AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 3, 2004
REGISTRATION NO. 333-112450
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
WYETH
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 13-2526821
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</Table>
FIVE GIRALDA FARMS
MADISON, NEW JERSEY 07940
(973) 660-5000
(Address, including zip code and telephone number,
including area code, of registrant's principal executive offices)
---------------------
LAWRENCE V. STEIN, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
WYETH
FIVE GIRALDA FARMS
MADISON, NEW JERSEY 07940
(973) 660-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------
COPIES TO:
<Table>
WILLIAM M. HASKEL, ESQ. JOSEPH H. KAUFMAN, ESQ.
WYETH SIMPSON THACHER & BARTLETT LLP
FIVE GIRALDA FARMS 425 LEXINGTON AVENUE
MADISON, NEW JERSEY 07940 NEW YORK, NEW YORK 10017
(973) 660-5000 (212) 455-2000
</Table>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 3, 2004
PROSPECTUS
(WYETH LOGO)
$1,020,000,000
FLOATING RATE CONVERTIBLE SENIOR DEBENTURES DUE 2024
---------------------
We issued the debentures in a private placement on December 16, 2003. The
initial purchasers resold the debentures to qualified institutional buyers in
accordance with Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). This prospectus will be used by the selling securityholders
from time to time to resell their debentures and any common stock issuable upon
conversion of their debentures. We will not receive any proceeds from the resale
of the debentures or any of those shares.
The debentures bear interest at an annual rate equal to 6-month LIBOR,
reset semiannually, minus 0.50%; provided that such rate will never be less than
0% per annum. The interest rate for the initial interest period, which commenced
on December 16, 2003 and ends on July 14, 2004, will be 0.73625% per annum.
Interest will be payable semiannually in arrears on January 15 and July 15 of
each year, each an interest payment date, beginning July 15, 2004.
The debentures are convertible by holders into shares of our common stock
at an initial conversion rate of 16.559 shares of our common stock per $1,000
principal amount of debentures (subject to adjustment in certain events), which
is equal to an initial conversion price of $60.39 per share, under the following
circumstances: (1) during any calendar quarter commencing after March 31, 2004
and prior to December 31, 2022 (and only during such calendar quarter), if the
price of our common stock issuable upon conversion reaches a specified threshold
during the previous calendar quarter, as described in this prospectus, (2) at
any time after December 31, 2022 and prior to maturity, if the price of our
common stock issuable upon conversion reaches a specified threshold on any day
following December 31, 2022, as described in this prospectus, (3) if we call the
debentures for redemption, (4) upon the occurrence of specified corporate
transactions described in this prospectus or (5) during any period in which the
credit ratings assigned to the debentures are below the levels described in this
prospectus. Upon conversion, we will have the right to deliver, in lieu of
common stock, cash or a combination of cash and common stock. The debentures are
unsecured and rank equally with all of our other existing and future unsecured
and unsubordinated indebtedness.
The debentures mature on January 15, 2024. We may redeem some or all of the
debentures at any time on or after July 20, 2009 for a price in cash equal to
100% of the principal amount of debentures to be redeemed plus any accrued and
unpaid interest, including additional interest, if any, to, but not including,
the redemption date.
Holders have the right to require us to purchase the debentures at a
purchase price in cash equal to 100% of the principal amount of the debentures
plus accrued and unpaid interest, including additional interest, if any, to, but
not including, the purchase date, on July 15, 2009, January 15, 2014 and January
15, 2019 or upon a fundamental change, as described in this prospectus.
For a more detailed description of the debentures, see "Description of the
Debentures" beginning on page 12.
Holders that are listed in the selling securityholder table on page 39 will
be entitled to sell or otherwise dispose of any Debentures only during specific
time periods in each calendar quarter, including the 20 calendar day period
commencing on May 10, 2004, as described in greater detail in this prospectus
under "Registration Rights."
The debentures have been designated for inclusion in The PORTAL(R) Market
of the National Association of Securities Dealers, Inc. The common stock of
Wyeth currently trades on the New York Stock Exchange (NYSE) under the symbol
"WYE". On April 30, 2004, the last reported sales price for the common stock on
the NYSE was $38.07 per share.
INVESTING IN THE DEBENTURES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION OR OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is , 2004.
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
Forward-Looking Information May Prove Inaccurate............ ii
Where You Can Find More Information......................... ii
Summary..................................................... 1
Risk Factors................................................ 6
Use of Proceeds............................................. 8
Price Range of Common Stock................................. 9
Dividend Policy............................................. 9
Ratio of Earnings to Fixed Charges.......................... 9
Selected Financial Data..................................... 10
Description of the Debentures............................... 11
Registration Rights......................................... 29
Description of Capital Stock................................ 31
Certain U.S. Federal Income Tax Consequences................ 34
Selling Securityholders..................................... 39
Plan of Distribution........................................ 44
Legal Matters............................................... 46
Experts..................................................... 46
</Table>
The distribution of this prospectus and the offering and sale of the
debentures or our common stock in certain jurisdictions may be restricted by
law. This prospectus does not constitute an offer of, or an invitation to
purchase, any of the debentures in any jurisdiction in which such offer or
invitation would be unlawful.
This prospectus summarizes certain documents and other information in a
manner we believe to be accurate, but we refer you to the actual documents for a
more complete understanding of what we discuss in this prospectus. In making an
investment decision, you must rely on your own examination of us and the terms
of the offering and the debentures or our common stock, including the merits and
risks involved.
