-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DRiQTsbx01fbGtZg3VVNujZML+HLQskRnJ3Fbgehz+3qrsOpzpMUymlFXh5CwJmU BPHuhvuBrv1lXpH1ABzUcg== 0000950129-96-003548.txt : 19961225 0000950129-96-003548.hdr.sgml : 19961225 ACCESSION NUMBER: 0000950129-96-003548 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19961224 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: VERITAS DGC INC CENTRAL INDEX KEY: 0000028866 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 760343152 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-17517 FILM NUMBER: 96685455 BUSINESS ADDRESS: STREET 1: 3701 KIRBY DR STREET 2: STE 112 CITY: HOUSTON STATE: TX ZIP: 77098 BUSINESS PHONE: 7135265611 MAIL ADDRESS: STREET 1: 3701 KIRBY DRIVE SUITE 112 CITY: HOUSTON STATE: TX ZIP: 77098 FORMER COMPANY: FORMER CONFORMED NAME: DIGICON INC DATE OF NAME CHANGE: 19920703 424B3 1 VERITAS DGC. - 424(B)(3) REG. NO. 333-17517 1 Filed Pursuant to Rule 424(b)(3) Registration No. 333-17517 PROSPECTUS 3,377,919 SHARES VERITAS DGC INC. COMMON STOCK --------------------- The shares of common stock offered hereby are shares of common stock, par value $.01 per share ("Common Stock"), of Veritas DGC Inc. (the "Company") held by certain stockholders of the Company. See "Selling Stockholders" and "Description of Common Stock and Special Voting Stock." The Company will not receive any of the proceeds from the sale of the Common Stock offered hereby. The Company's Common Stock is traded on the New York Stock Exchange under the symbol "VTS." On December 20, 1996, the reported closing sale price of the Common Stock on the New York Stock Exchange was $20.625 per share. The Common Stock may be offered and sold from time to time by Selling Stockholders through brokers or dealers or directly to one or more purchasers in negotiated transactions, at market prices prevailing at the time of sale or at prices related to such market prices. The Selling Stockholders and brokers executing selling orders on behalf of the Selling Stockholders may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), in which event commissions received by such brokers may be deemed to be underwriting commissions under the Securities Act. For further information concerning the plan of distribution of the Common Stock, see "Plan of Distribution." The expenses of this offering, estimated at $12,257.72 will be paid by the Company. PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER THE CAPTION "RISK FACTORS" BEGINNING AT PAGE 3. --------------------- 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 24, 1996. 2 This Prospectus incorporates by reference documents which contain certain statements of a forward-looking nature relating to future events or the future financial performance of the Company. Prospective investors are cautioned that such statements are only predictions and that actual events or results may differ materially. In evaluating such statements, prospective investors should specifically consider the various factors identified in this Prospectus and set forth under the caption "Risk Factors," which could cause actual results to differ materially from those indicated by such forward-looking statements. AVAILABLE INFORMATION The Company has filed with the Securities and Exchange Commission (the "Commission") in Washington, D.C., a Registration Statement on Form S-3 under the Securities Act, with respect to the Common Stock offered by this Prospectus. Certain portions of the Registration Statement have not been included in this Prospectus. For further information, reference is made to the Registration Statement and the Exhibits thereto. Statements made in this Prospectus regarding the contents of any contract or document filed as an exhibit to the Registration Statement are not necessarily complete and, in each instance, reference is hereby made to the copy of such contract or document so filed. Each such statement is qualified in its entirety by such reference. The Company is subject to the information requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Commission. The Registration Statement (with exhibits), as well as such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and its regional offices at the Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 13, New York, New York 10048. Copies of such material can be obtained at prescribed rates from the Public Reference Section of the Commission at its principal office at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Such materials also can be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which the Common Stock is listed. The Commission maintains a site on the World Wide Web that contains certain documents filed with the Commission electronically. The address of such site is http://www.sec.gov. and the Registration Statement may be inspected at such site. