As filed with the Securities and Exchange Commission on January 12, 1995
Registration No 33-56783
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AT&T CORP.
A New York
Corporation
I.R.S. Employer
No. 13-4924710
32 Avenue of the Americas,
New York, New York 10013-2412
(212-387-5400)
Agent for Service
S.L. Prendergast
Vice President and Treasurer
Please send copies of all communications to:
Charles S. Whitman III Albert F. Lilley
Davis Polk & Wardwell Milbank, Tweed, Hadley & McCloy
450 Lexington Avenue 1 Chase Manhattan Plaza
New York, New York 10017 New York, New York 10005
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. (check box)
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividends or
interest reimbursement plans, please check the following box. (check box)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Amount to be Offering Price Aggregate Registration
Securities to be Registered Registered Per Unit(1) Offering Price(1) Fee
<S> <C> <C> <C> <C>
Common Shares, par value 35,859,199
$1.00 per share shares $47.75 $1,712,276,752.25 $590,444.40 (2)
5,378,880
shares $48.31 $ 259,853,692.80 $ 89,604.72 (3)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
(2) Paid at time of original filing.
(3) Paid herewith.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until the
Registration Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two separate prospectuses. The first
prospectus relates to a public offering of AT&T Corp. common shares in the
United States (the "U.S. Offering"). The second prospectus relates to a
concurrent offering of common shares outside the United States (the
"International Offering"). The prospectuses for the U.S. Offering and the
International Offering will be identical with the exceptions of the front and
back cover pages and the section entitled "Underwriting" for the
International Offering. Such alternate pages appear in this Registration
Statement immediately following the complete prospectus for the U.S.
Offering.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION, DATED JANUARY 12, 1995
35,859,199 Shares
(logo AT&T)
AT&T Corp.
Common Shares
(par value $1.00 per share)
All of the 35,859,199 common shares (the "Common Shares") of AT&T Corp. being
offered hereby are being sold by the Selling Shareholder and are outstanding
common shares of the Company. Of the 35,859,199 Common Shares offered,
28,859,199 Common Shares are being offered hereby in the United States, and
7,000,000 Common Shares are being offered in a concurrent international
offering outside the United States. The Company will not receive any of the
proceeds from the sale of such Common Shares. See "Selling Shareholder".
The Common Shares are listed on the New York, Boston, Chicago, Pacific and
Philadelphia Stock Exchanges. On January 11, 1995, the reported last sale
price of the Company's common shares on the New York Stock Exchange was
$48-1/4 per share. See "Price Range of Common Shares and Dividends".
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.
PRICE $ A SHARE
<TABLE>
<CAPTION>
Proceeds to
Initial Public Underwriting Selling
Offering Price Discount(1) Shareholder(2)
------------------ --------------- ------------------
<S> <C> <C> <C>
Per Share $ $ $
Total(3) $ $ $
</TABLE>
(1) The Company and the Selling Shareholder have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.
(2) Before deducting expenses, estimated to be $990,000, of which $840,000
will be payable by the Company and $150,000 will be payable by the Selling
Shareholder.
(3) The Company has granted the U.S. Underwriters an option for 30 days to
purchase up to an additional 4,328,880 shares at the initial public offering
price per share, less the underwriting discount, solely to cover
over-allotments. Additionally, an over-allotment option on 1,050,000 shares
has been granted by the Company as part of the International Offering. If
such options are exercised in full, the total initial public offering price,
underwriting discount and proceeds to the Company (before deducting expenses
as indicated in note (2)) will be $ , $ and $ , respectively. The total
proceeds to the Selling Shareholder will not change. See "Underwriting".
Joint Global Coordinators
Goldman, Sachs & Co. Morgan Stanley & Co.
Incorporated
The Common Shares are offered by the several Underwriters named herein,
subject to prior sale, when, as and if accepted by the Underwriters. It is
expected that certificates for the Common Shares will be ready for delivery
in New York on or about , 1995.
Goldman, Sachs & Co. Morgan Stanley & Co.
Incorporated
CS First Boston
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch & Co.
Salomon Brothers Inc
January , 1995
<PAGE>
AVAILABLE INFORMATION
AT&T Corp. ("AT&T" or 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 AT&T 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 7 World Trade Center, 13th Floor, New York, New
York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Such material can also be inspected at
the New York, Boston, Chicago, Pacific and Philadelphia Stock Exchanges.
Copies of such material can also be obtained at the 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.
1-1105) and are incorporated herein by reference.
(1) AT&T's Annual Report on Form 10-K for the year 1993;
(2) AT&T's Quarterly Reports on Form 10-Q for the periods ended March 31,
1994, June 30, 1994 and September 30, 1994; and
(3) AT&T's Current Reports on Form 8-K dated January 14, 1994, January 27,
1994, March 4, 1994, March 23, 1994, April 5, 1994, August 16, 1993, as
amended (filed April 19, 1994), April 22, 1994, August 16, 1993, as amended
(filed May 20, 1994), May 26, 1994, July 15, 1994, August 16, 1993, as
amended (filed August 23, 1994), August 25, 1994, September 14, 1994,
September 19, 1994, October 26, 1994, December 8, 1994, December 13, 1994,
and October 26, 1994, as amended (filed December 27, 1994).
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 Common Shares shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the
date of filing of such documents; provided, however, that the documents
enumerated above or subsequently filed by AT&T pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act in each year during which the
offering made hereby is in effect prior to the filing with the SEC of AT&T's
Annual Report on Form 10-K covering such year shall not be incorporated by
reference herein or be a part hereof from and after the filing of such Annual
Report on Form 10-K. 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 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 AND THE 1993 AT&T ANNUAL REPORT TO SHAREOWNERS
MAY BE OBTAINED UPON REQUEST WITHOUT CHARGE FROM THE SECRETARY'S DEPARTMENT,
AT&T, ROOM 2420E, 32 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10013-2412
(TELEPHONE NUMBER 212-387-5400).
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON SHARES AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK, BOSTON, CHICAGO, PACIFIC AND
PHILADELPHIA STOCK EXCHANGES OR IN THE OVER-THE-COUNTER MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE>
THE COMPANY
AT&T is among the world's networking leaders, providing communications
services and products, as well as network equipment and computer systems, to
businesses, consumers, telecommunications service providers and government
agencies. Worldwide, AT&T's network handles more than 175 million voice,
data, video and facsimile messages on an average business day. AT&T Bell
Laboratories engages in basic research as well as product and service
development. AT&T also offers a general-purpose credit card and other
financial services.
AT&T has organized its businesses into the following functional groups:
*AT&T COMMUNICATIONS SERVICES GROUP provides a wide range of voice, data and
image telecommunications services to consumers, large and small businesses,
and government entities. For consumers, these services primarily consist of
long distance telephone, AT&T Calling Card, and domestic and international
operator services. AT&T provides business and government customers with long
distance as well as other advanced telecommunications services, including
toll-free "800" services, private line services and integrated digital
network services. In addition, AT&T constructs, operates and manages global
telecommunications networks for customers' and for its own use. In September
1994, a subsidiary of AT&T merged with McCaw Cellular Communications, Inc.
("McCaw"), the nation's largest cellular communications company, which will
form the basis for AT&T's future growth in the wireless communications area.
See "Recent Developments" in this Prospectus.
*AT&T GLOBAL INFORMATION SOLUTIONS COMPANY develops, manufactures, sells, and
services computer and information systems for businesses. These systems help
customers manage both computing and communications in one integrated package.
*AT&T MULTIMEDIA PRODUCTS GROUP meets the equipment needs of businesses,
government entities and consumers. This group offers products such as private
branch exchanges, voice and message processing products, and video
conferencing systems. This group also has responsibility for the design,
manufacture and sale of cellular, corded and cordless phones, answering
systems, facsimile machines and other telecommunications products.
*AT&T NETWORK SYSTEMS GROUP has primary responsibility for the development,
manufacture, installation and maintenance of communications equipment
marketed to local exchange carriers, private telecommunications network
operators, foreign telephone operators, government entities, private
businesses and the Company itself. In addition to advanced switching and
transmission systems, this group is a leader in the provision of hardware and
software systems integration for wireless service providers, cable television
operators and other telecommunications carriers.
*AT&T BELL LABORATORIES provides support to all of the Company's business
units. It designs and develops new products, systems, software and services,
and carries out a broad program of fundamental research to provide the
technology base for AT&T's future. AT&T Bell Laboratories is responsible for
the invention or development of many significant telecommunications devices
and processes, including the transistor, cellular wireless communications
technology, integrated circuits and many types of lasers.
*AT&T FINANCIAL SERVICES AND LEASING consists of AT&T Universal Card Services
Corp., a general- purpose credit card company, wholly owned by AT&T, and AT&T
Capital Corporation, a publicly-traded full- service finance and leasing
company, 86%-owned by AT&T.
AT&T has numerous subsidiary companies and offices throughout the world. In
1993, AT&T announced its intention to implement an international
organizational structure, along regional lines, to complement the functional
groups described above and to promote shared accountability among regional
units and those groups. Three regional units, representing all AT&T
businesses, have been formed: Latin America, with headquarters in Coral
Gables, Florida; Asia/ Pacific, with headquarters in Hong Kong; and
Europe/Middle East/Africa, with headquarters in Brussels.
The Company was incorporated on March 3, 1885 under the laws of the State of
New York and has its principal executive offices at 32 Avenue of the
Americas, New York, New York 10018-2412 (telephone number 212-387-5400).
<PAGE>
RECENT DEVELOPMENTS
Merger With McCaw
On September 19, 1994, a subsidiary of AT&T merged with McCaw, the leading
provider of wireless communications services in the United States. McCaw's
service offerings include cellular, messaging, data transmission and
air-to-ground communications. It has cellular operations in more than 100
cities in the United States with a total population of more than 100 million,
approximately 80% of which is in the 30 most populous markets in the United
States. McCaw has approximately 3.6 million cellular customers and 600,000
messaging subscribers. Revenue and net income for McCaw for the nine months
ended September 30, 1994 were $2,062 million and $34 million, respectively.
The merger with McCaw is expected to allow AT&T to better meet the
communications requirements of its customers. Under the terms of a proposed
antitrust consent decree among AT&T, McCaw and the United States, the
operations of AT&T and McCaw are subject to several conditions, including
maintaining McCaw as a separate business entity with separate officers and
personnel. After McCaw provides equal access to all interexchange carriers
AT&T may: use the AT&T brand on McCaw's cellular services; jointly market its
interexchange services with McCaw's cellular service; and provide customers
with a single bill for both wired and wireless services.
Option To Acquire Publicly Held Shares Of LIN Broadcasting
Under the Private Market Value Guarantee ("PMVG") between McCaw and its
52%-owned subsidiary, LIN Broadcasting Corporation ("LIN"), a process
commenced on January 1, 1995 to determine the private market value per share
of LIN (the "Private Market Price"). After the Private Market Price is
determined, McCaw will have 45 days to decide whether to proceed with the
acquisition of all the public shares of LIN at that price, subject to the
approval of the LIN public shareholders.
Private market value is defined in the PMVG as the price per share, including
control premium, that an unrelated third party would pay if it were to
acquire all the outstanding shares of LIN, including the shares held by
McCaw, in an arm's-length transaction and assuming that LIN was being sold in
a manner designed to attract all possible participants and to maximize
shareholder value. Using this definition, the Private Market Price will be
determined by Morgan Stanley & Co. Incorporated, which has been designated as
McCaw's appraiser under the PMVG, and by Lehman Brothers Inc. and Bear,
Stearns & Co., which have been designated to act jointly as the LIN
independent directors' appraiser, and if necessary by a third-party
appraiser.
AT&T and McCaw have not made any decision as to whether McCaw should proceed
with an acquisition of the LIN public shares. If the Private Market Price is
set at a level that AT&T and McCaw believe is reasonable, AT&T and McCaw
expect that McCaw would seek to proceed with an acquisition. If the Private
Market Price is set at a level that AT&T and McCaw believe is not reasonable,
AT&T and McCaw expect that McCaw would not proceed with an acquisition. Any
such acquisition would involve a substantial capital expenditure. If McCaw
does not proceed with an acquisition, the PMVG provides that McCaw will put
LIN in its entirety up for sale under the direction of the LIN independent
directors. Such a sale would also be subject to the approval of the LIN
public shareholders.
Personal Communications Services Auctions
On October 28, 1994, AT&T Wireless PCS Inc., a wholly owned subsidiary of
AT&T , filed an application with the FCC establishing its eligibility to bid
on broad-band personal communication service ("PCS") radio licenses to
provide wireless telephone service in 30 of 51 major trading areas in the
United States. The FCC auction began on December 5, 1994. It is not possible
to predict the outcome of the auction or the amounts successful bidders will
be required to pay in order to win licenses as about 30 companies have made
deposits and are eligible for bidding. In the event AT&T is successful in
obtaining one or more licenses, substantial expenditures could be required
for the licenses and for constructing associated systems.
Growth In Recent International Alliances To Provide Telecommunications
Service
On November 9, 1994, AT&T and Grupo Alfa ("Alfa") of Mexico announced that
they had signed a memorandum of understanding pursuant to which they plan to
work together to develop a possible joint venture to deliver
telecommunication services to Mexico's business and residential customers. If
such a joint venture is formed, Alfa's share
<PAGE>
of the voting equity would be 51% and AT&T's 49%. The services the joint
venture would offer and whether AT&T and Alfa would proceed with the
formation of the joint venture depend in part on the terms and conditions of
long distance competition and concessions to be issued in early 1995 by the
Secretariat of Communications and Transportation, the agency that regulates
telecommunications in Mexico, as well as the joint venture's ability to
secure an operating license.
Another significant recent international alliance is WorldPartners Company
("WorldPartners"), which AT&T formed as an equity partnership in 1993 with
Kokusai Denshin Denwa Co. Ltd. of Japan and Singapore Telecom to support the
provision of high quality advanced telecommunications services to
multinational business customers marketed under the name "WorldSource(SM)".
WorldPartners has recruited to date a total of nine telecommunications
services partners as members of the WorldPartners Association, the consortium
of companies offering WorldSource services, covering twenty-four countries in
North America, Europe and Asia. During 1994, a consortium of Dutch, Swiss and
Swedish telephone authorities known as Unisource joined WorldPartners.
Competition for WorldPartners to serve the communication needs of
multinational corporations is significant, consisting often of local national
telephone authorities as well as consortia formed between MCI and British
Telecommunications and, pending regulatory approval, among Sprint and France
Telecom and Deutsche Telekom.
Third Quarter Results
On October 20, 1994, AT&T announced its consolidated results (including the
operations of McCaw) for the third quarter of 1994. Reported earnings per
share were $.67 vs. $.66 in the third quarter of 1993, but included merger
expenses and other one-time charges totalling $327 million. Excluding McCaw
merger-related expenses, AT&T's earnings per share would have been $.78, an
increase of 18%.
Total revenues increased by 8.3% in the third quarter, largely due to a 3.5%
increase in telecommunications services revenues and a 20.1% increase in the
sales of products and systems. Telecommunications services revenues increased
largely because of an increase in long distance conversation volumes of more
than 7% from the prior year period and growth in cellular subscribers.
Product sales gains were led by increases in telecommunications network
products and systems and computer products and systems.
Combined operating profits, including merger expenses, for the third quarter
of 1994 increased $188 million, or 10.6%, to $1,957 million. Excluding
one-time expenses, operating income increased 24.4%.
Results for Full Year
AT&T expects to release results for the year ended December 31, 1994 on or
about January 24, 1995.
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated short-term debt and
capitalization of AT&T at September 30, 1994.
