AS FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ON JANUARY
22, 2003.
REGISTRATION NO. 333-
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LUCENT TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-3408857
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
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600 MOUNTAIN AVENUE, MURRAY HILL, NEW JERSEY 07974
(908) 582-8500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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RICHARD J. RAWSON, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
LUCENT TECHNOLOGIES INC.
600 MOUNTAIN AVENUE
MURRAY HILL, NEW JERSEY 07974
(908) 582-8500
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
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COPY TO:
STEPHEN L. BURNS, ESQ.
CRAVATH, SWAINE & MOORE
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
(212) 474-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement, as determined
by market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED(1)(2) UNIT(1)(2) PRICE(1)(3) REGISTRATION FEE(4)
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Common Stock, $.01 par value per share and
related preferred stock purchase
rights(5)(6)(7)............................
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Preferred Stock, $1.00 par value per
share(8)...................................
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Debt Securities(9)...........................
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Total...................................... -- -- $1,755,000,000 $161,460
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(continued on next page)
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1. There are being registered under this registration statement such
indeterminate number of shares of common stock and preferred stock of the
registrant and such indeterminate principal amount of debt securities of the
registrant, as shall have an aggregate initial offering price not to exceed
$1,755,000,000. If any debt securities are issued at an original issue
discount, then the debt securities registered shall include such additional
debt securities as may be necessary such that the aggregate initial public
offering price of all securities issued pursuant to this registration
statement will equal $1,755,000,000. Any securities registered under this
registration statement may be sold separately or as units with other
securities registered under this registration statement. The proposed
maximum initial offering prices per unit will be determined, from time to
time, by the registrant in connection with the issuance by the registrant of
the securities registered under this registration statement.
2. Not specified with respect to each class of securities being registered
under this registration statement pursuant to General Instruction II.D. of
Form S-3 under the Securities Act of 1933.
3. Estimated solely for the purpose of calculating the registration fee,
pursuant to Rule 457(o) under the Securities Act of 1933. Any offering of
debt securities denominated in any foreign or composite currency will be
treated as the equivalent in U.S. dollars based on the exchange rate
applicable to the purchase of such debt securities from the registrant. No
additional consideration will be received for common stock, preferred stock
or debt securities that are issued upon conversion into or exchange for
preferred stock or debt securities registered hereunder.
4. Pursuant to Rule 457(o) under the Securities Act of 1933, the registration
fee is calculated on the maximum offering price of all securities listed,
and the table does not specify information by each class about the amount to
be registered. A filing fee of $487,890 was previously paid in connection
with $1,755,000,000 of unsold securities registered under a registration
statement on Form S-3 (Registration No. 333-85219) initially filed by the
registrant on August 13, 1999. Accordingly, pursuant to Rule 457(p) under
the Securities Act of 1933, the registrant is offsetting $161,460 of the
previously paid filing fees against the total filing fee of $161,460 due in
connection with the filing of this registration statement. Accordingly, no
filing fee is paid herewith.
5. Including such indeterminate number of shares of common stock as the
registrant may elect from time to time to issue in connection with the
payment of dividends on preferred stock, to the extent dividends on any of
such shares of preferred stock are, by their terms, able to be satisfied by
the issue of shares of common stock.
6. Including such indeterminate number of shares of common stock as may from
time to time be issued (i) at indeterminate prices or (ii) upon conversion
into or exchange for debt securities or shares of preferred stock registered
hereunder, to the extent any of such debt securities or shares of preferred
stock are, by their terms, convertible into or exchangeable for common
stock.
7. This registration statement also relates to rights to purchase shares of the
registrant's junior preferred stock, par value $1.00 per share, which are
attached to all shares of common stock. Until the occurrence of certain
prescribed events, the rights are not exercisable, are evidenced by the
certificates representing the common stock and are transferred with and only
with the common stock. The value attributable to the rights, if any, is
reflected in the value of the common stock and no separate consideration is
to be received for the rights.
8. Including such indeterminate number of shares of preferred stock as may from
time to time be issued (i) at indeterminate prices or (ii) upon conversion
into or exchange for debt securities or other shares of preferred stock
registered hereunder, to the extent any such debt securities or other shares
of preferred stock are, by their terms, convertible into or exchangeable for
preferred stock.
9. Including such indeterminate amount of debt securities as may from time to
time be issued (i) at indeterminate prices or (ii) upon conversion into or
exchange for other debt securities or preferred stock registered hereunder,
to the extent any of such debt securities or shares of preferred stock are,
by their terms, convertible into or exchangeable for debt securities.
The information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell nor does it seek an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JANUARY 22, 2003
PROSPECTUS
$1,755,000,000
[LUCENT LOGO]
LUCENT TECHNOLOGIES INC.
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
We may sell, from time to time, securities comprising one or more of shares
of our common stock, $.01 par value per share, shares of our preferred stock,
$1.00 par value per share, or debt securities comprising one or more of
debentures, notes or other evidences of indebtedness, in one or more offerings
up to a total dollar (or its equivalent in foreign or composite currencies)
amount of $1,755,000,000 of these securities.
When we decide to sell particular securities, we will provide you with the
specific terms of the securities we are then offering in one or more prospectus
supplements to this prospectus. You should read this prospectus, together with
any prospectus supplement and information incorporated by reference in this
prospectus and any prospectus supplements carefully before you decide to invest.
Our common stock is listed for trading on the New York Stock Exchange under
the trading symbol "LU." Each prospectus supplement to this prospectus will
contain information, where applicable, as to any other listing on any national
securities exchange or The Nasdaq Stock Market of the securities covered by the
prospectus supplement.
These securities may be sold directly by us, through dealers or agents
designated from time to time, to or through underwriters or through a
combination of these methods. See "Plan of Distribution" in this prospectus. We
may also describe the plan of distribution for any particular offering of these
securities in any applicable prospectus supplement. If any agents, underwriters
or dealers are involved in the sale of any securities in respect of which this
prospectus is being delivered, we will disclose their names and the nature of
our arrangements with them in a prospectus supplement. The net proceeds we
expect to receive from any such sale will also be included in a prospectus
supplement.
This prospectus may not be used to offer or sell any securities unless it
is accompanied by a prospectus supplement.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 2 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 2003
TABLE OF CONTENTS
PAGE
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About this Prospectus....................................... ii
Incorporation of Certain Information by Reference...........
Where You Can Find More Information......................... 1
The Company................................................. 2
Risk Factors................................................ 2
Use of Proceeds............................................. 2
Ratios of Earnings to Fixed Charges and of Earnings to
Combined Fixed Charges and
Preferred Stock Dividend Requirements..................... 2
Description of Capital Stock................................ 3
Description of Debt Securities.............................. 13
Plan of Distribution........................................ 21
Validity of Securities...................................... 23
Experts..................................................... 23
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or, the SEC, utilizing a "shelf"
registration process, which allows us to offer and sell any combination of the
securities described in this prospectus in one or more offerings. Using this
prospectus, we may offer up to a total dollar (or its equivalent in foreign or
composite currencies) amount of $1,755,000,000 of these securities.
This prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a prospectus
supplement that will describe the specific terms of the securities we are then
offering. Each prospectus supplement will also contain specific information
about the terms of the offering it describes. Prospectus supplements may also
add to, update or change the information contained in this prospectus. In
addition, as we describe in the section entitled "Where You Can Find More
Information," we have filed and plan to continue to file other documents with
the Securities and Exchange Commission, or, the SEC, that contain information
about us and the business conducted by us and our subsidiaries. Before you
decide whether to invest in any of these securities, you should read this
prospectus, the prospectus supplement that further describes the offering of
these securities and the information we file with the SEC.
You should rely only on the information contained or incorporated by
reference in this prospectus and any applicable prospectus supplement. We have
not authorized any other person to provide you with different information. We
will not make an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted. You should assume that the information appearing
in this prospectus is accurate only as of the date on the cover page.
In this prospectus, references to "Company," "we," "us," "our" and "Lucent"
refer to Lucent Technologies Inc. and does not include any of its subsidiaries
in the context of the issuer of securities. In other contexts, reference to
"Company," "we," "us," "our" and "Lucent" may also include subsidiaries of
Lucent. The phrase "this prospectus" refers to this prospectus and any
applicable prospectus supplement, unless the context otherwise requires.
References to "securities" refer collectively to the common stock, preferred
stock and debt securities offered by this prospectus.
ii
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
This prospectus incorporates by reference important business and financial
information about us that is not otherwise included in this prospectus. The
following documents filed by us, Commission File No. 001-11639, with the SEC are
incorporated herein by reference and shall be deemed to be a part hereof:
1. Annual Report on Form 10-K for the fiscal year ended September 30,
2002, filed on December 12, 2002;
2. Current Reports on Form 8-K filed pursuant to Item 5 of Form 8-K on
October 11, 2002, October 18, 2002, October 23, 2002 and January 22,
2003; and
3. The "Description of Capital Stock" section of our registration
statement on Form 10, filed on February 26, 1996, as amended by
Amendment No. 1 on Form 10/A, filed on March 12, 1996, Amendment No. 2
on Form 10/A, filed on March 22, 1996, Amendment No. 3 on Form 10/A,
filed on April 1, 1996, Exhibit 99(i) on our Quarterly Report on Form
10-Q for the quarter ended December 31, 2001, filed on February 14,
2002 and any other amendments or reports for the purpose of updating
that description (including this prospectus).
Current Reports on Form 8-K containing only Regulation FD disclosure
furnished under Item 9 of Form 8-K are not incorporated herein by reference.
All documents and reports filed by us with the SEC (other than Current
Reports on Form 8-K containing only Regulation FD disclosure furnished pursuant
to Item 9 of Form 8-K, unless otherwise indicated therein) pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act of 1934, as
amended, or the Exchange Act, after the date of this prospectus and prior to the
termination of this offering shall be deemed incorporated herein by reference
and shall be deemed to be a part hereof from the date of filing of such
documents and reports. Any statement contained in a document incorporated or
deemed to be incorporated by reference in this prospectus shall be deemed to be
modified or superseded for purposes of this document to the extent that a
statement contained herein or in any subsequently filed document or report that
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
document.
We will provide, without charge to each person, including any beneficial
owner, to whom this prospectus is delivered, upon written or oral request of
such person, a copy of any or all of the documents incorporated herein by
reference other than exhibits, unless such exhibits specifically are
incorporated by reference into such documents or this document. Requests for
such documents should be addressed in writing or by telephone to:
Corporate Secretary
Lucent Technologies Inc.