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed by the Company with the Commission pursuant to the Exchange Act (File No. 1-7427), are incorporated in this Prospectus by reference and shall be deemed to be a part hereof: (a) the Company's Annual Report on Form 10-K for the year ended July 31, 1996; (b) the Company's Current Report on Form 8-K dated September 16, 1996; (c) the Company's Current Reports on Form 8-K and Form 8-K/A dated November 20, 1996; and (d) the Company's Quarterly Report on Form 10-Q for the quarterly period ended October 31, 1996. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Prospectus and before the termination of the offering covered hereby will be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained this Prospectus, in a document incorporated or deemed to be incorporated by reference in this Prospectus shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained in this Prospectus or in any other subsequently filed document which also is or is deemed to be incorporated by reference modifies or replaces such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom this Prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the documents incorporated by reference in this Prospectus, other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into the information that this Prospectus incorporates. All such requests should be directed to Veritas DGC Inc., 3701 Kirby Drive, Suite 112, Houston, Texas 77098, Attention: Corporate Secretary, telephone number (713) 512-8300. 2 3 THE COMPANY The Company was formerly named Digicon Inc. ("Digicon"). On August 30, 1996, Digicon and Veritas Energy Services Inc. ("VES") consummated a business combination (the "Combination") pursuant to which, among other things, (i) VES became a wholly-owned subsidiary of Digicon and (ii) Digicon's corporate name was changed to "Veritas DGC Inc." Unless the context otherwise requires, all references to the "Company" are to Veritas DGC Inc. and its subsidiaries and give effect to the consummation of the Combination. The Company is a leading provider of seismic data acquisition, data processing, multi-client data surveys, and exploration and development information services to the oil and gas industry in selected markets worldwide. The Company was incorporated in Texas in 1965 and was reincorporated in Delaware in 1969. The Company's principal offices are located at 3701 Kirby Drive, Houston, Texas 77098, and its telephone number is (713) 512-8300. RISK FACTORS Prospective investors should carefully consider the following factors. ENERGY INDUSTRY SPENDING Demand for the Company's seismic services depends upon the level of capital expenditures by oil and gas companies for exploration, production, development and field management activities. These activities depend in part on oil and gas prices, expectations about future prices, the cost of exploring for, producing and delivering oil and gas, the sale and expiration dates of leases in the United States, Canada and abroad, local and international political, regulatory and economic conditions and the ability of oil and gas companies to obtain capital. In addition, a decrease in oil and gas expenditures could result from such factors as unfavorable tax and other legislation or uncertainty concerning national energy policies. No assurance can be given that current levels of oil and gas activities will be maintained or that demand for the Company's services will reflect the level of such activities. Decreases in oil and gas activity could have a significant adverse effect upon the demand for the Company's services and the Company's results of operations. COMPETITION FOR SEISMIC BUSINESS Competition among seismic contractors historically has been intense. Competitive factors include price, crew experience, equipment availability, technological expertise and reputation for quality and dependability. Certain of the Company's major competitors operate more data acquisition crews than the Company, have substantially greater revenues than the Company and are subsidiaries or divisions of major industrial enterprises having far greater financial and other resources than the Company. There can be no assurance that the Company will be able to compete successfully against its competitors for contracts to conduct seismic surveys and process data. HAZARDOUS OPERATING CONDITIONS The Company's data acquisition activities involve operating under extreme weather and other hazardous conditions. Accordingly, these operations are subject to risks of loss to property and injury to personnel from such causes as fires, adverse weather and accidental explosions. The Company carries insurance against these risks in amounts that it considers adequate. The Company may not, however, be able to obtain insurance against certain risks or for certain equipment located from time to time in certain areas of the world. INVESTMENT IN MULTI-CLIENT DATA LIBRARY The Company has invested significant amounts in acquiring and processing multi-client data that is owned by the Company (book carrying value of $25.6 million at July 31, 1996), and it expects to continue doing so for the foreseeable future. Although the Company normally obtains prefunding commitments for a majority of the cost of acquiring and processing such surveys, future data licensing to multiple customers may 3 4 not fully recoup its costs. Factors affecting the Company's ability to recoup its costs include possible technological, regulatory or other industry or general economic developments, any of which could render all or portions of the Company's library of multi-client data obsolete or otherwise impair its value. In addition, the timing of multi-client data licensing is typically less dependable from period to period than are revenues from surveys performed on an exclusive contract basis for single customers. HIGH FIXED COSTS; CAPITAL INTENSIVE BUSINESS; RISK OF TECHNOLOGICAL OBSOLESCENCE Because of the high fixed costs involved in the major components of the Company's business, downtime or low productivity due to reduced demand, weather interruptions, equipment failures or other causes can result in significant operating losses. In recent years, the Company's contracts for data acquisition have been predominately on a turnkey or on a combination of turnkey/time basis. Under the turnkey method, payments for data acquisition services are based upon the amount of data collected, and the Company bears substantially all of the risk of business interruption caused by inclement weather and other hazards. When a combination of both turnkey and time methods is used, the risk of business interruptions is shared in an agreed percentage by the Company and the customer. Seismic data acquisition and processing is a capital intensive business. The development of seismic data acquisition and processing equipment has been characterized by rapid technological advancements in recent years and the Company expects this trend to continue. There can be no assurance that manufacturers of seismic equipment will not develop new systems that have competitive advantages over systems now in use that either render the Company's current equipment obsolete or require the Company to make significant capital expenditures to maintain its competitive position. The Company intends to upgrade its data acquisition and processing equipment as often as necessary to maintain its competitive position. However, to do so may require large expenditures of capital in addition to the Company's planned capital expenditures. There can be no assurance that the Company will have the necessary capital or that financing will be available on favorable terms. If the Company is unable to raise the capital necessary for its capital expenditure program and to upgrade its data acquisition and processing equipment to the extent necessary, it may be materially and adversely affected. RISKS INHERENT IN INTERNATIONAL OPERATIONS In fiscal 1995 and 1996, 61% and 62%, respectively, of the Company's revenues were derived from international operations and export sales, which are subject in varying degrees to risks inherent in doing business abroad. Such risks include the possibility of unfavorable circumstances arising from host country laws or regulations. For example, the Company has approximately 6,500 line miles of offshore Peru seismic data (book value of approximately $1.4 million at July 31, 1996) which will become saleable only upon receipt of previously expected governmental licenses which have been delayed for more than a year and has a $2.6 million claim for income taxes withheld by its client, a foreign national oil company (no book carrying value), which will become collectible only upon approval by the host country's taxation authorities. In addition, foreign operations include risks of partial or total expropriation; currency exchange rate fluctuations and restrictions on currency repatriation; the disruption of operations from labor and political disturbances, insurrection or war; and the requirements of partial local ownership of operations in certain countries. To minimize such risks, the Company generally denominates its contracts in U.S. dollars and other currencies it believes to be stable. The Company also obtains insurance against war, expropriation, confiscation and nationalization when such insurance is available and when management considers it advisable to do so. Such coverage is not always available, and when available, is subject to unilateral cancellation by the insuring companies on short notice. ENVIRONMENTAL AND OTHER REGULATIONS The Company's operations are subject to a variety of foreign, federal, state and local laws and regulations, including laws and regulations relating to the protection of the environment. The Company is required to invest financial and managerial resources to comply with such laws and related permit requirements in its operations and anticipates that it will continue to do so in the future. In recent years, an increased number of 