FORM S-3
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NRG Energy, Inc.
(Exact name of Registrant as specified in its charter)
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Delaware |
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41-1724239 |
(State or other jurisdiction of
incorporation or organization) |
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(I.R.S. Employer
Identification No.) |
211 Carnegie Center
Princeton, New Jersey 08540
(609) 524-4500
(Address, including zip code, and telephone number,
including area code, of registrants principal executive
offices)
Timothy W.J. OBrien
Vice President and General Counsel
NRG Energy, Inc.
211 Carnegie Center
Princeton, NJ 08540
Tel.: (609) 524-4500
Fax: (609) 524-4589
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Michael P. Rogan, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, NW
Washington, DC 20005-2111
Tel.: (202) 371-7000
Fax: (202) 393-5760
Approximate
date of commencement of proposed sale to the public: As soon
as practicable 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, 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 only in connection
with dividend or interest reinvestment plans, check the
following
box. þ
If this Form is filed to register
additional securities for an offering pursuant to
Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering. 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 delivery of the prospectus is
expected to be made pursuant to Rule 434, please check the
following
box. o
CALCULATION OF REGISTRATION FEE
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Proposed Maximum | |
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Proposed Maximum | |
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Title of Each Class of |
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Amount | |
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Offering Price Per | |
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Aggregate Offering | |
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Amount of | |
Securities to be Registered |
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to be Registered | |
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Share | |
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Price(1) | |
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Registration Fee | |
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Convertible Perpetual Preferred Stock, par value
$.01 per share
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420,000 |
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1,000 |
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420,000,000 |
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49,434 |
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Common Stock, par value $.01 per share
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10,500,000(2 |
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(2) |
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(2) |
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N/A |
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(1) |
Estimated solely for purposes of calculating the amount of the
registration fee, pursuant to Rule 457(i) of the Securities
Act of 1933, as amended. |
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(2) |
Represents the underlying shares of common stock issuable upon
conversion of the preferred stock, together with an
indeterminable number of additional shares as may become
issuable upon conversion of the preferred stock as a result of
anti-dilution adjustments. Pursuant to Rule 457(i), no
additional registration fee is required for the common stock
issuable upon conversion of the preferred stock because no
additional consideration will be received in connection with any
such conversion. |
The Registrant hereby amends this
Registration Statement on such date or dates as may be necessary
to delay its effective date until the Registrant shall file a
further amendment which specifically states that this
Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933
or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said
Section 8(a), may determine.
The information in
this prospectus is not complete and may be changed. The selling
security holders may not sell these securities 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.
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SUBJECT TO COMPLETION. DATED
MARCH 30, 2005.
NRG Energy, Inc.
420,000 Shares of 4% Convertible Perpetual
Preferred Stock
10,500,000 Shares of Common Stock issuable upon
conversion of the Preferred Stock
This prospectus relates to the offer and resale, from time to
time, of up to 420,000 shares of 4% Convertible
Perpetual Preferred Stock, par value $0.01, and the shares of
our common stock, par value $0.01, issuable upon the conversion
of the preferred stock. These shares are being offered to the
public market by those individuals named in the section of this
prospectus entitled Selling Stockholders, as
described under the section of this prospectus entitled
Plan of Distribution. We originally issued the
preferred stock in a private placement on December 21,
2004. The selling stockholders will receive the proceeds from
the sale of the preferred stock and common stock, but we will
bear the costs relating to the registration of the preferred
stock and common stock.
For a more detailed description of the preferred stock, see
Description of the Preferred Stock beginning on
page 27.
Our common stock is traded on the New York Stock Exchange under
the symbol NRG. At March 29, 2005, the last
reported sale price of our common stock was $34.15 per share.
The shares of preferred stock issued in the initial private
placement are eligible for trading in the
Portalsm
Market of the Nasdaq Stock Market, Inc. The preferred stock sold
using this prospectus, however, will no longer be eligible for
trading in the
Portalsm
Market of the Nasdaq Stock Market, Inc. We do not intend to list
the preferred stock on any national securities exchange or
automated quotation system.
An investment in the preferred stock or common stock involves
a high degree of risk. You should carefully consider the risk
factors beginning on page 7 of this prospectus and any
other information in this prospectus before deciding to purchase
the preferred stock or common stock.
The securities offered in this prospectus have not been
recommended by the Securities and Exchange Commission or any
state or foreign securities commission or any regulatory
authority. These authorities have not confirmed the accuracy or
determined the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.
This prospectus is
dated ,
2005.
TABLE OF CONTENTS
You should rely on the information contained or incorporated by
reference in this prospectus. We have not authorized any other
person to provide you with different information. If anyone
provides you with different or inconsistent information, you
should not rely on it. We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in
this prospectus is accurate only as of the date on the front
cover of this prospectus. Our business, financial condition,
results of operations, cash flows and prospects may have changed
since that date.
You should read the entire prospectus, especially the risks set
forth under the heading Risk Factors, and complete
your own examination before making an investment decision.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy and information statements and other
information with the SEC. We have filed a registration statement
on Form S-3 with the SEC of which this prospectus is a
part. This prospectus does not contain all of the information
included in the registration statement, and you should refer to
the registration statement and its exhibits and any related
prospectus supplement to read that information. References in
this prospectus and any related prospectus supplement to any of
our contracts or other documents are not necessarily complete,
and you should refer to the exhibits attached to or incorporated
by reference in the registration statement for copies of the
actual contract or document.
You may read and copy the registration statement, the related
exhibits and the other material we file with the SEC at the
SECs public reference room at 450 Fifth Street, NW,
Washington, DC 20549. You can also request copies of those
documents, upon payment of a duplicating fee, by writing to the
SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. The
SEC also maintains an internet site that contains reports, proxy
and information statements and other information regarding
issuers that file with the SEC. The sites address is
www.sec.gov.
The SEC allows us to incorporate by reference the information we
file with them, 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 that we later file with the
SEC will automatically update and supersede the information
contained or incorporated by reference in this prospectus.
Accordingly, we incorporate by reference:
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our annual report on Form 10-K for the year ended
December 31, 2004; |
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our Form 8-A filed on December 10, 2003, as amended on
March 22, 2004; and |
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our current reports on Form 8-K filed on February 24,
2005; March 3, 2005; and two current reports on Form 8-K
filed on March 30, 2005. |
All documents which we subsequently file pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 prior to the termination of an offering
pursuant to this prospectus shall be deemed to be incorporated
by reference into this prospectus from the date of filing of
such documents. These documents are or will be available for
inspection or copying at the locations identified above.
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We will provide without charge to each person, including any
beneficial owner, to whom this prospectus is delivered, upon
written or oral request, a copy of any and all of the documents
that have been or may be incorporated by reference in this
prospectus. You should direct requests for documents by writing
to:
NRG Energy, Inc.
211 Carnegie Center
Princeton, New Jersey 08540
(609) 524-4500
Attention: General Counsel
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SUMMARY
The following summary does not contain all the information
that may be important to you and is qualified in its entirety by
the more detailed information appearing elsewhere in this
prospectus. You should read the entire prospectus, especially
the risks set forth under the heading Risk Factors,
and complete your own examination of us and the terms of the
preferred stock or common stock before making an investment
decision. In this prospectus, unless the context requires
otherwise: NRG Energy, NRG,
we, us and our refer to NRG
Energy, Inc. and its subsidiaries.
Overview of NRG
NRG Energy is a wholesale power generation company, primarily
engaged in the ownership and operation of power generation
facilities, the transacting in and trading of fuel and
transportation services and the marketing and trading of energy,
capacity and related products in the United States and
internationally. We have a diverse portfolio of electric
generation facilities in terms of geography, fuel type and
dispatch levels. Our principal domestic generation assets
consist of a diversified mix of natural gas-, coal- and
oil-fired facilities, representing approximately 40%, 31% and
29% of our total domestic generation capacity, respectively. In
addition, 23% of our domestic generating facilities have dual-
or multiple-fuel capacity, which may allow plants to dispatch
with the lowest cost fuel option.
We seek to maximize operating income through the generation of
energy, marketing and trading of energy, capacity and ancillary
services into spot, intermediate and long-term markets and the
effective transacting in and trading of fuel supplies and
transportation-related services. We perform our own power
marketing (except with respect to our West Coast Power and Rocky
Road affiliates), which is focused on maximizing the value of
our North American and Australian assets through the pursuit of
asset-focused power and fuel marketing and trading activities in
the spot, intermediate and long-term markets. Our principal
objectives are the management and mitigation of commodity market
risk, the reduction of cash flow volatility over time, the
realization of the full market value of the asset base, and
adding incremental value by using market knowledge to
effectively trade positions associated with our asset portfolio.
Additionally, we work with markets, independent system operators
and regulators to promote market designs that provide adequate
long-term compensation for existing generation assets and to
attract the investment required to meet future generation needs.
As of December 31, 2004, we owned interests in 52 power
projects in five countries having an aggregate net generation
capacity of approximately 15,400 MW. Approximately
7,900 MW of our capacity consisted of merchant power plants
in the Northeast region of the United States. Certain of these
assets are located in transmission constrained areas, including
approximately 1,400 MW of in-city New York City
generation capacity and approximately 750 MW of southwest
Connecticut generation capacity. We also own approximately
2,500 MW of capacity in the South Central region of the
United States, with approximately 1,900 MW of that capacity
supported by long-term power purchase agreements.
As of December 31, 2004, our assets in the West Coast
region of the United States consisted of approximately
1,300 MW of capacity with the majority of such capacity
owned via our 50% interest in West Coast Power LLC, or West
Coast Power. Our assets in the West Coast region were supported
by a power purchase agreement with the California Department of
Water Resources that expired on December 31, 2004. One-year
term reliability must-run, or RMR, agreements with the
California Independent System Operator, or Cal ISO, for
approximately 568 MW in the San Diego area have been
renewed for 2005. On January 1, 2005, a new RMR agreement
for the 670 MW gross capacity of the West Coast Power El
Segundo generating facility became effective. In January 2005,
that generating facility entered into a tolling agreement for
its entire gross generating capacity of 670 MW commencing
May 1, 2005 and extending through December 31, 2005.
During the term of this agreement, the purchaser will be
entitled to primary energy dispatch right for the
facilitys generating capacity. The agreement is subject to
the amendment of the El Segundo RMR agreement to switch to RMR
Condition I and to otherwise allow the purchaser to exercise its
primary dispatch rights under this agreement while preserving
Cal ISOs ability to call on the El Segundo facility as a
reliability resource under the RMR agreement, if necessary.
Approximately 265 MW of capacity at the Long Beach
generating facility was retired January 1, 2005. We own
approximately 1,600 MW of net generating capacity in other
regions of the U.S. We
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also own interests in plants having a net generation capacity of
approximately 2,100 MW in various international markets,
including Australia, Europe and Brazil. We operate substantially
all of our generating assets, including the West Coast Power
plants.
We were incorporated as a Delaware corporation on May 29,
1992. In March 2004, our common stock was listed on the New York
Stock Exchange under the symbol NRG. Our
headquarters and principal executive offices are located at 211
Carnegie Center, Princeton, New Jersey 08540. Our telephone
number is (609) 524-4500. The address of our website is
www.nrgenergy.com. Our recent annual reports, quarterly reports,
current reports and other periodic filings are available free of
charge through our website. Our Corporate Governance Guidelines
and the charters of our Audit, Compensation and Governance and
Nominating Committees are also available on our website at
www.nrgenergy.com/investor/corpgov.htm. These charters are
available in print to any shareholder who requests them.
You can get more information regarding our business by reading
our Annual Report on Form 10-K for the fiscal year ended
December 31, 2004, and the other reports we file with the
Securities and Exchange Commission. See Where You Can Find
More Information.
The Offering
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Preferred Stock Offered by the Selling Holders |
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Up to 420,000 shares of 4% Convertible Perpetual
Preferred Stock, par value $0.01 per share. |
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Common Stock Offered by the Selling Holders |
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Up to 10,500,000 shares, based upon an initial conversion
price of $40 per share of common stock. The conversion
price is subject to adjustment as described in Description
of the Preferred Stock Adjustments of Conversion
Rate. |
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Liquidation preference |
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$1,000 per share of preferred stock. |
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Dividend |
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Holders of preferred stock are entitled to receive, when, as and
if declared by our board of directors, out of funds legally
available therefor, cash dividends at the rate of 4% per
annum, payable quarterly in arrears on March 15,
June 15, September 15 and December 15 of each year,
commencing March 15, 2005. Dividends on the preferred stock
will be cumulative from the date of initial issuance.
Accumulated but unpaid dividends cumulate dividends at the
annual rate of 4%. |
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For so long as the preferred stock remains outstanding,
(1) we will not declare, pay or set apart funds for the
payment of any dividend or other distribution with respect to
any junior stock or parity stock, and (2) neither we, nor
any of our subsidiaries, will, subject to certain exceptions,
redeem, purchase or otherwise acquire for consideration junior
stock or parity stock through a sinking fund or otherwise, in
each case, unless we have paid or set apart funds for the
payment of all accumulated and unpaid dividends, including
liquidated damages, if any, with respect to the shares of
preferred stock and any parity stock for all preceding dividend
periods. See Description of the Preferred
Stock Dividends. |
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We have not declared or paid dividends on our common stock, and
the payment of dividends is limited by our credit agreement. On
March 15, 2005, we paid dividends on our preferred stock. |
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Conversion of preferred stock |
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The preferred stock is convertible, at the option of the holder,
at any time into shares of our common stock at an initial
conversion price of $40.00 per share, which is equal to an
approximate conversion rate of 25 shares of our common
stock per share of preferred stock. |
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The conversion price may be adjusted for certain reasons,
including for any future common stock dividends, but will not be
adjusted for accumulated and unpaid dividends or liquidated
damages, if any. Upon conversion, holders will not receive any
cash payment representing accumulated dividends, if any.
Instead, accumulated dividends, if any, will be deemed paid by
the issuance of the common stock received by holders on
conversion. |
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If a fundamental change occurs, we will adjust the conversion
price as described under Description of the Preferred
Stock Adjustments to the Conversion
Price Adjustment for a Fundamental Change or
Public Acquirer Fundamental Change, as
applicable. |
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If we declare a cash dividend or cash distribution to holders of
our common stock, the conversion price shall be decreased to
equal the price determined by multiplying the conversion price
in effect immediately prior to the record date for such dividend
or distribution by the following fraction: |
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(Pre-Dividend Sale Price - Dividend Adjustment
Amount) |
(Pre-Dividend Sale Price)
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Pre-Dividend Sale Price means the average common
stock price for the three consecutive trading days ending on the
trading day immediately preceding the record date for such
dividend or distribution. |
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Dividend Adjustment Amount means the full amount of
the dividend or distribution to the extent payable in cash
applicable to one common share. See Description of the
Preferred Stock Adjustments to the Conversion
Price. |
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Optional redemption of preferred
stock |
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We may not redeem any shares of preferred stock at any time
before December 20, 2009. On or after December 20,
2009, we may redeem some or all of the preferred stock with cash
at a redemption price equal to 100% of the liquidation
preference, plus accumulated but unpaid dividends, including
liquidated damages, if any, to the redemption date. The terms of
the indenture governing our senior secured notes and our senior
credit facility could restrict our ability to redeem shares of
preferred stock for cash. |
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If full cumulative dividends on the preferred stock have not
been paid, the preferred stock may not be redeemed, and we may
not purchase or acquire any shares of preferred stock other than
pursuant to a purchase or exchange offer made on the same terms
to all holders of preferred stock. |
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The preferred stock is not subject to any mandatory redemption
or sinking fund provision. |
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Fundamental change with respect to preferred stock |
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If we become subject to a fundamental change, each holder of
shares of preferred stock will have the right to require us to
purchase any or all of its shares with cash at a purchase price
equal to 100% of the liquidation preference, plus accumulated
and unpaid dividends, including liquidated damages, if any, to
the date of purchase. Our ability to purchase all or a portion
of preferred stock for cash is subject to our obligation to
repay or repurchase any outstanding debt required to be repaid
or repurchased in connection with a fundamental change and to
any contractual restrictions then contained in our debt. |
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We will not be required to repurchase any shares of preferred
stock if the closing stock price of our common stock for the
five trading days within the 10 consecutive trading days ending
immediately before the later of the fundamental change or the
public announcement thereof equals or exceeds 105% of the
applicable conversion price of the preferred stock immediately
before the fundamental change or public announcement. |
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In addition, holders of shares of preferred stock shall not have
the right to require us to repurchase shares of preferred stock
upon a fundamental change (i) unless such purchase complies
with the indenture governing our senior secured notes and our
anticipated amended and restated credit facility and
(ii) unless and until our board of directors has approved
such fundamental change or elected to take a neutral position
with respect to such fundamental change. |
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Voting rights |
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Each holder of preferred stock will have one vote for each share
held by the holder on all matters voted upon by the holders of
our common stock, as well as voting rights specifically provided
for in our amended and restated certificate of incorporation or
as otherwise from time to time required by law. In addition,
whenever (1) dividends on the preferred stock or any other
class or series of stock ranking on a parity with the preferred
stock with respect to the payment of dividends are 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 redemption price on the
date shares of preferred stock are called for redemption or the
purchase price on the purchase date for shares of preferred
stock following a change of control, then, in each case, the
holders of preferred stock (voting separately as a class with
all other series of preferred stock upon which like voting
rights have been conferred and are exercisable) will be entitled
to vote for the election of two of the authorized number of our
directors at the next annual meeting of stockholders and at each
subsequent meeting until all dividends accumulated or the
redemption price on the preferred stock have been fully paid or
set apart for payment. The term of office of all directors
elected by the holders of preferred stock will terminate
immediately upon the termination of the rights of the holder of
preferred stock to vote for directors. Upon election of any
additional directors, the number of directors that comprise our
board will be increased by the number of such additional
directors. Holders of |
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shares of preferred stock will have one vote for each share of
preferred stock held. |
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Ranking |
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The preferred stock will be, with respect to dividend rights and
rights upon liquidation, winding up or dissolution: |
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junior to all our existing and future debt
obligations; |
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junior to each other class or series of our capital
stock other than (1) our common stock and any other class
or series of our capital stock the terms of which provide that
such class or series will rank junior to the preferred stock and
(2) any other class or series of our capital stock the
terms of which provide that such class or series will rank on a
parity with the preferred stock; |
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on a parity with any other class or series of our
capital stock the terms of which provide that such class or
series will rank on a parity with the preferred stock; |
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senior to our common stock and any other class or
series of our capital stock the terms of which provide that such
class or series will rank junior to the preferred stock; and |
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effectively junior to all of our subsidiaries
(1) existing and future liabilities and (2) capital
stock held by others. |
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Use of proceeds |
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All of the shares of preferred stock and common stock offered
hereby are being sold by the selling stockholders. We will not
receive any proceeds from the sale of preferred stock and common
stock in this offering. |
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Absence of a public market for the preferred stock |
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The shares of preferred stock issued in the initial private
placement are eligible for trading in the
Portalsm
Market of the Nasdaq Stock Market, Inc. The preferred stock sold
using this prospectus, however, will no longer be eligible for
trading in the
Portalsm
Market of the Nasdaq Stock Market, Inc. We do not intend to list
the preferred stock on any national securities exchange or
automated quotation system. |
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Listing of our Common Stock |
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Our common stock is traded on the New York Stock Exchange under
the symbol NRG. At March 29, 2005, the last
reported sale price of our common stock was $34.15 per share. |
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Risk factors |
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See Risk Factors and the other information in this
prospectus and our SEC filings for a discussion of the factors
you should carefully consider before deciding to invest in the
preferred stock. |
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Ratio of Earnings to Fixed Charges and Preference Dividends |
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Ratio | |
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Reorganized NRG
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Year Ended December 31, 2004
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1.77 |
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December 6, 2003 Through December 31, 2003
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1.63 |
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Predecessor Company
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January 1, 2003 Through December 5, 2003
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9.82 |
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Year Ended December 31, 2002
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(2) |
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Year Ended December 31, 2001
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1.26 |
x |
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Year Ended December 31, 2000
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1.81 |
x |
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(1) |
For the period January 1, 2003 through December 5,
2003, the earnings include a one time earning of $4,118,636,000
due to Fresh Start adjustments. |
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For the year ended December 31, 2002, the deficiency of
earnings to fixed charges was $3,023,467,000. |
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RISK FACTORS
Investing in our preferred stock and common stock involves a
high degree of risk. You should carefully consider the risks
described below, together with the other information contained
in this prospectus, contained in our SEC filings or derived from
your own examination of us and the terms of the preferred stock
and common stock, before making your decision to invest in
shares of our preferred stock and common stock.