We are not, and the selling securityholders are not, making any
representation to any purchaser of the debentures regarding the legality of an
investment in the debentures by the purchaser under any applicable laws or
regulations. You should consult your own attorney, accountant, business adviser
and tax adviser for legal, tax, business and financial advice regarding an
investment in the debentures.
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized any person to provide you
with different information or to make any representation not contained in, or
incorporated by reference into, this prospectus. If anyone provides you with
different or inconsistent information, you should not rely on it. You should not
assume the information contained in this prospectus is accurate after the date
on the front cover of this prospectus or that the information contained in
documents incorporated by reference is accurate after the respective dates of
filing of the incorporated documents. Our business, financial condition, results
of operations and prospects may have changed since those dates.
The selling securityholders reserve the right to withdraw this offering of
the debentures and our common stock at any time. The selling securityholders
also reserve the right to reject any offer to purchase some or all of the
debentures or common stock for any reason and to allot to any prospective
investor less than the full amount of debentures sought by the investor.
i
FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE
This prospectus contains or incorporates by reference "forward-looking
statements" as that term is used in federal securities laws about our financial
condition, results of operations and business. These statements include, among
others:
- statements concerning the benefits that we expect will result from our
business activities and certain transactions we have completed, such as
increased revenues, decreased expenses and avoided expenses and
expenditures; and
- statements of our expectations, beliefs, future plans and strategies,
anticipated developments and other matters that are not historical facts.
These statements may be made expressly in this prospectus, or may be
incorporated by reference to other documents filed with the Securities and
Exchange Commission (the "SEC"). You can identify many of these statements by
looking for words such as "believes," "expects," "anticipates," "estimates," or
similar expressions used in this prospectus or incorporated by reference in this
prospectus.
These forward-looking statements are subject to numerous assumptions, risks
and uncertainties that may cause our actual results to be materially different
from any future results expressed or implied by us in those statements,
including the risks and uncertainties of a research-based pharmaceutical and
health care company detailed in the documents filed with the SEC and
incorporated by reference in this prospectus.
Because the statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by the
forward-looking statements. We caution you not to place undue reliance on these
forward-looking statements, which speak only as of the date of this prospectus
or, in the case of documents incorporated by reference, the date of the
applicable document.
The cautionary statements contained or referred to in this section should
be considered in connection with any subsequent written or oral forward-looking
statements that we or persons acting on our behalf may issue. We do not
undertake any obligation to review or confirm analysts' expectations or
estimates or to release publicly any revisions to any forward-looking statements
to reflect events or circumstances after the date of this prospectus or to
reflect the occurrence of unanticipated events.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the SEC's public reference facilities in Washington,
D.C., New York, New York, and Chicago, Illinois. For further information on the
public reference rooms, please call the SEC at 1-800-SEC-0330. Our SEC filings
are also available to the public from the SEC's web site at http://www.sec.gov.
In addition, our SEC filings may be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
We incorporate by reference into this prospectus the documents listed below
and any reports filed by us with the SEC after the date of this prospectus under
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"):
- our Annual Report on Form 10-K, filed on March 12, 2004, for the year
ended December 31, 2003, and
- our Current Report on Form 8-K filed on April 28, 2004.
ii
You may obtain documents incorporated by reference into this prospectus at
no cost by requesting them in writing from us at the following address:
Investor Relations
Wyeth
Five Giralda Farms
Madison, New Jersey 07940
Tel: (973)660-5000
Any statement contained in this prospectus or in a document incorporated by
reference herein will be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained herein or therein, or
in any other subsequently filed document that also is or is deemed to be
incorporated herein or therein by reference, modifies or supersedes such
statement. Any such statement so modified or superseded will not be deemed to
constitute a part of this prospectus except as so modified or superseded.
The prospectus constitutes a part of a registration statement on Form S-3
(referred to herein, including all amendments and exhibits, as the "Registration
Statement") that we have filed with the SEC under the Securities Act of 1933, as
amended. This prospectus does not contain all of the information contained in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the SEC. We refer you to the Registration
Statement and related exhibits for further information regarding us and our
debentures and any common stock issuable upon conversion of the debentures. The
Registration Statement may be inspected at the public reference facilities
maintained by the SEC at the addresses set forth above. Statements contained in
this prospectus concerning the provisions of any document filed as an exhibit to
the Registration Statement 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 or otherwise filed with the SEC. Each such statement is
qualified in its entirety by such reference.
iii
SUMMARY
The following summary should be read together with the information
contained in other parts of this prospectus and the documents we incorporate by
reference. You should carefully read this prospectus and the documents we
incorporate by reference to fully understand the terms of the debentures as well
as the tax and other considerations that are important to you in making a
decision about whether to invest in the debentures and the common stock issuable
upon their conversion.
ABOUT WYETH
We are one of the world's largest research-based pharmaceutical and health
care products companies. In March 2002, we changed our name to Wyeth after being
known for 76 years as American Home Products Corporation.
We are a leader in the discovery, development, manufacturing and marketing
of pharmaceuticals, vaccines, biopharmaceuticals and non-prescription medicines.
We are also a global leader in animal health care.
We specialize in therapy areas of critical need, including neuroscience
therapies, gastrointestinal diseases, musculoskeletal therapies, vaccines,
infectious diseases, women's health care, cardiovascular diseases,
transplantation and oncology. Our research and development utilizes three
technology platforms: small molecules, vaccines and protein pharmaceuticals.
Our pharmaceuticals segment manufactures, distributes, and sells human
prescription pharmaceuticals, vaccines and biopharmaceuticals, nutritionals, and
animal biologicals and pharmaceuticals. These products are promoted and sold
worldwide primarily to wholesalers, pharmacies, hospitals, physicians,
retailers, veterinarians, and other human and animal health care institutions.
