<PAGE>
As filed with the Securities and Exchange Commission on May 24, 1994
Registration No. 33-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
LOTUS DEVELOPMENT CORPORATION
(Exact name of registrant as specified in charter)
Delaware 04-2757702
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
55 Cambridge Parkway
Cambridge, Massachusetts 02142
(617) 577-8500
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
___________________
Thomas M. Lemberg, Esq. Copy to:
Vice President, General Counsel
and Secretary Kenneth S. Siegel, Esq.
Lotus Development Corp. O'Sullivan Graev & Karabell
55 Cambridge Parkway 30 Rockefeller Plaza
Cambridge, Massachusetts 02142 New York, New York 10112
(617) 577-8500 (212) 408-2400
(Name, address, including zip code,
and telephone number, including area code, of
agent for service of process)
___________________
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: From time to time 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]
___________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================
Title of Shares Amount Proposed Proposed Amount of
to be Registered to be Maximum Maximum Registration Fee
Registered Aggregate Offering
Price Per Unit(1) Price(1)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,423,734 $57.125 $81,330,805 $28,045
==================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based on the average of the high and low sales prices
of the Common Stock on May 19, 1994, as reported in the NASDAQ National
Market System.
___________________
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
LOTUS DEVELOPMENT CORPORATION
Cross Reference Sheet Pursuant to Item 501(b)
of Regulation S-K Showing Location in Prospectus of
Information Required by Items of Form S-3
<TABLE>
<CAPTION>
FORM S-3 REGISTRATION
STATEMENT ITEM AND HEADING LOCATION IN PROSPECTUS
- -------------------------- ----------------------
<S> <C>
1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus.......................... Facing Page of Registration
Statement; Cross-Reference
Sheet; Outside Front Cover Page
of Prospectus
2. Inside Front and Outside Back
Cover Pages of Prospectus........... Inside Front Cover of
Prospectus; The Company
3. Summary Information, Risk
Factors and Ratio of Earnings to
Fixed Charges....................... Available Information
4. Use of Proceeds..................... Use of Proceeds
5. Determination of Offering Price..... *
6. Dilution............................ *
7. Selling Security-Holders............ Selling Shareholders
8. Plan of Distribution................ Plan of Distribution
9. Description of Securities to be
Registered.......................... Description of Company's
Securities; Incorporation of
Certain Documents by Reference
10. Interests of Named Experts and
Counsel............................ Legal Opinion
11. Material Changes................... Incorporation of Certain
Documents by Reference
12. Incorporation of Certain
Documents by Reference............. Incorporation of Certain
Documents by Reference
13. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities.................... *
</TABLE>
* Item is omitted because it is either not required or inapplicable.
<PAGE>
********************************************************************************
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
********************************************************************************
SUBJECT TO COMPLETION, DATED MAY 23, 1994
PROSPECTUS
1,423,734 SHARES
LOTUS DEVELOPMENT CORPORATION
COMMON STOCK
_____________________
This Prospectus relates to the public offering from time to time of up to
an aggregate of 1,423,734 shares (the "Shares") of common stock, par value $.01
per share (the "Common Stock"), of Lotus Development Corporation, a Delaware
corporation (the "Company" or "Lotus"), by the Selling Shareholders named
herein. See "The Selling Shareholders."
The Selling Shareholders, or any of them, may sell the Shares from time to
time in transactions on the NASDAQ National Market System or in the over-the-
counter market, or through private sales. See "Plan of Distribution." All
sales made on the NASDAQ National Market System or in the over-the-counter
market shall be made at the then prevailing price of the Shares on such national
market system or in such over-the-counter market, as applicable; any private
sales will be made at negotiated prices.
Sales of the Shares may be made to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders effecting such sales. The Selling
Shareholders and any broker-dealers who act in connection with sales of Shares
may be deemed to be "underwriters" as that term is defined in the Securities Act
of 1933, as amended (the "Securities Act"), and any commissions received by them
and profit on any resale of the Shares may be deemed to be underwriting
discounts and commissions under the Securities Act.
The Company will not receive any proceeds from the sale of Shares
hereunder. The Selling Shareholders shall pay all discounts and selling
commissions (if any), fees and expenses of counsel and other advisors to the
Selling Shareholders, or any of them, and any other expenses incurred in
connection with the registration and sale of the Shares, other than the
registration fee payable to the Securities and Exchange Commission hereunder,
the listing fee to be paid to the National Association of Securities Dealers,
Inc. ("NASD") for listing the Shares on the NASDAQ National Market System, fees
and expenses relating to the registration or qualification of the Shares
pursuant to any applicable state securities or "blue sky" laws and the fees and
expenses of the Company's counsel and independent accountants, which will be
paid by the Company. See "Plan of Distribution." Expenses of issuance and
distribution are estimated to be $120,545, of which approximately $90,545 will
be borne by the Company and approximately $30,000 will be borne by the Selling
Shareholders.
The Common Stock is traded on the NASDAQ National Market System under the
symbol "LOTS." On May 19, 1994 the reported closing price of the Company's
Common Stock on the NASDAQ National Market System was $58.00 per share.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
____________________
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON HAS HAVING BEEN AUTHORIZED BY THE
COMPANY OR BY ANY OTHER PERSON. ALL INFORMATION CONTAINED IN THIS PROSPECTUS IS
AS OF THE DATE OF THIS PROSPECTUS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR IN THE FACTS
HEREIN SET FORTH SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THE
SECURITIES COVERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO OR
SOLICITATION OF ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION MAY NOT BE LAWFULLY MADE.
