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As filed with the Securities and Exchange Commission on December 10, 1999
Registration No. 333-91899
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT No. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LEVEL 3 COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
Delaware 47-0210602
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
</TABLE>
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1025 Eldorado Boulevard
Broomfield, Colorado 80021
(720) 888-1000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
THOMAS C. STORTZ, ESQ.
Senior Vice President, General Counsel and Secretary
1025 Eldorado Boulevard
Broomfield, Colorado 80021
(720) 888-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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with copies to:
JOHN S. D'ALIMONTE, ESQ.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
(212) 728-8000
Approximate date of commencement of proposed sale to the public: From time
to time, after the effective date of this Registration Statement.
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. [_]
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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 that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ The information in this prospectus is not complete and may be changed. We +
+ may not sell these securities until the registration statement filed with +
+ the Securities and Exchange Commission is effective. This prospectus is not +
+ an offer to sell these securities and we are not soliciting offers to buy +
+ these securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED DECEMBER 10, 1999
Prospectus
Level 3 Communications, Inc.
Debt Securities
Preferred Stock
Depositary Shares
Common Stock
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We will provide specific terms of these securities and their offering prices
in supplements to this prospectus.
In the case of debt securities, these terms will include, as applicable, the
specific designation, aggregate principal amount, maturity, rate or formula of
interest, premium, terms for redemption. In the case of shares of preferred
stock, these terms will include, as applicable, the specific title and stated
value, any dividend, liquidation, redemption, conversion, voting and other
rights. In the case of depositary shares, these terms will include the
fractional share of preferred stock represented by each depositary share. In
the case of common stock, these terms will include the aggregate number of
shares offered.
We may sell any combination of these securities in one or more offerings up
to a total dollar amount of $3,500,000,000.
Our common stock is quoted on the Nasdaq National Market under the symbol
LVLT. The closing price of our common stock on the Nasdaq National Market was
$67.063 per share on December 9, 1999. None of the other securities are
currently publicly traded.
You should read this prospectus and any prospectus supplement carefully
before you invest.
See "Risk Factors" on page 1 for a discussion of matters that you should
consider before investing in these securities.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this prospectus is December , 1999.
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Table of Contents
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Page
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<S> <C>
About This Prospectus...................................................... 1
Where You Can Find More Information........................................ 1
Risk Factors............................................................... 1
The Company................................................................ 2
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends........... 2
Application of Proceeds.................................................... 2
Description of Debt Securities............................................. 3
General terms of debt securities......................................... 3
Certificated securities.................................................. 4
Book-entry debt securities............................................... 4
Merger................................................................... 5
Events of default, notice and waiver..................................... 6
Modification of the indentures........................................... 7
Defeasance and covenant defeasance....................................... 9
Senior debt securities................................................... 10
Subordination of subordinated securities................................. 10
Definition of senior indebtedness........................................ 11
Convertible debt securities.............................................. 11
Description of Preferred Stock............................................. 12
General.................................................................. 12
Dividends................................................................ 13
Redemption............................................................... 14
Conversion or exchange rights............................................ 15
Rights upon liquidation.................................................. 15
Voting rights............................................................ 16
Description of Depositary Shares........................................... 17
General.................................................................. 17
Dividends and other distributions........................................ 17
Withdrawal of stock...................................................... 17
Redemption of depositary shares.......................................... 17
Voting the preferred stock............................................... 18
Exchange of preferred stock.............................................. 18
Conversion of preferred stock............................................ 18
Amendment and termination of the deposit agreement....................... 19
Charges of preferred stock depositary.................................... 19
Resignation and removal of depositary.................................... 19
Miscellaneous............................................................ 19
Description of Common Stock................................................ 20
Description of Outstanding Capital Stock................................... 20
Common stock............................................................. 20
Preferred stock.......................................................... 21
Anti-takeover provisions................................................. 21
Plan of Distribution....................................................... 21
By agents................................................................ 21
By underwriters.......................................................... 22
To dealers............................................................... 22
Direct sales............................................................. 22
Delayed delivery contracts............................................... 22
General information...................................................... 22
Legal Matters.............................................................. 23
Experts.................................................................... 23
</TABLE>
<PAGE>
About This Prospectus
This prospectus is part of two registration statements that we filed with
the SEC utilizing a shelf registration process. Under this shelf process, we
may, over the next two years, sell any combination of the securities described
in this prospectus in one or more offerings up to a total dollar amount of
$3,500,000,000 or the equivalent denominated in foreign currencies or units of
two or more foreign currencies. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add,
update or change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with additional
information described under the heading "Where You Can Find More Information."
Where You Can Find More Information
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for further information on the public reference room. Our SEC filings are also
available at the offices of the Nasdaq National Market, in Washington, D.C.
The SEC allows us to incorporate by reference the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference our documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act until we sell all of the securities.
. Annual report on Form 10-K for the fiscal year ended December 31, 1998
. Quarterly reports on Form 10-Q for the quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999
. Current reports on Form 8-K, filed February 24, 1999, March 5, 1999, May
18, 1999, June 3, 1999 and September 20, 1999 and on Form 8-K/A filed
February 17, 1999 and November 9, 1999
. Registration statements on Forms 8-A/A filed March 31, 1998 and June 10,
1998
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Vice President, Investor Relations
Level 3 Communications, Inc.
1025 Eldorado Boulevard
Broomfield, Colorado 80021
(720) 888-1000
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or
any prospectus supplement is accurate as of any date other than the date on
the front of those documents.
Risk Factors
Before you invest in our securities, you should carefully consider the
risks involved. These risks include, but are not limited to:
. the risks described in our current report on Form 8-K/A filed with the
SEC on November 9, 1999, which is incorporated by reference in this
prospectus; and
. any risks that may be described in other filings we make with the SEC or
in the prospectus supplements relating to specific offerings of
securities.
1
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The Company
We engage in the communications, information services and coal mining
businesses through ownership of operating subsidiaries and substantial equity
positions in public companies. In late 1997, we announced a business plan to
increase substantially our information services business and to expand the
range of services we offer. We are implementing our business plan by building
an advanced communications network based on internet protocol technology.
Since late 1997, we have substantially increased the emphasis we place on
and the resources devoted to our communications and information services
business. Since that time we have become a facilities-based provider of a broad
range of integrated communications services. A facilities-based provider is one
that owns or leases a substantial portion of the plant, property and equipment
necessary to provide its services. We have expanded substantially the business
of our subsidiary, PKS Information Services, Inc. and are creating, through a
combination of construction, purchase and leasing of facilities and other
assets, an advanced, international facilities based communications network. We
designed our network based on internet protocol technology in order to leverage
the efficiencies of this technology to provide lower cost communications
services.
Our network will combine both local and long distance networks and will
connect customers end-to-end across the U.S. and in Europe and Asia. We expect
to complete the U.S. intercity portion of the network during the first quarter
of 2001. In the meantime, we have leased a national network over which we began
to offer services in the third quarter of 1998. We intend to provide a full
range of communications services--including local, long distance, international
and internet services.
Our principal executive offices are located at 1025 Eldorado Boulevard,
Broomfield, Colorado 80021 and our telephone number is (720) 888-1000.
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
The ratio of earnings to fixed charges for each of the periods indicated is
as follows:
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Nine Months Ended
September 30, Fiscal Year Ended
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1999 1998 1998 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C> <C>
-- -- -- 5.73 3.87 -- --
</TABLE>
For this ratio, earnings consist of earnings (loss) before income taxes,
minority interest and discontinued operations plus fixed charges excluding
capitalized interest. Fixed charges consist of interest expensed and
capitalized, plus the portion of rent expense under operating leases deemed by
us to be representative of the interest factor, plus, prior to September 30,
1995, preferred stock dividends on preferred stock of its former subsidiary,
MFS Communications Company, Inc. We had deficiencies of earnings to fixed
charges of $421 million for the nine months ended September 30, 1999, $106
million for the nine months ended September 30, 1998, $36 million for 1998, $32
million for 1995 and $42 million for 1994.
Application of Proceeds
Unless the applicable prospectus supplement states otherwise, the net
proceeds from the sale of the offered securities will be used for working
capital, capital expenditures, acquisitions and other general corporate
purposes. Until we use the net proceeds in this manner, we may temporarily use
them to make short-term investments or reduce short-term borrowings.
2
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Description of Debt Securities
This section describes the general terms and provisions of the debt
securities. The applicable prospectus supplement will describe the specific
terms of the debt securities offered through that prospectus supplement as well
as any general terms described in this section that will not apply to those
debt securities.
The debt securities will be our direct unsecured general obligations and may
include debentures, notes, bonds and/or other evidences of indebtedness. The
debt securities will be either senior debt securities or subordinated debt
securities. The debt securities will be issued under one or more separate
indentures between us and IBJ Whitehall Bank & Trust Company, as trustee.
Senior debt securities will be issued under a senior indenture, and
subordinated debt securities will be issued under a subordinated indenture.
Together, the senior indentures and the subordinated indentures are called
indentures.
We have summarized selected provisions of the indentures below. The summary
is not complete. We have also filed the forms of the indentures as exhibits to
the registration statement. You should read the indentures for provisions that
may be important to you before you buy any debt securities.
General terms of debt securities
The debt securities issued under each indenture may be issued without limit
as to aggregate principal amount, in one or more series. Each indenture
provides that there may be more than one trustee under the indenture, each with
respect to one or more series of debt securities. Any trustee under either
indenture may resign or be removed with respect to one or more series of debt
securities issued under that indenture, and a successor trustee may be
appointed to act with respect to that series.
