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As filed with the Securities and Exchange Commission on February 5, 1997
Registration No. 333-10443
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
Amendment No. 1
FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BROADBAND TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 56-1615990
(State of Incorporation) (I.R.S. Employer Identification No.)
4024 Stirrup Creek Drive, P. O. Box 13737
Durham, North Carolina 27709-3737
(919) 544-0015
(Address, including Zip Code and telephone number, including
area code, of registrant's principal executive offices)
<TABLE>
<S> <C>
With copies to:
Salim A. L. Bhatia, President James F. Verdonik, Esq.
BroadBand Technologies, Inc. Kilpatrick Stockton LLP
4024 Stirrup Creek Drive 4101 Lake Boone Trail
P.O. Box 13737 Suite 400
Durham, North Carolina 27709-3737 Raleigh, North Carolina 27607
(919) 544-0015 (919) 420-1700
(Name, address, including Zip Code,
and telephone number, including area
code, of agent for service)
</TABLE>
Approximate date of commencement of proposed sale to public: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.
[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ X ]
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. [ ]
<PAGE> 2
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The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until
the Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
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BROADBAND TECHNOLOGIES, INC.
1,000,000 Shares of Common Stock, par value $.01 per share, issuable upon
exercise of outstanding Warrants
This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
This Prospectus relates to the offering for resale of 1,000,000 shares
(the "Warrant Shares" or the "Offered Securities") of Common Stock, par value
$0.01 per share ("Common Stock"), of BroadBand Technologies, Inc. (the "Company"
or "BroadBand") that are issuable upon exercise of outstanding warrants,
subject to adjustment in certain events in accordance with the provisions of
the Warrants and/or the Warrant Agreement (as defined herein).
The Offered Securities may be offered and sold from time to time
pursuant to this Prospectus by the holder thereof named herein or by any
additional holder or holders thereof named in supplements hereto (collectively,
the "Selling Holders"). Information concerning the Selling Holders may change
from time to time and, to the extent required, will be set forth in supplements
to this Prospectus. The Offered Securities may be sold by the Selling Holders
from time to time directly to purchasers or through agents, underwriters or
dealers. See "Plan of Distribution" and "Selling Holders." If required, the
names of any such agent or underwriter involved in the sale of the Offered
Securities and the applicable agent's commission, dealer's purchase price or
underwriter's discount, if any, will be set forth in supplements to this
Prospectus.
The Company's Common Stock is quoted on The Nasdaq National Market
under the symbol "BBTK." On February 4, 1997, the last reported sale price of
the Common Stock as reported on The Nasdaq National Market was U.S. $13.00 per
share.
The Warrant Shares are issuable upon exercise of warrants issued on
March 30, 1995 to Bell Atlantic Corporation, a customer of the company, and
subsequently transferred to Bell Atlantic Investments, Inc. (Bell Atlantic
Corporation and Bell Atlantic Investments, Inc., collectively referred to herein
as "Bell Atlantic") (referred to herein as the "Warrants" or the "Bell Atlantic
Warrants"). The Bell Atlantic Warrants have an exercise price of $41.75 per
share and may be exercised at any time on or before March 31, 2001. See
"Description of Warrants."
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SEE "RISK FACTORS," COMMENCING ON PAGE 3, FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
SECURITIES OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<CAPTION> Underwriting
Price Discounts & Proceeds to Company
To Public Commissions or other Persons
--------- ------------ --------------------
<S> <C> <C> <C>
Per Unit (1) (2) (3) (4)
Total (1) (2) $41,750,000 (3) (4)
</TABLE>
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(1) The Selling Holders may from time to time effect the sale of the
Offered Securities at prices and at terms then prevailing or at prices
related to the then-current market price, or in negotiated
transactions.
(2) The Selling Holders will receive all of the net proceeds from the sale
of the Offered Securities and will pay all underwriting discounts and
selling commissions, if any, applicable to any such sale. The Selling
Holders and any broker-dealers, agents or underwriters who participate
in the distribution of the Offered Securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any
commission received by them and any profit on the resale of the
Offered Securities purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Plan of
Distribution" for a description of indemnification arrangements
between the Company and the Selling Holders.
(3) The Company will receive $41,750,000 if all the Warrants are exercised
in full.
(4) Expenses of preparing and filing the Registration Statement of which
this Prospectus forms a part will be borne by the Company. The Selling
Holders participating in the offering pursuant to the Registration
Statement will be responsible for any brokers' commissions and
underwriting discounts and commissions.
The date of this Prospectus is February 5, 1997.
<PAGE> 5
(Inside front cover page of Prospectus)
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at its
Regional Offices located at 7 World Trade Center, Suite 1300, New York, New
York 10048, and at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can be obtained from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 upon request and payment of the prescribed fee.
The Company's Common Stock is quoted in The Nasdaq National Market
System, and reports, proxy statements and other information filed by the
Company can be inspected at such exchange.
This Prospectus constitutes a part of a registration statement on Form
S-3 (together with all amendments and exhibits, the "Registration Statement")
filed by the Company with the Commission in Washington, D.C. This Prospectus
omits certain of the information contained in the Registration Statement, and
reference is hereby made to the Registration Statement for further information
with respect to the Company and the securities offered hereby. Statements
contained herein concerning the provisions of any documents are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such reference. Items of information omitted from
this Prospectus but contained in the Registration Statement may be obtained
from the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, upon request and payment of the prescribed fee.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, each of which was previously filed by the
Company with the Commission pursuant to Section 13 of the Exchange Act, are
incorporated herein by reference:
a. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995;
b. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996;
c. The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996;
d. The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996.
e. The Company's Report on Form 8-K dated May 17, 1996;
f. The Company's Report on Form 8-K dated May 22, 1996;
g. The Company's Report on Form 8-K dated November 19, 1996.
h. All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal
year ended December 31, 1995; and
i. The description of the Common Stock contained under the
caption "Description of Registrant's Securities to be
Registered" in the Company's registration statement on Form
8-A filed pursuant to Section 12(g) of the Exchange Act.
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All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in any
accompanying Prospectus Supplement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered upon written or oral request of each such person, a
copy of any documents incorporated herein by reference, other than exhibits to
such documents unless such exhibits are specifically incorporated by reference
into the documents that this Prospectus incorporates. Requests for such copies
should be directed to BroadBand Technologies, Inc., Attention: Secretary, 4024
Stirrup Creek Drive, P. O. Box 13737, Durham, North Carolina 27709-3737, (919)
544-0015.
RISK FACTORS
Before purchasing the Offered Securities, prospective investors should consider
carefully the following risk factors relating to the business of the Company
and this offering.
Uncertainty of Commercial Deployment of Fiber-to-the-Curb Local Distribution
Networks
The current infrastructure in the local distribution networks of
telephone companies, the Company's initial primary market, is based on copper
wire. The Company's FLX System works only in fiber-to-the-curb local
distribution networks. There can be no assurance that telephone companies will
pursue the large scale deployment of fiber required for fiber-to-the-curb local
distribution networks, or, if deployment occurs, as to the volume and timing of
such deployment. In the past, telephone companies have been cautious in
deploying new technologies. Significant deployment may be prevented or delayed
by a number of factors, including cost, regulatory barriers, lack of programming
content for Advanced Interactive Services, lack of consumer demand for Advanced
Interactive Services and the availability of alternative technologies. Even if
telephone companies deploy fiber-to-the-curb distribution networks, there can be
no assurance that telephone companies will deploy the Company's products.
