<PAGE> 1
As Filed Pursuant to Rule 424(b)(3)
Registration No. 333-01223
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. THIS PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL THESE SECURITIES AND
IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE
THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 5, 1999
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 3, 1996
$1,000,000,000
LUCENT TECHNOLOGIES
% DEBENTURES DUE MARCH , 2029
LUCENT TECHNOLOGIES LOGO
This is an offering of % Debentures due March , 2029 by Lucent
Technologies Inc. The Debentures will be general, unsecured, unsubordinated
obligations of Lucent. Interest on the Debentures will be paid on March
and September of each year. Interest will begin to accrue
from March , 1999. Interest payments will begin on September , 1999. The
Debentures will be issued in denominations of $1,000 and integral multiples of
$1,000. The Debentures will not be redeemable prior to maturity, except that at
the option of Lucent, the Debentures may be redeemed as a whole, but not in
part, at 100% of their principal amount plus accrued interest in the event of
certain changes relating to United States taxation.
------------------------
Neither the Securities and Exchange Commission, nor any state securities
commission has approved or disapproved of these securities or passed on the
adequacy or accuracy of this Prospectus Supplement and the accompanying
Prospectus. Any representation to the contrary is a criminal offense.
------------------------
<TABLE>
<CAPTION>
PER DEBENTURE TOTAL
------------- ------------
<S> <C> <C>
Initial Public Offering Price*........................ % $
Underwriting Discounts and Commissions................ % $
Net Proceeds, before expenses, to Lucent.............. % $
</TABLE>
------------------------
*The initial public offering price set forth above does not include accrued
interest. Interest on the Debentures will accrue from March , 1999 and must be
paid by the purchaser if the Debentures are delivered to the Underwriters after
March , 1999.
The Debentures are being offered for sale in the United States, Europe and
Asia. Lucent will apply to have the Debentures listed and traded in accordance
with the rules of the New York Stock Exchange, Luxembourg Stock Exchange and the
Stock Exchange of Singapore Limited.
------------------------
The Underwriters expect to deliver the Debentures to investors on or about
March , 1999.
<TABLE>
<S> <C>
Book-Running Lead Manager Joint Lead Manager
BEAR, STEARNS & CO. INC. MERRILL LYNCH & CO.
</TABLE>
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS MARCH , 1999
<PAGE> 2
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation of Certain Documents by Reference............. S-3
The Company................................................. S-4
Recent Developments......................................... S-4
Executive Officers and Directors............................ S-5
Use of Proceeds............................................. S-5
Capitalization.............................................. S-6
Selected Financial Data and Other Data...................... S-7
Ratio of Earnings to Fixed Charges.......................... S-9
Description of the Debentures............................... S-9
Certain United States Tax Documentation Requirements........ S-15
United States Taxation of Non-United States Persons......... S-16
Underwriting................................................ S-19
General Information......................................... S-20
Legal Matters............................................... S-21
Experts..................................................... S-21
PROSPECTUS
Available Information....................................... 2
Incorporation of Documents by Reference..................... 2
The Company................................................. 3
Recent Developments......................................... 3
Use of Proceeds............................................. 4
Ratio of Earnings to Fixed Charges.......................... 4
Description of the Notes.................................... 4
Description of the Warrants................................. 10
Plan of Distribution........................................ 11
For Florida Residents....................................... 12
Legal Opinions.............................................. 12
Experts..................................................... 12
</TABLE>
THE LUXEMBOURG STOCK EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF
THIS DOCUMENT, MAKES NO REPRESENTATION AS TO ITS ACCURACY OR COMPLETENESS AND
EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM
OR IN RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS DOCUMENT AND
THE PROSPECTUS.
THE STOCK EXCHANGE OF SINGAPORE LIMITED ASSUMES NO RESPONSIBILITY FOR THE
CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINIONS OR REPORTS EXPRESSED OR
CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS.
ADMISSION TO THE OFFICIAL LIST OF THE STOCK EXCHANGE OF SINGAPORE LIMITED IS NOT
TO BE TAKEN AS AN INDICATION OF THE MERITS OF LUCENT OR THE DEBENTURES.
No person is authorized to give any information or to represent anything
not contained in this Prospectus Supplement or the accompanying Prospectus. You
must not rely on any unauthorized information or representations. This
Prospectus Supplement and the Prospectus are an offer to sell or to buy only the
Debentures offered hereby, but only under circumstances and in jurisdictions
where it is lawful to do so. The information contained in this Prospectus
Supplement or the Prospectus as well as information previously filed with the
Securities and Exchange Commission and incorporated by reference is current only
as of the date of the information. Our business, financial condition, results of
operations and prospects may have changed since that date.
OFFERS AND SALES OF THE DEBENTURES ARE SUBJECT TO RESTRICTIONS IN RELATION
TO THE UNITED KINGDOM AND JAPAN, DETAILS OF WHICH ARE SET OUT IN "UNDERWRITING"
BELOW. THE DISTRIBUTION OF THIS PROSPECTUS
S-2
<PAGE> 3
SUPPLEMENT AND ACCOMPANYING PROSPECTUS AND THE OFFERING OF THE DEBENTURES IN
CERTAIN OTHER JURISDICTIONS MAY ALSO BE RESTRICTED BY LAW. THIS PROSPECTUS
SUPPLEMENT AND PROSPECTUS DO NOT CONSTITUTE AN OFFER, OR AN INVITATION ON OUR
BEHALF OR ON BEHALF OF THE UNDERWRITERS OR ANY OF THEM TO SUBSCRIBE TO OR
PURCHASE, ANY OF THE NOTES, AND MAY NOT BE USED FOR OR IN CONNECTION WITH AN
OFFER OR SOLICITATION BY ANYONE, IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR
SOLICITATION IS NOT AUTHORIZED OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH AN OFFER OR SOLICITATION.
We cannot guarantee that applications to the New York Stock Exchange,
Luxembourg Stock Exchange or Stock Exchange of Singapore Limited will be
approved, and settlement of the Debentures is not conditioned on obtaining these
listings.
In this Prospectus Supplement and accompanying Prospectus, unless otherwise
specified or the context otherwise requires, references to "dollars", "$" and
"U.S.$" are to United States dollars.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Lucent is subject to the information requirements of the Securities
Exchange Act of 1934 and files reports and other information with the Securities
and Exchange Commission ("SEC"). You may read and copy any reports or other
information that Lucent files with the SEC at the SEC's Public Reference Room
located at 450 Fifth Street, N.W., Washington D.C. 20549. You may also receive
copies of these documents upon payment of a duplicating fee, by writing to the
SEC's Public Reference Section. Please call the SEC at 1-800-SEC-0330 for
further information on the Public Reference Room in Washington D.C. and other
locations. Lucent's SEC filings are also available to the public at the SEC's
web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" information into this
document, which means that we can disclose important information to you by
referring you to other documents filed separately with the SEC, including
Lucent's annual, quarterly and current reports. The information incorporated by
reference is considered to be a part of this document, except for any
information that is modified or superseded by information contained in this
document or any other subsequently filed document. The information incorporated
by reference is an important part of this Prospectus Supplement and the
accompanying Prospectus. Any information that we file later with the SEC,
specifically, those documents filed pursuant to sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, will automatically update and
supersede the information in this Prospectus Supplement and the accompanying
Prospectus.
The following documents have been filed by Lucent with the SEC (File No.
1-11639) and are incorporated by reference into this Prospectus Supplement:
(1) Lucent's Annual Report on Form 10-K for the Fiscal Year ended September
30, 1998
(2) Lucent's Quarterly Report on Form 10-Q for the quarterly period ended
December 31, 1998
(3) Lucent's Current Report on Form 8-K filed October 22, 1998
(4) Lucent's Current Report on Form 8-K filed January 8, 1999
(5) Lucent's Current Report on Form 8-K filed January 15, 1999
(6) Lucent's Current Report on Form 8-K filed March 5, 1999
Copies of the above documents, along with exhibits specifically
incorporated by reference by this Prospectus Supplement or the Prospectus and
the Company's 1998 Annual Report to Shareowners, may be obtained without charge
from the Secretary's Department, Lucent Technologies Inc., 600 Mountain Avenue,
Murray Hill, New Jersey 07974 (telephone number: 908-582-8500).
This Prospectus Supplement and accompanying Prospectus, together with the
documents incorporated in them by reference, will be available free of charge at
the office of Banque Internationale a Luxembourg S.A., 69 route d'Esch L-1470,
Luxembourg and at the offices of Allen & Glendhill, 36 Robinson Road, #18-01
City House, Singapore 06887.
S-3
<PAGE> 4
THE COMPANY
The information contained in this section is qualified in its entirety by
and should be read together with the more detailed information and financial
statements included or incorporated by reference in this Prospectus Supplement
and accompanying Prospectus.
Lucent designs, builds and delivers a wide range of public and private
networks, communications systems and software, data networking systems, business
telephone systems and microelectronic components. Lucent is a global leader in
the sale of public communications systems, and is a supplier of systems or
software to most of the world's largest network operators. Lucent is also a
global leader in the sale of business communications systems and in the sale of
microelectronic components for communications applications to manufacturers of
communications systems and computers. Lucent's research and development
activities are conducted through Bell Laboratories, one of the world's foremost
industrial research and development organizations.
RECENT DEVELOPMENTS
On January 11, 1999, Lucent announced its intention to merge with Kenan
Systems Corporation, a privately held developer of third-party billing and
customer care software, in exchange for 12.88 million shares of Lucent common
stock. This transaction, which was accounted for as a pooling of interests, was
completed on February 26, 1999. Accordingly, the financial information presented
in this Prospectus Supplement under "Use of Proceeds," "Ratio of Earnings to
Fixed Charges," and "Capitalization" has been derived by combining the
historical financial information of Lucent at or for the quarters ended December
31, 1998 and December 31, 1997, fiscal years ended September 30, 1998 and 1997,
and for the nine month period ended September 30, 1996 with the historical
financial statements of Kenan at or for the quarters ended December 31, 1998 and
December 31, 1997 and fiscal years ended December 31, 1998, 1997 and 1996,
respectively.
On January 13, 1999, Lucent announced that it had entered into a definitive
agreement to merge with Ascend Communications, Inc., a developer, manufacturer
and seller of wide area networking solutions for telecommunications carriers,
Internet service providers and corporate customers worldwide. Under the terms of
the agreement, which was approved by each company's board of directors, each
share of Ascend common stock will be converted into 0.825 shares of Lucent
common stock, appropriately adjusted for the two-for-one stock split of Lucent's
common stock effective April 1, 1999. Based on Lucent's closing stock price of
$107 7/8 on January 12, 1999, the transaction would be valued at approximately
$20 billion. This transaction, which is subject to customary conditions and
regulatory approvals, is expected to be completed during Lucent's third fiscal
quarter, which ends June 30, 1999, and is expected to be accounted for as a
pooling of interests.
S-4
<PAGE> 5
EXECUTIVE OFFICERS AND DIRECTORS
CURRENT EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME POSITION
- ---- --------
<S> <C>
Richard A. McGinn Chairman of the Board and Chief Executive Officer
Donald K. Peterson Executive Vice President and Chief Financial Officer
Richard J. Rawson Senior Vice President and General Counsel
Patricia F. Russo Executive Vice President, Strategy, Business
Development and Corporate Operations
Daniel C. Stanzione Executive Vice President, Chief Operating Officer and
President, Bell Labs
Bernardus J. Verwaayen Executive Vice President and Chief Operating Officer
</TABLE>
DIRECTORS
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Paul A. Allaire Chairman of the Board and Chief Executive Officer of
Xerox Corporation
Carla A. Hills Chairman of the Board and Chief Executive Officer of
Hills and Company
Drew Lewis Retired Chairman of the Board and Chief Executive
Officer of Union Pacific Corporation
Paul H. O'Neill Chairman of the Board and Chief Executive Officer of
Aluminum Company of America (ALCOA)
Donald S. Perkins Retired Chairman of the Board and Chief Executive
Officer of Jewel Companies, Inc.
