Filed
Pursuant to Rule 424(b)(3)
Commission
File No. 333-161346
PROSPECTUS
$150,000,000
Common
Stock
Preferred
Stock
Depositary
Shares
Debt
Securities
Rights
Units
Warrants
We may offer and sell from time to time
under this prospectus an indeterminate number of shares of our common stock,
preferred stock, depositary shares, debt securities, rights to purchase common
stock, units consisting of two or more of these classes or series of securities
and warrants to purchase any of the other securities that may be sold under this
prospectus. We will describe in a prospectus supplement the securities we are
offering and selling, as well as the specific terms of the
securities.
We may offer these securities in
amounts, at prices and on terms determined at the time of offering. We may sell
the securities directly to you, through agents we select, or through
underwriters and dealers we select. If we use agents, underwriters or dealers to
sell the securities, we will name them and describe their compensation in a
prospectus supplement.
Our
common stock is quoted on The New York Stock Exchange under the symbol “NGS.” On
November 20, 2009, the last reported sale price of our common stock was $16.70
per share. The applicable prospectus supplement will contain information, where
applicable, as to any other listing on the NYSE or any other securities exchange
of the securities covered by the prospectus supplement.
We may
amend or supplement this prospectus from time to time by filing amendments or
supplements as required. You should read this entire prospectus and any
amendments or supplements carefully before you make your investment
decision.
Investing in our securities involves
certain risks. You should carefully consider the matters set forth in “Risk
Factors” on page 3 of this prospectus and in the applicable prospectus
supplement, along with any risk factor information incorporated by reference
herein for certain risks you should consider. You should read the entire
prospectus carefully before you make your investment decision.
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 November 25, 2009.
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TABLE
OF CONTENTS
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FORWARD-LOOKING
STATEMENT
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1
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ABOUT
THIS PROSPECTUS
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1
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INFORMATION
ABOUT MATRUAL GAS SERVICES GROUP, INC.
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3
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RISK
FACTORS
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4
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DESCRIPTION
OF COMMON STOCK AND PREFERRED STOCK
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5
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DESCRIPTION
OF DEPOSITARY SHARES
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8
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DESCRIPTION
OF DEBT SECURITIES
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12
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DESCRIPTION
OF RIGHTS
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21
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DESCRIPTION
OF UNITS
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DESCRIPTION
OF WARRANTS
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23
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USE
OF PROCEEDS
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RATIO
OF EARNINGS TO FIXED CHARGES
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PLAN
OF DISTRIBUTION
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LEGAL
MATTERS
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EXPERTS
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TRANSFER
AGENT AND REGISTRAR
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INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
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DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
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You
should rely on the information contained in this prospectus. We have not
authorized anyone to provide you with information different from that contained
in this prospectus. Offers to sell the securities will be made only in
jurisdictions where offers and sales are permitted. The information contained in
this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or of any sale of the
securities.
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FORWARD-LOOKING
STATEMENTS
Certain
statements contained in this prospectus are not statements of historical fact
and constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act (the “Act”), including, without limitation, the
statements specifically identified as forward-looking statements within this
prospectus. Many of these statements contain risk factors as well. In addition,
certain statements in future filings by the Company with the Securities and
Exchange Commission, in press releases, and in oral and written statements made
by or with the approval of the Company which are not statements of historical
fact constitute forward-looking statements within the meaning of the Act.
Examples of forward-looking statements, include, but are not limited to:
(i) projections of revenues, income or loss, earnings or loss per share,
the payment or non-payment of dividends, capital structure, and other financial
items, (ii) statements of our plans and objectives by our management or
Board of Directors including those relating to planned development of our
natural gas compression business, (iii) statements of future economic
performance and (iv) statements of assumptions underlying such statements.
Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,”
“may,” “will” and similar expressions are intended to identify forward-looking
statements but are not the exclusive means of identifying such
statements.
Such
forward-looking statements speak only as of the date on which such statements
are made, and the Company undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which such
statement is made to reflect the occurrence of unanticipated
events.
ABOUT
THIS PROSPECTUS
This is
only a summary and does not contain all of the information that you should
consider before investing in our common stock. You should read the entire
prospectus carefully, including the “Risk Factors” section as well as the
information incorporated by reference into this prospectus under “Incorporation
of Certain Information by Reference--Where You Can Find More
Information.”
In this
prospectus, the terms “company,” “we,” “us,” and “our” refer to Natural Gas
Services Group, Inc., a Colorado corporation, including our wholly owned
subsidiaries, if any.
This prospectus is part of a
registration statement that we filed with the Securities and Exchange Commission
utilizing a shelf registration process. Under the shelf registration process, we
may offer shares of our common stock, preferred stock, depositary shares,
various series of debt securities, rights, units and warrants to purchase any of
such securities with a total value of up to $150,000,000 from time to time under
this prospectus at prices and on terms to be determined by market conditions at
the time of offering. This prospectus provides you with a general description of
the securities we may offer. Each time we offer a type or series of securities,
we will provide a prospectus supplement that will describe the specific amounts,
prices and other important terms of the securities, including, to the extent
applicable:
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designation
or classification;
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aggregate
principal amount or aggregate offering
price;
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maturity;
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original
issue discount, if any;
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rates
and times of payment of interest, dividends or other payments, if
any;
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redemption,
conversion, exchange, settlement or sinking fund terms, if
any;
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conversion,
exchange or settlement prices or rates, if any, and, if applicable, any
provisions for changes to or adjustments in the conversion, exchange or
settlement prices or rates and in the securities or other property
receivable upon conversion, exchange or
settlement;
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ranking;
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restrictive
covenants, if any;
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voting
or other rights, if any; and
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important
federal income tax considerations.
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A prospectus supplement may include a
discussion of risks or other special considerations applicable to us or the
offered securities. A prospectus supplement may also add, update or change
information in this prospectus. If there is any inconsistency between the
information in this prospectus and the applicable prospectus supplement, you
must rely on the information in the prospectus supplement. Please carefully read
both this prospectus and the applicable prospectus supplement together with
additional information described under the heading “Incorporation of Certain
Information by Reference--Where You Can Find More Information.” This prospectus
may not be used to offer or sell any securities unless accompanied by a
prospectus supplement.
The registration statement containing
this prospectus, including exhibits to the registration statement, provides
additional information about us and the common stock offered under this
prospectus. The registration statement can be read at the SEC website or at the
SEC’s public reading room mentioned under the heading “Incorporation of Certain
Information by Reference--Where You Can Find More Information.”
We have not authorized any underwriter, broker-dealer, salesperson 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 securities, 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. We may also
authorize one or more free writing prospectuses to be provided to you that may
contain material information relating to these offerings. The prospectus
supplement and any related free writing prospectus that we may authorize to be
provided to you may also add, update or change information contained in this
prospectus or in any documents that we have incorporated by reference into this
prospectus. To the extent there is a conflict between the information contained
in this prospectus and the prospectus supplement or any related free writing
prospectus, you should rely on the information in the prospectus supplement or
the related free writing prospectus; provided that if any statement in one of
these documents is inconsistent with a statement in another document having a
later date — for example, a document incorporated by reference in this
prospectus or any prospectus supplement or any related free writing prospectus —
the statement in the document having the later date modifies or supersedes the
earlier statement.
