As filed with the Securities and Exchange Commission on November 8, 2001
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
______________________
KOPIN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2833935
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
695 Myles Standish Boulevard, Taunton, Massachusetts 02780 (508) 824-6696
(Address and telephone number of registrant's principal executive offices)
John C.C. Fan
Chairman of the Board of Directors, President and Chief Executive Officer
Kopin Corporation
695 Myles Standish Boulevard
Taunton, Massachusetts 02780
(508) 824-6696
(Name, address, including ZIP code, and telephone number, including area code,
of agent for service and registrant's principal executive offices)
Copy to:
John J. Concannon III, Esq.
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
(617) 951-8000
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
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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, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities Maximum Aggregate Amount of
to be Registered Offering Price (1)(2) Registration Fee
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Common Stock, $0.01 par value.......................... (3)(4) (3)
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Debt Securities........................................ (3) (3)
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Total.................................................. $150,000,000 $37,500
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(1) There are being registered hereunder such indeterminate number of shares of
common stock and such principal amount of debt securities or issue price of debt
securities issued at original issue discount as shall have an aggregate offering
price not to exceed $150,000,000.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended. In no
event will the aggregate offering price of all shares of common stock issued
from time to time pursuant to this registration statement exceed $150,000,000 or
the equivalent thereof in one or more foreign currencies, foreign currency
units, or composite currencies.
(3) Not required to be included in accordance with General Instruction II.D. of
Form S-3 under the Securities Act.
(4) The aggregate amount of common stock registered hereunder is limited to that
which is permissible under Rule 415(a)(4)(ii) under the Securities Act.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant 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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PROSPECTUS
The information contained in this prospectus is not complete and may be
changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
Subject to Completion, dated November 8, 2001
$150,000,000
KOPIN CORPORATION
Common Stock, $0.01 par value
Debt Securities
We will provide the specific terms for each of these securities and their
offering prices in supplements to this prospectus. In the case of common stock,
these terms will include the number of shares offered and their offering prices.
In the case of debt securities, these terms will include, as applicable, the
specific designation, aggregate principal amount, maturity, rate of formula of
interest, premium, and terms for redemption.
We may sell any combination of these securities, up to a total dollar
amount of $150,000,000, from time to time in one or more offerings to or through
underwriters, to other purchasers, or through agents under this prospectus, as
supplemented. We will provide the names of any underwriters or agents in
supplements to this prospectus.
Our common stock is listed on the Nasdaq National Market under the symbol
"KOPN." On November 6, 2001, the closing sale price of the common stock, as
reported on the Nasdaq National Market, was $15.00 per share. None of the other
securities are currently publicly traded.
You should read carefully this prospectus, the documents incorporated by
reference in the prospectus, and any prospectus supplement before you invest. We
strongly recommend that you read carefully the risks that we describe in the
prospectus and any prospectus supplement, as well as the risk factors in our
most current reports to the Securities and Exchange Commission, for a fuller
understanding of the risks and uncertainties that we face.
See "Risk Factors" beginning on page 3 to read about factors you should
consider before buying shares of our common stock.
This prospectus may not be used to consummate sales of securities unless it
is accompanied by a prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
___________________
The date of this prospectus is , 2001
Table of Contents
About this Prospectus...................................................................... i
Prospectus Summary......................................................................... 1
Risk Factors............................................................................... 3
Forward Looking Statements................................................................. 10
Use of Proceeds............................................................................ 10
Description of Capital Stock............................................................... 11
Description of Debt Securities............................................................. 13
Plan of Distribution....................................................................... 20
Legal Matters.............................................................................. 21
Experts.................................................................................... 21
Where You Can Get More Information......................................................... 22
About this Prospectus
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process we may offer, from time to time, shares of our common stock
or debt securities, in one or more offerings.
The total aggregate offering price of these securities will not exceed
$150,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we offer securities, we will provide you with
a prospectus supplement that will describe the specific amounts, prices, and
terms of the securities we offer. The prospectus supplement also may add,
update, or change information contained in this prospectus.
We may sell the securities to or through underwriters, dealers, or agents
or directly to purchasers. We and our agents reserve the sole right to accept
and to reject in whole or in part any proposed purchase of securities. A
prospectus supplement, which we will provide to you each time we offer
securities, will provide the names of any underwriters, dealers, or agents
involved in the sale of the securities, and any applicable fee, commission, or
discount arrangements with them.
All references to "Kopin," "we" or "us" are to Kopin Corporation and include
our subsidiaries, unless the context requires otherwise.
i
PROSPECTUS SUMMARY
This summary highlights the more detailed information contained elsewhere
in this prospectus. It may not include all the information that is important to
you. You should read the entire prospectus, the prospectus supplement delivered
with the prospectus, and the documents incorporated by reference before making
an investment decision.
About Kopin Corporation
Kopin is a leading developer and manufacturer of compound semiconductor
epitaxial transistor wafers used to build advanced integrated circuits, and is
one of the leading suppliers of miniature flat panel displays. We use our
proprietary semiconductor material technology to design, manufacture and market
products used in highly demanding wireless and high-speed fiber optic
communications. Our products enable our customers to develop and market an
improved generation of products for applications in wireless and fiber optic
communications and high resolution miniature video displays.
We produce two types of high performance products -- our "III-V" products
and our CyberDisplay products. Our primary III-V product is our heterojunction
bipolar transistor wafer, or HBT transistor wafer. Our HBT transistor wafers
are customer-specific arrays of vertically oriented transistors that our
customers use primarily to produce high performance integrated circuits for
wireless communications products. We commercially develop and manufacture
Gallium Arsenide-based HBT transistor wafers and other commercial semiconductor
products that utilize Indium Phosphide, Gallium Nitride, and Gallium Arsenide-
based substrates. We collectively refer to these compound semiconductor
materials as our "III-V" products.
Our CyberDisplay products are miniature, high performance, high resolution,
low cost displays designed for consumer electronics and next-generation mobile
communications devices. Current applications of our CyberDisplay products
include viewing images in camcorders and digital cameras, and we believe that
our CyberDisplay products are well suited for new applications such as reading
e-mail and browsing the Internet using digital wireless handsets, pagers, and
other consumer electronics devices.
We were incorporated in Delaware in 1984. Our principal executive offices
are located at 695 Myles Standish Boulevard, Taunton, Massachusetts, 02780. Our
telephone number is (508) 824-6696 and our web site is located at www.kopin.com.
Information contained in our web site is not a part of this prospectus.
Summary of the Securities We May Offer
We may offer shares of our common stock or debt securities from time to
time and the total aggregate dollar amount of all of the shares of common stock
and debt securities that we may issue will not exceed $150,000,000. When we use
the term "securities" in this prospectus, we mean any of the securities that we
may offer with this prospectus unless we say otherwise. This prospectus
describes the general terms that may apply to the securities, the specific terms
of any particular securities that we may offer will be described in a separate
supplement to this prospectus.
Common Stock
We may offer shares of our common stock. Our common stock currently is
traded on the Nasdaq National Market under the symbol "KOPN."
1
Debt Securities
We may offer debt securities, in one or more series, as either senior or
subordinated debt or as senior or subordinated convertible debt. For any
particular debt securities we offer, the applicable prospectus supplement will
describe the specific designation, the aggregate principal or face amount and
the purchase price; the ranking, whether senior or subordinated in right of
payment; the stated maturity; the redemption terms, if any; the conversion
terms, if any; the rate or manner of calculating the rate and the payment dates
for interest, if any; that amount or manner of calculating the amount payable at
maturity and whether that amount may be paid by delivering cash, securities or
other property; and any other specific terms. We will issue any senior and
subordinated debt securities under separate indentures between us and a trustee
that we will identify in the applicable prospectus supplement.
