<PAGE>
As filed with the Securities and Exchange Commission on December 8, 2000
Registration No. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
Tyco International Ltd.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Bermuda 7382 Not applicable
(State or other jurisdiction
of (Primary Standard Industrial (I.R.S. Employer
incorporation or
organization) Classification Code Number) Identification Number)
</TABLE>
--------------
The Zurich Centre, Second Floor
90 Pitts Bay Road
Pembroke HM 08, Bermuda
(441) 292-8674*
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------
Mark H. Swartz
c/o Tyco International (US) Inc.
One Tyco Park
Exeter, New Hampshire 03833
(603) 778-9700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------
* Tyco International Ltd. maintains its registered and principal executive
offices at The Zurich Centre, Second Floor, 90 Pitts Bay Road, Pembroke HM 08,
Bermuda. The executive offices of Tyco's principal United States subsidiaries
are located at One Tyco Park, Exeter, New Hampshire 03833. The telephone number
there is (603) 778-9700.
Copies to:
<TABLE>
<S> <C>
Meredith Cross, Esq. Fati Sadeghi, Esq.
Wilmer, Cutler & Pickering Senior Corporate Counsel
2445 M Street, NW Tyco International (US) Inc.
Washington, D.C. 20037 One Tyco Park
(202) 663-6000 Exeter, New Hampshire 03833
(603) 778-9700
</TABLE>
--------------
Approximate date the registrant proposes to begin selling securities 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 in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
Calculation of Registration Fee
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed
maximum offering Proposed
Title of securities to Amount to be price per maximum aggregate Amount of
be registered registered(1) share(2) offering price(2) registration fee
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Liquid Yield Option (TM)
Notes due 2020......... $4,657,500,000 75.75% $3,528,056,250 $931,407
-----------------------------------------------------------
Common shares, nominal
value U.S. $.20 per
share.................. (3) -- -- (3)
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(TM) Trademark of Merrill Lynch & Co., Inc.
(1) The LYONs were issued at an original price of $741.65 per $1,000 principal
amount at maturity, which represents an aggregate initial issue price of
$3,454,234,875 and an aggregate principal amount at maturity of
$4,657,500,000.
(2) This estimate is made pursuant to Rule 457(c) of the Securities Act solely
for purposes of determining the registration fee. The above calculation is
based on the average of the bid and ask prices for the Registrant's LYONs
in secondary market transactions executed by the Initial Purchaser of the
LYONs on December 4, 2000, as reported to the Registrant by the Initial
Purchaser.
(3) Includes such indeterminate number of common shares as shall be issuable
upon conversion and/or purchase by the Registrant of the LYONs registered
hereby, which are not subject to an additional registration fee pursuant to
Rule 457(i) under the Securities Act.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
files a further Amendment which specifically states that this Registration
Statement is to become effective in accordance with Section 8(a) of the
Securities Act or until the Registration Statement becomes effective on the
date the SEC, acting under Section 8(a), determines.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. The +
+selling securityholders 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 it is not +
+soliciting an offer to buy these securities in any state where the offer or +
+sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED DECEMBER 8, 2000
PROSPECTUS
$4,657,500,000
[LOGO OF TYCO]
Liquid Yield Option(TM) Notes due 2020
(Zero Coupon--Senior)
And
Common Shares Issuable Upon
Conversion and/or Purchase of the LYONs
We issued the LYONs in a private placement in November 2000 at an issue price
of $741.65 per LYON. Selling securityholders will use this prospectus to resell
their LYONs and the common shares issuable upon conversion, and/or purchase by
us, of their LYONs.
Holders may surrender the LYONs for conversion into common shares at a
conversion rate of 10.3014 common shares per LYON if any of the following
conditions is satisfied:
. if the closing sale price of our common shares for at least 20 trading
days in the 30 trading day period ending on the trading day prior to the
date of surrender is more than 110% of the accreted conversion price per
common share on that preceding trading day;
. if we have called the LYONs for redemption; or
. upon the occurrence of specified corporate transactions.
The conversion rate is subject to adjustment in specified circumstances.
We will not pay interest on the LYONs prior to maturity. The principal amount
at maturity of each LYON is $1,000. The issue price represents a yield to
maturity of 1.50% per year.
We may redeem all or a portion of the LYONs on or after November 17, 2007.
Holders may require us to repurchase the LYONs at a price of $752.82 per LYON
on November 17, 2001; at a price of $775.66 per LYON on November 17, 2003; at a
price of $799.19 per LYON on November 17, 2005; at a price of $823.44 per LYON
on November 17, 2007; or at a price of $914.24 per LYON on November 17, 2014.
In addition, holders may require us to repurchase the LYONs upon a change of
control occurring on or before November 17, 2007.
Our common shares currently trade on the New York Stock Exchange under the
symbol "TYC." The closing price of our common shares on the New York Stock
Exchange on December 6, 2000 was $57.50 per share.
-----------
Investing in the LYONs involves risks that are described in the "Risk Factors
Relating to the LYONs" section beginning on page 12 of this prospectus.
-----------
We will not receive any of the proceeds from the sale of the LYONs or the
common shares by any of the selling securityholders. The LYONs and the common
shares may be offered in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. In addition, the common
shares may be offered from time to time through ordinary brokerage transactions
on the New York Stock Exchange. See "Plan of Distribution." The selling
securityholders may be deemed to be "underwriters" as defined in the Securities
Act of 1933, as amended. Any profits realized by the selling securityholders
may be deemed to be underwriting commissions. If the selling securityholders
use any broker-dealers, any commissions paid to broker-dealers and, if broker-
dealers purchase any LYONs or common shares as principals, any profits received
by such broker-dealers on the resale of the LYONs or common shares, may be
deemed to be underwriting discounts or commissions under the Securities Act.
Neither the Securities and Exchange Commission, any state securities
commission nor any other regulatory body has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is , 2000.
(TM)Trademark of Merrill Lynch & Co., Inc.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information........................................ 3
Forward Looking Information................................................ 5
Summary.................................................................... 6
Risk Factors Relating to the LYONs......................................... 12
Use of Proceeds............................................................ 13
Ratio of Earnings to Fixed Charges......................................... 13
Description of LYONs....................................................... 15
Description of the Common Shares........................................... 27
Certain Bermuda and United States Federal Income Tax Consequences.......... 30
Selling Securityholders.................................................... 34
Plan of Distribution....................................................... 36
Service of Process and Enforcement of Liabilities.......................... 38
Legal Matters.............................................................. 38
Experts.................................................................... 38
</TABLE>
The Bermuda Stock Exchange takes no responsibility for the contents of this
document, makes no representation as to its accuracy or completeness and
expressly disclaims any liability whatsoever for any loss arising from or in
reliance upon any part of the contents of this document.
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Tyco files annual, quarterly and special reports, proxy statements and other
information with the SEC under the Securities Exchange Act of 1934, as amended.
You may read and copy this information at the following locations of the SEC:
Public Reference Room North East Regional Midwest Regional
450 Fifth Street, Office Office
N.W. 7 World Trade Center 500 West Madison
Room 1024 Suite 1300 Street
Washington, D.C. New York, New York Suite 1400
20549 10048 Chicago, Illinois
60661
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington, DC
20549, at prescribed rates.
The SEC also maintains a web site that contains reports, proxy statements
and other information about issuers, like Tyco, who file electronically with
the SEC. The address of that site is www.sec.gov.
You can also inspect reports, proxy statements and other information about
Tyco at the offices of the New York Stock Exchange, 20 Broad Street, New York,
New York 10005.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus,
except for any information superseded by information contained directly in this
prospectus. This prospectus incorporates by reference the documents set forth
below that Tyco has previously filed with the SEC. These documents contain
important information about Tyco and its finances.
<TABLE>
<CAPTION>
TYCO SEC FILINGS (File No. 001-13836) PERIOD
------------------------------------- ------
<C> <S>
Annual Report on Forms 10-K and 10-K/A Fiscal year ended September
30, 1999
Quarterly Reports on Forms 10-Q and 10-Q/A Quarterly periods ended
December 31, 1999, March
31, 2000 and June 30, 2000
Current Reports on Form 8-K Filed on December 9, 1999,
December 10, 1999, January
20, 2000, July 14, 2000,
November 1, 2000 and
November 15, 2000
The description of Tyco common shares as set Filed on March 1, 1999
forth
in its Registration Statement on Form 8-A/A
</TABLE>
All documents filed by Tyco with the SEC from the date of this prospectus to
the end of the offering of the LYONs and common shares under this document
shall also be deemed to be incorporated herein by reference.
You may request a copy of these filings at no cost, by writing or calling
Tyco at the following address or telephone number:
Tyco International Ltd.
The Zurich Centre, Second Floor
90 Pitts Bay Road
Pembroke HM 08, Bermuda
(441) 292-8674
Exhibits to the filings will not be sent, however, unless those exhibits
have specifically been incorporated by reference in this document.
3
<PAGE>
We have not authorized anyone to give any information or make any
representation about the offering that is different from, or in addition to,
that contained in this prospectus or in any of the materials that we have
incorporated by reference into this prospectus. Therefore, if anyone does give
you information of this sort, you should not rely on it. If you are in a
jurisdiction where offers to sell, or solicitations of offers to purchase, the
securities offered by this document are unlawful, or if you are a person to
whom it is unlawful to direct these types of activities, then the offer
presented in this document does not extend to you. The information contained in
this document speaks only as of the date of this document unless the
information specifically indicates that another date applies.
4
<PAGE>
FORWARD LOOKING INFORMATION
Certain statements contained or incorporated by reference in this document
are "forward looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. All forward looking statements
involve risks and uncertainties. In particular, any statement contained in this
document or any document incorporated by reference in this document regarding
the consummation and benefits of future acquisitions, as well as expectations
with respect to future sales, operating efficiencies and product expansion, are
subject to known and unknown risks, uncertainties and contingencies, many of
which are beyond the control of Tyco, which may cause actual results,
performance or achievements to differ materially from anticipated results,
performances or achievements. Factors that might affect such forward looking
statements include, among other things:
. overall economic and business conditions;
. the demand for Tyco's goods and services;
. competitive factors in the industries in which Tyco competes;
. changes in government regulation;
. changes in tax requirements, including tax rate changes, new tax laws
and revised tax law interpretations;
. results of litigation;
. interest rate fluctuations, foreign currency rate fluctuations and other
capital market conditions;
. economic and political conditions in international markets, including
governmental changes and restrictions on the ability to transfer capital
across borders;
. the ability to achieve anticipated synergies and other costs savings in
connection with acquisitions;
. the timing, impact and other uncertainties of future acquisitions; and
. the timing of construction and the successful operation of the TyCom
Global NetworkTM by Tyco's majority owned subsidiary, TyCom Ltd.
5
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere or incorporated by reference in this prospectus.
Because this is a summary, it may not contain all the information that may be
important to you. You should read the entire prospectus, as well as the
information incorporated by reference, before making an investment decision.
When used in this prospectus, the terms "Tyco," "we," "our" and "us" refer to
Tyco International Ltd. and its consolidated subsidiaries, unless otherwise
specified.
Tyco
Tyco is a diversified manufacturing and service company that, through its
subsidiaries:
. designs, manufactures and distributes electrical and electronic
components and multi-layer printed circuit boards;
. designs, engineers, manufactures, installs, operates and maintains
undersea cable communications systems;
. designs, manufactures and distributes disposable medical supplies and
other specialty products;
. designs, manufactures, installs and services fire detection and
suppression systems and installs, monitors and maintains electronic
security systems; and
. designs, manufactures and distributes flow control products and provides
environmental consulting services.
Tyco operates in more than 100 countries around the world and has announced
revenues for its fiscal year ended September 30, 2000 of approximately $28.9
billion.
Tyco's strategy is to be the low-cost, high-quality producer and provider in
each of its markets. It promotes its leadership position by investing in
existing businesses, developing new markets and acquiring complementary
businesses and products. Combining the strengths of its existing operations and
its business acquisitions, Tyco seeks to enhance shareholder value through
increased earnings per share and strong cash flows.
Tyco reviews acquisition opportunities in the ordinary course of business,
some of which may be material and some of which are currently under
investigation, discussion or negotiation. There can be no assurance that any of
such acquisitions will be consummated.
Tyco's common shares are listed on the New York Stock Exchange and the
Bermuda Stock Exchange under the symbol "TYC" and on the London Stock Exchange
under the symbol "TYI."
Tyco is a Bermuda company whose registered and principal executive offices
are located at The Zurich Centre, Second Floor, 90 Pitts Bay Road, Pembroke HM
08, Bermuda, and its telephone number is (441) 292-8674. The executive offices
of Tyco's principal United States subsidiaries are located at One Tyco Park,
Exeter, New Hampshire 03833. The telephone number there is (603) 778-9700.
For additional information regarding the business of Tyco, please see Tyco's
Forms 10-K and 10-K/A and other filings of Tyco with the SEC which are
incorporated by reference into this document. See "Where You Can Find More
Information."
6
<PAGE>
Current Developments
On December 4, 2000, Tyco agreed to acquire Simplex Time Recorder Co.
("Simplex") for approximately $1.15 billion in cash. Simplex manufactures fire
and security products and communications systems including control panels,
detection devices and system software. Simplex also installs, monitors and
services fire alarms, security systems and access control systems and will be
integrated within the Fire and Security Services segment. The acquisition is
subject to customary regulatory approvals.
