<PAGE>
As filed with the Securities and Exchange Commission on October 30, 2000
Registration Statement No. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
ANALOG DEVICES, INC.
(Exact name of registrant as specified in its charter)
----------------
Massachusetts 04-2348234
(state or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Technology Way
Norwood, Massachusetts 02062-9106
(781) 329-4700
(address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
----------------
Paul P. Brountas
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
(617) 526-6000
(name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------
Approximate date of commencement of proposed sale to public: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
<TABLE>
--------------------------------------------------------------------------------
<CAPTION>
Proposed
Maximum Proposed
Title of Each Class of Amount Aggregate Maximum Amount of
Securities to be to be Price Per Aggregate Registration
Registered Registered Unit(1) Offering Price Fee(1)
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4.75% Convertible Subor-
dinated Notes Due
2005................... $1,200,000,000 100% $1,200,000,000 $316,800
------------------------------------------------------------------------------------
Common Stock, $0.16 2/3
par value per share.... 9,246,720 shares (2) n/a n/a n/a
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
</TABLE>
(1) The shares of Common Stock registered hereunder are issuable upon
conversion of the 4.75% Convertible Subordinated Notes due 2005 registered
hereunder. Pursuant to Rule 457(i) under the Securities Act, there is no
filing fee with respect to the shares of Common Stock issuable upon
conversion of the exercise of the conversion privilege.
(2) Plus such additional indeterminate number of shares as may become issuable
upon conversion of the 4.75% Convertible Subordinated Notes due 2005
registered hereunder by means of adjustment to the conversion price
applicable thereto.
----------------
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be +
+changed. These securities may not be sold until the registration statement +
+filed with the Securities and Exchange Commission is effective. This +
+preliminary prospectus is not an offer to sell these securities, and we are +
+not soliciting offers to buy these securities in any jurisdiction where the +
+offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion. Dated October 30, 2000.
PROSPECTUS
ANALOG DEVICES, INC.
$1,200,000,000
Principal Amount of 4.75% Convertible
Subordinated Notes Due 2005
------------
9,246,720 Shares of Common Stock,
$0.16 2/3 Par Value Per Share
------------
This prospectus relates to $1,200,000,000 in aggregate principal amount of
4.75% Convertible Subordinated Notes due 2005 of Analog Devices, Inc. and
9,246,720 shares of common stock of Analog, which are initially issuable upon
conversion of the notes, plus an indeterminate number of shares as may become
issuable upon conversion as a result of adjustments to the conversion rate. The
notes and shares are to be offered for the account of the holders thereof. The
notes were originally issued and sold by Analog to Goldman, Sachs & Co., SG
Cowen Securities Corporation and Salomon Smith Barney Inc. in a private
placement.
The principal terms of the notes include the following:
.Interest:........ accrues from October 2, 2000 at the
rate of 4.75% per year, payable
semi-annually on each April 1 and
October 1, beginning April 1, 2001
.Maturity Date:... October 1, 2005, unless earlier
redeemed or repurchased
.Conversion 7.7056 shares of common stock per
Rate:............. each $1,000 principal amount of
notes, subject to adjustment
.Subordination:... subordinated to our senior debt;
effectively subordinated in right
of payment to all indebtedness and
other liabilities of our
subsidiaries; no restriction on
incurrence of additional
indebtedness
.Redemption:...... redeemable by Analog or the holders
The notes are currently designated for trading on the Private Offerings,
Resales and Trading through Automated Linkages, or PORTAL, Market. The notes
are issued in $1,000 principal amount and integral multiples of $1,000.
Analog's common stock is traded on the New York Stock Exchange under the symbol
"ADI". On October 25, 2000, the last reported sale price for the common stock
on the New York Stock Exchange was $64.125 per share.
The securities offered by this prospectus may be offered in negotiated
transactions, ordinary brokerage transactions or otherwise, at negotiated
prices or at the market prices prevailing at the time of sale.
INVESTING IN THE NOTES OR OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 4.
------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------
The date of this Prospectus is , 2000.
<PAGE>
This prospectus incorporates important business information about Analog
that is not included or delivered with this document. This information is
available without charge to stockholders upon written or oral request. Please
contact Analog at One Technology Way, Norwood, Massachusetts 02062, attention:
Joseph E. McDonough, Vice President--Finance, (781) 329-4700. Also see "Where
You Can Find More Information" in this prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Analog Devices............................................................. 3
Risk Factors............................................................... 4
Use of Proceeds............................................................ 8
Ratio of Earnings to Fixed Charges......................................... 8
Selected Consolidated Financial Data....................................... 9
Description of Notes....................................................... 10
Material United States Federal Income Tax Considerations................... 26
Description of Capital Stock............................................... 36
Selling Securityholders.................................................... 39
Plan of Distribution....................................................... 41
Legal Matters.............................................................. 43
Experts.................................................................... 43
Additional Filings and Company Information................................. 43
Where You Can Find More Information........................................ 44
Cautionary Statement Concerning Forward-looking Information................ 44
</TABLE>
<PAGE>
ANALOG DEVICES
We are a world leader in the design, manufacture and marketing of high-
performance analog, mixed-signal and digital signal processing integrated
circuits used in signal processing applications.
During the first nine months of fiscal 2000, approximately 40-45% of our net
sales came from the communications market, making it our largest and fastest
growing served market. Communications applications include wireless handsets
and base stations, as well as products used for high-speed access to the
Internet, including integrated circuits used in asynchronous digital subscriber
lines, which are broadband telecommunications lines, cable modems and central
office networking equipment.
We serve the personal computer market with products that monitor and manage
power usage, process signals used in flat panel displays and LCD projectors and
enable personal computers to provide high-quality digital audio. We also serve
the high-end consumer market with products used in digital cameras and
camcorders, DVD players and surround sound audio systems. We provide a broad
array of products to the industrial market, including products for automatic
test equipment and for the digital speed control of AC motors.
Our products are sold worldwide through a direct sales force, third-party
industrial distributors and independent sales representatives. We have direct
sales offices in 18 countries, including the United States. In the first nine
months of fiscal 2000, approximately 44% of net sales came from customers in
North America, while most of the balance came from customers in Western Europe
and Asia.
We are headquartered near Boston, in Norwood, Massachusetts, and have
manufacturing facilities in Massachusetts, California, North Carolina, Ireland,
the Philippines and Taiwan. Founded in 1965, we employ approximately 8,600
people worldwide. Our stock is listed on the New York Stock Exchange under the
symbol ADI and is included in the Standard & Poor's 500 Index.
3
<PAGE>
RISK FACTORS
You should carefully consider the following risks before making an
investment decision. You should also refer to the other information set forth
in this prospectus and incorporated by reference in this prospectus. This
prospectus contains forward-looking statements that involve risks and
uncertainties. Our actual results could vary significantly from the results
discussed in the forward-looking statements. Some risks that could cause our
results to vary are disclosed below.
We may experience material fluctuations in future operating results.
Our future operating results are difficult to predict and may be affected by
a number of factors including the timing of new product announcements or
introductions by us and our competitors, competitive pricing pressures,
fluctuations in manufacturing yields, adequate availability of wafers and
manufacturing capacity, our ability to continue hiring engineers and other
qualified employees needed to meet the expected demands of our largest
customers and changes in product mix and economic conditions in the United
States and international markets. In addition, the semiconductor market has
historically been cyclical and subject to significant economic downturns at
various times. Our business is subject to rapid technological changes and there
can be no assurance, depending on the mix of future business, that products
stocked in inventory will not be rendered obsolete before we ship them. As a
result of these and other factors, there can be no assurance that we will not
experience material fluctuations in future operating results on a quarterly or
annual basis.
Our future success depends upon our ability to develop and market new products
and enter new markets.
Our success depends in part on our continued ability to develop and market
new products. There can be no assurance that we will be able to develop and
introduce new products in a timely manner or that new products, if developed,
will achieve market acceptance. In addition, our growth is dependent on our
continued ability to penetrate new markets where we have limited experience and
competition is intense. There can be no assurance that the markets we serve
will grow in the future; that our existing and new products will meet the
requirements of these markets; that our products will achieve customer
acceptance in these markets; that competitors will not force prices to an
unacceptably low level or take market share from us; or that we can achieve or
maintain profits in these markets. Also, some of our customers in these markets
are less well established, which could subject us to increased credit risk.
We may not be able to compete successfully in the semiconductor industry in the
future.
The semiconductor industry is intensely competitive. Some of our competitors
have greater technical, marketing, manufacturing and financial resources than
we do. Our competitors also include emerging companies attempting to sell
products to specialized markets such as those that we serve. Our competitors
have, in some cases, developed and marketed products having similar design and
functionality as our products. There can be no assurance that we will be able
to compete successfully in the future against existing or new competitors or
that our operating results will not be adversely affected by increased price
competition.
We may not be able to satisfy increasing demand for our products, and increased
production may lead to overcapacity and lower prices.
The cyclical nature of the semiconductor industry has resulted in sustained
or short-term periods when demand for our products has increased or decreased
rapidly. We and the semiconductor industry have experienced a period of rapid
increases in demand during fiscal 1999 and during the current fiscal year. We
have increased our manufacturing capacity over the past three years through
both expansion of our production facilities and increased access to third-party
foundries. However,
4
<PAGE>
we cannot be sure that we will not encounter unanticipated production problems
at either our own facilities or at third-party foundries, or that the increased
capacity will be sufficient to satisfy demand for our products. We believe that
other semiconductor manufacturers have expanded their production capacity over
the past several years. This expansion by us and our competitors could lead to
overcapacity in our target markets, which could lead to price erosion that
would adversely affect our operating results.
We rely on third-party subcontractors and manufacturers for some industry-
standard wafers and therefore cannot control their availability or conditions
of supply.
We rely, and plan to continue to rely, on assembly and test subcontractors
and on third-party wafer fabricators to supply most of our wafers that can be
manufactured using industry-standard digital processes. This reliance involves
several risks, including reduced control over delivery schedules, manufacturing
yields and costs. Also, noncompliance with "take or pay" covenants in supply
agreements could adversely impact our operating results.
Our revenues may not increase enough to offset the expense of additional
capacity.
Our capacity additions resulted in a significant increase in operating
expenses. If revenue levels do not increase enough to offset these additional
expense levels, our future operating results could be adversely affected. In
addition, asset values could be impaired if the additional capacity is
underutilized for an extended period of time.
We rely on manufacturing capacity located in geologically unstable areas, which
could affect the availability of supplies and services.
We and many companies in the semiconductor industry rely on internal
manufacturing capacity located in California and Taiwan as well as wafer
fabrication foundries in Taiwan and other sub-contractors in geologically
unstable locations around the world. This reliance involves risks associated
with the impact of earthquakes on us and the semiconductor industry, including
temporary loss of capacity, availability and cost of key raw materials and
equipment, and availability of key services including transport.
We are exposed to economic and political risks through our significant
international operations.
In the first nine months of fiscal 2000, 56% of our revenues were derived
from customers in international markets. We have manufacturing facilities
outside the U.S. in Ireland, the Philippines and Taiwan. In addition to being
exposed to the ongoing economic cycles in the semiconductor industry, we are
also subject to the economic and political risks inherent in international
operations, including the risks associated with the ongoing uncertainties in
many developing economies around the world. These risks include air
transportation disruptions, expropriation, currency controls and changes in
currency exchange rates, tax and tariff rates and freight rates. Although we
engage in hedging transactions to reduce our exposure to currency exchange rate
fluctuations, there can be no assurance that our competitive position will not
be adversely affected by changes in the exchange rate of the U.S. dollar
against other currencies.
We are involved in frequent litigation regarding intellectual property rights,
which could be costly to undertake and could require us to redesign products or
pay significant royalties.
The semiconductor industry is characterized by frequent claims and
litigation involving patent and other intellectual property rights. We have
from time to time received, and may in the future receive, claims from third
parties asserting that our products or processes infringe their patents or
5
<PAGE>
other intellectual property rights. In the event a third party makes a valid
intellectual property claim and a license is not available on commercially
reasonable terms, we could be forced either to redesign or to stop production
of products incorporating that intellectual property, and our operating results
could be materially and adversely affected. Litigation may be necessary to
enforce patents or other of our intellectual property rights or to defend us
against claims of infringement, and this litigation can be costly and divert
the attention of key personnel. See Note 11 of the Notes to our Consolidated
Financial Statements contained in our Form 10-K for the fiscal year ended
October 30, 1999 incorporated by reference in this prospectus for information
concerning pending litigation involving us. An adverse outcome in this
litigation could have a material adverse effect on our consolidated financial
position or on our consolidated results of operations or cash flows in the
period in which the litigation is resolved.
The price of our common stock and therefore the price of our notes may
fluctuate significantly, which may result in losses for investors.
The market price for our common stock has been and may continue to be
volatile. For example, during the 52-week period ended October 25, 2000, the
closing prices of our common stock as reported on the New York Stock Exchange
ranged from a high of $103.00 to a low of $23.31. We expect our stock price to
be subject to fluctuations as a result of a variety of factors, including
factors beyond our control. These factors include:
. actual or anticipated variations in our quarterly operating results;
. announcements of technological innovations or new products or services by
us or our competitors;
. announcements relating to strategic relationships or acquisitions;
. changes in financial estimates or other statements by securities
analysts;
. changes in general economic conditions;
. conditions or trends affecting the semiconductor industry; and
. changes in the economic performance and/or market valuations of other
semiconductor and high-technology companies.
Because of this volatility, we may fail to meet the expectations of our
stockholders or of securities analysts at some time in the future, and our
stock price and therefore the price of our notes could decline as a result.
In addition, the stock market has experienced significant price and volume
fluctuations that have particularly affected the trading prices of equity
securities of many high technology companies. These fluctuations have often
been unrelated or disproportionate to changes in the operating performance of
these companies. Any negative change in the public's perception of
semiconductor companies could depress our stock price regardless of our
operating results.
Leverage and debt service obligations may adversely affect our cash flow.
