Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-31259
Prospectus
DIVIDEND
REINVESTMENT AND STOCK PURCHASE PLAN
BORGWARNER
INC.
500,000
Shares
Common
Stock
-----------------------------------------------------
BorgWarner
Inc. (the "Company"), through its Dividend Reinvestment and Stock Purchase
Plan
(the "Plan"), hereby offers to stockholders and other interested parties the
opportunity to purchase shares of our Common Stock, $.01 par value, ("Common
Stock"), through the Plan. Under the Plan you can purchase our Common
Stock by making initial cash purchases and optional cash purchases
and automatic reinvesting your cash dividends into additional shares of
Common Stock. No trading fees will be charged on any shares purchased through
either initial or optional cash purchases or reinvested dividends.
Shares
of
Common Stock needed to meet the requirements of the Plan will either be
purchased in the open market or issued directly by the Company from authorized
but unissued shares or treasury shares. If shares are purchased on the open
market, the price per share will be the weighted average price of shares
purchased to satisfy Plan requirements. If shares are purchased from the
Company, the price per share will be the average of the daily high and low
sale
prices quoted on the NYSE composite tape for the Investment Date.
The
Company's
Common Stock is listed on the New York Stock Exchange ("NYSE") under the ticker
BWA. The closing price of the Common Stock on December 15, 2006 as
shown
by the NYSE composite tape was $57.76.
This
prospectus describes and constitues the BorgWarner Dividend Reinvestment and
Stock Purchase Plan. Please read this prospectus carefully and keep it for
future reference. If you have any questions about the Plan, please call
the Plan administrator Mellon Bank N.A. at (800) 851-4229 between 8:00 a.m.
and
9:00 p.m.eastern time, on any business day. See
"Administration."
The
Company is a leading global Tier 1 supplier of highly engineered systems and
components, primarily to original equipment manufacturers ("OEMs") of passenger
cars, sport utility vehicles and light trucks. We are an original
equipment supplier to every major OEM in the world. The Company was
incorpoated in Delaware in 1987. Its executive offices are located at 3850
Hamlin Road, Auburn HIlls, Michigan 48326 and its telephone number is (248)
754-9200. References in this prospectus to "we," "our," "us," and
"BorgWarner" are to the Company.
To
the extent
required by applicable law in certain jurisdictions, including AZ, FL, NJ,
NC,
ND and TX, shares of Common Stock offered under the Plan to persons not
presently record holders of Common Stock are offered only through a
broker/dealer registered in such jurisdictions.
------------------------------------------------------------------------------------------------------------
THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------------------------------------------------------------------------------------------
The
date
of this prospectus is December 15, 2006.
No
person is
authorized in connection with any offering made hereby to give any information
or to make any representations not contained or incorporated by reference in
this Prospectus or any Prospectus Supplement, and any information or
representation not contained or incorporated by reference herein or therein
must
not be relied upon as having been authorized by the Company or any other person.
This Prospectus is not an offer to sell, or a solicitation of any offer to
buy,
by any person in any jurisdiction in which it is unlawful for such person to
make such an offer or solicitation. Neither the delivery of this Prospectus
nor
any sale made hereunder shall, under any circumstances, create any implication
that the information contained herein is correct as of any time subsequent
to
the date of such information.
|
TABLE
OF CONTENTS
|
PAGE
|
|
Where
You Can Find More Information
|
4
|
|
Incorporation
of Certain Information by Reference
|
4 |
|
The
Plan
|
5 |
|
Risk
Factors
|
5 |
|
Administration
|
10 |
|
Plan
Service Fees
|
11 |
|
Eligibility/Enrollment
|
12 |
|
Purchase
Options
|
12 |
|
Purchase
of Shares for the Plan
|
13 |
|
Source
and Pricing of Shares
|
13 |
|
Sale
of Shares for the Plan
|
14 |
|
Book
Entry; Certificates for Shares; Share Safekeeping
|
14 |
|
Gift/Transfer
of Shares within the Plan
|
15 |
|
Reports
to Participants
|
15 |
|
Federal
Income Tax Consequences
|
16 |
|
Other
Information
|
16 |
|
Description
of Capital Stock
|
19 |
|
Commission
Position on Indemnification for Securities Act Liabilities
|
25 |
WHERE
YOU
CAN FIND MORE INFORMATION
We
file
annual, quarterly and current reports, proxy statements and other information
with the SEC. Copies of these reports, proxy statements and other information
may be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You may request copies of these documents by writing
to
the SEC and paying a fee for the copying costs. You may call the SEC at
1-800-SEC-0330 for further information on the operation of the Public Reference
Room. Also, the SEC maintains an internet site at www.sec.gov that contains
reports, proxy and information statements and other information regarding
issuers that file electronically with the SEC, including BorgWarner. Our SEC
filings are also available to the public from the SEC’s web site at
http://www.sec.gov. Our common stock is listed on the New York Stock Exchange
and information about us is also available at the NYSE’s office.
We
have filed
with the Commission a registration statement on Form S-3 (registration no.
333-31259) under the Securities Act with respect to the shares of Common Stock
being offered by this prospectus. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits thereto.
For further information with respect to the Company and the Common Stock,
reference is hereby made to such registration statement and the exhibits
thereto.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The
SEC
allows us to “incorporate by reference” certain of our publicly filed documents
into this prospectus, which means that we may disclose material information
to
you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus and any later information
that we file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
additional documents we file with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act at any time after the initial filing of the
registration statement, whether before or after it is declared effective, until
the offering of the securities is terminated. This prospectus is part of a
registration statement on Form S-3 that we filed with the SEC and does not
contain all of the information set forth in the registration
statement.
The
following
documents that we previously filed with the SEC (SEC File No. 001-12162) are
incorporated by reference; provided, however, that we are not incorporating,
in
each case, any document or information deemed to have been furnished and not
filed in accordance with SEC rules.