<TABLE>
<CAPTION>
September 30, 1994
--------------------------
(Dollars in millions,
except per share amount)
<S> <C>
Debt maturing within one year $13,679
======
Long-term debt including capital leases $10,866
Shareowners' equity:
Common shares, par value $1.00 per share: 2,000,000,000
shares
authorized, 1,562,667,000 shares outstanding 1,563
Additional paid-in capital 15,375
Guaranteed ESOP obligation (305)
Foreign currency translation adjustments 219
Retained deficit (151)
------
Total shareowners' equity 16,701
------
Total capitalization $27,567
=======
</TABLE>
<PAGE>
SELECTED FINANCIAL DATA
The selected financial data set forth below for the years ended December 31,
1993, 1992 and 1991 and at December 31, 1993 and 1992 are derived from AT&T's
restated audited consolidated financial statements. The income statement data
for the nine month periods ended September 30, 1994 and 1993 and the balance
sheet data at September 30, 1994 are derived from AT&T's unaudited
consolidated financial statements.
<TABLE>
<CAPTION>
Nine Months ended Year Ended
September 30, December 31,
----------------------- --------------------------------------
1994 1993(1) 1993(1) 1992 1991(2)
(Dollars in millions, except per share amounts)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Total revenues $53,984 $50,281 $69,351 $66,647 $64,455
Operating income 5,814 4,890 6,568 6,629 1,570
Interest expense 580 706(3) 1,032 1,153 1,305
Income before cumulative effects of
accounting changes 3,372 2,926 3,702 3,442 171
Cumulative effects of accounting changes for:
--Postretirement benefits -- (7,023) (7,023) -- --
--Postemployment benefits -- (1,128) (1,128) -- --
--Income taxes -- (1,457) (1,457) -- --
Net income (loss) $ 3,372 $(6,682) $(5,906) $ 3,442 $ 171
Net income (loss) per share $ 2.16 $ (4.33) $ (3.82) $ 2.27 $ .12
Dividends declared per common share $ .99 $ .99 $ 1.32 $ 1.32 $ 1.32
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
--------------- ------------------------
1994 1993 1992
<S> <C> <C> <C>
Balance Sheet Data:
Total assets $75,547 $69,393 $66,104
Long-term debt including capital leases 10,866 11,802 14,166
Total debt (including current portion) (3) 24,545 22,865 21,857
Total shareowners' equity 16,701 13,374 20,313
</TABLE>
(1) 1993 data reflect a $9.6 billion net charge for three U.S. accounting
changes: Statement of Financial Accounting Standards ("SFAS") No. 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions",
SFAS No. 112, "Employers' Accounting for Postemployment Benefits", and
SFAS No. 109, "Accounting for Income Taxes".
(2) 1991 data reflect $4.5 billion of business restructuring and other
charges.
(3) Long-term debt redemption--in March 1993, AT&T issued redemption notices
for debentures and notes with an aggregate outstanding balance of $1,750
million at March 31, 1993. Expenses associated with these redemptions of
$83 million ($52 million or $.03 per share after taxes) were included in
interest expense for the three months ended March 31, 1993.
SELLING SHAREHOLDER
All of the Common Shares offered hereby are being sold by BT USA Holdings,
Inc. (the "Selling Shareholder"), a wholly-owned subsidiary of British
Telecommunications plc.
The Selling Shareholder acquired the Common Shares in connection with the
merger on September 19, 1994 of a subsidiary of AT&T with McCaw. Under the
terms of the merger agreement, the Selling Shareholder received the Common
Shares in exchange for its 35,859,199 shares of McCaw, which it purchased
beginning in 1989.
The Common Shares represent approximately 2.3% of the total outstanding
common shares of AT&T. The Common Shares are being registered pursuant to the
terms of a Registration Rights Agreement, dated as of September 19, 1994,
between AT&T and the Selling Shareholder. The Selling Shareholder will not
own any common shares of AT&T following completion of the offering.
The Selling Shareholder is being advised in connection with the offering by
Donaldson, Lufkin & Jenrette Securities Corporation and N M Rothschild & Sons
Limited.
<PAGE>
DESCRIPTION OF COMMON SHARES OF AT&T
All common shares (par value $1 per share) of AT&T are entitled to
participate equally in dividends. Each shareowner has one vote for each share
registered in the shareowner's name. All common shares would rank equally on
liquidation, and common shares (including the Common Shares offered by this
Prospectus) are fully-paid and nonassessable by AT&T. Holders of common
shares have no preemptive rights.
AT&T is authorized to issue common shares under the Shareowner Dividend
Reinvestment and Stock Purchase Plan and various employee benefit plans of
AT&T and its subsidiaries.
Certain Preferential Rights Of Holders Of Preferred Shares
AT&T's authorized capital includes a class of 100,000,000 preferred shares,
par value $1 per share, issuable in series, cumulative as to dividends and
having an authorized maximum liquidation preference of $8,000,000,000. The
preferred shares rank prior to the common shares both as to dividends and on
liquidation. There are no preferred shares issued and outstanding. AT&T's
Board of Directors is authorized to establish the number of shares,
designations, relative rights, preferences and limitations, including voting
and conversion rights, of any future series of preferred shares.
USE OF PROCEEDS
If all or part of the over-allotment options are exercised, the Company will
receive the proceeds from the sale of any additional shares sold as a result
of any such exercise. The proceeds will be used for general corporate
purposes.
PRICE RANGE OF COMMON SHARES AND DIVIDENDS
The Company's common shares are traded on the New York, Philadelphia, Boston,
Chicago and Pacific Stock Exchanges under the symbol "T". They also trade on
the London, Tokyo and other foreign stock exchanges. The following table sets
forth the high and low sale prices of the common shares for the periods
indicated as reported on the New York Stock Exchange Composite Tape:
<TABLE>
<CAPTION>
High Low
------ -------
<S> <C> <C>
Fiscal 1992
First Quarter 41-3/8 36-5/8
Second Quarter 44-5/8 40-1/8
Third Quarter 45-3/8 42
Fourth Quarter 53-1/8 40-5/8
Fiscal 1993
First Quarter 59-1/8 50-1/8
Second Quarter 63-7/8 53-3/4
Third Quarter 65 57-3/8
Fourth Quarter 61-3/8 52
Fiscal 1994
First Quarter 57-1/8 50-5/8
Second Quarter 57-1/8 49-1/2
Third Quarter 55-7/8 52-1/2
Fourth Quarter 55-1/4 47-1/4
Fiscal 1995
First Quarter (through January 11, 1995) 50-1/2 47-7/8
</TABLE>
Dividends on common shares are currently paid at the rate of $.33 per share
per quarter ($1.32 per year).
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated January , 1995, the U.S. Underwriters named below have
severally agreed to purchase and the Selling Shareholder has agreed to sell
to them, severally, the respective number of Common Shares set forth below.
<TABLE>
<CAPTION>
Number of
Underwriter Common Shares
- ----------------------------------------------------- -----------------
<S> <C>
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
CS First Boston Corporation
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch & Co.
Salomon Brothers Inc
---------------
Total 28,859,199
===============
</TABLE>
The Underwriting Agreement provides that the obligations of the several U.S.
Underwriters to pay for and accept delivery of the Common Shares are subject
to the approval of certain legal matters by their counsel and to certain
other conditions. The nature of the U.S. Underwriters' obligation is such
that they are committed to take and pay for all of the shares offered hereby
if any are taken.
The U.S. Underwriters propose to offer part of the Common Shares directly to
the public at the initial public offering price set forth on the cover page
hereof and part to certain dealers at a price which represents a concession
not in excess of $ a share under the initial public offering price. Any U.S.
Underwriter may allow, and such dealers may reallow, a concession not in
excess of $ a share to certain brokers and dealers.
The Company and the Selling Shareholder have entered into an underwriting
agreement (the "International Underwriting Agreement") with the underwriters
of the international offering (the "International Underwriters") providing
for the concurrent offer and sale of 7,000,000 Common Shares in an
international offering outside the United States (the "International
Offering"). The initial public offering price and aggregate underwriting
discounts and commissions per share for the two offerings are identical. The
closing of the offering made hereby is a condition to the closing of the
International Offering, and vice versa. The representatives of the
International Underwriters are Morgan Stanley & Co. International Limited and
Goldman Sachs International.
Pursuant to an Agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between Syndicates") relating to the two
offerings, each of the U.S. Underwriters named herein has agreed that, as a
part of the distribution of the shares offered hereby and subject to certain
exceptions, it will offer, sell or deliver the Common Shares, directly or
indirectly, only in the United States of America (including the States and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (the "United States") and to U.S. persons, which
<PAGE>
term shall mean, for purposes of this paragraph: (a) any individual who is a
resident of the United States or (b) any corporation, partnership or other
entity organized in or under the laws of the United States or any political
subdivision thereof and whose office most directly involved with the purchase
is located in the United States. Each of the International Underwriters has
agreed pursuant to the Agreement Between Syndicates that, as a part of the
distribution of the shares offered as a part of the International Offering,
and subject to certain exceptions, it will (i) not, directly or indirectly,
offer, sell or deliver Common Shares (a) in the United States or to any U.S.
persons or (b) to any person who it believes intends to reoffer, resell or
deliver the shares in the United States or to any U.S. persons, and (ii)
cause any dealer to whom it may sell such shares at any concession to agree
to observe a similar restriction.
Pursuant to the Agreement Between Syndicates, sales may be made between the
U.S. Underwriters and the International Underwriters of such number of Common
Shares as may be mutually agreed. The price of any shares so sold shall be
the initial public offering price, less an amount not greater than the
selling concession.
The Company has granted the U.S. Underwriters an option exercisable for 30
days after the date of this Prospectus to purchase up to an aggregate of
4,328,880 additional common shares solely to cover over-allotments, if any.
If the U.S. Underwriters exercise their over-allotment option, the U.S.
Underwriters have severally agreed, subject to certain conditions, to
purchase approximately the same percentage thereof that the number of shares
to be purchased by each of them, as shown in the foregoing table, bears to
the 28,859,199 Common Shares offered. The Company has granted the
International Underwriters a similar option to purchase up to an aggregate of
1,050,000 additional common shares.
The Company and the Selling Shareholder have agreed that, until 90 days
following the date hereof, they will not, without the consent of Goldman,
Sachs & Co. and Morgan Stanley & Co. Incorporated, offer, sell or contract to
sell, or announce the offering of any common shares of the Company or
securities convertible into or exchangeable for such common shares, with
certain exceptions.
Morgan Stanley & Co. Incorporated has been retained by AT&T and McCaw to
serve as McCaw's appraiser in connection with the Private Market Value
Guarantee with LIN. See "Recent Developments--Option to Acquire Publicly Held
Shares of LIN Broadcasting".
The Company, the Selling Shareholder and the Underwriters have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
<PAGE>
FOR FLORIDA RESIDENTS
AT&T 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 AT&T's 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- 0530, telephone number
(904) 488-9805.
LEGAL OPINIONS
Marilyn J. Wasser, Vice President--Law and Secretary of AT&T, is passing upon
the legality of the Common Shares for the Company. As of December 31, 1994,
Marilyn J. Wasser owned 3,019 common shares of AT&T and had options to
acquire 13,626 common shares of AT&T.
Davis Polk & Wardwell of New York, New York is passing upon the legality of
the Common Shares for the Underwriters. Such firm from time to time acts as
counsel for the Company and its subsidiaries.
Milbank, Tweed, Hadley & McCloy of New York, New York is passing upon the
legality of the Common Shares for the Selling Shareholder.
EXPERTS
The restated consolidated financial statements and restated consolidated
financial statement schedules of AT&T and its subsidiaries at December 31,
1993 and 1992 and for the years ended December 31, 1993, 1992 and 1991,
included in AT&T's Current Report on Form 8-K, dated October 26, 1994, as
amended (filed December 27, 1994), have been incorporated herein by reference
in reliance upon the report of Coopers & Lybrand L.L.P., independent
auditors, which report includes an explanatory paragraph regarding AT&T's
change in 1993 in methods of accounting for postretirement benefits,
postemployment benefits and income taxes, given on the authority of that firm
as experts in accounting and auditing.
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given
or made, such information or representations must not be relied upon as
having been authorized. This Prospectus does not constitute an offer to sell
or the solicitation of an offer to buy any securities other than the
securities to which it relates or an offer to sell or the solicitation of an
offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or that the information contained herein is correct as of any time
subsequent to its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
--
<S> <C>
Available Information 2
Incorporation of Documents by Reference 2
The Company 3
Recent Developments 4
Capitalization 6
Selected Financial Data 7
Selling Shareholder 7
Description of Common Shares of AT&T 8
Use of Proceeds 8
Price Range of Common Shares and
Dividends 8
Underwriting 9
For Florida Residents 11
Legal Opinions 11
Experts 11
</TABLE>
35,859,199 Shares
AT&T Corp.
Common Shares
(par value $1.00 per share)
Goldman, Sachs & Co.
Morgan Stanley & Co.
Incorporated
CS First Boston
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch & Co.
Salomon Brothers Inc
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
[ALTERNATE FOR INTERNATIONAL]
PROSPECTUS
SUBJECT TO COMPLETION, DATED JANUARY 12, 1995
35,859,199 Shares
AT&T Corp.
(logo AT&T)
Common Shares
(par value $1.00 per share)
All of the 35,859,199 common shares (the "Common Shares") of AT&T Corp. being
offered hereby are being sold by the Selling Shareholder and are outstanding
common shares of the Company. Of the 35,859,199 Common Shares offered,
7,000,000 Common Shares are being offered outside the United States hereby,
and 28,859,199 Common Shares are being offered in a concurrent offering in
the United States. The Company will not receive any of the proceeds from the
sale of such Common Shares. See "Selling Shareholder".
The Common Shares are listed on the New York, Boston, Chicago, Pacific and
Philadelphia Stock Exchanges. On January 11, 1995, the reported last sale
price of the Company's common shares on the New York Stock Exchange was
$48 1/4 per share. See "Price Range of Common Shares and Dividends".
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.
PRICE $ A SHARE
<TABLE>
<CAPTION>
Proceeds to
Initial Public Underwriting Selling
Offering Price Discount(1) Shareholder(2)
------------------ --------------- ------------------
<S> <C> <C> <C>
Per Share $ $ $
Total(3) $ $ $
</TABLE>
(1) The Company and the Selling Shareholder have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.
(2) Before deducting expenses, estimated to be $990,000, of which $840,000 will
be payable by the Company and $150,000 will be payable by the Selling
Shareholder.
(3) The Company has granted the International Underwriters an option for 30
days to purchase up to an additional 1,050,000 shares at the initial public
offering price per share, less the underwriting discount, solely to cover
over-allotments. Additionally, an over-allotment option on 4,328,880 shares
has been granted by the Company as part of the U.S. Offering. If such options
are exercised in full, the total initial public offering price, underwriting
discount and proceeds to the Company (before deducting expenses as indicated
in note (2)) will be $ , $ and $ , respectively. The total proceeds to the
Selling Shareholder will not change. See "Underwriting".
Joint Global Coordinators
Goldman, Sachs & Co. Morgan Stanley & Co.
Incorporated
The Common Shares are offered by the several Underwriters named herein,
subject to prior sale, when, as and if accepted by the Underwriters. It is
expected that certificates for the Common Shares will be ready for delivery
in New York on or about , 1995.
Morgan Stanley & Co. Goldman Sachs International
International
CS First Boston Limited
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch International Limited
Salomon Brothers International Limited
January , 1995
<PAGE>
[ALTERNATE FOR INTERNATIONAL]
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated January , 1995, the International Underwriters named below
have severally agreed to purchase and the Selling Shareholder has agreed to
sell to them, severally, the respective number of Common Shares set forth
below.