On November 17, 2000, Tyco completed a private placement offering of
$4,657,500,000 principal amount at maturity of LYONs due 2020 for aggregate net
proceeds of approximately $3,374,000,000. Each $1,000 principal amount at
maturity LYON was issued at 74.165% of principal amount at maturity, accretes
at a rate of 1.5% per annum and is convertible into 10.3014 Tyco common shares
if certain conditions are met. Tyco may be required to repurchase the LYONs at
the accreted value at the option of the holders on November 17, 2001, 2003,
2005, 2007 or 2014. The proceeds of that offering will be used to finance the
LPS acquisition and to repay commercial paper.
On November 13, 2000, Tyco agreed to acquire the Lucent Power Systems, or
LPS, business unit of Lucent Technologies, Inc. for $2.5 billion in cash. LPS
provides a full line of energy solutions and power products for
telecommunications service providers and for the computer industry and will be
integrated within the Electronics segment. LPS products include AC/DC and DC/DC
switching power supplies, batteries, power supplies and back-up power systems.
The acquisition is subject to customary regulatory approvals.
On October 24, 2000, Tyco announced its results for the fourth quarter of
fiscal 2000, the three months ended September 30, 2000. For the fiscal 2000
fourth quarter, income before restructuring and other non-recurring credits,
charges, gain and extraordinary items was $1.10 billion, or $0.64 per diluted
share, as compared to $782.7 million, or $0.46 per diluted share, for the
quarter ended September 30, 1999. After giving effect to restructuring and
other non-recurring credits, charges, gain and extraordinary items, net income
for the fourth quarter of fiscal 2000 was $1.91 billion, or $1.12 per diluted
share, compared to $780.5 million, or $0.46 per diluted share, in the fourth
quarter of fiscal 1999. Results in the fourth quarter of fiscal 2000 included a
$1.76 billion pretax gain from the initial public offering of TyCom Ltd. Fourth
quarter sales rose 25% to $7.81 billion, up from $6.22 billion a year ago.
For fiscal 2000, revenues increased to $28.93 billion, up 29% from revenues
of $22.50 billion in fiscal 1999. Income before restructuring and other non-
recurring credits, charges, gain and extraordinary items rose to $3.73 billion,
or $2.18 per diluted share, a 42% increase over $1.53 per diluted share in
fiscal 1999. After giving effect to restructuring and other non-recurring
credits, charges, gain and extraordinary items, net income for fiscal 2000 was
$4.52 billion, or $2.64 per diluted share, compared to $1.02 billion or $0.61
per diluted share, in fiscal 1999.
The following segment discussion is presented before merger, restructuring
and other non-recurring credits, charges, gain and extraordinary items
consistent with Tyco management's view of operations. Quarterly operating
profits at Tyco Electronics increased 69% to $746.8 million in the fiscal 2000
fourth quarter as compared to $441.6 million in the quarter ended September 30,
1999. Operating profits at Tyco Telecommunications increased 95% to $144.2
million in the fiscal 2000 fourth quarter as compared to $74.0 million in the
quarter ended September 30, 1999. Operating profits at Tyco Healthcare and
Specialty Products increased 9% to $404.3 million in the fiscal 2000 fourth
quarter as compared to $372.1 million in the quarter ended September 30, 1999.
Operating profits at Tyco Fire and Security Services increased 22% to $307.5
million in the fiscal 2000 fourth quarter as compared to $253.2 million in the
quarter ended September 30, 1999. Operating profits at Tyco Flow Control
Products and Services increased 14% to $200.3 million in the fiscal 2000 fourth
quarter as compared to $175.8 million in the quarter ended September 30, 1999.
The operating profits of Tyco's five business segments are stated before
deduction of general corporate expenses, goodwill amortization, interest
expense and taxes.
7
<PAGE>
On October 17, 2000, Tyco acquired Mallinckrodt Inc. ("Mallinckrodt"), a
global healthcare company with products used primarily for respiratory care,
diagnostic imaging and pain relief. Tyco issued approximately 64.8 million
common shares, valued at approximately $3.2 billion, and assumed approximately
$1.0 billion in debt. Mallinckrodt is being integrated within Tyco's Healthcare
group. Tyco is accounting for the acquisition as a purchase.
On October 6, 2000, Tyco sold its ADT Automotive business to Manheim
Auctions, Inc., a wholly owned subsidiary of Cox Enterprises, Inc., for
approximately $1 billion in cash. The sale is expected to generate a one-time
pre-tax gain to Tyco in excess of $300 million in the first quarter of fiscal
2001.
8
<PAGE>
The Offering
LYONs....................... $4,657,500,000 aggregate principal amount at
maturity of LYONs due November 17, 2020. We will
not pay interest on the LYONs prior to maturity.
Each LYON was issued at a price of $741.65 per
LYON and a principal amount at maturity of
$1,000.
Maturity of LYONs .......... November 17, 2020
Yield to Maturity of LYONs 1.50% per year, computed on a semi-annual bond
............................ equivalent basis, calculated from November 17,
2000.
Conversion Rights........... For each LYON surrendered for conversion, we will
deliver 10.3014 of our common shares. We may
adjust the conversion rate for certain reasons
specified in the indenture, but not for accrued
original issue discount. Upon conversion, a
holder will not receive any cash payment
representing accrued original issue discount.
Instead, accrued original issue discount will be
deemed paid by the common shares received by the
holder on conversion. See "Description of LYONs--
Conversion Rights."
Holders may surrender LYONs for conversion into
common shares if the closing sale price of our
common shares for at least 20 trading days in the
30 trading day period ending on the trading day
prior to the day of surrender is more than 110%
of the accreted conversion price per common share
at such preceding trading day. The accreted
conversion price per common share as of any day
will equal the sum of the issue price of a LYON
plus the accrued original issue discount for the
LYON, with that sum divided by the number of
common shares issuable upon a conversion of a
LYON on that day. Even if the foregoing condition
is not satisfied, LYONs or portions of LYONs in
integral multiples of $1,000 principal amount at
maturity called for redemption may be surrendered
for conversion until the close of business on the
day that is two business days prior to the
redemption date. In addition, if we make a
significant distribution to our shareholders or
if we are a party to specified consolidations,
mergers or binding share exchanges, holders may
surrender LYONs for conversion as provided in
"Description of LYONs--Conversion Rights." The
ability to surrender LYONs for conversion will
expire at the close of business on November 17,
2020, unless they have previously been redeemed
or purchased.
When a holder surrenders LYONs for conversion,
the conversion agent will cause the LYONs first
to be offered to a financial institution chosen
by us for exchange in lieu of conversion. In
order to accept LYONs surrendered for conversion,
the designated institution must agree to exchange
for those LYONs a number of common shares equal
to the number of common shares the holder of
those LYONs would receive upon conversion, plus
cash for any fractional shares. If the designated
institution declines to accept for
9
<PAGE>
exchange any LYONs in whole or in part, or if the
designated institution agrees to accept any LYONs
for exchange but does not timely deliver the
related common shares, we will convert those
LYONs or parts of LYONs. If the designated
institution accepts a LYON in exchange for common
shares and cash in lieu of fractional shares, a
U.S. holder that holds the LYON as a capital
asset will generally recognize capital gain or
loss equal to the difference between the fair
market value of the common shares and cash
received, and the U.S. holder's tax basis in its
LYON. By contrast, our conversion of a LYON into
common shares would generally not result in the
recognition of any gain or loss. See "Certain
Bermuda and United States Federal Income Tax
Consequences--U.S. Holders--Conversion" and "Risk
Factors Relating to the LYONs--The tax
consequences of surrendering LYONs for conversion
may vary."
Ranking..................... The LYONs are unsecured and unsubordinated
obligations and rank equal in right of payment
with all our existing and future unsecured and
unsubordinated indebtedness. The LYONs are
structurally subordinated to the indebtedness and
other obligations of our subsidiaries.
Original Issue Discount..... We issued each LYON with an original issue
discount for United States federal income tax
purposes equal to the principal amount at
maturity of each LYON less the issue price to
investors allocated to the LYONs. You should be
aware that, although we will not pay interest on
the LYONs, U.S. holders must include accrued
original issue discount in their gross income for
United States federal income tax purposes prior
to the conversion, redemption, sale or maturity
of the LYONs, even if such LYONs are ultimately
not converted, redeemed, sold or paid at
maturity. See "Certain Bermuda and United States
Federal Income Tax Consequences--U.S. Holders--
Original Issue Discount."
Sinking Fund................ None.
Redemption of LYONs at the
Option of Tyco..............
We may redeem all or a portion of the LYONs for
cash at any time on or after November 17, 2007,
at the redemption prices set forth in this
prospectus. See "Description of LYONs--Redemption
of LYONs at the Option of Tyco."
Purchase of LYONs by Tyco
at the Option of the
Holder...................... Holders may require us to purchase all or a
portion of their LYONs on November 17, 2001,
2003, 2005, 2007 or 2014, at the purchase prices
set forth in this prospectus. We may choose to
pay the purchase price for the November 17, 2001
purchase in cash, common shares or a combination
of cash and common shares. We will pay for all
other purchases in cash. See "Description of
LYONs--Purchase of LYONs by Tyco at the Option of
the Holder."
10
<PAGE>
Change in Control........... Upon a change in control of Tyco occurring on or
before November 17, 2007, each holder may require
us to purchase all or a portion of such holder's
LYONs in cash at a price equal to the issue price
of such LYONs plus accrued original issue
discount to the date of purchase. See
"Description of LYONs--Change in Control Permits
Purchase of LYONs by Tyco at the Option of the
Holder."
Events of Default........... If an event of default on the LYONs has occurred
and is continuing, the issue price of the LYONs
plus the accrued original issue discount may be
declared immediately due and payable. These
amounts automatically become due and payable upon
certain events of default. See "Description of
LYONs--Events of Default."
Use of Proceeds............. We will not receive any of the proceeds from the
sale by any selling securityholder of the LYONs
or the common shares. See "Use of Proceeds."
DTC Eligibility............. The LYONs have been issued in book-entry form and
are represented by permanent global certificates.
These global certificates have been deposited
with a custodian for, and registered in the name
of, a nominee of The Depository Trust Company, or
DTC, in New York, New York. Beneficial interests
in any such securities will be shown on, and
transfers will be effected only through, records
maintained by DTC and its direct and indirect
participants. Except in limited circumstances, no
such interest may be exchanged for certificated
securities. See "Description of LYONs--Book-Entry
System."
Trading..................... The LYONs issued in the initial private placement
are eligible for trading in the PORTAL system.
LYONs sold using this prospectus, however, will
no longer be eligible for trading in the PORTAL
system. Our common shares are traded on the New
York Stock Exchange under the symbol "TYC."
11
<PAGE>
RISK FACTORS RELATING TO THE LYONS
Prospective investors should carefully consider the following information
with the other information contained in this prospectus before purchasing the
LYONs.
The tax consequences of surrendering LYONs for conversion may vary.
When a holder surrenders LYONs for conversion, the conversion agent will
cause the LYONs first to be offered to a financial institution chosen by us for
exchange in lieu of conversion. In order to accept LYONs surrendered for
conversion, the designated institution must agree to exchange for such LYONs a
number of common shares equal to the number of common shares the holder of such
LYONs would receive upon conversion, plus cash for any fractional shares. If
the institution accepts any such LYONs for exchange, it will deliver the
appropriate number of common shares to the conversion agent and the conversion
agent will deliver those shares to the holder who surrendered the LYONs. If the
designated institution accepts a LYON in exchange for common shares and cash in
lieu of fractional shares, a U.S. holder that holds the LYON as a capital asset
will generally recognize capital gain or loss equal to the difference between
the fair market value of the common shares and cash received, and the U.S.
holder's tax basis in its LYON. By contrast, our conversion of a LYON into
common shares would generally not result in the recognition of any gain or
loss. See "Certain Bermuda and United States Federal Income Tax Consequences--
U.S. Holders--Conversion." Prior to surrendering LYONs for conversion, a holder
will not know whether he will receive common shares from a designated
institution or from us. In addition, the holder cannot withdraw his LYONs after
surrendering them for conversion.
An active trading market for LYONs may not develop.
We cannot assure you that an active trading market for the LYONs will
develop or as to the liquidity or sustainability of any such market, the
ability of the holders to sell their LYONs or the price at which holders of
the LYONs will be able to sell their LYONs. Future trading prices of the LYONs
will depend on many factors, including, among other things, prevailing interest
rates, our operating results, the price of our common shares and the market for
similar securities.
We may not be able to raise the funds necessary to finance a change in control
purchase or a purchase at the option of the holder.
On November 17, 2003, 2005, 2007 and 2014, and upon the occurrence of
specific kinds of change in control events occurring on or before November 17,
2007, holders of LYONs may require us to purchase their LYONs for cash.
However, it is possible that we would not have sufficient funds at that time to
make the required purchase of LYONs. In addition, certain important corporate
events, such as leveraged recapitalizations that would increase the level of
our indebtedness, would not constitute a change in control under the indenture.
See "Description of LYONs--Purchase of LYONs by Tyco at the Option of the
Holder" and "--Change in Control Permits Purchase of LYONs by Tyco at the
Option of the Holder."
Our holding company structure results in structural subordination and may
affect our ability to make payments on LYONs.