Some of these sales are made to large buying groups representing certain of
these customers. Principal product categories for human use and their respective
products are: neuroscience therapies including Effexor (marketed as Efexor
internationally) and Effexor XR; cardiovascular products including Altace
(co-marketed with King Pharmaceuticals, Inc.); nutritionals including S26, 2nd
Age Promil and 3rd Age Progress (international markets only); gastroenterology
drugs including Zoton (international markets only) and Protonix (U.S. market
only); anti-infectives including Zosyn (marketed as Tazocin internationally);
vaccines including Prevnar (marketed as Prevenar internationally); oncology
therapies; musculoskeletal therapies including Enbrel (which, under an
agreement, is co-promoted by Wyeth and Amgen in the United States and Canada
with Wyeth having exclusive international rights to the product) and Synvisc;
hemophilia treatments including BeneFIX coagulation factor IX (recombinant) and
ReFacto albumin-free formulated factor VIII (recombinant); immunological
products including Rapamune; and women's health care products including
Premarin, Prempro, Premphase, and Triphasil (marketed as Trinordiol
internationally). Principal animal health product categories include
pharmaceuticals, vaccines including West Nile -- Innovator and endectocides
including Cydectin.
Our consumer healthcare segment manufactures, distributes and sells
over-the-counter health care products. Principal consumer healthcare product
categories and their respective products are: analgesics including Advil
products; cough/cold/allergy remedies including Robitussin products, Dimetapp
products and Alavert; nutritional supplements including Centrum products,
Caltrate and Solgar products; hemorrhoidal, antacid, asthma and other relief
items including Preparation H and Chap Stick products. These products are
generally sold to wholesalers and retailers and are promoted primarily to
consumers worldwide through advertising. These products are manufactured in the
United States and Puerto Rico, and in 11 foreign countries.
We are incorporated in the State of Delaware, and the address of our
principal offices is Five Giralda Farms, Madison, New Jersey 07940. Our
telephone number is 973-660-5000. You may visit us at our web site located at
www.wyeth.com. The information contained in our web site has not been, and shall
not be deemed to be, incorporated by reference into this prospectus.
1
SUMMARY OF THE OFFERING
For a more complete description of the terms of the debentures and the
common stock issuable upon conversion of the debentures, see "Description of the
Debentures" and "Description of Capital Stock." For purposes of the description
of debentures included in this prospectus, reference to "the company," "issuer,"
"Wyeth," "us," "we" and "our" refer only to Wyeth and do not include our
subsidiaries.
Issuer........................ Wyeth
Debentures.................... $1,020,000,000 aggregate principal amount of
Floating Rate Convertible Senior Debentures due
2024.
Maturity...................... January 15, 2024
Interest...................... The debentures bear interest at an annual rate
equal to 6-month LIBOR, reset semiannually,
minus 0.50%; provided that such rate will never
be less than 0% per annum. The interest rate
for the initial interest period, which
commenced on December 16, 2003 and ends on July
14, 2004, will be 0.73625% per annum. Interest
will be payable semiannually in arrears on
January 15 and July 15 of each year, each an
interest payment date, beginning July 15, 2004.
We will also pay additional interest on the
debentures under the circumstances described in
this prospectus below.
Ranking....................... The debentures are unsecured and rank equally
in right of payment with all of our other
existing and future unsecured and
unsubordinated indebtedness. The debentures are
effectively subordinated to existing and future
indebtedness and other liabilities of our
subsidiaries and to any of our existing and
future secured indebtedness. The indenture does
not limit the amount of indebtedness we or our
subsidiaries may incur.
Conversion Rights............. Holders may convert their debentures into
shares of our common stock under any of the
following circumstances:
(1) during any calendar quarter commencing
after March 31, 2004 and prior to December
31, 2022 (and only during such calendar
quarter) if the last reported sale price of
our common stock for at least 20 trading
days during the period of 30 consecutive
trading days ending on the last trading day
of the previous calendar quarter, is
greater than or equal to 130% of the
applicable conversion price,
(2) at any time after December 31, 2022 and
prior to maturity, if the last reported
sale price of our common stock is greater
than or equal to 130% of the applicable
conversion price on any day after December
31, 2022,
(3) if the debentures have been called for
redemption,
(4) upon the occurrence of specified corporate
transactions described under "Description
of the Debentures -- Conversion
Rights -- Conditions to
Conversion -- Conversion Upon Specified
Corporate Transactions" or
(5) during any period in which the credit
rating assigned to the debentures by either
Moody's Investor Services, Inc. and its
successors ("Moody's") or Standard & Poor's
Ratings Services, a division of the
McGraw-Hill Companies, Inc. and its
2
successors ("S&P") is lower than Baa3 or
BBB-, respectively, or the debentures are
no longer rated by at least one of S&P or
Moody's.
For each $1,000 principal amount of debentures
surrendered for conversion, you will receive
16.559 shares of our common stock.
This represents an initial conversion price of
$60.39 per share of common stock. As described
in this prospectus, the conversion rate may be
adjusted for certain reasons, but it will not
be adjusted for accrued and unpaid interest,
including additional interest, if any. Except
as otherwise described in this prospectus, upon
conversion of the debentures you will not
receive any payment representing accrued and
unpaid interest, including additional interest,
if any.
Upon conversion, we will have the right to
deliver, in lieu of shares of our common stock,
cash or a combination of cash and shares of our
common stock. See "Description of the
Debentures -- Conversion Rights -- Payment Upon
Conversion."
Debentures called for redemption may be
surrendered for conversion prior to the close
of business on the business day immediately
preceding the redemption date.
