<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 28, 2000
REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
METRICOM, INC. METRICOM FINANCE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE DELAWARE
(STATE OF INCORPORATION) (STATE OF INCORPORATION)
77-0294597 77-0529272
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
333 WEST JULIAN STREET
SAN JOSE, CALIFORNIA 95110
(408) 282-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
TIMOTHY A. DREISBACH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
METRICOM, INC.
333 WEST JULIAN STREET, SAN JOSE, CALIFORNIA 95110
(408) 282-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
KENNETH L. GUERNSEY JEREMY W. DICKENS
CYDNEY S. POSNER WEIL, GOTSHAL & MANGES LLP
COOLEY GODWARD LLP 767 FIFTH AVENUE
ONE MARITIME PLAZA, 20TH FLOOR NEW YORK, NEW YORK 10153
SAN FRANCISCO, CALIFORNIA 94111 (212) 310-8000
(415) 693-2000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, as
amended, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C>
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF SECURITIES PROPOSED MAXIMUM AMOUNT OF REGISTRATION
TO BE REGISTERED OFFERING PRICE(1)(2) FEE(1)(2)(3)(4)
------------------------------------------------------------------------------------------------------------------
Common Stock of Metricom, Inc., $0.001 par value per
share(5)................................................... (9) --
Preferred Stock of Metricom, Inc., $0.001 par value per
share(6)................................................... (9) --
Debt Securities(7).......................................... (9) --
Guarantees of Metricom, Inc. with respect to Debt
Securities(8).............................................. (9) --
Equity Warrants of Metricom, Inc............................ (9) --
Debt Warrants............................................... (9) --
Units....................................................... (9) --
Total................................................ $300,250,000(10) $79,266
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The proposed maximum aggregate offering price per class of security will be
determined from time to time by the registrants in connection with the
issuance by the registrants of the securities registered hereunder.
(2) Of the unsold securities previously registered by the registrants under
Registration Statement Nos. 333-91359 and 333-95669 referred to below,
unsold securities with a maximum aggregate offering price of $899,750,000
are being carried forward in this registration statement pursuant to Rule
429 under the Securities Act. Accordingly, the total amount registered
under this registration statement as so consolidated is $1,200,000,000. In
connection with the filing of such earlier registration statements, the
registrants paid registration fees with respect to the above-specified
unsold securities in the aggregate amount of $244,020, consisting of
$128,816 paid under Registration Statement No. 333-91359 and $115,204 paid
under Registration Statement No. 333-95669. In accordance with Rule 429,
the amount of registration fee reflected in the table above does not
include the $244,020 previously paid to the Commission with respect to the
earlier registration statements.
(3) With respect to Debt Securities, excluding accrued interest and accrued
amortization of discount, if any, to the date of delivery.
(4) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act.
(5) Shares of Common Stock may be issued in primary offerings, upon conversion
of Debt Securities and/or Preferred Stock registered hereby and/or upon
exercise of Equity Warrants registered hereby. The aggregate amount of
Common Stock registered hereby that may be sold in at-the-market offerings
is limited to that which is permissible under Rule 415(a)(4) under the
Securities Act.
(6) Shares of Preferred Stock may be issued in primary offerings, upon
conversion of Debt Securities registered hereby and/or upon exercise of
Equity Warrants registered hereby.
(7) Debt Securities may be issued in primary offerings and/or upon exercise of
Debt Warrants registered hereby. Subject to note 10 below, there is being
registered hereunder, by Metricom, Inc. and Metricom Finance, Inc., an
indeterminate principal amount of their debt securities as may be sold,
from time to time, by either of the registrants. If any debt securities are
issued at an original issue discount, then the offering price shall be in
such greater principal amount at maturity as shall result in aggregate
gross proceeds to the registrants not to exceed $1,200,000,000 less the
gross proceeds attributable to any securities previously issued pursuant to
this registration statement.
(8) The obligations of Metricom Finance, Inc. under Debt Securities registered
hereunder will be fully and unconditionally guaranteed by Metricom, Inc. as
described more fully in the registration statement.
(9) Not required to be included in accordance with General Instruction II.D. of
Form S-3.
(10) Except as permitted by Rule 462 under the Securities Act, in no event will
the aggregate maximum offering price of all securities issued from time to
time pursuant to this registration statement exceed $1,200,000,000. The
securities registered hereunder may be sold separately or with other
securities registered hereunder.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT, THE PROSPECTUS INCLUDED IN
THIS REGISTRATION STATEMENT ALSO RELATES TO (a) THE $463,368,000 MAXIMUM
AGGREGATE OFFERING PRICE OF UNSOLD SECURITIES PREVIOUSLY REGISTERED UNDER
REGISTRATION STATEMENT ON FORM S-3 NO. 333-91359 AND (b) $436,382,000 MAXIMUM
AGGREGATE OFFERING PRICE OF UNSOLD SECURITIES PREVIOUSLY REGISTERED UNDER
REGISTRATION STATEMENT ON FORM S-3 NO. 333-95669. ACCORDINGLY, THIS REGISTRATION
STATEMENT CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO EACH OF SUCH EARLIER
REGISTRATION STATEMENTS. POST-EFFECTIVE AMENDMENT NO. 1 SHALL HEREAFTER BECOME
EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 28, 2000
PROSPECTUS
$1,200,000,000
METRICOM, INC.
[RICHOCHET LOGO]
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
GUARANTEES OF DEBT SECURITIES
EQUITY WARRANTS
DEBT WARRANTS
UNITS
METRICOM FINANCE, INC.
DEBT SECURITIES
DEBT WARRANTS
UNITS
GUARANTEED AS SET FORTH IN THIS PROSPECTUS BY METRICOM, INC.
Metricom, Inc. may offer, from time to time, in one or more series, at
prices and on terms that it will determine at the time of offering, any or all
of the following:
- secured or unsecured debt securities;
- shares of preferred stock;
- shares of common stock;
- warrants to purchase debt securities or any other security;
- warrants to purchase common stock or preferred stock;
- units consisting of two or more of the foregoing securities and/or
securities registered by Metricom Finance, Inc.; or
- guarantees of debt securities of Metricom Finance, Inc.
Metricom Finance, Inc., a wholly-owned subsidiary of Metricom, Inc.,
referred to as Metricom Finance, as co-issuer and co-obligor, may offer, from
time to time, in one or more series, at prices and on terms to be determined at
the time of the offering, one or more series of secured or unsecured debt
securities, warrants to purchase debt securities or units consisting of debt
securities, debt warrants or securities of Metricom, Inc. The obligation of
Metricom Finance under any debt securities will be fully and unconditionally
guaranteed by Metricom, Inc. as set forth in this prospectus.
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and the applicable supplement
carefully before you invest.
-------------------------
THE SECURITIES WE MAY OFFER INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON
PAGE 4.
-------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
If we sell the securities through agents or underwriters, we will include
their names and the fees, commissions and discounts they will receive, as well
as the net proceeds to us, in the applicable prospectus supplement.
The date of this prospectus is , 2000
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................... 1
Risk Factors......................... 4
Forward-Looking Information.......... 4
Deficiency of Earnings to Fixed
Charges and Deficiency of Earnings
to Combined Fixed Charges and
Preferred Stock Dividends.......... 4
Use of Proceeds...................... 5
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of Capital Stock......... 6
Description of Debt Securities....... 11
Description of Warrants.............. 21
Description of Units................. 23
Plan of Distribution................. 23
Legal Matters........................ 24
Experts.............................. 24
Where You Can Find More
Information........................ 25
</TABLE>
-------------------------
No dealer, sales person or other person is authorized to give any
information or to represent anything not contained in this prospectus or the
accompanying prospectus supplement. You must not rely on any unauthorized
information or representations. This prospectus and the accompanying prospectus
supplement are an offer to sell only the securities offered hereby, but only
under circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus and the accompanying prospectus
supplement is accurate as of the dates on their covers.
Metricom(R) and Ricochet(R) are Metricom, Inc. trademarks. Trade names and
trademarks of other companies appearing in this prospectus are the property of
their respective holders.
i
<PAGE> 4
PROSPECTUS SUMMARY
The following is a summary of Metricom, Inc.'s business. This summary
highlights selected information from this prospectus and does not contain all
the information that may be important to you. To understand the terms of the
securities, you should read this prospectus with the accompanying prospectus
supplement carefully. Together, these documents describe the specific terms of
the securities we are offering. You should also carefully read the section
entitled "Risk Factors" in this prospectus and the accompanying prospectus
supplement and the documents identified under the caption "Where You Can Find
More Information." References to "Metricom, Inc." refer to Metricom, Inc. and
references to "Metricom Finance" refer to Metricom Finance, Inc. Unless the
context requires otherwise, references to "we," "us" or "our" refer collectively
to Metricom, Inc. and Metricom Finance.
Metricom, Inc. is a leading provider of mobile wireless data access to
corporate networks and the Internet. Metricom, Inc. has designed its new
high-speed service, marketed under the Ricochet(R) brand name, to meet the needs
of the growing number of professionals who require full access to their
corporate networks and the Internet while away from the office. Metricom, Inc.'s
service will also appeal to consumers who desire high-speed mobile access to the
Internet. Simply by connecting a wireless modem to a laptop computer or portable
electronic device, users can access their corporate networks and the Internet
whenever they want and wherever they are within Metricom, Inc.'s service areas,
just as they would with a wired modem.
Metricom, Inc. is a Delaware corporation originally incorporated in
California in 1985. Metricom Finance is a wholly-owned subsidiary of Metricom,
Inc., formed for the purpose of allowing Metricom, Inc. to consummate a holding
company reorganization. A holding company reorganization is a transaction
effected either as a result of the transfer of all or substantially all of
Metricom, Inc.'s assets to Metricom Finance, the merger of a wholly owned
subsidiary of Metricom Finance with Metricom, Inc., or a merger of Metricom,
Inc. into a single member limited liability company owned by Metricom Finance,
after which any debt securities, issued under the registration statement of
which this prospectus is a part, will become solely the obligation of a holding
company.
Our principal office is located at 333 West Julian Street, San Jose,
California 95110; our telephone number at that location is (408) 282-3000.
