kWh) is equal
to 1 kW of power supplied to or taken from an electric circuit steadily for
one
hour. All dollar amounts are in U.S. dollars unless otherwise
noted.
Summary
of Business
We
have
been developing fuel cell technology since our founding in 1969. Our core
carbonate fuel cell products (“Direct FuelCell®”
or
“DFC®
Power
Plants”) offer stationary applications for customers. In addition to our current
commercial products, we continue to develop our next generation of carbonate
fuel cell and hybrid products as well as planar solid oxide fuel cell technology
with our own and government research and development funds.
Our
proprietary DFC®
Power
Plants electrochemically (meaning without combustion) produce electricity
directly from readily available hydrocarbon fuels, such as natural gas and
biomass fuels. Customers buy fuel cells to improve reliability and reduce
cost
and emissions.
We
believe our products offer significant advantages compared to other power
generation technologies:
· Reliable
24/7 baseload power,
· Ultra-clean
(e.g. virtually zero emissions) quiet operation,
· Lower
cost to generate electricity, and
· The
ability to site units locally and provide high temperature heat for cogeneration
applications.
Typical
customers for our products include manufacturers, mission critical institutions
such as correction facilities and government installations, hotels and customers
who can use waste or byproducts of their operations for fuel such as breweries,
food processors and waste water treatment facilities. With increasing demand
for
renewable and ultraclean power options, and increased volatility and uncertainty
in electric markets, our customers gain control of power generation economics,
reliability and emissions. Our fuel cells offer flexible siting and easy
permitting.
Through
December 31, 2006, our cumulative fleet availability was greater than 90
percent. Our DFC®
Power
Plants are protected by 46 U.S. and 74 international patents and we also
have
submitted 38 U.S. and 123 international patent applications.
Our
business strategy is to expand our leadership position in key markets, build
multi-megawatt markets and continue to reduce the costs of our products.
We
believe that with the emergence of the RPS markets, the growth of the California
market and continuing product cost reduction, we are well positioned to move
to
profitability. At a sustained annual order and production volume of
approximately 35 MW to 50 MW, depending on product mix, geographic location
and
other variables such as fuel prices, we believe we can reach gross margin
break-even. We believe our net income break-even can be achieved at a sustained
annual order and volume production of approximately 75-100 MW, assuming a
mix of
sub-MW and MW sales. Our 2.4 MW product currently has a production cost at
market clearing prices in certain regions such as Connecticut. Therefore,
if
product mix trends move toward MW and multi-MW orders, we believe that company
profitability can be achieved at annual volumes lower than 75
MW.
RISK
FACTORS
Investing
in our securities involves risks. Before investing in our securities, you should
carefully consider the following risk factors as well as the other information
included and incorporated by reference in this prospectus. If any of the
following risks actually occur, our business, financial condition, or results
of
operations and could be materially and adversely affected. In such cases, the
trading price of our securities could decline, and you may lose all or part
of
your investment.
We
have recently incurred losses and anticipate continued losses and negative
cash
flow.
We
have
been transitioning from a contract research and development company to a
commercial products developer and manufacturer. As such, we have not been
profitable since our fiscal year ended October 31, 1997. We expect to continue
to incur net losses and generate negative cash flow until we can produce
sufficient revenues to cover our costs. We may never become profitable. Even
if
we do achieve profitability, we may be unable to sustain or increase our
profitability in the future. For the reasons discussed in more detail below,
there are substantial uncertainties associated with our achieving and sustaining
profitability.
Our
cost reduction strategy may not succeed or may be significantly delayed, which
may result in our inability to offer our products at competitive prices and
may
adversely affect our sales.
Our
cost
reduction strategy is based on the assumption that a significant increase
in
production will result in economies of scale. In addition, our cost reduction
strategy relies on advancements in our manufacturing process, global competitive
sourcing, engineering design and technology (including projected power output)
that are currently not ascertainable. Failure to achieve our cost reduction
targets would have a material adverse effect on our commercialization plans
and,
therefore, our business, prospects, results of operations and financial
condition.
Our
products will compete with products using other energy sources, and if the
prices of the alternative sources are lower than energy sources used by our
products, sales of our products will be adversely
affected.
Our
Direct FuelCell®
has been
operated using a variety of hydrocarbon fuels, including natural gas, methanol,
diesel, biogas, coal gas, coal mine methane and propane. If these fuels are
not
readily available or if their prices increase such that electricity produced
by
our products costs more than electricity provided by other generation sources,
our products would be less economically attractive to potential customers.
In
addition, we have no control over the prices of several types of competitive
energy sources such as oil, gas or coal. Significant decreases (or short
term
increases) in the price of these fuels could also have a material adverse
effect
on our business because other generation sources could be more economically
attractive to consumers than our products.
We
have
contracted with certain customers to provide service of fuel cell power plants
over terms ranging from one to thirteen years. Under the provisions of these
contracts, we provide services to maintain, monitor and repair customer power
plants. Pricing for service contracts is based upon estimates of future costs,
which given the early stage of development could be materially different
from
actual expenses.
We
extend product warranties which could affect
our operating results.
We
warranty our products for a specific period of time against manufacturing
or
performance defects. As we have limited operating experience, warranty costs
are
expensed as incurred. As a result operating results could be negatively impacted
should there be product manufacturing or performance defects.
We
currently face and will continue to face significant
competition.
Our
Direct FuelCell®
currently faces, and will continue to face, significant competition. We compete
on the basis of our products’ reliability, fuel efficiency, environmental
considerations and cost. Technological advances in alternative energy products
or improvements in the electric grid or other sources of power generation,
or
other fuel cell technologies may negatively affect the development or sale
of
some or all of our products or make our products non-competitive or obsolete
prior to commercialization or afterwards. Other companies, some of which
have
substantially greater resources than ours, are currently engaged in the
development of products and technologies that are similar to, or may be
competitive with, our products and technologies.
Several
companies in the U.S. are involved in fuel cell development, although we
believe
we are the only domestic company engaged in significant manufacturing and
commercialization of carbonate fuel cells. Emerging fuel cell technologies
(and
companies developing them) include proton exchange membrane fuel cells (Ballard
Power Systems, Inc.; United Technologies Corp. or UTC Fuel Cells; and Plug
Power), phosphoric acid fuel cells (UTC Fuel Cells) and solid oxide fuel
cells
(Siemens Westinghouse Electric Company, SOFCo, General Electric, Delphi,
Rolls
Royce and Acumentrics). Each of these competitors has the potential to capture
market share in our target markets.
There
are
other potential carbonate fuel cell competitors internationally. In Europe,
a
company in Italy, Ansaldo Fuel Cells, is actively engaged in carbonate fuel
cell
development and is a potential competitor.
Other
than fuel cell developers, we must also compete with such companies as
Caterpillar, Cummins, and Detroit Diesel, which manufacture more mature
combustion-based equipment, including various engines and turbines, and have
well-established manufacturing, distribution, and operating and cost features.
Significant competition may also come from gas turbine companies like General
Electric, Ingersoll Rand, Solar Turbines and Kawasaki, which have recently
made
progress in improving fuel efficiency and reducing pollution in large-size
combined cycle natural gas fueled generators. These companies have also made
efforts to extend these advantages to smaller sizes.
We
have large and influential stockholders, which may make it difficult for
a third
party to acquire our common stock.
Our
largest two institutional shareholders each own more than 5%, but less than
10%,
of our outstanding common stock. MTU Friedrichshafen GmbH owns approximately
5%
of our outstanding common stock. James D. Gerson beneficially owns approximately
2% of our outstanding common stock. Loeb Investors Co. LXXV and Warren Bagatelle
(a managing director of an affiliate of Loeb Investors Co. LXXV) collectively
beneficially own approximately 2% of our outstanding common stock. These
ownership levels could make it difficult for a third party to acquire our
common
stock or have input into the decisions made by our board of directors, which
include Michael Bode (Chief Executive Officer of MTU CFC Solutions GmbH),
James
D. Gerson, Warren Bagatelle and Thomas L. Kempner (Chairman and Chief Executive
Officer of an affiliate of Loeb Investors Co. LXXV). MTU CFC is also a licensee
of our technology and a purchaser of our Direct FuelCell®
products. Therefore, it may be in MTU CFC’s interest to possess substantial
influence over matters concerning our overall strategy and technological
and
commercial development.
MTU
CFC may develop competing technologies.
MTU
CFC
Solutions GmbH is currently developing carbonate fuel cell technology. If
this
technology does not use DFC know-how, MTU CFC must use good faith efforts
to
license the technology to us. If MTU CFC is successful but does not grant
us a
license, it may be directly competing with us while having a significant
ownership interest in us, and a seat on our board of directors. We have agreed
with MTU CFC to continue developing products with as much commonality as
possible. However, the license agreement between us and MTU CFC provides
that
each of us retains the right to independently pursue the development of
carbonate fuel cell technologies.
We
have limited experience manufacturing our Direct
FuelCell®
products on a commercial basis, which may adversely affect our planned increases
in production capacity and our ability to satisfy customer
requirements.
We
have
limited experience manufacturing our Direct FuelCell®
products
on a commercial basis. Our manufacturing, testing and conditioning facilities
have equipment in place for a production capacity of 50 MW per year. We expect
that we will then increase our manufacturing capacity based on market demand.
We
cannot be sure that we will be able to achieve any planned increases in
production capacity. Also, as we scale up our production capacity, we cannot
be
sure that unplanned failures or other technical problems relating to the
manufacturing process will not occur.
Even
if
we are successful in achieving our planned increases in production capacity,
we
cannot be sure that we will do so in time to meet our product commercialization
schedule or to satisfy the requirements of our customers. Additionally, we
cannot be sure that we will be able to develop efficient, low-cost manufacturing
capabilities and processes (including automation) that will enable us to
meet
our cost goals and profitability projections. Our failure to develop advanced
manufacturing capabilities and processes, or meet our cost goals, could have
a
material adverse effect on our business, prospects, results of operations
and
financial condition.
Unanticipated
increases or decreases in business growth may result in adverse financial
consequences for us.
If
our
business grows more quickly than we anticipate, our existing and planned
manufacturing facilities may become inadequate and we may need to seek out
new
or additional space, at considerable cost to us. If our business does not grow
as quickly as we expect, our existing and planned manufacturing facilities
would, in part, represent excess capacity for which we may not recover the
cost;
in that circumstance, our revenues may be inadequate to support our committed
costs and our planned growth and our gross margins and business strategy would
be adversely affected.
Our
plans are dependent on market acceptance of our Direct
FuelCell®
products.
Our
plans
are dependent upon market acceptance of, as well as enhancements to, those
products. Fuel cell systems represent an emerging market, and we cannot be
sure
that potential customers will accept fuel cells as a replacement for traditional
power sources. As is typical in a rapidly evolving industry, demand and market
acceptance for recently introduced products and services are subject to a
high
level of uncertainty and risk. Since the distributed generation market is
still
evolving, it is difficult to predict with certainty the size of the market
and
its growth rate. The development of a market for our Direct FuelCell®
products
may be affected by many factors that are out of our control,
including:
· the
cost
competitiveness of our fuel cell products;
·
the
future costs of natural gas and other fuels used by our fuel cell
products;
·
consumer
reluctance to try a new product;
·
perceptions
of the safety of our fuel cell
products;
·
the
market for distributed generation;
·
local
permitting and environmental
requirements; and
·
the
emergence of newer, more competitive
technologies and products.
If
a
sufficient market fails to develop or develops more slowly than we anticipate,
we may be unable to recover the losses we will have incurred in the development
of Direct FuelCell®
products
and may never achieve profitability.
As
we
continue to commercialize our Direct FuelCell®
products, we will continue to develop warranties, production guarantees and
other terms and conditions relating to our products that will be acceptable
to
the marketplace, and continue to develop a service organization that will
aid in
servicing our products and obtain self-regulatory certifications, if available,
with respect to our products. Failure to achieve any of these objectives
may
also slow the development of a sufficient market for our products and,
therefore, have a material adverse effect on our results of
operations.
Our
government research and development contracts are subject to the risk of
termination by the contracting party and we may not realize the full amounts
allocated under the contracts due to the lack of Congressional
appropriations.
A
portion
of our fuel cell revenues have been derived from long-term cooperative
agreements and other contracts with the U.S. Department of Energy (“DOE”), the
U.S. Department of Defense, the U.S. Navy and other U.S. government agencies.
These agreements are important to the continued development of our technology
and our products.
Generally,
our U.S. government research and development contracts, are subject to the
risk
of termination at the convenience of the contracting agency. Furthermore,
these
contracts, irrespective of the amounts allocated by the contracting agency,
are
subject to annual Congressional appropriations and the results of government
or
agency sponsored reviews and audits of our cost reduction projections and
efforts. We can only receive funds under these contracts ultimately made
available to us annually by Congress as a result of the appropriations process.
Accordingly, we cannot be sure whether we will receive the full amounts awarded
under our government research and development or other contracts. Failure
to
receive the full amounts under any of our government research and development
contracts could materially and adversely affect our business prospects, results
of operations and financial condition.
Further,
although we have internal controls in place to oversee our government contracts,
no assurance can be given that these controls are sufficient to prevent isolated
violations of applicable laws, regulations and standards. If the agencies
determine that we or one of our subcontractors engaged in improper conduct,
we
may be subject to civil or criminal penalties and administrative sanctions,
payments, fines and suspension or prohibition from doing business with the
government, any of which could materially affect our financial condition.
The
U.S. government has certain rights relating to our intellectual property,
including restricting or taking title to certain
patents.
Many
of
our U.S. patents relating to our fuel cell technology are the result of
government-funded research and development programs. Two of our patents that
were the result of DOE-funded research prior to January 1988 (the date that
we
qualified as a “small business”) are owned by the U.S. government and have been
licensed to us. This license is revocable only in the limited circumstances
where it has been demonstrated that we are not making an effort to commercialize
the invention. We own all patents resulting from research funded by our DOE
contracts awarded after January 1988 to date, based on our “small business”
status when each contract was awarded. Under current regulations, patents
resulting from research funded by government agencies other than the DOE
are
owned by us, whether or not we are a “small business.”
