As filed with the Securities and Exchange Commission on June 5, 2001
Registration No. 333-92383
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
POST-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-1 ON FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
CHARLES RIVER LABORATORIES
INTERNATIONAL, INC.
(Formerly Charles River Laboratories Holdings, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 6770 06-139-7316
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification number)
251 Ballardvale Street
Wilmington, Massachusetts 01887
(978) 658-6000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-----------------------
Thomas F. Ackerman
Chief Financial Officer
Charles River Laboratories
International, Inc.
251 Ballardvale Street
Wilmington, Massachusetts 01887
(978) 658-6000, Ext. 1225
-----------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------
Copies to:
Richard D. Truesdell, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
Approximate date of commencement of proposed sale to the public: from time
to time after the effective date
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, please 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 this form is a post-effective amendment filed pursuant to Rule 462(d)
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. |_|
-----------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the SEC, acting pursuant to said Section 8(a), may
determine.
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Prospectus
, 200_
Charles River Laboratories International, Inc.
Common Stock
Warrants To Purchase Common Stock
- --------------------------------------------------------------------------------
This prospectus relates to the resale of 150,000 warrants and shares of
our common stock acquired on exercise of the warrants by holders named on page
11 of this prospectus or in an accompanying supplement to this prospectus. The
named holders may offer and sell all of the common stock and warrants being
registered from time to time. This prospectus also relates to the issuance and
sale by us of 1,139,551 shares of our common stock upon the exercise of the
warrants.
Each warrant entitles the holder to purchase 7.60 shares of our common
stock at an exercise price of $5.19 per share, subject to adjustment in some
circumstances. Upon exercise, the holders of warrants will be entitled, in the
aggregate, to purchase 1,139,551 shares of common stock, representing
approximately 2.5% of the outstanding shares of our common stock on a fully
diluted basis as of March 31, 2001. The warrants will be exercisable at any
time on or after October 21, 2001. Unless exercised, the warrants will
automatically expire at 5:00 p.m., New York City time, on October 1, 2009.
Our common stock is listed on the New York Stock Exchange under the symbol
"CRL."
We will not receive any proceeds from the sale of the common stock or
warrants by the holders, other than payment of the exercise price of the
warrants.
This investment involves risks. See "Risk Factors" beginning on page 5.
Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
2
TABLE OF CONTENTS
Page
----
The Company...................................................................4
Risk Factors..................................................................5
Use of Proceeds..............................................................10
Dividend Policy..............................................................10
Holders of the Warrants......................................................11
Description of the Warrants..................................................15
Description of Capital Stock.................................................18
Certain United States Federal Tax Consequences...............................21
Plan of Distribution.........................................................25
Legal Matters................................................................25
Experts......................................................................25
Where You Can Find More Information..........................................26
Incorporation of Documents by Reference......................................26
Index to Unaudited Pro Forma Condensed
Consolidated Financial Data...............................................P-1
-----------------------
Charles River is a registered trademark of Charles River Laboratories, Inc.
This prospectus also includes trademarks and tradenames of other parties.
3
THE COMPANY
Charles River Laboratories International, Inc. is a holding company and
does not have any material operations or assets other than its ownership of all
of the capital stock of Charles River Laboratories, Inc.
We are a leading provider of critical research tools and integrated
support services that enable innovative and efficient drug discovery and
development. We are the global leader in providing the animal research models
required in research and development for new drugs, devices and therapies and
have been in this business for more than 50 years. Since 1992, we have built
upon our research model technologies to develop a broad and growing portfolio
of biomedical products and services. Our wide array of services enables our
customers to reduce costs, increase speed and enhance their productivity and
effectiveness in drug discovery and development. Our customer base, spanning
over 50 countries, includes all of the major pharmaceutical and biotechnology
companies, as well as many leading hospitals and academic institutions. We
currently operate 76 facilities in 15 countries worldwide. Our differentiated
products and services, supported by our global infrastructure and scientific
expertise, enable our customers to meet many of the challenges of early-stage
life sciences research, a large and growing market. In 2000, our net sales were
$306.6 million, and our operating income was $65.1 million.
We are organized as a Delaware corporation. Our headquarters are located
at 251 Ballardvale Street, Wilmington, Massachusetts 01887. Our telephone
number is (978) 658-6000. Our website address is www.criver.com. The
information on our website is not incorporated as a part of this prospectus.
4
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks described below are not the only ones we face.
Additional risks not presently known to us or that we currently consider
immaterial may also impair our business operations. Any of these risks could
have a material and negative effect on our business, financial condition or
results of operations. The value of the warrants and trading price of our
common stock issuable upon exercise of the warrants could decline due to any of
these risks, and you may lose all or part of your investment.
Risks Related to Our Business and Industry
If we are not successful in selecting and integrating the businesses and
technologies we acquire, our business may suffer.
We have recently expanded our business through the Pathology Associates
International Corporation and Primedica Corporation acquisitions and we plan to
continue to grow our business through acquisitions of businesses and
technologies and through alliances. However, businesses and technologies may
not be available on terms and conditions we find acceptable. Even if completed,
acquisitions and alliances involve numerous risks which may include:
o difficulties and expenses incurred in assimilating operations,
services, products or technologies;
o difficulties in developing and operating new businesses including
diversion of management's attention from other business concerns;
o the potential loss of key employees of an acquired business and
difficulties in attracting new employees to grow businesses;
o difficulties in assimilating differences in foreign business
practices and overcoming language barriers;
o difficulties in obtaining intellectual property protections and
skills that we and our employees currently do not have; and
o difficulties in achieving business and financial success.
In the event that the success of an acquired business or technology or an
alliance does not meet expectations, we may be required to restructure. We may
not be able to successfully integrate acquisitions into our existing business
or successfully exploit new business or technologies.
Contaminations in our animal populations can damage our inventory, harm our
reputation for contaminant-free production and result in decreased sales.
Our research models and fertile chicken eggs must be free of contaminants,
such as viruses and bacteria. Presence of contaminants can distort or
compromise the quality of research results. Contaminations in our isolated
breeding rooms or poultry houses could disrupt our contaminant-free research
model and fertile egg production, harm our reputation for contaminant-free
production and result in decreased sales.
Contaminations typically require cleaning up the contaminated room or
poultry house. This clean-up results in inventory loss, clean-up and start-up
costs, and reduced sales as a result of lost customer orders and credits for
prior shipments. These contaminations are unanticipated and difficult to
predict. We experienced several material contaminations in our animal
populations in 1996 and a few significant contaminations in 1997 that adversely
impacted our 1996 and 1997 financial results. Since then, we made over $8.0
million in capital expenditures
5
designed to strengthen our biosecurity and significantly changed our operating
procedures. We have not experienced any significant contaminations since 1997.
Many of our customers are pharmaceutical and biotechnology companies, and we
are subject to risks, uncertainties and trends that affect companies in those
industries.
Sales of our products and services are highly dependent on research and
development expenditures by pharmaceutical and biotechnology companies. We are
therefore subject to risks, uncertainties and trends that affect companies in
those industries, including government regulation, pricing pressure,
technological change and shifts in the focus and scope of research and
development expenditures. For example, over the past several years, the
pharmaceutical industry has undergone significant mergers and combinations, and
many industry experts expect this trend to continue. After recent mergers and
combinations, some customers combined or otherwise reduced their research and
development operations, resulting in fewer animal research activities. We
experienced both temporary disruptions and permanent reductions in sales of our
research models to some of these customers. Future mergers and combinations in
the pharmaceutical or biotechnology industries, or other industry-wide trends,
could adversely affect demand for or pricing of our products.
New technologies may be developed, validated and increasingly used in
biomedical research that could reduce demand for some of our products and
services.
For many years, groups within the scientific and research community have
attempted to develop models, methods and systems that would replace or
supplement the use of living animals as test subjects in biomedical research.
Companies have developed several techniques that have scientific merit,
especially in the area of cosmetics and household product testing, markets in
which we are not active. Only a few alternative test methods in the discovery
and development of effective and safe treatments for human and animal disease
conditions have been validated and successfully deployed. The principal
validated non-animal test system is the LAL, or endotoxin detection system, a
technology which we acquired and have aggressively marketed as an alternative
to testing in animals. It is our strategy to participate in some fashion with
any non-animal test method as it becomes validated as a research model
alternative or adjunct in our markets. However, these methods may not be
available to us or we may not be successful in commercializing these methods.
Even if we are successful, sales or profits from these methods may not offset
reduced sales or profits from research models.
Alternative research methods could decrease the need for research models,
and we may not be able to develop new products effectively or in a timely
manner to replace any lost sales. In addition, one of the anticipated outcomes
of genomics research is to permit the elimination of more compounds prior to
preclinical testing. While this outcome may not occur for several years, if at
all, it may reduce the demand for some of our products and services.
The outsourcing trend in the preclinical and nonclinical stages of drug
discovery and development, meaning contracting out to others functions that
were previously performed internally, may decrease, which could slow our
growth.
Some areas of our biomedical products and services business have grown
significantly as a result of the increase over the past several years in
pharmaceutical and biotechnology companies outsourcing their preclinical and
nonclinical research support activities. While industry analysts expect the
outsourcing trend to continue for the next several years, a substantial
decrease in preclinical and nonclinical outsourcing activity could result in a
diminished growth rate in the sales of one or more of our expected higher
growth areas.
Our business may be affected by changes in the Animal Welfare Act and related
regulations which may require us to alter our operations.
The Animal Welfare Act imposes a wide variety of specific regulations on
producers and users of regulated species including cage size, shipping
conditions and environmental enrichment methods. Depending on whether the final
rule making in this area includes rats, mice and birds, including chickens, we
could be required to alter our production operations. This may include adding
production capacity, new equipment and additional employees. We
6
believe that application of the Animal Welfare Act to rats, mice and chickens
used in our research model and vaccine support products operations in the
United States will not result in loss of net sales, margin or market share,
since all U.S. producers and users will be subject to the same regulations.
While we do not anticipate the addition of rats, mice and chickens to the
Animal Welfare Act to require significant expenditures, changes to the
regulations may be more stringent than we expect and require more significant
expenditures. Additionally, if we fail to comply with state regulations,
including general anti-cruelty legislation, foreign laws and other anti-cruelty
laws, we could face significant civil and criminal penalties.
Factors such as exchange rate fluctuations and increased international and U.S.
regulatory requirements may increase our costs of doing business in foreign
countries.