The LYONs are obligations exclusively of Tyco. We are a holding company and
conduct substantially all of our operations through our subsidiaries. As a
result, our cash flow and our ability to service our debt, including the LYONs,
depends upon the earnings of our subsidiaries. In addition, we depend on the
distribution of earnings, loans or other payments by our subsidiaries to us.
Our subsidiaries are separate and distinct legal entities. Our subsidiaries
have no obligation to pay any amounts due on the LYONs or to provide us with
funds for our payment obligations, whether by dividends,
12
<PAGE>
distributions, loans or other payments. In addition, any payment of dividends,
distributions, loans or advances by our subsidiaries to us could be subject to
statutory or contractual restrictions. Payments to us by our subsidiaries will
also be contingent upon our subsidiaries' earnings and business considerations.
Our right to receive any assets of any of our subsidiaries upon their
liquidation or reorganization, and, as a result, the right of the holders of
the LYONs to participate in those assets, will be effectively subordinated to
the claims of that subsidiary's creditors, including trade creditors. In
addition, even if we were a creditor of any of our subsidiaries, our rights as
a creditor would be subordinate to any security interest in the assets of our
subsidiaries and any indebtedness of our subsidiaries senior to that held by
us.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the LYONs or common
shares by the selling securityholders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
Tyco for the nine months ended June 30, 2000, the years ended September 30,
1999 and 1998, the nine-month transition period ended September 30, 1997 and
the years ended December 31, 1996 and 1995.
<TABLE>
<CAPTION>
Nine Months Year Ended Nine Months Year Ended
Ended September 30, Ended December 31,
June 30, ------------- September 30, -------------
2000 1999 1998 1997(4) 1996 1995
----------- ------ ------ ------------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges
(1)(2)(3)............. 5.78 3.53 5.07 1.00 2.54 4.68
</TABLE>
--------
(1) For purposes of determining the ratio of earnings to fixed charges,
earnings consist of income (loss) before income taxes, extraordinary items,
cumulative effect of accounting changes and fixed charges. Fixed charges
consist of interest on indebtedness, amortization of debt expenses and one-
third of rent expense which is deemed representative of an interest factor.
(2) On July 2, 1997, Tyco, formerly called ADT Limited, merged with Tyco
International Ltd., a Massachusetts corporation ("Former Tyco"). On April
2, 1999, October 1, 1998, August 29, 1997 and August 27, 1997, Tyco
consummated mergers with AMP Incorporated, United States Surgical
Corporation, Keystone International, Inc. and Inbrand Corporation,
respectively. Each of the five merger transactions qualifies for the
pooling of interests method of accounting. As such, the ratios of earnings
to fixed charges presented above include the effect of the mergers, except
that the calculation presented above for periods prior to January 1, 1997
does not include Inbrand due to immateriality. Prior to their respective
mergers, AMP, US Surgical, Keystone, and ADT had December 31 year ends and
Former Tyco had a June 30 fiscal year end. The historical results upon
which the ratios are based have been combined using a December 31 year end
for AMP, US Surgical, Keystone, ADT and Former Tyco for the year ended
December 31, 1996. For 1995, the ratio of earnings to fixed charges
reflects the combination of AMP, US Surgical, Keystone and ADT with a
December 31 year end and Former Tyco with a June 30 fiscal year end.
(3) Earnings for the nine months ended June 30, 2000, the years ended September
30, 1999 and 1998, the nine months ended September 30, 1997 and the years
ended December 31, 1996 and 1995 include net merger, restructuring and
other non-recurring (credits) charges of $(81.3) million (of which net
charges of $1.0 million are included in cost of sales), $1,035.2 million
(of which $106.4 million is included in cost of sales), $256.9 million,
$947.9 million, $344.1 million and $97.1 million, respectively. Earnings
also include charges for the impairment of long-lived assets of $99.0
million, $507.5 million, $148.4 million, $744.7 million and $8.2 million in
the nine months ended June 30, 2000, the year ended September 30, 1999, the
nine months ended September 30, 1997 and the years ended December 31, 1996
and 1995,
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<PAGE>
respectively. The 1997 period also includes a write-off of purchased in-
process research and development of $361.0 million. The 1995 period also
includes a net loss on the disposal of businesses of $34.4 million.
On a pro forma basis, the ratio of earnings to fixed charges excluding
merger, restructuring and other non-recurring (credits) charges, charges
for the impairment of long-lived assets, the write-off of purchased in-
process research and development and the net loss on the disposal of
businesses would have been 5.81x, 5.82x, 5.68x, 6.81x, 5.76x and 5.09x for
the nine months ended June 30, 2000, the years ended September 30, 1999 and
1998, the nine months ended September 30, 1997 and the years ended December
31, 1996 and 1995, respectively.
(4) In September 1997, Tyco changed its fiscal year end from December 31 to
September 30. Accordingly, the nine-month transition period ended
September 30, 1997 is presented.
14
<PAGE>
DESCRIPTION OF LYONS
We issued the LYONs under a senior indenture dated as of November 17, 2000,
between us and State Street Bank and Trust Company, as trustee. The following
summarizes the material provisions of the LYONs and the indenture. The
following summary does not purport to be complete and is subject to, and
qualified by reference to, all of the provisions of the LYONs and the
indenture. As used in this "Description of LYONs," the words "we," "us," "our"
or "Tyco" do not include any current or future subsidiary of Tyco.
General
On November 17, 2000, we issued $4,657,500,000 aggregate principal amount at
maturity of the LYONs in a private placement. The LYONs will mature on November
17, 2020. The principal amount at maturity of each LYON is $1,000. The LYONs
will be payable at the office of the paying agent, which initially will be an
office or agency of the trustee, or an office or agency maintained by us for
such purpose, in the Borough of Manhattan, The City of New York.
We issued each LYON at an issue price of $741.65 per LYON, which represents
a substantial discount from its principal amount at maturity. See "Certain
Bermuda and United States Federal Income Tax Consequences--U.S. Holders--
Original Issue Discount." We will not make periodic payments of interest on the
LYONs but the LYONs will accrue original issue discount while they remain
outstanding. Original issue discount is the difference between the issue price
and the principal amount at maturity of a LYON. Original issue discount will
accrue at a rate of 1.50% per annum from the date of issuance. We will
calculate the accrual of original issue discount on a semiannual bond
equivalent basis using a 360-day year composed of twelve 30-day months.
Original issue discount began to accrue on November 17, 2000, the issue date of
the LYONs.
Original issue discount will cease to accrue on a LYON upon its maturity,
conversion, purchase by us at the option of a holder or redemption. We may not
reissue a LYON that has matured or been converted, purchased by us at the
option of a holder, redeemed or otherwise cancelled, except for registration of
transfer, exchange or replacement of such LYON. In certain circumstances
described in "--Conversion Rights," however, a LYON surrendered by a holder for
conversion may be transferred to a third party and remain outstanding.
Holders may present for conversion any LYONs that have become eligible for
conversion at the office of the conversion agent, and may present LYONs for
registration of transfer at the office of the trustee.
Ranking of LYONs
The LYONs are unsecured and unsubordinated obligations. The LYONs rank equal
in right of payment with all of our existing and future unsecured and
unsubordinated indebtedness. See "Risk Factors Relating to the LYONs--Our
holding company structure results in structural subordination and may affect
our ability to make payments on LYONs."
Conversion Rights
General
Holders may surrender LYONs for conversion into common shares at a
conversion rate of 10.3014 common shares per LYON if any of the following
conditions is satisfied:
. if the closing sale price of our common shares for at least 20 trading
days in the 30 trading day period ending on the trading day prior to the
day of surrender is more than 110% of the accreted conversion price per
common share at such preceding trading day;
. if we have called the LYONs for redemption; or
. upon the occurrence of specified corporate transactions.
We describe each of these conditions in greater detail below.
15
<PAGE>
Conversion Upon Satisfaction of Market Price Condition
Holders may surrender LYONs for conversion into our common shares if the
closing sale price of our common shares on the principal national securities
exchange on which the common shares are listed, for at least 20 trading days in
the 30 trading day period ending on the trading day prior to the day of
surrender, exceeds 110% of the accreted conversion price per common share at
that preceding trading day. The accreted conversion price per common share as
of any day equals the quotient of:
. the issue price of a LYON plus the accrued original issue discount for
such LYON, divided by
. the number of common shares issuable upon conversion of the LYON on that
day.
The conversion agent will, on our behalf, determine daily if the LYONs are
convertible as a result of the market price of our common shares and notify us
and the trustee.
Conversion Upon Notice of Redemption
A holder may surrender for conversion a LYON called for redemption at any
time prior to the close of business on the day that is two business days prior
to the redemption date, even if it is not otherwise convertible at such time.
If a holder has already delivered a purchase notice or a change in control
purchase notice with respect to a LYON, however, the holder may not surrender
that LYON for conversion until the holder has withdrawn the notice in
accordance with the indenture.
Conversion Upon Specified Corporate Transactions
Even if the market price contingency described above under "--Conversion
Rights --Conversion Upon Satisfaction of Market Price Condition" has not
occurred, if we elect to
. distribute to all holders of common shares certain rights entitling them
to purchase, for a period expiring within 60 days, common shares at less
than the quoted price at the time, or
. distribute to all holders of our common shares our assets, debt
securities or certain rights to purchase our securities, which
distribution has a per share value exceeding 15% of the closing price of
the common shares on the day preceding the declaration date for such
distribution,
we must notify the holders of LYONs at least 20 days prior to the ex-dividend
date for such distribution. Once we have given such notice, holders may
surrender their LYONs for conversion at any time until the earlier of close of
business on the business day prior to the ex-dividend date or our announcement
that such distribution will not take place.
In addition, if we are party to a consolidation, merger or binding share
exchange pursuant to which our common shares would be converted into cash,
securities or other property, a holder may surrender LYONs for conversion at
any time from and after the date which is 15 days prior to the anticipated
effective date of the transaction until 15 days after the actual date of such
transaction. If we are a party to a consolidation, merger or binding share
exchange pursuant to which the common shares are converted into cash,
securities or other property, then at the effective time of the transaction,
the right to convert a LYON into common shares will be changed into a right to
convert it into the kind and amount of cash, securities or other property which
the holder would have received if the holder had converted its LYON immediately
prior to the transaction. If the transaction also constitutes a "change in
control," as defined below, the holder can require us to purchase all or a
portion of its LYONs as described under "Change in Control Permits Purchase of
LYONs by Tyco at the Option of the Holder."
Exchange In Lieu of Conversion
When a holder surrenders LYONs for conversion, the conversion agent will
cause the LYONs first to be offered to a financial institution chosen by us for
exchange in lieu of conversion. We expect that when the
16
<PAGE>
LYONs are convertible, the designated institution will submit to the conversion
agent a non-binding offer to accept LYONs surrendered for conversion. In order
to accept LYONs surrendered for conversion, the designated institution must
agree to exchange for such LYONs a number of common shares equal to the number
of common shares the holder of such LYONs would receive upon conversion, plus
cash for any fractional shares. If the institution accepts any such LYONs, it
will deliver the appropriate number of common shares to the conversion agent
and the conversion agent will deliver those shares to the holder who
surrendered the LYONs. Our designation of an institution to which LYONs may be
submitted for exchange does not require the institution to accept any LYONs
from the conversion agent. If the designated institution declines to accept any
LYONs in whole or in part, we will convert those LYONs or parts of LYONs into
our common shares as of the close of business on the business day following the
business day on which the LYONs are surrendered for conversion. If the
designated institution agrees to accept any LYONs for exchange but does not
timely deliver the related common shares, we will convert the LYONs and deliver
the common shares. Any LYONs accepted for exchange by the designated
institution will remain outstanding.
We will not pay any consideration to, or otherwise enter into any
arrangement with, the designated institution for or with respect to such
designation. We anticipate that we will initially designate Merrill Lynch,
Pierce, Fenner & Smith Incorporated as the institution to which offers
described above will be made, although we may change this designation at any
time.
An exchange of LYONs may be treated as a sale of such LYONs for cash and the
use of such cash to purchase common shares. If the designated institution
accepts a LYON in exchange for common shares and cash in lieu of fractional
shares, a U.S. holder that holds the LYON as a capital asset will generally
recognize capital gain or loss equal to the difference between the fair market
value of the common shares and cash received and the U.S. holder's tax basis in
its LYON. Our conversion of a LYON into common shares would generally not
result in the recognition of any gain or loss. See "Certain Bermuda and United
States Federal Income Tax Consequences--U.S. Holders--Conversion" and "Risk
Factors Relating to the LYONs--The tax consequences of surrendering LYONs for
conversion may vary." Prior to surrendering LYONs for conversion, a holder will
not know whether he will receive common shares from a designated institution or
from us. In addition, the holder cannot withdraw LYONs after surrendering them
for conversion.
Conversion Rate and Delivery of Common Shares
The conversion rate is 10.3014 common shares per LYON, subject to adjustment
upon the occurrence of certain events described below. A holder of a LYON
otherwise entitled to a fractional share will receive cash equal to the then-
current market value of such fractional share.
On conversion of a LYON, a holder will not receive any cash payment
representing accrued original issue discount. Delivery to the holder of the
full number of common shares into which the LYON is convertible, together with
any cash payment for such holder's fractional shares, will be deemed to satisfy
our obligation to pay:
. the principal amount at maturity of the LYON; and
. accrued original issue discount attributable to the period from the
issue date through the conversion date.