Although the Company's FLX System has narrowband transport capability, the
Company believes its primary competitive advantage is the broadband capability
of its system to transmit Advanced Interactive Services or high speed
connections to the Internet or to digital video transmissions. Systems with high
performance broadband capability, such as the Company's FLX System, would be
attractive to telephone companies only to the extent that they plan to offer
such services. Currently, very little programming content exists for video types
of Advanced Interactive Services which utilize the full features of a high
performance local distribution network. Substantial amounts of time, effort and
money will be required to develop such programming content. There can be no
assurance that sufficient programming content for Advanced Interactive Services
will be developed to justify investment in deploying fiber in local distribution
networks, or that programming content will be both attractive to consumers and
offered at prices that will create a mass market. The Company has invested
substantial amounts to develop systems with high performance broadband
capability. However, unless and until telephone companies consider the
capability to transmit Advanced
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Interactive Services or high speed connections to the Internet or to digital
video broadcast to be the primary factor in purchasing decisions for their
local distribution networks, the Company's business will be materially and
adversely affected.
History of Losses; Uncertain Future Profitability; Future Capital Needs
The Company has not been profitable since its inception in 1988 and
was a development stage company until the third quarter of 1993. There can be
no assurance that the Company will achieve profitability. At September 30,
1996, the Company had an accumulated deficit of approximately $124.7 million.
The Company expects to continue to incur substantial losses in future periods.
There can be no assurance that telephone companies or other potential customers
will deploy the Company's FLX System on a widespread basis, or, if deployment
sales are made, that the volume, pricing and timing will be sufficient to
permit the Company to achieve profitability in the future. Based on its current
operating plan, the Company anticipates that its existing cash balances will be
sufficient to meet the Company's cash requirements to support expected growth
in sales volumes for the next several years. However, there can be no assurance
that the Company will not require additional capital before that date. The
Company's capital requirements will depend on numerous factors, including the
progress of the Company's research and development efforts, the resources the
Company devotes to production of its products and the Company's sales and
customer support efforts, and the demand for its products. If adequate
additional funding is not available, or if funding is not available on
satisfactory terms, the business of the Company would be materially adversely
affected.
Dependence on Lucent in the United States and Canada
The Company has an agreement with Lucent Technologies, Inc. ("Lucent"),
whereby Lucent has the exclusive right to sell in the United States and Canada
the Company's Second Generation Product configured for use in connection with
digital loop carriers. The Lucent agreement makes sales of the Company's Second
Generation Product in the United States and Canada substantially dependent on
the efforts of and on the attractiveness to telephone company carriers of the
digital loop carrier product of Lucent with which the Company's Second
Generation Product is designed to operate. The Company anticipates that Lucent
will continue to market other products that compete with the Company's Second
Generation Product. Failure by Lucent to aggressively market the Company's
Second Generation Product, or failure by telephone company customers to purchase
the Lucent digital loop carrier with which the Company's Second Generation
Product is compatible, will have a material adverse effect on the Company and
the value of the Company. The Company is similarly dependent on foreign digital
loop carrier vendors for sales in other countries.
Purchasing Practices of Telephone Companies
In recent years the purchasing practices of telephone companies have
increasingly been characterized by the use of fewer, larger contracts. This
trend, which is expected to intensify as telephone companies merge or otherwise
form strategic alliances, contributes to the variability of the Company's
operating results. Larger purchase contracts typically involve longer
negotiating cycles, require the dedication of substantial amounts of working
capital and other resources and require investments by the Company which may
substantially precede the time periods during which revenues will be recognized
from such investments. Furthermore, in return for large contracts customers
demand more stringent product acceptance criteria, which can also delay revenue
recognition.
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For example, customers have requested that products be priced based on
volume estimates of customers' future requirements, but the failure of such
customers to take delivery of product comparable to volume anticipated could
result in negative margins on product sales. Certain multi-year contracts may
relate to new technologies which may not have been previously deployed on a
large-scale basis. The Company may incur significant initial cost overruns and
losses on such contracts which would be recognized in the quarter in which they
became ascertainable. Future estimates on such contracts are revised
periodically over the lives of the contracts, and such revisions can have a
significant impact on reported earnings in any one quarter. As the Company
announces succeeding generations of its products to better meet the changing
requirements of customers, customers may delay orders of existing products until
the next generation product is available for shipment, or until small volumes of
next generation products are adequately field tested.
Market and Customer Concentration
The primary market on which the Company initially is focusing is
dominated by the Regional Bell Operating Companies ("RBOCs") and GTE. Market
concentration would increase if the two recently announced mergers of RBOCs are
consummated: SBC Communications with Pacific Telesis, and Bell Atlantic with
NYNEX. In the event the Company fails to gain a significant share of the
purchases of these companies or in the event these companies fail to purchase
commercial quantities of electronics and software for fiber-to-the-curb
distribution networks, there can be no assurance that the Company will have
significant alternative purchasers for its product. The Company believes it is
unlikely it will receive substantial deployment orders from every one of the
companies to which it is marketing. Even if demand for the Company's products
from these customers is high, the telephone companies have sufficient bargaining
power to demand low prices, expensive warranties and maintenance obligations,
penalties or other terms and conditions of sale which may adversely affect
operating results of the Company. Although the Company believes there may be
other potential future customers (such as interexchange carriers, alternative
local exchange carriers and cable television companies), substantial sales to
such companies are not expected in the near future and would require substantial
investment by the Company to achieve. There can be no assurance that the Company
will be successful in expanding into such alternative markets.
Management of Growth
The Company is in the process of making a transition from being
primarily devoted to marketing and product development to supplying and
supporting large volumes of quality products to telephone companies on a timely
basis at a reasonable cost to the Company. The Company's ability to achieve this
transition effectively requires it to implement and continually expand
operational and financial systems, recruit additional employees and train and
manage both current and new employees. The Company expects that growth will
place a significant strain on its operational resources and systems. Failure to
effectively manage the transition would have a material adverse effect on the
business of the Company.
Competition
The segment of the telecommunications industry in which the Company
competes is intensely competitive. Many of the Company's competitors have more
extensive engineering, manufacturing, and marketing capabilities and greater
financial and personnel resources than those of the Company. The Company's
ability to compete is dependent upon several factors, including partners'
capabilities, product features, innovation, quality, reliability, service,
support and price. The Company believes its competition may come from companies
that have or are developing products for a number of different types
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of technology. Included are technologies that can be described as Switched
Digital Video ("SDV") with fiber-to-the-curb, Hybrid-Fiber-Coax ("HFC"),
Asymmetric Digital Subscriber Line ("ADSL"), Plain Old Telephone Service
("POTS") over fiber-to-the-curb and cellular broadband. Companies that have
announced plans to develop these technologies are Lucent, ADC
Telecommunications, Alcatel, DSC Communications, Fujitsu, General Instrument,
Nortel, Ericsson-Raynet, Reliance (Rel/Tec), Siemens, Scientific Atlanta,
Pairgain Technologies and Westell Technologies. Some competitors are developing
systems that combine two or more of these different technologies to transmit
different types of services. The Company believes that the principal criteria
for competition in the market for electronics and software for local
distribution networks will be cost competitiveness, flexibility, revenue
generation capability, compatibility with the existing telephone or cable
television networks and upgradeability, as well as customer support. The Company
believes that it competes favorably on these factors for those telephone
companies that consider the capability to transmit high performance Advanced
Interactive Services important, but there can be no assurance the Company will
continue to compete favorably on these factors. Virtually all of the Company's
competitors are more established, benefit from greater market recognition and
have greater financial, technical, production and marketing resources than the
Company. Competition could increase if new companies enter the market or if
existing competitors expand their product lines.
Dependence on Third-Party Suppliers
The Company's strategic initiatives in the manufacturing arena depend
largely on third party suppliers of mechanical and electrical components and
contract assembly of printed circuit packs utilizing surface mount technology
("SMT"). Specifically, the Company uses numerous application specific
integrated circuits ("ASICs") and electro-optical components which constitute
the core technology. These components are all currently single sourced with
highly viable industry leaders. In some instances, the Company retains
exclusive intellectual property rights should the need to dual source dictate.