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RISK FACTORS
Investing in our securities involves a high degree of risk. Before making
an investment decision, you should consider carefully the risks described below
and the risks set forth in any prospectus supplement, as well as other
information we include or incorporate by reference in this prospectus and the
additional information in the reports that we file with the SEC. The risks and
uncertainties described are not the only ones facing us. Additional risks and
uncertainties that we do not presently know about or that we currently believe
are immaterial may also adversely impact our business. If any of the risks
described actually occur, our business, financial condition, and results of
operations would likely suffer. In such case, the price of our common stock or
debt securities could fall, and you may lose all or part of the money that you
paid to purchase our securities.
We have experienced a history of losses and have a significant accumulated
deficit.
Since inception, we have incurred significant net operating losses. As of
December 31, 2000, we had an accumulated deficit of $50.4 million and for the
nine months ended September 29, 2001 we incurred a net loss of $37.2 million
(excluding a $21.6 million unrealized net gain on our investments). For the
years ended December 31, 1997 and 1998, we incurred net losses of $6.3 million
and $3.0 million, respectively. We cannot assure you that we will achieve
profitability in the future.
Our revenue and cash flow could be negatively affected by the loss of any of the
few customers who account for a substantial portion of our revenues.
Historically, a few customers have accounted for a substantial portion of
our revenues. Sales of our HBT transistor wafers to Conexant Systems accounted
for approximately 59%, 49%, and 46% of our total revenues for the years ended
December 31, 1998, 1999, and 2000, respectively, and approximately 18% of our
total revenues for the nine months ended September 29, 2001. Sales to Mitsubishi
Electric were 13% and 11% of our total revenues for the years ended December 31,
1999 and 2000, respectively. For the years ended December 31, 1998, 1999, and
2000, revenues from multiple contracts with various U.S. governmental agencies
accounted for approximately 14%, 7%, and 2%, respectively, of our total
revenues. We anticipate that sales of our HBT transistor wafers to Conexant will
continue to represent a significant portion of our revenues for the near future;
however, Conexant has recently announced various downturns related to its
business, including lower than expected revenues and expense reduction
initiatives such as reductions in its work force and temporary plant shut downs.
In addition, for the nine months ended September 29, 2001, sales of our HBT
transistor wafers to Mitsubishi Electric accounted for less than 10% of our
total revenues. A continued reduction or delay in orders from Conexant or any of
our other significant customers would materially reduce our revenue and cash
flow and adversely affect our ability to achieve and maintain profitability.
If we are unable to significantly increase our CyberDisplay product production
capacity and reduce our CyberDisplay product production costs, our business will
suffer.
Our CyberDisplay product line currently has significant fixed costs and our
ability to achieve profitability in that product line depends upon achieving
significant sales volumes and higher gross profit margins. We have limited
experience manufacturing display products and we have not yet produced our
CyberDisplay products at volumes necessary to achieve profitability. If we are
unable to successfully increase our CyberDisplay production capacity and reduce
manufacturing costs, we may lose customer orders and our display business will
remain unprofitable.
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Our CyberDisplay products may not be widely accepted by the market.
Our success will in large part depend on the widespread adoption of the
viewing format of our CyberDisplay products. Our success also depends upon the
widespread consumer acceptance of our customers' products. Potential customers
may be reluctant to adopt our CyberDisplay products because of concerns
surrounding perceived risks relating to:
. The introduction of our display technology generally;
. Consumer acceptance of our CyberDisplay products; and
. The relative complexity, reliability, usefulness and cost-
effectiveness of our display products compared to other display
products available in the market or that may be developed by our
competitors.
In addition, our customers may be reluctant to rely upon a relatively small
company such as Kopin for a critical component. We cannot assure you that
prospective customers will adopt our CyberDisplay products or that consumers
will accept our CyberDisplay products. If we fail to achieve market acceptance
of our CyberDisplay products, our business may not be successful and the value
of your investment in Kopin may decline.
Our success depends on the continued growth and evolution of the wireless and
fiber optic communications markets.
Sales of products for wireless and fiber optic communications applications
constitute a significant portion of our current and projected product revenues
and cash flows. We are dependent on customer orders for these products for
wireless and fiber optic communications applications, which in turn depend upon
the current and anticipated market demand for wireless and fiber optic
communications in general. For the year ending December 31, 2001, we expect a
decline in product revenues from the sale of our III-V products compared to our
III-V product revenues in the year ended December 31, 2000 as a result of
worldwide inventory accumulation in the supply chain of wireless and fiber optic
communications products and related components. The deferral or cancellation of
customer orders due to excessive inventory or lack of demand will adversely
impact our results of operations.
In addition, the implementation of higher bandwidth infrastructure will be
needed to drive the development of the next-generation of wireless
communications services. These developments include data oriented services, such
as Internet browsing capabilities and the ability to view e-mail and other
information that should increase the demand for our products. Our future success
will depend in large part on the widespread adoption of this infrastructure and
the cost-effectiveness of these services to the consumer.
We do not have long-term contracts with our customers, which makes forecasting
our revenues and operating results difficult.
We generally do not enter into formal agreements with our customers
obligating them to purchase our products. Our business is characterized by
short-term purchase orders and shipment schedules and we generally permit orders
to be canceled or rescheduled without significant penalty. As a result, our
customers may cease purchasing our products at any time, which makes forecasting
our revenues difficult. In addition, due to the absence of substantial
noncancellable backlog, we typically plan our production and inventory levels
based on internal forecasts of customer demand, which are highly unpredictable
and can fluctuate substantially. Our operating results are difficult to forecast
because we are continuing to invest in capital equipment and increasing our
operating expenses for new product development. If we fail to accurately
forecast our revenues and operating results, our business may not be successful
and the value of your investment in Kopin may decline.
4
Potential fluctuations in operating results make financial forecasting difficult
and could adversely affect the price of our common stock.
Our quarterly and annual revenues and operating results may fluctuate
significantly for several reasons including:
. The timing and successful introduction of additional manufacturing
capacity;
. The timing of the initial selection of our III-V and CyberDisplay
products as a component in our customers' new products;
. Market acceptance of our and our customers' products;
. Competitive pressures on selling prices of our products;
. The timing and cancellation of customer orders;
. Our ability to introduce new products and technologies on a timely
basis;
. Our ability to successfully reduce costs; and
. The cancellation of U.S. government contracts.
We typically plan our production and inventory levels based on internal
forecasts of customer demand, which are highly unpredictable and can fluctuate
substantially. Our operating results are difficult to forecast because we are
continuing to invest in capital equipment and increasing our operating expenses
for new product development.
As a result of these and other factors, you should not rely on our revenues
and our operating results for any one quarter or year as an indication of our
future revenues or operating results. If our quarterly revenues or results of
operations fall below expectations of investors or public market analysts, the
price of our common stock could fall substantially.
Disruptions of our production of our III-V products would adversely affect our
operating results.
If we were to experience any significant disruption in the operation of our
facilities, we would be unable to supply III-V products to our customers. Our
manufacturing processes are highly complex and customer specifications are
extremely precise. We periodically modify our processes in an effort to improve
yields and product performance and to meet particular customer requirements. We
intend to broaden our volume production capabilities of Indium Phosphide HBT
transistor wafers and other semiconductor materials, but we have limited
experience in manufacturing Indium Phosphide HBT transistor wafers and other
semiconductor products in commercial quantities. Process changes or other
problems that occur in the complex manufacturing process can result in
interruptions in production or significantly reduced yields. Additionally, as we
introduce new equipment into our manufacturing processes, our III-V products
could be subject to especially wide variations in manufacturing yields and
efficiency. We may experience manufacturing problems that would result in delays
in product introduction and delivery or yield fluctuations. We are also subject
to the risks associated with the shortage of raw materials used in the
manufacture of our products.