4 5 the Company's data acquisition contracts have required customers to obtain all necessary permits. Customers' failure to timely obtain the required permits may result in crew downtime and operating losses. To date, the Company's cost of complying with governmental regulation has not been material, but the fact that such laws or regulations are changed frequently makes it impossible for the Company to predict the cost or impact of such laws and regulations on its future operations. The modification of existing laws or regulations or the adoption of new laws or regulations curtailing offshore drilling for oil and gas or imposing more stringent restrictions on seismic operations could adversely affect the Company. LEVERAGE AND LIQUIDITY The Company recently completed an offering of $75.0 million of 9 3/4% Senior Notes due 2003 (the "Senior Notes"). The degree to which the Company is leveraged (the ratio of total consolidated debt to total capitalization was approximately 41.5% at July 31, 1996, after giving effect to the issuance of the Senior Notes and the application of the net proceeds therefrom) could have important consequences, including the following: (i) the Company's ability to obtain financing in the future for working capital, capital expenditures and general corporate purposes may be impaired; (ii) a substantial portion of the Company's cash flow from operations must be dedicated to the payment of principal and interest on its indebtedness; and (iii) a high degree of leverage may make the Company more vulnerable to economic downturns and may limit its ability to withstand competitive pressures. Based on current operations, the Company expects that it will be able to service the interest and principal obligations on its indebtedness as well as its working capital needs and to fund its capital expenditures and other operating expenses out of cash flow from operations and available borrowings. However, there can be no assurance that the Company's business will continue to generate cash flow at levels sufficient to meet these requirements. If the Company is unable to generate sufficient cash flow from operations in the future to service its debt and capital expenditures, it may be required to sell assets, reduce capital expenditures, refinance all or a portion of its existing debt or obtain additional financing. There can be no assurance that any such asset sales or refinancing would be possible or that any additional financing could be obtainable. The Company's ability to meet its debt service obligations will be dependent upon its future performance which, in turn, will be subject to future economic conditions and to financial, business and other factors, many of which are beyond the Company's control. SELLING STOCKHOLDERS The following table sets forth certain information concerning the Selling Stockholders and reflects share information adjusted for a one for three reverse stock split (the "Reverse Split") effective January 17, 1995:
SHARES SHARES OWNED SHARES TO AND TO BE TO BE BE NAME AND ADDRESS OWNED SOLD OWNED - --------------------------------------------------------- ------------ --------- ---- Deltec Asset Management Corporation(1)................... 100,000 100,000 None 535 Madison Avenue New York, New York 10022 Hanseatic Investments Limited Partnership(1)............. 13,333 13,333 None 375 Park Avenue New York, New York 10152 Acorn Fund............................................... 400,000 396,000 * c/o Wanger Asset Management L.P.(2) 227 West Monore, Suite 3000 Chicago, Illinois 60606
5 6
SHARES SHARES OWNED SHARES TO AND TO BE TO BE BE NAME AND ADDRESS OWNED SOLD OWNED --------- --------- ---- Christian Humann and Francois Sicart Trustees under a deed of trust dated 2/2/88.............. 5,000 4,000 None c/o Tocqueville Asset Management L.P.(3) 1675 Broadway New York, New York 10019 Mellon Bank, N.A., as trustee for National Intergroup Inc.................................................... 20,000 20,000 None c/o Tocqueville Asset Management L.P.(3) 1675 Broadway New York, New York 10019 Trace Inc................................................ 15,000 15,000 None c/o Tocqueville Asset Management L.P.(3) 1675 Broadway New York, New York 10019 Jomacim, Inc. ........................................... 12,000 12,000 None c/o Tocqueville Asset Management L.P.(3) 1675 Broadway New York, New York 10019 Quantum Partners LDC ("Quantum")......................... 983,820 983,820 None Kaya Flamboyan 9, Willemstad, Curacao, Netherlands Antilles Soros Fund Management(4) George Soros(4) Soros Capital L.P.(6).................................... 43,200(5) 43,200(5) None c/o Westbroke Limited Richmond House 12 Par-La-Ville Road Hamilton, Bermuda HMDX Jupiter Management Co., Inc.(6)(7)....................... 42,000(5) 42,000(5) None c/o Douglas B. Thompson, President 3535 Briarpark, Suite 200 Houston, TX 77042 Steven J. Gilbert(4)(5).................................. 3,573 3,573 None Soros Capital L.P. c/o Westbroke Limited Richmond House 12 Par-La-Ville Road Hamilton, Bermuda HMDX CCF/Jupiter, L.P.(6)(8).................................. 490,288(5) 490,288(5) None DJ Investors, L.P.(8).................................... 107,227 107,227 None c/o Cambridge Capital Holdings, Inc. 767 Fifth Ave., Suite 2800 New York, NY 10153 Fund American Enterprise Holdings, Inc................... 115,000 115,000 None 80 South Main Street Hanover, NH 03755
