-----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, MIN0u/kDNpQJnyT1zXcYnf86yqwY0niGFnFkxMlJiaAWDGkRND/T07xngpnMvOyP rkvGiyqY0vuOOQf00l+Lfg== 0000936392-99-000768.txt : 19990701 0000936392-99-000768.hdr.sgml : 19990701 ACCESSION NUMBER: 0000936392-99-000768 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19990630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAXWELL TECHNOLOGIES INC CENTRAL INDEX KEY: 0000319815 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 952390133 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-81965 FILM NUMBER: 99656912 BUSINESS ADDRESS: STREET 1: 9275 SKY PARK COURT CITY: SAN DIEGO STATE: CA ZIP: 92123 BUSINESS PHONE: 6192795100 MAIL ADDRESS: STREET 1: 8888 BALBOA AVE STREET 2: 8888 BALBOA AVE CITY: SAN DIEGO STATE: CA ZIP: 92123 FORMER COMPANY: FORMER CONFORMED NAME: MAXWELL LABORATORIES INC /DE/ DATE OF NAME CHANGE: 19920703 S-3 1 FORM S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 1999 REGISTRATION NO. 333-_____ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM S-3 REGISTRATION STATEMENT Under The Securities Act of 1933 ---------------------- MAXWELL TECHNOLOGIES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 95-2390133 (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 9275 SKY PARK COURT SAN DIEGO, CALIFORNIA 92123 (619) 279-5100 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES) ---------------------- DONALD M. ROBERTS, ESQ. GENERAL COUNSEL MAXWELL TECHNOLOGIES, INC. 9275 SKY PARK COURT SAN DIEGO, CALIFORNIA 92123 (619) 279-5100 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ---------------------- COPIES TO: THOMAS A. WALDMAN, ESQ. Riordan & McKinzie 300 South Grand Avenue 29th Floor Los Angeles, California 90071 (213) 629-4824 ---------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE ========================================================================================================== AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF SHARES TO BE TO BE AGGREGATE PRICE AGGREGATE REGISTRATION REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE(1) - ---------------------------------------------------------------------------------------------------------- Common Stock, $.10 par value........ 244,796 shares $23.25 $5,691,507 $1,583 ==========================================================================================================
(1) Calculated pursuant to Rule 457, based on the average of the high and low sales prices of Maxwell Common Stock, $22.75 and $23.75 respectively, on June 24, 1999 as reported on the Nasdaq National Market. ================================================================================ 2 PROSPECTUS (Subject to completion, dated June 30, 1999) MAXWELL TECHNOLOGIES, INC. 244,796 SHARES OF COMMON STOCK This prospectus relates to the public offering, which is not being underwritten, of 244,796 shares of our common stock which are owned by some of our current stockholders. We will not receive any of the proceeds of this offering, as all proceeds will be received by the selling stockholders. The prices at which such stockholders may sell the shares will be determined by the prevailing market price for the shares or in negotiated transactions. Our common stock is traded on the Nasdaq National Market under the symbol "MXWL." On June 29, 1999, the last sale price of our common stock was $24.00 per share. INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this prospectus is _______ , 1999 The information in this prospectus is not complete and may be amended or changed. The selling stockholders may not sell the shares of common stock offered by this prospectus until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell the shares of common stock in any state where the offer or sale is not permitted. 3 No person has been authorized to give any information or to make any representations other than those contained in this prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by Maxwell Technologies, Inc. or by any other person. Neither the delivery of this prospectus nor any sale made under this prospectus shall, under any circumstances, create any implication that information herein is correct as of any time subsequent to the date of this prospectus. This prospectus is not an offer to sell or a solicitation of an offer to buy any security other than the securities covered by this prospectus, nor is it an offer to or solicitation of any person in any jurisdiction in which such offer or solicitation may not lawfully be made. TABLE OF CONTENTS
Page ---- WHERE YOU CAN FIND MORE INFORMATION.................................................. 2 THE COMPANY.......................................................................... 3 RISK FACTORS......................................................................... 4 FORWARD-LOOKING STATEMENTS........................................................... 16 USE OF PROCEEDS...................................................................... 17 SELLING STOCKHOLDERS................................................................. 17 PLAN OF DISTRIBUTION................................................................. 18 DESCRIPTION OF CAPITAL STOCK......................................................... 20 LEGAL MATTERS........................................................................ 21 EXPERTS.............................................................................. 21
4 WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any document we file at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0300 for further information on the public reference rooms. Our SEC filings are also available at the SEC's web site at http://www.sec.gov. The SEC allows us to disclose important information to you by referring you to documents which we have filed with the SEC. These documents are considered to be part of this prospectus, and later information filed with the SEC will update and supercede the information contained in this prospectus. The following documents and any future filings made with the SEC under Section 13a, 13(c), 14 or 15(d) of the Securities Act of 1934 are considered a part of the prospectus, and we encourage you to review them: (1) annual report on Form 10-K for the fiscal year ended July 31, 1998; (2) quarterly report on Form 10-Q for the quarter ended October 31, 1998; (3) quarterly report on Form 10-Q for the quarter ended January 31, 1999; (4) quarterly report on Form 10-Q for the quarter ended April 30, 1999; (5) current report on Form 8-K filed October 15, 1998; (6) current report on Form 8-K filed November 13, 1998; (7) current report on Form 8-K filed February 12, 1999; and (8) definitive proxy statement, filed on December 11, 1998, for the 1999 annual meeting of stockholders. You may request a copy of these documents, at no cost, by writing or telephoning us at the following address: Maxwell Technologies, Inc. Attention: Corporate Secretary 9275 Sky Park Court San Diego, CA 92123 (619) 279-5100 You should rely only on the information in the documents listed above or provided in this prospectus. We have not authorized any one to provide you with different information. The shares offered by this prospectus are not being offered in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of this prospectus. 2 5 THE COMPANY Maxwell Technologies, Inc. is a worldwide leader in pulsed power technologies, the storage of electrical energy and delivery of power in brief controlled bursts. We have leveraged our technical expertise, gained from over 30 years of experience performing research and development primarily for the United States Department of Defense, to develop a portfolio of pulsed power based commercial products. These products address a range of markets and applications. Our pulsed power based products include ultracapacitors for advanced electrical energy storage and power delivery, purification systems for water treatment and the sterilization of medical and pharmaceutical products, and electromagnetic interference ("EMI") filter capacitors for implantable medical devices. In addition to pulsed power based products, we design and build industrial computers and subsystems which we sell in the computer telephony, medical, manufacturing automation and other markets and we design and manufacture electronic components for use in space vehicles and satellites. Government funded research and development projects in pulsed power continue to be an important part of our business. These projects serve as a starting point for developing new technologies and provide us with scientific and engineering expertise. In December 1998, we acquired KD Components, Inc. KD Components designs, manufacturers and provides high reliability ceramic capacitors, primarily for high voltage uses. To acquire KD Components, we issued 144,566 shares of common stock to the stockholders of KD Components. In January 1999, we acquired Space Electronics Inc. SEI designs, manufactures and provides electronic components and related services for space and other high-reliability applications. To acquire SEI, we issued 681,234 shares of common stock to the stockholders and optionholders of SEI. In January 1999, we also acquired the German distributor of our I-Bus operation in exchange for 113,500 shares of our common stock which were issued to the sole stockholder of the acquired company. We own the PowerCache(TM), PureBright(R), CoolPure(R) and JAMIS(R) trademarks. All other trademarks or trade names referred to in this prospectus or in the documents which are considered to be a part of this prospectus are the property of their respective owners. Our executive offices are located at 9275 Sky Park Court, San Diego, California 92123. Our telephone number is (619) 279-5100. 