THE SECURITIES WE MAY OFFER
Metricom, Inc. and Metricom Finance may offer various series of debt
securities, warrants to purchase debt securities or units, and Metricom, Inc.
may offer shares of its preferred or common stock or warrants to purchase shares
of its preferred or common stock, with a total value of up to $1,200,000,000,
from time to time under this prospectus at prices and on terms to be determined
by market conditions at the time of offering. This prospectus provides you with
a general description of the securities we may offer. Each time we offer a type
or series of securities, we will provide a prospectus supplement that will
describe the specific amounts, prices and other important terms of the
securities, including, to the extent applicable:
- designation or classification;
- aggregate principal amount or aggregate offering price;
- maturity, if applicable;
- rates and times of payment of interest or dividends, if any;
- redemption, conversion or sinking fund terms, if any;
1
<PAGE> 5
- voting or other rights, if any;
- financial or other covenants, if any;
- conversion prices and terms, if any;
- in the case of a warrant, procedures and limitations relating to the
exercise of the warrant, including its termination date, exercise price,
duration and anti-dilution provisions;
- in the case of a warrant offered concurrently with the offering of any
other security, the date on and after which the warrant may be
transferred separately from the other security; and
- important federal income tax considerations.
The prospectus supplement may also add, update or change information
contained in this prospectus or in documents we have incorporated by reference.
THIS PROSPECTUS MAY NOT BE USED TO COMPLETE ANY SALE OF SECURITIES UNLESS IT IS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
We may sell the securities directly or through agents, underwriters or
dealers. We, and our agents or underwriters, reserve the right to accept or
reject all or part of any proposed purchase of securities. If we do offer
securities through agents, underwriters or dealers we will include in the
applicable prospectus supplement:
- the names of those agents, underwriters or dealers;
- applicable fees, discounts and commissions, to be paid to them; and
- the net proceeds to us.
We may also deliver this prospectus in connection with the sale of any debt
securities, warrants to purchase debt securities, shares of preferred stock or
common stock or warrants to purchase preferred stock or common stock that we may
issue or sell pursuant to the registration statement of which this prospectus is
a part.
COMMON STOCK. Metricom, Inc. may offer its common stock from time to time.
Subject to any preferences of outstanding shares of preferred stock, holders of
common stock are entitled to one vote per share on all matters submitted to a
vote of stockholders. Subject to any preferences of outstanding shares of
preferred stock, holders of common stock are entitled to dividends when and if
declared by the board of directors.
PREFERRED STOCK. Metricom, Inc. may offer its preferred stock from time to
time. Metricom, Inc.'s board of directors has the authority to issue its
undesignated shares of preferred stock in new series and to fix the rights,
preferences, privileges and restrictions of any new series, including dividend
rights, dividend rates, conversion rights, voting rights, terms of redemption,
redemption prices, liquidation preferences and the number of shares constituting
any series or the designation of such series, without further vote or action by
its stockholders, subject to rights of the holders of outstanding preferred
stock.
DEBT SECURITIES. We may offer debt securities from time to time, in one or
more series, as either senior or subordinated debt or as senior or subordinated
convertible debt. The senior debt securities will rank equally with all of our
other unsecured and unsubordinated debt. The subordinated debt securities will
be subordinate and junior in right of payment, to the extent and in the manner
described in the instrument governing that debt, to all of our senior
indebtedness. Convertible or exchangeable debt securities will be convertible
into or exchangeable for Metricom, Inc.'s common stock, preferred stock or any
other security designated by Metricom, Inc. or Metricom Finance, Inc. Conversion
or exchange may be mandatory or at your option and would be at prescribed
conversion or exchange rates.
2
<PAGE> 6
The debt securities will be issued under indentures between us and Bank One
Trust Company, N.A. or another trustee chosen by us, referred to in this
prospectus as the trustee. In this prospectus, we have summarized certain
general features of the debt securities. We urge you, however, to read the
prospectus supplements related to the series of debt securities being offered,
as well as the complete indentures, which contain the terms of the debt
securities. The indentures have been filed as exhibits to the registration
statement of which this prospectus is a part.
GUARANTEES. Metricom, Inc. will fully and unconditionally guarantee the
obligations of Metricom Finance under the debt securities. Each guarantee with
respect to senior debt securities will constitute part of Metricom, Inc.'s
senior debt. Each guarantee with respect to subordinated debt securities will be
subordinated to Metricom, Inc.'s senior indebtedness on the same basis as the
applicable security of Metricom Finance is subordinated to the senior
indebtedness of Metricom Finance. Upon the completion of a holding company
reorganization. After that time, all references in the indenture and any
supplemental indentures to an obligor of the debt securities will refer only to
the holding company resulting from that reorganization.
EQUITY WARRANTS. Metricom, Inc. may offer warrants to purchase shares of
its preferred or common stock from time to time. Unless provided otherwise in
the relevant prospectus supplement, holders of warrants will not generally be
entitled to receive dividends paid on the preferred or common stock. Holders of
warrants will not be stockholders. Any equity warrants Metricom, Inc. may issue
will have only those anti-dilution protections described in the applicable
prospectus supplement. If Metricom, Inc. offers warrants concurrently with the
offer of other securities, including debt securities of Metricom Finance,
Metricom, Inc. may provide as a term of the warrants that the warrants may not
be transferred separately from the other securities for a period of time as
specified in the applicable prospectus supplement.
DEBT WARRANTS. We may offer warrants to purchase our debt securities from
time to time. Prior to the exercise of these debt warrants, holders of debt
warrants will not have any of the rights of holders of the debt securities
purchasable upon the exercise and will not be entitled to payment of principal
of, premium, if any, or interest, if any, on, the debt securities purchasable
upon the exercise.
UNITS. We may offer from time to time units consisting of two or more of
the securities described above. These units may be issuable as, and for a
specified period of time may be transferable as, a single security only, as
distinguished from the separate constituent securities constituting such units.
3
<PAGE> 7
RISK FACTORS
The prospectus supplement applicable to each type or series of securities
we offer will contain a discussion of risks applicable to an investment in
Metricom, Inc. and/or Metricom Finance and to the particular types of securities
that we are offering under that prospectus supplement. Prior to making a
decision about investing in our securities, you should carefully consider the
specific factors discussed under the caption "Risk Factors" in the applicable
prospectus supplement, together with all of the other information contained in
the prospectus supplement or appearing or incorporated by reference in this
prospectus.
FORWARD-LOOKING INFORMATION
This prospectus and the information incorporated herein by reference
contain forward-looking statements, within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
that are based on the current expectations that we have about Metricom, Inc. and
its industry. Words such as "expect," "anticipate," "estimate," "believe,"
"will," "intend," "plan" and other similar expressions are used to identify some
forward-looking statements, but not all forward-looking statements include these
words. For example, some of these forward-looking statements relate to
commercial acceptance of Metricom, Inc.'s service. All forward-looking
statements involve risks and uncertainties. Metricom, Inc.'s actual results may
differ significantly from our expectations and from the results expressed in or
implied by these forward-looking statements. The section captioned "Risk
Factors" in Metricom, Inc.'s annual report on Form 10-K for the year ended
December 31, 1999 and the similarly captioned section in prospectus supplements
accompanying this prospectus describe or will describe some, but not necessarily
all, of the factors that could cause these differences. We urge you to read
those sections carefully. Except as may be required by law, we undertake no
obligation to publicly update any forward-looking statements for any reason,
even if new information becomes available or other events occur in the future.
DEFICIENCY OF EARNINGS TO FIXED CHARGES AND DEFICIENCY OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Metricom, Inc.'s earnings were insufficient to cover fixed charges during
each of the periods described below. Accordingly, our ratio of earnings to fixed
charges and ratio of earnings to combined fixed charges and preferred stock
dividends are not meaningful for the periods presented.
The following table sets forth our deficiency of earnings to fixed charges
and deficiency of earnings to combined fixed charges and preferred dividends for
the periods presented.
<TABLE>
<CAPTION>
(IN THOUSANDS)
------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED YEAR ENDED DECEMBER 31,
JUNE 30, JUNE 30, ----------------------------
2000 1999 1999 1998 1997
---------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Deficiency of earnings to fixed
charges............................ $50,651 $31,575 $ 66,292 $84,164 $59,328
======= ======= ======== ======= =======
Deficiency of earnings to combined
fixed charges and preferred
dividends.......................... $76,532 $31,575 $104,526 $84,164 $59,328
======= ======= ======== ======= =======
</TABLE>
4
<PAGE> 8
USE OF PROCEEDS
Unless otherwise described in a prospectus supplement, we will use the net
proceeds from the offering of the securities for deployment and
commercialization of Metricom, Inc.'s network and for other general corporate
purposes, principally working capital, funding our operating losses, capital
expenditures and operating expenses related to Metricom, Inc. When we offer a
particular type or series of securities, the prospectus supplement relating to
those securities will describe our intended use of the net proceeds we will
receive from the sale of those securities. Unless otherwise described in a
prospectus supplement, pending application for specific purposes, the net
proceeds of any offering of securities may be invested in short-term
interest-bearing instruments and other investment-grade securities.
5
<PAGE> 9
DESCRIPTION OF CAPITAL STOCK
GENERAL
Metricom, Inc. has authorized capital stock of 500,000,000 shares of common
stock, $0.001 par value per share, and 80,000,000 shares of preferred stock,
$0.001 par value per share. As of August 22, 2000, there were 30,758,065 shares
of Metricom, Inc.'s common stock and 60,000,000 shares of Metricom, Inc.'s
preferred stock outstanding.
Metricom Finance has authorized capital stock of 1,000 shares of common
stock, $0.001 par value. As of August 22, 2000, there were 1,000 shares issued,
outstanding and held of record by Metricom, Inc.