Risks Related to Our Business
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Future decreases in gas prices may adversely impact our
financial performance. |
Certain of our facilities, particularly our coal generation
assets, are currently benefiting from higher electricity prices
in their respective markets as a result of high gas prices
compared to historical levels. Gas-fired facilities set the
marginal cost of energy in most of our domestic markets. A
decrease in gas prices may lead to a corresponding decrease in
electricity prices in these markets, which could materially and
adversely impact our financial performance.
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Our revenues are unpredictable because most of our power
generation facilities operate, wholly or partially, without
long-term power purchase agreements. Further, because wholesale
power prices are subject to significant volatility, the revenues
that we generate are subject to significant fluctuations. |
Most of our facilities operate as merchant
facilities without long-term agreements. An oversupply of
generating capacity has depressed wholesale power prices in many
regions of the country and increased the difficulty of obtaining
long-term contracts. Without the benefit of long-term power
purchase agreements, we cannot be sure that we will be able to
sell any or all of the power generated by our facilities at
commercially attractive rates or that our facilities will be
able to operate profitably. This could lead to future
impairments of our property, plant and equipment or to the
closing of certain of our facilities resulting in economic
losses and liabilities.
We sell all or a portion of the energy, capacity and other
products from many of our facilities to wholesale power markets,
including energy markets operated by independent system
operators, or ISOs, or regional transmission organizations, or
RTOs. The prices of energy products in those markets are
influenced by many factors outside of our control, including
fuel prices, transmission constraints, supply and demand,
weather, economic conditions and the rules, regulations and
actions of the ISOs or RTOs and state and federal regulators. In
addition, unlike most other commodities, electric power can only
be stored on a very limited basis and generally must be produced
concurrently with its use. As a result, the wholesale power
markets are subject to significant and unpredictable price
fluctuations over relatively short periods.
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Competition in wholesale power markets may have a material
adverse effect on our results of operations and cash
flows. |
We have numerous competitors in all aspects of our business, and
additional competitors may enter the industry. Our wholesale
energy operations compete with other providers of electric
energy in the procurement of fuel and transportation services,
and the sale of capacity, energy and related products. In order
to successfully compete, we seek to aggregate fuel supplies at
competitive prices from different sources and locations and to
efficiently utilize transportation services from third-party
pipelines, railways and other fuel transporters and transmission
services from electric utilities.
We also compete against other energy merchants on the basis of
our relative skills, financial position and access to credit
sources. Energy customers, wholesale energy suppliers and
transporters often seek financial guarantees and other
assurances that their energy contracts will be satisfied. As a
result, our business is constrained by our liquidity, our access
to credit and the reduction in market liquidity. Other companies
with which we compete may have greater resources in these areas.
Other factors may contribute to increased competition in
wholesale power markets. The future of the wholesale power
generation industry is unpredictable, but may include
consolidation within the industry, the sale, bankruptcy or
liquidation of certain competitors, the re-regulation of certain
markets or a long-term reduction in
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new investment into the industry. New capital and competitors
have entered the industry in the last three years, including
financial investors who perceive that asset values may have
bottomed out at levels below their true replacement value. A
number of generation facilities in the United States are now in
the hands of lenders. Under any scenario, we anticipate that we
will continue to face competition from numerous companies in the
industry. We anticipate that the Federal Energy Regulatory
Commission, or FERC, will continue its efforts to facilitate the
competitive energy marketplace throughout the country on several
fronts but particularly by encouraging utilities to voluntarily
participate in RTOs or ISOs.
Many companies in the regulated utility industry, with which the
wholesale power industry is closely linked, are also
restructuring or reviewing their strategies. Several of those
companies are discontinuing their unregulated activities,
seeking to divest their unregulated subsidiaries or attempting
to have their regulated subsidiaries acquire assets out of their
or other companies unregulated subsidiaries. This may lead
to increased competition between the regulated utilities and the
unregulated power producers within certain markets.
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A substantial portion of our historical cash flow has been
derived from a CDWR contract in California and we do not expect
to be able to enter into comparable agreements beyond
2004. |
In March 2001, certain affiliates of West Coast Power entered
into a contract with the California Department of Water
Resources, or CDWR, pursuant to which the affiliates agreed to
sell up to 2,300 MW from January 1, 2002 through
December 31, 2004, any of which may be resold by the CDWR
to utilities such as Southern California Edison Company,
PG&E Corp. and San Diego Gas and Electric Company. This
contract contributed $108.6 million for the year ended
December 31, 2004 and $102.6 million for the full year
2003 to our reported equity earnings in West Coast Power, which
were decreased by the non-cash impact of fresh start accounting
of $115.8 million for the year ended December 31, 2004
and $8.8 million for the period December 6, 2003
through December 31, 2003. West Coast Power made
distributions to NRG Energy of $114.2 million for the year
ended December 31, 2004 and $122.2 million during
calendar year 2003. The contract and the corresponding earnings
and cash flow terminated on December 31, 2004. The CDWR
contract accounted for a majority of West Coast Powers
revenues during these periods. Beginning January 2005, all of
the West Coast Power assets have been negotiated and will
operate under reliability must-run, or RMR, agreements. In
January 2005, the El Segundo generating facility entered into a
tolling arrangement for its entire gross generating capacity of
670 MW commencing May 1, 2005 and extending through
December 31, 2005. During the term of this agreement, the
purchaser will be entitled to primary energy dispatch rights for
the facilitys generating capacity. The agreement is
subject to the amendment of the El Segundo RMR agreement to
switch to RMR Condition I and to otherwise allow the purchaser
to exercise its primary dispatch rights under this agreement
while preserving Cal ISOs ability to call on the El
Segundo facility as a reliability resource under the RMR
agreement, if necessary.
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Construction, expansion, refurbishment and operation of
power generation facilities involve significant risks that
cannot always be covered by insurance or contractual protections
and could have a material adverse effect on our revenues and
results of operations. |
Many of our facilities are old. Newer plants owned by our
competitors are often more efficient than our aging plants,
which may put some of our plants at a competitive disadvantage.
Over time, our plants may be squeezed out of their markets, or
be unable to compete, because of the construction of new, more
efficient plants. Older equipment, even if maintained in
accordance with good engineering practices, may require
significant capital expenditures to keep it operating at optimum
efficiency. This equipment is also likely to require periodic
upgrading and improvement. Any unexpected failure, including
failure associated with breakdowns, forced outages or any
unanticipated capital expenditures could result in reduced
profitability. In addition, if we make any major
modifications to our power generation facilities, as
defined under the new source review provisions of the federal
Clean Air Act, we may be required to install best
available control technology or to achieve the
lowest achievable emissions rate. Any such
modifications would likely result in substantial additional
capital expenditures.
In general, environmental laws and regulations, particularly
with respect to air emissions, are becoming more stringent,
which may require us to install expensive plant upgrades and/or
restrict or modify our operations to meet more stringent
standards. An example of this is RGGI, the regional greenhouse
gas initiative in the
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Northeast. There are many key unknowns with respect to this
initiative, including the applicable baseline, initial
allocations, required emissions reductions, availability of
offsets, the extent to which states will adopt the program, and
the timing for implementation. There can be no assurance at this
time that a carbon dioxide cap-and-trade program, if implemented
by the states in which we operate, would not have a material
adverse effect on our operations in this region.
We cannot predict the level of capital expenditures that will be
required due to frequently changing environmental and safety
laws and regulations, deteriorating facility conditions and
unexpected events (such as natural disasters or terrorist
attacks). The unexpected requirement of large capital
expenditures could have a material adverse effect on our
financial performance and condition. Further, the construction,
expansion, modification and refurbishment of power generation
facilities involve many risks, including:
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interruptions to dispatch at our facilities; |
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supply interruptions; |
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work stoppages; |
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labor disputes; |
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weather interferences; |
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unforeseen engineering, environmental and geological
problems; and |
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unanticipated cost overruns. |
The ongoing operation of our facilities involves all of the
risks described above, as well as risks relating to the
breakdown or failure of equipment or processes, performance
below expected levels of output or efficiency and the inability
to transport our product to our customers in an efficient manner
due to a lack of transmission capacity. While we maintain
insurance, obtain warranties from vendors and obligate
contractors to meet certain performance levels, the proceeds of
such insurance, warranties or performance guarantees may not be
adequate to cover our lost revenues, increased expenses or
liquidated damages payments should we experience equipment
breakdown or non-performance by contractors. Any of these risks
could cause us to operate below expected capacity or
availability levels, which in turn could result in lost
revenues, increased expenses, higher maintenance costs and
penalties.
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We are exposed to the risk of fuel and fuel transportation
cost increases and volatility and interruption in fuel supply
because some of our facilities do not have long-term natural
gas, coal or liquid fuel supply agreements. |
Most of our domestic natural gas-, coal- and oil-fired power
generation facilities purchase their fuel requirements under
short-term contracts or on the spot market. Although we attempt
to purchase fuel based on our known fuel requirements, we still
face the risks of supply interruptions and fuel price volatility
as fuel deliveries may not exactly match energy sales due in
part to our need to prepurchase fuel inventories for reliability
and dispatch requirements. The price we can obtain for the sale
of energy may not rise at the same rate, or may not rise at all,
to match a rise in fuel costs. This may have a material adverse
effect on our financial performance. Moreover, changes in market
prices for natural gas, coal and oil may result from the
following:
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weather conditions; |
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seasonality; |
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demand for energy commodities and general economic conditions; |
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disruption of electricity, gas or coal transmission or
transportation, infrastructure or other constraints or
inefficiencies; |
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additional generating capacity; |
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availability of competitively priced alternative energy sources; |
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availability and levels of storage and inventory for fuel stocks; |
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natural gas, crude oil, refined products and coal production
levels; |
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the creditworthiness or bankruptcy or other financial distress
of market participants; |
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changes in market liquidity; |
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natural disasters, wars, embargoes, acts of terrorism and other
catastrophic events; and |
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federal, state and foreign governmental regulation and
legislation. |
The volatility of fuel prices could materially and adversely
affect our financial results and operations.
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The quality of fuel that we rely on at certain of our coal
plants may not be available at times. |
Our plant operating characteristics and equipment often dictate
the specific fuel quality to be combusted. The availability and
price of specific fuel qualities may vary due to supplier
financial or operational disruptions, transportation disruptions
and force majeure. At times, coal of specific quality may not be
available at any price, or we may not be able to transport such
coal to our facilities on a timely basis. In such case, we may
not be able to run a coal facility even if it would be
profitable. Operating a coal plant with lesser quality coal can
lead to emission problems. If we had contracted the power from
the facility, we could be required to supply or purchase power
from alternate sources, perhaps at a loss. This could have a
material adverse impact on the financial results of specific
plants and on our results of operations.
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We often rely on single suppliers and at times we rely on
single customers at our facilities, exposing us to significant
financial risks if either should fail to perform their
obligations. |
We often rely on a single contracted supplier for the provision
of transportation of fuel and other services required for the
operation of our facilities. If these suppliers cannot perform,
we utilize the marketplace to provide these services. At times,
we rely on a single customer or a few customers to purchase all
or a significant portion of a facilitys output, in some
cases under long-term agreements that provide the support for
any project debt used to finance the facility. For the year
ended December 31, 2004, we derived 49.8% of our revenues
from majority-owned operations from four customers: New York
Independent System Operator, or NYISO, accounted for 28.5%, ISO
New England accounted for 9.1%, National Electricity Market
Management Co. Ltd (Australia) accounted for 6.8% and Vattenfall
Europe (Germany) accounted for 5.4%. For the period
December 6, 2003 through December 31, 2003, we derived
39.0% of our revenues from majority-owned operations from two
customers: NYISO accounted for 26.5% and ISO New England
accounted for 12.5%. During the period January 1, 2003
through December 5, 2003, we derived 33.4% of our revenues
from majority-owned operations from NYISO. During 2002, we
derived approximately 26.0% of our revenues from majority-owned
operations from NYISO. The failure of any supplier or customer
to fulfill its contractual obligations to a facility could have
a material adverse effect on such facilitys financial
results. Consequently, the financial performance of any such
facility is dependent on the credit quality of, and continued
performance by, suppliers and customers.
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Our operations are subject to hazards customary to the
power generation industry. We may not have adequate insurance to
cover all of these hazards. |
Our operations are subject to many hazards associated with the
power generation industry, which may expose us to significant
liabilities for which we may not have adequate insurance
coverage. Power generation involves hazardous activities,
including acquiring, transporting and unloading fuel, operating
large pieces of rotating equipment and delivering electricity to
transmission and distribution systems. In addition to natural
risks such as earthquake, flood, lightning, hurricane and wind,
hazards, such as fire, explosion, collapse and machinery
failure, are inherent risks in our operations. These and other
hazards can cause significant personal injury or loss of life,
severe damage to and destruction of property, plant and
equipment, contamination of, or damage to, the environment and
suspension of operations. The occurrence of any one of these
events may result in our being named as a defendant in lawsuits
asserting claims for substantial damages, including for
environmental cleanup
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costs, personal injury and property damage and fines and/or
penalties. We maintain an amount of insurance protection that we
consider adequate, but we cannot assure you that our insurance
will be sufficient or effective under all circumstances and
against all hazards or liabilities to which we may be subject. A
successful claim for which we are not fully insured could hurt
our financial results and materially harm our financial
condition. Further, due to rising insurance costs and changes in
the insurance markets, we cannot assure you that insurance
coverage will continue to be available at all or at rates or on
terms similar to those presently available to us.
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We may not have sufficient liquidity to hedge market risks
effectively. |
We are exposed to market risks through our power marketing
business, which involves the sale of energy, capacity and
related products and procurement of fuel, transmission services
and emission allowances. These market risks include, among other
risks, volatility arising from the timing differences associated
with buying fuel, converting fuel into energy and delivering the
energy to a buyer. We seek to manage this volatility by entering
into forward and other contracts that hedge our exposure for our
net transactions. The effectiveness of our hedging strategy may
be dependent on the amount of collateral available to enter into
these hedging contracts, and liquidity requirements may be
greater than we anticipate or are able to meet. Without a
sufficient amount of working capital to post as collateral in
support of performance guarantees or as cash margin, we may not
be able to effectively manage price volatility. Factors which
could lead to an increase in our required collateral include
volatile commodity prices, adverse changes in our industry,
credit rating downgrades and the secured nature of our Amended
Credit Facility. Under certain unfavorable commodity price
scenarios, it is possible that we could experience inadequate
liquidity as a result of the posting of additional collateral.