3 6 RISK FACTORS Investing in our common stock involves a high degree of risk. Any of the following risks could materially adversely affect our business, financial condition and results of operations and could result in a complete loss of your investment. You should carefully consider these risk factors, together with all other information included in this prospectus, and in the documents which are considered to be a part of this prospectus, before you decide whether to purchase shares of our common stock. The risks set out below are not exhaustive. OUR SUCCESS DEPENDS ON OUR ABILITY TO DEVELOP AND MARKET OUR PRODUCTS AND TECHNOLOGIES Many of our products are in the development stage. Our products are also alternatives to established products or are new technologies that provide capabilities that do not presently exist in the marketplace. Our products are sold in highly competitive and rapidly changing markets. The success of our products is significantly affected by their cost, by technology standards and end user preferences. In addition, the success of our products depends on a number of factors, including our ability to: - overcome technical, financial and other risks involved in introducing new products and technologies - identify and develop a market for our new products and technologies; - produce products that can be competitively priced; - respond to technological changes by improving our existing products and technologies; - accurately anticipate market demand for our products and technologies; - demonstrate that our products have technological and/or economic advantages over the products of our competitors; and - respond to competitors that are more experienced, have significantly greater resources, and a larger base of customers. OUR SUCCESS DEPENDS ON OUR ABILITY TO TRANSITION FROM RELYING ON THE GOVERNMENT SECTOR TO PRIVATE- SECTOR SALES Historically, we have relied upon various government agencies to fund our research and development, and we have derived a significant portion of our revenues from the government sector. Our business strategy is to now concentrate on developing, manufacturing and marketing our products to the private sector, while maintaining steady revenues from the government sector. Our success in this transition will depend upon a number of objectives, including the following: - developing and manufacturing new products at competitive prices; 4 7 - gaining customer acceptance for our products and services; - expanding our customer base through our sales and marketing efforts; - increasing our manufacturing capacity; and - developing extensions of our existing products and services into new applications. WE RELY EXTENSIVELY ON STRATEGIC RELATIONSHIPS THAT MAY NOT BE SUCCESSFUL We have established and will continue to attempt to establish strategic relationships with corporate partners and United States government agencies to develop our products. These relationships allow us to understand and access new markets, and provide us an opportunity to test our products. If these relationships are not successful or not continued, it could have a material adverse effect on our sales and growth. The success of these relationships depends on a number of factors, including: - the interest in our products which are still in the development stage; - our success in meeting the expectations of our strategic partners; and - our strategic partners' success in marketing or their willingness to purchase any such products. We may not be successful in continuing our relationships with our current strategic partners. In addition, we may not be able to enter into new strategic relationships on commercially reasonable terms or if we do, these relationships may not be successful. EVEN IF SUCCESSFUL, OUR STRATEGIC RELATIONSHIPS PRESENT SEVERAL RISKS Although we rely extensively on our strategic relationships, these relationships present several risks to our business, including the following: - Our partners may require us to share control over our development, manufacturing and marketing programs, and limit our ability to license our technology to others. In addition, some of our partners require that we share our proprietary technology with them and restrict our ability to engage in some areas of product development and marketing; - Our strategic partners may use or disclose the technology which we jointly develop without paying us any royalties; - We often grant exclusivity rights to our strategic partners as an incentive for them to participate in the development of a product. Any exclusivity rights granted to strategic partners may decrease our ability to find a broader market for some of our products. This may have the effect of substantially decreasing our revenues during the exclusivity period; and 5 8 - Our strategic partners may seek to manufacture jointly developed products on their own or obtain these products from third party sources which would have the effect of decreasing our revenues from these products. WE DEPEND ON OEM CUSTOMERS AND AS A RESULT HAVE LONG SALES CYCLES Sales to a few original equipment manufacturers, known as "OEMs," as opposed to direct retail sales to customers, make up a significant part of our revenues. The timing and volume of these sales depend upon the sales levels and shipping schedules for the products of our OEM customers. Thus, even if we develop a successful component, our sales will not increase unless the product into which our component is incorporated is successful. If our OEM customers fail to sell a sufficient quantity of products incorporating our components, or if the OEM's sales timing and volume fluctuates, it could have a material adverse effect on our business, financial condition and results of operations. Our OEM customers typically require a long development and engineering process before incorporating our products and services in their devices. This period of time is in addition to the time we spend on basic research and product development. As a result, we are vulnerable to changes in technology or end user preferences. Our opportunity to sell our products to our OEM customers typically occurs at infrequent intervals, depending on when the OEM customer designs a new product or enhances an existing one. If we are not aware of an OEM's product development schedule, or if we cannot provide components or technologies when they develop their products, we will miss an opportunity that may not reappear for some time. OUR ACQUISITION STRATEGY COULD ADVERSELY AFFECT OUR SUCCESS As part of our business strategy, we regularly review possible acquisitions of complementary companies, technologies or products, and periodically engage in discussions regarding such possible acquisitions. During fiscal 1999, we have acquired three businesses with strategic importance to different areas of our operations. The businesses we acquired are geographically dispersed, with one located in California, one in Nevada and the other in Germany. We completed four acquisitions in fiscal 1998. The success of our acquisition strategy depends on a number of factors, including the following: - correctly valuing the commercial potential of technologies owned by the companies we acquire; - successfully integrating the operations, products, personnel and cultures of the companies we acquire; - effectively managing our operations in a number of locations and foreign countries; - our ability to focus on our day-to-day business operations while pursuing our acquisition strategy; - our ability to enter markets in which we have limited or no direct experience; and - retaining the key employees of the companies we acquire. 6 9 In addition, similar to the charges that were taken in connection with two of the acquisitions we completed in fiscal 1998, any future acquisition may result in: - dilutive issuances of equity securities; - the incurrence of debt; - a decrease in our cash balances; - amortization expenses related to goodwill and other intangible assets; and - other charges to operating results, including acquired in-process research and development charges. Moreover, there can be no assurance that any equity or debt financing proposed in connection with any acquisition will be available to us on acceptable terms or at all, when, and if, we find a suitable company, technology or product to acquire. We cannot assure that any acquisition we complete will result in long-term benefits to us or to our stockholders or that we will be able to effectively manage the resulting business. WE HAVE INCURRED LOSSES HISTORICALLY AND IN THE EVENT OF FUTURE LOSSES, THE PRICE OF OUR COMMON STOCK WILL FLUCTUATE We have incurred net losses in three of our past five fiscal years. In the future, we may experience significant fluctuations in our revenues and we may incur net losses from period to period as a result of a number of factors, including the following: - the amounts invested in developing and marketing our products in any period as compared to the volume of sales of those products in the same period; - fluctuations in the demand for our products by OEMs; - the prices at which we sell our products and services as compared to the prices of our competitors; - the timing of our product introductions as compared to those of our competitors; - the profit margins on our mix of product sales; - the structure and timing of new strategic relationships; - the contraction, cancellation or suspension by the United States government of its programs and contracts with us; and - the dilution, debt, expenses, and/or charges we incur as part of our acquisition strategy. 7 10 In addition, we incur significant costs developing and marketing products based on new technologies. If in any period these costs are more than the revenues we derive from the sales of these products, it could have the effect of offsetting any income derived from our other products and we could incur net losses. We anticipate that, in order to increase our market share, we may sell our products and services at profit margins below those we ultimately expect to achieve and/or significantly reduce the prices of our products and services in a particular quarter or quarters. The impact of the foregoing may cause our operating results to be below the expectations of public market analysts and investors. In such event, the price of our common stock would likely fluctuate. WE MAY EXPERIENCE DIFFICULTIES MANUFACTURING OUR PRODUCTS As described in more detail below, we may experience difficulties in manufacturing our products in increased quantities, outsourcing the manufacturing of our products, and customizing our manufacturing process. Manufacturing In Increased Quantities. We have limited experience in manufacturing our products in high volume. It may be difficult for us to: - increase the quantity of the new products we manufacture, especially those products that contain new technologies; and - reduce our manufacturing costs to a level needed to produce adequate profit margins. It may also be difficult for us to solve management, technological, engineering and other problems related to our manufacturing processes. These problems include production yields, quality control and assurance, component supply, and shortages of qualified management and other personnel. In addition, in order to manufacture our products in high volume, we will need to continue to expand our current facilities and/or obtain additional facilities. We may not be successful in expanding our facilities or in obtaining additional facilities. Outsourcing. We may elect to have some of our products manufactured by third parties. Outsourcing involves risks with respect to quality assurance, cost and the absence of close engineering support. Customized Manufacturing Process. Part of our ultracapacitor manufacturing strategy is to implement a process that will allow customization of our ultracapacitors while retaining the benefits of volume manufacturing and materials procurement. There can be no assurance that such a process can be developed and implemented in time to meet our needs. WE HAVE LIMITED MARKETING AND SALES EXPERIENCE AND OUR STRATEGY DEPENDS ON THIRD PARTIES We have limited experience marketing and selling our products. To sell our products, we will need to train our marketing and sales personnel to effectively demonstrate the advantages of our products over the products offered by our competitors. The highly technical nature of the products we offer may limit our ability to retain and attract adequate marketing and sales personnel. Thus, as part of our sales 8 11 and marketing strategy, we enter into arrangements with distributors and sales representatives and depend upon their efforts to sell our products. These arrangements may not be successful. OUR SUCCESS DEPENDS UPON PROTECTING OUR INTELLECTUAL