The Company has engaged in formal contracts with two large SMT contract
manufacturers to provide turnkey sources for all circuit pack assembly and some
functional testing. Additionally, the Company has supply agreements in place
for most component original equipment manufacturers ("OEMs") and distribution
to ensure continued supply and competitive pricing, including, but not limited
to, static random access memory ("SRAM"), dynamic random access memory ("DRAM")
and other key SMT components. Currently, the overall availability of components
is sufficient to meet expected demand. However, there can be no assurance that
this condition will continue and should industry-wide component allocation
occur, the Company could experience assembly delays and thus could incur
shipment delays which would have a materially adverse effect on the Company's
operating results. Furthermore, delays in filling orders may have a material
adverse effect on the Company's credibility with its customers, thereby causing
a permanent loss of sales.
Regulatory Matters
Telephone companies, which constitute the Company's initial primary
market, are subject to extensive regulation by both the federal and state
governments. Many of the statutes and regulations applicable to the telephone
companies have the effect of limiting their economic incentive to deploy
fiber-to-the-curb distribution networks. Although many of these restrictions
recently have been, or are in the process of being, either eliminated or
modified, other restrictions remain, particularly state regulations. The
Federal Communications Commission ("FCC") is considering issuing regulations
under the Telecommunications Reform Act, including regulations with respect to
allocating costs for the provision of video services over integrated networks
by telephone companies. The FCC also is considering revising its regulations
governing telephone and cable inside wire to reflect the use of such wire,
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among other things, for broadband services. The nature of such regulations and
their effect on the Company cannot be determined at this time. Such regulations
could, however, have a material adverse effect on the purchasing decisions of
telephone companies as they relate to purchasing products of the Company.
Government regulations may be a significant adverse factor in purchasing
decisions by the telephone companies as the restrictions limit the potential
profitability of providing video programming and may materially and adversely
affect the telephone companies' demand for the products of the Company. Cable
television companies, which may become a future market for the Company, are
also subject to extensive governmental regulations that may discourage them
from deploying fiber-to-the-curb distribution networks or otherwise cause them
not to purchase products from the Company.
Research and Development
The telecommunications equipment market is characterized by the
continuing advancement of technology and the development of increasingly
sophisticated and powerful systems. To remain competitive, the Company must
dedicate significant resources to the development and enhancement of its
current and future products. There can be no assurance that the Company's
development efforts will be successful.
Industry Standards and Compatibility with Equipment and Software
Widespread commercial deployment of the FLX System by telephone
companies will depend on the determinations by the telephone companies as to
whether the FLX System is compatible with the existing equipment and software
used by the telephone industry as well as standards for future products and
requirements for manufacturing processes, quality controls, suppliers and
components ("Standards"). In the past, the Company has had substantial
deviations from industry Standards and some deviations continue. The Company
continues to adapt its products to changing Standards. Failure to comply
substantially with such Standards in a timely manner, either as they exist at
the present time or as they evolve in the future, would have a material adverse
effect on the business of the Company. In some cases, to be compatible with
equipment or software the Company must obtain the cooperation of competitors
who may seek to prevent or delay such compatibility. Failure of the FLX System
to be compatible with the equipment and operating systems and other software
used by the telephone companies in a timely manner would have a material
adverse effect on the business of the Company.
Dependence on Key Personnel
The Company's future success depends in large part on the continued
service of its key technical and management personnel and on its ability to
continue to attract and retain highly-skilled engineering, manufacturing,
marketing and managerial personnel. The competition for such personnel is
intense, and the loss of key employees, not all of whom are subject to
noncompetition agreements, may have a material adverse effect on the business
of the Company. In addition, there can be no assurance the Company will be able
to enforce noncompetition agreements against employees who have executed such
agreements.
Lack of Protection from Proprietary Rights
The Company relies on a combination of patent, copyright, trademark
and trade secret protection and non-disclosure agreements to establish and
protect its proprietary rights. The Company is not expecting to rely on its
patents as a primary resource in competing in its market. Despite the Company's
efforts to safeguard and maintain its proprietary rights, there can be no
assurance that the Company will be successful in doing so, or that the
Company's
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competitors will not independently develop or patent technologies that are
substantially equivalent or superior to the Company's technologies. In the
event that there is a determination that the Company has infringed a third
party patent, the business of the Company may be materially and adversely
affected.
Risk of International Growth and Foreign Exchange
The Company intends to continue to pursue growth opportunities in
international markets. In many international markets, long-standing
relationships between potential customers of the Company and their domestic
providers, and protective regulations, including local content requirements and
type approvals, create barriers to entry. In addition, pursuit of such
international growth opportunities may require significant investments for an
extended period before returns on such investments, if any, are realized. Such
projects and investments could be adversely affected by reversals or delays in
the opening of foreign markets to new competitors, exchange controls, currency
fluctuations, investment policies, repatriation of cash, nationalization,
social and political risks, taxation, and other factors, depending on the
country in which such opportunity arises. In addition, the laws and policies of
the United States affecting foreign trade, investment and taxation could also
adversely affect such projects and investments. There can be no assurance that
the Company will be able to overcome these barriers.
A significant change in the value of the dollar against the currency
of one or more countries where the Company recognizes substantial revenue or
earnings may materially adversely affect the Company's results. The Company
will attempt to mitigate any such effects through the use of foreign currency
hedging, although there can be no assurance that such attempts will be
successful.
Variability of Quarterly Operating Results and Possible Volatility of
Securities Prices
Based on the recent trading in stocks of other technology companies,
the Company believes that factors such as announcements of new products by the
Company or its competitors and quarterly variations in financial results could
cause the market price of the securities of the Company to fluctuate
substantially. Stock prices for many high technology companies fluctuate widely
for reasons which may be unrelated to operating performance or new product
announcements. Broad market fluctuations, earnings and other announcements of
other companies, general economic conditions or other matters unrelated to the
Company and outside the control of the Company also could affect the market
price of the Company's securities. In addition, the market for the products of
the Company is highly concentrated. Quarterly sales may fluctuate widely based
on the timing of customer orders. Announcements by telephone, cable or other
companies or government agencies of their plans with respect to fiber in the
distribution network or for field trials or deployment orders for products of
competitors of the Company could cause the market price of the Company's
securities to fluctuate substantially. Announcements of regulatory changes, or
the failure to make changes that are anticipated by the telephone, cable
television or other industries or the public, may create public perception that
the business prospects of the Company will be adversely affected. Such a
perception may adversely affect the market price of the securities of the
Company.
Absence of Dividends
The Company has never paid any dividends and does not anticipate
paying dividends in the foreseeable future. In addition, the terms of future
loan agreements and other debt documents may restrict the Company's ability to
pay dividends.
Possible Limitations on Tax Loss Carryforwards
The Company currently has substantial net operating loss carryforwards
("NOLs"). Section 382 of the Internal Revenue Code of 1986, as amended (the
"Code"), imposes limits on the change in ownership percentage of the Company's
stock which, if exceeded, would limit the Company's future use of its NOLs.
The limitations of Section 382 could be triggered by a combination of past and
of future issuances of equity securities by the Company, including issuances of
shares of Common Stock upon exercise of the Warrants. If the ownership
percentage of the Company changes in excess of the limits imposed by this
provision, the annual utilization of NOLs attributable to losses incurred prior
to the change in ownership would generally be limited to an amount determined
by multiplying the fair market value of the Company immediately prior to the
change in ownership percentage by the federal long-term tax exempt interest
rate at the time of the change.