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Our ability to manufacture and distribute our CyberDisplay products would be
severely limited if the third party that we rely on to manufacture integrated
circuits for our CyberDisplay products fails to provide those services.
We depend on United Microelectronics Corporation, or UMC, for the
fabrication of integrated circuits for our CyberDisplay products. We have no
long-term contracts with UMC. If UMC were to terminate its arrangement with us
or become unable to provide the required capacity and quality on a timely basis,
we would be able to manufacture and ship our CyberDisplay products only in
limited quantities until replacement foundry services could be obtained.
Furthermore, we cannot assure you that we would be able to establish alternative
manufacturing and packaging relationships on acceptable terms.
Our reliance on UMC involves certain risks, including:
. The lack of control over production capacity and delivery schedules;
. Limited control over quality assurance, manufacturing yields and
production costs; and
. The risks associated with international commerce, including unexpected
changes in legal and regulatory requirements, changes in tariffs and
trade policies and political and economic instability.
UMC, as well as several other third parties with which we do business, is
located in Taiwan. Due to the earthquake that occurred in Taiwan in 1999 and the
typhoon that occurred in Taiwan in September 2001, many Taiwanese companies,
including UMC, experienced related business interruptions. UMC has resumed
normal operations, however, our business could suffer significantly if UMC's
operations were disrupted again for an extended period of time.
We depend on third parties to provide integrated circuit chip sets and other
critical raw materials for use with our CyberDisplay products.
We do not manufacture the integrated circuit chip sets necessary for use
with our CyberDisplay products. Instead, we rely on third party independent
contractors for these integrated circuit chip sets and other critical raw
materials. Motorola currently produces all the integrated circuit chips used
with our CyberDisplay products in camcorders. If Motorola or any other third
party were unable to supply these integrated circuit chip sets and other
critical raw materials, we would be unable to sell our CyberDisplay products
until a replacement supplier could be found. We cannot assure you that a
replacement supplier could be found on reasonable terms or in a timely manner.
In the three month period ended September 30, 2000, two of our vendors could not
supply the quantity and quality of critical raw materials we needed. As a
result, we were unable to meet customer demand, and our manufacturing yield and
gross margins were adversely affected. Any interruption in our ability to
manufacture and distribute our CyberDisplay products could cause our display
business to be unsuccessful and the value of your investment in Kopin may
decline.
We may not be able to operate multiple manufacturing facilities successfully.
A critical part of our business strategy is the expansion of our production
capacity both internally and using third party manufacturers. We are
establishing a second internal facility to manufacture our III-V products. We
also are increasing our CyberDisplay product manufacturing capabilities at our
Korean subsidiary, Kowon Technology. In particular, we expect to increasingly
rely upon Kowon for back-end packaging of our CyberDisplay products. If we are
unable to significantly increase our manufacturing capacity at Kowon, we may be
able to manufacture and ship our CyberDisplay products only in limited
quantities until replacement foundry services could be obtained.
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We are also considering the establishment of additional internal and third
party manufacturing capabilities to produce both our III-V and CyberDisplay
products. To date, we have operated only one facility for our III-V product
line.
Our ability to successfully operate additional manufacturing sites will
depend on a number of factors including:
. The identification and availability of appropriate and affordable
sites;
. The management of facility construction and development timing and
costs;
. The transfer of our manufacturing techniques to additional sites,
particularly Kowon;
. The establishment of adequate management and information systems and
financial controls; and
. The adaptation of our complex manufacturing process in our additional
sites.
Additionally, we cannot be sure that any new manufacturing facilities will
have operating results similar to those of our current facilities. Any failure
to effectively implement our expansion strategy would adversely impact our
ability to grow our business.
Increased competition may result in decreased demand or prices for our products.
Competition in the markets for our products is intense and we may not be
able to compete successfully. We compete with several companies primarily
engaged in the business of designing, manufacturing and selling integrated
circuits or alternative display technologies, as well as the supply of other
discrete products. Our competitors could develop new process technologies that
may be superior to ours, including technologies that target markets in which our
products are sold. Many of our existing and potential competitors have strong
market positions, considerable internal manufacturing capacity, established
intellectual property rights and substantial technological capabilities.
Furthermore, they also have greater financial, technical, manufacturing,
marketing and personnel resources than we do, and we may not be able to compete
successfully with them.
In addition, many of our existing and potential customers manufacture or
assemble wireless communications devices and have substantial in-house
technological capabilities and substantially greater resources than we do. We
may not be able to sell our products to these customers and they may begin to
commercialize their internal capabilities and become our competitors. If one of
our large customers establishes internal design and manufacturing capabilities,
it could have an adverse effect on our operating results.
We expect competition to increase. This could mean lower prices or reduced
demand for our products. Any of these developments would have an adverse effect
on our operating results.
If we fail to keep pace with changing technologies, we may lose customers.
The advanced semiconductor materials and display industries are
characterized by rapidly changing customer requirements and evolving
technologies and industry standards. To achieve our goals, we need to continue
to enhance our existing products and develop and market new products that keep
pace with continuing changes in industry standards and requirements and customer
preferences. If we cannot keep pace with these changes, our business could
suffer.
We may not be successful in protecting our intellectual property and proprietary
rights.
Our success depends in part on our ability to protect our intellectual
property and proprietary rights. We have obtained certain domestic and foreign
patents and we intend to continue
7
to seek patents on our inventions when appropriate. We also attempt to protect
our proprietary information with contractual arrangements and under trade secret
laws. Our employees and consultants generally enter into agreements containing
provisions with respect to confidentiality and the assignment of rights to
inventions made by them while in our employ. These measures may not adequately
protect our intellectual and proprietary rights. Existing trade secret,
trademark and copyright laws afford only limited protection and our patents
could be invalidated or circumvented. Moreover, the laws of certain foreign
countries in which our products are or may be manufactured or sold may not fully
protect our intellectual property rights. Misappropriation of our technology and
the costs of defending our intellectual property rights from misappropriation
could substantially impair our business. If we are unable to protect
our intellectual property and proprietary rights, our business may not be
successful and the value of your investment in Kopin may decline.
Our products could infringe on the intellectual property rights of others.
Our products could be found to infringe on the intellectual property rights
of others. Other companies may hold or obtain patents or inventions or other
proprietary rights in technology necessary for our business. We are currently
the subject of a patent infringement claim by Teledyne Lighting and Display
Products relating to a light source used to backlight some of our CyberDisplay
products. We intend to defend this claim vigorously, however, we cannot assure
you that we will prevail and we may have to spend significant time and incur
significant expenses defending this claim. If we are forced to continue to
defend against this or to defend against other infringement claims, we may face
costly litigation, diversion of technical and management personnel, and product
shipment delays, even if the allegations of infringement are unwarranted. If
there is a successful claim of infringement against us and we are unable to
develop non-infringing technology or license the infringed or similar technology
on a timely basis, or if we are required to cease using one or more of our
business or product names due to a successful trademark infringement claim
against us, it could adversely affect our business.
Our business could suffer if we lose the services of, or fail to attract, key
personnel.