6 7
SHARES SHARES OWNED SHARES TO AND TO BE TO BE BE NAME AND ADDRESS OWNED SOLD OWNED --------- --------- ---- Fund American Enterprises, Inc........................... 719,895 719,895 None The 1820 House, Main Street Norwich, VT 05055 J/D Funding Corp.(7)..................................... 146,224 146,224 None Jupiter Investment Company, Inc.(7)...................... 17,451 17,451 None c/o Douglas B. Thompson, President 3701 Kirby Drive, Suite 112 Houston, TX 77098 Ingrid Morsman........................................... 8,366 8,366 None 820 Potts Lane Bryn Mawr, PA 19010 Natalie Thompson Defined Benefit Pension Plan(7)......... 30,100 30,100 None 180 Orchard Way Vero Beach, FL 32963 Neptune Partners-1989A, L.P.............................. 43,972 43,972 None Neptune 1989 Investors Limited........................... 28,782 28,782 None Neptune 1989C Offshore Investors Limited................. 30,822 30,822 None c/o Neptune Management Company, Inc. 881 Ocean Drive, Unit 20F Key Biscayne, FL 33149 Arik Yale Prawer......................................... 5,866 5,866 None --------- --------- 7150 Shoreline Drive, #3306 San Diego, CA 92122 Totals......................................... 3,381,919 3,377,919 ========= =========
- --------------- * Does not exceed one percent. (1) In June 1992, Hanseatic Corporation, an affiliate of Hanseatic Investments Limited Partnership, extended a $6,000,000 secured term loan to the Company, with interest payable quarterly at 10.75%. This loan was repaid in fiscal year 1996. In connection with this loan, the Company issued to Hanseatic Corporation and Deltec Securities Corporation, as custodian, warrants to purchase 13,333 and 100,000 shares of Common Stock, respectively. The warrants held by Hanseatic Corporation were transferred to Hanseatic Investment Limited Partnership. All of the warrants were exercised at an exercise price of $6.00 per share on or before the effective date of this Registration Statement. (2) Wanger Asset Management, L.P. is the investment advisor to Acorn Fund. (3) Tocqueville Asset Management L.P. is the investment advisor to these entities. (4) Soros Fund Management is an investment advisor to Quantum, George Soros is the sole proprietor of Soros Fund Management. Steven J. Gilbert, a director of the Company, may be deemed to beneficially own the shares held by Quantum by virtue of an investment advisory contract between Mr. Gilbert and Quantum. Mr. Gilbert expressly disclaims beneficial ownership of these shares. (5) Represents or includes the shares of Common Stock, which may be acquired by the indicated stockholder (CCF/Jupiter, L.P. -- 34,800) upon exercise of outstanding warrants. These warrants are presently exercisable through July 26, 1999 at an exercise price of $4.50 per share. Steven J. Gilbert, a director of the Company, may be deemed to own 43,200 of such shares by virtue of his affiliation with Soros Capital L.P. See note (6) below. (6) In July 1994, CCF Jupiter, L.P., along with Soros Capital L.P. and Jupiter Management Co., Inc., extended a $3,000,000 subordinated, secured credit facility to the Company. The Company's borrowings 7 8 under this credit facility bear interest at Bank of America's prime commercial lending rate plus 3% through January 26, 1995, and thereafter, at Bank of America's prime rate plus 6%. The Company repaid all of its borrowings under this credit facility in June 1995. In connection with this credit facility, the Company issued to these lenders warrants exercisable for 120,000 shares of Common Stock at an exercise price of $4.50 per share, as adjusted for the one for three reverse stock split effective January 17, 1995. Both the number of shares purchasable under, and the exercise price of, the warrants are subject to further adjustment in certain events, including stock splits or dividends on, and reclassifications of, the Common Stock. The warrants may not be redeemed by the Company. In November 1993 the Company obtained a secured credit facility from the same affiliated lenders which provided for total borrowings of $3,386,667, an annualized interest rate of 25%, and maturity in May 1994. The Company repaid all of its borrowings under that credit facility in April 1994. (7) Douglas B. Thompson, a director of the Company, is an affiliate of Jupiter Management Co., Inc., J/D Funding Corp., Jupiter Investment Company, Inc. and Natalie Thompson Defined Benefit Pension Plan. Mr. Thompson disclaims beneficial interest in shares