As a result, accrued original issue discount will be deemed to be paid in full
rather than cancelled, extinguished or forfeited. LYONs that are exchanged will
remain outstanding with the same terms as were in effect before the exchange.
We will not adjust the conversion rate for accrued original issue discount.
As soon as practicable following the conversion date, we will deliver through
the conversion agent a certificate for the number of full common shares into
which any LYON is converted, together with any cash payment for fractional
shares. For a discussion of the tax treatment of a holder receiving common
shares upon surrendering LYONs for conversion,
17
<PAGE>
see "Certain Bermuda and United States Federal Income Tax Consequences--U.S.
Holders--Conversion" and "--Disposition or Purchase at the Option of the
Holder."
We will adjust the conversion rate for:
. dividends or distributions on our common shares payable in common shares
or other capital stock of Tyco;
. subdivisions, combinations or certain reclassifications of our common
shares;
. distributions to all holders of common shares of certain rights
entitling them to purchase, for a period expiring within 60 days, common
shares at less than the quoted price at the time; and
. distributions to all holders of our common shares of our assets or debt
securities or certain rights to purchase our securities, but excluding
cash dividends or other cash distributions from current or retained
earnings unless the annualized amount thereof per share exceeds 5% of
the closing price of the common shares on the day preceding the date of
declaration of such dividend or other distribution.
We will not adjust the conversion rate, however, if holders of LYONs are to
participate in the transaction without conversion, or in certain other cases.
The indenture permits us to increase the conversion rate from time to time.
If we are party to a consolidation, merger or binding share exchange
pursuant to which the common shares are converted into cash, securities or
other property, at the effective time of the transaction, the right to convert
a LYON into common shares will be changed into a right to convert it into the
kind and amount of cash, securities or other property which the holder would
have received if the holder had converted its LYON immediately prior to the
transaction.
In the event of:
. a taxable distribution to holders of common shares which results in an
adjustment of the conversion rate; or
. an increase in the conversion rate at our discretion,
the holders of the LYONs may, in certain circumstances, be deemed to have
received a distribution subject to Federal income tax as a dividend. See
"Certain Bermuda and United States Federal Income Tax Consequences--U.S.
Holders--Constructive Dividend."
Redemption of LYONs at the Option of Tyco
No sinking fund is provided for the LYONs. Prior to November 17, 2007, we
cannot redeem the LYONs at our option. Beginning on November 17, 2007, we may
redeem the LYONs for cash in whole at any time, or in part from time to time.
We will give not less than 15 days nor more than 60 days notice of redemption
by mail to holders of LYONs. Holders may convert LYONs or portions of LYONs
called for redemption, even if the market price contingency described under "--
Conversion Rights" has not occurred, until the close of business on the day
that is two business days prior to the redemption date.
18
<PAGE>
The table below shows redemption prices of a LYON on November 17, 2007, at
each November 17 after that prior to maturity and at maturity on November 17,
2020. These prices reflect the accrued original issue discount calculated to
each such date. The redemption price of a LYON redeemed between such dates
would include an additional amount reflecting the additional original issue
discount accrued since the next preceding date in the table.
<TABLE>
<CAPTION>
Accrued
LYON Original
Issue Issue Redemption
Redemption Date Price Discount Price
--------------- ------- -------- ----------
<S> <C> <C> <C>
November 17:
2007................................................ $741.65 $81.79 $ 823.44
2008................................................ 741.65 94.18 835.83
2009................................................ 741.65 106.77 848.42
2010................................................ 741.65 119.54 861.19
2011................................................ 741.65 132.51 874.16
2012................................................ 741.65 145.67 887.32
2013................................................ 741.65 159.03 900.68
2014................................................ 741.65 172.59 914.24
2015................................................ 741.65 186.35 928.00
2016................................................ 741.65 200.33 941.98
2017................................................ 741.65 214.51 956.16
2018................................................ 741.65 228.90 970.55
2019................................................ 741.65 243.52 985.17
At stated maturity.................................. 741.65 258.35 1,000.00
</TABLE>
If we will redeem less than all of the outstanding LYONs, the trustee shall
select the LYONs to be redeemed on a pro rata basis in principal amounts at
maturity of $1,000 or integral multiples of $1,000. If a portion of a holder's
LYONs is selected for partial redemption and the holder converts a portion of
the LYONs, the converted portion shall be deemed to be the portion selected for
redemption.
Purchase of LYONs by Tyco at the Option of the Holder
General
On November 17, 2001, 2003, 2005, 2007 and 2014, holders may require us to
purchase any outstanding LYON for which the holder has properly delivered, and
not withdrawn, a written purchase notice, subject to certain additional
conditions. Holders may submit their LYONs for purchase to the paying agent at
any time from the opening of business on the date that is 20 business days
prior to the purchase date until the close of business on the fifth business
day prior to the purchase date.
The purchase price of a LYON will be:
. $752.82 per LYON on November 17, 2001
. $775.66 per LYON on November 17, 2003
. $799.19 per LYON on November 17, 2005
. $823.44 per LYON on November 17, 2007
. $914.24 per LYON on November 17, 2014
Each of the purchase prices shown above is equal to the issue price plus
original issue discount accrued at a rate of 1.50% to the purchase date. We may
choose to pay the purchase price for the November 17, 2001 purchase in cash,
common shares or a combination of cash and common shares. For all other
purchases, we will pay the purchase price in cash.
19
<PAGE>
Required Notices and Procedure
On a date not less than 20 business days prior to each purchase date, we are
required to give notice to all holders at their addresses shown in the register
of the registrar, and beneficial owners as required by applicable law, stating,
among other things, the procedures that holders must follow to require us to
purchase their LYONs. For the November 17, 2001 purchase, we will also state:
. whether we will pay the purchase price of LYONs in cash, common shares
or a combination of cash and common shares, specifying the percentages
of each; and
. if we elect to pay in common shares, in whole or in part, the method of
calculating the market price of the common shares.
The purchase notice given by each holder electing to require us to purchase
LYONs must be given so as to be received by the paying agent no later than the
close of business on the fifth business day prior to the purchase date and must
state:
. the certificate numbers of the holder's LYONs to be delivered for
purchase;
. the portion of the principal amount at maturity of LYONs to be
purchased, which must be $1,000 or an integral multiple of $1,000;
. that the LYONs are to be purchased by us pursuant to the applicable
provisions of the LYONs;
. if we elect, pursuant to the notice we are required to give, to pay any
or all of the purchase price for the November 17, 2001 purchase in
common shares, but we instead must pay the purchase price entirely in
cash because one or more of the conditions to payment of any or all of
the purchase price in common shares (described below in "-- Election to
Pay Purchase Price in Common Shares") is not satisfied prior to the
close of business on the purchase date, whether the holder elects:
(1) to withdraw the purchase notice as to some or all of the LYONs to
which it relates, stating the principal amount at maturity and
certificate numbers of the LYONs as to which such withdrawal shall
relate; or
(2) to receive cash in such event in respect of the entire purchase
price for all LYONs or portions of LYONs subject to such purchase
notice.
If the holder fails to indicate, in the purchase notice and in any written
notice of withdrawal, a choice with respect to the election described in the
final bullet point above, the holder will be deemed to have elected to receive
cash in respect of the entire purchase price for all LYONs subject to the
purchase notice in these circumstances. For a discussion of the tax treatment
of a holder receiving cash instead of common shares, see "Certain Bermuda and
United States Federal Income Tax Consequences--U.S. Holders--Disposition or
Purchase at the Option of the Holder."
A holder may withdraw any purchase notice by delivering a written notice of
withdrawal to the paying agent prior to the close of business on the purchase
date. The notice of withdrawal shall state:
. the principal amount at maturity of the LYONs being withdrawn;
. the certificate numbers of the LYONs being withdrawn; and
. the principal amount at maturity, if any, of the LYONs that remain
subject to the purchase notice.
In connection with any purchase offer, we will:
. comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then apply; and
. file Schedule TO or any other required schedule under the Exchange Act.
20
<PAGE>
Our obligation to pay the purchase price for a LYON as to which a purchase
notice has been delivered and not validly withdrawn is conditioned upon the
holder delivering the LYON, together with necessary endorsements, to the paying
agent at any time after delivery of the purchase notice. We will cause the
purchase price for the LYON to be paid promptly following the later of the
purchase date or the time of delivery of the LYON.
If the paying agent holds money or securities sufficient to pay the purchase
price of the LYON on the business day following the purchase date in accordance
with the terms of the indenture, then, immediately after the purchase date, the
LYON will cease to be outstanding and original issue discount on such LYON will
cease to accrue, whether or not such LYON is delivered to the paying agent.
After the LYON ceases to be outstanding, all other rights of the holder shall
terminate, other than the right to receive the purchase price upon delivery of
the LYON.
The terms of our then-existing borrowing agreements may limit our ability to
purchase LYONs.
We may not purchase any LYONs at the option of holders if an event of
default with respect to the LYONs, other than a default in the payment of the
purchase price with respect to such LYONs, has occurred and is continuing.
Election to Pay Purchase Price in Common Shares
If we elect to pay any or all of the purchase price for the November 17,
2001 purchase in common shares, the number of common shares we deliver will
equal the quotient of:
. the portion of the purchase price to be paid in common shares, divided
by
. the market price of a common share.
If we elect to deliver common shares in payment of any or all of the
purchase price, a holder of a LYON otherwise entitled to a fractional share
will receive cash equal to the then-current market value of the fractional
share. See "Certain Bermuda and United States Federal Income Tax Consequences--
U.S. Holders--Disposition or Purchase at the Option of the Holder."
The "market price" means the average of the sale prices of the common shares
for the five trading day period ending on the third business day prior to the
applicable purchase date. If the third business day prior to the applicable
purchase date is not a trading day, the five trading period shall end on the
last trading day prior to such third business day. We will appropriately adjust
the market price to take into account the occurrence, during the period
commencing on the first of such trading days during such five trading day
period and ending on such purchase date, of certain events that would result in
an adjustment of the conversion rate with respect to the common shares.
The "sale price" of the common shares on any date means the closing per
share sale price (or if no closing sale price is reported, the average of the
bid and ask prices or, if more than one in either case, the average of the
average bid and the average ask prices) on such date as reported in composite
transactions for the principal United States securities exchange on which the
common shares are traded or, if the common shares are not listed on a United
States national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated.
Because the market price of the common shares is determined prior to the
applicable purchase date, holders of LYONs bear the market risk with respect to
the value of the common shares to be received from the date such market price
is determined to such purchase date. We may pay the purchase price or any
portion of the purchase price in common shares only if the information
necessary to calculate the market price is published in a daily newspaper of
national circulation.
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Our right to purchase LYONs, in whole or in part, with common shares is also
subject to our satisfying various additional conditions, including:
. the registration of the common shares under the Securities Act and the
Exchange Act, if required; and
. any necessary qualification or registration under applicable state
securities law or the availability of an exemption from such
qualification and registration.
If these conditions are not satisfied with respect to a holder prior to the
close of business on the purchase date, we will pay the purchase price for the
holder's LYONs entirely in cash. See "Certain Bermuda and United States Federal
Income Tax Consequences--U.S. Holders--Disposition or Purchase at the Option of
the Holder." Once we have given the required notice to the holders of LYONs
describing the consideration we will pay for the LYONs, we may not change the
form, components or percentages of components of that consideration, except as
described in the first sentence of this paragraph.
Change in Control Permits Purchase of LYONs by Tyco at the Option of the Holder
In the event of a "change in control," as defined below, occurring on or
prior to November 17, 2007, each holder will have the right, subject to the
terms and conditions of the indenture, to require us to purchase for cash all
or any portion of the holder's LYONs, in integral multiples of $1,000 principal
amount at maturity. The purchase price for each $1,000 principal amount at
maturity of such LYON will equal the issue price of such LYONs plus the accrued
original issue discount to the date of purchase. We will be required to
purchase the LYONs as of the date that is 35 business days after the occurrence
of the change in control. We refer to this date in this prospectus as a "change
in control purchase date."
Within 15 business days after a change in control occurs, we must mail to
the trustee, to all holders of LYONs at their addresses shown in the register
of the registrar and to beneficial owners as required by applicable law, a
notice regarding the change in control. The notice must state, among other
things:
. the events causing a change in control;
. the date of the change in control;
. the last date on which a holder may exercise the purchase right;
. the change in control purchase price;
. the change in control purchase date;
. the name and address of the paying agent and the conversion agent;
. the conversion rate and any adjustments to the conversion rate;
. that LYONs with respect to which a change in control purchase notice has
been given by the holder may be converted, if otherwise convertible,
only if the change in control purchase notice has been withdrawn in
accordance with the terms of the indenture; and
. the procedures that holders must follow to exercise these rights.
To exercise this right, the holder must deliver a written purchase notice to
the paying agent so that it is received by the paying agent no later than the
close of business on the fifth business day prior to the change in control
purchase date. The purchase notice must state:
. the certificate numbers of the LYONs to be delivered by the holder;
. the portion of the principal amount at maturity of LYONs to be
purchased, which portion must be $1,000 or an integral multiple of
$1,000; and
. that we are to purchase such LYONs pursuant to the applicable provisions
of the LYONs.