THE DATE OF THIS PROSPECTUS IS MAY __, 1994.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder, and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information filed by
the Company with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional
Offices of the Commission: Room 3190, Northwest Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661-2511; and 13th Floor, 7 World Trade Center, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports, proxy statements and
other information concerning the Company are also available for inspection at
the offices of the NASDAQ Stock Market, Inc., Reports Section, 1735 K Street,
Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(i) the Annual Report of the Company on Form 10-K for the year ended
December 31, 1993;
(ii) the Quarterly Report of the Company on Form 10-Q for the fiscal
quarter ended April 2, 1994;
(iii) the Company's definitive Proxy Statement, dated April 13, 1994, for
its Annual Meeting of Shareholders to be held on Wednesday, May 25, 1994;
(iv) the description of the Common Stock contained in the registration
statement on Form 8-A filed by the Company with the Commission on February
24, 1984; and
(v) the descriptions of the Series A Preferred Stock Purchase Rights and
of the Series A Preferred Stock contained in the registration statement on
Form 8-A filed by the Company with the Commission on November 10, 1988, as
amended.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior
to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the filing date of
such document.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents which have been incorporated by reference
herein, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference herein). Requests for such copies
should be directed to: Thomas M. Lemberg, Esq., Vice President, General Counsel
and Secretary of the Company, telephone number (617) 577-8500.
2
<PAGE>
THE COMPANY
Lotus Development Corporation was incorporated in Delaware in April 1982.
The Company and its subsidiaries are engaged in the development, manufacturing,
marketing and support of applications software and services that meet the
evolving technology and business application requirements of individuals, work
groups, and entire organizations.
The Company's products and services consist primarily of desktop
applications, which include spreadsheets, word processing, graphics, end-user
database and personal information management software, and communications
products and services, which include Lotus Notes, cc:Mail and consulting
services. These products and services comprise the Company's "Working Together"
strategy, which is defined by products that have common user interfaces, that
are integrated with each other, that work across multiple platforms, and that
help people work together more productively. The centerpiece of this strategy
is communications products that facilitate workgroup computing and make the
Company's desktop applications more productive through group-enabling and ease-
of-use features. The Company markets its products in more than 80 countries
worldwide and provides support services through its consulting services group
and its worldwide support centers.
Lotus' initial product, Lotus 1-2-3, was shipped in January 1983. 1-2-3 is
a software product that combines spreadsheet, database and graphing capabilities
into a single program for use with most personal computers. According to
industry reports, soon after its introduction, 1-2-3 became the personal
computer software industry's best selling business applications software
product. Since its release in 1983, 1-2-3 has been continually updated to
incorporate new technological advances, increased functionality, ease-of-use,
and compatibility with major operating system and hardware platforms. By the
end of 1993, the Company had shipped approximately 15 million units of 1-2-3.
The Company has added to its established spreadsheet products in an effort
to build a strong presence in each of the predominant desktop applications
categories. Lotus has developed or acquired presentation graphics (Freelance
Graphics), word processing (Ami Pro), end-user database (Lotus Approach) and
personal information management (Lotus Organizer) software products. In 1992,
the Company introduced SmartSuite, an integrated suite of the Company's desktop
applications.
The Company introduced Lotus Notes in 1990 and acquired cc:Mail, Inc. in
1991 to position itself to capitalize on the trend toward networked computing,
information sharing and organizational computing. Lotus Notes has been widely
acclaimed for its ability to enable workgroups to access, track, share, route
and organize information across diverse computing platforms and geographical
boundaries. Notes is the predominant client-server product for developing and
deploying groupware applications, including those found in customer service,
sales and account management and product development. The combination of Notes
and cc:Mail, the leading LAN (Local Area Network)-based electronic mail product,
has established the Company as a leader in PC-based communications software.
The Company has also integrated Notes with its desktop products to enable them
to take advantage of workgroup computing environments.
The Company's aim is to develop and market the best desktop applications in
the industry and to play a leadership role in the rapidly growing communications
market. Improving organizational productivity for its customers in today's
networked computing environment is a primary objective.
The Company has developed and adopted cross-product standards for most
Lotus products that enhance user value in areas such as user interface design,
database access methods, international character sets, networking, mail
enabling, customization and extensibility. When appropriate, the Company has
worked with other major software and hardware companies to develop these
standards. Furthermore, as networked computing environments become more
prevalent, the Company has focused on providing customers with communications
products capable of being used across a broad range of hardware systems and
operating environments. This provides customers with the ability to easily
share information among users, to more readily move users between computing
platforms, and to exercise greater flexibility in selecting computing
environments. The Company believes this approach is of
3
<PAGE>
significant value to customers because it preserves their existing investment
while allowing them to take advantage of new technologies. The Company also
believes this approach is necessary to maintain its competitive position.
The Company's address is 55 Cambridge Parkway, Cambridge, Massachusetts
02142, and its telephone number is (617) 577-8500.
THE SELLING SHAREHOLDERS
Each of the Selling Shareholders is a stockholder of Iris Associates, Inc.,
a Delaware corporation ("Iris"). On May 23, 1994, Lotus and a wholly-owned
subsidiary ("Acquisition Sub") entered into an Agreement and Plan of
Reorganization with Iris providing for the acquisition of Iris by Lotus pursuant
to a merger between Iris and Acquisition Sub (the "Merger"). In the Merger, the
shares of capital stock of Iris owned by the Selling Shareholders will be
converted, on a pro rata basis, into shares of Lotus Common Stock, and Iris will
become a wholly-owned subsidiary of Lotus. The Selling Shareholders will
receive, in the aggregate, 1,423,734 shares of Lotus Common Stock in the Merger,
all of which may be offered for sale from time to time by the Selling
Shareholders pursuant to the registration statement of which this Prospectus is
a part.