PROPERTY RIGHTS Our success depends on the establishment and maintenance of intellectual property rights. Although we try to protect our intellectual property rights through patents, copyrights, trade secrets and other measures, these steps may not prevent misappropriation by third parties. Other issues include: - adequately protecting our intellectual property rights under the laws of some foreign countries, which may not be as protective as United States' laws; and - the possibility that third parties could "reverse engineer" our products in order to determine their method of operation and introduce competing products or develop competing technology independently. As our business has expanded, we have emphasized protecting our technologies and products through patents. Our success depends on maintaining our patents, adding to them where appropriate, and developing products and applications without infringing on third parties' patent and proprietary rights. The risks involved in protecting our patents include: - our patents may be circumvented or challenged and held unenforceable or invalid; - our pending or future patent applications, if any, may not be issued with the protections we seek; and - others may claim rights in the patented and other proprietary technology owned or licensed by us. If our patents are invalidated or if it is determined that we, or the licensor of the patent, does not hold sole rights to the patent, it could have a material adverse effect on our business, results of operations and financial condition, particularly if we cannot design around others' proprietary rights. Competing research and patent activity in our product areas is substantial. Conflicting patent and other proprietary rights claims may result in disputes or litigation. Although we do not believe that our products or proprietary rights infringe on third party rights, infringement claims could be asserted against us in the future. The negative effects of such claims, with or without merit, are: - time-consuming, costly litigation; - product shipment delays; - we could be required to enter into royalty or licensing agreements; and - possible damage payments or injunctions which prevent us from making, using or selling the infringing product. 9 12 Also, we may not be able to stop a third party's product from infringing on our proprietary rights, without litigation. Some of our owned or licensed patents and patent applications have "march-in" rights and non-exclusive, royalty-free, confirmatory licenses held by various governmental agencies or other entities. "March-in" rights are the United States government or agency's right to cancel agreements and require a contractor to grant licenses to third parties if the contractor does not develop the technology in the agreements. Confirmatory licenses permit the United States government to select vendors other than us to make products for them which would otherwise infringe our patent rights that are subject to the royalty-free licenses. In addition, the United States government can require us to grant licenses (including exclusive licenses) of our patents and patent applications or other inventions developed for the government to a third party if it finds that we did not commercialize such inventions or if such action is necessary: - to meet public health or safety needs; - to meet requirements for public use under federal regulations; or - because we have not made reasonable efforts to ensure products are manufactured in the United States. Because a number of our commercial products are derived from technology originally developed in government funded programs, these risks may apply outside of the work on government contracts. THERE ARE RISKS ASSOCIATED WITH OUR INTERNATIONAL SALES AND OPERATIONS We derive an increasing portion of our revenues from sales to customers located outside of the United States. We expect our international sales to continue to represent a significant and increasing portion of our future revenues. As a result, our business will continue to be subject to certain risks, such as foreign government regulations and export controls, as well as changes in tax laws, tax treaties, tariffs and freight rates. We have only recently established or acquired operations in foreign countries. Since we are relatively inexperienced in managing our international operations, we may be unable to focus on the operation and expansion of our worldwide business and to manage cultural, language and legal differences inherent in international operations. In addition, to the extent we are unable able to effectively respond to political, economic and other conditions in these countries, our business, results of operations and financial condition could be materially adversely affected. Moreover, changes in the mix of income from our foreign subsidiaries, expiration of tax holidays and changes in tax laws and regulations could result in increased tax rates for us. THERE ARE RISKS ASSOCIATED WITH OUR CONTINUING BUSINESS WITH THE UNITED STATES GOVERNMENT We derive a significant portion of our revenues, including revenues of the newly-acquired Space Electronics unit, from contracts with the United States government, principally agencies of the United States Department of Defense, and from subcontracts with government suppliers. The reductions in 10 13 defense budgets in the 1990's have adversely affected our traditional business, particularly in the area of system survivability products and services, such as weapons effects simulation and testing. We have also experienced increased competition in bidding for new defense programs from contractors seeking to replace their lost government business. In addition, defense spending in general, and the number and size of contracts awarded to us, could be reduced in the future. A significant loss of United States government funding would have a material adverse effect on our business, results of operations and financial condition. Our business with the United States government is also subject to various other risks, including the following: - unilateral termination for the convenience of the government; - reduction or modification in the event of changes in the government's requirements or budgetary constraints; - increased or unexpected costs causing losses or reduced profits under fixed-price contracts or unallowable costs under cost-plus contracts; - risks of potential disclosure of our confidential information to third parties; - the failure or inability of a subcontractor or contractor to perform its obligations under a contract in circumstances where we are the prime contractor or subcontractor; and - the failure of the government to exercise options provided for in the contracts and the exercise of march-in rights or confirmatory licenses by the government. There can be no assurance that our contracts with the Department of Defense and other government agencies will not be terminated, reduced or modified. OUR SUCCESS DEPENDS ON OUR ABILITY TO OBTAIN A SUBSTANTIAL AMOUNT OF CAPITAL We believe that in the future we will need a substantial amount of capital for a number of purposes including the following: - to achieve our long-term strategic objectives; - to maintain and enhance our competitive position; - to meet anticipated volume production requirements for several of our product lines, in particular our ultracapacitors and purification systems; - to expand our manufacturing capabilities and facilities; - to establish viable production alternatives; - to fund our continuing expansion into commercial markets; 11 14 - to construct and equip additional or existing facilities; and - to acquire new or complementary businesses, product lines and technologies. There can be no assurance that the necessary additional financing will be available to us on acceptable terms or at all. If adequate funds are not available, we may be required to change, delay, reduce or eliminate our planned product commercialization strategy or our anticipated facilities expansion plans and expenditures. This could have a material adverse effect on our business, results of operations and financial condition. OUR SUCCESS DEPENDS ON OUR KEY PERSONNEL Since we primarily focus on emerging technologies, our success depends upon the continued service of our key technical and senior management personnel. Some of our scientists and engineers are the key developers of our products and technologies and are recognized as world-leaders in their area of expertise. The loss of any of these scientists or engineers to our competitors could end our technological and competitive advantage in some product areas and business segments. Our performance also depends on our ability to identify, hire, train, retain and motivate high quality personnel, especially key manufacturing executives and highly skilled engineers and scientists. The industries in which we compete are characterized by a high level of employee mobility and aggressive recruiting of skilled personnel. Our employees may terminate their employment with us at any time. OUR FAILURE OR THE FAILURE OF OUR PRODUCTS, CUSTOMERS, SUPPLIERS OR VENDORS TO BE YEAR 2000 COMPLIANT COULD ADVERSELY AFFECT OUR OPERATIONS A significant percentage of the software that runs most computers relies on two digit date codes to perform a number of computation and decision making functions. As the year 2000 approaches, these computer programs may fail from an inability to interpret data codes properly, misreading "00" for the year 1900 instead of 2000. We believe that our major computer systems and software programs are Year 2000 compliant or will be brought into compliance on a timely basis. In addition, we have taken steps to bring many of our products which could be impacted by Year 2000 problems into compliance. However, the failure of our computer systems and software programs or of our products to operate properly with regard to Year 2000 requirements could result in the following: - unanticipated expenses to remedy any problems; - a reduction in our sales; and - exposure to related litigation by our customers. In addition, our customers or third party component suppliers and vendors may also experience business disruptions in connection with the Year 2000 problem. Our business, operating results and financial condition could be materially adversely affected by Year 2000 problems with our own systems and 12 15 products or if any of our customers or vendors or other third party entities experience a business disruption as a result of Year 2000 problems. WE RELY ON A LIMITED NUMBER OF THIRD PARTY SUPPLIERS Our ability to manufacture products depends in part on our ability to secure qualified and adequate sources of materials, components and sub-assemblies at prices which enable us to make our products at competitive costs. Some of our suppliers are currently the sole source of one or more items which we need to manufacture our products. On occasion, we have experienced difficulty in obtaining timely delivery of supplies from outside suppliers. This has adversely impacted our delivery time to our customers and in one circumstance we believe such delivery problems were a contributing factor to the loss of certain business from a major customer. There can be no assurance