A significant part of our net sales is derived from operations outside the
United States. Our operations and financial results could be significantly
affected by factors such as changes in foreign currency rates, uncertainties
related to regional economic circumstances and the costs of complying with a
wide variety of international and U.S. regulatory requirements.
Because the sales and expenses of our foreign operations are generally
denominated in local currencies, we are subject to exchange rate fluctuations
between local currencies and the U.S. dollar in the reported results of our
foreign operations. These fluctuations may decrease our earnings. We currently
do not hedge against the risk of exchange rate fluctuations.
We face significant competition in our business, and if we are unable to
respond to competition in our business, our revenues may decrease.
We face significant competition from different competitors in each of our
business areas. Some of our competitors in biotech safety testing and medical
device testing are larger than we are and may have greater capital, technical
or other resources than we do. We generally compete on the basis of quality,
reputation, and availability of service. Expansion by our competitors into
other areas in which we operate, new entrants into our markets or changes in
our competitors' strategy could adversely affect our competitive position. Any
erosion of our competitive position may decrease our revenues or limit our
growth.
Negative attention from special interest groups may impair our business.
Our core research model activities with rats, mice and other rodents have
not historically been the subject of animal rights media attention. However,
the large animal component of our business has been the subject of adverse
attention and on-site protests. We closed our small import facility in England
due in part to protests by animal right activists, which included threats
against our facilities and employees. Future negative attention or threats
against our facilities or employees could impair our business.
One of our large animal operations is dependent on a single source of supply,
which if interrupted could adversely affect our business.
We depend on a single, international source of supply for one of our large
animal operations. Disruptions to their continued supply may arise from export
or import restrictions or embargoes, foreign government or economic
instability, or severe weather conditions. Any disruption of supply could harm
our business if we cannot remove the disruption or are unable to secure an
alternative or secondary source on comparable commercial terms.
Tax benefits we expect to be available in the future may be subject to
challenge.
In connection with the recapitalization, our shareholders, CRL Acquisition
LLC and Bausch & Lomb Incorporated, or B&L, made a joint election intended to
permit us to increase the depreciable and amortizable tax basis in our assets
for Federal income tax purposes, thereby providing us with expected future tax
benefits. In connection with our initial public offering, CRL Acquisition LLC
reorganized, terminated its existence as a corporation for tax purposes and
distributed a substantial portion of our stock to its members. It is possible
that the
7
Internal Revenue Service may contend that this reorganization and liquidating
distribution should be integrated with our original recapitalization. We
believe that the reorganization and liquidating distribution should not have
any impact upon the election for federal income tax purposes. However, the
Internal Revenue Service may reach a different conclusion. If the Internal
Revenue Service were successful, the expected future tax benefits would not be
available, and we would be required to write off the related deferred tax asset
reflected in our balance sheet by recording a non-recurring tax expense in our
results of operations in an amount equal to such deferred tax asset.
We depend on key personnel and may not be able to retain these employees or
recruit additional qualified personnel, which would harm our business.
Our success depends to a significant extent on the continued services of
our senior management and other members of management. James C. Foster, our
Chief Executive Officer since 1992, has held various positions with Charles
River for 25 years and recently became our Chairman. We have no employment
agreement with Mr. Foster, nor with any other executive officer. If Mr. Foster
or other members of management do not continue in their present positions, our
business may suffer.
Because of the specialized scientific nature of our business, we are
highly dependent upon qualified scientific, technical and managerial personnel.
There is intense competition for qualified personnel in the pharmaceutical and
biotechnological fields. Therefore, we may not be able to attract and retain
the qualified personnel necessary for the development of our business. The loss
of the services of existing personnel, as well as the failure to recruit
additional key scientific, technical and managerial personnel in a timely
manner could harm our business.
DLJ Merchant Banking Partners, II, L.P. and its affiliates have substantial
control over our company and may have different interests than those of other
holders of our common stock.
DLJ Merchant Banking Partners II, L.P. and affiliated funds, which we
refer to as the DLJMB Funds, beneficially own approximately 30.0% of our
outstanding common stock. As a result of their stock ownership and contractual
rights they received in the recapitalization, these entities have substantial
control over our business, policies and affairs, including the power to:
o elect a majority of our directors;
o appoint new management;
o prevent or cause a change of control; and
o substantially control any action requiring the approval of the
holders of common stock, including the adoption of amendments to our
certificate of incorporation and approval of mergers or sales of
substantially all of our assets.
The directors elected by the DLJMB Funds have the ability to control
decisions affecting the business and management of our company including our
capital structure. This includes the issuance of additional capital stock, the
implementation of stock repurchase programs and the declaration of dividends.
The DLJMB Funds and the directors they appoint may have different interests
than those of other holders of our common stock.
Our historical financial information may not be representative of our results
as a separate company.
The historical financial information incorporated by reference in this
prospectus for the periods prior to the recapitalization may not reflect what
our results of operations, financial position and cash flows would have been
had we been a separate, stand-alone company during the periods presented. We
made some adjustments and allocations to the historical financial statements
for the periods prior to the recapitalization incorporated by reference in this
prospectus because B&L did not account for us as a single stand-alone business
in those periods. Our adjustments and allocations made in preparing our
historical consolidated financial statements may not appropriately reflect our
operations during the periods presented prior to the recapitalization, as if we
had operated as a stand-alone company.
8
Healthcare reform could reduce or eliminate our business opportunities.
The United States and many foreign governments have reviewed or undertaken
healthcare reform, most notably price controls on new drugs, which may
adversely affect research and development expenditures by pharmaceutical and
biotechnology companies, resulting in a decrease of the business opportunities
available to us. We cannot predict the impact that any pending or future
healthcare reform proposals may have on our business.
Risks Relating to the Warrants and Common Stock
There is no active trading market for the warrants
There is no active trading market for the warrants which may make it
difficult for you to sell your warrants, or sell your warrants at a price that
you believe reflects the financial performance of our company.
Our stock price may be volatile and could decline substantially.
The stock market has, from time to time, experienced extreme price and
volume fluctuations. The market price for our common stock and value of the
warrants may be adversely affected due to many factors, including:
o our operating results failing to meet the expectations of securities
analysts or investors in any quarter;
o downward revisions in securities analysts' estimates;
o material announcements by us or our competitors;
o governmental regulatory action;
o technological innovations by competitors or competing technologies;
o investor perceptions of our industry or prospects or those of our
customers; and
o changes in general market conditions or economic trends.
In the past, companies that have experienced volatility in the market
price of their stock have been the subject of securities class action
litigation. If we become involved in a securities class action litigation in
the future, it could result in substantial costs and diversion of management
attention and resources, harming our business.
Shares eligible for public sale could adversely affect our stock price and the
value of the warrants.
The market price of our common stock and the value of the warrants could
decline as a result of sales by our existing stockholders or the perception
that these sales could occur. These sales also might make it difficult for us
to sell equity securities in the future at a time and price that we deem
appropriate. In addition, some existing stockholders have the ability to
require us to register their shares.
9
USE OF PROCEEDS
All of the warrants offered hereby are being sold by the holders listed on
page 11 of this prospectus. We will not receive any proceeds from the sale of
our warrants or common stock issued upon the exercise of the warrants, other
than the payment of the exercise price of the warrants.
DIVIDEND POLICY
We have not declared or paid any cash dividends on shares of our common
stock in the past two years except to our former parent company and we do not
intend to pay cash dividends in the foreseeable future. We currently intend to
retain any earnings to finance future operations and expansion and to reduce
indebtedness. We are a holding company and are dependent on distributions from
our subsidiaries to meet our cash requirements. The terms of the indenture
governing our senior subordinated notes and our credit facility restrict the
ability of our subsidiaries to make distributions to us and, consequently,
restrict our ability to pay dividends on our common stock. In addition, holders
of the warrants will not have the right to receive any dividends so long as
their warrants are unexercised.
10
HOLDERS OF THE WARRANTS
The table below sets forth information with respect to the number of
warrants and shares of our common stock owned by each of the holders. We have
registered the warrants and the common stock issuable upon the exercise of the
warrants to permit public secondary trading of the warrants and shares of our
common stock, and the holders may offer the warrants and common stock issued
upon the exercise of the warrants for resale from time to time. See "Plan of
Distribution." The percentage of ownership shown in the table is based on
40,127,642 shares of common stock outstanding on March 31, 2001.
Because the holders may, under this prospectus, offer all or some portion
of the warrants or the common stock issuable upon exercise of the warrants, no
estimate can be given as to the amount of the warrants or the common stock
issuable upon exercise of the warrants that will be held by the holders upon
termination of any such sales. In addition, the holders identified below may
have sold, transferred or otherwise disposed of all or a portion of their
warrants, since the date on which they provided the information regarding their
warrants, in transactions exempt from the registration requirements of the
Securities Act. See "Plan of Distribution."
None of the holders listed below have, or within the past three years had,
any position, office or other material relationship with us or any of our
predecessors or affiliates other than the affiliation of some of our directors,
with some of the holders listed below as disclosed in the documents
incorporated by reference hereto.
We filed with the SEC a registration statement, of which this prospectus
forms a part, with respect to the resale of the warrants and the issuance and
resale of our common stock issued upon the exercise of the warrants from time
to time, under Rule 415 under the Securities Act, in the over-the-counter
market, in privately-negotiated transactions, in underwritten offerings or by a
combination of such methods of sale. We are obligated to use our best efforts
to keep the registration statement effective until the later of (i) February 8,
2002 and (ii) the earlier of (A) the expiration of the warrants on October 1,
2009 and (B) the first date as of which all warrants have been exercised by
their holders; provided that this obligation shall expire before that date if
we deliver to the warrant agent a written opinion of our counsel that all
holders of warrants and our common stock may resell the warrants and our common
stock without registration under the Securities Act of 1933 and without
restriction as to the manner, timing or volume of any such sale.
The warrants and our common stock issued upon the exercise of the warrants
offered by this prospectus may be offered from time to time by the persons or
entities named below:
Ownership
Number of Warrants and Underlying Common After Resale
Stock Owned Prior to Resale of Warrants of Warrants
---------------------------------------- --------------
Percentage of
Number of Common Percentage of Percentage of
Shares Stock Owned Warrants Shares of
Number of Underlying Prior to Offered by Common
Warrants the Warrants Resale Holder Stock
--------- ------------ ----------- ------------- -------------
AIG SoundShore Holdings Ltd.