Ten
U.S.
patents that we own have resulted from government-funded research and are
subject to the risk of exercise of “march-in” rights by the government. March-in
rights refer to the right of the U.S. government or a government agency to
exercise its non-exclusive, royalty-free, irrevocable worldwide license to
any
technology developed under contracts funded by the government if the contractor
fails to continue to develop the technology. These “march-in” rights permit the
U.S. government to take title to these patents and license the patented
technology to third parties if the contractor fails to utilize the patents.
In
addition, our DOE-funded research and development agreements also require
us to
agree that we will not provide to a foreign entity any fuel cell technology
subject to that agreement unless the fuel cell technology will be substantially
manufactured in the U.S. Accordingly, we could lose some or all of the value
of
these patents.
A
failure to qualify as a “small business” could adversely affect our rights to
own future patents under DOE-funded contracts.
Qualifying
as a “small business” under DOE contracts allows us to own the patents that we
develop under DOE contracts. A “small business” under applicable government
regulations generally consists of no more than 500 employees. If we continue
to
grow, we will no longer qualify as a “small business” and no longer own future
patents we develop under future contracts, grants or cooperative agreements
funded by the DOE based on such certification, unless we obtain a patent
waiver
from the DOE. Should we not obtain a patent waiver and outright ownership,
we
would nevertheless retain exclusive rights to any such patents, so long as
we
continue to commercialize the technology covered by the patents. As a result
of
our acquisition of Global Thermoelectric Inc., the number of our employees
increased and therefore, we temporarily did not qualify as a “small business.”
Following the sale of Global Thermoelectric Inc. and its TEG product line
on May
27, 2004, we again qualified as a “small business”; however, we cannot assure
you that we will continue to qualify as a “small business” in the
future.
Our
future success and growth is dependent on our distribution
strategy.
We
cannot
assure you that we will enter into distributor relationships that are consistent
with, or sufficient to support, our commercialization plans or our growth
strategy or that these relationships will be on terms favorable to us. Even
if
we enter into these types of relationships, we cannot assure you that the
distributors with which we form relationships will focus adequate resources
on
selling our products or will be successful in selling them. Some of these
distributor arrangements have or will require that we grant exclusive
distribution rights to companies in defined territories. These exclusive
arrangements could result in us being unable to enter into other arrangements
at
a time when the distributor with which we form a relationship is not successful
in selling our products or has reduced its commitment to marketing our products.
In addition, certain distributor arrangements include, and some future
distributor arrangements may also include, the issuance of equity and warrants
to purchase our equity, which may have an adverse effect on our stock price.
To
the extent we enter into distributor relationships, the failure of these
distributors in assisting us with the marketing and distribution of our products
may adversely affect our results of operations and financial
condition.
We
cannot
be sure that MTU CFC Solutions GmbH will continue to, or original equipment
manufacturers (“OEMs”) will, manufacture or package products using our Direct
FuelCell®
components. In this area, our success will largely depend upon our ability
to
make our products compatible with the power plant products of OEMs and the
ability of these OEMs to sell their products containing our products. In
addition, some OEMs may need to redesign or modify their existing power plant
products to fully incorporate our products. Accordingly, any integration,
design, manufacturing or marketing problems encountered by MTU CFC or other
OEMs
could adversely affect the market for our Direct FuelCell®
products
and, therefore, our business, prospects, results of operations and financial
condition.
We
depend on third party suppliers for the development and supply of key components
for Direct FuelCell®
products.
We
purchase several key components of our Direct FuelCell®
products
from other companies and rely on third-party suppliers for the balance-of-plant
components in our Direct FuelCell®
products. There are a limited number of suppliers for some of the key components
of Direct FuelCell®
products. A supplier’s failure to develop and supply components in a timely
manner or to supply components that meet our quality, quantity or cost
requirements or technical specifications or our inability to obtain alternative
sources of these components on a timely basis or on terms acceptable to us
could
harm our ability to manufacture our Direct FuelCell®
products. In addition, to the extent the processes that our suppliers use
to
manufacture components are proprietary, we may be unable to obtain comparable
components from alternative suppliers.
We
do not
know when or whether we will secure long-term supply relationships with any
of
our suppliers or whether such relationships will be on terms that will allow
us
to achieve our objectives. Our business, prospects, results of operations
and
financial condition could be harmed if we fail to secure long-term relationships
with entities that will supply the required components for our Direct
FuelCell®
products.
We
depend on our intellectual property, and our failure to protect that
intellectual property could adversely affect our future growth and
success.
Failure
to protect our existing intellectual property rights may result in the loss
of
our exclusivity or the right to use our technologies. If we do not adequately
ensure our freedom to use certain technology, we may have to pay others for
rights to use their intellectual property, pay damages for infringement or
misappropriation or be enjoined from using such intellectual property. We
rely
on patent, trade secret, trademark and copyright law to protect our intellectual
property. The patents that we have obtained will expire between 2008 and
2024
and the average remaining life of our U.S. patents is approximately 11.4
years.
Some
of
our intellectual property is not covered by any patent or patent application
and
includes trade secrets and other know-how that is not patentable, particularly
as it relates to our manufacturing processes and engineering design. In
addition, some of our intellectual property includes technologies and processes
that may be similar to the patented technologies and processes of third parties.
If we are found to be infringing third-party patents, we do not know whether
we
will able to obtain licenses to use such patents on acceptable terms, if at
all.
Our patent position is subject to complex factual and legal issues that may
give
rise to uncertainty as to the validity, scope and enforceability of a particular
patent. Accordingly, we cannot assure you that:
·
any
of
the U.S., Canadian or other foreign patents owned by us or other patents that
third parties license to us will not be invalidated, circumvented, challenged,
rendered unenforceable or licensed to others; or,
·
any
of our pending or future patent
applications will be issued with the breadth of claim coverage sought by us,
if
issued at all.
In
addition, effective patent, trademark, copyright and trade secret protection
may
be unavailable, limited or not applied for in certain foreign
countries.
We
also
seek to protect our proprietary intellectual property, including intellectual
property that may not be patented or patentable, in part by confidentiality
agreements and, if applicable, inventors’ rights agreements with our
subcontractors, vendors, suppliers, consultants, strategic partners and
employees. We cannot assure you that these agreements will not be breached,
that
we will have adequate remedies for any breach or that such persons or
institutions will not assert rights to intellectual property arising out of
these relationships. Certain of our intellectual property has been licensed
to
us on a non-exclusive basis from third parties that may also license such
intellectual property to others, including our competitors. If our licensors
are
found to be infringing third-party patents, we do not know whether we will
be
able to obtain licenses to use the intellectual property licensed to us on
acceptable terms, if at all.
If
necessary or desirable, we may seek extensions of existing licenses or further
licenses under the patents or other intellectual property rights of others.
However, we can give no assurances that we will obtain such extensions or
further licenses or that the terms of any offered licenses will be acceptable
to
us. The failure to obtain a license from a third party for intellectual property
that we use at present could cause us to incur substantial liabilities, and
to
suspend the manufacture or shipment of products or our use of processes
requiring the use of that intellectual property.
While
we
are not currently engaged in any material intellectual property litigation,
we
could become subject to lawsuits in which it is alleged that we have infringed
the intellectual property rights of others or commence lawsuits against others
who we believe are infringing upon our rights. Our involvement in intellectual
property litigation could result in significant expense to us, adversely
affecting the development of sales of the challenged product or intellectual
property and diverting the efforts of our technical and management personnel,
whether or not that litigation is resolved in our favor.
Our
future success will depend on our ability to attract and retain qualified
management and technical personnel.
Our
future success is substantially dependent on the continued services and on
the
performance of our executive officers and other key management, engineering,
scientific, manufacturing and operating personnel, particularly R. Daniel
Brdar,
our Chief Executive Officer. The loss of the services of any executive officer,
including Mr. Brdar, or other key management, engineering, scientific,
manufacturing and operating personnel, could materially adversely affect
our
business. Our ability to achieve our development and commercialization plans
will also depend on our ability to attract and retain additional qualified
management and technical personnel. Recruiting personnel for the fuel cell
industry is competitive. We do not know whether we will be able to attract
or
retain additional qualified management and technical personnel. Our inability
to
attract and retain additional qualified management and technical personnel,
or
the departure of key employees, could materially and adversely affect our
development and commercialization plans and, therefore, our business, prospects,
results of operations and financial condition.
Our
management may be unable to manage rapid growth
effectively.
We
may
rapidly expand our manufacturing capabilities, accelerate the commercialization
of our products and enter a period of rapid growth, which will place a
significant strain on our senior management team and our financial and other
resources. Any expansion may expose us to increased competition, greater
overhead, marketing and support costs and other risks associated with the
commercialization of a new product. Our ability to manage rapid growth
effectively will require us to continue to improve our operations, to improve
our financial and management information systems and to train, motivate and
manage our employees. Difficulties in effectively managing the budgeting,
forecasting and other process control issues presented by such a rapid expansion
could harm our business, prospects, results of operations and financial
condition.
We
may be affected by environmental and other governmental
regulation.
We
are
subject to federal, state, provincial or local regulation with respect to,
among
other things, emissions and siting. Assuming no co-generation applications
are
used in conjunction with our Direct FuelCell®
plants,
they will discharge humid flue gas at temperatures of up to 800o
F, water
at temperatures of approximately 10-20
o
F above
surrounding air temperatures and carbon dioxide.
In
addition, it is possible that industry-specific laws and regulations will
be
adopted covering matters such as transmission scheduling, distribution and
the
characteristics and quality of our products, including installation and
servicing. These regulations could limit the growth in the use of carbonate
fuel
cell products, decrease the acceptance of fuel cells as a commercial product
and
increase our costs and, therefore, the price of our Direct FuelCell®
products. Accordingly, compliance with existing or future laws and regulations
could have a material adverse effect on our business, prospects, results
of
operations and financial condition.
Utility
companies could impose customer fees or interconnection requirements on our
customers that could make our products less
desirable.
Utility
companies commonly charge fees to larger, industrial customers for disconnecting
from the electric grid or for having the capacity to use power from the electric
grid for back up purposes. These fees could increase the cost to our customers
of using our Direct FuelCell®
products
and could make our products less desirable, thereby harming our business,
prospects, results of operations and financial condition.
Several
states have created and adopted or are in the process of creating their own
interconnection regulations covering both technical and financial requirements
for interconnection to utility grids. Depending on the complexities of the
requirements, installation of our systems may become burdened with additional
costs that might have a negative impact on our ability to sell systems. The
Institute of Electrical and Electronics Engineers has been working to create
an
interconnection standard addressing the technical requirements for distributed
generation to interconnect to utility grids. Many parties are hopeful that
this
standard will be adopted nationally to help reduce the barriers to deployment
of
distributed generation such as fuel cells; however this standard may not
be
adopted nationally thereby limiting the commercial prospects and profitability
of our fuel cell systems.
We
could be liable for environmental damages resulting from our research,
development or manufacturing operations.
Our
business exposes us to the risk of harmful substances escaping into the
environment, resulting in personal injury or loss of life, damage to or
destruction of property, and natural resource damage. Depending on the nature
of
the claim, our current insurance policies may not adequately reimburse us
for
costs incurred in settling environmental damage claims, and in some instances,
we may not be reimbursed at all. Our business is subject to numerous federal,
state and local laws and regulations that govern environmental protection
and
human health and safety. We believe that our businesses are operating in
compliance in all material respects with applicable environmental laws, however
these laws and regulations have changed frequently in the past and it is
reasonable to expect additional and more stringent changes in the
future.
Our
operations may not comply with future laws and regulations and we may be
required to make significant unanticipated capital and operating expenditures.
If we fail to comply with applicable environmental laws and regulations,
governmental authorities may seek to impose fines and penalties on us or to
revoke or deny the issuance or renewal of operating permits and private parties
may seek damages from us. Under those circumstances, we might be required to
curtail or cease operations, conduct site remediation or other corrective
action, or pay substantial damage claims.
We
may be required to conduct environmental remediation activities, which could
be
expensive.
We
are
subject to a number of environmental laws and regulations, including those
concerning the handling, treatment, storage and disposal of hazardous materials.
These environmental laws generally impose liability on present and former owners
and operators, transporters and generators for remediation of contaminated
properties. We believe that our businesses are operating in compliance in all
material respects with applicable environmental laws, many of which provide
for
substantial penalties for violations. We cannot assure you that future changes
in such laws, interpretations of existing regulations or the discovery of
currently unknown problems or conditions will not require substantial additional
expenditures. Any noncompliance with these laws and regulations could subject
us
to material administrative, civil or criminal penalties or other liabilities.
In
addition, we may be required to incur substantial costs to comply with current
or future environmental and safety laws and regulations.
Our
products use inherently dangerous, flammable fuels, operate at high temperatures
and use corrosive carbonate material, each of which could subject our business
to product liability claims.
Our
business exposes us to potential product liability claims that are inherent
in
products that use hydrogen. Our products utilize fuels such as natural gas
and
convert these fuels internally to hydrogen that is used by our products to
generate electricity. The fuels we use are combustible and may be toxic.
In
addition, our Direct FuelCell®
products
operate at high temperatures and our Direct FuelCell®
products
use corrosive carbonate material, which could expose us to potential liability
claims. Although we have comprehensive safety, maintenance and training programs
in place, we cannot guarantee there will not be accidents. Any accidents
involving our products or other hydrogen-using products could materially
impede
widespread market acceptance and demand for our Direct FuelCell®
products. In addition, we might be held responsible for damages beyond the
scope
of our insurance coverage. We also cannot predict whether we will be able
to
maintain our insurance coverage on acceptable terms.
We
are subject to risks inherent in international
operations.