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Possible Anti-Takeover Effect of Certain Charter and Statutory Provisions
The Company's Certificate of Incorporation authorizes the issuance of
preferred stock with designations, rights and preferences determined from time
to time by the Board of Directors, without further action by the stockholders.
These provisions could have the effect of deterring hostile takeovers or
delaying or preventing changes in control or management of the Company and may
limit the price that certain investors may be willing to pay in the future for
shares of the Common Stock.
On November 19, 1996, the Board of Directors of the Company declared
a dividend distribution of one (1) preferred share purchase right (a "Right")
for each share of Common Stock of the Company outstanding as of the Close of
Business on December 23, 1996 (the "Record Date"), each Right initially
representing the right to purchase for $250 (the "Purchase Price") one
one-thousandth (1/1000th) of a share of Preferred Stock of the Company. The
description and terms of the Rights are set forth in a Rights Agreement
between the Company and First Union National Bank, as Rights Agent (the "Rights
Agreement"). The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company without conditioning the offer on the Rights being redeemed or a
substantial number of Rights being acquired, and under certain circumstances
the Rights beneficially owned by such a person or group may become void. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors because, if the Rights would become
exercisable as a result of such merger or business combination, the Board of
Directors may, at its option, any time prior to the time that any person or
group of affiliated or associated persons (subject to certain exceptions)
acquires, or obtains the right to acquire, beneficial ownership of fifteen
percent (15%) or more of the outstanding shares of the Company's Common Stock,
redeem all (but not less than all) of the then outstanding Rights at the
redemption price of one cent ($0.01) per Right, payable in cash, stock or other
consideration deemed appropriate by the Board.
Additionally, the Restated Certificate of Incorporation of the
Company (the "Certificate"), and the Amended and Restated Bylaws of the Company
(the "Bylaws") and applicable provisions of the Delaware General Corporation
Law (the "DGCL") contain several provisions that may make more difficult the
acquisition of control of the Company without the approval of the Board of
Directors of the Company, including provisions to, among other things (i)
classify the Company's Board of Directors into three classes, each of which
(after an initial transition period) serves for staggered three-year periods;
(ii) provide that a director of the Company may be removed by the stockholders
only for cause; (iii) provide that only the President, the Chairman of the
Board, a majority of the Board of Directors or the holders of shares entitled
to cast a majority of the votes entitled to be cast by all outstanding shares
may call special meetings of the stockholders; and (iv) provide that the
stockholders may take action only at a meeting of the stockholders. A
supermajority vote of the holders of shares entitled to cast 75% of the votes
entitled to be cast by all outstanding shares is required to change the
provisions described in (i), (iii) and (iv) above. With certain exceptions,
Section 203 of the DGCL ("Section 203") imposes certain restrictions on mergers
and other business combinations between the Company and any holder of 15% or
more of the Common Stock.
Cautionary Statement Identifying Important Factors That Could Cause the
Company's Actual Results to Differ From Those Projected in Forward Looking
Statements:
The cautionary statements made above and elsewhere herein by the
Company should not be construed as exhaustive or as any admission regarding the
adequacy of disclosures made by the Company prior to the effective date of the
Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Forward
looking statements are beyond the ability of the Company to control and in many
cases the Company cannot predict what factors would cause actual results to
differ materially from those indicated by the forward looking statements.
In connection with the "safe harbor" provisions of the Reform Act,
readers of this document, and any document incorporated by reference herein, are
advised that this document and documents incorporated by reference into this
document contain both statements of historical facts and forward looking
statements. Forward looking statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
indicated by the forward looking statements. Examples of forward looking
statements include, but are not limited to (i) projections of revenues, income
or loss, earnings or loss per share, capital expenditures, dividends, capital
structure and other financial items, (ii) statements of the plans and objectives
of the Company or its management or Board of Directors, including the
introduction of new products, or estimates or predictions of actions by
customers, suppliers, competitors or regulatory authorities, (iii) statements of
future economic performance and (iv) statements of assumptions underlying other
statements and statements about the Company or its business.
This Prospectus and any documents incorporated by reference herein
also identify important factors which could cause actual results to differ
materially from those indicated by the forward looking statements. These risks
and uncertainties include the factors described above and other factors which
are described herein and/or in documents incorporated by reference herein.
9
<PAGE> 13
USE OF PROCEEDS
The Selling Holders will receive all of the proceeds from the sale of
the Offered Securities. The Company will receive $41,750,000 if all the
Warrants are exercised in full. Any proceeds received by the Company upon the
exercise of any of the Warrants will be used by the Company for general
corporate purposes.
THE COMPANY
The Company designs, manufactures, markets and supports a sophisticated
electronics and software platform for the telecommunications industry, focusing
primarily on operators of local exchange telephone networks in the United
States. During 1994, 1995, and 1996, the Company expanded its marketing efforts
in Canada, Europe and the Asia/Pacific markets. Its platform (the "FLX
System") provides operators of fiber based distribution networks with the
capability to transmit voice, video and data in a wide array of advanced,
interactive entertainment, information, communications, transactions and other
services ("Advanced Interactive Services") to residential and business
subscribers. A network utilizing the Company's FLX System could transmit
applications such as high speed access to the Internet and digital video
broadcast.
The Company's second generation product is a "global core" platform
that enables a Digital Loop Carrier (DLC) system providing the telephony
interfaces to interface with the Company's FLX-2500 System, which provides
broadband video and data interfaces and switching, as well as transport
technology (the "Second Generation Product"). The Company believes this
provides the flexibility to partner with some of the world's most experienced
telecommunication providers. In North America, the DLC Access System partner
is Lucent. In France, SAT, a SAGEM Company, will provide the DLC Access System
and in Korea, Samsung Electronics will provide the DLC Access System.
Although the Company's first generation products included the
telephony interfaces, the Company believes the flexibility of its Second
Generation Product, worldclass suppliers as partners providing the telephony
interfaces and a more cost competitive platform make the FLX-2500 an attractive
single, integrated end-to-end access solution for network operators.
The Company was organized in the state of North Carolina in July 1988,
and reincorporated in the state of Delaware in December 1988. The Company's
executive offices are located at 4024 Stirrup Creek Drive, P. O. Box 13737,
Durham, NC 27709-3737. Its telephone number is (919) 544-0015.
DESCRIPTION OF WARRANTS
The Company issued the Bell Atlantic Warrants to Bell Atlantic
Corporation, a customer of the Company, pursuant to an agreement dated as of
March 30, 1995 (the "Warrant Agreement") in consideration for a purchase price
of $7 million. The Bell Atlantic Warrants subsequently were transferred by
Bell Atlantic Corporation to Bell Atlantic Investments, Inc. The Bell Atlantic
Warrants are exercisable for 1,000,000 shares, in whole or in part, at an
exercise price of $41.75 per share from time to time and at any time up to
March 31, 2001.
The Warrants contain antidilution provisions pursuant to which the
exercise price and the number of shares issuable are adjustable to reflect
stock dividends, splits, combinations and other corporate transactions.
10
<PAGE> 14
Holders of the Warrants are entitled to certain rights with respect to
the registration under the Securities Act of the Warrant Shares under the
Warrant Agreement. The Warrant Agreement grants to the warrantholders both
demand and piggyback registration rights. The Company has filed a registration
statement of which this Prospectus forms a part pursuant to such piggyback
registration rights. The Company has agreed to pay the expenses of such
registration.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue up to 30,000,000 shares of Common
Stock, par value $0.01 per share, and 7,500,000 shares of Preferred Stock, par
value $0.01 per share. As of January 29, 1997, there were 13,255,779 shares
of Common Stock outstanding held by approximately 8,000 holders of record and
beneficial owners. There are no shares of Preferred Stock outstanding. In
addition, as of January 29, 1997 the Company had 2,521,701 shares reserved for
issuance upon the exercise of outstanding options and 1,225,000 shares reserved
for issuance upon the exercise of outstanding warrants, including the 1,000,000
shares of Common Stock issuable upon the exercise of the Bell Atlantic Warrants.