Optional Redemption........... Prior to July 20, 2009, the debentures are not
redeemable. On or after July 20, 2009, we may
redeem for cash all or part of the debentures
at any time, upon not less than 20 nor more
than 60 days notice before the redemption date,
by mail to the trustee, the paying agent and
each holder of debentures, for a price equal to
100% of the principal amount of the debentures
to be redeemed plus any accrued and unpaid
interest, including additional interest, if
any, to, but not including, the redemption
date. See "Description of the
Debentures -- Optional Redemption."
Purchase of Debentures by Us
at the Option of the Holder... Holders have the right to require us to
purchase all or any portion of their debentures
for cash on July 15, 2009, January 15, 2014 and
January 15, 2019. In each case, we will pay a
purchase price equal to 100% of the principal
amount of the debentures to be purchased plus
any accrued and unpaid interest, including
additional interest, if any, to, but not
including, such purchase date. See "Description
of the Debentures -- Purchase of Debentures by
Us at the Option of the Holder."
Fundamental Change............ If we undergo a Fundamental Change (as defined
under "Description of the
Debentures -- Fundamental Change Requires
Purchase of Debentures by Us at the Option of
the Holder"), holders will have the right, at
their option, to require us to purchase for
cash all or any portion of their debentures.
Holders may exercise this right prior to the
close of business on the business day
immediately preceding the Fundamental Change
purchase date, which will be no less than 20
and no more than 35 business days after we
deliver you a notice of Fundamental Change. The
cash price we are required to pay is equal to
100% of the principal amount of the debentures
to be purchased plus accrued and unpaid
interest, including additional interest, if
any, to, but not including, the
3
Fundamental Change purchase date. See
"Description of the Debentures -- Fundamental
Change Requires Purchase of Debentures by Us at
the Option of the Holder."
Registration Rights........... Pursuant to a registration rights agreement we
entered into with the initial purchasers, we
filed a shelf registration statement under the
Securities Act, of which this prospectus is a
part, relating to the resale of the debentures
and the common stock issuable upon conversion
thereof. We have agreed to use our reasonable
efforts to have that shelf registration
statement declared effective within 180 days of
the date of original issuance of the
debentures, subject to our right to postpone
under certain circumstances, and to keep such
registration statement effective during the
periods referred to below until the earlier of
(i) the date all registrable securities have
been sold pursuant to the shelf registration
statement or Rule 144 under the Securities Act,
or any successor provision and (ii) the
expiration of the holding period with respect
to the registrable securities under Rule 144(k)
under the Securities Act, or any successor
provision. However, holders of registrable
securities will only be entitled to sell such
securities under the shelf registration
statement during the following periods:
(1) the 20 calendar day period commencing on
the deadline for filing any of our
quarterly reports on Form 10-Q or annual
reports on Form 10-K;
(2) in connection with our option to purchase
the debentures, the period commencing on
the date we call the debentures for
redemption and ending on the redemption
date;
(3) in connection with any Fundamental Change,
the period commencing on the date we send a
Fundamental Change purchase notice and
ending on the Fundamental Change purchase
date, unless we elect to pay all
conversions during this period in cash; and
(4) in connection with conversions upon
specified corporate transactions, the
period commencing on the date we send
notice of such transaction and ending on
the earlier of the business day following
the ex-dividend date for such transaction
or our public announcement that such
transaction will not take place, unless we
elect to pay all conversions during this
period in cash.
If we do not fulfill certain of our obligations
under the registration rights agreement, we
will be required to pay additional interest to
holders of the debentures. See "Registration
Rights."
Use of Proceeds............... We will not receive any proceeds from the sale
by selling securityholders of the debentures or
shares of common stock issuable upon conversion
of the debentures.
Trustee, Paying Agent and
Conversion Agent.............. JPMorgan Chase Bank.
Risk Factors.................. You should consider carefully all of the
information set forth and incorporated by
reference in this prospectus, including the
specific
4
factors set forth under "Risk Factors"
beginning on page 6, before deciding whether to
invest in the debentures.
Governing Law................. The indenture and the debentures are governed
by and construed in accordance with the laws of
the State of New York.
Book-Entry Form............... The debentures were issued in book-entry form
and are represented by permanent global
certificates deposited with, or on behalf of,
The Depository Trust Company ("DTC") and
registered in the name of a nominee of DTC.
Beneficial interests in any of the debentures
will be shown on, and transfers will be
effected only through, records maintained by
DTC or its nominee and any such interest may
not be exchanged for certificated securities,
except in certain circumstances.
Trading....................... The debentures are not listed on any securities
exchange or included in any automated quotation
system. No assurance can be given as to the
development or liquidity of any trading market
for the debentures. Our common stock is listed
on the New York Stock Exchange under the symbol
"WYE."
5
RISK FACTORS
Before purchasing the debentures you should carefully consider the
following risk factors, the other information contained in this prospectus and
the information incorporated by reference herein in order to evaluate an
investment in the debentures.
RISK RELATED TO THE DEBENTURES
AN ACTIVE TRADING MARKET FOR THE DEBENTURES MAY NOT DEVELOP.
The debentures are a new issue of securities with no established trading
market and will not be listed on any securities exchange. Each of the initial
purchasers has informed us that it intends to make a market in the debentures.
However, the initial purchasers are not obligated to do so and may cease their
market-making at any time. In addition, such market-making activity will be
subject to limits imposed by the Securities Act and the Exchange Act and may be
limited during the pendency of the effectiveness of a shelf registration
statement, of which this prospectus is a part, or any post-effective amendment.