600 Mountain Avenue
Murray Hill, New Jersey 07974
(908) 582 8500
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information reporting requirements of the Exchange
Act and accordingly file annual, quarterly and special reports, proxy statements
and other information with the SEC. Members of the public may read and copy any
materials we file with the SEC at the SEC's following public reference
facilities:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 233 Broadway 175 West Jackson Boulevard
Room 1024 New York, NY 10279 Suite 900
Washington, D.C. 20549 Chicago, IL 60604
Information on the operation of these public reference facilities may be
obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet
site at that contains materials we file electronically with the
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SEC. Our SEC filings can also be inspected and copied at the offices of The New
York Stock Exchange at 20 Broad Street, New York, New York 10005.
THE COMPANY
We operate in the global communications networking industry and design and
deliver networks for the world's largest communications service providers.
Backed by Bell Labs, one of the world's foremost industrial and research
development organizations, we rely on our strengths in mobility, optical, data
and voice networking technologies as well as software and services to develop
next generation networks. Our systems, services and software are designed to
help customers quickly deploy and better manage their networks and create new
opportunities for revenue-generating services that help businesses and
consumers.
Our principal executive offices are located at 600 Mountain Avenue, Murray
Hill, New Jersey 07974 and our telephone number, at that location is (908)
582-8500.
RISK FACTORS
Investing in our securities involves risks. You should carefully consider
the specific factors discussed under the caption "Risk Factors" in the
applicable prospectus supplement, together with all the other information
contained in the prospectus supplement or appearing or incorporated by reference
in this prospectus. You should also consider the risks, uncertainties and
assumptions discussed under the caption "Risks Related to Our Business and
Investing in Our Securities" included in our annual report on Form 10-K for the
year ended September 30, 2002, which is incorporated by reference in this
prospectus, and which may be amended, supplemented or superseded from time to
time by other reports we file with the SEC in the future.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the securities offered
by this prospectus for working capital, capital expenditures, debt service,
preferred stock dividend requirements or redemptions, other general corporate
purposes or for any other purpose we describe in any applicable prospectus
supplement. Debt service may include making interest and principal payments on
our debt. Our management will retain broad discretion in the allocation of the
net proceeds from the sale of these securities.
RATIOS OF EARNINGS TO FIXED CHARGES AND OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The following table sets forth our consolidated ratios of earnings to fixed
charges and of earnings to combined fixed charges and preferred stock dividend
requirements for the periods shown.
FISCAL YEAR ENDED SEPTEMBER 30,
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2002 2001 2000 1999 1998
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Ratio of Earnings to Fixed Charges................ --(a) --(b) 4.6 7.2 4.3
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements........... --(a) --(b) 4.6 7.2 4.3
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(a) Our earnings were insufficient to cover our fixed charges by $7,087 million
and our earnings were insufficient to cover our combined fixed charges and
preferred stock dividend requirements by $7,254 million during fiscal 2002.
(b) Our earnings were insufficient to cover our fixed charges by $19,860 million
and our earnings were insufficient to cover our combined fixed charges and
preferred stock dividend requirements by $19,888 million during fiscal 2001.
Fixed charges consist of interest expense on all indebtedness and that
portion of operating lease rental expense that is representative of the interest
factor. Preferred stock dividend requirements consist of the amount of pre-tax
earnings that is required to pay the dividends on our outstanding preferred
stock.
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DESCRIPTION OF CAPITAL STOCK
We are authorized by Section 1 of our Restated Certificate of
Incorporation, as amended, which we refer to as our certificate of
incorporation, to issue 10,250 million shares of capital stock, of which 10,000
million shares shall be common stock, $.01 par value, per share, or, our common
stock, and 250 million shares shall be preferred stock, $1.00 par value, per
share, or, our preferred stock. As of December 31, 2002, approximately
3,713,350,863 million shares of our common stock were issued and outstanding,
and 1,318,112 shares of our preferred stock were issued and outstanding. Our
common stock is listed for trading on the New York Stock Exchange under the
trading symbol "LU."
Our certificate of incorporation was amended on April 8, 1996 by the
designation of 7.5 million shares of our preferred stock as Series A Junior
Participating Preferred Stock, which we refer to as our junior preferred stock,
and further amended on February 17, 1999 and February 16, 2000 by the
designation of an additional 7.5 million shares and 10.0 million shares,
respectively, of our preferred stock as junior preferred stock.
Our certificate of incorporation was amended on August 6, 2001 by the
designation of 1,885,000 shares of our preferred stock as 8.00% redeemable
convertible preferred stock, which we refer to as our redeemable convertible
preferred stock.
COMMON STOCK
The holders of shares of our common stock are entitled to one vote for each
share upon all proposals presented to the stockholders on which the holders of
our common stock are entitled to vote. Except as otherwise required by law or by
the resolution or resolutions adopted by our board of directors designating the
rights, powers and preferences of any series of our preferred stock, the holders
of shares of our common stock have the exclusive right to vote for the election
of directors and for all other purposes. Our certificate of incorporation does
not provide for cumulative voting in the election of our directors. Subject to
any preferential rights of any outstanding series of preferred stock created by
our board of directors from time to time, the holders of shares of our common
stock are entitled to such dividends as may be declared from time to time by our
board of directors from funds available therefor, and upon liquidation are
entitled to receive pro rata all our assets available for distribution to such
holders. See "Dividend Policy."
PREFERRED STOCK
The following is a summary of certain general terms and provisions of our
preferred stock and is not complete. The particular terms of any series of
preferred stock we offer, including the extent to which the general terms and
provisions below may apply to that series of preferred stock, will be described
in a prospectus supplement relating to that series of preferred stock. You
should refer to the applicable certificate of designation for such series of
preferred stock for complete information with respect to such preferred stock.
Our certificate of incorporation authorizes our board of directors to
establish one or more series of preferred stock and to determine, with respect
to any series of preferred stock, the terms and rights of such series,
including:
- the designation of the series;
- the number of shares of the series, which number our board of directors
may thereafter (except where otherwise provided in the applicable
certificate of designation) increase or decrease (but not below the
number of shares thereof then outstanding);
- whether dividends, if any, will be cumulative or noncumulative, and, in
the case of shares of any series having cumulative dividend rights, the
date or dates or method of determining the date or dates from which
dividends on the shares of such series shall be cumulative;
- the rate of any dividends (or method of determining such dividends)
payable to the holders of the shares of such series, any conditions upon
which such dividends will be paid and the date or dates or the method for
determining the date or dates upon which such dividends will be payable;
- the redemption rights and price or prices, if any, for shares of the
series;
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- the terms and amounts of any sinking fund provided for the purchase or
redemption of shares of the series;
- the amounts payable on and the preferences, if any, of shares of the
series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of our company;
- whether the shares of the series will be convertible or exchangeable into
shares of any other class or series, or any other security, of our
company or any other corporation, and, if so, the specification of such
other class or series or such other security, the conversion or exchange
price or prices or rate or rates, any adjustments thereof, the date or
dates as of which such shares will be convertible or exchangeable and all
other terms and conditions upon which such conversion or exchange may be
made;
- restrictions on the issuance of shares of the same series or of any other
class or series;
- the voting rights, if any, of the holders of the shares of the series;
and
- any other relative rights, preferences and limitations of such series.
We believe that the ability of our board of directors to issue one or more
series of preferred stock will provide us with flexibility in structuring
possible future financings and acquisitions, and in meeting other corporate
needs which might arise. The authorized shares of our preferred stock, as well
as shares of our common stock, will be available for issuance without further
action by our stockholders, unless such action is required by applicable law or
the rules of any stock exchange or automated quotation system on which our
securities may be listed or traded. The New York Stock Exchange currently
requires stockholder approval as a prerequisite to listing shares in several
instances, including where the present or potential issuance of shares could
result in an increase in the number of shares of common stock, or in the amount
of voting securities, outstanding of at least 20%. If the approval of our
stockholders is not required for the issuance of shares of our preferred stock
or our common stock, our board of directors may determine not to seek
stockholder approval.
Although our board of directors has no intention at the present time of
doing so, it could issue a series of our preferred stock that could, depending
on the terms of such series, impede the completion of a merger, tender offer or
other takeover attempt. Our board of directors will make any determination to
issue such shares based on its judgment as to our and our stockholders' best
interests. Our board of directors, in so acting, could issue preferred stock
having terms that could discourage an acquisition attempt through which an
acquirer may be able to change the composition of our board of directors,
including a tender offer or other transaction that some, or a majority, of our
stockholders might believe to be in their best interests or in which
stockholders might receive a premium for their stock over the then current
market price of such stock.
JUNIOR PREFERRED STOCK
We have designated and reserved 25 million shares of our preferred stock as
our junior preferred stock for issuance upon exercise of certain rights. See
"-- Rights Plan."
REDEEMABLE CONVERTIBLE PREFERRED STOCK
On August 6, 2001, we designated and issued 1,885,000 shares of our
preferred stock as our redeemable convertible preferred stock. Each share of our
redeemable convertible preferred stock has an initial liquidation preference of
$1,000 and is currently convertible into common stock at a conversion price of
$5.94 per share of common stock (equivalent to a conversion rate of 168.3502
shares of common stock for each share of preferred stock), representing an
adjustment of the initial conversion price of $7.48 per share of common stock
(or initial conversion rate of 133.6898 shares of common stock for each share of
preferred stock) on account of our distribution of our shares of Agere Systems
Inc. to our common shareowners in connection with our spin-off of Agere Systems
Inc. The conversion price is subject to further specified adjustments.
4
RANKING
Our redeemable convertible preferred stock ranks, with respect to dividend
rights and rights upon liquidation, winding up or dissolution:
- junior to:
- all our existing and future debt obligations; and
- each class or series of our capital stock that has terms providing that
such class or series will rank senior to our redeemable convertible
preferred stock;
- on a parity with each class or series of our capital stock that has terms
providing that such class or series will rank on a parity with our
redeemable convertible preferred stock; and
- senior to our junior preferred stock, our common stock and each class or
series of our capital stock that has terms providing that such class or
series will rank junior to our redeemable convertible preferred stock.