Common Stock
Each holder of Common Stock is entitled to one vote for each share held
of record on each matter submitted to a vote of shareholders. Subject to
contractual restrictions on dividends and to preferences which may be granted to
holders of Preferred Stock, each holder of Common Stock is entitled to share
ratably in distributions to shareholders and to receive ratably such dividends
as may be declared by the Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, each holder of Common Stock is entitled to share ratably in all assets
remaining after payments of liabilities and the liquidation preference of
outstanding Preferred Stock, if any. Holders of Common Stock have no
conversion, preemptive rights or other rights to subscribe for additional shares
of Common Stock, and there are not redemption rights or sinking fund provisions
with respect to the Common Stock. The outstanding shares of Common Stock are,
and the shares issuable upon conversion will be, when issued upon conversion,
validly issued, fully paid and nonassessable.
The rights, preferences and privileges of the holders of Common Stock
are subject to the rights of the holders of shares of any class or series of
Preferred Stock that the Company may designate and issue in the future, and
except for such rights, preferences and privileges as the holders of Preferred
Stock may have, the holders of Common Stock have all powers, preferences and
rights conferred upon owners of shares of capital stock under the laws of the
State of Delaware.
Preferred Stock
The Board of Directors, without further action by the holders of
Common Stock but subject to any limitations prescribed by law, may issue shares
of Preferred Stock in one or more series and may fix or alter the rights,
preferences, privileges and restrictions, including voting rights, redemption
provisions (including sinking fund provisions), dividend rights, dividend
rates, liquidation preferences and conversion rights, and the description and
number of shares constituting wholly unissued shares of Preferred Stock. The
Board of Directors, without further shareholder approval but subject to any
limitations prescribed by law, can issue Preferred Stock with voting and
conversion rights which could adversely affect the voting power of the holders
of Common Stock. No shares of Preferred Stock currently are outstanding.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificate will be distributed. The Rights will separate from the Common Stock
and a distribution of Rights Certificates will occur (the "Distribution Date")
upon the earlier of (i) ten (10) days following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of fifteen
percent (15%) or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), or (ii) ten (10) business days (or such later date as the
Board shall determine) following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning fifteen
percent (15%) or more of such outstanding shares of Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on November 19, 2006, unless earlier redeemed
by the Company. Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
In the event that, at any time following the Distribution Date, any
Person (subject to certain exceptions) becomes an Acquiring Person except
pursuant to an offer for all outstanding shares of Common Stock which a
majority of the members of the Board of Directors who are not officers of the
Company and who are not representatives, nominees, affiliates or associates of
an Acquiring Person determines to be fair to, and otherwise in the best
interests of, stockholders, each holder of a Right will thereafter have the
right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
(2) times the exercise price of the Right. Notwithstanding any of the
foregoing, if any Person (subject to certain exceptions) becomes an Acquiring
Person (except pursuant to an offer for all outstanding shares of Common Stock
as described above), all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void.
The Purchase Price payable, and the number of units of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or securities convertible
into Preferred Stock or equivalent preferred stock at less than the current
market price of the Preferred Stock, or (iii) upon the distribution to holders
of the Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
Each holder of Preferred Stock is entitled to one vote for each share
held of record on each matter submitted to a vote of shareholders. Each holder
of Preferred Stock is entitled to a quarterly dividend equal to the greater of
Ten Dollars ($10.00) or, subject to adjustment, 1,000 times the aggregate per
share amount of all cash dividends and 1,000 times the aggregate per share
amount of the fair market value of all non-cash dividends (subject to the
certain exceptions) on the Common Stock. In the event of a liquidation,
dissolution or winding up of the Corporation, no distribution shall be made to
the holders of stock ranking junior to the Preferred Stock unless, prior
thereto, the holders of Preferred Stock have received $1,000 per share, plus
accrued and unpaid dividends to the date of distribution. Holders of Preferred
Stock have no conversion, preemptive rights or other rights to subscribe for
additional shares of Preferred Stock, and there are not redemption rights or
sinking fund provisions with respect to the Preferred Stock.
11
<PAGE> 15
The issuance of shares of Preferred Stock under certain circumstances
could have the effect of delaying or preventing a change of control or other
corporate action.
Certain Charter Provisions
The Company's Restated Certificate of Incorporation (the "Certificate
of Incorporation") authorizes the issuance of a preferred stock with
designations, rights, and preferences determined from time to time by the Board
of Directors, without further action by the stockholders.
The Company's Certificate of Incorporation provides that the
stockholders may not take action by written consent as Delaware law would
otherwise permit, but may act only at an annual or special meeting of the
stockholders. The affirmative vote of the holders of shares of the Company's
capital stock entitled to cast 75% or more of the aggregate number of votes
entitled to be cast by all holders of outstanding shares of the Company's
capital stock is required to change this provision of the Certificate of
Incorporation.
The Company's Amended and Restated Bylaws contain provisions which
provide for a classified Board of Directors consisting of three classes with
directors serving staggered three-year terms. Therefore, only one third of the
directors are subject to election by the stockholders each year. The
affirmative vote of the holders of the Company's capital stock which are
entitled to cast at least 75% of the aggregate number of votes entitled to be
cast by all holders of the Company's outstanding capital stock is required to
amend this provision of the Amended and Restated Bylaws. Under Delaware law, if
a Board of Directors is classified, a director may not be removed except for
cause unless the corporation's certificate of incorporation provides otherwise.
The Company's Certificate of Incorporation does not contain a provision altering
this statutory provision.
The Company's Amended and Restated Bylaws provide that a special
meeting of the stockholders may be called by the President or the Chairman of
the Board or at the request of a majority of the Board of Directors or the
holders of shares entitled to cast a majority of the votes entitled to be cast
by all outstanding shares. The affirmative vote of the holders of the Company's
capital stock which are entitled to cast at least 75% of the aggregate number of
votes entitled to be cast by all holders of the Company's outstanding capital
stock is required to amend this provision of the Amended and Restated Bylaws.
These provisions in the Company's Certificate of Incorporation and
Amended and Restated Bylaws could have the effect of deterring hostile takeovers
or delaying or preventing changes in control or management of the Company or the
removal of the incumbent Board of Directors.
The Company has also included in its Certificate of Incorporation
provisions to eliminate the personal liability of its directors to the Company
or its stockholders for monetary damages to the fullest extent permitted under
Delaware law. The Company's Amended and Restated Bylaws include provisions
indemnifying the Company's officers and directors to the fullest extent
permitted by Delaware law (including without limitation the advancement of
expenses for such officers and directors) and granting the Company the power to
(i) indemnify, and advance expenses to, its employees and agents to the fullest
extent permitted by Delaware law, and (ii) purchase and maintain insurance for
its directors, officers, employees and agents to the fullest extent permitted by
Delaware law. The Company does not have any indemnification agreements with any
of its directors or officers.