Since
we
market our Direct FuelCell®
products
both inside and outside the U.S. and Canada, our success depends, in part,
on
our ability to secure international customers and our ability to manufacture
products that meet foreign regulatory and commercial requirements in target
markets. We have limited experience developing and manufacturing our products
to
comply with the commercial and legal requirements of international markets.
In
addition, we are subject to tariff regulations and requirements for export
licenses, particularly with respect to the export of some of our technologies.
We face numerous challenges in our international expansion, including unexpected
changes in regulatory requirements, fluctuations in currency exchange rates,
longer accounts receivable requirements and collections, difficulties in
managing international operations, potentially adverse tax consequences,
restrictions on repatriation of earnings and the burdens of complying with
a
wide variety of international laws. Any of these factors could adversely
affect
our operations and revenues.
Our
stock price has been and could remain volatile.
The
market price for our common stock has been and may continue to be volatile
and
subject to extreme price and volume fluctuations in response to market and
other
factors, including the following, some of which are beyond our
control:
| · |
failure
to meet our product development and commercialization
milestones;
|
| · |
variations
in our quarterly operating results from the expectations of securities
analysts or investors;
|
| · |
downward
revisions in securities analysts’ estimates or changes in general market
conditions;
|
| · |
announcements
of technological innovations or new products or services by us or
our
competitors;
|
| · |
announcements
by us or our competitors of significant acquisitions, strategic
partnerships, joint ventures or capital
commitments;
|
| · |
additions
or departures of key personnel;
|
| · |
investor
perception of our industry or our prospects;
|
| · |
insider
selling or buying;
|
| · |
demand
for our common stock; and
|
| · |
general
technological or economic trends.
|
In
the
past, following periods of volatility in the market price of their stock, many
companies have been the subjects of securities class action litigation. If
we
became involved in securities class action litigation in the future, it could
result in substantial costs and diversion of management’s attention and
resources and could harm our stock price, business, prospects, results of
operations and financial condition.
Provisions
of Delaware and Connecticut law and of our charter and by-laws may make a
takeover more difficult.
Provisions
in our certificate of incorporation and by-laws and in Delaware and Connecticut
corporate law may make it difficult and expensive for a third party to pursue
a
tender offer, change in control or takeover attempt that is opposed by our
management and board of directors. Public stockholders who might desire to
participate in such a transaction may not have an opportunity to do so. These
anti-takeover provisions could substantially impede the ability of public
stockholders to benefit from a change in control or change in our management
and
board of directors.
We
depend on relationships with strategic partners, and the terms and
enforceability of many of these relationships are not
certain.
We
have
entered into relationships with strategic partners for design, product
development and distribution of our existing products, and products under
development, some of which may not have been documented by a definitive
agreement. The terms and conditions of many of these agreements allow for
termination by the partners. Termination of any of these agreements could
adversely affect our ability to design, develop and distribute these products
to
the marketplace. We cannot assure you that we will be able to successfully
negotiate and execute definitive agreements with any of these partners, and
failure to do so may effectively terminate the relevant
relationship.
Future
sales of substantial amounts of our common stock could affect the market price
of our common stock.
Future
sales of substantial amounts of our common stock, or securities convertible
or
exchangeable into shares of our common stock, into the public market, including
shares of our common stock issued upon exercise of options and warrants, or
perceptions that those sales could occur, could adversely affect the prevailing
market price of our common stock and our ability to raise capital in the
future.
The
rights of the Series 1 preferred shares and Series B preferred stock could
negatively impact FuelCell.
The
terms
of the Series 1 preferred shares issued by FuelCell Energy, Ltd., our
wholly-owned, indirect subsidiary, provide rights to the holder, Enbridge
Inc.
(“Enbridge”), including dividend and conversion rights among others that could
negatively impact us. For example, the terms of the Series 1 preferred shares
provide that the holders are entitled to receive cumulative dividends for
each
calendar quarter for so long as such shares are outstanding. Assuming the
exchange rate for Canadian dollars is Cdn.$1.1758 to U.S.$1.00 (exchange
rate on
January 10, 2007) at the time of the applicable dividend payment date, we
are
required to pay a preferred dividend of approximately $265,776 per calendar
quarter, subject to reduction in accordance with the terms of the Series
1
preferred shares. The terms of the Series 1 preferred shares also require
that
the holder be paid any accrued and unpaid dividends on December 31, 2010.
To the
extent that there is a significant amount of accrued dividends that is unpaid
as
of December 31, 2010 and we do not have sufficient working capital at that
time
to pay the accrued dividends, our financial condition could be adversely
affected. We have guaranteed these dividend obligations, including paying
a
minimum of Cdn.$500,000 in cash annually to Enbridge for so long as Enbridge
holds the Series 1 preferred shares. We have also guaranteed the liquidation
obligations of FuelCell Energy, Ltd. under the Series 1 preferred shares.
We
are
also required to issue common stock to the holder of the Series 1 preferred
shares if and when the holder exercises its conversion rights. The number
of
shares of common stock that we may issue upon conversion could be significant
and dilutive to our existing stockholders. For example, assuming the holder
of
the Series 1 preferred shares exercises its conversion rights after July
31,
2020 and assuming our common stock price is U.S.$6.22 (our common stock closing
price on January 10, 2007) and the exchange rate for Canadian dollars is
Cdn.$1.1758 to U.S.$1.00 (exchange rate on January 10, 2007) at the time
of
conversion, we would be required to issue approximately 3,598,260 shares
of our
common stock.
The
terms
of the Series B preferred stock also provide rights to their holders that
could
negatively impact us. Holders of the Series B preferred stock are
entitled to receive cumulative dividends at the rate of $50 per share per
year,
payable either in cash or in shares of our common stock. To the
extent the dividend is paid in shares, additional issuances could be dilutive
to
our existing stockholders and the sale of those shares could have a negative
impact on the price of our common stock. A share of our Series B preferred
stock may be converted at any time, at the option of the holder, into 85.1064
shares of our common stock (which is equivalent to an initial conversion
price
of $11.75 per share), plus cash in lieu of fractional shares. Furthermore,
the conversion rate applicable to the Series B preferred stock is subject
to
adjustment upon the occurrence of certain events.
RATIO
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED
DIVIDENDS
The
ratio
of our earnings to fixed charges are set forth below for each of the periods
indicated.
| |
|
Fiscal
Year Ended October 31,
|
| |
|
2006(1)
|
|
2005(1)
|
|
2004(1)
|
|
2003(1)
|
|
2002(1)
|
|
Ratio
of earnings to fixed charges and preference dividends
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
(1)
For
the
fiscal years ended October 31, 2006, 2005, 2004, 2003 and 2002, our earnings
were insufficient to cover fixed charges. The coverage deficiencies were
$83.3
million, $71.5 million,
$88.2 million,
$67.4 million
and $48.8 million,
respectively.
For
purposes of calculating the ratios of earnings to fixed charges, (i) fixed
charges consist of interest on debt, amortization of discount on debt,
capitalized interest, and preferred dividends and (ii) earnings consist of
pre-tax income from operations and fixed charges (excluding capitalized
interest) and include the amortization of capitalized interest.
USE
OF PROCEEDS
Except
as
may be provided in an applicable prospectus supplement, we will use the net
proceeds from the sale of the debt securities, preferred stock and/or common
stock for market and product development, project financing and general
corporate purposes. General corporate purposes may include capital expenditures,
repayment of debt, payment of dividends and any other purposes that we may
specify in any prospectus supplement. We may invest the net proceeds temporarily
until we use them for their stated purpose.
DESCRIPTION
OF DEBT SECURITIES
We
may
from time to time offer and sell debt securities consisting of debentures,
notes
and/or other unsecured evidences of indebtedness (the "Debt Securities"). The
Debt Securities will be either our unsecured senior debt securities (the "Senior
Debt Securities") or our unsecured subordinated debt securities (the
"Subordinated Debt Securities"). The Senior Debt Securities will be issued
under
an Indenture (the "Senior Indenture") between us and a trustee that will be
identified in a prospectus supplement (the "Senior Trustee"). The Senior Debt
Securities will be our direct, unsecured obligations and will rank equally
with
all of our outstanding unsecured senior indebtedness. The Subordinated Debt
Securities will be issued under a second indenture (the "Subordinated
Indenture") between us and a trustee that will be identified in a prospectus
supplement (the "Subordinated Trustee"), which may be the same as the Senior
Trustee. The Subordinated Debt Securities will be our direct, unsecured
obligations and, unless otherwise specified in the prospectus supplement
relating to a particular series of Subordinated Debt Securities offered by
such
prospectus supplement, will be subject to the subordination provisions set
forth
under the heading "Subordination of the Subordinated Debt Securities" below.
The
Senior Indenture and the Subordinated Indenture are together called the
"Indentures" and the Senior Trustee and the Subordinated Trustee are together
called the "Trustee."
The
following summary of certain provisions of the Indentures is not complete.
You
should refer to the form of each Indenture, copies of which will be filed as
exhibits to the registration statement of which this prospectus is a
part.
The
following section describes certain general terms and provisions of the Debt
Securities. The Debt Securities may be issued from time to time in one or more
series. The particular terms of each series of Debt Securities offered by any
prospectus supplement will be described in that prospectus
supplement.
General.
The
Indentures do not limit the aggregate principal amount of Debt Securities that
we may issue. Each Indenture provides that Debt Securities of any series may
be
issued under it up to the aggregate principal amount authorized from time to
time by us and may be denominated in any currency or currency unit that we
designate. We will determine the terms and conditions of each series of Debt
Securities, including the maturity, principal and interest, but those terms
must
be consistent with the Indenture. Unless set forth in the applicable prospectus
supplement, neither the Indentures nor the Debt Securities will limit or
otherwise restrict the amount of other indebtedness that we may incur or the
other securities that we may issue.
The
prospectus supplement relating to each series of Debt Securities being offered
will specify the particular terms of those Debt Securities. The terms may
include:
| · |
the
title of the Debt Securities and whether they are Senior Debt Securities
or Subordinated Debt Securities;
|
| · |
any
limit on the aggregate principal amount of the Debt
Securities;
|
| · |
the
priority of payment of the Debt Securities, including any subordination
provisions;
|
| · |
the
price or prices (which may be expressed as a percentage of the aggregate
principal amount thereof) at which the Debt Securities will be
issued;
|
| · |
the
date or dates on which the principal and premium, if any, of the
Debt
Securities are payable;
|
| · |
the
interest rate or rates (which may be fixed or variable) of the Debt
Securities, if any;
|
| · |
the
interest payment date or dates, if any, or the method or methods
by which
such dates may be determined, if any, the date or dates on which
payment
of interest, if any, will commence, the date or dates from which
interest
will accrue and the regular record dates for such interest payment
dates;
|
| · |
the
extent to which any of the Debt Securities will be issuable in temporary
or permanent global form, or the manner in which any interest payable
on a
temporary or permanent Global Security (as defined herein) will be
paid;
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each
office or agency where, subject to the terms of the applicable Indenture,
the Debt Securities may be presented for registration of transfer
or
exchange;
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the
place or places where, subject to the terms of the applicable Indenture,
the principal (and premium, if any) and interest, if any, on the
Debt
Securities will be payable;
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the
terms and conditions on which we may redeem any Debt Securities,
if at
all;
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any
obligation to redeem or purchase any Debt Securities and the terms
and
conditions on which we must do so;
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the
denomination or denominations in which the Debt Securities will be
issuable if other than $1,000 and integral multiples
thereof;
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the
currency, currencies or units based on or related to currencies for
which
the Debt Securities may be purchased and the currency, currencies
or
currency units in which the principal of, premium, if any, and any
interest on such Debt Securities may be
payable;
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| · |
whether
the Debt Securities will be convertible into shares of our common
stock or
preferred stock, or other securities or property, and, if so, the
terms of
such conversion;
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any
index used to determine the amount of payments of principal of, premium,
if any, and interest on the Debt
Securities;
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the
payment of any additional amounts with respect to the Debt
Securities;
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whether
any of the Debt Securities will be issued as Original Issue Discount
Securities (as defined below) and the terms and provisions relating
to
these securities;
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information
with respect to book-entry procedures relating to Global Securities,
if
any;
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| · |
if
applicable, that the Debt Securities are
defeasible;
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any
additional covenants or Events of Default not set forth in the applicable
Indenture or changes in the covenants or Events of Default set forth
in
the applicable Indenture; and
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| · |
any
other terms of the Debt Securities not inconsistent with the provisions
of
the applicable Indenture.
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Debt
Securities may be issued as original issue discount Debt Securities (bearing
no
interest or interest at a rate that at the time of issuance is below market
rates) ("Original Issue Discount Securities"), to be sold at a substantial
discount below their stated principal amount. There may not be any periodic
payments of interest on Original Issue Discount Securities. In the event
of an
acceleration of the maturity of any Original Issue Discount Security, the
amount
payable to the holder of such Original Issue Discount Security upon such
acceleration will be set forth in the prospectus supplement and determined
in
accordance with the terms of such security and the Indenture, but will be
an
amount less than the amount payable at the maturity of the principal of such
Original Issue Discount Security. The federal income tax considerations with
respect to Original Issue Discount Securities will be explained in the
prospectus supplement we prepare for the Original Issue Discount
Securities.
Conversion
and Exchange Rights. The
prospectus supplement will describe, if applicable, the terms on which you
may
convert Debt Securities into or exchange them for our common stock, our
preferred stock or other securities or property. The conversion or exchange
may
be mandatory or may be at your option. We will describe how the number of shares
of our common stock, our preferred stock or other securities or property to
be
received upon conversion or exchange would be calculated.
Form,
Exchange and Transfer.
We will
issue Debt Securities only in fully registered form, without coupons, and,
unless otherwise specified in the prospectus supplement, only in denominations
of $1,000 and integral multiples thereof.
The
holder of a Debt Security may elect, subject to the terms of the Indentures
and
the limitations applicable to Global Securities, to exchange them for other
Debt
Securities of the same series of any authorized denomination and of a like
tenor
and aggregate principal amount.