If two or more persons are acting as trustee with respect to different
series of debt securities issued under the same indenture, each of those
trustees will be a trustee of a trust under that indenture separate and apart
from the trust administered by any other trustee. In that case, except as
otherwise indicated in this prospectus, any action described in this prospectus
to be taken by the trustee may be taken by each of those trustees only with
respect to the one or more series of debt securities for which it is trustee.
A prospectus supplement relating to a series of debt securities being
offered will include specific terms relating to the offering and that series.
These terms will contain some or all of the following:
. the title of the debt securities;
. any limit on the aggregate principal amount of the debt securities;
. the purchase price of the debt securities, expressed as a percentage of
the principal amount;
. the date or dates on which the principal of and any premium on the debt
securities will be payable or the method for determining the date or
dates;
. if the debt securities will bear interest, the interest rate or rates or
the method by which the rate or rates will be determined;
. if the debt securities will bear interest, the date or dates from which
any interest will accrue, the interest payment dates on which any
interest will be payable, the record dates for those interest payment
dates and the basis upon which interest shall be calculated if other
than that of a 360 day year of twelve 30-day months;
. the place or places where payments on the debt securities will be made
and the debt securities may be surrendered for registration of transfer
or exchange;
3
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. if we will have the option to redeem all or any portion of the debt
securities, the terms and conditions upon which the debt securities may
be redeemed;
. the terms and conditions of any sinking fund or other similar provisions
obligating us or permitting a holder to require us to redeem or purchase
all or any portion of the debt securities prior to final maturity;
. the currency or currencies in which the debt securities are denominated
and payable if other than U.S. dollars;
. whether the amount of any payments on the debt securities may be
determined with reference to an index, formula or other method and the
manner in which such amounts are to be determined;
. any additions or changes to the events of default in the respective
indentures;
. any additions or changes with respect to the other covenants in the
respective indentures;
. the terms and conditions, if any, upon which the debt securities may be
convertible into common stock or preferred stock;
. whether the debt securities will be issued in certificated or book-entry
form;
. whether the debt securities will be in registered or bearer form and, if
in registered form, the denominations of the debt securities if other
than $1,000 and multiples of $1,000;
. the applicability of the defeasance and covenant defeasance provisions
of the applicable indenture; and
. any other terms of the debt securities consistent with the provisions of
the applicable indenture.
Debt securities may be issued under the indentures as original issue
discount securities to be offered and sold at a substantial discount from their
stated principal amount. Special U.S. federal income tax, accounting and other
considerations applicable to original issue discount securities will be
described in the applicable prospectus supplement.
Unless otherwise provided with respect to a series of debt securities, the
debt securities will be issued only in registered form, without coupons, in
denominations of $1,000 and multiples of $1,000.
Certificated securities
Except as otherwise stated in the applicable prospectus supplement, debt
securities will not be issued in certificated form. If, however, debt
securities are to be issued in certificated form, no service charge will be
made for any transfer or exchange of any of those debt securities. We may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection with the transfer or exchange of those debt
securities.
Book-entry debt securities
The debt securities of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with the
depositary identified in the applicable prospectus supplement. Unless it is
exchanged in whole or in part for debt securities in definitive form, a global
security may not be transferred. However, transfers of the whole security
between the depositary for that global security and its nominee or their
respective successors are permitted.
4
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Unless otherwise stated, The Depository Trust Company, New York, New York
will act as depositary for each series of global securities. Beneficial
interests in global securities will be shown on, and transfers of global
securities will be effected only through, records maintained by DTC and its
participants.
DTC has provided the following information to us. DTC is a:
. limited-purpose trust company organized under the New York Banking Law;
. a banking organization within the meaning of the New York Banking Law;
. a member of the U.S. Federal Reserve System;
. a clearing corporation within the meaning of the New York Uniform
Commercial Code; and
. a clearing agency registered under the provisions of Section 17A of the
Securities Exchange Act.
DTC holds securities that its direct participants deposit with DTC. DTC also
facilitates the settlement among direct participants of securities
transactions, in deposited securities through electronic computerized book-
entry changes in the direct participant's accounts. This eliminates the need
for physical movement of securities certificates. Direct participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is owned by a number of its direct
participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to DTC's book-entry system is also available to indirect participants such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant. The rules
applicable to DTC and its direct and indirect participants are on file with the
SEC.
Principal and interest payments on global securities registered in the name
of DTC's nominee will be made in immediately available funds to DTC's nominee
as the registered owner of the global securities. We and the trustee will treat
DTC's nominee as the owner of the global securities for all other purposes as
well. Accordingly, we, the trustee and any paying agent will have no direct
responsibility or liability to pay amounts due on the global securities to
owners of beneficial interests in the global securities. It is DTC's current
practice, upon receipt of any payment of principal or interest, to credit
direct participants' accounts on the payment date according to their respective
holdings of beneficial interests in the global securities. These payments will
be the responsibility of the direct and indirect participants and not of DTC,
the trustee or us.
Debt securities represented by a global security will be exchangeable for
debt securities in definitive form of like amount and terms in authorized
denominations only if:
. DTC notifies us that it is unwilling or unable to continue as
depositary;
. DTC ceases to be a registered clearing agency and a successor depositary
is not appointed by us within 90 days; or
. we determine not to require all of the debt securities of a series to be
represented by a global security and notify the trustee of our decision.
Merger
We generally may consolidate with, or sell, lease or convey all or
substantially all of our assets to, or merge with or into, any other
corporation if:
. we are the continuing corporation; or
. we are not the continuing corporation, the successor corporation,
expressly assumes all payments on all the debt securities and the
performance and observance of all the covenants and conditions of the
applicable indenture; and
5
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. neither we nor the successor corporation is in default immediately after
the transaction under the applicable indenture.
Events of default, notice and waiver
Senior indenture. The senior indenture provides that the following are
events of default with respect to any series of senior debt securities:
. default for 30 days in the payment of any interest on any debt security
of that series;
. default in the payment of the principal of or premium, if any, on any
debt security of that series at its maturity;
. default in making a sinking fund payment required for any debt security
of that series;
. default in the performance of any of our other covenants in the senior
indenture that continues for 60 days after written notice, other than
default in a covenant included in the senior indenture solely for the
benefit of another series of senior debt securities;
. the acceleration of the maturity of more than $25,000,000 in the
aggregate of any of our other indebtedness, where that indebtedness is
not discharged or that acceleration is not rescinded or annulled;
. certain events of bankruptcy, insolvency or reorganization of us or our
property; and
. any other event of default provided with respect to a particular series
of debt securities.
The senior trustee generally may withhold notice to the holders of any
series of debt securities of any default with respect to that series if it
considers the withholding to be in the interest of those holders. However, the
senior trustee may not withhold notice of any default in the payment of the
principal of, or premium, if any, or interest on any debt security of that
series or in the payment of any sinking fund installment in respect of any debt
security of that series.
If an event of default with respect to any series of senior debt securities
occurs and is continuing, the senior trustee or the holders of not less than
25% in principal amount of the outstanding debt securities of that series may
declare the principal amount of all of the debt securities of that series
immediately due and payable. Subject to certain conditions, the holders of a
majority in principal amount of outstanding debt securities of that series may
rescind and annul that acceleration. However, they may only do so if all events
of default, other than the non-payment of accelerated principal or specified
portion of accelerated principal, with respect to debt securities of that
series have been cured or waived.
Holders of a majority in principal amount of any series of outstanding
senior debt securities may, subject to some limitations, waive any past default
with respect to that series and the consequences of the default. The prospectus
supplement relating to any series of senior debt securities which are original
issue discount securities will describe the particular provisions relating to
acceleration of a portion of the principal amount of those original issue
discount securities upon the occurrence and continuation of an event of
default. Within 120 days after the close of each fiscal year, we must file with
the senior trustee a statement, signed by specified of our officers, stating
whether those officers have knowledge of any default under the senior
indenture.
Except with respect to its duties in case of default, the senior trustee is
not obligated to exercise any of its rights or powers at the request or
direction of any holders of any series of outstanding senior debt securities,
unless those holders have offered the senior trustee reasonable security or
indemnity. Subject to those indemnification provisions and limitations
contained in the senior indenture, the holders of a majority in principal
amount of any series of the outstanding debt securities issued thereunder may
direct any proceeding for any remedy available to the senior trustee, or the
exercising of any of the senior trustee's trusts or powers.
6
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Subordinated indenture. The subordinated indenture provides that the
following are events of default with respect to any series of subordinated debt
securities:
. default for 30 days in the payment of any interest on any debt security
of that series;
. default in the payment of the principal of or premium, if any, on any
debt security of that series at its maturity;
. default in making a sinking fund payment required for any debt security
of that series;
. any default in the performance of any of our other covenants in the
subordinated indenture that continues for 60 days after written notice,
other than default in a covenant included in the subordinated indenture
solely for the benefit of another series of subordinated debt
securities;
. the acceleration of more than $25,000,000, where that indebtedness is
not discharged or that acceleration is not rescinded or annulled;
. certain events relating to the bankruptcy, insolvency or reorganization
of us or our property; and
. any other event of default provided with respect to a particular series
of debt securities.
The subordinated trustee generally may withhold notice to the holders of any
series of subordinated debt securities of any default with respect to that
series if it considers the withholding to be in the interest of the holders.
However, the subordinated trustee may not withhold notice of any default in the
payment of the principal of or premium, if any or interest on any debt security
of that series or in the payment of any sinking fund installment in respect of
any debt security of that series.