The name and address of each of the Selling Shareholders, the positions,
offices and other material relationships, if any, of such Selling Shareholder
with Iris prior to the Merger, the number of Shares to be held by such Selling
Shareholder following the Merger and the percentage ownership of such Selling
Shareholder following the Merger of the issued and outstanding shares of Lotus
Common Stock is as set forth below:
<TABLE>
<CAPTION>
Name Address Positions, Offices and No. of Shares Percent of Lotus
---- ------- Other Material ------------- Common Stock
Relationships with Iris ----------------
-----------------------
<S> <C> <C> <C> <C>
Raymond E. Ozzie One Technology Park President 791,963 1.74%
Westford, MA 01886
Timothy Halvorsen One Technology Park Vice President 199,323 *%
Westford, MA 01886
Alan E. Eldridge One Technology Park -- 43,673 *%
Westford, MA 01886
Steven R. One Technology Park Vice President, Chief 185,085 *%
Beckhardt Westford, MA 01886 Financial Officer
Jack E. Ozzie One Technology Park -- 4,367 *%
Westford, MA 01886
Leonard M. One Technology Park Vice President 199,323 *%
Kawell Westford, MA 01886
</TABLE>
- -------------------
* Less than 1%
Except for the positions, offices and other material relationships with
Iris set forth above, none of the Selling Shareholders has held any position or
office, or had any other material relationship, with Lotus or any of its
predecessors or affiliates. If all the Shares being offered by the Selling
Shareholders are sold, none of the Selling Shareholders will own any Common
Stock.
PLAN OF DISTRIBUTION
The Shares are being registered to permit public secondary sales of the
Shares by the Selling Shareholders, or any of them, from time to time after the
date of this Prospectus. The Company anticipates that the Selling Shareholders
may sell all or a portion of the Shares from time to time through the NASDAQ
National Market
4
<PAGE>
System or in the over-the-counter market, and may sell Shares to or through one
or more broker-dealers at prices prevailing on such National Market System or
over-the-counter market, as appropriate, at the times of such sales. The
Selling Shareholders may also make private sales directly or through one or more
broker-dealers. Broker-dealers participating in such transactions may receive
compensation in the form of discounts, concessions or commissions (including,
without limitation, customary brokerage commissions) from the Selling
Shareholders effecting such sales. The Selling Shareholders and any broker-
dealers who act in connection with sales of Shares may be deemed to be
"underwriters" as that term is defined in the Securities Act, and any
commissions received by them and profit on any resale of the Shares might be
deemed to be underwriting discounts and commissions under the Securities Act.
In effecting sales, broker-dealers engaged by a Selling Shareholder may arrange
for other broker-dealers to participate.
The Selling Shareholders shall pay all discounts and selling commissions
(if any), fees and expenses of counsel and other advisors to the Selling
Shareholders, or any of them, and any other expenses incurred in connection with
the registration and sale of the Shares, other than the registration fee payable
to the Securities Exchange Commission hereunder, the listing fee to be paid to
the NASD for listing the Shares on the NASDAQ National Market System, fees and
expenses relating to the registration or qualification of the Shares pursuant to
any applicable state securities or "blue sky" laws and the fees and expenses of
the Company's counsel and independent accountants, which will be paid by the
Company.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Shares
hereunder.
DESCRIPTION OF THE COMPANY'S SECURITIES
COMMON STOCK
The Company is authorized to issue up to 100,000,000 shares of Common
Stock. The holders of the Company's Common Stock are entitled to one vote for
each share held on all matters submitted to a vote of stockholders.
Upon liquidation, dissolution or winding up of the Company, subject to the
rights of the holders of Preferred Stock, $1.00 par value (the "Preferred
Stock"), of the Company then outstanding, the holders of Common Stock are
entitled to receive the net assets of the Company in proportion to the
respective number of shares held by them. The holders of Common Stock have no
preemptive or cumulative voting rights, and there are no conversion rights or
sinking fund provisions applicable thereto. The outstanding shares of Common
Stock are duly authorized, fully paid and nonassessable.
Subject to the rights of any holders of Preferred Stock and the limitations
contained in certain loan agreements to which the Company is a party, the
holders of Common Stock are entitled to receive dividends when, as and if
declared by the Board of Directors of the Company out of funds legally available
therefor. Certain of the loan agreements to which the Company is a party
contain provisions restricting the ability of the Company to redeem, or to pay
dividends or make distributions with respect to, its capital stock. These
restrictions would not presently affect the Company's ability to pay dividends
from its current retained earnings.
The Company has never declared or paid cash dividends on the Common Stock
and does not currently intend to pay cash dividends on the Common Stock in the
foreseeable future. The Company intends to retain future earnings for
reinvestment in its business. Subject to the provisions of the loan agreements
referred to above, any future payment of cash dividends on the Common Stock will
be within the discretion of the Company's Board of Directors.