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We may sell the securities directly to or through underwriters, dealers or
agents. We, and our underwriters or agents, reserve the right to accept or
reject all or part of any proposed purchase of securities. If we do offer
securities through underwriters or agents, we will include in the applicable
prospectus supplement:
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the
names of those underwriters or
agents;
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applicable
fees, discounts and commissions to be paid to
them;
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details
regarding over-allotment options, if any;
and
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the
net proceeds to us.
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INFORMATION
ABOUT NATURAL GAS SERVICES GROUP, INC.
We are a leading provider of small to medium horsepower compression equipment to
the natural gas industry. We focus primarily on the non-conventional natural gas
production business in the United States (such as coalbed methane, gas shales
and tight gas), which, according to data from the Energy Information
Administration, is the single largest and fastest growing segment of U.S. gas
production. We manufacture, fabricate and rent natural gas compressors that
enhance the production of natural gas wells and provide maintenance services for
those compressors. In addition, we sell custom fabricated natural gas
compressors to meet customer specifications dictated by well pressures,
production characteristics and particular applications. We also manufacture and
sell flare systems for oil and gas plant and production facilities.
The vast majority of our rental operations are in non-conventional natural gas
regions, which typically have lower initial reservoir pressures and faster well
decline rates. These areas usually require compression to be
installed sooner and with greater frequency.
We maintain our principal offices at 508 W. Wall St., Suite 550, Midland,
Texas 79701 and our telephone number is (432) 262-2700. Our website is
located at http://www.ngsgi.com.
The information on or that can be accessed through our website is not part of
this prospectus. We were incorporated in Colorado on December 17,
1998.
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RISK
FACTORS
Any
investment in our securities involves a high degree of risk. You should consider
carefully the risk factors described in our periodic reports filed with the SEC
(including the risks, uncertainties and assumptions discussed under the heading
“Risk Factors” included in our most recent annual report on Form 10-K, as such
may be revised or supplemented prior to the completion of this offering by more
recently filed quarterly reports on Form 10-Q, each of which is or upon filing
will be incorporated herein by reference), which may be amended, supplemented or
superseded from time to time by other reports we file with the SEC in the
future, and those identified in any applicable prospectus supplement, as well as
other information in this prospectus and any applicable prospectus supplement
and the documents incorporated by reference herein before purchasing any of our
securities. Each of these risk factors could adversely affect our business,
operating results and financial condition, as well as adversely affect the value
of an investment in our securities. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial may also impair our
business operations.
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DESCRIPTION
OF COMMON STOCK AND PREFERRED STOCK
The following description of our common stock and preferred stock, together with
any additional information we include in any applicable prospectus supplement or
any related free writing prospectus, summarizes the material terms and
provisions of our common stock and the preferred stock that we may offer under
this prospectus. While the terms we have summarized below will apply generally
to any future common stock or preferred stock that we may offer, we will
describe the particular terms of any class or series of these securities in more
detail in the applicable prospectus supplement. For the complete terms of our
common stock and preferred stock, please refer to our articles of incorporation
and our amended and restated bylaws that are incorporated by reference into the
registration statement of which this prospectus is a part or may be incorporated
by reference in this prospectus or any applicable prospectus supplement. The
terms of these securities may also be affected by the Colorado Business
Corporation Act. The summary below and that contained in any applicable
prospectus supplement or any related free writing prospectus are qualified in
their entirety by reference to our articles of incorporation and our amended and
restated bylaws.
Common
Stock
We are
currently authorized to issue 30,000,000 shares of Common Stock, and as of
November 24, 2009, (i) 12,096,833 shares of Common Stock were issued and
outstanding, (ii) 750,000 shares were reserved for issuance under our 1998 Stock
Option Plan, of which 397,069 shares remain unissued; (ii) 300,000 shares were
reserved for issuance under the our 2009 Restricted Stock/Unit Plan, of which
all 300,000 shares remain unissued, and (iii) 45,000 shares were reserved for
issuance upon exercise of a Non-Statutory Stock Option Agreement dated August
24, 2005 issued to one of our an executive officers.
Voting Rights
Each share of Common Stock entitles the holder thereof to one vote on each
matter for which shareholders are entitled to vote. A majority of the
outstanding shares of our Common Stock of the Company entitled to vote at
meetings of shareholders, present in person or by proxy, constitute a quorum at
any meeting of shareholders. Matters are generally decided by the affirmative
vote of a majority of the shares of our Common Stock present in person or by
proxy and entitled to vote. The Board of Directors is elected by plurality and
cumulative voting is not allowed. Thus, at each election of directors, that
number of candidates equaling the number of directors to be elected, having the
highest number of votes cast in favor of their election, shall be elected to the
Board of Directors.
Dividends
Holders of Common Stock are entitled to
dividends out of funds legally available for such dividends when, if and as
declared by the Board of Directors.
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Liquidation
In event
of the voluntary or involuntary liquidation, dissolution, distribution of assets
or other winding up, holders of our common stock have the right to receive
ratably all of the assets remaining after payment of liabilities and liquidation
preferences of any preferred stock then outstanding.
Other
Matters
Shares of
Common Stock are not liable to assessment or further call. Our Common
Stock has no preemptive, conversion or other subscription rights. There are no
redemption or sinking fund provisions applicable to our Common Stock. All
outstanding shares of Common Stock are validly issued, fully paid and
non-assessable.
Preferred
Stock
We are
authorized to issue 5,000,000 shares of preferred stock, none of which are
issued and outstanding as of the date of this prospectus. Our board of directors
is authorized to classify or reclassify any unissued portion of our authorized
shares of preferred stock to provide for the issuance of shares of other classes
or series, including preferred stock in one or more series. We may issue
preferred stock from time to time in one or more class or series, with the exact
terms of each class or series established by our board of directors. Our board
of directors may issue preferred stock with voting and other rights that could
adversely affect the voting power of the holders of our common stock without
seeking shareholder approval. Additionally, the issuance of preferred stock may
have the effect of decreasing the market price of the common stock and may
adversely affect the voting power of holders of common stock and reduce the
likelihood that common shareholders will receive dividend payments and payments
upon liquidation.
The
rights, preferences, privileges and restrictions of the preferred stock of each
series will be fixed by the certificate of designation relating to each series.
We will incorporate by reference into the registration statement of which this
prospectus is a part the form of any certificate of designation that describes
the terms of the series of preferred stock we are offering before the issuance
of the related series of preferred stock. The applicable prospectus supplement
will specify the terms of the series of preferred stock we are offering,
including, but not limited to:
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the
distinctive designation and the maximum number of shares in the
series;
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the
number of shares we are offering and purchase price per
share;
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the
liquidation preference, if any;
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the
terms on which dividends, if any, will be
paid;
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the
voting rights, if any, on the shares of the
series;
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the
terms and conditions, if any, on which the shares of the series shall be
convertible into, or exchangeable for, shares of any other class or
classes of capital stock;
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the
terms on which the shares may be redeemed, if at
all;
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any
listing of the preferred stock on any securities exchange or
market;
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a
discussion of any material or special United States federal income tax
considerations applicable to the preferred stock;
and
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any
or all other preferences, rights, restrictions, including restrictions on
transferability, and qualifications of shares of the
series.
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The
issuance of preferred stock may delay, deter or prevent a change in
control.
The
prospectus supplement relating to a preferred stock offering will contain a
description of the specific terms of that series as fixed by our Board of
Directors.