<TABLE>
<CAPTION>
Number of
Underwriter Common Shares
- ----------------------------------------------------- -----------------
<S> <C>
Morgan Stanley & Co. International Limited
Goldman Sachs International
CS First Boston Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch International Limited
Salomon Brothers International Limited
---------
Total 7,000,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the several
International Underwriters to pay for and accept delivery of the Common
Shares are subject to the approval of certain legal matters by their counsel
and to certain other conditions. The nature of the International
Underwriters' obligation is such that they are committed to take and pay for
all of the shares offered hereby if any are taken.
The International Underwriters propose to offer part of the Common Shares
directly to the public at the initial public offering price set forth on the
cover page hereof and part to certain dealers at a price which represents a
concession not in excess of $ a share under the initial public offering
price. Any International Underwriter may allow, and such dealers may reallow,
a concession not in excess of $ a share to certain brokers and dealers.
The Company and the Selling Shareholder have entered into an underwriting
agreement (the "U.S. Underwriting Agreement") with the underwriters of the
U.S. offering (the "U.S. Underwriters") providing for the concurrent offer
and sale of 28,859,199 Common Shares in a U.S. offering in the United States
(the "U.S. Offering"). The initial public offering price and aggregate
underwriting discounts and commissions per share for the two offerings are
identical. The closing of the offering made hereby is a condition to the
closing of the U.S. Offering, and vice versa. The representatives of the U.S.
Underwriters are Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated.
Pursuant to an Agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between Syndicates") relating to the two
offerings, each of the U.S. Underwriters has agreed that, as a part of the
distribution of the shares offered hereby and subject to certain exceptions,
it will offer, sell or deliver the Common Shares, directly or indirectly,
only in the United States of America (including the States and the District
of Columbia), its territories,
<PAGE>
[ALTERNATE FOR INTERNATIONAL]
its possessions and other areas subject to its jurisdiction (the "United
States") and to U.S. persons, which term shall mean, for purposes of this
paragraph: (a) any individual who is a resident of the United States or (b)
any corporation, partnership or other entity organized in or under the laws
of the United States or any political subdivision thereof and whose office
most directly involved with the purchase is located in the United States.
Each of the International Underwriters named herein has agreed pursuant to
the Agreement Between Syndicates that, as a part of the distribution of the
shares offered as a part of the International Offering, and subject to
certain exceptions, it will (i) not, directly or indirectly, offer, sell or
deliver Common Shares (a) in the United States or to any U.S. persons or (b)
to any person who it believes intends to reoffer, resell or deliver the
shares in the United States or to any U.S. persons, and (ii) cause any dealer
to whom it may sell such shares at any concession to agree to observe a
similar restriction.
Pursuant to the Agreement Between Syndicates, sales may be made between the
U.S. Underwriters and the International Underwriters of such number of Common
Shares as may be mutually agreed. The price of any shares so sold shall be
the initial public offering price, less an amount not greater than the
selling concession.
The Company has granted the International Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to
an aggregate of 1,050,000 additional common shares solely to cover
over-allotments, if any. If the International Underwriters exercise their
over-allotment option, the International Underwriters have severally agreed,
subject to certain conditions, to purchase approximately the same percentage
thereof that the number of shares to be purchased by each of them, as shown
in the foregoing table, bears to the 7,000,000 Common Shares offered. The
Company has granted the U.S. Underwriters a similar option to purchase up to
an aggregate of 4,328,880 additional common shares.
Each International Underwriter has also agreed that (a) it has not offered
or sold, and will not offer or sell, in the United Kingdom, by means of any
document, any Common Shares other than to persons whose ordinary business it
is to buy or sell shares or debentures, whether as principal or agent, or in
circumstances which do not constitute an offer to the public within the
meaning of the Companies Act 1985 of Great Britain, (b) it has complied, and
will comply with, all applicable provisions of the Financial Services Act of
1986 of Great Britain with respect to anything done by it in relation to the
Common Shares 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 issuance of the
Common Shares to a person who is of a kind described in Article 9(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1988 (as amended) of Great Britain or is a person to whom the document may
otherwise lawfully be issued or passed on.
Buyers of Common Shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practice of the country of
purchase in addition to the initial public offering price.
The Company and the Selling Shareholder have agreed that, until 90 days
following the date hereof, they will not, without the consent of Goldman,
Sachs & Co. and Morgan Stanley & Co. Incorporated, offer, sell or contract to
sell, or announce the offering of any common shares of the Company or
securities convertible into or exchangeable for such common shares, with
certain exceptions.
Morgan Stanley & Co. Incorporated has been retained by AT&T and McCaw to
serve as McCaw's appraiser in connection with the Private Market Value
Guarantee with LIN. See "Recent Developments--Option to Acquire Publicly Held
Shares of LIN Broadcasting".
The Company, the Selling Shareholder and the Underwriters have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act of 1933.
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given
or made, such information or representations must not be relied upon as
having been authorized. This Prospectus does not constitute an offer to sell
or the solicitation of an offer to buy any securities other than the
securities to which it relates or an offer to sell or the solicitation of an
offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or that the information contained herein is correct as of any time
subsequent to its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
--
<S> <C>
Available Information 2
Incorporation of Documents by
Reference 2
The Company 3
Recent Developments 4
Capitalization 6
Selected Financial Data 7
Selling Shareholder 7
Description of Common Shares of AT&T 8
Use of Proceeds 8
Price Range of Common Shares and
Dividends 8
Underwriting 9
For Florida Residents 11
Legal Opinions 11
Experts 11
</TABLE>
[ALTERNATE FOR INTERNATIONAL]
35,859,199 Shares
AT&T Corp.
Common Shares
(par value $1.00 per share)
(logo AT&T)
Morgan Stanley & Co.
International
Goldman Sachs International
CS First Boston Limited
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch International
Limited
Salomon Brothers
International Limited
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee $ 680,050
Printing and Distributing Prospectus and Miscellaneous
Material 125,000*
Accountants' Fee 15,000*
Blue Sky Fees and Expenses 15,000*
Miscellaneous Expenses 4,950*
----------
Total $ 840,000*
==========
</TABLE>
* Estimated
The Selling Shareholder bears no portion of the expenses listed above.
Item 15. Indemnification of Directors and Officers.
Pursuant to the statutes of the State of New York, a director or officer of a
corporation is entitled, under specified circumstances, to indemnification by
the corporation against reasonable expenses, including attorney's fees,
incurred by him in connection with the defense of a civil or criminal
proceeding to which he has been made, or threatened to be made, a party by
reason of the fact that he was such director or officer. In certain
circumstances, indemnity is provided against judgments, fines and amounts
paid in settlement. In general, indemnification is available where the
director or officer acted in good faith, for a purpose he reasonably believed
to be in the best interests of the corporation. Specific court approval is
required in some cases. The foregoing statement is subject to the detailed
provisions of Sections 715, 717 and 721-725 of the New York Business
Corporation Law ("BCL").
The AT&T By-laws provide that AT&T is authorized, by (i) a resolution of
shareholders, (ii) a resolution of directors or (iii) an agreement providing
for such indemnification, to the fullest extent permitted by applicable law,
to provide indemnification and to advance expenses to directors and officers
in respect of claims, actions, suits or proceedings based upon, arising from,
relating to or by reason of the fact that any such director or officer serves
or served in such capacity with AT&T or at the request of AT&T in any
capacity with any other enterprise.
AT&T has entered into contracts with its officers and directors, pursuant to
the provisions of BCL Section 721, by which it will be obligated to indemnify
such persons, to the fullest extent permitted by the BCL, against expenses,
fees, judgments, fines and amounts paid in settlement in connection with any
present or future threatened, pending or completed action, suit or proceeding
based in any way upon or related to the fact that such person was an officer
or director of AT&T or, at the request of AT&T, an officer, director or other
partner, agent, employee or trustee of another enterprise. The contractual
indemnification so provided will not extend to any situation where a judgment
or other final adjudication adverse to such person establishes that his acts
were committed in bad faith or were the result of active and deliberate
dishonesty or that there inured to such person a financial profit or other
advantage.
The directors and officers of AT&T are covered by insurance policies
indemnifying against certain liabilities, including certain liabilities
arising under the Securities Act of 1933, which might be incurred by them in
such capacities and against which they cannot be indemnified by the
registrant.
Any underwriters who execute the agreement filed as Exhibit 1 to this
registration statement will agree to indemnify the registrant and
registrant's directors and its officers who signed the registration statement
against certain liabilities which might arise under the Securities Act of
1933 from information furnished to the registrant by or on behalf of any such
indemnifying party.
<PAGE>
Item 16. Exhibits.
The exhibits identified in parentheses below, on file with the SEC, are
incorporated herein by reference as exhibits hereto.
<TABLE>
<CAPTION>
Exhibit
Number
- ---------
<S> <C>
1A Form of Underwriting Agreement (U.S. Version).
1B Form of Underwriting Agreement (International Version).
4 Restated Certificate of Incorporation of the registrant filed January
10, 1989, Certificate of Change to Restated Certificate of Incorporation
dated March 18, 1992, Certificate of Amendment to Restated Certificate
of Incorporation dated June 1, 1992, and Certificate of Amendment of the
Certificate of Incorporation dated April 20, 1994 (Exhibit 4-B to
Registration Statement No. 33-53765).
5* Opinion of Marilyn J. Wasser, Vice President--Law and Secretary of the
registrant, as to the legality of the securities being registered.
23A Consent of Coopers & Lybrand.
23B* Consent of Marilyn J. Wasser, Vice President--Law and Secretary of the
registrant, is contained in opinion of counsel filed as Exhibit 5.
24** Powers of Attorney executed by the directors and officers who signed
this registration statement.
</TABLE>
*to be filed by amendment
**previously filed
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors and officers of the registrant pursuant
to the provisions referred to in the first, second, third and fifth
paragraphs of Item 15 above or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director or officer of the registrant in the
successful defense of any action, suit or proceeding) is asserted against the
registrant by such director or officer in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in The City of New York, State of New York, on the
11th day of January, 1995.
AT&T CORP.
By: (S.L. Prendergast
Vice President and Treasurer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed below by the
following persons in the capacities and on the date indicated.
Principal Executive Officer:
R.E. Allen Chairman of the Board
Principal Financial Officer:
R.W. Miller Executive Vice President
and Chief Financial Officer
Principal Accounting Officer:
M.B. Tart Vice President
and Controller
By: (S.L. Prendergast
attorney-in-fact)*
January 11, 1995
Directors:
R.E. Allen
M. Kathryn Eickhoff
Philip M. Hawley
Drew Lewis
Victor A. Pelson
Donald S. Perkins
Henry B. Schacht
Franklin A. Thomas
Joseph D. Williams
Thomas H. Wyman
* by power of attorney
<PAGE>
EXHIBIT INDEX
Exhibits identified in parentheses below, on file with the SEC, are
incorporated herein by reference as exhibits hereto.
<TABLE>
<CAPTION>
Exhibit
Number
- ---------
<S> <C>
1A Form of Underwriting Agreement (U.S. Version).
1B Form of Underwriting Agreement (International Version).
4 Restated Certificate of Incorporation of the registrant
filed January 10, 1989, Certificate of Change to Restated
Certificate of Incorporation dated March 18, 1992,
Certificate of Amendment to Restated Certificate of
Incorporation dated June 1, 1992, and Certificate of
Amendment of the Certificate of Incorporation dated April
20, 1994 (Exhibit 4-B to Registration Statement No.
33-53765).
5* Opinion of Marilyn J. Wasser, Vice President--Law and
Secretary of the registrant, as to the legality of the
securities being registered.
23A Consent of Coopers & Lybrand.
23B* Consent of Marilyn J. Wasser, Vice President--Law and
Secretary of the registrant, is contained in opinion of
counsel filed as Exhibit 5.
24** Powers of Attorney executed by the directors and officers
who signed this registration statement.
</TABLE>
*to be filed by amendment
**previously filed
Exhibit 1A
28,859,199 Shares
AT&T CORP.
COMMON SHARES
($1.00 par value)
FORM OF UNDERWRITING AGREEMENT
(U.S. VERSION)
<PAGE>
, 1995
, 1995
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
As Representatives of the Several Underwriters Named in Schedule I hereof
Dear Sirs:
The undersigned, AT&T Corp., a New York corporation (the "Company"), and BT
USA Holdings, Inc., a Delaware corporation ("BT"), hereby confirm their
respective agreements with the several Underwriters, named in Schedule I
hereof, as follows:
1. Underwriters and Representatives. The term "Underwriters" as used herein
shall mean the several persons, firms and corporations named in Schedule I
hereof, and the term "Underwriter" shall mean any one of such persons, firms
or corporations. The terms "Underwriters," "persons," "firms" and
"corporations" as used herein shall include the singular of such terms as
well as the plural. The term "Representatives" shall mean the representatives
to whom this Agreement is addressed, who, by signing this Agreement represent
that they have been authorized by each Underwriter to execute this Agreement
on behalf of such Underwriter and to act for such Underwriter in the manner
herein provided. All obligations of the Underwriters hereunder are several
and not joint.
2. Description of Securities. BT proposes to sell to the Underwriters an
aggregate of 28,859,199 currently outstanding common shares, par value $1.00
per share (the "Shares"), of the Company. The outstanding common shares of
the Company (including the Shares and the Option Shares referred to below)
are hereinafter referred to as the Common Shares.
The Company proposes to issue and sell to the several Underwriters not more
than 4,328,880 of its common shares, par value $1.00 per share (the "Option
Shares"), if and to the extent that the Representatives shall have determined
to exercise, on behalf of the Underwriters, the right to purchase such Option
Shares granted to the Underwriters in Section 5 hereof. The Shares and the
Option Shares are hereinafter referred to collectively as the "Offered
Shares".
It is understood and agreed to by all parties that the Company and BT are
concurrently entering into an agreement (the "International Underwriting
Agreement") providing for the sale by BT of up to an aggregate of 7,000,000
Common Shares (the "International Shares"), and for the issuance and sale by
the Company of not more than 1,050,000 of its common shares, par value $1.00
per share (the "International Option Shares", and, together with the
International Shares, the "International Offered Shares"), through
arrangements with certain underwriters outside the United States (the
"International Underwriters"), for whom Morgan Stanley & Co. International
Limited and Goldman Sachs International are acting as lead managers. Anything
herein or therein to the contrary notwithstanding, the respective closings
under this Agreement and the International Underwriting Agreement are hereby
expressly made conditional on one another. The Underwriters hereunder and the
International Underwriters are simultaneously entering into an Agreement
between U.S. and International Underwriting Syndicates (the "Agreement
between Syndicates") which provides, among other things, for the transfer of
Common Shares between the two syndicates. Two forms of prospectus are to be
used in connection with the offering and sale of Common Shares contemplated
by the foregoing, one relating to the Offered Shares hereunder and the other
relating to the International Offered Shares. The latter form of prospectus
will be identical to the former except for certain substitute pages as
included in the registration statement and amendments thereto. Except as used
in Sections 5 and 6 herein, and except as the context may otherwise require,
references hereinafter to the Offered Shares shall include all Common Shares
which may be sold pursuant to either this Agreement or the International
Underwriting Agreement, and references herein to any prospectus, whether in
preliminary or final form, and whether as amended or supplemented, shall
include both the U.S. and the international versions thereof.
3. Representations and Warranties of the Company. The Company represents
and warrants to BT and the several Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement No. 33-56783 on Form S-3 including a
prospectus relating to the Offered Shares, which has
<PAGE>
become effective under the Securities Act of 1933, as amended (the "Act").
The term "Registration Statement" means the Registration Statement as amended
to the date hereof including the information, if any, deemed to be part of
the Registration Statement at the time of effectiveness pursuant to Rule 430A
under the Act, and the term "Prospectus" means the prospectus in the form
first used to confirm sales of the Offered Shares. The term "preliminary
prospectus" means any preliminary prospectus relating to the Offered Shares
used prior to the effectiveness of the Registration Statement. As used
herein, Registration Statement, Prospectus and preliminary prospectus shall
include in each case the material, if any, incorporated by reference therein.