(1)
our
Annual Report on Form 10-K for the fiscal year ended December 31, 2005, filed
on
February 17, 2006;
(2)
our
Proxy Statement on Schedule 14A, relating to our annual meeting of stockholders
held on April 26, 2006, filed on March 23, 2006;
(3)
our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2006,
filed
on April 27, 2006;
(4)
our
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2006, filed
on July 27, 2006;
(5)
our
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2006,
filed on October 27, 2006;
(6)
our
Current Reports on Form 8-K filed February 1, February 8, April 27 (as to the
Form 8-K including Items 1.01, 5.02 and 9.01 on such date), September 22, and
October 30, 2006; and
(7)
the
description of our voting common stock contained in our registration statement
on Form S-3/A (Registration No. 333-84931) filed on September 21, 1999,
including any amendment or report filed for the purposes
of updating
such description.
We
will
provide at no cost to any person to whom a copy of this prospectus is delivered,
on written or oral request, a copy of any or all of the documents incorporated
by reference, other than exhibits to those documents, unless specifically
incorporated by reference. You should direct any requests for documents to
BorgWarner Inc., 3850 Hamlin Road, Auburn Hills, Michigan 48326, Attention:
Corporate Secretary.
RISK
FACTORS
You
should carefully
consider the following factors before you make any decision to invest in the
securities described in this prospectus and any accompanying prospectus
supplement.
Our
industry is cyclical and our results of operations will be adversely affected
by
industry downturns.
Automotive
and truck production and sales are cyclical and sensitive to general economic
conditions and other factors. Significant reduction in automotive or truck
production would have a material adverse effect on our sales to original
equipment manufacturers and our financial position and operating
results.
We
are dependent on sport utility vehicle and light truck market segments.
Some
of our
products, in particular four-wheel drive transfer cases, are currently used
exclusively in four-wheel drive systems for sport utility vehicles and light
trucks. For 2005, for example, sales of rear-wheel drive transfer cases
represented 12% of our total consolidated revenue. Any significant reduction
in
production in this market segment or loss of business in this market segment
would have a material adverse effect on our sales to original equipment
manufacturers and our financial position and operating results.
We
face strong competition.
We
compete
worldwide with a number of other manufacturers and distributors that produce
and
sell products similar to ours. Price, quality and technological innovation
are
the primary elements of competition. Our competitors include vertically
integrated units of our major original equipment manufacturer customers, as
well
as a large number of independent domestic and international suppliers. We are
not as large as a number of these companies and do not have as many financial
or
other resources. The competitive environment has changed dramatically over
the
past few years as our traditional U.S. original equipment manufacturer
customers, faced with intense international competition, have expanded their
worldwide sourcing of components. As a result, we have experienced competition
from suppliers in other parts of the world that enjoy economic advantages,
such
as lower labor costs, lower health care costs and, in some cases, export or
raw
materials subsidies. Increased competition could adversely affect our
businesses.
We
are under substantial pressure from original equipment manufacturers to reduce
the prices of our products.
There
is
substantial and continuing pressure on original equipment manufacturers to
reduce costs, including costs of products we supply. Although original equipment
manufacturers have indicated that they will continue to rely on outside
suppliers, a number of our major original equipment manufacturer customers
manufacture products for their own uses that directly compete with our products.
These original equipment manufacturers could elect to manufacture such products
for their own uses in place of the products we currently supply. We believe
that
our ability to develop proprietary new products and to control our costs will
allow us to remain competitive. However, we cannot assure you that we will
be
able to improve or maintain our gross margins on product sales to original
equipment manufacturers or that the recent trend by original equipment
manufacturers towards increased outsourcing will continue.
Annual
price
reductions to original equipment manufacturer customers appear to have become
a
permanent feature of our business environment. In 2005 and 2004, the combination
of price reductions to customers and cost increases for material, labor and
overhead, totaled approximately $139.6 million and $127.8 million, respectively.
To maintain our profit margins, we seek price reductions from our suppliers,
improve production processes to increase manufacturing efficiency, update
product designs to reduce costs and develop new products the benefits of which
support stable or increased prices. Our ability to pass through increased raw
material costs to our original equipment manufacturer customers is limited,
with
cost recovery less than 100% and often on a delayed basis. We cannot assure
you
that we will be able to reduce costs in an amount equal to annual price
reductions and increases in raw material costs.
We
rely on sales to several major customers.
Our
worldwide
sales in 2005 to Ford Motor Company, Volkswagen, DaimlerChrysler and General
Motors Corporation constituted approximately 16%, 13%, 12% and 9%, respectively,
of our 2005 consolidated sales. These four customers constituted approximately
50% of our 2005 sales. Credit rating agencies rate two of these customers below
investment grade. The corresponding percentages for 2004 were 21%, 10%, 14%
and
10%. No other single customer accounted for more than 10% of our consolidated
sales in 2005 or 2004.
Although
we
have had long-standing relationships with each of Ford, Volkswagen,
DaimlerChrysler, General Motors and have sold a wide variety of products to
various divisions of each company globally, the loss of any significant portion
of our sales to any of these customers would have a material adverse effect
on
our financial position and operating results.
We
are sensitive to the effects of our major customers’ labor relations.
All
three of
our primary North American customers, Ford, DaimlerChrysler and General Motors
have major union contracts with the United Automobile, Aerospace and
Agricultural Implement Workers of America. Because of domestic original
equipment manufacturers’ dependence on a single union, we are affected by labor
difficulties and work stoppages at original equipment manufacturers’ facilities.
Similarly, a majority of our global customers’ operations outside of North
America are also represented by various unions. Any work stoppage could have
a
material adverse effect on our financial position and operating results.
Part
of our labor force is unionized.
As
of
December 31, 2005, approximately 24% of our U.S. hourly employees were
unionized. Our two most significant domestic collective bargaining agreements
are for our Muncie, Indiana plant and our Ithaca, New York plants. The Muncie
agreement expires in May 2009 and the Ithaca agreement expires in October 2008.
The hourly workers at our European and certain Asian facilities are also
unionized. While we believe that our relations with our employees are good,
a
prolonged dispute with our employees could have a material adverse effect on
our
financial position and operating results.
We
are subject to extensive environmental regulations.