The Restated and Amended Certificate of Incorporation of Metricom, Inc.
includes a number of provisions that may have the effect of deterring hostile
takeovers or delaying or preventing changes in control or management of
Metricom, Inc. First, Metricom, Inc.'s board of directors is classified into
three classes of directors with staggered three-year terms. The restated
certificate provides that directors may be removed at any time for cause by the
vote of the holders of a majority of the voting power and without cause by the
vote of the holders of 66 2/3% of the voting power of all outstanding voting
stock. The restated certificate also provides that vacancies on the board of
directors or newly created directorships shall, unless the board of directors
determines otherwise or except as otherwise required by law, be filled only by
the affirmative vote of a majority of directors then in office, even though less
than a quorum. In addition, the restated certificate provides that, except in
specified circumstances, stockholder action may be taken only at a duly called
meeting of stockholders and not by a written consent. In addition, Metricom,
Inc.'s Bylaws contain requirements for advance notice of stockholder proposals
and director nominations. These and other provisions of the restated certificate
and bylaws and Delaware law could discourage potential acquisition proposals and
could delay or prevent a change in control or management of Metricom, Inc.
Each of Metricom, Inc. and Metricom Finance is currently subject to the
provisions of Section 203 of the Delaware General Corporation Law regulating
corporate takeovers. Section 203 prevents certain Delaware corporations,
including those whose securities are listed on the Nasdaq National Market, from
engaging, under certain circumstances, in a "business combination," which
includes a merger or sale of more than 10% of the corporation's assets, with any
interested stockholder for three years following the date that the stockholder
became an interested stockholder. An interested stockholder is a stockholder who
acquired 15% or more of the corporation's outstanding voting stock without the
prior approval of the corporation's board of directors. At Metricom, Inc.'s
annual meeting of stockholders held on October 15, 1999, its stockholders
elected not to be governed by Section 203. The election will become effective on
October 15, 2000. Metricom Finance's stockholder has made the same election,
which election is currently effective.
The following summaries of certain provisions of our common stock and
preferred stock do not purport to be complete and are subject to, and are
qualified in their entirety, by the provisions of Metricom, Inc.'s restated
certificate and bylaws and Metricom Finance's Certificate of Incorporation, and
Bylaws, which are, or will be, filed or incorporated by reference as exhibits to
the registration statement of which this prospectus is a part.
COMMON STOCK
Subject to preferences that may apply to shares of preferred stock
outstanding at the time, the holders of outstanding shares of common stock are
entitled to receive dividends out of assets legally available for the payment of
dividends at the times and in the amounts that the board of directors may
determine from time to time. Subject to preferences that only apply to any
outstanding preferred
6
<PAGE> 10
stock, each holder of common stock is entitled to one vote for each share of
common stock held on all matters submitted to a vote of stockholders. Metricom,
Inc.'s restated certificate does not provide for cumulative voting, which means
that the holders of a majority of the shares voted can elect all of the
directors then standing for election (other than directors to be elected solely
by the holders of a series of preferred stock). The common stock is not entitled
to preemptive rights and is not subject to conversion or redemption. Upon a
liquidation, dissolution or winding-up, the assets legally available for
distribution to stockholders are distributable ratably among the holders of the
common stock and any participating preferred stock outstanding at that time
after payment of liquidation preferences, if any, on any outstanding preferred
stock and payment of other claims of creditors. Each outstanding share of common
stock is, and all shares of common stock to be outstanding upon completion of
this offering will be, validly issued, fully paid and nonassessable.
The transfer agent and registrar for Metricom, Inc.'s common stock is
Boston Equiserve.
PREFERRED STOCK
The following description summarizes material terms and provisions of
Metricom, Inc.'s preferred stock and the preferred stock that Metricom, Inc. may
offer. Metricom, Inc.'s restated certificate authorizes 80,000,000 shares of
preferred stock, of which 36,000,000 shares are designated Series A1 preferred
stock, 36,000,000 shares are designated Series A2 preferred stock and 8,000,000
shares are not currently designated. Metricom, Inc.'s board of directors has the
authority to issue the remaining undesignated shares of preferred stock in
additional series and to fix the rights, preferences, privileges and
restrictions of any new series, including dividend rights, dividend rates,
conversion rights, voting rights, terms of redemption, redemption prices,
liquidation preferences and the number of shares constituting any series or the
designation of such series, without further vote or action by its stockholders,
subject to rights of the holders of outstanding preferred stock. The
availability of undesignated preferred stock may have the effect of delaying,
deterring or preventing a change in control without further action by Metricom,
Inc.'s stockholders and may adversely affect the voting and other rights of the
holders of Metricom, Inc.'s common stock. Metricom Finance's certificate does
not currently authorize preferred stock.
The terms of the preferred stock that Metricom, Inc. may offer will be
established by or pursuant to a resolution of the board of directors of
Metricom, Inc. and will be issued under certificates of designation or through
amendments to Metricom, Inc.'s restated certificate of incorporation. When
Metricom, Inc. offers to sell preferred stock, it will describe the specific
terms of the preferred stock in a supplement to this prospectus. Metricom, Inc.
will also indicate in the supplement whether the general terms and provisions
described in this prospectus apply to the preferred stock that Metricom, Inc.
may offer.
The following terms of the preferred stock, as applicable, will be set
forth in a prospectus supplement relating to the preferred stock:
- the title and stated value;
- the number of shares Metricom, Inc. is offering;
- the liquidation preference per share;
- the purchase price;
- the dividend rate, period and payment date, and method of calculation for
dividends;
- whether dividends will be cumulative or non-cumulative and, if
cumulative, the date from which dividends will accumulate;
- the procedures for any auction and remarketing, if any;
7
<PAGE> 11
- the provisions for a sinking fund, if any;
- the provisions for redemption or repurchase, if applicable, and any
restrictions on Metricom, Inc.'s ability to exercise those redemption and
repurchase rights;
- any listing of the preferred stock on any securities exchange or market;
- whether the preferred stock will be convertible into or exchangeable for
Metricom, Inc.'s common stock or any other security, and, if applicable,
the conversion or exchange price, or how it will be calculated, and the
conversion or exchange period;
- voting rights, if any, of the preferred stock;
- preemption rights, if any;
- restrictions on transfer, sale or other assignment, if any;
- whether interests in the preferred stock will be represented by
depositary shares;
- a discussion of any material or special United States federal income tax
considerations applicable to the preferred stock;
- the relative ranking and preferences of the preferred stock as to
dividend or liquidation rights;
- any limitations on issuance of any class or series of preferred stock
ranking senior to or on a parity with the series of preferred stock as to
dividend or liquidation rights; and
- any other material specific terms, preferences, rights or limitations of,
or restrictions on, the preferred stock.
SERIES A1 AND A2 PREFERRED STOCK
Metricom, Inc. currently has authorized and designated 36,000,000 shares of
Series A1 preferred stock and 36,000,000 shares of Series A2 preferred stock. Of
these shares, 30,000,000 shares of the Series A1 preferred stock and 30,000,000
shares of the Series A2 preferred stock are outstanding. The material rights,
preferences and restrictions of these series of preferred stock are summarized
below.
DIVIDENDS. The holders of shares of each of the Series A1 preferred and
Series A2 preferred have the right to receive cumulative dividends payable, at
Metricom, Inc.'s option, in cash or additional shares of Series A1 preferred or
Series A2 preferred, as the case may be, at the annual rate of 6.5% of the
original issue price of $10 per share, until November 15, 2002 after which date
the right to such cumulative dividends shall terminate, and holders of shares of
each of the Series A1 and Series A2 preferred stock shall be entitled to
dividends only when, as and if declared by Metricom, Inc.'s Board of Directors.
Cumulative dividends payable to the holders of Series A1 preferred stock will be
prior and in preference to any dividends payable to the holders of common stock
and Series A2 preferred stock. Cumulative dividends payable to the holders of
Series A2 preferred stock will be prior and in preference to the dividends
payable to the holders of common stock.
VOTING RIGHTS. For so long as more than 7,500,000 shares of each of the
Series A1 preferred and Series A2 preferred are outstanding, the affirmative
vote of the holders of at least a majority of the outstanding shares of each of
the Series A1 and Series A2 preferred will be required to:
- amend any provision of Metricom, Inc.'s restated certificate that changes
the rights and preferences of that series so as to adversely affect the
rights of the Series A1 preferred or Series A2 preferred, as the case may
be, in a manner different from other classes or series of stock;
8
<PAGE> 12
- issue any new class or series of stock ranking senior in liquidation
preference or dividends to the Series A1 preferred or Series A2
preferred, as the case may be;
- issue any debt securities convertible into equity securities at a price
lower than $10 per share, subject to adjustment for any stock dividend,
split, combination or other similar event;
- redeem or repurchase, under specified circumstances, any series of stock
junior to the Series A1 preferred or Series A2 preferred, as the case may
be; or
- declare or pay any dividend on outstanding common stock, subject to
specified exceptions.
In addition, for so long as more than 7,500,000 shares of either of the
Series A1 preferred or Series A2 preferred are outstanding, the holders of
shares of those series of preferred stock, voting as separate classes, will be
entitled to elect one member of Metricom, Inc.'s board of directors to represent
each series. Holders of outstanding shares of Series A1 preferred may waive this
right from time to time and instead designate an observer to attend meetings of
the board of directors.
LIQUIDATION RIGHTS. If Metricom, Inc. is liquidated, dissolved or wound up,
the holders of Series A1 preferred and holders of Series A2 preferred will be
entitled to be paid out of Metricom, Inc.'s assets, before any distribution to
the holders of common stock, an amount equal to the greater of the original
issue price plus accrued but unpaid dividends or the amount the holders would
have received if the shares had been converted to common stock. For this
purpose, "liquidation" includes:
- a consolidation, merger or other reorganization in which Metricom, Inc.'s
stockholders prior to the transaction own less than 50% of our voting
power after such transaction or other transaction or series of
transactions to which we are party in which over 50% of Metricom, Inc.'s
voting power is transferred; or
- a sale, lease or other disposition of all or substantially all of
Metricom, Inc.'s assets.
REDEMPTION. On November 15, 2009, Metricom, Inc. must redeem all
outstanding shares of Series A1 and Series A2 preferred. In the event of a
change of control or major acquisition by Metricom, Inc., each holder of Series
A1 and Series A2 preferred will have the right to require Metricom, Inc. to
redeem all, but not less than all, of the shares of preferred stock held by that
holder. For purposes of this provision, a "change of control" means an event by
which any person or group, other than Vulcan Ventures Incorporated ("Vulcan"),
MCI WorldCom, Inc. ("MCI WorldCom") and their respective affiliates:
- becomes a beneficial owner of more than 30% of Metricom, Inc.'s
outstanding equity securities, or
- acquires the right to elect at least 30% of Metricom, Inc.'s board of
directors.