Further, if our facilities experience unplanned outages, we may
be required to procure replacement power in the open market to
minimize our exposure to liquidated damages. Without adequate
liquidity to post margin and collateral requirements, we may be
exposed to significant losses and may miss significant
opportunities, and we may have increased exposure to the
volatility of spot markets.
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The accounting for our hedging activities may increase the
volatility in our quarterly and annual financial results. |
We engage in commodity-related marketing and price-risk
management activities in order to economically hedge our
exposure to market risk with respect to (i) electricity
sales from our generation assets, (ii) fuel utilized by
those assets and (iii) emission allowances. We generally
attempt to balance our fixed-price physical and financial
purchases and sales commitments in terms of contract volumes and
the timing of performance and delivery obligations, through the
use of financial and physical derivative contracts. These
derivatives are accounted for in accordance with
SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended by
SFAS No. 137, SFAS No. 138 and
SFAS No. 149. SFAS No. 133 requires us to
record all derivatives on the balance sheet at fair value with
changes in the fair value resulting from fluctuations in the
underlying commodity prices immediately recognized in earnings,
unless the derivative qualifies for hedge accounting treatment.
Whether a derivative qualifies for hedge accounting depends upon
it meeting specific criteria used to determine if hedge
accounting is and will remain appropriate for the term of the
derivative. Economic hedges will not necessarily qualify for
hedge accounting treatment. As a result, we are unable to
predict the impact that our risk management decisions may have
on our quarterly operating results or financial position.
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The value of our assets is subject to the nature and
extent of decommissioning and remediation obligations applicable
to us. |
Our facilities and related properties may become subject to
decommissioning and/or site remediation obligations that may
require material unplanned expenditures or otherwise materially
affect the value of those assets. While we meet all site
remediation obligations currently applicable to our assets
(largely through the provision of various forms of financial
assurance), more onerous obligations apply to sites where a
plant is to be dismantled, which could negatively affect our
ability to economically undertake power redevelopments or
alternate uses at existing power plant sites. Further, laws and
regulations may change to impose material additional
decommissioning and remediation obligations on us in the future,
negatively impacting the value of our assets and /or our ability
to undertake redevelopment projects.
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Our results are subject to quarterly and seasonal
fluctuations. |
Our quarterly operating results have fluctuated in the past and
will continue to do so in the future as a result of a number of
factors, including seasonal variations in demand and
corresponding electricity and fuel price volatility and
variations in levels of production.
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Because we own less than a majority of some of our project
investments, we cannot exercise complete control over their
operations. |
We have limited control over the operation of some project
investments and joint ventures because our investments are in
projects where we beneficially own less than a majority of the
ownership interests. We seek to exert a degree of influence with
respect to the management and operation of projects in which we
own less than a majority of the ownership interests by
negotiating to obtain positions on management committees or to
receive certain limited governance rights such as rights to veto
significant actions. However, we may not always succeed in such
negotiations. We may be dependent on our co-venturers to operate
such projects. Our co-venturers may not have the level of
experience, technical expertise, human resources management and
other attributes necessary to operate these projects optimally.
The approval of co-venturers also may be required for us to
receive distributions of funds from projects or to transfer our
interest in projects.
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Our access to the capital markets may be limited. |
We may require additional capital from outside sources from time
to time. Our ability to arrange financing, either at the
corporate level or on a non-recourse project-level basis, and
the costs of such capital are dependent on numerous factors,
including:
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general economic and capital market conditions; |
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covenants in our existing debt and credit agreements; |
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credit availability from banks and other financial institutions; |
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investor confidence in us, our partners and the regional
wholesale power markets; |
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our financial performance and the financial performance of our
subsidiaries; |
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our levels of indebtedness; |
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maintenance of acceptable credit ratings; |
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cash flow; and |
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provisions of tax and securities laws that may impact raising
capital. |
We may not be successful in obtaining additional capital for
these or other reasons. The failure to obtain additional capital
from time to time may have a material adverse effect on our
business and operations.
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Our business is subject to substantial governmental
regulation and permitting requirements and may be adversely
affected by liability under, or any future inability to comply
with, existing or future regulations or requirements. |
Our business is subject to extensive foreign, federal, state and
local energy, environmental and other laws and regulations. We
generally are required to obtain and comply with a wide variety
of licenses, permits and other approvals in order to construct,
operate or modify our facilities. We may incur significant
additional costs because of our need to comply with these
requirements. If we fail to comply with these requirements, we
could be subject to civil or criminal liability and the
imposition of liens or fines. We could also be required to shut
down any facilities that do not comply with these requirements.
In addition, we are at risk for liability for past, current or
future contamination at our former and existing facilities or
with respect to off-site waste disposal sites that we have used
in our operations. Existing regulations may be revised or
reinterpreted and new laws and regulations may be adopted or
become applicable to us or our facilities in a manner that may
have a detrimental effect on our
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business. With the continuing trend toward stricter standards,
greater regulation and more extensive permitting requirements,
we expect that our environmental expenditures will be
substantial in the future.
Our operations are potentially subject to the provisions of
various energy laws and regulations, including the Public
Utility Holding Company Act of 1935, or PUHCA, the Federal Power
Act or FPA, and state and local utility laws and regulations.
Under the FPA, FERC regulates our wholesale sales of electric
power (other than sales by our qualifying facilities, which are
exempt from FERC rate regulation). The ability to sell energy at
market-based rates is predicated on the absence of market power
in either generation or transmission, the inability to create
barriers to entry and the inability to engage in abusive
affiliate transactions and filing of certain reports with FERC.
The market power analysis includes not only generation and
transmission owned by a particular applicant but also assets
owned by affiliated companies. Holders of market-based rate
authority must comply with obligations imposed by FERC and with
certain FERC filing requirements such as the requirement to file
quarterly reports detailing wholesale sales. Although a number
of our direct and indirect subsidiaries have obtained
market-based rate authority from FERC, these authorizations
could be revoked if we fail in the future to satisfy the
applicable criteria, if FERC modifies the criteria, or if FERC
eliminates or further restricts the ability of wholesale sellers
to make sales at market-based rates.
In addition, under PUHCA, registered holding companies and their
subsidiaries (i.e., companies with 10% or more of their voting
securities held by registered holding companies) are subject to
extensive regulation by the SEC. We will not be considered a
holding company or subject to PUHCA as long as we do not become
a subsidiary of another registered holding company and the
projects in which we have an interest (1) qualify as a
qualifying facility, or QF, under the Public Utility Regulatory
Policies Act, or PURPA, (2) obtain and maintain exempt
wholesale generator, or EWG, status under Section 32 of
PUHCA, (3) obtain and maintain foreign utility company, or
FUCO, status under Section 33 of PUHCA, or (4) are
subject to another exemption or waiver. If our projects were to
cease to be exempt and we were to become subject to SEC and FERC
regulation under PUHCA, it would be difficult for us to comply
with PUHCA absent a substantial corporate restructuring.
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Our business faces regulatory risks related to the market
rules and regulations imposed by transmission providers,
independent system operators and regional transmission
organizations. |
We face regulatory risk imposed by the various transmission
providers, ISOs and RTOs and their corresponding market rules.
These market rules are subject to revisions, and such revisions
may not benefit us. Transmission providers, ISOs and RTOs have
FERC-approved tariffs that govern access to their transmission
system. These tariffs may contain provisions that limit access
to the transmission grid or allocate scarce transmission
capacity in a particular manner.
We presently operate in the following ISO or RTO markets:
California (through the West Coast Power joint venture and
individually), New England, New York and PJM (the Pennsylvania,
Jersey, Maryland Interconnection). The chief regulatory risk is
the lack of, or uncertainty regarding, market mechanisms that
effectively compensate generating units for providing
reliability services and installed capacity.
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Restrictions in transmission access and expansions in the
transmission system could reduce revenues. |
We are dependent on access to transmission systems to sell our
energy. In the northeastern ISO and RTO markets, we have a
significant amount of generation located in load pockets.
Expansion of the transmission system to reduce or eliminate
these load pockets could negatively impact our existing
facilities in these areas.
Our facilities located in the Entergy franchise territory face a
different transmission risk, in that restrictions on
transmission access may limit our ability to sell energy or to
service new customers.
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We are subject to claims made after the date that we filed
for bankruptcy and other claims that were not discharged in the
bankruptcy cases, which could have a material adverse effect on
our results of operations and profitability. |
The nature of our business frequently subjects us to litigation.
Many of the largest claims against us prior to the date of the
bankruptcy filing were satisfied and discharged in accordance
with the terms of the NRG plan of
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reorganization or the plan of reorganization for certain
subsidiaries or in connection with settlement agreements that
were approved by the bankruptcy court prior to our emergence
from bankruptcy. Circumstances in which pre-bankruptcy filing
claims have not been discharged include, among others, where we
have agreed with a given claimant to preserve their claims, as
well as, potentially, instances where a claimant had no notice
of the bankruptcy filing. The ultimate resolution of certain
remaining or future claims may have a material adverse effect on
our results of operations and profitability. In addition, claims
made against subsidiaries that did not file for chapter 11,
and claims arising after the date of our bankruptcy filing, were
not discharged in the bankruptcy cases. See
Item 15 Note 27 to the Consolidated
Financial Statements included in our Annual Report on
Form 10-K for the Year ended December 31, 2004, for a
description of the significant legal proceedings and
investigations in which we are presently involved.
Under the NRG plan of reorganization, we have established
disputed claims reserves, which we will utilize to make
distributions to holders of disputed claims in our bankruptcy
cases as and when their claims are resolved. If these reserves
prove inadequate, we will be required to finance any further
cash distributions from other resources, and doing so could have
a material adverse impact on our financial condition, and, in
addition, we could be required to issue new common stock, which
would dilute existing shareholders. In particular, the State of
Californias disputed claims against us are capped at
$1.35 billion. There are also a number of private claims
springing from the California energy crisis for which there is
no cap. We have made no reserves for these claims, because we
believe they are without merit; however, if the State of
California or these private litigants prevail, then payment of
the distributions to which the State of California or these
private litigants would be entitled under the NRG plan of
reorganization could have a material adverse impact on our
financial condition.
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Acts of terrorism could have a material adverse effect on
our financial condition, results of operations and cash
flows. |
Our generation facilities and the facilities of third parties on
which they rely may be targets of terrorist activities, as well
as events occurring in response to or in connection with them,
that could cause environmental repercussions and/or result in
full or partial disruption of their ability to generate,
transmit, transport or distribute electricity or natural gas.
Strategic targets, such as energy-related facilities, may be at
greater risk of future terrorist activities than other domestic
targets. Any such environmental repercussions or disruption
could result in a significant decrease in revenues or
significant reconstruction or remediation costs, which could
have a material adverse effect on our financial condition,
results of operations and cash flows.
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Our international investments face uncertainties. |
We have investments in power projects in Australia, the United
Kingdom, Germany and Brazil. International investments are
subject to risks and uncertainties relating to the political,
social and economic structures of the countries in which we
invest. Risks specifically related to our investments in
international projects may include:
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fluctuations in currency valuation; |
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currency inconvertibility; |
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expropriation and confiscatory taxation; |
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increased regulation; and |
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approval requirements and governmental policies limiting returns
to foreign investors. |
Risks Related to the Preferred Stock and the Common Stock
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The preferred stock ranks junior to all of our
liabilities. |
The preferred stock ranks junior to all of our liabilities. In
the event of our bankruptcy, liquidation or winding-up, our
assets will be available to pay obligations on the preferred
stock, including the purchase of your shares of the preferred
stock for cash upon a fundamental change, only after all our
indebtedness and other liabilities have been paid. In addition,
the preferred stock will effectively rank junior to all existing
and future liabilities of our subsidiaries and any capital stock
of our subsidiaries held by others. The rights of holders of the
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preferred stock to participate in the distribution of assets of
our subsidiaries will rank junior to the prior claims of that
subsidiarys creditors and any other equity holders.
Consequently, if we are forced to liquidate our assets to pay
our creditors, we may not have sufficient assets remaining to
pay amounts due on any or all of the preferred stock then
outstanding. We and our subsidiaries may incur substantial
amounts of additional debt and other obligations that will rank
senior to the preferred stock.
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We may not be able to pay the purchase price of the
preferred stock in cash upon a fundamental change. We also could
be prevented from paying dividends on shares of the preferred
stock. |
In the event of a fundamental change you will have the right to
require us to purchase with cash all your shares of preferred
stock. However, we may not have sufficient cash to purchase your
shares of preferred stock upon a fundamental change or may be
otherwise unable to pay the purchase price in cash.
In addition, holders of shares of preferred stock shall not have
the right to require us to repurchase shares of preferred stock
upon a fundamental change (i) unless such purchase complies
with our indenture governing our senior secured notes and our
anticipated amended and restated credit facility and
(ii) unless and until our board of directors has approved
such fundamental change or elected to take a neutral position
with respect to such fundamental change. Also, the terms of the
indenture governing our senior secured notes, our existing
credit facility and our anticipated amended and restated credit
facility contain or will contain, as applicable, limitations on
our ability to pay the purchase price of the preferred stock in
cash. In addition, they contain restrictions that could limit
our ability to pay dividends on the shares of preferred stock.
Even if the terms of the instruments governing our indebtedness
allow us to pay cash dividends and to redeem and purchase the
preferred stock in cash, we can only make such payments from
legally available funds, as determined by our board of
directors, and such funds may not be available to pay cash
dividends to you or to redeem or purchase your shares of
preferred stock. Dividends on the preferred stock will only be
paid when, as and if declared by our board of directors. The
board of directors may elect not to declare dividends on the
preferred stock.
Further, because we are a holding company, our ability to
purchase the preferred stock for cash or to pay dividends on the
preferred stock may be limited by restrictions on our ability to
obtain funds for such repurchase through dividends from our
subsidiaries.
|
|
|
An active trading market for the preferred stock may not
develop, and you may be unable to resell your shares of
preferred stock at or above the purchase price. |
The shares of preferred stock issued in the initial private
placement are eligible for trading in the
Portalsm
Market of the Nasdaq Stock Market, Inc. The preferred stock sold
using this prospectus, however, will no longer be eligible for
trading in the
Portalsm
Market of the Nasdaq Stock Market, Inc. We do not intend to list
the preferred stock on any national securities exchange or
automated quotation system. Consequently, a liquid trading
market for the preferred stock may not develop and the market
price of the preferred stock may be volatile. As a result, you
may be unable to sell your shares of preferred stock at a price
equal to or greater than that which you paid, if at all.
|
|
|
If you convert your shares of preferred stock into shares
of common stock, you will experience immediate dilution. |
If you convert your shares of preferred stock into shares of
common stock, you will experience immediate dilution because the
per share conversion price of the preferred stock immediately
after this offering will be higher than the net tangible book
value per share of the outstanding common stock. In addition,
you will also experience dilution when and if we issue
additional shares of common stock, which we may be required to
issue pursuant to options, warrants, our stock option plan or
other employee or director compensation plans.
15
|
|
|
The price of our common stock, and therefore of the
preferred stock, may fluctuate significantly, which may make it
difficult for you to resell the preferred stock, or common stock
issuable upon conversion of the preferred stock, when you want
or at prices you find attractive. |
The price of our common stock on the New York Stock Exchange
constantly changes. We expect that the market price of our
common stock will continue to fluctuate. Because the preferred
stock is convertible into our common stock, volatility or
depressed prices for our common stock could have a similar
effect on the trading price of the preferred stock. Holders who
have received common stock upon conversion will also be subject
to the risk of volatility and depressed prices.