In order to continue to provide quality products in our rapidly changing
business, we believe it is important to retain personnel with experience and
expertise relevant to our business. Our success depends in large part upon a
number of key management and technical employees. The loss of the services of
one or more key employees, including John C.C. Fan, our President and Chief
Executive Officer, could seriously impede our success. We do not maintain any
"key-man" insurance policies on Dr. Fan or any other employees. In addition, due
to the level of technical and marketing expertise necessary to support our
existing and new customers, our success will depend upon our ability to attract
and retain highly-skilled management, technical, and sales and marketing
personnel. Competition for highly-skilled personnel is intense and there may be
only a limited number of persons with the requisite skills to serve in these
positions. Due to lower III-V product revenues resulting from the current
slowdown in the market for wireless and fiber optic communications products, we
have taken certain cost reduction measures, including reducing our workforce,
reducing senior management pay and delaying salary increases. If the wireless
and fiber optic communications markets experience an upturn, we may need to
increase our workforce. Due to the competitive nature of the labor markets in
which we operate, we may be unsuccessful in attracting and retaining these
personnel. Our inability to attract and retain key personnel could adversely
affect our ability to develop and manufacture our products.
8
We may be unable to continue to grow at our historical growth rates or to manage
our growth effectively.
In 1999 and 2000, we experienced significant growth in sales of our III-V
and CyberDisplay products. Due to the current slowdown in the wireless
communications and fiber optic markets and other general economic conditions, we
do not expect to increase sales in 2001 and, if we do increase sales after 2001,
we cannot assure you that sales will increase at the same rate as in 1999 and
2000. In addition, we cannot assure you that our systems, procedures, controls
and existing and planned space will be adequate to support our future
operations. As a result of these concerns, we cannot be sure that we will grow,
or, if we do grow, that we will be able to achieve our historical growth rate.
We may pursue acquisitions and investments that could adversely affect our
business.
In the past we have made, and in the future we may make, acquisitions of
and investments in businesses, products and technologies that could complement
or expand our business. If we identify an acquisition candidate, we may not be
able to successfully negotiate or finance the acquisition or integrate the
acquired businesses, products or technologies into our existing business and
products. Future acquisitions could result in potentially dilutive issuances of
equity securities, the incurrence of debt and contingent liabilities,
amortization expenses and write-downs of acquired assets.
We may incur significant liabilities if we fail to comply with stringent
environmental regulations or if we did not comply with these regulations in the
past.
We are subject to a variety of federal, state and local governmental
regulations related to the use, storage, discharge and disposal of toxic or
otherwise hazardous chemicals used in our manufacturing process. Although we
believe that our activities conform to environmental regulations, the failure to
comply with present or future regulations could result in fines being imposed on
us, suspension of production or a cessation of operations. We cannot assure you
that we have not in the past violated applicable laws or regulations, which
could result in required remediation or other liabilities.
You should not expect to receive dividends from us.
We have not paid cash dividends in the past, nor do we expect to pay
dividends for the foreseeable future. We anticipate that earnings, if any, will
be retained for the development of our businesses.
Our stock price may be volatile in the future.
The trading price of our common stock has been subject to wide fluctuations
in response to quarter-to-quarter variations in results of operations,
announcements of technological innovations or new products by us or our
competitors, general conditions in the wireless communications, semiconductor
and display markets, changes in earnings estimates by analysts or other events
or factors. In addition, the public stock markets have experienced extreme price
and trading volatility in recent months. This volatility has significantly
affected the market prices of securities of many technology companies for
reasons frequently unrelated to the operating performance of the specific
companies. These broad market fluctuations may adversely affect the market price
of our common stock.
9
A public market may not develop for the securities that we may offer.
The securities we may offer may not develop an active public market, which
could depress the resale price of the securities. The securities we may offer,
other than our common stock, will be new issues of securities for which there is
currently no trading market. We cannot predict whether an active trading market
for the securities will develop or be sustained. If an active trading market
were to develop, the securities could trade at prices that may be lower than the
initial offering price of the securities.
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus, any prospectus
supplement and the documents that we incorporate by reference, including
statements concerning certain market trends, our liquidity position and our
manufacturing capabilities, constitute forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act
that involve substantial risks and uncertainties. In some cases, you can
identify these statements by forward-looking words such as "may," "will,"
"should," "expect," "plan," "anticipate," "believe," "estimate," or "continue"
and variations of these words or comparable words. In addition, any statements
which refer to expectations, projections, or other characterizations of future
events or circumstances are forward-looking statements. These forward-looking
statements involve known and unknown risks, uncertainties and situations that
may cause our or our industry's actual results, level of activity, performance,
or achievements to be materially different from any future results, levels of
activity, performance, or achievements expressed or implied by these statements.
The risk factors set forth herein, in any prospectus supplement, and in the
reports we file with the Securities and Exchange Commission that are
incorporated by reference in this prospectus provide examples of risks,
uncertainties and events that may cause our actual results to differ from the
expectations described or implied in our forward-looking statements. Although we
believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus. Except as
required by law, we do not undertake to update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
USE OF PROCEEDS
Unless we specify otherwise in a prospectus supplement, we intend to use
the net proceeds from the sale of securities that we may offer to provide
additional funds for working capital and other general corporate purposes that
may include, among other things, an increase in the production capabilities of
our III-V and CyberDisplay products. We also may use a portion of the net
proceeds of this offering to acquire or invest in businesses, products, services
or technologies complementary to our current business, through mergers,
acquisitions, joint ventures or otherwise.
The precise amount and timing of the application of proceeds will depend
upon our funding requirements in the future. We will retain broad discretion in
the allocation of the net proceeds from an offering under this prospectus, as
amended and supplemented. Pending the uses described above, the net proceeds
will be invested in short-term, interest bearing, investment grade securities.
We may set forth additional information on the use of net proceeds from the
securities we may offer under this prospectus in a prospectus supplement
relating to the specific offering.
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DESCRIPTION OF CAPITAL STOCK
General
We are authorized to issue 120,000,000 shares of common stock, $0.01 par
value per share, and 3,000 shares of preferred stock, $0.01 par value per share.
The following description of our capital stock is subject to and qualified in
its entirety by our certificate of incorporation and by-laws, each as amended
and restated, and by the provisions of applicable Delaware law.
Common Stock
As of October 27, 2001, there were 65,422,952 shares of common stock
outstanding. These shares were held of record by approximately 435 stockholders.
Holders of our common stock are entitled to one vote per share for each
share held of record on all matters to be voted upon by the stockholders.
Accordingly, holders of a majority of the shares of our common stock entitled to
vote in any election of directors may elect all of the directors standing for
election. Subject to preferences that may be applicable to any outstanding
preferred stock, holders of our common stock are entitled to receive ratably
such dividends as may be declared from time to time by our board of directors
out of funds legally available for that purpose. In the event of a liquidation,
dissolution or winding up of Kopin, the holders of our common stock are entitled
to share ratably in all assets remaining after payment of liabilities, subject
to prior distribution rights of preferred stock, if any, then outstanding. The
holders of our common stock have no cumulative voting rights, preemptive or
conversion rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to our common stock. The rights, preferences
and privileges of holders of our common stock are subject to, and may be
adversely affected by, the rights of the holders of shares of any series of
preferred stock which we may designate and issue in the future.
Preferred Stock
Our board of directors has the authority, without action by the
stockholders, to designate and issue preferred stock in one or more series and
to designate the rights, preferences and privileges of each series, which may be
greater than the rights of our common stock. It is not possible to state the
actual effect of the issuance of any shares of preferred stock upon the rights
of holders of the common stock until our board of directors determines the
specific rights of the holders of such preferred stock. The effects, however,
might include, among other things:
. Restriction of dividends on our common stock;
. Dilution of the voting power of our common stock;
. Impairment of the liquidation rights of our common stock; or
. Delay and prevention of a change in control of Kopin without further
action by the stockholders.