5
<PAGE>
RIGHTS PLAN
On November 7, 1988, the Board of Directors of the Company declared a
dividend of one preferred share purchase right (a "Right") for each outstanding
share of Common Stock. The dividend was paid as of the close of business on
November 23, 1988 (the "Rights Record Date"), to the stockholders of record on
that date. On November 7, 1988, the Board of Directors of the Company also
directed the issuance of one Right with respect to each share of Common Stock
issued (a) subsequent to the Rights Record Date and prior to the earliest to
occur of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined), or (b) upon the exercise, after
the Distribution Date and prior to the earlier to occur of the Redemption Date
and the Final Expiration Date, of an option granted prior to the Distribution
Date pursuant to any benefit plan of the Company. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share (a
"Series A Preferred Share") of Series A Junior Participating Preferred Stock,
$1.00 per value (the "Series A Preferred Stock"), of the Company at a price of
$75 per one one-hundredth of a Series A Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
the Rights Agreement dated as of November 7, 1988, between the Company and The
First National Bank of Boston, as Rights Agent, as amended by the Amendment to
the Rights Agreement dated as of April 5, 1990, and the Amendment to the Rights
Agreement dated as of September 16, 1991, each between the Company and The
First National Bank of Boston, as Rights Agent (the "Rights Agreement").
The following is a general description only and is subject to detailed
terms and conditions of the Rights Agreement.
RIGHTS EVIDENCED BY COMMON STOCK CERTIFICATES. Until the earlier to occur
of (a) 10 days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired beneficial
ownership of 15% or more of the outstanding Common Stock or (b) 10 business days
(or such later date as may be determined by action of the Board of Directors
prior to the time that a person or group has become an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in a person or
group becoming an Acquiring Person (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Stock certificates outstanding as of the Rights Record Date, by such
Common Stock certificate.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Stock. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Rights Record Date upon a transfer or an original
issuance of Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Stock outstanding as of the Rights Record Date, even without such
notation, will also constitute the surrender for transfer of the Rights
associated with the Common Stock represented by such certificates.
ISSUANCE OF RIGHTS CERTIFICATES; EXPIRATION OF RIGHTS. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Rights Certificates") will be mailed to holders of record of Common
Stock as of the close of business on the Distribution Date and such separate
Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and are not
exercisable at any time at which they are redeemable by the Company. The Rights
will expire on November 23, 1998 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed by the
Company, in each case as described below.
ADJUSTMENTS TO PREVENT DILUTION. The Purchase Price payable, and the
number of Series A Preferred Shares or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (a) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Series A Preferred Shares, (b) upon the
grant to holders of Series A Preferred Shares of certain rights or
6
<PAGE>
warrants to subscribe for or purchase Series A Preferred Shares at a price, or
securities convertible into Series A Preferred Shares with a conversion price,
less than the then current market price of the Series A Preferred Shares or (c)
upon the distribution to holders of Series A Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Series A Preferred Shares)
or of subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one-hundredths of a
Series A Preferred Share issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Series A Preferred Shares will be issued
(other than fractions that are integral multiples of one one-hundredth of a
Series A Preferred Share, which may, at the election of the Company, be
evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Series A Preferred Shares on the
last trading day prior to the date of exercise.
SERIES A PREFERRED STOCK. Series A Preferred Shares purchasable upon
exercise of the Rights will not be redeemable. Each Series A Preferred Share
will be entitled to a minimum preferential quarterly dividend payment of $1 per
share but will be entitled to an aggregate dividend of 100 times the dividend
declared per share of Common Stock. In the event of liquidation, the holders of
Series A Preferred Shares will be entitled to a minimum preferential liquidation
payment of $100 per share but will be entitled to an aggregate payment of 100
times the payment made per share of Common Stock. Each Series A Preferred Share
will have 100 votes, voting together with the Common Stock. Finally, in the
event of any merger, consolidation or other transaction in which Common Stock is
exchanged, each Series A Preferred Share will be entitled to receive 100 times
the amount received per share of Common Stock. These rights are protected by
customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting rights of the
Series A Preferred Stock, the value of the one-hundredth interest in a Series A
Preferred Share purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
PROTECTION AGAINST CERTAIN UNFAIR TWO-STEP OR COERCIVE TRANSACTIONS; RIGHT
TO BUY ACQUIRING CORPORATION STOCK AT HALF PRICE. Unless the Rights are earlier
redeemed, in the event that the Company is acquired in a merger or other
business combination transaction or rights, assets, properties or interests in
properties accounting for 50% or more of the fair market value of the assets or
more than 50% of the revenues of the Company are sold, proper provision will be
made so that each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company which at the time of
such transaction will have a market value of two times the exercise price of the
Right. If any person becomes an Acquiring Person, then proper provision will be
made so that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person and certain affiliated or associated persons (which will
thereafter be void), will thereafter have the right to receive upon exercise, in
lieu of one one-hundredth of a Series A Preferred Share, that number of shares
of Common Stock (or, in certain circumstances, other securities or cash) having
a market value of two times the Purchase Price of the Right.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
Common Stock and prior to the acquisition by such person or group of 50% or more
of the outstanding Common Stock, the Board of Directors of the Company (with the
concurrence of a majority of the directors (the "Unaffiliated Directors") who
are neither employees or officers of the Company nor affiliated or associated
with an Acquiring Person) may exchange the Rights (other than Rights owned by
such person or group which have become void), in whole or in part, at an
exchange ratio of one share of Common Stock, or one one-hundredth of a Series A
Preferred Share (or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per Right (subject
to adjustment).
7
<PAGE>
REDEMPTION. At any time prior to the earlier of (a) the tenth day
following a public announcement that a person has become an Acquiring Person (or
such later date determined by the Board of Directors of the Company with the
concurrence of a majority of the Unaffiliated Directors) and (b) the Final
Expiration Date, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price");
provided, however, that the Rights will not be redeemable at any time at which
Unaffiliated Directors do not constitute a majority of the Board of Directors.
The redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion may
establish. Rights will not be exercisable at any time at which the Company's
right to redeem is in effect.
In addition, if a bidder who does not beneficially own more than 1% of the
Common Stock (and who has not within the past year owned in excess of 1% of the
Common Stock and, at a time he or she held such greater-than 1% stake,
disclosed, or caused the disclosure of, an intention that relates to or would
result in the acquisition or influence of control of the Company) proposes to
acquire all the Common Stock (and all other shares of capital stock of the
Company entitled to vote with the Common Stock in the election of directors or
on mergers, consolidations, sales of all or substantially all the Company's
assets, liquidations, dissolutions or windings up) for cash at a price that a
nationally-recognized investment banker selected by such bidder states in
writing is fair, and such bidder has obtained written financing commitments (or
otherwise has financing) and complies with certain procedural requirements, then
the Company, upon the request of the bidder, will hold a special stockholders
meeting to vote on a resolution requesting the Board of Directors to accept the
bidder's proposal. If a majority of the outstanding shares entitled to vote on
the proposal vote in favor of such resolution, then for a period of 60 days
after such meeting the Rights will be automatically redeemed at the Redemption
Price immediately prior to the consummation of any tender offer for all of such
shares at a price per share in cash equal to or greater than the price offered
by such bidder; provided, however, that no redemption will be permitted or
required after the acquisition by any person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
Common Stock. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
AMENDMENT OF RIGHTS PLAN. The terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to lower the threshold for exercisability of the
Rights from 15% to not less than the smallest whole percentage greater than the
largest percentage of the outstanding Common Stock then known to the Company to
be beneficially owned by any person or group of affiliated or associated
persons, except that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person no such amendment
may adversely affect the interests of the holders of the Rights and except that
the exercise price of the Rights, the redemption price of the Rights and the
final expiration date of the Rights Agreement cannot be amended without the
consent of each holder.
NO STOCKHOLDER RIGHTS PRIOR TO EXERCISE. Until a Right is exercised, the
holder thereof, as such, will not have any rights, including, without
limitation, the right to vote or to receive dividends, as a stockholder of the
Company.
CERTAIN ANTI-TAKEOVER EFFECTS. The Rights have certain anti-takeover
effects. The Rights will cause substantial dilution to a person or group that
attempts to acquire the Company on terms not approved by the Board of Directors
of the Company, except pursuant to an offer conditioned on a substantial number
of Rights being acquired. The Rights should not interfere with any merger or
other business combination approved by the Board of Directors since the Rights
may be redeemed by the Company at the Redemption Price prior to the time that a
person or group has acquired beneficial ownership of 15% or more of the Common
Stock.
INCORPORATION BY REFERENCE. The Rights Agreement, specifying the terms of
the Rights and including the form of the Certificate of Designations setting
forth the terms of the Series A Preferred Shares as an exhibit thereto, has
previously been filed with the Commission and is incorporated herein by
reference. The foregoing description of the Rights is qualified in its entirety
by reference to such exhibit.
8
<PAGE>
PREFERRED STOCK
The Board of Directors of the Company is empowered by the Company's Second
Restated Certificate of Incorporation to issue up to 5,000,000 shares of
Preferred Stock, from time to time, in series and, with respect to each series,
to determine its relative rights, privileges, qualifications, limitations and
restrictions. The Board of Directors of the Company has designated 550,000
shares of Preferred Stock as Series A Preferred Stock. There are currently no
shares of Preferred Stock outstanding.
The Board of Directors of the Company, without the prior consent of the
holders of Common Stock, could issue shares of Preferred Stock with voting and
conversion rights that could adversely affect the voting rights of the holders
of Common Stock. In the event of a proposed merger, tender offer, proxy contest
or other attempt to gain control of the Company, it would be possible, subject
to any limitations imposed by applicable law and the Second Restated Certificate
of Incorporation, for the Board of Directors of the Company, without the prior
consent of the holders of Common Stock, to authorize the issuance of one or more
series of Preferred Stock with voting rights or other rights and preferences
that would impede the success of such proposed merger, tender offer, proxy
contest or other attempt to gain control of the Company.
The Company has no present plans (i) to issue any shares of Preferred Stock
other than the shares of Series A Preferred Stock described above or (ii) to
designate any additional Series of Preferred Stock.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
Section 203 of the Delaware General Corporation Law prevents an "interested
stockholder" (defined in Section 203, generally, as a person owning 15% or more
of a corporation's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with a publicly-held Delaware
corporation for three years following the date such person became an interested
stockholder unless (i) before such person became an interested stockholder, the
board of directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved the business
combination; (ii) upon consummation of the transaction that resulted in the
interested stockholder's becoming an interested stockholder, the interested
stockholder owns at least 85% of the voting stock of the corporation outstanding
at the time the transaction commenced (excluding stock held by directors who are
also officers of the corporation and by employee stock plans that do not provide
employees with the rights to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer); or (iii)
following the transaction in which such person became an interested stockholder,
the business combination is approved by the board of directors of the
corporation and authorized at a meeting of stockholders by the affirmative vote
of the holders of two-thirds of the outstanding voting stock of the corporation
not owned by the interested stockholder.
LEGAL OPINION
The validity of the issuance of shares of Common Stock offered hereby has
been passed upon by O'Sullivan Graev & Karabell, New York, New York. Lawrence
G. Graev, a member of the firm of O'Sullivan Graev & Karabell, is a director of
the Company. Mr. Graev beneficially owns 39,000 shares of Common Stock of the
Company.