Our stock price can fluctuate as a result of a variety of
factors, many of which are beyond our control. These factors
include:
|
|
|
|
|
new laws or regulations or new interpretations of existing laws
or regulations applicable to our business; |
|
|
|
changes in accounting standards, policies, guidance,
interpretations or principles; |
|
|
|
our inability to raise additional capital; |
|
|
|
sales of common stock by us or members of our management team; |
|
|
|
quarterly variations in our operating results; |
|
|
|
operating results that vary from the expectations of management,
securities analysts and investors; |
|
|
|
changes in expectations as to our future financial performance,
including financial estimates by securities analysts and
investors; |
|
|
|
developments generally affecting our industry; |
|
|
|
announcements by us or our competitors of significant contracts,
acquisitions, joint marketing relationships, joint ventures or
capital commitments; |
|
|
|
announcements by third parties of significant claims or
proceedings against us; |
|
|
|
our dividend policy; |
|
|
|
future sales of our equity or equity-linked securities; and |
|
|
|
general domestic and international economic conditions. |
In addition, the stock market in general has experienced extreme
volatility that has often been unrelated to the operating
performance of a particular company. These broad market
fluctuations may adversely affect the market price of our common
stock.
|
|
|
Our ability to pay dividends may be limited. |
We are prohibited by the terms of our senior credit facility
from paying dividends to the holders of our common stock, and we
are restricted in our ability to pay such dividends by the terms
of the indenture governing our senior secured notes. In the
future, we may agree to further restrictions on our ability to
pay dividends. In addition, to maintain our credit ratings, we
may be limited in our ability to pay dividends so that we can
maintain an appropriate level of debt.
|
|
|
The additional shares of our common stock payable on our
preferred stock in connection with certain fundamental changes
may not adequately compensate holders of the preferred stock for
the lost option time value of the shares of our preferred stock
as a result of such fundamental change. |
If a fundamental change occurs, we will, in certain
circumstances, increase the conversion rate of our preferred
stock by a number of additional shares of common stock. The
number of additional shares of our common stock will be
determined based on the date on which the fundamental change
becomes effective, and the price paid per share of common stock
in the fundamental change transaction as described under
Description of the Preferred Stock Adjustments
to the Conversion Price Adjustment for a Fundamental
Change. While
16
the increase in the conversion rate upon conversion is designed
to compensate you for the lost option time value of your shares
of preferred stock as a result of the fundamental change, the
increase is only an approximation of this lost value and may not
adequately compensate you for your loss. If the price paid per
share of common stock in the fundamental change transaction is
less than the price per share of the common stock at the date of
issuance of our preferred stock or above a specified price,
there will be no increase in the conversion rate. In addition,
in certain circumstances, upon a fundamental change arising from
our acquisition by a public company, we may elect to adjust the
conversion rate as described under Description of the
Preferred Stock Adjustments to the Conversion
Price Public Acquirer Fundamental Change and,
if we so elect, holders of shares of our preferred stock will
not be entitled to the increase in the conversion rate described
above.
|
|
|
We may issue additional series of preferred stock that
rank equally to the preferred stock as to dividend payments and
liquidation preference. |
Our amended and restated certificate of incorporation and the
certificate of designation for the preferred stock do not
prohibit us from issuing additional series of preferred stock
that would rank equally to the preferred stock as to dividend
payments and liquidation preference. Including the
420,000 shares of the preferred stock subject to this
prospectus, our amended and restated certificate of
incorporation provides that we have the authority to issue
10,000,000 shares of preferred stock. The issuances of
other series of preferred stock could have the effect of
reducing the amounts available to the preferred stock in the
event of our liquidation. It may also reduce dividend payments
on the preferred stock if we do not have sufficient funds to pay
dividends on all preferred stock outstanding and outstanding
parity preferred stock.
|
|
|
Future issuances of preferred stock may adversely affect
the market price for our common stock. |
Additional issuances and sales of preferred stock, or the
perception that such issuances and sales could occur, may cause
prevailing market prices for our common stock to decline and may
adversely affect our ability to raise additional capital in the
financial markets at a time and price favorable to us.
|
|
|
We may not have sufficient earnings and profits in order
for distributions on the preferred stock to be treated as
dividends. |
The dividends paid by us may exceed our current and accumulated
earnings and profits, as calculated for U.S. federal income
tax purposes. This will result in the amount of the dividends
that exceeds such earnings and profits being treated first as a
return of capital to the extent of the holders adjusted
tax basis in the preferred stock, and the excess as capital
gain. Such treatment will generally be unfavorable for corporate
holders and may also be unfavorable to certain other holders.
|
|
|
Our corporate documents and Delaware law contain
provisions that could discourage, delay or prevent a change in
control of our company even if some stockholders might consider
such a development favorable, which may adversely affect the
price of our common stock. |
Provisions in our amended and restated certificate of
incorporation and amended and restated by-laws may discourage,
delay or prevent a merger or acquisition involving us that our
stockholders may consider favorable. For example, our amended
and restated certificate of incorporation authorizes our board
of directors to issue shares of preferred stock to which special
rights are attached, including voting and dividend rights. With
these rights, preferred stockholders could make it more
difficult for a third party to acquire us. In addition, our
amended and restated certificate of incorporation provides for a
staggered board of directors, whereby directors serve for
three-year terms, with approximately one third of the directors
coming up for reelection each year. Having a staggered board of
directors will make it more difficult for a third party to
obtain control of our board of directors through a proxy
contest, which may be a necessary step in an acquisition of us
that is not favored by our board of directors.
We are also subject to the anti-takeover provisions of
Section 203 of the Delaware General Corporation Law. Under
these provisions, if anyone becomes an interested
stockholder, we may not enter into a business
combination with that person for three years without
special approval, which could discourage a third party
17
from making a takeover offer and could delay or prevent a change
of control. For purposes of Section 203, interested
stockholder means, generally, someone owning 15% or more
of our outstanding voting stock or an affiliate of ours that
owned 15% or more of our outstanding voting stock during the
past three years, subject to certain exceptions as described in
Section 203.
Upon any change in control, the lenders under our existing
credit facility will have the right to require us to repay all
of our outstanding obligations under the facility. Upon the
occurrence of a change in control, the holders of our senior
secured notes will have the right, subject to certain
conditions, to require us to repurchase their notes at a price
equal to 101% of their principal amount plus accrued and unpaid
interest and liquidated damages, if any, to the date of
repurchase.
18
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements within the
meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act. The words
believes, projects,
anticipates, plans, expects,
intends, estimates and similar
expressions are intended to identify forward-looking statements.
These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause our
actual results, performance and achievements, or industry
results, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statement. These factors, risks and
uncertainties include, but are not limited to, the factors
described under Risk Factors on page 7 herein or in
our SEC filings, and the following:
|
|
|
|
|
Lack of comparable financial data due to adoption of Fresh Start
reporting; |
|
|
|
Our ability to successfully and timely close transactions to
sell certain of our assets; |
|
|
|
The potential impact of our corporate relocation on workforce
requirements including the loss of institutional knowledge and
the inability to maintain existing processes; |
|
|
|
Hazards customary to the power production industry and power
generation operations such as fuel and electricity price
volatility, unusual weather conditions, catastrophic
weather-related or other damage to facilities, unscheduled
generation outages, maintenance or repairs, unanticipated
changes to fossil fuel supply costs or availability due to
higher demand, shortages, transportation problems or other
developments, environmental incidents, or electric transmission
or gas pipeline system constraints and the possibility that we
may not have adequate insurance to cover losses as a result of
such hazards; |
|
|
|
Our potential inability to enter into contracts to sell power
and procure fuel on terms and prices acceptable to us; |
|
|
|
The liquidity and competitiveness of wholesale markets for
energy commodities; |
|
|
|
Changes in government regulation, including but not limited to
the pending changes of market rules, market structures and
design, rates, tariffs, environmental laws and regulations and
regulatory compliance requirements; |
|
|
|
Price mitigation strategies and other market structures employed
by independent system operators, or ISOs, or regional
transmission organizations, or RTOs, that result in a failure to
adequately compensate our generation units for all of their
costs; |
|
|
|
Our ability to borrow additional funds and access capital
markets, as well as our substantial indebtedness and the
possibility that we may incur additional indebtedness going
forward; and |
|
|
|
Significant operating and financial restrictions placed on us
contained in the indenture governing our 8% second priority
senior secured notes due 2013, our amended and restated credit
facility as well as in debt and other agreements of certain of
our subsidiaries and project affiliates generally. |
Forward-looking statements speak only as of the date they were
made, and we undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of
new information, future events or otherwise. The foregoing
review of factors that could cause our actual results to differ
materially from those contemplated in any forward-looking
statements included in this prospectus should not be construed
as exhaustive.
19
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERENCE
DIVIDENDS
The ratios of earnings to fixed charges and preference dividends
for the periods indicated are stated below. For this purpose,
earnings include pre-tax income (loss) before
adjustments for minority interest in our consolidated
subsidiaries and income or loss from equity investees, plus
fixed charges and distributed income of equity investees,
reduced by interest capitalized. Fixed charges
include interest, whether expensed or capitalized, amortization
of debt expense and the portion of rental expense that is
representative of the interest factor in these rentals.
Preference dividends equals the amount of pre-tax
earnings that is required to pay the dividends on outstanding
preference securities.
|
|
|
|
|
|
|
|
|
Period |
|
Ratio | |
|
|
|
|
| |
|
|
Reorganized NRG
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2004
|
|
|
1.77 |
x |
|
|
|
|
December 6, 2003 Through December 31, 2003
|
|
|
1.63 |
x |
|
|
|
|
Predecessor Company
|
|
|
|
|
|
|
|
|
January 1, 2003 Through December 5, 2003
|
|
|
9.82 |
x(1) |
|
|
|
|
Year Ended December 31, 2002
|
|
|
|
(2) |
|
|
|
|
Year Ended December 31, 2001
|
|
|
1.26 |
x |
|
|
|
|
Year Ended December 31, 2000
|
|
|
1.81 |
x |
|
|
|
|
|
|
(1) |
For the period January 1, 2003 through December 5,
2003, the earnings include a one time earning of $4,118,636,000
due to Fresh Start adjustments. |
|
(2) |
For the year ended December 31, 2002, the deficiency of
earnings to fixed charges was $3,023,467,000. |
20
USE OF PROCEEDS
All of the shares of preferred stock and common stock offered
hereby are being sold by the selling stockholders. We will not
receive any proceeds from the sale of preferred stock and common
stock in this offering.
21
SELLING STOCKHOLDERS
Information about the selling stockholders may change over time.
Any changed information will be set forth in a post-effective
amendment or, if permissible, a prospectus supplement to the
extent we are advised of such changes. From time to time,
additional information concerning ownership of the shares may
rest with certain holders thereof not named in the table below
and of whom we are unaware. All information in the following
tables and related footnotes has been supplied to us by the
selling stockholders, and we have relied on their
representations.
The following table and accompanying notes set forth certain
information provided to us by the selling stockholders. Under
this prospectus, the selling stockholders and any of their
respective transferees, assignees, donees, distributees,
pledgees, or other successors-in-interest may offer and sell
from time to time up to an aggregate of 420,000 shares of
preferred stock, or 10,500,000 shares of our common stock
issuable upon conversion of the preferred stock. The shares
listed below are being registered to permit public sales of
these securities by the selling stockholders, and the selling
stockholders may offer all, some or none of their securities.
The number of shares of preferred stock and common stock that
may be actually purchased by certain selling stockholders and
the number of shares of preferred stock and common stock that
may be actually sold by each selling stockholder will be
determined by such selling stockholder. Because certain selling
stockholders may purchase all, some or none of the shares of
preferred stock or common stock that can be purchased upon
conversion of the preferred stock and each selling stockholder
may sell all, some or none of the shares of preferred stock and
common stock that each holds, and because the offering
contemplated by this prospectus is not currently being
underwritten, no estimate can be given as to the number of
shares of preferred stock and common stock that will be held by
the selling stockholders upon termination of the offering. In
addition, the selling stockholders listed below may have
acquired, sold or transferred, in transactions exempt from the
registration requirements of the Securities Act, some or all of
their shares of preferred stock and common stock since the date
as of which the information in the tables is presented.
The following table sets forth information regarding the
beneficial ownership of shares of common stock by the selling
stockholders as of the date of this prospectus, and the number
of shares of preferred stock and common stock covered by this
prospectus. Except as otherwise noted below, none of the selling
stockholders has held any position or office, or has had any
other material relationship with us or any of our affiliates
within the past three years.
The information set forth in the following table regarding the
beneficial ownership after resale of shares is based on the
assumption that each selling stockholder will sell all of the
shares of preferred stock and common stock owned by the selling
stockholder and covered by the prospectus. If all of the shares
of our preferred stock and common stock listed below are sold
pursuant to this prospectus, then the selling stockholders will
sell 420,000 shares of Preferred Stock, or
10,500,000 shares of our common stock.
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ownership Before | |
|
Securities Offered by | |
|
Ownership After Offering | |
|
|
Offering | |
|
This Prospectus | |
|
| |
|
|
| |
|
| |
|
|
|
% of | |
Name |
|
Preferred | |
|
Common | |
|
Preferred | |
|
Common | |
|
Preferred | |
|
Common | |
|
Common(1) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
AM International E MAC 63 Ltd.
|
|
|
790 |
|
|
|
19,750 |
|
|
|
790 |
|
|
|
19,750 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
AM Master Fund I, LP
|
|
|
6,916 |
|
|
|
172,900 |
|
|
|
6,916 |
|
|
|
172,900 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Barclays Global Investors Diversified Alpha Plus Funds
|
|
|
1,530 |
|
|
|
38,250 |
|
|
|
1,530 |
|
|
|
38,250 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Basso Holdings Ltd.
|
|
|
600 |
|
|
|
15,000 |
|
|
|
600 |
|
|
|
15,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Basso Multi-Strategy Holding Fund Ltd.
|
|
|
1,400 |
|
|
|
35,000 |
|
|
|
1,400 |
|
|
|
35,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
BBT Fund, LP
|
|
|
2,250 |
|
|
|
56,250 |
|
|
|
2,250 |
|
|
|
56,250 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Boston Income Portfolio c/o Eaton Vance Mgt.
|
|
|
1,255 |
|
|
|
31,375 |
|
|
|
1,255 |
|
|
|
31,375 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Citigroup Global Markets Inc.(2)
|
|
|
4,994 |
|
|
|
124,850 |
|
|
|
4,994 |
|
|
|
124,850 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Concentrated Alpha Partners, LP
|
|
|
2,250 |
|
|
|
56,250 |
|
|
|
2,250 |
|
|
|
56,250 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Delaware Dividend Income Fund
|
|
|
750 |
|
|
|
18,750 |
|
|
|
750 |
|
|
|
18,750 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Diversified High Yield Bond Portfolio c/o Eaton Vance Mgt.
|
|
|
245 |
|
|
|
6,125 |
|
|
|
245 |
|
|
|
6,125 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
DKR SoundShore Strategic Holding Fund Ltd.
|
|
|
2,000 |
|
|
|
50,000 |
|
|
|
2,000 |
|
|
|
50,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Equitec Group, LLC
|
|
|
500 |
|
|
|
12,500 |
|
|
|
500 |
|
|
|
12,500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Forest Fulcrum Fund LP
|
|
|
1,291 |
|
|
|
32,275 |
|
|
|
1,291 |
|
|
|
32,275 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Forest Global Convertible Fund, Ltd., Class A-5
|
|
|
2,638 |
|
|
|
65,950 |
|
|
|
2,638 |
|
|
|
65,950 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Forest Multi-Strategy-Master Fund SPC, on behalf of its
Multi-Strategy Segregated Portfolio
|
|
|
3,012 |
|
|
|
75,300 |
|
|
|
3,012 |
|
|
|
75,300 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Frontpoint Convertible Arbitrage Fund, LP
|
|
|
8,000 |
|
|
|
200,000 |
|
|
|
8,000 |
|
|
|
200,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Grace Convertible Arbitrage Fund, Ltd.
|
|
|
7,000 |
|
|
|
175,000 |
|
|
|
7,000 |
|
|
|
175,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Hallmark Master Trust High Yield Fund c/o Eaton Vance Mgt.
|
|
|
70 |
|
|
|
1,750 |
|
|
|
70 |
|
|
|
1,750 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
HFR CA Global Opportunity Master Trust
|
|
|
1,298 |
|
|
|
32,450 |
|
|
|
1,298 |
|
|
|
32,450 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
HFR RVA Select Performance Master Trust
|
|
|
340 |
|
|
|
8,500 |
|
|
|
340 |
|
|
|
8,500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
High Income Portfolio c/o Eaton Vance Mgt.
|
|
|
865 |
|
|
|
21,625 |
|
|
|
865 |
|
|
|
21,625 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Intl Union of Operating Engineers c/o Eaton Vance
Mgt.
|
|
|
15 |
|
|
|
375 |
|
|
|
15 |
|
|
|
375 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
JHVST MidCap Value B
|
|
|
200 |
|
|
|
52,200 |
|
|
|
200 |
|
|
|
5,000 |
|
|
|
0 |
|
|
|
47,200 |
|
|
|
* |
|
JMG Triton Offshore, Ltd.
|
|
|
2,850 |
|
|
|
71,250 |
|
|
|
2,850 |
|
|
|
71,250 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
JP Morgan Securities Inc.
|
|
|
3,325 |
|
|
|
83,125 |
|
|
|
3,325 |
|
|
|
83,125 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
KBC Financial Products USA, Inc.
|
|
|
4,000 |
|
|
|
100,000 |
|
|
|
4,000 |
|
|
|
100,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
KDC Convertible Arbitrage Fund LP
|
|
|
3,000 |
|
|
|
75,000 |
|
|
|
3,000 |
|
|
|
75,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
LDG Limited
|
|
|
130 |
|
|
|
3,250 |
|
|
|
130 |
|
|
|
3,250 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Lincoln National Convertible Securities Fund
|
|
|
750 |
|
|
|
18,750 |
|
|
|
750 |
|
|
|
18,750 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ownership Before | |
|
Securities Offered by | |
|
Ownership After Offering | |
|
|
Offering | |
|
This Prospectus | |
|
| |
|
|
| |
|
| |
|
|
|
% of | |
Name |
|
Preferred | |
|
Common | |
|
Preferred | |
|
Common | |
|
Preferred | |
|
Common | |
|
Common(1) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
LLT Limited
|
|
|
1,006 |
|
|
|
25,150 |
|
|
|
1,006 |
|
|
|
25,150 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Lyxor/ AM Investment Fund Ltd.
|
|
|
988 |
|
|
|
24,700 |
|
|
|
988 |
|
|
|
24,700 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Lyxor/ Forest Fund Limited
|
|
|
4,094 |
|
|
|
102,350 |
|
|
|
4,094 |
|
|
|
102,350 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Lyxor/ Silverado Fund Ltd.
|
|
|
1,550 |
|
|
|
38,750 |
|
|
|
1,550 |
|
|
|
38,750 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
MSS Convertible Arbitrage 1
|
|
|
20 |
|
|
|
500 |
|
|
|
20 |
|
|
|
500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
National Bank of Canada
|
|
|
1,186 |
|
|
|
29,650 |
|
|
|
1,186 |
|
|
|
29,650 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Newport Alternative Income Fund
|
|
|
2,923 |
|
|
|
73,075 |
|
|
|
2,923 |
|
|
|
73,075 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Pebble Limited Partnership
|
|
|
2,570 |
|
|
|
64,250 |
|
|
|
2,570 |
|
|
|
64,250 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
RWDSU Local 338 High Yield Fund c/o Eaton Vance Mgt.