Anti-Takeover
Effects of Provisions of our Charter Documents and Colorado Law
The following is a summary of certain provisions of Colorado law, our amended
articles of incorporation and bylaws. This summary does not purport to be
complete and is qualified in its entirety by reference to the corporate law of
Colorado and our amended articles of incorporation and bylaws.
Size of
Board. Our Bylaws provide that the size of the Board of Directors may not
be changed except (i) by a resolution adopted by at least 80% of the votes
entitled to be cast by each shareholder voting group entitled to vote thereon,
or (ii) by unanimous consent of the Board of Directors. This provision of the
Bylaws may not be changed except upon approval by at least 80% of the votes
entitled to be cast by each voting group entitled to vote thereon.
Filling
Vacancies on Board. Except with respect to a vacancy on the
Board of Directors due to the removal of the Director, any vacancy on the Board
may be filled by the affirmative vote of a majority of the shareholders or the
Board of Directors. As a result of the ability of the Board to fill a vacancy,
such new directors may not be up for shareholder election at the next annual
meeting due to the staggered Board classification described below. The overall
effect of these provisions may be to prevent a person or entity from immediately
acquiring Board control.
Removal
of Directors. Our Bylaws provide that any Director or the
entire Board of Directors may be removed for cause only at a special meeting of
the shareholders by the affirmative vote of at least 80% of the votes entitled
to be cast by each voting group entitled to vote thereon at such meeting, if
notice of the intention to act upon such matter shall have been given in the
notice calling the meeting. The Bylaws also provide that vacancies arising as a
result of the removal of directors by shareholder action may be filled at such
meeting by the affirmative vote of at least 80% of the shares of the votes
entitled to be cast by each voting group entitled to vote thereon. This
provision of the Bylaws may not be changed except upon approval by at least 80%
of the votes entitled to be cast by each voting group entitled to vote
thereon.
Staggered Board of
Directors. Our amended articles of incorporation provide that
the Board of Directors is to be divided into three classes, each class to be as
nearly equal in number as possible. At each annual meeting of shareholders,
members of one of the classes, on a rotating basis, are elected for a three year
term. The staggered Board provision cannot be amended or repealed by the
directors and cannot be amended or repealed without the affirmative vote of the
holders of at least 80% of the votes entitled to be cast in the election of
directors.
Limited
Ability for Shareholders to Call a Special Meeting. Our Bylaws
only permit shareholders to call a special meeting if we receive one or more
written demands for the meeting, stating the purpose or purposes of the meeting,
signed and dated by holders of shares representing at least 10% of all votes
entitled to be cast on any issue proposed to be considered at the
meeting.
No cumulative
voting. Cumulative voting in the election of directors is not
allowed.
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Indemnification. The amended articles provide that our
directors and officers shall be indemnified and shall be advanced expenses
incurred in defending a civil, criminal, administrative or investigative action,
suit or proceeding arising out of their status as directors and officers to the
fullest extent allowed by law.
DESCRIPTION
OF DEPOSITARY SHARES
General
We may,
at our option, elect to offer fractional shares or multiple shares of preferred
stock, rather than whole individual shares of preferred stock. If we decide to
do so, we will issue the preferred stock in the form of depositary shares. Each
depository share will represent a fraction or multiple of a share of a
particular series of preferred stock and will be evidenced by depositary
receipts issued pursuant to the deposit agreement. Depositary receipts will be
distributed to those persons purchasing the fractional or multiple shares of
preferred stock in accordance with the terms of the prospectus supplement or
other offering materials.
The
shares of any series of preferred stock represented by depositary shares will be
deposited under a deposit agreement between us and a bank or trust company
selected by us having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000, as preferred stock
depositary. Each owner of a depositary share will be entitled to all the rights
and preferences of the underlying preferred stock, including dividend, voting,
redemption, conversion and liquidation rights, in proportion to the applicable
fraction of a share of preferred stock represented by the depositary
share.
Dividends
and Other Distributions
The preferred stock depositary will
distribute all cash dividends or other cash distributions received in respect of
the deposited preferred stock to the record holders of depositary shares
relating to the underlying preferred stock in proportion to the number of the
depositary shares owned by the holders.
The
preferred stock depositary will distribute any property received by it other
than cash to the record holders of depositary shares entitled to these
distributions. If the preferred stock depositary determines that it is not
feasible to make a distribution, it may, with our approval, sell the property
and distribute the net proceeds from the sale to the holders of the depositary
shares.
Conversion
or Exchange of Preferred Stock
If a
series of preferred stock represented by depositary shares is subject to
conversion or exchange, the applicable prospectus supplement will describe the
rights or obligations of each record holder of depositary receipts to convert or
exchange the depositary shares.
Redemption
of Preferred Stock
If we
redeem a series of preferred stock represented by depositary shares, the
depositary shares will be redeemed from the proceeds received by the preferred
stock depositary resulting from the redemption, in whole or in part, of the
applicable series of preferred stock. The depositary shares will be redeemed by
the preferred stock depositary at a price per depositary share equal to the
applicable fraction of the redemption price per share payable in respect of the
shares of preferred stock so redeemed.
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Whenever
we redeem shares of preferred stock held by the preferred stock depositary, the
preferred stock depositary will redeem as of the same date the number of
depositary shares representing shares of preferred stock so redeemed. If fewer
than all the depositary shares are to be redeemed, the depositary shares to be
redeemed will be selected by the preferred stock depositary by lot or ratably or
by any other equitable method as the preferred stock depositary
decides.
Withdrawal
of Preferred Stock
Unless
the related depositary shares have previously been called for redemption, any
holder of depositary shares may receive the number of whole shares of the
related series of preferred stock and any money or other property represented by
those depositary shares after surrendering the related depositary receipts at
the corporate trust office of the preferred stock depositary. Holders of
depositary shares making these withdrawals will be entitled to receive whole
shares of preferred stock on the basis set forth in the prospectus supplement or
other offering materials for that series of preferred stock.
However,
holders of whole shares of preferred stock will not be entitled to deposit that
preferred stock under the deposit agreement or to receive depositary shares for
that preferred stock after withdrawal. If the depositary shares surrendered by
the holder in connection with withdrawal exceed the number of depositary shares
that represent the number of whole shares of preferred stock to be withdrawn,
the preferred stock depositary will deliver to that holder at the same time new
depositary receipts evidencing the excess number of depositary
shares.
Voting
Deposited Preferred Stock
When the
preferred stock depositary receives notice of any meeting at which the holders
of any series of deposited preferred stock are entitled to vote, the preferred
stock depositary will mail the information contained in the notice to the record
holders of the depositary shares relating to the applicable series of preferred
stock. Each record holder of the depositary shares on the record date will be
entitled to instruct the preferred stock depositary to vote the amount of the
preferred stock represented by the holder’s depositary shares. To the extent
possible, the preferred stock depositary will vote the amount of the series of
preferred stock represented by depositary shares in accordance with the
instructions it receives.
We will
agree to take all reasonable actions that the preferred stock depositary
determines are necessary to enable the preferred stock depositary to vote as
instructed. The preferred stock depositary will vote all shares of any series of
preferred stock held by it proportionately with instructions received if it does
not receive specific instructions from the holders of depositary shares
representing that series of preferred stock.