Holders
of Debt Securities may present them for exchange as provided above or for
registration of transfer, duly endorsed or with the form of transfer endorsed
thereon duly executed, at the office of the transfer agent we designate for
the
purpose. We will not impose a service charge for any registration of transfer
or
exchange of Debt Securities, but we may require a payment sufficient to cover
any tax or other governmental charge payable in connection with the transfer
exchange. We will name the transfer agent in the prospectus supplement. We
may
designate additional transfer agents or rescind the designation of any transfer
agent or approve a change in the office through which any transfer agent acts,
but we must maintain a transfer agent in each place of payment for the Debt
Securities.
If
we
redeem the Debt Securities, we will not be required to issue, register the
transfer of or exchange any Debt Security during a specified period prior to
mailing a notice of redemption. We are not required to register the transfer
of
or exchange any Debt Security selected for redemption, except the unredeemed
portion of the Debt Security being redeemed.
Payment
and Paying Agents.
Unless
otherwise stated in the prospectus supplement, we will pay principal and any
premium or interest on a Debt Security to the person in whose name the Debt
Security is registered at the close of business on the regular record date
for
such interest.
Unless
otherwise stated in the prospectus supplement, we will pay principal and any
premium or interest on the Debt Securities at the office of our designated
paying agent, except we may pay interest by check mailed to the address of
the
person entitled to the payment. Unless we state otherwise in the prospectus
supplement, the corporate trust office of the Trustee will be the paying agent
for the Debt Securities.
Any
other
paying agents we designate for the Debt Securities of a particular series will
be named in the prospectus supplement. We may designate additional paying
agents, rescind the designation of any paying agent or approve a change in
the
office through which any paying agent acts, but we must maintain a paying agent
in each place of payment for the Debt Securities.
The
paying agent will return to us all money we pay to it for the payment of the
principal, premium or interest on any Debt Security that remains unclaimed
for a
specified period. The holder thereafter may look only to us for
payment.
Global
Securities.
The Debt
Securities of any series may be represented by one or more global securities
(each, a "Global Security" and, together, the "Global Securities") that will
have an aggregate principal amount equal to that of the Debt Securities of
that
series. Each Global Security will be registered in the name of a depositary
identified in the prospectus supplement. We will deposit the Global Security
with the depositary or a custodian, and the Global Security will bear a legend
regarding the restrictions on exchanges and registration of
transfer.
No
Global
Security may be exchanged in whole or in part for Debt Securities registered,
and no transfer of a Global Security in whole or in part may be registered,
in
the name of any person other than the depositary or any nominee of the
depositary unless (1) the depositary has notified us that it is unwilling or
unable to continue as depositary or (2) an event of default occurs and continues
with respect to the Debt Securities. The depositary will determine how all
securities issued in exchange for a Global Security will be
registered.
As
long
as the depositary or its nominee is the registered holder of a Global Security,
the depositary or the nominee will be considered the sole owner and holder
of
the Global Security and the underlying Debt Securities. Except as stated above,
owners of beneficial interests in a Global Security will not be entitled to
have
the Global Security or any Debt Security registered in their names, will not
receive physical delivery of certificated Debt Securities and will not be
considered to be the owners or holders of the Global Security or underlying
Debt
Securities. We will make all payments of principal, premium and interest on
a
Global Security to the depositary or its nominee. The laws of some jurisdictions
require that certain purchasers of securities take physical delivery of such
securities in definitive form. These laws may prevent you from transferring
your
beneficial interests in a Global Security.
Only
institutions that have accounts with the depositary or its nominee and persons
that hold beneficial interests through the depositary or its nominee may own
beneficial interests in a Global Security. The depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts
of
Debt Securities represented by the Global Security to the accounts of its
participants. Ownership of beneficial interests in a Global Security will be
shown only on, and the transfer of those ownership interests will be effected
only through, records maintained by the depositary or any such
participant.
The
policies and procedures of the depositary may govern payments, transfers,
exchanges and other matters relating to beneficial interests in a Global
Security. We and the Trustee assume no responsibility or liability for any
aspect of the depositary's or any participant's records relating to, or for
payments made on account of, beneficial interests in a Global
Security.
The
specific terms of the depositary arrangement with respect to any series of
Debt
Securities will be described in the applicable prospectus
supplement.
Consolidation,
Merger and Sale of Assets.
Each
Indenture provides that we may, without the consent of the holders of any of
the
Debt Securities outstanding under the applicable Indenture, consolidate with,
merge into or transfer our assets substantially as an entirety to any person,
provided that:
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any
successor assumes our obligations on the applicable Debt Securities
and
under the applicable Indenture;
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after
giving effect to the transaction, there is no Default or Event of
Default
that is continuing; and
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certain
other conditions under the applicable Indenture are
met.
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Accordingly,
such consolidation, merger or transfer of assets substantially as an entirety,
which meets the conditions described above, would not create any Event of
Default which would entitle holders of the Debt Securities, or the Trustee
on
their behalf, to take any of the actions described below under "Events of
Default."
Leveraged
and Other Transactions.
Unless
otherwise specified in the applicable prospectus supplement, the Indentures
and
the Debt Securities will not contain, among other things, provisions that would
protect holders of the Debt Securities in the event of a highly leveraged or
other transaction involving us that could adversely affect the holders of Debt
Securities.
Modification
of the Indentures; Waiver.
Each
Indenture provides that, with the consent of the holders of not less than a
majority in aggregate principal amount of the outstanding Debt Securities of
each affected series, modifications and alterations of such Indenture may be
made that affect the rights of the holders of such Debt Securities. However,
no
such modification or alteration may be made without the consent of the holder
of
each Debt Security so affected which would, among other things:
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change
the maturity of the principal of, or of any installment of interest
(or
premium, if any) on, any Debt Security issued pursuant to such
Indenture;
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change
the principal amount thereof, premium thereon, if any, or interest
thereon;
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change
the method of calculation of interest or the currency of payment
of
principal or interest (or premium, if any)
thereon;
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reduce
the minimum rate of interest thereon;
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impair
the right to bring suit for the enforcement of any such payment on
or with
respect to any such Debt Security;
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reduce
the amount of principal of an Original Issue Discount Security that
would
be due and payable upon an acceleration of the maturity
thereof;
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reduce
the above-stated percentage in principal amount of outstanding Debt
Securities of any series required to modify or alter such
Indenture;
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in
the case of Subordinated Debt Securities, modify the subordination
provisions in a manner materially adverse to their
holders;
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in
the case of Debt Securities that are convertible or exchangeable
into our
other securities, adversely affect the right of holders to convert
or
exchange any of the Debt Securities;
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reduce
the percentage in principal amount of outstanding Debt Securities
of any
series necessary for waiver of compliance with certain provisions
of the
Indentures or for waiver of certain
defaults;
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modify
provisions with respect to modification and waiver;
or
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change
our obligation to maintain an office or agency as required by the
applicable Indenture.
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The
holders of a majority in aggregate principal amount of the outstanding Debt
Securities of any series may waive, on behalf of the holders of all Debt
Securities of that series, our compliance with certain restrictive provisions
of
the Indentures. Prior to the acceleration of the maturity of the Debt Securities
of any series outstanding under the Indentures, the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of any series
may
waive any past default under the Indenture with respect to Debt Securities
of
that series, except a default (1) in the payment of principal, premium or
interest on any Debt Security of that series or (2) in respect of a
covenant or provision of the Indenture that cannot be amended without each
holder's consent.
Except
in
certain limited circumstances, we may set any day as a record date for the
purpose of determining the holders of outstanding Debt Securities of any series
entitled to give or take any direction, notice, consent, waiver or other action
under the Indentures. In certain limited circumstances, the Trustee may set
a
record date for action by holders. To be effective, the action must be taken
by
holders of the requisite principal amount of such Debt Securities within a
specified period following the record date.
Events
of Default.
An Event
of Default with respect to the Debt Securities of any series is defined in
the
applicable Indenture as:
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default
in the payment of principal of or premium, if any, on any Debt Security
of
that series when due, whether or not, in the case of Subordinated
Debt
Securities, such payment is prohibited by the Subordinated
Indenture;
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default
in the payment of interest on any Debt Security of that series when
due,
which continues for 30 days, whether or not, in the case of Subordinated
Debt Securities, such payment is prohibited by the Subordinated
Indenture;
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failure
to deposit any sinking fund payment, when due, in respect of any
Debt
Security of that series, whether or not, in the case of Subordinated
Debt
Securities, such payment is prohibited by the subordination provisions
of
the Subordinated Indenture;
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default
in the performance by us of any of our other covenants in the applicable
Indenture with respect to the Debt Securities of such series, which
continues for 90 days after written notice by the Trustee or the
holders
of at least 25% in aggregate principal amount of the Debt Securities
of
that series;
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certain
events of bankruptcy, insolvency or reorganization affecting us;
and
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any
other event that may be specified in a prospectus supplement with
respect
to any series of Debt Securities.
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If
an
Event of Default (other than an Event of Default relating to events of
bankruptcy, insolvency or reorganization) with respect to any series of Debt
Securities occurs and is continuing, either the Trustee or the holders of
at
least 25% in aggregate principal amount of the Debt Securities of such series
outstanding may declare the principal amount (or if such Debt Securities
are
Original Issue Discount Securities, such portion of the principal amount
as may
be specified in the terms of that series) of all Debt Securities of that
series
to be immediately due and payable. If an Event of Default relating to events
of
bankruptcy, insolvency or reorganization with respect to the Debt Securities
of
any series at the time outstanding shall occur, the principal amount of all
the
Debt Securities of that series (or, in the case of any such Original Issue
Discount Security, such specified amount) will automatically, and without
any
action by the applicable Trustee or any holder, become immediately due and
payable. After any such acceleration, but before a judgment or decree based
on
acceleration, the holders of a majority in principal amount of the outstanding
Debt Securities of that series may, under certain circumstances, rescind
and
annul such acceleration if all Events of Default, other than the non-payment
of
accelerated principal (or other specified amount), have been cured or waived
as
provided in the applicable Indenture. For information as to waiver of defaults,
see "Modification of the Indentures; Waiver."
If
an
Event of Default occurs and is continuing, the Trustee may, in its discretion,
and at the written request of holders of not less than a majority in aggregate
principal amount of the Debt Securities of any series, and upon reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request and subject to certain other conditions set forth
in the applicable Indenture will, proceed to protect the rights of the holders
of all the Debt Securities of such series.
The
Indentures provide that upon the occurrence of an Event of Default relating
to
payments of principal of, premium, if any, or interest on any Debt Security,
we
will, upon demand of the Trustee, pay to it, for the benefit of the holder
of
any such Debt Security, the whole amount then due and payable on such Debt
Securities for principal, premium, if any, and interest. The Indentures further
provide that that if we fail to pay such amount upon such demand, the Trustee
may, among other things, institute a judicial proceeding for the collection
of
the amount due.
No
holder
of a Debt Security of any series may institute any proceeding with respect
to
the Indentures, or for the appointment of a receiver or a trustee, or for other
remedy, unless (1) the holder has previously given the Trustee written
notice of a continuing event of default, (2) the holders of at least 25% in
aggregate principal amount of the outstanding Debt Securities of that series
have made a written request, and the holders have offered reasonable indemnity
to the Trustee to institute the proceeding, and (3) the Trustee has failed
to institute the proceeding, and has not received a direction inconsistent
with
the request within 60 days of such notice. The Indentures also provide that,
notwithstanding any other provision of the applicable Indenture, the holder
of
any Debt Security of any series will have the right to institute suit for the
enforcement of any payment of principal of, premium, if any, and interest on
such Debt Securities when due and that such right will not be impaired without
the consent of such holder.
We
are
required to file annually with the applicable Trustee a written statement as
to
the existence or non-existence of defaults under the Indentures or the Debt
Securities.
Subordination
of the Subordinated Debt Securities.
The
Subordinated Debt Securities will be our direct, unsecured obligations and,
unless otherwise specified in the prospectus supplement relating to a particular
series of Subordinated Debt Securities offered by such prospectus supplement,
will be subject to the subordination provisions described in this section.
Upon
any distribution of our assets due to any dissolution, winding up, liquidation
or reorganization, the payment of the principal of, premium, if any, and
interest on the Subordinated Debt Securities is to be subordinated in right
of
payment to all Senior Indebtedness. In certain events of bankruptcy or
insolvency, the payment of the principal of and interest on the Subordinated
Debt Securities will, to the extent provided in the Subordinated Indenture,
also
be effectively subordinated in right of payment to all General Obligations
(as
defined below).
Upon
any
distribution of our assets due to any dissolution, winding up, liquidation
or
reorganization, the holders of Senior Indebtedness will first be entitled to
receive payment in full of all amounts due or to become due before the holders
of the Subordinated Debt Securities will be entitled to receive any payment
in
respect of the Subordinated Debt Securities. If upon any such payment or
distribution of assets, after giving effect to such subordination provisions
in
favor of the holders of Senior Indebtedness, (i) there remain any amounts of
cash, property or securities available for payment or distribution in respect
of
the Subordinated Debt Securities ("Excess Proceeds") and (ii) if, at such time,
any creditors in respect of General Obligations have not received payment in
full of all amounts due or to become due on or in respect of such General
Obligations, then such Excess Proceeds will first be applied to pay or provide
for the payment in full of such General Obligations before any payment or
distribution may be made in respect of the Subordinated Debt
Securities.
In
addition, no payment may be made on the Subordinated Debt Securities, or in
respect of any redemption, retirement, purchase or other acquisition of any
of
the Subordinated Debt Securities, at any time in the event:
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there
is a default in the payment of the principal of, premium, if any,
interest
on or otherwise in respect of any Senior Indebtedness;
or
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any
event of default with respect to any Senior Indebtedness has occurred
and
is continuing or would occur as a result of such payment on the
Subordinated Debt Securities or any redemption, retirement, purchase
or
other acquisition of any of the Subordinated Debt Securities, permitting
the holders of such Senior Indebtedness to accelerate the maturity
thereof.
|
Except
as
described above, our obligation to make payments of the principal of, premium,
if any, or interest on the Subordinated Debt Securities will not be
affected.