that these and other similar supply problems will not recur. Currently, a single domestic supplier provides one of the components for our EMI filter product. This supplier has indicated that it plans to design, build and sell a product which would compete with our EMI filter. If this occurs, we believe that we could still obtain the component from this supplier or, if necessary, we believe that we could replace this supplier with another vendor or that we could manufacture the component on our own. Although we seek to reduce our dependence on sole and limited source suppliers, the partial or complete loss of these sources could have at least a temporary material adverse effect on our business and results of operations and damage customer relationships. WE ARE EXPOSED TO SIGNIFICANT PRODUCT LIABILITY RISKS We may be exposed to certain product liability risks. For example, our EMI filters are components of implantable medical devices and, due to the litigious environment surrounding the medical device industry, may subject us to an increased risk of product liability claims that may involve significant defense costs. Our other products may also be used in functions involving significant product liability risks. There can be no assurance that product liability claims will not be asserted against us in the future. Although we maintain product liability insurance with coverage limits that we believe to be adequate, there can be no assurance that this coverage will in fact be adequate to protect us against future product liability claims. In addition, product liability insurance is expensive and there can be no assurance that, in the future, product liability insurance will be available to us in amounts or on terms satisfactory to us, if at all. A successful product liability claim or series of claims brought against us could have a material adverse effect on our business, financial condition and results of operations. WE ARE SUBJECT TO VARIOUS ENVIRONMENTAL REGULATIONS We are subject to a variety of environmental regulations relating to the use, storage, discharge, handling, emission, generation, manufacture and disposal of toxic or other hazardous substances. If we fail to comply with current or future regulations, substantial fines could be imposed against us, our production could be suspended or stopped, or our manufacturing process could be altered. Such regulations could require us to acquire expensive remediation or abatement equipment or to incur substantial expenses to comply with environmental regulations. If we fail to adequately control the use, discharge, disposal or storage of hazardous or toxic substances, we could incur significant liabilities. 13 16 OUR FINANCIAL CONDITION COULD BE AFFECTED BY THE STOCK OPTION PLANS AT OUR SUBSIDIARIES Several of our principal operating subsidiaries have, or will have, employee stock option plans which provide for the issuance of options to purchase shares of the subsidiary's common stock. In most cases, we can grant up to 12% or 15% of the outstanding stock of a subsidiary under its stock option plan. Certain key employees of one of our subsidiaries, Maxwell Business Systems, Inc., however, own an aggregate of 20%, and have the right to purchase up to an additional 29%, of that subsidiary's common stock. If the options granted under one of our subsidiary's stock option plans are exercised, our ownership interest in that subsidiary will be reduced. This will have the effect of reducing our portion of the net income and dividends that we receive from that subsidiary, as well as reducing the proceeds if we were to sell that subsidiary. Ultimately, we expect that our reported earnings per share will be reduced in future quarters due to the increasing fair value of certain subsidiaries and the dilution created by options granted under our subsidiaries' stock option plans. Currently, no established trading market exists for the common stock underlying any of the subsidiary options and such options are not exchangeable for shares of our common stock. We have no plan to offer an exchangeability feature for options to purchase shares of our common stock or otherwise provide liquidity for these subsidiary options, but we could consider such alternatives in the future. OUR FINANCIAL CONDITION COULD BE AFFECTED BY POTENTIAL PUBLIC OFFERINGS OF OUR SUBSIDIARIES' STOCK Due to our corporate structure of operating through separate subsidiaries, we could engage in future public offerings of the common stock of our subsidiaries, sales of subsidiaries or strategic acquisitions with subsidiary stock if our board determined that it was in the best interests of the stockholders to pursue that course of action. Some of these alternatives could adversely effect our business, financial condition and results of operations. For example, any public offering or other sale of a minority portion of a subsidiary's stock would reduce that subsidiary's contribution to our net income and earnings per share. WE MAY FACE DIFFICULTIES IN OBTAINING FDA APPROVAL FOR OUR PRODUCTS Some of our products are subject to the approval process of the Food and Drug Administration (FDA) because they are used for food storage or in medical devices. These products include our CoolPure(R) and PureBright(R) technologies and the EMI filter. There are many aspects of the FDA approval process that could have a material adverse effect on our business, financial condition and results of operations, including the following: - the FDA testing and application process is expensive and lengthy and varies based on the type of product; - our products may not ultimately receive FDA approval or clearance which would prevent us from marketing such products; 14 17 - the FDA may restrict a product's intended use as a condition to approving or clearing such product or place conditions on any approval that could restrict the commercial applications of such products; - the FDA may require post-marketing testing and surveillance to monitor the effects of products it initially approves; - the FDA may withdraw its approval or clearance of any product if compliance with regulatory standards is not maintained or if problems occur following initial marketing; and - failure to comply with existing or future regulatory requirements can result in, among other things, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, failure of the United States government to grant pre-market clearance or pre-market approval for products, withdrawal of marketing clearances or approvals and criminal prosecution. OUR LONG-TERM FIXED-PRICE CONTRACTS MAY BE UNPROFITABLE Some of our businesses, primarily those involved in government funded research and systems development, enter into long-term fixed-price contracts for large hardware systems or components. If we experience unanticipated delays in program schedules, fail to anticipate costs accurately or encounter problems with important vendors, it could adversely affect the profitability of these contracts. ANTI-TAKEOVER PROVISIONS IN OUR CERTIFICATE OF INCORPORATION AND BYLAWS COULD PREVENT TRANSACTIONS WHICH ARE IN THE BEST INTEREST OF OUR STOCKHOLDERS Certain provisions in our certificate of incorporation could make it more difficult for a third party to acquire control of Maxwell, even if such change in control would be beneficial to our stockholders. We have a staggered board of directors which means that our directors are divided into three classes. The directors in each class are elected to serve three-year terms. Since the three-year terms of each class overlap the terms of the other classes of directors, the entire board of directors cannot be replaced in any one year. Furthermore, our certificate of incorporation contains a "fair price provision" which may require a potential acquirer to obtain the consent of our board to any business combination involving Maxwell. Our certificate of incorporation and bylaws do not permit stockholder action by written consent or the calling by stockholders of a special meeting. The provisions of our certificate of incorporation and bylaws could delay, deter or prevent a merger, tender offer, or other business combination or change in control involving us that some, or a majority, of our stockholders might consider to be in their best interests. This includes offers or attempted takeovers that could result in our stockholders receiving a premium over the market price for their shares of our common stock. 15 18 OUR COMMON STOCK EXPERIENCES LIMITED TRADING VOLUME AND OUR STOCK PRICE HAS BEEN VOLATILE Our common stock is traded on the Nasdaq National Market. The trading volume of our common stock each day is relatively small. This means that sales or purchases of relatively small blocks of stock can have a significant impact on the price at which our stock is traded. We believe factors such as quarterly fluctuations in financial results, announcements of new technologies impacting our products, announcements by competitors or changes in securities analysts' recommendations may cause the price of our stock to fluctuate, perhaps substantially. These fluctuations, as well as general economic conditions in the United States and worldwide, such as recessions or higher interest rates, may adversely affect the market price of our common stock. FORWARD-LOOKING STATEMENTS This prospectus and the documents considered to be a part of this prospectus may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results in the future could differ materially from those described in any forward-looking statements as a result of certain factors, including those set forth in "Risk Factors," as well as those noted elsewhere in this prospectus and the documents considered to be a part of this prospectus generally. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. 16 19 USE OF PROCEEDS We will not receive any proceeds from the sale of the shares offered by this prospectus. All proceeds from the sale of the shares offered hereby will be for the account of the selling stockholders. SELLING STOCKHOLDERS The following table sets forth the name of, and number of shares owned by, each selling stockholder. The shares of common stock to be sold under this prospectus were issued to the former stockholders of KD Components, Inc. and Bressner Technology GmbH, and in connection with our acquisitions of those companies. None of the selling stockholders has held any position or office or has any other material relationship with us or any of our affiliates within the past three years other than as a result of his or her beneficial ownership of shares or the fact that some of the selling stockholders were employees of one of the acquired companies and are now one of our employees. The shares may be offered from time to time by the selling stockholders named below. However, such selling stockholders are under no obligation to sell all or any portion of such shares, nor are the selling stockholders obligated to sell any such shares immediately under this prospectus. Because the selling stockholders may sell all or some of their shares of common stock offered hereby, no estimate can be given as to the number of shares of common stock that will be held by any selling stockholder upon termination of any offering made under this prospectus.