1281 East Main Street
Stamford, CT 06902........................... 8,300 63,080 -- 8,300 --
AIG SoundShore Strategic Holding Fund Ltd.
1281 East Main Street
Stamford, CT 06902........................... 5,500 41,800 -- 5,500 --
Atlas Strategic Income Fund c/o
Oppenheimer Funds, Inc.
Two World Trade Center, 34th Floor
New York, NY 10048........................... 100 760 -- 100 --
11
Ownership
Number of Warrants and Underlying Common After Resale
Stock Owned Prior to Resale of Warrants of Warrants
---------------------------------------- --------------
Percentage of
Number of Common Number of Percentage of
Shares Stock Owned Warrants Shares of
Number of Underlying Prior to Offered by Common
Name and Address of Holders Warrants the Warrants Resale Holder Stock
- --------------------------- --------- ------------ ------------- ---------- -------------
Ares Leveraged Investment Fund, L.P.
c/o Ares Management, L.P.
1999 Avenue of the Stars,
Suite 1900
Los Angeles, CA 90067........................ 2,500 19,000 -- 2,500 --
Ares Leveraged Investment Fund II, L.P.
c/o Ares Management, L.P.
1999 Avenue of the Stars,
Suite 1900
Los Angeles, CA 90067........................ 5,000 38,000 -- 5,000 --
Carlyle High Yield Partners, L.P.
520 Madison Avenue, 41st Floor
New York, NY 10022........................... 10,000 76,000 -- 10,000 --
Carlyle High Yield Partners II, Ltd.
520 Madison Avenue, 41st Floor.
New York, NY 10022........................... 3,000 22,800 -- 3,000 --
Columbia/HCA
c/o Caywood Scholl Capital Mgmt.
4350 Executive Drive #125
San Diego, CA 92121.......................... 150 1,140 -- 150 --
CSFB Corp.
11 Madison Avenue
New York, NY 10010........................... 5,125 38,950 30.3%* 5,125 30.3%*
DeMoss Foundation
c/o Caywood Scholl Capital Mgmt.
4350 Executive Drive #125
San Diego, CA 92121.......................... 100 760 -- 100 --
Dresdner RCM Caywood Scholl CBO I, Ltd.
c/o Caywood Scholl Capital Mgmt.
4350 Executive Drive #125
San Diego, CA 92121.......................... 2,500 19,000 -- 2,500 --
DLJ ESC II, L.P.
277 Park Avenue
New York, NY 10172........................... 3,455 26,258 30.3%* 3,455 30.3%*
12
Ownership
Number of Warrants and Underlying Common After Resale
Stock Owned Prior to Resale of Warrants of Warrants
---------------------------------------- --------------
Percentage of
Number of Common Number of Percentage of
Shares Stock Owned Warrants Shares of
Number of Underlying Prior to Offered by Common
Name and Address of Holders Warrants the Warrants Resale Holder Stock
- --------------------------- --------- ------------ ------------- ---------- -------------
DLJ Investment Funding, Inc.
277 Park Avenue
New York, NY 10172........................... 2,303 17,503 30.3%* 2,303 30.3%*
DLJ Investment Partners, L.P.
277 Park Avenue
New York, NY 10172........................... 24,242 184,239 30.3%* 24,242 30.3%*
Enterprise High Yield Bond Fund
c/o Caywood Scholl Capital Mgmt.
4350 Executive Drive #125
San Diego, CA 92121.......................... 350 2,660 -- 350 --
Enterprise Accumulation Trust High Yield
c/o Caywood Scholl Capital Mgmt.
4350 Executive Drive #125
San Diego, CA 92121.......................... 250 1,900 -- 250 --
IL Annuity & Insurance Co.-RGA
c/o Caywood Scholl Capital Mgmt.
4350 Executive Drive # 125
San Diego, CA 92121.......................... 150 1,140 -- 150 --
JHW Cash Flow Fund I, L.P.
c/o Kerri Cagnassola1
77 Broad Street
Stamford, CT 06901........................... 5,000 38,000 -- 5,000 --
Oneok Master Trust
10 West 3rd Street, 1st Floor
Tulsa, Oklahoma 74103........................ 500 3,800 -- 500 --
Oppenheimer Champion Income Fund
c/o Oppenheimer Funds, Inc.
Two World Trade Center, 34th Floor
New York, NY 10048........................... 4,500 34,200 -- 4,500 --
Oppenheimer High Income Fund
c/o Oppenheimer Funds, Inc.
Two World Trade Center, 34th Floor
New York, NY 10048........................... 1,100 8,360 -- 1,100 --
Oppenheimer High Yield Bond Fund
c/o Oppenheimer Funds, Inc.
Two World Trade Center, 34th Floor
New York, NY 10048........................... 3,000 22,800 -- 3,000 --
13
Ownership
Number of Warrants and Underlying Common After Resale
Stock Owned Prior to Resale of Warrants of Warrants
---------------------------------------- --------------
Percentage of
Number of Common Number of Percentage of
Shares Stock Owned Warrants Shares of
Number of Underlying Prior to Offered by Common
Warrants the Warrants Resale Holder Stock
--------- ------------ ------------- ---------- -------------
Oppenheimer Strategic Bond Fund
c/o Oppenheimer Funds, Inc.
Two World Trade Center, 34th Floor
New York, NY 10048........................... 350 2,660 -- 350 --
Oppenheimer Strategic Income
c/o Oppenheimer Funds, Inc.
Two World Trade Center, 34th Floor
New York, NY 10048........................... 5,950 45,220 -- 5,950 --
Sutter CBO 1999-1 Ltd.
c/o Chase Bank of Texas, N.A.
600 Travis Street, 51st Floor
Houston, TX 77002............................ 3,500 26,600 -- 3,500 --
TCW Leveraged Income
Investment Trust L.P.
865 South Figueroa Street, 21st Floor
Los Angeles, CA 90017........................ 3,150 23,940 -- 3,150 --
TCW Leveraged Income Trust II L.P.
865 South Figueroa Street, 21st Floor
Los Angeles, CA 90017........................ 3,150 23,940 -- 3,150 --
TCW Crescent/Mach I, L.P.
865 South Figueroa Street, 21st Floor
Los Angeles, CA 90017........................ 2,100 15,960 -- 2,100 --
TCW Crescent Mezzanine Partners II, L.P.
865 South Figueroa Street, 21st Floor
Los Angeles, CA 90017........................ 27,044 205,534 -- 27,044 --
TCW Crescent Mezzanine Trust II
865 South Figueroa Street, 21st Floor
Los Angeles, CA 90017........................ 6,556 49,826 -- 6,556 --
The 1818 Mezzanine Fund, L.P.
c/o Brown Brothers Harriman & Co.
59 Wall Street
New York, NY 1005............................ 10,000 76,000 -- 39,424 --
Wells Fargo Bank, N.A.,
Capital Markets High Yield
555 Montgomery Street, 10th Floor
San Francisco, CA 94111...................... 4,000 30,400 -- 4,000 --
- -------------------
* The holder indirectly owns such percentage of our common stock.
14
Only selling holders identified above who beneficially own the securities
set forth opposite each such selling holder's name in the foregoing table may
sell such securities under the registration statement of which this prospectus
forms a part. Prior to any use of this prospectus in connection with sale of
the warrants and/or the common stock issuable upon exercise of warrants by any
holder not identified above, we will supplement this prospectus to set forth
the name and number of shares beneficially owned by the selling holder
intending to sell such warrants and/or common stock, and the number of warrants
and/or shares of common stock to be offered. The prospectus supplement will
also disclose whether any selling holder selling in connection with such
prospectus supplement has held any position or office with, been employed by or
otherwise has had a material relationship with, us or any of our affiliates
during the three years prior to the date of the prospectus supplement, if such
information has not been disclosed herein.
Each of DLJ ESC II, L.P., DLJ Investment Funding, Inc. and DLJ Investment
Partners, L.P., has made the following representations:
o it acquired the warrants in the ordinary course of its business;
o it is not engaged in, and do not intend to engage in, a distribution
of the warrants; and
o it has no arrangement or understanding to participate in a
distribution of the warrants.
DESCRIPTION OF THE WARRANTS
We issued the warrants under a warrant agreement between us and State
Street Bank and Trust Company, as warrant agent, a copy of which is available
as described under the caption entitled "Where You Can Find More Information."
The following is only a summary of the warrant agreement and may not contain
all the information that is important to you. Therefore, we encourage you to
read the warrant agreement which has been filed with the SEC as an exhibit to
the registration statement on form S-1 with respect to the warrants and shares
of our common stock issuable upon the exercise of the warrants. See "Where You
Can Find More Information" for information on how you can obtain a copy of the
warrant agreement.
General
We initially issued the warrants as part of units in a transaction exempt
from the registration requirements of the Securities Act of 1933. Each unit
consisted of $1,000 principal amount of 13-1/2% senior subordinated notes due
2009, or notes, and one warrant initially to purchase 3.942 shares of common
stock, par value $.01 per share, at an exercise price of $10.00 per share.
On June 21, 2000, each of our then outstanding share of common stock was
exchanged for 1.927 new shares of common stock. After adjusting for the
exchange each warrant entitles the holder to purchase 7.60 shares of common
stock at an exercise price of $5.19 per share. The holders are entitled to
purchase an aggregate of 1,139,551 shares of our common stock, representing
approximately 2.5% of our common stock on a fully diluted basis as of March 31,
2001. Unless exercised, the warrants will automatically expire at 5:00 p.m. New
York City time on October 1, 2009.
The exercise price and the number of our common stock are both subject to
adjustment in particular cases referred to below. The warrants will be
exercisable at any time on or after October 1, 2001.
The warrants shall be exercised by surrendering to our warrant agent the
warrant certificates evidencing the warrants to be exercised with the
accompanying form of election to purchase properly completed and executed,
together with payment of the exercise price. Payment of the exercise price may
be made at the holder's election (i) by tendering notes having an aggregate
principal amount at maturity, plus accrued and unpaid interest, if any,
thereon, to the date of exercise equal to the exercise price and (ii) in cash
in United States dollars by wire transfer or by certified or official bank
check to our order. Upon surrender of the warrant certificate and payment of
the exercise
15
price, we will deliver or cause to be delivered, to or upon the written order
of such holder, stock certificates representing the number of whole shares of
our common stock to which the holder is entitled. If less than all of the
warrants evidenced by a warrant certificate are to be exercised, a new warrant
certificate will be issued for the remaining number of warrants. Holders of
warrants will be able to exercise their warrants only if a registration
statement relating to our common stock underlying the warrants is then in
effect, or the exercise of such warrants is exempt from the registration
requirements of the Securities Act, and such securities are qualified for sale
or exempt from qualification under the applicable securities laws of the states
in which the various holders of warrants or other persons to whom it is
proposed that our common stock be issued on exercise of the warrants reside.