Without the consent of holders of at least two-thirds of the shares of our
redeemable convertible preferred stock outstanding, we will not be entitled to
issue any class or series of capital stock that ranks senior to our redeemable
convertible preferred stock.
DIVIDENDS
Dividends on our redeemable convertible preferred stock are payable on
February 1 and August 1 of each year. We began paying the dividends on our
redeemable convertible preferred stock on February 1, 2002. Dividends accrue
from the beginning of the relevant dividend period at the annual rate of 8.00%
of the applicable accreted liquidation preference per share. We will pay
dividends on a dividend payment date either, at our option and subject to agreed
upon conditions, in cash, shares of our common stock or any combination thereof.
Shares of our common stock delivered to the transfer agent on behalf of holders
of preferred stock will be sold on the holders' behalf, resulting in net cash
proceeds to be distributed to the holders in an amount equal to the cash
dividend otherwise payable.
To pay dividends, we must pay the dividends out of funds legally available
for payment, and to pay dividends by delivering shares to the transfer agent, we
must provide the transfer agent with a registration statement permitting the
immediate sale of the shares of common stock in the public market.
If we pay dividends by delivering shares of our common stock to the
transfer agent, those shares will be owned beneficially by the holders of our
redeemable convertible preferred stock upon delivery of such shares of our
common stock to the transfer agent, and the transfer agent will hold those
shares and the net cash proceeds from the sale of those shares for the exclusive
benefit of the holders. If a holder provides notice to the transfer agent at
least 30 days prior to the applicable dividend payment date not to sell any
shares of common stock received and held on behalf of that holder, the transfer
agent will deliver to or for the account of the holder promptly after receipt by
the transfer agent, shares of common stock having the value of the dividend
payment calculated based on an average sale price on the five trading days
preceding the third business day before the relevant dividend payment date.
If we are unable to pay dividends on our redeemable convertible preferred
stock in full on any dividend payment date, the liquidation preference of our
redeemable convertible preferred stock will be increased for subsequent dividend
periods by an amount that reflects the accretion of the unpaid dividends at an
annual rate of 10.00%, calculated on a semi-annual basis, from, and including,
the first day of the relevant dividend period to, but excluding, the dividend
payment date. The conversion price will not change as a result of any accretion.
REDEMPTION AT OUR OPTION
We may not redeem any shares of our redeemable convertible preferred stock
at any time before August 15, 2006. Thereafter, we may, at our option and upon
notice to the holders of our redeemable convertible preferred stock, redeem any
outstanding shares of our redeemable convertible preferred stock at a price per
share equal to the accreted liquidation preference thereof, plus an amount equal
to accrued and
5
unpaid dividends from, and including, the immediately preceding dividend payment
date to, but excluding, the redemption date. We may, at our option, elect to pay
the redemption price:
- in cash; or
- in shares of our common stock valued at a discount of 5% from the market
price of our common stock; or
- any combination thereof.
We may pay such redemption price only out of funds legally available for
such payment, and if we pay the redemption price in shares of our common stock,
such shares must be eligible for immediate sale in the public market by
non-affiliates of ours absent a registration statement.
REDEMPTION AT THE OPTION OF THE HOLDER
On the redemption dates of August 2, 2004, August 2, 2007, August 2, 2010,
and August 2, 2016, we will, at the option of the holder, be required to redeem
any outstanding shares of our redeemable convertible preferred stock at a price
per share equal to the accreted liquidation preference thereof, plus an amount
equal to accrued and unpaid dividends from, and including, the immediately
preceding dividend payment date to, but excluding, the redemption date.
The terms of our redeemable convertible preferred stock permit us, at our
option, to pay the redemption price:
- in cash; or
- in shares of our common stock valued at a discount of 5% from the market
price of our common stock; or
- any combination thereof.
We may pay the redemption price only out of funds legally available for
such payment, and if we pay the redemption price in shares of the common stock,
such shares must be eligible for immediate sale in the public market by
non-affiliates of ours absent a registration statement.
MANDATORY REDEMPTION
We will be obligated to redeem all outstanding shares of our redeemable
convertible preferred stock on August 1, 2031, at a price per share equal to the
accreted liquidation preference thereof, plus an amount equal to accrued and
unpaid dividends from, and including, the immediately preceding dividend payment
date to, but excluding, the date of redemption.
The terms of our redeemable convertible preferred stock permit us, at our
option, to pay the redemption price:
- in cash; or
- in shares of our common stock valued at a discount of 5% from the market
price of our common stock; or
- any combination thereof.
We may pay the redemption price only out of funds legally available for
such payment, and if we pay the redemption price in shares of our common stock,
such shares must be eligible for immediate sale in the public market by
non-affiliates of ours absent a registration statement.
CONVERSION
Each share of our redeemable convertible preferred stock may be converted
at the option of the holder into a number of shares of our common stock, subject
to adjustment based on adjustments to the conversion price.
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VOTING RIGHTS
The holders of shares of our redeemable convertible preferred stock are not
entitled to any voting rights except as required by law. Notwithstanding the
foregoing, so long as any shares of our redeemable convertible preferred stock
remain outstanding, we shall not, without the consent of the holders of at least
two-thirds of the shares of our redeemable convertible preferred stock
outstanding:
- issue shares of or increase the authorized number of shares of any class
or series of stock ranking prior to the outstanding redeemable
convertible preferred stock as to the payment of dividends or
distributions upon liquidation, dissolution or winding up; or
- amend our certificate of incorporation or the resolutions contained in
the certificate of designations relating to our redeemable convertible
preferred stock, whether by merger, consolidation or otherwise, if the
amendment would alter or change any power, preference or special right of
the outstanding redeemable convertible preferred stock so as to
materially and adversely affect the holders thereof.
CHANGE OF CONTROL
If we undergo a change of control, each holder of shares of our redeemable
convertible preferred stock will have the right to require us to redeem any
outstanding shares of the holder's redeemable convertible preferred stock at a
redemption price per share equal to the accreted liquidation preference of those
shares, plus an amount equal to accrued and unpaid dividends, if any, on those
shares from, and including, the immediately preceding dividend payment date to,
but excluding, the date of redemption. This right of holders will be subject to
our obligation to repay or repurchase any indebtedness or preferred stock
required to be repaid or repurchased in connection with a change of control and
to any contractual restrictions then contained in our indebtedness.
We may, at our option, elect to pay the redemption price in cash or in
shares of our common stock valued at a discount of 5% from the market price of
our common stock, or any combination thereof. However, we may pay such
redemption price only out of funds legally available for such payment, and if we
pay the redemption price in shares of our common stock, such shares must be
eligible for immediate sale in the public market by non-affiliates of ours
absent a registration statement.
Holders of our redeemable convertible preferred stock will not have this
redemption right if our common stock trades at or above 105% of the conversion
price of our redeemable convertible preferred stock during specified periods, or
if holders of our redeemable convertible preferred stock receive specified
securities as a result of the change of control.
EXCHANGE RIGHT
We have the right, at any time we have legally available funds, to require
all holders of our outstanding redeemable convertible preferred stock to
exchange their shares of our redeemable convertible preferred stock for 8.00%
convertible subordinated debentures having an aggregate principal amount equal
to the accreted liquidation preference of our redeemable convertible preferred
stock and having a conversion price and interest rate equal to the conversion
price and dividend rate for our redeemable convertible preferred stock, rounded
down to the nearest whole dollar amount.
ANTITAKEOVER EFFECTS OF CERTAIN PROVISIONS OF OUR CERTIFICATE OF INCORPORATION
AND BY-LAWS
BOARD OF DIRECTORS
Our certificate of incorporation provides that, except as otherwise fixed
by or pursuant to the provisions of a certificate of designations setting forth
the rights of the holders of any class or series of our preferred stock, the
number of our directors will be fixed from time to time exclusively pursuant to
a resolution adopted by a majority of the total number of directors which we
would have if there were no vacancies, or the whole of our board of directors,
but shall not be less than three. Our directors, other than those who may be
elected by the holders of our preferred stock, are classified, with respect to
the time for which they severally hold office, into three classes, as nearly
equal in number as possible with each director to hold office until its
successor is duly elected and qualified. Directors elected to succeed directors
whose terms then expire are elected for a term of
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office to expire at the third succeeding annual meeting of stockholders after
their election, with each director to hold office until such person's successor
is duly elected and qualified.
Our certificate of incorporation provides that, except as otherwise
provided for or fixed by or pursuant to a certificate of designations setting
forth the rights of the holders of any class or series of our preferred stock,
newly created directorships resulting from any increase in the number of our
directors and any vacancies on our board of directors resulting from death,
resignation, disqualification, removal or other cause will be filled by the
affirmative vote of a majority of our remaining directors then in office, even
though less than a quorum of our board of directors, and not by the
stockholders. Any director elected in accordance with the preceding sentence
will hold office for the remainder of the full term of the class of directors in
which the new directorship was created or the vacancy occurred and until such
director's successor shall have been duly elected and qualified. No decrease in
the number of directors constituting our board of directors will shorten the
term of any incumbent director. Subject to the rights of holders of our
preferred stock, any director may be removed from office only for cause by the
affirmative vote of the holders of at least a majority of the voting power of
all voting stock then outstanding, voting together as a single class.
These provisions would preclude a third party from removing incumbent
directors and simultaneously gaining control of our board of directors by
filling the vacancies created by removal with its own nominees. Under the
classified board provisions described above, it would take at least two
elections of our directors for any individual or group to gain control of our
board of directors. Accordingly, these provisions could discourage a third party
from initiating a proxy contest, making a tender offer or otherwise attempting
to gain control of us.
NO STOCKHOLDER ACTION BY WRITTEN CONSENT; SPECIAL MEETINGS
Our certificate of incorporation and by-laws provide that any action
required or permitted to be taken by our stockholders must be effected at a duly
called annual or special meeting of such holders and may not be effected by any
consent in writing by such holders. Except as otherwise required by law and
subject to the rights of the holders of any of our preferred stock, special
meetings of our stockholders for any purpose or purposes may be called only by
our board of directors pursuant to a resolution stating the purpose or purposes
thereof approved by a majority of our whole board of directors or by the
chairman of our board of directors and any power of stockholders to call a
special meeting is specifically denied. No business other than that stated in
the notice shall be transacted at any special meeting. These provisions may have
the effect of delaying consideration of a stockholder proposal until the next
annual meeting unless a special meeting is called by our board of directors or
the chairman of our board of directors.