If an event of default with respect to any series of subordinated debt
securities occurs and is continuing, the subordinated trustee or the holders of
not less than 25% in principal amount of the outstanding debt securities of
that series may declare the principal amount of all of the debt securities of
that series immediately due and payable. Subject to certain conditions, the
holders of a majority in principal amount of outstanding debt securities of
that series may rescind and annul that acceleration. However, they may only do
so if all events of default with respect to debt securities of that series have
been cured or waived. Holders of a majority in principal amount of any series
of the outstanding subordinated debt securities may, subject to some
limitations, waive any past default with respect to that series and the
consequences of the default. The prospectus supplement relating to any series
of subordinated debt securities which are original issue discount securities
will describe the particular provisions relating to acceleration of a portion
of the principal amount of those original issue discount securities upon the
occurrence and continuation of an event of default. Within 120 days after the
close of each fiscal year, we must file with the subordinated trustee a
statement, signed by specified officers of us, stating whether such officers
have knowledge of any default under the subordinated indenture.
Except with respect to its duties in case of default, the subordinated
trustee is not obligated to exercise any of its rights or powers at the request
or direction of any holders of any series of outstanding subordinated debt
securities, unless those holders have offered the subordinated trustee
reasonable security or indemnity. Subject to those indemnification provisions
and limitations contained in the subordinated indenture, the holders of a
majority in principal amount of any series of the outstanding subordinated debt
securities may direct any proceeding for any remedy available to the
subordinated trustee, or the exercising of any of the subordinated trustee's
trusts or powers.
Modification of the indentures
Senior indenture. Modifications and amendments of the senior indenture may
be made only, subject to some exceptions, with the consent of the holders of a
majority in aggregate principal amount of all outstanding debt securities under
the senior indenture which are affected by the modification or amendment.
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However, the holder of each affected senior debt security must consent to any
modification or amendment of the senior indenture that:
. changes the stated maturity of the principal of, or the premium, if any,
or any installment of interest on, that debt security;
. reduces the principal amount of, or the rate or amount of interest on,
or any premium payable on redemption of, that debt security;
. reduces the amount of principal of an original issue discount security
that would be due and payable upon declaration of acceleration of its
maturity or would be provable in bankruptcy;
. adversely affects any right of repayment of the holder of that debt
security;
. changes the place of payment where, or the currency in which, any
payment on that debt security is payable;
. impairs the right to institute suit to enforce any payment on or with
respect to that debt security; or
. reduces the percentage of outstanding debt securities of any series
necessary to modify or amend the senior indenture or to waive compliance
with some of its provisions or defaults and their consequences.
We and the senior trustee may amend the senior indenture without the consent
of the holders of any senior debt securities in certain limited circumstances,
such as:
. to evidence the succession of another entity to us and the assumption by
the successor of our covenants contained in the senior indenture;
. to secure the securities; and
. to cure any ambiguity, to correct or supplement any provision in the
senior indenture which may be inconsistent with any other provision of
the senior indenture.
Subordinated indenture. Modifications and amendments to the subordinated
indenture may be made only, subject to some exceptions, with the consent of the
holders of a majority in aggregate principal amount of all outstanding debt
securities under the subordinated indenture which are affected by the
modification or amendment. However, the holder of each affected subordinated
debt security must consent to any modification or amendment of the subordinated
indenture that:
. changes the stated maturity of the principal of, or the premium, if any,
or any installment of interest on, that debt security;
. reduces the principal amount of, or the rate or amount of interest on,
or any premium payable on redemption of, that debt security;
. reduces the amount of principal of an original issue discount security
that would be due and payable upon declaration of acceleration of its
maturity or would be provable in bankruptcy;
. adversely affects any right of the repayment of the holder of that debt
security;
. changes the place of payment where, or the currency in which, any
payment on that debt security is payable;
. impairs the right to institute suit to enforce any payment on or with
respect to that debt security;
. reduces the percentage of outstanding debt securities of any series
necessary to modify or amend the subordinated indenture or to waive
compliance with some of its provisions or defaults and their
consequences; or
. subordinates the indebtedness evidenced by that debt security to any of
our indebtedness other than senior indebtedness.
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We and the subordinated trustee also may amend the subordinated indenture
without the consent of the holders of any subordinated securities in certain
limited circumstances, such as:
. to evidence the succession of another entity to us and the assumption by
the successor of our covenants contained in the subordinated indenture;
. to secure the securities; and
. to cure any ambiguity, to correct or supplement any provision in the
subordinated indenture which may be inconsistent with any other
provision of the subordinated indenture.
Defeasance and covenant defeasance
When we establish a series of debt securities, we may provide that that
series is subject to the defeasance and discharge provisions of the applicable
indenture. If those provisions are made applicable, we may elect either:
. to defease and be discharged from, subject to some limitations, all of
our obligations with respect to those debt securities; or
. to be released from our obligations to comply with specified covenants
relating to those debt securities as described in the applicable
prospectus supplement.
To effect that defeasance or covenant defeasance, we must irrevocably
deposit in trust with the relevant trustee an amount in any combination of
funds or government obligations, which, through the payment of principal and
interest in accordance with their terms, will provide money sufficient to make
payments on those debt securities and any mandatory sinking fund or analogous
payments on those debt securities.
On such a defeasance, we will not be released from obligations:
. to pay additional amounts, if any, upon the occurrence of some events;
. to register the transfer or exchange of those debt securities;
. to replace some of those debt securities;
. to maintain an office relating to those debt securities;
. to hold moneys for payment in trust will not be discharged.
To establish such a trust we must, among other things, deliver to the
relevant trustee an opinion of counsel to the effect that the holders of those
debt securities:
. will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of the defeasance or covenant defeasance; and
. will be subject to U.S. federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if the
defeasance or covenant defeasance had not occurred. In the case of
defeasance, the opinion of counsel must be based upon a ruling of the
IRS or a change in applicable U.S. federal income tax law occurring
after the date of the applicable indenture.
Government obligations mean generally securities which are:
. direct obligations of the U.S. or of the government which issued the
foreign currency in which the debt securities of a particular series are
payable, in each case, where the issuer has pledged its full faith and
credit to pay the obligations; or
. obligations of an agency or instrumentality of the U.S. or of the
government which issued the foreign currency in which the debt
securities of that series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
U.S. or that other government.
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In any case, the issuer of government obligations cannot have the option
to call or redeem the obligations. In addition, government obligations
include, subject to certain qualifications, a depository receipt issued
by a bank or trust company as custodian with respect to any government
obligation or a specific payment of interest on or principal of any such
government obligation held by the custodian for the account of a
depository receipt holder.
If we effect covenant defeasance with respect to any debt securities, the
amount on deposit with the relevant trustee will be sufficient to pay amounts
due on the debt securities at the time of their stated maturity. However,
those debt securities may become due and payable prior to their stated
maturity if there is an event of default with respect to a covenant from which
we have not been released. In that event, the amount on deposit may not be
sufficient to pay all amounts due on the debt securities at the time of the
acceleration.
The applicable prospectus supplement may further describe the provisions,
if any, permitting defeasance or covenant defeasance, including any
modifications to the provisions described above.
Senior debt securities
Senior debt securities are to be issued under the senior indenture. Each
series of senior debt securities will constitute senior indebtedness and will
rank equally with each other series of senior debt securities and other senior
indebtedness. All subordinated debt, including, but not limited to, all
subordinated securities, will be subordinated to the senior debt securities
and other senior indebtedness.
Subordination of subordinated securities
Subordinated indenture. Payments on the subordinated securities will be
subordinated to our senior indebtedness, whether outstanding on the date of
the subordinated indenture or incurred after that date. At September 30, 1999,
our aggregate senior indebtedness was approximately $3.019 billion. The
applicable prospectus supplement for each issuance of subordinated securities
will specify the aggregate amount of our outstanding indebtedness as of the
most recent practicable date that would rank senior to and equally with the
offered subordinated securities.
Ranking. No class of subordinated securities is subordinated to any other
class of subordinated debt securities. See "Subordination provisions" below.
Subordination provisions. If any of certain specified events occur, the
holders of senior indebtedness must receive payment of the full amount due on
the senior indebtedness, or that payment must be duly provided for, before we
may make payments on the subordinated securities. These events are:
. any distribution of our assets upon our liquidation, reorganization or
other similar transaction except for a distribution in connection with a
merger or other transaction complying with the covenant described above
under "Merger";
. the occurrence and continuation of a payment default on any senior
indebtedness; or
. a declaration of the principal of any series of the subordinated
securities, or, in the case of original issue discount securities, the
portion of the principal amount specified under their terms, as due and
payable, that has not been rescinded and annulled.
However, if the event is the acceleration of any series of subordinated
securities, only the holders of senior indebtedness outstanding at the time of
the acceleration of those subordinated securities, or, in the case of
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original issue discount securities, that portion of the principal amount
specified under their terms, must receive payment of the full amount due on
that senior indebtedness, or such payment must be duly provided for, before we
make payments on the subordinated securities.
As a result of the subordination provisions, some of our general creditors,
including holders of senior indebtedness, may recover more, ratably, than the
holders of the subordinated securities in the event of insolvency.
Definition of senior indebtedness
Senior indebtedness means the following indebtedness or obligations:
. the principal of and premium, if any, and unpaid interest on
indebtedness for money borrowed;
. purchase money and similar obligations;
. obligations under capital leases;
. guarantees, assumptions or purchase commitments relating to, or other
transactions as a result of which we are responsible for the payment of,
the indebtedness of others;
. renewals, extensions and refunding of that indebtedness;
. interest or obligations in respect of the indebtedness accruing after
the commencement of any insolvency or bankruptcy proceedings; and
. obligations associated with derivative products.