(b) (i) Each part of the Registration Statement (including the material
incorporated by reference therein) when such part became effective, did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) each preliminary prospectus relating to the
Offered Shares, if any, complied when so filed in all material respects with
the Act and the applicable rules and regulations of the Commission
thereunder, (iii) the Registration Statement and the Prospectus comply and,
as amended or supplemented, if applicable, will comply in all material
respects with the Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Registration Statement and the Prospectus
do not and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement, any preliminary
prospectus or the Prospectus in reliance upon written information furnished
to the Company by or on behalf of BT or any Underwriter expressly for use in
connection with the preparation of any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement
thereof.
(c) Each document incorporated by reference in the Prospectus complied when
filed with the Commission in all material respects with the provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), together
with the applicable instructions, rules and regulations of the Commission
thereunder, and each document, if any, hereafter filed under the Exchange Act
and so incorporated by reference in the Prospectus will comply when so filed
in all material respects with the requirements of such Exchange Act,
instructions, rules and regulations.
(d) The accountants who have certified or shall certify the financial
statements filed and to be filed with the Commission as parts of the
Registration Statement and the Prospectus are public or certified
accountants, independent with respect to the Company, as required by the Act
and the Exchange Act and the rules and regulations of the Commission
thereunder.
(e) The Option Shares have been duly authorized and, when issued and
delivered in accordance with the terms hereof, will be validly issued, fully
paid and non-assessable, and the issuance of such shares will not be subject
to any preemptive or similar rights.
(f) The sale of the Shares by BT, the performance of the Company's
obligations hereunder and the consummation of the transactions herein
contemplated will not result in a breach of any of the terms and provisions
of, or constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party or by which it
is bound, or the Company's certificate of incorporation or by-laws; or, to
the best of its knowledge, any order, rule or regulation applicable to the
Company of any court, federal or state regulatory body, administrative agency
or other governmental body having jurisdiction over the Company or its
properties and no consent, approval or authorization or order of, or
qualification with, any governmental body, agency, authority or court is
required for the valid issuance, sale and delivery of the Option Shares,
except such as have been obtained or may be required by the securities or
Blue Sky laws of the various states or foreign jurisdictions in connection
with the offer and sale of the Option Shares.
4. Representations and Warranties of BT. BT represents and warrants to the
Company and the several Underwriters that:
(a) BT has good and valid title to the Shares, free and clear of all liens,
encumbrances, equities or claims.
(b) To the extent that any statements or omissions made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto are made in reliance upon and in conformity with written
information furnished to the Company by BT expressly for use therein, such
preliminary prospectus
<PAGE>
and the Registration Statement did, and the Prospectus and any further
amendments or supplements to the Registration Statement and the Prospectus
will, when they become effective or are filed with the Commission, as the
case may be, not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading.
5. Purchase and Sale of Offered Shares. On the basis of the representations
and warranties of the Company and BT and on the terms and subject to the
conditions herein set forth, each of the Underwriters agrees, severally and
not jointly, to purchase from BT, and on the basis of the representations and
warranties of the Company and on the terms and subject to the conditions
herein set forth, BT agrees to sell to each of the Underwriters, severally
and not jointly, the number of Shares set forth opposite its name in Schedule
I hereof at a price of $ per Share--the "purchase price."
On the terms and subject to the conditions herein set forth, the Company
agrees to sell to the Underwriters the Option Shares, and the Underwriters
shall have a right to purchase, severally and not jointly, the Option Shares
in such amounts and at such times as may be determined by the Representatives
at the purchase price per Share set forth in the immediately preceding
paragraph. Option Shares may be purchased as provided herein and in Section 7
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Shares. If any Option Shares are to be purchased,
each Underwriter, severally and not jointly, agrees to purchase the number of
Option Shares (subject to such adjustment to eliminate fractional shares as
the Representatives may determine) that bears the same proportion to the
total number of Option Shares to be purchased as the number of Shares set
forth in Schedule I hereto opposite the name of such Underwriter bears to the
total number of Shares.
6. Closing. Delivery of, and payment of the purchase price for, the Shares
shall be made at the office of Davis Polk & Wardwell, counsel for the
Underwriters, 450 Lexington Avenue, New York, New York at 10:00 A.M. on
, 1994, or at such other place or time on the same or such other day
as shall be agreed upon by the Company, BT and the Representatives. The time
and date for such payment and delivery are herein referred to as the "time of
closing". At the time of closing, the Company, on behalf of BT, will deliver
certificates in definitive form for the Shares, registered in such names and
in such authorized denominations as the Representatives shall have specified
not less than two business days prior to the day of closing, against payment
therefor as provided in Section 7 hereof, to the Representatives for the
respective accounts of the Underwriters.
The Company and BT agree to make such certificates available to the
Representatives for examination on behalf of the Underwriters at the office
of the , , New York, New York, not later than 2:00 P.M. on the
business day next preceding the day of closing.
If, at the time of closing or on an Option Closing Date (as hereinafter
defined), as the case may be, for any reason (other than termination of this
Agreement in accordance with the provisions of Section 10, 11 or 15 hereof)
one or more of the Underwriters shall fail or refuse to pay for Offered
Shares it has or they have agreed to purchase at such time (any such
Underwriter being hereinafter referred to as a "defaulting Underwriter") and
the aggregate number of Offered Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of Offered Shares to be purchased at such
time, the remaining Underwriters shall be obligated severally in the
proportion which the number of Shares set forth opposite their names in
Schedule I of this Agreement bears to the aggregate number of Shares set
forth opposite the names of all such non-defaulting Underwriters (or in such
other proportion as the Representatives shall specify) to purchase the
Offered Shares which the defaulting Underwriter or Underwriters agreed but
failed or refused to purchase; provided that in no event shall the number of
Offered Shares that any Underwriter is obligated to purchase be increased
pursuant to the provisions of this paragraph by more than one-ninth of the
number of Offered Shares such Underwriter has agreed to purchase at such time
pursuant to Section 5 hereof without the written consent of such Underwriter.
In the event that any defaulting Underwriter or Underwriters shall fail or
refuse to purchase Offered Shares the aggregate number of which is more than
one-tenth of the aggregate number of Offered Shares, and if arrangements
satisfactory to, in the case of the Shares, the Representatives and BT (or,
in the case of the Option Shares, the Representatives and the Company) for
the purchase of all such Offered Shares are not made within two business days
after such default, this Agreement will terminate without liability on the
part of any of the non-defaulting Underwriters, of the Company or of BT. In
the event that the non-defaulting Underwriters agree to purchase, in
accordance with this paragraph, all the Offered Shares which the defaulting
Underwriter or Underwriters fail or refuse to purchase, the Representatives,
BT or the Company shall have the right to postpone the time of closing, but
in no event longer than five business days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in
any other documents or arrangements may be effected. Except to the extent
provided in subparagraphs (d) and (e) of Section 8 hereof and in Section 12
hereof, such ter-
<PAGE>
mination of this Agreement shall be without any liability on the part of the
Company, BT or any Underwriter other than a defaulting Underwriter which
shall have failed, otherwise than for some reason sufficient to justify under
the terms hereof the cancellation or termination of its obligations
hereunder, to pay for the Offered Shares which such Underwriter has agreed to
purchase (any such failure or refusal being hereinafter referred to as a
"default"). Unless this Agreement is terminated in accordance with any of its
provisions, a default by one or more of the Underwriters shall not relieve
any other Underwriter from its obligation to purchase the Offered Shares
which it has agreed to purchase.
7. Payment. At the time of closing, BT will cause the Shares to be
delivered to the Representatives for the account of each Underwriter against
payment of the purchase price of such Shares by certified or official bank
check or checks payable to the order of BT in New York Clearing House or
other next day funds.
Payment for the Option Shares shall be made by certified or official bank
check or checks payable to the order of the Company in New York Clearing
House or other next day funds at the office of Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York, at 10:00 A.M. on each date (which may
be the same as the day of closing but shall in no event be earlier than the
day of closing nor later than ten business days after the giving of the
notice hereinafter referred to) as shall be designated in a written notice
from the Representatives to the Company and BT of their determination, on
behalf of the Underwriters, to purchase a number, specified in said notice,
of Option Shares. The time and date of each such payment is hereinafter
referred to as an "Option Closing Date". The notice of the determination to
exercise an option to purchase Option Shares and of the applicable Option
Closing Date may be given at any time within 30 days after the date of this
Agreement.
In the event the Underwriters elect to exercise any over-allotment option,
certificates for the Option Shares shall be in definitive form and registered
in such names and in such authorized denominations as the Representatives
shall request in writing not less than two business days prior to the
applicable Option Closing Date. The certificates evidencing the Option Shares
shall be delivered to the Representatives on such Option Closing Date for the
respective accounts of the several Underwriters, with transfer taxes, if any,
payable by the Company in connection with the transfer of the Option Shares
to the Underwriters duly paid, against payment of the purchase price
therefor.
8. Covenants of the Company. The Company covenants and agrees with BT and
the several Underwriters as follows:
(a) The Company will not file any amendment or supplement to the
Registration Statement or the Prospectus of which BT and the Representatives
shall not previously have been advised or which shall be disapproved by Davis
Polk & Wardwell, counsel for the Underwriters, or Milbank, Tweed, Hadley &
McCloy, counsel for BT, and will not file any document pursuant to the
Exchange Act which is deemed to be incorporated by reference in the
Prospectus of which BT, Milbank, Tweed, Hadley & McCloy and Davis Polk &
Wardwell shall not previously have been advised.
(b) The Company will deliver to BT and the Representatives a reasonable
number of copies of the registration statement as originally filed (including
all exhibits and documents incorporated by reference therein) and of all
amendments thereto up to the time of closing. Promptly upon the filing with
the Commission of any amendment to the Registration Statement or of any
supplement to or amendment of the Prospectus, the Company will deliver to BT
and the Representatives a reasonable number of copies thereof. The terms
"supplement" and "amendment" or "amend", as used in this Agreement, shall
include all documents filed by the Company with the Commission subsequent to
the date of the Prospectus pursuant to the Exchange Act which are deemed to
be incorporated by reference in the Prospectus.
(c) The Company will advise BT and the Representatives promptly (confirming
such advice in writing) of any official request made by the Commission for an
amendment to the Registration Statement or Prospectus or for additional
information with respect thereto and of any official notice of the
institution of proceedings for, or of the entry of, a stop order suspending
the effectiveness of the Registration Statement. The Company will use its
best efforts to prevent the issuance of any such stop order, and, if such a
stop order should be entered, the Company will make every reasonable effort
to obtain the lifting or removal thereof as soon as possible.
(d) The Company will pay all expenses in connection with the preparation
and filing of the Registration Statement, the delivery of the Offered Shares
and the printing of the copies of any preliminary prospectus and of the
Prospectus to be furnished as provided in the first sentence of subparagraph
(g) below, but will not pay any transfer taxes relating to the sale by BT of
the Shares to the several Underwriters as contemplated by this
<PAGE>
Agreement. The Company will not be required to pay any amount for any
expenses of the Representatives or any of the Underwriters, or of BT (which
expenses, in the case of BT, will be paid by BT and will be limited to fees
and disbursements of counsel retained by BT, costs of insurance in connection
with the registration of the Shares, and underwriting discounts and
commissions, and transfer taxes, if any, relating to the sale of the Shares
to the several Underwriters as contemplated by this Agreement), except the
cost of mailing to BT and the Underwriters of copies of the Registration
Statement and all amendments thereto (including documents incorporated by
reference), the preliminary prospectuses and the Prospectus, and except as
provided by subparagraph (e) below. It is understood that, except as provided
in subparagraphs (e) and (f) below and Section 12 hereof, the Underwriters
will pay all of their own expenses, including the fees of their counsel,
transfer taxes on the resale of any of the Shares by them, and any
advertising expenses connected with any offers they may make. The Company and
BT will not in any event be liable to any of the several Underwriters for
damages on account of loss of anticipated profits.
(e) The Company will use its best efforts to qualify the Offered Shares, or
to assist in the qualification of the Offered Shares by or on behalf of the
Representatives, for offer and sale under the securities or Blue Sky laws of
such jurisdictions as the Representatives or BT may designate, will comply
with such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the
distribution of the Offered Shares and will pay or reimburse the
Representatives for counsel fees, filing fees and out-of-pocket expenses in
connection with such qualification; provided that the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction, or to pay or to incur, or to
reimburse the Representatives for, any such expenses if no Offered Shares are
delivered to and purchased by the Underwriters hereunder because of a default
by one or more of the Underwriters or the termination of this Agreement
pursuant to Section 15 hereof.
(f) The Company will furnish to BT and to the Representatives or to the
respective Underwriters as many copies of the Prospectus as BT, on the one
hand, may reasonably request, and the Representatives or the respective
Underwriters, on the other hand, may reasonably request for the purposes
contemplated by the Act, provided, as to copies of the Prospectus to be
provided to the Representatives or the respective Underwriters, Davis Polk &
Wardwell is of the opinion that the Prospectus is required by law to be
delivered in connection with sales by such an Underwriter or a dealer. If,
during such period as in the opinion of Davis Polk & Wardwell the Prospectus
is required by law to be delivered in connection with sales by an underwriter
or dealer, any event shall occur which should be set forth in a supplement to
or an amendment of the Prospectus in order to make the Prospectus not
misleading, the Company will, upon the occurrence of each such event
forthwith at its expense, notify BT and the Representatives of the happening
of such event and either (i) prepare and furnish to BT and to the
Representatives or to the respective Underwriters as many copies as BT and
the Representatives or the respective Underwriters may reasonably request for
the purposes contemplated by the Act of a supplement to or amendment of the
Prospectus which will supplement or amend the Prospectus or (ii) file with
the Commission documents deemed incorporated by reference in the Prospectus,
in either case so that as supplemented or amended, it will not at the date of
such supplement or amendment contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading. For the purpose of
this subparagraph (f) the Company will furnish such reasonable information
with respect to itself as BT or the Representatives may from time to time
request, and, if in the opinion of counsel for BT or the Representatives,
respectively, it is necessary to the conducting of a reasonable investigation
within the meaning of the Act, BT or the Representatives, each at its own
expense, may visit any of the properties of the Company and may inspect the
books of account of the Company at any reasonable time. Notwithstanding any
of the other provisions of this subparagraph (f), the Company shall not be
under any obligation to furnish any supplement to or amendment of the
Prospectus on account of any change in, or to include in any amended
prospectus any change in, the information furnished to the Company by BT or
by any Underwriter or Underwriters or by the Representatives on its or their
behalf for use in the Prospectus, unless BT or the Representatives, have
advised the Company in writing of such change and have requested the Company
at the Company's expense, with respect to information furnished to the
Company by BT, or at the expense of such Underwriter or Underwriters, with
respect to information provided to the Company by the Underwriters, to
prepare a supplement to or amendment of the Prospectus to reflect such change
or to include such change in an amended prospectus.
<PAGE>
(g) The Company will cause to be made generally available to its security
holders as soon as practicable, but in any event not later than eighteen
months after the effective date of the Registration Statement, an earnings
statement or statements which shall meet the requirements of Section 11(a) of
the Act and Rule 158 promulgated thereunder.
(h) Until 90 days following the date hereof, the Company will not, without
the written consent of the Representatives, offer, sell, contract to sell or
announce the offering of, any Common Shares or securities of the Company that
are substantially similar to the Common Shares, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, any Common Shares or such substantially
similar securities (other than (1) pursuant to shareowner or employee benefit
plans, or other continuous offerings of the same type, whether of the Company
or any affiliate, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of the date hereof and (2) contracts
to sell, or announcements of offerings, in either case, in connection with
acquisitions by the Company which sales or offerings will not be completed
until at least 90 days following the date hereof).