Our
operations are subject to laws governing, among other things, emissions to
air,
discharges to waters and the generation, handling, storage, transportation,
treatment and disposal of waste and other materials. We believe that our
business, operations and activities have been and are being operated in
compliance in all material respects with applicable environmental and health
and
safety laws. However, the operation of automotive parts manufacturing plants
entails risks in these areas, and we cannot assure you that we will not incur
material costs or liabilities as a result. Furthermore, through various
acquisitions over the years, we have acquired a number of manufacturing
facilities, and we cannot assure you that we will not incur materials costs
and
liabilities relating to activities that predate our ownership. In addition,
potentially significant expenditures could be required in order to comply with
evolving environmental and health and safety laws that may be adopted in the
future.
We
believe
that the overall impact of compliance with regulations and legislation
protecting the environment will not have a material adverse effect on our future
financial position or operating results, but we cannot assure you that this
will
be the case. Capital expenditures and expenses in 2005 attributable to
compliance with environmental laws were not material.
We
may have liability in our material costs related to product warranties,
environmental and regulatory matters, litigation and other
claims.
We
and
certain of our current and former direct and indirect corporate predecessors,
subsidiaries and divisions have been identified by the United States
Environmental Protection Agency and certain state environmental agencies and
private parties as potentially responsible parties at various hazardous waste
disposal sites under the Comprehensive Environmental Response, Compensation
and
Liability Act and equivalent state laws. As a result, as of December 31, 2005,
we may be liable for the cost of clean-up and other remedial activities at
38 of
these sites.
Based
on
information available to us, we have established an accrual in our financial
statements for indicated environmental liabilities, with a balance of
approximately $38.3 million at December 31, 2005. We currently expect this
amount to be expended over the next three to five years.
We
believe
that none of these matters, individually or in the aggregate, will have a
material adverse effect on our future financial position or operating results,
either because estimates of the maximum potential liability at a site are not
large or because liability will be shared with other potentially responsible
parties. However, we cannot assure you of the ultimate outcome.
We
provide
warranties to our customers for some of our products. Under these warranties,
we
may be required to bear costs and expenses for the repair or replacement of
these products. We cannot assure you that costs and expenses associated with
these product warranties will not be material, or that those costs will not
exceed any amounts accrued for such warranties in our financial
statement.
Based
upon
information available to us, we have established an accrual in our financial
statements for product warranties, with a balance of approximately $44.0 million
at December 31, 2005.
We
are also
party to, or have an obligation to defend a party to, various legal proceedings,
including those described in Note 14 to the Notes to the Consolidated Financial
Statements. Although we believe that none of these matters is likely to have
a
material adverse effect on our financial condition or future operating results,
there can be no assurance as to the ultimate outcome of any such matter or
proceeding.
Our
growth strategy may prove unsuccessful.
We
have a
stated goal of increasing revenues and operating revenues at a rate greater
than
global vehicle production by increasing content per vehicle with innovative
new
components and through select acquisitions. We may not meet our goal because
of
any of the following: (a) a significant decrease in the production of sport
utility vehicles and light trucks, high content vehicles for us; (b) the failure
to develop new products which will be purchased by our customers; (c) technology
changes rendering our products obsolete; (d) a reversal of the trend of
supplying systems (which allows us to increase content per vehicle) instead
of
components; and (e) the failure to find suitable acquisition targets or the
failure to integrate operations of acquired businesses quickly and cost
effectively.
We
are subject to risks related to our international
operations.
We
have
manufacturing and technical facilities in many regions and countries, including
North America, Europe, China, India, South Korea, Japan, and Brazil and sell
our
products worldwide. For 2005, approximately 55 percent of our sales were outside
North America. Consequently, our results could be affected by changes in trade,
monetary and fiscal policies, trade restrictions or prohibitions, import or
other charges or taxes, and fluctuations in foreign currency exchange rates,
changing economic conditions, and political instability and
disputes.
We
may not realize sales represented by awarded business.
We
base our
growth projections, in part, on commitments made by our customers. These
commitments generally renew yearly during a program life cycle. If actual
production orders from our customers do not approximate such commitments, it
could have a material adverse effect on our growth and financial
performance.
We
are impacted by the rising cost of providing pension and other postretirement
benefits.
The
automotive industry, like other industries, continues to be impacted by the
rising cost of providing pension and other postretirement benefits. To partially
address this impact, we adjusted certain retiree medical plans effective April
1, 2006 to provide certain participating retirees with continued access to
group
health coverage while reducing our subsidy of the program. See “Item 1. Legal
Proceedings” in our Current Report on Form 10-Q for the quarterly period ended
September 30, 2006 filed with the SEC and any additional descriptions in the
reports we subsequently file with the SEC.
Certain
defined benefit pension plans we sponsor are currently
underfunded.
We
sponsor
certain defined benefit pension plans worldwide that are underfunded and will
require cash payments. Additionally, if the performance of the assets in our
pension plans does not meet our expectations, or if other actuarial assumptions
are modified, our required contributions may be higher than we expect. See
Note
11 to our audited consolidated financial statements for the year ended December
31, 2005 and “New Accounting Pronouncements” in “Item 2. Management’s
Discussions and Analysis of Financial Condition and Results of Operations” in
our Current Report on Form 10-Q for the quarterly period ended September 30,
2006 filed with the SEC and any additional descriptions in the reports we
subsequently file with the SEC.
THE
PLAN
The
Plan
provides existing and potential investors the opportunity to make optional
or
initial cash purchases of our Common Stock directly from the Plan, thereby
avoiding fees and commissions. Under the Plan, optional cash purchases of our
Common Stock must be at least $50. Initial cash purchases of our Common Stock
must be at least $500. Purchases of our Common Stock (both optional and initial
cash purchases) can be no greater than $120,000 in a calendar year. Participants
in the Plan may also elect to reinvest all or a portion of their cash dividends
in additional shares of Common Stock. Participants, for no charge, may
deposit our Common Stock certificates with the Administrator for safekeeping.
Participants may also sell shares of our Common Stock through the
Plan.
ADMINISTRATION
The
Mellon
Bank N.A. (the "Administrator") has been appointed by the Company to act as
administrator of the Plan. The Administrator, as agent for Plan participants,
is
responsible for receiving all cash to be invested by participants and performing
other duties required by the Plan. The Administrator will forward funds to
be
used to purchase shares of Common Stock in the open market to Chase Securities,
Inc. ("Chase"), an affiliate of the Administrator. The Administrator also will
promptly forward instructions to sell shares to Chase. Chase is responsible
for
purchasing and selling shares of Common Stock in the open market for
participants' Plan accounts in accordance with the provisions of the Plan.