However, indebtedness or obligations are not senior indebtedness if the
instrument by which we become obligated for that indebtedness or those
obligations expressly provides that that indebtedness or those obligations are
junior in right of payment to any other of our indebtedness or obligations.
Convertible debt securities
Unless otherwise provided in the applicable prospectus supplement, the
following provisions will apply to debt securities that will be convertible
into common stock or preferred stock.
Conversion. The holder of unredeemed convertible debt securities may, at any
time during the period specified in the applicable prospectus supplement,
convert those convertible debt securities into shares of common stock or
preferred stock. The conversion price or rate for each $1,000 principal amount
of convertible debt securities will be specified in the applicable prospectus
supplement. The holder of a convertible debt security may convert a portion of
the convertible debt security which is $1,000 principal amount or any multiple
of $1,000. In the case of convertible debt securities called for redemption,
conversion rights will expire at the close of business on the date fixed for
the redemption. However, in the case of repayment at the option of the
applicable holder, conversion rights will terminate upon receipt of written
notice of the holder's exercise of that option.
In certain events, the conversion price or rate will be subject to
adjustment as specified in the applicable indenture. For debt securities
convertible into common stock, those events include:
. the issuance of shares of common stock as a dividend;
. subdivisions and combinations of common stock;
. the issuance to all holders of common stock of rights or warrants
entitling such holders for a period not exceeding 45 days to subscribe
for or purchase shares of common stock at a price per share less than
its current per share market price; and
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. the distribution to all holders of common stock of:
(1) shares of our capital stock, other than common stock;
(2) evidences of our indebtedness or assets excluding cash dividends or
distributions paid from our retained earnings; or
(3) subscription rights or warrants other than those referred to above.
No adjustment of the conversion price or rate will be required in any of
these cases unless an adjustment would require a cumulative increase or
decrease of at least 1% in that price or rate. Fractional shares of common
stock will not be issued upon conversion. In place of fractional shares, we
will pay a cash adjustment. Unless otherwise specified in the applicable
prospectus supplement, convertible debt securities convertible into common
stock surrendered for conversion between any record date for an interest
payment and the related interest payment date must be accompanied by payment of
an amount equal to the interest payment on the surrendered convertible debt
security. However, that payment does not have to accompany convertible debt
securities surrendered for conversion if those convertible debt securities have
been called for redemption during that period.
The adjustment provisions for debt securities convertible into shares of
preferred stock will be determined at the time of an issuance of debt
securities and will be described in the applicable prospectus supplement.
Description of Preferred Stock
This section describes the general terms and provisions of our preferred
stock. The applicable prospectus supplement will describe the specific terms of
the preferred stock offered through that prospectus supplement as well as any
general terms described in this section that will not apply to those shares of
preferred stock.
We have summarized certain selected terms of the preferred stock in this
section. The summary is not complete. You should read our restated certificate
of incorporation that is an exhibit to our annual report on Form 10-K and the
certificate of designation relating to the applicable series of the preferred
stock that we will file with the SEC for additional information before you buy
any preferred stock.
General
Our restated certificate of incorporation and Delaware General Corporation
Law give our board of directors the authority, without further stockholder
action, to issue a maximum of 10,000,000 shares of preferred stock. The board
of directors has the authority to fix the following terms with respect to
shares of any series of preferred stock:
. the designation of the series;
. the number of shares to comprise the series;
. the dividend rate or rates payable with respect to the shares of the
series;
. the redemption price or prices, if any, and the terms and conditions of
any redemption;
. the voting rights;
. any sinking fund provisions for the redemption or purchase of the shares
of the series;
. the terms and conditions upon which the shares are convertible or
exchangeable, if they are convertible or exchangeable; and
. any other relative rights, preferences and limitations pertaining to the
series.
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The preferred stock will have the rights described in this section unless
the applicable prospectus supplement provides otherwise. You should read the
prospectus supplement relating to the particular series of the preferred stock
it offers for specific terms, including:
. the designation, stated value and liquidation preference of that series
of the preferred stock and the number of shares offered;
. the initial public offering price at which the shares will be issued;
. the dividend rate or rates or method of calculation of dividends, the
dividend periods, the date or dates on which dividends will be payable
and whether such dividends will be cumulative or noncumulative and, if
cumulative, the dates from which dividends shall commence to cumulate;
. any redemption or sinking fund provisions;
. any conversion or exchange provisions;
. the procedures for any auction and remarketing, if any, of that series
of preferred stock;
. whether interests in that series of preferred stock will be represented
by our depositary shares; and
. any additional dividend, liquidation, redemption, sinking fund and other
rights, preferences, privileges, limitations and restrictions of that
series of preferred stock.
When we issue shares of preferred stock against payment for the shares, they
will be fully paid and nonassessable. This means that the full purchase price
for those shares will have been paid and the holders of those shares will not
be assessed any additional monies for those shares. Holders of preferred stock
will have no preemptive rights to subscribe for any additional securities that
we may issue.
Because we are a holding company, our rights and the rights of holders of
our securities, including the holders of preferred stock, to participate in the
distribution of assets of any subsidiary of ours upon its liquidation or
recapitalization will be subject to the prior claims of its creditors and
preferred stockholders. We will not be structurally subordinated to the extent
we are a creditor with recognized claims against the subsidiary or are a holder
of preferred stock of the subsidiary.
Dividends
The holders of the preferred stock will be entitled to receive dividends, if
declared by our board of directors out of our assets that we can legally use to
pay dividends. The prospectus supplement relating to a particular series of
preferred stock will describe the dividend rates and dates on which dividends
will be payable. The rates may be fixed or variable or both. If the dividend
rate is variable, the applicable prospectus supplement will describe the
formula used for determining the dividend rate for each dividend period. We
will pay dividends to the holders of record as they appear on our stock books
on the record dates fixed by our board of directors. The applicable prospectus
supplement will specify whether dividends will be paid in the form of cash,
preferred stock or common stock.
The applicable prospectus supplement will also state whether dividends on
any series of preferred stock are cumulative or noncumulative. If our board of
directors does not declare a dividend payable on a dividend payment date on any
noncumulative series of preferred stock, then the holders of that series will
not be entitled to receive a dividend for that dividend period. In those
circumstances, we will not be obligated to pay the dividend accrued for that
period, whether or not dividends on such preferred stock are declared or paid
on any future dividend payment dates.
Our board of directors may not declare and pay a dividend on any of our
stock ranking, as to dividends, equal with or junior to any series of preferred
stock unless full dividends on that series have been declared and
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paid, or declared and sufficient money is set aside for payment. Until either
full dividends are paid, or are declared and payment is set aside, on preferred
stock ranking equal as to dividends, then:
. we will declare any dividends pro rata among the preferred stock of each
series and any preferred stock ranking equal to the preferred stock as
to dividends; in other words, the dividends we declare per share on each
series of such preferred stock will bear the same relationship to each
other that the full accrued dividends per share on each such series of
the preferred stock bear to each other;
. other than such pro rata dividends, we will not declare or pay any
dividends or declare or make any distributions upon any security ranking
junior to or equal with the preferred stock as to dividends or upon
liquidation, except dividends or distributions paid for with securities
ranking junior to the preferred stock as to dividends and upon
liquidation; and
. we will not redeem, purchase or otherwise acquire or set aside money for
a sinking fund for any securities ranking junior to or equal with the
preferred stock as to dividends or upon liquidation except by conversion
into or exchange for stock junior to the preferred stock as to dividends
and upon liquidation.
We will not owe any interest, or any money in lieu of interest, on any
dividend payment(s) on any series of the preferred stock which may be past due.
Redemption
Preferred stock may be redeemable, in whole or in part, at our option, and
may be subject to mandatory redemption through a sinking fund or otherwise, as
described in the applicable prospectus supplement. Redeemed preferred stock
will become authorized but unissued shares of preferred stock that we may issue
in the future.
If a series of preferred stock is subject to mandatory redemption, the
applicable prospectus supplement will specify the number of shares that we will
redeem each year and the redemption price. If preferred stock is redeemed, we
will pay all accrued and unpaid dividends on those shares to, but excluding,
the redemption date. In the case of any noncumulative series of preferred
stock, accrued and unpaid dividends will not include any accumulation of
dividends for prior dividend periods. The applicable prospectus supplement will
also specify whether we will pay the redemption price in cash or other
property. If the redemption price for preferred stock of any series is payable
only from the net proceeds of the issuance of our capital stock, the terms of
that preferred stock may provide for its automatic conversion upon the
occurrence of certain events. These events include if no capital stock has been
issued or if the net proceeds from any issuance are insufficient to pay in full
the aggregate redemption price then due.
If fewer than all of the outstanding shares of any series of the preferred
stock are to be redeemed, our board of directors will determine the number of
shares to be redeemed. We may redeem the shares pro rata from the holders of
record in proportion to the number of shares held by them, with adjustments to
avoid redemption of fractional shares, or by lot in a manner determined by our
board of directors.
Even though the terms of a series of preferred stock may permit redemption
of shares of preferred stock in whole or in part, if any dividends, including
accumulated dividends, on that series are past due:
. we will not redeem any preferred stock of that series unless we
simultaneously redeem all outstanding shares of preferred stock of that
series; and
. we will not purchase or otherwise acquire any preferred stock of that
series.
The prohibition discussed in the prior sentence will not prohibit us from
purchasing or acquiring preferred stock of that series through a purchase or
exchange offer if we make the offer on the same terms to all holders of that
series.