EXPERTS
The consolidated balance sheets as of December 31, 1993 and 1992 and the
consolidated statements of operations, cash flows and stockholders' equity for
each of the three years in the period ended December 31, 1993, incorporated by
reference in this prospectus, have been incorporated herein in reliance on the
report of Coopers & Lybrand, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses that are expected to be
incurred in connection with the offering of the Shares. All such expenses shall
be borne by the Company, other than the printing and engraving expenses, the
fees and expenses of legal counsel to the Selling Shareholders, and certain
miscellaneous expenses, which will be paid by the Selling Shareholders. All
amounts set forth below are estimates, other than the SEC registration fee and
NASDAQ listing fee.
<TABLE>
<S> <C>
SEC registration fee................................... $ 28,045
NASDAQ listing fee..................................... 17,500
Printing and engraving expenses........................ 15,000
Legal fees and expenses (counsel to the Company)....... 30,000
Legal fees and expenses (counsel to the Selling
Shareholders)......................................... 10,000
Accounting fees and expenses........................... 10,000
Blue Sky fees and expenses (including counsel fees).... 5,000
Miscellaneous expenses................................. 5,000
--------
Total.......................................... $120,545
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides for
indemnification of directors, officers, employees and agents, subject to certain
limitations (Del. Code, Title 8 Section 145). Article Ninth of the Company's
Second Restated Certificate of Incorporation provides that:
(a) The Corporation shall, to the fullest extent permitted by the
General Corporation Law of the State of Delaware, indemnify any and
all persons whom it shall have power to indemnify under said law from
and against any and all of the expenses, liabilities or other matters
permitted to be indemnified from and against under said law and the
indemnification provided for herein shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under any
By-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office, and shall continue as
to a person who has ceased to be director, officer, employee or agent
and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(b) To the fullest extent permitted by the General Corporation Law of
the State of Delaware, a director of this Corporation shall not be
liable to the Corporation or any of its stockholders for monetary
damages for breach of fiduciary duty as a director.
Article VII of the Company's By-Laws provides, in part, as follows:
Section 1. INDEMNIFICATION. (a) The Corporation shall indemnify,
defend and hold harmless, each director and officer of the
Corporation, and (ii) each other person designated in writing by the
President or the Chief Financial Officer from time to time, against
all expenses,
II-1
<PAGE>
losses, claims, damages and liabilities, including, without
limitation, attorneys' fees, judgments, fines and amounts paid in
settlement (all such expenses, collectively, "Costs") actually and
reasonably incurred by him/her in connection with the investigation,
defense or appeal of any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative, to which the director, officer or other person
(collectively "persons"), is a party or threatened to be made a party
(all such actions, collectively, "Proceedings") (A) by reason of the
fact that he/she is or was a director, officer, employee or agent of
the Corporation or of any other corporation, partnership, joint
venture, trust or other enterprise (collectively "Affiliates") of
which he/she has been or is serving at the request of, for the
convenience of, or to represent the interest of the Corporation or (B)
by reason of anything done or not done by him/her in any such capacity
referred to in the immediately foregoing clause (A). Pursuant to this
Article VII, the Board of Directors may authorize the execution and
delivery by the Corporation of any agreement or undertaking with or on
behalf of any person not inconsistent with this Article VII or
applicable law with respect to the matters set forth herein.
Section 2. CULPABLE ACTION. (a) Notwithstanding the provisions of
Section 1, a person shall not be entitled to indemnification if (i)
the Corporation is prohibited from paying such indemnification under
applicable law, (ii) the person breached his/her duty of loyalty to
the Corporation or its stockholders or any Affiliate or its
stockholders, (iii) the person's actions or omissions were not in good
faith or involved intentional misconduct or knowing violation of law
or (iv) the person derived an improper personal benefit from any
transaction which is a subject of the applicable Proceeding (any
existence or occurrence described in the foregoing clauses (i)-(iv),
individually, a "Culpable Action").
* * *
Section 3. PAYMENT OF COSTS. The Costs incurred by a person in
connection with any Proceeding, including any Proceeding brought
pursuant to Section 2(b), shall be paid by the Corporation on an "as
incurred" basis; provided, however, that if it shall ultimately be
determined that there exists or has occurred a Culpable Action with
respect to such Proceeding, the person shall repay the Corporation the
amount (or the appropriate portion thereof as contemplated by Section
2(d)) so advanced, including the costs of obtaining a determination
pursuant to Section 2(b).
The officers and directors of the Company are covered by one or more
policies of officers' and directors' liability insurance paid for by the
Company.
ITEM 16. EXHIBITS.
NUMBER DESCRIPTION
4(a) Rights Agreement dated as of November 7, 1988 (the "Rights Agreement"),
between the Company and The First National Bank of Boston, which includes
the Certificate of Designations setting forth the terms of the Series A
Junior Participating Preferred Stock, par value $1.00 per share, as
Exhibit A, the form of Right Certificate as Exhibit B and the Summary of
Rights to Purchase Preferred Shares as Exhibit C (filed as Exhibit 1 to
the Company's Registration Statement on Form 8-A on November 10, 1988,
and incorporated herein by reference).
4(b) Amendment to the Rights Agreement dated as of April 5, 1990, between the
Company and The First National Bank of Boston, as Rights Agent (filed as
Exhibit 28(d) to the Company's Current Report on Form 8-K dated April 5,
1990, and incorporated herein by reference).