ADVANCE NOTICE PROCEDURES
Our by-laws establish an advance notice procedure for stockholders to make
nominations of candidates for election as directors or to bring other business
before an annual meeting of our stockholders, which we refer to as the
stockholder notice procedure. The stockholder notice procedure provides that
only persons who are nominated by, or at the direction of, the chairman of our
board of directors, or by a stockholder who has given timely written notice to
our secretary prior to the meeting at which directors are to be elected, will be
eligible for election as directors of our company. The stockholder notice
procedure also provides that at an annual meeting only such business may be
conducted as has been brought before the meeting by, or at the direction of, the
chairman of our board of directors or our board of directors, or by a
stockholder who has given timely written notice to our secretary of such
stockholder's intention to bring such business before such meeting. Under the
stockholder notice procedure, for notice of stockholder nominations to be made
at an annual meeting to be timely, such notice must be received by us not later
than the close of business on the 45th calendar day nor earlier than the close
of business on the 75th calendar day prior to the first anniversary of the
record date of stockholders entitled to vote at the preceding year's annual
meeting (except that, in the event that the record date is more than 30 calendar
days before or more than 60 calendar days after such anniversary date, notice by
the stockholder to be timely must be so delivered not earlier than the close of
business on the 75th calendar day prior to such record date and not later than
the close of business on the later of the 45th calendar day prior to such record
meeting or the 10th calendar day following the day on which public announcement
of such record date is first made by us).
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Notwithstanding the foregoing, in the event that the number of directors to
be elected to our board of directors is increased and there is no public
announcement by us naming all of the nominees for director or specifying the
size of the increased board of directors at least 55 calendar days prior to the
first anniversary of the record date for preceding year's annual meeting, a
stockholder's notice also will be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall be
delivered not later than the close of business on the 10th calendar day
following the day on which such public announcement is first made by us. Under
the stockholder notice procedure, timely notice of a stockholder nomination to
be made at a special meeting at which directors are to be elected must be
received by us not earlier than the close of business on the 90th calendar day
prior to such special meeting and not later than the close of business on the
later of the 60th calendar day prior to such special meeting or the 10th
calendar day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by our board of
directors to be elected at such meeting.
In addition, under the stockholder notice procedure, a stockholder's notice
to us proposing to nominate a person for election as a director or relating to
the conduct of business other than the nomination of directors must contain
certain specified information. If the chairman of a meeting determines that an
individual was not nominated, or other business was not brought before the
meeting, in accordance with the stockholder notice procedure, such individual
will not be eligible for election as a director, or such business will not be
conducted at such meeting, as the case may be.
AMENDMENT
Our certificate of incorporation provides that the affirmative vote of the
holders of at least 80% of the voting power of the outstanding shares of voting
stock, voting together as a single class, is required to amend provisions of our
certificate of incorporation relating to:
- stockholder action without a meeting;
- the calling of special meetings;
- the number, election and term of our directors;
- the filling of vacancies; and
- the removal of directors.
Our certificate of incorporation further provides that our related by-laws
described above (including the stockholder notice procedure) may be amended only
by our board of directors or by the affirmative vote of the holders of at least
80% of the voting power of the outstanding shares of voting stock, voting
together as a single class.
SHARE PURCHASE RIGHTS PLAN
Pursuant to the share purchase rights plan, or, our rights plan, our board
of directors has caused to be issued one preferred share purchase right, or, a
right, for each outstanding share of our common stock. Each right will entitle
the registered holder to purchase from us one one-hundredth of a share of our
junior preferred stock at a price of $90.00, which we refer to as the purchase
price, subject to adjustment. The description and terms of the rights is set
forth in a rights agreement dated April 4, 1996, which we refer to as the rights
agreement, between us and The Bank of New York (successor to First Chicago Trust
Company of New York) as rights agent. The description set forth below is
intended as a summary only and is qualified in its entirety by reference to the
rights agreement.
Until the earlier to occur of:
- ten days following a public announcement that a person or group of
affiliated or associated persons, which we refer to as the acquiring
person, has acquired beneficial ownership of 10% or more of the
outstanding shares of our common stock; or
- ten business days (or such later date as may be determined by action of
our board of directors prior to such time as any person becomes an
acquiring person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of
which would result
9
in the beneficial ownership by a person or group of 10% or more of such
outstanding shares of our common stock
(the earlier of such dates being called the rights distribution date), the
rights will be evidenced by the certificates representing our common stock.
The rights agreement provides that, until the rights distribution date (or
earlier redemption or expiration of the rights), the rights will be transferred
with and only with our common stock. Until the rights distribution date (or
earlier redemption or expiration of the rights), our common stock certificates
will contain a notation incorporating the rights agreement by reference. As soon
as practicable following the rights distribution date, separate certificates
evidencing the rights, called the right certificates, will be mailed to holders
of record of our common stock as of the close of business on the rights
distribution date and such separate right certificates alone will evidence the
rights.
The rights will not be exercisable until the rights distribution date. The
rights will expire on the 10th anniversary of the date of issuance referred to
as the final expiration date, unless the final expiration date is extended or
unless the rights are earlier redeemed or exchanged by us, in each case, as
summarized below.
In the event that any person or group of affiliated or associated persons
becomes an acquiring person, proper provision shall be made so that each holder
of a right, other than rights beneficially owned by the acquiring person (which
will thereafter be void), will thereafter have the right to receive upon
exercise that number of shares of our common stock having a market value of two
times the exercise price of the right. In the event that we are acquired in a
merger or other business combination transaction or 50% or more of our
consolidated assets or earning power are sold after a person or group of
affiliated or associated persons becomes an acquiring person, proper provision
will be made so that each holder of a right will thereafter have the right to
receive, upon the exercise thereof at the then-current exercise price of the
right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the exercise
price of the right.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 10% or more of our outstanding
common stock and prior to the acquisition by such person or group of 50% or more
of our outstanding common stock, our board of directors may exchange the rights
(other than rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one share of our common stock, or one
one-hundredth of a share of our junior preferred stock (or of a share of a class
or series of our preferred stock having equivalent rights, preferences and
privileges), per right, subject to adjustment.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 10% or more of our outstanding
common stock, our board of directors may redeem the rights in whole, but not in
part, at a price of $.01 per Right, referred to as the redemption price. The
redemption of the rights may be made effective at such time on such basis and
with such conditions as our board of directors, in its sole discretion, may
establish. Immediately upon any redemption of the rights, the right to exercise
the rights will terminate and the only right of the holders of the rights will
be eligible to receive the redemption price.
The terms of the rights may be amended by our board of directors without
the consent of the holders of the rights; provided, however, that, from and
after such time as any person or group of affiliated or associated persons
becomes an acquiring person, no such amendment may adversely affect the
interests of the holders of the rights. Until a right is exercised, the holder
thereof, as such, will have no rights as a stockholder of our company,
including, without limitation, the right to vote or to receive dividends.
The number of outstanding rights and the number of one one-hundredths of a
share of our junior preferred stock issuable upon exercise of each right also
will be subject to adjustment in the event of a stock split of our common stock
or a stock dividend on our common stock payable in our common stock or
subdivisions, consolidations or combinations of our common stock occurring, in
any such case, prior to the rights distribution date. The purchase price
payable, and the number of shares of our junior preferred stock or
10
other securities or property issuable, upon exercise of the Rights will be
subject to adjustment from time to time to prevent dilution:
- in the event of a stock dividend on, or a subdivision, combination or
reclassification of, our junior preferred stock;
- upon the grant to holders of our junior preferred stock of certain rights
or warrants to subscribe for or purchase our junior preferred stock at a
price, or securities convertible into our junior preferred stock with a
conversion price, less than the then-current market price of our junior
preferred stock; or
- upon the distribution to holders of our junior preferred stock of
evidences of indebtedness or assets, excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends payable
in our junior preferred stock, or of subscription rights or warrants,
other than those referred to above.
With certain exceptions, no adjustment in the purchase price will be
required until cumulative adjustments require an adjustment of at least one
percent in such purchase price. No fractional shares of our junior preferred
stock will be issued (other than fractions which are integral multiples of one
one-hundredth of a share of our junior preferred stock, which may, at our
election, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of our junior
preferred stock on the last trading day prior to the date of exercise.
Shares of our junior preferred stock purchasable upon exercise of the
rights will not be redeemable. Each share of our junior preferred stock will be
entitled to a minimum preferential quarterly dividend payment of $1.00 per share
but will be entitled to an aggregate dividend of 100 times the dividend declared
per share of our common stock. In the event of liquidation, our junior preferred
stockholders will be entitled to a minimum preferential liquidation payment of
$100 per share but will be entitled to an aggregate payment of 100 times the
payment made per share of our common stock. Each share of our junior preferred
stock will have 100 votes voting together with our common stock. Finally, in the
event of any merger, consolidation or other transaction in which shares of our
common stock are exchanged, each share of our junior preferred stock will be
entitled to receive 100 times the amount received per share of our common stock.
These rights are protected by customary anti-dilution provisions.
Due to the nature of our junior preferred stock's dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a share of junior
preferred stock purchasable upon exercise of each right should approximate the
value of one share of our common stock.
The rights have certain antitakeover effects. The rights will cause
substantial dilution to a person or group of persons that attempts to acquire us
on terms not approved by our board of directors. The rights should not interfere
with any merger or other business combination approved by our board of directors
prior to the time that a person or group has acquired beneficial ownership of
10% percent or more of our common stock since the rights may be redeemed by us
at the redemption price until such time.
DELAWARE BUSINESS COMBINATION STATUTE
Section 203 of the Delaware General Corporation Law, or, the DGCL, provides
that, subject to certain exceptions specified therein, an "interested
stockholder" of a Delaware corporation shall not engage in any business
combination, including mergers or consolidations or acquisitions of additional
shares of the corporation, with the corporation for a three-year period
following the date that such stockholder becomes an interested stockholder
unless:
(i) prior to such date, the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder,
(ii) 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 certain shares), or
(iii) on or subsequent to such date, the business combination is approved
by the board of directors of the corporation 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.
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Except as otherwise specified in Section 203, an interested stockholder is
defined to include:
(x) any person that is the owner of 15% or more of the outstanding voting
stock of the corporation, or is an affiliate or associate of the
corporation and was the owner of 15% or more of the outstanding voting
stock of the corporation at any time within three years immediately prior
to the date of determination and
(y) the affiliates and associates of any such person.