|
|
|
20 |
|
|
|
500 |
|
|
|
20 |
|
|
|
500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Sage Capital Management, LLC
|
|
|
3,000 |
|
|
|
75,000 |
|
|
|
3,000 |
|
|
|
75,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
SEPTA High Yield Fund c/o Eaton Vance Mgt.
|
|
|
20 |
|
|
|
500 |
|
|
|
20 |
|
|
|
500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Severn River Master Fund
|
|
|
1,000 |
|
|
|
25,000 |
|
|
|
1,000 |
|
|
|
25,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Silverado Arbitrage Trading, Ltd.
|
|
|
500 |
|
|
|
12,500 |
|
|
|
500 |
|
|
|
12,500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Silvercreek II Limited
|
|
|
7,260 |
|
|
|
181,500 |
|
|
|
7,260 |
|
|
|
181,500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Silvercreek Limited Partnership
|
|
|
9,747 |
|
|
|
243,675 |
|
|
|
9,747 |
|
|
|
243,675 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Silver Point Capital Fund, LP
|
|
|
1,365 |
|
|
|
1,042,333 |
|
|
|
1,365 |
|
|
|
34,125 |
|
|
|
0 |
|
|
|
1,008,208 |
|
|
|
1.2 |
|
Silver Point Capital Offshore
Fund, Ltd.
|
|
|
2,135 |
|
|
|
1,654,740 |
|
|
|
2,135 |
|
|
|
53,375 |
|
|
|
0 |
|
|
|
1,601,365 |
|
|
|
1.8 |
|
Sphinx Convertible Arbitrage SPC
|
|
|
1,734 |
|
|
|
43,350 |
|
|
|
1,734 |
|
|
|
43,350 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Sphinx Fund
|
|
|
140 |
|
|
|
3,500 |
|
|
|
140 |
|
|
|
3,500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
SRI Fund, L.P.
|
|
|
500 |
|
|
|
12,500 |
|
|
|
500 |
|
|
|
12,500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
TQA Master Fund, Ltd.
|
|
|
870 |
|
|
|
21,750 |
|
|
|
870 |
|
|
|
21,750 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
TQA Master Plus Fund, Ltd.
|
|
|
1,510 |
|
|
|
37,750 |
|
|
|
1,510 |
|
|
|
37,750 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Trout LLT Limited
|
|
|
908 |
|
|
|
22,700 |
|
|
|
908 |
|
|
|
22,700 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
UBS AG London FBO HFS
|
|
|
5,000 |
|
|
|
125,000 |
|
|
|
5000 |
|
|
|
125,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
UBS AG London FBO PFEL
|
|
|
18,500 |
|
|
|
462,500 |
|
|
|
18,500 |
|
|
|
462,500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
UBS AG London FBO WCBP
|
|
|
20,000 |
|
|
|
500,000 |
|
|
|
20,000 |
|
|
|
500,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Volkswagen High Yield Bond Fund c/o Eaton Vance Mgt.
|
|
|
10 |
|
|
|
250 |
|
|
|
10 |
|
|
|
250 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Xavex Convertible Arbitrage 7 Fund
|
|
|
150 |
|
|
|
3,750 |
|
|
|
150 |
|
|
|
3,750 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Zurich Institutional Benchmarks Master Fund Ltd.
c/o TQA Investors, LLC
|
|
|
180 |
|
|
|
4,500 |
|
|
|
180 |
|
|
|
4,500 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Zurich Institutional Benchmarks Master Fund Ltd.
c/o Forest Investment Management LLC
|
|
|
2,155 |
|
|
|
53,875 |
|
|
|
2,155 |
|
|
|
53,875 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
(1) Based on 87,045,104 shares of common stock outstanding
as of March 28, 2005.
(2) Citigroup Global Markets Inc. was a co-placement agent
on the issuance of the preferred stock.
24
PLAN OF DISTRIBUTION
We are registering a total of 420,000 shares of our
preferred stock, and 10,500,000 shares of our common stock
issuable upon conversion of the preferred stock. We will not
receive any of the proceeds from the sale by the selling
stockholders of the shares of the preferred stock or common
stock. A selling stockholder is a person named in the section of
this prospectus entitled Selling Stockholders and
also includes any donee, pledgee, transferee, or other
successor-in-interest selling shares of our preferred stock or
common stock received after the date of this prospectus from a
selling stockholder as a gift, pledge, partnership distribution,
or other non-sale related transfer.
We will bear all costs, fees and expenses in connection to our
obligation to register the shares of the preferred stock and
common stock offered by this prospectus. If the shares of
preferred stock or common stock are sold through broker-dealers
or agents, the selling stockholders will be responsible for any
compensation to such broker-dealers or agents.
The selling stockholders may pledge or grant a security interest
in some or all of the shares of preferred stock or common stock
owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer
and sell the shares of preferred stock or common stock from time
to time pursuant to this prospectus. The selling stockholders
also may transfer and donate the shares of preferred stock or
common stock in other circumstances in which case the
transferees, donees, pledgees or other successors-in-interest
will be the selling beneficial owners for purpose of this
prospectus.
The selling stockholders will sell their shares of preferred
stock and common stock subject to the following:
|
|
|
|
|
all or a portion of the shares of preferred stock or common
stock beneficially owned by selling stockholders or their
respective pledgees, donees, transferees or
successors-in-interest, may be sold on any national securities
exchange or quotation service on which the shares of preferred
stock or common stock may be listed or quoted at the time of
sale, in the over-the counter market, in privately negotiated
transactions, through the writing of options, whether such
options are listed on an options exchange or otherwise, short
sales or in combination of such transactions; |
|
|
|
each sale may be made at market prices prevailing at the time of
such sale, at negotiated prices, at fixed prices, or at varying
prices determined at the time of sale; and |
|
|
|
some or all of the shares of preferred stock or common stock may
be sold through one or more broker-dealers or agents and may
involve crosses, block transactions in which the broker-dealer
will attempt to sell shares as agent but may position and resell
a portion of the block as principal to facilitate the
transaction, or hedging transactions. The selling stockholders
may enter into hedging transactions with broker-dealers or
agents, which may in turn engage in short sales of preferred
stock and common stock in the course of hedging in positions
they assume. The selling stockholders may also sell shares of
preferred stock and common stock short and deliver shares of
preferred stock and common stock to close out short positions,
or loan pledge shares of preferred stock and common stock to
broker-dealers or agents that in turn may sell such shares. |
In connection with such sales through one or more broker-dealers
or agents, such broker-dealers or agents may receive
compensation in the form of discounts, concessions or
commissions from the selling stockholders and receive
commissions from the purchasers of the shares of preferred stock
or common stock for whom they act as broker-agent or to whom
they sell as principal (which discounts, concessions or
commissions as to particular broker-dealers or agents may be
excess of those customary in the types of transactions involved).
The selling stockholders and any broker-dealer participating in
the distribution of the shares of preferred stock and common
stock may be deemed to be underwriters within the
meaning of the Securities Act of 1933, as amended, and any
profits realized by the selling stockholder, and commissions
paid, or any discounts or concessions allowed to any
broker-dealer may be deemed to be underwriting commissions or
discounts under the Securities Act of 1933. If the selling
stockholders were deemed to be underwriters, the selling
stockholders could be subject to certain statutory liabilities
under the federal securities laws, including under
Sections 11, 12 and 17 of the Securities Act and
Rule 10b-5 under the Exchange Act. In addition, any shares
of preferred stock and
25
common stock covered by this prospectus that qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather
than pursuant to this prospectus.
The aggregate proceeds to the selling stockholders from the sale
of the offered securities offered by them will be the purchase
price of such preferred stock or common stock less discounts and
commissions, if any, payable by them. Each of the selling
stockholders reserves the right to accept and, together with
their broker-dealers or agents from time to time, to reject, in
whole or in part, any proposed purchase of the offered
securities to be made directly or through broker-dealers or
agents. We will not receive any of the proceeds from the
offering of the offered securities.
If required at the time a particular offering of the shares of
preferred stock and common stock is made, a prospectus
supplement or, if appropriate, a post-effective amendment to the
registration statement of which this prospectus is a part, will
be distributed which will set forth the aggregate amount of
shares of preferred stock and common stock being offered and the
terms of the offering, including the name or names of any
broker-dealers or agents, any discounts, commissions and other
terms constituting compensation from the selling stockholder and
any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.
Under the securities laws of some states, the shares of
preferred stock and common stock may be sold in such states only
through registered or licensed brokers or dealers. In addition,
in some states the shares of preferred stock and common stock
may not be sold unless such shares have been registered or
qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
There can be no assurance that any selling stockholder will sell
any or all of the shares of preferred stock or common stock
registered pursuant to the registration statement of which this
prospectus forms a part.
The selling stockholders and any other person participating in
such distribution will be subject to applicable provisions of
the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, including, without limitation,
Regulation M of the Exchange Act, which may limit the
timing of purchases and sales of any of the shares of preferred
stock and common stock by the selling stockholders and
participating person. Regulation M may also restrict the
ability of any person engaged in the distribution of the shares
of preferred stock and common stock to engage in market-making
activities with respect to the shares of preferred stock and
common stock. All of the foregoing may affect the marketability
of the shares of preferred stock and common stock and the
ability of any person or entity to engage in market-making
activities with respect to the shares of preferred stock and
common stock.
In that regard, the selling stockholders are required to
acknowledge that they understand their obligations to comply
with the provisions of the Exchange Act and the rules thereunder
relating to stock manipulation, particularly Regulation M
thereunder (or any successor rules or regulations), in
connection with the offering made by this prospectus. Each
selling stockholder is required to agree that neither it nor any
person acting on its behalf will engage in any transaction in
violation of such provisions.
Pursuant to the registration rights agreements described below
under Description of the Preferred Stock
Registration Rights, we and the selling stockholders have
agreed, subject to exceptions, to indemnify each other against
specified liabilities, including liabilities under the
Securities Act, and may be entitled to contribution from each
other in respect of those liabilities. Once sold under this
registration statement, of which this prospectus forms a part,
the shares of preferred stock and common stock will be freely
tradable in the hands of persons other than affiliates.
The preferred stock issued in the initial private placement are
eligible for trading in the
Portalsm
Market of the Nasdaq Stock Market, Inc. The preferred stock sold
using this prospectus, however, will no longer be eligible for
trading in the
Portalsm
Market of the Nasdaq Stock Market, Inc. We do not intend to list
the preferred stock on any national securities exchange or
automated quotation system.
Under the registration rights agreement, we may be required from
time to time to require holders of offered securities to
discontinue the sale or other disposition of those debentures
and shares of common stock under specified circumstances. See
Description of the Preferred Stock
Registration Rights.
26
DESCRIPTION OF THE PREFERRED STOCK
The shares of preferred stock were issued pursuant to a
certificate of designations dated as of December 20, 2004.
The preferred stock, and the shares of common stock issuable
upon conversion of the preferred stock, are covered by a
certificate of designations and a registration rights agreement,
both of which are filed as exhibits to the registration
statement of which this prospectus forms a part. You may request
a copy of the certificate of designations and the registration
rights agreement by writing or telephoning us at: NRG Energy,
Inc., 211 Carnegie Center, Princeton, New Jersey 08540;
(609) 524-4500; Attention: General Counsel.
The following description is a summary of the material
provisions of the preferred stock, the certificate of
designations and the registration rights agreement. It does not
purport to be complete. This summary is subject to, and is
qualified by, reference to all the provisions of the certificate
of designations, including the definitions of terms used in the
certificate of designations, and the registration rights
agreement. We urge you to read the certificate of designations
because it, and not this description, defines your rights as a
holder of shares of preferred stock.
As used in this Description of the Preferred Stock
section, references to NRG, we,
our or us refer solely to NRG Energy,
Inc. and not to our subsidiaries.
General
Under our amended and restated certificate of incorporation, our
board of directors is authorized, without further stockholder
action, to issue up to 10,000,000 shares of serial
preferred stock, par value $0.01 per share, in one or more
series, with such voting powers or, subject to certain
limitations, without voting powers, and with such designations,
preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions,
as shall be set forth in the resolutions providing therefor. All
shares of authorized serial preferred stock are currently
undesignated.
Pursuant to the certificate of designations dated
December 20, 2004, we issued 420,000 shares of our
4% Convertible Perpetual Preferred Stock, $0.01 par
value per share, and $1,000 liquidation preference per share.
The shares of preferred stock have been validly issued, fully
paid and nonassessable. The holders of the shares of preferred
stock have no preemptive rights or preferential rights to
purchase or subscribe for stock, obligations, warrants or any
other of our securities.
The preferred stock issued in the initial private placement are
eligible for trading in the
Portalsm
Market of the Nasdaq Stock Market, Inc. The preferred stock sold
using this prospectus, however, will no longer be eligible for
trading in the
Portalsm
Market of the Nasdaq Stock Market, Inc. We do not intend to list
the preferred stock on any national securities exchange or
automated quotation system.
Our corporate documents and Delaware law contain provisions that
could discourage, delay or prevent a change in control of our
company even if some stockholders might consider such a
development favorable, which may adversely affect the price of
our preferred and common stock. These provisions are described
above under Risk FactorsRisks Related to this
Offering.
Ranking
The preferred stock, with respect to dividend rights and upon
liquidation, winding up and dissolution, ranks:
|
|
|
|
|
junior to all our existing and future debt obligations; |
|
|
|
junior to senior stock, which is each class or
series of our capital stock other than (a) our common stock
and any other class or series of our capital stock the terms of
which provide that such class or series will rank junior to the
preferred stock and (b) any other class or series of our
capital stock the terms of which provide that such class or
series will rank on a parity with the preferred stock; |
|
|
|
on a parity with parity stock, which is any class or
series of our capital stock that has terms which provide that
such class or series will rank on a parity with the preferred
stock; |
27
|
|
|
|
|
senior to junior stock, which is our common stock
and each class or series of our capital stock that has terms
which provide that such class or series will rank junior to the
preferred stock; and |
|
|
|
effectively junior to all of our subsidiaries
(i) existing and future liabilities and (ii) capital
stock held by others. |
The term senior stock includes warrants, rights,
calls or options exercisable for or convertible into that type
of stock.
Dividends
Holders of the shares of preferred stock are entitled to
receive, when, as and if declared by our board of directors, out
of funds legally available for payment, cumulative cash
dividends on each outstanding share of preferred stock at the
annual rate of 4% of the liquidation preference per share. The
dividend rate is initially equivalent to $40.00 per share
annually. The right of holders of the shares of preferred stock
to receive dividend payments is subject to the rights of any
holders of shares of senior stock and parity stock.
Dividends are payable quarterly in arrears on March 15,
June 15, September 15 and December 15 of each year,
beginning on March 15, 2005. If any of those dates is not a
business day, then dividends will be payable on the next
succeeding business day. Dividends will accumulate from the most
recent date as to which dividends will have been paid or, if no
dividends have been paid, from the date of original issuance of
the preferred stock. Dividends are payable to holders of record
as they appear in our stock records at the close of business on
March 1, June 1, September 1 and December 1
of each year or on a record date that may be fixed by our board
of directors and that will be not more than 60 days nor
fewer than 10 days before the applicable quarterly dividend
payment date. Dividends will be cumulative from each quarterly
dividend payment date, whether or not we have funds legally
available for the payment of those dividends.
Dividends payable on the shares of preferred stock for any
period shorter than a full quarterly period will be computed on
the basis of a 360-day year consisting of twelve 30-day months.
Dividends on the shares of preferred stock, including liquidated
damages, if any, will be payable in cash. Accumulated unpaid
dividends cumulate dividends at the annual rate of 4% and are
payable in the manner provided above.
For so long as the preferred stock is outstanding, (1) we
will not declare, pay or set apart funds for the payment of any
dividend or other distribution with respect to any junior stock
or parity stock and (2) neither we, nor any of our
subsidiaries, will redeem, purchase or otherwise acquire for
consideration junior stock or parity stock through a sinking
fund or otherwise, unless, in each case, we have paid or set
apart funds for the payment of all accumulated and unpaid
dividends, including liquidated damages, if any, with respect to
the shares of the preferred stock and any parity stock for all
preceding dividend periods. As an exception to clause (2),
we will be able to redeem, purchase or otherwise acquire for
consideration parity stock pursuant to a purchase or exchange
offer made on similar terms to all holders of preferred stock
and such parity stock.
Holders of the preferred stock will not have any right to
receive dividends that we may declare on our common stock. The
right to receive dividends declared on our common stock will be
realized only after conversion of such holders shares of
preferred stock into shares of our common stock.
Conversion Rights
Each share of preferred stock is convertible at any time and
from time to time, at the option of the holder, into fully paid
and nonassessable shares of our common stock at an initial
conversion price of $40.00 per share, which is equal to an
approximate conversion rate of 25 shares per share of
preferred stock, subject to adjustments as described under
Adjustments to the Conversion Price.
If and only to the extent you elect to convert your shares of
our preferred stock in connection with a fundamental change as
described below under Fundamental Change
Requires Us to Purchase Shares of Preferred Stock at the Option
of the Holder, pursuant to which 10% or more of the fair
market value of the consideration for the common stock in the
transaction consists of (i) cash, (ii) other property
or (iii) securities that
28
are not traded or scheduled to be traded immediately following
such transaction on a U.S. national securities exchange or
the Nasdaq National Market, we will increase the conversion rate
by a number of additional shares as described under
Adjustments to the Conversion PriceAdjustment
for a Fundamental Change, or, in lieu thereof, we may in
certain circumstances elect to adjust the conversion rate and
related conversion obligation so that shares of our preferred
stock are convertible into shares of the acquiring or surviving
entity as described under Adjustments to the
Conversion PricePublic Acquirer Fundamental Change.