Although we are required to use our reasonable efforts to have the shelf
registration statement declared effective by the SEC, we cannot assure you that
an active trading market for the debentures will develop. If an active trading
market does not develop, the market price and liquidity of the debentures may be
adversely affected.
THE PRICE OF OUR COMMON STOCK, AND THEREFORE THE PRICE OF THE DEBENTURES, MAY
FLUCTUATE SIGNIFICANTLY, WHICH MAY MAKE IT DIFFICULT FOR HOLDERS TO RESELL THE
DEBENTURES OR THE SHARES OF OUR COMMON STOCK ISSUABLE UPON CONVERSION OF THE
DEBENTURES WHEN DESIRED OR AT ATTRACTIVE PRICES.
We expect our stock price to be subject to fluctuations as a result of a
variety of factors, including factors beyond our control. These factors include
the factors discussed under "Forward-Looking Information May Prove Inaccurate."
In addition, the stock markets in general, including the New York Stock
Exchange, recently have experienced significant price and trading fluctuations.
These fluctuations have resulted in volatility in the market prices of
securities that often has been unrelated or disproportionate to changes in
operating performance. These broad market fluctuations may adversely affect the
market price of our common stock and the debentures.
THE TRADING PRICES FOR THE DEBENTURES WILL BE DIRECTLY AFFECTED BY THE TRADING
PRICE OF OUR COMMON STOCK AND COULD BE AFFECTED BY HEDGING ACTIVITY BY
INVESTORS IN THE DEBENTURES.
We expect that the trading price of the debentures in the secondary market
will be significantly affected by the trading price of our common stock, the
general level of interest rates and our credit quality. This may result in
greater volatility in the trading prices of the debentures than would be
expected for non-convertible debt securities.
It is impossible to predict whether the price of our common stock or
interest rates will rise or fall. The trading price of our common stock will be
influenced by our operating results and prospects and by economic, financial,
regulatory and other factors. In addition, general market conditions, including
the level of, and fluctuations in, the trading prices of stocks generally, and
sales of substantial amounts of common stock by us in the market after the
offering of the debentures, or the perception that such sales may occur, could
affect the price of our common stock.
In addition to the factors described above, the price of our common stock
could be affected by possible sales of our common stock by investors who view
the debentures as a more attractive means of equity participation in our company
and by hedging or arbitrage trading activity that we expect to develop involving
our common stock as a result of the issuance of the debentures. The hedging or
arbitrage could, in turn, affect the trading price of the debentures.
6
THE CONDITIONAL CONVERSION FEATURE OF THE DEBENTURES COULD RESULT IN YOU
RECEIVING LESS THAN THE VALUE OF THE COMMON STOCK INTO WHICH A DEBENTURE WOULD
OTHERWISE BE CONVERTIBLE.
The debentures are convertible into shares of our common stock only if
specified conditions are met. If the specific conditions for conversion are not
met, you will not be able to convert your debentures, and you may not be able to
receive the value of the common stock into which the debentures would otherwise
be convertible.
WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO PURCHASE THE
DEBENTURES UPON A FUNDAMENTAL CHANGE OR OTHER PURCHASE EVENT, AS REQUIRED BY
THE INDENTURE GOVERNING THE DEBENTURES.
On July 15, 2009, January 15, 2014 and January 15, 2019, holders of the
debentures may require us to purchase their debentures for cash. In addition,
holders of the debentures also may require us to purchase their debentures upon
a Fundamental Change as described under "Description of the
Debentures -- Fundamental Change Requires Purchase of Debentures by Us at the
Option of the Holder." A Fundamental Change also may constitute an event of
default under, and result in the acceleration of the maturity of, our other
indebtedness under another indenture or credit facility or other indebtedness
that we may incur in the future. We cannot assure you that we would have
sufficient financial resources, or would be able to arrange financing, to pay
the purchase price for the debentures tendered by holders. Failure by us to
purchase the debentures when required will result in an event of default with
respect to the debentures.
IF WE INCREASE THE CASH DIVIDEND ON OUR COMMON STOCK, YOU MAY BE DEEMED TO
HAVE RECEIVED A TAXABLE DIVIDEND WITHOUT THE RECEIPT OF ANY CASH.
If we increase the cash dividend on our common stock, an adjustment to the
conversion rate may result, and you may be deemed to have received a taxable
dividend subject to United States federal income tax without the receipt of any
cash. If you are a non-U.S. holder (as defined in "Certain U.S. Federal Income
Tax Consequences"), such deemed dividend may be subject to United States federal
withholding tax at a 30% rate or such lower rate as may be specified by an
applicable treaty. See "Certain U.S. Federal Income Tax Consequences."
IF YOU HOLD DEBENTURES, YOU WILL NOT BE ENTITLED TO ANY RIGHTS WITH RESPECT TO
OUR COMMON STOCK, BUT YOU WILL BE SUBJECT TO ALL CHANGES MADE WITH RESPECT TO
OUR COMMON STOCK.
If you hold debentures, you will not be entitled to any rights with respect
to our common stock (including, without limitation, voting rights and rights to
receive any dividends or other distributions on our common stock), but you will
be subject to all changes affecting the common stock. You will only be entitled
to rights on the common stock if and when we deliver shares of common stock to
you upon conversion of your debentures. For example, in the event that an
amendment is proposed to our Restated Certificate of Incorporation or Bylaws
requiring stockholder approval and the record date for determining the
stockholders of record entitled to vote on the amendment occurs prior to
delivery of the common stock, you will not be entitled to vote on the amendment,
although you will nevertheless be subject to any changes in the powers,
preferences or special rights of our common stock.