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Unless the applicable prospectus supplement specifies otherwise, we will
give notice of a redemption by mailing a notice to each record holder of the
shares to be redeemed, between 30 to 60 days prior to the date fixed for
redemption. We will mail the notices to the holders' addresses as they appear
on our stock records. Each notice will state:
. the redemption date;
. the number of shares and the series of the preferred stock to be
redeemed;
. the redemption price;
. the place or places where holders can surrender the certificates for the
preferred stock for payment of the redemption price;
. that dividends on the shares to be redeemed will cease to accrue on the
redemption date; and
. the date when the holders' conversion rights, if any, will terminate.
If we redeem fewer than all shares of any series of the preferred stock held
by any holder, we will also specify the number of shares to be redeemed from
the holder in the notice.
If we have given notice of the redemption and have provided the funds for
the payment of the redemption price, then beginning on the redemption date:
. the dividends on the preferred stock called for redemption will no
longer accrue;
. such shares will no longer be considered outstanding; and
. the holders will no longer have any rights as stockholders except to
receive the redemption price.
When the holders of these shares surrender the certificates representing
these shares, in accordance with the notice, the redemption price described
above will be paid out of the funds we provide. If fewer than all the shares
represented by any certificate are redeemed, a new certificate will be issued
representing the unredeemed shares without cost to the holder of those shares.
Conversion or exchange rights
The prospectus supplement relating to a series of preferred stock that is
convertible or exchangeable will state the terms on which shares of that series
are convertible or exchangeable into common stock, another series of preferred
stock or debt securities.
Rights upon liquidation
Unless the applicable prospectus supplement states otherwise, if we
liquidate, dissolve or wind up our business, the holders of shares of each
series of the preferred stock will be entitled to receive:
. liquidation distributions in the amount stated in the applicable
prospectus supplement; and
. all accrued and unpaid dividends whether or not earned or declared.
We will pay these amounts to the holders of shares of each series of the
preferred stock, and all amounts owing on any preferred stock ranking equally
with that series of preferred stock as to liquidating distributions, out of our
assets available for distribution to stockholders. These payments will be made
before any distribution is made to holders of any securities ranking junior to
the series of preferred stock upon liquidation.
If we liquidate, dissolve or wind up our business and the assets available
for distribution to the holders of the preferred stock of any series and any
other shares of our stock ranking equal with that series as to liquidating
distributions are insufficient to pay all amounts to which the holders are
entitled, then we will only
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make pro rata distributions to the holders of all shares ranking equal as to
liquidating distributions. This means that the distributions we pay to these
holders will bear the same relationship to each other that the full
distributable amounts for which these holders are respectively entitled upon
liquidation of our business bear to each other.
After we pay the full amount of the liquidation distribution to which the
holders of a series of the preferred stock are entitled, those holders will
have no right or claim to any of our remaining assets.
Voting rights
Except as indicated below or in the applicable prospectus supplement, or
except as expressly required by applicable law, the holders of preferred stock
will not be entitled to vote.
If we fail to pay dividends on any shares of preferred stock for six
consecutive quarterly periods, the holders of those shares of preferred stock,
voting separately as a class with all other series of preferred stock upon
which the same voting rights have been conferred and are exercisable, will be
entitled to vote for the election of two additional directors to the board of
directors. This may be done at a special meeting called by the holders of
record of at least 10% of those shares of preferred stock or the next annual
meeting of stockholders and at each subsequent meeting until:
. in the case of a series of preferred stock with cumulative dividends,
all dividends accumulated on that series of preferred stock for the past
dividend periods and the then current dividend period have been fully
paid or declared and a sum sufficient for the payment of these dividends
has been set aside for payment; or
. in the case of a series of noncumulative preferred stock, four
consecutive quarterly dividends on that series of noncumulative
preferred stock have been fully paid or declared and a sum sufficient
for the payment of these dividends has been set aside for payment.
In this case, the entire board of directors will be increased by two
directors.
So long as any shares of preferred stock remain outstanding, unless we
receive the consent of the holders of any outstanding series of preferred stock
as specified below, we will not:
. authorize, issue or increase the authorized amount of, any capital stock
ranking prior to the outstanding series of preferred stock as to
dividends or liquidating distributions;
. reclassify any capital stock into any shares with this kind of prior
ranking;
. authorize or issue any obligation or security that represents the right
to purchase any capital stock with this kind of prior ranking; or
. amend or alter the provisions of our restated certificate of
incorporation, so as to materially and adversely affect any right,
preference, privilege or voting power of that series of preferred stock
or the holders of that series of preferred stock.
This consent must be given by the holders of at least two-thirds of each
series of all outstanding preferred stock described in the preceding sentence,
voting separately as a class. We will not be required to obtain this consent
with respect to the actions relating to changes to our restated certificate of
incorporation, however, if we only:
. increase the amount of the authorized preferred stock or any outstanding
series of preferred stock or any of our other capital stock; or
. create and issue another series of preferred stock or any other capital
stock; and
. in either case, this preferred stock ranks equal with or junior to the
outstanding preferred stock as to dividends and liquidating
distributions.
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Description of Depositary Shares
This section describes the general terms and provisions of shares of
preferred stock represented by depositary shares. The applicable prospectus
supplement will describe the specific terms of the depositary shares offered
through that prospectus supplement and any general terms outlined in this
section that will not apply to those depositary shares.
We have summarized in this section certain terms and provisions of the
deposit agreement, the depositary shares and the receipts representing
depositary shares. The summary is not complete. You should read the forms of
deposit agreement and depositary receipt that we have filed with the SEC for
additional information before you buy any depositary shares that represent
preferred stock of that series.
General
We may issue depositary receipts evidencing the depositary shares. Each
depositary share will represent a fraction of a share of preferred stock.
Shares of preferred stock of each class or series represented by depositary
shares will be deposited under a separate deposit agreement among us, the
preferred stock depositary and the holders of the depositary receipts. Subject
to the terms of the deposit agreement, each owner of a depositary receipt will
be entitled, in proportion to the fraction of a share of preferred stock
represented by the depositary shares evidenced by that depositary receipt, to
all the rights and preferences of the preferred stock represented by those
depositary shares. Those rights include any dividend, voting, conversion,
redemption and liquidation rights. Immediately following our issuance and
delivery of the preferred stock to the preferred stock depositary, we will
cause the preferred stock depositary to issue the depositary receipts on our
behalf.
Dividends and other distributions
The preferred stock depositary will distribute all dividends or other cash
distributions received in respect of the preferred stock to the record holders
of depositary receipts in proportion to the number of depositary receipts owned
by those holders.
If there is a distribution other than in cash, the preferred stock
depositary will distribute property it receives to the entitled record holders
of depositary receipts. However, if the preferred stock depositary determines
that it is not feasible to make that distribution, the preferred stock
depositary may, with our approval, sell the property and distribute the net
proceeds from this sale to the holders of depositary shares.
Withdrawal of stock
If a holder of depositary receipts surrenders the depositary receipts at the
corporate trust office of the preferred stock depositary, the holder will be
entitled to receive the number of shares of the preferred stock and any money
or other property represented by those depositary shares. However, the holder
will not be entitled to receive these shares and related assets if the related
depositary shares have previously been called for redemption or converted or
exchanged into other securities of our company. Holders of depositary receipts
will be entitled to receive whole or fractional shares of the preferred stock
on the basis of the proportion of preferred stock represented by each
depositary share specified in the applicable prospectus supplement. Holders of
shares of preferred stock received in exchange for depositary shares will no
longer be entitled to receive depositary shares in exchange for shares of
preferred stock. If the holder delivers depositary receipts evidencing a number
of depositary shares that is more than the number of depositary shares
representing the number of shares of preferred stock to be withdrawn, the
preferred stock depositary will issue the holder a new depositary receipt
evidencing this excess number of depositary shares at the same time.
Redemption of depositary shares
Whenever we redeem shares of preferred stock held by the preferred stock
depositary, the preferred stock depositary will redeem as of that redemption
date the number of depositary shares representing shares of the
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preferred stock so redeemed. However, we must have paid in full the redemption
price of the preferred stock to be redeemed plus any accrued and unpaid
dividends on the preferred stock to the preferred stock depositary.
The redemption price per depositary share will be equal to the redemption
price and any other amounts per share payable with respect to the preferred
stock. If fewer than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by the preferred stock
depositary pro rata or by lot or another equitable method. In each case, we
will determine the method for selecting the depositary shares.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be outstanding. When the depositary shares are no
longer outstanding, all rights of the holders of the related depositary
receipts will cease, except the right to receive money or other property that
the holders of the depositary receipts were entitled to receive upon such
redemption. These payments will be made when the holders surrender their
depositary receipts to the preferred stock depositary.
Voting the preferred stock
Upon receipt of notice of any meeting at which the holders of the preferred
stock are entitled to vote, the preferred stock depositary will mail
information about the meeting contained in the notice to the record holders of
the depositary shares representing such preferred stock. Each record holder of
depositary shares on the record date will be entitled to instruct the preferred
stock depositary as to how the preferred stock underlying the holder's
depositary shares will be voted. The record date for the depositary shares will
be the same as the record date for the preferred stock.
The preferred stock depositary will vote the amount of preferred stock
represented by the depositary shares according to these instructions. We will
agree to take all reasonable action deemed necessary by the preferred stock
depositary in order to enable the preferred stock depositary to vote the
preferred stock in that manner. The preferred stock depositary will not vote
shares of preferred stock for which it does not receive specific instructions
from the holders of depositary shares representing that preferred stock. The
preferred stock depositary will not be responsible for any failure to carry out
any voting instruction, or for the manner or effect of any vote, as long as its
action or inaction is in good faith and does not result from its negligence or
willful misconduct.