Henry B. Schacht Former Chairman of the Board and Chief Executive
Officer of Lucent
Franklin A. Thomas Retired President of the Ford Foundation
John A. Young Retired President and Chief Executive Officer of
Hewlett-Packard Company
</TABLE>
Each of the above-named persons is a full-time employee of Lucent, except
Messrs. Allaire, Lewis, O'Neill, Perkins, Schacht, Thomas and Young and Mme.
Hills, and the business address of each, in their capacity as an Executive
Officer or Director, is c/o Lucent Technologies Inc., 600 Mountain Avenue,
Murray Hill, New Jersey 07974.
USE OF PROCEEDS
Lucent will use the net proceeds from the sale of the Debentures to reduce
its outstanding commercial paper. On December 31, 1998, Lucent had approximately
$3.53 billion of commercial paper borrowings outstanding, with an effective
average interest rate of 5.21%.
S-5
<PAGE> 6
CAPITALIZATION
The capitalization of Lucent and its subsidiaries at December 31, 1998 and
as adjusted for the Debentures offered hereby is as follows (in millions of U.S.
dollars):
<TABLE>
<CAPTION>
OUTSTANDING
DECEMBER 31,
1998 AS ADJUSTED
------------ ------------
<S> <C> <C>
DEBT
Debt maturing within one year............................. $ 3,763 $
Long-term debt............................................ 2,404
Debentures offered hereby................................. -- $1,000
----------
Total debt........................................ 6,167
----------
SHAREOWNERS' EQUITY
Preferred stock -- par value $1.00 per share
authorized shares: 250,000,000
issued and outstanding shares: none.................... -- --
Common stock -- par value $.01 per share
authorized shares: 3,000,000,000(1)
issued and outstanding shares:
1,333,123,849(2) at December 31, 1998.................. 13 13
Additional paid-in capital (contributions by
shareowners)........................................... 4,809 4,809
Guaranteed ESOP obligation................................ (49) (49)
Retained earnings......................................... 3,965 3,965
Accumulated other comprehensive income (loss)............. (220) (220)
---------- ------
Total shareowners' equity......................... 8,518 8,518
Total capitalization.............................. $ 14,685 $
========== ======
</TABLE>
- ----------------
(1) Increased to 6,000,000,000 authorized shares effective February 17, 1999.
(2) A two-for-one stock split of the common stock will be effective April 1,
1999.
S-6
<PAGE> 7
SELECTED FINANCIAL DATA AND OTHER DATA
The following supplementary selected financial data has been prepared
giving effect to the merger between a subsidiary of Lucent and Kenan under the
pooling of interests method of accounting. The supplementary selected financial
information is derived from the financial information of Lucent at or for the
twelve months ended September 30, 1998, 1997 and 1996, and the years ended
December 31, 1995 and 1994 and the financial information of Kenan at or for the
twelve month periods ended December 31, 1998, 1997, 1996, 1995 and 1994,
respectively. The supplementary selected information at or for the nine month
periods ended September 30, 1996 and 1995 is derived from the financial
information of Lucent at or for the nine month periods ended September 30, 1996
and 1995 and the financial information of Kenan at or for the twelve month
periods ended December 31, 1996 and 1995, respectively.
The supplemental selected financial information for the three month periods
ended December 31, 1998 and 1997 has been derived by combining the historical
financial information of Lucent for the three month periods ended December 31,
1998 and 1997, with the financial information of Kenan for the three month
periods ended December 31, 1998 and 1997, respectively.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED NINE MONTHS ENDED YEAR ENDED
DECEMBER 31, YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
----------------- ----------------------------- ----------------- ------------------
1998 1997 1998 1997 1996 1996(1) 1995 1995 1994
------- ------- ------- ------- ------- ------- ------- ------- -------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
Revenues........................ $ 9,264 $ 8,748 $30,328 $26,444 $23,324 $15,897 $14,004 $21,431 $19,777
Gross margin.................... 4,866 4,227 14,157 11,539 8,927 6,602 6,158 8,483 8,436
Depreciation and amortization... 346 344 1,338 1,453 1,328 939 1,106 1,495 1,313
Operating income (loss)......... 2,128 1,401 2,550 1,666 (939) 495 436 (998) 970
Income (loss) before cumulative
effect of accounting change... 1,428 799 1,055 574 (788) 229 151 (866) 481
Cumulative effect of accounting
change(6)..................... 1,308 -- -- -- -- -- -- -- --
Net income (loss)............... 2,736 799 1,055 574 (788) 229 151 (866) 481
Earnings (loss) per common
share -- basic(2)(3):
Income (loss) before
cumulative effect of
accounting change........... 1.07 0.61 0.80 0.44 (0.67) 0.19 0.14 (0.82) --
Cumulative effect of
accounting change(6)........ 0.99 -- -- -- -- -- -- -- --
Net income (loss)............. 2.06 0.61 0.80 0.44 (0.67) 0.19 0.14 (0.82) --
Earnings (loss) per common
share -- diluted(2)(3):
Income (loss) before
cumulative effect of
accounting change........... 1.05 0.61 0.78 0.44 (0.67) 0.19 0.14 (0.82) --
Cumulative effect of
accounting change(6)........ 0.96 -- -- -- -- -- -- -- --
Net income (loss)............... 2.01 0.61 0.78 0.44 (0.67) 0.19 0.14 (0.82) --
Earnings (loss) per common
share -- pro forma(3)(4)...... -- -- -- -- (0.61) 0.18 0.12 (0.67) --
Dividends per common share(3)... 0.080 0.075 0.155 0.1125 0.075 0.075 -- -- --
FINANCIAL POSITION
Total assets.................... 31,752 24,809 26,831 23,868 22,650 22,650 18,232 19,735 17,348
Working capital................. 4,984 3,313 3,724(5) 1,782 2,074 2,074 191 (382) 248
Total debt...................... 6,167 3,702 4,640 4,203 3,997 3,997 4,192 4,014 3,164
Shareowners' equity............. 8,518 4,694 5,615 3,410 2,695 2,695 2,787 1,438 2,480
</TABLE>
S-7
<PAGE> 8
<TABLE>
<CAPTION>
THREE MONTHS
ENDED NINE MONTHS ENDED YEAR ENDED
DECEMBER 31, YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
----------------- ----------------------------- ----------------- ------------------
1998 1997 1998 1997 1996 1996(1) 1995 1995 1994
------- ------- ------- ------- ------- ------- ------- ------- -------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER INFORMATION
Selling, general &
administrative expenses as a
percentage of revenues........ 19.3% 17.9% 21.4% 22.0% 31.3% 26.8% 28.9% 33.1% 27.1%
Research & development expenses
as a percentage of
revenues(7)................... 10.0% 9.5% 12.2% 11.5% 11.0% 11.6% 12.0% 11.1% 10.6%
Gross margin percentage......... 52.5% 48.3% 46.7% 43.6% 38.3% 41.5% 44.0% 39.6% 42.7%
Ratio of total debt to total
capital (debt plus equity).... 42.0% 44.1% 45.2% 55.2% 59.7% 59.7% 60.1% 73.6% 56.1%
Capital expenditures............ $ 344 $ 263 $ 1,634 $ 1,639 $ 1,435 $ 942 $ 785 $ 1,278 $ 878
</TABLE>
- ---------------
(1) Beginning September 30, 1996, Lucent changed its fiscal year end from
December 31 to September 30, and reported results for the nine-month
transition period ended September 30, 1996.
(2) The calculation of earnings per share on a historical basis includes the
retroactive recognition to January 1, 1995 of the 1,049,249,788 shares
(524,624,894 shares on a pre-split basis) owned by AT&T on April 10, 1996.
(3) All per share data has been restated to reflect the two-for-one split of
Lucent's common stock, which became effective on April 1, 1998.
(4) The calculation of earnings (loss) per share on a pro forma basis assumes
that all 1,286,202,650 shares (636,661,931 shares on a pre-split basis)
outstanding on April 10, 1996 were outstanding since January 1, 1995 and
gives no effect to the use of proceeds from Lucent's initial public
offering.
(5) Reflects the reclassification from debt maturing within one year to
long-term debt as a result of the November 19, 1998 sale of $500 ($495 net
of unamortized costs) of ten-year notes.
(6) Effective October 1, 1998, Lucent changed its method for calculating net
pension and post-retirement benefit costs. This change reduces the disparity
between fair value and market-related value of plan assets.
(7) Excludes one-time charges of purchased in-process research and development
costs from acquisitions.
S-8
<PAGE> 9
RATIO OF EARNINGS TO FIXED CHARGES
The following table presents the unaudited ratio of earnings to fixed
charges of Lucent and its subsidiaries and has been prepared to give retroactive
effect to the merger with Kenan, which was accounted for as a pooling of
interests.
<TABLE>
<S> <C>
3-month period ended December 31, 1998..................... 19.3
3-month period ended December 31, 1997..................... 13.0
12-month period ended September 30, 1998.................... 6.6
12-month period ended September 30, 1997.................... 5.0
9-month period ended September 30, 1996.................... 2.5
12-month period ended December 31, 1995..................... *
12-month period ended December 31, 1994..................... 3.2
</TABLE>
- ---------------
* For the year ended December 31, 1995, the ratio of earnings to fixed charges
computation indicates that earnings were inadequate to cover fixed charges by
$1,154 million. The year ended December 31, 1995 includes pre-tax
restructuring and other charges of $2,801 million.
For purposes of determining the ratio of earnings to fixed charges,
earnings are defined as income (loss) from continuing operations before income
taxes, less interest capitalized, less undistributed earnings of less than 50%
owned affiliates and plus fixed charges. Fixed charges consist of interest
expense on all indebtedness and that portion of operating lease rental expense
that is representative of the interest factor. Certain years have been
reclassified to conform to the current period presentation.
DESCRIPTION OF THE DEBENTURES
Information in this section should be read in conjunction with the
statements under "Description of the Notes" in the Prospectus.
GENERAL
The Debentures:
- mature on March , 2029.
- bear interest at a rate of % per annum.
- are issued pursuant to an Indenture dated April 1, 1996 between Lucent
and the Bank of New York, as Trustee, and represent a new and separate
series under the Indenture.
- will be issued in U.S. dollars in denominations of $1,000 and integral
multiples of $1,000.
- represent unsecured and unsubordinated debt.
- will rank equally with Lucent's other unsecured and unsubordinated debt.
- are not redeemable prior to maturity except that, at the option of
Lucent, the Debentures may be redeemed as a whole, but not in part, at
100% of their principal amount plus accrued interest in the event of
certain changes relating to United States taxation.
- are not subject to any sinking fund.
- will be represented by one or more Global Debentures in fully registered
form. Except in certain limited circumstances, the Debentures will not be
issued in definitive form. If the Debentures are issued in definitive
form, they will be issued in registered form, and payments of principal
and interest payments will be made according to alternative arrangements.