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A holder may withdraw any change in control purchase notice by delivering a
written notice of withdrawal to the paying agent so that it is received by the
paying agent prior to the close of business on the change in control purchase
date. The notice of withdrawal must state:
. the principal amount at maturity being withdrawn;
. the certificate numbers of the LYONs being withdrawn; and
. the principal amount at maturity, if any, of the LYONs that remain
subject to a change in control purchase notice.
Our obligation to pay the change in control purchase price for a LYON for
which a holder has delivered, and not validly withdrawn, a change in control
purchase notice is conditioned upon delivery of the LYON, together with
necessary endorsements, to the paying agent at any time after the delivery of
such change in control purchase notice. We will cause the change in control
purchase price for such LYON to be paid promptly following the later of the
change in control purchase date or the time of delivery of such LYON.
If the paying agent holds money sufficient to pay the change in control
purchase price of the LYON on the change in control purchase date in accordance
with the terms of the indenture, then, immediately after the change in control
purchase date, the LYON will cease to be outstanding and original issue
discount on such LYON will cease to accrue, whether or not the LYON is
delivered to the paying agent. After the LYON has ceased to be outstanding, all
other rights of the holder shall terminate, other than the right to receive the
change in control purchase price upon delivery of the LYON.
Under the indenture, a "change in control" of Tyco is deemed to have
occurred at such time as:
. any person, including its affiliates and associates, other than us, our
subsidiaries or our or their employee benefit plans, files a Schedule
13D or 14D-1, or any successor schedule, form or report under the
Exchange Act, disclosing that such person has become the beneficial
owner of 50% or more of the voting power of our common shares or other
capital stock into which our common shares are reclassified or changed,
with certain exceptions; or
. any consolidation or merger of Tyco is consummated pursuant to which the
common shares are converted into cash, securities or other property, in
each case other than any consolidation or merger in which the holders of
the common shares immediately prior to the consolidation or merger have,
directly or indirectly, at least a majority of the total voting power in
the aggregate of all classes of capital stock of the continuing or
surviving corporation immediately after the consolidation or merger.
The indenture does not permit our board of directors to waive our obligation
to purchase LYONs at the option of holders in the event of a change in control.
In connection with any purchase offer in the event of a change in control,
we will:
. comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then be applicable;
and
. file Schedule TO or any other required schedule under the Exchange Act.
The change in control purchase feature of the LYONs may in certain
circumstances make more difficult or discourage a takeover of Tyco. The change
in control purchase feature, however, is not the result of our knowledge of any
specific effort:
. to accumulate our common shares;
. to obtain control of us by means of a merger, tender offer, solicitation
or otherwise; or
. by management to adopt a series of anti-takeover provisions.
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Instead, the change in control purchase feature is a standard term contained in
other LYONs offerings that Merrill Lynch has marketed. The terms of the change
in control purchase feature resulted from negotiations between Merrill Lynch
and us.
We could, in the future, enter into certain transactions, including certain
recapitalizations, that would not constitute a change in control under the
LYONs but that would increase our, or our subsidiaries', outstanding
indebtedness.
We cannot purchase LYONs at the option of holders upon a change in control
if an event of default with respect to the LYONs, other than a default in the
payment of the change in control purchase price with respect to the LYONs, has
occurred and is continuing.
Merger and Sales of Assets by Tyco
The indenture provides that we may not consolidate with or merge with or
into any other person or convey, transfer or lease our properties and assets
substantially as an entirety to another person, unless among other items:
. Tyco International Ltd. is the surviving person, or the resulting,
surviving or transferee person, if other than Tyco, is organized and
existing under the laws of:
(a) the United States, any state thereof or the District of Columbia;
(b) Bermuda or any member country of the European Union; or
(c) any other country, if the merger, consolidation or other
transaction would not impair the rights of holders;
. the successor person assumes all of our obligations on the LYONs and
under the indenture; and
. we or the successor person will not be in default under the indenture
immediately after the transaction.
When such a person assumes our obligations in such circumstances, subject to
certain exceptions, we will be discharged from all obligations under the LYONs
and the indenture. Although the indenture permits these transactions, some of
the transactions described above which occur on or prior to November 17, 2007
could constitute a change in control of Tyco and permit each holder to require
us to purchase the LYONs of such holder as described above.
Events of Default
The following will be events of default for the LYONs:
. default in payment of the principal amount at maturity, issue price,
accrued original issue discount, redemption price, purchase price or
change in control purchase price with respect to any LYON when such
amount becomes due and payable;
. failure by Tyco to comply with any of its other agreements in the LYONs
or the indenture upon receipt by Tyco of notice of such default by the
trustee or by holders of not less than 25% in aggregate principal amount
at maturity of the LYONs then outstanding and Tyco's failure to cure (or
obtain a waiver of) such default within 90 days after receipt of such
notice;
. default by Tyco in the payment at the final maturity thereof, after the
expiration of any applicable grace period, of principal of, or premium,
if any, on indebtedness for money borrowed, other than non-recourse
indebtedness, in the principal amount then outstanding of $50 million or
more, or acceleration of any indebtedness in such principal amount so
that it becomes due and payable prior to the date on which it would
otherwise have become due and payable and such acceleration is not
rescinded within 10 business days after notice to Tyco in accordance
with the indenture; or
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. certain events of bankruptcy, insolvency or reorganization affecting
Tyco, Tyco International Group S.A., or certain of Tyco's significant
subsidiaries if such subsidiaries become guarantors under the senior
indenture of Tyco International Group S.A.
If an event of default shall have happened and be continuing, either the
trustee or the holders of not less than 25% in aggregate principal amount at
maturity of the LYONs then outstanding may declare the issue price of the LYONs
plus the original issue discount on the LYONs accrued through the date of such
declaration to be immediately due and payable. In the case of certain events of
bankruptcy or insolvency of Tyco, the issue price of the LYONs plus the
original issue discount accrued thereon through the occurrence of such event
shall automatically become and be immediately due and payable.
Backup Withholding and Information Reporting
Information reporting may apply to original issue discount or dividends, if
any, made by us on, or the proceeds of the sale or other disposition of, the
LYONs or common shares with respect to certain noncorporate holders, and backup
withholding at a rate of 31% may apply unless the recipient of such payment
supplies appropriate information when requested or otherwise establishes an
exemption from backup withholding. Any amount withheld under the backup
withholding rules will be allowable as a credit against the holder's federal
income tax, provided that the required information is provided to the Internal
Revenue Service.
Modification
We and the trustee may enter into supplemental indentures that add, change
or eliminate provisions of the indenture or modify the rights of the holders of
the LYONs with the consent of the holders of at least a majority in principal
amount at maturity of the LYONs then outstanding. However, without the consent
of each holder, no supplemental indenture may:
. alter the manner of calculation or rate of accrual of original issue
discount on any LYON or extend the time of payment;
. make any LYON payable in money or securities other than that stated in
the LYON;
. extend the stated maturity of any LYON;
. reduce the principal amount at maturity, issue price, redemption price,
purchase price or change in control purchase price with respect to any
LYON;
. make any change that adversely affects the right of a holder to convert
any LYON;
. make any change that adversely affects the right to require us to
purchase a LYON;
. impair the right to convert, or receive payment with respect to, a LYON,
or right to institute suit for the enforcement of any payment with
respect to, or conversion of, the LYONs; and
. change the provisions in the indenture that relate to modifying or
amending the indenture.
Without the consent of any holder of LYONs, we and the trustee may enter
into supplemental indentures for any of the following purposes:
. to evidence a successor to us and the assumption by that successor of
our obligations under the indenture and the LYONs;
. to add to our covenants for the benefit of the holders of the LYONs or
to surrender any right or power conferred upon us;
. to secure our obligations in respect of the LYONs;
. to make any changes or modifications to the indenture necessary in
connection with the registration of the LYONs under the Securities Act
and the qualification of the LYONs under the Trust Indenture Act as
contemplated by the indenture;
. to cure any ambiguity or inconsistency in the indenture.
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No supplemental indenture entered into pursuant to second, third, fourth or
fifth bullets of the preceding paragraph may be entered into without the
consent of the holders of a majority in principal amount at maturity of the
LYONs, however, if such supplemental indenture may materially and adversely
affect the interests of the holders of the LYONs.
The holders of a majority in principal amount at maturity of the outstanding
LYONs may, on behalf of the holders of all LYONs:
. waive compliance by us with restrictive provisions of the indenture, as
detailed in the indenture; and
. waive any past default under the indenture and its consequences, except
a default in the payment of the principal amount at maturity, issue
price, accrued and unpaid interest, accrued original issue discount,
redemption price, purchase price or change in control purchase price or
obligation to deliver common shares upon conversion with respect to any
LYON or in respect of any provision which under the indenture cannot be
modified or amended without the consent of the holder of each
outstanding LYON affected.
Governing Law
The indenture and the LYONs are governed by, and will be construed in
accordance with, the law of the State of New York, without regard to conflicts
of laws principles.
Information Concerning the Trustee
State Street Bank and Trust Company is the trustee, registrar and paying
agent.
Book-Entry System
The LYONs will only be issued in the form of global securities held in book-
entry form. DTC or its nominee will be the sole registered holder of the LYONs
for all purposes under the indenture. Owners of beneficial interests in the
LYONs represented by the global securities will hold their interests pursuant
to the procedures and practices of DTC. As a result, beneficial interests in
any such securities will be shown on, and transfers will be effected only
through, records maintained by DTC and its direct and indirect participants.
Any such interest may not be exchanged for certificated securities, except in
limited circumstances. Owners of beneficial interests must exercise any rights
in respect of their interests, including any right to convert or require
repurchase of their interests in the LYONs, in accordance with the procedures
and practices of DTC. Beneficial owners will not be holders and will not be
entitled to any rights under the global securities or the indenture. We and the
trustee, and any of our or their respective agents, may treat DTC as the sole
holder and registered owner of the global securities.
Exchange of Global Securities
The LYONs, represented by a global security, will be exchangeable for
certificated securities with the same terms only if:
. DTC is unwilling or unable to continue as depositary or if DTC ceases to
be a clearing agency registered under the Exchange Act and we do not
appoint a successor depositary within 90 days;
. we decide to discontinue use of the system of book-entry transfer
through DTC or any successor depositary; or
. a default under the indenture occurs and is continuing.
DTC has advised us as follows: DTC is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Uniform Commercial Code, and
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a "clearing agency" for registered participants, and it facilitates the
settlement of transactions among its participants in those securities through
electronic computerized book-entry changes in participants' accounts,
eliminating the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers, including the agent,
banks, trust companies, clearing corporation and other organizations, some of
whom and/or their representatives own DTC. Access to DTC's book-entry system is
also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly.
DESCRIPTION OF THE COMMON SHARES
The following description is a summary of the terms of the common shares of
Tyco International Ltd. This description is not complete and is subject to the
applicable provisions of Bermuda law and Tyco's Memorandum of Association and
Bye-Laws, which are filed as exhibits to the registration statement related to
this prospectus. Tyco has authorized 2,500,000,000 common shares. As of
September 30, 2000, there were 1,684,511,070 common shares outstanding.
Dividends
Tyco's Board of Directors may declare dividends out of Tyco's available
profits as long as there are no reasonable grounds for believing that:
. Tyco is, or after payment of the dividend would be, unable to pay its
liabilities as they become due, or
. the realizable value of Tyco's assets would thereby be less than the
aggregate of its liabilities and its issued share capital and share
premium accounts.
Subject to special rights of any other Tyco shares, all dividends are
payable according to the amounts paid or credited as paid on common shares.
Dividends are normally payable in U.S. dollars, but holders with a registered
address in the United Kingdom and other countries outside the United States may
receive payment in another currency. Any dividend that is unclaimed may be
invested or otherwise made use of by Tyco's Board, and after a period of 12
years is forfeited and reverts to Tyco.
Voting Rights
At any general meeting, votes may be given in person or by proxy. Tyco's
Bye-Laws require that any proxy must be a shareholder of Tyco. Under Tyco's
Bye-Laws, not less than two holders of common shares present, in person or by
proxy, constitute a quorum at a general meeting except as provided under "--
Variation of Rights" below.
Under Bermuda law, questions proposed for consideration at a company's
general meeting are decided by a simple majority vote or by the vote required
by the bye-laws, except where a larger majority is required by law. Any
question proposed for consideration at a general meeting may be decided on a
show of hands, in which each shareholder present in person or by proxy is
entitled to one vote and casts this vote by raising his or her hand, unless,
before or on the declaration of the result of a show of hands, a poll is
demanded by:
. the Chairman of the meeting;
. at least three shareholders present in person or represented by proxy;
. any shareholder or shareholders present in person or represented by
proxy holding individually or between them at least 10% of the total
voting rights of all shareholders having the right to vote at the
meeting; or
. a shareholder or shareholders present in person or by proxy holding
shares conferring the right to vote at the meeting and on which an
aggregate sum has been paid equal to at least 10% of the total sum paid
up on all shares entitled to vote.
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Tyco's Bye-Laws provide that a shareholder is not entitled, except as proxy
for another shareholder, to be present or vote at any meeting, either
personally or by proxy, in respect of any share held by the shareholder,
whether alone or jointly with any other person, on which there shall not have
been paid all calls due and payable, together with interest and expenses.