Additionally, Mellon Investor Services, L.L.C., an affiliate of the
Administrator, will perform certain services for the Plan, including keeping
records, sending statements of account activity to participants and other
ministerial duties.
For
information about the Plan, participants should contact Mellon Investor
Services:
Call
Mellon Investor Services: (800) 851-4229
Outside
the United States call collect: (201) 680-6578
Website
address: www.melloninvestor.com
E-mail
address: shrelations@melloninvestor.com
Participants
should send written requests and notices as follows:
A.
For
optional cash purchases:
The
Mellon Bank N.A.
c/o
Mellon Investor Services
Optional
Cash Investments
P.O.
Box
382009
Pittsburgh,
PA 15250
Check
or
money order should be made payable to The Mellon Bank N.A. in U.S. dollars.
Participants should use the transaction stub at the bottom of their statement
for optional cash purchases.
B.
For
correspondence and all requests except optional cash purchases:
The
Mellon Bank N.A.
c/o
Mellon Investor Services
P.O.
Box
3338
South
Hackensack, NJ 07606-1939
Participants
should include their daytime telephone number.
PLAN
SERVICE FEES
Fees
and
charges for the Plan are as follows:
|
Share
Safekeeping
|
No
charge
|
|
Certification
of Shares
|
No
charge
|
|
Initial
Cash Purchase
|
No
charge
|
|
Optional
Cash Purchase
|
No
charge
|
|
Sale
of Shares
|
$15.00
plus $0.12/share
|
|
Dividend
Reinvestment
|
No
charge
|
ELIGIBILITY/ENROLLMENT
To
participate in the Plan, the requirements listed below must be met. Citizens
or
residents of countries other than the United States should first determine
if
there are any governmental regulations which would prohibit participation in
the
Plan.
To
make an
initial cash purchase of Common Stock, you must forward a completed enrollment
form and the initial cash purchase to the Administrator. Initial cash purchases
must be at least $500. You may not sell or withdraw shares purchased by check
for a period of fifteen (15) calendar days from the receipt of the check by
the
Administrator. Payment can be made by check, money order or by automatic
withdrawal from a bank account. Interest will not be paid on funds held pending
investment. Funds will be held in an account for the exclusive benefit of Plan
participants pending investment.
Current
investors who hold Common Stock registered in their names may join the Plan
by
returning a completed enrollment form to the Administrator. Current investors
whose shares are held in a brokerage, bank or other intermediary account, should
(i) instruct their broker, bank or trustee to register some or all of their
Common Stock directly in their name and (ii) return a completed enrollment
form
to the Administrator. Unless investors make a written request for the issuance
of certificates, shares will be registered in book entry form. (See "Book Entry;
Certificates for Shares; Share Safekeeping" on page 8).
PURCHASE
OPTIONS
Dividends
Participants
in the Plan may elect (i) full reinvestment of cash dividends for the purchase
of additional shares of Common Stock or (ii) partial reinvestment of cash
dividends and partial payment of cash dividends. Participants who choose partial
dividend reinvestment may have their cash dividend payment deposited
electronically into their bank account instead of receiving a check by mail.
Participants may elect to reinvest dividends on as little as one share of Common
Stock. For participants who do not elect to reinvest their dividends, cash
dividends will be paid by check or electronic deposit, as chosen under the
Plan.
Optional
Cash Purchases
Participants
may purchase additional shares of Common Stock through the
Plan's optional cash purchases feature. The minimum optional cash purchase
is $50. The total investment (both initital and optional cash purchases )
allowed in any calendar year is $120,000 per participant. Optional cash
purchases can be made by check or money order, or by automatic withdrawal from
participant's bank accounts. Funds will be deducted from participant's
bank accounts on the 15th day of each month. If this date falls on a bank
holiday or weekend, funds will be deducted on the next business
day.
PURCHASE
OF SHARES FOR THE PLAN
The
Administrator will purchase our Common Stock using initial and optional cash
purchases as promptly as possible, but at least once each week. The
Administrator will reinvest dividends to purchase Common Stock on a quarterly
basis. Purchases can be made over a number of days to meet the requirements
of
the Plan.
SOURCE
AND PRICING OF SHARES
Common
Stock
needed to meet the requirements of the Plan will either be purchased by the
Administrator in the open market or issued directly by us from authorized but
unissued shares or treasury shares. Initially, Common Stock will be purchased
in
the open market.
If
shares are
purchased in the open market, whether for initial or optional cash purchases
or
dividend reinvestment, the price per share will be the weighted average price
of
shares purchased to satisfy Plan requirements.
If
the shares
are purchased from the Company, the price per share for initial and optional
cash purchases will be the average of the daily high and low sales prices quoted
on the NYSE composite tape for the relevant Investment Date. An "Investment
Date" is the date each week on which shares of Common Stock are allocated to
the
Plan accounts for participants who acquire shares through initial or optional
cash purchases. For quarterly reinvestment of dividends, the "Investment Date"
is the Dividend Payment Date, and the price per share will be the average of
the
daily high and low sales prices quoted on the NYSE composite tape for that
date.
In the event no trading is reported for the Investment Date, the purchase price
will be the average of the high and low sales prices of Common Stock for the
most recent business day for which trading for Common Stock was reported on
the
NYSE composite tape.
Timing
and Control
Because
the
Administrator will arrange for the open market purchase of shares on behalf
of
the Plan neither the Company nor any participant in the Plan has the authority
or power to control the timing or pricing of shares purchased or the selection
of the broker making the purchases. Therefore, Participants will not be able
to
precisely time their purchases through the Plan, and will bear the market risk
associated with fluctuations in the price of the Common Stock. It is possible
that the market price of the Common Stock could go up or down before the broker
purchases Common Stock with a participant's funds. In addition, participants
will not earn interest on initial or optional cash purchases for the period
before the shares are purchased.