Amendment
and Termination of the Deposit Agreement
The form
of depositary receipt evidencing the depositary shares and any provision of the
deposit agreement may at any time be amended by agreement between us and the
preferred stock depositary. However, any amendment that imposes additional
charges or materially and adversely alters the existing rights of the holders of
depositary shares will not be effective unless the amendment has been approved
by the holders of at least a majority of the affected depositary shares then
outstanding. Holders who retain their depositary shares after the amendment
becomes effective will be deemed to agree to the amendment and will be bound by
the amended deposit agreement. The deposit agreement automatically terminates
if:
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all
outstanding depositary shares have been
redeemed;
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each
share of preferred stock has been converted into or exchanged for common
stock; or
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a
final distribution in respect of the preferred stock has been made to the
holders of depositary shares in connection with any liquidation,
dissolution or winding up of our
company.
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We may
terminate the deposit agreement at any time and the preferred stock depositary
will give notice of that termination to the record holders of all outstanding
depositary receipts not less than 30 days prior to the termination date. In
that event, the preferred stock depositary will deliver or make available for
delivery to holders of depositary shares, upon surrender of the related
depositary receipts, the number of whole or fractional shares of the related
series of preferred stock as are represented by those depositary
shares.
Charges
of Preferred Stock Depositary; Taxes and Other Governmental Charges
No fees,
charges and expenses of the preferred stock depositary or any agent of the
preferred stock depositary or of any registrar will be payable by any person
other than us, except for any taxes and other governmental charges and except as
provided in the deposit agreement. If the preferred stock depositary incurs
fees, charges or expenses for which it is not otherwise liable at the election
of a holder of depositary shares or other person, that holder or other person
will be liable for those fees, charges and expenses.
Resignation
and Removal of Depositary
The
preferred stock depositary may resign at any time by delivering to us notice of
its intent to do so, and we may at any time remove the preferred stock
depositary. Any resignation or removal will take effect upon the appointment of
a successor preferred stock depositary and its acceptance of the appointment. A
successor preferred stock depositary must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.
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Miscellaneous
The
preferred stock depositary will forward all reports and communications from us
which are delivered to the preferred stock depositary and which we are required
to furnish to the holders of the deposited preferred stock.
Neither
we nor the preferred stock depositary will be liable if it is prevented or
delayed by law or any circumstances beyond its control in performing its
obligations under the deposit agreement. Our obligations and that of
the preferred stock depositary under the deposit agreement will be limited to
performance with honest intentions of our and their duties under the agreement
and we and they will not be obligated to prosecute or defend any legal
proceeding in respect of any depositary shares, depositary receipts or shares of
preferred stock unless satisfactory indemnity is furnished. We and
the preferred stock depositary may rely upon written advice of counsel or
accountants, or upon information provided by holders of depositary shares or
other persons believed to be competent and on documents believed to be
genuine.
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General
The debt securities that we may issue may constitute debentures, notes, bonds or
other evidences of indebtedness of Natural Gas Services Group, Inc., to be
issued in one or more series, which may include senior debt securities,
subordinated debt securities and senior subordinated debt securities. The
particular terms of any series of debt securities we may offer, including the
extent to which the general terms set forth below may be applicable to a
particular series, will be described in a prospectus supplement relating to such
series.
Debt securities that we may issue may be issued under a senior indenture between
us and a trustee, or a subordinated indenture between us and a trustee
(collectively, the “indenture”). We have filed forms of the indentures as
exhibits to the registration statement of which this prospectus is a part. If we
enter into any revised indenture or indenture supplement, we will file a copy of
that supplement with the Securities and Exchange Commission.
The following description is a summary of the material provisions of the
indenture. It does not restate the indenture in its entirety. The indenture is
governed by the Trust Indenture Act of 1939. The terms of the debt securities
include those stated in the indenture and those made part of the indenture by
reference to the Trust Indenture Act. We urge you to read the indenture because
it, and not this description, defines your rights as a holder of the debt
securities.
The indenture contains no covenant or provision which affords debt holders
protection in the event of a highly leveraged transaction.
Information
You Will Find in the Prospectus Supplement
The indenture provides that we may issue debt securities from time to time in
one or more series by resolution of our board of directors or by means of a
supplemental indenture, and that we may denominate the debt securities and make
them payable in foreign currencies. The indenture does not limit the aggregate
principal amount of debt securities that can be issued thereunder. The
prospectus supplement for a series of debt securities will provide information
relating to the terms of the series of debt securities being offered, which may
include:
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the
title and denominations of the debt securities of the
series;
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any
limit on the aggregate principal amount of the debt securities of the
series;
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the
date or dates on which the principal and premium, if any, with respect to
the debt securities of the series are payable or the method of
determination thereof;
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the
rate or rates, which may be fixed or variable, at which the debt
securities of the series shall bear interest, if any, or the method of
calculating and/or resetting such rate or rates of
interest;
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the
dates from which such interest shall accrue or the method by which such
dates shall be determined and the basis upon which interest shall be
calculated;
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the
interest payment dates for the series of debt securities or the method by
which such dates will be determined, the terms of any deferral of interest
and any right of ours to extend the interest payments
periods;
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the
place or places where the principal and interest on the series of debt
securities will be payable;
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the
terms and conditions upon which debt securities of the series may be
redeemed, in whole or in part, at our option or
otherwise;
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our
obligation, if any, to redeem, purchase, or repay debt securities of the
series pursuant to any sinking fund or other specified event or at the
option of the holders and the terms of any such redemption, purchase, or
repayment;
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the
terms, if any, upon which the debt securities of the series may be
convertible into or exchanged for other securities, including, among other
things, the initial conversion or exchange price or rate and the
conversion or exchange period;
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if
the amount of principal, premium, if any, or interest with respect to the
debt securities of the series may be determined with reference to an index
or formula, the manner in which such amounts will be
determined;
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if
any payments on the debt securities of the series are to be made in a
currency or currencies (or by reference to an index or formula) other than
that in which such securities are denominated or designated to be payable,
the currency or currencies (or index or formula) in which such payments
are to be made and the terms and conditions of such
payments;
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any
changes or additions to the provisions of the indenture dealing with
defeasance, including any additional covenants that may be subject to our
covenant defeasance option;
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the
currency or currencies in which payment of the principal and premium, if
any, and interest with respect to debt securities of the series will be
payable, or in which the debt securities of the series shall be
denominated, and the particular provisions applicable thereto in
accordance with the indenture;
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the
portion of the principal amount of debt securities of the series which
will be payable upon declaration of acceleration or provable in bankruptcy
or the method by which such portion or amount shall be
determined;
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whether
the debt securities of the series will be secured or guaranteed and, if
so, on what terms;
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any
addition to or change in the events of default with respect to the debt
securities of the series;
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the
identity of any trustees, authenticating or paying agents, transfer agents
or registrars;
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the
applicability of, and any addition to or change in, the covenants
currently set forth in the
indenture;
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the
subordination, if any, of the debt securities of the series and terms of
the subordination;
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whether
securities of the series shall be issuable as registered securities or
bearer securities (with or without interest coupons), and any restrictions
applicable to the offering, sale or delivery of such bearer securities and
the terms upon which such bearer securities of a series may be exchanged
for registered securities, and vice versa;
and
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any
other terms of the debt securities of the
series.
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Senior
Debt
We may issue senior debt securities under the indenture and any coupons that
will constitute part of our senior debt. Unless otherwise set forth in the
applicable indenture supplement or in any board resolution establishing such
debt securities and described in a prospectus supplement, the senior debt
securities may be senior unsecured obligations, ranking equally with all of our
existing and future senior unsecured debt. The senior debt securities will be
senior to all of our subordinated debt and junior to any secured debt we may
incur as to the assets securing such debt.