S-9
<PAGE> 10
- Lucent may, without the consent of the holders of the Debentures, issue
additional debentures having the same ranking and the same interest rate,
maturity and other terms as the Debentures. Any additional debentures,
together with the Debentures, will constitute a single series of
debentures under the Indenture.
INTEREST:
- is payable on March and September of each year, payable to the
persons in whose names the Debentures are registered at the close of
business on March and September , as the case may be, prior to the
payment date.
- payments begin on September , 1999 and interest begins to accrue from
March , 1999.
BOOK-ENTRY, DELIVERY AND FORM
The Debentures will be issued in the form of one or more definitive global
Debentures in registered form (each, a "Global Debenture"). The Global
Debentures will be deposited, until all obligations of Lucent with respect to
the Debentures are satisfied, with, or on behalf of, The Depository Trust
Company ("DTC") and registered, at the request of DTC, in the name of Cede & Co.
Beneficial interests in the Global Debentures will be represented through
book-entry accounts of financial institutions acting on behalf of beneficial
owners as direct and indirect participants in DTC (the "DTC Participants").
Investors may elect to hold their interests in the Global Debentures through
either DTC or Cedelbank ("Cedel") or Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear System ("Euroclear"), either
directly if they are participants in such systems, or indirectly through
organizations that are participants in such systems. Cedel and Euroclear will
hold interests on behalf of their participants through customers' securities
accounts in Cedel's and Euroclear's names on the books of their respective U.S.
depositaries, which in turn will hold such interests in customers' securities
accounts in the U.S. depositaries' names on the books of DTC. The Chase
Manhattan Bank will act as U.S. depositary for Euroclear, and Citibank, N.A.
will act as U.S. depositary for Cedel (in such capacities, the "U.S.
Depositaries"). Beneficial interests in the Global Debentures may be held in
denominations of $1,000 and integral multiples thereof. The Global Debentures
may be transferred, as a whole but not in part, only to another nominee of DTC
or to a successor of DTC or its nominee.
So long as DTC, or its nominee, is the registered owner of a Global
Debenture, DTC or such nominee, as the case may be, will be considered the sole
owner and holder of the Debentures represented by such Global Debenture for all
purposes of the Debentures. Owners of beneficial interests in Global Debentures
will not be entitled to have the Debentures represented by such Global
Debentures registered in their names. Accordingly, each person owning a
beneficial interest in a Global Debenture must rely on the procedures of DTC, or
its nominee, and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a holder of Debentures.
DTC advises that it is a limited-purpose trust company organized under the
laws of the State of New York, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered pursuant to the provision of Section 17A
of the Exchange Act. DTC was created to hold securities of DTC Participants and
to facilitate the clearance and settlement of securities transactions among DTC
Participants in such securities through electronic book-entry changes in
accounts of DTC Participants, thereby eliminating the need for physical movement
of securities. DTC Participants include securities brokers and dealers
(including underwriters), banks, trust companies, clearing corporations and
certain other organizations. Access to DTC's book-entry system is also available
to others, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a participant, either directly
or indirectly. DTC agrees with and represents to its participants that it will
administer its book-entry system in accordance with its rules and by-laws and
requirements of law.
S-10
<PAGE> 11
DTC also advises that:
1. DTC management is aware that some computer applications, systems,
and the like for processing date ("Systems") that are dependent upon
calendar dates, including dates before, on, and after January 1, 2000, may
encounter "Year 2000 problems." DTC has informed DTC Participants and other
members of the financial community (the "Industry") that it has developed
and is implementing a program so that its Systems, as the same relate to
the timely payment of distributions (including principal and income
payments) to securityholders, book-entry deliveries, and settlement of
trades within DTC ("DTC Services"), continue to function appropriately.
This program includes a technical assessment and a remediation plan, each
of which is complete. Additionally, DTC's plan includes a testing phase,
which is expected to be completed within appropriate time frames.
2. DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents,
as well as third party vendors from whom DTC licenses software and
hardware, and third party vendors on whom DTC relies for information of the
provision of services, including telecommunication and electrical utility
service providers, among others. DTC has informed the Industry that it is
contacting (and will continue to contact) third party vendors from whom DTC
acquires services to: (i) impress upon them the importance of such services
being year 2000 compliant and (ii) determine the extent of their efforts
for Year 2000 remediation (and, as appropriate, testing) of their services.
In addition, DTC is in the process of developing such contingency plans as
it deems appropriate.
3. The foregoing information with respect to DTC has been provided to
the Industry for informational purposes only and is not intended to serve
as a representation, warranty, or contract modification of any kind.
Cedel advises that it is incorporated under the laws of Luxembourg as a
professional depositary. Cedel holds securities for its participating
organizations ("Cedel Participants") and facilitates the clearance and
settlement of securities transactions among Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical movement of certificates. Cedel provides to
Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedel interfaces with domestic markets in
several countries. As a professional depositary, Cedel is subject to regulation
by the Luxembourg Monetary Institute. Cedel Participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations and may include the Underwriters. Indirect access to Cedel
is also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Cedel Participant
either directly or indirectly.
Distributions with respect to Debentures held beneficially through Cedel
will be credited to cash accounts of Cedel Participants in accordance with its
rules and procedures, to the extent received by the U.S. Depositary for Cedel.
Euroclear advises that it was created in 1968 to hold securities for
participants of Euroclear ("Euroclear Participants") and to clear and settle
transactions among Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in several
countries. Euroclear is operated by the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York (the "Euroclear Operator"), under contract
with Euro-clear Clearance Systems S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for Euroclear on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries and may include the
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Underwriters. Indirect access to Euroclear is also available to other firms that
clear through or maintain a custodial relationship with a Euroclear Participant,
either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions with respect to Debentures held beneficially through
Euroclear will be credited to the cash accounts of Euroclear Participants in
accordance with the Terms and Conditions, to the extent received by the U.S.
Depositary for Euroclear.
Debentures will not be issued in definitive form, except in very limited
circumstances. If Euroclear, Cedelbank or DTC notifies Lucent that it is
unwilling or unable to continue as a clearing system in connection with the
Global Debentures or, in the case of DTC only, DTC ceases to be clearing agency
registered under the Exchange Act, and in each case a successor clearing system
is not appointed by Lucent within 90 days after receiving such notice from
Euroclear, Cedelbank or DTC or on becoming aware that DTC is no longer so
registered, Lucent will issue or cause to be issued individual certificates in
registered form on registration of transfer of, or in exchange for, book-entry
interests in the Debentures represented by such Global Debentures upon delivery
of such Global Debentures for cancellation.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for the Debentures will be made in immediately available
funds. Secondary market trading between DTC Participants will occur in the
ordinary way in accordance with DTC rules and will be settled in immediately
available funds using DTC's Same-Day Funds Settlement System. Secondary market
trading between Cedel Participants and/or Euroclear Participants will occur in
the ordinary way in accordance with the applicable rules and operating
procedures of Cedel and Euroclear and will be settled using the procedures
applicable to conventional Eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through DTC on the one hand, and directly or indirectly through Cedel or
Euroclear Participants, on the other, will be effected in DTC in accordance with
DTC's rules on behalf of the relevant European international clearing system by
its U.S. Depositary; however, such cross-market transactions will require
delivery of instructions to the relevant European international clearing system
by the counterparty in such system in accordance with its rules and procedures
and within its established deadlines (European time). The relevant European
international clearing system will, if the transaction meets its settlement
requirements, deliver instructions to its U.S. Depositary to take action to
effect final settlement on its behalf by delivering or receiving Debentures in
DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Cedel Participants and Euroclear
Participants may not deliver instructions directly to the U.S. Depositaries.
Because of time-zone differences, credits of Debentures received in Cedel
or Euroclear as a result of a transaction with a DTC Participant will be made
during subsequent securities settlement processing and dated the business day
following the DTC settlement date. Such credits or any transactions in such
Debentures settled during such processing will be reported to the relevant
Euroclear or Cedel Participants
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on such business day. Cash received in Cedel or Euroclear as a result of sales
of Debentures by or through a Cedel Participant or a Euroclear Participant to a
DTC Participant will be received with value on the DTC settlement date but will
be available in the relevant Cedel or Euroclear cash account only as of the
business day following settlement in DTC.
Although DTC, Cedel and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of Debentures among participants of DTC, Cedel
and Euroclear, they are under no obligation to perform or continue to perform
such procedures and such procedures may be discontinued at any time.
PAYMENT OF ADDITIONAL AMOUNTS
Lucent will, subject to the exceptions and limitations set forth below, pay
as additional interest on the Debentures such additional amounts as are
necessary in order that the net payment by Lucent or a paying agent of the
principal of and interest on the Debentures to a holder who is a non-United
States person (as defined below), after deduction for any present or future tax,
assessment or governmental charge of the United States or a political
subdivision or taxing authority thereof or therein, imposed by withholding with
respect to the payment, will not be less than the amount provided in the
Debentures to be then due and payable; provided, however, that the foregoing
obligation to pay additional amounts shall not apply:
(1) to a tax, assessment or governmental charge that is imposed or withheld
solely by reason of the holder, or a fiduciary, settlor, beneficiary,
member or shareholder of the holder if the holder is an estate, trust,
partnership or corporation, or a person holding a power over an estate
or trust administered by a fiduciary holder, being considered as:
(a) being or having been present or engaged in trade or business in the
United States or having or having had a permanent establishment in
the United States;
(b) having a current or former relationship with the United States,
including a relationship as a citizen or resident thereof;
(c) being or having been a foreign or domestic personal holding company,
a passive foreign investment company or a controlled foreign
corporation with respect to the United States or a corporation that
has accumulated earnings to avoid United States federal income tax;
or
(d) being or having been a "10-percent shareholder" of Lucent as defined
in section 871(h)(3) of the United States Internal Revenue Code of
1986, as amended, (the "Code") or any successor provision;
(2) to any holder that is not the sole beneficial owner of the Debentures,
or a portion thereof, or that is a fiduciary or partnership, but only
to the extent that a beneficiary or settlor with respect to the
fiduciary or a beneficial owner or member of the partnership would not
have been entitled to the payment of an additional amount had the
beneficiary, settlor, beneficial owner or member received directly its
beneficial or distributive share of the payment;
(3) to a tax, assessment or governmental charge that is imposed or withheld
solely by reason of the failure of the holder or any other person to
comply with certification, identification or information reporting
requirements concerning the nationality, residence, identity or
connection with the United States of the holder or beneficial owner of
such Debentures, if compliance is required by statute, by regulation of
the United States Treasury Department or by an applicable income tax
treaty to which the United States is a party as a precondition to
exemption from, or reduction of, such tax, assessment or other
governmental charge;
(4) to a tax, assessment or governmental charge that is imposed otherwise
than by withholding by Lucent or a paying agent from the payment;
(5) to a tax, assessment or governmental charge that is imposed or withheld
solely by reason of a change in law, regulation, or administrative or
judicial interpretation that becomes effective more than 15 days after
the payment becomes due or is duly provided for, whichever occurs
later;
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(6) to an estate, inheritance, gift, sales, excise, transfer, wealth or
personal property tax or a similar tax, assessment or governmental
charge;
(7) to any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of or
interest on any Debenture, if such payment can be made without such
withholding by any other paying agent; or
(8) in the case of any combination of items (1), (2), (3), (4), (5), (6)
and (7).
The Debentures are subject in all cases to any tax, fiscal or other law or
regulation or administrative or judicial interpretation applicable thereto.
Except as specifically provided under this heading, "-- Payment of Additional
Amounts", Lucent shall not be required to make any payment with respect to any
tax, assessment or governmental charge imposed by any government or a political
subdivision or taxing authority thereof or therein.