No fractional shares of our common stock will be issued upon exercise of
the warrants. We will pay to the holder of the warrant at the time of exercise
an amount in cash equal to the current market value of any such fractional
shares of our common stock less a corresponding fraction of the exercise price.
The holders of the warrants will have no right to vote on matters
submitted to our stockholders and will have no right to receive dividends. The
holders of the warrants will not be entitled to share in our assets in the
event of our liquidation, dissolution or the winding up. In the event a
bankruptcy or reorganization is commenced by or against us, a bankruptcy court
may hold that unexercised warrants are executory contracts which may be subject
to rejection by us with approval of the bankruptcy court, and the holders of
the warrants may, even if sufficient funds are available, receive nothing or a
lesser amount as a result of any such bankruptcy case than they would be
entitled to if they had exercised their warrants prior to the commencement of
any such case.
In the event of a taxable distribution to holders of our common stock that
results in an adjustment to the number of shares of our common stock or other
consideration for which a warrant may be exercised, the holders of the warrants
may, in particular circumstances, be deemed to have received a distribution
subject to United States federal income tax as a dividend. See "Certain United
States Federal Tax Consequences."
There is no established public trading market for the warrants.
Adjustments
The number of shares of our common stock purchasable upon the exercise of
the warrants and the exercise price will be subject to adjustment if particular
events occur, including:
(1) the payment of dividends and other distributions on our common stock,
(2) subdivisions, combinations and reclassifications of our common stock,
(3) the issuance to all holders of our common stock of rights, options or
other warrants entitling them to subscribe for our common stock or securities
convertible into, or exchangeable or exercisable for, our common stock at a
price which is less than the fair market value per share (as defined) of our
common stock,
(4) some distributions to all holders of our common stock of any of our
assets or debt securities or any rights or other warrants to purchase any such
securities, but excluding those rights and warrants referred to in clause (3)
above;
(5) the issuance of shares of our common stock for consideration per
share less than the then fair market value per share of our common stock, but
excluding securities issued in transactions referred to in clauses (1) through
(4) above or (6) below and subject to some exceptions;
(6) the issuance of securities convertible into or exchangeable for our
common stock for a conversion or exchange price plus consideration received
upon issuance less than the then fair market value per share of our common
stock at the time of issuance of such convertible or exchangeable security, but
excluding securities issued in transactions referred to in clauses (1) through
(4) above; and
16
(7) some other events that could have the effect of depriving holders of
the warrants of the benefit of all or a portion of the purchase rights
evidenced by the warrants.
Adjustments to the exercise price will be calculated to the nearest cent.
No adjustment need be made for any of the foregoing transactions if holders of
warrants issued are to participate in the transaction on a basis and with
notice that our board of directors determines to be fair and appropriate in
light of the basis and notice on which other holders of our common stock
participate in the transaction.
"Fair market value" per security at any date of determination shall be (1)
in connection with a sale to a party that is not our affiliate in an
arm's-length transaction, the price per security at which such security is sold
and (2) in connection with any sale to our affiliate, (a) the last price per
security at which such security was sold in an arm's-length transaction within
the three-month period preceding such date of determination or (b) if clause
(a) is not applicable, the fair market value of such security determined in
good faith by (i) a majority of our board of directors, including a majority of
the disinterested directors, and approved in a board resolution delivered to
the Warrant Agent or (ii) a nationally recognized investment banking, appraisal
or valuation firm, which is not our affiliate, in each case taking into
account, among all other factors deemed relevant by the board of directors or
such investment banking, appraisal or valuation firm, the trading price and
volume of such security on any national securities exchange or automated
quotation system on which such security is traded.
"Disinterested director" means, in connection with any issuance of
securities that gives rise to a determination of the fair market value thereof,
each member of our board of directors who is not an officer, employee, director
or other affiliate of the party to whom we are proposing to issue the
securities giving rise to such determination.
No adjustment in the exercise price will be required unless such
adjustment would require an increase or decrease of at least one percent (1.0%)
in the exercise price; provided however, that any adjustment that is not made
will be carried forward and taken into account in any subsequent adjustment. In
the case of particular combinations or mergers, or the sale of all or
substantially all of our assets to another corporation, (i) each warrant will
thereafter be exercisable for the right to receive the kind and amount of
shares of stock or other securities or property to which such holder would have
been entitled as a result of such combination, merger or sale had the warrants
been exercised immediately prior thereto and (ii) the Person formed by or
surviving any such combination or merger, if other than the company, or to
which such sale shall have been made will assume our obligations under the
warrant agreement.
Reservation of Shares
We have authorized and reserved for issuance and will at all times reserve
and keep available such number of shares of our common stock as will be
issuable upon the exercise of all outstanding warrants. Such shares of our
common stock, when paid for and issued, will be duly and validly issued, fully
paid and non-assessable, free of preemptive rights and free from all taxes,
liens, charges and security interests with respect to the issuance thereof.
Amendment
From time to time, we and State Street Bank and Trust Company, warrant
agent, without the consent of the holders of the warrants, may amend or
supplement the warrant agreement for particular purposes, including curing
defects or inconsistencies or making any change that does not adversely affect
the legal rights of any holder. Any amendment or supplement to the warrant
agreement that adversely affects the legal rights of the holders of the
warrants will require the written consent of the holders of a majority of the
then outstanding warrants (excluding warrants held by us or any of our
affiliates). The consent of each holder of the warrants affected will be
required for any amendment under which the exercise price would be increased or
the number of shares of our common stock purchasable upon exercise of warrants
would be decreased, other than for particular adjustments provided in the
warrant agreement.
17
DESCRIPTION OF CAPITAL STOCK
General Matters
As of March 31, 2001, the total amount of our authorized capital stock is
120,000,000 shares of common stock, $.01 par value per share, and 20,000,000
shares of preferred stock to be issued from time to time in one or more series,
with such designations, powers, preferences, rights, qualifications,
limitations and restrictions as our board of directors may determine. As of
March 31, 2001 we had outstanding 40,127,642 shares of common stock, no shares
of preferred stock and options to purchase 2,233,122 shares of our common
stock, of which 662,451 were currently exercisable. As of March 31, 2001, there
were approximately 70 holders of record of our common stock. The following
summary of provisions of our capital stock describes all material provisions
of, but does not purport to be complete and is subject to, and qualified in its
entirety by, our restated certificate of incorporation and our amended and
restated by-laws, which are included as exhibits to the registration statement
of which this prospectus forms a part, and by the provisions of applicable law.
Common Stock
Holders of our common stock are entitled to share equally, share for
share, if dividends are declared on our common stock, whether payable in cash,
property or our securities. The shares of common stock are not convertible and
the holders thereof have no preemptive or subscription rights to purchase any
of our securities. Upon liquidation, dissolution or winding up of our company,
the holders of common stock are entitled to share equally, share for share, in
our assets which are legally available for distribution, after payment of all
debts and other liabilities and subject to the prior rights of any holders of
any series of preferred stock then outstanding. Each outstanding share of
common stock is entitled to one vote on all matters submitted to a vote of
stockholders. There is no cumulative voting. Except as otherwise required by
law or the restated certificate, the holders of common stock vote together as a
single class on all matters submitted to a vote of stockholders.
Our common stock is listed on the New York Stock Exchange under the symbol
"CRL."
Preferred Stock
Our board of directors may, without further action by our stockholders,
from time to time, direct the issuance of shares of preferred stock in series
and may, at the time of issuance, determine the rights, preferences and
limitations of each series. Satisfaction of any dividend preferences of
outstanding shares of preferred stock would reduce the amount of funds
available for the payment of dividends on shares of common stock. Holders of
shares of preferred stock may be entitled to receive a preference payment in
the event of any liquidation, dissolution or winding-up of our company before
any payment is made to the holders of shares of common stock. In some
circumstances, the issuance of shares of preferred stock may render more
difficult or tend to discourage a merger, tender offer or proxy contest, the
assumption of control by a holder of a large block of our securities or the
removal of incumbent management. Upon the affirmative vote of a majority of the
total number of directors then in office, our board of directors, without
stockholder approval, may issue shares of preferred stock with voting and
conversion rights which could adversely affect the holders of shares of common
stock.
We have no current intention to issue any of our unissued, authorized
shares of preferred stock. However, the issuance of any shares of preferred
stock in the future could adversely affect the rights of the holders of common
stock.
Select Provisions of Certificate of Incorporation and Bylaws
Our directors will be elected by a plurality of the votes cast for
election. Directors may only be removed for cause with the affirmative vote of
the holders of 80% of the shares of our capital stock.
Special meetings of stockholders may be called at any time by our
chairman, our chief executive officer or our board of directors pursuant to a
resolution adopted by a majority of the directors then in office. Our
certificate of
18
incorporation and bylaws do not permit our stockholders to take any action by
written consent in lieu of a meeting. Our bylaws also have specific provisions
regarding the procedures for nominating directors and giving notice of business
to be brought before the annual meeting of stockholders. The affirmative vote
of the holders of 80% of the shares of our capital stock are required to alter,
amend or repeal these provisions of our certificate of incorporation and
bylaws.
DLJMB Warrants
In addition to the warrants described in this prospectus, as of March 31,
2001, we had outstanding warrants to purchase 1,831,094 shares of common stock
at an exercise price of not less than $0.01 per share subject to customary
antidilution provisions (which differ in some respects from those contained in
the warrants described in this prospectus) and other customary terms. These
warrants will be exercisable at any time prior to 5:00 p.m., New York city
time, on April 1, 2010.
Registration Rights
Pursuant to the Investors' Agreement, we granted holders of approximately
17,000,000 shares of our common stock demand registration rights to cause us to
file a registration statement under the Securities Act covering resales of
their shares. In connection with the Primedica Corporation acquisition, we have
also granted such demand registration rights and "piggyback" registration
rights, to include shares in our registration of securities, for 658,945 shares
of our common stock. We also have granted additional holders of approximately
23,600,000 shares of our common stock "piggyback" registration rights. The
DLJMB Funds are entitled to registration rights with respect to their warrants
and the 1,831,094 shares issuable on exercise thereof. We have agreed to
indemnify all holders whose shares are registered pursuant to exercise of these
rights against specified liabilities, including liabilities under the
Securities Act, and to pay their expenses in connection with these
registrations.