Under certain circumstances, Section 203 makes it more difficult for a
person who would be an interested stockholder to effect various business
combinations with a corporation for a three-year period. We have not elected to
be exempt from the restrictions imposed under Section 203. The provisions of
Section 203 may encourage persons interested in acquiring us to negotiate in
advance with our board of directors, since the stockholder approval requirement
would be avoided if a majority of our directors then in office approves either
the business combination or the transaction which results in any such person
becoming an interested shareholder. Such provisions also may have the effect of
preventing changes in our management. It is possible that such provisions could
make it more difficult to accomplish transactions which our stockholders may
otherwise deem to be in their best interests.
LIABILITY OF DIRECTORS; INDEMNIFICATION
Our certificate of incorporation provides that a director of our company
will not be personally liable to us or our stockholders for monetary damages for
breach of fiduciary duty as a director, except, if required by the DGCL as
amended from time to time, for liability:
- for any breach of the director's duty of loyalty to us or our
stockholders;
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- under Section 174 of the DGCL, which concerns unlawful payments of
dividends, stock purchases or redemptions; or
- for any transaction from which the director derived an improper personal
benefit.
Neither the amendment nor repeal of such provision will eliminate or reduce
the effect of such provision in respect of any matter occurring, or any cause of
action, suit or claim that, but for such provision, would accrue or arise prior
to such amendment or repeal.
While our certificate of incorporation provides our directors with
protection from awards for monetary damages for breaches of their duty of care,
it does not eliminate such duty. Accordingly, our certificate of incorporation
will have no effect on the availability of equitable remedies such as an
injunction or rescission based on a director's breach of his or her duty of
care.
Our certificate of incorporation provides that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person, or a person of whom such
person is the legal representative, is or was a director or officer of our
company or is or was serving at the request of our company as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, will be
indemnified and held harmless by us to the fullest extent authorized by the
DGCL, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits us to provide
broader indemnification rights than said law permitted us to provide prior to
such amendment), against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith. Such right to indemnification
includes the right to have us pay the expenses incurred in defending any such
proceeding in advance of its final disposition, subject to the provisions of the
DGCL. Such rights are not exclusive of any other right which any person may have
or thereafter acquire under any statute, provision of our certificate of
incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise. No repeal or modification of such provision will in any
way diminish or adversely affect the rights of any director, officer, employee
or agent of our company thereunder in
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respect of any occurrence or matter arising prior to any such repeal or
modification. Our certificate of incorporation also specifically authorizes us
to maintain insurance and to grant similar indemnification rights to our
employees or agents.
TRANSFER AGENT AND REGISTRAR
The Bank of New York is the transfer agent and registrar for our common
stock and our redeemable convertible preferred stock.
DESCRIPTION OF DEBT SECURITIES
The following is a summary of certain general terms and provisions of the
indenture which will govern the debt securities and is not complete. The
particular terms of any series of debt securities we offer, including the extent
to which the general terms and provisions may apply to that series of debt
securities, may be described in a prospectus supplement relating to those debt
securities.
We may issue debt securities from time to time in one or more series. The
debt securities will be issued under and controlled by an indenture between us
and The Bank of New York, as trustee, which we refer to as the indenture, and
any applicable supplement to the indenture. The following sections briefly
outline the provisions of the indenture. The indenture has been filed as an
exhibit to the registration statement of which this prospectus forms a part. If
we enter into any indenture supplement, we will file a copy of that supplement
with the SEC. You should read the applicable indenture and any supplements in
its entirety in order to completely understand its terms and conditions. In
addition, you should read the applicable prospectus supplement for particular
terms of our debt securities.
GENERAL TERMS
The debt securities represent our direct, unsecured, general obligations
and:
- may rank equally with our other unsubordinated debt or may be
subordinated to other debt we have or may incur;
- may be issued in one or more series with the same or various maturities;
- may be issued at a price of 100% of their principal amount or at a
premium or discount;
- may be issued in registered or bearer form and certificated or
uncertificated form; and
- may be represented by one or more global notes registered in the name of
a designated depository's nominee, and if so, beneficial interests in the
global note will be shown on and transfers will be made only through
records maintained by the designated depository and its participants.
The applicable prospectus supplement will describe, among other things, the
following terms, to the extent they are applicable to that series of debt
securities:
- the title of the debt securities of the series;
- any limit upon the aggregate principal amount of the debt securities of
the series that may be authenticated and delivered under the indenture;
- the date or dates on which the principal and premium of the debt
securities of the series are payable;
- the rate or rates (which may be fixed or variable) at which the debt
securities of the series shall bear interest, if any, or the method of
determining such rate or rates, the date or dates from which such
interest, if any, shall accrue, the interest payment dates on which such
interest, if any, shall be payable or the method by which such dates will
be determined, the record dates for the determination of holders thereof
to whom such interest is payable (in the case of debt securities in
registered form), and the basis upon which such interest will be
calculated if other than that of a 360-day year of twelve 30-day months;
- the currency or currencies, including composite currencies in which debt
securities of the series shall be denominated, if other than U.S.
dollars, the place or places, if any, in addition to or instead of the
corporate trust office of the trustee (in the case of debt securities in
registered form) or the principal
13
New York office of the trustee (in the case of debt securities in bearer
form), where the principal, premium and interest with respect to debt
securities of such series shall be payable or the method of such payment,
if by wire transfer, mail or other means;
- the price or prices at which, the period or periods within which, and the
terms and conditions upon which, debt securities of the series may be
redeemed, in whole or in part at our option or otherwise;
- whether debt securities of the series are to be issued in registered form
or bearer form or both and, if debt securities are to be issued in bearer
form, whether coupons will be attached to them, whether debt securities
of the series in bearer form may be exchanged for debt securities of the
series issued in registered form, and the circumstances under which and
the places at which any such exchanges, if permitted, may be made;
- if any debt securities of the series are to be issued in bearer form or
as one or more global securities representing individual debt securities
of the series in bearer form, whether certain provisions for the payment
of additional interest or tax redemptions shall apply; whether interest
with respect to any portion of a temporary debt security of the series in
bearer form payable with respect to any interest payment date prior to
the exchange of such temporary debt security in bearer form for
definitive debt securities of the series in bearer form shall be paid to
any clearing organization with respect to the portion of such temporary
debt security in bearer form held for its account and, in such event, the
terms and conditions (including any certification requirements) upon
which any such interest payment received by a clearing organization will
be credited to the persons entitled to interest payable on such interest
payment date; and the terms upon which a temporary debt security in
bearer form may be exchanged for one or more definitive debt securities
of the series in bearer form;
- our obligation, if any, to redeem, purchase or repay the debt securities
of the series pursuant to any sinking fund or analogous provisions or at
the option of a holder of such debt securities and the price or prices at
which, the period or periods within which, and the terms and conditions
upon which, debt securities of the series shall be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligations;
- the terms, if any, upon which the debt securities of the series may be
convertible into or exchanged for any of our common stock, preferred
stock, other debt securities or warrants for common stock, preferred
stock or other securities of any kind and the terms and conditions upon
which such conversion or exchange shall be effected, including the
initial conversion or exchange price or rate, the conversion or exchange
period and any other additional provisions;
- if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which the debt securities of the series shall be
issuable;
- if the amount of principal, premium or interest with respect to the debt
securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be
determined;
- if the principal amount payable at the stated maturity of debt securities
of the series will not be determinable as of any one or more dates prior
to such stated maturity, the amount that will be deemed to be such
principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity
other than the stated maturity and which will be deemed to be outstanding
as of any such date (or, in any such case, the manner in which such
deemed principal amount is to be determined), and if necessary, the
manner of determining the equivalent thereof in U.S. currency;
- any changes or additions to the indenture dealing with defeasance;
- if other than the principal amount thereof, the portion of the principal
amount of the debt securities of the series that shall be payable upon
declaration of acceleration of the maturity thereof or provable in
bankruptcy;
- the terms, if any, of the transfer, mortgage, pledge or assignment as
security for the debt securities of the series of any properties, assets,
moneys, proceeds, securities or other collateral, including whether
14
certain provisions of the Trust Indenture Act of 1939, as amended, are
applicable and any corresponding changes to provisions of the indenture
as then in effect;
- any addition to or change in the events of default with respect to the
debt securities of the series and any change in the right of the trustee
or the holders to declare the principal amount of, premium, if any, and
interest, with respect to such debt securities due and payable;
- if the debt securities of the series shall be issued in whole or in part
in the form of a global security, the terms and conditions, if any, upon
which such global security may be exchanged in whole or in part for other
individual debt securities in definitive registered form, the depositary
(as defined in the applicable prospectus supplement) for such global
security and the form of any legend or legends to be borne by any such
global security in addition to or in lieu of the legend referred to in
the indenture;
- any trustee, authenticating agent, paying agent, transfer agent, service
agent or registrar;
- the applicability of, and any addition to or change in, the covenants
(and the related definitions) set forth in the indenture or in the terms
then set forth in the indenture relating to permitted consolidations,
mergers, or sales of assets;
- the subordination, if any, of the debt securities of the series pursuant
to the indenture and any corresponding changes to the provisions of the
indenture as then in effect;
- with regard to debt securities of the series that do not bear interest,
the dates for certain required reports to the trustee;
- any U.S. Federal income tax consequences applicable to the debt
securities of the series;
- the terms applicable to original issue discount securities, including the
rate or rates at which original issue discount will accrue; and
- any other terms of debt securities of the series (which terms shall not
be prohibited by the provisions of the indenture).
We may issue debt securities of a series in registered form or bearer form
or both as specified in the terms of the series, may be issued in whole or in
part in the form of one or more global securities and as book-entry securities
that will be deposited with, or on behalf of a depositary named by us and
identified in a prospectus supplement with respect to such series. The
prospectus supplement will specify whether the offered debt securities will be
registered, bearer, global or book-entry form.
GLOBAL SECURITIES
We may issue debt securities of a series in whole or in part in the form of
one or more global debt securities. A global security is a security, typically
held by a depositary, that represents and is denominated in an amount equal to
the aggregate principal amount of all outstanding debt securities of a series or
any portion thereof, in either case having the same original issue date, date or
dates on which principal and interest are due, and interest rate or method of
determining interest. Any global debt securities will be deposited with, or on
behalf of, a depositary or its nominee, which will be identified in the
applicable prospectus supplement. We may issue global securities in either
registered or bearer form and in either temporary or definitive form.