We have a substantial amount of outstanding indebtedness as a result of the
issuance of the notes. There is the possibility that we may be unable to
generate cash sufficient to pay the principal of, interest on and other amounts
due in respect of the notes when due.
Our substantial leverage could have significant negative consequences,
including:
. increasing our vulnerability to general adverse economic and industry
conditions;
6
<PAGE>
. requiring the dedication of a substantial portion of our expected cash
flow from operations to service our indebtedness, thereby reducing the
amount of our expected cash flow available for other purposes, including
capital expenditures; and
. limiting our flexibility in planning for, or reacting to, changes in our
business and the industry in which we compete.
The notes rank below our senior debt, and we may be unable to repay our
obligations under the notes.
The notes are unsecured and subordinated in right of payment to all of our
senior debt. Because the notes are subordinate to our senior debt, if we
experience:
. a bankruptcy, liquidation or reorganization;
. an acceleration of the notes due to an event of default under the
indenture; or
. other specified events;
we will be permitted to make payments on the notes only after we have satisfied
all of our senior debt obligations. Therefore, we may not have sufficient
assets remaining to pay amounts due on any or all of the notes. In addition,
the notes effectively are subordinate to all liabilities, including trade
payables, of our subsidiaries and any subsidiaries that we may in the future
acquire or establish. Consequently, our right to receive assets of any
subsidiaries upon their liquidation or reorganization, and the rights of the
holders of the notes to share in those assets, would be subordinate to the
claims of the subsidiaries' creditors.
The notes are our obligations exclusively. The indenture for the notes does
not limit our ability, or that of any of our presently existing or future
subsidiaries, to incur senior debt, other indebtedness and other liabilities.
We may have difficulty paying what we owe under the notes if we, or any of our
subsidiaries, incur additional indebtedness or other liabilities. As of July
29, 2000, we had senior debt outstanding of approximately $5 million, and our
subsidiaries had approximately $385 million of outstanding liabilities,
excluding intercompany liabilities. From time to time we and our subsidiaries
may incur additional indebtedness, including senior debt, which could adversely
affect our ability to pay our obligations under the notes.
We may be unable to repay or repurchase the notes.
At maturity, the entire outstanding principal amount of the notes will
become due and payable. In addition, if we experience a change in control, as
described in "Description of the Notes--Repurchase at Option of Holders Upon a
Change in Control", each holder of the notes may require us to repurchase all
or a portion of that holder's notes. At maturity or if a change in control
occurs, we may not have sufficient funds or may be unable to arrange for
additional financing to pay the principal amount or repurchase price due. Under
the terms of the indenture for the notes, we may elect, if we meet some
conditions, to pay the repurchase price with shares of common stock. Any future
borrowing arrangements or agreements relating to senior debt to which we become
a party may contain restrictions on, or prohibitions against, our repayments or
repurchases of the notes. If the maturity date or change in control occurs at a
time when our other arrangements prohibit us from repaying or repurchasing the
notes, we could try to obtain the consent of the lenders under those
arrangements, or we could attempt to refinance the borrowings that contain the
restrictions. If we do not obtain the necessary consents or refinance these
borrowings, we will be unable to repay or repurchase the notes. In that case,
our failure to repurchase any tendered notes or repay the notes due upon
maturity would constitute an event of default under the indenture. Any such
default, in turn, may cause a default under the terms of our senior debt. As a
result, in those circumstances, the subordination provisions of the indenture
would, absent a waiver, prohibit any repayment or repurchase of the notes until
we pay the senior debt in full.
7
<PAGE>
USE OF PROCEEDS
All of the notes and the shares of our common stock issuable upon conversion
of the notes are being sold by the selling securityholders or by their
pledgees, donees, transferees or other successors in interest. We will not
receive any proceeds from the sale of the notes or the shares of our common
stock issuable upon conversion of the notes.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Fiscal Year Ended Nine Months Ended
----------------------------------------------------------- -----------------
October 28, November 2, November 1, October 31, October 30, July 31, July 29,
1995 1996 1997 1998 1999 1999 2000
----------- ----------- ----------- ----------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
29.6 19.3 15.0 11.1 28.2 18.4 141.1
</TABLE>
The ratio of earnings to fixed charges is computed by dividing income before
taxes, net of dividends and income/loss on WaferTech, adjusted for fixed
charges by fixed charges. Fixed charges consist of interest expense, whether
expensed or capitalized, plus the portion of rent expense under operating
leases that we consider to be representative of the interest factor, plus
amortization of debt issuance costs.
8
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share data)
The selected consolidated financial data set forth below for each of the
fiscal years in the three-year period ended October 30, 1999 and as at October
31, 1998 and October 30, 1999 have been derived from our audited consolidated
financial statements in the Annual Report on Form 10-K for the fiscal year
ended October 30, 1999, incorporated by reference into this prospectus. We have
prepared our consolidated financial statements in accordance with U.S.
generally accepted accounting principles, and our financial statements have
been audited by Ernst & Young LLP, independent auditors.The following data
should be read in conjunction with our audited consolidated financial
statements and notes thereto and "Management Analysis" in the Annual Report on
Form 10-K for the fiscal year ended October 30, 1999, incorporated by reference
into this prospectus.
<TABLE>
<CAPTION>
Year Ended
------------------------------------
November 1, October 31, October 30,
1997 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
Statement of Operations Data:
Net sales................................. $1,243,494 $1,230,571 $1,450,379
Net income before cumulative effect of
change in accounting principle........... 178,219 119,488 196,819
Cumulative effect of change in accounting
principle................................ -- (37,080) --
Net income after cumulative effect of
change in accounting principle........... 178,219 82,408 196,819
Net income per share (1):
Basic.................................... 0.56 0.26 0.58
Diluted.................................. 0.52 0.25 0.55
Pro forma amounts with the change in
accounting principle related to revenue
recognition applied retroactively:
Net sales................................. $1,214,602 $1,230,571 --
Net income................................ 167,515 119,488 --
Net income per share (1):
Basic.................................... 0.53 0.37 --
Diluted.................................. 0.49 0.35 --
<CAPTION>
October 31, October 30,
1998 1999
----------- -----------
<S> <C> <C> <C>
Balance Sheet Data:
Total assets.......................................... $1,861,730 $2,218,354
Long-term debt and non-current obligations under
capital leases ...................................... 340,758 16,214
</TABLE>
--------
(1) All share and per share information gives effect to our two-for-one stock
split, distributed to stockholders as a 100% stock dividend, on March 15,
2000.
9
<PAGE>
DESCRIPTION OF NOTES
We issued the notes under a document called the "Indenture". The Indenture
is a contract between us and State Street Bank and Trust Company, as Trustee.
The Indenture and the notes are governed by New York law. Because this section
is a summary, it does not describe every aspect of the notes and the Indenture
that may be important to you. In this section, we use capitalized words to
signify defined terms that have been given special meaning in the Indenture. We
describe the meaning of only the more important terms. You should read the
Indenture itself for a full description of the terms of the notes. Wherever we
refer to particular defined terms, those defined terms are incorporated by
reference here. In this section, references to "Analog", "we", "our" or "us"
refer solely to Analog Devices, Inc. and not its subsidiaries.
General
The notes are general, unsecured obligations of Analog. The notes are
subordinated, which means that they rank behind some of our indebtedness as
described below. The notes are limited to $1,200,000,000 aggregate principal
amount. We are required to repay the principal amount of the notes in full on
October 1, 2005. The notes bear interest at the rate of 4.75% per annum.
Interest is computed on the basis of a 360 day year of twelve thirty day
months. We will pay interest on the notes on April 1 and October 1 of each
year, commencing on April 1, 2001.
A holder of notes may convert the notes into shares of our common stock
initially at the conversion rate of 7.7056 shares per $1,000 in principal
amount of the notes at any time before the close of business on the business
day preceding October 1, 2005, unless the notes have been previously redeemed
or repurchased. The conversion rate may be adjusted as described below.
We may redeem the notes at our option at any time on or after October 1,
2003, in whole or in part, at the redemption prices set forth below under "--
Optional Redemption by Analog", plus accrued and unpaid interest to the
redemption date. If there is a Change in Control of Analog, a holder of notes
may have the right to require us to repurchase its notes as described below
under "--Repurchase at Option of Holders Upon a Change in Control".
Form, Denomination, Transfer, Exchange and Book-Entry Procedures
The notes are issued:
. only in fully registered form;
. without interest coupons; and
. in denominations of $1,000 and greater multiples.
The notes are evidenced by one or more global notes which were deposited
with the Trustee as custodian for DTC and registered in the name of Cede & Co.,
which we refer to as Cede, as nominee of DTC. The global note and any notes
issued in exchange for the global note are subject to restrictions on transfer
and will bear legends regarding those restrictions. Except as set forth below,
record ownership of the global note may be transferred, in whole or in part,
only to another nominee of DTC or to a successor of DTC or its nominee.
The global note will not be registered in the name of any person, or
exchanged for notes that are registered in the name of any person, other than
DTC or its nominee unless either of the following occurs:
. DTC notifies us that it is unwilling, unable or no longer qualified to
continue acting as the depositary for the global note; or
10
<PAGE>
. an Event of Default with respect to the notes represented by the global
note has occurred and is continuing.
In those circumstances, DTC will determine in whose names any securities issued
in exchange for the global note will be registered.
DTC or its nominee will be considered the sole owner and holder of the
global note for all purposes, and as a result:
. a holder of notes cannot get notes registered in its name if they are
represented by the global note;
. a holder of notes cannot receive certificated (physical) notes in
exchange for its beneficial interest in the global notes;
. a holder of notes will not be considered to be the owner or holder of the
global note or any note it represents for any purpose; and
. all payments on the global note will be made to DTC or its nominee.
The laws of some jurisdictions require that some kinds of purchasers (for
example, some insurance companies) can only own securities in definitive
(certificated) form. These laws may limit the ability of a holder of notes to
transfer its beneficial interests in the global note to these types of
purchasers.
Only institutions (such as a securities broker or dealer) that have accounts
with DTC or its nominee, which are referred to as participants, and persons
that may hold beneficial interests through participants can own a beneficial
interest in the global note. The only place where the ownership of beneficial
interests in the global note will appear and the only way the transfer of those
interests can be made will be on the records kept by DTC (for their
participants' interests) and the records kept by those participants (for
interests of persons held by participants on their behalf).
Secondary trading in bonds and notes of corporate issuers is generally
settled in clearinghouse (that is, next-day) funds. In contrast, beneficial
interests in a global note usually trade in DTC's same-day funds settlement
system and settle in immediately available funds. We make no representations as
to the effect that settlement in immediately available funds will have on
trading activity in those beneficial interests.
We will make cash payments of interest on and principal of and the
redemption or repurchase price of the global note, as well as any payment of
Liquidated Damages, to Cede, the nominee for DTC, as the registered owner of
the global note. We will make these payments by wire transfer of immediately
available funds on each payment date.
We have been informed that DTC's practice is to credit participants'
accounts on the payment date with payments in amounts proportionate to their
respective beneficial interests in the notes represented by the global note as
shown on DTC's records, unless DTC has reason to believe that it will not
receive payment on that payment date. Payments by participants to owners of
beneficial interests in notes represented by the global note held through
participants will be the responsibility of those participants.
We will send any redemption notices to Cede. We understand that if less than
all the notes are being redeemed, DTC's practice is to determine by lot the
amount of the holdings of each participant to be redeemed.
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We also understand that neither DTC nor Cede will consent or vote with
respect to the notes. We have been advised that under its usual procedures, DTC
will mail an "omnibus proxy" to us as soon as possible after the record date.
The omnibus proxy assigns Cede's consenting or voting rights to those
participants to whose accounts the notes are credited on the record date
identified in a listing attached to the omnibus proxy.
Because DTC can only act on behalf of participants, who in turn act on
behalf of indirect participants, the ability of a person having a beneficial
interest in the principal amount represented by the global note to pledge the
interest to persons or entities that do not participate in the DTC book-entry
system, or otherwise take actions in respect of that interest, may be affected
by the lack of a physical certificate evidencing its interest.
DTC has advised us that it will take any action permitted to be taken by a
holder of notes (including the presentation of notes for exchange) only at the
direction of one or more participants to whose account DTC interests in the
global note are credited and only in respect of the portion of the principal
amount of the notes represented by the global note as to which the participant
or participants has or have given the direction.
DTC has also advised us as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code, as amended, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants and facilitate the clearance and settlement of
securities transactions between participants through electronic book-entry
changes in accounts of its participants. Participants include securities
brokers and dealers, banks, trust companies and clearing corporations and may
include other organizations. Some of these participants (or their
representatives), together with other entities, own DTC. Indirect access to the
DTC system is available to other entities such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
The policies and procedures of DTC, which may change periodically, will
apply to payments, transfers, exchanges and other matters relating to
beneficial interests in the global note. We and the Trustee have no
responsibility or liability for any aspect of DTC's or any participants'
records relating to beneficial interests in the global note, including for
payments made on the global note, and we and the Trustee are not responsible
for maintaining, supervising or reviewing any of those records.
Conversion Rights
A holder of notes may, at its option, convert any portion of the principal
amount of any note that is an integral multiple of $1,000 into shares of our
common stock at any time on or prior to the close of business on the business
day prior to the maturity date, unless the notes have been previously redeemed
or repurchased, at a conversion rate of 7.7056 shares of common stock per
$1,000 principal amount of notes. The conversion rate is equivalent to a
conversion price of approximately $129.78. The right of a holder of notes to
convert a note called for redemption or delivered for repurchase will terminate
at the close of business on the business day prior to the redemption date or
repurchase date for that note, unless we default in making the payment due upon
redemption or repurchase.
A holder of notes may convert all or part of any note by delivering the note
at the Corporate Trust Office of the Trustee in the Borough of Manhattan, The
City of New York, accompanied by a duly signed and completed notice of
conversion, a copy of which may be obtained by the Trustee. The conversion date
will be the date on which the note and the duly signed and completed notice of
conversion are so delivered.