We must give notice to all holders at least 15 trading days
prior to the anticipated effective date of such fundamental
change and whether we will elect to increase the conversion rate
as described in Adjustments to the Conversion
PriceAdjustment for a Fundamental Change or adjust
the conversion rate as described in
Adjustments to the Conversion
PricePublic Acquirer Fundamental Change. We must
also give notice to all holders that such fundamental change has
become effective. To receive the additional shares upon
conversion, if applicable, holders may surrender shares of our
preferred stock for conversion and receive the additional shares
described under Adjustments to the Conversion
PriceAdjustment for a Fundamental Change at any time
from and after the date that is 15 days prior to the
anticipated effective date of such fundamental change until and
including the date that is 15 days after the actual
effective date.
A holder of shares of the preferred stock may convert any or all
of those shares by surrendering to us at our principal office or
at the office of the transfer agent, as may be designated by our
board of directors, the certificate or certificates for those
shares of the preferred stock accompanied by a written notice
stating that the holder elects to convert all or a specified
whole number of those shares in accordance with the provisions
described in this prospectus and specifying the name or names in
which the holder wishes the certificate or certificates for
shares of common stock to be issued. In case the notice
specifies a name or names other than that of the holder, the
notice will be accompanied by payment of all transfer taxes
payable upon the issuance of shares of common stock in that name
or names. Other than those taxes, we will pay any documentary,
stamp or similar issue or transfer taxes that may be payable in
respect of any issuance or delivery of shares of common stock
upon conversion of shares of the preferred stock. As promptly as
practicable after the surrender of that certificate or
certificates and the receipt of the notice relating to the
conversion and payment of all required transfer taxes, if any,
or the demonstration to our satisfaction that those taxes have
been paid, we will deliver or cause to be delivered
(a) certificates representing the number of validly issued,
fully paid and nonassessable full shares of our common stock to
which the holder, or the holders transferee, of shares of
the preferred stock being converted will be entitled along with
cash payment for any fractional shares, and (b) if less
than the full number of shares of preferred stock evidenced by
the surrendered certificate or certificates is being converted,
a new certificate or certificates, of like tenor, for the number
of shares evidenced by the surrendered certificate or
certificates less the number of shares being converted along
with cash payment for any fractional shares. This conversion
will be deemed to have been made at the close of business on the
date of giving the notice and of surrendering the certificate or
certificates representing the shares of preferred stock to be
converted so that the rights of the holder thereof as to the
shares being converted will cease except for the right to
receive shares of common stock, and the person entitled to
receive the shares of common stock will be treated for all
purposes as having become the record holder of those shares of
common stock at that time.
In lieu of the foregoing procedures, if the preferred stock is
held in global form, you must comply with The Depository Trust
Company (DTC) procedures to convert your beneficial
interest in respect of preferred stock evidenced by a global
certificate for the preferred stock.
If a holder of shares of preferred stock exercises conversion
rights, upon delivery of the shares for conversion, those shares
will cease to cumulate dividends as of the end of the day
immediately preceding the date of conversion. Holders of shares
of preferred stock who convert their shares into our common
stock will not be entitled to, nor will the conversion rate be
adjusted for, any accumulated and unpaid dividends. Accordingly,
shares of preferred stock surrendered for conversion after the
close of business on any record date for the payment of
dividends declared and before the opening of business on the
dividend payment date relating to that record date must be
accompanied by a payment in cash of an amount equal to the
dividend payable in respect of those shares for the dividend
period in which the shares are converted. A holder of shares of
preferred stock on a
29
dividend payment record date who converts such shares into
shares of our common stock on the corresponding dividend payment
date will be entitled to receive the dividend payable on such
shares of preferred stock on such dividend payment date, and the
converting holder need not include payment of the amount of such
dividend upon surrender of shares of preferred stock for
conversion.
Notwithstanding the foregoing, if shares of preferred stock are
converted during the period between the close of business on any
dividend payment record date and the opening of business on the
corresponding dividend payment date, and we have called such
shares of preferred stock for redemption during such period or
we have specified a fundamental change purchase date during such
period, the holder who tenders such shares for conversion will
receive the dividend payable on such dividend payment date and
need not include payment of the amount of such dividend upon
surrender of shares of preferred stock for conversion.
In case any shares of preferred stock are to be redeemed, the
right to convert those shares of the preferred stock will
terminate at 5:00 p.m., New York City time, on the second
business day immediately preceding the date fixed for redemption
unless we default in the payment of the redemption price of
those shares.
In connection with the conversion of any shares of preferred
stock, no fractional shares of common stock will be issued, but
we will pay a cash adjustment in respect of any fractional
interest in an amount equal to the fractional interest
multiplied by the closing sale price (as defined below under
Adjustments to the Conversion Price) of
our common stock on the date the shares of preferred stock are
surrendered for conversion. If more than one share of preferred
stock will be surrendered for conversion by the same holder at
the same time, the number of full shares of common stock
issuable on conversion of those shares will be computed on the
basis of the total number of shares of preferred stock so
surrendered. Our ability to pay cash in lieu of fractional
shares is subject to limitations set forth in the indenture
governing our senior secured notes.
We will at all times reserve and keep available, free from
preemptive rights, for issuance upon the conversion of shares of
preferred stock a number of our authorized but unissued shares
of common stock or shares of common stock held in treasury that
will from time to time be sufficient to permit the conversion of
all outstanding shares of preferred stock.
Before the delivery of any securities that we will be obligated
to deliver upon conversion of the preferred stock, we will
comply with all applicable federal and state laws and
regulations that require action to be taken by us. All shares of
common stock delivered upon conversion of the preferred stock
will upon delivery be duly and validly issued, fully paid and
nonassessable, free of all liens and charges and not subject to
any preemptive rights.
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Adjustments to the Conversion Price |
The conversion price (as well as the share price (as defined
below) used to determine the number of additional shares
described under Adjustments to the Conversion
PriceAdjustment for a Fundamental Change) is subject
to adjustment from time to time if any of the following events
occur, except that we will not make any adjustments to the
conversion price (or the share price used to determine the
number of additional shares) if holders of shares of our
preferred stock participate in any of the following events:
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(1) dividends or distributions on shares of our common
stock payable in shares of our common stock; |
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(2) subdivisions, combinations or certain reclassifications
of shares of our common stock; |
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(3) dividends or distributions to all or substantially all
holders of shares of our common stock of rights or warrants
entitling them to purchase, for a period expiring within
45 days of the record date for such distribution, our
common stock at less than the average closing sale price (as
defined below) for the 10 trading days (as defined below)
preceding the declaration date for such distribution; |
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(4) dividends or distributions to all or substantially all
holders of shares of our common stock of shares of our capital
stock, evidences of indebtedness or assets, including securities
but excluding: |
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rights or warrants specified above; |
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dividends or distributions specified above; and |
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cash distributions. |
30
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In the event that we make a dividend or distribution to all
holders of our common stock consisting of capital stock of, or
similar equity interest in, a subsidiary or other business unit
of ours, the conversion rate will be adjusted based on the
market value of the securities so distributed relative to the
market value of our common stock, in each case based on the
average closing sale prices of those securities for the 10
trading days commencing on and including the fifth trading day
after the date on which ex-dividend trading
commences for such dividend or distribution on the New York
Stock Exchange or such other national or regional exchange or
market on which the securities are then listed or quoted; |
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(5) dividends or distributions to all or substantially all
holders of shares of our common stock of cash, excluding any
dividend or distribution in connection with our liquidation,
dissolution or winding up. If we declare such a cash dividend or
cash distribution, the conversion price shall be decreased to
equal the price determined by multiplying the conversion price
in effect immediately prior to the record date for such dividend
or distribution by the following fraction: |
(Pre-Dividend Sale Price - Dividend Adjustment
Amount)
(Pre-Dividend Sale Price)
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provided that if the numerator of the foregoing fraction is less
than $1.00 (including a negative amount), then in lieu of any
adjustment in respect of such cash distribution, we shall make
adequate provision so that each holder of preferred stock shall
have the right to receive upon conversion, in addition to the
common stock issuable upon such conversion, the amount of cash
such holder would have received had such holder converted its
preferred stock solely into our common stock at the then
applicable conversion price immediately prior to the record date
for such cash dividend or cash distribution; |
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Pre-Dividend Sale Price means the average closing
sale price for the three consecutive trading days ending on the
trading day immediately preceding the record date for such
dividend or distribution. Dividend Adjustment Amount
means the full amount of the dividend or distribution to the
extent payable in cash applicable to one of our common shares; |
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(6) we or one of our subsidiaries makes a payment in
respect of a tender offer or exchange offer for our common stock
to the extent that the cash and value of any other consideration
included in the payment per share of common stock exceeds the
closing sale price per share of common stock on the trading day
next succeeding the last date on which tenders or exchanges may
be made pursuant to such tender or exchange offer; and |
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7) someone other than us or one of our subsidiaries makes a
payment in respect of a tender offer or exchange offer in which,
as of the closing date of the offer, our board of directors is
not recommending rejection of the offer. The adjustment referred
to in this clause will only be made if: |
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the tender offer or exchange offer is for an amount that
increases the offerors ownership of common stock to more
than 25% of the total shares of common stock
outstanding; and |
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the cash and value of any other consideration included in the
payment per share of common stock exceeds the closing sale price
per share of common stock on the trading day next succeeding the
last date on which tenders or exchanges may be made pursuant to
the tender or exchange offer. |
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However, the adjustment referred to in this clause will
generally not be made if as of the closing of the offer, the
offering documents disclose a plan or an intention to cause us
to engage in a consolidation or merger or a sale of all or
substantially all of our assets. |
In the event of:
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any reclassification of our common stock; |
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a consolidation, merger or combination involving us; or |
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a sale or conveyance to another person or entity of all or
substantially all of our property and assets; |
31
in which holders of our common stock would be entitled to
receive stock, other securities, other property, assets or cash
for their common stock, upon conversion of your preferred stock
you will be entitled to receive the same type of consideration
that you would have been entitled to receive if you had
converted the preferred stock into our common stock immediately
prior to any of these events. In such a case, any increase in
the conversion rate by additional shares as described under
Adjustments to the Conversion
PriceAdjustment for a Fundamental Change, will not
be payable in shares of our common stock, but will represent a
right to the aggregate amount of securities, cash and other
property into which the additional shares would convert upon
such reclassification, consolidation, merger, combination, sale
or conveyance. Notwithstanding the first sentence of this
paragraph, if we elect to adjust the conversion rate and our
conversion obligations as described in
Adjustments to the Conversion
PricePublic Acquirer Fundamental Change, the
provisions described in that section will apply instead of the
provisions described in the first sentence of this paragraph.
The closing sale price on any date means the closing
sale price per stock (or if no closing sale price is reported,
the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask
prices) on such date for our common stock as reported in
composite transactions on the principal United States securities
exchange on which our common stock is traded or, if our common
stock is not listed on a United States national or regional
securities exchange, as reported by the Nasdaq National Market.
A trading day means any regular or abbreviated
trading day on the New York Stock Exchange.
To the extent that we adopt any shareholder rights plan, upon
conversion of shares of our preferred stock into shares of our
common stock, you will receive, in addition to shares of our
common stock, the rights under the rights plan unless the rights
have separated from shares of our common stock at the time of
conversion, in which case the conversion rate will be adjusted
as if we distributed to all holders of shares of our common
stock, shares of our capital stock, evidences of indebtedness or
assets as described above, subject to readjustment in the event
of the expiration, termination or redemption of such rights.
No adjustment to the conversion rate or the ability of a holder
of shares of our preferred stock to convert will be made if the
holder will otherwise participate in the distribution without
conversion solely as a holder of shares of our preferred stock.
You may in certain situations be deemed to have received a
distribution subject to United States federal income tax as a
dividend in the event of any taxable distribution to holders of
common stock or in certain other situations requiring a
conversion rate adjustment. See Certain United States
Federal Income Tax Considerations.
We may, from time to time, increase the conversion rate if our
board of directors has made a determination that this increase
would be in our best interests. Any such determination by our
board will be conclusive. In addition, we may increase the
conversion rate if our board of directors deems it advisable to
avoid or diminish any income tax to holders of common stock
resulting from any stock or rights distribution. See
Certain United States Federal Income Tax
Considerations. We will not be required to make an
adjustment in the conversion rate unless the adjustment would
require a change of at least 1% in the conversion rate, provided
that such adjustments will be made in the event of a redemption
of preferred stock by us. However, we will carry forward any
adjustments that are less than 1% of the conversion rate. Except
as described above in this section, we will not adjust the
conversion rate for any issuance of our common stock or
convertible or exchangeable securities or rights to purchase our
common stock or convertible or exchangeable securities. In
particular, we will not adjust the conversion rate:
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upon the issuance of any shares of our common stock pursuant to
any present or future plan providing for the reinvestment of
dividends or interest payable on our securities and the
investment of additional optional amounts in shares of our
common stock under any plan; |
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upon the issuance of any shares of our common stock or options
or rights to purchase those shares pursuant to any present or
future employee, director or consultant benefit plan or program
of or assumed by us or any of our subsidiaries; |
32
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upon the issuance of any shares of our common stock pursuant to
any option, warrant, right or exercisable, exchangeable or
convertible security not described in the preceding bullet and
outstanding as of the date the preferred stock was first issued; |
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for a change in the par value of the common stock; or |
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for accumulated and unpaid dividends on the preferred stock,
including liquidated damages. |
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Adjustment for a Fundamental Change |
If a fundamental change as described below under
Fundamental Change Requires Us to Purchase
Shares of Preferred Stock at the Option of the Holder
occurs and 10% or more of the fair market value of the
consideration for the common stock in the transaction consists
of (i) cash, (ii) other property or
(iii) securities that are not traded or scheduled to be
traded immediately following such transaction on a
U.S. national securities exchange or the Nasdaq National
Market, we will decrease the conversion price for the preferred
stock, which will increase the number of shares of common stock
issuable upon a conversion (the additional shares)
during the conversion period specified above under
Conversion RightsGeneral as
described below. After such conversion period, the conversion
price and the conversion rate will be readjusted so as not to
include the additional shares.
The number of additional shares will be determined by reference
to the table below, based on the date on which such fundamental
change becomes effective (the effective date) and
the share price (the share price) paid per share of
common stock in the transaction constituting a fundamental
change. If holders of our common stock receive only cash in the
transaction constituting a fundamental change, the share price
shall be the cash amount paid per share. Otherwise, the share
price shall be the average of the closing sale prices of our
common stock on the five trading days prior to but not including
the effective date of the transaction constituting a fundamental
change.
The share prices set forth in the first row of the table below
(i.e., column headers) will be adjusted as of any date on which
the conversion price of the preferred stock is adjusted, as
described above. The adjusted share prices will equal the share
prices applicable immediately prior to such adjustment,
multiplied by a fraction, the numerator of which is the
conversion price as so adjusted and the denominator of which is
the conversion price immediately prior to the adjustment giving
rise to the share price adjustment. The number of additional
shares will be adjusted in the same manner as the conversion
price as set forth above.
The following table sets forth the hypothetical share price and
number of additional shares of common stock to be received per
share of preferred stock:
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Stock Price on Date of Fundamental Change | |
Date of |
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Fundamental Change |
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$32.12 | |
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$34.00 | |
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$36.00 | |
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$38.00 | |
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$40.00 | |
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$50.00 | |
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$60.00 | |
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$70.00 | |
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$80.00 | |
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$100.00 | |
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$150.00 | |
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$200.66 | |
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December 20, 2004
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6.7137 |
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6.1242 |
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5.5908 |
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5.1360 |
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4.7421 |
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3.4207 |
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2.6742 |
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2.1956 |
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1.8595 |
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1.4111 |
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0.8335 |
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0.5478 |
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December 15, 2005
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6.1068 |
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5.5114 |
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4.9782 |
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4.5286 |
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4.1462 |
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3.4193 |
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2.6731 |
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2.1946 |
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1.8586 |
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1.1735 |
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0.6968 |
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0.4605 |
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December 15, 2006
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5.4692 |
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4.8556 |
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4.3125 |
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3.8612 |
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3.4832 |
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3.4179 |
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2.6719 |
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2.1936 |
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1.8578 |
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0.9120 |
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0.5444 |
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0,3616 |
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December 15, 2007
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4.7958 |
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4.1423 |
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3.5716 |
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3.1065 |
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2.7252 |
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3.4165 |
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2.6707 |
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2.1926 |
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1.8569 |
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0.6273 |
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0.3763 |
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0.2511 |
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December 15, 2008
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4.1042 |
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3.3595 |
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2.7177 |
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2.2092 |
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1.8100 |
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3.4172 |
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2.6713 |
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2.1932 |
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1.8574 |
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0.3229 |
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0.1945 |
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0.1303 |
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December 15, 2009
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3.6828 |
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2.6882 |
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1.7198 |
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0.8893 |
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0.2157 |
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3.4179 |
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2.6718 |
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2.1937 |
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1.8579 |
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0.0000 |
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0.0000 |
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0.0000 |
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December 15, 2010
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3.6400 |
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2,6566 |
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1.6980 |
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0.8124 |
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0.0035 |
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3.4165 |
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2.6707 |
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2.1927 |
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1.8570 |
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0.0000 |
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0.0000 |
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0.0000 |
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December 15, 2011
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3.6466 |
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2.6606 |
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1.7001 |
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0.8136 |
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0.0035 |
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3.4109 |
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2.6660 |
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2.1887 |
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1.8536 |
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0.0000 |
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0.0000 |
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0.0000 |
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December 15, 2012
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3.6559 |
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2.6670 |
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1.7041 |
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0.8158 |
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0.0035 |
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3.4096 |
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2.6648 |
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2.1877 |
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1.8527 |
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0.0000 |
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0.0000 |
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0.0000 |
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December 15, 2013
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3.6687 |
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2.6766 |
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1.7109 |
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0.8195 |
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0.0028 |
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3.4082 |
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2.6637 |
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2.1867 |
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1.8519 |
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0.0000 |
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0.0000 |
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0.0000 |
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December 15, 2014
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3.6823 |
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2.6860 |
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1.7166 |
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0.8230 |
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0.0021 |
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3.4068 |
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2.6625 |
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2.1857 |
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1.8510 |
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0.0000 |
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0.0000 |
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0.0000 |
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The share prices and additional share amounts set forth above
are based upon a closing sale price of $32.12 per share at
December 14, 2004 and an initial conversion price of $40.00.