By
reason
of the subordination in favor of the holders of Senior Indebtedness, in the
event of a distribution of assets upon any dissolution, winding up, liquidation
or reorganization, our creditors who are not holders of Senior Indebtedness
or
the Subordinated Debt Securities may recover less, proportionately, than holders
of Senior Indebtedness and may recover more, proportionately, than holders
of
the Subordinated Debt Securities.
Subject
to payment in full of all Senior Indebtedness, the holders of Subordinated
Debt
Securities will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or our
securities applicable to Senior Indebtedness. Subject to payment in full of
all
General Obligations, the holders of the Subordinated Debt Securities will be
subrogated to the rights of the creditors in respect of General Obligations
to
receive payments or distributions of cash, property or our securities applicable
to such creditors in respect of General Obligations.
"Senior
Indebtedness" for purposes of the Subordinated Indenture is the principal of,
premium, if any, and interest on:
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all
of our indebtedness for money borrowed (other than (i) the Subordinated
Debt Securities and (ii) the Junior Subordinated Indebtedness (as
defined
below)) whether outstanding on the date of execution of the Subordinated
Indenture or created, assumed or incurred after that date, except
such
indebtedness as is by its terms expressly stated to be not superior
in
right of payment to the Subordinated Debt Securities or to rank equally
with the Subordinated Debt Securities; and
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any
deferrals, renewals or extensions of any such Senior
Indebtedness.
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The
term
"indebtedness for money borrowed" as used in this prospectus includes, without
limitation, any obligation of, or any obligation guaranteed by us for the
repayment of borrowed money, whether or not evidenced by bonds, debentures,
notes or other written instruments, and any deferred obligation for the payment
of the purchase price of property or assets. The Subordinated Indenture does
not
limit our issuance of additional Senior Indebtedness.
The
Subordinated Debt Securities will rank senior in right of payment to our Junior
Subordinated Indebtedness upon any distribution of our assets due to any
dissolution, winding up, liquidation or reorganization, to the extent provided
in the instruments creating our Junior Subordinated Indebtedness. "Junior
Subordinated Indebtedness" is the principal of, premium, if any, and interest
on:
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all
of our indebtedness for money borrowed whether outstanding on the
date of
the execution of the Subordinated Indenture or created, assumed or
incurred after that date that is by its terms subordinated to the
Subordinated Debt Securities; and
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any
deferrals, renewals or extensions of any of such Junior Subordinated
Indebtedness.
|
Unless
otherwise specified in the prospectus supplement relating to a particular series
of Subordinated Debt Securities offered thereby, the term "General Obligations"
means all obligations to make payment on account of claims in respect of
derivative products such as interest and foreign exchange rate contracts,
commodity contracts and similar arrangements, other than:
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obligations
on account of Senior Indebtedness;
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obligations
on account of indebtedness for money borrowed ranking equal with
or
subordinate to the Subordinated Debt Securities;
and
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obligations
which by their terms are expressly stated not to be senior in right
of
payment to the Subordinated Debt Securities or to rank equally
with the
Subordinated Debt Securities.
|
Unless
otherwise specified in the prospectus supplement relating to any series of
Subordinated Debt Securities, payment of principal of the Subordinated Debt
Securities may be accelerated only in case of the bankruptcy, insolvency or
reorganization of our company.
Defeasance
and Covenant Defeasance.
To the
extent stated in the prospectus supplement, we may elect to apply the provisions
relating to defeasance and discharge of indebtedness, or to defeasance of
certain restrictive covenants in the Indentures, to the Debt Securities of
any
series.
DESCRIPTION
OF CAPITAL STOCK
General
The
following is a summary of the rights of our common stock and preferred stock
and
related provisions of our certificate of incorporation and bylaws. For more
detailed information, please see our certificate of incorporation and bylaws,
as
amended.
Authorized
and Outstanding Capital Stock
Our
authorized capital stock consists of 150,000,000 shares of common stock,
par
value $.0001 per share, and 250,000 shares of preferred stock, par value
$.01
per share, issuable in one or more series designated by our board of directors,
of which 105,875 shares of our preferred stock have been designated as 5%
Series
B Cumulative Convertible Perpetual Preferred Stock (“Series B preferred stock”).
On January 10, 2007, 53,169,234 shares
of
our common stock were issued and outstanding and 64,120 shares of our Series
B
preferred stock were issued and outstanding. No other shares of our preferred
stock are issued and outstanding.
In
addition, as of January 10, 2007, there were outstanding options to purchase
6,017,629 shares
of
our common stock under our stock options plans, 2,669,689 shares of our common
stock were available for future issuance under our stock option plans,
332,837 shares
of
our common stock were available for future issuance under our employee stock
purchase plan, and there were outstanding warrants to purchase
1,200,000 shares
of
our common stock. In addition, as of January 10, 2007, we were obligated,
if and
when the holder exercises its conversion rights, to issue approximately
207,952 shares
of
our common stock upon conversion of the Series 1 preferred shares. As of
January
10, 2007, there were 736 holders of record of our common stock.
Common
Stock
Voting
Rights
The
holders of our common stock have one vote per share. Holders of our common
stock
are not entitled to vote cumulatively for the election of directors. Generally,
all matters to be voted on by shareholders must be approved by a majority,
or,
in the case of the election of directors, by a plurality, of the votes entitled
to be cast at a meeting at which a quorum is present by all shares of our common
stock present in person or represented by proxy, voting together as a single
class, subject to any voting rights granted to holders of any then outstanding
preferred stock.
Dividends
Holders
of our common stock will share ratably in any dividends declared by the board
of
directors, subject to the preferential rights of any of our preferred stock
then
outstanding. Dividends consisting of shares of our common stock may be paid
to
holders of shares of our common stock.
Other
Rights
In
the
event of our liquidation, dissolution or winding up, after payment of
liabilities and liquidation preferences on any of our preferred stock then
outstanding, the holders of shares of our common stock are entitled to share
ratably in all assets available for distribution. Holders of shares of our
common stock have no preemptive rights or rights to convert their shares of
our
common stock into any other securities. There are no redemption or sinking
fund
provisions applicable to the common stock.
Preferred
Stock
This
section describes the general terms of our preferred stock, $0.01 par value,
to
which any prospectus supplement may relate. Certain terms of any series of
our
preferred stock offered by any prospectus supplement will be described in such
prospectus supplement. If so indicated in the prospectus supplement, the terms
of that series may differ from the terms described below. The provisions of
our
preferred stock described below are not complete. You should refer to our
certificate of incorporation and any certificate of amendment to our certificate
of incorporation or certificate of designations filed with the SEC in connection
with the offering of our preferred stock.
Under
our
certificate of incorporation, our board of directors has the authority, without
further shareholder action, to issue from time to time, preferred stock in
one
or more series and for such consideration as may be fixed from time to time
by
our board of directors. Our board also has the authority to fix and determine,
in the manner provided by law, the relative rights and preferences of the shares
of any series so established, such as dividend and voting rights. Our
certificate of incorporation authorizes 250,000 shares of preferred stock.
Prior
to the issuance of each series of preferred stock, our board will adopt
resolutions creating and designating the series as a series of preferred stock.
The board of directors may, without shareholder approval, issue preferred stock
with voting and other rights that could adversely affect the voting power and
other rights of the holders of our common stock and could have anti-takeover
effects.
Our
preferred stock will have the dividend, liquidation, redemption, voting and
conversion rights set forth below unless otherwise specified in the applicable
prospectus supplement. You should read the prospectus supplement relating to
the
particular series of preferred stock offered thereby for specific terms,
including:
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the
designation, stated value and liquidation preference of such preferred
stock and the number of shares offered;
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the
initial public offering price at which the preferred stock will be
issued;
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the
dividend rate or rates (or method of calculation), the dividend periods,
the date on which dividends will be payable and whether such dividends
will be cumulative or noncumulative and, if cumulative, the dates
from
which dividends will begin to cumulate;
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any
redemption or sinking fund provisions;
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any
conversion provisions; and
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any
additional rights, preferences, privileges, qualifications, limitations
and restrictions of the preferred
stock.
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Unless
otherwise specified in the applicable prospectus supplement, the shares of
each
series of preferred stock will upon issuance rank equally in all respects with
each other then outstanding series of preferred stock.
Preferred
stock could be issued quickly with terms that could delay or prevent a change
of
control or make the removal of management more difficult. Additionally, the
issuance of preferred stock may decrease the market price of our common stock
and may adversely affect the voting and other rights of the holders of our
common stock.
Ranking
Any
series of our preferred stock will, with respect to dividend rights and rights
on liquidation, winding up or dissolution, rank:
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senior
to all classes of our common stock and to all equity securities issued
by
us, the terms of which specifically provide that the equity securities
will rank junior to that preferred stock;
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| · |
equally
with all equity securities issued by us, the terms of which specifically
provide that the equity securities will rank equally with that preferred
stock; and
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junior
to all equity securities issued by us, the terms of which specifically
provide that the equity securities will rank senior to that preferred
stock.
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Dividends
The
holders of our preferred stock will be entitled to receive, when, as and if
declared by our board of directors, dividends at such rates and on such dates
as
will be specified in the applicable prospectus supplement. Such rates may be
fixed or variable or both. If variable, the formula used for determining the
dividend rate for each dividend period will be specified in the applicable
prospectus supplement. Dividends will be payable to the holders of record as
they appear on our stock books on such record dates as will be fixed by our
board. Dividends may be paid in the form of cash, preferred stock (of the same
or a different series) or our common stock, in each case as specified in the
applicable prospectus supplement.
Dividends
on any series of our preferred stock may be cumulative or noncumulative, as
specified in the applicable prospectus supplement. If the dividends on a series
of our preferred stock are noncumulative ("Noncumulative Preferred Stock"),
and
our board of directors fails to declare a dividend payable on a dividend payment
date, then the holders of such preferred stock will have no right to receive
a
dividend in respect to the dividend period relating to such dividend payment
date, and we will not be obligated to pay the dividend accrued for such period,
whether or not dividends on such preferred stock are declared or paid on any
future dividend payment dates.
We
will
not declare or pay or set apart for payment any dividends on any series of
our
preferred stock that rank, as to dividends, on a parity with or junior to the
outstanding preferred stock of any series unless (i) if such outstanding
preferred stock has a cumulative dividend ("Cumulative Preferred Stock"), full
cumulative dividends have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such payment
on such preferred stock for all dividend periods terminating on or prior to
the
date of payment of any such dividends on such other series of the preferred
stock or (ii) if such outstanding preferred stock is Noncumulative Preferred
Stock, full dividends for the then-current dividend period on such preferred
stock have been or contemporaneously are declared and paid or declared and
a sum
sufficient for the payment thereof set apart for such payment.
Until
full dividends are paid (or declared and payment is set aside) on our preferred
stock ranking equal as to dividends, then:
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we
will declare any dividends pro rata among the preferred stock of
each
series and any preferred stock ranking equal to such preferred stock
as to
dividends (i.e., the dividends we declare per share on each series
of such
preferred stock will bear the same relationship to each other that
the
full accrued dividends per share on each such series of the preferred
stock (which will not, if such preferred stock is Noncumulative Preferred
Stock, include any accumulation in respect to unpaid dividends for
prior
dividend periods) bear to each other);
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other
than such pro rata dividends, we will not declare or pay any dividends
or
declare or make any distributions upon any security ranking junior
to or
equal with the preferred stock as to dividends or upon liquidation
(except
dividends on common stock payable in common stock, dividends or
distributions paid for with securities ranking junior to the preferred
stock as to dividends and upon liquidation and cash in lieu of fractional
shares in connection with such dividends);
and
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we
will not redeem, purchase or otherwise acquire (or set aside money
for a
sinking fund for) our common stock or any other securities ranking
junior
to or equal with the preferred stock as to dividends or upon liquidation
(except by conversion into or exchange for stock junior to the preferred
stock as to dividends and upon liquidation).
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We
will
not owe any interest, or any money in lieu of interest, on any dividend payment
on any series of the preferred stock that may be past due.
Redemption
A
series
of our preferred stock may be redeemable, in whole or in part, at our option,
and may be subject to mandatory redemption pursuant to a sinking fund or
otherwise, in each case upon terms, at the times and at the redemption prices
specified in the applicable prospectus supplement. Redeemed shares of our
preferred stock will become authorized but unissued shares of preferred stock
that we may issue in the future.
The
prospectus supplement relating to a series of our preferred stock that is
subject to mandatory redemption will specify the number of shares of such
preferred stock that we will redeem each year and the redemption price per
share. If shares of our preferred stock are redeemed, we will pay all accrued
and unpaid dividends thereon (which will not, if such preferred stock is
Noncumulative Preferred Stock, include any accumulation in respect of unpaid
dividends for prior dividend periods) up to but excluding the date of
redemption. The redemption price may be payable in cash or other property,
as
specified in the applicable prospectus supplement. If the redemption price
for
our preferred stock of any series is payable only from the net proceeds of
the
issuance of our capital stock, the terms of such preferred stock may provide
that, if no such capital stock will have been issued or to the extent the net
proceeds from any issuance are insufficient to pay in full the aggregate
redemption price then due, such preferred stock will automatically and
mandatorily be converted into shares of our applicable capital stock pursuant
to
conversion provisions specified in the applicable prospectus supplement.
If
fewer
than all the outstanding shares of our preferred stock of any series are to
be
redeemed, our board will determine the number of shares to be redeemed. We
will
redeem the shares pro rata from the holders of record of such shares in
proportion to the number of such shares held by such holders (with adjustments
to avoid redemption of fractional shares) or by lot or by any other method
as
may be determined by our board.
Even
though the terms of a series of the Cumulative Preferred Stock may permit
redemption of such preferred stock in whole or in part, if any dividends,
including accumulated dividends, on that series are past due:
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we
will not redeem any preferred stock of that series unless we
simultaneously redeem all outstanding preferred stock of that series;
and
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we
will not purchase or otherwise acquire any preferred stock of that
series.