SALE
OF
SHARES FOR THE PLAN
Participants
may sell any number of shares held in their Plan account or other eligible
book
entry shares by notifying the Administrator. The Administrator will arrange
for
sales to be made at least weekly. Sales may be made more frequently if volume
dictates. The sale price will be the weighted average price of all shares sold
for Plan participants during that period. Participants will receive the proceeds
of the sale less a $15 sales transaction fee, a $0.12 per share trading fee,
and
any required tax withholdings. Participants may choose to sell their shares
through a stockbroker of their choice, in which case they should contact the
Administrator to authorize a transfer to their broker or request a certificate
for their shares. If a participant's total holdings fall below one share, the
Administrator will liquidate the fractional share and remit the proceeds, less
any applicable fees, and close the Plan account.
Timing
and Control
Because
the
Administrator will sell the shares on behalf of the Plan, neither the Company
nor any participant in the Plan has the authority or power to control the timing
or pricing of shares sold or the selection of the broker making the sales.
Therefore, participants will not be able to precisely time the sales through
the
Plan and will bear the market risk associated with fluctuation in the price
of
the Common Stock. It is possible that the market price of the Common Stock
could
go down or up before the broker sells a participant's shares. In addition,
participants will not earn interest on a sales transaction.
BOOK
ENTRY; CERTIFICATES FOR SHARES; SHARE SAFEKEEPING
Shares
purchased under the Plan will be maintained in participants' Plan accounts
in
book entry form. Certificates for shares will be issued only upon written
request to the Administrator. Participants may use the Plan's share safekeeping
service to deposit with the Administrator any shares of Common Stock in their
possession. Safekeeping is beneficial because participants no longer bear the
risks associated with loss, theft or destruction of stock certificates. With
safekeeping, participants have the options of reinvesting their dividends or
receiving cash dividends, or selling their shares under the Plan. To use the
safekeeping service, participants should send their certificates to Mellon
Investor Services by registered mail with written instruction to deposit them
in
safekeeping. If participants use registered mail, their certificates will be
automatically covered by an Administrator blanket bond up to the first $100,000
of value. Participants should not endorse the certificates or complete the
assignment section.
GIFT/TRANSFER
OF SHARES WITHIN THE PLAN
Participants
can give or transfer shares of Common Stock to anyone they choose
by:
Making
an
initial $500 cash purchase to establish an account in a recipient's
name; or
Submitting
an
optional cash purchase on behalf of an existing Participant in the Plan in
an
amount not less than $50; or
Transferring
shares from their account to the recipient.
Participants
must transfer a whole number of shares unless the entire account is transferred.
Participants may transfer shares to new or existing shareholders. Mellon
Investor Services will automatically place such new accounts in full dividend
reinvestment status. New participants, at their discretion, may elect another
option. Requests by participants who reinvest dividends to either (i) transfer
all their shares or (ii) make a partial sale and transfer the balance of their
shares may have processing of their request held until after their account
is
credited with reinvested dividends if their request is received between the
ex-dividend and the dividend payment date. This hold period could be as long
as
four weeks.
Upon
requesting a gift or transfer, participants must have their signature guaranteed
by a financial institution participating in the Medallion Guarantee program.
The
Medallion Guarantee program ensures that the individual signing the certificate
is in fact the registered owner as it appears on the stock certificate or stock
power.
Participants
should contact their bank or broker for more information regarding the Medallion
Guarantee program. Please call Mellon Investor Services at (800) 851-4229 for
additional assistance.
REPORTS
TO PARTICIPANTS
If
participants reinvest dividends, the Administrator will mail a quarterly
statement showing all transactions (shares, amounts invested, purchase prices,
sale prices) for the account including year-to-date and other account
information. Supplemental statements or notices will be sent when participants
make an initial or optional cash purchase or a deposit, transfer, withdrawal
or
other change in share holdings.
If
participants do not reinvest dividends, the Administrator will promptly mail
a
statement or notice confirming any transactions, including transfers and
certificate deposits. Such participants who continue to be enrolled in the
Plan,
but have no transactions, will receive an annual statement of
holdings.
Participants
should retain their account statements to establish the cost basis of shares
purchased under the Plan for income tax and other purposes.
Participants
should notify the Administrator promptly of any change in address since all
notices, statements and reports will be mailed to the address of
record.
FEDERAL
INCOME TAX CONSEQUENCES
The
following
discussion relates to the material federal income tax consequences of
participation in the Plan. The effect of such tax consequences upon any
participant will depend upon such participant's individual circumstances which
together with the state and local tax consequences of participation should
be
discussed by each participant with his or her tax advisor.
A
Participant
will be required to include in federal taxable income dividend amounts
reinvested in Common Stock pursuant to the Plan even though the participant
does
not actually receive the dividend amount in cash. When the Administrator
purchases Common Stock for a participant's account on the open market with
reinvested dividends, the amount of the dividend included in taxable income
will
also include that portion of any trading fees, service charges and any
applicable taxes paid by the Company that are attributable to the acquisition
of
the shares.
A
participant's tax basis in shares acquired pursuant to the Plan is in general
equal to the amount of the dividend income included in federal taxable income
described above. Such shares of Common Stock will have a holding period
beginning on the day after the shares are allocated to the participant's
account.
A
participant
will not realize any taxable income upon the participant's request for
certificates for certain or all shares acquired pursuant to the Plan. However,
a
Participant will realize gain or loss when shares held by the participant or
shares held in the participant's Plan account are sold.
OTHER
INFORMATION
Stock
Split, Stock Dividend and Other Distributions
In
the event
dividends are paid in Common Stock, or Common Stock is distributed in connection
with any stock split or similar transaction, each account will be adjusted
to
reflect the receipt of the Common Stock so paid or distributed.
Voting
of
Plan Shares
Participants
will have the exclusive right to exercise all voting rights for shares of Common
Stock held in their account. The Administrator will forward all shareholder
material relating to shares of Common Stock held in a participant's account
to
the participant. Shares held in a Plan account may be voted in person or by
proxy received by the participant prior to any meeting of the shareholders.
Shares of Common Stock held in a participant's account will not be voted unless
the participant or his or her proxy votes them.