For purposes of this provision, a "major acquisition" means the acquisition
by Metricom, Inc. of more than 50% of the outstanding equity securities or all
or substantially all of the assets of any entity, or Metricom, Inc.'s merger
with another entity in which it is the surviving entity, in each case, for
equity consideration exceeding 25% of its outstanding equity securities.
CONVERSION. Holders of each of the Series A1 and Series A2 preferred have
the right to convert their shares into common stock of Metricom, Inc., subject
to the limitation that Series A1 preferred shares do not become convertible
until May 2002, at which time 25% of the Series A1 preferred stock originally
issued will become convertible. Following each six-month period thereafter, an
additional 25% of the Series A1 preferred stock originally issued will become
convertible. Each share of Series A1 and Series A2 preferred is initially
convertible into one share of common stock. The conversion rates and prices for
each of the Series A1 and Series A2 preferred will be adjusted in the event of
any stock split or combination, dividend payment or distribution on the common
stock, reclassification or other change to the common stock, or reorganization,
merger or sale of assets. Each
9
<PAGE> 13
of the Series A1 and Series A2 preferred will automatically be converted into
shares of common stock in the event that shares of either series are transferred
by the original purchaser to a person other than Vulcan, MCI WorldCom or their
respective affiliates. If the holders of the Series A2 preferred stock exercise
their right to convert their shares into common stock, then upon conversion
Metricom, Inc. must pay to those holders who convert all accrued but unpaid
dividends on the shares being converted. Dividends may not be paid on Series A2
preferred stock until all dividends payable on Series A1 preferred stock are
fully paid, or declared and funds set aside for payment. Therefore, a conversion
by holders of Series A2 preferred stock into common stock will also require
Metricom, Inc. to pay all accrued but unpaid dividends on the Series A1
preferred stock and to declare and set aside funds for the then-current dividend
period.
REGISTRATION RIGHTS. Under Metricom, Inc.'s amended and restated
registration rights agreement, dated November 15, 1999, the holders of
60,000,000 shares of our currently outstanding series of redeemable convertible
preferred stock are entitled to certain registration rights with respect to the
shares of common stock issuable upon conversion of the preferred stock. Subject
to certain exceptions, including Metricom, Inc.'s right to defer a demand
registration under specified conditions, holders of an aggregate of at least
500,000 shares of registrable securities have the right to require Metricom,
Inc. to use its best efforts to register under the Securities Act its
registrable securities, the anticipated offering price of which, net of
underwriting discounts and commissions, would exceed $10,000,000. Additionally,
in the event that Metricom, Inc. registers any of its common stock, either for
its own account or for the account of any other stockholder, it is required to
notify holders of registrable securities and, subject to certain limitations, to
include in that registration the registrable securities of holders requesting
registration. Registrable securities need not be included in registration
statements relating to employee benefit plans or with respect to corporate
reorganizations or other transactions under Rule 145 of the Securities Act.
Metricom, Inc. is also required, subject to certain limitations, to give notice
of and effect certain short-term registrations upon request of holders of
registrable securities. Metricom, Inc. is not required to effect more than two
registrations on Form S-3 in any 12-month period unless the registration is
requested by Vulcan or MCI WorldCom or certain of their affiliates; however, it
is not required to effect this registration if it has effected one or more
registrations upon one of these holders' requests within the preceding 12-month
period.
10
<PAGE> 14
DESCRIPTION OF DEBT SECURITIES
The following description summarizes certain general terms and provisions
of the debt securities that we may offer. When we offer to sell a particular
series of debt securities, we will describe the specific terms of the series in
a supplement to this prospectus. We also will indicate in the supplement whether
the general terms and provisions described in this prospectus apply to a
particular series of debt securities. The debt securities will be issued under
one or more indentures between us and Bank One Trust Company, N.A. or another
trustee chosen by us and qualified to act under the Trust Indenture Act of 1939,
as amended. The form of indenture will be filed as an exhibit to the
registration statement of which this prospectus is a part, and every definitive
or supplemental indenture will be filed by us from time to time by means of an
exhibit to Form 8-K and will be available for inspection at the corporate trust
office of the trustee, or as described below under "Where You Can Find More
Information." The indentures will be subject to, and governed by, the Trust
Indenture Act. We will execute an indenture if and when we issue any debt
securities. The statements contained in this prospectus relating to the
indentures and the debt securities we may issue are summaries and do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, all provisions of the indentures (including those terms made a
part of the indenture by reference to the Trust Indenture Act) and the relevant
debt securities. Capitalized terms used below but not defined in this prospectus
shall have the meanings set forth in the indentures. References below to an
"indenture" are references to the applicable indenture under which we issue a
particular series of debt securities.
GENERAL
We will establish the terms of each series of debt securities by or
pursuant to a resolution of our Board of Directors or by a supplemental
indenture. We will describe the particular terms of each series of debt
securities in a prospectus supplement relating to that series.
We can issue an unlimited amount of debt securities under the indenture. We
can issue these securities in one or more series with the same or various
maturities, at par, at a premium or at a discount. We will set forth in a
prospectus supplement relating to any series of debt securities being offered,
the following terms of the debt securities, as applicable:
- the title of the debt securities;
- whether the debt securities are senior debt securities or subordinated
debt securities or any combination thereof and, if subordinated debt
securities, the subordination terms relating to those securities;
- the price or prices, expressed as a percentage of the aggregate principal
amount, at which we will sell the debt securities;
- any limit upon the aggregate principal amount of the debt securities;
- the date or dates on which we will pay the principal on the debt
securities;
- the rate or rates, which may be fixed or variable, or the method by which
such rate or rates will be determined, at which the debt securities will
bear interest, if any;
- the date or dates from which any interest will accrue, the dates upon
which any interest will be payable and the record dates for payment of
interest;
- the place or places where principal of, premium, if any, and interest, if
any, on, the debt securities will be payable;
- any obligation we have to redeem, repurchase or repay the debt securities
in whole or in part pursuant to any sinking fund or analogous provisions
or at the option of a holder of the debt
11
<PAGE> 15
securities, and the price or prices at which and the period or periods
within which and the terms and conditions upon which we will redeem,
repurchase or repay the debt securities;
- the denominations in which the debt securities will be issued, if other
than denominations of U.S. $1,000 and any integral multiple thereof;
- the portion of the principal amount of the debt securities payable upon
declaration of the acceleration of the maturity date, if other than the
principal amount;
- any addition to or material change in the covenants described in this
prospectus or in the indenture with respect to the debt securities;
- any addition to or change in the events of default described in this
prospectus or in the indenture with respect to the debt securities;
- whether we will issue the debt securities in global form and, if so, the
terms and conditions, if any, upon which global debt securities may be
exchanged for other individual securities, and the name of the depositary
for the debt securities;
- the terms and conditions, if any, upon which the debt securities shall be
exchanged for or converted into common stock or preferred stock of
Metricom, Inc., or warrants or any other security;
- any provisions relating to any security provided for the debt securities;
- the form and terms of any guarantee of the debt securities;
- if the principal amount payable at the stated maturity of any debt
securities will not be determinable as of any one or more dates prior to
the stated maturity, the amount which will be deemed to be the principal
amount as of any date for any purpose, including the principal amount
which will be due and payable upon any maturity other than the stated
maturity or which will be deemed to be outstanding as of any such date
(or, in any such case, the manner in which such deemed principal amount
is to be determined);
- if applicable, that the debt securities are defeasible pursuant to the
provisions of the indenture;
- whether the debt securities will be listed on any securities exchange or
included in any other market or quotation or trading system;
- any trustee or fiscal or authenticating or payment agent, issuing and
paying agent, transfer agent or registrar or any other person or entity
to act in connection with the debt securities for or on our behalf or on
behalf of the holders of the debt securities; and
- any other material terms of the debt securities, which may modify or
delete any provision of the indenture as it applies to that series.
We may issue debt securities at a discount below their stated principal
amount and provide for less than the entire principal amount of the debt
securities to be payable upon declaration of acceleration of maturity. In that
event, we will describe any material federal income tax considerations and other
material considerations in the applicable prospectus supplement. We may issue
debt securities in bearer form, with or without coupons. In that event, we will
describe any material federal income tax considerations and other material
considerations in the applicable prospectus supplement.
STATUS OF DEBT SECURITIES
Except in the case of a holding company reorganization, the senior debt
securities will rank equally with all of our other unsecured and unsubordinated
indebtedness. Our obligations pursuant to
12
<PAGE> 16
subordinated debt securities will be subordinate in right of payment to all of
our senior indebtedness. With respect to any series of subordinated debt
securities, except as otherwise set forth in the applicable prospectus
supplement, our "senior indebtedness" means the principal of, premium, if any,
and any interest (including interest accruing subsequent to the commencement of
any proceeding for our bankruptcy or reorganization under any applicable
bankruptcy, insolvency or similar law now or hereafter in effect) and all other
monetary obligations of every kind or nature due on or in connection with the
following:
- all our indebtedness (including senior debt securities) regardless of
when incurred (a) for borrowed money or (b) in connection with our
acquisition of assets other than in the ordinary course of business, for
the payment of which we are liable directly or indirectly by guarantee,
letter of credit, obligation to purchase or acquire or otherwise, or the
payment of which is secured by a lien, charge or encumbrance on assets we
acquired;
- amendments, modifications, renewals, extensions and deferrals of any such
indebtedness;
- any indebtedness issued in exchange for any such indebtedness (these
three bullet points being collectively referred to as "Debt"); provided,
however, that the following will not constitute senior indebtedness with
respect to subordinated debt securities;
- any Debt as to which, in the instrument evidencing such Debt or pursuant
to which such Debt was issued, it is expressly provided that such Debt is
subordinate in right of payment to all our Debt not expressly
subordinated to such Debt; and
- any of our Debt in respect of subordinated debt securities and any Debt
which by its terms refers explicitly to the subordinated debt securities
and states that such Debt shall not be senior in right of payment.