Tyco's Bye-Laws also provide that any person who is known or believed by Tyco
to be interested in common shares, and who has failed to comply with a notice
from Tyco requesting specified information regarding that person's interest in
common shares, will lose voting rights for the period the shareholder fails to
comply with the notice, plus an additional 90 days. In addition, a shareholder
loses voting rights,
. if the shareholder has failed to comply with a notice under Tyco's Bye-
Laws requiring the shareholder to make an offer in accordance with the
City Code on Takeovers and Mergers of the United Kingdom, as applied by
Tyco's Bye-Laws, or, as the case may be, in accordance with Tyco's Bye-
Laws,
. for a period of 180 days if the shareholder acquires three percent or
more of the issued share capital of any class of Tyco, either alone or
in concert with others, and fails to notify Tyco of the acquisition
within two days, or, already possessing three percent or more of the
issued share capital of any class of Tyco, fails to notify Tyco of a
change in the shareholder's interests amounting to one percent or more
of the share capital of any class, provided that Tyco notifies the
shareholder of the loss of the voting rights.
Liquidation
On a liquidation of Tyco, holders of common shares are entitled to receive
any assets remaining after the payment of Tyco's debts and the expenses of the
liquidation, subject to special rights of any other class of shares.
Suspension of Rights
In certain circumstances, the rights of a shareholder to vote and to receive
any payment or income or capital in respect of a common share may be suspended.
Those circumstances include failure to provide information about ownership of
and other interests in common shares, if so required in accordance with Tyco's
Bye-Laws, as discussed above under "--Voting Rights."
Variation of Rights
If, at any time, the share capital of Tyco is divided into different classes
of shares, the rights attached to any class, unless otherwise provided by the
terms of issue of the shares of that class, may be varied with written consent
of the holders of three-fourths of the issued shares of that class, or by
resolution passed at a separate general meeting by a majority of three-fourths
of the holders of the shares of that class voting in person or by proxy. Under
Tyco's Bye-Laws, three shareholders holding not less than one-third of the
issued shares of a class, in person or by proxy, constitute a quorum at a
general meeting held for this purpose. At any adjournment of this meeting, two
shareholders of that class, in person or by proxy, constitute a quorum,
irrespective of the amount of their holdings.
Sale, Lease or Exchange of Assets and Mergers
Under Bermuda law, there is no requirement for a company's shareholders to
approve a sale, lease or exchange of all or substantially all of a company's
property and assets. Bermuda law provides that a company may enter into a
compromise or arrangement in connection with a scheme for the reconstruction of
the company on terms that include, among other things, the transfer of all or
part of the undertaking or the property of the company to another company. Any
compromise or arrangement of this kind requires the approval of a majority in
number representing three-fourths in value of the creditors or shareholders or
class of shareholders, as the case may be, present and voting either in person
or by proxy at the meeting, and the sanction of the Bermuda Supreme Court.
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Under Bermuda law, unless the company's bye-laws provide otherwise, an
amalgamation requires the approval of the holders of at least three-fourths of
those voting at a meeting of shareholders at which a requisite quorum is
present. Tyco's Bye-Laws do not contain any contrary provisions. For purposes
of approval of an amalgamation, all shares, whether or not otherwise entitled
to vote, carry the right to vote. A separate vote of a class of shares is
required if the rights of that class would be altered by virtue of the
amalgamation.
Share Acquisitions, Business Combinations and Related Provisions
Under Tyco's Bye-Law 104(1)(A), if any person, whether as a result of one
transaction or a series of transactions, would be obligated to make an offer to
Tyco's security holders under the Rules of the City Code, Tyco's Board may
require that person to make an offer as if the City Code applied to Tyco. The
City Code provides that, when any person, together with persons acting in
concert with that person, acquires shares which carry 30% or more of the voting
rights of a company, that person must make an offer for all shares of any class
of equity share capital, whether voting or non-voting, and also any voting non-
equity share capital in which that person or persons hold shares. The offer
must be for cash or offer a cash alternative, in each case at not less than the
highest price paid, in cash or otherwise, by the offeror, or anyone acting in
concert with the offeror, for shares of the same class during the offer period
and within the 12 months before commencement of the offer.
Tyco's Bye-Law 104(3) further provides that, where any person is interested
in 30% or more of Tyco's outstanding common shares, Tyco's Board may serve a
notice requiring that person to make an offer for all of the outstanding
securities of Tyco if Tyco's Board determines that an offer under Tyco's Bye-
Law 104(1)(A) is not expedient, or if a person required to make the offer fails
to do so. This offer must be made within 30 days of the demand on terms that
payment in full therefor will be made within 21 days of the offer becoming
unconditional in all respects. If Tyco's Board serves a notice under this
provision, the directors may also require that the offeror offer to purchase
securities of Tyco convertible into voting or non-voting shares of Tyco on
terms considered "fair and reasonable" by the directors in their sole
discretion. Unless Tyco's Board otherwise agrees, the offer must be for cash or
must offer a cash alternative at not less than the highest price paid by the
offeror, or any person acting in concert with the offeror, for shares of that
class within the preceding 12 months or, if that price is unavailable or
inappropriate, at a price fixed by the directors. Any offer of this kind must
remain open for at least 14 days after the date on which it becomes
unconditional as to acceptances.
Tyco's Bye-Law 104(1)(B) provides that when any person has acquired, is in
the process of acquiring, or appears to Tyco's Board likely to acquire an
interest in shares of the Tyco in circumstances in which that person would be
subject to the "Rules Governing Substantial Acquisitions of Shares" issued by
the Takeover Panel of the United Kingdom, the directors may give notice
requiring that person to comply with these rules. If that person fails to
comply, the directors may give further notice requiring that person, within 28
days of the date of the notice, to dispose, or to procure the disposal by any
person with whom the person has acted in concert, of any interest in shares
acquired. These rules provide that a person may not, in any period of seven
days, acquire shares representing 10% or more of the voting rights in a company
if these shares, aggregated with shares already held by the purchaser, would
carry 15% or more, but less than 30%, of the voting rights of the company. The
rules do not apply to an acquisition from a single shareholder if the
acquisition is the only acquisition within a seven-day period and do not apply
to a person who acquires 30% or more of the voting rights in a company.
Under Tyco's Bye-Laws, any person who acquires an interest in three percent
or more of the issued share capital of any class of Tyco is required to notify
Tyco of that interest and of any change in that person's interest amounting to
one percent or more of the issued capital of any class. This notification must
be made within two days, Saturday and Sundays excluded, after the relevant
event. In determining the percentage interest of any person for these purposes
and for the purposes of Bye-Law 104, interests of persons acting in concert may
be aggregated.
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CERTAIN BERMUDA AND UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended to be a general summary of Bermuda and
United States federal income tax consequences to holders of LYONs and common
shares into which the LYONs have been converted. Due to the complexity of the
tax laws of these and other taxing jurisdictions, the uncertainty, in some
instances, as to the manner in which such laws apply to holders, and possible
changes in law, it is particularly important that each holder consult with its
own tax advisor regarding the tax treatment of the acquisition, ownership and
disposition of LYONs and common shares into which the LYONs have been converted
under the laws of any federal, state, local or other taxing jurisdiction.
Bermuda
Under current law, no income, withholding or other taxes or stamp,
registration or other duties are imposed in Bermuda upon the issue, transfer or
sale of the LYONs, payments made in respect of the LYONs, or the conversion of
the LYONs into common shares.
As of the date hereof, there is no Bermuda income, corporation or profits
tax, withholding tax, capital gains tax, capital transfer tax, estate duty or
inheritance tax payable in respect of capital gains realized on a disposition
of common shares or in respect of distributions by us with respect to our
common shares. Furthermore, we have received from the Minister of Finance of
Bermuda under the Exempted Undertakings Tax Protection Act of 1966 an
undertaking that, in the event of there being enacted in Bermuda any
legislation imposing any tax computed on profits or income, including any
dividend or capital gains withholding tax, or computed on any capital assets,
gain or appreciation or any tax in the nature of an estate or inheritance tax
or duty, the imposition of such tax shall not be applicable to us or any of our
operations, nor to our common shares nor to our obligations until the year
2016. This undertaking applies to our common shares. It does not, however,
prevent the application of Bermuda taxes to persons ordinarily resident in
Bermuda.
The foregoing discussion is intended only as a summary and does not purport
to be a complete analysis or listing of all potential tax effects relevant to a
decision whether to invest in the LYONs. Potential investors are urged to
consult their tax advisors concerning the United States federal, state and
local, Bermuda, and other non-United States tax consequences of the LYONs to
them.
United States
The following is a general discussion of certain U.S. federal income tax
consequences of the ownership and disposition of LYONs, and common shares into
which LYONs have been converted, to initial purchasers that purchased LYONs at
their "issue price." The "issue price" of the LYONs equals the first price at
which a substantial amount of the LYONs were sold for cash to the public, not
including sales to bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters, placement agents or wholesalers. This
summary is based upon laws, regulations, rulings and decisions currently in
effect, all of which are subject to change at any time, possibly with
retroactive effect. There can be no assurance that the Internal Revenue Service
will not challenge one or more of the conclusions described herein, and we have
not obtained, nor do we intend to obtain, a ruling from the Internal Revenue
Service with respect to the United States federal income tax consequences of
acquiring or holding LYONs. Moreover, this summary deals only with purchasers
who hold LYONs or common shares into which LYONs have been converted as
"capital assets" within the meaning of Section 1221 of the Internal Revenue
Code of 1986, as amended, or the Code, and does not purport to deal with
persons in special tax situations, such as financial institutions, insurance
companies, regulated investment companies, tax exempt investors, dealers in
securities and currencies, U.S. expatriates, persons holding LYONs as a hedge
against currency risk or as a position in a "straddle," "hedge," "conversion"
or another integrated transaction for tax purposes, persons who own, directly
or indirectly, 10 percent or more of our voting power, or U.S. holders, as
defined below, whose functional currency is not the U.S. dollar. Further, this
discussion does not address the consequences under U.S. federal estate or gift
tax laws or the laws of any U.S. state or locality.
30
<PAGE>
Prospective purchasers of the LYONs are urged to consult their own tax
advisors concerning the consequences, in their particular circumstances, of
ownership and disposition of the LYONs, and common shares into which the LYONs
have been converted, under the U.S. federal tax laws and the laws of any
relevant state, local or non-U.S. taxing jurisdiction.
We have been advised by our counsel, Wilmer, Cutler & Pickering, that in the
opinion of such counsel the LYONs will be treated as indebtedness for United
States federal income tax purposes. Counsel has further advised us that it is
counsel's opinion that, while the following does not purport to discuss all tax
matters relating to the LYONs, based upon the LYONs being treated as
indebtedness, the following are the material federal income tax consequences of
the LYONs, subject to the qualifications set forth above.
As used herein, the term "U.S. holder" means a beneficial owner of LYONs or
common shares into which LYONs have been converted that is, for U.S. federal
income tax purposes:
. a citizen or resident of the United States;
. a corporation or other entity that has elected to be treated as a
corporation, created or organized in or under the laws of the United
States or any political subdivision thereof;
. an estate, the income of which is subject to U.S. federal income tax
regardless of its source; or
. a trust if, in general, a court within the United States is able to
exercise primary jurisdiction over its administration and one or more
U.S. persons have authority to control all of its substantial decisions.
As used herein, the term "non-U.S. holder" means a beneficial owner, other
than a partnership, of LYONs or common shares into which LYONs have been
converted that is not a U.S. holder for U.S. federal income tax purposes.
If a partnership, including for this purpose any entity treated as a
partnership for U.S. tax purposes, is a beneficial owner of LYONs or common
shares into which LYONs have been converted, the treatment of a partner in the
partnership will generally depend upon the status of the partner and upon the
activities of the partnership. A holder of LYONs that is a partnership, and
partners in such a partnership, should consult their tax advisors about the
U.S. federal income tax consequences of holding and disposing of LYONs and
common shares into which LYONs have been converted.
U.S. Holders
Original Issue Discount
The LYONs were issued at a substantial discount from their principal amount
at maturity. For United States federal income tax purposes, the difference
between the issue price and the stated principal amount at maturity of each
LYON constitutes original issue discount. U.S. holders of the LYONs will be
required to include original issue discount in income periodically over the
term of the LYONs before receipt of the cash or other payment attributable to
such income.
A U.S. holder of a LYON must include in gross income for federal income tax
purposes such holder's "accrued original issue discount," which is the sum of
the daily portions of original issue discount with respect to the LYON for each
day during the taxable year or portion of a taxable year on which such holder
holds the LYON. The daily portion is determined by allocating to each day of an
accrual period a pro rata portion of an amount equal to the adjusted issue
price of the LYON at the beginning of the accrual period multiplied by the
yield to maturity of the LYON. The accrual period of a LYON may be of any
length and may vary in length over the term of the LYON, provided that each
accrual period is no longer than one year and each scheduled payment of
principal or interest occurs at the end of an accrual period or on the first
day of an accrual period. The adjusted issue price of the LYON at the start of
any accrual period is the issue price of the LYON increased by the accrued
original issue discount for each prior accrual period. Under these rules, U.S.
holders
31
<PAGE>
will have to include in gross income increasingly greater amounts of original
issue discount in each successive accrual period. Any amount included in income
as original issue discount will increase a holder's tax basis in the LYON.
Original issue discount on the LYONs will be income from sources outside the
United States and, with certain exceptions, will be treated as "passive" income
for purposes of computing the foreign tax credit allowable under U.S. federal
income tax laws. The rules relating to foreign tax credits and the timing
thereof are extremely complex, and U.S. holders should consult their own tax
advisors with regard to the availability of foreign tax credits and the
application of the foreign tax credit limitations to their particular
situations.