Subordinated
Debt
We may issue subordinated debt securities under the indenture and any coupons
that will constitute part of such subordinated debt. These subordinated debt
securities will be subordinate and junior in right of payment, to the extent and
in the manner set forth in the indenture and any applicable indenture
supplement, to all of our senior indebtedness.
If this prospectus is being delivered in connection with a series of
subordinated debt securities, the accompanying prospectus supplement or the
information incorporated by reference will set forth the approximate amount of
senior indebtedness, if any, outstanding as of the end of our most recent fiscal
quarter.
Senior
Subordinated Debt
We may issue senior subordinated debt securities under the indenture and any
coupons that will constitute part of our senior subordinated debt. These senior
subordinated debt securities will be, to the extent and in the manner set forth
in the indenture, subordinate and junior in right of payment to all of our
“senior indebtedness” and senior to our other subordinated debt.
Interest
Rate
Debt securities that bear interest will do so at a fixed rate or a floating
rate. We may sell, at a discount below the stated principal amount, any debt
securities which bear no interest or which bear interest at a rate that at the
time of issuance is below the prevailing market rate. The relevant prospectus
supplement will describe the special United States federal income tax
considerations applicable to:
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any
discounted debt securities; and
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any
debt securities issued at par which are treated as having been issued at a
discount for United States federal income tax
purposes.
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Registered
Global Securities
We may
issue registered debt securities of a series in the form of one or more fully
registered global securities. We will deposit the registered global security
with a depositary or with a nominee for a depositary identified in the
prospectus supplement relating to such series. The global security or global
securities will represent and will be in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
outstanding registered debt securities of the series to be represented by the
registered global security or securities. Unless it is exchanged in whole or in
part for debt securities in definitive registered form, a registered global
security may not be transferred, except as a whole in three cases:
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the
depositary for the registered global security to a nominee of the
depositary;
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by
a nominee of the depositary to the depositary or another nominee of the
depositary; and
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by
the depositary or any nominee to a successor of the depositary or a
nominee of the successor.
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The
prospectus supplement relating to a series of debt securities will describe the
specific terms of the depositary arrangement concerning any portion of that
series of debt securities to be represented by a registered global security. We
anticipate that the following provisions will generally apply to all depositary
arrangements.
Upon the
issuance of a registered global security, the depositary will credit, on its
book-entry registration and transfer system, the principal amounts of the debt
securities represented by the registered global security to the accounts of
persons that have accounts with the depositary. These persons are referred to as
“participants.” Any underwriters, agents or debtors participating in the
distribution of debt securities represented by the registered global security
will designate the accounts to be credited. Only participants or persons that
hold interests through participants will be able to beneficially own interests
in a registered global security. The depositary for a global security will
maintain records of beneficial ownership interests in a registered global
security for participants. Participants or persons that hold through
participants will maintain records of beneficial ownership interests in a global
security for persons other than participants. These records will be the only
means to transfer beneficial ownership in a registered global
security.
The laws
of some states may require that specified purchasers of securities take physical
delivery of the securities in definitive form. These laws may limit the ability
of those persons to own, transfer or pledge beneficial interests in global
securities.
So long
as the depositary, or its nominee, is the registered owner of a registered
global security, the depositary or its nominee will be considered the sole owner
or holder of the debt securities represented by the registered global security
for all purposes under the indenture. Except as set forth below, owners of
beneficial interests in a registered global security:
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may
not have the debt securities represented by a registered global security
registered in their names;
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will
not receive or be entitled to receive physical delivery of debt securities
represented by a registered global security in definitive form;
and
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will
not be considered the owners or holders of debt securities represented by
a registered global security under the
indenture.
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Accordingly,
each person owning a beneficial interest in a registered global security must
rely on the procedures of the depositary for the registered global security and,
if the person is not a participant, on the procedures of the participant through
which the person owns its interests, to exercise any rights of a holder under
the indenture applicable to the registered global security.
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We
understand that, under existing industry practices, if we request any action of
holders, or if an owner of a beneficial interest in a registered global security
desires to give or take any action which a holder is entitled to give or take
under the indenture, the depositary for the registered global security would
authorize the participants holding the relevant beneficial interests to give or
take the action, and the participants would authorize beneficial owners owning
through the participants to give or take the action or would otherwise act upon
the instructions of beneficial owners holding through them.
Payment
of Interest on and Principal of Registered Global Securities
We will
make principal, premium, if any, and interest payments on debt securities
represented by a registered global security registered in the name of a
depositary or its nominee to the depositary or its nominee as the registered
owner of the registered global security. None of Natural Gas Services Group, the
trustee, or any paying agent for debt securities represented by a registered
global security will have any responsibility or liability for:
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any
aspect of the records relating to, or payments made on account of,
beneficial ownership interests in such registered global
security;
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maintaining,
supervising, or reviewing any records relating to beneficial ownership
interests;
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the
payments to beneficial owners of the global security of amounts paid to
the depositary or its nominee; or
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any
other matter relating to the actions and practices of the depositary, its
nominee or any of its participants.
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We expect
that the depositary, upon receipt of any payment of principal, premium or
interest in respect of the global security, will immediately credit
participants’ accounts with payments in amounts proportionate to their
beneficial interests in the principal amount of a registered global security as
shown on the depositary’s records. We also expect that payments by participants
to owners of beneficial interests in a registered global security held through
participants will be governed by standing instructions and customary practices.
This is currently the case with the securities held for the accounts of
customers registered in “street name.” Such payments will be the responsibility
of participants.
Exchange
of Registered Global Securities
We may
issue debt securities in definitive form in exchange for the registered global
security if both of the following occur:
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the
depositary for any debt securities represented by a registered global
security is at any time unwilling or unable to continue as depositary or
ceases to be a clearing agency registered under the Securities Exchange
Act of 1934; and
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we
do not appoint a successor depositary within
90 days.
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In
addition, we may, at any time, determine not to have any of the debt securities
of a series represented by one or more registered global securities. In this
event, we will issue debt securities of that series in definitive form in
exchange for all of the registered global security or securities representing
those debt securities.
Our
Covenants
The indenture includes covenants by us, including among other things that we
will make all payments of principal and interest at the times and places
required. The board resolution or supplemental indenture establishing each
series of debt securities may contain additional covenants, including covenants
which could restrict our right to incur additional indebtedness or liens and to
take certain actions with respect to our businesses and assets.
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Events
of Default
Unless
otherwise indicated in the applicable prospectus supplement, the following will
be events of default under the indenture with respect to each series of debt
securities issued under the indenture:
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failure
to pay when due any interest on any debt security of that series that
continues for 30 days;
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failure
to pay when due the principal of, or premium, if any, on, any debt
security of that series;
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default
in the payment of any sinking fund installment with respect to any debt
security of that series when due and
payable;
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failure
to perform any other covenant or agreement of ours under the indenture or
the supplemental indenture with respect to that series or the debt
securities of that series, continued for 90 days after written notice to
us by the trustee or holders of at least 25% in aggregate principal amount
of the outstanding debt securities of the series to which the covenant or
agreement relates;
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certain
events of bankruptcy, insolvency or similar proceedings affecting us and
our subsidiaries; and
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any
other event of default specified in any supplemental indenture under which
such series of debt securities is
issued.