The maximum amount of additional stock payable is
6.7137 per share of preferred stock. Notwithstanding the
foregoing, in no event will the total number of shares of common
stock issuable upon conversion exceed approximately
31.1333 per share of preferred stock, subject to
adjustments in the same manner as the conversion price as set
forth above Adjustments to Conversion
Price.
33
The exact share prices and effective dates may not be set forth
in the table above, in which case:
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If the share price is between two share price amounts in the
table or the effective date is between two effective dates in
the table, the number of additional shares will be determined by
a straight-line interpolation between the number of additional
stock set forth for the higher and lower share price amounts and
the two dates, as applicable, based on a 365-day year. |
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If the share price is equal to or in excess of $200 per
share (subject to adjustment), no additional stock will be
issued upon conversion. |
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If the share price is less than $32.12 per share (subject
to adjustment), no additional share will be issued upon
conversion. |
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Public Acquirer Fundamental Change |
Notwithstanding the provisions set forth above under
Adjustments to the Conversion Price-Adjustment
for a Fundamental Change, in the case of a public acquirer
fundamental change (as defined below), we may, in lieu of
increasing the conversion rate by additional shares as described
above, elect to adjust the conversion rate and the related
conversion obligation such that, from and after the effective
date of such public acquirer fundamental change, holders of the
preferred stock will be entitled to convert their preferred
stock into a number of shares of public acquirer common stock
(as defined below) that have been registered, or the resale of
which will be registered, under the Securities Act, by
multiplying the conversion rate in effect immediately before the
public acquirer fundamental change by a fraction:
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The numerator of which will be (i) in the case of a
consolidation, merger or binding share exchange, pursuant to
which our common stock is converted into or exchanged for the
right to receive cash, securities or other property, the average
value of all cash and any other consideration (as determined by
our board of directors) paid or payable per share of common
stock or (ii) in the case of any other public acquirer
fundamental change, the average of the last closing price of our
common stock for the five consecutive trading days prior to but
excluding the effective date of such public acquirer fundamental
change, and |
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The denominator of which will be the average of the last closing
prices of the public acquirer common stock for the five
consecutive trading days commencing on the trading day next
succeeding the effective date of such public acquirer
fundamental change. |
A public acquirer fundamental change means any
fundamental change that would otherwise obligate us to increase
the conversion rate as described above and the acquirer (or any
entity that is a directly or indirectly wholly-owned subsidiary
of the acquirer) has a class of common stock traded on a
national securities exchange or quoted on the Nasdaq National
Market or which will be so traded or quoted when issued or
exchanged in connection with such fundamental change (the
public acquirer common stock). If an acquirer does
not itself have a class of common stock satisfying the foregoing
requirement, it will be deemed to have public acquirer
common stock if a corporation that directly or indirectly
owns at least a majority of the acquirer, has a class of common
stock satisfying the foregoing requirement, and in each case
such person has taken all necessary action to ensure that upon
conversion of the shares of our preferred stock into such class
of common stock, such class of common stock will not be treated
as restricted securities and will otherwise be
eligible for immediate sale in the public market by
non-affiliates of ours absent a registration statement, and all
references to public acquirer common stock will refer to such
class of common stock. Majority owned for these purposes means
having the beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of more than 50% of the total voting power of all
shares of the respective entitys capital stock that are
entitled to vote generally in the election of directors.
Upon our decision to adjust the conversion rate and related
conversion obligation upon a public acquirer fundamental change,
holders may convert their preferred stock at the adjusted
conversion rate described in the preceding paragraph but will
not be entitled to the increased conversion rate as described
above under Adjustment for a Fundamental
Change. The registered shares of public acquirer common
stock, or the shares of public acquirer common stock registered
for resale, as the case may be, shall be listed, or approved for
34
listing subject only to the official notice of issuance, on a
national securities exchange or the Nasdaq National Market.
Optional Redemption
We may not redeem any shares of preferred stock before
December 20, 2009. On or after December 20, 2009, we
will have the option to redeem some or all the shares of
preferred stock with cash at a redemption price of 100% of the
liquidation preference, plus accumulated and unpaid dividends,
including liquidated damages, if any, to the redemption date. If
full cumulative dividends on the preferred stock have not been
paid, the preferred stock may not be redeemed and we may not
purchase or acquire any shares of preferred stock otherwise than
pursuant to a purchase or exchange offer made on the same terms
to all holders of preferred stock and any parity stock.
In the event of an optional redemption, we will send a written
notice by first class mail to each holder of record of the
preferred stock at such holders registered address, not
fewer than 30 nor more than 90 days prior to the redemption
date. In addition, we will (i) publish such information
once in a daily newspaper printed in the English language and of
general circulation in the Borough of Manhattan, City of New
York, (ii) issue a press release containing such
information and (iii) publish such information on our
website on the World Wide Web.
If we give notice of redemption, then, by 12:00 p.m., New
York City time, on the redemption date, to the extent funds are
legally available, we shall, with respect to:
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shares of preferred stock held by DTC or its nominees, deposit
or cause to be deposited, irrevocably with DTC cash sufficient
to pay the redemption price and will give DTC irrevocable
instructions and authority to pay the redemption price to
holders of such shares of preferred stock; and |
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shares of preferred stock held in certificated form, deposit or
cause to be deposited, irrevocably with the transfer agent cash
sufficient to pay the redemption price and will give the
transfer agent irrevocable instructions and authority to pay the
redemption price to holders of such shares of preferred stock
upon surrender of their certificates evidencing their shares of
preferred stock. |
If on the redemption date DTC and the transfer agent hold cash
sufficient to pay the redemption price for the shares of
preferred stock delivered for redemption in accordance with the
terms of the certificate of designations, dividends will cease
to accumulate on those shares of preferred stock called for
redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
Payment of the redemption price for the shares of preferred
stock is conditioned upon book-entry transfer of or physical
delivery of certificates representing the preferred stock,
together with necessary endorsements, to the transfer agent, or
to the transfer agents account at DTC, at any time after
delivery of the redemption notice. Payment of the redemption
price for the preferred stock will be made (i) if
book-entry transfer of or physical delivery of the preferred
stock has been made by or on the redemption date, on the
redemption date, or (ii) if book-entry transfer of or
physical delivery of the preferred stock has not been made by or
on such date, at the time of book-entry transfer of or physical
delivery of the preferred stock.
If the redemption date falls after a dividend payment record
date and before the related dividend payment date, holders of
the shares of preferred stock at the close of business on that
dividend payment record date will be entitled to receive the
dividend payable on those shares on the corresponding dividend
payment date. The redemption price payable on such redemption
date will include only the liquidation preference, but will not
include any amount in respect of dividends declared and payable
on such corresponding dividend payment date.
In the case of any partial redemption, we will select the shares
of preferred stock to be redeemed on a pro rata basis, by lot or
any other method that we, in our discretion, deem fair and
appropriate.
Our amended and restated certificate of incorporation provides
that we may not redeem the preferred stock if, (i) as of
the date of the mailing of the redemption notice, such
redemption would, if such date were the date fixed for
redemption, reduce our net assets remaining after such
redemption below twice the aggregate amount payable upon
voluntary or involuntary liquidation, dissolution or winding up
to holders of senior stock or parity stock upon such
liquidation, dissolution or winding up or (ii) we have not
paid or set apart for payment all
35
accumulated dividends for the current and prior dividend periods
in respect of shares that have a right to cumulative dividends.
Fundamental Change Requires Us to Purchase Shares of
Preferred Stock at the Option of the Holder
In the event of a fundamental change, you will have the right,
at your option, subject to the terms and conditions of the
certificate of designations, to require us to purchase any or
all of your shares of preferred stock. We will purchase the
preferred stock with cash at a price equal to 100% of the
liquidation preference of the preferred stock to be purchased
plus any accumulated and unpaid dividends, including liquidated
damages, if any, to, but excluding, the fundamental change
purchase date, unless such fundamental change purchase date
falls after a record date and on or prior to the corresponding
dividend payment date, in which case (i) we will pay the
full amount of accumulated and unpaid dividends payable on such
dividend payment date only to the holder of record at the close
of business on the corresponding record date and (ii) the
purchase price payable on the fundamental change purchase date
will include only the liquidation preference, but will not
include any amount in respect of dividends declared and payable
on such corresponding dividend payment date. We will be required
to purchase the preferred stock as of a date that is not less
than 30 or more than 60 business days after the occurrence of
such fundamental change, which we refer to as a fundamental
change purchase date.
A fundamental change is a transaction or event
(whether by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) in connection with which all or
substantially all of our common stock is exchanged for,
converted into, acquired for or constitutes solely the right to
receive consideration 90% or more of the fair market value of
which is not common stock that:
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is listed on, or immediately after the transaction or event will
be listed on, a United States national securities
exchange, or |
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is approved, or immediately after the transaction or event will
be approved, for quotation on the Nasdaq National Market or any
similar United States system of automated dissemination of
quotations of securities prices. |
However, notwithstanding the foregoing, holders of preferred
stock will not have the right to require us to repurchase any
shares of preferred stock upon a fundamental change (and we will
not be required to deliver the notice incidental thereto), if
either (1) the closing stock price 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
the public announcement thereof, equals or exceeds 105% of the
applicable conversion price of the preferred stock immediately
before the fundamental change or the public announcement thereof
or (2) shares of our common stock are changed into or
exchanged for, in addition to any other consideration,
securities of the surviving person that represent, immediately
after such transaction, 50% or more of the aggregate voting
power of the voting stock of the surviving person.
In addition, holders of shares of preferred stock shall not have
the right to require us to repurchase shares of preferred stock
upon a fundamental change (i) unless such purchase complies
with our indenture governing our senior secured notes and our
anticipated amended and restated credit facility and
(ii) unless and until our board of directors has approved
such fundamental change or elected to take a neutral position
with respect to such fundamental change.
Within 30 business days after the occurrence of a fundamental
change, we are obligated to mail to all holders of preferred
stock at their addresses shown in the register of the registrar
and to beneficial owners as required by applicable law (and
issue a press release and publish on our website on the World
Wide Web) a notice regarding the fundamental change, stating,
among other things:
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the events causing a fundamental change; |
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the date of such fundamental change; |
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the last date on which the purchase right may be exercised; |
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the fundamental change purchase price; |
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the fundamental change purchase date; |
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the name and address of the paying agent and the conversion
agent; |
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the conversion rate and any adjustments to the conversion rate; |
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a statement that the preferred stock with respect to which a
fundamental change purchase notice is given by the holder may be
converted only if the fundamental change purchase notice has
been withdrawn in accordance with the terms of the preferred
stock; and |
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the procedures that holders must follow to exercise these rights. |
To exercise this right, you must deliver a written notice to the
transfer agent prior to the close of business on the business
day immediately before the fundamental change purchase date. The
required purchase notice upon a fundamental change must state:
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if certificated shares of preferred stock have been issued, the
preferred stock certificate numbers, or if not, such information
as may be required under applicable DTC procedures; |
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the number of preferred shares to be purchased; and |
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that we are to purchase such preferred stock pursuant to the
applicable provisions of the preferred stock and certificate of
designations. |
You may withdraw any fundamental change purchase notice by a
written notice of withdrawal delivered to the transfer agent
prior to the close of business on the business day before the
fundamental change purchase date. The notice of withdrawal must
state:
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the number of the withdrawn shares of preferred stock; |
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if certificated shares of preferred stock have been issued, the
preferred stock certificate numbers, or if not, such information
as may be required under applicable DTC procedures; and |
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the number, if any, of shares of preferred stock that remain
subject to your fundamental change purchase notice. |
A holder must either effect book-entry transfer or deliver the
preferred stock to be purchased, together with necessary
endorsements, to the office of the transfer agent after delivery
of the fundamental change purchase notice to receive payment of
the fundamental change purchase price. You will receive payment
in cash on the later of the fundamental change purchase date or
the time of book-entry transfer or the delivery of the preferred
stock. If the transfer agent holds money sufficient to pay the
fundamental change purchase price of the preferred stock on the
business day following the fundamental change purchase date,
then, immediately after the fundamental change purchase date:
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the shares of preferred stock will cease to be outstanding; |
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dividends will cease to accrue; and |
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all other rights of the holder will terminate. |
This will be the case whether or not book-entry transfer of the
preferred stock is made or whether or not the preferred stock is
delivered to the transfer agent.
The fundamental change purchase feature of the preferred stock
may in certain circumstances make more difficult or discourage a
takeover of NRG. The fundamental change purchase feature,
however, is not the result of our knowledge of any specific
effort:
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to accumulate shares of common stock; |
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to obtain control of NRG by means of a merger, tender offer,
solicitation or otherwise; or |
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by management to adopt a series of anti-takeover provisions. |
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We could, in the future, enter into certain transactions,
including certain recapitalizations, that would not constitute a
fundamental change with respect to the fundamental change
purchase feature of the preferred stock but that would increase
the amount of our (or our subsidiaries) outstanding
indebtedness.
Our ability to purchase shares of preferred stock upon the
occurrence of a fundamental change is subject to important
limitations. Because we are a holding company, our ability to
purchase the preferred stock for cash may be limited by
restrictions on our ability to obtain funds for such repurchase
through dividends from our subsidiaries and the terms of our
then existing borrowing agreements. If a fundamental change were
to occur, we may not have sufficient legally available funds to
pay the purchase price in cash for all tendered shares of
preferred stock. Any future credit agreements or other
agreements relating to our indebtedness may contain provisions
prohibiting the purchase of the preferred stock under certain
circumstances, or expressly prohibit our purchase of the
preferred stock upon a fundamental change or may provide that a
fundamental change constitutes an event of default under that
agreement. If a fundamental change occurs at a time when we are
prohibited from purchasing shares of preferred stock for cash,
we could seek the consent of our lenders to purchase the
preferred stock or attempt to refinance this debt. If we do not
obtain consent, we would not be permitted to purchase the
preferred stock.
Voting Rights
Each holder of preferred stock will have one vote for each share
held by the holder on all matters voted upon by the holders of
our capital stock, as well as voting rights specifically
provided for in our amended and restated certificate of
incorporation or as otherwise from time to time required by law.
In addition, whenever (1) dividends on any shares of
preferred stock or any other class or series of stock ranking on
a parity with the 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 redemption price on the date shares of preferred stock are
called for redemption or the purchase price on the purchase date
for shares of preferred stock following a fundamental change,
then, in each case, the holders of shares of preferred stock
(voting separately as a class with all other series of other
preferred stock on parity with the preferred stock upon which
like voting rights have been conferred and are exercisable) will
be entitled to vote for the election of two of the authorized
number of our directors at the next annual meeting of
stockholders and each subsequent meeting until all dividends
accumulated on the preferred stock have been fully paid or set
aside for payment. Upon election of any additional directors,
the number of directors that comprise our board shall be
increased by the number of such additional directors. The term
of office of all directors elected by the holders of preferred
stock will terminate immediately upon the termination of the
right of the holders of preferred stock to vote for directors.
Each holder of shares of the preferred stock will have one vote
for each share of preferred stock held.
So long as any shares of the preferred stock remain outstanding,
we will not, without the consent of the holders of at least
two-thirds of the shares of preferred stock outstanding at the
time, voting separately as a class with all other series of
preferred stock upon which like voting rights have been
conferred and are exercisable (1) issue or increase the
authorized amount of any class or series of stock ranking senior
to the outstanding preferred stock as to dividends or upon
liquidation or (2) amend, alter or repeal provisions of our
amended and restated certificate of incorporation or of the
resolutions contained in the certificate of designations,
whether by merger, consolidation or otherwise, so as to amend,
alter or affect any power, preference or special right of the
outstanding preferred stock or the holders thereof without the
affirmative vote of not less than two-thirds of the issued and
outstanding preferred stock; provided, however, that any
increase in the amount of the authorized common stock or
authorized preferred stock or the creation and issuance of other
series of common stock or preferred stock ranking on a parity
with or junior to the preferred stock as to dividends and upon
liquidation will not be deemed to materially and adversely
affect such powers, preference or special rights.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or
winding up of our company resulting in a distribution of assets
to the holders of any class or series of our capital stock, each
holder of shares of preferred stock will be entitled to payment
out of our assets available for distribution of an amount equal
to the liquidation
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preference per share of preferred stock held by that holder,
plus all accumulated and unpaid dividends, on those shares to
the date of that liquidation, dissolution, winding up, before
any distribution is made on any junior stock, including our
common stock, but after any distributions on any of our
indebtedness or senior stock. After payment in full of the
liquidation preference and all accumulated and unpaid dividends
to which holders of shares of preferred stock are entitled,
holders will not be entitled to any further participation in any
distribution of our assets. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of our
company, the amounts payable with respect to shares of preferred
stock and all other parity stock are not paid in full, holders
of shares of preferred stock and holders of the parity stock
will share equally and ratably in any distribution of our assets
in proportion to the liquidation preference and all accumulated
and unpaid dividends to which each such holder is entitled.