9. Covenants of BT. BT covenants and agrees with the Company and the
several Underwriters as follows:
(a) BT will pay or cause to be paid, or will reimburse the Company or the
Representatives for, all transfer, stamp, documentary or similar taxes, if
any, on the transfer and sale, respectively, of the Shares to the
Underwriters by BT.
(b) BT agrees that if, during any period referred to in subparagraph (f) of
Section 8, the information in writing regarding BT furnished to the Company
expressly for use in the Prospectus shall require revision to make such
information, as it appears in the Prospectus, not misleading, BT shall
forthwith notify the Company and the Representatives of the changes that need
to be made in the information supplied and shall cooperate with the Company
and the Representatives in preparing amendments to or supplements of the
Prospectus so that, as amended or supplemented, such information will not at
the date of such amendment or supplement contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
(c) Until 90 days following the date hereof, BT will not, without the
consent of the Representatives, offer, sell, contract to sell or announce the
offering of, any Common Shares.
10. Conditions of the Obligations of the Underwriters. The obligations of
the Underwriters to purchase and pay for the Shares shall be subject to the
following additional conditions:
(a) At the time of closing no stop order suspending the effectiveness of
the Registration Statement, as amended from time to time, shall be in effect,
no proceedings for that purpose shall be pending before, or threatened by,
the Commission, and BT and the Representatives shall have received a
certificate, dated the day of the closing and signed by a Vice President or
the Treasurer of the Company to the effect that no such stop order is in
effect and, to the knowledge of the Company, no proceedings for such purpose
are pending before or threatened by the Commission.
(b) At or prior to the time of closing, the Representatives shall have
received from counsel for the Company an opinion, satisfactory to Davis Polk
& Wardwell, to the effect that--
(i) the Company is a corporation in good standing, duly organized and
validly existing under the laws of the State of New York and is authorized by
its certificate of incorporation to transact the business in which it is
engaged, as set forth in the Prospectus;
(ii) the Company is duly qualified to transact the business in which it
is engaged, as set forth in the Prospectus, in each state in which it
operates;
(iii) all the Shares have been duly authorized by proper corporate
proceedings and are validly issued, fully paid, non-assessable and free of
preemptive rights and the Option Shares have been duly authorized by proper
corporate proceedings and, when issued and delivered in accordance with the
terms hereof, will be validly issued, fully paid and non-assessable, and the
issuance of such shares is not subject to any preemptive or similar rights;
(iv) this Agreement has been duly authorized, executed and delivered on
behalf of the Company and is valid and binding on the Company, except as
rights to indemnity and contribution hereunder may be limited under
applicable law;
<PAGE>
(v) all consents, approvals, authorizations or other orders of regulatory
authorities legally required for the sale of the Shares to the Underwriters
pursuant to the terms of this Agreement, have been obtained, and no consent,
approval or authorization or order of, or qualification with, any
governmental body, agency, authority or court is required for the valid
issuance, sale and delivery of the Option Shares, except such as have been
obtained or may be required by the securities or Blue Sky laws of the various
states or foreign jurisdictions in connection with the offer and sale of the
Option Shares; and
(vi) except as to financial statements and schedules contained or
incorporated by reference therein, which such opinion need not pass upon, (A)
each document or portion thereof incorporated by reference in the Prospectus
complied when filed with the Commission as to form in all material respects
with the requirements of the Exchange Act, together with the applicable
instructions, rules and regulations of the Commission thereunder, (B) each
part of the Registration Statement when it became effective complied as to
form in all material respects with the requirements of the Act and the
applicable instructions, rules and regulations of the Commission thereunder
and (C) the Registration Statement and the Prospectus, as amended or
supplemented, if applicable, comply, and at the date hereof complied, as to
form in all material respects with the requirements of the Act and the
applicable instructions, rules and regulations of the Commission thereunder.
(c) At or prior to the time of closing, the Representatives shall have
received from Milbank, Tweed, Hadley & McCloy, counsel to BT, an opinion,
satisfactory to Davis Polk & Wardwell, to the effect that--
(i) BT is a corporation in good standing and validly existing under the
laws of the State of Delaware;
(ii) this Agreement has been duly authorized, executed and delivered by
BT;
(iii) immediately prior to the time of delivery, BT has good and valid
title to the Shares, free and clear of all liens, encumbrances, equities or
claims, and has full right, power and authority to sell, transfer and deliver
the Shares in the manner provided by this Agreement;
(iv) good and valid title to the Shares, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the several
Underwriters who have purchased the Shares in good faith and without notice
of any such lien, encumbrance, equity or claim or any other adverse claim
within the meaning of the Uniform Commercial Code; and
(v) no consent, approval, authorization or order of any court or
governmental agency or body is required for the sale, transfer and delivery
of the Shares hereunder, except such as have been obtained under the Act and
such as may be required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters.
(d) At the date hereof and at or prior to the time of closing the
Representatives shall have received from Davis Polk & Wardwell, counsel to
the Underwriters, an opinion to the effect specified in clauses (i), (iii),
(iv) and (vi)(B) and (C) of subparagraph (b) above.
(e) Except as reflected in or contemplated by the Registration Statement
and the Prospectus, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been, at the time of closing, any material adverse change, financial or
otherwise, in the condition of the Company from that set forth in the
Registration Statement and the Prospectus; the representations and warranties
of the Company herein shall be true at the time of closing; the Company shall
not have failed, at or prior to the time of closing, to have performed all
agreements herein contained which should have been performed by it at or
prior to such time; and BT and the Representatives shall have received at the
time of closing, a certificate to the foregoing effect dated the day of the
closing and signed by a Vice President or the Treasurer of the Company.
(f) The representations and warranties of BT herein shall be true at the
time of closing; BT shall not have failed, at or prior to the time of
closing, to have performed all agreements herein contained which should have
been performed by it at or prior to such time; and the Representatives shall
have received at the time of closing a certificate to the foregoing effect
dated the day of the closing and signed by the Chairman of the Board, the
President, an Executive, Senior or Corporate Vice President or the Secretary
of BT.
(g) At the date hereof and at or prior to the time of closing, BT and the
Representatives each shall have received an executed copy of a letter of
Coopers & Lybrand addressed to the Company, to BT and to the Rep
<PAGE>
resentatives, to the effect that (i) they are independent public accountants
as required by the Act and the applicable published rules and regulations of
the Commission thereunder; (ii) the audited financial statements contained or
incorporated by reference in the Registration Statement, as amended or
supplemented from time to time, comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act and the
applicable published rules and regulations of the Commission thereunder; and
(iii) nothing has come to their attention as the result of specified
procedures not constituting an audit that caused them to believe (A) that the
unaudited financial statements, if any, contained in or incorporated by
reference as aforesaid, do not so comply and are not fairly presented in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
contained as aforesaid, (B) that there was any change in the capital stock or
long or intermediate term debt of the Company, or any decrease in net assets,
from the date of the latest balance sheet which is contained in or
incorporated by reference as aforesaid, to a date not more than five days
prior to the date of such letter or (C) that there were any decreases, as
compared with the corresponding period in the preceding year, in total
revenues, operating income or net income from the date of the latest figures
for such items contained in the Registration Statement to the date of the
latest available financial statements of the Company; provided that, with
respect to any of the items specified in clause (iii), such letter may
contain an exception for matters which the Registration Statement discloses
have occurred or may occur; and provided further, that the letter may vary
from the requirements specified in this paragraph in such manner as BT and
the Representatives in their sole discretion may determine to be immaterial
or in such manner as may be acceptable to BT and the Representatives.
In case any of the conditions specified above in this Section 10 shall not
have been fulfilled, this Agreement may be terminated by the Representatives
by delivering written notice of termination to the Company and BT. Any such
termination shall be without liability of any party to any other party except
to the extent provided in Section 12 and subparagraphs (d) and (e) of Section
8 hereof.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to (i) the delivery to the Representatives on each
Option Closing Date of the relevant documents contemplated by paragraphs (a),
(b), (d) and (e) of this Section 10, in each case revised to reflect the fact
that the shares being purchased are Option Shares and dated the relevant
Option Closing Date, and (ii) the Option Shares shall have been duly listed,
subject to notice of issuance, on the New York Stock Exchange.
11. Conditions of the Obligation of BT. The obligation of BT to deliver the
Shares upon payment therefor shall be subject to the following conditions:
(a) The conditions set forth in Section 10(a) hereof shall have been met.
(b) At or prior to the time of closing, BT shall have received from counsel
for the Company an opinion, satisfactory to Milbank, Tweed, Hadley & McCloy,
to the effect set forth in Section 10(b) hereof.
(c) At or prior to the time of closing, BT shall have received from
Milbank, Tweed, Hadley & McCloy an opinion satisfactory to BT.
(d) The conditions set forth in Section 10(e) hereof shall have been met.
(e) At the date hereof and at or prior to the time of closing, BT shall
have received an executed copy of a letter of Coopers & Lybrand addressed to
the Company, to BT and to the Representatives to the effect set forth in
Section 10(g) hereof.
In case any of the conditions specified above in this Section 11 shall not
have been fulfilled, this Agreement may be terminated by BT by delivering
written notice of termination to the Representatives and the Company. Any
such termination shall be without liability of any party to any other party
except to the extent provided in Section 12 and subparagraphs (d) and (e) of
Section 8 hereof.
12. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold BT, BT's officers and directors, each Underwriter, and each person,
if any, who controls BT or any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, harmless from and against any
and all losses, claims, damages or liabilities, joint or several, with
respect to the Offered Shares or any other securities of the Company insofar
as such losses, claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise because the
Registration Statement, any preliminary prospectus used in connection with
the Offered Shares or the Prospectus (if used
<PAGE>
within the period set forth in the first sentence of subparagraph (f) of
Section 8 hereof and if used as amended or supplemented by all amendments or
supplements thereto which have been furnished to BT or to the Representatives
or to such Underwriter) contained or is alleged to have contained any untrue
statement of a material fact or omitted or is alleged to have omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, except as to losses, claims, damages or
liabilities with respect to the Shares, in the case of BT, or generally, in
the case of the Underwriters, caused by any such untrue statement or omission
or alleged untrue statement or omission made in reliance upon information
furnished to the Company in writing by or on behalf of BT or any Underwriter
expressly for use in connection with the preparation of any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment or
supplement thereof; provided that the indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter (or
to the benefit of any person controlling such Underwriter) on account of any
losses, claims, damages or liabilities arising from the sale of Offered
Shares to any person if a copy of the Prospectus (as amended or supplemented
by all amendments or supplements thereto which have been furnished to the
Representatives or to such Underwriter, but without documents incorporated by
reference therein or exhibits) shall not have been sent, mailed or given to
such person, if required by the Act, at or prior to the written confirmation
of the sale of such Offered Shares to such person and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities.
(b) BT agrees to indemnify and hold the Company, its directors, its
officers who sign the registration statement, and each Underwriter, and each
person, if any, who controls the Company or any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, harmless
from and against any and all losses, claims, damages and liabilities with
respect to the Shares insofar as such losses, claims, damages or liabilities
(or actions or proceedings, whether commenced or threatened, in respect
thereof) arise because the Registration Statement, any preliminary prospectus
used in connection with the Offered Shares or the Prospectus (if used within
the period set forth in the first sentence of subparagraph (f) of Section 8
hereof and if used as amended or supplemented by all amendments or
supplements thereto which have been furnished to the Representatives or to
such Underwriter) contained or is alleged to have contained any untrue
statement of a material fact or omitted or is alleged to have omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or omission or
alleged untrue statement or omission was made in any preliminary prospectus
or the Registration Statement or Prospectus or any amendment or supplement
thereto in reliance upon information furnished in writing by or on behalf of
BT expressly for use in connection with the preparation thereof; provided
that the indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) on account of any losses, claims, damages or
liabilities arising from the sale of Shares to any person if a copy of the
Prospectus (as amended or supplemented by all amendments or supplements
thereto which have been furnished to the Representatives or to such
Underwriter, but without documents incorporated by reference therein or
exhibits) shall not have been sent, mailed or given to such person, if
required by the Act, at or prior to the written confirmation of the sale of
such Shares to such person and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities. Notwithstanding the provisions of this subparagraph
(b), BT shall not be required to indemnify any entity or person in an amount
in excess of the net proceeds received by BT in connection with the sale of
the Shares as set forth herein.
(c) Each Underwriter agrees to indemnify and hold the Company, its
directors, its officers who sign the registration statement, BT, BT's
officers and directors and each person who controls BT or the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
harmless from and against any and all losses, claims, damages and liabilities
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise
because the Registration Statement, any preliminary prospectus used in
connection with the Offered Shares or the Prospectus (or any amendment or
supplement thereto) contained or is alleged to have contained any untrue
statement of a material fact or omitted or is alleged to have omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or omission or
alleged untrue statement or omission was made in any such preliminary
prospectus or in the Registration Statement or Prospectus or any amendment or
supplement thereto in reliance upon information furnished in writing by or on
behalf of such Underwriter for use in connection with the preparation
thereof.
(d) The Company, BT and each Underwriter agree that upon the commencement
of any action against it, the Company's or BT's directors, the Company's
officers who sign the registration statement, BT's officers or any person
controlling the Company, BT or each Underwriter as aforesaid in respect of
which indemnity may be sought on account
<PAGE>
of any indemnity agreement contained herein, it will give prompt written
notice of the commencement thereof to the party or parties against whom
indemnity shall be sought, but the omission so to notify such indemnifying
party or parties of any such action shall not relieve such indemnifying party
or parties from any liability which it or they may have to the indemnified
party or parties otherwise than on account of such indemnity agreement,
except to the extent that the indemnifying party is actually prejudiced by
such failure to give notice. In case such notice of any such action shall be
so given, such indemnifying party or parties shall be entitled to participate
at its or their own expense in the defense of such action, or, if it or they
so elect, to assume the defense of such action, and in the latter event such
defense shall be conducted by counsel chosen by such indemnifying party or
parties and satisfactory to the indemnified party or parties who shall be
defendant or defendants in such action, and such defendant or defendants
shall bear the fees and expenses of any additional counsel retained by them;
but if the indemnifying party or parties shall not elect to assume the
defense of such action, such indemnifying party or parties will reimburse
such indemnified party or parties for the reasonable fees and expenses of any
counsel retained by them. In the event that the parties to any such action
(including impleaded parties) include both the indemnifying party and the
indemnified parties and (i) the indemnifying party or parties and indemnified
party or parties mutually agree, (ii) representation of both the indemnifying
party or parties and the indemnified party or parties by the same counsel is
inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them or (iii) in the
indemnified party's reasonable judgment a conflict of interest between the
indemnified party or parties and the indemnifying party or parties may exist,
then the indemnifying party or parties shall not have the right to assume the
defense of such action on behalf of such indemnified party or parties and
will reimburse such indemnified party or parties for the reasonable fees and
expenses of any counsel retained by them and satisfactory to the indemnifying
party or parties, it being understood that the indemnifying party or parties
shall not, in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses
of more than one separate firm of attorneys for all such indemnified parties,
which firm shall be designated in writing by the Representatives in the case
of an action in which one or more Underwriters or controlling persons are
indemnified parties and by the Company in the case of an action in which the
Company or any of its directors, officers or controlling persons are
indemnified parties and by BT in the case of an action in which BT or any of
its directors, officers or controlling persons are indemnified parties. The
indemnifying party or parties shall not be liable under this Agreement with
respect to any settlement made by any indemnified party or parties without
prior written consent by the indemnifying party or parties to such
settlement.