Provisions of Delaware Law Governing Business Combinations
We are subject to the "business combination" provisions of the Delaware
General Corporation Law. In general, such provisions prohibit a publicly held
Delaware corporation from engaging in various "business combination"
transactions with any "interested stockholder" for a period of three years
after the date of the transaction in which the person became an "interested
stockholder," unless:
o the transaction is approved by the board of directors prior to the
date the "interested stockholder" obtained such status;
o upon consummation of the transaction which resulted in the
stockholder becoming an "interested stockholder," the "interested
stockholder" owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced,
excluding for purposes of determining the number of shares
outstanding those shares owned by (a) persons who are directors and
also officers and (b) employee stock plans in which employee
participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender
or exchange offer; or
o on or subsequent to such date the "business combination" is approved
by the board of directors and authorized at an annual or special
meeting of stockholders by the affirmative vote of at least 66 2-3%
of the outstanding voting stock which is not owned by the "interested
stockholder."
A "business combination" is defined to include mergers, asset sales and
other transactions resulting in financial benefit to a stockholder. In general,
an "interested stockholder" is a person who, together with affiliates and
associates, owns 15% or more of a corporation's voting stock or within three
years did own 15% or more of a corporation's voting stock. The statute could
prohibit or delay mergers or other takeover or change in control attempts.
19
Limitations on Liability and Indemnification of Officers and Directors
Our restated certificate of incorporation limits the liability of
directors to the fullest extent permitted by the Delaware General Corporation
Law. In addition, our restated certificate of incorporation provides that we
will indemnify our directors and officers to the fullest extent permitted by
such law. We have entered into indemnification agreements with our current
directors and executive officers and expect to enter into a similar agreement
with any new directors or executive officers.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is EquiServe Trust
Company, N.A.
20
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
The following discussion describes the material United States federal
income tax consequences of the ownership, disposition and exercise of warrants
and the ownership and sale or other disposition of stock issuable upon the
exercise of the warrants. This discussion is based on the Internal Revenue Code
of 1986, as amended to the date hereof (the "Code"), administrative
pronouncements, judicial decisions and Treasury Regulations, and
interpretations of the foregoing, changes to any of which subsequent to the
date of this registration statement may affect the tax consequences described
herein, possibly with retroactive effect.
The following discusses only warrants and shares of common stock issuable
upon the exercise of the warrants that are held as capital assets within the
meaning of Section 1221 of the Code. It does not discuss all of the tax
consequences that may be relevant to a holder in light of its particular
circumstances or to holders subject to special rules, such as some financial
institutions, tax-exempt entities, insurance companies, dealers and traders in
securities or currencies and holders who hold the warrants or the shares of
common stock issuable upon the exercise of the warrants as part of a hedging
transaction, "straddle," conversion transaction or other integrated
transaction, or persons who have ceased to be United States citizens or to be
taxed as resident aliens. Persons considering the purchase of warrants should
consult their tax advisors with regard to the application of the United States
federal income tax laws to their particular situations as well as any tax
consequences arising under the laws of any state, local or foreign taxing
jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a
warrant or of the shares of common stock issuable upon the exercise of the
warrants that for United States federal income tax purposes is:
o a citizen or resident of the United States;
o a corporation created or organized in or under the laws of the United
States or of any political subdivision thereof;
o an estate the income of which is subject to United States federal
income taxation regardless of its source; or
o a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or
more United States persons have the authority to control all
substantial decisions of the trust.
As used herein, the term "Non-U.S. Holder" means an owner of a warrant or
of the shares of common stock issuable upon the exercise of the warrants that
is, for United States federal income tax purposes,
o a nonresident alien individual;
o a foreign corporation;
o a nonresident alien fiduciary of a foreign estate or trust; or
o a foreign partnership, one or more of the members of which is a
nonresident alien individual, a foreign corporation or a nonresident
alien fiduciary of a foreign estate or trust.
21
Tax Consequences to U.S. Holders
The Warrants
A U.S. Holder will generally not recognize any gain or loss upon exercise
of any warrants (except with respect to any cash received in lieu of a
fractional share of common stock issuable upon the exercise of a warrant). A
U.S. Holder will have an initial tax basis in the shares of common stock
received on exercise of the warrants equal to the sum of its tax basis in the
warrants and the aggregate cash exercise price paid for the shares. A U.S.
Holder's holding period in the shares of common stock received will commence on
the day the warrants are exercised.
If a warrant expires without being exercised, a U.S. Holder will recognize
a capital loss in an amount equal to its tax basis in the warrant. Upon the
sale or other disposition of a warrant, a U.S. Holder will generally recognize
a capital gain or loss equal to the difference, if any, between the amount
realized on the sale or disposition and the U.S. Holder's tax basis in the
warrant. This capital gain or loss will be long-term capital gain or loss if,
at the time of such sale or disposition, the warrant has been held for more
than one year.
Under Section 305 of the Code, a U.S. Holder of a warrant may be deemed to
have received a constructive distribution from us, which may result in the
inclusion of ordinary dividend income, in the event of particular adjustments
to the number of shares of common stock to be issued on exercise of a warrant.
Backup Withholding and Information Reporting
Information reporting will generally apply to dividends received with
respect to the shares of common stock issuable upon the exercises of the
warrants and to the proceeds received on the sale or disposition of a warrant
or of shares, in each case by a U.S. Holder who is not an exempt resident.
Backup withholding of U.S. federal income tax at a rate of 31% may also apply
to dividends received with respect to the shares of common stock issuable upon
the exercise of the warrants and to the proceeds of a disposition of a warrant
or shares by a U.S. Holder who is not an exempt recipient. Generally,
individuals are not exempt recipients, whereas corporations and some other
entities are exempt recipients. Backup withholding will apply only if the U.S.
Holder is not an exempt recipient and
o fails to furnish its Taxpayer Identification Number ("TIN") which, in
the case of an individual, is his or her Social Security Number;
o furnishes an incorrect TIN;
o is notified by the Internal Revenue Service ("IRS") that it has
failed to properly report payments of dividends; or
o under particular circumstances, fails to certify, under penalty of
perjury, that it has furnished a correct TIN and has not been
notified by the IRS that it is subject to backup withholding.
U.S. Holders should consult their tax advisors regarding their
qualification for exemption from backup withholding and the procedure for
obtaining such an exemption if applicable.
The amount of any backup withholding from a payment to a U.S. Holder is
not an additional tax and is allowable as a credit against the U.S. Holder's
United States federal income tax liability, if any, or may be claimed as a
refund, provided that the required information is furnished to the IRS.
22
Tax Consequences to Non-U.S. Holders
Dividends on Warrant Shares
Dividends paid to a Non-U.S. Holder on the shares of common stock (and any
deemed dividends resulting from particular adjustments to the number of shares
of common stock to be issued on exercise of a warrant) generally will be
subject to withholding tax at a 30% rate or at a lower rate provided in an
applicable income tax treaty, unless the dividends are effectively connected
with the conduct by the Non-U.S. Holder of a trade or business in the United
States. Currently, for purposes of determining whether tax is to be withheld at
a 30% rate or at a reduced treaty rate, we ordinarily will presume that
dividends paid on or before December 31, 2000 to an address in a foreign
country are paid to a resident of that country absent knowledge that this
presumption is not warranted. Under Treasury Regulations effective for payments
after December 31, 2000, Non-U.S. Holders will be required to satisfy
particular applicable certification requirements to claim a reduced rate of
withholding under an applicable treaty.
Sale, Exercise or other Disposition of the Warrants or Shares
A Non-U.S. Holder will generally not recognize any gain or loss upon
exercise of any warrants (except with respect to any cash received in lieu of a
fractional share of common stock issuable upon the exercise of the warrant). A
Non-U.S. Holder will have an initial tax basis in the shares of common stock
received on exercise of the warrants equal to the sum of its tax basis in the
warrants and the aggregate cash exercise price paid for the shares. A Non- U.S.
Holder's holding period in the shares of common stock received will commence on
the day the warrants are exercised.
A Non-U.S. Holder of a warrant of shares of common stock issuable upon the
exercise of the warrants will not be subject to United States federal income
tax on any gain realized on the sale or other disposition of the warrant or
shares, unless:
o that gain is effectively connected with the Non-U.S. Holder's conduct
of a trade or business in the United States; or
o the warrant or share was a United States real property interest
("USRPI") as defined in Section 897(c)(1) of the Code at any time
during the five year period prior to the sale or exchange or at any
time during the time that the Non-U.S. Holder held such warrant or
share, whichever time was shorter.
A warrant or share of common stock would be a USRPI only if, at any time
during the five years prior to the sale or exchange of the warrant or share or
at any time during the period that the Non-U.S. Holder held the warrant or
share, whichever time was shorter, we had been a "United States real property
holding corporation" (USRPHC") as defined in Section 897(c)(2) of the Code. We
believe that we were not, have not been and will not become a USRPHC for
federal income tax purposes.
Effectively Connected Dividend Income or Gain
Dividends with respect to shares of common stock or gain realized on the
sale or other disposition of warrants or shares that are effectively connected
with the conduct of a trade or business in the U.S. by a Non-U.S. Holder,
although exempt from the withholding tax, described above may be subject to
U.S. income tax at graduated rates as if such dividends or gain were earned by
a U.S. Holder. The Non-U.S. Holder will be entitled to the exemption from
withholding tax if it properly certifies on IRS Form 4224, Form W-8ECI or other
appropriate successor form that the income is effectively connected with the
conduct of a United States trade or business. In addition, if the Non-U.S.
Holder is a foreign corporation, it may be subject to a 30% branch profits tax
(unless reduced or eliminated by an applicable treaty) on its earnings and
profits for the taxable year attributable to its effectively connected income,
subject to particular adjustments.
23
Backup Withholding and Information Reporting
Where required, we will report annually to the IRS and to each Non-U.S.
Holder the amount of any dividends paid to the Non-U.S. Holder. Copies of these
information returns may also be made available under the provisions of a
specific treaty or other agreement to the tax authorities of the country in
which the Non-U.S. Holder resides.