Generally, we may not make any payment pursuant to the subordinated debt
securities unless all amounts of principal, premium, if any, and interest then
due on all applicable senior indebtedness has been paid in full or if there has
occurred and is continuing beyond any applicable grace period a default in any
payment with respect to any applicable senior indebtedness, or if there has
occurred any event of default with respect to any applicable senior indebtedness
permitting the holders to accelerate the maturity of the senior indebtedness, or
if any judicial proceeding is pending with respect to any such default. However,
exceptions to these restrictions may be set forth in the applicable prospectus
supplement. Upon any distribution of our assets upon dissolution, winding-up,
liquidation or reorganization, the holders of our senior indebtedness will be
entitled to receive payment in full of principal, premium, if any, and interest
(including interest accruing subsequent to the commencement of any proceeding
for our bankruptcy or reorganization under any applicable bankruptcy, insolvency
or similar law now or hereafter in effect) before any payment is made on the
subordinated debt securities. By reason of this subordination, in the event of
our insolvency, holders of our senior indebtedness may receive more, ratably,
and holders of the subordinated debt securities having a claim pursuant to the
subordinated debt securities may receive less, ratably, than our other
creditors. These subordination provisions will not prevent the occurrence of any
event of default (an "Event of Default") in respect of the subordinated debt
securities. If we offer debt securities, the applicable prospectus supplement
will set forth the aggregate amount of outstanding indebtedness, if any, as of
the most recent practicable date that by the terms of such debt securities would
be senior to such debt securities. The applicable prospectus supplement will
also set forth any limitation on our ability to issue any additional senior
indebtedness and will describe in more detail the material terms of the
subordination provisions of these securities, including relevant definitions.
13
<PAGE> 17
CONVERSION RIGHTS
The terms, if any, on which a series of debt securities may be exchanged
for or converted into shares of common stock, preferred stock, warrants or any
other security will be set forth in the applicable prospectus supplement.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless we specify otherwise in the applicable prospectus supplement,
payment of principal, premium, if any, and any interest on the debt securities
will be payable, and the exchange of and the transfer of debt securities will be
registrable, at the office of the trustee or at any other office or agency
maintained by us for that purpose subject to the limitations of the indenture.
Unless we indicate otherwise in the applicable prospectus supplement, we will
issue the debt securities in denominations of U.S. $1,000 or integral multiples
thereof. We will not require a service charge for any registration of transfer
or exchange of the debt securities, but we may require payment of a sum
sufficient to cover any tax or other governmental charge.
GLOBAL DEBT SECURITIES
We may issue the debt securities of a series in the form of one or more
global securities that we will deposit with a depositary or its nominee
identified in the applicable prospectus supplement. In that event, we will issue
one or more global securities in a denomination or in aggregate denominations
equal to the portion of the aggregate principal amount of outstanding debt
securities of the series to be represented by a global security or securities.
We will deposit each global security with the depositary or nominee or a
custodian therefor and each global security will bear a legend regarding the
restrictions on exchanges and registration of transfer thereof referred to below
and any other matters as may be provided for pursuant to the applicable
indenture. Notwithstanding any provision of the indenture or any debt security
described in this prospectus, no global security may be transferred to, or
registered or exchanged for debt securities registered in the name of, any
person or entity other than the depositary for the global security or any
nominee of the depositary, and no such transfer may be registered, unless:
- the depositary has notified us that it is unwilling or unable to continue
as depositary for the global security or has ceased to be qualified to
act as such as required by the applicable indenture;
- we execute and deliver to the trustee an order that the global security
shall be so transferable, registrable and exchangeable; or
- there shall exist circumstances, if any, as may be described in the
applicable prospectus supplement.
All debt securities issued in exchange for a global security or any portion
thereof will be registered in such names as the depositary may direct. We will
describe the specific terms of the depositary arrangement with respect to any
portion of a series of debt securities to be represented by a global security in
the applicable prospectus supplement. We expect that the following provisions
will apply to depositary arrangements. Unless otherwise specified in the
applicable prospectus supplement, debt securities which are to be represented by
a global security to be deposited with or on behalf of a depositary will be
represented by a global security registered in the name of the depositary or its
nominee. Upon the issuance of a global security, and the deposit of the global
security with or on behalf of the depositary for the global security, the
depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of the debt securities represented by the global
security to the accounts of institutions that have accounts with the depositary
or its nominee ("participants"). The accounts to be credited will be designated
by the underwriters or
14
<PAGE> 18
agents who sell the debt securities or by us, if the debt securities are offered
and sold directly by us. Ownership of beneficial interests in the global
security will be limited to participants or persons that may hold interests
through participants. Ownership of beneficial interests by participants in the
global security will be shown on, and the transfer of that ownership interest
will be effected only through, records maintained by the depositary or its
nominee for the global security. Ownership of beneficial interests in the global
security by persons that hold through participants will be shown on, and the
transfer of that ownership interest within such participant will be effected
only through, records maintained by the participant. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of the securities in certificate form. The foregoing limitations and
these laws may impair the ability to transfer beneficial interests in the global
securities. So long as the depositary for a global security, or its nominee, is
the registered owner of the global security, the depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by the global security for all purposes under the
indenture. Unless otherwise specified in the applicable prospectus supplement,
owners of beneficial interests in the global security will not be entitled to
have debt securities of the series represented by the global security registered
in their names, will not receive or be entitled to receive physical delivery of
debt securities of the series in certificate form and will not be considered the
holders thereof for any purposes under the indenture. Accordingly, each person
owning a beneficial interest in the global security must rely on the procedures
of the depositary and, if that person is not a participant, on the procedures of
the participant through which the person owns its interest, to exercise any
rights of a holder under the indenture. If we request any action of holders or
if an owner of a beneficial interest in a global security desires to give any
notice or take any action a holder is entitled to give or take under the
indenture, the depositary will authorize the participants to give that notice or
take that action, and participants would authorize beneficial owners owning
through those participants to give that notice or take that action or would
otherwise act upon the instructions of beneficial owners owning through them. We
undertake no responsibility for the actions of the depositary, participants and
client participants or for enforcing their respective standing procedures.
Notwithstanding any other provisions to the contrary in the indenture, the
rights of the beneficial owners of the debt securities to receive payment of the
principal of, premium, if any, and interest, if any, on, the debt securities, on
or after the respective due dates expressed in the debt securities, or to
institute suit for the enforcement of these payments on or after these
respective dates, shall not be impaired or affected without the consent of the
beneficial owners. Principal of, premium and interest on a global security will
be payable in the manner described in the applicable prospectus supplement.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Unless we specify otherwise in the applicable prospectus supplement, the
indenture will provide that we may not consolidate with or merge with or into,
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of our property or assets to any person (a "successor person")
in one or more related transactions unless, among other things:
- we are the surviving corporation or the successor person, if other than
us, is a corporation organized and existing under the laws of the United
States, any state thereof or the District of Columbia;
- the successor person, if other than us, assumes all of our obligations
under the debt securities and the indenture; and
- immediately prior to and after giving effect to the transaction, no Event
of Default shall have occurred and be continuing. Notwithstanding the
foregoing, any of our subsidiaries may consolidate with, merge into or
transfer all or part of its properties and assets to us.
15
<PAGE> 19
EVENTS OF DEFAULT
Unless we specify otherwise in the applicable prospectus supplement, the
following will constitute Events of Default under the indenture with respect to
debt securities of any series:
- failure to pay principal of, or premium, if any, on, any debt security of
that series when due and payable;
- failure to pay any interest on any debt security of that series when due,
and continuance of that default for 30 days;
- failure to pay any mandatory sinking fund payment, when and as due by the
terms of any debt securities of that series;
- failure to comply with any of our other agreements in the debt securities
of that series or in the indenture with respect to that series, which
default continues for the period and after the notice provided in the
applicable prospectus supplement;
- failure to pay principal when due or resulting in acceleration of any of
our other debt where the aggregate principal amount with respect to which
that default or acceleration has occurred exceeds a certain amount
provided in the applicable prospectus supplement, provided that this
default will be cured or waived if the default that resulted in the
acceleration of our other indebtedness is cured or waived or that
indebtedness is discharged; and
- certain events of bankruptcy, insolvency or reorganization.
Except as set forth in the applicable prospectus supplement, a default
under the fourth or fifth bullet points above is not an Event of Default with
respect to a particular series of debt securities until the trustee or the
holders of at least 25% in principal amount of the then outstanding debt
securities of that series notify us of the default and we do not cure the
default within 60 days after receipt of the notice. The notice must specify the
default, demand that it be remedied and state that the notice is a "Notice of
Default."
Except as we may otherwise specify in the applicable prospectus supplement,
an Event of Default with respect to outstanding debt securities of any series,
other than an Event of Default relating to certain events of bankruptcy,
insolvency or reorganization, shall occur and be continuing, either the trustee
or the holders of at least 25% in principal amount of the outstanding debt
securities of that series by notice, as provided in the indenture, may declare
the unpaid principal amount (or, if the debt securities of that series are
original issue discount securities, such lesser amount as may be specified in
the terms of that series) of, and any accrued and unpaid interest on, all debt
securities of that series to be due and payable immediately. However, at any
time after a declaration of acceleration with respect to debt securities of any
series has been made, but before a judgment or decree based on that acceleration
has been obtained, the holders of a majority in principal amount of the
outstanding debt securities of that series may, under certain circumstances,
rescind and annul that acceleration. For information as to waiver of defaults,
see "Modification and Waiver" below. The indenture will provide that, subject to
the duty of the trustee during an Event of Default to act with the required
standard of care, the trustee will be under no obligation to exercise any of its
rights or powers under the indenture at the request or direction of any of the
holders, unless those holders shall have offered to the trustee reasonable
indemnity. Subject to certain provisions, including those requiring
indemnification of the trustee, the holders of a majority in principal amount of
the outstanding debt securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee, or exercising any trust or power conferred on the trustee, with
respect to the debt securities of that series. We will be required to furnish to
the trustee under the indenture annually a statement as to our performance of
our obligations under the indenture and as to any default in our performance.