owned, controlled or deemed to be owned or controlled by each such selling stockholders. (8) George F. Baker, a director of the Company, is an affiliate of CCF/Jupiter, L.P. and DJ Investors, L.P. Mr. Baker disclaims beneficial interest in shares owned, controlled or deemed to be owned or controlled by each such selling stockholder. PLAN OF DISTRIBUTION All or part of the Common Stock offered hereby may be sold by the Selling Stockholders from time to time (i) on the New York Stock Exchange or otherwise at prices current at the time of sale or at prices related to such market prices, either directly or through brokers or to dealers, to the extent that such prices are obtainable and satisfactory to the Selling Stockholders or (ii) to the extent the same may be available, pursuant to Rule 144 under the Securities Act. It is anticipated that any commissions with respect to such sales will not exceed regular brokerage commissions. The Selling Stockholders, and brokers executing selling orders on behalf of the Selling Stockholders and dealers to whom the Selling Stockholders may sell, may be deemed "underwriters" within the meaning of the Securities Act. Any profit represented by the excess of the selling price over the cost of the shares sold in the case of dealers, or any commission received in the case of brokers, may be deemed to be underwriting discounts or commissions under the Securities Act. DESCRIPTION OF COMMON STOCK AND SPECIAL VOTING STOCK The Company has only one class of stock outstanding, Ordinary Shares, consisting of a series of one share of special voting stock ("Special Voting Stock") and all other shares being designated as common stock, par value $.01 per share ("Common Stock"). At November 1, 1996, of the 40,000,000 authorized Ordinary Shares, there were 14,697,976 shares outstanding (including one share of Special Voting Stock). Each share of Common Stock has one vote on all matters presented to the stockholders. Subject to the rights and preferences of any preferred stock which may be designated and issued, the holders of Common Stock are entitled to receive dividends, if and when declared by the board of directors, and are entitled on liquidation to all assets remaining after the payment of liabilities. The Common Stock has no preemptive or other subscription rights. Outstanding shares of Common Stock, including the shares of Common Stock offered hereby, are fully paid and nonassessable. Except as otherwise required by law or the Company's certificate of incorporation, the share of Special Voting Stock will possess a number of votes equal to the number of outstanding VES exchangeable shares (the "Exchangeable Shares") not owned by the Company or any entity controlled by the Company, on all matters submitted to a vote of the Company's Common Stock holders. At November 1, 1996, there were 3,746,405 Exchangeable Shares outstanding. The Exchangeable Shares were issued upon consummation of the Combination as consideration for the Company's acquisition of all of VES' voting securities. 8 9 Since the Common Stock and the Exchangeable Shares do not have cumulative voting rights, the holders of more than 50% of such shares may, if they choose to do so, elect all of the directors and, in that event, the holders of the remaining shares of Common Stock and Exchangeable Shares will not be able to elect any directors. ChaseMellon Shareholder Services Group, Inc., Dallas, Texas, is the transfer agent and registrar for the Common Stock. COUNSEL The validity of the Common Stock offered hereby has been passed upon for the Company by Porter & Hedges, L.L.P., Houston, Texas. EXPERTS The financial statements incorporated in this Prospectus by reference from the Company's Annual Report on Form 10-K for the year ended July 31, 1996 have been audited by Deloitte and Touche LLP, independent auditors as stated in their report, which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm given their authority as experts in accounting and auditing. 9 10 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS; ANY INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO ANY PERSON IN ANY STATE WHERE SUCH OFFER WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. --------------------- TABLE OF CONTENTS
PAGE --- Available Information.................. 2 Incorporation of Certain Documents by Reference............................ 2 The Company............................ 3 Risk Factors........................... 3 Selling Stockholders................... 5 Plan of Distribution................... 8 Description of Common Stock and Special Voting Stock......................... 8 Counsel................................ 9 Experts................................ 9
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 3,377,919 SHARES VERITAS DGC INC. COMMON STOCK ------------------------------ P R O S P E C T U S ------------------------------ DECEMBER 24, 1996 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----