As used under this heading "-- Payment of Additional Amounts" and under the
headings "-- Redemption", "Certain United States Tax Documentation Requirements"
and "United States Taxation of Non-United States Persons," the term "United
States" means the United States of America (including the States and the
District of Columbia) and its territories, its possessions and other areas
subject to its jurisdiction, "United States person" means (i) any individual who
is a citizen or resident of the United States, (ii) a corporation, partnership
or other entity created or organized in or under the laws of the United States,
(iii) or any estate the income of which is subject to United States federal
income taxation regardless of its source and (iv) any trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust or if the trust
elects under United States Treasury Regulations to be treated as a U.S. person,
and "non-United States person" means a person who is not a United States person.
REDEMPTION
If (i) as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States (or any
political subdivision or taxing authority thereof or therein), or any change in,
or amendments to, the official position regarding the application or
interpretation of such laws, regulations or rulings, which change or amendment
is announced or becomes effective on or after the date of this Prospectus
Supplement, Lucent becomes or will become obligated to pay additional amounts as
described herein under the heading "Payment of Additional Amounts" or (ii) any
act is taken by a taxing authority of the United States on or after the date of
this Prospectus Supplement, whether or not such act is taken with respect to
Lucent or any affiliate, that results in a substantial probability that Lucent
will or may be required to pay such additional amounts, then Lucent may, at its
option, redeem, as a whole, but not in part, the Debentures on not less than 30
nor more than 60 days' prior notice, at a redemption price equal to 100% of
their principal amount, together with interest accrued but unpaid thereon to the
date fixed for redemption; provided that Lucent determines, in its business
judgment, that the obligation to pay such additional amounts cannot be avoided
by the use of reasonable measures available to it, not including substitution of
the obligor under the Debentures. No redemption pursuant to (ii) above may be
made unless Lucent shall have received an opinion of independent counsel to the
effect that an act taken by a taxing authority of the United States results in a
substantial probability that it will or may be required to pay the additional
amounts described herein under the heading "-- Payment of Additional Amounts"
and Lucent shall have delivered to the Trustee a certificate, signed by a duly
authorized officer, stating that based on such opinion Lucent is entitled to
redeem the Debentures pursuant to their terms.
NOTICES
Notices to holders of the Debentures will be published in Authorized
Newspapers in The City of New York, in London, and, (i) so long as the
Debentures are listed on the Luxembourg Stock Exchange, in Luxembourg and (ii)
so long as the Debentures are listed on the Stock Exchange of Singapore Limited,
in
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Singapore. It is expected that publication will be made in The City of New York
in The Wall Street Journal, in London in the Financial Times, in Luxembourg in
the Luxemburger Wort and in Singapore in The Business Times. Any such notice
shall be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first such publication.
APPLICABLE LAW AND SERVICE OF PROCESS
The Debentures and the Indenture will be governed by and construed in
accordance with the laws of the State of New York. Lucent has designated
Corporation Services Company in New York City as the authorized agent to receive
service of process in the State of New York.
CERTAIN UNITED STATES TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of the Debentures will generally be subject to the 30%
United States federal withholding tax that generally applies to payments of
interest on a registered form debt obligation issued by a United States person,
unless one of the following steps is taken to obtain an exemption from or
reduction of the tax:
EXEMPTION FOR NON-UNITED STATES PERSONS (IRS FORM W-8)
A beneficial owner of the Debentures that is a non-United States persons
(other than certain persons that are related to the Company through stock
ownership as described in clauses (x)(a) and (b) of Paragraph (i) under the
"United States Taxation of Non-United States Persons -- Income and Withholding
Tax") can obtain an exemption from the withholding tax by providing a properly
completed IRS Form W-8 (Certificate of Foreign Status). Copies of IRS Form W-8
may be obtained from Banque Internationale a Luxembourg S.A., the Luxembourg
listing agent.
EXEMPTION FOR NON-UNITED STATES PERSONS WITH EFFECTIVELY CONNECTED INCOME (IRS
FORM 4224)
A beneficial owner of the Debentures that is a non-United States person,
including a non-United States corporation or bank with a United States branch,
that conducts a trade or business in the United States with which interest
income on the Debentures is effectively connected, can obtain an exemption from
the withholding tax by providing a properly completed IRS Form 4224 (Exemption
from Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States).
EXEMPTION OR REDUCED RATE FOR NON-UNITED STATES PERSONS ENTITLED TO THE BENEFITS
OF A TREATY (IRS FORM 1001)
A beneficial owner of the Debentures that is a non-United States person
entitled to the benefits of an income tax treaty to which the United States is a
party can obtain an exemption from or reduction of the withholding tax
(depending on the terms of the treaty) by providing a properly completed IRS
Form 1001 (Ownership, Exemption or Reduced Rate Certificate).
EXEMPTION FOR UNITED STATES PERSONS (IRS FORM W-9)
A beneficial owner of the Debentures that is a United States person can
obtain a complete exemption from the withholding tax by providing a properly
completed IRS Form W-9 (Request for Taxpayer Identification Number and
Certification).
UNITED STATES FEDERAL INCOME TAX REPORTING PROCEDURE
A beneficial owner of the Debentures, or, in the case of IRS Forms 1001 and
4224, its agent, is required to submit the appropriate IRS Form under applicable
procedures to the person through which the owner directly holds the Debentures.
For example, if the beneficial owner is listed directly on the books of
Euroclear or Cedelbank as the holder of the Debentures, the IRS Form must be
provided to Euroclear or
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Cedelbank, as the case may be. Each other person through which the Debentures
are held must submit, on behalf of the beneficial owner, the IRS Form (or in
certain cases a copy thereof) under applicable procedures to the person through
which it holds the Debentures, until the IRS Form is received by the United
States person who would otherwise be required to withhold United States federal
income tax from interest on the Debentures. For example, in the case of
Debentures held through Euroclear or Cedelbank, the IRS Form (or a copy thereof)
must be received by the U.S. Depositary of such clearing agency. Applicable
procedures include additional certification requirements, described in clause
(x)(c)(B) of paragraph (i) under the "United States Taxation of Non-United
States Persons -- Income and Withholding Tax," if a beneficial owner of the
Debentures provides an IRS Form W-8 to a securities clearing organization, bank
or other financial institution that holds the Debentures on its behalf.
Regulations recently issued by the IRS, which will be effective for
payments made after December 31, 1999, make certain modifications to the
certification procedures applicable to non-United States persons. Prospective
investors should consult their tax advisors regarding the certification
requirements for non-United States persons.
Each holder of the Debentures that is not a United States person should be
aware that if it does not properly provide the required IRS Form, or if the IRS
Form (or, if permissible, a copy of such Form) is not properly transmitted to
and received by the United States person otherwise required to withhold United
States federal income tax, interest on the Debentures may be subject to United
States withholding tax at a 30% rate and the holder (including the beneficial
owner) will not be entitled to any additional amounts from Lucent described
under the heading "Description of the Debentures -- Payment of Additional
Amounts" with respect to such tax. Such tax, however, may in certain
circumstances be allowed as a refund or as a credit against such holder's United
States federal income tax. The foregoing does not deal with all aspects of
federal income tax withholding that may be relevant to non-United States holders
of the Debentures. Investors are advised to consult their own tax advisors for
specific advice concerning the ownership and disposition of the Debentures.
UNITED STATES TAXATION OF NON-UNITED STATES PERSONS
INCOME AND WITHHOLDING TAX
In the opinion of Cravath, Swaine & Moore, as special tax counsel to
Lucent, under United States federal tax law as of the date of this Prospectus
Supplement, and subject to the discussion of backup withholding below:
(i) payments of principal and interest on a Debenture that is
beneficially owned by a non-United States person will not be subject
to United States federal withholding tax; provided, that in the case
of interest,
(x)(a) the beneficial owner does not actually or constructively own
10% or more of the total combined voting power of all classes
of stock of Lucent entitled to vote,
(b) the beneficial owner is not a controlled foreign corporation
that is related to Lucent through stock ownership, and
(c) either (A) the beneficial owner of the Debenture certifies,
under penalties of perjury, that it is not a United States
person and provides its name and address or (B) a securities
clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its
trade or business and holds the Debentures certifies, under
penalties of perjury, that such statement has been received
from the beneficial owner by it or by a financial institution
between it and the beneficial owner and furnishes the payor
with a copy thereof;
(y) the beneficial owner is entitled to the benefits of an income
tax treaty under which the interest is exempt from United
States federal withholding tax and the beneficial owner
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of the Debenture or such owner's agent provides an IRS Form
1001 claiming the exemption; or
(z) the beneficial owner conducts a trade or business in the United
States to which the interest is effectively connected and the
beneficial owner of the Debenture or such owner's agent
provides an IRS Form 4224;
provided that in each such case, the relevant certification or IRS
Form is delivered pursuant to applicable procedures and is properly
transmitted in a timely manner to the person otherwise required to
withhold United States federal income tax, and none of the persons
receiving the relevant certification or IRS Form has actual knowledge
that the certification or any statement on the IRS Form is false;
(ii) a non-United States person will not be subject to United States
federal income tax on any gain realized on the sale, exchange or
redemption of a Debenture unless the gain is effectively connected
with the beneficial owner's trade or business in the United States
or, in the case of an individual, the holder is present in the United
States for 183 days or more in the taxable year in which the sale,
exchange or redemption occurs and certain other conditions are met;
and
(iii) a Debenture owned by an individual who at the time of death is not a
citizen or resident of the United States will not be subject to
United States federal estate tax as a result of such individual's
death if the individual does not actually or constructively own 10%
or more of the total combined voting power of all classes of stock of
Lucent entitled to vote and the income on the Debenture would not
have been effectively connected with a U.S. trade or business of the
individual.
Interest on a Debenture that is effectively connected with the conduct of a
trade or business in the United States by a holder of a Debenture who is a
non-United States person, although exempt from United States withholding tax,
may be subject to United States income tax as if such interest was earned by a
United States person.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments of
principal and interest made on a Debenture and the proceeds of the sale of a
Debenture within the United States to non-corporate holders of the Debentures,
and "backup withholding" at a rate of 31% will apply to such payments if the
holder fails to provide an accurate taxpayer identification number in the manner
required or to report all interest and dividends required to be shown on its
federal income tax returns.
Information reporting on IRS Form 1099 and backup withholding will not
apply to payments made by Lucent or a paying agent to a non-United States person
on a Debenture if, in the case of interest, the IRS Form described in clause (y)
or (z) in Paragraph (i) under "Income and Withholding Tax" has been provided
under applicable procedures, or, in the case of interest or principal, the
certification described in clause (x)(c) in Paragraph (i) under "Income and
Withholding Tax" and a certification that the beneficial owner satisfies certain
other conditions have been supplied under applicable procedures, provided that
the payor does not have actual knowledge that the certifications are incorrect.
Payments of the proceeds from the sale of a Debenture made to or through a
foreign office of a broker will not be subject to information reporting or
backup withholding, except that if the broker is a United States person, a
controlled foreign corporation for United States tax purposes or a foreign
person 50% or more of whose gross income is effectively connected with a United
States trade or business for a specified three-year period, information
reporting may apply to such payments. Payments of the proceeds from the sale of
a Debenture to or through the United States office of a broker are subject to
information reporting and backup withholding unless the holder or beneficial
owner certifies that it is a non-United States person and that it satisfies
certain other conditions or otherwise establishes an exemption from information
reporting and backup withholding.