16
<PAGE> 20
MODIFICATION AND WAIVER
Subject to certain exceptions, the indenture will provide that we and the
trustee may amend the indenture or the debt securities with the written consent
of the holders of a majority in principal amount of the then outstanding debt
securities of each series affected by the amendment with each series voting as a
separate class. The holders of a majority in principal amount of the then
outstanding debt securities of any series may also waive compliance by us with
certain restrictive provisions of the indenture with respect to the debt
securities of that series; provided, however, that, except as otherwise
specified in the applicable prospectus supplement, without the consent of each
holder of debt securities affected, an amendment or waiver may not, among other
things:
- reduce the percentage of the principal amount of debt securities whose
holders must consent to an amendment or waiver;
- reduce the rate or change the time for payment of interest on any debt
security, including default interest;
- reduce the principal of or premium, if any, or change the fixed maturity
of any debt security, or reduce the amount of, or postpone the date fixed
for, redemption or the payment of any sinking fund or analogous
obligation with respect to any series of debt securities;
- make any debt security payable in currency other than that stated in the
debt security;
- make any change in the provisions concerning waivers of default or Events
of Default by holders or concerning the rights of holders to recover the
principal of, premium, if any, and interest on, any debt security;
- waive a default in the payment of the principal of, premium, if any, and
interest on, any debt security, except as otherwise provided in the
indenture; or
- reduce the principal amount of original issue discount securities payable
upon acceleration of the maturity thereof.
We and the trustee may amend the indenture or the debt securities without
notice to or the consent of any holder of a debt security to, among other
things:
- cure any ambiguity, defect or inconsistency;
- comply with the indenture's provisions with respect to successor
corporations;
- comply with any requirements of the Securities and Exchange Commission in
connection with the qualification of the indenture under the Trust
Indenture Act;
- provide for uncertificated debt securities in addition to or in place of
certificated debt securities;
- add to, change or eliminate any of the provisions of the indenture in
respect of one of more series of debt securities, provided, however, that
any addition, change or elimination (a) shall neither (i) apply to any
debt security of any series created prior to the execution of such
amendment and entitled to the benefit of such provision, nor (ii) modify
the rights of a holder of any such debt security with respect to such
provision, or (b) shall become effective only when there is no
outstanding debt security of any series created prior to such amendment
and entitled to the benefit of such provision;
- make any other change that does not adversely affect in any material
respect the interest of any holder; or
- establish additional series of debt securities as permitted by the
indenture.
17
<PAGE> 21
The holders of a majority in principal amount of the then outstanding debt
securities of any series, by notice to us and to the trustee, may waive an
existing default or Event of Default and its consequences except a default or
Event of Default in the payment of the principal of, premium, if any, or any
interest on, any debt security with respect to the debt securities of that
series or in the payment of any sinking fund installment with respect to the
debt securities of that series or in respect of any provision in the indenture
which cannot be modified or amended without the consent of the holder of each
outstanding debt security of such series affected; provided, however, that the
holders of a majority in principal amount of the outstanding debt securities of
any series may rescind an acceleration and its consequences, including any
related payment default that resulted from such acceleration. In the event we
issue debt securities at a discount, then the above shall apply to the holders
of a majority in principal amount at maturity.
DEFEASANCE OF DEBT SECURITIES. Unless otherwise specified in the applicable
prospectus supplement, the indenture will provide that we may be discharged from
any and all obligations in respect of the debt securities of any series (except
for certain obligations to register the transfer or exchange of debt securities
of that series, to replace stolen, lost or mutilated debt securities of that
series, and to maintain paying agencies) upon the deposit with the trustee, in
trust, of money and/or U.S. government obligations, that, through the payment of
interest and principal in respect thereof in accordance with their terms, will
provide money in an amount sufficient in the opinion of a nationally recognized
firm of independent public accountants to pay and discharge each installment of
principal, premium, if any, and interest, if any, on and any mandatory sinking
fund payments in respect of the debt securities of that series on the stated
maturity of those payments or other redemption date in accordance with the terms
of the indenture and the debt securities.
This discharge may occur only if, among other things, we have received
from, or there has been published by, the United States Internal Revenue Service
a ruling, or, since the date of execution of the indenture, there has been a
change in the applicable United States federal income tax law, in either case to
the effect that holders of the debt securities of such series will not recognize
income, gain or loss for United States federal income tax purposes as a result
of the deposit, defeasance and discharge and will be subject to United States
federal income tax on the same amount and in the same manner and at the same
times as would have been the case if the deposit, defeasance and discharge had
not occurred. The applicable prospectus supplement will describe any other
conditions we must meet in order to legally defease a particular class or series
of debt securities.
DEFEASANCE OF CERTAIN COVENANTS. Unless otherwise specified in the
applicable prospectus supplement, the indenture will provide that, upon
compliance with certain conditions, we may omit to comply with the restrictive
covenants contained in the indenture, as well as any additional covenants or
Events of Default contained in a supplement to the indenture, a Board Resolution
or an Officers' Certificate delivered pursuant to the indenture. The conditions
include:
- depositing with the trustee money and/or U.S. government obligations,
that, through the payment of interest and principal in respect thereof in
accordance with their terms, will provide money in an amount sufficient
in the opinion of a nationally recognized firm of independent public
accountants to pay principal, premium, if any, and interest, if any, on
and any mandatory sinking fund payments in respect of the debt securities
of that series on the stated maturity of those payments or other
redemption date in accordance with the terms of the indenture and the
debt securities; and
- delivering to the trustee an opinion of counsel to the effect that the
holders of the debt securities of that series will not recognize income,
gain or loss for United States federal income tax purposes as a result of
that deposit and related covenant defeasance and will be subject to
United States federal income tax in the same amount and in the same
manner and
18
<PAGE> 22
at the same times as would have been the case if the deposit and related
covenant defeasance had not occurred.
The applicable prospectus supplement will describe any additional
conditions we must meet in order to defease the covenants applicable to a
particular class or series of debt securities.
DEFEASANCE OF CERTAIN COVENANTS AND EVENTS OF DEFAULT. In the event we
exercise our option to omit to comply with certain covenants contained in the
indenture with respect to any series of debt securities and the debt securities
of that series are declared due and payable because of the occurrence of any
Event of Default, the amount of money and/or U.S. government obligations on
deposit with the trustee will be sufficient to pay amounts due on the debt
securities of that series at the time of their stated maturity but may not be
sufficient to pay amounts due on the debt securities of that series at the time
of the acceleration resulting from the Event of Default. However, we will remain
liable for those payments.
SATISFACTION AND DISCHARGE
The indentures will, upon a written request or order signed by one of our
designated officers and delivered to the trustee, cease to be of further effect
with respect to any series of debt securities, except as to any surviving rights
of registration of transfer or exchange or conversion of debt securities of that
series expressly provided for, and the trustee will be required to execute
proper instruments acknowledging satisfaction and discharge of such indenture as
to that series when either:
- we have delivered to the trustee for cancellation all debt securities of
that series previously authenticated and delivered, other than:
- debt securities that have been destroyed, lost or stolen and which have
been replaced or paid, as provided in the indentures, and
- debt securities for which money sufficient to make all payment on the
debt securities has previously been deposited in trust with the trustee
or any paying agent or segregated and held in trust by us with any
remaining amounts to thereafter be repaid to us, as provided in the
indentures; or
- all debt securities, other than convertible debt securities, of the
series:
- have become due and payable, or
- will become due and payable at their stated maturity within one year,
or
- if redeemable at our option, are to be called for redemption within one
year under arrangements reasonably satisfactory to the trustee for the
giving of notice of redemption by the trustee in our name and at our
expense; and
- we irrevocably deposit or cause to be deposited with the trustee as trust
funds in trust an amount of money or government obligations sufficient to
pay and discharge the entire indebtedness on those debt securities not
previously delivered to the trustee for cancellation, including all
principal of and any premium and installments of interest to the date of
such deposit in the case of debt securities which have become due and
payable or to the stated maturity or redemption of the debt securities,
as applicable.
In addition, in order to satisfy and discharge the securities, we will be
required to:
- pay or cause to be paid all other sums payable under the debt securities
by us, and
- deliver an officers' certificate and an opinion of counsel to the
trustee, each stating that all conditions precedent provided for relating
to the satisfaction and discharge of the indentures as to such series
have been satisfied.
19
<PAGE> 23
REGARDING THE TRUSTEE
The indenture and provisions of the Trust Indenture Act incorporated by
reference in the indenture contain certain limitations on the rights of a
trustee, should it become our creditor, to obtain payment of claims in certain
cases, or to realize on certain property received in respect of any claim, as
security or otherwise. The trustee and its affiliates may engage in, and will be
permitted to continue to engage in, other transactions with us and our
affiliates; provided, however, that if it acquires any conflicting interest (as
defined in the Trust Indenture Act), it must eliminate that conflict or resign.
The holders of a majority in principal amount of the then outstanding debt
securities of any series will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
trustee. The Trust Indenture Act and the indenture provide that in case an Event
of Default shall occur and be continuing, the trustee will be required, in the
exercise of its rights and powers, to use the degree of care and skill of a
prudent person in the conduct of that person's affairs. Subject to this
provision, the trustee will be under no obligation to exercise any of its rights
or powers under the indenture at the request of any of the holders of the debt
securities issued thereunder, unless they have offered to the trustee indemnity
satisfactory to it.
GUARANTEES
The obligations of Metricom Finance under the debt securities will be fully
and unconditionally guaranteed by Metricom, Inc. Each guarantee of Metricom
Finance's obligations under senior debt securities will constitute part of the
senior debt of Metricom, Inc. and will rank pari passu with all other unsecured
and unsubordinated debt of Metricom, Inc. Each guarantee with respect to
subordinated debt securities will be subordinated to Metricom, Inc.'s senior
indebtedness on the same basis as provided above with respect to the
subordination of the relevant subordinated debt securities to senior
indebtedness of Metricom Finance. Upon completion of a holding company
reorganization, the guarantee automatically, and without further notice to or
action by the holders of the debt securities, will be released entirely and will
cease to be of any force and effect.