Neither the voluntary sale, conveyance, exchange or transfer,
for cash, shares of stock, securities or other consideration, of
all or substantially all of our property or assets nor the
consolidation, merger or amalgamation of our company with or
into any corporation or the consolidation, merger or
amalgamation of any corporation with or into our company will be
deemed to be a voluntary or involuntary liquidation, dissolution
or winding up of our company.
We are not required to set aside any funds to protect the
liquidation preference of the shares of preferred stock,
although the liquidation preference of $1,000 will be
substantially in excess of the $0.01 par value of the
shares of the preferred stock.
Transfer Agent
The transfer agent, registrar, dividend disbursing agent,
calculation agent and redemption agent for the preferred stock
is Wells Fargo Bank, N.A.
Book-Entry System
The preferred stock was issued in the form of global securities
held in book-entry form. DTC or its nominee is the sole
registered holder of the preferred stock. Owners of beneficial
interests in the preferred stock represented by the global
securities hold their interests pursuant to the procedures and
practices of DTC. As a result, beneficial interests in any such
securities are shown on, and transfers are effected only
through, records maintained by DTC and its direct and indirect
participants and any such interest may not be exchanged for
certificated securities, except in limited circumstances. Owners
of beneficial interests must exercise any rights in respect of
their interests, including any right to convert or require
repurchase of their interests in the preferred stock, in
accordance with the procedures and practices of DTC. Beneficial
owners will not be holders and will not be entitled to any
rights provided to the holders of the preferred stock under the
global securities or the certificate of designations. Our
company and any of our agents may treat DTC as the sole holder
and registered owner of the global securities.
DTC has advised us as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a
banking organization within the meaning of the New
York Uniform Commercial Code, and a clearing agency
registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC facilitates the settlement of transactions
among its participants through electronic computerized
book-entry changes in participants accounts, eliminating
the need for physical movement of securities certificates.
DTCs participants include securities brokers and dealers,
including the underwriters, banks, trust companies, clearing
corporations and other organizations, some of whom and/or their
representatives own DTC. Access to DTCs book-entry system
is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
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Exchange of Global Securities
The preferred stock, represented by one or more global
securities, is exchangeable for certificated securities with the
same terms only if:
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DTC is unwilling or unable to continue as depositary or if DTC
ceases to be a clearing agency registered under the Exchange Act
and a successor depositary is not appointed by us within
90 days; or |
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we decide to discontinue use of the system of book-entry
transfer through DTC (or any successor depositary). |
Registration Rights
On December 21, 2004, we entered into a registration rights
agreement with the placement agents for the benefit of the
holders of the preferred stock and our common stock issuable on
conversion of the preferred stock. Under this agreement, we
agreed to, at our cost:
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on or prior to the 120th day after the first date of original
issuance of the preferred stock, file a shelf registration
statement, of which this prospectus is a part, with the SEC
covering resales of the preferred stock and our common stock
issuable on conversion of the preferred stock; |
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use commercially reasonable efforts to cause the shelf
registration statement, of which this prospectus is a part, to
be declared effective under the Securities Act no later than
210 days after the first date of original issuance of the
preferred stock; and |
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use commercially reasonable efforts to keep the shelf
registration statement effective after its effective date until
the earlier of: (1) the sale pursuant to such shelf
registration statement of all of the preferred stock and any of
our common stock issued upon conversion of the preferred stock;
(2) the expiration of the holding period applicable to the
preferred stock and our common stock issuable upon conversion of
the preferred stock held by non-affiliates of NRG under
Rule 144 (k) under the Securities Act, or any
successor provision; and (3) the date on which all of the
preferred stock and any of our common stock issued upon
conversion of the preferred stock (i) cease to be
outstanding or (ii) have been resold pursuant to
Rule 144 under the Securities Act. |
We have the right to suspend use of the shelf registration
statement during specified periods of time for any bona fide
reason, including pending corporate developments and public
filings with the SEC and similar events for a period not to
exceed 30 days in any three-month period and not to exceed
an aggregate of 90 days in any 12-month period. If the
shelf registration statement is not declared effective on or
prior to the 210th day after the first date of original issuance
of the preferred stock or, after the shelf registration
statement has been declared effective, we fail to keep the shelf
registration statement effective or usable in accordance with
and during the periods specified in the registration rights
agreement, other than the periods during which we are permitted
to suspend registration, then, in each case, we will pay
liquidated damages to all holders of preferred stock and all
holders of our common stock issued on conversion of preferred
stock equal to (i) in respect of each $1,000 liquidation
preference of preferred stock outstanding, at a rate per annum
equal to 0.25% of such liquidation preference, and (ii) in
respect of any outstanding common stock issued upon conversion
of preferred stock, at a rate per annum equal to 0.25% of the
liquidation preference of preferred stock that would then be
convertible into such number of stock. So long as the failure to
file or become effective or such unavailability continues, we
will pay liquidated damages in cash on March 15,
June 15, September 15 and December 15 of each year to the
person who is the holder of record of the preferred stock or
common stock issued in respect of the preferred stock, as
applicable, on the immediately preceding March 1,
June 1, September 1 and December 1. When such
registration default is cured, accrued and unpaid liquidated
damages through the date of cure will be paid in cash on the
subsequent interest payment date to the record holder. Holders
of our common stock issued in respect of the preferred stock
that have been transferred pursuant to the shelf registration
statement or in accordance with Rule 144 or that are
eligible for resale under Rule 144(k) will not be entitled
to be included in the shelf registration statement covering
resales and shall not be entitled to liquidated damages.
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Only holders of registrable securities who have been named in
this prospectus and have satisfied certain other conditions will
be entitled to receive any additional interest that may be
payable because the shelf registration statement is not
effective or usable in accordance with and during the periods
specified in the registration rights agreement, other than the
periods during which we are permitted to suspend registration.
Upon any sale or other transfer of any shares of preferred stock
or shares of common stock issued upon conversion of preferred
stock pursuant to the registration statement of which this
prospectus is a part, such shares of preferred stock or shares
of common stock, as the case may be, will cease to be
registrable securities, and our obligation to pay additional
interest, if any, in respect of those shares of preferred stock
or shares of common stock will terminate.
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LEGAL MATTERS
The validity of the preferred stock and common stock to be
offered by this prospectus is being passed on for us by Skadden,
Arps, Slate, Meagher & Flom LLP, New York, NY.
EXPERTS
The consolidated financial statements and schedule of NRG
Energy, Inc. as of December 31, 2004, and for the year then
ended, and managements assessment of the effectiveness of
internal control over financial reporting as of
December 31, 2004, have been incorporated by reference
herein in reliance upon the reports of KPMG LLP, independent
accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated financial statements of NRG for the period
December 6, 2003 through December 31, 2003, the period
January 1, 2003 through December 5, 2003 and the year
ended December 31, 2002 incorporated in this prospectus by
reference to NRGs annual report on Form 10-K for the
year ended December 31, 2004 have been so incorporated in
reliance on the reports of PricewaterhouseCoopers LLP, an
independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of West Coast Power LLC
incorporated in this prospectus by reference to NRGs
annual report on Form 10-K for the year ended
December 31, 2004 have been so incorporated in reliance on
the reports of PricewaterhouseCoopers LLP, an independent
registered public accounting firm, given on the authority of
said firm as experts in auditing and accounting.
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PROSPECTUS
No
dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this
prospectus. You must not rely on any unauthorized information or
representations. This prospectus is an offer to sell only the
shares offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
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Item 14. |
Other Expenses of Issuance and Distribution |
The following table sets forth the fees and expenses payable by
the Registrant in connection with the issuance and distribution
of the securities being registered. Except for the Securities
and Exchange Commission Registration Fee, all amounts are
estimates.
|
|
|
|
|
Securities and Exchange Commission Registration Fee
|
|
$ |
49,434 |
|
Printing and Engraving Fees and Expenses
|
|
$ |
10,000 |
|
Accounting Fees and Expenses
|
|
$ |
100,000 |
|
Legal Fees and Expenses
|
|
$ |
300,000 |
|
Transfer Agent Fees
|
|
$ |
50,000 |
|
Miscellaneous
|
|
$ |
10,000 |
|
|
|
|
|
|
|
$ |
519,434 |
|
|
|
|
|
Reference is made to the Plan of Distribution for
the description of expenses to be incurred by the Selling
Stockholders.
|
|
Item 15. |
Indemnification of Directors and Officers |
Section 145 of the Delaware General Corporation Law, or
DGCL, authorizes a corporation, subject to the procedures and
limitations stated therein, to indemnify its directors,
officers, employees and agents against expenses, including
attorneys fees, judgments, fines and amounts paid in
settlement reasonably incurred provided they act in good faith
and in a manner reasonably believed to be in or not opposed to
the best interests of the corporation, although in the case of
proceedings brought by or on behalf of the corporation,
indemnification is limited to expenses and is not permitted if
the individual is adjudged liable to the corporation, unless the
court determines otherwise. The statute provides that
indemnification pursuant to its provisions is not exclusive of
other rights of indemnification to which a person may be
entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
Article NINE of our Amended and Restated Certificate of
Incorporation provides for the limitation of liability of
directors and for the indemnification of directors and officers.
Article NINE states that to the fullest extent permitted by
the DGCL, and except as otherwise provided in our Amended and
Restated By-laws, (i) no director of the Company shall be
liable to the Company or its stockholders for monetary damages
arising from a breach of fiduciary duty owed to the Company or
its stockholders; and (ii) the Company shall indemnify its
officers and directors.
Set forth below are material provisions of Article V of our
by-laws that authorize the indemnification of directors and
officers:
|
|
|
|
|
Section 1 of Article V provides that our directors and
officers shall be indemnified and held harmless by the Company
to the fullest extent authorized by the DGCL. In addition, this
right of indemnification continues to persons who have ceased to
be our directors or officers and to his or her heirs, executors
and administrators; provided, however, that, except with respect
to proceedings to enforce rights to indemnification, the Company
shall not indemnify any such indemnitee in connection with a
proceeding initiated by such indemnitee except to the extent
such proceeding was authorized in writing by the board of
directors of the Company. |
|
|
|
Section 3 of Article V provides that the Company may
purchase and maintain insurance on its own behalf and on behalf
of any person who is or was a director, officer, employee or
agent of the Company against any expense, liability or loss
asserted against him or her and incurred by him or her in any
such capacity, |
II-1
|
|
|
|
|
whether or not the Company would have the power to indemnify
such person against such expenses, liability or loss under the
DGCL. |
|
|
|
Section 5 of Article V provides that the rights to
indemnification conferred in Article V of our by-laws and
in our certificate of incorporation shall not be exclusive of
any other right which any person may have or hereafter acquire
under any statute, by-law, agreement, vote of stockholders or
disinterested directors or otherwise. |
Item 16. Exhibits
The following is a list of all exhibits filed as a part of this
registration statement on Form S-3.
|
|
|
|
|
Exhibit |
|
|
Number |
|
Description of Exhibits |
|
|
|
|
3 |
.1 |
|
Amended and Restated Certificate of Incorporation (Incorporated
herein by reference to NRG Energy, Inc.s Annual Report on
Form 10-K for the fiscal year ended December 31, 2003). |
|
|
3 |
.2 |
|
Amended and Restated By-Laws (Incorporated herein by reference
to NRG Energy Inc.s Current Report on Form 8-K filed
March 3, 2005). |
|
|
3 |
.3 |
|
Certificate of Designations of 4.0% Convertible Perpetual
Preferred Stock, as filed with the Secretary of State of the
State of Delaware on December 20, 2004 (Incorporated herein
by reference to Exhibit 3.1 to NRG Energy Inc.s
Current Report on Form 8-K filed December 27, 2004). |
|
|
4 |
|
|
Registration Rights Agreement, dated as of December 20,
2004, by and among NRG Energy, Inc., Citigroup Global Markets
Inc., and Deutsche Bank Securities Inc. (Incorporated herein by
reference to Exhibit 4.1 to NRG Energy Inc.s Current
Report on Form 8-K filed December 27, 2004). |
|
|
5 |
.1 |
|
Opinion of Skadden, Arps, Slate, Meagher & Flom LLP. |
|
|
12 |
.1 |
|
Statement of Computation of Ratio of Earnings to Fixed Charges
and Preference Dividends. |
|
|
23 |
.1 |
|
Consent of KPMG LLP, independent registered public accounting
firm. |
|
|
23 |
.2 |
|
Consent of PricewaterhouseCoopers LLP, independent registered
public accounting firm. |
|
|
23 |
.3 |
|
Consent of PricewaterhouseCoopers LLP, independent registered
public accounting firm (with respect to West Coast Power LLC). |
|
|
23 |
.4 |
|
Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1). |
|
|
24 |
.1 |
|
Power of Attorney (included in Signature Page hereto). |
|
|
99 |
.1 |
|
Consent of Person Named as About to Become a Director. |
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement: (i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 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 (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or
Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
II-2
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrants annual report
pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plans annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers, and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act 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.
(d) The undersigned registrant hereby undertakes that:
|
|
|
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a 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 this registration statement as
of the time it was declared effective. |
|
|
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be determined to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be determined to be the initial bona fide offering
thereof. |
II-3
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 the requirements for filing on Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Princeton, State of New Jersey, on March 30, 2005.
|
|
|
|
Title: |
President and Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature to this registration statement
appears below hereby constitutes and appoints David Crane,
Timothy W.J. OBrien and Tanuja M. Dehne as his
attorneys-in-fact, with full power of substitution, to sign on
his behalf, individually and in the capacities stated below, and
to file (i) any and all amendments and post-effective
amendments to this registration statement and (ii) any
registration statement relating to the same offering pursuant to
Rule 462(b) under the Securities Act of 1933 which
amendments or registration statements may make such changes and
additions as such attorneys-in-fact may deem necessary or
appropriate. 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.
|
|
|
|
|
|
|
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
/s/ David Crane
David
Crane |
|
President, Chief Executive
Officer and Director
(Principal Executive Officer) |
|
March 30, 2005 |
|
/s/ Robert C. Flexon
Robert
C. Flexon |
|
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer) |
|
March 30, 2005 |
|
/s/ James J. Ingoldsby
James
J. Ingoldsby |
|
Vice President and Controller
(Principal Accounting Officer) |
|
March 30, 2005 |
|
/s/ John F. Chlebowski
John
F. Chlebowski |
|
Director |
|
March 30, 2005 |
|
/s/ Lawrence S. Coben
Lawrence
S. Coben |
|
Director |
|
March 30, 2005 |
|
/s/ Howard E. Cosgrove
Howard
E. Cosgrove |
|
Director |
|
March 30, 2005 |
|
/s/ Stephen L. Cropper
Stephen
L. Cropper |
|
Director |
|
March 30, 2005 |
II-4
|
|
|
|
|
|
|
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
/s/ Herbert H. Tate
Herbert
H. Tate |
|
Director |
|
March 30, 2005 |
|
/s/ Thomas H. Weidemeyer
Thomas
H. Weidemeyer |
|
Director |
|
March 30, 2005 |
|
/s/ Walter R. Young
Walter
R. Young |
|
Director |
|
March 30, 2005 |
II-5
EXHIBIT INDEX
|
|
|
|
|
Exhibit |
|
|
Number |
|
Description of Exhibits |
|
|
|
|
3 |
.1 |
|
Amended and Restated Certificate of Incorporation (Incorporated
herein by reference to NRG Energy, Inc.s Annual Report on
Form 10-K for the fiscal year ended December 31,
2003). |
|
|
3 |
.2 |
|
Amended and Restated By-Laws (Incorporated herein by reference
to NRG Energy, Inc.s Current Report on Form 8-K filed
March 3, 2005). |
|
|
3 |
.3 |
|
Certificate of Designations of 4.0% Convertible Perpetual
Preferred Stock, as filed with the Secretary of State of the
State of Delaware on December 20, 2004 (Incorporated herein
by reference to Exhibit 3.1 to NRG Energy, Inc.s
Current Report on Form 8-K filed December 27, 2004). |
|
|
4 |
|
|
Registration Rights Agreement, dated as of December 20,
2004, by and among NRG Energy, Inc., Citigroup Global Markets
Inc., and Deutsche Bank Securities Inc. (Incorporated herein by
reference to Exhibit 4.1 to NRG Energy, Inc.s Current
Report on Form 8-K filed December 27, 2004). |
|
|
5 |
.1 |
|
Opinion of Skadden, Arps, Slate, Meagher & Flom LLP. |
|
|
12 |
.1 |
|
Statement of Computation of Ratio of Earnings to Fixed Charges
and Preference Dividends. |
|
|
23 |
.1 |
|
Consent of KPMG LLP, independent registered public accounting
firm. |
|
|
23 |
.2 |
|
Consent of PricewaterhouseCoopers LLP, independent registered
public accounting firm. |
|
|
23 |
.3 |
|
Consent of PricewaterhouseCoopers LLP, independent registered
public accounting firm (with respect to West Coast Power LLC). |
|
|
23 |
.4 |
|
Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1). |
|
|
24 |
.1 |
|
Power of Attorney (included in Signature Page hereto). |
|
|
99 |
.1 |
|
Consent of Person Named as About to Become a Director. |
II-6