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As promptly as practicable on or after the conversion date, we will issue
and deliver to the Trustee a certificate or certificates for the number of full
shares of our common stock issuable upon conversion, together with payment in
lieu of any fraction of a share. The certificate will then be sent by the
Trustee to the conversion agent for delivery to the holder. The shares of our
common stock issuable upon conversion of the notes will be fully paid and
nonassessable and will rank equally with the other shares of our common stock.
If a holder of notes surrenders a note for conversion on a date that is not
an Interest Payment Date, the holder will not be entitled to receive any
interest for the period from the next preceding Interest Payment Date to the
conversion date, except as described below in this paragraph. Any note
surrendered for conversion during the period from the close of business on any
Regular Record Date to the opening of business on the next succeeding Interest
Payment Date (except notes (or portions thereof) called for redemption on a
redemption date for which the right to convert would terminate during that
period) must be accompanied by payment of an amount equal to the interest
payable on the Interest Payment Date on the principal amount of notes being
surrendered for conversion. In the case of any note which has been converted
after any Regular Record Date (as described below under "--Payment and
Conversion") but before the next succeeding Interest Payment Date, interest
payable on the Interest Payment Date shall be payable on the Interest Payment
Date notwithstanding the conversion, and the interest shall be paid to the
holder of the note on the Regular Record Date.
No other payment or adjustment for interest, or for any dividends in respect
of our common stock, will be made upon conversion. Holders of our common stock
issued upon conversion will not be entitled to receive any dividends payable to
holders of our common stock as of any record time or date before the close of
business on the conversion date. We will not issue fractional shares upon
conversion. Instead, we will pay cash based on the market price of our common
stock at the close of business on the conversion date.
A holder of notes will not be required to pay any taxes or duties relating
to the issue or delivery of our common stock on conversion but will be required
to pay any tax or duty relating to any transfer involved in the issue or
delivery of our common stock in a name other than that of the holder.
Certificates representing shares of our common stock will not be issued or
delivered unless all taxes and duties, if any, payable by the holder have been
paid.
The conversion rate will be subject to adjustment for, among other things:
. dividends (and other distributions) payable in our common stock on shares
of our capital stock,
. the issuance to all holders of our common stock of rights, options or
warrants entitling them to subscribe for or purchase our common stock at
less than the then Current Market Price of the common stock (determined
as provided in the Indenture) as of the record date for shareholders
entitled to receive those rights, options or warrants,
. subdivisions, combinations and reclassifications of our common stock,
. distributions to all holders of our common stock of evidences of
indebtedness of Analog, shares of capital stock, cash or assets
(including securities, but excluding those dividends, rights, options,
warrants and distributions referred to above, dividends and distributions
paid exclusively in cash and distributions upon mergers or
consolidations),
. distributions consisting exclusively of cash (excluding any cash portion
of distributions referred to in the immediately preceding clause, or cash
distributed upon a merger or consolidation as
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<PAGE>
discussed below) to all holders of our common stock in an aggregate amount
that, combined together with (1) other all-cash distributions made within
the preceding 365-day period in respect of which no adjustment has been
made and (2) any cash and the fair market value of other consideration
payable in connection with any tender offer by us or any of our
subsidiaries for our common stock concluded within the preceding 365-day
period in respect of which no adjustment has been made, exceeds 12.5% of
our market capitalization (being the product of the Current Market Price
per share of the common stock on the record date for the distribution and
the number of shares of common stock then outstanding), and
. the successful completion of a tender offer made by us or any of our
subsidiaries for our common stock which involves an aggregate
consideration that, together with any cash and other consideration
payable in a tender offer by us or any of our subsidiaries for our common
stock expiring within the 365-day period preceding the expiration of the
tender offer in respect of which no adjustment has been made, exceeds 15%
of our market capitalization on the expiration of the tender offer.
We reserve the right to effect increases in the conversion rate in addition
to those required by the foregoing provisions as we consider to be advisable
in order that any event treated for United States federal income tax purposes
as a dividend of stock or stock rights will not be taxable to the recipients.
We will not be required to make any adjustment to the conversion rate until
the cumulative adjustments amount to 1.0% or more of the conversion rate. We
will compute all adjustments to the conversion rate and will give notice by
mail to holders of the registered notes of any adjustments.
In case of any consolidation or merger of Analog with or into another
entity or any merger of another entity into Analog (other than a merger which
does not result in any reclassification, conversion, exchange or cancellation
of our common stock), or in case of any sale or transfer of all or
substantially all of our assets, each note then outstanding will become
convertible only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger, sale or transfer by a
holder of the number of shares of common stock into which the notes were
convertible immediately prior to the consolidation or merger or sale or
transfer.
We may increase the conversion rate for any period of at least 20 days,
upon at least 15 days' notice, if our Board of Directors determines that the
increase would be in our best interest. The Board of Directors' determination
in this regard will be conclusive. We will give holders of notes at least 15
days' notice of such an increase in the conversion rate. Any increase,
however, will not be taken into account for purposes of determining whether
the closing price of our common stock exceeds the conversion price by 105% in
connection with an event which otherwise would be a Change in Control as
defined below.
We may also increase the conversion rate for the remaining term of the
notes or any shorter period in order to avoid or diminish any income tax to
any holders of shares of common stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax purposes.
If at any time we make a distribution of property to our stockholders that
would be taxable to stockholders as a dividend for United States federal
income tax purposes, such as distributions of evidences of indebtedness or
assets of Analog, but generally not stock dividends on common stock or rights
to subscribe for common stock, and, pursuant to the adjustment provisions of
the Indenture, the number of shares into which notes are convertible is
increased, that increase may be deemed for United States federal income tax
purposes to be the payment of a taxable dividend to holders of notes. See
"Material United States Federal Income Tax Consequences--U.S. Holders".
Subordination
The notes are subordinated and, as a result, the payment of the principal,
any premium and interest (including Liquidated Damages) on the notes,
including amounts payable on any redemption
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<PAGE>
or repurchase, will be subordinated to the prior payment in full, in cash or
other payment satisfactory to holders of Senior Debt, of all of our Senior
Debt. The notes are also effectively subordinated to any debt or other
liabilities of our subsidiaries. On July 29, 2000 we had approximately $5
million outstanding Senior Debt and the aggregate amount of liabilities of our
subsidiaries was approximately $385 million, excluding intercompany
liabilities.
"Senior Debt" is defined in the Indenture to mean: the principal of (and
premium, if any) and interest (including all interest accruing subsequent to
the commencement of any bankruptcy or similar proceeding, whether or not a
claim for post-petition interest is allowable as a claim in any such
proceeding) on, and all fees and other amounts payable in connection with, the
following, whether absolute or contingent, secured or unsecured, due or to
become due, outstanding on the date of the Indenture or thereafter created,
incurred or assumed:
. our indebtedness evidenced by a credit or loan agreement, note, bond,
debenture or other written obligation,
. all of our obligations for money borrowed,
. all of our obligations evidenced by a note or similar instrument given in
connection with the acquisition of any businesses, properties or assets
of any kind,
. our obligations (1) as lessee under leases required to be capitalized on
the balance sheet of the lessee under generally accepted accounting
principles or (2) as lessee under other leases for facilities, capital
equipment or related assets, whether or not capitalized, entered into or
leased for financing purposes,
. all of our obligations under interest rate and currency swaps, caps,
floors, collars, hedge agreements, forward contracts or similar
agreements or arrangements,
. all of our obligations with respect to letters of credit, bankers'
acceptances and similar facilities (including reimbursement obligations
with respect to the foregoing),
. all of our obligations issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable and accrued
liabilities arising in the ordinary course of business),
. all obligations of the type referred to in the above clauses of another
person and all dividends of another person, the payment of which, in
either case, we have assumed or guaranteed, or for which we are
responsible or liable, directly or indirectly, jointly or severally, as
obligor, guarantor or otherwise, or which are secured by a lien on our
property, and
. renewals, extensions, modifications, replacements, restatements and
refundings of, or any indebtedness or obligation issued in exchange for,
any indebtedness or obligation described in the above clauses of this
definition.
Senior Debt will not include the notes or any other indebtedness or
obligation if its terms or the terms of the instrument under which or pursuant
to which it is issued expressly provide that it is not superior in right of
payment to the notes.
We may not make any payment on account of principal, premium or interest
(including Liquidated Damages, if any) on the notes, or redemption or
repurchase of the notes, if either of the following occurs:
. we default on our obligations to pay principal, premium, interest or
other amounts on our Senior Debt, including a default under any
redemption or repurchase obligation, and the default continues beyond any
grace period that we may have to make those payments; or
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. any other default occurs and is continuing on any Designated Senior Debt
(as described below) and (1) the default permits the holders of the
Designated Senior Debt to accelerate its maturity and (2) the Trustee has
received a notice, which is referred to as a Payment Blockage Notice, of
the default from Analog, the holder of the debt or any other person
permitted to give this notice under the Indenture.
If payments on the notes have been blocked by a payment default on Senior
Debt, payments on the notes may resume when the payment default has been cured
or waived or ceases to exist. If payments on the notes have been blocked by a
nonpayment default, payments on the notes may resume on the earlier of (1) the
date the nonpayment default is cured or waived or ceases to exist or (2) 179
days after the Payment Blockage Notice is received.
No nonpayment default that existed on the day a Payment Blockage Notice was
delivered to the Trustee can be used as the basis for any subsequent Payment
Blockage Notice. In addition, once a holder of Designated Senior Debt has
blocked payment on the notes by giving a Payment Blockage Notice, no new period
of payment blockage can be commenced pursuant to a subsequent Payment Blockage
Notice until both of the following are satisfied:
. 365 days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice; and
. all scheduled payments of principal, any premium and interest with
respect to the notes that have come due have been paid in full in cash.
"Designated Senior Debt" means our obligations under any particular Senior
Debt in which the instrument creating or evidencing the same or the assumption
or guarantee thereof (or related agreements or documents to which we are a
party), whether or not executed contemporaneously with the incurrence of that
Senior Debt, expressly provides that the indebtedness shall be "Designated
Senior Debt" for purposes of the Indenture. The instrument, agreement or other
document evidencing any Designated Senior Debt may place limitations and
conditions on the right of that Senior Debt to exercise the rights of
Designated Senior Debt.
In addition, upon any acceleration of the principal due on the notes as a
result of an Event of Default or upon any payment or distribution of our assets
to creditors upon any dissolution, winding up, liquidation or reorganization,
whether voluntary or involuntary, marshaling of assets, assignment for the
benefit of creditors, or in bankruptcy, insolvency, receivership or other
similar proceedings, all principal, premium, if any, interest and other amounts
due on all Senior Debt must be paid in full before a holder of notes is
entitled to receive any payment. By reason of this subordination, in the event
of insolvency, our creditors who are holders of Senior Debt are likely to
recover more, ratably, than a holder of notes is, and a holder of notes will
likely experience a reduction or elimination of payments on the notes.
In addition, the notes are "structurally subordinated" to all indebtedness
and other liabilities, including trade payables and lease obligations, of our
subsidiaries. This occurs because any right of Analog to receive any assets of
any of our subsidiaries upon the subsidiary's liquidation or reorganization,
and the right of the holders of the notes to participate in those assets, will
be effectively subordinated to the claims of that subsidiary's creditors,
including trade creditors, except to the extent that Analog itself is
recognized as a creditor of that subsidiary, in which case the claims of Analog
would still be subordinate to any security interest in the assets of the
subsidiary and any indebtedness of the subsidiary senior to that held by
Analog.
The Indenture does not limit our ability to incur Senior Debt or our ability
or the ability of our subsidiaries to incur any other indebtedness.
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Optional Redemption by Analog
On or after October 1, 2003 we may redeem the notes, in whole or in part, at
the prices set forth below. If we elect to redeem all or part of the notes, we
will give at least 30 but no more than 60 days notice to the holders of notes.
The redemption price, expressed as a percentage of principal amount, is as
follows for the 12-month periods beginning on October 1 of the following years:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2003.............................................................. 101.90%
2004.............................................................. 100.95%
</TABLE>
and thereafter is equal to 100% of the principal amount, in each case together
with accrued interest to the date of redemption.
No sinking fund is provided for the notes, which means that the Indenture
does not require us to redeem or retire the notes periodically.
We may, to the extent permitted by applicable law, at any time purchase
notes in the open market, by tender at any price or by private agreement. Any
note that we purchase may, to the extent permitted by applicable law and
subject to restrictions contained in the purchase agreement with the initial
purchasers, be re-issued or resold or may, at our option, be surrendered to the
Trustee for cancellation. Any notes surrendered for cancellation may not be re-
issued or resold and will be canceled promptly.
Payment and Conversion
We will make all payments of principal and interest on registered notes by
U.S. dollar check drawn on an account maintained at a bank in The City of New
York. If a holder of notes holds registered notes with a face value greater
than $2,000,000, at the request of the holder we will make payments of
principal or interest to the holder by wire transfer to an account maintained
by the holder at a bank in The City of New York. Payment of any interest on the
notes will be made to the person in whose name the note, or any predecessor
note, is registered at the close of business on the March 15 or the September
15 (whether or not a business day) immediately preceding the relevant Interest
Payment Date, referred to as a Regular Record Date. If a holder of notes holds
registered notes with a face value in excess of $2,000,000 and the holder would
like to receive payments by wire transfer, the holder will be required to
provide the Trustee with wire transfer instructions at least 15 days prior to
the relevant payment date.
Payments on any global note registered in the name of DTC or its nominee
will be payable by the Trustee to DTC or its nominee in its capacity as the
registered holder under the Indenture. Under the terms of the Indenture, we and
the Trustee will treat the persons in whose names the notes, including any
global note, are registered as the owners for the purpose of receiving payments
and for all other purposes. Consequently, neither we, the Trustee nor any of
our agents or the Trustee's agents has or will have any responsibility or
liability for (1) any aspect of DTC's records or any participant's or indirect
participant's records relating to or payments made on account of beneficial
ownership interests in the global note, or for maintaining, supervising or
reviewing any of DTC's records or any participant's or indirect participant's
records relating to the beneficial ownership interests in the global note, or
(2) any other matter relating to the actions and practices of DTC or any of its
participants or indirect participants.