HOLDING COMPANY REORGANIZATION
A holding company reorganization is a transaction after which all or
substantially all our assets and operations will be owned and operated by a
subsidiary corporation or limited liability company wholly owned by a holding
company, and the holding company will remain as the sole obligor in respect of
the debt securities. We currently expect that this type of reorganization of our
operations may be effected either as a result of the transfer of all or
substantially all of Metricom, Inc.'s assets to Metricom Finance, the merger of
a wholly owned subsidiary of Metricom Finance with Metricom, Inc., or a merger
of Metricom, Inc. into a single-member limited liability company owned by
Metricom Finance, after which the debt securities will become solely the
obligation of a holding company. That holding company will have no material
assets other than the capital stock of its subsidiaries. If we complete a
holding company reorganization, the debt securities will be effectively junior
to all of the liabilities, including credit facilities, other indebtedness and
trade payables that the holding company's subsidiaries may incur, all of which
subsidiary debt also could be secured by liens. While we have not made a final
determination as to whether to undertake a holding company reorganization,
because of our ambitious growth plans and in order to preserve our flexibility
to create a corporate structure that may facilitate our ability to raise
additional capital in the future, we will structure the debt securities to allow
us to reorganize if we choose to do so.
Prior to completing a holding company reorganization, Metricom Finance will
not have any operations or any material assets and will not have any revenues.
As a result, prospective investors should not expect Metricom Finance to
contribute to the amounts required to be paid on the debt
20
<PAGE> 24
securities. Moreover, Metricom, Inc. has fully and unconditionally guaranteed
the obligations of Metricom Finance with respect to the debt securities solely
for the purpose of enabling Metricom, Inc. and Metricom Finance to register the
debt securities, as co-obligors, on the registration statement of which this
prospectus is a part. Upon the completion of a holding company reorganization,
the debt securities will, by their terms, be the obligation solely of a holding
company, meaning a company the only asset of which is the stock of or an
ownership interest in either a corporate subsidiary (or subsidiaries) or a
limited liability company, and the guarantee automatically, and without further
notice to or action by the holders of the debt securities, will be released
entirely and will cease to be of any force and effect. After that time, all
references in the indenture and any supplemental indentures to an obligor of the
debt securities will refer only to the holding company.
GOVERNING LAW
The indentures and debt securities will be governed by and construed in
accordance with the laws of the State of New York. The indentures are subject to
the provisions of the Trust Indenture Act that are required to be a part thereof
and will, to the extent applicable, be governed by such provisions.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt securities, or debt warrants, as
well as warrants to purchase preferred stock or common stock, or equity
warrants. We refer to debt warrants and equity warrants collectively as
warrants. Warrants may be issued independently or together with any securities
and may be attached to or separate from those securities. We will issue warrants
under warrant agreements to be entered into between us and a bank or trust
company, as warrant agent. When we issue warrants, we will describe the specific
terms of the warrants in a prospectus supplement.
DEBT WARRANTS
The applicable prospectus supplement will describe the terms of debt
warrants offered under that prospectus supplement, the warrant agreement
relating to the debt warrants and the debt warrant certificates representing the
debt warrants, including the following:
- the title of the debt warrants;
- the aggregate number of debt warrants;
- the price or prices at which the debt warrants will be issued;
- the designation, aggregate principal amount and terms of the debt
securities purchasable upon exercise of the debt warrants, and the
procedures and conditions relating to the exercise of the debt warrants;
- the designation and terms of any related debt securities, common stock,
preferred stock or any other security with which the debt warrants are
issued, and the number of the debt warrants issued with each debt
security, share of common stock, share of preferred stock or any other
security;
- the date, if any, on and after which the debt warrants and the related
debt securities, preferred stock, common stock or any other security will
be separately transferable;
- the principal amount of debt securities purchasable upon exercise of each
debt warrant;
- the date on which the right to exercise the debt warrants will commence
and the date on which those rights will expire;
21
<PAGE> 25
- the maximum or minimum number of debt warrants which may be exercised at
any time;
- information with respect to book-entry procedures, if any;
- a discussion of any material federal income tax considerations; and
- any other material terms of the debt warrants and terms, procedures and
limitations relating to the exercise of the debt warrants.
Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations. Debt warrants may be exercised at the
office of the warrant agent or any other office indicated in the prospectus
supplement. Prior to the exercise of their debt warrants, holders of debt
warrants will not have any of the rights of holders of the debt securities
purchasable upon the exercise and will not be entitled to payment of principal
of, premium, if any, or interest, if any, on, the debt securities purchasable
upon the exercise.
EQUITY WARRANTS
The applicable prospectus supplement will describe the terms of equity
warrants offered under that prospectus supplement, the warrant agreements
relating to the equity warrants and the warrant certificates representing the
equity warrants, including the following:
- the title of the equity warrants;
- the securities (i.e., preferred stock or common stock) for which the
equity warrants are exercisable;
- the price or prices at which the equity warrants will be issued;
- if applicable, the designation and terms of the debt securities,
preferred stock, common stock or any other security with which the equity
warrants are issued, and the number of equity warrants issued with each
debt security or share of preferred stock, common stock or other
security;
- if applicable, the date on and after which the equity warrants and the
related debt securities, preferred stock, common stock or any other
security will be separately transferable;
- the date on which the right to exercise the equity warrants will
commence, and the date on which those rights will expire;
- the maximum or minimum number of equity warrants that may be exercised at
any time;
- information with respect to book-entry procedures, if any;
- if applicable, a discussion of any material federal income tax
considerations; and
- any other material terms of the equity warrants, including terms,
procedures and limitations relating to any anti-dilution provisions
relating to the equity warrants and to the exchange and exercise of the
equity warrants.
Unless otherwise provided in the applicable prospectus supplement, holders
of equity warrants will not be entitled, by virtue of being such holders, to
vote, consent, receive dividends, receive notice as stockholders with respect to
any meeting of stockholders for the election of directors or any other matter,
or to exercise any rights whatsoever as stockholders. Except as set forth in the
applicable prospectus supplement, the exercise price payable and the number of
shares of common stock or preferred stock purchasable upon the exercise of each
equity warrant will be subject to adjustment in certain events, including the
issuance of a stock dividend to holders of common stock or preferred stock or a
stock split, reverse stock split, combination, subdivision or reclassification
of common stock or preferred stock. In lieu of adjusting the number of shares of
common stock or preferred stock
22
<PAGE> 26
purchasable upon exercise of each equity warrant, Metricom, Inc. may elect to
adjust the number of equity warrants. Unless otherwise provided in the
applicable prospectus supplement, no adjustments in the number of shares
purchasable upon exercise of the equity warrants will be required until
cumulative adjustments require an adjustment of at least 1% thereof. Metricom,
Inc. may, at its option, reduce the exercise price at any time. No fractional
shares will be issued upon exercise of equity warrants, but it will pay the cash
value of any fractional shares otherwise issuable. Notwithstanding the
foregoing, except as otherwise provided in the applicable prospectus supplement,
in case of any consolidation, merger, or sale or conveyance of our property as
an entirety or substantially as an entirety, the holder of each outstanding
equity warrant shall have the right to the kind and amount of shares of stock
and other securities and property (including cash) receivable by a holder of the
number of shares of common stock or preferred stock into which the equity
warrant was exercisable immediately prior to the particular triggering event.
EXERCISE OF WARRANTS
Each warrant will entitle the holder to purchase the principal amount, or
number of, securities at the exercise price as shall in each case be set forth
in, or be determinable as set forth in, the applicable prospectus supplement.
Warrants may be exercised at any time up to the close of business on the
expiration date set forth in the prospectus supplement relating to the warrants
offered thereby. After the close of business on the expiration date, unexercised
warrants will become void. Warrants may be exercised as set forth in the
applicable prospectus supplement. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the office of the warrant
agent or any other office indicated in the applicable prospectus supplement, we
will, as soon as practicable, forward the securities purchasable upon that
exercise. If less than all of the warrants represented by a particular warrant
certificate are exercised, a new warrant certificate will be issued for the
remaining warrants.
DESCRIPTION OF UNITS
We may issue units consisting of two or more other constituent securities.
These units may be issuable as, and for a specified period of time may be
transferable as, a single security only, as distinguished from the separate
constituent securities constituting such units. When we issue units, we will
describe their specific terms in a prospectus supplement, including the
following:
- the title of any series of units;
- identification and description of the separate constituent securities
constituting the units;
- the price or prices at which the units will be issued;
- if applicable, the date on and after which the constituent securities
constituting the units will become separately transferable;
- information with respect to book-entry procedures, if any;
- a discussion of any material federal income tax considerations; and
- any other material terms of the units and their constituent securities.
PLAN OF DISTRIBUTION
We may sell the securities being offered by this prospectus directly or
through agents, underwriters or dealers.
23
<PAGE> 27
Agents designated by us from time to time may solicit offers to purchase
the securities offered by this prospectus. Any agent involved in the offer or
sale of those securities may be deemed to be an underwriter under the Securities
Act and we will name that agent and describe any commissions payable by us to
that agent in a prospectus supplement. Any agent appointed by us will be acting
on a reasonable efforts basis for the period of its appointment or, if indicated
in the applicable prospectus supplement, on a firm commitment basis. We may be
obligated under agreements with these agents to indemnify them against civil
liabilities, including liabilities under the Securities Act. These agents may
also engage in transactions with or perform services for us in the ordinary
course of business.
If we utilize any underwriters in any sale of the securities in respect of
which this prospectus is delivered, we will enter into an underwriting agreement
with those underwriters at the time of sale to them, and the names of the
underwriters and the terms of the transaction will be set forth in the
prospectus supplement. That prospectus supplement will be used by the
underwriters to make resales of the securities in respect of which this
prospectus is delivered to the public. We may be obligated under the
underwriting agreements with these underwriters to indemnify them against civil
liabilities, including liabilities under the Securities Act. These underwriters
may also engage in transactions with or perform services for us in the ordinary
course of business.
If we utilize a dealer in any sale of the securities in respect of which
the prospectus is delivered, we will sell the securities to the dealer, as
principal. The dealer may then resell those securities to the public at varying
prices to be determined by the dealer at the time of resale. We may be obligated
under agreements with these dealers to indemnify them against civil liabilities,
including liabilities under the Securities Act. These dealers may also engage in
transactions with or perform services for us in the ordinary course of business.
If so indicated in the applicable prospectus supplement, we will authorize
agents, underwriters or dealers to solicit offers from purchasers to purchase
the securities from us at the public offering price set forth in the prospectus
supplement under delayed delivery contracts providing for payment and delivery
of those securities on a specified date in the future. These delayed delivery
contracts will be subject to only those conditions set forth in the prospectus
supplement, and we will set forth the commission payable for solicitation of
these offers in the prospectus supplement.