12
<PAGE> 16
Certain Provisions of Delaware Law
The Company is a Delaware corporation and is subject to Section 203 of
the Delaware General Corporation Law. Section 203 provides, subject to certain
exceptions, that a Delaware corporation may not engage in a "business
combination" (as defined under Delaware law) with an "interested stock holder"
(defined generally as a person owning 15% or more of the corporation's
outstanding voting stock) for three years following the date such person became
an interested stockholder unless: (i) before such person became an interested
stockholder, the board of directors of the corporation approved the transaction
in which the interested stockholder became an interested stockholder or
approved the business combination, (ii) upon consummation of the transaction
that resulted in the interested stockholder becoming an interested stockholder,
the interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced (excluding stock
held by directors who are also officers of the corporation and by employee
stock plans that do not provide employees with the rights to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer), or (iii) at or subsequent to the time the person
became an interested stockholder, the business combination is approved by the
board of directors of the corporation and approved at a meeting of stockholders
by the affirmative vote of the holders of at least 66 2/3% of the outstanding
voting stock of the corporation that is not owned by the interested
stockholder. For purposes of Section 203, a "business combination" includes a
merger, asset sale or other transaction resulting in a financial benefit to the
interested stockholder and an "interested stockholder" is defined as any person
who is: (i) the owner of 15% or more of the outstanding voting stock of the
corporation or (ii) an affiliate or associate of the corporation who was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within the three-year period immediately prior to the date on which it is
sought to be determined whether such person is an interested stockholder.
The foregoing provisions could delay or frustrate a change in control
of the Company. The provisions could also discourage or make more difficult a
merger, tender offer or proxy contest, even if such event would be favorable to
the interests of stockholders.
Transfer Agent
The transfer agent for the Common Stock is First Union National Bank
of North Carolina.
SELLING HOLDERS
This Prospectus relates to the offering for resale of the Warrant
Shares by the holders listed below and other holders identified in supplements
to this Prospectus (the "Selling Holders").
The Warrants were issued in private placements exempt from
registration pursuant to Section 4(2) of the Securities Act in March 1995.
The following table sets forth certain information with regard to the
beneficial ownership by the holder listed below of the Common Stock beneficially
owned by it and to be sold by it hereunder as of the date of this Prospectus.
Such information has been obtained from such holder. Bell Atlantic Corporation
is a customer of the Company.
13
<PAGE> 17
<TABLE>
<CAPTION>
Name of Selling Holder Common Stock Common Stock
Owned Prior to Offered Hereby
Offering (1) (2)
<S> <C> <C>
Bell Atlantic 1,000,000 1,000,000
Investments, Inc.
TOTAL 1,000,000 1,000,000
</TABLE>
___________________
(1) Includes Common Stock as to which the Selling Holder has sole or
shared voting or investment power and Common Stock issuable pursuant
to options and/or warrants exercisable within the next 60 days. Also
includes the shares of Common Stock which are issuable upon exercise
of the Warrants held by such Selling Holder. The number of shares of
Common Stock issuable upon exercise of the Warrants is subject to
adjustment under certain circumstances. See "Description of
Warrants". Accordingly, the number of shares of Common Stock issuable
upon exercise of the Warrants may increase or decrease from time to
time.
(2) Assumes the full exercise of the Warrants owned by such Selling Holder
and the offering of such shares by such Selling Holder pursuant to the
Registration Statement of which this Prospectus forms a part. The
number of shares of Common Stock issuable upon exercise of the
Warrants is subject to adjustment under certain circumstances. See
"Description of Warrants." Accordingly, the number of shares of
Common Stock issuable upon exercise of the Warrants may increase or
decrease from time to time.
Because the Selling Holders may, pursuant to this Prospectus, offer
all or some portion of the Offered Securities from time to time, no estimate
can be given as to the amount of the Offered Securities that will be held by
the Selling Holders upon termination of any such sales. In addition, the
Selling Holders identified above may have sold, transferred or otherwise
disposed of all or a portion of the Warrants since the date on which they
provided the information regarding the Warrants, in transactions exempt from
the registration requirements of the Securities Act. See "Plan of
Distribution."
Only Selling Holders identified above who beneficially own the Offered
Securities set forth opposite each such Selling Holder's name in the foregoing
table on the effective date of the Registration Statement of which this
Prospectus forms a part may sell such Offered Securities pursuant to the
Registration Statement. The Company may from time to time include additional
Selling Holders in supplements to this Prospectus.
PLAN OF DISTRIBUTION
The Selling Holders may from time to time effect the sale of their
Offered Securities in one or more transactions in the public market (which may
include a firm underwritten offering) at fixed prices, at prices and at terms
then prevailing or at prices related to the then-current market price, or in
negotiated transactions or otherwise. The Offered Securities may be sold
pursuant to the Registration Statement of which this Prospectus is a part,
another registration statement or pursuant to an exemption from registration,
including Rule 144.
14
<PAGE> 18
The Offered Securities may be sold in transactions effected on The
Nasdaq Stock Market, in other over-the-counter markets, on any national
securities exchange or other quotation service on which the Offered Securities
may be listed or quoted at the time of sale, or otherwise than on such
exchanges or over-the-counter markets. If all or a portion of the Offered
Securities are sold in such transactions, they may be sold: (a) by means of a
block trade in which the broker or dealer so engaged will attempt to sell the
Registrable Securities as agent but may position and resell a portion of the
block as principal to facilitate the transactions; (b) through purchases by a
broker (or, in the case of an underwritten offering, an underwriter or
underwriters ("Underwriter" or "Underwriters")) as principal and resale by such
broker (or Underwriter) for its account pursuant to this Prospectus; (c) by
means of an exchange distribution in accordance with the rules of such
exchange; (d) through ordinary brokerage transactions and transactions in which
the broker solicits purchasers; (e) through the writing of options; (f)
directly to purchasers by the holders of the Warrants; (g) by means of a
combination of the foregoing methods; or (h) otherwise.
In effecting sales, brokers, dealers or Underwriters, as the case may
be, engaged by the Selling Holders may arrange for other brokers, dealers or
Underwriters to participate. The Selling Holders and any brokers, dealers or
Underwriters engaged by the Selling Holders may receive commissions or discounts
from the Selling Holders in amounts to be negotiated. Such brokers, dealers or
Underwriters, as the case may be, and any other participating brokers, dealers
or Underwriters, as well as the Selling Holders, may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales and any profit on the sale of Offered Securities and any discounts or
commission received by any Underwriter, broker or dealer may be deemed to be
underwriting discounts and commissions under the Securities Act.
To the best knowledge of the Company, there are currently no plans,
arrangements or understandings between any Selling Holders and any broker,
dealer or Underwriter regarding the sale of the Offered Securities by the
Selling Holders. There is no assurance that any Selling Holder will sell any or
all of Offered Securities offered by it hereunder or that any such Selling
Holder will not transfer, devise or gift such Offered Securities by other means
not described herein.
At the time a particular offering of the Offered Securities is made, a
Prospectus Supplement, if required, will be distributed which will set forth the
aggregate amount and type of Offered Securities being offered and the terms of
the offering, including the name or names or any underwriters, broker/dealers or
agent, any discounts, commissions and other terms constituting compensation from
the Selling Holders and any discounts, commissions or concessions allowed or
reallowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if
applicable, the Offered Securities will be offered or sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Offered Securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions or any exemption
from registration or qualification is available and is complied with.
The Selling Holders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Offered Securities by the
Selling Holders. The foregoing may affect the marketability of such securities.
15
<PAGE> 19
The outstanding Common Stock of the Company is listed for trading on
The Nasdaq National Market, and the Company currently intends to apply for
listing of the Warrant Shares on the Nasdaq National Market.
Pursuant to the Warrant Agreement, each of the Company and the Selling
Holders will be indemnified by the other against certain liabilities, including
certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith. The Company has agreed to pay expenses
incident to the registration of the Offered Securities. The Selling Holders
will, however, pay any brokers' commissions and underwriting discounts and
commissions.