(e) If the indemnification provided for Underwriters and persons
controlling Underwriters in subparagraph (a) of this Section 12 is
unavailable to an indemnified party in respect of any losses, claims, damages
or liabilities referred to therein, then the indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities in such proportion as
is appropriate to reflect primarily the relative benefits received by the
Company and BT on the one hand and the Underwriters on the other in
connection with the sale of the Offered Shares and also to reflect where
appropriate the relative fault of the Company and BT on the one hand and of
the Underwriters on the other in connection with the statements or omissions
or alleged statements or omissions which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and BT on the one hand, and
of the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or BT on the one hand or by the
Underwriters on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subparagraph (e) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
subparagraph (e). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in this
subparagraph (e) shall be deemed to include, subject to the limitations set
forth above in this Section 12, any legal or other expenses reasonably
incurred by such indemnified party in connection with defending any such
action or claim. Notwithstanding the provisions of this subparagraph (e), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Offered Shares underwritten by
it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has been required to pay,
otherwise than pursuant to this subparagraph (e), by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty
<PAGE>
of such fraudulent misrepresentation. Each Underwriter's obligation to
contribute pursuant to this subparagraph (e) is several in an amount which
shall bear the same proportion as the number of Shares set forth opposite the
name of such Underwriter in Schedule I hereto (plus any increase in such
amount as may be required pursuant to Section 6) bears to the total number of
Shares sold hereunder.
(f) If the indemnification provided for BT, the Company, the Company's or
BT's directors, the Company's officers who sign the registration statement,
BT's officers and persons controlling BT or the Company in subparagraphs (a)
or (b) of this Section 12 is unavailable to an indemnified party in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraphs, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities in accordance with Section 7(f) of the Registration Rights
Agreement dated as of September 19, 1994, between BT and the Company (the
"Registration Rights Agreement"). Notwithstanding the provisions of this
subparagraph (f) and of Section 7(f) of the Registration Rights Agreement, BT
shall not be required to contribute any amount in excess of the net proceeds
received by BT in connection with the sale of the Shares as set forth herein.
13. Miscellaneous. This Agreement shall inure to the benefit of the
Company, its directors, its officers who sign the registration statement, BT,
BT's officers and directors, the several Underwriters and each controlling
person referred to in Section 12 hereof and their respective successors.
Nothing in this Agreement is intended or shall be construed to give to any
other person, firm or corporation any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein
contained. The term "successor" as used in this Agreement shall not include
any purchaser, as such purchaser, of any of the Offered Shares from any of
the several Underwriters.
14. Notices. All communications herein shall be in writing, and if to the
Underwriters, unless otherwise provided, shall be mailed or delivered to the
Representatives, c/o Goldman, Sachs & Co., Attention: Registration
Department, at 85 Broad Street, New York, New York 10004 and c/o Morgan
Stanley & Co. Incorporated, Attention: Managing Director, Equity Syndicate
Department at 1251 Avenue of the Americas, New York, New York 10020, if to
the Company, unless otherwise provided, shall be mailed or delivered to the
Company, at 1 Oak Way, Berkeley Heights, NJ 07922, Attention: Treasurer and
if to BT, unless otherwise provided, shall be mailed or delivered to BT, at
40 East 52nd Street, 14th Floor, New York, New York 10022, Attention:
Secretary, with copies to British Telecommunications plc at BT Centre, 81
Newgate Street, London EC1A 7AJ, Attention: the Secretary, and to Milbank,
Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, New York 10005,
Attention: Albert F. Lilley, Esq.
15. Termination of Agreement. This Agreement may be terminated by the
Representatives, by delivering written notice of termination to the Company
and BT at any time prior to the time of closing or an Option Closing Date, if
any, if after the signing of this Agreement trading in securities generally
on the New York Stock Exchange shall have been materially suspended or
materially limited, or minimum prices shall have been established on such
Exchange (which shall not include trading suspensions or limitations
resulting from the operation of General Rules 80A and 80B of such Exchange,
as amended or supplemented), or a banking moratorium shall have been declared
by either Federal or New York State authorities.
A termination of this Agreement pursuant to this Section 15 shall be
without liability of any party to any other party.
16. Governing Law. The validity and interpretation of this Agreement shall
be governed by the laws of the State of New York.
17. Survival Clause. Except with respect to any Underwriter who is in
default within the meaning of Section 6 hereof, the indemnity and
contribution agreements contained in Section 12 hereof and the
representations and warranties of the Company and BT set forth in this
Agreement or in any certificate furnished pursuant hereto shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or BT or officer or director of BT or any person controlling any
Underwriter or BT or (iii) acceptance of and payment for the Offered Shares.
<PAGE>
Please sign and return to us the enclosed duplicate of this letter,
whereupon this letter will become a binding agreement between the Company, BT
and the several Underwriters, in accordance with its terms.
Very truly yours,
AT&T CORP.
By__________________________
BT USA HOLDINGS, INC.
By__________________________
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
________________________
(Goldman, Sachs & Co.)
Morgan Stanley & Co. Incorporated
By:______________________________
Acting severally on behalf of themselves
and the several Underwriters named herein.
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Number
Number of Option
Name of Shares Shares
- ---------------------------------------------------- ----------- ---------
<S> <C> <C>
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
CS First Boston Corporation
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch & Co.
Salomon Brothers Inc
Total 28,859,199 4,328,880
========== =========
</TABLE>
Exhibit 1B
7,000,000 Shares
AT&T CORP.
COMMON SHARES
($1.00 par value)
FORM OF UNDERWRITING AGREEMENT
(INTERNATIONAL VERSION)
, 1995
<PAGE>
, 1995
Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA, England
Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB, England
As Representatives of the Several Underwriters Named in Schedule I hereof
Dear Sirs:
The undersigned, AT&T Corp., a New York corporation (the "Company"), and BT
USA Holdings, Inc., a Delaware corporation ("BT"), hereby confirm their
respective agreements with the several Underwriters, named in Schedule I
hereof, as follows:
1. Underwriters and Representatives. The term "Underwriters" as used herein
shall mean the several persons, firms and corporations named in Schedule I
hereof, and the term "Underwriter" shall mean any one of such persons, firms
or corporations. The terms "Underwriters," "persons," "firms" and
"corporations" as used herein shall include the singular of such terms as
well as the plural. The term "Representatives" shall mean the representatives
to whom this Agreement is addressed, who, by signing this Agreement represent
that they have been authorized by each Underwriter to execute this Agreement
on behalf of such Underwriter and to act for such Underwriter in the manner
herein provided. All obligations of the Underwriters hereunder are several
and not joint.
2. Description of Securities. BT proposes to sell to the Underwriters an
aggregate of 7,000,000 currently outstanding common shares, par value $1.00
per share (the "Shares"), of the Company. The outstanding common shares of
the Company (including the Shares and the Option Shares referred to below)
are hereinafter referred to as the Common Shares.
The Company proposes to issue and sell to the several Underwriters not more
than 1,050,000 of its common shares, par value $1.00 per share (the "Option
Shares"), if and to the extent that the Representatives shall have determined
to exercise, on behalf of the Underwriters, the right to purchase such Option
Shares granted to the Underwriters in Section 5 hereof. The Shares and the
Option Shares are hereinafter referred to collectively as the "Offered
Shares".
It is understood and agreed to by all parties that the Company and BT are
concurrently entering into an agreement (the "U.S. Underwriting Agreement")
providing for the sale by BT of up to an aggregate of 28,859,199 Common
Shares (the "U.S. Shares"), and for the issuance and sale by the Company of
not more than 4,328,880 of its common shares, par value $1.00 per share (the
"U.S. Option Shares", and, together with the U.S. Shares, the "U.S. Offered
Shares"), through arrangements with certain underwriters in the United States
(the "U.S. Underwriters"), for whom Goldman, Sachs & Co. and Morgan Stanley &
Co. Incorporated are acting as lead managers. Anything herein or therein to
the contrary notwithstanding, the respective closings under this Agreement
and the U.S. Underwriting Agreement are hereby expressly made conditional on
one another. The Underwriters hereunder and the U.S. Underwriters are
simultaneously entering into an Agreement between U.S. and International
Underwriting Syndicates (the "Agreement between Syndicates") which provides,
among other things, for the transfer of Common Shares between the two
syndicates. Two forms of prospectus are to be used in connection with the
offering and sale of Common Shares contemplated by the foregoing, one
relating to the Offered Shares hereunder and the other relating to the U.S.
Offered Shares. The latter form of prospectus will be identical to the former
except for certain substitute pages as included in the registration statement
and amendments thereto. Except as used in Sections 5 and 6 herein, and except
as the context may otherwise require, references hereinafter to the Offered
Shares shall include all Common Shares which may be sold pursuant to either
this Agreement or the U.S. Underwriting Agreement, and references herein to
any prospectus, whether in preliminary or final form, and whether as amended
or supplemented, shall include both the U.S. and the international versions
thereof.
3. Representations and Warranties of the Company. The Company represents
and warrants to BT and the several Underwriters that:
<PAGE>
(a) The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement No. 33-56783 on Form S-3 including a
prospectus relating to the Offered Shares, which has become effective under
the Securities Act of 1933, as amended (the "Act"). The term "Registration
Statement" means the Registration Statement as amended to the date hereof
including the information, if any, deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A under the Act,
and the term "Prospectus" means the prospectus in the form first used to
confirm sales of the Offered Shares. The term "preliminary prospectus" means
any preliminary prospectus relating to the Offered Shares used prior to the
effectiveness of the Registration Statement. As used herein, Registration
Statement, Prospectus and preliminary prospectus shall include in each case
the material, if any, incorporated by reference therein.
(b) (i) Each part of the Registration Statement (including the material
incorporated by reference therein) when such part became effective, did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) each preliminary prospectus relating to the
Offered Shares, if any, complied when so filed in all material respects with
the Act and the applicable rules and regulations of the Commission
thereunder, (iii) the Registration Statement and the Prospectus comply and,
as amended or supplemented, if applicable, will comply in all material
respects with the Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Registration Statement and the Prospectus
do not and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement, any preliminary
prospectus or the Prospectus in reliance upon written information furnished
to the Company by or on behalf of BT or any Underwriter expressly for use in
connection with the preparation of any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement
thereof.
(c) Each document incorporated by reference in the Prospectus complied when
filed with the Commission in all material respects with the provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), together
with the applicable instructions, rules and regulations of the Commission
thereunder, and each document, if any, hereafter filed under the Exchange Act
and so incorporated by reference in the Prospectus will comply when so filed
in all material respects with the requirements of such Exchange Act,
instructions, rules and regulations.
(d) The accountants who have certified or shall certify the financial
statements filed and to be filed with the Commission as parts of the
Registration Statement and the Prospectus are public or certified
accountants, independent with respect to the Company, as required by the Act
and the Exchange Act and the rules and regulations of the Commission
thereunder.
(e) The Option Shares have been duly authorized and, when issued and
delivered in accordance with the terms hereof, will be validly issued, fully
paid and non-assessable, and the issuance of such shares will not be subject
to any preemptive or similar rights.
(f) The sale of the Shares by BT, the performance of the Company's
obligations hereunder and the consummation of the transactions herein
contemplated will not result in a breach of any of the terms and provisions
of, or constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party or by which it
is bound, or the Company's certificate of incorporation or by-laws; or, to
the best of its knowledge, any order, rule or regulation applicable to the
Company of any court, federal or state regulatory body, administrative agency
or other governmental body having jurisdiction over the Company or its
properties and no consent, approval or authorization or order of, or
qualification with, any governmental body, agency, authority or court is
required for the valid issuance, sale and delivery of the Option Shares,
except such as have been obtained or may be required by the securities or
Blue Sky laws of the various states or foreign jurisdictions in connection
with the offer and sale of the Option Shares.
4. Representations and Warranties of BT. BT represents and warrants to the
Company and the several Underwriters that:
(a) BT has good and valid title to the Shares, free and clear of all liens,
encumbrances, equities or claims.
(b) To the extent that any statements or omissions made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto are made in reliance upon and in conformity
<PAGE>
with written information furnished to the Company by BT expressly for use
therein, such preliminary prospectus and the Registration Statement did, and
the Prospectus and any further amendments or supplements to the Registration
Statement and the Prospectus will, when they become effective or are filed
with the Commission, as the case may be, not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
5. Purchase and Sale of Offered Shares. On the basis of the representations
and warranties of the Company and BT and on the terms and subject to the
conditions herein set forth, each of the Underwriters agrees, severally and
not jointly, to purchase from BT, and on the basis of the representations and
warranties of the Company and on the terms and subject to the conditions
herein set forth, BT agrees to sell to each of the Underwriters, severally
and not jointly, the number of Shares set forth opposite its name in Schedule
I hereof at a price of $ per Share--the "purchase price."
On the terms and subject to the conditions herein set forth, the Company
agrees to sell to the Underwriters the Option Shares, and the Underwriters
shall have a right to purchase, severally and not jointly, the Option Shares
in such amounts and at such times as may be determined by the Representatives
at the purchase price per Share set forth in the immediately preceding
paragraph. Option Shares may be purchased as provided herein and in Section 7
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Shares. If any Option Shares are to be purchased,
each Underwriter, severally and not jointly, agrees to purchase the number of
Option Shares (subject to such adjustment to eliminate fractional shares as
the Representatives may determine) that bears the same proportion to the
total number of Option Shares to be purchased as the number of Shares set
forth in Schedule I hereto opposite the name of such Underwriter bears to the
total number of Shares.
The Underwriters propose to offer the Offered Shares for sale upon the
terms and conditions set forth in the Prospectus and in the forms of
Agreement among Underwriters (International Version) and Selling Agreements,
which have been previously submitted to the Company and BT by you. Each
Underwriter hereby makes to and with the Company and BT the representations
and agreements of such Underwriter as a member of the selling group contained
in Sections 3(d) and 3(e) of the form of Selling Agreements.
6. Closing. Delivery of, and payment of the purchase price for, the Shares
shall be made at the office of Davis Polk & Wardwell, counsel for the
Underwriters, 450 Lexington Avenue, New York, New York at 10:00 A.M.(1) on
, 1994, or at such other place or time on the same or such other day
as shall be agreed upon by the Company, BT and the Representatives. The time
and date for such payment and delivery are herein referred to as the "time of
closing". At the time of closing, the Company, on behalf of BT, will deliver
certificates in definitive form for the Shares, registered in such names and
in such authorized denominations as the Representatives shall have specified
not less than two business days prior to the day of closing, against payment
therefor as provided in Section 7 hereof, to the Representatives for the
respective accounts of the Underwriters.
The Company and BT agree to make such certificates available to the
Representatives for examination on behalf of the Underwriters at the office
of the , , New York, New York, not later than 2:00 P.M. on the
business day next preceding the day of closing.
If, at the time of closing or on an Option Closing Date (as hereinafter
defined), as the case may be, for any reason (other than termination of this
Agreement in accordance with the provisions of Section 10, 11 or 15 hereof)
one or more of the Underwriters shall fail or refuse to pay for Offered
Shares it has or they have agreed to purchase at such time (any such
Underwriter being hereinafter referred to as a "defaulting Underwriter") and
the aggregate number of Offered Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of Offered Shares to be purchased at such
time, the remaining Underwriters shall be obligated severally in the
proportion which the number of Shares set forth opposite their names in
Schedule I of this Agreement bears to the aggregate number of Shares set
forth opposite the names of all such non-defaulting Underwriters (or in such
other proportion as the Representatives shall specify) to purchase the
Offered Shares which the defaulting Underwriter or Underwriters agreed but
failed or refused to purchase; provided that in no event shall the number of
Offered Shares that any Underwriter is obligated to purchase be increased
pursuant to the provisions of this paragraph by more than one-ninth of the
number of Offered Shares such Underwriter has agreed to purchase at such time
pursuant to Section 5 hereof without the written consent of such Underwriter.