Conversion
A U.S. holder's conversion of a LYON into common shares will be a taxable
event if a financial institution designated by us agrees to exchange the LYON
for a number of our common shares equal to the number of common shares the
holder would receive upon conversion, plus cash for any fractional share. A
U.S. holder's conversion of a LYON into common shares will generally not be a
taxable event, except with respect to cash received in lieu of a fractional
share, if the designated financial institution does not accept the LYON, and
the LYON is instead converted into common shares by us. A U.S. holder will not
know prior to surrendering LYONs for conversion whether he will receive common
shares from a designated institution or from us, and will not be able to
withdraw his LYONs after they are surrendered for conversion. See "Description
of LYONS--Conversion Rights" above.
If the designated institution exchanges the LYON for common shares and cash
in lieu of fractional shares, a U.S. holder will recognize capital gain or loss
equal to the difference between the fair market value of the common shares and
cash received and the U.S. holder's tax basis in its LYON. A U.S. holder's tax
basis in its LYON will generally equal its cost, increased by any amount
included in income as original issue discount as described above. Capital gain
or loss will be long-term if the LYON is held for more than one year at the
time of the exchange. Prospective investors should consult their tax advisors
regarding the treatment of capital gains, which may be taxed at lower rates
than ordinary income for taxpayers who are individuals, and losses, the
deductibility of which is subject to limitations. The holder's tax basis in the
common shares received will be equal to their fair market value at the time of
conversion, and the holding period for such common shares will begin on the day
following the date of the exchange.
If the designated institution does not accept the LYON, and the LYON is
instead converted into common shares by us, a U.S. holder's conversion of a
LYON into common shares will generally not be a taxable event, except with
respect to cash received in lieu of a fractional share. The U.S. holder's basis
in the common shares received on conversion of a LYON will be the same as the
holder's basis in the LYON at the time of conversion, exclusive of any tax
basis allocable to a fractional share. The holding period for the common shares
received on conversion will include the holding period of the converted LYON,
assuming each is held as a capital asset, except that the holder's holding
period for common shares attributable to accrued original issue discount may
commence on the day following the date of conversion. Cash received in lieu of
a fractional share upon conversion of a LYON should be treated as a payment in
exchange for the fractional share. Accordingly, if the common shares are
capital assets in the hands of the U.S. holder, the receipt of cash in lieu of
a fractional share should generally result in capital gain or loss, if any,
measured by the difference between the cash received for the fractional share
and the holder's basis in the fractional share.
Whether or not the conversion is considered a taxable event, a U.S. holder's
obligation to include in gross income the daily portions of original issue
discount with respect to a LYON will terminate prospectively on the date of
conversion.
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<PAGE>
Disposition or Purchase at the Option of the Holder
Except as described below, gain or loss upon a sale or other disposition of
a LYON, including a redemption of the LYON for cash at our option, or common
shares received upon a conversion or a tender of a LYON will generally be
capital gain or loss, which will be long-term if the LYON or common shares is
held for more than one year. Prospective investors should consult their tax
advisors regarding the treatment of capital gains, which may be taxed at lower
rates than ordinary income for taxpayers who are individuals, and losses, the
deductibility of which is subject to limitations.
If a U.S. holder elects to exercise its option to tender a LYON to us on a
purchase date and we issue common shares in satisfaction of all or part of the
purchase price, the exchange of the LYON for common shares should qualify as a
reorganization. If the purchase price is paid solely in common shares, neither
gain nor loss would generally be recognized by the holder, except as described
below with respect to a fractional share. If the purchase price is paid in a
combination of common shares and cash, other than cash received in lieu of a
fractional share, gain, but not loss, realized by the holder would be
recognized, but only to the extent such gain does not exceed such cash. Such
gain would generally be a capital gain, and would be a long-term capital gain
if the tendered LYON were held for more than one year.
A U.S. holder's tax basis in the common shares received in the exchange will
be the same as the holder's tax basis in the LYON tendered to us in exchange
for the LYON, exclusive of any tax basis allocable to a fractional share
interest as described below. However, this tax basis will be decreased by the
amount of cash, other than cash received in lieu of a fractional share, if any,
received in exchange and increased by the amount of any gain recognized by the
holder on the exchange, other than gain with respect to a fractional share. The
holding period for common shares received in the exchange will include the
holding period for the LYON tendered to us in exchange for the LYON, assuming
each is held as a capital asset. However, the holding period for common shares
attributable to accrued original issue discount may commence on the day
following the purchase date.
Cash received in lieu of a fractional share upon a tender of a LYON to us on
a purchase date should be treated as a payment in exchange for the fractional
share. Accordingly, if the common shares are capital assets in the hands of the
holder, the receipt of cash in lieu of a fractional share should generally
result in capital gain or loss, if any, measured by the difference between the
cash received for the fractional share and the holder's basis in the fractional
share.
If a U.S. holder elects to exercise its option to tender a LYON to us on a
purchase date or a change in control purchase date and we deliver cash in
satisfaction of the purchase price, the holder would recognize gain or loss,
measured by the difference between the amount of cash transferred by us to the
holder and the holder's basis in the tendered LYON. Gain or loss recognized by
the holder would generally be capital gain or loss, and would be long-term
capital gain or loss if the tendered LYON were held for more than one year.
Dividends
If a U.S. holder receives common shares, in general, distributions on the
common shares that are paid out of our current or accumulated earnings and
profits, as defined for U.S. federal income tax purposes, will constitute
dividends and will be includible in income by a holder when received or
accrued, in accordance with that holder's method of accounting for U.S. federal
income tax purposes.
Constructive Dividend
If at any time we make a distribution of property to our shareholders that
would be taxable to the shareholders as a dividend for United States federal
income tax purposes and, in accordance with the anti-dilution provisions of the
LYONs, the conversion rate of the LYONs is increased, such increase may be
deemed to be the payment of a taxable dividend to holders of the LYONs.
33
<PAGE>
For example, an increase in the conversion rate in the event of
distributions of our evidences of indebtedness or our assets or an increase at
our discretion will generally result in deemed dividend treatment to holders of
the LYONs, but generally an increase in the event of stock dividends or the
distribution of rights to subscribe for common shares will not. See
"Description of LYONS--Conversion Rights."
Backup Withholding and Information Reporting
Non-exempt U.S. holders may be subject to information reporting with respect
to original issue discount or dividends on, and the proceeds of the sale or
other disposition of, the LYONs or common shares. Non-exempt U.S. holders that
are subject to information reporting and that do not provide appropriate
information when requested may be subject to backup withholding at a 31% rate.
U.S. holders should consult their tax advisors.
Non-U.S. Holders
Original Issue Discount and Disposition
In general and subject to the discussion below under "--Backup Withholding
and Information Reporting," a non-U.S. holder will not be subject to U.S.
federal income or withholding tax with respect to original issue discount with
respect to LYONs, dividends with respect to common shares into which LYONs have
been converted, or gain upon the disposition of LYONs or common shares, unless:
. the income or gain is "U.S. trade or business income," which means
income or gain that is effectively connected with the conduct by the
non-U.S. holder of a trade or business, or, in the case of a treaty
resident, attributable to a permanent establishment or a fixed base, in
the United States, or
. such non-U.S. holder is an individual who is present in the U.S. for 183
days or more in the taxable year of disposition and certain other
conditions are met.
U.S. trade or business income of a non-U.S. holder will generally be subject
to regular U.S. income tax in the same manner as if it were realized by a U.S.
holder. Non-U.S. holders that realize U.S. trade or business income with
respect to the LYONs or common shares should consult their tax advisers as to
the treatment of such income or gain. In addition, U.S. trade or business
income of a non-U.S. holder that is a non-U.S. corporation may be subject to a
branch profits tax at a rate of 30%, or such lower rate provided by an
applicable income tax treaty.
Backup Withholding and Information Reporting
If the LYONs, or common shares into which LYONs have been converted, are
held by a non-U.S. holder through a non-U.S., and non-U.S. related, broker or
financial institution, information reporting and backup withholding generally
would not be required. Information reporting, and possibly backup withholding,
may apply if the LYONs or common shares are held by a non-U.S. holder through a
U.S., or U.S. related, broker or financial institution and the non-U.S. holder
fails to provide appropriate information. Non-U.S. holders should consult their
tax advisers.
SELLING SECURITYHOLDERS
The LYONs were originally issued by us and sold by Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "Initial Purchaser") in a transaction exempt
from the registration requirements of the Securities Act to persons reasonably
believed by the Initial Purchaser to be "qualified institutional buyers" as
defined by Rule 144A under the Securities Act. The selling securityholders may
from time to time offer and sell pursuant to this prospectus any or all of the
LYONs listed below and the common shares issued upon purchase by us, or
conversion, of such LYONs. When we refer to the "selling securityholders" in
this prospectus, we mean those persons listed in the table below, as well as
the pledgees, donees, assignees, transferees, successors and others who later
hold any of the selling securityholders' interests.
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<PAGE>
The table below sets forth the name of each selling securityholder, the
principal amount at maturity of LYONs that each selling securityholder may
offer pursuant to this prospectus and the number of common shares into which
such LYONs are convertible. Unless set forth below, none of the selling
securityholders has, or within the past three years has had, any material
relationship with us or any of our predecessors or affiliates.
We have prepared the table below based on information given to us by the
selling securityholders on or prior to December 7, 2000. However, any or all of
the LYONs or common shares listed below may be offered for sale pursuant to
this prospectus by the selling securityholders from time to time. Accordingly,
no estimate can be given as to the amounts of LYONs or common shares that will
be held by the selling securityholders upon consummation of any such sales. In
addition, the selling securityholders listed in the table below may have
acquired, sold or transferred, in transactions exempt from the registration
requirements of the Securities Act, some or all of their LYONs since the date
as of which the information in the table is presented.
Information about the selling securityholders may change over time. Any
changed information will be set forth in prospectus supplements. From time to
time, additional information concerning ownership of the LYONs and common
shares may rest with certain holders thereof not named in the table below and
of whom we are unaware.
<TABLE>
<CAPTION>
Aggregate
Principal Number of
Amount at Common
Maturity of Percentage of Shares Percentage of
LYONs That May LYONs That May Common Shares
Name be Sold Outstanding be Sold(1) Outstanding(2)
---- -------------- ------------- ---------- --------------
<S> <C> <C> <C> <C>
Arpeggio Fund, LP....... $ 6,200,000 * 63,869 *
Gryphon Domestic III,
LLC.................... 17,700,000 * 182,335 *
Investcorp--Sam Fund
Limited................ 18,900,000 * 194,696 *
Rhapsody Fund, LP....... 21,200,000 * 218,390 *
UBS AG London Branch.... 170,600,000 3.7% 1,757,419 *
UBS O'Connor LLC f/b/o
UBS Global Equity
Arbitrage Master
Limited................ 50,000,000 1.1 515,070 *
UBS Warburg LLC......... 33,346,000 * 343,510 *
All other holders of
LYONs or future
transferees, pledgees,
donees, assignees or
successors of any such
holders (3)(4)......... 4,339,554,000 93.2% 44,703,482 2.6%
-------------- ----- ---------- ---
Total................... $4,657,500,000 100.0% 47,978,771 2.7%
============== ===== ========== ===
</TABLE>
--------
* Less than one percent (1%).
(1) Assumes conversion of all of the holder's LYONs at a conversion rate of
10.3014 common shares per $1,000 principal amount at maturity of the LYONs.
This conversion rate is subject to adjustment, however, as described under
"Description of the LYONs--Conversion Rights--Conversion Rate and Delivery
of Common Shares." As a result, the number of common shares issuable upon
conversion of the LYONs may increase or decrease in the future. Does not
include common shares that may be issued by us upon purchase of LYONs by us
at the option of the holder.
(2) Calculated based on Rule 13d-3(d)(i) of the Exchange Act, using
1,748,649,762 common shares outstanding as of December 6, 2000. In
calculating this amount for each holder, we treated as outstanding the
number of common shares issuable upon conversion of all of that holder's
LYONs, but we did not assume conversion of any other holder's LYONs. Does
not include common shares that may be issued by us upon purchase of LYONs
by us at the option of the holder.
(3) Information about other selling securityholders will be set forth in
prospectus supplements, if required.
(4) Assumes that any other holders of LYONs, or any future pledgees, donees,
assignees, transferees or successors of or from any such other holders of
LYONs, do not beneficially own any common shares other than the common
shares issuable upon conversion of the LYONs at the initial conversion
rate.
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<PAGE>
PLAN OF DISTRIBUTION
We are registering the LYONs and common shares covered by this prospectus to
permit holders to conduct public secondary trading of these securities from
time to time after the date of this prospectus. We have agreed, among other
things, to bear all expenses, other than underwriting discounts and selling
commissions, in connection with the registration and sale of the LYONs and the
common shares covered by this prospectus.
We will not receive any of the proceeds from the offering of LYONs or the
common shares by the selling securityholders. We have been advised by the
selling securityholders that the selling securityholders may sell all or a
portion of the LYONs and common shares beneficially owned by them and offered
hereby from time to time:
. directly; or
. through underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, commissions or concessions from
the selling securityholders or from the purchasers of the LYONs and
common shares for whom they may act as agent.