EXPERTS
The financial statements of the Company as of December 31, 1995 and
1994 and for the three years in the period ended December 31, 1995 appearing in
the Annual Report on Form 10-K for the fiscal year ended December 31, 1995
incorporated herein by reference have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the Warrants and of the Common Stock offered hereby
will be passed upon for the Company by Kilpatrick Stockton LLP (formerly
known as Petree Stockton, L.L.P), Raleigh, North Carolina. As of January 29,
1997, attorneys at Kilpatrick Stockton LLP owned 1,100 shares of the
Common Stock of the Company.
INDEMNIFICATION AND LIMITATION OF LIABILITY
The Bylaws of the Company provide that the Company shall indemnify the
directors and officers of the Company against liability (and expenses related
thereto) arising out of their status as directors and officers to the extent
permitted by law. Additionally, certain mandatory indemnification rights are
available under the Delaware General Corporation Law (the "DGCL") to officers
and directors who are wholly successful in the defense of any proceeding to
which such person was a party by virtue of his position as a director or
officer.
Further, as permitted by the DGCL, the Certificate of Incorporation of
the Company includes a provision limiting the personal liability of its
directors for monetary damages for certain breaches of their duties as directors
to the extent permitted under the DGCL.
Such limitation of liability pursuant to state law does not affect
liability, if any, arising under the federal securities laws. Further, insofar
as indemnification or limitation of monetary damages for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to contractual provisions or otherwise, the
Company has been advised that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
16
<PAGE> 20
PROSPECTUS
BROADBAND TECHNOLOGIES, INC.
February 5, 1997
TABLE OF CONTENTS
PAGE
<TABLE>
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Information by Reference . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Description of Warrants . . . . . . . . . . . . . . . . . . . . . . 10
Description of Capital Stock . . . . . . . . . . . . . . . . . . . 11
Selling Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . 14
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Indemnification and Limitation of Liability . . . . . . . . . . . . 16
</TABLE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with this offering, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell or
solicitation of an offer to buy, any securities other than the registered
securities to which it relates, or an offer to or solicitation of any person in
any jurisdiction in which such offer or solicitation would be unlawful. The
delivery of this Prospectus at any time does not imply that information herein
is correct as of any time subsequent to its date.
17
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses of this offering (other than underwriting
discounts and commissions) will be paid by the Registrant and are as follows:
<TABLE>
<S> <C>
Registration Fee-Securities and Exchange Commission $14,396.55
----------
Legal Fees and Expenses $ 5,000.00
----------
Printing Expenses $ 5,000.00
----------
Accounting Fees and Expenses $ 5,000.00
----------
Miscellaneous $ 5,000.00
----------
Total $34,396.55
==========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Article VII of the Bylaws of the Registrant provides as follows:
1. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved
in any action, suit or proceeding, whether civil, criminal,
administrative, investigative or otherwise (hereinafter a
"Proceeding"), by reason of the fact that he or she is or was (a) a
director of the corporation, (b) an officer of the corporation elected
or appointed by the stockholders or the board of directors, or (c)
serving, at the request of the corporation as evidenced by a vote of
the board of directors prior to the occurrence of the event to which
the indemnification relates, as a director, officer, employee or agent
of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to an employee benefit
plan (such persons described in (a), (b) and (c) are sometimes
hereinafter referred to as an "Indemnitee"), whether the basis of such
Proceeding is alleged action in an official capacity as such a director
or officer of the corporation or as such other director, officer,
employee or agent or in any other capacity while serving as such a
director or officer of the corporation or as such other director,
officer, employee or agent, shall be indemnified and held harmless by
the corporation to the fullest extent authorized by the General
Corporation Law of Delaware, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader
indemnification rights than permitted prior thereto), against all
expense, liability and loss (including, but not limited to, attorneys'
fees, judgments, fines, ERISA, excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by such Indemnitee
in connection therewith and such indemnification shall continue as to
an Indemnitee who has ceased to be such a director, officer, employee
or agent and shall inure to the benefit of the Indemnitee's heirs,
executors and administrators; provided, however, that, except as
provided in Section 3 of this Article with respect to Proceedings to
enforce rights to indemnification, the corporation shall indemnify any
such Indemnitee in connection with a Proceeding (or part thereof)
initiated by such Indemnitee only if such Proceeding (or part thereof)
was authorized or ratified by the board of directors of the
corporation. The right to indemnification conferred in this Article
shall be a contract right and shall include the right to be paid by the
corporation the expenses incurred in defending any Proceeding in
advance of its final disposition (hereinafter an "Advancement of
Expenses");
II-1
<PAGE> 22
provided, however, that, if the General Corporation Law of Delaware
requires, an Advancement of Expenses incurred by an Indemnitee in his
or her capacity as a director or officer of the corporation (but not in
any other capacity in which service was or is rendered by such
Indemnitee, including, without limitation, service to an employee
benefit plan) shall be made only upon delivery to the corporation of an
undertaking (hereinafter an "Undertaking"), by or on behalf of such
Indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further
right to appeal (hereinafter a "Final Adjudication") that such
Indemnitee is not entitled to be indemnified for such expenses under
this Article or otherwise.
2. Indemnification of Employees and Agents of the Corporation.
The corporation may, to the extent authorized from time to time by the
board of directors, grant rights to indemnification, and to an
Advancement of Expenses, to any employee or agent of the corporation to
the fullest extent of the provisions of this Article.
3. Right of Indemnitee to Bring Suit. If a claim under this
Article is not paid in full by the corporation within sixty (60) days
after a written claim has been received by the corporation, except in
the case of a claim for an Advancement of Expenses, in which case the
applicable period shall be twenty (20) days, the Indemnitee may at any
time thereafter bring suit against the corporation to recover the
unpaid amount of the claim. If the Indemnitee is successful in whole
or in part in any such suit, or in a suit brought by the corporation to
recover an Advancement of Expenses pursuant to the terms of an
Undertaking, the Indemnitee shall also be entitled to be paid the
expense of prosecuting or defending such suit. In any suit brought by
the Indemnitee to enforce a right to indemnification hereunder (but not
in a suit brought by the Indemnitee to enforce a right to an
Advancement of Expenses), it shall be a defense that the Indemnitee has
not met the applicable standard of conduct set forth in the General
Corporation Law of Delaware. In addition, in any suit by the
corporation to recover an Advancement of Expenses pursuant to the terms
of an Undertaking, the corporation shall be entitled to recover such
expenses upon a Final Adjudication that the Indemnitee has not met the
applicable standard of conduct set forth in the General Corporation Law
of Delaware. Neither the failure of the corporation (including its
board of directors, independent legal counsel, or stockholders) to have
made a determination prior to the commencement of such suit that
indemnification of the Indemnitee is proper in the circumstances
because the Indemnitee has met the applicable standard of conduct set
forth in the General Corporation Law of Delaware, nor an actual
determination by the corporation (including its board of directors,
independent legal counsel, or stockholders) that the Indemnitee has not
met such applicable standard of conduct, shall create a presumption
that the Indemnitee has not met the applicable standard of conduct or,
in the case of such a suit brought by the Indemnitee, be a defense to
such suit. In any suit brought by the Indemnitee to enforce a right to
indemnification or to an Advancement of Expenses hereunder, or by the
corporation to recover an Advancement of Expenses pursuant to the terms
of an Undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such Advancement of Expenses, under
this Article or otherwise shall be on the corporation.
4. Non-Exclusivity of Rights. The rights to indemnification
and to Advancement of Expenses conferred in this Article shall not be
exclusive of any other right which any person may have or hereafter
acquire under these bylaws, the certificate of incorporation or any
II-2
<PAGE> 23
statute, agreement, vote of stockholders, of disinterested directors or
otherwise.
5. Insurance. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent
of the corporation or any director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such
expense, liability or loss under the General Corporation Law of
Delaware.