In the event that any defaulting Underwriter or Underwriters shall fail or
refuse to purchase Offered Shares
- --------------------------------------------
(1) Times mentioned herein are New York time.
<PAGE>
the aggregate number of which is more than one-tenth of the aggregate number
of Offered Shares, and if arrangements satisfactory to, in the case of the
Shares, the Representatives and BT (or, in the case of the Option Shares, the
Representatives and the Company) for the purchase of all such Offered Shares
are not made within two business days after such default, this Agreement will
terminate without liability on the part of any of the non-defaulting
Underwriters, of the Company or of BT. In the event that the non-defaulting
Underwriters agree to purchase, in accordance with this paragraph, all the
Offered Shares which the defaulting Underwriter or Underwriters fail or
refuse to purchase, the Representatives, BT or the Company shall have the
right to postpone the time of closing, but in no event longer than five
business days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Except to the extent provided in subparagraphs
(d) and (e) of Section 8 hereof and in Section 12 hereof, such termination of
this Agreement shall be without any liability on the part of the Company, BT
or any Underwriter other than a defaulting Underwriter which shall have
failed, otherwise than for some reason sufficient to justify under the terms
hereof the cancellation or termination of its obligations hereunder, to pay
for the Offered Shares which such Underwriter has agreed to purchase (any
such failure or refusal being hereinafter referred to as a "default"). Unless
this Agreement is terminated in accordance with any of its provisions, a
default by one or more of the Underwriters shall not relieve any other
Underwriter from its obligation to purchase the Offered Shares which it has
agreed to purchase.
7. Payment. At the time of closing, BT will cause the Shares to be
delivered to the Representatives for the account of each Underwriter against
payment of the purchase price of such Shares by certified or official bank
check or checks payable to the order of BT in New York Clearing House or
other next day funds.
Payment for the Option Shares shall be made by certified or official bank
check or checks payable to the order of the Company in New York Clearing
House or other next day funds at the office of Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York, at 10:00 A.M. on each date (which may
be the same as the day of closing but shall in no event be earlier than the
day of closing nor later than ten business days after the giving of the
notice hereinafter referred to) as shall be designated in a written notice
from the Representatives to the Company and BT of their determination, on
behalf of the Underwriters, to purchase a number, specified in said notice,
of Option Shares. The time and date of each such payment is hereinafter
referred to as an "Option Closing Date". The notice of the determination to
exercise an option to purchase Option Shares and of the applicable Option
Closing Date may be given at any time within 30 days after the date of this
Agreement.
In the event the Underwriters elect to exercise any over-allotment option,
certificates for the Option Shares shall be in definitive form and registered
in such names and in such authorized denominations as the Representatives
shall request in writing not less than two business days prior to the
applicable Option Closing Date. The certificates evidencing the Option Shares
shall be delivered to the Representatives on such Option Closing Date for the
respective accounts of the several Underwriters, with transfer taxes, if any,
payable by the Company in connection with the transfer of the Option Shares
to the Underwriters duly paid, against payment of the purchase price
therefor.
8. Covenants of the Company. The Company covenants and agrees with BT and
the several Underwriters as follows:
(a) The Company will not file any amendment or supplement to the
Registration Statement or the Prospectus of which BT and the Representatives
shall not previously have been advised or which shall be disapproved by Davis
Polk & Wardwell, counsel for the Underwriters, or Milbank, Tweed, Hadley &
McCloy, counsel for BT, and will not file any document pursuant to the
Exchange Act which is deemed to be incorporated by reference in the
Prospectus of which BT, Milbank, Tweed, Hadley & McCloy and Davis Polk &
Wardwell shall not previously have been advised.
(b) The Company will deliver to BT and the Representatives a reasonable
number of copies of the registration statement as originally filed (including
all exhibits and documents incorporated by reference therein) and of all
amendments thereto up to the time of closing. Promptly upon the filing with
the Commission of any amendment to the Registration Statement or of any
supplement to or amendment of the Prospectus, the Company will deliver to BT
and the Representatives a reasonable number of copies thereof. The terms
"supplement" and "amendment" or "amend", as used in this Agreement, shall
include all documents filed by the Company with the Commission subsequent to
the date of the Prospectus pursuant to the Exchange Act which are deemed to
be incorporated by reference in the Prospectus.
(c) The Company will advise BT and the Representatives promptly (confirming
such advice in writing) of any official request made by the Commission for an
amendment to the Registration Statement or Prospectus
<PAGE>
or for additional information with respect thereto and of any official notice
of the institution of proceedings for, or of the entry of, a stop order
suspending the effectiveness of the Registration Statement. The Company will
use its best efforts to prevent the issuance of any such stop order, and, if
such a stop order should be entered, the Company will make every reasonable
effort to obtain the lifting or removal thereof as soon as possible.
(d) The Company will pay all expenses in connection with the preparation
and filing of the Registration Statement, the delivery of the Offered Shares
and the printing of the copies of any preliminary prospectus and of the
Prospectus to be furnished as provided in the first sentence of subparagraph
(g) below, but will not pay any transfer taxes relating to the sale by BT of
the Shares to the several Underwriters as contemplated by this Agreement. The
Company will not be required to pay any amount for any expenses of the
Representatives or any of the Underwriters, or of BT (which expenses, in the
case of BT, will be paid by BT and will be limited to fees and disbursements
of counsel retained by BT, costs of insurance in connection with the
registration of the Shares, and underwriting discounts and commissions, and
transfer taxes, if any, relating to the sale of the Shares to the several
Underwriters as contemplated by this Agreement), except the cost of mailing
to BT and the Underwriters of copies of the Registration Statement and all
amendments thereto (including documents incorporated by reference), the
preliminary prospectuses and the Prospectus, and except as provided by
subparagraph (e) below. It is understood that, except as provided in
subparagraphs (e) and (f) below and Section 12 hereof, the Underwriters will
pay all of their own expenses, including the fees of their counsel, transfer
taxes on the resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make. The Company and BT will not
in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits.
(e) The Company will use its best efforts to qualify the Offered Shares, or
to assist in the qualification of the Offered Shares by or on behalf of the
Representatives, for offer and sale under the securities or Blue Sky laws of
such jurisdictions as the Representatives or BT may designate, will comply
with such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the
distribution of the Offered Shares and will pay or reimburse the
Representatives for counsel fees, filing fees and out-of-pocket expenses in
connection with such qualification; provided that the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction, or to pay or to incur, or to
reimburse the Representatives for, any such expenses if no Offered Shares are
delivered to and purchased by the Underwriters hereunder because of a default
by one or more of the Underwriters or the termination of this Agreement
pursuant to Section 15 hereof.
(f) The Company will furnish to BT and to the Representatives or to the
respective Underwriters as many copies of the Prospectus as BT, on the one
hand, may reasonably request, and the Representatives or the respective
Underwriters, on the other hand, may reasonably request for the purposes
contemplated by the Act, provided, as to copies of the Prospectus to be
provided to the Representatives or the respective Underwriters, Davis Polk &
Wardwell is of the opinion that the Prospectus is required by law to be
delivered in connection with sales by such an Underwriter or a dealer. If,
during such period as in the opinion of Davis Polk & Wardwell the Prospectus
is required by law to be delivered in connection with sales by an underwriter
or dealer, any event shall occur which should be set forth in a supplement to
or an amendment of the Prospectus in order to make the Prospectus not
misleading, the Company will, upon the occurrence of each such event
forthwith at its expense, notify BT and the Representatives of the happening
of such event and either (i) prepare and furnish to BT and to the
Representatives or to the respective Underwriters as many copies as BT and
the Representatives or the respective Underwriters may reasonably request for
the purposes contemplated by the Act of a supplement to or amendment of the
Prospectus which will supplement or amend the Prospectus or (ii) file with
the Commission documents deemed incorporated by reference in the Prospectus,
in either case so that as supplemented or amended, it will not at the date of
such supplement or amendment contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading. For the purpose of
this subparagraph (f) the Company will furnish such reasonable information
with respect to itself as BT or the Representatives may from time to time
request, and, if in the opinion of counsel for BT or the Representatives,
respectively, it is necessary to the conducting of a reasonable investigation
within the meaning of the Act, BT or the Representatives, each at its own
expense, may visit any of the properties of the Company and may inspect the
books of account of the Company at any reasonable time. Notwithstanding any
of the other provisions of this subparagraph (f), the Company shall not be
under any obligation to furnish any supplement to or amendment of the
Prospectus on account of any change in, or to include in any amended
prospectus any change in, the information furnished to the Company by BT or
by any Underwriter or Underwriters or by the
<PAGE>
Representatives on its or their behalf for use in the Prospectus, unless BT
or the Representatives, have advised the Company in writing of such change
and have requested the Company at the Company's expense, with respect to
information furnished to the Company by BT, or at the expense of such
Underwriter or Underwriters, with respect to information provided to the
Company by the Underwriters, to prepare a supplement to or amendment of the
Prospectus to reflect such change or to include such change in an amended
prospectus.
(g) The Company will cause to be made generally available to its security
holders as soon as practicable, but in any event not later than eighteen
months after the effective date of the Registration Statement, an earnings
statement or statements which shall meet the requirements of Section 11(a) of
the Act and Rule 158 promulgated thereunder.
(h) Until 90 days following the date hereof, the Company will not, without
the written consent of the Representatives, offer, sell, contract to sell or
announce the offering of, any Common Shares or securities of the Company that
are substantially similar to the Common Shares, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, any Common Shares or such substantially
similar securities (other than (1) pursuant to shareowner or employee benefit
plans, or other continuous offerings of the same type, whether of the Company
or any affiliate, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of the date hereof and (2) contracts
to sell, or announcements of offerings, in either case, in connection with
acquisitions by the Company which sales or offerings will not be completed
until at least 90 days following the date hereof).
9. Covenants of BT. BT covenants and agrees with the Company and the
several Underwriters as follows:
(a) BT will pay or cause to be paid, or will reimburse the Company or the
Representatives for, all transfer, stamp, documentary or similar taxes, if
any, on the transfer and sale, respectively, of the Shares to the
Underwriters by BT.
(b) BT agrees that if, during any period referred to in subparagraph (f) of
Section 8, the information in writing regarding BT furnished to the Company
expressly for use in the Prospectus shall require revision to make such
information, as it appears in the Prospectus, not misleading, BT shall
forthwith notify the Company and the Representatives of the changes that need
to be made in the information supplied and shall cooperate with the Company
and the Representatives in preparing amendments to or supplements of the
Prospectus so that, as amended or supplemented, such information will not at
the date of such amendment or supplement contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
(c) Until 90 days following the date hereof, BT will not, without the
consent of the Representatives, offer, sell, contract to sell or announce the
offering of, any Common Shares.
10. Conditions of the Obligations of the Underwriters. The obligations of
the Underwriters to purchase and pay for the Shares shall be subject to the
following additional conditions:
(a) At the time of closing no stop order suspending the effectiveness of
the Registration Statement, as amended from time to time, shall be in effect,
no proceedings for that purpose shall be pending before, or threatened by,
the Commission, and BT and the Representatives shall have received a
certificate, dated the day of the closing and signed by a Vice President or
the Treasurer of the Company to the effect that no such stop order is in
effect and, to the knowledge of the Company, no proceedings for such purpose
are pending before or threatened by the Commission.
(b) At or prior to the time of closing, the Representatives shall have
received from counsel for the Company an opinion, satisfactory to Davis Polk
& Wardwell, to the effect that--
(i) the Company is a corporation in good standing, duly organized and
validly existing under the laws of the State of New York and is authorized by
its certificate of incorporation to transact the business in which it is
engaged, as set forth in the Prospectus;
(ii) the Company is duly qualified to transact the business in which it
is engaged, as set forth in the Prospectus, in each state in which it
operates;
(iii) all the Shares have been duly authorized by proper corporate
proceedings and are validly issued, fully paid, non-assessable and free of
preemptive rights and the Option Shares have been duly authorized
<PAGE>
by proper corporate proceedings and, when issued and delivered in accordance
with the terms hereof, will be validly issued, fully paid and non-assessable,
and the issuance of such shares is not subject to any preemptive or similar
rights;
(iv) this Agreement has been duly authorized, executed and delivered on
behalf of the Company and is valid and binding on the Company, except as
rights to indemnity and contribution hereunder may be limited under
applicable law;
(v) all consents, approvals, authorizations or other orders of regulatory
authorities legally required for the sale of the Shares to the Underwriters
pursuant to the terms of this Agreement, have been obtained, and no consent,
approval or authorization or order of, or qualification with, any
governmental body, agency, authority or court is required for the valid
issuance, sale and delivery of the Option Shares, except such as have been
obtained or may be required by the securities or Blue Sky laws of the various
states or foreign jurisdictions in connection with the offer and sale of the
Option Shares; and
(vi) except as to financial statements and schedules contained or
incorporated by reference therein, which such opinion need not pass upon, (A)
each document or portion thereof incorporated by reference in the Prospectus
complied when filed with the Commission as to form in all material respects
with the requirements of the Exchange Act, together with the applicable
instructions, rules and regulations of the Commission thereunder, (B) each
part of the Registration Statement when it became effective complied as to
form in all material respects with the requirements of the Act and the
applicable instructions, rules and regulations of the Commission thereunder
and (C) the Registration Statement and the Prospectus, as amended or
supplemented, if applicable, comply, and at the date hereof complied, as to
form in all material respects with the requirements of the Act and the
applicable instructions, rules and regulations of the Commission thereunder.
(c) At or prior to the time of closing, the Representatives shall have
received from Milbank, Tweed, Hadley & McCloy, counsel to BT, an opinion,
satisfactory to Davis Polk & Wardwell, to the effect that--
(i) BT is a corporation in good standing and validly existing under the
laws of the State of Delaware;
(ii) this Agreement has been duly authorized, executed and delivered by
BT;
(iii) immediately prior to the time of delivery, BT has good and valid
title to the Shares, free and clear of all liens, encumbrances, equities or
claims, and has full right, power and authority to sell, transfer and deliver
the Shares in the manner provided by this Agreement;
(iv) good and valid title to the Shares, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the several
Underwriters who have purchased the Shares in good faith and without notice
of any such lien, encumbrance, equity or claim or any other adverse claim
within the meaning of the Uniform Commercial Code; and
(v) no consent, approval, authorization or order of any court or
governmental agency or body is required for the sale, transfer and delivery
of the Shares hereunder, except such as have been obtained under the Act and
such as may be required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters.
(d) At the date hereof and at or prior to the time of closing the
Representatives shall have received from Davis Polk & Wardwell, counsel to
the Underwriters, an opinion to the effect specified in clauses (i), (iii),
(iv) and (vi)(B) and (C) of subparagraph (b) above.
(e) Except as reflected in or contemplated by the Registration Statement
and the Prospectus, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been, at the time of closing, any material adverse change, financial or
otherwise, in the condition of the Company from that set forth in the
Registration Statement and the Prospectus; the representations and warranties
of the Company herein shall be true at the time of closing; the Company shall
not have failed, at or prior to the time of closing, to have performed all
agreements herein contained which should have been performed by it at or
prior to such time; and BT and the Representatives shall have received at the
time of closing, a certificate to the foregoing effect dated the day of the
closing and signed by a Vice President or the Treasurer of the Company.
<PAGE>
(f) The representations and warranties of BT herein shall be true at the
time of closing; BT shall not have failed, at or prior to the time of
closing, to have performed all agreements herein contained which should have
been performed by it at or prior to such time; and the Representatives shall
have received at the time of closing a certificate to the foregoing effect
dated the day of the closing and signed by the Chairman of the Board, the
President, an Executive, Senior or Corporate Vice President or the Secretary
of BT.