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After any such acceleration, but before a judgment or decree based on
acceleration has been obtained by the trustee, the holders of a majority in
aggregate principal amount of each affected series of debt securities may waive
all defaults with respect to such series and rescind and annul such acceleration
if all events of default, other than the non-payment of accelerated principal,
have been cured, waived or otherwise remedied.
No holder of any debt securities will have any right to institute any proceeding
with respect to the indenture or for any remedy under the indenture, unless such
holder shall have previously given to the trustee written notice of a continuing
event of default and the holders of at least 25% in aggregate principal amount
of the outstanding debt securities of the relevant series shall have made
written request and offered indemnity satisfactory to the trustee to institute
such proceeding as trustee, and the trustee shall not have received from the
holders of a majority in aggregate principal amount of the outstanding debt
securities of such series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. However, such
limitations do not apply to a suit instituted by a holder of a debt security for
enforcement of payment of the principal of and premium, if any, or interest on
such debt security on or after the respective due dates expressed in such debt
security.
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Supplemental
Indentures
We and the trustee may, at any time and from time to time, without prior notice
to or consent of any holders of debt securities after issuance of such debt
securities, enter into one or more supplemental indentures to, among other
things:
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add
guarantees to or secure any series of debt
securities;
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add
any additional Events of Default;
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provide
for the succession of another person pursuant to the provisions of the
indenture relating to consolidations, mergers and sales of assets and the
assumption by such successor of our covenants, agreements, and
obligations, or to otherwise comply with the provisions of the indenture
relating to consolidations, mergers, and sales of
assets;
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surrender
any right or power conferred upon us under the indenture or to add to our
covenants further covenants, restrictions, conditions or provisions for
the protection of the holders of all or any series of debt
securities;
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cure
any ambiguity or to correct or supplement any provision contained in the
indenture, in any supplemental indenture or in any debt securities that
may be defective or inconsistent with any other provision contained
therein, so long as any such action does not adversely affect the
interests of the holders of debt securities of any series in any material
respect;
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add
or change or eliminate any of the provisions of the indenture to extent as
shall be necessary to permit or facilitate the issuance of debt securities
in bearer form, registrable or not registrable as to principal, and with
or without interest coupons;
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add
to or change any of the provisions of the indenture to permit the
defeasance and discharge of any series of debt securities pursuant to the
indenture;
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change,
or eliminate any of the provisions of the indenture provided that any such
change or elimination shall become effective only when there are no debt
securities outstanding of any series created prior to the execution of
such supplemental indenture;
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evidence
and provide for the acceptance of appointment by a successor or separate
trustee; and
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establish
the form or terms of debt securities of any series and to make any change
that does not adversely affect the interests of the holders of debt
securities.
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Notwithstanding
our rights and the rights of the trustee to enter into one or more supplemental
indentures with the consent of the holders of debt securities of the affected
series as described above, no such supplemental indenture to be entered into
after issuance of the debt securities shall, without the consent of the holder
of each outstanding debt security of the affected series, among other
things:
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change
the final maturity of the principal of, or any installment of interest on,
any debt securities;
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reduce
the principal amount of any debt securities or the rate of interest on any
debt securities;
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change
the currency in which any debt securities are
payable;
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release
any security interest that may have been granted with respect to such debt
securities;
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impair
the right of the holders to conduct a proceeding for any remedy available
to the trustee;
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reduce
the percentage in principal amount of any series of debt securities whose
holders must consent to an amendment or supplemental
indenture;
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modify
the ranking or priority of the
securities;
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reduce
any premium payable upon the redemption of any debt securities or change
the time at which any debt security may be redeemed;
or
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make
any change that adversely affects the relative rights of holders of
subordinated debt securities with respect to senior debt
securities.
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Satisfaction
and Discharge of the Indenture; Defeasance
Except to the extent set forth in a supplemental indenture with respect to any
series of debt securities, we, at our election, may discharge the indenture and
the indenture shall generally cease to be of any further effect with respect to
that series of debt securities if (a) we have delivered to the trustee for
cancellation all debt securities of that series (with certain limited
exceptions) or (b) all debt securities of that series not previously
delivered to the trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year, and we have deposited with the trustee the
entire amount sufficient to pay at maturity or upon redemption all such debt
securities.
In addition, we have a “legal defeasance option” (pursuant to which we may
terminate, with respect to the debt securities of a particular series, all of
our obligations under such debt securities and the indenture with respect to
such debt securities) and a “covenant defeasance option” (pursuant to which we
may terminate, with respect to the debt securities of a particular series, our
obligations with respect to such debt securities under certain specified
covenants contained in the indenture). If we exercise our legal defeasance
option with respect to a series of debt securities, payment of such debt
securities may not be accelerated because of an event of default. If we exercise
our covenant defeasance option with respect to a series of debt securities,
payment of such debt securities may not be accelerated because of an event of
default related to the specified covenants.
We may exercise our legal defeasance option or our covenant defeasance option
with respect to the debt securities of a series only if we irrevocably deposit
in trust with the trustee cash or U.S. government obligations (as defined in the
indenture) for the payment of principal, premium, if any, and interest with
respect to such debt securities to maturity or redemption, as the case may be.
In addition, to exercise either of our defeasance options, we must comply with
certain other conditions, including the delivery to the trustee of an opinion of
counsel to the effect that the holders of debt securities of such series will
not recognize income, gain or loss for Federal income tax purposes as a result
of such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance had not occurred (and, in the case of legal defeasance only,
such opinion of counsel must be based on a ruling from the Internal Revenue
Service or other change in applicable Federal income tax law).
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The trustee will hold in trust the cash or U.S. government obligations deposited
with it as described above and will apply the deposited cash and the proceeds
from deposited U.S. government obligations to the payment of principal, premium,
if any, and interest with respect to the debt securities of the defeased series.
In the case of subordinated debt securities, the money and U.S. government
obligations held in trust will not be subject to the subordination provisions of
the indenture.
Mergers,
Consolidations and Certain Sales of Assets
Under the
proposed form of indenture, we may not (1) consolidate with or merge into
any other person or entity or permit any other person or entity to consolidate
with or merge into us in a transaction in which we are not the surviving entity,
or (2) transfer, lease or dispose of all or substantially all of our assets
to any other person or entity unless:
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the
resulting, surviving or transferee entity shall be a corporation organized
and existing under the laws of the United States or any state thereof and
such resulting, surviving or transferee entity shall expressly assume, by
supplemental indenture, all of our obligations under the debt securities
and the indenture;
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immediately
after giving effect to such transaction (and treating any indebtedness
which becomes an obligation of the resulting, surviving or transferee
entity as a result of such transaction as having been incurred by such
entity at the time of such transaction), no default or event of default
would occur or be continuing; and
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we
shall have delivered to the trustee an officers’ certificate and an
opinion of counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with the
indenture.
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Governing
Law
The
indenture and the debt securities will be governed by the laws of the State of
New York.
No
Personal Liability of Directors, Officers, Employees and
Shareholders
No
director, officer, incorporator or shareholder of Natural Gas Services Group, as
such, shall have any liability for any obligations of Natural Gas Services Group
under the debt securities or the indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation, solely by reason of
his, her, or its status as director, officer, incorporator or shareholder of
Natural Gas Services Group. By accepting a debt security, each holder waives and
releases all such liability, but only such liability. The waiver and release are
part of the consideration for issuance of the debt securities. Nevertheless,
such waiver may not be effective to waive liabilities under the federal
securities laws and it has been the view of the Securities and Exchange
Commission that such a waiver is against public policy.