Delaware Anti-Takeover Law and Certain Charter and By-Law Provisions
We are subject to Section 203 of the Delaware General Corporation Law, an
anti-takeover law. In general, Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years following the date the person became an
interested stockholder, unless the "business combination" or the transaction in
which the person became an interested stockholder is approved in a prescribed
manner. Generally, a "business combination" includes a merger, asset or stock
sale or other
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transaction resulting in a financial benefit to the interested stockholder.
Generally, an "interested stockholder" is a person who, together with affiliates
and associates, owns or within three years prior to the determination of
interested stockholder status, did own, 15% or more of a corporation's voting
stock. The existence of this provision may have an anti-takeover effect with
respect to transactions not approved in advance by our board of directors,
including discouraging attempts that might result in a premium over the market
price for the shares of common stock held by stockholders.
Our amended and restated certificate of incorporation and by-laws provide
that vacancies on our board of directors may only be filled by a vote of a
majority of the board of directors then in office. Furthermore, any director
elected by the stockholders, or by the board of directors to fill a vacancy, may
be removed only for cause by a vote of a majority of the voting power of the
shares of our common stock entitled to vote for the election of directors. These
provisions of our amended and restated certificate of incorporation and by-laws
could make it more difficult for a third party to acquire, or discourage a third
party from attempting to acquire, control of Kopin and therefore may limit the
price that certain investors might be willing to pay in the future for shares of
our common stock.
Our amended and restated certificate of incorporation and by-laws further
provide that any action required or permitted to be taken by our stockholders
may be taken only at a duly called annual or special meeting of the stockholders
or by unanimous written consent of stockholders. These provisions could have the
effect of delaying stockholder actions that are favored by the holders of a
majority of our outstanding voting securities until the next annual
stockholders' meeting, particularly because special meetings of the stockholders
may only be called by our board of directors or our chief executive officer.
These provisions may also discourage another person or entity from making a
tender offer for our stock, because such person or entity, even if it acquired a
majority of our outstanding voting securities, would be able to take action as a
stockholder (such as electing new directors or approving a merger) only at a
duly called stockholders meeting or by unanimous written consent.
Our amended and restated certificate of incorporation also incorporates
certain provision permitted under the Delaware General Corporation Law relating
to the liability of directors. The provisions eliminate a director's liability
for monetary damages for a breach of fiduciary duty, including gross negligence,
except in circumstances involving certain wrongful acts, such as breach of
director's duty of loyalty or acts or omissions that involve intentional
misconduct or a knowing violation of law. These provisions do not eliminate a
director's duty of care nor do they prevent recourse against directors through
equitable remedies such as injunctive relief. Moreover, the provisions do not
apply to claims against a director for violations of certain laws, including
federal securities laws.
Our amended and restated certificate of incorporation also contains
provisions to indemnify our directors, officers, employees or other agents to
the fullest extent permitted by the Delaware General Corporation Law. These
provisions may have the practical effect in certain cases of eliminating the
ability of stockholders to collect monetary damages from directors.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is EquiServe LLP.
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DESCRIPTION OF DEBT SECURITIES
We may offer any combination of senior debt securities or subordinated
debt securities. Debt securities are unsecured obligations to repay advanced
funds. We may issue any of the senior debt securities and the subordinated debt
securities under separate indentures between us, as issuer, and the trustee or
trustees identified in a prospectus supplement.
The prospectus supplement will describe the particular terms of any debt
securities we may offer and may differ from the terms summarized below. The
following summaries of the debt securities and certain provisions of the
indentures are not complete. We urge you to read the indentures to be filed as
exhibits to the registration statement, which includes this prospectus and any
prospectus supplements, in the event that we offer debt securities. We also urge
you to read the description of the debt securities included in the applicable
prospectus supplement.
We conduct some of our operations through our subsidiaries. Our rights and
the rights of our creditors, including holders of debt securities, to the assets
of any subsidiary of ours upon that subsidiary's liquidation or reorganization
or otherwise would be subject to the prior claims of that subsidiary's
creditors, except to the extent that we may be a creditor with recognized claims
against the subsidiary. Our subsidiaries' creditors would include trade
creditors, debt holders, secured creditors and taxing authorities. Except as we
may provide in a prospectus supplement, neither the debt securities that we may
issue nor the indentures will restrict us or any of our subsidiaries from
incurring indebtedness.
General
We may issue debt securities in one or more series. The debt securities
will have terms that are consistent with the indentures. Unless the prospectus
supplement indicates otherwise, senior debt securities will be unsecured and
unsubordinated obligations and will rank equal with all our other unsecured and
unsubordinated debt. Subordinated debt securities will be paid only if all
payments due under our senior indebtedness, including any outstanding senior
debt securities, have been made.
The indentures might not limit the amount of other debt that we may incur
or whether that debt is senior to the debt securities that we may offer under a
prospectus supplement, and might not contain financial or similar restrictive
covenants. The indentures might not contain any provision to protect holders of
debt securities against a sudden or dramatic decline in our ability to pay our
debt.
The prospectus supplement will describe the debt securities and the price
or prices at which we will offer the debt securities. The description will
include:
. The title and form of the debt securities;
. Any limit on the aggregate principal amount of the debt securities or
the series of which they are a part;
. The person to whom any interest on a debt security of the series will
be paid;
. The date or dates on which we must repay the principal;
. The rate or rates at which the debt securities will bear interest, if
any, the date of dates from which interest will accrue, and the dates
on which we must pay interest;
. If applicable, the duration and terms of the right to extend interest
payment periods;
. The place or places where we must pay the principal and any premium or
interest on the debt securities;
. The terms and conditions on which we may redeem any debt security, if
at all;
. Any obligation to redeem or purchase any debt securities, and the
terms and conditions on which we must do so;
. The denominations in which we may issue the debt securities;
. The manner in which we will determine the amount of principal or any
premium or interest on the debt securities;
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. The currency in which we will pay the principal of any premium or
interest on the debt securities;
. The principal amount of the debt securities that we will pay upon
declaration of acceleration of their maturity;
. The amount that will be deemed to the principal amount for any
purpose, including the principal amount that will be due and payable
upon any maturity or that will be deemed to be outstanding as of any
date;
. If applicable, that the debt securities are defeasible and the terms
of such defeasance;
. If applicable, the terms of any right to convert debt securities into,
or exchange debt securities for, shares of common stock or other
securities or property;
. Whether we will issue the debt securities in the form of one or more
global securities and, if so, the respective depositaries for the
global securities and the terms of the global securities;
. The subordination provisions that will apply to any subordinated debt
securities;
. Any addition to or change in the events of default applicable to the
debt securities and any change in the right of the trustee or the
holders to declare the principal amount of any of the debt securities
due and payable; and
. Any addition to or change in the covenants in the indentures.
We may sell the debt securities at a substantial discount below their
stated principal amount. We will describe U.S. federal income tax
considerations, if any, applicable to debt securities sold at an original issue
discount in the prospectus supplement. An "original issue discount security" is
any debt security sold for less than its face value, and which provides that the
holder cannot receive the full face value if maturity is accelerated. The
prospectus supplement relating to any original issue discount securities will
describe the particular provisions relating to acceleration of the maturity upon
the occurrence of any event of default. In addition, we will describe U.S.
federal income tax or other considerations applicable to any debt securities
that are denominated in a currency or unit other than U.S. dollars in the
prospectus supplement.
Conversion and Exchange Rights
The prospectus supplement will describe, if applicable, the terms on which
the debt securities may be converted into or exchanged for common stock or other
securities or property. The conversion or exchange may be mandatory or may be at
your option. The prospectus supplement will describe how the number of shares of
common stock or other securities or property to be received upon conversion or
exchange would be calculated.