The LYONs and the common shares may be sold from time to time in one or more
transactions at:
. fixed prices, which may be changed;
. prevailing market prices at the time of sale;
. varying prices determined at the time of sale; or
. negotiated prices.
These prices will be determined by the holders of the securities or by
agreement between these holders and underwriters or dealers who may receive
fees or commissions in connection with the sale. The aggregate proceeds to the
selling securityholders from the sale of the LYONs or common shares offered by
them hereby will be the purchase price of the LYONs or common shares less
discounts and commissions, if any.
The sales described in the preceding paragraph may be effected in
transactions:
. on any national securities exchange or quotation service on which the
LYONs and common shares may be listed or quoted at the time of sale,
including the New York Stock Exchange in the case of the common shares;
. in the over-the-counter market;
. in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
. through the writing of options.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
In connection with sales of the LYONs and the common shares or otherwise,
the selling securityholders may enter into hedging transactions with broker-
dealers. These broker-dealers may in turn engage in short sales of the LYONs
and the common shares in the course of hedging their positions. The selling
securityholders may also sell the LYONs and common shares short and deliver
LYONs and the common shares to close out short positions, or loan or pledge
LYONs and the common shares to broker-dealers that in turn may sell the LYONs
and the common shares.
To our knowledge, there are currently no plans, arrangements or
understandings between any selling securityholders and any underwriter, broker-
dealer or agent regarding the sale of the LYONs and the common shares by the
selling securityholders. Selling securityholders may not sell any, or may not
sell all, of the
36
<PAGE>
LYONs and the common shares offered by them pursuant to this prospectus. In
addition, we cannot assure you that a selling securityholder will not transfer,
devise or gift the LYONs and the common shares by other means not described in
this prospectus. In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be
sold under Rule 144 or Rule 144A rather than pursuant to this prospectus.
The outstanding common shares are listed for trading on the New York Stock
Exchange.
The selling securityholders and any broker and any broker-dealers, agents or
underwriters that participate with the selling securityholders in the
distribution of the LYONs or the common shares may be deemed to be
"underwriters" within the meaning of the Securities Act. In this case, any
commissions received by these broker-dealers, agents or underwriters and any
profit on the resale of the LYONs or the common shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act. In
addition, any profits realized by the selling securityholders may be deemed to
be underwriting commissions.
The LYONs were issued and sold in November 2000 in transactions exempt from
the registration requirements of the Securities Act to persons reasonably
believed by the Initial Purchaser to be "qualified institutional buyers," as
defined in Rule 144A under the Securities Act. We have agreed to indemnify the
Initial Purchaser and each selling securityholder, and each selling
securityholder has agreed to indemnify us, the Initial Purchaser and each other
selling securityholder against specified liabilities arising under the
Securities Act.
The selling securityholders and any other person participating in such
distribution will be subject to the Exchange Act. The Exchange Act rules
include, without limitation, Regulation M, which may limit the timing of
purchases and sales of any of the LYONs and the underlying common shares by the
selling securityholders and any such other person. In addition, Regulation M of
the Exchange Act may restrict the ability of any person engaged in the
distribution of the LYONs and the underlying common shares to engage in market-
making activities with respect to the particular LYONs and the underlying
common shares being distributed for a period of up to five business days prior
to the commencement of the distribution. This may affect the marketability of
the LYONs and the underlying common shares and the ability of any person or
entity to engage in market-making activities with respect to the LYONs and the
underlying common shares.
We will use our reasonable efforts to keep the registration statement of
which this prospectus is a part effective until the earlier of:
. the sale, pursuant to the registration statement to which this
prospectus relates, of all the securities registered thereunder;
. the expiration of the holding period applicable to the securities held
by persons that are not our affiliates under Rule 144(k) under the
Securities Act or any successor provision; and
. sale to the public under Rule 144 of all the securities registered
thereunder.
Our obligation to keep the registration statement to which this prospectus
relates effective is subject to specified, permitted exceptions. In these
cases, we may prohibit offers and sales of LYONs and common shares pursuant to
the registration statement to which this prospectus relates.
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<PAGE>
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES
Tyco is organized under the laws of Bermuda. Tyco is a holding company but
has significant operating subsidiaries, and a substantial portion of its
assets, located outside of the United States. As a result, it may be difficult
for holders of Tyco securities to serve notice of a lawsuit on Tyco within the
United States. It may also be difficult for Tyco securityholders to enforce, in
Bermuda, judgments obtained in United States courts. Furthermore, Tyco's
Bermuda counsel, Appleby Spurling & Kempe, has advised Tyco that there is some
doubt as to the enforcement in Bermuda, in original actions or in actions for
enforcement of judgments of United States courts, of liabilities predicated
upon United States federal securities laws (including civil liabilities under
such laws), although Bermuda courts will generally enforce foreign judgments
for liquidated amounts in civil matters subject to some conditions and
exceptions.
LEGAL MATTERS
Certain U.S. legal matters regarding the LYONs are being passed upon for us
by Wilmer, Cutler & Pickering, Washington, D.C., counsel to Tyco. Wilmer,
Cutler & Pickering has advised Tyco as to certain tax matters relating to the
LYONS. Certain matters under the laws of Bermuda related to the LYONs and the
common shares are being passed upon for us by Appleby Spurling & Kempe,
Hamilton, Bermuda, Bermuda counsel to Tyco. Michael L. Jones, Secretary of
Tyco, is a partner of Appleby Spurling & Kempe. Wilmer, Cutler & Pickering will
rely on Appleby Spurling & Kempe with respect to matters of Bermuda law.
EXPERTS
The consolidated financial statements and financial statement schedule of
Tyco as of September 30, 1999 and 1998, and for the years ended September 30,
1999 and 1998 and the nine months ended September 30, 1997, included in Tyco's
Annual Report on Form 10-K/A filed on June 26, 2000, and incorporated by
reference in this document, have been audited by PricewaterhouseCoopers,
independent accountants, as set forth in their report included therein. In its
report, that firm states that with respect to certain subsidiaries its opinion
is based upon the reports of other independent accountants, namely Deloitte &
Touche LLP (as it relates to the consolidated statements of operations, changes
in stockholders' equity and cash flows of United States Surgical Corporation
and its subsidiaries for the nine-month period ended September 30, 1997 and the
related financial statement schedule for the nine-month period ended September
30, 1997) and Arthur Andersen LLP (as it relates to the consolidated balance
sheet of AMP Incorporated and subsidiaries as of September 30, 1998 and the
related consolidated statements of income, shareholders' equity and cash flows
for the year ended September 30, 1998 and the nine months ended September 30,
1997). The consolidated financial statements and financial statement schedule
referred to above have been incorporated herein in reliance on said reports
given on the authority of such firms as experts in auditing and accounting.
38
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Tyco is paying all of the selling securityholders' expenses related to this
offering, except the selling securityholders will pay any applicable broker's
commissions and expenses. The following table sets forth the approximate amount
of fees and expenses payable by Tyco in connection with this Registration
Statement and the distribution of the LYONs and common shares registered
hereby. All of the amounts shown are estimates except the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee.......................................... $ 931,407
Printing expenses............................................. 20,000
Legal fees and expenses....................................... 30,000
Accounting fees and expenses.................................. 8,000
Miscellaneous expenses........................................ 11,000
----------
Total....................................................... $1,000,407
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Bye-Law 102 of Tyco's Bye-Laws provides, in part, that Tyco shall indemnify
its directors and other officers for all costs, losses and expenses which they
may incur in the performance of their duties as director or officer, provided
that such indemnification is not otherwise prohibited under the Companies Act
1981 (as amended) of Bermuda. Section 98 of the Companies Act 1981 (as amended)
prohibits such indemnification against any liability arising out of fraud or
dishonesty of the director or officer. However, such section permits Tyco to
indemnify a director or officer against any liability incurred by him in
defending any proceedings, whether civil or criminal, in which judgment is
given in his favor or in which he is acquitted or when other similar relief is
granted to him.
Tyco maintains $250 million of insurance to reimburse the directors and
officers of Tyco and its subsidiaries, for charges and expenses incurred by
them for wrongful acts claimed against them by reason of their being or having
been directors or officers of Tyco or any of its subsidiaries. Such insurance
specifically excludes reimbursement of any director or officer for any charge
or expense incurred in connection with various designated matters, including
libel or slander, illegally obtained personal profits, profits recovered by
Tyco pursuant to Section 16(b) of the Exchange Act and deliberate dishonesty.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
3.1 Memorandum of Association (incorporated by reference to Exhibit 3.1 to
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992)
3.2 Certificate of Incorporation on change of name (incorporated by
reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-
K filed July 10, 1997)
3.3 Bye-laws of Tyco (incorporated by reference to Exhibit 3.3 to the
Registrant's Form S-3 dated April 23, 1998 (File No. 333-50855) and to
Exhibit 3.5 to the Registrant's Current Report on Form 8-K filed
September 14, 1999)
4.1 Indenture between Tyco International Ltd. and State Street Bank and
Trust Company, dated as of November 17, 2000
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
Form of Liquid Yield Option (TM) Note due 2020 (Zero Coupon--Senior)
4.2 (included in Exhibit 4.1)
4.3 Registration Rights Agreement dated as of November 17, 2000, by and
between Tyco International Ltd. and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
5.1 Opinion of Appleby Spurling & Kempe
5.2 Opinion of Wilmer, Cutler & Pickering
Opinion of Wilmer, Cutler & Pickering as to certain U.S. federal
8.1 income tax matters
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of PricewaterhouseCoopers
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Arthur Andersen LLP
23.4 Consent of Appleby Spurling & Kempe (included in Exhibit 5.1)
23.5 Consent of Wilmer, Cutler & Pickering (included in Exhibit 5.2)
23.6 Consent of Wilmer, Cutler & Pickering (included in Exhibit 8.1)
Power of Attorney (included on signature pages of this Registration
24.1 Statement)
Form of T-1 Statement of Eligibility of the Trustee under the
25.1 Indenture
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. 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; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(a) and (1)(b) shall not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
40
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is
against public policy as expressed in the Securities Act of 1933, as amended,
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933, as amended,
and will be governed by the final adjudication of such issue.
41
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Exeter, State of New Hampshire, on the 8th day of
December, 2000.
Tyco International Ltd.
/s/ Mark H. Swartz
By: _________________________________
Mark H. Swartz
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and
appoints L. DENNIS KOZLOWSKI AND MARK H. SWARTZ, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this registration statement (including all pre-effective
and post-effective amendments thereto and all registration statements filed
pursuant to Rule 462(b) which incorporate this registration statement by
reference), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that such attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons on December 8,
2000 in the capacities indicated below.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ L. Dennis Kozlowski Chairman of the Board,
______________________________________ President, Chief
L. Dennis Kozlowski Executive Officer and
Director (Principal
Executive Officer)
/s/ Lord Ashcroft KCMG Director
______________________________________
Lord Ashcroft KCMG
/s/ Joshua M. Berman Director
______________________________________
Joshua M. Berman
/s/ Richard S. Bodman Director
______________________________________
Richard S. Bodman
/s/ John F. Fort Director
______________________________________
John F. Fort
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Stephen W. Foss Director
______________________________________
Stephen W. Foss
/s/ Philip M. Hampton Director
______________________________________
Philip M. Hampton
/s/ Wendy E. Lane Director
______________________________________
Wendy E. Lane
/s/ James S. Pasman, Jr. Director
______________________________________
James S. Pasman, Jr.
/s/ W. Peter Slusser Director
______________________________________
W. Peter Slusser
/s/ Mark H. Swartz Executive Vice President
______________________________________ and Chief Financial
Mark H. Swartz Officer (Principal
Financial and Accounting
Officer)
/s/ Frank E. Walsh, Jr. Director
______________________________________
Frank E. Walsh, Jr.
</TABLE>
43
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
3.1 Memorandum of Association (incorporated by reference to Exhibit 3.1 to
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992)
3.2 Certificate of Incorporation on change of name (incorporated by
reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-
K filed July 10, 1997)
3.3 Bye-laws of Tyco (incorporated by reference to Exhibit 3.3 to the
Registrant's Form S-3 dated April 23, 1998 (File No. 333-50855) and to
Exhibit 3.5 to the Registrant's Current Report on Form 8-K filed
September 14, 1999)
4.1 Indenture between Tyco International Ltd. and State Street Bank and
Trust Company, dated as of November 17, 2000
4.2 Form of Liquid Yield Option (TM) Note due 2020 (Zero Coupon--Senior)
(included in Exhibit 4.1)
4.3 Registration Rights Agreement dated as of November 17, 2000, by and
between Tyco International Ltd. and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
5.1 Opinion of Appleby Spurling & Kempe
5.2 Opinion of Wilmer, Cutler & Pickering
8.1 Opinion of Wilmer, Cutler & Pickering as to certain U.S. federal
income tax matters
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of PricewaterhouseCoopers
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Arthur Andersen LLP
23.4 Consent of Appleby Spurling & Kempe (included in Exhibit 5.1)
23.5 Consent of Wilmer, Cutler & Pickering (included in Exhibit 5.2)
23.6 Consent of Wilmer, Cutler & Pickering (included in Exhibit 8.1)
24.1 Power of Attorney (included on signature pages of this Registration
Statement)
25.1 Form of T-1 Statement of Eligibility of the Trustee under the
Indenture
</TABLE>