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The
prohibition discussed in the preceding sentence will not prohibit us from
purchasing or acquiring preferred stock of that series pursuant to a purchase
or
exchange offer if we make the offer on the same terms to all holders of that
series.
Conversion
Rights
The
prospectus supplement relating to a series of convertible preferred stock will
describe the terms on which shares of such series are convertible into our
common stock.
Rights
Upon Liquidation
Unless
the applicable prospectus supplement states otherwise, if we voluntarily or
involuntarily liquidate, dissolve or wind up our business, the holders of our
preferred stock will be entitled to receive out of our assets available for
distribution to stockholders, before any distribution of assets is made to
holders of our common stock or any other class or series of shares ranking
junior to such preferred stock upon liquidation, liquidating distributions
in
the amount of the liquidation preference of such preferred stock plus accrued
and unpaid dividends (which will not, if such preferred stock is Noncumulative
Preferred Stock, include any accumulation in respect of unpaid dividends for
prior dividend periods). If we voluntarily or involuntarily liquidate, dissolve
or wind up our business and the amounts payable with respect to our preferred
stock of any series and any of our other securities ranking equal as to any
such
distribution are not paid in full, the holders of such preferred stock and
of
such other shares will share ratably in any such distribution of our assets
in
proportion to the full respective preferential amounts to which they are
entitled. After payment of the full amount of the liquidating distribution
to
which they are entitled, the holders of our preferred stock of any series will
not be entitled to any further participation in any distribution of our
assets.
Voting
Rights
Except
as
described in this section or in the applicable prospectus supplement, or except
as expressly required by applicable law, the holders of our preferred stock
will
not be entitled to vote. If the holders of a series of our preferred stock
are
entitled to vote and the applicable prospectus supplement does not state
otherwise, each such share will be entitled to one vote on matters on which
holders of such series of preferred stock are entitled to vote. For any series
of our preferred stock having one vote per share, the voting power of such
series, on matters on which holders of such series and holders of other series
of our preferred stock are entitled to vote as a single class, will depend
on
the number of shares in such series, not the aggregate stated value, liquidation
preference or initial offering price of the shares of such series of preferred
stock.
Unless
we
receive the consent of the holders of an outstanding series of preferred stock
and the outstanding shares of all other series of preferred stock which (i)
rank
equal with such series either as to dividends or the distribution of assets
upon
liquidation, dissolution or winding up of our business and (ii) have voting
rights that are exercisable and that are similar to those of such series, we
will not:
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authorize,
create or issue, or increase the authorized or issued amount of,
any class
or series of stock ranking prior to such outstanding preferred stock
with
respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up of our business;
or
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amend,
alter or repeal, whether by merger, consolidation or otherwise, the
provisions of our certificate or of the resolutions contained in
any
certificate of designations creating such series of preferred stock
so as
to materially and adversely affect any right, preference privilege
or
voting power of such outstanding preferred stock.
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This
consent must be given by the holders of a majority of all such outstanding
preferred stock described in the preceding sentence, voting together as a single
class. We will not be required to obtain this consent with respect to the
actions listed in the second bullet point above, however, if we only (i)
increase the amount of the authorized preferred stock, (ii) create and issue
another series of preferred stock, or (iii) increase the amount of authorized
shares of any series of preferred stock, if such preferred stock in each case
ranks equal with or junior to the preferred stock with respect to the payment
of
dividends and the distribution of assets upon liquidation, dissolution or
winding up of our business.
Series
1 Preferred Shares
On
August
4, 2003, we entered into a combination agreement with Global Thermoelectric
Inc.
(“Global”) to combine Global with us in a share-for-share exchange pursuant to a
Plan of Arrangement subject to approval by the Court of Queen’s Bench of
Alberta, Canada. On October 31, 2003, our shareholders and the shareholders
of
Global approved the combination. On October 31, 2003, the Court of Queen’s Bench
of Alberta issued an order approving the combination. On November 3, 2003,
the
combination transaction was consummated. In the aggregate, we issued
approximately 8.2 million shares of our common stock and exchangeable shares
in
the acquisition. Following our acquisition of Global, Global’s Series 2
preferred shares remained outstanding in Global. At the time of the sale
of our
thermoelectric generator business, the holder of the Series 2 preferred shares
exchanged them for Series 1 Class A cumulative redeemable exchangeable preferred
shares (which were referred to as the Series 1 preferred shares) issued by
FuelCell Energy, Ltd., one of our indirect, wholly-owned subsidiaries. We
have
guaranteed the obligations of FuelCell Energy, Ltd. under the Series 1 preferred
shares.
The
Series 1 preferred shares may be converted into shares of our common stock
at
the following conversion prices:
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Cdn.$120.22
per share of our common stock until July 31,
2010;
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Cdn.$129.46
per share of our common stock after July 31, 2010 until July 31,
2015;
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Cdn.$138.71
per share of our common stock after July 31, 2015 until July 31,
2020;
and
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at
any time after July 31, 2020, the price equal to 95% of the then
current
market price (converted to Cdn.$ at the time of such calculation)
of
shares of our common stock at the time of
conversion.
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The
foregoing conversion prices are subject to adjustment for certain subsequent
events. As illustrated below, the number of shares of our common stock issuable
upon conversion of the Series 1 preferred shares after July 31, 2020 may
be
significantly greater than the number of shares issuable prior to that
time.
The
following examples illustrate the number of shares of our common stock that
we
will be required to issue to the holder(s) of the Series 1 preferred shares
if
and when the holder(s) exercise their conversion rights pursuant to the terms
of
the Series 1 preferred shares. The following examples are based upon Cdn.$25.0
million of Series 1 preferred shares outstanding (which is the amount currently
outstanding) and assume that all accrued dividends on the Series 1 preferred
shares have been paid through the time of the conversion and, in the case
of
conversions occurring after July 31, 2020, that the exchange rate for Canadian
dollars is Cdn.$1.1758 to U.S.$1.00 (exchange rate on January 10, 2007) at
the
time of the conversion:
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if
the Series 1 preferred shares convert prior to July 31, 2010, we
would be
required to issue approximately 207,952 shares of our common
stock;
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if
the Series 1 preferred shares convert after July 31, 2010, but prior
to
July 31, 2015, we would be required to issue approximately 193,110
shares
of our common stock;
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if
the Series 1 preferred shares convert after July 31, 2015, but prior
to
July 31, 2020, we would be required to issue approximately 180,232
shares
of our common stock; and
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if
the Series 1 preferred shares convert any time after July 31, 2020,
assuming our common stock price is U.S. $6.22 (our common stock
closing
price on January 10, 2007) at the time of conversion, we would
be required
to issue approximately 3,598,260 shares of our common
stock.
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Subject
to the Business Corporations Act (Alberta), the holder of the Series 1 preferred
shares is not entitled to receive notice of or to attend or vote at any meeting
of the FuelCell Energy, Ltd. Common shareholders. At present, we own all
of the
FuelCell Energy, Ltd. common stock.
Quarterly
dividends of Cdn.$312,500 accrue on the Series 1 preferred shares (subject
to
possible reduction pursuant to the terms of the Series 1 preferred shares
on
account of increases in the price of our common stock). We have agreed to
pay a
minimum of Cdn.$500,000 in cash or common stock annually to Enbridge, the
sole
current holder of the Series 1 preferred shares, as long as Enbridge holds
the
shares. Interest accrues on cumulative unpaid dividends at a 2.45% quarterly
rate, compounded quarterly, until payment thereof. All cumulative unpaid
dividends must be paid by December 31, 2010. Subsequent to 2010, FuelCell
Energy, Ltd. would be required to pay annual dividend amounts totaling Cdn.$1.25
million so long as the Series 1 preferred shares remain outstanding. Cumulative
unpaid dividends of $5.3
million on the Series 1 preferred shares were outstanding as of October 31,
2006. We have guaranteed the dividend obligations of FuelCell Energy, Ltd.
to
the Series 1 preferred shareholders.
Subject
to the Business Corporations Act (Alberta), we may redeem the Series 1 preferred
shares, in whole or part, at any time, if on the day that the notice of
redemption is first given, the volume-weighted average price at which our
common
stock is traded on the applicable stock exchange during the 20 consecutive
trading days ending on a date not earlier than the fifth preceding day on
which
the notice of redemption is given was not less than a 20% premium to the
current
conversion price on payment of Cdn.$25.00 per Series 1 preferred share to
be
redeemed, together with an amount equal to all accrued and unpaid dividends
to
the date fixed for redemption. On or after July 31, 2010, the Series 1 preferred
shares are redeemable by us at any time on payment of Cdn.$25.00 per Series
1
preferred share to be redeemed together with an amount equal to all accrued
and
unpaid dividends to the date fixed for redemption. Holders of the Series
1
preferred shares do not have any mandatory or conditional redemption rights.
There are currently 1,000,000 Series 1 preferred shares
outstanding.
In
the
event of the liquidation, dissolution or winding up of FuelCell Energy, Ltd.,
whether voluntary or involuntary, or any other distribution of its assets
among
its shareholders for the purpose of winding up its affairs, the holder of
the
Series 1 preferred shares will be entitled to receive the amount paid on
such
Series 1 preferred shares (currently Cdn.$25.0 million) together with an
amount
equal to all accrued and unpaid dividends thereon, before any amount will
be
paid or any of FuelCell Energy, Ltd.’s property or assets will be distributed to
the holders of FuelCell Energy, Ltd.’s common stock. After payment to the holder
of the Series 1 preferred shares of the amounts payable to them, the holder
of
the Series 1 preferred shares will not be entitled to share in any other
distribution of FuelCell Energy, Ltd.’s property or assets. We have guaranteed
the liquidation obligations of FuelCell Energy, Ltd. under the Series 1
preferred shares.
Series
B Preferred Stock
On
November 11, 2004, we entered into a purchase agreement with Citigroup Global
Markets Inc., RBC Capital Markets Corporation, Adams Harkness, Inc., and
Lazard
Freres & Co., LLC (the “Initial Purchasers”) for the private placement under
Rule 144A of up to 135,000 shares of our 5% Series B Cumulative Convertible
Perpetual Preferred Stock (Liquidation Preference $1,000). On November 17,
2004
and January 25, 2005, we closed on the sale of 100,000 shares and 5,875 shares,
respectively, of Series B preferred stock to the Initial Purchasers.
At
October 31, 2006 and 2005, there were 250,000 preferred shares authorized
of
which 64,120 and 105,875 Series B preferred shares were issued and outstanding,
respectively. The carrying value of the Series B preferred stock as of October
31, 2006 and 2005 represents the net proceeds to us of approximately $60.0
million and $99.0 million, respectively. During fiscal 2006, we converted
41,755
shares of Series B preferred stock into 3,553,615 shares of our common stock.
The conversion occurred pursuant to the terms of the Certificate of Designation
for the Series B preferred stock, whereby upon conversion, the holders received
85.1064 shares of our common stock per share of Series B preferred stock.
In
addition, pursuant to this conversion, we paid a conversion premium of $4.3
million.
The
following is a summary of certain provisions of our Series B preferred stock.
The resale of the shares of our Series B preferred stock and the resale of
the
shares of our common stock issuable upon conversion of the shares of our
Series
B preferred stock are
covered
by a registration rights agreement.
Ranking
Shares
of
our Series B preferred stock rank with respect to dividend rights and rights
upon our liquidation, winding up or dissolution:
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senior
to shares of our common stock;
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junior
to our debt obligations; and
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effectively
junior to our subsidiaries’ (i) existing and future liabilities and (ii)
capital stock held by others.
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Dividends
The
Series B preferred stock pays cumulative annual dividends of $50 per share
which
are payable quarterly in arrears on February 15, May 15, August 15 and November
15, which commenced on February 15, 2005, when, as and if declared by the
board
of directors. Dividends will be paid on the basis of a 360-day year consisting
of twelve 30-day months. Dividends on the shares of our Series B preferred
stock
will accumulate and be cumulative from the date of original issuance.
Accumulated dividends on the shares of our Series B preferred stock will
not
bear any interest.
The
dividend rate on the Series B preferred stock is subject to upward adjustment
as
set forth in the certificate of designation of the Series B preferred stock
if
we fail to pay, or to set apart funds to pay, dividends on the shares of
our
Series B preferred stock for any quarterly dividend period. The dividend
rate on
the Series B preferred stock is also subject to upward adjustment as set
forth
in the registration rights agreement entered into with the Initial Purchasers
if
we fail to satisfy our registration obligations with respect to the Series
B
preferred stock (or the underlying common shares) set forth in the registration
rights agreement.
No
dividends or other distributions may be paid or set apart for payment upon
our
common shares (other than a dividend payable solely in shares of a like or
junior ranking) unless all accumulated and unpaid dividends have been paid
or
funds or shares of common stock therefore have been set apart on our Series
B
preferred stock.
We
may
pay dividends on the Series B preferred stock:
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at
the option of the holder, in shares of our common stock, which
will be
registered pursuant to a registration statement to allow for the
immediate
sale of these common shares in the public
market.
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Liquidation
The
Series B preferred stock has a liquidation preference of $1,000 per share.
Upon
any voluntary or involuntary liquidation, dissolution or winding up of FuelCell
resulting in a distribution of assets to the holders of any class or series
of
our capital stock, each holder of shares of our Series B preferred stock
will be
entitled to payment out of our assets available for distribution of an amount
equal to the liquidation preference per share of Series B preferred stock
held
by that holder, plus all accumulated and unpaid dividends on those shares
to the
date of that liquidation, dissolution, or winding up, before any distribution
is
made on any junior shares, including shares of our common stock, but after
any
distributions on any of our indebtedness or senior shares (if any). After
payment in full of the liquidation preference and all accumulated and unpaid
dividends to which holders of shares of our Series B preferred stock are
entitled, holders of shares of our Series B preferred stock will not be entitled
to any further participation in any distribution of our assets.