Backup withholding (described above under "-- Tax Consequences to U.S.
Holders--Backup Withholding and Information Reporting") generally will not
apply to dividends paid on or before December 31, 2000 to a Non-U.S. Holder at
an address outside the United States, provided we or our paying agent do not
have actual knowledge that the payee is a United States Person. Under Treasury
Regulations effective for payments made after December 31, 2000, however, a
Non-U.S. Holder will be subject to backup withholding unless applicable
certification requirements are met.
Under current Treasury Regulations, payments on the sale or other
disposition of a warrant or of shares of common stock made to or through a
foreign office of a broker generally will not be subject to backup withholding.
However, if such broker is a United States person, a controlled foreign
corporation for United States federal income tax purposes, a foreign person 50
percent or more of whose gross income is effectively connected with a United
States trade or business for a specified three-year period or (generally in the
case of payments made after December 31, 2000) a foreign partnership with
particular connections to the United States, then information reporting (but
not backup withholding) will be required unless the broker has in its records
documentary evidence that the beneficial owner is not a United States person
and some other particular conditions are met or the beneficial owner otherwise
establishes an exemption. Backup withholding may apply to any payment that the
broker is required to report if the broker has actual knowledge that the payee
is a United States person. Payments to or through the United States office of a
broker will be subject to backup withholding and information reporting unless
the holder certifies, under penalties of perjury, that it is not a United
States person or otherwise establishes an exemption.
Recently promulgated Treasury Regulations, generally effective for
payments after December 31, 2000, provide some presumptions under which a
Non-U.S. Holder will be subject to backup withholding and information reporting
unless the holder certifies as to its non-U.S. status or otherwise establishes
an exemption. In addition, the new Treasury Regulations change some procedural
requirements relating to establishing a holder's non-U.S. status.
Non-U.S. Holders of warrants or of the shares of common stock issuable
upon the exercise of the warrants should consult their tax advisers regarding
the application of information reporting and backup withholding in their
particular situations, the availability of an exemption therefrom, and the
procedure for obtaining such an exemption, if available. Any amount withheld
from a payment to a Non-U.S. Holder under the backup withholding rules is not
an additional tax and is allowable as a credit against the holder's United
States federal income tax liability, if any, or may entitle the holder to a
refund, provided that the required information is furnished to the IRS.
24
PLAN OF DISTRIBUTION
We will not receive any proceeds from the sale of our warrants or common
stock issued upon the exercise of the warrants, other than the payment of the
exercise price of the warrants. The warrants and the common stock issued upon
the exercise of the warrants may be sold by the holders from time to time in
transactions in the market, in negotiated transactions, in underwritten
offerings, or a combination of such methods of sale, at fixed prices which may
be changed, at market prices prevailing at the time of sale, at prices related
to prevailing market prices or at negotiated prices. The holders may effect
such transactions by selling the warrants and our common stock issued upon the
exercise of the warrants to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from the holders and/or the purchasers of the warrants for whom such
broker-dealers may act as agents or to whom they sell as principals, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).
In order to comply with the securities laws of particular states, if
applicable, the warrants and common stock issued on exercise of the warrants
may be sold in such jurisdictions only through registered or licensed brokers
or dealers. In addition, in particular states the warrants and shares of our
common stock issued on exercise of the warrants 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.
The holders and any broker-dealers or agents that participate with the
holders in the distribution of the warrants or our common stock issued upon the
exercise of the warrants may be deemed to be "underwriters" within the meaning
of the Securities Act, and any commissions received by them and any profit on
the resale of the warrants or the common stock issued upon the exercise of the
warrants purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
Each holder will be subject to applicable provisions of the Securities
Exchange Act of 1934 and the rules and regulations thereunder, which provisions
may limit the timing of purchases and sales of shares of our common stock by
the holders.
The costs of the registration of the warrants and the shares issuable on
exercise of the warrants will be paid by us, including, without limitation, SEC
filing fees and expenses of compliance with state securities or "blue sky"
laws; provided, however, that the selling holders will pay all underwriting
discounts and selling commissions, if any. The selling holders will be
indemnified by us against particular civil liabilities, including some
liabilities under the Securities Act, or will be entitled to contribution in
connection therewith.
LEGAL MATTERS
The validity of the warrants and shares of our common stock issuable upon
the exercise of the warrants offered hereby will be passed upon for us by Davis
Polk & Wardwell, New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K of Charles River Laboratories International,
Inc. for the year ended December 30, 2000 and the audited financial statements
included on page F-1 of Charles River Laboratories International, Inc.'s Form
8-K dated February 15, 2001 have been so incorporated in reliance on the
reports of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
25
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act with respect to the resale of warrants and shares of common
stock issuable upon the exercise of the warrants. This prospectus does not
contain all the information included in the registration statement and the
related exhibits and schedules. You will find additional information about us,
our common stock and the warrants in the registration statement. The
registration statement and the related exhibits and schedules may be inspected
and copied at the public reference facilities maintained by the SEC at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the public reference facilities of the SEC's Regional Offices: New York
Regional Office, Seven World Trade Center, Suite 1300, New York, New York
10048; and Chicago Regional Office, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661. Copies of this material may also be obtained from the
Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. You can obtain information on the operation of the
public reference facilities by calling 1-800-SEC-0330. The SEC also maintains a
site on the World Wide Web (http://www.sec.gov) that contains reports, proxy
and information statements and other information regarding registrants,
including us, that file electronically with the SEC. Statements made in this
prospectus about legal documents may not necessarily be complete and you should
read the documents which are filed as exhibits or schedules to the registration
statement or otherwise filed with the SEC.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you directly to those documents. The information incorporated by
reference is considered to be part of this prospectus. In addition, information
we file with the SEC in the future will automatically update and supersede
information contained in this prospectus and any accompanying prospectus
supplement. We incorporate by reference the documents listed below, each of
which is filed under SEC File No. 001-15943, and any future filings made with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 until we sell all of the securities we are offering:
o Our annual report on Form 10-K for the year ended December 30, 2000;
o Our quarterly report on Form 10-Q for the fiscal quarter ended March 31,
2001; and
o Our current reports on Form 8-K dated January 9, 2001, February 7, 2001,
February 15, 2001, February 28, 2001 and March 12, 2001.
o Our annual proxy statement filed pursuant to Section 14(a) on April 6,
2001.
We will provide free copies of any of those documents, if you write or
telephone us at: 251 Ballardvale Street, Wilmington, Massachusetts, 01887,
(978) 658-6000.
26
INDEX TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
Page
----
Introduction to Unaudited Pro Forma Condensed Consolidated Financial
Data.......................................................................P-2
Charles River Laboratories International, Inc. and Subsidiaries Unaudited Pro
Forma Condensed Consolidated Statement of Income for the Year Ended December
30, 2000.....................................................................P-3
Notes to Unaudited Pro Forma Condensed Consolidated Statement of Income for
the Year Ended December 30, 2000.............................................P-4
Unaudited Pro Forma Condensed Consolidated Statement of Income for the Three
Months Ended March 31, 2000..................................................P-5
Notes to Unaudited Pro Forma Condensed Consolidated Statement of Income for
the Three Months Ended March 31, 2001........................................P-6
P-1
INTRODUCTION TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL DATA
On June 28, 2000 we consummated an initial public offering (the "IPO") of
14,000,000 shares of our common stock at a price of $16.00 per share. We issued
an additional 2,100,000 shares of common stock on July 6, 2000 upon the
exercise of the over-allotment option by the underwriters. Proceeds from the
offering were used to repay a portion of the debt we incurred in connection
with the recapitalization. Our common stock is listed on the New York Stock
exchange under the symbol "CRL".
On March 21, 2001, we consummated a public offering (the "follow on
offering") of 3,500,000 shares of our common stock, at a price of $19.00 per
share. In the offering an additional 4,550,000 shares of common stock, which
included the exercise of the underwriters' over-allotment option of 1,050,000
shares, were also sold by existing shareholders. As of March 31, 2001, part of
the proceeds have been used to repay a portion of debt. The remaining proceeds
will be used to further repay existing indebtedness.
The following unaudited pro forma condensed consolidated financial data of
the Company is based upon historical consolidated financial statements of the
Company as adjusted to give effect to the impact of the transactions described
above. The unaudited pro forma condensed consolidated statement of income for
the year ended December 30, 2000, gives effect to the IPO and follow on
offering and the associated use of proceeds, as if these offerings had occurred
at the beginning of the fiscal 2000 year. The unaudited pro forma condensed
consolidated statement of income for the three months ended March 31, 2001
gives effect to the follow on offering and the associated use of proceeds as of
March 31, 2001, as if these transactions had occurred at the beginning of the
period presented.
The pro forma adjustments are based on estimates, available information
and assumptions and may be revised as additional information becomes available.
The unaudited pro forma condensed consolidated financial data do not purport to
represent what the Company's combined results of operations or financial
position would actually have been if the above transactions and the offering
had occurred on the dates indicated and are not necessarily representative of
the Company's combined results of operations for any future period. The
unaudited pro forma condensed consolidated statements of income should be read
in conjunction with our consolidated financial statements and the notes
thereto, "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the other financial information incorporated by
reference in this prospectus.
P-2
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 30, 2000
(dollars in thousands except for earnings per share amounts)
Follow on
Company IPO Offering
Historical Adjustments(a) Adjustments(d) Pro Forma
----------- -------------- -------------- ---------
Net sales related to products............ $ 229,217 $ - $ - $ 229,217
Net sales related to services............ 77,368 77,368
----------- -------------- -------------- ---------
Total net sales....................... 306,585 - - 306,585
Cost of products sold.................... 136,161 136,161
Cost of services provided................ 50,493 50,493
Selling, general & administrative
expenses.............................. 51,204 51,204
Amortization of goodwill &
intangibles........................... 3,666 3,666
----------- -------------- -------------- ---------
Operating Income...................... 65,061 - - 65,061
Interest income.......................... 1,644 1,644
Other income (expense)................... 390 390
Interest expense......................... (40,691) 17,368(b) 1,033(e) (22,290)
(Loss) from foreign currency, net........ (319) (319)
----------- -------------- -------------- ---------
Income before income taxes, minority
interests, earnings from equity
investments and extraordinary item.. 26,085 17,368 1,033 44,486
Provision for income taxes............... 7,837 6,720(c) 400(f) 14,957
----------- -------------- -------------- ---------
Income before minority interests,
earnings from equity investments
and extraordinary item............. 18,248 10,648 633 29,529
Minority interests....................... (1,396) (1,396)
Earnings from unconsolidated
subsidiaries.......................... 1,025 1,025
----------- -------------- -------------- ---------
Earnings before extraordinary item.... $ 17,877 $10,648 $ 633 29,158
=========== ============== ============== =========
Earnings per common share before
extraordinary item
Basic................................. $ 0.64 $ 0.74
Diluted............................... $ 0.56 $ 0.67
Shares outstanding
Basic................................. 27,737,677 39,420,369
Diluted............................... 31,734,354 43,417,046
P-3
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 30, 2000
Adjustments
(a) This column gives effect to the Company's June 28, 2000 IPO as if it
occurred on December 26, 1999. The Company sold 16,100,000 shares of
its common stock including the exercise of the underwriter's over
allotment option of 2,100,000 shares at a price of $16.00 per share.