Unless and until a global security is exchanged in whole or in part for the
individual debt securities represented thereby, a global security may not be
transferred except as a whole:
- by the depositary for the global security to a nominee for the
depository;
- by a nominee of the depositary to the depositary or to another nominee of
the depositary; or
- by the depositary or its nominee to a successor depositary or a nominee
of a successor depositary.
15
The prospectus supplement relating to a particular series of debt
securities will describe the specific terms of the depositary arrangement with
respect to such series of debt securities. We anticipate that the following
provisions will generally apply to all depositary arrangements for debt
securities:
- ownership of beneficial interests in a global security will be limited to
persons that have accounts with the depositary for the global security,
which we refer to as a participant, or persons holding interests through
the participants;
- after the issuer of a series of debt securities issues the registered
global security for the series, the depositary will credit, on its
book-entry registration and transfer system, the participants' accounts
in an amount equal to the respective principal amounts of the debt
securities of that series represented by the global security beneficially
owned by the participants;
- the underwriters, agents or dealers participating in the distribution of
the debt securities will designate the accounts to be credited unless
such debt securities are offered by us or through our agents, in which
case we will designate the accounts to be credited;
- only a participant or a person that may hold an interest through a
participant may be the beneficial owner of a global security; and
- ownership of beneficial interests in the global security will be shown
on, and the transfer of that ownership interest will be effected only
through, records maintained by the depositary for the global security for
interests of the participants, and on the records of the participants for
interests of persons holding through the participants.
The laws of some states may require that specified purchasers of securities
take physical delivery of the securities in definitive form. These laws may
limit the ability of those persons to own, transfer or pledge beneficial
interests in global securities.
So long as the depositary for a global security, or its nominee, is the
registered owner of the global security, the depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the debt securities
represented by the global security for all purposes under the indenture. Except
as stated below, owners of beneficial interests in a global security:
- will not be entitled to have the debt securities represented by a
registered global security registered in their names;
- will not receive or be entitled to receive physical delivery of the debt
securities in definitive form; and
- will not be considered the owners or holders of the debt securities under
the indenture.
Accordingly, each person owning a beneficial interest in a registered
global security must rely on the procedures of the depositary for the registered
global security and, if the person is not a participant, on the procedures of
the participant through which the person owns its interests, to exercise any
rights of a holder under the indenture applicable to the registered global
security.
We understand that, under existing industry practices, if we request any
action of holders, or if an owner of a beneficial interest in a registered
global security desires to give or take any action which a holder is entitled to
give or take under the indenture, the depositary for the registered global
security would authorize the participants holding the relevant beneficial
interests to give or take the action, and the participants would authorize
beneficial owners owning through the participants to give or take the action or
would otherwise act upon the instructions of beneficial owners holding through
them.
Subject to the restrictions applicable to bearer securities described in
the applicable prospectus supplement, principal, premium, if any, and interest
payments on individual debt securities represented by a global security will be
made to the depositary or its nominee, as the case may be, as the registered
owner or holder of such global security. Neither we, the applicable trustee, nor
any registrar or paying agent of the debt securities will be responsible or
liable for any aspect of the records relating to, or payments made on account
of, beneficial ownership interests in the global security for the series or for
maintaining, supervising or reviewing any records relating to the beneficial
ownership interests.
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We expect that the depositary for any such debt securities represented by a
global security, upon receipt of any payment of principal, premium, if any, or
interest in respect of the global security, will immediately credit participants
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of the global security as shown on the
depositary's records. We also expect that payments by participants to owners of
beneficial interests in a global security held through the participants will be
governed by standing customer instructions and customary practices, as is now
the case with the securities held for the accounts of customers and registered
in "street name." Such payments will be the responsibility of the participants.
Receipt by owners of beneficial interests in a temporary global security of
payments of principal, premium or interest with respect thereto will be subject
to the restrictions described in an applicable prospectus supplement.
If the depositary for any debt securities represented by a global security
is at any time unwilling or unable to continue as depositary or ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, we will
appoint an eligible successor depositary. If we fail to appoint an eligible
successor depositary within 90 days, individual debt securities of such series
will be issued in exchange for the global security. In addition, we may at any
time and in our sole discretion determine not to have any debt securities of a
series represented by one or more global securities. In that event, individual
debt securities of such series will be issued in exchange for the global
security representing such series debt securities. Furthermore, if we so specify
with respect to the debt securities of a series, an owner of a beneficial
interest in a global security representing debt securities of such series may,
on terms acceptable to us, the trustee, and the depositary for such global
security, receive individual debt securities of such series in exchange for such
beneficial interests, subject to any limitations described in the prospectus
supplement relating to such debt securities. In any such instance, an owner of a
beneficial interest in a global security will be entitled to physical delivery
of individual debt securities of the series represented by such global security
equal in principal amount to such beneficial interest and to have such debt
securities registered in its name (if the debt securities are issuable as
registered securities). Individual debt securities of such series so issued will
be issued (a) as registered securities in denominations, unless otherwise
specified by us, of $1,000 and integral multiples thereof if the debt securities
are issuable as registered securities, (b) as bearer securities in the
denomination or denominations specified by us if the debt securities are
issuable as bearer securities or (c) as either registered securities or bearer
securities as described above if the debt securities are issuable in either
form.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
The debt securities of a series may be issued as registered securities
(which will be registered as to principal and interest in the register
maintained by the registrar for such debt securities) or bearer securities
(which will be transferable only by delivery). If such debt securities are
issuable as bearer securities, the applicable prospectus supplement will
describe certain special limitations and considerations that will apply to such
debt securities.
COVENANTS
If debt securities are issued, the indenture, as supplemented for a
particular series of debt securities, will contain certain covenants for the
benefit of the holders of such series of debt securities, which will be
applicable (unless waived or amended) so long as any of the debt securities of
such series are outstanding, unless stated otherwise in the prospectus
supplement. The specific terms of the covenants, and summaries thereof, will be
set forth in the prospectus supplement relating to such series of debt
securities.
MERGERS AND SALES OF ASSETS
The indenture provides that we may not consolidate with or merge into any
other person or convey, transfer or lease all or substantially all of our
properties and assets to another person, unless among other items: (i) the
resulting, surviving or transferee person (if other than Lucent) is organized
and existing under the laws of the United States, any state thereof or the
District of Columbia and such person expressly assumes, by supplemental
indenture, all our obligations under the indenture and the debt securities; (ii)
we or such successor person shall not immediately thereafter be in default under
the indenture and the debt securities; and (iii) we shall have provided the
trustee with an opinion of counsel and officer's certificate confirming
17
compliance with the indenture. Upon the assumption of the obligations by such a
person in such circumstances, subject to certain exceptions, we shall be
discharged from all obligations under all debt securities and the indenture
(except in the case of a lease).
SUBORDINATION
Debt securities of a series, and any guarantees, may be subordinated, which
we refer to as the subordinated debt securities, to senior indebtedness (as
defined in the applicable prospectus supplement) to the extent set forth in the
prospectus supplement relating thereto. To the extent we conduct operations
through subsidiaries, the holders of debt securities (whether or not
subordinated debt securities) will be structurally subordinated to the creditors
of our subsidiaries except to the extent such subsidiary is a guarantor of such
series of debt securities.
EVENTS OF DEFAULT
Each of the following constitutes an event of default under the form of
indenture with respect to any series of debt securities which may be issued,
except as may be specified in the prospectus supplement:
1. default for 30 days in the payment of interest when due on the debt
securities;
2. default in the payment of principal or premium, if any, when due on the
debt securities;
3. our failure to comply with the obligations described under "-- Mergers
and Sales of Assets" above;
4. our failure to comply for 30 days after notice with any of the
obligations in the covenants set forth in the prospectus supplement;
5. our failure to comply for 60 days after notice with other agreements
contained in the indenture or any supplemental indenture relating to
that series of debt securities;
6. certain events of bankruptcy, insolvency or reorganization affecting
us; or
7. any other event of default provided with respect to that series of debt
securities.
A prospectus supplement may omit, modify or add to the foregoing events of
default.
A default under clauses (4) or (5) will not constitute an event of default
until the trustee or the holders of 25% in principal amount of the outstanding
debt securities notify us of the default and we do not cure such default within
the time specified after receipt of such notice.
If an event of default (other than certain events of bankruptcy, insolvency
or reorganization) occurs and is continuing, the trustee or the holders of at
least 25% in aggregate principal amount of the outstanding applicable series of
debt securities may declare the principal of and accrued but unpaid interest on
all the applicable debt securities to be due and payable. Upon such a
declaration, such principal of (or, in the case of original issue discount debt
securities, the portion thereby specified in the terms thereof), premium, if
any, and accrued interest shall be due and payable immediately. In the case that
certain events of bankruptcy, insolvency or reorganization occur and are
continuing, the principal of (or, in the case of original issue discount debt
securities, the portion thereby specified in the terms thereof), premium, if
any, and accrued interest on all the applicable debt securities will
automatically become and be immediately due and payable without any declaration
or other act on the part of the trustee or any holders of such debt securities.
Subject to the provisions of the indenture relating to the duties of the
trustee, in case an event of default occurs and is continuing, the trustee is
under no obligation to exercise any of the rights or powers under the indenture
at the request or direction of any of the holders of the applicable debt
securities unless such holders
18
have offered to the trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium, if any, or interest when due, no holder of a debt security
may pursue any remedy with respect to the indenture or debt securities unless:
1. such holder has previously given the trustee written notice that an
event of default is continuing with respect to such series of debt
securities;
2. holders of at least 25% in aggregate principal amount of the
outstanding debt securities of the applicable series have made a
written request to the trustee to pursue the remedy;
3. such holders have offered the trustee reasonable security or indemnity
against any loss, liability or expense;
4. the trustee has not complied with such request within 60 days after the
receipt thereof and the offer of security or indemnity; and
5. holders of a majority in aggregate principal amount of the outstanding
debt securities of such series have not given the trustee a direction
inconsistent with such request within such 60-day period.
Subject to certain restrictions, the holders of a majority in principal
amount of the outstanding debt securities of such series are given the right
under the indenture to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or of exercising any trust or
power conferred on the trustee. The trustee, however, may refuse to follow any
direction that conflicts with law or the indenture or that the trustee
determines is unduly prejudicial to the rights of any other holder of such
series of debt securities or that would involve the trustee in personal
liability.