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We will not be required to make any payment on the notes due on any day
which is not a business day until the next succeeding business day. The payment
made on the next succeeding business day will be treated as though it were paid
on the original due date and no interest will accrue on the payment for the
additional period of time.
Notes may be surrendered for conversion at the Corporate Trust Office of the
Trustee in the Borough of Manhattan, The City of New York. Notes surrendered
for conversion must be accompanied by appropriate notices and any payments in
respect of interest or taxes, as applicable, as described above under "--
Conversion Rights".
We have initially appointed the Trustee as paying agent and conversion
agent. We may terminate the appointment of any paying agent or conversion agent
and appoint additional or other paying agents and conversion agents. However,
until the notes have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of, premium, if any, and interest on the notes
have been made available for payment and either paid or returned to us as
provided in the Indenture, the Trustee will maintain an office or agency in the
Borough of Manhattan, The City of New York for surrender of notes for
conversion. Notice of any termination or appointment and of any change in the
office through which any paying agent or conversion agent will act will be
given in accordance with "--Notices" below.
All moneys deposited with the Trustee or any paying agent, or then held by
us, in trust for the payment of principal of, premium, if any, or interest on
any notes which remain unclaimed at the end of two years after the payment has
become due and payable will be repaid to us, and a holder of notes will then
look only to us for payment.
Repurchase at Option of Holders Upon a Change in Control
If a Change in Control as defined below occurs, a holder of notes will have
the right, at its option, to require us to repurchase all of its notes not
previously called for redemption, or any portion of the principal amount
thereof, that is equal to $1,000 or an integral multiple of $1,000. The price
we are required to pay is 100% of the principal amount of the notes to be
repurchased, together with interest accrued to, but excluding, the repurchase
date.
At our option, instead of paying the repurchase price in cash, we may pay
the repurchase price in our common stock valued at 95% of the average of the
closing prices of our common stock for the five trading days immediately
preceding and including the fifth trading day prior to the repurchase date. We
may only pay the repurchase price in our common stock if we satisfy conditions
provided in the Indenture.
Within 30 days after the occurrence of a Change in Control, we are obligated
to give to the holders of notes notice of the Change in Control and of the
repurchase right arising as a result of the Change in Control. We must also
deliver a copy of this notice to the Trustee. To exercise the repurchase right,
a holder of notes must deliver on or before the 30th day after the date of our
notice irrevocable written notice to the Trustee of the holder's exercise of
its repurchase right, together with the notes with respect to which the right
is being exercised. We are required to repurchase the notes on the date that is
45 days after the date of our notice.
A Change in Control will be deemed to have occurred at the time after the
notes are originally issued that any of the following occurs:
(1) any person, including any syndicate or group deemed to be a "person"
under Section 13(d)(3) of the Exchange Act, acquires beneficial ownership,
directly or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares
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of our capital stock entitling the person to exercise 50% or more of the
total voting power of all shares of our capital stock that is entitled to
vote generally in elections of directors, other than an acquisition by us,
any of our subsidiaries or any of our employee benefit plans; or
(2) we merge or consolidate with or into any other person, any merger of
another person into us, or we convey, sell, transfer or lease all or
substantially all of our assets to another person, other than any
transaction:
. that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of our capital stock, or
. pursuant to which the holders of our common stock immediately prior to
the transaction have the entitlement to exercise, directly or indirectly,
50% or more of the total voting power of all shares of capital stock
entitled to vote generally in the election of directors of the continuing
or surviving corporation immediately after the transaction, or
. which is effected solely to change our jurisdiction of incorporation and
results in a reclassification, conversion or exchange of outstanding
shares of our common stock solely into shares of common stock of the
surviving entity.
However, a Change in Control will not be deemed to have occurred if either
(A) the closing price per share of our common stock for any five trading days
within the period of 10 consecutive trading days ending immediately after the
later of the Change in Control or the public announcement of the Change in
Control, in the case of a Change in Control relating to an acquisition of
capital stock, or the period of 10 consecutive trading days ending immediately
before the Change in Control, in the case of Change in Control relating to a
merger, consolidation or asset sale, equals or exceeds 105% of the conversion
price of the notes in effect on each of those trading days or (B) all of the
consideration (excluding cash payments for fractional shares and cash payments
made pursuant to dissenters' appraisal rights) in a merger or consolidation
otherwise constituting a Change in Control under clause (1) and/or clause (2)
above consists of shares of common stock traded on a national securities
exchange or quoted on the Nasdaq National Market (or will be so traded or
quoted immediately following the merger or consolidation) and as a result of
the merger or consolidation the notes become convertible into such common
stock.
For purposes of these provisions:
. the conversion price is equal to $1,000 divided by the conversion rate;
. whether a person is a "beneficial owner" will be determined in
accordance with Rule 13d-3 under the Exchange Act; and
. "person" includes any syndicate or group that would be deemed to be a
"person" under Section 13(d)(3) of the Exchange Act.
Rule 13e-4 under the Exchange Act requires the dissemination of prescribed
information to security holders in the event of an issuer tender offer and may
apply in the event that the repurchase option becomes available to the holders
of notes. We will comply with this rule to the extent it applies at that time.
The definition of Change in Control includes a phrase relating to the
conveyance, transfer, sale, lease or disposition of "all or substantially all"
of our assets. There is no precise, established definition of the phrase
"substantially all" under applicable law. Accordingly, the ability of a holder
of notes to require us to repurchase its notes as a result of the conveyance,
transfer, sale, lease or other disposition of less than all of our assets may
be uncertain.
The foregoing provisions would not necessarily provide the holders of notes
with protection if we are involved in a highly leveraged or other transaction
that may adversely affect the holders.
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Our ability to repurchase notes upon the occurrence of a Change in Control
is subject to important limitations. Some of the events constituting a Change
in Control could result in an event of default under our Senior Debt. Moreover,
a Change in Control could cause an event of default under, or be prohibited or
limited by, the terms of our Senior Debt. As a result, unless we were to obtain
a waiver, a repurchase of the notes in cash could be prohibited under the
subordination provisions of the Indenture until the Senior Debt is paid in
full. Although we have the right to repurchase the notes with our common stock,
subject to certain conditions, we cannot assure the holders of notes that we
would have the financial resources, or would be able to arrange financing, to
pay the repurchase price in cash for all the notes that might be delivered by
holders of notes seeking to exercise the repurchase right. If we were to fail
to repurchase the notes when required following a Change in Control, an Event
of Default under the Indenture would occur, whether or not the repurchase is
permitted by the subordination provisions of the Indenture. Any such default
may, in turn, cause a default under our Senior Debt. See "--Subordination".
Mergers and Sales of Assets
We may not (1) consolidate with or merge into any other person or convey,
transfer, sell or lease our properties and assets substantially as an entirety
to any person, (2) permit any person to consolidate with or merge into us or
(3) permit any person to convey, transfer, sell or lease that person's
properties and assets substantially as an entirety to us unless:
. in the case of (1) and (2) above, the person formed by the consolidation
or into which we are merged or the person to which our properties and
assets are so conveyed, transferred, sold or leased, shall be a
corporation, limited liability company, partnership or trust organized
and existing under the laws of the United States, any State within the
United States or the District of Columbia and, if we are not the
surviving person, the surviving person assumes the payment of the
principal of, premium, if any, and interest on the notes and the
performance of our other covenants under the Indenture, and
. in all cases, immediately after giving effect to the transaction, no
Event of Default, and no event that, after notice or lapse of time or
both, would become an Event of Default, will have occurred and be
continuing.
Events of Default
The following will be Events of Default under the Indenture:
. we fail to pay principal of or premium, if any, on any note when due,
whether or not prohibited by the subordination provisions of the
Indenture;
. we fail to pay any interest, including any Liquidated Damages, on any
note when due, which failure continues for 30 days, whether or not
prohibited by the subordination provisions of the Indenture;
. we fail to provide notice of a Change in Control, whether or not the
notice is prohibited by the subordination provisions of the Indenture;
. we fail to perform any other covenant in the Indenture, which failure
continues for 60 days after written notice as provided in the Indenture;
. any indebtedness under any bonds, debentures, notes or other evidences of
indebtedness for money borrowed (or any guarantee thereof) by us or any
of our significant subsidiaries in an aggregate principal amount in
excess of $45,000,000 is not paid when due either at its stated maturity
or upon acceleration thereof, and the indebtedness is not discharged, or
the acceleration is not rescinded or annulled, within a period of 30 days
after notice as provided in the Indenture; and
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. certain events of bankruptcy, insolvency or reorganization involving us
or any of our significant subsidiaries.
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any holder, unless the holder shall
have offered reasonable indemnity to the Trustee. Subject to providing
indemnification of the Trustee, the holders of a majority in aggregate
principal amount of the outstanding notes will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee.
If an Event of Default other than an Event of Default arising from events of
insolvency, bankruptcy or reorganization with respect to Analog occurs and is
continuing, either the Trustee or the holders of at least 25% in principal
amount of the outstanding notes may, subject to the subordination provisions of
the Indenture, accelerate the maturity of all notes. However, after an
acceleration, but before a judgment or decree based on acceleration, the
holders of a majority in aggregate principal amount of outstanding notes may,
under certain circumstances, rescind and annul the acceleration if all Events
of Default, other than the non-payment of principal of the notes which have
become due solely by the declaration of acceleration, have been cured or waived
as provided in the Indenture. If an Event of Default arising from events of
insolvency, bankruptcy or reorganization with respect to Analog occurs, then
the principal of, and accrued interest on, all the notes will automatically
become immediately due and payable without any declaration or other act on the
part of the holders of the notes or the Trustee. For information as to waiver
of defaults, see "--Meetings, Modification and Waiver".
A holder of notes will not have any right to institute any proceeding with
respect to the Indenture, or for any remedy under the Indenture, unless the
holder gives the Trustee written notice of a continuing Event of Default and
the holders of at least 25% in aggregate principal amount of the outstanding
notes have made written request, and offered reasonable indemnity, to the
Trustee to institute proceedings, and the Trustee has not received from the
holders of a majority in aggregate principal amount of the outstanding notes
direction inconsistent with the written request and shall have failed to
institute the proceeding within 60 days. However, these limitations do not
apply to a suit instituted by a holder of notes for the enforcement of payment
of the principal of, premium, if any, or interest, including Liquidated
Damages, on the holder's note on or after the respective due dates expressed in
its note or the holder's right to convert its note in accordance with the
Indenture.
We will be required to furnish to the Trustee annually a statement as to our
performance of some of our obligations under the Indenture and as to any
default in such performance.
Meetings, Modification and Waiver
The Indenture contains provisions for convening meetings of the holders of
notes to consider matters affecting their interests.
Certain limited modifications of the Indenture may be made without the
necessity of obtaining the consent of the holders of the notes. Other
modifications and amendments of the Indenture may be made, and certain past
defaults by us may be waived, either (i) with the written consent of the
holders of not less than a majority in aggregate principal amount of the notes
at the time outstanding or (ii) by the adoption of a resolution, at a meeting
of holders of the notes at which a quorum is present, by the holders of at
least 66 2/3% in aggregate principal amount of the notes represented at the
meeting or, if less, holders of not less than a majority in aggregate principal
amount of the notes at the time outstanding. The quorum at any meeting called
to adopt a resolution will be persons holding or representing a majority in
aggregate principal amount of the notes at the time
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outstanding and, at any reconvened meeting adjourned for lack of a quorum, 25%
of the aggregate principal amount.
However, a modification or amendment requires the consent of the holder of
each outstanding note affected if it would:
. change the stated maturity of the principal or interest of a note;
. reduce the principal amount of, or any premium or interest on, any note;
. reduce the amount payable upon a redemption or mandatory repurchase;
. modify the provisions with respect to the repurchase rights of holders of
notes in a manner adverse to the holders;
. change the place or currency of payment on a note;
. impair the right to institute suit for the enforcement of any payment on
any note;
. modify our obligation to maintain an office or agency in New York City;
. modify the subordination provisions in a manner that is adverse to the
holders of the notes;
. adversely affect the right to convert the notes;
. modify our obligation to deliver information required under Rule 144A to
permit resales of the notes and common stock issued upon conversion of
the notes if we cease to be subject to the reporting requirements under
the Exchange Act;
. reduce the above-stated percentage of the principal amount of the holders
whose consent is needed to modify or amend the Indenture;
. reduce the percentage of the principal amount of the holders whose
consent is needed to waive compliance with certain provisions of the
Indenture or to waive certain defaults; or
. reduce the percentage required for the adoption of a resolution or the
quorum required at any meeting of holders of notes at which a resolution
is adopted.
The holders of a majority in aggregate principal amount of the outstanding
notes may waive compliance by us with certain restrictive provisions of the
Indenture by written consent. Holders of at least 66 2/3% in aggregate
principal amount of notes represented at a meeting or, if less, holders of not
less than a majority in aggregate principal amount of the notes at the time
outstanding may also waive compliance by us with certain restrictive provisions
of the Indenture by the adoption of a resolution at the meeting if a quorum of
holders is present and certain other conditions are met. The holders of a
majority in aggregate principal amount of the outstanding notes also may waive
by written consent any past default under the Indenture, except a default in
the payment of principal, premium, if any, or interest which has not been
cured.
Registration Rights
The registration statement of which this prospectus forms a part has been
filed under the terms of a Registration Rights Agreement, which we entered into
with the initial purchasers of the notes. In the Registration Rights Agreement
we agreed, for the benefit of the holders of the notes and the shares of common
stock issuable upon conversion of the notes, which we refer to together as the
Registrable Securities, that we would, at our expense:
. file with the SEC, within 90 days after the date the notes were
originally issued, a shelf registration statement covering resales of the
Registrable Securities, subject to our right to postpone the filing of
the shelf registration statement for an additional 90 days in limited
circumstances;
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. use our reasonable efforts to cause the shelf registration statement to
be declared effective under the Securities Act within 180 days after the
date the notes are originally issued, subject to our right to postpone
having the shelf registration statement declared effective for an
additional 90 days in limited circumstances; and
. use our reasonable efforts to keep effective the shelf registration
statement until two years after the date the notes are issued or, if
earlier, until there are no outstanding Registrable Securities, which is
referred to as the Effectiveness Period.