CONVERSION OF THE DEBENTURES WILL DILUTE THE OWNERSHIP INTEREST OF EXISTING
STOCKHOLDERS, INCLUDING HOLDERS WHO HAD PREVIOUSLY CONVERTED THEIR DEBENTURES.
The conversion of some or all of the debentures will dilute the ownership
interests of existing stockholders. Any sales in the public market of the common
stock issuable upon such conversion could adversely affect prevailing market
prices of our common stock.
WE MAY ISSUE ADDITIONAL SHARES OF COMMON STOCK AND THEREBY MATERIALLY AND
ADVERSELY AFFECT THE PRICE OF OUR COMMON STOCK.
We are not restricted from issuing additional common stock during the life
of the debentures and have no obligation to consider the interests of the
holders of the debentures for any reason. If we issue additional shares
7
of common stock, it may materially and adversely affect the price of our common
stock and, in turn, the price of the debentures.
THE CONVERSION RATE OF THE DEBENTURES WILL NOT BE ADJUSTED FOR ALL DILUTIVE
EVENTS.
The conversion rate of the debentures is subject to adjustment for certain
events, including but not limited to the issuance of stock dividends on our
common stock, the issuance of rights or warrants, subdivisions, combinations,
distributions of capital stock, indebtedness or assets, certain cash dividends
and certain issuer tender or exchange offers as described under "Description of
the Debentures -- Conversion Rights -- Conversion Rate Adjustments." The
conversion rate will not be adjusted for other events, such as a third party
tender or exchange offer or an issuance of common stock for cash, that may
adversely affect the trading price of the debentures or the common stock. There
can be no assurance that an event that adversely affects the value of the
debentures, but does not result in an adjustment to the conversion rate, will
not occur.
WE MAY ISSUE PREFERRED STOCK WHOSE TERMS COULD ADVERSELY AFFECT THE VOTING
POWER OR VALUE OF OUR COMMON STOCK.
Our Restated Certificate of Incorporation authorizes us to issue, without
the approval of our stockholders, one or more classes or series of preferred
stock having such preferences, powers and relative, participating, optional and
other rights, including preferences over our common stock respecting dividends
and distributions, as our board of directors may determine. The terms of one or
more classes or series of preferred stock could adversely impact the voting
power or value of our common stock which the debentures are convertible into
thereby adversely affecting the value of the debentures. For example, we might
afford holders of preferred stock the right to elect some number of our
directors in all events or on the happening of specified events or the right to
veto specified transactions. Similarly, the repurchase or redemption rights or
liquidation preferences we might assign to holders of preferred stock could
affect the residual value of our common stock which the debentures are
convertible into, thereby adversely affecting the value of the debentures.
USE OF PROCEEDS
We will not receive any proceeds from the sale by the selling
securityholders of the debentures or the shares of common stock issuable upon
conversion of the debentures offered by this prospectus.
8
PRICE RANGE OF COMMON STOCK
Our common stock trades on the New York Stock Exchange, or NYSE, under the
symbol "WYE." The following table sets forth on a per share basis the high and
low intra-day sale prices on the NYSE for our common stock for the periods
indicated.
<Table>
<Caption>
COMMON STOCK
PRICE
-------------
HIGH LOW
----- -----
YEAR ENDED 2002:
First Quarter............................................... 66.51 60.48
Second Quarter.............................................. 66.49 49.00
Third Quarter............................................... 52.24 28.25
Fourth Quarter.............................................. 39.39 31.25
YEAR ENDED 2003:
First Quarter............................................... 40.00 32.75
Second Quarter.............................................. 49.95 34.46
Third Quarter............................................... 49.29 41.32
Fourth Quarter.............................................. 48.32 36.81
YEAR ENDING 2004:
First Quarter............................................... 44.70 36.62
Second Quarter (through April 30, 2004)..................... 40.63 37.44
</Table>
The reported last sale price of our common stock on April 30, 2004 on the
NYSE was $38.07 per share. As of December 31, 2003, there were approximately
59,181 holders of record of our common stock.
DIVIDEND POLICY
We have paid cash dividends on our common stock without interruption since
1950. We paid a quarterly dividend of $0.23 per share in each of 2002, 2003 and
the first quarter of 2004. On April 22, 2004, we announced a quarterly cash
dividend on our common stock of $0.23 per share, payable on June 1, 2004 to
shareholders of record on May 13, 2004. Future dividends will be declared at the
discretion of our board of directors and will depend upon our future earnings,
financial condition and other factors affecting dividend policy.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our consolidated ratio of earnings to fixed
charges for each of the five most recent fiscal years ended on December 31.
<Table>
<Caption>
FISCAL YEAR ENDED DECEMBER 31,
------------------------------------
1999 2000 2001 2002 2003
---- ---- ---- ---- ----
Ratio of earnings to fixed charges............... * * 7.2 15.0 7.6
</Table>
- ---------------
* The results of operations for the years ended December 31, 1999 and 2000 were
inadequate to cover total fixed charges as defined. The coverage deficiencies
for the years ended December 31, 1999 and 2000 were $1,892,692,000 and
$1,171,633,000, respectively.
For the purposes of the table above, earnings are defined as income (loss)
from continuing operations before income taxes, less equity earnings and
capitalized interest, plus fixed charges, distributed income of equity
investees, minority interests and amortization of capitalized interest. Fixed
charges include interest expense on all debt, amortization of deferred debt
issuance costs, capitalized interest and the portion of rental expense on
operating leases attributable to interest.
9
SELECTED FINANCIAL DATA
The following table presents selected financial data of Wyeth and its
subsidiaries for the periods specified.