Exchange of preferred stock
Whenever we exchange all of the shares of preferred stock held by the
preferred stock depositary for debt securities or common stock, the preferred
stock depositary will exchange as of that exchange date all depositary shares
representing all of the shares of the preferred stock exchanged for debt
securities or common stock. However, we must have issued and deposited with the
preferred stock depositary debt securities or common stock for all of the
shares of the preferred stock to be exchanged.
The exchange rate per depositary share will be equal to the exchange rate
per share of preferred stock, multiplied by the fraction of a share of
preferred stock represented by one depositary share, plus all money and other
property, if any, represented by such depositary shares, including all accrued
and unpaid dividends on the shares of preferred stock.
Conversion of preferred stock
The depositary shares, as such, are not convertible or exchangeable into
common stock or any of our other securities or property. Nevertheless, the
prospectus supplement relating to an offering of depositary shares may provide
that the holders of depositary receipts may surrender their depositary receipts
to the preferred stock depositary with written instructions to the preferred
stock depositary to instruct us to cause the conversion or exchange of the
preferred stock represented by these depositary shares. We have agreed that
upon receipt of
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these instructions and any related amounts payable we will cause the requested
conversion or exchange. If the depositary shares are to be converted or
exchanged in part only, a new depositary receipt or receipts will be issued for
any depositary shares not to be converted or exchanged.
Amendment and termination of the deposit agreement
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may be amended by agreement between us and
the preferred stock depositary. However, any amendment that materially and
adversely alters the rights of the holders of depositary shares or that would
be materially and adversely inconsistent with the rights granted to the holders
of the related preferred stock requires the approval of the holders of at least
two thirds of the depositary shares then outstanding.
We may terminate the deposit agreement upon not less than 60 days' notice if
holders of a majority of the depository shares then outstanding consent. If we
terminate the deposit agreement, the preferred stock depositary will deliver or
make available to each holder of depositary receipts that surrenders the
depositary receipts it holds, the number of whole or fractional shares of
preferred stock represented by the depositary shares evidenced by these
depositary receipts.
In addition, the deposit agreement will automatically terminate if:
. all outstanding depositary shares are redeemed, converted or exchanged;
or
. there is a final distribution in respect of the related preferred stock
in connection with any liquidation of our business and the distribution
has been distributed to the holders of the related depositary receipts.
Charges of preferred stock depositary
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the deposit agreement. In addition, we will pay
the fees and expenses of the preferred stock depositary in connection with the
performance of its duties under the deposit agreement. Holders of depositary
receipts will pay transfer and other taxes and governmental charges and any
other charges that are stated to be their responsibility in the deposit
agreement.
Resignation and removal of depositary
The preferred stock depositary may resign at any time by delivering notice
to us. We also may remove the preferred stock depositary at any time.
Resignations or removals will take effect upon the appointment of a successor
preferred stock depositary. This successor must be appointed within 60 days
after delivery of the notice of resignation or removal and must be a bank or
trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
Miscellaneous
The preferred stock depositary will forward to holders of depositary
receipts any reports and communications that we send to the preferred stock
depositary with respect to the related preferred stock.
Neither we nor the preferred stock depositary will be liable if it is
prevented or delayed, by law or any circumstances beyond its control in
performing its obligations under the deposit agreement. Our obligations and the
preferred stock depositary's obligations under the deposit agreement will be
limited to performance in good faith and without negligence or willful
misconduct of the duties described in the deposit agreement. Neither we nor the
preferred stock depositary will be obligated to prosecute or defend any legal
proceeding relating to any depositary receipts, depositary shares or shares of
preferred stock unless satisfactory indemnity is furnished. We and the
preferred stock depositary may rely on written advice of counsel or
accountants, or information
19
<PAGE>
provided by persons presenting shares of preferred stock for deposit, holders
of depositary receipts or other persons believed to be competent and authorized
to this information and on documents believed to be genuine.
If the preferred stock depositary receives conflicting claims, requests or
instructions from any holders of depositary receipts, on the one hand, and us,
on the other hand, the preferred stock depositary will be entitled to act on
the claims, requests or instructions received from us.
Description of Common Stock
We may issue, either separately or together with other securities, shares of
our common stock. Under our restated certificate of incorporation, we are
authorized to issue up to 1,500,000,000 shares of our common stock. A
prospectus supplement relating to an offering of common stock, or other
securities convertible or exchangeable for, or exercisable into, common stock,
will describe the relevant terms, including the number of shares offered, any
initial offering price, and market price and dividend information, as well as,
if applicable, information on other related securities. See "Description of
Outstanding Capital Stock" below.
Description of Outstanding Capital Stock
We have summarized some of the terms and provisions of our outstanding
capital stock in this section. The summary is not complete. We have also filed
our restated certificate of incorporation, our by-laws and the certificate of
designation relating to the Series A preferred stock as exhibits to our annual
report on Form 10-K. You should read our restated certificate of incorporation
and our by-laws and the certificate of designation relating to the Series A
preferred stock for additional information before you purchase any of our
capital stock.
As of October 29, 1999, our authorized capital stock was 1,518,500,000
shares. Those shares consisted of:
. 1,500,000,000 shares of common stock, par value $.01 per share;
. 10,000,000 shares of preferred stock, par value $.01 per share; and
. 8,500,000 shares of Class R convertible common stock, par value
$.01 per share.
As of October 29, 1999 there were 341,076,021 shares of common stock, no shares
of preferred stock and no shares of Class R convertible common stock
outstanding.
Common stock
Subject to the senior rights of preferred stock which may from time to time
be outstanding, holders of common stock are entitled to receive dividends
declared by the board of directors out of funds legally available for their
payment. Upon dissolution and liquidation of our business, holders of common
stock are entitled to a ratable share of our net assets remaining after payment
to the holders of the preferred stock of the full preferential amounts they are
entitled to. All outstanding shares of common stock are fully paid and
nonassessable.
The holders of common stock are entitled to one vote per share for the
election of directors and on all other matters submitted to a vote of
stockholders. Holders of common stock are not entitled to cumulative voting
for the election of directors. They are not entitled to preemptive rights.
The transfer agent and registrar for the common stock is Norwest Bank
Minnesota, N.A.
20
<PAGE>
Preferred stock
The preferred stock has priority over the common stock with respect to
dividends and to other distributions, including the distribution of assets upon
liquidation. The board of directors is authorized to fix and determine the
terms, limitations and relative rights and preferences of the preferred stock,
to establish series of preferred stock and to fix and determine the variations
as among series. The board of directors without stockholder approval could
issue preferred stock with voting and conversion rights which could adversely
affect the voting power of the holders of common stock. The board of directors
has designated 500,000 shares of Series A junior participating preferred stock.
Series A junior participating preferred stock will be issued in units
consisting of one one-thousandth of a share of Series A junior participating
preferred stock. Series A junior participating preferred stock is on a parity
with the common stock with respect to dividends and to other distributions,
including the distribution of assets on liquidation. Quarterly dividends per
unit equal the amount of the quarterly dividend paid per share of common stock,
when, as and if declared by the board of directors. The holders of units are
entitled to one vote per unit, voting together with the common stock on all
matters submitted to the stockholders. As of the date of this prospectus, there
are no outstanding shares of preferred stock.
Anti-takeover provisions
We currently have provisions in our restated certificate of incorporation
and by-laws that could have an anti-takeover effect. The provisions in the
restated certificate of incorporation include:
. a classified board of directors;
. a prohibition on our stockholders taking action by written consent;
. the requirement that special meetings of stockholders be called only by
the board of directors or the chairman of the board; and
. the requirement of the affirmative vote of at least 66-2/3% of our
outstanding shares of stock entitled to vote thereon to adopt, repeal,
alter, amend or rescind our by-laws.
The by-laws contain specific procedural requirements for the nomination of
directors and the introduction of business by a stockholder of record at an
annual meeting of stockholders where such business is not specified in the
notice of meeting or brought by or at the discretion of the board of directors.
In addition to these provisions, the board of directors has adopted a
stockholder's rights plan, under which rights were distributed in a dividend.
These rights entitle the holder to acquire units of Series A junior
participating preferred stock, which is exercisable upon the occurrence of
certain events, including the acquisition by a person or group of a specified
percentage of the common stock.
Plan of Distribution
We may sell the offered securities as follows:
. through agents;
. through underwriters;
. to dealers; or
. directly to one or more purchasers.
By agents
Offered securities may be sold through agents designated by us. Unless
otherwise indicated in a prospectus supplement, the agents will use their best
efforts to solicit purchases for the period of their appointment.
21
<PAGE>
By underwriters
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account. The underwriters may
resell the securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The obligations of the underwriters to purchase the
securities will be subject to certain conditions. The underwriters will be
obligated to purchase all the securities of the series offered if any of the
securities are purchased. Any initial public offering price and any discounts
or concessions allowed or re-allowed or paid to dealers may be changed from
time to time.
To dealers
If a dealer is used in the sale, we will sell the offered securities to the
dealer, as principal. The dealer may then resell those securities to the
public at varying prices to be determined by the dealer at the time of resale.
Direct sales
We may also sell offered securities directly to institutional investors or
others. These sales may include ones made under arrangements with the
investors under which we have the right to require the investors to purchase
the offered securities from us from time to time at prices tied to the market
price for those securities.
Delayed delivery contracts
We may authorize underwriters, dealers and agents to solicit offers by
certain institutional investors to purchase offered securities under contracts
providing for payment and delivery on a future date specified in the
prospectus supplement. The prospectus supplement will also describe the public
offering price for the securities and the commission payable for solicitation
of these delayed delivery contracts. Delayed delivery contracts will contain
definite fixed price and quantity terms. The obligations of a purchaser under
these delayed delivery contracts will be subject to only two conditions:
. that the institution's purchase of the securities at the time of
delivery of the securities is not prohibited under the law of any
jurisdiction to which the institution is subject; and
. that we shall have sold to the underwriters the total principal amount
of the offered securities, less the principal amount covered by the
delayed delivery contracts.