PERCENTAGE OF SHARES SHARES BENEFICIALLY NUMBER OF SHARES BENEFICIALLY OWNED BENEFICIALLY OWNED NUMBER OF OWNED AFTER AFTER THE NAME OF SELLING STOCKHOLDER(1) PRIOR TO THE OFFERING SHARES OFFERED THE OFFERING(1) OFFERING(2) - ------------------------------ --------------------- -------------- ---------------- ------------ Josef Bressner(3)................. 113,500 113,500 * -- Jeffrey M. Day(3)................. 42,598 42,598 * -- Michael W. Day.................... 88,698 88,698 * --
- --------------------- * Amount represents less than 1% of the issued and outstanding shares of our common stock. (1) Percentage is based on 9,547,942 shares of our common stock outstanding on May 31, 1999, adjusted as required by rules promulgated by the SEC. Information with respect to beneficial ownership is based on information furnished to us by each stockholder included in the table or included in filings with the Securities and Exchange Commission. We believe that each individual person has sole voting and investment power for shares beneficially owned by him, subject to community property laws if applicable. (2) Assumes the sale of all of the shares offered by the selling stockholders. (3) The stockholder is one of our employees. 17 20 PLAN OF DISTRIBUTION The shares of common stock covered by this prospectus may be offered and sold from time to time by the selling stockholders. References in this plan of distribution to "selling stockholders" include donees and pledgees selling shares received from a named selling stockholder after the date of this prospectus. The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. The selling stockholders may sell the shares on the Nasdaq National Market, or in private sales at negotiated prices. The shares may be sold by one or more of the following methods of sale, at market prices prevailing at the time of sale, or at negotiated prices: - a block trade in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; - purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus; - an over-the-counter distribution in accordance with the rules of the Nasdaq National Market; - ordinary brokerage transactions and transactions in which the broker solicits purchasers; and - in privately negotiated transactions. If required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution. In addition, if we are notified by a selling stockholder that a donee or pledgee intends to sell more than 500 shares, we will file a supplement to this prospectus. In effecting sales, broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to participate in the resales. The selling stockholders may enter into hedging transactions with broker-dealers in connection with distributions of the shares or otherwise. In such transactions, broker-dealers or other financial institutions may engage in short sales of the shares in the course of hedging the positions they assume with a selling stockholder. The selling stockholders may also sell shares short and redeliver the shares to close out such short positions. The selling stockholders may also enter into option or other transactions with broker-dealers which require the delivery to the broker-dealer of the shares. The broker-dealer may then resell or otherwise transfer such shares pursuant to this prospectus. The selling stockholders may also pledge or loan the shares to a broker-dealer. The broker-dealer may sell the shares so loaned, or upon a default the broker-dealer may sell the pledged shares pursuant to this prospectus. In addition, any shares that qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this prospectus. In effecting sales, broker-dealers or agents engaged by the selling stockholders may arrange for other broker-dealers or agents to participate. Broker-dealers or agents may receive compensation in the form of commissions, discounts or concessions from selling stockholders. Broker-dealers or agents may also receive compensation from the purchasers of the shares for whom they act as agents or to whom they sell as principals, or both. We will pay all expenses incident to the offering and sale of the shares to 18 21 the public other than any commissions and discounts of underwriters, dealers or agents and any transfer taxes. The selling stockholders and any underwriter, broker-dealer or agent who participate in the distribution of such shares may be underwriters under the Securities Act of 1933, and any discount, commission or concession they receive may be an underwriting discount or commission under the Securities Act of 1933. In order to comply with the securities laws of some states, if applicable, the shares must be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with. We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, we will make copies of this prospectus available to the selling stockholders and we have informed them of the need for delivery of copies of this prospectus to purchasers at or prior to the time of any sale of the shares offered by this prospectus. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against some liabilities, including liabilities arising under the Securities Act of 1933. At the time a particular offer of shares is made, if required, a prospectus supplement will be distributed that will set forth the number of shares being offered and the terms of the offering, including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter, any discount, commission and other item constituting compensation, any discount, commission or concession allowed or reallowed or paid to any dealer, and the proposed selling price to the public. 19 22 DESCRIPTION OF CAPITAL STOCK COMMON STOCK Our authorized capital stock consists of 40,000,000 shares of common stock with a $.10 par value. As of May 31, 1999, there were 9,547,942 shares of common stock outstanding, excluding shares issuable upon the exercise of outstanding options to purchase an aggregate of 1,579,903 shares of common stock held by employees, management and directors. Holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. There is no cumulative voting for the election of directors. Holders of common stock are entitled to receive ratably such dividends as may be declared by the board of directors out of funds legally available for dividends. In the event of a liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in all assets remaining after payment to all creditors. Holders of our common stock have no preemptive rights and have no rights to convert their common stock into any other securities. All of the outstanding shares of common stock are, and the shares being offered by this prospectus will upon issuance and sale be, fully paid and nonassessable. The transfer agent and registrar for the common stock is ChaseMellon Shareholder Services, L.L.C. ANTI-TAKEOVER PROVISIONS The provisions of our certificate of incorporation and bylaws having possible "anti-takeover" effects are those that: - form a classified board of directors with staggered terms of office, eliminate cumulative voting and permit the removal of directors only for cause; - impose supermajority stockholder vote or disinterested director approval requirements in connection with certain mergers, acquisitions and other business combinations, unless specified minimum price and procedural requirements are satisfied in the proposed transaction (a "fair price provision"); - eliminate the right of stockholders to call special stockholders' meetings and limit their right to take action without a meeting by written consent; and - impose supermajority stockholder vote or disinterested director approval requirements for amendments to a number of provisions in our charter documents, including the provisions described in the three preceding clauses. In general, the fair price provisions may have the effect of requiring cash payment for shares of common stock by an acquiror having accumulated 10% or more of the common stock at a price greater than the highest market price of the common stock within a recent date. Such a 10% or more stockholder must also meet certain procedural requirements intended to prevent accumulations of additional stock below the fair price. 20 23 DELAWARE LAW We are subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, Section 203 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 either: - prior to the date at which the person becomes an interested stockholder, the board of directors approves such transaction or business combination; - the stockholder acquires more than 85% of the outstanding voting stock of the corporation (excluding shares held by directors who are officers or held in certain employee stock plans) upon consummation of such transaction; or - the business combination is approved by the board of directors and by two-thirds of the outstanding voting stock of the corporation (excluding shares held by the interested stockholder) at a meeting of stockholders (and not by written consent). A "business combination" includes a merger, asset sale or other transaction resulting in a financial benefit to such interested stockholder. An "interested stockholder" is a person who, together with affiliates and associates, owns (or within three years prior, did own) 15% or more of the corporation's voting stock. LEGAL MATTERS The validity of the shares of common stock offered by this prospectus will be passed on for us by Riordan & McKinzie, a Professional Corporation, Los Angeles, California. A principal of Riordan & McKinzie owns 6,625 shares of common stock. EXPERTS Ernst & Young LLP, independent auditors, have audited our consolidated financial statements included in our annual report on Form 10-K for the fiscal year ended July 31, 1998, as set forth in their report, which is incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing. The consolidated financial statements of Space Electronics Inc. incorporated by reference in this prospectus have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated herein in reliance on the authority of that firm as experts in giving said reports. 21 24 ================================================================================ NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS IN CONNECTION WITH THIS OFFERING MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US OR BY ANY SELLING STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS. ----------------------------- 244,796 SHARES MAXWELL TECHNOLOGIES, INC. COMMON STOCK ----------------------------- PROSPECTUS ----------------------------- , 1999 ================================================================================ 25 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following is a statement of estimated expenses to be paid by the Registrant in connection with the issuance and distribution of the securities being registered. All of the amounts shown are estimated, except the SEC registration fee. SEC Registration Fee.................................................. $ 1,583 Legal fees............................................................ 10,000 Accountants' fees..................................................... 5,000 Blue Sky qualification fees and expenses.............................. -- Transfer Agent fees................................................... 1,000 Miscellaneous......................................................... 5,000 Total............................................................. $ 22,583
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Maxwell Technologies, Inc. is a Delaware corporation. Article V of our Bylaws provides that we may indemnify our officers and Directors to the full extent permitted by law. Section 145 of the General Corporation Law of the State of Delaware ("GCL") provides that a Delaware corporation has the power to indemnify its officers and directors in certain circumstances. Subsection (a) of Section 145 of the GCL empowers a corporation to indemnify any director or officer, or former director or officer, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding provided that such director or officer acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, provided that such director or officer had no cause to believe his or her conduct was unlawful. Subsection (b) of Section 145 of the GCL empowers a corporation to indemnify any director or officer, or former director or officer, who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses actually and reasonably incurred in connection with the defense or settlement of such action or suit, provided that such director or officer 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 no indemnification may be made in respect of any claim, issue or matter as to which such director or officer shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action was brought shall determine that despite the adjudication of liability, such director or officer is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 145 of the GCL further provides that to the extent a director or officer of a corporation has been successful in the defense of any action, suit or proceeding referred to in subsections (a) and (b) or in the defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys' fees) II-1 26 actually and reasonably incurred by him or her in connection therewith; that indemnification provided for by Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and that the corporation shall have power to purchase and maintain insurance on behalf of a director or officer of the corporation against any liability asserted against him or her or incurred by him or her in any such capacity or arising out of his or her status as such whether or not the corporation would have the power to indemnify him or her against such liabilities under Section 145. Article Seventeenth of our Certificate of Incorporation currently provides that each Director shall not be personally liable to Maxwell or our stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (i) for any breach of the Director's duty of loyalty to Maxwell or our stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the GCL, or (iv) for any transaction from which the Director derived an improper benefit. We have entered into indemnity agreements with each of our Directors and executive officers. The indemnity agreements generally indemnify such persons against liabilities arising out of their service in their capacities as our Directors, officers, employees or agents. We may from time to time enter into indemnity agreements with additional individuals who become our officers or Directors. ITEM 16. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 4.1+ Registration Rights Agreement dated as of December 31, 1998 by and among the Company and certain shareholders of KD Components. 4.2* Registration Rights Agreement dated as of January 23, 1999, by and among the Company and certain shareholders of Bressner Technology GmbH. 5.1* Opinion of Riordan & McKinzie, a Professional Corporation. 23.1* Consent of Ernst & Young LLP, Independent Auditors. 23.2* Consent of Arthur Andersen LLP, Independent Auditors. 23.3* Consent of Riordan & McKinzie (included in Exhibit 5.1). 24.1* Powers of Attorney with respect to the Company (included on page II-4).