Subordination of Subordinated Debt Securities
Unless the prospectus supplement indicates otherwise, the following
provisions will apply to the subordinated debt securities. The indebtedness
underlying the subordinated debt securities will be payable only if all payments
due under our senior indebtedness, including any outstanding senior debt
securities, have been made. If we distribute our assets to creditors upon any
dissolution, winding-up, liquidation ,or reorganization or in bankruptcy,
insolvency, receivership, or similar proceedings, we must first pay all amounts
due or to become due on all senior indebtedness before we pay the principal of,
or any premium or interest on, the subordinated debt securities. In the event
the subordinated debt securities are accelerated because of an event of default,
we may not make any payment on the subordinated debt securities until we have
paid all senior indebtedness or the acceleration is rescinded. If the payment of
subordinated debt securities accelerates because of an
14
event of default, we must promptly notify holders of senior indebtedness of the
acceleration. If we experience a bankruptcy, dissolution or reorganization,
holders of senior indebtedness may recover more, ratably, and holders of
subordinated debt for subordinated debt securities may recover less, ratably,
than our other creditors. The indenture for subordinated debt securities may not
limit our ability to incur additional senior indebtedness.
Form, Exchange, and Transfer
We will issue debt securities only in fully registered form and, unless the
prospectus supplement indicates otherwise, only in denominations of $1,000 and
integral multiples thereof. The holder of a debt security may elect, subject to
the terms of the indentures and the limitations applicable to global securities,
to exchange them for other debt securities of the same series of any authorized
denomination and of similar terms and aggregate principal amount.
Holders of debt securities may present them for exchange as provided above
or for registration of transfer, duly endorsed or with the form of transfer duly
executed, at the office of the transfer agent we designate for that purpose. We
will not impose a service charge for any registration of transfer or exchange of
debt securities, but we may require a payment sufficient to cover any tax or
other governmental charge payable in connection with the transfer or exchange.
We will name the transfer agent in the prospectus supplement. We may designate
additional transfer agents or rescind the designation of any transfer agent or
approve a change in the office through which any transfer agent acts, but we
must maintain a transfer agent in each place in which we will pay on debt
securities.
If we redeem the debt securities, we will not be required to issue, register the
transfer of or exchange any debt security during a specified period prior to
mailing a notice of redemption. We are not required to register the transfer of
or exchange any debt securities selected for redemption, except the unredeemed
portion of the debt security being redeemed.
Global Securities
The debt securities may be represented, in whole or in part, by one or more
global securities that will have an aggregate principal amount equal to that of
all debt securities of that series. Each global security will be registered in
the name of a depositary identified in the prospectus supplement. We will
deposit the global security with the depositary or a custodian, and the global
security will bear a legend regarding the restrictions on exchanges and
registration of transfer.
No global security may be exchanged in whole or in part for debt securities
registered, and no transfer of a global security in whole in part may be
registered in the name of any person other than the depositary or any nominee or
successor of the depositary unless:
. the depositary is unwilling or unable to continue as depositary; or
. the depositary is no longer in good standing under the Exchange Act or
other applicable statute or regulation.
The depositary will determine how all securities issued in exchange for a global
security will be registered.
As long as the depositary or its nominee is the registered holder of a
global security, we will consider the depositary or the nominee to be the sole
owner and holder of the global security and the underlying debt securities.
Except as stated above, owners of beneficial interests in a global security will
not be entitled to have the global security or any debt security registered in
their names, will not receive physical delivery of certificated debt securities
and will not be considered to be the
15
owners or holders of the global security or underlying debt securities. We will
make all payments of principal, premium and interest on a global security to the
depositary or its nominee. The laws of some jurisdictions require that some
purchasers of securities take physical delivery of securities in definitive
form. These laws may prevent you from transferring your beneficial interests in
a global security.
Only institutions that have accounts with the depositary or its nominee and
persons that hold beneficial interests through the depositary or its nominee may
own beneficial interests in a global security. The depositary will credit, on
its book-entry registration and transfer system, the respective principal amount
of debt securities represented by the global security to the accounts of its
participants. Ownership of beneficial interests in a global security will be
shown only on, and the transfer of those ownership interests will be effected
only through, records maintained by the depositary or any such participant.
The policies and procedures of the depositary may govern payment,
transfers, exchanges and other matters relating to beneficial interest in a
global security. We and the trustee will assume no responsibility or liability
for any aspect of the depositary's or any participant's records relating to, or
for payments made on account of, beneficial interests in a global security.
Payment and Paying Agent
Unless the prospectus supplement indicates otherwise, we will pay principal
and any premium or interest on a debt security to the person in whose name the
debt security is registered at the close of business on the regular record date
for the interest.
Unless the prospectus supplement indicates otherwise, we will pay principal
and any premium or interest on the debt securities at the office of our
designated paying agent. Unless the prospectus supplement indicates otherwise,
the corporate trust office of the trustee will be the paying agent for the debt
securities.
Any other paying agents we designate for the debt securities of a
particular series will be named in the prospectus supplement. We may designate
additional paying agents, rescind the designation of any paying agent or approve
a change in the office through which any paying agent acts, but we must maintain
a paying agent in each place of payment for the debt securities.
The paying agent will return to us all money we pay to it for the payment
of the principal, premium or interest on any debt security that remains
unclaimed for a specified period. Thereafter, the holder may look only to us for
payment, as an unsecured general creditor.
Consolidation, Merger, or Sale of Assets
The terms of the indentures may provide that, so long as any securities
remain outstanding, we may not consolidate or enter into a share exchange with
or merge into any other person, in a transaction in which we are not the
surviving corporation, or sell, convey, transfer, or lease our properties and
assets substantially as an entirety to any person, unless:
. the successor assumes our obligations under the debt securities and
the indentures; and
. we meet the other conditions described in the indentures.
Events of Default
Each of the following may constitute an event of default under each
indenture:
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. failure to pay the principal of or any premium on any debt security
when due;
. failure to pay any interest on any debt security when due, for more
than a specified number of days past the due date;
. failure to deposit any sinking fund payment when due;
. failure to perform any covenant or agreement in the indenture, which
failure continued for a specified number of days after written notice
has been given by the trustee or the requisite holders of the debt
securities of that series;
. specified events of bankruptcy, insolvency or reorganization; and
. any other event of default specified in the prospectus supplement.
If an event of default occurs and continues, both the trustee and holders
of a specified percentage in aggregate principal amount of the outstanding
securities of that series may declare the principal amount of the debt
securities of that series to be immediately due and payable. The holder of a
majority in aggregate principal amount of the outstanding securities of that
series may, under specified circumstances, rescind and annul the acceleration if
all events of default, other than the nonpayment of accelerated principal, have
been cured or waived.
Except for specified duties in case of an event of default, the trustee
will not be obligated to exercise any of its rights or powers at the request or
direction of any of the holders, unless the holders have offered the trustee
reasonable indemnity. If they provide this indemnification, the holders of a
majority in aggregate principal amount of the outstanding securities of any
series may direct the time, method and place of conducting any proceeding for
any remedy available to the trustee or exercising any trust or power conferred
on the trustee with respect to the debt securities of that series.
No holder of a debt security of any series may institute any proceeding
with respect to the indenture, or for the appointment of a receiver or a
trustee, or for any other remedy, unless:
. the holder has previously given the trustee written notice of a
continuing event of default;
. the holders of a specified percentage in aggregate principal amount of
the outstanding securities of that series have made a written request
upon the trustee, and have offered reasonable indemnity to the
trustee, to institute the proceeding;
. the trustee has failed to institute the proceeding for a specified
period of time after its receipt of the notification; and
. the trustee has not received a direction inconsistent with the request
within a specified number of days.