If a default with respect to a series of debt securities occurs, is
continuing and is known to the trustee, such trustee must mail to each holder of
such debt securities notice of the default within 90 days after it occurs.
Except in the case of a default in the payment of principal, premium, if any, or
interest on any debt security, the trustee may withhold notice if and so long as
a committee of its trust officers in good faith determines that withholding
notice is in the interests of the holders of the debt securities. In addition,
we are required to deliver to each trustee, within 120 days after the end of
each fiscal year, a certificate indicating whether the signers thereof know of
any default under the related indenture that occurred during the previous year.
MODIFICATION OF THE INDENTURE
We and the trustee may enter into supplemental indentures without the
consent of the holders of debt securities for one or more of the following
purposes:
(a) to evidence the succession of another person to us pursuant to the
provisions of the indenture relating to consolidations, mergers and
sales of assets and the assumption by such successor of our covenants,
agreements and obligations in the indenture and in the debt
securities;
(b) to surrender any right or power conferred upon us by the indenture, to
add to our covenants such further covenants, restrictions, conditions
or provisions for the protection of the holders of all or any series of
debt securities as our board of directors shall consider to be for the
protection of the holders of such debt securities, and to make the
occurrence, or the occurrence and continuance, of a default in any of
such additional covenants, restrictions, conditions or provisions a
default or an event of default under the indenture (provided, however,
that with respect to any such additional covenant, restriction,
condition or provision, such supplemental indenture may provide for a
period of grace after default, which may be shorter or longer than that
allowed in the case of other defaults, may provide for an immediate
enforcement upon such default, may limit the remedies available to the
trustee upon such default or may limit the right of holders of a
majority in aggregate principal amount of any or all series of debt
securities to waive such default);
(c) to cure any ambiguity or correct or supplement any provision contained
in the indenture, in any supplemental indenture or in any debt
securities that may be effective or inconsistent with any other
provision contained therein, to convey, transfer, assign, mortgage or
pledge any property to or with
19
the trustee, or to make such other provisions in regard to matters or
questions arising under the indenture as shall not adversely affect
the interests of any holders of debt securities of any series;
(d) to modify or amend the indenture in such a manner as to permit the
qualification of the indenture or any supplemental indenture under the
Trust Indenture Act as then in effect;
(e) to add or change any of the provisions of the indenture to provide
that bearer securities may be registerable as to principal, to change
or eliminate any restrictions on the payment of principal or premium
with respect to registered securities or of principal, premium or
interest with respect to bearer securities, or to permit registered
securities to be exchanged for bearer securities, so as to not
adversely affect the interests of the holders of debt securities or
any coupons of any series in any material respect or permit or
facilitate the issuance of debt securities of any series in
uncertificated form;
(f) to comply with the provisions of the indenture relating to
consolidations, mergers and sales of assets;
(g) in the case of subordinated debt securities, to make any change in the
provisions of the indenture relating to subordination that would limit
or terminate the benefits available to any holder of senior
indebtedness under such provision (but only if each such holder of
senior indebtedness consents to such change);
(h) to add guarantees with respect to the debt securities or to secure the
debt securities;
(i) to make any change that does not adversely affect the rights of any
holder;
(j) to add to, change, or eliminate any of the provisions of the indenture
with respect to one or more series of debt securities, so long as any
such addition, change or elimination not otherwise permitted under the
indenture shall (1) neither apply to any debt security of any series
created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor modify the rights of the
holders of any such debt security with respect to such provision or
(2) become effective only when there is no such debt security
outstanding;
(k) to evidence and provide for the acceptance of appointment by a
successor or separate trustee with respect to the debt securities of
one or more series and to add to or change any of the provisions of the
indenture as shall be necessary to provide for or facilitate the
administration of the indenture by more than one trustee; and
(l) to establish the form or terms of debt securities and coupons of any
series, as described under "-- General Terms" above.
With the consent of the holders of a majority in aggregate principal amount
of the outstanding debt securities of each series affected thereby, we and the
trustee may from time to time and at any time enter into a supplemental
indenture for the purpose of adding any provisions to, changing in any manner or
eliminating any of the provisions of the indenture or of any supplemental
indenture or modifying in any manner the rights of the holder of the debt
securities of such series; provided, however, that without the consent of the
holders of each debt security so affected, no such supplemental indenture shall
(a) reduce the percentage in principal amount of debt securities of any series
whose holders must consent to an amendment, (b) reduce the rate of or extend the
time for payment of interest on any debt security or coupon or reduce the amount
of any payment to be made with respect to any coupon, (c) reduce the principal
of or extend the stated maturity of any debt security, (d) reduce the premium
payable upon the redemption of any debt security or change the time at which any
debt security may or shall be redeemed, (e) make any debt security payable in a
currency other than that stated in the debt security, (f) in the case of any
subordinated debt security or coupons appertaining thereto, make any change in
the provisions of the indenture relating to subordination that adversely affects
the rights of any holder under such provision, (g) release any security that may
have been granted with respect to the debt securities, (h) make any change in
the provisions of the indenture relating to waivers of defaults or amendments
that require unanimous consent, (i) change any obligation of ours provided for
in the indenture to pay additional interest with respect to bearer securities or
(j) limit our obligation to maintain a paying agency outside the United States
for payment on bearer securities or limit our obligation to redeem certain
bearer securities.
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SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
Unless otherwise provided in the prospectus supplement, the indenture shall
cease to be of any further effect with respect to a series of debt securities if
(a) we have delivered to the trustee for cancellation all debt securities of
such series (with certain limited exceptions) or (b) all debt securities of such
series not theretofore delivered to the trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year, and we shall have
deposited with the trustee as trust funds the entire amount sufficient to pay at
maturity or upon redemption all such debt securities and coupons (and if, in
either case, we shall also pay or cause to be paid all other sums payable under
the indenture by us).
In addition, we shall have a "legal defeasance option" (pursuant to which
we may terminate, with respect to the debt securities of a particular series,
all of our obligations under such debt securities, the indenture and the
applicable indenture supplement with respect to such debt securities) and a
"covenant defeasance option" (pursuant to which we may terminate, with respect
to the debt securities of a particular series, our obligations with respect to
such debt securities under certain specified covenants contained in the
indenture). If we exercise our legal defeasance option with respect to a series
of debt securities, payment of such debt securities may not be accelerated
because of an event of default. If we exercise our covenant defeasance option
with respect to a series of debt securities, payment of such debt securities may
not be accelerated because of an event of default related to the specified
covenants.
The applicable prospectus supplement will describe the procedures we must
follow in order to exercise our defeasance options.
REGARDING THE TRUSTEE
The indenture provides that, except during the continuance of an event of
default, the trustee will perform only such duties as are specifically set forth
in the indenture. During the existence of an event of default, the trustee will
exercise its rights and powers under the indenture and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of their own affairs.
We and the trustee may have had, and continue to have, other customary
banking agreements and arrangements, including stock transfer agent, lending and
depository relationships.
The indenture and provisions of the Trust Indenture Act of 1939 that are
incorporated by reference therein contain limitations on the rights of the
trustee, should it become one of our creditors, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claim as security or otherwise. The trustee is permitted to engage in other
transactions with us or any of our affiliates; provided, however, that if it
acquires any conflicting interest (as defined under the Trust Indenture Act), it
must eliminate such conflict or resign.
GOVERNING LAW
The indenture and the debt securities will be governed by the laws of the
State of New York.
PLAN OF DISTRIBUTION
These securities may be distributed under this prospectus from time to time
in one or more transactions:
- at a fixed price or 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.
Each time we sell securities, we will describe the method of distribution
of the securities in the prospectus supplement relating to the transaction.
21
We may offer and sell these securities in any one or more of the following
ways:
- through underwriters or dealers;
- through agents;
- directly to purchasers; or
- through a combination of such methods of sale.
Each time we sell securities, we will provide a prospectus supplement that
will name any underwriter, dealer or agent involved in the offer and sale of the
securities. The prospectus supplement will also set forth the terms of the
offering, including the purchase price of the securities and the proceeds we
will receive from the sale of the securities, any underwriting discounts and
other items constituting underwriters' compensation, public offering or purchase
price and any discounts or commissions allowed or paid to dealers, any
commissions allowed or paid to agents and any securities exchanges on which the
securities may be listed. The maximum underwriting commission or discount to be
received by any member of the National Association of Securities Dealers Inc.,
or NASD, or independent broker-dealer will not be greater than 8% for any sale
of securities offered under this prospectus.
If underwriters or dealers are used in the sale, the securities will be
acquired by the underwriters or dealers for their own account and may be resold
from time to time in one or more transactions, at a fixed price or prices, which
may be changed, or at market prices prevailing at the time of sale, or at prices
related to such prevailing market prices, or at negotiated prices. The
securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more of
such firms. Unless otherwise set forth in the prospectus supplement, the
obligations of underwriters or dealers to purchase the securities offered will
be subject to certain conditions precedent and the underwriters or dealers will
be obligated to purchase all the offered securities if any are purchased. Any
public offering price and any discounts or concessions allowed or reallowed or
paid by underwriters or dealers to other dealers may be changed from time to
time.
The securities may be sold directly by us or through agents designated by
us from time to time. Any agent involved in the offer or sale of the securities
in respect of which this prospectus is delivered will be named, and any
commissions payable by us to such agent will be set forth in, the prospectus
supplement. Unless otherwise indicated in the prospectus supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
Offers to purchase the securities offered by this prospectus may be
solicited, and sales of the securities may be made, by us of those securities
directly to institutional investors or others, who may be deemed to be
underwriters within the meaning of the Securities Act with respect to any
resales of the securities. The terms of any offer made in this manner will be
included in the prospectus supplement relating to the offer.
If indicated in the applicable prospectus supplement, we will authorize
underwriters, dealers or agents to solicit offers by certain institutional
investors to purchase securities from us pursuant to contracts providing for
payment and delivery at a future date. Institutional investors with which these
contracts may be made include, among others:
- commercial and savings banks;
- insurance companies;
- pension funds;
- investment companies; and
- educational and charitable institutions.