We will be permitted to suspend the use of this prospectus, which is part of
the shelf registration statement, in connection with the sales of Registrable
Securities during prescribed periods of time for reasons relating to pending
corporate developments, public filings with the SEC and other events. Following
the effectiveness of the registration statement of which this prospectus forms
a part, we will provide to each holder of Registrable Securities copies of this
prospectus, notify each holder that the shelf registration statement has become
effective and take certain other actions required to permit public resales of
the Registrable Securities.
We may, upon written notice to all the holders of Registrable Securities,
postpone having the shelf registration statement declared effective for a
reasonable period not to exceed 90 days if we possess material non-public
information the disclosure of which would have a material adverse effect on us
and our subsidiaries taken as a whole. Notwithstanding any such postponement,
additional interest, which is referred to as Liquidated Damages, will accrue on
the notes (or on the common stock into which any notes have been converted) if
either of the following events, which are referred to as Registration Defaults,
occurs:
. on or prior to 90 days following the date the notes were originally
issued, a shelf registration statement has not been filed with the SEC;
or
. on or prior to 180 days following the date the notes were originally
issued, the shelf registration statement is not declared effective.
In that case, Liquidated Damages will accrue on the Registrable Securities
from and including the day following the Registration Default to but excluding
the day on which the Registration Default has been cured. Liquidated Damages
will be paid semi-annually in arrears, with the first semi-annual payment due
on the first Interest Payment Date following the date on which the Liquidated
Damages began to accrue. Liquidated Damages accrue either on the principal
amount of the notes or based on the conversion price of common stock issued
upon conversion of the notes.
The rates at which Liquidated Damages will accrue will be as follows:
. 0.25% of the principal amount (or the conversion price) per annum to and
including the 90th day after the Registration Default; and
. 0.50% of the principal amount (or the conversion price) per annum from
and after the 91st day after the Registration Default.
In addition, Liquidated Damages will accrue if:
. the shelf registration statement ceases to be effective, or we otherwise
prevent or restrict holders of Registrable Securities from making sales
under the shelf registration statement, for more than 45 days, whether or
not consecutive, during any 90-day period; or
. the shelf registration statement ceases to be effective, or we otherwise
prevent or restrict holders of Registrable Securities from making sales
under the shelf registration statement, for more than 90 days, whether or
not consecutive, during any 12-month period.
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In either event, the interest rate on the notes will increase by an
additional 0.50% per annum from the 46th day of the 90-day period or the 91st
day of the 12-month period. The Liquidated Damages will continue to accrue
until the earlier of the following:
. the time the shelf registration statement again becomes effective or the
holders of Registrable Securities are again able to make sales under the
shelf registration statement, depending on which event triggered the
increase in interest rate; or
. the date the Effectiveness Period expires.
A holder who elects to sell any Registrable Securities pursuant to the shelf
registration statement of which this prospectus forms a part is required to be
named as a selling securityholder in this prospectus, may be required to
deliver a prospectus to purchasers, may be subject to certain civil liability
provisions under the Securities Act in connection with those sales and is bound
by the provisions of the Registration Rights Agreement that apply to a holder
making this election, including indemnification provisions.
No holder of Registrable Securities is entitled to be named as a selling
securityholder in this prospectus and no holder of Registrable Securities is
entitled to use this prospectus for offers and resales of Registrable
Securities at any time, unless the holder has returned a completed and signed
Notice and Questionnaire to us.
Beneficial owners of Registrable Securities who have not returned a Notice
and Questionnaire to us may receive another Notice and Questionnaire from us
upon request. Following our receipt of a completed and signed Notice and
Questionnaire, we will include the Registrable Securities covered thereby in
the shelf registration statement, subject to restrictions on the timing and
number of supplements to the shelf registration statement provided in the
Registration Rights Agreement.
We agreed in the Registration Rights Agreement to use our reasonable efforts
to cause the shares of common stock issuable upon conversion of the notes to be
listed on the New York Stock Exchange. However, if the common stock is not then
listed on the New York Stock Exchange, we will use our reasonable efforts to
cause the shares of common stock issuable upon conversion of the notes to be
quoted or listed on whichever market or exchange the common stock is then
quoted or listed, upon effectiveness of the shelf registration statement.
This summary of certain provisions of the Registration Rights Agreement may
not contain all the information important to the holders of notes. Holders of
notes may request from us a copy of the Registration Rights Agreement.
Notices
Notice to holders of the registered notes will be given by mail to the
addresses as they appear in the security register. Notices will be deemed to
have been given on the date of mailing.
Notice of a redemption of notes will be given not less than 30 nor more than
60 days prior to the redemption date and will specify the redemption date. A
notice of redemption of the notes will be irrevocable.
Replacement of Notes
We will replace any note that becomes mutilated, destroyed, stolen or lost
at the expense of the holder upon delivery to the Trustee of the mutilated
notes or evidence of the loss, theft or destruction satisfactory to us and the
Trustee. In the case of a lost, stolen or destroyed note, indemnity
satisfactory to the Trustee and us may be required at the expense of the holder
of the note before a replacement note will be issued.
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Payment of Stamp and Other Taxes
We have paid all stamp and other duties, if any, which may have been imposed
by the United States or any political subdivision thereof or taxing authority
thereof or therein with respect to the issuance of the notes. We were not
required to make any payment with respect to any other tax, assessment or
governmental charge imposed by any government or any political subdivision
thereof or taxing authority thereof or therein.
Governing Law
The Indenture and the notes are governed by and construed in accordance with
the laws of the State of New York, United States of America.
The Trustee
If an Event of Default occurs and is continuing, the Trustee will be
required to use the degree of care of a prudent person in the conduct of his
own affairs in the exercise of its powers. Subject to these provisions, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request of any of the holders of notes, unless they
shall have offered to the Trustee reasonable security or indemnity.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of material United States federal income tax
considerations relating to the purchase, ownership and disposition of the notes
and the common stock into which the notes may be converted. This summary is not
a complete analysis of all the potential tax considerations relating thereto.
We have based this summary on the provisions of the Internal Revenue Code of
1986, as amended, or the Code, the applicable U.S. Treasury regulations
promulgated or proposed thereunder, judicial authority and current
administrative rulings and practice, all of which are subject to change,
possibly on a retroactive basis, or to different interpretations.
This summary applies to you only if you hold the notes and common stock as
capital assets. A capital asset is generally an asset held for investment
rather than as inventory or as property used in a trade or business. This
summary also does not discuss the particular tax consequences that might be
relevant to you if you are subject to special rules under the federal income
tax laws. Special rules apply, for example, if you are:
. a bank, thrift, insurance company, regulated investment company, or other
financial institution or financial service company,
. a broker or dealer in securities or foreign currency,
. a person that has a functional currency other than the U.S. dollar,
. a partnership or other flow-through entity,
. a subchapter S corporation,
. a person subject to alternative minimum tax,
. a person who owns the notes or common stock as part of a straddle,
hedging transaction, conversion transaction, constructive sale
transaction or other risk-reduction transaction,
. a tax-exempt entity,
. a person who has ceased to be a United States citizen or to be taxed as a
resident alien, or
. a person who acquires the notes or common stock in connection with your
employment or other performance of services.
In addition, the following summary does not address all possible tax
consequences. In particular, except as specifically provided, it does not
discuss any estate, gift, generation-skipping, transfer, state, local or
foreign tax consequences. We have not sought any ruling from the Internal
Revenue Service, or IRS, with respect to the statements made and the
conclusions reached in the following summary, and there can be no assurance
that the IRS will agree with these statements and conclusions. For all these
reasons, we urge you to consult with your tax advisor about the federal income
tax and other tax consequences of the acquisition, ownership and disposition of
the notes and common stock.
INVESTORS CONSIDERING THE PURCHASE OF THE NOTES SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME
TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING
UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY
APPLICABLE TAX TREATY.
In General
We have treated the notes as indebtedness for federal income tax purposes.
This summary assumes that the IRS will respect this classification.
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U.S. Holders
As explained below, the federal income tax consequences of acquiring, owning
and disposing of the notes and common stock depend on whether or not you are a
U.S. holder. For purposes of this summary, you are a U.S. holder if you are a
beneficial owner of the notes or common stock and for federal income tax
purposes are:
. a citizen or resident of the United States, including an alien individual
who is a lawful permanent resident of the United States or who meets the
substantial presence residency test under the federal income tax laws,
. a corporation, partnership or other entity treated as a corporation or
partnership for federal income tax purposes, that is created or organized
in or under the laws of the United States, any of the fifty states or the
District of Columbia, unless otherwise provided by Treasury regulations,
. an estate the income of which is subject to federal income taxation
regardless of its source, or
. a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust,
and if your status as a U.S. holder is not overridden under the provisions of
an applicable tax treaty. Conversely, you are a non-U.S. holder if you are a
beneficial owner of the notes or common stock and are not a U.S. holder.
If a partnership holds notes or common stock, the tax treatment of a partner
will generally depend upon the status of the partner and upon the activities of
the partnership. If you are a partner in that partnership, you should consult
your tax advisor.
Payment of Interest
All of the notes bear interest at a stated fixed rate. You generally must
include this stated interest in your gross income as ordinary interest income:
. when you receive it, if you use the cash method of accounting for federal
income tax purposes, or
. when it accrues, if you use the accrual method of accounting for federal
income tax purposes.
In some circumstances, we may be obligated to pay you amounts in excess of
stated interest or principal on the notes. For example, we would have to pay
liquidated damages in some circumstances described in "Description of Notes--
Registration Rights". In addition, in some cases we will be able to call the
notes for redemption at a price that will include an additional amount in
excess of the principal of the notes. According to Treasury regulations, the
possibility of liquidated damages being paid to you will not affect the amount
of interest income you recognize, in advance of the payment of any liquidated
damages, if there is only a remote chance as of the date the notes were issued
that you will receive liquidated damages. We believe that the likelihood that
we will pay liquidated damages is remote. Therefore, we do not intend to treat
the potential payment of liquidated damages as part of the yield to maturity of
any notes. Similarly, we intend to take the position that the likelihood of a
redemption or repurchase of the notes is remote and likewise do not intend to
treat the possibility of any premium payable on a redemption or repurchase as
affecting the yield to maturity of any notes. Our determination that these
contingencies are remote is binding on you unless you disclose your contrary
position in the manner required by applicable Treasury regulations. Our
determination is not, however, binding on the IRS. In the event a contingency
occurs, it would
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affect the amount and timing of the income that you must recognize. If we pay
liquidated damages on the notes, you will be required to recognize additional
income. If we pay a redemption premium, the premium could be treated as capital
gain under the rules described under "--Sale, Exchange or Redemption of Notes
or Shares of Common Stock".
Amortizable Bond Premium on Notes
If you acquire a note and your adjusted tax basis in the note upon
acquisition is greater than its principal amount, then you will be treated as
having acquired that note with bond premium equal to the excess. Amortizable
bond premium, however, will not include any premium attributable to the value
of the note's conversion feature. You generally may elect to amortize the bond
premium over the remaining term of the note on a constant yield method. The
amount amortized in any year will be treated as a reduction of your interest
income from the note for that year. If you do not make the election, your bond
premium on a note will decrease the gain or increase the loss that you
otherwise recognize on the note's disposition. Any election to amortize bond
premium applies to all debt obligations, other than debt obligations the
interest on which is excludable from gross income, that you hold at the
beginning of the first taxable year to which the election applies or that you
thereafter acquire. You may not revoke an election to amortize bond premium
without the consent of the IRS. We urge you to consult with your tax advisor
regarding this election.
Market Discount on Notes
If you acquire a note and your adjusted tax basis upon acquisition is less
than its principal amount, then you will be treated as having acquired that
note at a market discount equal to the difference. The foregoing does not apply
if the amount of the market discount is less than the de minimis amount
specified under the Code. Under the market discount rules, you will be required
to treat any gain on the sale, exchange, redemption, retirement or other
taxable disposition of a note, or any appreciation in a note in the case of a
nontaxable disposition, such as a gift, as ordinary income to the extent of the
market discount that has not previously been included in income and that is
treated as having accrued on the note at the time of the payment or
disposition. In addition, you may be required to defer, until the maturity of
the note or earlier taxable disposition, the deduction of all or a portion of
interest expense on any indebtedness incurred or continued to purchase or carry
the note.
Any market discount will be considered to accrue evenly during the period
from the day after your acquisition to the maturity date of the note, unless
you elect to accrue the market discount on a constant yield method. You may
also elect to include market discount in income currently as it accrues, on
either an even or constant yield method. In that event, your basis in the note
will increase by the amounts you so include in your income. If you make this
election, the rules described above regarding ordinary income on dispositions
and deferral of interest deductions will not apply. This election to include
market discount in income currently, once made, applies to all market discount
obligations acquired on or after the first taxable year to which the election
applies. You may not revoke a market discount election without the consent of
the IRS. We urge you to consult with your tax advisor regarding these market
discount elections.
You should consult your own tax advisors concerning the existence of, and
tax consequences of, market discount and amortizable bond premium.
Conversion of Notes
You generally will not recognize gain or loss on the conversion of the notes
solely into common stock, except with respect to cash received in lieu of
fractional shares. Your tax basis in the shares of common stock received upon
conversion of the notes will be equal to your adjusted tax basis in the notes
exchanged for those shares, less any portion thereof allocable to cash received
in lieu of a fractional share of common stock. The holding period of the common
stock will generally include the period during which you held the notes prior
to conversion.
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Under the current ruling policy of the IRS, cash received in lieu of a
fractional share of common stock generally should be treated as a payment in
exchange for the fractional share rather than as a dividend. Accordingly, the
receipt of cash in lieu of a fractional share of common stock generally will
result in gain or loss (measured by the difference between the cash you receive
for the fractional share and your adjusted tax basis in the fractional share).