- ----------------------- + Incorporated by reference from the Company's Registration Statement on Form S-3 filed with the SEC on March 29, 1999 (Registration No. 333-75227). * Included in this filing. ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. II-2 27 Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. That, insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act of 1934, and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act of 1934, that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 28 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that is has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Diego, State of California on the 30th day of June, 1999. MAXWELL TECHNOLOGIES, INC. By: /s/ Thomas L. Horgan ---------------------------------------------- Thomas L. Horgan Chief Executive Officer and President Each person whose signature appears below constitutes and appoints Thomas L. Horgan and Donald M. Roberts, and each of them his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Registration Statement, including any post-effective amendments as well as any related Registration Statement (or amendment thereto) filed in reliance upon Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ Thomas L. Horgan President, Chief Executive Officer and Director June 30, 1999 -------------------- (Principal Executive Officer and Principal Thomas L. Horgan Financial Officer) /s/ William A. Long Corporate Manager of Financial Reporting June 30, 1999 -------------------- (Principal Accounting Officer) William A. Long /s/ Carlton J. Eibl Director June 30, 1999 ------------------- Carlton J. Eibl /s/ Mark Rossi Director June 30, 1999 ------------------- Mark Rossi /s/ Kenneth F. Potashner Chairman of the Board and Director June 30, 1999 - ------------------------ Kenneth F. Potashner /s/ Karl M. Samuelian Director June 30, 1999 --------------------- Karl M. Samuelian
II-4 EX-4.2 2 EXHIBIT 4.2 1 EXHIBIT 4.2 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (the "Agreement") is entered into as of January 23, 1999, by and among Maxwell Technologies, Inc., a Delaware corporation ("Maxwell"), and Mr. Josef Bressner ("Holder"). R E C I T A L S A. Maxwell, MML Acquisition Corp., a Delaware corporation and the Holder are parties to a Purchase and exchange Agreement dated as of January 23, 1999 (the "Exchange Agreement"), pursuant to which the Holder will exchange all of the outstanding shares of Bressner Technology ("the Company") for shares of common stock, $.10 par value, of Maxwell ("Maxwell Common Stock"); and B. This Agreement is the Registration Rights Agreement referred to in Sections 2.2, 5.1 and 5.2 of the Exchange Agreement and, pursuant thereto, must be entered into by the parties as a condition precedent to the consummation of the transactions contemplated by the Exchange Agreement. A G R E E M E N T NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings: "Eligible Resale Date" shall mean ten days following the date on which Maxwell has filed with the SEC consolidated financial statements of Maxwell including the results of operations of Maxwell and the Company combined, of at least 30 days, in accordance with Regulation S-X under the Exchange Act and SEC releases and interpretations governing pooling-of-interests accounting treatment in business combinations. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. -1- 2 "Form S-3" shall mean such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by Maxwell with the SEC. "Holder" shall mean a holder of Registrable Securities. On the date hereof, the Holder is the only person holding Registrable Securities. "Prospectus" shall mean the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such Prospectus. "Register," "registered" and "registration" shall mean and refer to a registration effected by preparing and filing a Registration Statement and taking all other actions that are necessary or appropriate in connection therewith, and the declaration or ordering of effectiveness of such Registration Statement by the SEC. "Registration Expenses" shall have the meaning set forth in Section 4. "Registrable Securities" shall mean the shares of Maxwell Common Stock (i) issued pursuant to the Exchange Agreement, and (ii) issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (i) above; provided, however, that Registrable Securities shall not include (i) any shares of Maxwell Common Stock that have previously been sold to the public, (ii) have been sold in a private transaction (excluding the issuance of the Maxwell Common Stock pursuant to the Exchange Agreement), or (iii) are eligible for sale to the public under Rule 144. "Registration Statement" shall mean any registration statement of Maxwell in compliance with the Securities Act that covers Registrable Securities pursuant to the provisions of this Agreement, including, without limitation, the Prospectus, all amendments and supplements to such Registration Statement, including all post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement. "Rule 144" shall mean Rule 144 promulgated under the Securities Act or any similar successor rule, as the same shall be in effect from time to time. "Rule 415" shall mean Rule 415 promulgated under the Securities Act, or any similar successor rule, as the same shall be in effect from time to time. -2- 3 "Securities Act" shall mean the Securities Act of 1933, as amended from time to time. "SEC" shall mean the Securities and Exchange Commission. "Shelf Registration Statement" shall have the meaning set forth in Section 2(a) hereof. 2. Form S-3 Registration. (a) As soon as practicable, but no later than 20 days, following the Eligible Resale Date, Maxwell shall file a Registration Statement on Form S-3 providing for the sale pursuant to Rule 415 (a "Shelf Registration Statement"), and/or any similar rule that may be adopted by the SEC, of Registrable Securities by Holder. Maxwell shall use reasonable efforts to provide 10 days' notice to the Holder at the Company's address of the anticipated filing date of a Shelf Registration Statement under this Section 2(a), and such notice shall request all information required from Holder to participate in the Shelf Registration Statement so that Holder may participate in such registration. After the Registration Statement has become effective, Maxwell shall use commercially reasonable efforts to keep such Registration Statement continuously effective for 120 days. (b) Maxwell shall not have the obligation to register securities under this Agreement unless Holder provides and/or confirms in writing prior to or after the filing of the Registration Statement such information (including, without limitation, information as to the number of Registrable Securities that Holder has sold pursuant to any such Registration Statement from time to time) as Maxwell reasonably requests in connection with such Registration Statement. (c) Notwithstanding the foregoing, for a period not to exceed 90 days in any 12-month period, Maxwell shall not be obligated to prepare and file, or be prevented from delaying or abandoning, the Registration Statement required hereunder if Maxwell, in its good faith judgment, reasonably believes that the filing or maintenance of such Registration Statement would require the disclosure of material non-public information regarding Maxwell and, accordingly, that the filing thereof, at the time requested, or the offering of Maxwell Common Stock pursuant thereto, would materially and adversely affect (A) a pending or scheduled public offering or private placement of securities of Maxwell or any of its subsidiaries, (B) an acquisition, merger, consolidation or similar transaction by or of Maxwell or any of its subsidiaries, (C) preexisting and continuing negotiations, discussions or pending proposals with respect to any of the foregoing transactions, or (D) the financial condition of Maxwell in view of the disclosure of any pending or threatened litigation, claim, assessment or governmental investigation which might be required thereby. The reason for such delay shall be confirmed by a certificate of Maxwell's Chairman or President, subject to -3- 4 confidentiality restrictions, and no such delay shall shorten the 120-day effective period of such Registration Statement once it is filed and declared effective. In the event that Maxwell, in good faith, reasonably believes that such conditions are continuing after such 90-day period, it may, with the consent of Holder, which consent shall not be unreasonably withheld, extend such 90-day period for an additional 30 days. Any further delay shall require the consent of Holder. 3. Registration Procedures. In connection with Maxwell's registration obligations pursuant to Section 2 hereof, Maxwell will use its diligent efforts to effect such registration to permit the sale of the Registrable Securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto Maxwell will: (a) prepare and file with the SEC a Registration Statement with respect to such Registrable Securities and use its diligent efforts to cause such Registration Statement to become effective; provided that, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, Maxwell will use reasonable efforts to furnish to Holder and his counsel, copies of all such documents proposed to be filed at least twenty days prior thereto, and Maxwell will not file any such Registration Statement or amendment thereto or any Prospectus or any supplement thereto to which Holder shall reasonably object within such twenty day period; provided, further, that Maxwell will not name or otherwise provide any information with respect to Holder in any Registration Statement or Prospectus without the express written consent of Holder, unless required to do so by the Securities Act and the rules and regulations thereunder; (b) prepare and file with the SEC such amendments, post-effective amendments and supplements to the Registration Statement and the Prospectus as may be necessary to comply with the provisions of the Securities Act and the rules and regulations thereunder with respect to the disposition of all securities covered by such Registration Statement; (c) promptly notify Holder (i) when the Registration Statement, Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (iv) of the receipt by Maxwell of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (v) of the happening of any event which makes any statement made in the Registration Statement, the Prospectus or any document incorporated therein by reference untrue or which -4- 5 requires the making of any changes in