The net proceeds of $235,964 were used to repay a portion of the
Company's indebtedness as described in Note 2 to the consolidated
financial statements for the year ended December 30, 2000, contained
within the Company's annual report on Form 10-K which is incorporated
by reference in this prospectus.
(b) The reduction to interest expense reflects the benefit that will be
achieved as a result of the redemption of a portion of the senior
subordinated notes and repayment of debt, along with the associated
benefit related to the reduced amortization of the deferred financing
costs and the discounts on the redeemed senior subordinated notes and
the senior discount debentures.
(c) Reflects the tax effect of the reduction in interest expense as
described above.
(d) This column gives effect to the Company's March 21, 2001 follow on
offering and the associated use of proceeds as of March 31, 2001 as
if these transactions occurred on December 26, 1999. The Company sold
3,500,000 shares of its common stock at a price of $19.00 per share
and received net proceeds of $62,222. As of March 31, 2001, the
Company had used a portion of the net proceeds to repay $12,000 of
term debt.
(e) The reduction of the interest expense reflects the tax benefit that
will be achieved as a result of repaying $12,000 of term debt along
with the associated benefit related to the reduced amortization of
deferred financing costs.
(f) Reflects the tax effect of the reduction in interest expense as
described above.
Extraordinary Items
The extraordinary loss of $30,051 computed as if the IPO had occurred
on December 26, 1999 results from:
(i) the estimated premiums related to the senior subordinated notes
redeemed ($7,088) and the early extinguishment of the senior
discount debentures ($24,444);
(ii) the $5,698 write off of deferred financing costs related to the
senior subordinated notes and senior discount debentures to be
redeemed, and the portions of the term loan A and term loan B to
be repaid from the proceeds of the offering; and
(iii)the write off of the discounts related to the redeemed senior
subordinated notes ($726) and the senior discount debentures
($8,276).
(iv) the tax benefits associated with the above extraordinary loss
are estimated to be $16,181.
The extraordinary loss of $248 computed as if the follow on offering
had occurred on December 26, 1999 results from a $381 write-off of
deferred financing costs related to the term debt repaid from the
proceeds from the follow on offering, and an associated tax benefit
of $133.
P-4
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF INCOME
For the Three Months Ended March 31, 2001
(dollars in thousands except for earnings per-share
amounts)
Follow on
Company Offering
Historical Adjustments(a) Pro Forma
----------- -------------- ------------
Net sales related to products................... $ 62,078 $ - $ 62,078
Net sales related to services................... 36,953 36,953
----------- -------------- ------------
Total net sales.............................. 99,031 99,031
Cost of products sold........................... 36,418 36,418
Cost of services provided....................... 25,951 25,951
Selling, general & administrative expenses...... 15,460 15,460
Amortization of goodwill & intangibles.......... 1,828 1,828
----------- -------------- ------------
Operating income............................. 19,374 19,374
Interest income................................. 253 253
Other income (expense).......................... 555 555
Interest expense................................ (6,958) 284(b) (6,674)
----------- -------------- ------------
Income before income taxes, minority
interests, earnings
from equity investments and
extraordinary item......... 13,224 284 13,508
Provision for income taxes...................... 5,555 110(c) 5,665
----------- -------------- ------------
Income before minority interests, earnings
from equity investments and
extraordinary item......................... 7,669 174 7,843
Minority interests.............................. (564) - (564)
Earnings from unconsolidated subsidiaries....... 83 83
----------- -------------- ------------
Earnings before extraordinary item........... 7,188 174 $ 7,362
=========== ============== ============
Earnings per common share before
extraordinary item
Basic........................................ $ 0.20 $ 0.19
Diluted...................................... $ 0.18 $ 0.17
Shares outstanding
Basic........................................ 36,582,532 39,659,455
Diluted...................................... 40,287,045 43,363,968
P-5
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF INCOME
For the Three Months Ended March 31, 2001
Adjustments
(a) This column gives effect to the March 21, 2001 follow on offering and
the associated use of proceeds as of March 31, 2001, as if these
transactions had occurred on December 31, 2000.
(b) The reduction to interest expense reflects the benefit that will be
achieved as a result of repaying $12,000 of term debt, along with the
reduced amortization of deferred financing costs.
(c) Reflects the tax effect of the reduction in interest expense
described above.
Extraordinary Item
The extraordinary loss of $248 computed as if the follow on offering
occurred on December 31, 2000 results from the $381 write off of
deferred financing costs related to the term debt repaid from the
proceeds of the follow on offering, and an associated tax benefit of
$133.
P-6
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Registrant in connection
with the sale of the securities being registered.
Legal fees and expenses.................................. $ 75,000
Accounting fees and expenses............................. 20,000
--------
Total.................................................... $ 95,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act").
As permitted by the Delaware General Corporation Law, the Registrant's
certificate of incorporation includes a provision that eliminates the personal
liability of its directors 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 the Registrant or its stockholders, (ii) for acts or omissions not
in good faith or that involve intentional misconduct or a knowing violation of
law, (iii) under section 174 of the Delaware General Corporation Law (regarding
unlawful dividends and stock purchases) or (iv) for any transaction from which
the director derived an improper personal benefit.
As a result of this provision, the ability of the Registrant, or a
stockholder thereof, to successfully prosecute an action against a director for
breach of his duty of care is limited. However, the provision does not affect
the availability of equitable remedies such as an injunction or rescission
based upon a director's breach of his duty of care. The SEC has taken the
position that the provision will have no effect on claims arising under the
federal securities laws.
In addition, the Registrant's certificate of incorporation provides for
mandatory indemnification rights, subject to limited exceptions, to any
director or executive officer of the Registrant who (because of the fact that
he or she is a director or officer) is involved in a legal proceeding of any
nature. Such indemnification rights include reimbursement for expenses incurred
by such director or officer in advance of the final disposition of such
proceeding in accordance with the applicable corporate law.
The indemnification provisions in the Registrant's certificate of
incorporation, by-laws and the indemnification agreements entered into between
the Registrant and each of its directors and executive officers may be
sufficiently broad to permit indemnification of the Registrant's directors and
executive officers for liabilities arising under the Securities Act.
Charles River Laboratories, Inc. provides insurance from commercial
carriers against some liabilities incurred by the directors and officers of the
Registrant.
Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:
Document Exhibit
- --------- ----------
Amended and Restated Certificate of Incorporation..................... 3.1
II-1
Document Exhibit
- --------- ----------
By-laws............................................................... 3.2
Form of Indemnification Agreement..................................... 10.16
ITEM 16. EXHIBITS.
Number Description
2.1*** Recapitalization Agreement, dated as of July 25, 1999,
among Charles River Laboratories, Inc., Charles River
Laboratories International, Inc. (formerly known as
Endosafe, Inc.), Bausch & Lomb Incorporated, and other
parties listed therein.
2.2*** Amendment No. 1 to Recapitalization Agreement, dated as of
September 29, 1999 by Bausch & Lomb Incorporated and CRL
Acquisition LLC.
2.3** Agreement and Plan of Reorganization, dated as of June 6,
2000, among Charles River Laboratories International, Inc.,
CRL Acquisition LLC and B&L CRL, Inc.
3.1** Amended and Restated Certificate of Incorporation of
Charles River Laboratories International, Inc.
3.2** By-laws of Charles River Laboratories International, Inc.
4.1o Warrant Agreement dated as of September 29, 1999, between
Charles River Laboratories Holdings, Inc. and State Street
Bank and Trust Company.
4.2** Amended and Restated Investors' Agreement, dated as of June
19, 2000, among Charles River Laboratories International,
Inc. and the shareholders named therein.
5.1*** Opinion of Davis Polk & Wardwell with respect to the
validity of the securities.
10.1++ Amended and Restated Credit Agreement, dated as of February
2, 2001, among Charles River Laboratories, Inc., the
various financial institutions that are or may become
parties as lenders thereto, Credit Suisse First Boston, as
lead arranger, sole book runner and syndication agent for
the lenders, Union Bank of California, N.A., as
administrative agent for the lenders, and National City
Bank, as documentation agent for the lenders.
10.2*** Indenture, dated as of September 29, 1999 between Charles
River Laboratories, Inc. and the Trustee.
10.3*** Purchase Agreement between Charles River Laboratories, Inc.
and Donaldson, Lufkin & Jenrette Securities Corporation as
Initial Purchaser.
10.4+ Joint Venture Agreement between Ajinomoto Co., Inc. and
Charles River Breeding Laboratories, Inc. dated June 24,
1981, and ancillary agreements, amendments and addendums.
10.5*** Supply Agreement between Merck & Co., Inc. and Charles
River Laboratories, Inc. dated September 30, 1994.
10.6*** Amended and Restated Stock Purchase Agreement among Charles
River Laboratories, Inc. and SBI Holdings, Inc. and its
stockholders dated September 4, 1999.
10.7+ Ground Lease between HIC Associates (Lessor) and Charles
River Laboratories, Inc. (Lessee) dated June 5, 1992; Real
Estate Lease between Charles River Laboratories, Inc.
(Landlord) and Charles River Partners L.P. (Tenant) dated
December 22, 1993; and Assignment and Assumption Agreement
between Charles River Partners, L.P. (Assignor) and
Wilmington Partners L.P. (Assignees) dated December 22,
1993.
10.8*** Amended and Restated Distribution Agreement between Charles
River BRF, Inc., Charles River Laboratories, Inc.,
Bioculture Mauritius Ltd. and Marry Ann and Owen Griffiths,
dated December 23, 1997.