Any gain would be ordinary income to the extent of any accrued market discount
on your notes that you have not previously included in your income, and
otherwise would be capital gain. Any accrued market discount not previously
included in income as of the date of the conversion of the notes will carry
over to the common stock received on conversion and will give rise to ordinary
income upon the subsequent disposition of that stock.
Sale, Exchange or Redemption of Notes or Shares of Common Stock
You generally will recognize gain or loss upon the sale, exchange,
redemption, retirement or other disposition of notes (other than a conversion)
measured by the difference between:
. the amount of cash proceeds and the fair market value of any property
you receive (except to the extent attributable to accrued interest
income and market discount not previously included in income, which will
generally be taxable as ordinary income, or attributable to accrued
interest previously included in income, which amount may be received
without generating further income), and
. your adjusted tax basis in the notes.
Your adjusted tax basis in the notes generally will equal your acquisition
cost of the notes after reduction for amounts allocated to prior accrued stated
interest, increased by any market discount included in your income, and reduced
by any bond premium you amortized and principal payments you received. Subject
to the market discount rules described above, the capital gain or loss will be
long-term if your holding period is more than 12 months and will be short-term
if your holding period is equal to or less than 12 months. In general, for
individuals, long-term capital gains are taxed at a maximum rate of 20% and
short-term capital gains are taxed at a maximum rate of 39.6%.
Constructive Dividends on Notes
Under Treasury regulations, an adjustment in the conversion price, or the
failure to make an adjustment, may, under particular circumstances, be treated
as a constructive taxable dividend to the extent of our current or accumulated
earnings and profits. Adjustments to the conversion price made pursuant to a
bona fide reasonable adjustment formula which has the effect of preventing the
dilution of your interest as a holder of the notes generally will not be
considered to result in a constructive distribution of stock where the
adjustment does not compensate you for taxable distributions to other
stockholders. However, if at any time
. we make a distribution of cash or property to our stockholders or a
purchase of common stock and the distribution or purchase would be
taxable to our stockholders as a dividend for United States federal
income tax purposes (e.g., distributions of evidences of our
indebtedness or assets, but generally not stock dividends or rights to
subscribe for common stock) and, pursuant to the anti-dilution
provisions of the Indenture, the conversion price (as defined in the
Indenture) of the notes is reduced,
. the conversion price is reduced pursuant to a formula that is not a bona
fide reasonable adjustment formula, or
. the conversion price of the notes is reduced at our discretion,
this reduction in conversion price may be deemed to be the payment of a taxable
dividend to you as a holder of the notes (pursuant to Section 305 of the Code).
You could therefore have taxable income as a result of an event pursuant to
which you received no cash or property. Your tax basis in a note, however,
generally will be increased by the amount of any constructive dividend included
in your income.
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Distributions on Common Stock
The amount of any distribution by us on the common stock will be equal to
the amount of cash and the fair market value, on the date of distribution, of
any property distributed. Generally, distributions will be treated as follows:
. first as ordinary dividend income to the extent paid out of our current
or accumulated earnings and profits,
. next as a nontaxable return of capital that reduces your basis in the
stock dollar-for-dollar until the basis has been reduced to zero, and
. finally as capital gain from the sale or exchange of the stock.
In general, if you are a corporate U.S. holder, you will qualify for the 70%
dividends-received deduction if you own less than 20% of the voting power and
value of our stock (other than any non-voting, non-convertible, non-
participating preferred stock). If you are a corporate U.S. holder that owns
20% or more of the voting power and value of our stock (other than any non-
voting, non-convertible, non-participating preferred stock), generally you will
qualify for an 80% dividends-received deduction. The dividends-received
deduction is subject, however, to holding period requirements and taxable
income and other limitations.
A failure to adjust fully the conversion price of the notes to reflect a
stock dividend or other event increasing the proportionate interest of holders
of common stock in our earnings and profits or assets could, in some
circumstances, be deemed to result in the payment of a taxable dividend to
holders of common stock.
Sale of Common Stock
Subject to the market discount rules discussed above, your sale or other
taxable disposition of common stock will generally result in capital gain or
loss equal to the difference between the amount of cash or property you receive
and your adjusted tax basis in the stock. Such capital gain or loss will be
long-term if your holding period is more than 12 months and will be short-term
is your holding period is equal to or less than 12 months. In general, for
individuals, long-term capital gains are taxed at a maximum rate of 20% and
short-term capital gains are taxed at a maximum rate of 39.6%. Your basis and
holding period in common stock received upon conversion of a convertible note
are determined as discussed above under "-Conversion of Notes."
Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply to "reportable
payments" to certain noncorporate U.S. holders of principal and interest on a
note, dividends on common stock, the proceeds of the sale of a note and the
proceeds of the sale of common stock. If you are a noncorporate U.S. holder you
may be subject to backup withholding at a 31% rate when you receive interest
and dividends with respect to the notes or common stock, or when you receive
proceeds upon the sale, exchange, redemption, retirement or other disposition
of the notes or common stock. In general, you can avoid this backup withholding
by properly executing under penalties of perjury an IRS Form W-9 or
substantially similar form that provides:
. your correct taxpayer identification number, and
. a certification that (a) you are exempt from backup withholding because
you are a corporation or come within another enumerated exempt category,
(b) you have not been notified by the IRS that you are subject to backup
withholding, or (c) you have been notified by the IRS that you are no
longer subject to backup withholding.
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If you do not provide your correct taxpayer identification number on the IRS
Form W-9 or substantially similar form, you may be subject to penalties imposed
by the IRS.
Backup withholding will not apply, however, with respect to payments made to
certain holders, including corporations, tax exempt organizations and certain
foreign persons, provided their exemptions from backup withholding are properly
established.
Amounts withheld are generally not an additional tax and may be refunded or
credited against your federal income tax liability, provided you furnish the
required information to the IRS.
We will report to the U.S. holders of notes and common stock and to the IRS
the amount of any "reportable payments" for each calendar year and the amount
of tax withheld, if any, with respect to these payments.
Non-U.S. Holders
As used herein, the term "non-U.S. holder" means any beneficial owner of a
note or common stock that is not a U.S. holder.
Payment of Interest
Generally, if you are a non-U.S. holder, interest income that is not
effectively connected with a United States trade or business will not be
subject to a U.S. withholding tax under the "portfolio interest exemption"
provided that:
. you do not actually or constructively own (pursuant to the conversion
feature of the notes or otherwise) 10% or more of the combined voting
power of all of our classes of stock entitled to vote,
. you are not a controlled foreign corporation related to us actually or
constructively through stock ownership,
. you are not a bank which acquired the notes in consideration for an
extension of credit made pursuant to a loan agreement entered into in
the ordinary course of business, and
. either (a) you provide a Form W-8BEN (or a suitable substitution form)
signed under penalties of perjury that includes your name and address
and certifies as to your non-United States status, or (b) a securities
clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business,
provides a statement to us or our agent under penalties of perjury in
which it certifies that a Form W-8BEN or W-8IMY (or a suitable
substitute) has been received by it from you or a qualifying
intermediary and furnishes us or our agent with a copy of such form.
Interest on notes not exempted from U.S. withholding tax as described above
and not effectively connected with a United States trade or business generally
will be subject to U.S. withholding tax at a 30% rate, except where an
applicable tax treaty provides for the reduction or elimination of that
withholding tax. We may be required to report annually to the IRS and to each
non-U.S. holder the amount of interest paid to, and the tax withheld, if any,
with respect to, each non-U.S. holder.
Except to the extent that an applicable treaty otherwise provides, generally
you will be taxed in the same manner as a U.S. holder with respect to interest
if the interest income is effectively connected with your conduct of a United
States trade or business. If you are a corporate non-U.S. holder, you may also,
under certain circumstances, be subject to an additional "branch profits tax"
at a 30% rate (or, if applicable, a lower treaty rate). Even though the
effectively connected interest is subject to income tax, and may be subject to
the branch profits tax, it may not be subject to withholding tax if you deliver
a properly executed IRS Form W-8ECI to the payor.
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To claim the benefit of a tax treaty or to claim exemption from withholding
because the income is U.S. trade or business income, the non-U.S. holder must
provide a properly executed IRS Form 1001 or IRS Form 4224 (or any successor
forms that the IRS designates), as applicable, prior to the payment of
interest. Under recently issued Treasury regulations that generally will be
effective on and after January 1, 2001, the non-U.S. holder must provide a
properly executed Form W-8BEN or W-8ECI in order to continue to claim such
benefit or exemption for payments made after December 31, 2000. Under the new
regulations, a non-U.S. holder may in some circumstances be required to obtain
a U.S. taxpayer identification number and make some certifications to us.
Special procedures are provided in the new regulations for payments through
qualified intermediaries. Prospective investors should consult their tax
advisors regarding the effect, if any, of the new regulations.
Sale, Exchange or Redemption of Notes
If you are a non-U.S. holder of a note, generally you will not be subject to
United States federal income tax or withholding tax on any gain realized on the
sale, exchange or redemption of the note, including the receipt of cash in lieu
of fractional shares upon conversion of a note into common stock, unless
. the gain is effectively connected with your conduct of a United States
trade or business,
. you are an individual and are present in the United States for a period
or periods aggregating 183 days or more during the taxable year of the
disposition and certain other conditions are met,
. you are subject to tax pursuant to the provisions of the Code applicable
to certain United States expatriates, or
. we are, or have been at any time, within the shorter of the five year
period preceding the sale or other disposition and the period you held
the note, a United States real property holding corporation within the
meaning of Section 897 of the Code. We do not believe that we are
currently a "United States real property holding corporation" within the
meaning of Section 897 of the Code and do not expect that we will become
one in the future. See "--United States Real Property Holding
Corporations" below.
Conversion of Notes
In general, if you are a non-U.S. holder, no United States federal income
tax or withholding tax will be imposed upon the conversion of a note into
common stock. However, cash (if any) received in lieu of a fractional share
will be subject to U.S. federal income tax if it is U.S. trade or business
income. Cash received in lieu of a fractional share may give rise to gain that
would be subject to the rules described above for the sale of notes.
Sale or Exchange of Common Stock
As a non-U.S. holder, generally you will not be subject to United States
federal income tax or withholding tax on the sale or exchange of common stock
unless any of the conditions described above under "--Sale, Exchange or
Redemption of Notes" are satisfied.
Dividends
If you are a non-U.S. holder, you will be subject to United States federal
withholding tax at a 30% rate (or lower rate provided under any applicable
income tax treaty) on distributions by us with respect to the common stock that
are treated as dividends paid (or dividends deemed paid on the
notes or common stock, as described above under "U.S. Holders--Constructive
Dividends on Notes"
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and "U.S. Holders--Distributions on Common Stock") (excluding dividends that
are effectively connected with the conduct by you of a trade or business in the
United States and that are taxable as described below). Except to the extent
that an applicable tax treaty otherwise provides, generally you will be taxed
in the manner as a U.S. holder on dividends paid (or deemed paid) that are
effectively connected with your conduct of a trade or business in the United
States. If you are a foreign corporation, you may also be subject to a United
States branch profits tax on such effectively connected income at a 30% rate or
such lower rate as may be specified in an applicable income tax treaty. Even
though such effectively connected dividends are subject to income tax, and may
be subject to the branch profits tax, they will not be subject to U.S.
withholding tax if you deliver the appropriate IRS Form W-8ECI to the payor, as
discussed above.
Under Treasury regulations applicable for payments made after December 31,
2000, if you are a non-U.S. holder of common stock and wish to claim the
benefit of an applicable treaty rate, you will be required to satisfy certain
certification requirements.
Death of a Non-U.S. Holder
If you are an individual who is not a citizen or resident of the United
States and you hold a note at the time of your death, it will not be includable
in your gross estate for United States estate tax purposes, provided that you
do not at the time of death actually or constructively own 10% or more of the
combined voting power of all of our classes of stock entitled to vote, and
provided that, at the time of death, payments with respect to that note would
not have been effectively connected with your conduct of a trade or business
within the United States.
Common stock actually or beneficially held by you at the time of your death
(or previously transferred subject to certain retained rights or powers) will
be subject to United States federal estate tax unless otherwise provided by an
applicable estate tax treaty.
Information Reporting and Backup Withholding Tax
If you are a non-U.S. holder, United States information reporting
requirements and backup withholding tax will not apply to payments of interest
on a note if you provide the statement described under "--Payment of Interest",
provided that the payor does not have actual knowledge that you are a United
States person.
Information reporting will not apply to any payment of the proceeds of the
sale of a note, or any payment of the proceeds of the sale of common stock
effected outside the United States by a foreign office of a "broker" (as
defined in applicable Treasury regulations), unless the broker
(1) is a United States person,
(2) is a foreign person that derives 50% or more of its gross income for
certain periods from the conduct of a trade or business in the United
States,
(3) is a controlled foreign corporation for United States federal income
tax purposes, or
(4) with respect to payments made after December 31, 2000, is a foreign
partnership, if at any time during its tax year, one or more of its
partners are U.S. persons (as defined in Treasury regulations) who in the
aggregate hold more than 50% of the income or capital interests in the
partnership or if, at any time during its tax year, the foreign partnership
is engaged in a United States trade or business.
Payment of the proceeds of any such sale effected outside the United States
by a foreign office of any broker that is described in (1), (2), (3) or (4) of
the preceding sentence will be subject to information reporting requirements
unless the broker has documentary evidence in its records that
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you are a non-U.S. holder and certain other conditions are met, or you
otherwise establish an exemption. Temporary Treasury regulations indicate that
these payments are not currently subject to backup withholding. Payment of the
proceeds of any such sale to or through the United States office of a broker is
subject to information reporting and backup withholding requirements, unless
you provide the statement described in "--Payment of Interest" or otherwise
establish an exemption.
If paid to an address outside the United States, dividends on common stock
held by you as a non-U.S. holder will generally not be subject to the
information reporting and backup withholding requirements described in this
section. However, under recently issued Treasury regulations, dividend payments
made after December 31, 2000 will be subject to information reporting and
backup withholding unless applicable certification requirements are satisfied.