II-2
<PAGE>
4(c) Amendment to the Rights Agreement dated as of September 16, 1991, between
the Company and The First National Bank of Boston, as Rights Agent (filed
as Exhibit 28(a) to the Company's Current Report on Form 8-K dated
September 16, 1991, and incorporated herein by reference).
5* Opinion of O'Sullivan Graev & Karabell as to the validity of the issuance
of the shares of Common Stock being registered.
23(a)* Consent of Coopers & Lybrand (included on page II-7).
23(b)* Consent of O'Sullivan Graev & Karabell (included in Exhibit 5).
24* Powers of Attorney
________________
* Filed herewith.
ITEM 17. UNDERTAKINGS.
1. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 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 of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the
II-3
<PAGE>
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the undersigned registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
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 payment by the registrant
of expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Cambridge and the Commonwealth of Massachusetts on
the 23rd day of May, 1994.
LOTUS DEVELOPMENT CORPORATION
By /s/ Edwin J. Gillis
------------------------------------
Name: Edwin J. Gillis
Title: Senior Vice President
Finance and Operations
(Principal Financial
Officer)
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
Chairman, President, CEO and
Director (Principal Executive
/s/ Jim P. Manzi Officer) May 23, 1994
- ---------------------------
Jim P. Manzi*
/s/ Richard S. Braddock Director May 23, 1994
- ---------------------------
Richard S. Braddock*
/s/ William H. Gray III Director May 23, 1994
- ---------------------------
William H. Gray III*
/s/ Michael E. Porter Director May 23, 1994
- ---------------------------
Michael E. Porter*
/s/ Henri A. Termeer Director May 23, 1994
- ---------------------------
Henri A. Termeer*
Senior Vice President Finance and
Operations (Principal Financial
/s/ Edwin J. Gillis Officer) May 23, 1994
- ---------------------------
Edwin J. Gillis
Vice President Finance and Corporate
Services and Corporate Controller
/s/ Lyn L. Benton (Principal Accounting Officer) May 23, 1994
- ---------------------------
Lyn L. Benton*
*By Thomas M. Lemberg
-----------------------
Attorney-in-Fact
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Lawrence G. Graev Director May 23, 1994
- ---------------------------
Lawrence G. Graev*
/s/ Aldo Papone Director May 23, 1994
- ---------------------------
Aldo Papone*
/s/ Chester A. Suida Director May 23, 1994
- ---------------------------
Chester A. Suida*
*By Thomas M. Lemberg
-----------------------
Attorney-in-Fact
II-6
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the
registration statement of Lotus Development Corporation on Form
S-3 of our reports dated January 26, 1994, on our audits of the
consolidated financial statements and financial statement
schedules of Lotus Development Corporation as of December 31,
1993 and 1992 and for each of the three years in the period ended
December 31, 1993, which reports are included or incorporated by
reference in the Annual Report on Form 10-K of Lotus Development
Corporation for the year ended December 31, 1993. We also
consent to the reference to our firm under the caption "Experts."
COOPERS & LYBRAND
Boston, Massachusetts
May 23, 1994
II-7
<PAGE>
EXHIBIT INDEX
-------------
Number Description
4(a) Rights Agreement dated as of November 7,
1988 (the "Rights Agreement"), between
the Company and The First National Bank
of Boston, which includes the Certifi-
cate of Designations setting forth the
terms of the Series A Junior Participat-
ing Preferred Stock, par value $1.00 per
share, as Exhibit A, the form of Right
Certificate as Exhibit B and the Summary
of Rights to Purchase Preferred Shares
as Exhibit C (filed as Exhibit 1 to the
Company's Registration Statement on Form
8-A on November 10, 1988, and incorpo-
rated herein by reference).
4(b) Amendment to the Rights Agreement dated
as of April 5, 1990, between the Company
and The First National Bank of Boston,
as Rights Agent (filed as Exhibit 28(d)
to the Company's Current Report on Form
8-K dated April 5, 1990, and incorpo-
rated herein by reference).
4(c) Amendment to the Rights Agreement dated
as of September 16, 1991, between the
Company and The First National Bank of
Boston, as Rights Agent (filed as Ex-
hibit 28(a) to the Company's Current
Report on Form 8-K dated September 16,
1991, and incorporated herein by
reference.)
5* Opinion of O'Sullivan Graev & Karabell
as to the validity of the issuance of
the shares of Common Stock being
registered.
23(a)* Consent of Coopers & Lybrand (included
on page II-7).
23(b) Consent of O'Sullivan Graev & Karabell
(included in Exhibit 5).
24* Powers of Attorney
__________________
* Filed herewith.
<PAGE>
EXHIBIT 5
O'SULLIVAN GRAEV & KARABELL
30 Rockefeller Plaza
New York, New York 10112
May 23, 1994
Lotus Development Corporation
55 Cambridge Parkway
Cambridge, Massachusetts 02142
Lotus Development Corporation
Shares of Common Stock, $.01 Par Value
--------------------------------------
Dear Sirs:
We have acted as counsel to Lotus Development
Corporation, a Delaware corporation (the "Company"), in
connection with the registration under the Securities Act of
1933, as amended, of 1,423,734 shares (the "Shares") of Common
Stock, $.01 par value, of the Company for sale by certain Selling
Shareholders named in the Registration Statement on Form S-3
relating to the Shares (the "Selling Shareholders"). The Shares
will be issued to the Selling Shareholders by the Company
pursuant to the Agreement and Plan of Reorganization dated as of
May 23, 1994 (the "Merger Agreement"), among the Company, LDC
VIII Acquisition Corporation, a wholly-owned subsidiary of the
Company, certain Selling Shareholders and Iris Associates, Inc.,
a Delaware corporation ("Iris"), in exchange for shares of common
stock of Iris held of record by the Selling Shareholders
immediately prior to the closing thereunder.