10.9*** Supply Agreement between Sierra Biomedical, Inc. and
Scientific Resources International, Ltd., dated March 18,
1997.
II-2
Number Description
------ -----------
10.10**** Severance Agreement between Charles River Laboratories,
Inc. and Real H. Renaud dated January 20, 1992.
10.11**** 1999 Charles River Laboratories Officer Separation Plan.
10.12**** Form of Agreement and Release among Bausch & Lomb,
Incorporated, Charles River Laboratories, Inc. and the
named executive officers dated as of July 25, 1999.
10.13# 1999 Management Incentive Plan.
10.14** 2000 Incentive Plan.
10.15** 2000 Directors Stock Plan.
10.16** Form of Indemnification Agreement.
10.17X Amendment No. 1 to the Credit Agreement, among Charles
River Laboratories, Inc., the various financial
institutions that are or may become parties as lenders
thereto, Credit Suisse First Boston, Union Bank of
California and National City Bank, dated April 18, 2001.
10.18X Amendment No. 1 to Charles River International, Inc. 2000
Incentive Plan, as amended, dated May 8, 2001.
21.1**** Subsidiaries of Charles River Laboratories International,
Inc.
23.1*** Consent of Davis Polk & Wardwell (contained in their
opinion filed as Exhibit 5.1).
23.2* Consent of PricewaterhouseCoopers LLP.
24.1*** Power of Attorney pursuant to which amendments to this
registration statement may be filed.
- -------------------
* Filed herewith.
o Previously filed as an exhibit to Post-Effective Amendment No. 1 to the
Company's Registration Statement on Form S-1 (File No. 333-92383) filed
August 31, 2000.
** Previously filed as an exhibit to Amendment No. 2 to the Company's
Registration Statement on Form S-1 (File No. 333-35524) filed June 23,
2000.
*** Previously filed as an exhibit to the Company's Registration
Statement on Form S-1 (File No. 333-92383) filed December 8, 1999.
**** Previously filed as an exhibit to Amendment No. 1 to the Company's
Registration Statement on Form S-1 (File No. 333-35524) filed June 6,
2000.
+ Previously filed as an exhibit to Amendment No. 1 to the Company's
Registration Statement on Form S-1 (File No. 333-92383) filed
January 28, 2000.
# Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q (File No. 333-92383) filed May 9, 2000.
++ Previously filed as an exhibit to the Company's Registration Statement
on Form S-3 (File No. 333-55670), as amended, filed February 15, 2001.
X Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q (File No. 333-92383) filed May 15, 2001.
II-3
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in the volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent 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; provided, however, that clauses (1)(i)
and (1)(ii) do not apply if the information required to be included
in a post-effective amendment by those clauses is contained in
periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement.
(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 the time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 2 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilmington, State of Massachusetts, on the 5th day
of June, 2001.
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
By:/s/ Thomas F. Ackerman
----------------------------------------
Thomas F. Ackerman
Senior Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 2 to the Registration Statement has been signed by
the following persons in the capacities indicated on June 5, 2001.
Signature Title
--------- -----
- ----------*------------ President, Chief Executive Officer (Principal Executive
James C. Foster Officer) and Chairman
/s/ Thomas Ackerman
- ----------------------
Thomas F. Ackerman Chief Financial Officer (Principal Financial Officer)
and Senior Vice President
- ----------*------------ Director
Robert Cawthorn
- ----------*------------ Director
Thompson Dean
- ----------*------------ Director
Reid S. Perper
- ----------*------------ Director
Douglas E. Rogers
* The undersigned, by signing his name hereto, does sign and execute this
Post-Effective Amendment No. 2 pursuant to the Power of Attorney executed by
the above-named directors and officers of the Registrant and previously filed
with the Securities and Exchange Commission on behalf of such directors and
officers.
By: /s/ Thomas Ackerman
--------------------------------
Thomas F. Ackerman
Attorney-in Fact
II-5
Exhibit Index
(a) Exhibits. The following exhibits are filed as part of this
registration statement:
Number Description
------ -----------
2.1*** Recapitalization Agreement, dated as of July 25, 1999,
among Charles River Laboratories, Inc., Charles River
Laboratories International, Inc. (formerly known as
Endosafe, Inc.), Bausch & Lomb Incorporated, and other
parties listed therein.
2.2*** Amendment No. 1 to Recapitalization Agreement, dated as of
September 29, 1999 by Bausch & Lomb Incorporated and CRL
Acquisition LLC.
2.3** Agreement and Plan of Reorganization, dated as of June 6,
2000, among Charles River Laboratories International, Inc.,
CRL Acquisition LLC and B&L CRL, Inc.
3.1** Amended and Restated Certificate of Incorporation of
Charles River Laboratories International, Inc.
3.2** By-laws of Charles River Laboratories International, Inc.
4.1o Warrant Agreement dated as of September 29, 1999, between
Charles River Laboratories Holdings, Inc. and State Street
Bank and Trust Company.
4.2** Amended and Restated Investors' Agreement, dated as of June
19, 2000, among Charles River Laboratories International,
Inc. and the shareholders named therein.
5.1*** Opinion of Davis Polk & Wardwell with respect to the
validity of the securities.
10.1++ Amended and Restated Credit Agreement, dated as of February
2, 2001, among Charles River Laboratories, Inc., the
various financial institutions that are or may become
parties as lenders thereto, Credit Suisse First Boston, as
lead arranger, sole book runner and syndication agent for
the lenders, Union Bank of California, N.A., as
administrative agent for the lenders, and National City
Bank, as documentation agent for the lenders.
10.2*** Indenture, dated as of September 29, 1999 between Charles
River Laboratories, Inc. and the Trustee.
10.3*** Purchase Agreement between Charles River Laboratories, Inc.
and Donaldson, Lufkin & Jenrette Securities Corporation as
Initial Purchaser.
10.4+ Joint Venture Agreement between Ajinomoto Co., Inc. and
Charles River Breeding Laboratories, Inc. dated June 24,
1981, and ancillary agreements, amendments and addendums.
10.5*** Supply Agreement between Merck & Co., Inc. and Charles
River Laboratories, Inc. dated September 30, 1994.
10.6*** Amended and Restated Stock Purchase Agreement among Charles
River Laboratories, Inc. and SBI Holdings, Inc. and its
stockholders dated September 4, 1999.
10.7+ Ground Lease between HIC Associates (Lessor) and Charles
River Laboratories, Inc. (Lessee) dated June 5, 1992; Real
Estate Lease between Charles River Laboratories, Inc.
(Landlord) and Charles River Partners L.P. (Tenant) dated
December 22, 1993; and Assignment and Assumption Agreement
between Charles River Partners, L.P. (Assignor) and
Wilmington Partners L.P. (Assignees) dated December 22,
1993.
10.8*** Amended and Restated Distribution Agreement between Charles
River BRF, Inc., Charles River Laboratories, Inc.,
Bioculture Mauritius Ltd. and Marry Ann and Owen Griffiths,
dated December 23, 1997.
10.9*** Supply Agreement between Sierra Biomedical, Inc. and
Scientific Resources International, Ltd., dated March 18,
1997.
10.10**** Severance Agreement between Charles River Laboratories,
Inc. and Real H. Renaud dated January 20, 1992.
II-6
Number Description
------ -----------
10.11**** 1999 Charles River Laboratories Officer Separation Plan.
10.12**** Form of Agreement and Release among Bausch & Lomb,
Incorporated, Charles River Laboratories, Inc. and the
named executive officers dated as of July 25, 1999.
10.13# 1999 Management Incentive Plan.
10.14** 2000 Incentive Plan.
10.15** 2000 Directors Stock Plan.
10.16** Form of Indemnification Agreement.
10.17X Amendment No. 1 to the Credit Agreement, among Charles
River Laboratories, Inc., the various financial
institutions that are or may become parties as lenders
thereto, Credit Suisse First Boston, Union Bank of
California and National City Bank, dated April 18, 2001.
10.18X Amendment No. 1 to Charles River International, Inc. 2000
Incentive Plan, as amended, dated May 8, 2001.
21.1**** Subsidiaries of Charles River Laboratories International,
Inc.
23.1*** Consent of Davis Polk & Wardwell (contained in their
opinion filed as Exhibit 5.1).
23.2* Consent of PricewaterhouseCoopers LLP.
24.1*** Power of Attorney pursuant to which amendments to this
registration statement may be filed.
- -------------------
* Filed herewith.
o Previously filed as an exhibit to Post-Effective Amendment No. 1 to
the Company's Registration Statement on Form S-1 (File No. 333-92383)
filed August 31, 2000.
** Previously filed as an exhibit to Amendment No. 2 to the Company's
Registration Statement on Form S-1 (File No. 333-35524) filed June
23, 2000.
*** Previously filed as an exhibit to the Company's Registration
Statement on Form S-1 (File No. 333-92383) filed December 8, 1999.
**** Previously filed as an exhibit to Amendment No. 1 to the Company's
Registration Statement on Form S-1 (File No. 333-35524) filed June 6,
2000.
+ Previously filed as an exhibit to Amendment No. 1 to the Company's
Registration Statement on Form S-1 (File No. 333-92383) filed January
28, 2000.
# Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q (File No. 333-92383) filed May 9, 2000.
++ Previously filed as an exhibit to the Company's Registration
Statement on Form S-3 (File No. 333-55670), as amended, filed
February 15, 2001.
X Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q (File No. 333-92383) filed May 15, 2001.
II-7
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 9, 2001 relating to the
financial statements and financial statement schedules, which appears in
Charles River Laboratories International Inc.'s Annual Report on Form 10-K for
the year ended December 30, 2000. We also consent to the incorporation by
reference of our report dated February 9, 2001 relating to the financial
statements which appears in the Current Report on Form 8-K dated February 15,
2001. We also consent to the reference to us under the heading "Experts" in
such Registration Statement.
//PricewaterhouseCoopers LLP
Boston, Massachusetts
June 5, 2001
E-1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 9, 2001 relating to the
financial statements and financial statement schedules, which appears in
Charles River Laboratories International Inc.'s Annual Report on Form 10-K for
the year ended December 30, 2000. We also consent to the incorporation by
reference of our report dated February 9, 2001 relating to the financial
statements which appears in the Current Report on Form 8-K dated February 15,
2001. We also consent to the reference to us under the heading "Experts" in
such Registration Statement.
//PricewaterhouseCoopers LLP
Boston, Massachusetts
June 5, 2001
E-1