Treasury regulations that apply to payments made after December 31, 2000
will modify current information reporting and backup withholding procedures and
requirements. These regulations provide presumptions regarding the status of
holders when payments to the holders cannot be reliably associated with
appropriate documentation provided to the payor. For payments made after
December 31, 2000, a holder must provide certification, if applicable, that
conforms to the requirements of the regulations. Holders of a note or common
stock should consult with their tax advisors regarding the application of the
backup withholding rules to their particular situation, the availability of an
exemption, the procedure for obtaining any available exemption and the impact
of these new regulations on payments made with respect to notes or common stock
after December 31, 2000.
United States Real Property Holding Corporations
The discussion of the United States taxation of non-U.S. holders of notes
and common stock assumes that we are at no time a United States real property
holding corporation within the meaning of Section 897(c) of the Code. Under
present law, we would not be a United States real property holding corporation
so long as the fair market value of our United States real property interests
is less than 50% of the sum of
. the fair market value of our United States real property interests,
. our interests in real property located outside the United States, and
. our other assets which are used or held for use in a trade or business.
We believe that we are not a United States real property holding corporation
and do not expect to become one. If we become a United States real property
holding corporation, gain recognized by you as a non-U.S. holder on a
disposition of notes or common stock would be subject to United States federal
income tax unless
. our common stock is "regularly traded on an established securities
market" within the meaning of the Code and
. either (A) you do not own, actually or constructively, at any time
during the five-year period preceding the disposition, more than 5% of
the common stock, or (B) in the case of a disposition of notes, you do
not own, actually or constructively, notes which, as of any date on
which you acquired notes, had a fair market value greater than that of
5% of the common stock.
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Our Deductions for Interest on the Notes
Under Section 279 of the Code, deductions otherwise allowable to a
corporation for interest may be reduced or eliminated in the case of corporate
acquisition indebtedness. This is defined generally to include subordinated
convertible debt issued to provide consideration for the acquisition of stock
or a substantial portion of the assets of another corporation, if either
. the acquiring corporation has a debt to equity ratio that exceeds 2 to 1
or
. the projected earnings of the corporation (the average annual earnings
for the three-year period ending on the test date) do not exceed three
times the annual interest costs of the corporation.
Our deductions for interest on the notes could be reduced or eliminated if
the notes meet the definition of corporate acquisition indebtedness in the year
of issue. We believe that, based upon a preliminary analysis, we did not fail
either the debt/equity or the earnings coverage test for the year ended October
28, 2000 and accordingly that interest deductions on the notes will not be
disallowed. However, there can be no assurance that, based upon all of the
facts, including events that took place between the date of issuance of the
notes and the end of the taxable year of issuance, that interest deductions on
the notes may not be disallowed in whole or in part in the year of issuance or
in the future. In addition, the notes could become corporate acquisition
indebtedness in a subsequent year if we initially meet the debt/equity ratio
and earnings coverage tests, but later fail one or both tests in a year during
which we issue additional indebtedness for corporate acquisitions. Our ability
to deduct all of the interest payable on the notes will depend on the
application of the foregoing tests to us. The availability of an interest
deduction with respect to the notes was not determinative on our issuance of
the notes.
Under Section 163(l) of the Code, no deduction is permitted for interest
paid or accrued or any indebtedness of a corporation that is "payable in
equity" of the issuer or a related party. Debt is treated as debt payable in
equity of the issuer if the debt is part of an arrangement designed to result
in payment of the instrument with or by reference to the equity. Such
arrangements could include debt instruments that are convertible at the
holder's option if it is substantially certain that the option will be
exercised. The legislative history indicates that it is not expected the
provision will affect debt with a conversion feature where the conversion price
is significantly higher than the market price of the stock on the date of the
debt issuance. Accordingly, we do not believe that our interest deduction with
respect to interest payments on the notes will be adversely affected by the
application of these rules to the holder's option to convert the notes.
Similarly, we do not believe that our interest deduction with respect to
interest payments on the notes will be adversely affected by the application of
these rules to our option to satisfy our obligation under the repurchase right
triggered by a Change in Control with common stock.
The preceding discussion of material United States federal income tax
consequences is for general information only and is not tax advice.
Accordingly, each investor should consult its own tax advisor as to particular
tax consequences to it of purchasing, holding and disposing of the notes and
the common stock, including the applicability and effect of any state, local or
foreign tax laws, and of any proposed changes in applicable laws.
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DESCRIPTION OF CAPITAL STOCK
We are authorized to issue up to 600,000,000 shares of common stock, par
value $.16 2/3 per share, and 471,934 shares of preferred stock, par value
$1.00 per share.
Common Stock
As of October 25, 2000, there were 357,905,514 shares of our common stock
outstanding that were held of record by approximately 4,359 stockholders.
Holders of our common stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive ratably
any dividends that may be declared by the Board of Directors out of funds
legally available therefor, subject to any preferential dividend rights of
outstanding preferred stock. In the event of our liquidation, dissolution or
winding up, the holders of common stock are entitled to share ratably in our
net assets available after the payment of all debts and other liabilities and
subject to the prior rights of any outstanding preferred stock. Holders of the
common stock have no preemptive, subscription, redemption or conversion rights.
The outstanding shares of common stock are fully paid and nonassessable. The
rights, preferences and privileges of holders of common stock are subject to,
and may be adversely affected by, the rights of the holders of shares of any
series of preferred stock which we may designate and issue in the future. There
are no shares of preferred stock outstanding.
Preferred Stock
Our Board of Directors is authorized, subject to some limitations prescribed
by law, without further stockholder approval to issue from time to time up to
an aggregate of 471,934 shares of preferred stock in one or more series and to
fix or alter the designations, preferences, rights and any qualifications,
limitations or restrictions of the shares of each series, including the
dividend rights, dividend rates, conversion rights, voting rights, terms of
redemption (including sinking fund provisions), redemption price or prices,
liquidation preferences and the number of shares constituting any series or
designation of that series. The issuance of preferred stock may have the effect
of delaying, deferring or preventing a change of control of Analog. We have no
present plans to issue any shares of preferred stock.
Massachusetts Law and Certain Provisions of Our Restated Articles of
Organization and By-Laws
Because we have more than 200 stockholders of record, we are subject to
Chapter 110F of the Massachusetts General Laws, an anti-takeover law. In
general, this statute prohibits a publicly held Massachusetts corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
becomes an interested stockholder, unless
. the interested stockholder obtains the approval of the Board of Directors
prior to becoming an interested stockholder,
. the interested stockholder acquires 90% of the outstanding voting stock
of the corporation (excluding shares held by some affiliates of the
corporation) at the time it becomes an interested stockholder, or
. the business combination is approved by both the Board of Directors and
the holders of two-thirds of the outstanding voting stock of the
corporation (excluding shares held by the interested stockholder).
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An "interested stockholder" is a person who, together with affiliates and
associates, owns (or at any time within the prior three years did own) 5% or
more of the outstanding voting stock of the corporation. A "business
combination" includes a merger, a stock or asset sale, and some other
transactions resulting in a financial benefit to the interested stockholders.
Massachusetts General Laws Chapter 156B, Section 50A generally requires that
a publicly-held Massachusetts corporation have a classified board of directors
consisting of three classes as nearly equal in size as possible, unless the
corporation elects to opt out of the statute's coverage. Our By-Laws contain
provisions which give effect to Section 50A.
Our By-Laws include a provision excluding us from the applicability of
Massachusetts General Laws Chapter 110D, entitled "Regulation of Control Share
Acquisitions". In general, this statute provides that any stockholder of a
corporation subject to this statute who acquires 20% or more of the outstanding
voting stock of a corporation may not vote that stock unless the stockholders
of the corporation so authorize. The Board of Directors may amend our By-Laws
at any time to subject us to this statute prospectively.
Our Restated Articles of Organization, as amended, provide that we shall
indemnify our directors and officers to the fullest extent authorized by
Massachusetts law, as it now exists or may in the future be amended, against
all liabilities and expenses incurred in connection with service for us or on
our behalf. In addition, the Articles of Organization provide that our
directors will not be personally liable for monetary damages to us for breaches
of their fiduciary duty as directors, unless they violated their duty of
loyalty to us or our stockholders, acted in bad faith, knowingly or
intentionally violated the law, authorized illegal dividends or redemptions or
derived an improper personal benefit from their action as directors. This
provision does not eliminate director liability under federal securities laws
or preclude non-monetary relief under state law.
Stockholder Rights Plan
In March 1998, the Board of Directors adopted a Stockholder Rights Plan that
replaced a plan adopted by the Board in 1988. Pursuant to the Stockholder
Rights Plan, each share of common stock has an associated right. Under certain
circumstances, each right would entitle the registered holder to purchase from
us one one-thousandth share of Series A Junior Participating Preferred Stock at
a purchase price of $90 in cash, subject to adjustment.
The rights are not exercisable and cannot be transferred separately from the
common stock until ten business days (or such later date as may be determined
by the Board of Directors) after
. the public announcement that a person or group of affiliated or
associated persons has acquired (or obtained rights to acquire)
beneficial ownership of 15% or more of our common stock or
. the commencement of a tender offer or exchange offer that would result in
a person or group beneficially owning 20% or more of the outstanding
common stock.
If and when the rights become exercisable, each holder of a right shall have
the right to receive, upon exercise, that number of common stock (or in certain
circumstances, cash, property or other of our securities) that equals the price
of the right divided by 50% of the current market price (as defined in the
Stockholder Rights Plan) per share of common stock at the date of the
occurrence of the event. In the event at any time after any person becomes an
acquiring person,
. we are consolidated with, or merged with and into, another entity and we
are not the surviving entity of the consolidation or merger or if we are
the surviving entity, shares of our outstanding common stock are changed
or exchanged for stock or securities or cash or any other property, or
. 50% or more of our assets or earning power is sold or transferred,
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each holder of a right shall thereafter have the right to receive upon exercise
that number of shares of common stock of the acquiring company that equals the
exercise price of the right divided by 50% of the current market price of the
common stock at the date of the occurrence of the event.
The rights have anti-takeover effects, in that they would cause substantial
dilution to a person or group that attempts to acquire a significant interest
in our stock on terms not approved by the Board of Directors. The rights expire
on March 17, 2008 but may be redeemed by us for $.0005 per right at any time
prior to the tenth day following a person's acquisition of 15% or more of our
then outstanding common stock. So long as the rights are not separately
transferable, each new share of common stock issued will have a right
associated with it.
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SELLING SECURITYHOLDERS
We originally sold the notes on October 2, 2000 to Goldman, Sachs & Co., SG
Cowen Securities Corporation and Salomon Smith Barney Inc. The initial
purchasers of the notes have advised us that the notes were resold in
transactions exempt from the registration requirements of the Securities Act to
"qualified institutional buyers", as defined in Rule 144A of the Securities
Act. These subsequent purchasers, or their transferees, pledgees, donees or
successors, may from time to time offer and sell any or all of the notes and/or
shares of the common stock issuable upon conversion of the notes pursuant to
this prospectus.
The notes and the shares of common stock issuable upon conversion of the
notes have been registered in accordance with the registration rights
agreement. Pursuant to the registration rights agreement, we are required to
file a registration statement with regard to the notes and the shares of our
common stock issuable upon conversion of the notes and to keep the registration
statement effective until the earlier of:
(1) the sale of all the securities registered under the registration rights
agreement;
(2) the expiration of the holding period applicable to these securities
under Rule 144(k) under the Securities Act with respect to persons who
are not our affiliates; and
(3) two years from the date the registration statement is declared
effective.
The selling securityholders may choose to sell notes and/or the shares of
common stock issuable upon conversion of the notes from time to time. See "Plan
of Distribution".
The following table sets forth:
(1) the name of each selling securityholder who has provided us with notice
as of the date of this prospectus pursuant to the registration rights
agreement of their intent to sell or otherwise dispose of notes and/or
shares of common stock issuable upon conversion of the notes pursuant
to the registration statement,
(2) the principal amount of notes and the number of shares of our common
stock issuable upon conversion of the notes which they may sell from
time to time pursuant to the registration statement, and
(3) the amount of outstanding notes and our common stock beneficially owned
by the selling securityholder prior to the offering, assuming no
conversion of the notes.
To our knowledge, no selling securityholder nor any of its affiliates has
held any position or office with, been employed by or otherwise has had any
material relationship with us or our affiliates during the three years prior to
the date of this prospectus.
A selling securityholder may offer all or some portion of the notes and
shares of the common stock issuable upon conversion of the notes. Accordingly,
no estimate can be given as to the amount or percentage of notes or our common
stock that will be held by the selling securityholders upon termination of
sales pursuant to this prospectus. In addition, the selling securityholders
identified below may have sold, transferred or disposed of all or a portion of
their notes since the date on which they provided the information regarding
their holdings in transactions exempt from the registration requirements of the
Securities Act.
The information contained under the column heading "Shares That May be Sold"
assumes conversion of the full amount of the notes held by the holder at the
initial rate of 7.7056 shares of common stock per each $1,000 principal amount
of notes.
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<TABLE>
<CAPTION>
Shares Of
Amount Of Common
Notes Owned Amount Of Stock Owned
Before Notes That Before Shares That
Name Offering May Be Sold Offering May Be Sold
---- ----------- ----------- ----------- -----------
[Details on selling securityholders to be inserted]
<S> <C> <C> <C> <C>
Unknown (1).....................
</TABLE>
--------
(1) The name "Unknown" represents the remaining selling securityholders. We are
unable to provide the names of these securityholders because certain of
these notes are currently evidenced by a global note which has been
deposited with DTC and registered in the name of Cede & Co. as DTC's
nominee.
If, after the date of this prospectus, a securityholder notifies us pursuant
to the registration rights agreement of its intent to dispose of notes pursuant
to the registration statement, we may supplement this prospectus to include
that information.
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PLAN OF DISTRIBUTION
We are registering the notes and the shares of our common stock issuable
upon conversion of the notes to permit public secondary trading of these
securities by the holders from time to time after the date of this prospectus.
We have agreed, among other things, to bear all expenses, other than
underwriting discounts and selling commissions, in connection with the
registration and sale of the notes and the shares of our common stock issuable
upon conversion of the notes covered by this prospectus.