(g) At the date hereof and at or prior to the time of closing, BT and the
Representatives each shall have received an executed copy of a letter of
Coopers & Lybrand addressed to the Company, to BT and to the Representatives,
to the effect that (i) they are independent public accountants as required by
the Act and the applicable published rules and regulations of the Commission
thereunder; (ii) the audited financial statements contained or incorporated
by reference in the Registration Statement, as amended or supplemented from
time to time, comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the applicable published
rules and regulations of the Commission thereunder; and (iii) nothing has
come to their attention as the result of specified procedures not
constituting an audit that caused them to believe (A) that the unaudited
financial statements, if any, contained in or incorporated by reference as
aforesaid, do not so comply and are not fairly presented in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements contained as
aforesaid, (B) that there was any change in the capital stock or long or
intermediate term debt of the Company, or any decrease in net assets, from
the date of the latest balance sheet which is contained in or incorporated by
reference as aforesaid, to a date not more than five days prior to the date
of such letter or (C) that there were any decreases, as compared with the
corresponding period in the preceding year, in total revenues, operating
income or net income from the date of the latest figures for such items
contained in the Registration Statement to the date of the latest available
financial statements of the Company; provided that, with respect to any of
the items specified in clause (iii), such letter may contain an exception for
matters which the Registration Statement discloses have occurred or may
occur; and provided further, that the letter may vary from the requirements
specified in this paragraph in such manner as BT and the Representatives in
their sole discretion may determine to be immaterial or in such manner as may
be acceptable to BT and the Representatives.
Subject to the provisions of the Agreement between Syndicates, in case any
of the conditons specified above in this Section 10 shall not have been
fulfilled, this Agreement may be terminated by the Representatives by
delivering written notice of termination to the Company and BT. Any such
termination shall be without liability of any party to any other party except
to the extent provided in Section 12 and subparagraphs (d) and (e) of Section
8 hereof.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to (i) the delivery to the Representatives on each
Option Closing Date of the relevant documents contemplated by paragraphs (a),
(b), (d) and (e) of this Section 10, in each case revised to reflect the fact
that the shares being purchased are Option Shares and dated the relevant
Option Closing Date, and (ii) the Option Shares shall have been duly listed,
subject to notice of issuance, on the New York Stock Exchange.
11. Conditions of the Obligation of BT. The obligation of BT to deliver the
Shares upon payment therefor shall be subject to the following conditions:
(a) The conditions set forth in Section 10(a) hereof shall have been met.
(b) At or prior to the time of closing, BT shall have received from counsel
for the Company an opinion, satisfactory to Milbank, Tweed, Hadley & McCloy,
to the effect set forth in Section 10(b) hereof.
(c) At or prior to the time of closing, BT shall have received from
Milbank, Tweed, Hadley & McCloy an opinion satisfactory to BT.
(d) The conditions set forth in Section 10(e) hereof shall have been met.
(e) At the date hereof and at or prior to the time of closing, BT shall
have received an executed copy of a letter of Coopers & Lybrand addressed to
the Company, to BT and to the Representatives to the effect set forth in
Section 10(g) hereof.
In case any of the conditions specified above in this Section 11 shall not
have been fulfilled, this Agreement may be terminated by BT by delivering
written notice of termination to the Representatives and the Company. Any
such termination shall be without liability of any party to any other party
except to the extent provided in Section 12 and subparagraphs (d) and (e) of
Section 8 hereof.
<PAGE>
12. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold BT, BT's officers and directors, each Underwriter, and each person,
if any, who controls BT or any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, harmless from and against any
and all losses, claims, damages or liabilities, joint or several, with
respect to the Offered Shares or any other securities of the Company insofar
as such losses, claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise because the
Registration Statement, any preliminary prospectus used in connection with
the Offered Shares or the Prospectus (if used within the period set forth in
the first sentence of subparagraph (f) of Section 8 hereof and if used as
amended or supplemented by all amendments or supplements thereto which have
been furnished to BT or to the Representatives or to such Underwriter)
contained or is alleged to have contained any untrue statement of a material
fact or omitted or is alleged to have omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except as to losses, claims, damages or liabilities with respect
to the Shares, in the case of BT, or generally, in the case of the
Underwriters, caused by any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon information furnished to
the Company in writing by or on behalf of BT or any Underwriter expressly for
use in connection with the preparation of any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement
thereof; provided that the indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter (or
to the benefit of any person controlling such Underwriter) on account of any
losses, claims, damages or liabilities arising from the sale of Offered
Shares to any person if a copy of the Prospectus (as amended or supplemented
by all amendments or supplements thereto which have been furnished to the
Representatives or to such Underwriter, but without documents incorporated by
reference therein or exhibits) shall not have been sent, mailed or given to
such person, if required by the Act, at or prior to the written confirmation
of the sale of such Offered Shares to such person and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities.
(b) BT agrees to indemnify and hold the Company, its directors, its
officers who sign the registration statement, and each Underwriter, and each
person, if any, who controls the Company or any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, harmless
from and against any and all losses, claims, damages and liabilities with
respect to the Shares insofar as such losses, claims, damages or liabilities
(or actions or proceedings, whether commenced or threatened, in respect
thereof) arise because the Registration Statement, any preliminary prospectus
used in connection with the Offered Shares or the Prospectus (if used within
the period set forth in the first sentence of subparagraph (f) of Section 8
hereof and if used as amended or supplemented by all amendments or
supplements thereto which have been furnished to the Representatives or to
such Underwriter) contained or is alleged to have contained any untrue
statement of a material fact or omitted or is alleged to have omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or omission or
alleged untrue statement or omission was made in any preliminary prospectus
or the Registration Statement or Prospectus or any amendment or supplement
thereto in reliance upon information furnished in writing by or on behalf of
BT expressly for use in connection with the preparation thereof; provided
that the indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) on account of any losses, claims, damages or
liabilities arising from the sale of Shares to any person if a copy of the
Prospectus (as amended or supplemented by all amendments or supplements
thereto which have been furnished to the Representatives or to such
Underwriter, but without documents incorporated by reference therein or
exhibits) shall not have been sent, mailed or given to such person, if
required by the Act, at or prior to the written confirmation of the sale of
such Shares to such person and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities. Notwithstanding the provisions of this subparagraph
(b), BT shall not be required to indemnify any entity or person in an amount
in excess of the net proceeds received by BT in connection with the sale of
the Shares as set forth herein.
(c) Each Underwriter agrees to indemnify and hold the Company, its
directors, its officers who sign the registration statement, BT, BT's
officers and directors and each person who controls BT or the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
harmless from and against any and all losses, claims, damages and liabilities
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise
because the Registration Statement, any preliminary prospectus used in
connection with the Offered Shares or the Prospectus (or any amendment or
supplement thereto) contained or is alleged to have contained any untrue
statement of a material fact or omitted or is alleged to have omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or omission or
alleged untrue statement or omission was made
<PAGE>
in any such preliminary prospectus or in the Registration Statement or
Prospectus or any amendment or supplement thereto in reliance upon
information furnished in writing by or on behalf of such Underwriter for use
in connection with the preparation thereof.
(d) The Company, BT and each Underwriter agree that upon the commencement
of any action against it, the Company's or BT's directors, the Company's
officers who sign the registration statement, BT's officers or any person
controlling the Company, BT or each Underwriter as aforesaid in respect of
which indemnity may be sought on account of any indemnity agreement contained
herein, it will give prompt written notice of the commencement thereof to the
party or parties against whom indemnity shall be sought, but the omission so
to notify such indemnifying party or parties of any such action shall not
relieve such indemnifying party or parties from any liability which it or
they may have to the indemnified party or parties otherwise than on account
of such indemnity agreement, except to the extent that the indemnifying party
is actually prejudiced by such failure to give notice. In case such notice of
any such action shall be so given, such indemnifying party or parties shall
be entitled to participate at its or their own expense in the defense of such
action, or, if it or they so elect, to assume the defense of such action, and
in the latter event such defense shall be conducted by counsel chosen by such
indemnifying party or parties and satisfactory to the indemnified party or
parties who shall be defendant or defendants in such action, and such
defendant or defendants shall bear the fees and expenses of any additional
counsel retained by them; but if the indemnifying party or parties shall not
elect to assume the defense of such action, such indemnifying party or
parties will reimburse such indemnified party or parties for the reasonable
fees and expenses of any counsel retained by them. In the event that the
parties to any such action (including impleaded parties) include both the
indemnifying party and the indemnified parties and (i) the indemnifying party
or parties and indemnified party or parties mutually agree, (ii)
representation of both the indemnifying party or parties and the indemnified
party or parties by the same counsel is inappropriate under applicable
standards of professional conduct due to actual or potential differing
interests between them or (iii) in the indemnified party's reasonable
judgment a conflict of interest between the indemnified party or parties and
the indemnifying party or parties may exist, then the indemnifying party or
parties shall not have the right to assume the defense of such action on
behalf of such indemnified party or parties and will reimburse such
indemnified party or parties for the reasonable fees and expenses of any
counsel retained by them and satisfactory to the indemnifying party or
parties, it being understood that the indemnifying party or parties shall
not, in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys for all such indemnified parties, which firm
shall be designated in writing by the Representatives in the case of an
action in which one or more Underwriters or controlling persons are
indemnified parties and by the Company in the case of an action in which the
Company or any of its directors, officers or controlling persons are
indemnified parties and by BT in the case of an action in which BT or any of
its directors, officers or controlling persons are indemnified parties. The
indemnifying party or parties shall not be liable under this Agreement with
respect to any settlement made by any indemnified party or parties without
prior written consent by the indemnifying party or parties to such
settlement.
(e) If the indemnification provided for Underwriters and persons
controlling Underwriters in subparagraph (a) of this Section 12 is
unavailable to an indemnified party in respect of any losses, claims, damages
or liabilities referred to therein, then the indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities in such proportion as
is appropriate to reflect primarily the relative benefits received by the
Company and BT on the one hand and the Underwriters on the other in
connection with the sale of the Offered Shares and also to reflect where
appropriate the relative fault of the Company and BT on the one hand and of
the Underwriters on the other in connection with the statements or omissions
or alleged statements or omissions which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and BT on the one hand, and
of the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or BT on the one hand or by the
Underwriters on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subparagraph (e) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
subparagraph (e). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in this
subparagraph (e) shall be deemed to include, subject to the limitations
<PAGE>
set forth above in this Section 12, any legal or other expenses reasonably
incurred by such indemnified party in connection with defending any such
action or claim. Notwithstanding the provisions of this subparagraph (e), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Offered Shares underwritten by
it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has been required to pay,
otherwise than pursuant to this subparagraph (e), by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Each Underwriter's obligation to contribute
pursuant to this subparagraph (e) is several in an amount which shall bear
the same proportion as the number of Shares set forth opposite the name of
such Underwriter in Schedule I hereto (plus any increase in such amount as
may be required pursuant to Section 6) bears to the total number of Shares
sold hereunder.
(f) If the indemnification provided for BT, the Company, the Company's or
BT's directors, the Company's officers who sign the registration statement,
BT's officers and persons controlling BT or the Company in subparagraphs (a)
or (b) of this Section 12 is unavailable to an indemnified party in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraphs, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities in accordance with Section 7(f) of the Registration Rights
Agreement dated as of September 19, 1994, between BT and the Company (the
"Registration Rights Agreement"). Notwithstanding the provisions of this
subparagraph (f) and of Section 7(f) of the Registration Rights Agreement, BT
shall not be required to contribute any amount in excess of the net proceeds
received by BT in connection with the sale of the Shares as set forth herein.
13. Miscellaneous. This Agreement shall inure to the benefit of the
Company, its directors, its officers who sign the registration statement, BT,
BT's officers and directors, the several Underwriters and each controlling
person referred to in Section 12 hereof and their respective successors.
Nothing in this Agreement is intended or shall be construed to give to any
other person, firm or corporation any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein
contained. The term "successor" as used in this Agreement shall not include
any purchaser, as such purchaser, of any of the Offered Shares from any of
the several Underwriters.
14. Notices. All communications herein shall be in writing, and if to the
Underwriters, unless otherwise provided, shall be mailed or delivered to the
Representatives, c/o Morgan Stanley & Co. International Limited, Attention:
Managing Director, Equity Capital Markets, at 25 Cabot Square, Canary Wharf,
London E14 4QA, England, and c/o Goldman Sachs International, Attention:
Equity Capital Markets, at Peterborough Court, 133 Fleet Street, London EC4A
2BB, England, if to the Company, unless otherwise provided, shall be mailed
or delivered to the Company, at 1 Oak Way, Berkeley Heights, NJ 07922,
Attention: Treasurer and if to BT, unless otherwise provided, shall be mailed
or delivered to BT, at 40 East 52nd Street, 14th Floor, New York, New York
10022, Attention: Secretary, with copies to British Telecommunications plc at
BT Centre, 81 Newgate Street, London EC1A 7AJ, Attention: the Secretary, and
to Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, New
York 10005, Attention: Albert F. Lilley, Esq.
15. Termination of Agreement. This Agreement may be terminated by the
Representatives, by delivering written notice of termination to the Company
and BT at any time prior to the time of closing or an Option Closing Date, if
any, if after the signing of this Agreement trading in securities generally
on the New York Stock Exchange shall have been materially suspended or
materially limited, or minimum prices shall have been established on such
Exchange (which shall not include trading suspensions or limitations
resulting from the operation of General Rules 80A and 80B of such Exchange,
as amended or supplemented), or a banking moratorium shall have been declared
by either Federal or New York State authorities.
A termination of this Agreement pursuant to this Section 15 shall be
without liability of any party to any other party.
16. Governing Law. The validity and interpretation of this Agreement shall
be governed by the laws of the State of New York.
17. Survival Clause. Except with respect to any Underwriter who is in
default within the meaning of Section 6 hereof, the indemnity and
contribution agreements contained in Section 12 hereof and the
representations and warranties of the Company and BT set forth in this
Agreement or in any certificate furnished pursuant hereto shall
<PAGE>
remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or BT or officer or director of BT or any person controlling
any Underwriter or BT or (iii) acceptance of and payment for the Offered
Shares.
Please sign and return to us the enclosed duplicate of this letter,
whereupon this letter will become a binding agreement between the Company, BT
and the several Underwriters, in accordance with its terms.
Very truly yours,
AT&T CORP.
By__________________________
BT USA HOLDINGS, INC.
By__________________________
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
Morgan Stanley & Co. International Limited
By:________________________________
___________________________________
(Goldman Sachs International)
Acting severally on behalf of themselves and
the several Underwriters named herein.
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Number
Number of Option
Name of Shares Shares
- ---------------------------------------------------- --------- ---------
<S> <C> <C>
Morgan Stanley & Co. International Limited
Goldman Sachs International
CS First Boston Limited
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch International Limited
Salomon Brothers International Limited
Total 7,000,000 1,050,000
========= =========
</TABLE>
Exhibit 23-A
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this amendment to the
registration statement on Form S-3 of AT&T Corp. and its subsidiaries (the
"Company") of our reports, which include explanatory paragraphs regarding the
change in methods of accounting for postretirement benefits, postemployment
benefits and income taxes in 1993, dated January 27, 1994 (notes 4, 21, and
22 are dated September 19, 1994), on our audits of the consolidated financial
statements and consolidated financial statement schedules of the Company,
which are included or incorporated by reference in the Company's Annual
Report on Form 10-K for the year ended December 31, 1993 and included in Form
8-K, dated October 26, 1994 (as amended on December 27, 1994). We also
consent to the reference to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
New York, New York
January 11, 1995