Conversion
A
share
of our Series B preferred stock may be converted at any time, at the option
of
the holder, into 85.1064 shares of our common stock (which is equivalent to
an
initial conversion price of $11.75 per share) plus cash in lieu of fractional
shares. The conversion rate is subject to adjustment upon the occurrence of
certain events, as described below, but will not be adjusted for accumulated
and
unpaid dividends. Upon conversion, holders of Series B preferred stock will
not
receive a cash payment for any accumulated dividends. Instead accumulated
dividends, if any, will be cancelled.
On
or
after November 20, 2009 we may, at our option, cause shares of our Series
B
preferred stock to be automatically converted into that number of shares
of our
common stock that are issuable at the then prevailing conversion rate. We
may
exercise our conversion right only if the closing price of our common stock
exceeds 150% of the then prevailing conversion price for 20 trading days
during
any consecutive 30 trading day period, as described in the certificate of
designation for the Series B preferred stock.
If
holders of shares of our Series B preferred stock elect to convert their
shares
in connection with certain fundamental changes (as described below and in
the
certificate of designation), we will in certain circumstances discussed below
increase the conversion rate by a number of additional shares of common stock
upon conversion or, in lieu thereof, we may in certain circumstances elect
to
adjust the conversion rate and related conversion obligation so that shares
of
our Series B preferred stock are converted into shares of the acquiring or
surviving company, in each case as described in the certificate of
designation.
The
adjustment of the conversion price of the Series B preferred stock is to
prevent
dilution of the interests of the holders of the Series B preferred stock,
including on account of the following:
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Issuances
of common stock as a dividend or distribution to holders of our
common
stock;
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Common
stock share splits or share
combinations;
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Issuances
to holders of our common stock of any rights, warrants or options
to
purchase our common stock for a period of less than 60 days; and
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Distributions
of assets, evidences of indebtedness or other property to holders
of our
common stock.
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Shares
of
our Series B preferred stock will not be redeemable by us, except in the
case of
a fundamental change (as described below and in the certificate of designation)
whereby holders may require us to purchase all or part of their shares at
a
redemption price equal to 100% of the liquidation preference of the shares
of
Series B preferred stock to be repurchased, plus accrued and unpaid dividends,
if any. We may, at our option, elect to pay the redemption price in cash
or, in
shares of our common stock valued at a discount of 5% from the market price
of
shares of our common stock, or any combination thereof. Notwithstanding the
foregoing, we may only pay such redemption price in shares of our common
stock
that are registered under the Securities Act of 1933 and eligible for immediate
sale in the public market by non-affiliates of FuelCell.
Redemption
by holders of the Series B preferred stock can only occur upon a fundamental
change, which we do not consider to be probable at this time. Accordingly,
future adjustments of the redemption price will only be made if and when
a
fundamental change is considered probable.
A
“fundamental change” will be deemed to have occurred if any of the following
occurs:
(1)
any
"person" or "group" is or becomes the beneficial owner, directly or indirectly,
of 50% or more of the total voting power of all classes of our capital stock
then outstanding and normally entitled to vote in the election of
directors;
(2)
during any period of two consecutive years, individuals who at the beginning
of
such period constituted the Board of Directors (together with any new directors
whose election by our Board of Directors or whose nomination for election
by our
shareholders was approved by a vote of two-thirds of our directors then still
in
office who were either directors at the beginning of such period or whose
election of nomination for election was previously so approved) cease for
any
reason to constitute a majority of our directors then in
office;
(3)
the
termination of trading of our common stock on the Nasdaq Stock Market and
such
shares are not approved for trading or quoted on any other U.S. securities
exchange; or
(4)
we
consolidate with or merge with or into another person or another person merges
with or into us or the sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of our assets and certain of our
subsidiaries, taken as a whole, to another person and, in the case of any
such
merger or consolidation, our securities that are outstanding immediately prior
to such transaction and which represent 100% of the aggregate voting power
of
our voting stock are changed into or exchanged for cash, securities or property,
unless pursuant to the transaction such securities are changed into securities
of the surviving person that represent, immediately after such transaction,
at
least a majority of the aggregate voting power of the voting stock of the
surviving person.
Notwithstanding
the foregoing, holders of shares of Series B preferred stock will not have
the
right to require us to repurchase their shares if either:
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the
last reported sale price of shares of our common stock for any
five
trading days within the 10 consecutive trading days ending immediately
before the later of the fundamental change or its announcement
equaled or
exceeded 105% of the conversion price of the shares of Series B
preferred
stock immediately before the fundamental change or
announcement;
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at
least 90% of the consideration, excluding cash payments for fractional
shares and in respect of dissenters' appraisal rights, in the transaction
constituting the fundamental change consists of shares of capital
stock
traded on a U.S. national securities exchange or which will be
so traded
or quoted when issued or exchanged in connection with a fundamental
change
and as a result of the transaction, shares of Series B preferred
stock
become convertible into such publicly traded securities;
or
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in
the case of number 4 above of a fundamental change event, the
transaction
is effected solely to change our jurisdiction of
incorporation.
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Voting
Holders
of shares of our Series B preferred stock have no voting rights unless (1)
dividends on any shares of our Series B preferred stock or any other class
or
series of stock ranking on a parity with the shares of our Series B preferred
stock with respect to the payment of dividends shall be in arrears for dividend
periods, whether or not consecutive, containing in the aggregate a number
of
days equivalent to six calendar quarters or (2) we fail to pay the repurchase
price, plus accrued and unpaid dividends, if any, on the fundamental change
repurchase date for shares of our Series B preferred stock following a
fundamental change (as described in the certificate of designation for the
Series B preferred stock). In each such case, the holders of shares of our
Series B preferred stock (voting separately as a class with all other series
of
other preferred stock on parity with our Series B preferred stock upon which
like voting rights have been conferred and are exercisable, if any) will
be
entitled to vote for the election of two directors in addition to those
directors on the board of directors at such time at the next annual meeting
of
shareholders and each subsequent meeting until the repurchase price or all
dividends accumulated on the shares of our Series B preferred stock have
been
fully paid or set aside for payment. The term of office of all directors
elected
by the holders of shares of our Series B preferred stock will terminate
immediately upon the termination of the right of holders of shares of our
Series
B preferred stock to vote for directors.
So
long
as any shares of our Series B preferred stock remain outstanding, we will
not,
without the consent of the holders of at least two-thirds of the shares of
our
Series B preferred stock outstanding at the time (voting separately as a
class
with all other series of preferred stock, if any, on parity with our Series
B
preferred stock upon which like voting rights have been conferred and are
exercisable) issue or increase the authorized amount of any class or series
of
shares ranking senior to the outstanding shares of our Series B preferred
stock
as to dividends or upon liquidation. In addition, we will not, subject to
certain conditions, amend, alter or repeal provisions of our certificate
of
incorporation, including the certificate of designation relating to our Series
B
preferred stock, whether by merger, consolidation or otherwise, so as to
adversely amend, alter or affect any power, preference or special right of
the
outstanding shares of our Series B preferred stock or the holders thereof
without the affirmative vote of not less than two-thirds of the issued and
outstanding shares of our Series B preferred stock.
Provisions
of our Certificate of Incorporation and By-Laws
A
number
of provisions of our certificate of incorporation and by-laws concern matters
of
corporate governance and the rights of shareholders. Some of these provisions,
including, but not limited to, the inability of shareholders to take action
by
unanimous written consent, supermajority voting provisions with respect to
any
amendment of voting rights provisions, the filling of vacancies on the board
of
directors by the affirmative vote of a majority of the remaining directors,
and
the ability of the board of directors to issue shares of preferred stock and
to
set the voting rights, preferences and other terms thereof, without further
shareholder action, may be deemed to have anti-takeover effect and may
discourage takeover attempts not first approved by the board of directors,
including takeovers which shareholders may deem to be in their best interests.
If takeover attempts are discouraged, temporary fluctuations in the market
price
of shares of our common stock, which may result from actual or rumored takeover
attempts, may be inhibited. These provisions, together with the ability of
the
board of directors to issue preferred stock without further shareholder action,
could also delay or frustrate the removal of incumbent directors or the
assumption of control by shareholders, even if the removal or assumption would
be beneficial to our shareholders. These provisions could also discourage or
inhibit a merger, tender offer or proxy contest, even if favorable to the
interests of shareholders, and could depress the market price of our common
stock. The board of directors believes these provisions are appropriate to
protect our interests and the interests of our shareholders. The board of
directors has no present plans to adopt any further measures or devices which
may be deemed to have an “anti-takeover effect.”
Delaware
Anti-Takeover Provisions
We
are
subject to Section 203 of the Delaware General Corporation Law, which prohibits
a publicly-held Delaware corporation from engaging in a “business combination,”
except under certain circumstances, with an “interested shareholder” for a
period of three years following the date such person became an “interested
shareholder” unless:
· before
such person became an interested shareholder, the board of directors of the
corporation approved either the business combination or the transaction that
resulted in the interested shareholder becoming an interested
shareholder;
· upon
the
consummation of the transaction that resulted in the interested shareholder
becoming an interested shareholder, the interested shareholder owned at least
85
percent of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding shares held by directors who are also officers
of the corporation and shares held by employee stock plans in which employee
participants do not have the right to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer;
or
· at
or
following the time such person became an interested shareholder, the business
combination is approved by the board of directors of the corporation and
authorized at an annual or special meeting of shareholders (and not by written
consent) by the affirmative vote of the holders of at least 66 2/3 percent
of
the outstanding voting stock of the corporation which is not owned by the
interested shareholder.
The
term
“interested shareholder” generally is defined as a person who, together with
affiliates and associates, owns, or, within the three years prior to the
determination of interested shareholder status, owned, 15 percent or more of
a
corporation’s outstanding voting stock. The term “business combination” includes
mergers, asset or stock sales and other similar transactions resulting in a
financial benefit to an interested shareholder. Section 203 makes it more
difficult for an “interested shareholder” to effect various business
combinations with a corporation for a three-year period. The existence of this
provision would be expected to have an anti-takeover effect with respect to
transactions not approved in advance by the board of directors, including
discouraging attempts that might result in a premium over the market price
for
the shares of our common stock held by shareholders. A Delaware corporation
may
“opt out” of Section 203 with an express provision in its original certificate
of incorporation or any amendment thereto. Our certificate of incorporation
does
not contain any such exclusion.
Listing
on the Nasdaq Global Market
Our
common stock is listed on the Nasdaq Global Market under the symbol “FCEL”.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock and preferred stock is
Continental Stock Transfer & Trust Company, New York, New
York.
PLAN
OF DISTRIBUTION
We
may
sell the securities from time to time pursuant to underwritten public offerings,
negotiated transactions, block trades or a combination of these methods.
We may
sell the securities (1) through underwriters or dealers, (2) through
agents and/or (3) directly to one or more purchasers. We may distribute the
securities from time to time in one or more transactions:
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at
a fixed price or prices, which may be changed;
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·
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at
market prices prevailing at the time of sale;
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·
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at
prices related to such prevailing market prices; or
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·
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at
negotiated prices.
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We
may
solicit directly offers to purchase the securities being offered by this
prospectus. We may also designate agents to solicit offers to purchase the
securities from time to time. We will name in a prospectus supplement any
agent
involved in the offer or sale of our securities.
If
we
utilize a dealer in the sale of the securities being offered by this prospectus,
we will sell the securities to the dealer, as principal. The dealer may then
resell the securities to the public at varying prices to be determined by
the
dealer at the time of resale.
If
underwriters are used in the sale of any the securities, the securities will
be
acquired by the underwriters for their own account and may be resold from
time
to time in one or more transactions, including negotiated transactions, at
a
fixed public offering price or at varying prices determined at the time of
sale.
The securities may be either offered to the public through underwriting
syndicates represented by managing underwriters, or directly by underwriters.
Generally, the underwriters’ obligations to purchase the securities will be
subject to certain conditions precedent. The underwriters will be obligated
to
purchase all of the securities if they purchase any of the securities.
We
may
sell the securities through agents from time to time. The applicable prospectus
supplement will name any agent involved in the offer or sale of the securities
and any commissions paid to them. Generally, any agent will be acting on
a best
efforts basis for the period of its appointment. In addition, we may enter
into
derivative, sale or forward sale transactions with third parties, or sell
securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement indicates,
in
connection with such transaction, the third parties may, pursuant to this
prospectus and the applicable prospectus supplement, sell the securities
covered
by this prospectus and the applicable prospectus supplement, including in
short
sale transactions. If so, the third party may use securities borrowed from
us or
others to settle such sales and may use securities received from us or others
to
settle those sales to close out any related short positions. The third party
in
such sale transactions will be an underwriter and will be identified in the
applicable prospectus supplement (or a post-effective amendment). We may
also
loan or pledge the securities covered by this prospectus and the applicable
prospectus supplement to third parties, who may sell the loaned securities
or,
in an event of default in the case of a pledge, sell the pledged securities
pursuant to this prospectus and the applicable prospectus supplement.
The
Underwriters, broker-dealers and agents that participate in the distribution
of
the securities may be deemed to be “underwriters” as defined by the Securities
Act. Any commissions paid or any discounts or concessions allowed to any
such
persons, and any profits they receive on resale of the securities, may be
deemed
to be underwriting discounts and commissions under the Securities Act.
Agents,
underwriters, and dealers may be entitled under relevant agreements with
us to
indemnification by us against certain liabilities, including liabilities
under
the Securities Act, or to contribution with respect to payments which such
agents, underwriters and dealers may be required to make in respect thereof.
The
terms and conditions of any indemnification or contribution will be described
in
the applicable prospectus supplement.