In all cases, these purchasers must be approved by us. Unless otherwise set
forth in the applicable prospectus supplement, the obligations of any purchaser
under any of these contracts will not be subject to any conditions except that
(a) the purchase of the securities must not at the time of delivery be
prohibited under
22
the laws of any jurisdiction to which that purchaser is subject and (b) if the
securities are also being sold to underwriters, we must have sold to these
underwriters the securities not subject to delayed delivery. Underwriters and
other agents will not have any responsibility in respect of the validity or
performance of these contracts.
Some of the underwriters, dealers or agents used by us in any offering of
securities under this prospectus may be customers of, engage in transactions
with, and perform services for us in the ordinary course of business.
Underwriters, dealers, agents and other persons may be entitled under
agreements which may be entered into with us to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act of 1933 and to be reimbursed by us for certain expenses.
Subject to any restrictions relating to debt securities in bearer form, any
securities initially sold outside the United States may be resold in the United
States through underwriters, dealers or otherwise.
Each series of securities other than common stock will be new issue of
securities with no established trading market. Any underwriters to whom offered
securities are sold by us for public offering and sale may make a market in such
securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time.
The anticipated date of delivery of the securities offered by this
prospectus will be described in the applicable prospectus supplement relating to
the offering. The securities offered by this prospectus may or may not be listed
on a national securities exchange or a foreign securities exchange. No assurance
can be given as to the liquidity or activity of any trading in the offered
securities.
If more than 10% of the net proceeds of any offering of securities made
under this prospectus will be received by NASD members participating in the
offering or affiliates or associated persons of such NASD members, the offering
will be conducted in accordance with NASD Conduct Rule 2710(c)(8).
VALIDITY OF SECURITIES
Unless otherwise disclosed in a prospectus supplement, the validity of
these securities will be passed upon for us by Richard J. Rawson, our Senior
Vice President, General Counsel and Secretary, and for any underwriters, dealers
or agents, if any, by counsel specified in a prospectus supplement. As of
January 21, 2003, Richard J. Rawson owned 334,078 shares of our common stock and
vested options and stock units for 2,659,876 shares of our common stock. Our
special counsel, Cravath, Swaine & Moore, New York, New York, may pass upon
certain other legal matters in connection with any offering of these securities
by us.
EXPERTS
Our consolidated financial statements as of September 30, 2002 and 2001 and
for each of the years during the three-year period ended September 30, 2002,
incorporated in this prospectus by reference to our Annual Report on Form 10-K,
filed on December 12, 2002, have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table itemizes the expenses incurred by the registrant in
connection with the issuance and distribution of the securities being
registered, other than underwriting discounts and commissions. All the amounts
shown are estimates, except the SEC registration fee.
SEC registration fee........................................ $161,460*
Accounting fees and expenses................................ 7,000
Legal fees and expenses..................................... 200,000
Printing fees and expenses.................................. 30,000
Fees and expenses of trustee................................ 5,000
Miscellaneous fees and expenses............................. 10,000
--------
Total....................................................... $406,460
========
---------------
* Includes the offset pursuant to Rule 457(p) of an aggregate registration fee
of $161,460, which registrant paid in connection with $1,755,000,000 of unsold
securities under Registration Statement No. 333-85219.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The registrant's Certificate of Incorporation provides that a director of
the registrant shall not be personally liable to the registrant or its
securityholders for monetary damages for breach of fiduciary duty as a director,
except, if required by the Delaware General Corporation Law, for liability (1)
for any breach of the director's duty of loyalty to the registrant or its
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) under Section 174 of
the Delaware General Corporation Law, which concerns unlawful payments of
dividends, stock purchases or redemptions or (4) for any transaction from which
the director derived an improper personal benefit. Neither the amendment nor
repeal of such provision shall eliminate or reduce the effect of such provision
in respect of any matter occurring, or any cause of action, suit or claim that,
but for such provision, would accrue or arise prior to such amendment or repeal.
While the registrant's Certificate of Incorporation provides directors with
protection from awards for monetary damages for breach of their duty of care, it
does not eliminate such duty. Accordingly, the registrant's Certificate of
Incorporation will have no effect on the availability of equitable remedies such
as an injunction or rescission based on a director's breach of his or her duty
of care.
The registrant's Certificate of Incorporation provides that each person who
was or is made a party to or is threatened to be made a party to or is involved
in any action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that such
person, or a person of whom such person is the legal representative, is or was a
director or officer of the registrant or is or was serving at the request of the
registrant as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the registrant to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the registrant to provide broader
indemnification rights than said law permitted the registrant to provide prior
to such amendment), against all expense, liability and loss reasonably incurred
or suffered by such person in connection therewith. Such right to
indemnification includes the right to have the registrant pay the expenses
incurred in defending any such proceeding in advance of its final disposition,
subject to the provisions of the Delaware General Corporation Law. Such rights
are not exclusive of any other right which any person may have or hereafter
acquire under any statute, provision of the registrant's
II-1
Certificate of Incorporation or By-laws, agreement, vote of securityholders or
disinterested directors or otherwise. No repeal or modification of such
provision will in any way diminish or adversely affect the rights of any
director, officer, employee or agent of the registrant thereunder in respect of
any occurrence or matter arising prior to any such repeal or modification.
The registrant's Certificate of Incorporation also specifically authorizes
the registrant to maintain insurance and to grant similar indemnification rights
to employees or agents of the registrant. The directors and officers of the
registrant are covered by insurance policies indemnifying them against certain
liabilities, including certain liabilities arising under the Securities Act,
which might be incurred by them in such capacities.
ITEM 16. EXHIBITS
See the index to exhibits, which is incorporated herein by reference.
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 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 under Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(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 section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In
II-2
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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Murray Hill, State of New Jersey on January 22, 2003.
LUCENT TECHNOLOGIES INC.
Registrant
By: /s/ JOHN A. KRITZMACHER
------------------------------------
John A. Kritzmacher
Senior Vice President and Corporate
Controller
Date: January 22, 2003
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, each of the undersigned constitutes and
appoints John A. Kritzmacher, Frank A. D'Amelio and Richard A. Rawson, and each
of them, as attorneys-in-fact and agents, with full power of substitution and
resubstitution, for and in the name, place and stead of the undersigned, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement or any registration statement for
this offering that is to be effective upon the filing pursuant to rule 462(b)
under the Securities Act of 1933, as amended, and all post-effective amendments
thereto, and to file the same, with all exhibits thereto and all other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorney-in-fact or substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated, on January 22, 2003.
(SIGNATURE) (TITLE)
----------- -------
/s/ PATRICIA F. RUSSO President and Chief Executive Officer
----------------------------------------- (principal executive officer) and Director
Patricia F. Russo
/s/ FRANK A. D'AMELIO Executive Vice President and Chief Financial
----------------------------------------- Officer (principal financial officer)
Frank A. D'Amelio
/s/ JOHN A. KRITZMACHER Senior Vice President and Corporate
----------------------------------------- Controller (principal accounting officer)
John A. Kritzmacher
/s/ PAUL A. ALLAIRE Director
-----------------------------------------
Paul A. Allaire
/s/ ROBERT E. DENHAM Director
-----------------------------------------
Robert E. Denham
II-4
(SIGNATURE) (TITLE)
----------- -------
/s/ DANIEL S. GOLDIN Director
-----------------------------------------
Daniel S. Goldin
/s/ CARLA A. HILLS Director
-----------------------------------------
Carla A. Hills
/s/ HENRY B. SCHACHT Director
-----------------------------------------
Henry B. Schacht
/s/ FRANKLIN A. THOMAS Director
-----------------------------------------
Franklin A. Thomas
/s/ JOHN A. YOUNG Director
-----------------------------------------
John A. Young
II-5
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
1.1 Form of Agency Agreement (to be filed on Form 8-K or by
amendment)
1.2 Form of Underwriting Agreement (to be filed on Form 8-K or
by amendment)
4.1 Provisions of the Certificate of Incorporation of the
registrant, as amended effective February 16, 2000, that
define the rights of securityholders of the registrant.(1)
4.2 The By-Laws of the registrant, as amended through December
18, 2002, that define the rights of securityholders of the
registrant.(2)
4.3 Rights Agreement, dated as of April 4, 1996, between the
registrant and The Bank of New York (successor to First
Chicago Trust Company of New York), as rights agent.(3)
4.4 Amendment to Rights Agreement, dated as of April 4, 1996,
between the registrant and The Bank of New York (successor
to First Chicago Trust Company of New York), dated as of
February 18, 1998.(4)
4.5 Form of Indenture.
4.6 Certificate of Designations of the 8.00% redeemable
convertible preferred stock setting forth the powers,
preferences and rights, and the qualifications, limitations
and restrictions thereof, filed with the Certificate of
Incorporation.(5)
4.7 Form of registrant's common stock certificate.(6)
5 Opinion and consent of Richard J. Rawson, Senior Vice
President, General Counsel and Secretary of the registrant.
12 Statement Regarding Computation of Ratios.(7)
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Richard J. Rawson (included in Exhibit 5).
24 Powers of Attorney (included in the signatures page of this
registration statement).
25 Statement of Eligibility Under the Trust Indenture Act of
1939 of a Corporation Designated to Act as Trustee on Form
T-1, by The Bank of New York.
---------------
(1) Incorporated by reference to Exhibit 3.1 to the registrant's registration
statement on Form S-4 (registration no. 333-31400), filed with the SEC on
March 1, 2000.
(2) Incorporated by reference to Exhibit 4.1 to the registrant's current report
on Form 8-K filed with the SEC on January 22, 2003.
(3) Incorporated by reference to Exhibit 4.2 to the registrant's registration
statement on Form S-1/A (registration no. 333-00703), filed with the SEC on
April 1, 1996.
(4) Incorporated by reference to Exhibit 10(i)5 to the registrant's annual
report on Form 10-K for the year ended September 30, 1998, filed with the
SEC on December 22, 1998.
(5) Incorporated by reference to Exhibit 3 to the registrant's quarterly report
on Form 10-Q for the quarter ended June 30, 2001, filed with the SEC on
August 13, 2001.
(6) Incorporated by reference to Exhibit 4(iv) to the registrants quarterly
report on Form 10-Q for the quarter ended December 31, 2001, filed with the
SEC on February 14, 2002.
(7) Incorporated by reference to Exhibit 12 to the registrant's annual report on
Form 10-K for the year ended September 30, 2002, filed with the SEC on
December 12, 2002.