<Table>
<Caption>
FISCAL YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------
1999 2000 2001 2002 2003
----------- ----------- ----------- ----------- -----------
($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SUMMARY OF NET REVENUE AND EARNINGS
Net revenue(1).................................... $11,695,061 $13,081,334 $13,983,745 $14,584,035 $15,850,632
Income (loss) from continuing
operations(1)(2)(3)............................. (1,207,243) (901,040) 2,285,294 4,447,205 2,051,192
Diluted earnings (loss) per share from continuing
operations(1)(2)................................ (0.92) (0.69) 1.72 3.33 1.54
Dividends per common share........................ 0.905 0.92 0.92 0.92 0.92
FINANCIAL POSITION
Current assets(1)(3).............................. $12,384,778 $10,180,811 $ 9,766,753 $11,605,699 $14,962,242
Current liabilities(1)(3)......................... 6,480,383 9,742,059 7,257,181 5,485,506 8,429,510
Ratio of current assets to current
liabilities(1)(3)............................... 1.91 1.05 1.35 2.12 1.77
Total assets(1)(3)................................ $23,123,756 $21,092,466 $22,967,922 $26,042,592 $31,031,922
Long-term debt(1)(4).............................. 3,606,423 2,394,790 7,357,277 7,546,041 8,076,429
Average stockholders' equity...................... 7,914,772 4,516,420 3,445,333 6,114,243 8,725,147
STOCKHOLDERS -- OUTSTANDING SHARES
Number of common stockholders..................... 62,482 58,355 64,698 61,668 59,181
Weighted average common shares outstanding used
for diluted earnings (loss) per share
calculation (in thousands)...................... 1,308,876 1,306,474 1,330,809 1,334,127 1,335,910
EMPLOYMENT DATA(1)
Number of employees at year end................... 46,815 48,036 52,289 52,762 52,385
Wages and salaries................................ $ 2,032,431 $ 2,264,258 $ 2,536,220 $ 2,792,379 $ 3,003,555
Benefits (including social security taxes)........ 593,222 602,816 691,018 842,177 933,448
</Table>
- ---------------
(1) As a result of the sale of the Cyanamid Agricultural Products business on
June 30, 2000, amounts for 1999 were restated to reflect this business as a
discontinued operation with the net assets of the discontinued business held
for sale related to the Cyanamid Agricultural Products business included in
current assets.
(2) See "Management's Discussion and Analysis of Financial Condition and Results
of Operations" contained in our Annual Report on Form 10-K incorporated by
reference into this prospectus for discussion of gains related to
Immunex/Amgen common stock transactions, diet drug litigation charges and
special charges for the years ended December 31, 2003, 2002 and 2001.
(3) As a result of charges of $2,000,000, $1,400,000, $950,000, $7,500,000 and
$4,750,000 in 2003, 2002, 2001, 2000 and 1999, respectively, related to the
litigation brought against us regarding the use of the diet drugs REDUX or
PONDIMIN, current liabilities increased substantially beginning in 1999
compared with prior years, and unfavorably impacted the ratio of current
assets to current liabilities in years subsequent to 1998.
In 2002, we sold 67,050,400 shares of Amgen Inc. (Amgen) common stock
received in connection with Amgen's acquisition of Immunex Corporation
(Immunex) for net proceeds of $3,250,753. We used a portion of these
proceeds to pay down commercial paper and substantially reduce current
liabilities. Additionally, the remaining 31,235,958 shares of Amgen common
stock owned by us as of December 31, 2002 had a fair value of $1,509,947.
The fair value of these shares as well as the proceeds from the shares sold
in 2002 substantially increased total assets. In 2003, we completed the
sales of the remaining 31,235,958 shares of its Amgen common stock holdings
for net proceeds of $1,579,917.
(4) In 2001, we issued $3,000,000 of senior notes. In 2003, we issued $4,800,000
of senior notes and $1,020,000 of convertible senior debentures. A portion
of the proceeds from the 2003 borrowings was used to repurchase
approximately $1,700,000 in previously issued senior notes.
10
DESCRIPTION OF THE DEBENTURES
The following description of the debentures is only a summary and is not
intended to be comprehensive. For purposes of this "Description of the
Debentures," the terms "Wyeth," "we," "our," "ours" and "us" refer only to Wyeth
and not to any of our subsidiaries.
GENERAL
We issued the debentures on December 16, 2003 under a supplement to an
indenture dated as of April 10, 1992, as amended on October 13, 1992, between
the Company and JPMorgan Chase Bank, as trustee. Copies of the supplement and
the indenture, which we collectively refer to as the indenture, have been filed
as exhibits to the shelf registration statement, of which this prospectus is a
part.
The debentures are limited to $1,020.0 million in aggregate principal
amount. The debentures were issued in registered form without coupons only in
denominations of $1,000 principal amount and integral multiples of $1,000. We
use the term "debenture" in this prospectus to refer to each $1,000 principal
amount of debentures. The debentures mature on January 15, 2024.
The debentures bear interest at an annual rate equal to 6-month LIBOR,
reset semiannually, minus 0.50% (but never less than 0%) on the principal amount
from December 16, 2003, or from the most recent date to which interest has been
paid or provided for. The interest rate for the initial interest period, which
commenced on December 16, 2003 and ends on July 14, 2004, will be 0.73625% per
annum. Interest will be payable semiannually in arrears on January 15 and July
15 of each year, each an interest payment date, beginning July 15, 2004, to the
person in whose name a debenture is registered at the close of business on the
January 1 or July 1, as the case may be, immediately preceding the relevant
interest payment date, each of which we refer to as a record date. Interest on
the debentures will be calculated on the basis of a 360-day year using the
actual number of days elapsed during an interest period. If any date on which
interest is payable is not a business day, other than the interest payment date
that is the date of maturity, a redemption date or a purchase date, we will pay
interest on the next business day (without any interest or other payment due on
the delay), except that if such next business day is in a different month, then
that interest payment date will be the immediately preceding day that is a
business day. If the maturity date or any redemption date or purchase date
(including upon the occurrence of a Fundamental Change, as described below) for
the debentures falls on a day that is not a business day, we will pay the
interest and principal payable on the next business day (without any interest or
other payment due on the delay).