Limitation
of Liability
Neither
the
Company nor the Administrator (nor any of their respective agents,
representatives, employees, officers, directors, or subcontractors) will be
liable to Plan participants in administering the Plan for any act done in good
faith or for any good faith omission to act, including, without limitation,
any
claim of liability arising from (i) failure to terminate a participant's account
upon a participant's death or adjudicated incompetency, prior to the receipt
of
notice in writing of such death or adjudicated incompetency, (ii) the prices
or
times at which shares are purchased or sold for participants or (iii)
fluctuations in the market value of the Common Stock.
Change
or
Termination of the Plan
In
its sole
discretion, the Company may suspend, modify, or terminate the Plan at any time
in whole, in part, or with respect to participants in one or more jurisdictions.
Notice of such suspension, modification, or termination will be sent promptly
to
all participants. Upon any whole or partial termination of the Plan, the Plan
accounts of affected participants shall be treated as individual book entry
accounts. Fractional shares in Plan accounts will be sold in the open market
in
the aggregate and their cash value determined for each account by reference
to
the price received for sales of all shares, including fractions in the aggregate
(less trading fees, related service charges and applicable taxes, as described
herein), for the relevant sale date. A check for the proceeds of the fractional
share sale will be sent to each Participant at his or her latest address of
record. Dividends paid thereafter on shares held in individual book entry
accounts shall be transmitted via check.
Termination
of Individual Participation
In
its sole
discretion, the Company may suspend, modify or terminate the Plan account of
any
participant after advance written notice is mailed to the participant at the
address appearing on the Administrator's records. Upon any whole or partial
termination of a Plan account, the Plan accounts of affected participants shall
be treated as individual book entry accounts. Fractional shares in Plan accounts
will be sold in the open market and their cash value determined for each account
by reference to the price received for sales of all shares, including fractions
in the aggregate (less trading fees, related service charges and applicable
taxes, as described herein), for the relevant sale date. A check for the
proceeds of the fractional share sale will be sent to each participant at his
or
her latest address of record. Dividends paid thereafter on shares held in
individual book entry accounts shall be transmitted via check.
A
participant
may request termination of his or her participation in the Plan at any time.
Upon termination, the participant may instruct the Administrator to send the
appropriate stock certificates for all whole shares of Common Stock in the
Plan
account to the participant's address of record. A participant will receive
a
check for the liquidation proceeds for any fractional share held in his or
her
Plan account at the date of termination. Fractional shares in Plan accounts
for
terminating Participants will be sold in the open market and their cash value
determined for each account by reference to the price
received together with other fractions and whole shares to be sold for other
participants (less trading fees, related service charges and applicable taxes,
as described herein) for the relevant sale date. After participation in the
Plan
has been terminated, no further investments may be made without re-enrolling
in
the Plan.
Participants
may also terminate participation in the Plan by requesting the Administrator
to
sell all shares in his or her Plan account. Upon such request, the Administrator
shall sell such shares in the manner described in the section entitled "Sale
of
Shares for the Plan." The check a participant will receive from the
Administrator upon such termination will include the sale proceeds of whole
shares in the Plan account plus the liquidation value of any fractional share.
Fractional shares in Plan accounts will be sold in the open market together
with
other fractions and whole shares to be sold for other participants and their
cash value determined for each account by reference to the price received for
all whole shares sold (less trading fees, related service charges and applicable
taxes, as described herein) for the relevant sale date.
Participants
may also be able in the future to terminate participation in the Plan by
requesting the Administrator to transfer all the participant's plan shares
electronically to a financial intermediary the participant designates. These
services are not fully operational on an industry-wide basis as of this
date.
Use
of
Proceeds
It
is
expected that shares of Common Stock needed to meet the requirements of the
Plan
will be purchased on the open market. From time to time, the Company may elect
to have the Plan purchase Common Stock directly from the Company in the form
of
authorized but unissued or treasury shares. The Company intends to use any
net
proceeds from the sales of such shares for general corporate
purposes.
Legal
Matters
Laurene
H.
Horiszny, Vice President, Secretary and General Counsel of the Company, has
given her opinion concerning the validity of the Common Stock covered by this
Prospectus. Ms. Horiszny owns Common Stock and is eligible to participate in
the
Plan.
Foreign
Participation
Participants
who live outside the United States should determine whether any laws or
governmental regulations prohibit their participation in the Plan. In addition,
the Company reserves the right to terminate participation of any shareholder
if
it deems it advisable under any foreign law or regulation.
Experts
The
consolidated financial statements as of December 31, 2005 and 2004, and for
each
of the three years in the period ended December 31, 2005 and management’s report
on the effectiveness of internal control over financial reporting as of December
31, 2005, included and incorporated by reference in the registration statement,
including the prospectus, have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their reports,
which
are included and incorporated by reference herein, and have been so included
and
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
DESCRIPTION
OF CAPITAL STOCK
The
following summary description of our common stock is based on the provisions
of
our restated certificate of incorporation and by-laws and the applicable
provisions of the Delaware general corporation law. This information is
qualified entirely by reference to the provisions of our restated certificate
of
incorporation, our by-laws and the Delaware general corporation law. For
information on how to obtain copies of our restated certificate of incorporation
and by-laws, see “Where You Can Find More Information.”
Authorized
Capital
We
currently have authority to issue 180,000,000 shares of capital stock,
consisting of 5,000,000 shares of preferred stock, $0.01 par value, 150,000,000
shares of voting common stock, $0.01 par value, and 25,000,000 shares of
non-voting common stock, $0.01 par value. As of September 30, 2006,
57,555,044 shares of our voting common stock were issued and outstanding, and
no
shares of our non-voting common stock or preferred stock were issued or
outstanding.
The
rights of the holders of our voting and non-voting common stock discussed below
are subject to the rights that our board of directors may from time to time
confer on holders of our preferred stock issued in the future. These rights
may
adversely affect the rights of holders of our voting common stock, non-voting
common stock, or both.
Requirements
for Advance Notification or Stockholder Proposals and Nominations
Our
by-laws contain provisions requiring that a stockholder deliver advance notice
of any business that such stockholder intends to raise at an annual meeting
of
stockholders and providing for procedures to be followed if a stockholder wishes
to nominate a person to be elected as a director. To be timely, the stockholder
must give written notice to our Secretary not less than 60 days nor more than
90
days prior to the first anniversary of the preceding year’s annual meeting. If
the date of the next annual meeting is more than 30 days before, or more than
60
days after, the first anniversary of the preceding year’s annual meeting, the
stockholder must deliver notice to our Secretary not earlier than the 90th
day
prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the 10th day following
the
day on which public announcement of the date of such meeting is first made.