Modification and Waiver
We and the trustee may change an indenture without the consent of any
holders with respect to specific matters, including to fix any ambiguity,
defect, or inconsistency in the indenture and to change anything that does not
materially adversely affect the interests of any holder of debt securities of
any series.
In addition, under the indentures, the rights of holders of a series of
debt securities may be changed by us and the trustee under certain conditions.
These conditions may include the written consent of the holders of not less than
a majority in aggregate principal amount of the outstanding debt securities of
each class that is affected or the adoption of a resolution, at a meeting of
holders of debt securities at which a
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quorum is present by the holders of at least two-thirds in aggregate principal
amount of the outstanding debt securities of each class that is affected
represented at such meeting. The indentures also may require that we and the
trustee obtain the consent of the holder of any outstanding debt securities
affected to the extent that we:
. extend the fixed maturity of any series of notes issued;
. reduce the principal amount, reduce the rate of or extend the time of
payment of interest, or any premium payable upon the redemption, of
any debt securities; or
. reduce the percentage of debt securities the holders of which are
required to consent to any amendment.
Except in some limited circumstances, we may set any day as a record date
for the purpose of determining the holders of outstanding debt securities of any
series entitled to give or take any direction, notice, consent, waiver or other
action under the indentures, or be present at a meeting of holders of debt
securities. In some limited circumstances, the trustee may set a record date. To
be effective, the action must be taken by holders of the requisite principal
amount of such debt securities within a specified period following the record
date.
Defeasance
To the extent stated in the prospectus supplement, we may elect to apply
the provisions in the indentures relating to defeasance and discharge of
indebtedness, or to defeasance of some restrictive covenants, to the debt
securities of any series. The indentures may provide that, upon satisfaction of
the requirements described below, we may terminate all of our obligations under
the debt securities of any series and the applicable indenture, which is known
as legal defeasance, other than our obligation:
. To maintain a registrar and paying agents and hold moneys for payment
in trust;
. To register the transfer or exchange or the debt securities; and
. To replace mutilated, destroyed, lost or stolen debt securities.
In addition, we may terminate our obligation to comply with any restrictive
covenants under the debt securities of any series or the applicable indenture,
which is known as covenant defeasance.
We may exercise our legal defeasance option even if we have previously
exercised our covenant defeasance option. If we exercise either defeasance
option, payment of the debt securities may not be accelerated because of the
occurrence of events of default.
To exercise either defeasance option as to debt securities of any series,
we would be required to satisfy customary conditions described in the applicable
indenture, which may include the establishment of a trust with the trustee in
which we would irrevocably deposit money and/or obligations that will provide
money in an amount sufficient to pay the principal of, premium, if any, and each
installment of interest on the debt securities, the delivery of an opinion of
counsel to the trustee, and the failure of an event of default to have occurred
or be continuing.
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Notices
We will mail notices to holders of debt securities as indicated in the
prospectus supplement.
Title
We may treat the person in whose name a debt security is registered as the
absolute owner, whether or not such debt security may be overdue, for the
purpose of making payment and for all other purposes.
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PLAN OF DISTRIBUTION
We may sell the securities being offered hereby in one or more of the
following ways from time to time:
. through agents to the public or to investors;
. to underwriters for resale to the public or to investors; or
. directly to investors; or
. any other method permitted by law.
We will set forth in a prospectus supplement the terms of the offering of
securities, including:
. the name or names of any agents or underwriters;
. the purchase price of the securities being offered and the proceeds
that we will receive from the sale;
. any over-allotment options under which underwriters may purchase
additional securities from us;
. any agency fees or underwriting discounts and other items constituting
agents' or underwriters' compensation;
. any discounts or concessions allowed or reallowed or paid to dealers;
and
. any securities exchanges on which the securities being offered may be
listed.
Agents
We may designate agents who agree to use their reasonable or best efforts
to solicit purchases for the period of their appointment or to sell securities
on a continuing basis.
Underwriters
If we use underwriters for a sale of securities, the underwriters will
acquire the securities for their own account. The underwriters may resell the
securities in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The obligations of the underwriters to purchase the securities will be subject
to the conditions set forth in the applicable underwriting agreement. We may
change from time to time any discounts or concessions the underwriters allow or
reallow or pay to dealers. We may use underwriters with whom we have a material
relationship. We will describe in the prospectus supplement naming the
underwriter the nature of any such relationship.
Direct Sales
We may also sell securities directly to one or more purchasers without
using underwriters or agents. Underwriters, dealers, and agents that participate
in the distribution of the securities may be underwriters as defined in the
Securities Act and any discounts or commissions they receive from us and any
profit on their resale of the securities may be treated as underwriting
discounts and commissions under the Securities Act. We will identify in the
applicable prospectus supplement any underwriters, dealers, or agents and will
describe their compensation. We may have agreements with the underwriters,
dealers, and agents to indemnify them against specified civil liabilities,
including liabilities under the Securities Act. Underwriters, dealers, and
agents may engage in transactions with or perform services for us or our
subsidiaries in the ordinary course of their businesses.
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Trading Markets and Listing of Securities.
Unless otherwise specified in the applicable prospectus supplement, each
class or series of securities will be a new issue with no established trading
market, other than our common stock, which is listed on the Nasdaq National
Market. We may elect to list any other class or series of securities on any
exchange, but we are not obligated to do so. It is possible that one or more
underwriters may make a market in a class or series of securities, but the
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. We cannot give any assurance as to the
liquidity of the trading market for any of the securities.
Stabilization Activities
Any underwriter may engage in over-allotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves sales in excess of the offering
size, which create a short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a selling concession
from a dealer when the securities originally sold by the dealer are purchased in
a covering transaction to cover short positions. Those activities may cause the
price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of the activities at any time.
Passive Market Making.
Any underwriters who are qualified market makers on the Nasdaq National
Market may engage in passive market making transactions in common stock on the
Nasdaq National Market in accordance with Rule 103 of Regulation M, during the
business day prior to the pricing of the offering, before the commencement of
offer or sales of the common stock. Passive market makers must comply with
applicable volume and price limitations and must be identified as passive market
makers. In general, a passive market maker must display its bid at a price not
in excess of the highest independent bid for such security; if all independent
bids are lowered below the passive market maker's bid, however, the passive
market maker's bid must then be lowered when certain purchase limits are
exceeded.
LEGAL MATTERS
Bingham Dana LLP, 150 Federal Street, Boston, Massachusetts, will provide
us with an opinion as to legal matters in connection with the securities that we
may offer.
EXPERTS
The consolidated financial statements of Kopin Corporation as of December
31, 1999 and 2000 and for each of the three years in the period ended December
31, 2000, incorporated by reference in this prospectus have been audited by
Deloitte and Touche LLP, independent auditors, as stated in their report
incorporated by reference herein, and are included in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
21
WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports,
proxy statements, and other information with the Securities and Exchange
Commission. You may read and copy these reports, proxy statements, and other
information at the SEC's public reference room located at 450 Fifth Street,
N.W., Washington, DC 20549. You can request copies of these documents by writing
to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-
SEC-0330 for more information about the operation of the public reference rooms.
Our SEC filings are also available at the SEC's Web site at
"http://www.sec.gov". In addition, you can read and copy our SEC filings at the
office of the National Association of Securities Dealers, Inc. at 1735 K Street,
Washington, DC 20006.
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those other documents. The information incorporated by
reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 prior to termination of the offering:
. our annual report on Form 10-K for the fiscal year ended December 31,
2000;
. our quarterly report on Form 10-Q for the fiscal quarter ended March
31, 2001;
. our quarterly report on Form 10-Q/A for the fiscal quarter ended June
30, 2001;
. our quarterly report on Form 10-Q for the fiscal quarter ended
September 29, 2001;
. our definitive proxy materials on Schedule 14A as filed with the SEC
on April 20, 2001;
. our current reports on Form 8-K as filed with the SEC on March 7, 2001
and March 9, 2001; and
. our current report on Form 8-K as filed with the SEC on October 4,
2001.