Conversion
or Exchange Rights
Any debt
securities issued under the indenture may be convertible into or exchangeable
for shares of our equity securities. The terms and conditions of such conversion
or exchange will be set forth in the applicable prospectus supplement. Such
terms may include, among others, the following:
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the
conversion or exchange price;
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the
conversion or exchange period;
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provisions
regarding our ability or that of the holder to convert or exchange the
debt securities;
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events
requiring adjustment to the conversion or exchange price;
and
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provisions
affecting conversion or exchange in the event of our redemption of such
debt securities.
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Concerning
the Trustee
The
indenture provides that there may be more than one trustee with respect to one
or more series of debt securities. If there are different trustees for different
series of debt securities, each trustee will be a trustee of a trust under a
supplemental indenture separate and apart from the trust administered by any
other trustee under such indenture. Except as otherwise indicated in this
prospectus or any prospectus supplement, any action permitted to be taken by a
trustee may be taken by the trustee only with respect to the one or more series
of debt securities for which it is the trustee under an indenture. Any trustee
under the indenture or a supplemental indenture may resign or be removed with
respect to one or more series of debt securities. All payments of principal of,
premium, if any, and interest on, and all registration, transfer, exchange,
authentication and delivery of (including authentication and delivery on
original issuance of the debt securities), the debt securities of a series will
be effected by the trustee with respect to such series at an office designated
by the trustee.
The
indenture contains limitations on the right of the trustee, should it become a
creditor of Natural Gas Services Group, to obtain payment of claims in certain
cases or to realize on certain property received in respect of any such claim as
security or otherwise. If the trustee acquires an interest that conflicts with
any duties with respect to the debt securities, the trustee is required to
either resign or eliminate such conflicting interest to the extent and in the
manner provided by the indenture.
Limitations
on Issuance of Bearer Debt Securities
Debt
securities in bearer form are subject to special U.S. tax requirements and may
not be offered, sold, or delivered within the United States or its possessions
or to a U.S. person, except in certain transactions permitted by U.S. tax
regulations. Investors should consult the relevant prospectus supplement, in the
event that bearer debt securities are issued for special procedures and
restrictions that will apply to such an offering.
DESCRIPTION
OF RIGHTS
We may
issue rights to purchase debt securities, preferred stock, common stock or
depositary shares. These rights may be issued independently or together with any
other security offered hereby and may or may not be transferable by the
shareholder receiving the rights in such offering. In connection with any
offering of such rights, we may enter into a standby arrangement with one or
more underwriters or other purchasers pursuant to which the underwriters or
other purchasers may be required to purchase any securities remaining
unsubscribed for after such offering.
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Each
series of rights will be issued under a separate rights agreement which we will
enter into with a bank or trust company, as rights agent, all as set forth in
the applicable prospectus supplement. The rights agent will act solely as our
agent in connection with the certificates relating to the rights and will not
assume any obligation or relationship of agency or trust with any holders of
rights certificates or beneficial owners of rights. We will file the rights
agreement and the rights certificates relating to each series of rights with the
Securities and Exchange Commission, and incorporate them by reference as an
exhibit to the registration statement of which this prospectus is a part on or
before the time we issue a series of rights.
The
applicable prospectus supplement will describe the specific terms of any
offering of rights for which this prospectus is being delivered, including the
following:
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the
date of determining the shareholders entitled to the rights
distribution;
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the
number of rights issued or to be issued to each
shareholder;
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the
exercise price payable for each share of debt securities, preferred stock,
common stock or other securities upon the exercise of the
rights;
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the
number and terms of the shares of debt securities, preferred stock, common
stock or other securities which may be purchased per each
right;
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the
extent to which the rights are
transferable;
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the
date on which the holder’s ability to exercise the rights shall commence,
and the date on which the rights shall
expire;
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the
extent to which the rights may include an over-subscription privilege with
respect to unsubscribed securities;
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if
applicable, the material terms of any standby underwriting or purchase
arrangement entered into by us in connection with the offering of such
rights; and
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any
other terms of the rights, including the terms, procedures, conditions and
limitations relating to the exchange and exercise of the
rights.
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The
description in the applicable prospectus supplement of any rights that we may
offer will not necessarily be complete and will be qualified in its entirety by
reference to the applicable rights certificate, which will be filed with the
Securities and Exchange Commission.
DESCRIPTION
OF UNITS
As
specified in the applicable prospectus supplement, we may issue units consisting
of one or more debt securities, shares of common stock or preferred stock,
warrants or any combination of such securities. In addition, the prospectus
supplement relating to units will describe the terms of any units we issue,
including as applicable:
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the
designation and terms of the units and the securities included in the
units;
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any
provision for the issuance, payment, settlement, transfer or exchange of
the units;
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the
date, if any, on and after which the units may be transferable
separately;
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whether
we will apply to have the units traded on a securities exchange or
securities quotation system;
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any
material United States federal income tax consequences;
and
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how,
for United States federal income tax purposes, the purchase price paid for
the units is to be allocated among the component
securities.
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DESCRIPTION
OF WARRANTS
We may
issue warrants for the purchase of debt securities, common stock, preferred
stock or other securities. Warrants may be issued independently or together with
debt securities, common stock, preferred stock or other securities offered by
any prospectus supplement and may be attached to or separate from any such
offered securities. Series of warrants may be issued under a separate warrant
agreement entered into between us and a bank or trust company, as warrant agent,
all as will be set forth in the prospectus supplement relating to the particular
issue of warrants. The warrant agent would act solely as our agent in connection
with the warrants and would not assume any obligation or relationship of agency
or trust for or with any holders of warrants or beneficial owners of
warrants.
You
should refer to the provisions of the warrant agreement that will be filed with
the Securities and Exchange Commission in connection with the offering of
warrants for the complete terms of the warrant agreement.
Prior to
the exercise of any warrants, holders of such warrants will not have any rights
of holders of the securities purchasable upon such exercise, including the right
to receive payments of dividends, or the right to vote such underlying
securities.
USE
OF PROCEEDS
Unless the applicable prospectus
supplement states otherwise, we expect to use the net proceeds of the sale of
our securities for general corporate purposes, including, but not limited to,
acquisitions of companies or assets, repayment of existing indebtedness and for
working capital. As of the date of this prospectus, we have not identified as
probable any specific material proposed uses of these proceeds. If, as of the
date of any prospectus supplement, we have identified any such uses, we will
describe them in the prospectus supplement. The amount of our securities offered
from time to time pursuant to this prospectus and any prospectus supplement, and
the precise amounts and timing of the application of net proceeds from the sale
of those securities, will depend upon our funding requirements. If we elect at
the time of an issuance of our securities to make different or more specific use
of proceeds than described in this prospectus, such use will be described in the
prospectus supplement relating to those securities.
RATIO
OF EARNINGS TO FIXED CHARGES
If we offer debt securities and/or
preference equity securities under this prospectus, then we will, at that time,
provide a ratio of earnings to fixed charges and/or ratio of combined fixed
charges and preference dividends to earnings, respectively, in the applicable
prospectus supplement for such offering.
PLAN
OF DISTRIBUTION
We may sell the securities covered by
this prospectus from time to time. Registration of the securities covered by
this prospectus does not mean, however, that those securities will necessarily
be offered or sold.