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Regulations recently issued by the IRS, which will be effective for
payments made after December 31, 1999, make certain modifications to the
certification procedures applicable to non-United States persons. Prospective
investors should consult their own tax advisors regarding the certification
requirements for non-United States persons.
Backup withholding is not a separate tax, but is allowed as a refund or
credit against the holder's United States federal income tax, provided the
necessary information is furnished to the Internal Revenue Service. Interest on
a Debenture that is beneficially owned by a non-United States person will be
reported annually on IRS Form 1042S, which must be filed with the Internal
Revenue Service and furnished to such beneficial owner.
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UNDERWRITING
Lucent is selling the Debentures to the Underwriters named below pursuant
to the Underwriting Agreement dated March , 1999. Subject to certain
conditions, Lucent has agreed to sell to each of the Underwriters, and each of
the Underwriters has severally agreed to purchase, the principal amount of
Debentures set forth in the following table:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF DEBENTURES
- ----------- ----------------
<S> <C>
Bear, Stearns & Co. Inc.................................... $
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................
--------------
Total......................................... $1,000,000,000
</TABLE>
Under the terms and conditions of the Underwriting Agreement, if the
Underwriters take any of the Debentures, then they are obligated to take and pay
for all of the Debentures.
The Debentures are a new issue of securities with no established trading
market. Lucent will apply for listing of the Debentures on the New York Stock
Exchange, the Luxembourg Stock Exchange and the Stock Exchange of Singapore
Limited. We cannot guarantee that applications to the New York Stock Exchange,
Luxembourg Stock Exchange or Stock Exchange of Singapore Limited will be
approved, and settlement of the Debentures is not conditioned on obtaining these
listings. Lucent has been advised by the Underwriters that the Underwriters
intend to make a market in the Debentures but are not obligated to do so and may
discontinue market making at any time without notice. Lucent cannot give any
assurance as to the liquidity of any trading market for the Debentures.
The Underwriters initially propose to offer part of the Debentures directly
to the public at the public offering price set forth on the cover page and part
to certain dealers at a price that represents a concession not in excess of
% of the principal amount of the Debentures. Any Underwriter may allow, and
any such dealer may reallow, a concession not in excess of % of the
principal amount of the Debentures to certain other dealers. After the initial
offering of the Debentures, the Underwriters may, from time to time, vary the
offering price and other selling terms.
The Debentures are offered for sale in the United States, Europe and Asia.
Each of the Underwriters has agreed that it will not offer, sell or deliver
any of the Debentures, directly or indirectly, or distribute this Prospectus
Supplement or the accompanying Prospectus or any other offering material
relating to the Debentures, in or from any jurisdiction except under
circumstances that will, to the best knowledge and belief of such Underwriter,
result in compliance with the applicable laws and regulations thereof and which
will not impose any obligations on Lucent except as set forth in the
Underwriting Agreement.
Each Underwriter has represented and agreed that (a) it has not offered or
sold, and, prior to the expiration of the period of six months from the closing
date for the Debentures, will not offer or sell any Debentures to persons in the
United Kingdom, except to those persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995,
(b) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986, with respect to anything done by it in relation to
the Debentures in, from or otherwise involving the United Kingdom, and (c) it
has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Debentures to a person who is of a kind described in Article 11 (3) of the
Financial Services Act 1986 (Investment Advertisements)
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(Exemptions) Order 1996, as amended, or is a person to whom such documents may
otherwise lawfully be issued or passed on.
Each of the Underwriters has agreed that it has not offered or sold, and it
will not offer or sell, directly or indirectly, any of the Debentures in or to
residents of Japan or to any persons for reoffering or resale, directly or
indirectly, in Japan or to any resident of Japan except pursuant to an exemption
from the registration requirements of the Securities and Exchange Law available
thereunder and in compliance with the other relevant laws of Japan.
This Prospectus Supplement and the accompanying Prospectus have not been
registered with the Registrar of Companies in Singapore. Accordingly, each
Underwriter has represented and agreed that it has not offered or sold, and will
not offer or sell, any Debentures nor will it circulate or distribute this
Prospectus Supplement or the accompanying Prospectus or any other offering
document or material relating to the Debentures, directly or indirectly, to the
public or any member of the public in Singapore other than (1) to an
institutional investor or other person specified in Section 106C of the
Companies Act, Chapter 50 of Singapore (the "Singapore Companies Act"), (2) to a
sophisticated investor, and in accordance with the conditions, specified in
Section 106D of the Singapore Companies Act, or (3) otherwise pursuant to, and
in accordance with the conditions of, any other applicable provision of the
Singapore Companies Act.
Purchasers of the Debentures may be required to pay stamp taxes and other
charges in accordance with the laws and practices of the country of purchase in
addition to the issue price set forth on the cover page hereof.
In connection with the offering of the Debentures, the Underwriters may, to
the extent permitted by applicable law, engage in transactions that stabilize,
maintain or otherwise affect the price of the Debentures. Specifically, the
Underwriters may overallot in connection with the offering of the Debentures,
creating a short position in the Debentures for their own account. In addition,
the Underwriters may bid for, and purchase, Debentures in the open market to
cover short positions or to stabilize the price of the Debentures. Finally, the
Underwriters may reclaim selling concessions allowed for distributing the
Debentures in the offering, if the Underwriters repurchase previously
distributed Debentures in transactions to cover short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market prices of the Debentures above independent market levels.
The Underwriters are not required to engage in any of these activities and may
end any of these activities at any time.
Lucent estimates that its share of the total expenses of the offering of
the Debentures, excluding underwriting discounts and commissions, will be
approximately $750,000. Lucent has agreed to reimburse the Underwriters for
certain expenses incurred by the Underwriters in connection with the offering of
the Debentures.
It is expected that delivery of the Debentures will be made against payment
therefor on or about March , 1999, which is the third business day following
the date hereof (such settlement cycle being herein referred to as "T+3").
In the ordinary course of their respective businesses certain of the
Underwriters and their affiliates have engaged and may in the future engage in
various banking and financial services for and commercial transactions with the
Company and its affiliates.
Lucent has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute payments which the Underwriters may be required to make in
respect of such liabilities.
GENERAL INFORMATION
Application will be made to list the Debentures on the Luxembourg Stock
Exchange. In connection with the listing application, the Certificate of
Incorporation and the By-Laws of Lucent and a legal notice relating to the
issuance of the Debentures have been deposited prior to listing with Greffier en
Chef du
S-20
<PAGE> 21
Tribunal d'Arrondissement de et a Luxembourg, where copies thereof may be
obtained upon request. Copies of the above documents together with this
Prospectus Supplement, the accompanying Prospectus, the Indenture and Lucent's
current Annual and Quarterly Reports, as well as all future Annual Reports and
Quarterly Reports, so long as any of the Debentures are outstanding, will be
made available for inspection at the main office of Banque Internationale a
Luxembourg S.A. in Luxembourg. Banque Internationale a Luxembourg S.A. will act
as intermediary between the Luxembourg Stock Exchange and Lucent and the holders
of the Debentures. In addition, copies of the Annual Reports and Quarterly
Reports of Lucent may be obtained free of charge at such office.
Notices to holders of the Debentures will, in addition to publication in
the manner specified in the terms and conditions of the Debentures, also be
published in a leading newspaper having general circulation in Singapore (which
is expected to be The Business Times).
So long as any of the Debentures are outstanding, the Certificate of
Incorporation, the By-Laws of Lucent, a legal notice relating to the issuance of
the Debentures, this Prospectus Supplement, the accompanying Prospectus, the
Indenture and Lucent's current Annual and Quarterly Reports, as well as all
future Annual Reports and Quarterly Reports may be inspected on any business day
in Singapore at the offices of Allen & Gledhill in Singapore.
Other than as disclosed or contemplated herein or in the documents
incorporated herein by reference, there has been no material adverse change in
the financial position of Lucent since December 31, 1998.
Neither Lucent nor any of its subsidiaries is involved in litigation,
arbitration, or administrative proceedings relating to claims or amounts that
are material in the context of the issue of the Debentures.
Lucent accepts responsibility for the information contained in relation to
Lucent and the provisions of the Debentures in this Prospectus Supplement and
accompanying Prospectus.
Resolutions relating to the issue and sale of the Debentures were adopted
by the Board of Directors of Lucent on February 23, 1996 and February 17, 1999.
The Debentures have been assigned Euroclear and Cedel Common Code No. ,
International Security Identification Number (ISIN) and CUSIP No. .
LEGAL MATTERS
The validity of the Debentures offered in this Prospectus Supplement, as
well as certain other legal matters, will be passed upon for Lucent by Pamela F.
Craven, Vice President-Law and Secretary, of the Company. As of January 31,
1999, Pamela F. Craven owned 548 shares of Lucent Common Stock and options and
stock units for 158,334 shares of Lucent Common Stock. Certain legal matters
will be passed upon for the Underwriters by Cravath, Swaine & Moore, New York,
New York. Certain legal matters relating to the federal tax consequences of the
issuance of the Debentures and other matters relating thereto will be passed
upon for Lucent by Cravath, Swaine & Moore, New York, New York, as special tax
counsel to Lucent. Cravath, Swaine and Moore also acts as counsel for Lucent
from time to time, including Lucent's recently announced proposed merger with
Ascend Communications.
EXPERTS
The consolidated balance sheets of Lucent Technologies Inc. as of September
30, 1998 and 1997 and the consolidated statements of income, changes in
shareowners' equity and cash flows for each of the two years in the period ended
September 30, 1998 and for the nine-month period ended September 30, 1996,
included in Lucent's Annual Report on Form 10-K and the supplemental
consolidated balance sheets of Lucent Technologies Inc. as of September 30, 1998
and 1997 and the supplemental consolidated
S-21
<PAGE> 22
statements of income, changes in shareowners' equity and cash flows for each of
the two years in the period ended September 30, 1998 and for the nine-month
period ended September 30, 1996, included in the Company's Current Report on
Form 8-K, incorporated by reference in this Prospectus Supplement, have been
incorporated herein, in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
S-22
<PAGE> 23
PROSPECTUS
$3,500,000,000
LUCENT TECHNOLOGIES
NOTES AND WARRANTS
------------------------
Lucent Technologies Inc. (the "Company"), directly, through agents
designated from time to time, or through dealers or underwriters also to be
designated, may sell from time to time notes, debentures and other debt
securities (the "Notes") of the Company, and Warrants (the "Warrants") to
purchase Notes, for an aggregate offering price of up to $3,500,000,000, or the
equivalent thereof in one or more foreign currencies or currency units, on terms
to be determined at the time of sale. The specific designation, aggregate
principal amount, maturities, rates or method of calculating rates and time of
payment of interest, purchase price, any terms for redemption or repayment, the
currencies or currency units in which the Notes are denominated or payable,
whether the Notes are issuable in registered form or bearer form (with or
without interest coupons) or both, or in uncertificated form, whether Notes
initially will be represented by a single temporary or permanent global Note,
the duration, purchase price, exercise price and detachability of any Warrants,
and the agent, dealer or underwriter, if any, in connection with the sale of,
and any other terms with respect to, the Notes and/or Warrants in respect of
which this Prospectus is being delivered are set forth in the accompanying
Prospectus Supplement ("Prospectus Supplement"). The Company reserves the sole
right to accept and, together with its agents from time to time, to reject in
whole or in part any proposed purchase of Notes or Warrants to be made directly
or through agents.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
If an agent of the Company or a dealer or an underwriter is involved in the
sale of the Notes or Warrants in respect of which this Prospectus is being
delivered, the agent's commission or dealer's or underwriter's discount is set
forth in, or may be calculated from, the Prospectus Supplement and the net
proceeds to the Company from such sale will be the purchase price of such Notes
or Warrants less such commission in the case of an agent, the purchase price of
such Notes or Warrants in the case of a dealer or the public offering price less
such discount in the case of an underwriter, and less, in each case, the other
attributable issuance expenses. The aggregate proceeds to the Company from all
the Notes and Warrants will be the purchase price of Notes and Warrants sold,
less the aggregate of agents' commissions and dealers' and underwriters'
discounts and other expenses of issuance and distribution. The net proceeds to
the Company from the sale of Notes and Warrants are also set forth in the
Prospectus Supplement. See "Plan of Distribution" for possible indemnification
arrangements for the agents, dealers and underwriters.