The
notice must provide information about the stockholder giving the notice and
the
beneficial owner, if any, on whose behalf the nomination or proposal is being
made, each person whom the stockholder proposes to nominate for election or
reelection as director, and the business to be brought before the meeting.
In
addition, if we plan to increase the size of our board of directors, and we
do
not publicly announce all of the nominees for election or specify the size
of
the increased board of directors at least 70 days prior to the first anniversary
of the preceding year’s annual meeting, a stockholder will have ten days
following the date of our public announcement to give notice with respect to
nominees for any new positions created by such increase.
Special
Meetings
Subject
to the rights of holders of preferred stock, special meetings of stockholders
may be called only by our board of directors pursuant to a resolution approved
by a majority of the total number of directors, or by a person or committee
expressly so authorized by our board of directors pursuant to a resolution
approved by a majority of the total number of directors. According to our
by-laws, if we call a special meeting to elect directors to our board of
directors, a stockholder may nominate individuals for election if such
stockholder delivers notice to our Secretary not earlier than the 90th day
prior
to such special meeting and not later than the close of business on the later
of
the 60th day prior to such special meeting or the 10th day following the day
on
which public announcement is first made of the date of the special meeting
and
of the nominees proposed by our board of directors to be elected at such
meeting.
Voting
Rights
Each
holder
of our common stock is entitled to one vote per share in the election of
directors and on all other matters submitted to a vote of stockholders, and
does
not have cumulative voting rights. In general, holders of our non-voting common
stock do not have voting rights, other than those required by law. However,
holders of non-voting common stock may vote as a separate class on amendments
to
the restated certificate of incorporation that adversely affect their powers,
preferences or special rights as holders of non-voting common stock.
Conversion
Rights
Qualified
institutional investors who are subject to regulatory requirements that forbid
or limit their right to own general voting stock may convert their common stock
into non-voting common stock on a share-for-share basis as needed to satisfy
applicable regulatory requirements, or directly purchase non-voting common
stock
because of such regulatory requirements. Thereafter, the non-voting common
stock
may be converted into common stock on a share-for-share basis in such
circumstances as are permitted by applicable regulatory
requirements.
Dividends
Subject
to
any preferential rights of any of our outstanding preferred stock, holders
of
our common stock and non-voting common stock, treated as a single class, are
entitled to receive, based on the number of shares held, cash dividends when
and
as declared by our board of directors from funds legally available for such
purpose.
Rights
Upon Liquidation
If
we
liquidate, holders of our common stock and non-voting common stock, treated
as a
single class, are entitled to receive, based on the number of shares held,
all
of the assets available for distribution to stockholders after payment of all
prior claims, including any preferential liquidation rights of any preferred
stock outstanding at that time. The holders of our common stock and non-voting
common stock do not have any redemption rights.
No
Action
by Written Consent
Subject
to the rights of holders of preferred stock, any action required or permitted
to
be taken by our stockholders must be effected at an annual or special meeting
of
stockholders and may not be affected by any consent in writing by such
stockholders.
Other
Rights
The
holders
of our common stock and non-voting common stock do not have preemptive rights
to
subscribe to any additional shares of any class of our capital stock. All of
our
outstanding shares of common stock are, and, upon conversion or exchange, any
issued shares of our common stock and/or non-voting common stock will be, fully
paid and non-assessable. Our common stock and non-voting common stock do not
have any sinking fund provisions.
Our
voting
common stock is listed for trading on the New York Stock Exchange under the
symbol “BWA” and the transfer agent and registrar for our voting common stock is
Mellon Investor Services, L.L.C..
Some
Important Charter and Statutory Provisions
Our
restated
certificate of incorporation provides for the division of our board of directors
into three classes of directors, each serving staggered, three-year terms.
In
addition, our restated certificate of incorporation and our by-laws provide
that
directors may be removed only for cause and only upon the affirmative vote
of
holders of at least 80% of our outstanding voting power. Our restated
certificate of incorporation further provides generally that any alteration,
amendment or repeal of its sections regarding the composition, election and
classification of our board of directors requires the approval of the holders
of
at least 80% of our outstanding voting power.
Our
restated
certificate of incorporation also provides that when it is evaluating any
proposal from another party to (1) make a tender offer for our equity
securities, (2) merge or consolidate us with another corporation or (3) purchase
or otherwise acquire substantially all of our properties and assets, our board
of directors must give due consideration to all relevant factors, including
the
social and economic effects on our employees, customers, suppliers and other
constituents and the communities in which we operate or are located.
Our
restated
certificate of incorporation provides that a director will not be personally
liable for monetary damages to us or our stockholders for breach of fiduciary
duty as a director, except for liability:
|
·
|
for
any breach of the director’s duty of loyalty to us or our
stockholders;
|
|
·
|
for
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of
law;
|
|
·
|
for
paying a dividend or approving a stock repurchase or redemption in
violation of Section 174 of the Delaware general corporation law;
or
|
|
·
|
for
any transaction from which the director derived an improper personal
benefit.
|
Our
restated
certificate of incorporation also provides that each of our current or former
directors, officers, employees or agents, or each such person who is or was
serving or who had agreed to serve at our request as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or
other enterprise (including the heirs, executors, administrators or estate
of
that person), will be indemnified by us to the fullest extent permitted by
the
Delaware general corporation law. Our restated certificate of incorporation
also
specifically authorizes us to enter into agreements with any person providing
for indemnification greater or different than that provided by our restated
certificate of incorporation.
These
provisions may have the effect of deterring hostile takeovers or delaying
changes in control of our company or our management.