Underwriters,
broker-dealers or agents may receive compensation in the form of commissions,
discounts or concessions from us. Underwriters, broker-dealers or agents
may
also receive compensation from the purchasers of the securities for whom
they
act as agents or to whom they sell as principals, or both. Compensation as
to a
particular underwriter, broker-dealer or agent might be in excess of customary
commissions and will be in amounts to be negotiated in connection with
transactions involving the securities. In effecting sales, broker-dealers
engaged by us may arrange for other broker-dealers to participate in the
resales. Maximum compensation to any underwriters, dealers or agents will
not
exceed any applicable NASD limitations.
Underwriters
or agents may purchase and sell the securities in the open market. These
transactions may include over-allotments, stabilizing transactions, syndicate
covering transactions and penalty bids. Over-allotments involve sales in
excess
of the offering size, which creates a short position. Stabilizing transactions
consist of bids or purchases for the purpose of preventing or retarding a
decline in the market price of the securities and are permitted so long as
the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve the placing of any bid on behalf of the underwriting
syndicate or the effecting of any purchase to reduce a short position created
in
connection with an offering. The underwriters or agents also may impose a
penalty bid, which permits them to reclaim selling concessions allowed to
syndicate members or certain dealers if they repurchase the securities in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the securities, which may be higher
than
the price that might otherwise prevail in the open market. These activities,
if
begun, may be discontinued at any time. These transactions may be effected
on
any exchange on which the securities are traded, in the over-the-counter
market
or otherwise.
Except
as
indicated in the applicable prospectus supplement, the securities are not
expected to be listed on any securities exchange, except for our common stock,
which is quoted on the Nasdaq Global Market under the symbol “FCEL”, and no
underwriters will be obligated to make a market in these securities. We cannot
predict the activity or liquidity of any trading in these
securities.
FOR
SECURITIES ACT LIABILITIES
Our
certificate of incorporation provides that none of our directors will be
personally liable to us or our shareholders for monetary damages for breach
of
fiduciary duty as a director, except to the extent such exemption from liability
or limitation thereof is not permitted under the Delaware General Corporation
Law. Our by-laws provide for indemnification of our officers and directors
to
the fullest extent permitted by applicable law. Insofar as indemnification
for
liabilities under the Securities Act of 1933 may be permitted to directors,
officers or controlling persons of FuelCell pursuant to the Certificate of
Incorporation, Bylaws or applicable law, or otherwise, we have 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.
LEGAL
MATTERS
The
validity of the securities offered hereby has been passed upon for us by
Robinson & Cole LLP, Stamford, Connecticut.
EXPERTS
Our
consolidated financial statements as of October 31, 2006 and 2005, and for
each
of the three years in the period ended October 31, 2006, incorporated by
reference in this prospectus and in the registration statement of which this
prospectus is a part, from our Annual Report on Form 10-K for the year ended
October 31, 2006, have been audited by KPMG LLP, independent registered public
accounting firm, as stated in their report, and have been so incorporated
in
reliance upon the report given on their authority as experts in accounting
and
auditing. The audit report covering the October 31, 2006 consolidated financial
statements refers to a change in the method of accounting for share-based
payments.
WHERE
YOU CAN FIND MORE INFORMATION
We
have
filed with the Securities and Exchange Commission (SEC) a registration statement
on Form S-3 under the Securities Act with respect to our securities offered
hereby. This prospectus, which constitutes a part of the registration statement,
does not contain all of the information set forth in the registration statement
or the exhibits and schedules filed therewith. We have omitted certain parts
of
the registration statement as permitted by the rules and regulations of the
SEC.
For further information about us and our securities offered hereby, reference
is
made to the registration statement and the exhibits and schedules filed
therewith. Statements contained in this prospectus regarding the contents
of any
contract or any other document that is filed as an exhibit to the registration
statement are not necessarily complete, and each such statement is qualified
in
all respects by reference to the full text of such contract or other document
filed as an exhibit to the registration statement. A copy of the registration
statement and the exhibits and schedules filed therewith may be inspected
without charge at the public reference room maintained by the SEC, located
at
100 F Street, N.E., Washington, D.C. 20549, and copies of all or any part
of the
registration statement may be obtained from such offices upon the payment
of the
fees prescribed by the SEC. Please call the SEC at 1-800-SEC-0330 for further
information about the public reference room. The SEC also maintains an Internet
web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC.
The
address of the site is http://www.sec.gov.
We
are
subject to the informational requirements of the Securities Exchange Act
of 1934
and, therefore, we file annual, quarterly and current reports, proxy statements
and other information with the SEC. Such periodic reports, proxy
statements and other information are available for inspection and copying
at the
public reference room and web site of the SEC referred to above. Our common
stock is quoted on the Nasdaq Global Market, and you may also inspect and
copy
our SEC filings at the offices of the National Association of Securities
Dealers, Inc. located at 1735 K Street, N.W., Washington, D.C. 20006.
You
should rely only on the information provided in this prospectus and the
registration statement. We have not authorized anyone else to provide you with
different information. Our securities are not being offered in any state
where the offer is not permitted. You should assume that the information
in this prospectus is accurate only as of the dates of those documents.
Our business, financial condition, results of operations and prospects may
have
changed since those dates.
The
Securities
and Exchange Commission
(SEC)
allows us to “incorporate by reference” information that we file with it, which
means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is an important
part
of this prospectus. Information in this prospectus supersedes information
incorporated by reference that we filed with the SEC prior to the date of this
prospectus, while information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference into this
registration statement and prospectus the documents listed below, and any future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities
Exchange Act of 1934:
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1.
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Our
Annual Report on Form 10-K for the fiscal year ended October 31,
2006;
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2.
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Our
Proxy for our shareholders’ meeting on March 28, 2006, filed on February
17, 2006;
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3.
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Our
Current Reports on Form 8-K filed December 19, 2006 and January
16, 2007;
and
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4.
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The
description of our common stock set forth in our registration statement
on
Form 8-A, filed with the SEC on June 6, 2000, including any amendments
or
reports filed for the purposes of updating this
description.
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We
will
furnish without charge to you, on written or oral request, a copy of any or
all
of the documents incorporated by reference, including exhibits to these
documents. You should direct any requests for documents to FuelCell Energy,
Inc., Attention: Corporate Secretary, 3 Great Pasture Road, Danbury, Connecticut
06813, telephone: (203) 825-6000.
[LOGO]
$150,000,000
Debt
Securities
Preferred
Stock
Common
Stock
PROSPECTUS
_________________,
2007
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following table sets forth all expenses payable by us in connection with the
offering of the securities being registered. All such expenses are being borne
by us.
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SEC
Registration Fee
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$
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17,655.00
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Accounting
Fees and Expenses*
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$
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______
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Legal
Fees and Expenses*
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$
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______
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Miscellaneous
Expenses*
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$
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______
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Total*
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$
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______
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*
Estimated.
Item
15. Indemnification of Directors and Officers
Section
145 of the Delaware General Corporation Law provides that a corporation may
indemnify any person, including an officer and director, who was or is, or
is
threatened to be made, a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of
the
fact that such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests
of
such corporation, and, with respect to any criminal actions and proceedings,
had
no reasonable cause to believe that his conduct was unlawful. A Delaware
corporation may indemnify any person, including an officer or director, who
was
or is, or is threatened to be made, a party to any threatened, pending or
contemplated action or suit by or in the right of such corporation, under the
same conditions, except that no indemnification is permitted without judicial
approval if such person is adjudged to be liable to such corporation.
Where an officer or director of a corporation is successful, on the merits
or otherwise, in the defense of any action, suit or proceeding referred to
above, or any claim, issue or matter herein, the corporation must indemnify
such
person against the expenses (including attorneys’ fees) which such officer or
director actually and reasonably incurred in connection therewith.
Our
certificate of incorporation provides that none of our directors will be
personally liable to us or our shareholders for monetary damages for breach
of
fiduciary duty as a director, except to the extent such exemption from liability
or limitation thereof is not permitted under the Delaware General Corporation
Law.
Our
by-laws provide for indemnification of our officers and directors to the fullest
extent permitted by applicable law. We also maintain directors’ and officers’
liability insurance policies.
Item
16. Exhibits
The
following exhibits are included or incorporated herein by
reference:
| Exhibit
No. |
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Description
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1.1
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Form
of Underwriting Agreement*
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4.1
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Specimen
of Common Share Certificate (incorporated by reference to exhibit
of the
same number contained in the Company's Annual Report on Form 10K
for its
fiscal year ended October 31, 1999)
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4.2
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Form
of Senior Indenture*
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4.3
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Form
of Subordinated Indenture*
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4.4
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Form
of Senior Debt Security*
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4.5
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Form
of Subordinated Debt Security*
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5.1
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Opinion
of Robinson & Cole LLP
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12.1
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Statement
of Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Dividends
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23.1
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Consent
of Independent Registered Public Accounting Firm
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23.2
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Consent
of Robinson & Cole LLP (included in Exhibit
5.1)
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24.1
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Power
of Attorney (incorporated by reference to exhibit of the same number
contained in the Company's Registration Statement on Form S-3,
filed with
the SEC on September 2, 2005)
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*To
be
filed by amendment or as an exhibit to a report pursuant to Section 13(a),
13(c)
or 15(d) of the Securities Exchange Act of 1934.
Item
17. Undertakings
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, as amended (the “Securities Act”);
(ii) To
reflect in the prospectus any facts or events arising after the effective
date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Securities and Exchange Commission (the “Commission”) pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
provided,
however,
that
paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the registration
statement is on Form
S-3
and the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission
by
the registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 (“Exchange Act”) that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed pursuant
to
Rule
424(b)
that is
part of the registration statement.
2.
That,
for
the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide
offering
thereof.
3.
To
remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
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(b) |
each
prospectus required to be filed pursuant to Rule
424(b)(2),
(b)(5),
or (b)(7)
as
part of a registration statement in reliance on Rule 430B relating
to an
offering made pursuant to Rule
415(a)(1)(i),
(vii),
or (x)
for the purpose of providing the information required by section
10(a) of
the Securities Act shall be deemed to be part of and included in
the
registration statement as of the earlier of the date such form
of
prospectus is first used after effectiveness or the date of the
first
contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of
the issuer
and any person that is at that date an underwriter, such date shall
be
deemed to be a new effective date of the registration statement
relating
to the securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall
be deemed
to be the initial bona fide offering thereof; provided,
however,
that no statement made in a registration statement or prospectus
that is
part of the registration statement or made in a document incorporated
or
deemed incorporated by reference into the registration statement
or
prospectus that is part of the registration statement will, as
to a
purchaser with a time of contract of sale prior to such effective
date,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement
or
made in any such document immediately prior to such effective date;
or
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5. That,
for
the purpose of determining liability of the registrant under the Securities
Act
to any purchaser in the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless
of
the underwriting method used to sell the securities to the purchaser, if
the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to
the
purchaser and will be considered to offer or sell such securities to such
purchaser: (i) Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to
Rule 424; (ii) any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used or referred
to by
the undersigned registrant; (iii) the portion of any other free writing
prospectus relating to the offering containing material information about
the
undersigned registrant or its securities provided by or on behalf of the
undersigned registrant; and (iv) any other communication that is an offer
in the offering made by the undersigned registrant to the
purchaser.
6. The
undersigned registrant hereby undertakes that: (i) for purposes of
determining any liability under the Securities Act, the information omitted
from
the form of prospectus filed as part of the registration statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of the registration statement
as
of the time it was declared effective; and (ii) for the purpose of
determining any liability under the Securities Act, each post-effective
amendment that contains a form of prospectus 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.
7. The
undersigned registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act) 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.
8.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being
registered, the registrant will, unless in the opinion of its counsel the
matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
Signatures
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-3 and has duly caused this Amendment No.1 to the registration
statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Danbury, State of Connecticut, on January
22,
2007.
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FUELCELL
ENERGY, INC.
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By: |
/s/ Joseph
G.
Mahler |
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Joseph
G. Mahler
Senior
Vice President and
Chief
Financial Officer
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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.
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SIGNATURE
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TITLE
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DATE
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/s/
R. Daniel Brdar
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President,
Chief Executive Officer, Chairman
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January
22, 2007
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R.
Daniel Brdar
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of the Board
and a
Director |
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(Principal
Executive Officer)
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*
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Senior
Vice President, Chief Financial
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January
22, 2007
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Joseph
G. Mahler
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Officer,
Corporate Secretary and Treasurer
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(Principal
Accounting and Financial Officer)
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*
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Director
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January
22, 2007
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Warren
D. Bagatelle
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*
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Director
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January
22, 2007
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Michael
Bode
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*
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Director
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January
22, 2007
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James
D. Gerson
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*
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Director
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January
22, 2007
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Thomas
L. Kempner
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Director
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____________ |
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William
A. Lawson
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*
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Director
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January
22, 2007
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Charles
J. Murphy
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*
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Director
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January
22, 2007
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John
A. Rolls
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*
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Director
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January
22, 2007
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George
K. Petty
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*By:
/s/
Joseph G. Mahler
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January
22, 2007
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Joseph
G. Mahler
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Attorney-in
Fact
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INDEX
OF
EXHIBITS
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Exhibit
No.
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Description
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1.1
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Form
of Underwriting Agreement*
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4.1
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Specimen
of Common Share Certificate (incorporated by reference to exhibit
of the
same number contained in the Company's Annual Report on Form 10K
for its
fiscal year ended October 31, 1999)
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4.2
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Form
of Senior Indenture*
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4.3
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Form
of Subordinated Indenture*
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4.4
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Form
of Senior Debt Security*
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4.5
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Form
of Subordinated Debt Security*
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5.1
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Opinion
of Robinson & Cole LLP
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12.1
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Statement
of Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Dividends
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23.1
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Consent
of Independent Registered Public Accounting Firm
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23.2
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Consent
of Robinson & Cole LLP (included in Exhibit
5.1)
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24.1
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Power
of Attorney (incorporated by reference to exhibit of the same number
contained in the Company's Registration Statement on Form S-3,
filed with
the SEC on September 2, 2005)
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*To
be
filed by amendment or as an exhibit to a report pursuant to Section 13(a),
13(c)
or 15(d) of the Securities Exchange Act of 1934.