------------------------
April 3, 1996
<PAGE> 24
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR
THE PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS
AND PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY ANY AGENT, DEALER OR UNDERWRITER. THE DELIVERY OF THIS PROSPECTUS AND THE
PROSPECTUS SUPPLEMENT SHALL NOT IMPLY THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS AND PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO
WHICH THEY RELATE.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 ("Exchange Act") and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission ("SEC"). Such reports, proxy statements and other information filed
by the Company can be inspected and copied at the public reference facilities
maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549, and at the regional offices of the SEC located at 13th
Floor, 7 World Trade Center, New York, NY 10048 and Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, IL 60661-2511. Such material can
also be inspected at the New York Stock Exchange. Copies of such material can
also be obtained at prescribed rates from the Public Reference Section of the
SEC, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549.
------------------------
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the SEC (File
No. 1-11639) and are incorporated herein by reference.
(1) The Company's Registration Statement on Form 10 (No. 1-11639) filed
with the Commission on February 26, 1996 (the "Form 10") including the exhibits
thereto, as amended by Amendment No. 1 thereto filed on Form 10/A on March 12,
1996 and Amendment No. 2 thereto filed on Form 10/A on March 22, 1996 and
Amendment No. 3 thereto filed on Form 10/A on April 1, 1996.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Notes and Warrants shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein or in the accompanying Prospectus
Supplement 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 Prospectus.
COPIES OF THE ABOVE DOCUMENTS, OTHER THAN EXHIBITS UNLESS SPECIFICALLY
INCORPORATED BY REFERENCE INTO THE INFORMATION THAT THIS PROSPECTUS
INCORPORATES, MAY BE OBTAINED UPON REQUEST WITHOUT CHARGE FROM THE SECRETARY'S
DEPARTMENT, LUCENT TECHNOLOGIES INC., 600 MOUNTAIN AVENUE, MURRAY HILL, NEW
JERSEY 07974 (TELEPHONE NUMBER 908-582-8500).
2
<PAGE> 25
THE COMPANY
The Company was incorporated in November 1995 under the laws of the State
of Delaware and has its principal executive offices at 600 Mountain Avenue,
Murray Hill, New Jersey 07928 (telephone number 908-582-8500).
The Company is one of the world's leading designers, developers and
manufacturers of telecommunications systems, software and products. The Company
is a global market leader in the sale of public telecommunications network
systems, business communications systems and microelectronic components for
communications applications. Further, the Company is the largest supplier in the
United States of telecommunications products for consumers. In addition, the
Company supports network operators and businesses with engineering,
installation, maintenance and operations support services. The Company's
research and development activities are conducted through Bell Laboratories,
which consists of approximately three-quarters of the total resources of AT&T's
former Bell Laboratories division.
The Company's systems for network operators enable network operators to
provide wireline and wireless local, long-distance and international voice, data
and video services. The Company's networks include switching, transmission and
cable systems packaged and customized with application software, operations
support systems and associated professional services. The Company's business
systems are primarily customer premises-based telecommunications systems that
enable businesses to communicate within and between locations. The Company
designs, develops and sells high-performance integrated circuits, electronic
power systems and optoelectronic components for communications applications,
both for other manufacturers and for incorporation into its own systems and
products. In addition, the Company offers a wide range of communications
products in the United States for consumers and small businesses, including
corded, cordless and cellular telephones, telephone answering systems and
related accessories.
The Company is a majority owned subsidiary of AT&T Corp. ("AT&T"). AT&T has
announced its intention, subject to the satisfaction of certain conditions, to
divest its ownership interest in the Company by December 31, 1996 by means of a
tax-free distribution to its shareholders.
RECENT DEVELOPMENTS
The Company's business is highly seasonal, with revenue and net income
concentrated in the fourth quarter of the year. Consequently, during the three
quarters ending in March, June and September, the Company historically has not
been as profitable as in the quarter ending in December, and the Company
traditionally incurs losses in the first quarter. Such seasonality also causes
the Company's cash flow requirements to vary greatly from quarter to quarter.
In the first quarter of 1996, the Company expects to incur a net loss
before cumulative effects of accounting changes, net of taxes in the range of
$100 million to $140 million as compared to a net loss of $22 million in the
first quarter of 1995. For the second quarter of 1996, the Company expects that
it may earn substantially less than the $159 million earned in the second
quarter of 1995, resulting in a loss for the first half of 1996. There are
several factors influencing the significantly lower operating results
anticipated for the first half of 1996: (i) one-time expenses associated with
the Company's transition to operation as an independent publicly held company,
including replication and modification of information, payroll and financial
systems, and development of corporate identity programs; (ii) increased selling,
general and administrative expenses associated with plans that pre-date the
Company's restructuring decisions; (iii) the planned increase in expenditure by
the Company for research and development; and (iv) one-time costs associated
with the integration of the businesses purchased from Philips Electronics NV in
February 1996. The impact on selling, general and administrative expenses of the
actions taken in connection with the Company's strategic reorganization is not
expected to be realized until the second quarter of 1996 and subsequent periods.
3
<PAGE> 26
USE OF PROCEEDS
The Company intends to use the proceeds from the sale of the Notes and
Warrants towards refunding of debt, capital expenditures and general corporate
purposes. The specific use of proceeds will be indicated in the accompanying
Prospectus Supplement hereto. The amount and timing of the sales of the Notes
and Warrants will depend on market conditions and the availability of other
funds to the Company.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the unaudited historical ratios of earnings
to fixed charges of the Company and its subsidiaries.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
-- 3.2 2.8 1.7 --
</TABLE>
For the purpose of calculating the ratio: (i) earnings have been calculated
by adding fixed charges to income before income taxes, and by deducting
therefrom interest capitalized during the period and the Company's share of the
undistributed income in less-than-fifty-percent-owned affiliates; and (ii) fixed
charges comprise total interest (including capitalized interest) and the portion
of rentals representative of the interest factor. For the years ended December
31, 1995 and 1991, the ratio computations indicate that earnings were inadequate
to cover fixed charges by $1,154 million and $1,529 million, respectively. The
years ended December 31, 1995 and 1991 include pre-tax restructuring and other
charges of $2,801 million and $1,006 million, respectively.
DESCRIPTION OF THE NOTES
The Notes are to be issued under an indenture (the "Indenture"), dated as
of April 1, 1996, between the Company and The Bank of New York, as Trustee (the
"Trustee").
A copy of the Indenture is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by, reference to all the provisions of the Indenture. References are to the
Indenture, and wherever particular provisions are referred to, such provisions
are incorporated by reference as part of the statement made, and the statement
is qualified in its entirety by such reference.
GENERAL
The Indenture does not limit the aggregate principal amount of Notes which
may be issued thereunder and provides that the Notes may be issued from time to
time in one or more series. Reference is made to the Prospectus Supplement which
accompanies this Prospectus for a description of the Notes being offered thereby
including: (1) the aggregate principal amount of such Notes; (2) the percentage
of their principal amount at which such Notes will be sold; (3) the date(s) on
which such Notes will mature, or whether such Notes are payable on demand; (4)
the rate(s) per annum at which such Notes will bear interest, if any, or the
method of calculating such rate or rates of interest; (5) the times at which
such interest, if any, will be payable; (6) the terms for redemption or early
repayment, if any; (7) the denominations in which such Notes are authorized to
be issued; (8) the coin or currency in which the Notes are denominated, which
may be a composite currency such as the European Currency Unit; (9) any
provision enabling payments of the principal of or any premium or interest on
the Notes in a coin or currency other than the currency in which the Notes are
denominated, including a non-U.S. dollar denominated currency; (10) the manner
in which the amount of payments of principal of and any premium or interest on
the Notes is to be determined if such determination is to be made with reference
to one or more indexes; (11) whether such Notes are issuable in registered form
("registered Notes") or bearer form (with or without interest coupons) ("bearer
Notes") or both, and whether such Notes shall be uncertificated; (12) whether
any series of Notes will be represented by one or more temporary or
4
<PAGE> 27
permanent global securities and, if so, whether any such global securities will
be in registered or bearer form, the identity of the depository for such global
security or securities and the method of transferring beneficial interests in
such global security or securities; (13) if a temporary global security is to be
issued with respect to a series or any portion thereof, the terms upon which
interests in such temporary global security may be exchanged for interests in a
permanent global security or for definitive Notes of the series and the terms
upon which interest in a permanent global security, if any, may be exchanged for
definitive Notes of the series; (14) information with respect to book-entry
procedures, if any; (15) whether and under what circumstances the Company will
pay additional amounts on any Notes held by a person who is not a United States
person in respect of taxes or similar charges withheld and, if so, whether the
Company will have the option to redeem such Notes rather than pay such
additional amounts; and (16) any other terms, including any terms which may be
required by or advisable under United States laws and regulations or advisable
in connection with the marketing of the Notes of such series, which will not be
inconsistent with the provisions of the Indenture.
Notes of any series may be registered Notes or bearer Notes or both as
specified in the terms of the series. Additionally, Notes of any series may be
represented by a single global note registered in the name of a depository's
nominee and, if so represented, beneficial interests in such global note will be
shown on, and transfers thereof will be effected only through, records
maintained by a designated depository and its participants. Notes of any series
may also be uncertificated. Unless otherwise indicated in the Prospectus
Supplement, no bearer Notes (including Notes in permanent global bearer form, as
described below) will be offered, sold, resold or delivered, directly or
indirectly, to persons who are within the United States or its possessions or to
any United States person in connection with their original issuance or their
exchange for a portion of a temporary or permanent global Note. For purposes of
this Prospectus, "United States person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States or of any political subdivision
thereof, or an estate or trust the income of which is subject to United States
Federal income taxation regardless of its source.
Unless otherwise indicated in the Prospectus Supplement, principal and
interest, if any, will be payable at the office of one or more paying agents as
specified in the Prospectus Supplement; provided that payment of interest may be
made at the option of the Company by check mailed to the address of the person
entitled thereto as it appears in the register of the Notes. To the extent set
forth in the Prospectus Supplement, except in special circumstances set forth in
the Indenture, interest, if any, on bearer Notes will be payable only against
presentation and surrender of the coupons for the interest installments
evidenced thereby as they mature at the office of a paying agent of the Company
located outside of the United States and its possessions. The Company will
maintain one or more such agents for a period of two years after the principal
of such bearer Notes has become due and payable. During any period thereafter
for which it is necessary in order to conform to United States tax laws or
regulations, the Company will maintain a paying agent outside of the United
States and its possessions to which the bearer Notes and coupons related thereto
may be presented for payment and will provide the necessary funds therefor to
such paying agent upon reasonable notice.