General information
Underwriters, dealers, agents and direct purchasers that participate in the
distribution of the offered securities may be underwriters as defined in the
Securities Act and any discounts or commissions they receive from us and any
profit on the resale of the offered securities by them may be treated as
underwriting discounts and commissions under the Securities Act. Any
underwriters, dealers or agents will be identified and their compensation
described in a prospectus supplement.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us or our subsidiaries in the ordinary course of their
businesses.
The place, time of delivery and other terms of the sale of the offered
securities will be described in the prospectus supplement.
22
<PAGE>
Legal Matters
Willkie Farr & Gallagher will issue an opinion for us about the legality of
the offered securities. Any underwriters will be advised about other issues
relating to any offering by their own legal counsel.
Experts
The consolidated financial statements of Level 3 Communications, Inc. as of
December 31, 1998 and for the year then ended, incorporated by reference in
this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and have been incorporated herein in reliance upon the authority of
said firm as experts in giving said report.
The consolidated balance sheet of Level 3 Communications, Inc. as of
December 27, 1997, and the related statements of earnings, cash flows,
comprehensive income, and changes in stockholders' equity for each of the two
years in the period ended December 27, 1997, as well as the consolidated
balance sheets of RCN Corporation and Subsidiaries as of December 31, 1997 and
1998 and the related statements of operations, cash flows, comprehensive
income, and changes in stockholders' equity, for each of the three years in the
period ended December 31, 1998, incorporated by reference in this registration
statement, have been incorporated herein in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
23
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
The estimated expenses, other than underwriting discounts and commissions,
in connection with the offerings of the Securities are as follows:
<TABLE>
<S> <C>
Securities Act Registration Fee.................................. $627,132
"Blue Sky" Fees and Expenses..................................... 15,000*
Printing and Engraving Expenses.................................. 200,000*
Legal Fees and Expenses.......................................... 200,000*
Fees of Rating Agencies.......................................... 60,000*
Accounting Fees and Expenses..................................... 100,000*
Fees of Indenture Trustees (including counsel fees).............. 20,000*
Miscellaneous.................................................... 77,868*
----------
Total.......................................................... $1,300,000*
==========
</TABLE>
- --------
* Estimated and subject to future contingencies.
ITEM 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL") empowers a
Delaware corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. A
corporation may, in advance of the final action of any civil, criminal,
administrative or investigative action, suit or proceeding, pay the expenses
(including attorneys' fees) incurred by any officer, director, employee or
agent in defending such action, provided that the director or officer
undertakes to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the corporation. A corporation may
indemnify such person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
A Delaware corporation may indemnify officers and directors in an action by
or in the right of the corporation to procure a judgment in its favor under the
same conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him or her against the expenses (including attorneys' fees) which he
or she actually and reasonably incurred in connection therewith. The
indemnification provided is not deemed to be exclusive of any other rights to
which an officer or director may be entitled under any corporation's by-law,
agreement, vote or otherwise.
In accordance with Section 145 of the DGCL, Article XI of the Company's
Restated Certificate of Incorporation (the "Certificate") and the Company's By-
laws (the "By-laws") provide that the Company shall indemnify each person who
is or was a director, officer or employee of the Company (including the heirs,
executors, administrators or estate of such person) or is or was serving at the
request of the Company as director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise, to the
II-1
<PAGE>
fullest extent permitted under subsections 145(a), (b), and (c) of the DGCL or
any successor statute. The indemnification provided by the Certificate and the
By-laws shall not be deemed exclusive of any other rights to which any of those
seeking indemnification or advancement of expenses may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her 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 a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person. Expenses (including attorneys' fees) incurred in defending a civil,
criminal, administrative or investigative action, suit or proceeding upon
receipt of an undertaking by or on behalf of the indemnified person to repay
such amount if it shall ultimately be determined that he or she is not entitled
to be indemnified by the Company. The Certificate further provides that a
director of the Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the Company 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 174 of the DGCL, or (iv) for any transaction from which the
director derived an improper personal benefit. If the DGCL is amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Company shall
be eliminated or limited to the fullest extent permitted by the DGCL as so
amended.
The By-laws provide that the Company may purchase and maintain insurance on
behalf of its directors, officers, employees and agents against any liabilities
asserted against such persons arising out of such capacities.
ITEM 16. Exhibits.
<TABLE>
<C> <C> <S>
1.1 -- Form of Underwriting Agreement for Debt Securities*
1.2 -- Form of Underwriting Agreement for Equity Securities*
4.1 -- Form of Senior Indenture (incorporated by reference to Exhibit 4.1 to
Amendment 1 to the Registrant's Registration Statement on Form S-3
(File No. 333-68887) filed with the Securities and Exchange
Commission on February 3, 1999).
4.2 -- Form of Subordinated Indenture (incorporated by reference to Exhibit
4.2 to Amendment 1 to the Registrant's Registration Statement on
Form S-3 (File No. 333-68887) filed with the Securities and Exchange
Commission on February 3, 1999).
4.3 -- Form of Certificate of Designation for the Preferred Stock (together
with Preferred Stock certificate)*
4.4 -- Form of Senior Debt Security*
4.5 -- Form of Subordinated Debt Security*
4.6 -- Form of Deposit Agreement (incorporated by reference to Exhibit 4.6
to Amendment 1 to the Registrant's Registration Statement on Form S-
3 (File No. 333-68887) filed with the Securities and Exchange
Commission on February 3, 1999).
4.7 -- The instruments defining the rights of the holders of the long-term
debt securities of the Registrant are omitted pursuant to Section
(b)(4)(iii)(A) of Item 601 of Regulation S-K. Registrant agrees to
furnish supplementally copies of these instruments to the Securities
and Exchange Commission upon request.
5 -- Opinion of Willkie Farr & Gallagher
12 -- Statement Regarding Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividends+
23.1 -- Consent of PricewaterhouseCoopers LLP
23.2 -- Consent of PricewaterhouseCoopers LLP
23.3 -- Consent of Arthur Andersen LLP
23.4 -- Consent of Willkie Farr & Gallagher (included in Exhibit 5)
24 -- Power of Attorney+
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C> <C>
25.1 -- Statement of Eligibility of Senior Trustee on Form T-1 (incorporated by reference to
Exhibit 25.1 to Amendment 1 to the Registrant's Registration Statement on Form S-3
(File No. 333-68887) filed with the Securities and Exchange Commission on February
3, 1999).
25.2 -- Statement of Eligibility of Subordinated Trustee on Form T-1 (incorporated by
reference to Exhibit 25.2 to Amendment 1 to the Registrant's Registration Statement
on Form S-3 (File No. 333-68887) filed with the Securities and Exchange Commission
on February 3, 1999).
</TABLE>
- --------
* To be filed by amendment or incorporated by reference to the extent
applicable in connection with an offering.
+Previously filed.
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;
(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 this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement; provided, however, that subparagraphs (i) and (ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in registration statements
on Form S-3 or Form S-8 and the periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
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
herein, 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.
The undersigned Registrant hereby further undertakes that, for the purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the Securities offered herein, and the offering of such Securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 of this
registration statement, or otherwise (other than insurance), the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such 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 such Act and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Broomfield, State
of Colorado, on the 10th day of December, 1999.
Level 3 Communications, Inc.
/s/ Thomas C. Stortz
By: __________________________________
Name:Thomas C. Stortz
Title:Senior Vice President and
Secretary
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.
Name Title Date
Chairman of the
* Board December 10,
- ------------------------------------ 1999
Walter Scott, Jr.
President, Chief
* Executive Officer December 10,
- ------------------------------------ and Director 1999
James Q. Crowe
Executive Vice
* President, Chief December 10,
- ------------------------------------ Financial Officer 1999
R. Douglas Bradbury and Director
(principal
financial officer)
Vice President,
* Controller December 10,
- ------------------------------------ (principal 1999
Eric J. Mortensen accounting
officer)
II-5
<PAGE>
Name Title Date
Director
* December 10,
- ------------------------------------- 1999
Philip B. Fletcher
Director
* December 10,
- ------------------------------------- 1999
William L. Grewcock
Director
* December 10,
- ------------------------------------- 1999
Richard R. Jaros
Director
* December 10,
- ------------------------------------- 1999
Robert E. Julian
Director
* December 10,
- ------------------------------------- 1999
David C. McCourt
Director
* December 10,
- ------------------------------------- 1999
Kenneth E. Stinson
Director
* December 10,
- ------------------------------------- 1999
Michael B. Yanney
Neil J. Eckstein, by signing his name below, signs this document on the
behalf of each of the above named persons specified by and asterisk (*),
pursuant to a power of attorney duly executed by such persons, filed with the
Securities and Exchange Commission in the Registrant's Registration Statement
on December 1, 1999.
By: /s/ Neil J. Eckstein
----------------------------
Attorney-in fact
Neil J. Eckstein
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Page
Exhibit Description Number
------- ----------- ----------
<C> <C> <S> <C>
1.1 -- Form of Underwriting Agreement for Debt Securities*
1.2 -- Form of Underwriting Agreement for Equity
Securities*
4.1 -- Form of Senior Indenture (incorporated by reference
to Exhibit 4.1 to Amendment 1 to the Registrant's
Registration Statement on Form S-3 (File No. 333-
68887) filed with the Securities Exchange Commission
on February 3, 1999).