In that connection, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of
such documents, corporate records and other instruments as we
have deemed necessary for the purposes of this opinion. In our
examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted
<PAGE>
to us as certified or photostatic copies and the authenticity of
the originals of such latter documents.
Based upon the foregoing, we are of the opinion as
follows:
1. The Company is a validly existing corporation in
good standing under the laws of the State of Delaware.
2. The issuance of the Shares by the Company to the
Selling Shareholders pursuant to the Merger Agreement has been
duly authorized by all requisite corporate action on behalf of
the Company, and when issued and delivered by the Company to the
Selling Shareholders pursuant to the Merger Agreement, against
delivery of the shares of Iris common stock to be surrendered in
exchange therefor, the Shares will be duly authorized, validly
issued, fully paid and non-assessable.
We are admitted to the Bar of the State of New York and
we express no opinion as to laws of any other jurisdiction other
than the Delaware General Corporation Law.
We hereby consent to the inclusion of this opinion as
Exhibit 5 to the Registration Statement on Form S-3 being filed
with respect to the Shares by the Company.
Very truly yours,
/s/ O'Sullivan Graev & Karabell
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
-----------------
Each of the undersigned directors and officers of Lotus
Development Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint EDWIN J.
GILLIS and THOMAS M. LEMBERG, and each of them, his or her true
and lawful attorneys and agents, and attorney and agent, to do
any and all acts and things in his or her name and on his or her
behalf in his or her stead as if he or she were present and
acting himself or herself, including, without limitation, to
execute, deliver and file with governmental authorities any and
all instruments and other documents for him or her and in his or
her name in the respective capacities indicated below, that said
attorneys and agents, or either of them, may deem necessary or
advisable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Securities Act"), and with any
rules, regulations and requirements of the Securities and
Exchange Commission, in connection with (i) the registration
under the Securities Act of shares of Common Stock, $.01 par
value, of the Corporation to be sold from time to time by certain
Selling Shareholders named in the registration statement on Form
S-3 relating thereto (the "Registration Statement"), including
specifically, but without limitation, power and authority to sign
for him or her in his or her name in the respective capacities
indicated below the Registration Statement and any and all other
registration statements and amendments (including, without
limitation, post-effective amendments) thereto; and each of the
undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be
done (or shall have done or caused to be done) by virtue hereof.
This Power of Attorney may be executed in one or more
counterparts, each of which shall be deemed an original but all
of which together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the undersigned directors and officers
of the Corporation have hereunto set their hands in the
respective capacities and on the respective dates indicated.
/s/ Jim P. Manzi Chairman of the May 14, 1994
-------------------------- Board, President,
Jim P. Manzi CEO and Director
(Principal
Executive Officer)
/s/ Edwin J. Gillis Senior Vice May 23, 1994
-------------------------- President of
Edwin J. Gillis Finance and Operations
(Principal
Financial Officer)
/s/ Lyn L. Benton Vice President May 23, 1994
-------------------------- Finance and
Lyn L. Benton Corporate Services
and Corporate
Controller
(Principal
Accounting Officer)
/s/ Richard S. Braddock Director May 23, 1994
--------------------------
Richard S. Braddock
/s/ William H. Gray, III Director May 12, 1994
--------------------------
William H. Gray, III
/s/ Michael E. Porter Director May 23, 1994
--------------------------
Michael E. Porter
/s/ Henri A. Termeer Director May 23, 1994
--------------------------
Henri A. Termeer
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
-----------------
Each of the undersigned directors and officers of Lotus
Development Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint EDWIN J.
GILLIS and THOMAS M. LEMBERG, and each of them, his or her true
and lawful attorneys and agents, and attorney and agent, to do
any and all acts and things in his or her name and on his or her
behalf in his or her stead as if he or she were present and
acting himself or herself, including, without limitation, to
execute, deliver and file with governmental authorities any and
all instruments and other documents for him or her and in his or
her name in the respective capacities indicated below, that said
attorneys and agents, or either of them, may deem necessary or
advisable to enable the Corporation to comply with the Securities
Act of 1933, as amended (the "Securities Act"), and with any
rules, regulations and requirements of the Securities and
Exchange Commission, in connection with (i) the registration
under the Securities Act of shares of Common Stock, $.01 par
value, of the Corporation to be sold from time to time by certain
Selling Shareholders named in the registration statement on Form
S-3 relating thereto (the "Registration Statement"), including
specifically, but without limitation, power and authority to sign
for him or her in his or her name in the respective capacities
indicated below the Registration Statement and any and all other
registration statements and amendments (including, without
limitation, post-effective amendments) thereto; and each of the
undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be
done (or shall have done or caused to be done) by virtue hereof.
This Power of Attorney may be executed in one or more
counterparts, each of which shall be deemed an original but all
of which together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the undersigned directors and officers
of the Corporation have hereunto set their hands in the
respective capacities and on the respective dates indicated.
/s/ Lawrence G. Graev Director May 23, 1994
--------------------------
Lawrence G. Graev
/s/ Aldo Papone Director May 12, 1994
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Aldo Papone
/s/ Chester A. Siuda Director May 23, 1994
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Chester A. Siuda
2