Bearer Notes and the coupons related thereto will be transferable by
delivery. Unless otherwise indicated in the Prospectus Supplement, registered
Notes will be transferable at the office of one or more transfer or paying
agents as specified in the Prospectus Supplement.
The Notes will be unsecured obligations of the Company and will rank pari
passu with all other unsecured and unsubordinated indebtedness of the Company.
Unless otherwise indicated in the Prospectus Supplement, the Notes will be
issued only in denominations of $25,000, or the equivalent thereof in the case
of Notes denominated in a foreign currency or currency unit (rounded downward to
an integral multiple of 1,000 units of such foreign currency or currency unit),
and any integral multiple of $1,000 over $25,000, or, in the case of Notes
denominated in a foreign currency or currency unit, 1,000 units of such currency
or currency unit, or
5
<PAGE> 28
in such other denominations, not less than $25,000, as may be specified in the
terms of Notes of any particular series. No service charge will be made for any
transfer or exchange of such Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Notes may be issued as original issue discount Notes (bearing no interest
or interest at a rate which at the time of issuance is below market rates) to be
sold at a substantial discount below their stated principal amount. Federal
income tax consequences and other special considerations applicable to any such
original issue discount Notes will be described in the Prospectus Supplement
relating thereto.
Registered Notes may be exchanged for an equal aggregate principal amount
of registered Notes of the same series having the same date of maturity,
interest rate, original issue date and other terms in such authorized
denominations as may be requested upon surrender of the registered Notes to a
transfer agent of the Company as specified in the Prospectus Supplement and upon
fulfillment of all other requirements of such agent.
To the extent permitted by the terms of a series of Notes authorized to be
issued in registered form and bearer form, bearer Notes may be exchanged for an
equal aggregate principal amount of registered or bearer Notes of the same
series having the same date of maturity, interest rate, original issue date and
other terms in such authorized denominations as may be requested upon delivery
of the bearer Notes with all unpaid coupons relating thereto to a transfer or
paying agent of the Company as specified in the Prospectus Supplement and upon
fulfillment of all other requirements of such agent. Registered Notes will not
be exchangeable for bearer Notes.
TEMPORARY GLOBAL NOTES
If so specified in the Prospectus Supplement, all or any portion of the
Notes of a series that are issuable as bearer Notes initially will be
represented by one or more temporary global Notes, without interest coupons, to
be deposited with a common depository in London for Morgan Guaranty Trust
Company of New York, Brussels Office, as operator of the Euroclear System
("Euroclear"), and CEDEL S.A. ("CEDEL") for credit to the respective accounts of
the beneficial owners of such Notes (or to such other accounts as they may
direct). On and after the exchange date determined as provided in any such
temporary global Note and described in the Prospectus Supplement, the interest
in such temporary global Note will be exchangeable for definitive Notes in
bearer form, registered form, or permanent global form, or any combination
thereof, as specified in the Prospectus Supplement.
The Prospectus Supplement will set forth the procedures by which interest
in respect of any portion of a temporary global Note payable in respect of an
Interest Payment Date (as defined in such Prospectus Supplement) occurring prior
to the issuance of definitive Notes will be paid.
PERMANENT GLOBAL NOTES
If any Notes of a series are issuable in either bearer or registered
permanent global form, the Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
permanent global Note may exchange such interests for Notes of such series and
of like tenor and principal amount in any authorized form and denomination. A
person having a beneficial interest in a permanent global Note, except with
respect to payment of principal of, premium, if any, and any interest on such
permanent global Note, will be treated as a holder of such principal amount of
outstanding Notes represented by such permanent global Note as shall be
specified in a written statement of the holder of such permanent global Note, or
in the case of a permanent global Note in bearer form, of Euroclear or CEDEL
which is produced to the Trustee by such person. Principal of, premium, if any,
and any interest on a permanent global Note will be payable in the manner
described in the Prospectus Supplement.
6
<PAGE> 29
COVENANTS
Limitation on Secured Indebtedness. The Company covenants in the Indenture
that it will not, and will not permit any Restricted Subsidiary to, create,
assume, incur or guarantee any Secured Indebtedness without securing the Notes
equally and ratably with such Secured Indebtedness unless immediately thereafter
the aggregate amount of all Secured Indebtedness (not including Secured
Indebtedness with which the Notes are equally and ratably secured or Secured
Indebtedness which is concurrently being retired) and the discounted present
value of all net rentals payable under leases entered into in connection with
sale and leaseback transactions (as further described below) would not exceed
15% of Consolidated Net Tangible Assets. (Section 4.03)
Limitation on Sale and Leaseback Transactions. The Company covenants in
the Indenture that it will not, and will not permit any Restricted Subsidiary
to, enter into any lease longer than three years (not including leases of newly
acquired, improved or constructed property) covering any Principal Property of
or any Restricted Subsidiary that is sold to any other person in connection with
such lease, unless either (a) immediately thereafter, the sum of (i) the
discounted present value of all net rentals payable under all such leases
entered into after January 31, 1996 (except any such leases entered into by a
Restricted Subsidiary before the time it became a Restricted Subsidiary) and
(ii) the aggregate amount of all Secured Indebtedness (not including Secured
Indebtedness with which the Notes are equally and ratably secured) does not
exceed 15% of Consolidated Net Tangible Assets, or (b) an amount equal to the
greater of (x) the net proceeds to the Company or a Restricted Subsidiary from
such sale and (y) the discounted present value of all net rentals payable
thereunder, is applied within 180 days to the retirement of long-term debt of
the Company or a Restricted Subsidiary (other than such debt which is
subordinate to the Notes or which is owing to the Company or a Restricted
Subsidiary). (Section 4.04)
Certain Definitions. "Secured Indebtedness" means indebtedness of the
Company or any Restricted Subsidiary for borrowed money secured by any lien upon
(or in respect of any conditional sale or other title retention agreement
covering) any Principal Property or the stock or indebtedness of a Restricted
Subsidiary, but excluding from such definition all indebtedness: (i) outstanding
on February 1, 1996 secured by liens (or arising from conditional sale or other
title retention agreements) existing on that date; (ii) incurred after January
31, 1996 to finance the acquisition, improvement or construction of such
property and either secured by purchase money mortgages or liens placed on such
property within 180 days of acquisition, improvement or construction or arising
from conditional sale or other title retention agreements; (iii) secured by
liens on Principal Property or the stock or indebtedness of Restricted
Subsidiaries and existing at the time of acquisition thereof; (iv) owing to the
Company or any other Restricted Subsidiary; (v) secured by liens existing at the
time a corporation becomes a Restricted Subsidiary; (vi) incurred to finance the
acquisition or construction of property secured by liens in favor of any country
or any political subdivision thereof; and (vii) constituting any replacement,
extension or renewal of any such indebtedness (to the extent such indebtedness
is not increased). "Principal Property" means land, land improvements, buildings
and associated factory, laboratory, office and switching equipment (excluding
all products marketed by the Company or any of its subsidiaries) constituting a
manufacturing, development, warehouse, service, office or operating facility
owned by or leased to the Company or a Restricted Subsidiary, located within the
United States and having an acquisition cost plus capitalized improvements in
excess of 1.25 per cent of Consolidated Net Tangible Assets as of the date of
such determination, other than any such property financed through the issuance
of tax-exempt governmental obligations, or which the Board of Directors
determines is not of material importance to the Company and its Restricted
Subsidiaries taken as a whole, or in which the interest of the Company and all
its subsidiaries does not exceed 50%. "Consolidated Net Tangible Assets" means
the total assets of the Company and its subsidiaries, less current liabilities
and certain intangible assets (other than product development costs).
"Restricted Subsidiary" means (i) any Subsidiary of the Company which has
substantially all its property in the United States, which owns or is a lessee
of any Principal Property and in which the investment of the Company and all its
Subsidiaries exceeds 1.25 per cent of Consolidated Net Tangible Assets as of
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<PAGE> 30
the date of such determination, other than certain financing Subsidiaries and
Subsidiaries formed or acquired after January 31, 1996 for the purpose of
acquiring the business or assets of another person and that do not acquire all
or any substantial part of the business or assets of the Company or any
Restricted Subsidiary and (ii) any other Subsidiary designated by the Board of
Directors of the Company as a Restricted Subsidiary. "Subsidiary" means any
corporation a majority of the voting shares of which are at the time owned or
controlled directly or indirectly, by the Company or by one or more
Subsidiaries, or by the Company and one or more Subsidiaries. (Section 1.01)
Limitation on Consolidation, Merger, Sale or Conveyance of Assets. Nothing
in the Indenture shall prevent any consolidation of the Company with, or merger
of the Company into, any other corporation or corporations (whether or not
affiliated with the Company), or successive consolidations or mergers to which
the Company or its successor or successors shall be a party or parties, or shall
prevent any sale or conveyance of the property of the Company (including stock
of subsidiaries) as an entirety or substantially as an entirety to any other
corporation (whether or not affiliated with the Company) authorized to acquire
and own or operate the same; provided that the Company covenants in the
Indenture that upon any such consolidation, merger, sale or conveyance, the due
and punctual payment of the principal of (and premium, if any) and interest on
all of the Notes of each series, according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
the Indenture to be performed or observed by the Company shall be expressly
assumed, by supplemental indenture executed and delivered to the Trustee by the
corporation formed by such consolidation, or into which the Company shall have
been merged, or which shall have acquired such property. The Indenture does not
contain any covenants or provisions which would afford protection to Noteholders
in the event of a highly leveraged transaction. (Section 5.01)
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that, if an Event of Default specified therein in
respect of any series of Notes shall have happened and be continuing, either the
Trustee or the holders of 25% in principal amount of the outstanding Notes of
such series may declare the principal of all of the Notes of such series to be
due and payable. (Section 6.01).
Events of Default in respect of the Notes of any series are defined in the
Indenture as being: default for 90 days in payment of any interest installment
when due; unless otherwise specified in the Prospectus Supplement with respect
to the Notes of any series, default in payment of principal of or premium, if
any, on Notes of such series when due; default for 90 days after written notice
to the Company by the Trustee or by the holders of 25% in principal amount of
the outstanding Notes of such series in performance of any agreement in the
Notes or Indenture in respect of such series; and certain events of bankruptcy,
insolvency and reorganization. (Section 6.01)
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default in respect of any series of Notes, give to the holders
of such series notice of all uncured and unwaived defaults known to it; provided
that, except in the case of default in payment on any of the Notes of such
series, the Trustee will be protected in withholding such notice if it in good
faith determines that the withholding of such notice is in the interest of the
holders of such series. The term "default" for the purpose of this provision
means any event which is, or after notice or passage of time or both would be,
an Event of Default. (Section 7.05)
The Indenture contains provisions entitling the Trustee, subject to the
duty of the Trustee during an Event of Default in respect of any series of Notes
to act with the required standard of care, to refuse to perform any duty or
exercise any right or power unless it receives indemnity satisfactory to it.
(Section 7.01)
The Indenture provides that the holders of a majority in principal amount
of the outstanding Notes of any series may direct the time, method and place of
conducting proceedings for remedies available to the Trustee, or exercising any
trust or power conferred on the Trustee, in respect of such series. (Section
6.06)
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In certain cases, the holders of a majority in principal amount of the
outstanding Notes of a series may on behalf of the holders of all Notes of such
series waive any past default or Event of Default, or compliance with certain
provisions of the Indenture, except among other things a default in payment of
the principal of, premium, if any, or interest on, any of the Notes of such
series. (Sections 6.01 and 6.06)
The terms for any series of Notes may provide that the holders of Notes of
such series shall act as one class together with the holders of Notes of one or
more other series in voting, giving notice, waiving, giving directions or taking
any other specified, permitted or authorized action.