You may request a copy of any and all of these filings and documents at no cost,
by writing or telephoning us at the following address:
Kopin Corporation
695 Myles Standish Boulevard
Taunton, Massachusetts 02780
(508) 824-6696
22
================================================================================
You should rely only on the information contained in this prospectus or
incorporated by reference into this prospectus. We have not authorized any
dealer, salesperson or other person to give any information or to make any
representations not contained in this prospectus or any prospectus supplement.
You must not rely on any unauthorized information. This prospectus is not an
offer of these securities in any state where an offer is not permitted. The
information in this prospectus is correct only as of the date of this
prospectus, regardless of the time of the delivery of this prospectus or any
sale of these securities. You should not assume that this prospectus is
accurate as of any other date.
Table of Contents
-----------------
Page
----
About this Prospectus................................................ i
Prospectus Summary................................................... 1
Risk Factors......................................................... 3
Forward Looking Statements........................................... 10
Use of Proceeds...................................................... 10
Description of Capital Stock......................................... 11
Description of Debt Securities....................................... 13
Plan of Distribution................................................. 20
Legal Matters........................................................ 21
Experts.............................................................. 21
Where You Can Get More Information................................... 22
$150,000,000
Kopin Corporation
Common Stock, $0.01 par value
Debt Securities
___________________
PROSPECTUS
, 2001
___________________
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered. Except for the SEC
registration fee, all amounts are estimates.
Securities and Exchange Commission Registration Fee............... $37,500
Nasdaq National Market Fees....................................... *
Fees of Registrar and Transfer Agent.............................. *
Legal Fees and Expenses........................................... *
Accounting Fees and Expenses...................................... *
Miscellaneous..................................................... *
-------
Total............................................................. *
___________________________
*To be provided by amendment
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify its officers and directors and certain other persons to
the extent and under the circumstances set forth therein.
The Amended and Restated Certificate of Incorporation and the Amended and
Restated By-Laws of Kopin include provisions to eliminate the personal liability
of our directors for monetary damages resulting from breaches of their fiduciary
duty to the extent permitted by Section 102(b)(7) of the Delaware General
Corporation Law and authorize Kopin to indemnify our directors and officers to
the fullest extent permitted by Section 145 of the DGCL, including circumstances
in which indemnification is otherwise discretionary. Kopin has purchased an
insurance policy covering its officers and directors with respect to certain
liabilities arising under the Securities Act or otherwise.
II-1
Item 16. Exhibits.
Exhibit Number Description
---------------- -----------
1* Form of Underwriting Agreement
4.1(a) Amended and Restated Certificate of Incorporation of the Registrant
(Filed as Exhibit 3.1 to registration statement on Form S-1, File
No. 33-57450 and incorporated herein by reference.)
4.1(b) Certificate of Amendment of Amended and Restated Certificate of
Incorporation of the Registrant (Filed as Exhibit 3.2(a) to Form
10-Q for the quarterly period ended July 1, 2000, File No. 000-19882
and incorporated herein by reference.)
4.1(c) Certificate of Amendment of Amended and Restated Certificate of
Incorporation of the Registrant (Filed as Exhibit 3.2(b) to Form
10-Q for the quarterly period ended July 1, 2000, File No. 000-19882
and incorporated herein by reference.)
4.2 Amended and Restated By-laws, as amended, of the Registrant (Filed
as Exhibit 3.2 to registration statement on Form S-1, File No.
33-57450 and incorporated herein by reference.)
4.3* Form of Senior Indenture
4.4* Form of Subordinated Indenture
5* Opinion of Bingham Dana LLP
23.1* Consent of Bingham Dana LLP (included in Exhibit 5)
23.2 Independent Auditors' Consent - Deloitte & Touche LLP
24.1 Power of Attorney (included on signature page)
25* Statement of Eligibility of the Trustee under the Trust Indenture
Act of 1939
___________________
*To be filed by amendment or as an exhibit to a report pursuant to
Section 13(a), 13(c) or 15(d) of the Exchange Act.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made pursuant to this Registration Statement, a post-effective
amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to
such information in this Registration Statement;
(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.
II-2
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions described in Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) or Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of that Act.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant, Kopin Corporation, certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Taunton in the
Commonwealth of Massachusetts, on this 7th day of November, 2001.
KOPIN CORPORATION
By: /s/ John C.C. Fan
----------------------------
John C.C. Fan
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby appoint each of John C.C.
Fan and Richard A. Sneider severally, acting alone and without the other, his
true and lawful attorney-in-fact with the authority to execute in the name of
each such person, any and all amendments (including without limitation, post-
effective amendments) to this Registration Statement on Form S-3, to sign any
and all additional registration statements relating to the same offering of
securities as this Registration Statement that are filed pursuant to Rule 462(b)
of the Securities Act, and to file such registration statements with the
Securities and Exchange Commission, together with any exhibits thereto and other
documents therewith, necessary or advisable to enable the Registrant to comply
with the Securities Act, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, which amendments may make
such other changes in the Registration Statement as the aforesaid attorney-in-
fact executing the same deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ John C.C. Fan Chief Executive Officer, President November 7, 2001
- ----------------------------------- (Principal Executive Officer) and
John C.C. Fan Director
/s/ David E. Brook Director and Secretary November 6, 2001
- -----------------------------------
David E. Brook
/s/ Andrew H. Chapman Director November 6, 2001
- -----------------------------------
Andrew H. Chapman
/s/ Morton Collins Director November 6, 2001
- -----------------------------------
Morton Collins
- -----------------------------------
Chi Chia Hsieh Director
/s/ Michael A. Wall Director November 6, 2001
- -----------------------------------
Michael A. Wall
/s/ Richard A. Sneider Chief Financial Officer November 7, 2001
- ----------------------------------- (Principal Accounting Officer and
Richard A. Sneider Principal Financial Officer)
Exhibit Index
-------------
Exhibit Number Description
-------------- -----------
1* Form of Underwriting Agreement
4.1(a) Amended and Restated Certificate of Incorporation of the Registrant
(Filed as Exhibit 3.1 to registration statement on Form S-1, File
No. 33-57450 and incorporated herein by reference.)
4.1(b) Certificate of Amendment of Amended and Restated Certificate of
Incorporation of the Registrant (Filed as Exhibit 3.2(a) to Form
10-Q for the quarterly period ended July 1, 2000, File No. 000-19882
and incorporated herein by reference.)
4.1(c) Certificate of Amendment of Amended and Restated Certificate of
Incorporation of the Registrant (Filed as Exhibit 3.2(b) to Form
10-Q for the quarterly period ended July 1, 2000, File No. 000-19882
and incorporated herein by reference.)
4.2 Amended and Restated By-laws, as amended, of the Registrant (Filed
as Exhibit 3.2 to registration statement on Form S-1, File No.
33-57450 and incorporated herein by reference.)
4.3* Form of Senior Indenture
4.4* Form of Subordinated Indenture
5* Opinion of Bingham Dana LLP
23.1* Consent of Bingham Dana LLP (included in Exhibit 5)
23.2 Independent Auditors' Consent - Deloitte & Touche LLP
24.1 Power of Attorney (included on signature page)
25* Statement of Eligibility of the Trustee under the Trust Indenture
Act of 1939
___________________
*To be filed by amendment or as an exhibit to a report pursuant to Section
13(a), 13(c) or 15(d) of the Exchange Act.