We may sell the securities separately
or together:
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through
one or more underwriters or dealers in a public offering and sale by
them;
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directly
to investors;
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through
agents; or
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through
a combination of any of these methods of
sale.
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We may sell the securities from time to
time:
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in
one or more transactions at a fixed price or prices, which may be changed
from time to time;
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at
market prices prevailing at the times of
sale;
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at
prices related to such prevailing market prices;
or
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at
negotiated prices.
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We will describe the method of
distribution of the securities and the terms of the offering in the prospectus
supplement.
Any discounts or concessions allowed or
re-allowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale of
any 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
described above. 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 conditions precedent and the underwriters will be
obligated to purchase all of the securities if they purchase any of the
securities. We may use underwriters with whom we have a material relationship.
We will describe in the prospectus supplement, naming the underwriter, the
nature of any such relationship.
We may authorize underwriters, dealers
or agents to solicit offers by certain purchasers to purchase the securities
from us at the public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on a
specified date in the future. The contracts will be subject only to those
conditions set forth in the prospectus supplement, and the prospectus supplement
will set forth any commissions we pay for solicitation of these
contracts.
We may enter into derivative
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 those
derivatives, the third parties may sell securities covered by this prospectus
and the applicable prospectus supplement, including in short sale transactions.
If so, the third party may use securities pledged by us or borrowed from us or
others to settle those sales or to close out any related open borrowings of
stock, and may use securities received from us in settlement of those
derivatives to close out any related open borrowings of stock. The third party
in such sale transactions will be an underwriter and will be identified in the
applicable prospectus supplement or in a post-effective amendment.
Underwriters, dealers and agents may be
entitled to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments made by the underwriters, dealers or agents, under agreements between
us and the underwriters, dealers and agents.
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We
may grant underwriters who participate in the distribution of securities an
option to purchase additional securities to cover over-allotments, if any, in
connection with the distribution.
Underwriters, dealers or agents may
receive compensation in the form of discounts, concessions or commissions from
us or our purchasers, as their agents in connection with the sale of securities.
These underwriters, dealers or agents may be considered to be underwriters under
the Securities Act of 1933. As a result, discounts, commissions or profits on
resale received by the underwriters, dealers or agents may be treated as
underwriting discounts and commissions. The prospectus supplement will identify
any such underwriter, dealer or agent and describe any compensation received by
them from us. Any initial public offering price and any discounts or concessions
allowed or re-allowed or paid to dealers may be changed from time to
time.
Unless otherwise specified in the
related prospectus supplement, all securities we offer, other than common stock,
will be new issues of securities with no established trading market. Any
underwriters may make a market in these securities, but will not be obligated to
do so and may discontinue any market making at any time without notice. Any
common stock sold pursuant to a prospectus supplement will be listed for trading
on the New York Stock Exchange or other principal market for our common stock.
We may apply to list any series of debt securities, preferred stock, depositary
shares, rights, units or warrants on an exchange, but we are not obligated to do
so. Therefore, there may not be liquidity or a trading market for any series of
securities.
Any underwriter may engage in
over-allotment transactions, stabilizing transactions, short-covering
transactions and penalty bids in accordance with Regulation M under the
Securities Exchange Act of 1934. Over-allotment involves sales in excess of the
offering size, which create a short position. Stabilizing transactions permit
bids to purchase the underlying security so long as the stabilizing bids do not
exceed a specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a selling concession
from a dealer when the securities originally sold by the dealer are purchased in
a covering transaction to cover short positions. Those activities may cause the
price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of the activities at any time. We make no
representation or prediction as to the direction or magnitude of any effect that
such transactions may have on the price of the securities. For a description of
these activities, see the information under the heading “Underwriting” or “Plan
of Distribution” in the applicable prospectus supplement.
Underwriters, broker-dealers or agents
who may become involved in the sale of the common stock may engage in
transactions with and perform other services for us in the ordinary course of
their business for which they receive compensation.
LEGAL
MATTERS
Unless
otherwise indicated in the applicable prospectus supplement, Jones & Keller,
P.C., Denver, Colorado will provide opinions regarding the authorization and
validity of the securities. Jones & Keller, P.C. may also provide opinions
regarding certain other matters. Any underwriters will also be advised about
legal matters by their own counsel, which will be named in the prospectus
supplement.
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EXPERTS
The
consolidated financial statements incorporated by reference in this prospectus
and elsewhere in the registration statement have been so incorporated by
reference in reliance upon the report of Hein & Associates LLP, independent
registered public accountants, upon the authority of said firm as experts in
giving said report.
TRANSFER
AGENT AND REGISTRAR
Our
Transfer Agent and Registrar is Computershare Trust Company, Inc., 350 Indiana
Street, Suite 800, Golden, Colorado 80401
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
Where
You Can Find More Information
We file
annual, quarterly and current reports, proxy statements and other information
with the Commission. You may read and copy any reports, statements or other
information we file with the Commission at the Commission’s Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission
at 1-800-SEC-0330 for further information on the operation of the Public
Reference Room. Our Commission filings are also available to the public from
commercial document retrieval services and at the Internet site maintained by
the Commission at
www.sec.gov.
We have
filed with the Commission a registration statement on Form S-3 relating to the
securities covered by this prospectus and any prospectus supplement. This
prospectus is a part of the registration statement and does not contain all the
information in the registration statement. Whenever a reference is made in this
prospectus or any prospectus supplement to a contract or other document, the
reference is only a summary and you should refer to the exhibits that are a part
of the registration statement for a copy of the contract or other document. You
may review a copy of the registration statement at the Commission’s public
reference room in Washington, D.C., as well as through the Commission’s Internet
site.
The
Commission allows us to “incorporate by reference” into this prospectus the
information 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 considered to be part of this prospectus, and
information we file later with the Commission will automatically update and
supersede such information. The following documents filed with the Commission
are hereby incorporated by reference into this prospectus:
A. our
Annual Report on Form 10-K for the Fiscal Year Ended December 31,
2008.
B. our
Quarterly Report on Form 10-Q for the quarters ended March 31, 2009, June 30,
2009 and September 30, 2009;
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C. our
Current Reports on Form 8-K filed on February 3, 2009, March 4, 2009, March 23,
2009, May 8, 2009, June 18, 2009, July 14, 2009, August 7, 2009 and November 6,
2009;
D. the
description of our Common Stock, par value $.01 per share, set forth in our
Registration Statement on Form 8-A filed on July 17, 2002, including any
amendment or report filed for the purpose of updating such description;
and
E. all
documents filed by us with the Commission pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the
date of this Registration Statement shall be deemed to be incorporated herein by
reference and to be a part of this Registration Statement from the date of the
filing of such documents until such time as there shall have been filed a
post-effective amendment that indicates that all securities offered hereby have
been sold or that deregisters all securities remaining unsold at the time of
such amendment.
This
prospectus is part of a registration statement that we filed with the
Commission. Upon written or oral request, we will provide, without charge, to
each person, including beneficial owners of our securities, to whom a copy of
this prospectus is delivered, a copy of any or all of the information
incorporated by reference in this prospectus (other than exhibits to such
documents, unless the exhibits are specifically incorporated by reference in
such documents). Your requests for copies should be directed to the Investor
Relations, 508 West Wall Street, Suite 550, Midland, Texas 79701; telephone
(432) 262-2700.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR
SECURITIES ACT LIABILITIES
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of registrant
pursuant to the above, the registrant has been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
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