4.2 -- Form of Subordinated Indenture (incorporated by
reference to Exhibit 4.2 to Amendment 1 to the
Registrant's Registration Statement on Form S-3
(File No. 333-68887) filed with the Securities
and Exchange Commission on February 3, 1999).
4.3 -- Form of Certificate of Designation for the Preferred
Stock (together with Preferred Stock certificate)*
4.4 -- Form of Senior Debt Security*
4.5 -- Form of Subordinated Debt Security*
4.6 -- Form of Deposit Agreement (incorporated by reference
to Exhibit 4.6 to Amendment 1 to the Registrant's
Registration Statement on Form S-3 (File No. 333-
68887) filed with the Securities and Exchange
Commission on February 3, 1999).
4.7 -- The instruments defining the rights of the holders
of the long-term debt securities of the Registrant
are omitted pursuant to Section (b)(4)(iii)(A) of
Item 601 of Regulation S-K. Registrant agrees to
furnish supplementally copies of these instruments
to the Securities and Exchange Commission upon
request.
5 -- Opinion of Willkie Farr & Gallagher
12 -- Statement Regarding Computation of Ratio of Earnings
to Fixed Charges and Preferred Stock Dividends+
23.1 -- Consent of PricewaterhouseCoopers LLP
23.2 -- Consent of PricewaterhouseCoopers LLP
23.3 -- Consent of Arthur Andersen LLP
23.4 -- Consent of Willkie Farr & Gallagher (included in
Exhibit 5)
24 -- Power of Attorney+
25.1 -- Statement of Eligibility of Senior Trustee on Form
T-1 (incorporated by reference to Exhibit 25.1 to
Amendment 1 to the Registrant's Registration
Statement on Form S-3 (File No. 333-68887) filed
with the Securities and Exchange Commission on
February 3, 1999).
25.2 -- Statement of Eligibility of Subordinated Trustee on
Form T-1 (incorporated by reference to Exhibit 25.2
to Amendment 1 to the Registrant's Registration
Statement on Form S-3 (File No. 333-68887) filed
with the Securities and Exchange Commission on
February 3, 1999).
</TABLE>
- --------
* To be filed by amendment or incorporated by reference to the extent
applicable in connection with an offering.
+ Previously filed.
<PAGE>
EXHIBIT 5
December 10, 1999
Level 3 Communications, Inc.
1025 Eldorado Boulevard
Broomfield, Colorado 80021
Re: Level 3 Communications, Inc.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel for Level 3 Communications, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of $2,375,500,000 aggregate
principal amount of the Company's senior and subordinated debt securities
(collectively, the "Debt Securities"); preferred stock, par value $.01 per share
("Preferred Stock"), and related depositary shares representing fractional
interests in the Preferred Stock ("Depositary Shares"); and common stock, par
value $.01 per share ("Common Stock"). The Debt Securities, Preferred Stock,
Depositary Shares and Common Stock are herein referred to collectively as the
"Securities." The Securities may be issued from time to time by the Company
after the registration statement to which this opinion is an exhibit (the
"Registration Statement") becomes effective. The terms used herein, unless
otherwise defined, have the meanings assigned to them in the Registration
Statement.
We have examined such documents as we have considered necessary for
purposes of this opinion, including (i) the form of indenture (the "Senior
Indenture") between the Company and IBJ Whitehall Bank & Trust Company (formerly
known as IBJ Schroder Bank & Trust Company, as trustee, (ii) the form of
indenture (the "Subordinated Indenture") between the Company and IBJ Whitehall
Bank & Trust Company, as trustee, (iii) the Restated Certificate of
Incorporation and By-Laws of the Company, and (iv) the form of deposit agreement
between the Company and a depositary ("Depositary") relating to the Depositary
Shares; and such other documents and matters of law as we have deemed necessary
in connection with the opinions hereinafter
<PAGE>
Level 3 Communications, Inc.
December 10, 1999
Page 2
expressed. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to authentic originals of all documents submitted to us as
certified copies or photocopies. In rendering the opinions expressed below, we
have relied on factual representations by Company officials and statements of
fact contained in the documents we have examined.
On the basis of the foregoing and having regard for legal consideration we
deem relevant, we are of the opinion that:
1. The Company has been duly incorporated and is a validly existing
corporation under the laws of the State of Delaware.
2. Upon the taking of appropriate corporate action by the Company; the
effectiveness of the Registration Statement under the Act; the qualification of
the Senior Indenture or the Subordinated Indenture, as the case may be, under
the Trust Indenture Act of 1939; the compliance with the "blue sky" laws of
certain states; the due execution and delivery by the parties thereto of the
Senior Indenture, the Subordinated Indenture, and each amendment of or
supplement to the Senior Indenture or the Subordinated Indenture, as the case
may be (each such Indenture, as so amended or supplemented, being referred to as
an "Indenture," and the trustee under any Indenture being referred to as a
"Trustee"), assuming that the relevant Indenture is consistent with the form
thereof filed as an exhibit to the Registration Statement; the Debt Securities
will be duly and validly authorized and, when the Debt Securities are duly
executed by the Company, authenticated by the relevant Trustee and sold and
delivered at the price and in accordance with the terms set forth in the
Registration Statement, the supplement or supplements to the Prospectus included
therein and the relevant Indenture and the applicable definitive purchase,
underwriting or similar agreement, the Debt Securities will be valid and binding
obligations of the Company, entitled to the benefits of the relevant Indenture,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
3. Upon the taking of appropriate corporate action by the Company and its
stockholders, including the approval of the terms of any class or series of
Preferred Stock and the authorization of the execution and filing of a
<PAGE>
Level 3 Communications, Inc.
December 10, 1999
Page 3
Certificate of Designation (a "Certificate") relating thereto with the Delaware
Secretary of State; the effectiveness of the Registration Statement under the
Act; the compliance with the "blue sky" laws of certain states; the Preferred
stock will be duly and validly authorized, and, when certificates representing
the shares of Preferred Stock are duly executed by the Company, countersigned,
registered and sold and delivered at the price and in accordance with the terms
set forth in the Registration Statement and the supplement or supplements to the
Prospectus included therein and the applicable definitive purchase, underwriting
or similar agreement, will be validly issued, fully paid and nonassessable.
4. Upon the taking of appropriate corporate action by the Company and its
stockholders; the effectiveness of the Registration Statement under the Act; the
compliance with the "blue sky" laws of certain states; the Common Stock will be
duly and validly authorized, and, when the certificates representing shares of
Common Stock are duly executed by the Company, countersigned, registered and
sold and delivered the price in accordance with the terms set forth in the
Registration Statement and the supplement or supplements to the Prospectus
included therein and the applicable definitive purchase, underwriting or similar
agreement, the Common Stock will be validly issued, fully paid and
nonassessable.
5. Upon the taking of appropriate corporate action by the Company and its
stockholders, including the authorization of the execution and filing of a
Certificate relating to the underlying Preferred Stock with the Delaware
Secretary of State; the effectiveness of the Registration Statement under the
Act; the compliance with the "blue sky" laws of certain states; the due
execution and delivery by the parties thereto of a Deposit Agreement relating to
Depositary Shares, and each amendment thereof or supplement thereto (each such
Deposit Agreement, as so amended or supplemented, being referred to as a
"Deposit Agreement"), assuming that the relevant Deposit Agreement is consistent
with the form thereof filed as an exhibit to the Registrations Statement; the
shares of Preferred Stock underlying such Depositary Shares have been deposited
with a bank or trust company (which meets the requirements for the Depositary
set forth in the Registration Statement or in the supplement or supplements to
the Prospectus included therein) under the applicable Deposit Agreement, the
Depositary Shares will be duly and validly authorized, and, when the depositary
receipts evidencing rights in the Depositary Shares are duly executed by the
relevant Depositary and registered, and the Depositary Shares sold and delivered
at the price and in accordance with the terms set forth in the Registration
Statement, the
<PAGE>
Level 3 Communications, Inc.
December 10, 1999
Page 4
supplement or supplements to the Prospectus included therein and the Deposit
Agreement and the applicable definitive purchase, underwriting or similar
agreement, will be validly issued and will entitle the holders thereof to the
rights specified in the Deposit Agreement and the depositary receipts evidencing
rights therein, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus. In giving such consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
/s/ Willkie, Farr & Gallagher
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of Level 3 Communications, Inc. on Form S-3 of our report dated March 30, 1998,
on our audits of the consolidated financial statements of Level 3
Communications, Inc. (formerly Peter Kiewit Sons', Inc.) as of December 27,
1997 and for each of the two years in the period ended December 27, 1997 which
report is included in the 1998 Annual Report on Form 10-K of Level 3
Communications, Inc. We also consent to the reference to our firm under the
caption "Experts".
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Omaha, Nebraska
December 10, 1999
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of Level 3 Communications, Inc. on Form S-3 of our report dated March 8, 1999,
except for Note 20 as to which the date is March 18, 1999, on our audits of the
consolidated financial statements and financial statement schedules of RCN
Corporation and Subsidiaries as of December 31, 1998 and 1997, and for the
years ended December 31, 1998, 1997 and 1996, which report is incorporated by
reference in the 1998 Annual Report on Form 10-K of Level 3 Communications,
Inc. We also consent to the reference to our firm under the caption "Experts".
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December 10, 1999
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of our report dated March
29, 1999 on the consolidated financial statements of Level 3 Communications,
Inc. as of December 31, 1998 and for the year then ended included in Level 3
Communications, Inc.'s Form 10-K for the year ended December 31, 1998 and to
all references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Denver, Colorado
December 10, 1999