the Registration Statement, the Prospectus or any document incorporated therein by reference in order to make the statements therein not misleading in light of the circumstances then existing; (d) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest possible moment; (e) furnish to Holder, without charge, at least one conformed copy of the Registration Statement and any post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference); (f) deliver to Holder, without charge, such reasonable number of conformed copies of the Registration Statement (and any post-effective amendment thereto) and such number of copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto (and any documents incorporated by reference therein) as Holder may reasonably request; Maxwell consents to the use of the Prospectus or any amendment or supplement thereto by Holder in connection with the offer and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto; (g) prior to any offering of Registrable Securities covered by a Registration Statement, register or qualify or cooperate with Holder in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions as Holder reasonably requests, and use its reasonable efforts to keep each such registration or qualification effective, including through new filings, or amendments or renewals, during the period such Registration Statement is required to be kept effective pursuant to the terms of this Agreement; and do any and all other acts or things necessary or advisable to enable the disposition in all such jurisdictions reasonably requested by Holder of the Registrable Securities covered by such Registration Statement, provided that under no circumstances shall Maxwell be required in connection therewith or as a condition thereof to qualify to do business or to file a general consent to service of process in any such states or jurisdictions; (h) cooperate with Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, free of any and all restrictive legends, such certificates to be in such denominations and registered in such names as Holder may request; (i) upon the occurrence of any event contemplated by Section 3(c)(v) above, prepare a supplement or post-effective amendment to the Registration Statement or the Prospectus or any document incorporated therein by reference or file any other required -5- 6 document so that, as thereafter delivered to the purchasers of the Registrable Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (j) make generally available to the holders of Maxwell's outstanding securities earnings statements satisfying the provisions of Section 11(a) of the Securities Act, no later than 60 days after the end of any 12 month period (or 90 days, if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm or best efforts underwritten offering, or, if not sold to underwriters in such an offering, (ii) beginning with the first month of Maxwell's first fiscal quarter commencing after the effective date of the Registration Statement, which statements shall cover said 12 month period; (k) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by each Registration Statement from and after a date not later than the effective date of such Registration Statement; (l) use its best efforts to cause all Registrable Securities covered by each Registration Statement to be listed, subject to notice of issuance, prior to the date of the first sale of such Registrable Securities pursuant to such Registration Statement, on each securities exchange on which the Maxwell Common Stock is then listed, and admitted to trading on the Nasdaq National Market, if the Maxwell Common Stock is then admitted to trading on the Nasdaq National Market; (m) enter into such agreements (including underwriting agreements in customary form containing, among other things, reasonable and customary indemnities) and take such other actions as Holder shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; and (n) cooperate with Holder and the managing underwriter or underwriters in their marketing efforts with respect to the sale of the Registrable Securities, including participation by Maxwell management in "road show" presentations. Holder agrees that, upon receipt of any notice from Maxwell of the happening of any event of the kind described in Section 3(c)(v) hereof, Holder will forthwith discontinue disposition of Registrable Securities under the Prospectus related to the applicable Registration Statement until Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(i) hereof, or until it is advised in writing by Maxwell that the use of the Prospectus may be resumed. It shall be a condition precedent to the obligations of Maxwell to take any action pursuant to this Section 3 with respect to the Registrable Securities of Holder that Holder shall furnish to Maxwell, upon reasonable request by Maxwell, such information -6- 7 regarding himself and the Registrable Securities held by him as shall be required by the Securities Act to effect the registration of Holder's Registrable Securities. 4. Registration Expenses. All expenses incident to any registration to be effected hereunder and incident to Maxwell's performance of or compliance with this Agreement, including without limitation all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, National Association of Securities Dealers, Inc., stock exchange and qualification fees, fees and disbursements of Maxwell's counsel and of independent certified public accountants of Maxwell (including the expenses of any special audit required by or incident to such performance), the fees of one counsel and one accountant representing Holder in such offering, expenses of any underwriters that are customarily requested in similar circumstances by such underwriters (excluding discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals relating to the distribution of the Registrable Securities, which will be borne by Holder), all such expenses being herein called "Registration Expenses," will be borne by Maxwell. Maxwell will also pay its internal expenses, the expense of any annual audit and the fees and expenses of any person retained by Maxwell. 5. Holder's Covenants. Holder covenants and agrees: (a) To sell all Registrable Securities only through a broker-dealer approved by Maxwell in writing, which approval shall not be unreasonably delayed or withheld; and (b) During the time the Registration Statement filed pursuant to Section 2(a) or 2(b) is effective, Holder shall not sell more than 10% of his Registrable Securities on any one trading day, or more than 25% of his Registrable Securities in any five consecutive trading days. Holder understands and agrees these manner of sale requirements are entered into for the benefit of Maxwell. -7- 8 6. Indemnification. (a) Indemnification by Maxwell. Maxwell agrees to indemnify and hold harmless Holder, partners and employees from and against any and all losses, claims, damages and liabilities (including any investigation, legal or other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted) (collectively, "Damages") to which Holder may become subject under the Securities Act, the Exchange Act or other federal or state securities law or regulation, at common law or otherwise, insofar as such Damages arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or preliminary prospectus or any amendment or supplement thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (iii) any violation or alleged violation by Maxwell of the Securities Act, the Exchange Act or any state securities or blue sky laws in connection with the Registration Statement, Prospectus or preliminary prospectus or any amendment or supplement thereto, provided that Maxwell will not be liable to Holder to the extent that such Damages arise from or are based upon any untrue statement or omission (x) based upon written information furnished to Maxwell by Holder expressly for the inclusion in such Registration Statement, (y) made in any preliminary prospectus if Holder failed to deliver a copy of the Prospectus with or prior to the delivery of written confirmation of the sale by Holder to the party asserting the claim underlying such Damages and such Prospectus would have corrected such untrue statement or omission and (z) made in any Prospectus if such untrue statement or omission was corrected in an amendment or supplement to such Prospectus and Holder failed to deliver such amendment or supplement prior to or concurrently with the sale of Registrable Securities to the party asserting the claim underlying such Damages. (b) Indemnification by Holder. Holder agrees to indemnify and hold harmless Maxwell, its directors and each officer who signed such Registration Statement and each person who controls Maxwell (within the meaning of Section 15 of the Securities Act), under the same circumstances as the foregoing indemnity from Maxwell to Holder to the extent that such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement of a material fact or omission of a material fact that was made in the Prospectus, the Registration Statement, or any amendment or supplement thereto, in reliance upon and in conformity with information relating to Holder furnished in writing to Maxwell by Holder expressly for use therein, provided that in no event shall the aggregate liability of Holder exceed the amount of the net proceeds received by Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. Maxwell and Holder shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as customarily furnished by such persons in similar circumstances. -8- 9 (c) Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder will (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person and not of the indemnifying party unless (A) the indemnifying party has agreed to pay such fees or expenses, (B) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (C) in the reasonable judgment of such person and the indemnifying party, based upon written advice of their respective counsel, a conflict of interest may exist between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person). If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). No indemnified party will be required to consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by all claimants or plaintiffs to such indemnified party of a release from all liability in respect to such claim or litigation. Any indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim. As used in this Section 6(c), the terms "indemnifying party", "indemnified party" and other terms of similar import are intended to include only Maxwell (and its officers, directors and control persons as set forth above) on the one hand, and Holder (and his partners, employees, attorneys and control persons as set forth above) on the other hand, as applicable. (d) Contribution. If for any reason the foregoing indemnity is unavailable, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law or provides a lesser sum to the indemnified party than the amount hereinafter calculated, in such proportion as is appropriate to reflect not only the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other but also the relative fault of the indemnifying party and the indemnified party as well as any other relevant equitable considerations. Notwithstanding the foregoing, Holder shall not be required to contribute any amount in excess of the amount Holder would have been required to pay to an indemnified party if the indemnity under -9- 10 Section 6(b) hereof was available. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligation of any person to contribute pursuant to this Section 6(d) shall be several and not joint. (e) Timing of Payments. An indemnifying party shall make payments of all amounts required to be made pursuant to the foregoing provisions of this Section 6 to or for the account of the indemnified party from time to time promptly upon receipt of bills or invoices relating thereto or when otherwise due or payable. (f) Survival. The indemnity and contribution agreements contained in this Section 6 shall remain in full force and effect, regardless of any investigation made by or on behalf of Holder, and shall survive the transfer of such Registrable Securities by Holder. 7. Preparation; Reasonable Investigation. In connection with the preparation and filing of a Registration Statement pursuant to the terms of this Agreement: (a) Maxwell shall, with respect to a Registration Statement filed pursuant to Section 2, give Holder, his underwriters, if any, and their respective counsel and accountants the opportunity to participate in the preparation of such Registration Statement (other than reports and proxy statements incorporated therein by reference and lawfully and properly filed with the SEC) and each Prospectus included therein or filed with the SEC, and each amendment thereof or supplement thereto; and (b) Maxwell shall give Holder, his underwriters, if any, and their respective counsel and accountants such reasonable access to its books and records and such opportunities to discuss the business of Maxwell with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of Holder or such underwriters, to conduct a reasonable investigation within the meaning of Section 11(b)(3) of the Securities Act. 8. Rule 144. Maxwell covenants that it will use commercially reasonable efforts to file, on a timely basis, the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and it will take such further action as Holder may reasonably request (including, without limitation, compliance with the current public information requirements of Rule 144(c) and Rule 144A), all to the extent required from time to time to enable Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the conditions provided by Rule 144, or any similar rule or regulation hereafter adopted by the SEC. Upon the request of Holder, Maxwell will deliver to Holder a written statement, signed by the Chairman or President of Maxwell, verifying that it has complied with such information and requirements. -10- 11 9. Specific Performance. Holder, in addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, will be entitled to specific performance of his rights under this Agreement. Maxwell agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 10. Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed, postage prepaid, sent by facsimile or delivered personally by hand or nationally recognized courier addressed (a) if to Holder, at the address of the Company, or at such other address as Holder or permitted assignee shall have furnished to Maxwell in writing, (b) if to Maxwell, at 9275 Sky Park Court, San Diego, CA 92123; Attention: Donald M. Roberts; Facsimile (619) 277-6754, or such other address provided to Holder in writing. All such notices and other written communications shall be effective on the date of mailing, facsimile transfer or delivery. 11. Successors and Assigns: Assignment of Rights. The rights and benefits of Holder hereunder may not be assigned to a transferee or assignee, without the consent of Maxwell; provided, however, that, no later than the 10th day prior to the filing of the Registration Statement under Section 2 hereof, the rights and benefits of Holder hereunder may be transferred in connection with a transfer or assignment of any Registrable Securities held by Holder (i) by gift to immediate family members of Holder, or trusts or other entities for the sole benefit thereof, or (ii) by gift to any entity in which Holder, his or her immediate family members, or trusts or other entities for the sole benefit thereof beneficially own all of the voting securities; provided, however, that in each case, the transferee executes an instrument pursuant to which the transferee agrees to be bound by the terms and conditions hereof as a Holder, and such other documents related to the Exchange Agreement as Maxwell or its counsel may reasonably require, after which, such transferee shall be deemed a "Holder" hereunder. Any transfer of Registrable Securities, and rights hereunder, shall be subject to compliance with applicable securities laws and the restrictions contained in the Agreement. 12. Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 13. Entire Agreement; Amendment; Waiver. This Agreement, the Exchange Agreement and the other agreements contemplated thereby constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. Without limiting the foregoing, the rights of Holder to registration pursuant to the terms of this Agreement shall be subject to the limitations on resale contained in Exchange Agreement. -11- 12 Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated, except by a written instrument signed by Maxwell and the holders of at least 51% of the Registrable Securities and any such amendment, waiver, discharge or termination shall be binding upon all the parties hereto, but in no event shall the obligation of any party hereto be materially increased, except upon the written consent of such party. 14. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be original, and all of which together shall constitute one instrument. 15. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to principles of conflicts of laws thereof. 16. No Third Party Beneficiaries. The covenants and agreements set forth herein are for the sole and exclusive benefit of the parties hereto and their respective successors and assigns and such covenants and agreements shall not be construed as conferring, and are not intended to confer, any rights or benefits upon any other persons. -12- 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. MAXWELL: MAXWELL TECHNOLOGIES, INC. By: /s/ John D. Werderman --------------------- Name: John D. Werderman Title: Vice President HOLDER: /s/ Josef Bressner ------------------- Josef Bressner -13- 14 SCHEDULE OF AFFILIATED HOLDERS SCHEDULE A
Holder's Name/Address/Telecopier No. Number of Shares of Maxwell Common Stock Issued Pursuant to the Merger Agreement - ------------------------------------------------------- -------------------------------------------------
-14- 15 SCHEDULE OF AFFILIATED HOLDERS SCHEDULE B
Holder's Name/Address/Telecopier No. Number of Shares of Maxwell Common Stock Issued Pursuant to the Merger Agreement - ------------------------------------------------------- -------------------------------------------------
-15- EX-5.1 3 EXHIBIT 5.1 1 EXHIBIT 5.1 RIORDAN & MCKINZIE A PROFESSIONAL LAW CORPORATION 300 S. GRAND AVENUE, 29TH FLOOR LOS ANGELES, CALIFORNIA 90071-3155 June ___, 1999 13-364-011 Maxwell Technologies, Inc. 9275 Sky Park Court San Diego, California 92123 Ladies and Gentlemen: We have acted as counsel to Maxwell Technologies, Inc., a Delaware corporation (the "Company"), in connection with the registration under the Securities Act of 1933, as amended (the "1933 Act"), of 244,796 authorized and previously issued shares of the Common Stock (the "Shares"), $.10 par value per share, of the Company to be sold. This opinion is delivered to you in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the 1933 Act in connection with the Registration Statement on Form S-3, including all pre-effective and post-effective amendments thereto (the "Registration Statement"), for the aforementioned sale, filed with the Securities and Exchange Commission (the "Commission") under the 1933 Act. In rendering the opinion set forth herein, we have made such investigations of fact and law, and examined such documents and instruments, or copies thereof established to our satisfaction to be true and correct copies thereof, as we have deemed necessary under the circumstances. Based upon the foregoing and such other examination of law and fact as we have deemed necessary, and in reliance thereon, we are of the opinion that, the Shares are duly authorized, validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to this firm under the caption "Legal Matters" in the Prospectus which is a part of the Registration Statement. Very truly yours, Riordan & McKinzie EX-23.1 4 EXHIBIT 23.1 1 EXHIBIT 23.1 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of Maxwell Technologies, Inc. for the registration of 244,796 shares of its common stock and to the incorporation by reference therein of our report dated September 15, 1998, with respect to the consolidated financial statements of Maxwell Technologies, Inc. included in its Annual Report (Form 10-K) for the year ended July 31, 1998, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP ERNST & YOUNG LLP San Diego, California June 28, 1999 EX-23.2 5 EXHIBIT 23.2 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of Maxwell Technologies, Inc. of our report on the financial statements of Space Electronics Inc., dated January 23, 1998 included in Maxwell Technologies, Inc. Form 8-K, dated February 12, 1999 and to all references to our firm included in this Registration Statement. It should be noted that we have not audited any financial statements of Space Electronics Inc. subsequent to December 31, 1997 or performed any audit procedures subsequent to the date of our report. /s/ Arthur Andersen LLP ARTHUR ANDERSEN LLP San Diego, California June 29, 1999 -----END PRIVACY-ENHANCED MESSAGE-----