We
are
subject to the provisions of Section 203 of the Delaware general corporation
law. In general, the statute prohibits a publicly held Delaware corporation
from
engaging in a “business combination” with an “interested stockholder” for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless:
|
(1)
|
prior
to that date, the board of directors approved either the business
combination or the transaction that resulted in the stockholder becoming
an interested stockholder;
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|
(2)
|
when
the transaction that resulted in such person becoming an interested
stockholder was completed, the interested stockholder owned at least
85%
of the voting stock of the corporation outstanding at the time the
transaction began, excluding, for purposes of determining the number
of
shares outstanding, shares owned by some directors or employee stock
plans; or
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|
(3)
|
on
or after the date the stockholder became an interested stockholder,
the
business combination is approved by the board of directors and authorized
by the affirmative vote, and not by the written consent, of at least
two-thirds of outstanding voting stock, excluding the stock owned
by the
interested stockholder.
|
For
purposes
of Section 203, a “business combination” includes a merger, asset sale, or other
transaction resulting in a financial benefit to the interested stockholder.
An
“interested stockholder” is a person, other than the corporation and any direct
or indirect majority-owned subsidiary of the corporation, who together with
affiliates and associates, owns or, as an affiliate or associate, within three
years prior, did own, 15% or more of the corporation’s outstanding voting
stock.
Stockholder
Rights Plan
On
July 21,
1998, our board of directors adopted a stockholder rights plan and, on July
22,
1998, signed a rights agreement with Mellon Investor Services, L.L.C., as rights
agent. A copy of our rights agreement has been filed as an exhibit to the
registration statement of which this prospectus is a part and is incorporated
by
reference into this prospectus. Under our stockholder rights plan, one preferred
stock purchase right is attached to each outstanding share of our common stock.
We refer to these preferred stock purchase rights as the “rights.” Each share of
common stock and each share of non-voting common stock issued in the future
will
also receive a right until the rights become exercisable. Until a right is
exercised, the holder of a right does not have any additional rights as a
stockholder. These rights will expire on July 22, 2008, unless they are
previously redeemed or exchanged by us as described below. These rights trade
automatically with our common stock and non-voting common stock and will
separate from the common stock and non-voting common stock and become
exercisable only under the circumstances described below.
In
general,
the rights will become exercisable when the first of the following events
happen:
|
(1)
|
ten
calendar days after a public announcement that a person or group
has
acquired beneficial ownership of 20% or more of the sum of our outstanding
common stock and non-voting common stock; or
|
|
(2)
|
ten
business days, or such other date determined by our board of directors,
after the beginning of, or announcement of an intention to begin,
a tender
offer or exchange offer that would result in a person or group
beneficially owning 20% or more of the sum of our outstanding common
stock
and non-voting common stock.
|
If
the rights
become exercisable, holders of the rights will be able to purchase from us
one
one-hundredth of a share of our Series A Junior Participating Preferred Stock
at
a price of $300, subject to adjustment. However, all rights owned by any persons
or groups triggering the event shall be void. If a person or group acquires
20%
or more of the sum of our outstanding common stock and non-voting common stock
then each right will entitle the holder (other than the 20% or more person
or
group that triggered the rights) to purchase a number of shares of our common
stock in respect of rights attached to our common stock, or a number of shares
of our non-voting common stock in respect of rights attached to our non-voting
common stock, in either case having a market value of two times the exercise
price of the right.
If
we are
acquired in a merger or other business combination transaction, or 50% or more
of our consolidated assets or earning power are sold after a person or group
acquires 20% or more of the sum of our outstanding common stock and non-voting
common stock, then each right will entitle the holder (other than the 20% or
more person or group that triggered the rights) to purchase a number of shares
of common stock of the surviving or acquiring corporation having a market value
of two times the exercise price of the right.
At
any time
after a person or group has acquired beneficial ownership of 20% or more of
our
outstanding common stock and non-voting common stock, our board of directors
may, at its option, exchange all or any part of the then outstanding and
exercisable rights for shares of common stock or shares of Series A Preferred
Stock at an exchange ratio of one share of common stock or one one-hundredth
of
a share of Series A Junior Participating Preferred Stock per right. However,
our
board of directors will not be empowered to effect such exchange at any time
after any person or group becomes the beneficial owner of 50% or more of our
outstanding common stock.
Our
board of
directors may redeem the rights for $.01 per right at any time before a person
or group has acquired beneficial ownership of 20% or more of the sum of our
outstanding common stock and non-voting common stock. Our board of directors
may
generally reduce the 20% trigger to the higher of (1) the largest percentage
then known to our company beneficially owned by a person or group or (2) 10%,
and may otherwise amend the rights at any time before a person or group has
acquired beneficial ownership of 20% or more of the sum of our outstanding
common stock and non-voting common stock. The rights will expire at the close
of
business on July 22, 2008 unless we redeem them before that date.
Commission
Position on Indemnification for Securities Act Liabilities
Section
145
of the General Corporation Law of the State of Delaware ("DGCL") provides that
a
corporation has the power to indemnify its officers and directors against the
expenses, including attorney's fees, judgments, fines or settlement amounts
actually and reasonably incurred by them in connection with the defense of
any
action by reason of being or having been directors or officers, if such person
shall have acted in good faith and in a manner reasonably believed to be in
or
not opposed to the best interests of the corporation, except that if such action
shall be in the right of the corporation, no such indemnification shall be
provided as to any claim, issue or matter as to which such person shall have
been judged to have been liable to the corporation unless and to the extent
that
the Court of Chancery of the State of Delaware, or another court in which the
suit was brought, shall determine upon application that, in view of all of
the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity.
As
permitted
by Section 102 of the DGCL, our Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") provides that no
director shall be liable to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a director other than (i) for breaches of the
director's duty of loyalty to the Company and its stockholders, (ii) for acts
or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) for the unlawful payment of dividends or unlawful stock
purchases or redemptions under Section 174 of the DGCL, and (iv) for any
transaction from which the director derived an improper personal
benefit.
Our
Certificate of Incorporation provides for indemnification of our directors
and
officers to the fullest extent permitted by the DGCL, and allows us to advance
or reimburse litigation expenses upon submission by the director, officer or
employee of an undertaking to repay such advances or reimbursements if it is
ultimately determined that indemnification is not available to such director
or
officer.
Insofar
as
indemnification for liabilities arising under the Securities Act of 1933 may
be
permitted to our directors, officers or controlling persons pursuant
to the foregoing provisions, we have been informed that in the opinion of
the SEC such indemnification is against public policy and
unenforceable.