If we sell any warrants pursuant to this prospectus and an applicable
prospectus supplement, we may deliver the prospectus in connection with the sale
of our common stock upon the exercise of the applicable warrants.
LEGAL MATTERS
Cooley Godward LLP, San Francisco, California will provide us with an
opinion as to the legality of the securities we are offering. Weil, Gotshal &
Manges LLP, New York, New York, will serve as counsel to underwriters, dealers
or agents purchasing any of the securities we are offering by this prospectus.
Attorneys with Cooley Godward LLP own an aggregate of 1,621 shares of our common
stock.
EXPERTS
The audited financial statements and schedules incorporated by reference in
this prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
24
<PAGE> 28
WHERE YOU CAN FIND MORE INFORMATION
Metricom, Inc. files annual and quarterly reports and proxy statements, and
Metricom, Inc. and Metricom Finance may file current reports and other
information with the SEC. We have filed with the SEC a registration statement on
Form S-3 under the Securities Act. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits to the
registration statement. For further information with respect to us and the
securities we are offering under this prospectus, we refer you to the
registration statement and the exhibits and schedules filed as a part of the
registration statement. You may read and copy the registration statement, as
well as our reports, proxy statements and other information at the SEC's public
reference room at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. You
can request copies of these documents by writing to the SEC and paying a fee for
the copying cost. Please call the SEC at 1-800-SEC-0330 for more information
about the operation of the public reference room. Our SEC filings are also
available at the SEC's web site at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" information that we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. This prospectus and the information that
we file later with the SEC may update and supersede the information incorporated
by reference. We incorporate by reference the documents listed below and any
future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 prior to the termination of the offering of
all securities to which this prospectus relates:
- Metricom, Inc. Annual Report on Form 10-K for the year ended December 31,
1999;
- Metricom, Inc. Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 2000;
- Metricom, Inc. Current Reports on Form 8-K filed on January 28, 2000,
February 7, 2000, February 10, 2000 and February 16, 2000; and
- The description of Metricom, Inc.'s common stock contained in our
registration statement on Form 8-A filed with the SEC on February 28,
1992.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
Metricom, Inc.
333 West Julian Street
San Jose, California 95110
(408) 282-3000
25
<PAGE> 29
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated costs and expenses, other than
the underwriting discounts and commissions, payable by the registrant in
connection with the offering of the securities being registered. All the amounts
shown are estimates, except for the registration fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 79,266
Accounting fees and expenses................................ 50,000
Legal fees and expenses..................................... 75,000
Miscellaneous............................................... 45,734
--------
Total............................................. $250,000
========
</TABLE>
We will pay all fees and expenses associated with filing this registration
statement.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law, or the DGCL,
authorizes a court to award or a corporation's board of directors to grant
indemnification to directors and officers in terms sufficiently broad to permit
such indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act. Our
Restated Bylaws provide for mandatory indemnification of our directors and
executive officers and permissive indemnification of other officers, employees
and other agents to the maximum extent permitted by the DGCL. Metricom, Inc. has
entered into indemnification agreements with Metricom, Inc.'s directors and
certain officers. The indemnification agreements provide our directors with
further indemnification to the maximum extent permitted by the DGCL. We also
have obtained directors and officers insurance to insure our directors and
officers against certain liabilities, including liabilities under the securities
laws.
The form of underwriting agreement filed as Exhibit 1.1 to the registration
statement provides for indemnification by the underwriters of the registrant and
its officers and directors for certain liabilities under the Securities Act or
otherwise.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<S> <C>
1.1 Form of Underwriting Agreement*
3.1(a) Restated Certificate of Incorporation of Metricom, Inc.**
3.1(b) Certificate of Amendment of Amended and Restated Certificate
of Incorporation of Metricom, Inc.**
3.2 Bylaws of Metricom, Inc.***
3.3 Certificate of Incorporation of Metricom Finance, Inc.****
3.4 Bylaws of Metricom Finance, Inc.****
4.1 Form of Warrant Agreement, including form of warrant
certificate.*
4.2 Senior Debt Indenture to be entered into between Metricom,
Inc. and Bank One Trust Company, N.A., as trustee.****
4.3 Subordinated Debt Indenture to be entered into between
Metricom, Inc. and Bank One Trust Company, N.A., as
trustee.****
</TABLE>
II-1
<PAGE> 30
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<S> <C>
5.1 Opinion of Cooley Godward LLP.
12.1 Statement regarding computation of deficiency of earnings to
fixed charges and deficiency of earnings to combined fixed
charges and preferred stock dividends.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included in the signature page).
25.1 Statement of Eligibility and Qualification on Form T-1 of
Bank One Trust Company, N.A. to act as trustee under the
indentures.
</TABLE>
-------------------------
* To be filed by amendment or incorporated by reference from reports filed
under the Securities Exchange Act of 1934.
** Filed as Exhibits 3.1(a) and (b) to the Form 10-Q filed by Metricom, Inc.
for the quarter ended June 30, 2000 and incorporated herein by reference.
*** Filed as Exhibit 3.2 to the Form 10-K405/A filed by Metricom, Inc. for the
year ended December 31, 1997 and incorporated herein by reference.
**** Filed as Exhibits 4.2, 4.3, 4.4 and 4.5 to the Registration Statement filed
by Metricom, Inc. and Metricom Finance on Form S-3, as amended (No.
333-91359) and incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The undersigned registrant undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 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 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the provisions described in Item 15 or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned registrant further undertakes that:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-2
<PAGE> 31
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. 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 a prospectus
filed with the Securities and Exchange Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Forms S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(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 to file an application for the
purpose of determining the eligibility of the trustee to act under subsection(a)
of section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under section 305(b)(2) of the Trust
Indenture Act.
II-3
<PAGE> 32
SIGNATURES
METRICOM, INC.
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose, State of California, on August 28, 2000.
METRICOM, INC.
By: /s/ TIMOTHY A. DREISBACH
------------------------------------
Timothy A. Dreisbach
President and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Timothy A. Dreisbach, Dale W. Marquart
and James E. Wall, and each or any one of them, as his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments and registration
statements filed pursuant to Rule 462 to this registration statement), and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
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
connection therewith, as fully to all intents and purposes as he might or could
do in person, ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitutes or substitute, 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 below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ TIMOTHY A. DREISBACH President and Chief Executive August 28, 2000
------------------------------------------------ Officer and Director
Timothy A. Dreisbach (Principal Executive Officer)
/s/ JAMES E. WALL Chief Financial Officer (Principal August 28, 2000
------------------------------------------------ Financial and Accounting Officer)
James E. Wall
/s/ BRAM JOHNSON Director August 28, 2000
------------------------------------------------
Bram Johnson
/s/ RALPH DERRICKSON Director August 23, 2000
------------------------------------------------
Ralph Derrickson
/s/ ROBERT P. DILWORTH Director August 28, 2000
------------------------------------------------
Robert P. Dilworth
/s/ JUSTIN L. JASCHKE Director August 28, 2000
------------------------------------------------
Justin L. Jaschke
</TABLE>
II-4
<PAGE> 33
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ DAVID MOORE Director August 28, 2000
------------------------------------------------
David Moore
/s/ WILLIAM D. SAVOY Director August 28, 2000
------------------------------------------------
William D. Savoy
</TABLE>
II-5
<PAGE> 34
SIGNATURES
METRICOM FINANCE, INC.
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Gatos, State of California, on August 28, 2000.
METRICOM FINANCE, INC.
By: /s/ TIMOTHY A. DREISBACH
------------------------------------
Timothy A. Dreisbach
President and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Timothy A. Dreisbach, Dale W. Marquart
and James E. Wall, and each or any one of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments and registration
statements filed pursuant to Rule 462) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
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
connection therewith, as fully to all intents and purposes as he might or could
do in person, ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitutes or substitute, 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 below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ TIMOTHY A. DREISBACH President and Chief August 28, 2000
------------------------------------------ Executive Officer and Director
Timothy A. Dreisbach (Principal Executive Officer)
/s/ JAMES E. WALL Chief Financial Officer (Principal August 28, 2000
------------------------------------------ Financial and Accounting Officer)
James E. Wall
/s/ DALE W. MARQUART Director August 28, 2000
------------------------------------------
Dale W. Marquart
</TABLE>
II-6
<PAGE> 35
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
1.1 Form of Underwriting Agreement*
3.1(a) Restated Certificate of Incorporation of Metricom, Inc.**
3.1(b) Certificate of Amendment of Amended and Restated Certificate
of Incorporation of Metricom, Inc.**
3.2 Bylaws of Metricom, Inc.***
3.3 Certificate of Incorporation of Metricom Finance, Inc.****
3.4 Bylaws of Metricom Finance, Inc.****
4.1 Form of Warrant Agreement, including form of warrant
certificate.*
4.2 Senior Debt Indenture to be entered into between Metricom,
Inc. and Bank One Trust Company, N.A., as trustee.****
4.3 Subordinated Debt Indenture to be entered into between
Metricom, Inc. and Bank One Trust Company, N.A., as
trustee.****
5.1 Opinion of Cooley Godward LLP.
12.1 Statement regarding computation of deficiency of earnings to
fixed charges and deficiency of earnings to combined fixed
charges and preferred stock dividends.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included in the signature page).
25.1 Statement of Eligibility and Qualification on Form T-1 of
Bank One Trust Company, N.A. to act as trustee under the
indentures.
</TABLE>
-------------------------
* To be filed by amendment or incorporated by reference from reports filed
under the Securities Exchange Act of 1934.
** Filed as Exhibits 3.1(a) and (b) to the Form 10-Q filed by Metricom, Inc.
for the quarter ended June 30, 2000 and incorporated herein by reference.
*** Filed as Exhibit 3.2 to the Form 10-K405/A filed by Metricom, Inc. for the
year ended December 31, 1997 and incorporated herein by reference.
**** Filed as Exhibits 4.2, 4.3, 4.4 and 4.5 to the Registration Statement filed
by Metricom, Inc. and Metricom Finance on Form S-3, as amended (No.
333-91359) and incorporated herein by reference.