6. Severability. If this Article or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction,
then the corporation shall nevertheless indemnify each director or
officer and may indemnify each employee or agent of the corporation as
to costs, charges and expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or
investigative, including an action by or in the right of the
corporation, to the fullest extent permitted by any applicable portion
of this Article that shall not have been invalidated and to the fullest
extent permitted by applicable law.
Reference is made to Article 10 of the Certificate of Incorporation of
the Registrant, which provides as follows:
10. A member of the Board of Directors of the corporation
shall not be personally liable to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation
Law of Delaware or any successor provision, or (iv) for any transaction
from which such director derived an improper personal benefit. If the
General Corporation Law of Delaware is amended after the effective date
of this Restated Certificate of Incorporation to authorize corporate
action further eliminating or limiting the personal liability of
directors, then the liability of a director of the corporation shall be
eliminated or limited to the fullest extent permitted by the General
Corporation Law of Delaware, as so amended.
Any repeal or modification of this Article 10 (i) by the
stockholders of the corporation or (ii) by an amendment to the General
Corporation Law of Delaware (unless such statutory amendment
specifically provides to the contrary) shall not adversely affect any
right or protection, existing at the time of such repeal or
modification with respect to any acts or omissions occurring either
before or after such repeal or modification, of a person serving as a
director at the time of such repeal or modification.
Reference is also made to Section 145 of Title 8 of the Delaware Code,
which provides as follows:
(a) A corporation shall have power to indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the corporation,
or is or was
II-3
<PAGE> 24
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause
to believe that his conduct was unlawful.
(b) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of
the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b). Such determination shall
be made (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2)
if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative,
or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
director or
II-4
<PAGE> 25
officer to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the corporation as authorized
in this section. Such expenses (including attorneys' fees) incurred by
other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether
or not the corporation would have the power to indemnify him against
such liability under the provisions of this section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee, or agent
with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interests of the corporation" as
referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a
II-5
<PAGE> 26
corporation's obligation to advance expenses (including attorneys'
fees).
Further, the Company maintains a directors' and officers' liability
policy which insures such persons against claims arising from certain acts or
decisions by them in their capacities as directors and officers of the Company,
subject to certain exclusions and deductible and maximum amounts.
<TABLE>
<CAPTION>
Item 16. Exhibits.
<S> <C>
3.1* Amended and Restated Certificate of Incorporation of Registrant (Incorporated by reference to
Exhibit 3.1 to the Registrant's Registration Statement on Form S-1, Registration Number 33-
62754, declared effective June 30, 1993)
3.2* Amended and Restated Bylaws of Registrant (Incorporated by reference to exhibit to the
Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 1994)
4.1* Amended and Restated Certificate of Incorporation of Registrant (Included as Exhibit 3.1 to
this Registration Statement)
4.2* Amended and Restated Bylaws of Registrant (Included as Exhibit 3.2 to this Registration
Statement)
4.3* Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-1, Registration Number 33-62754, declared effective June 30,
1993)
4.4* Warrant Agreement, dated as of March 30, 1995, by and between the Registrant and Bell Atlantic
Corporation (Incorporated by reference to Exhibit to Registrant's Current Report on Form 8-K,
Commission File Number 0-21766, dated March 30, 1995)
4.5* Form of Warrant Certificate (contained in Exhibit 4.4)
4.6* Rights Agreement, dated as of November 19, 1996, by and between BroadBand Technologies, Inc., and
First Union National Bank, as Rights Agent, including the form of Certificate of Designation,
Preferences and Rights of Series A Preferred Stock as Exhibit A, the form of Rights Certificate
as Exhibit B, and the Summary of Rights as Exhibit C (Incorporated by reference to Exhibit 4 to
Registrant's Current Report on Form 8-K, Commission File Number 0-21766, dated November 19, 1996)
5.1* Opinion of Petree Stockton, L.L.P.
23.1* Consent of Petree Stockton, L.L.P. (contained in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
24.1* Power of Attorney (Contained on Signature Page of Registration Statement previously filed)
- ------------
* Previously filed
</TABLE>
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement;
II-6
<PAGE> 27
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(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 (a)(1)(i) and (a)(1)(ii)
do not apply if the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 as may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 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
II-7
<PAGE> 28
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
II-8
<PAGE> 29
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Durham, State of North Carolina, on February 5,
1997.
BROADBAND TECHNOLOGIES, INC.
By: /s/ Salim A. L. Bhatia
----------------------------
Salim A. L. Bhatia
President
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities indicated on the 5th day of February, 1997.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Salim A. L. Bhatia President (principal executive officer) and
----------------------------------- Director
Salim A. L. Bhatia
/s/ Timothy K. Oakley Vice President (principal financial officer
----------------------------------- and principal accounting officer)
Timothy K. Oakley
* Chairman of the Board, Director
-----------------------------------
John R. Hutchins, III
* Director
-----------------------------------
J. Richard Jones
* Director
-----------------------------------
Fredric R. Boswell
* Director
-----------------------------------
Richard P. Clark
* Director
-----------------------------------
Charles T. Lee
* Director
-----------------------------------
Lawrence A. McLernon
* By: /s/ Salim A. L. Bhatia
------------------------------
Salim A. L. Bhatia
Attorney-in-fact
</TABLE>
II-9
<PAGE> 30
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
No. Description Page No.
- ------- ----------- ----------
<S> <C>
3.1* Amended and Restated Certificate of Incorporation of Registrant
(Incorporated by reference to Exhibit 3.1 to the Registrant's
Registration Statement Form S-1, Registration Number 33-62754,
declared effective June 30, 1993)
3.2* Amended and Restated Bylaws of Registrant (Incorporated by
reference to exhibit to the Registrant's Quarterly Report filed
on Form 10-Q for the period ended June 30, 1994)
4.1* Amended and Restated Certificate of Incorporation of Registrant
(Included as Exhibit 3.1 to this Registration Statement)
4.2* Amended and Restated Bylaws of Registrant (Included as Exhibit
3.2 to this Registration Statement)
4.3* Form of Common Stock Certificate (Incorporated by reference to
Exhibit 4.1 to the Registrant's Registration Statement on Form
S-1, Registration Number 33-62754, declared effective June 30,
1993)
4.4* Warrant Agreement, dated as of March 30, 1995, by and between
the Registrant and Bell Atlantic Corporation (Incorporated by
reference to Exhibit to Registrant's Current Report on Form
8-K, Commission File Number 0-21766, dated March 30, 1995)
4.5* Form of Warrant Certificate (contained in Exhibit 4.4)
4.6* Rights Agreement, dated as of November 19, 1996, by and between
BroadBand Technologies, Inc., and First Union National Bank, as
Rights Agent, including the form of Certificate of Designation,
Preferences and Rights of Series A Preferred Stock as Exhibit
A, the form of Rights Certificate as Exhibit B, and the
Summary of Rights as Exhibit C (Incorporated by reference to
Exhibit 4 to Registrant's Current Report on Form 8-K,
Commission File Number 0-21766, dated November 19, 1996)
5.1* Opinion of Petree Stockton, L.L.P.
23.1* Consent of Petree Stockton, L.L.P. (contained
in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
24.1* Power of Attorney (Contained on Signature Page of
Registration Statement previously filed)
- ------------
* Previously filed
</TABLE>
II-10
<PAGE> 1
Exhibit 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-10443) and
related prospectus of BroadBand Technologies, Inc. for the registration of the
1,000,000 shares of its common stock issuable upon exercise of outstanding
warrants and to the incorporation by reference therein of our report dated
February 7, 1996, with respect to the financial statements of BroadBand
Technologies, Inc. included in its Annual Report (Form 10-K) for the year ended
December 31, 1995, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Raleigh, North Carolina
February 5, 1997