DISCHARGE AND DEFEASANCE
Under terms satisfactory to the Trustee, the Company may discharge certain
obligations to holders of any series of Notes issued under the Indenture which
have not already been delivered to the Trustee for cancellation and which have
either become due and payable or are by their terms due and payable within one
year (or scheduled for redemption within one year) by irrevocably depositing
with the Trustee as trust funds an amount in cash sufficient to pay at maturity
(or upon redemption) the principal of and interest on such Notes. (Section 8.01)
In the case of any series of Notes the exact amounts (including the
currency of payment) of principal of and interest due on such series can be
determined at the time of making the deposit referred to below, the Company at
its option may also (i) discharge any and all of its obligations to holders of
such series of Notes ("defeasance") on the 91st day after the conditions set
forth below have been satisfied, but may not thereby avoid its duty to register
the transfer or exchange of such series of Notes, to replace any temporary,
mutilated, destroyed, lost or stolen Notes of such series or to maintain an
office or agency in respect of such series of Notes, or (ii) be released with
respect to such series of Notes from the obligations imposed by the covenants
described under "Covenants" above ("covenant defeasance"). Defeasance and
covenant defeasance may be effected only if, among other things, (i) the Company
irrevocably deposits with the Trustee as trust funds (a) money in an amount, (b)
in the case of Notes payable only in U.S. Dollars, U.S. Government Obligations
which through the payment of interest and principal in respect thereof will
provide money in an amount or (c) a combination of (a) and (b), certified by a
nationally recognized firm of independent public accountants to be sufficient to
pay each installment of principal of and interest on all outstanding Notes of
such series on the dates such installments of principal and interest are due;
and (ii) the Company delivers to the Trustee an opinion of independent counsel
to the effect that the holders of such series of Notes will not recognize gain
or loss for United States Federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to United States Federal
income tax on the same amount and in the same manner and at the same time as
would have been the case if such defeasance or covenant defeasance had not
occurred (which opinion may include or be based on a ruling to that effect
received from or published by the Internal Revenue Service). "U.S. Government
Obligations" means (i) direct obligations of the United States of America for
the payment of which the full faith and credit of the United States of America
is pledged; or (ii) obligations of a person controlled or supervised by and
acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America. (Sections 1.01 and 8.02)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in principal amount of the
outstanding Notes of each series affected thereby (with such series voting as a
separate class), to execute supplemental indentures adding any provisions to or
changing or eliminating any of the provisions of the Indenture or modifying the
rights of the holders of Notes of each such series, except that no such
supplemental indenture may, without the consent of each holder affected, among
other things, change the maturity of any Notes, or change the principal amount
thereof, or any premium thereon, or change the rate or change the
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<PAGE> 32
time of payment of interest thereon, make any Note payable in money other than
that stated in the Note, or reduce the aforesaid percentage of outstanding
Notes. (Sections 9.01 and 9.02)
CONCERNING THE TRUSTEE
The Company may from time to time maintain lines of credit, and have other
customary banking relationships, with The Bank of New York, the Trustee under
the Indenture.
DESCRIPTION OF THE WARRANTS
The Company may issue Warrants for the purchase of Notes. Warrants may be
issued independently or together with any Notes offered by any Prospectus
Supplement and may be attached to or separate from such Notes. The Warrants will
be issued under a Warrant Agreement to be entered into between the Company and a
bank or trust company, as Warrant Agent, and may be issued in one or more
series, all as set forth in the Prospectus Supplement relating to the particular
issue of Warrants. The Warrant Agent will act solely as an agent of the Company
in connection with the Warrants and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
Warrants. The following summaries of certain provisions of the form of Warrant
Agreement do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, the provisions of the form of Warrant Agreement
(including the form of certificate evidencing the Warrants ("Warrant
Certificate")), copies of which are filed as exhibits to the Registration
Statement.
GENERAL
If Warrants are offered, the Prospectus Supplement will describe the
following terms of the Warrants offered hereby (to the extent such terms are
applicable to such Warrants): (i) the offering price; (ii) the coin or currency
for which Warrants may be purchased, which may be a composite currency such as
the European Currency Unit; (iii) the date on which the right to exercise the
Warrants shall commence and the date on which such right shall expire or, if the
Warrants are not continuously exercisable throughout such period, the specific
date or dates on which they will be exercisable; (iv) whether the Warrants will
be issuable in registered or bearer form or both and whether the Warrants will
be issued in temporary and/or permanent global form, or in uncertificated form;
(v) the designation, aggregate principal amount, currency or currency unit and
other terms of the Notes purchasable upon exercise of the Warrants and, if such
Notes are issuable in bearer form, restrictions applicable to the purchase of
Notes in bearer form upon exercise of the Warrants; (vi) the designation and
terms of the Notes with which the Warrants are issued and the number of Warrants
issued with each such Note; (vii) the date on and after which the Warrants and
the related Notes will be separately transferable; (viii) the principal amount
of Notes purchasable upon exercise of one Warrant and the price at which and
currency or currency units in which such principal amount of Notes may be
purchased upon such exercise; (ix) United States Federal income tax
consequences; and (x) any other terms of the Warrants, including any terms which
may be required or advisable under United States laws or regulations.
Warrant Certificates may be exchanged for new Warrant Certificates of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office of
the Warrant Agent or any other office indicated in the Prospectus Supplement.
Prior to the exercise of their Warrants, holders of Warrants will not have any
of the rights of holders of the Notes purchasable upon such exercise, including
the right to receive payments of principal of, premium, if any, or interest, if
any, on the Notes purchasable upon such exercise or to enforce covenants in the
Indenture.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Notes at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the Warrants. Warrants
may be exercised at any time up to 5:00 P.M. New York time on the date set
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<PAGE> 33
forth in the Prospectus Supplement relating to such Warrants. After such time on
the date (or such later date to which such date may be extended by the Company),
unexercised Warrants will become void.
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement relating thereto, Warrants may be exercised
by delivery to the Warrant Agent of the Warrant Certificate evidencing such
Warrants properly completed and duly executed and of payment as provided in the
Prospectus Supplement of the amount required to purchase the Notes purchasable
upon such exercise. Warrants will be deemed to have been exercised upon receipt
of such Warrant Certificate and payment at the corporate trust office of the
Warrant Agent or any other office indicated in the Prospectus Supplement and the
Company will, as soon as practicable thereafter, issue and deliver the Notes
purchasable upon such exercise. If fewer than all of the Warrants represented by
such Warrant Certificate are exercised, a new Warrant Certificate will be issued
for the remaining amount of the Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Notes and Warrants being offered hereby in four
ways: (i) directly to purchasers, (ii) through agents, (iii) through dealers, or
(iv) through underwriters. Any or all of the foregoing may be customers of,
engage in transactions with or perform services for the Company in the ordinary
course of business.
Offers to purchase the Notes and Warrants may be solicited directly by the
Company or by agents designated by the Company from time to time. Any such
agent, who may be deemed to be an underwriter as that term is defined in the
Securities Act of 1933, as amended (the "Securities Act"), involved in the offer
or sale of the Notes and/or Warrants in respect of which this Prospectus is
delivered will be named, and any commission payable by the Company to such agent
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. Agents may be entitled under agreements, which
may be entered into with the Company, to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act.
If a dealer is utilized in the sale of the Notes and/or Warrants in respect
of which this Prospectus is delivered, the Company will sell such Notes and/or
Warrants to the dealer, as principal. The dealer may then resell such Notes
and/or Warrants to the public (or to other dealers for resale to the public at
prices to be determined by such other dealers) at varying prices to be
determined by such dealer at the time of resale. Dealers may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If the sale is accomplished through an underwriter or underwriters, the
Company will enter into an underwriting agreement with such underwriters at the
time of sale to them and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement, which will be used
by the underwriters to make resales of the Securities in respect of which this
Prospectus is delivered to the public. The underwriters may be entitled, under
the relevant underwriting agreement, to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
Notes and/or Warrants from the Company at the public offering price set forth in
the Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on a specified future date. Institutions with
which Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, educational and charitable
institutions, and other institutions, but shall in all cases be subject to the
approval of the Company. Except as otherwise provided in the Prospectus
Supplement, Contracts will not be subject to any conditions except that the
purchase by an institution of the Notes covered by its Contract shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject. A
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commission indicated in the Prospectus Supplement will be paid to agents and
underwriters soliciting purchases of the Notes and/or Warrants pursuant to
Contracts accepted by the Company.
The place and time of delivery for the Notes and/or Warrants in respect of
which this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
FOR FLORIDA RESIDENTS
AT&T, the parent of the Company, provides telecommunications services
between the United States and Cuba jointly with Empresa de Telecomunicaciones
Internacionales de Cuba ("EMTELCUBA"), the Cuban telephone company, pursuant to
all applicable U.S. laws and regulations. All payments due EMTELCUBA are handled
in accordance with the provisions of the Cuban Assets Control Regulations and
the Cuban Democracy Act of 1992 and specific licenses issued thereunder. AT&T is
the sole owner of the Cuban American Telephone and Telegraph Company ("CATT"), a
Cuban corporation. CATT owns cable facilities between the United States and Cuba
that were activated on November 25, 1994.
This information is accurate as of the date hereof. Current information
concerning the Company's and its affiliates' business dealings with the
government of Cuba or with any person or affiliate located in Cuba may be
obtained from the Division of Securities and Investor Protection of the Florida
Department of Banking and Finance, the Capitol, Tallahassee, Florida 32399-0350,
telephone number (904) 488-9805.
LEGAL OPINIONS
Richard J. Rawson, Senior Vice President and General Counsel of the
Company, is passing upon the legality of the Notes and Warrants for the Company.
EXPERTS
The consolidated financial statements and financial statement schedule of
the Company and its subsidiaries at December 31, 1995 and 1994 and for the years
ended December 31, 1995, 1994 and 1993 incorporated by reference in this
Prospectus and Registration Statement have been incorporated herein in reliance
upon the report of Coopers & Lybrand L.L.P., independent auditors, given on the
authority of that firm as experts in accounting and auditing.
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PRINCIPAL OFFICES OF
LUCENT TECHNOLOGIES INC.
600 Mountain Avenue
Murray Hill, NJ 07974
TRUSTEE
The Bank of New York
101 Barclay Street
New York, New York 10286
LUXEMBOURG STOCK EXCHANGE LISTING AGENT
Banque Internationale a Luxembourg S.A.
69 route d'Esch
L-1470 Luxembourg
LEGAL ADVISERS
<TABLE>
<S> <C> <C>
To Lucent Technologies Inc. To Lucent Technologies Inc. To Lucent Technologies Inc.
as to United States Law as Special United States as to Singapore Law
Tax Counsel
Pamela F. Craven Cravath, Swaine & Moore Allen & Gledhill
Vice President -- Law and Worldwide Plaza 36 Robinson Road
Secretary 825 Eighth Avenue #18-01 City House
Lucent Technologies Inc. New York, New York 10019-7475 Singapore 068877
600 Mountain Avenue
Murray Hill, NJ 07974
</TABLE>
To the Underwriters
as to United States Law
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019-7475
AUDITORS TO
LUCENT TECHNOLOGIES INC.
PricewaterhouseCoopers LLP
1301 Avenue of the Americas
New York, New York 10019-6013