We will not receive any of the proceeds from the offering of the notes or
the shares of our common stock issuable upon conversion of the notes by the
selling securityholders. The notes and shares of common stock issuable upon
conversion of the notes may be sold from time to time directly by any selling
securityholder or, alternatively, through underwriters, broker-dealers or
agents. If notes or shares of common stock issuable upon conversion of the
notes are sold through underwriters or broker-dealers, the selling
securityholder will be responsible for underwriting discounts or commissions or
agents' commissions.
The notes or shares of common stock issuable upon conversion of the notes
may be sold:
. in one or more transactions at fixed prices,
. at prevailing market prices at the time of sale,
. at varying prices determined at the time of sale or
. at negotiated prices.
These sales may be effected in transactions, which may involve block trades
or transactions in which the broker acts as agent for the seller and the buyer:
. on any national securities exchange or quotation service on which the
notes or shares of common stock issuable upon conversion of the notes
may be listed or quoted at the time of sale,
. in the over-the-counter market,
. in transactions otherwise than on a national securities exchange or
quotation service or in the over-the-counter market or
. through the writing of options.
In connection with sales of the notes or shares of common stock issuable
upon conversion of the notes or otherwise, any selling securityholder may:
. enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the notes or shares of common stock issuable
upon conversion of the notes in the course of hedging the positions they
assume,
. sell short and deliver notes or shares of common stock issuable upon
conversion of the notes to close out the short positions or
. loan or pledge notes or shares of common stock issuable upon conversion
of the notes to broker-dealers that in turn may sell the securities.
The outstanding common stock is publicly traded on the New York Stock
Exchange. The initial purchasers of the notes have advised us that certain of
the initial purchasers are making and
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currently intend to continue making a market in the notes; however, they are
not obligated to do so and any market-making of this type may be discontinued
at any time without notice, in the sole discretion of the initial purchasers.
We do not intend to apply for listing of the notes on the New York Stock
Exchange or any securities exchange. Accordingly, we cannot assure that any
trading market will develop or have any liquidity.
The selling securityholders and any broker-dealers, agents or underwriters
that participate with the selling securityholders in the distribution of the
notes or the shares of common stock issuable upon conversion of the notes may
be deemed to be "underwriters" within the meaning of the Securities Act, in
which event any commissions received by these broker-dealers, agents or
underwriters and any profits realized by the selling securityholders on the
resales of the notes or the shares may be deemed to be underwriting commissions
or discounts under the Securities Act.
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144, Rule 144A or any other available exemption from
registration under the Securities Act may be sold under Rule 144, Rule 144A or
any of the other available exemptions rather than pursuant to this prospectus.
There is no assurance that any selling securityholder will sell any or all
of the notes or shares of common stock issuable upon conversion of the notes
described in this prospectus, and any selling securityholder may transfer,
devise or gift the securities by other means not described in this prospectus.
We originally sold the notes to the initial purchasers in October 2000 in a
private placement. We agreed to indemnify and hold the initial purchasers of
the notes harmless against certain liabilities under the Securities Act that
could arise in connection with the sale of the notes by the initial purchasers.
The registration rights agreement provides for us and the selling
securityholders to indemnify each other against certain liabilities arising
under the Securities Act.
We agreed pursuant to the registration rights agreement to use reasonable
efforts to cause the registration statement to which this prospectus relates to
become effective within 180 days after the date the notes were originally
issued and to keep the registration statement effective until the earlier of:
. the sale of all the securities registered under the registration rights
agreement,
. the expiration of the holding period applicable to the securities under
Rule 144(k) under the Securities Act with respect to persons who are not
our affiliates, and
. two years from the date the registration statement is declared
effective.
The registration rights agreement provides that we may suspend the use of
this prospectus in connection with sales of notes and shares of common stock
issuable upon conversion of the notes by holders for a period not to exceed an
aggregate of 45 days in any 90-day period or 90 days in any 12-month period if
any event occurs or any fact exists that would render the registration
statement materially misleading. We will bear the expenses of preparing and
filing the registration statement and all post-effective amendments.
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LEGAL MATTERS
The validity of the notes and the shares of common stock issuable upon
conversion of the notes offered hereby will be passed upon for Analog by Hale
and Dorr LLP, a limited liability partnership including professional
corporations, 60 State Street, Boston, Massachusetts 02109. Paul P. Brountas, a
partner of Hale and Dorr LLP, is Clerk of Analog and owns 70,000 shares of
common stock of Analog.
EXPERTS
The consolidated financial statements and financial statement schedule of
Analog Devices, Inc. incorporated by reference and included, respectively, in
Analog Devices, Inc.'s Annual Report on Form 10-K for the year ended October
30, 1999, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their reports thereon incorporated by reference and included therein,
respectively, and incorporated herein by reference. Such consolidated financial
statements and financial statement schedule are incorporated herein by
reference in reliance upon such reports given on the authority of such firm as
experts in accounting and auditing.
ADDITIONAL FILINGS AND COMPANY INFORMATION
We file reports, proxy statements, information statements and other
information with the Securities and Exchange Commission. You may read and copy
this information, for a copying fee, at the Commission's Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices
of the Commission located at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center, Suite 1300,
New York, New York 10048. Please call the Commission at 1-800-SEC-0330 for more
information on its public reference rooms. Our Commission filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the Commission at http://www.sec.gov.
Our common stock is traded on the New York Stock Exchange and, therefore,
the information we file with the Commission may also be inspected at the
offices of the New York Stock Exchange, located at 20 Broad Street, New York,
NY 10005.
We have filed with the Commission a registration statement on Form S-3 to
register with the Commission the resale of the notes and shares of our common
stock described in this prospectus. This prospectus is part of that
registration statement, and provides you with a general description of the
notes and shares of common stock being registered, but does not include all of
the information you can find in the registration statement or the exhibits. You
should refer to the registration statement and its exhibits for more
information about Analog, the notes and the shares of common stock being
registered.
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<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
The Commission allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring to another document filed separately with the Commission. The
information incorporated by reference is deemed to be part of this prospectus,
except for information superseded by this prospectus. The prospectus
incorporates by reference the documents set forth below that we have previously
filed with the Commission. These documents contain important information about
Analog and its finances.
(1) Annual Report on Form 10-K for the year ended October 30, 1999;
(2) Quarterly Report on Form 10-Q for the quarter ended January 29, 2000;
(3) Quarterly Report on Form 10-Q for the quarter ended April 29, 2000;
(4) Quarterly Report on Form 10-Q for the quarter ended July 29, 2000; and
(5) Current Report on Form 8-K dated October 6, 2000.
We are also incorporating by reference additional documents that we may file
with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act prior to the termination of this offering.
If you are a stockholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through us or the
Commission. Documents incorporated by reference are available from us without
charge, except exhibits, unless we have specifically incorporated by reference
an exhibit into a document that this prospectus incorporates. Stockholders may
obtain documents incorporated by reference into this prospectus by requesting
them in writing or by telephone from:
Analog Devices, Inc.
Attention: Joseph E. McDonough, Vice President-Finance
One Technology Way
Norwood, MA 02062-9106
Telephone: (781) 329-4700
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
Some statements in this prospectus and in the documents incorporated by
reference may constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are subject
to risks and uncertainties and are based on beliefs and assumptions of Analog,
based on information currently available to the company's management. For this
purpose, any statements contained herein or incorporated herein that are not
statements of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words "believes", "plans", "expects" and
similar expressions are intended to identify forward-looking statements. Actual
results may vary materially from those we express in forward looking
statements. Factors which could cause actual results to differ from
expectations include those set forth under "Risk Factors".
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by the Registrant (except expenses incurred
by the Selling Securityholders for brokerage fees, selling commissions and
expenses incurred by the Selling Securityholders for legal services). All
amounts shown are estimates except the Securities and Exchange Commission
registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee...................... $316,800
Legal fees and expenses............................................ 25,000
Printing expenses.................................................. 8,000
--------
Total Expenses................................................... $349,800
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 6A of the Registrant's Articles of Organization, as amended (the
"Articles of Organization") provides for indemnification of directors and
officers to the full extent permitted under Massachusetts law. Section 67 of
Chapter 156B of the Massachusetts General Laws provides that a corporation has
the power to indemnify a director, officer, employee or agent of the
corporation and certain other persons serving at the request of the corporation
in related capacities against amounts paid and expenses incurred in connection
with an action or proceeding to which he is or is threatened to be made a party
by reason of such position, if such person shall have acted in good faith and
in a manner he reasonably believed to be in the best interests of the
corporation, provided that, no indemnification shall be made with respect to
any matter as to which such person shall have been adjudged not to be entitled
to indemnification under Section 67.
Article 6A also provides for indemnification of directors and officers of
the Registrant against liabilities and expenses in connection with any legal
proceedings to which they may be made a party or with which they may become
involved or threatened by reason of having been an officer or director of the
Registrant or of any other organization at the request of the Registrant.
Article 6A generally provides that a director or officer of the Registrant (i)
shall be indemnified by the Registrant for all expenses of such legal
proceedings unless he has been adjudicated not to have acted in good faith in
the reasonable belief that his action was in the best interests of the
Registrant, and (ii) shall be indemnified by the Registrant for the expenses,
judgments, fines and amounts paid in settlement and compromise of such
proceedings. No indemnification will be made to cover costs of settlements and
compromises if the Board determines by a majority vote of a quorum consisting
of disinterested directors (or, if such quorum is not obtainable, by a majority
of the disinterested directors of the Registrant), that such settlement or
compromise is not in the best interests of the Registrant.
Article 6A permits the payment by the Registrant of expenses incurred in
defending a civil or criminal action in advance of its final disposition,
subject to receipt of an undertaking by the indemnified person to repay such
payment if it is ultimately determined that such person is not entitled to
indemnification under the Articles of Organization. No advance may be made if
the Board of Directors determines, by a majority vote of a quorum consisting of
disinterested directors (or, if such quorum is not obtainable, by a majority of
the disinterested directors of the Registrant), that such person did not act in
good faith in the reasonable belief that his action was in the best interest of
the Registrant.
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<PAGE>
Article 6D of the Registrant's Articles of Organization provides that no
director shall be liable to the Registrant or its stockholders for monetary
damages for breach of his fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 61 or
62 of Chapter 156B, or (iv) for any transaction from which the director derived
an improper personal benefit.
The Registrant has directors and officers liability insurance for the
benefit of its directors and officers.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<C> <S>
4.1 Indenture dated as of October 2, 2000 by and between Registrant, as
Issuer, and State Street Bank and Trust Company, as Trustee, relating to
the Registrant's 4.75% Convertible Subordinated Notes due 2005.
4.2 Specimen Note for Registrant's 4.75% Convertible Subordinated Notes due
2005 (included in pages 16 to 29 of the Indenture filed as Exhibit 4.1).
4.3 Registration Rights Agreement dated October 2, 2000 by and between
Registrant, Goldman, Sachs & Co., SG Cowen Securities Corporation and
Salomon Smith Barney Inc. relating to the Registrant's 4.75% Convertible
Subordinated Notes due 2005.
5.1 Opinion of Hale and Dorr LLP.
12.1 Statement of Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Hale and Dorr LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (see page II-4 of this Registration Statement).
25.1 Statement of Eligibility of Trustee on Form T-1.
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any derivation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the Registration
Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
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<PAGE>
provided, however, that paragraphs (i) and (ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 and 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at the time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnification provisions described herein, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit, or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Norwood, Commonwealth of Massachusetts, on this 30th
day of October, 2000.
Analog Devices, Inc.
/s/ Jerald G. Fishman
By: _________________________________
Jerald G. Fishman
President and Chief Executive
Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Analog Devices, Inc., hereby
severally constitute Jerald G. Fishman and Joseph E. McDonough, and each of
them singly, our true and lawful attorneys with full power to any of them, and
to each of them singly, to sign for us and in our names in the capacities
indicated below the Registration Statement on Form S-3 filed herewith and any
and all pre-effective and post-effective amendments to said Registration
Statement and generally to do all such things in our name and behalf in our
capacities as officers and directors to enable Analog Devices, Inc. to comply
with the provisions of the Securities Act and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jerald G. Fishman President, Chief Executive October 30, 2000
______________________________________ Officer and Director
Jerald G. Fishman (Principal Executive
Officer)
/s/ Ray Stata Chairman of the Board and October 30, 2000
______________________________________ Director
Ray Stata
/s/ Joseph E. McDonough Vice President-Finance and October 30, 2000
______________________________________ Chief Financial Officer
Joseph E. McDonough (Principal Financial and
Accounting Officer)
/s/ John L. Doyle Director October 30, 2000
______________________________________
John L. Doyle
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Charles O. Holliday, Jr. Director October 30, 2000
______________________________________
Charles O. Holliday, Jr.
/s/ Joel Moses Director October 30, 2000
______________________________________
Joel Moses
/s/ F. Grant Saviers Director October 30, 2000
______________________________________
F. Grant Saviers
/s/ Lester C. Thurow Director October 30, 2000
______________________________________
Lester C. Thurow
</TABLE>
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EXHIBIT INDEX
<TABLE>
<C> <S>
4.1 Indenture dated as of October 2, 2000 by and between Registrant, as
Issuer, and State Street Bank and Trust Company, as Trustee, relating to
the Registrant's 4.75% Convertible Subordinated Notes due 2005.
4.2 Specimen Note for Registrant's 4.75% Convertible Subordinated Notes due
2005 (included in pages 16 to 29 of the Indenture filed as Exhibit 4.1).
4.3 Registration Rights Agreement dated October 2, 2000 by and between
Registrant, Goldman, Sachs & Co., SG Cowen Securities Corporation and
Salomon Smith Barney Inc. relating to the Registrant's 4.75% Convertible
Subordinated Notes due 2005.
5.1 Opinion of Hale and Dorr LLP.
12.1 Statement of Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Hale and Dorr LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (see page II-4 of this Registration Statement).
25.1 Statement of Eligibility of Trustee on Form T-1.
</TABLE>