The term "business day," when used with respect to any place of payment for
the debentures or the determination of LIBOR reset date as described below under
"6-month LIBOR", means a day other than a Saturday or a Sunday, a legal holiday
or a day on which banking institutions or trust companies in that place of
payment are authorized or obligated by law to close; provided that such day is
also a London banking day as defined below.
In addition, we will pay additional interest on the debentures under the
circumstances described below under "Registration Rights."
Interest payments on the debentures will include accrued interest from and
including the date of issue or from and including the last date in respect of
which interest has been paid, as the case may be, to, but excluding, the
interest payment date or the date of maturity, as the case may be.
Holders may present debentures for conversion at the office of the
conversion agent and may present debentures for exchange or for registration of
transfer at the office or agency maintained by us for that purpose in the
Borough of Manhattan, The City of New York. We will not charge a service charge
for any exchange or registration of transfer of debentures. However, we may
require payment of a sum sufficient to cover any tax or other governmental
charge payable for the registration of transfer or exchange. The trustee serves
as the initial conversion agent, paying agent and registrar for the debentures.
At any time, we may designate additional paying agents. However, at all times we
will be required to maintain a paying agent for the debentures in the Borough of
Manhattan, The City of New York.
11
Any monies deposited with the trustee or any paying agent or then held by
us in trust for the payment of principal and interest (including additional
interest, if any) on the debentures that remain unclaimed for two years after
the date the payments became due and payable, shall, at our request, be repaid
to us or released from trust, as applicable, and the holders of the debentures
shall thereafter look, as a general unsecured creditor, only to us for payment
thereof.
6-MONTH LIBOR
The annual rate of interest payable on the debentures will be reset on each
interest payment date, which we also refer to as a LIBOR reset date. If any
LIBOR reset date would otherwise be a day that is not a business day, that LIBOR
reset date will be postponed to the next succeeding business day, unless that
business day falls in the next succeeding calendar month, in which case that
LIBOR reset date will be the immediately preceding business day.
We will determine 6-month LIBOR on the second London banking day preceding
the related LIBOR reset date, which we refer to as the LIBOR determination date.
"6-month LIBOR" means:
(a) the rate for six-month deposits in United States dollars
commencing on the related LIBOR reset date, that appears on the Moneyline
Telerate Page 3750 as of 11:00 AM, London time, on the LIBOR determination
date,
(b) if no rate appears on the particular LIBOR determination date on
the Moneyline Telerate Page 3750, the rate calculated by us as the
arithmetic mean of at least two offered quotations obtained by us after
requesting the principal London offices of each of four major reference
banks in the London interbank market to provide us with its offered
quotation for deposits in United States dollars for the period of six
months, commencing on the related LIBOR reset date, to prime banks in the
London interbank market at approximately 11:00 AM, London time, on that
LIBOR determination date and in a principal amount that is representative
for a single transaction in United States dollars in that market at that
time,
(c) if fewer than two offered quotations referred to in clause (b) are
provided as requested, the rate calculated by us as the arithmetic mean of
the rates quoted at approximately 11:00 AM, New York time, on the
particular LIBOR determination date by three major banks in The City of New
York selected by us for loans in United States dollars to leading European
banks for a period of six months, commencing on the related LIBOR reset
date, and in a principal amount that is representative for a single
transaction in United States dollars in that market at that time or
(d) if the banks so selected by us are not quoting as mentioned in
clause (c), 6-month LIBOR in effect on the preceding LIBOR determination
date.
"Moneyline Telerate Page 3750" means the display on Moneyline Telerate (or
any successor service) on such page (or any other page as may replace such page
on such service) for the purpose of displaying the London interbank rates of
major banks for United States dollars.
"London banking day" means a day on which commercial banks are open for
business, including dealings in United States dollars in London.
RANKING
The debentures are our direct, unsecured and unsubordinated obligations.
The debentures rank equally in right of payment with all of our other existing
and future unsecured and unsubordinated indebtedness. In addition, the
debentures effectively rank junior to any secured indebtedness that we may incur
to the extent of the assets securing such indebtedness. We currently conduct
substantially all of our operations through Wyeth. However, to the extent we
conduct operations, now or in the future, through subsidiaries, creditors of
those subsidiaries, including trade creditors and secured creditors, will
generally have claims to the assets of our subsidiaries that are superior to the
claims of our creditors, including holders of the debentures.
12
CONVERSION RIGHTS
Subject to the conditions and during the periods and under the
circumstances described below, holders may convert their debentures into shares
of our common stock initially at a conversion rate of 16.559 shares of common
stock per debenture at any time by giving notice on the business day prior to
the close of business on January 15, 2024. The conversion price as of any date
of determination is a dollar amount (initially $60.39 per share of common stock)
derived by dividing the principal amount of a $1,000 principal amount debenture
by the conversion rate in effect on such date. The conversion rate and the
equivalent conversion price in effect at any given time are referred to as the
"applicable conversion rate" and the "applicable conversion price,"
respectively, and are subject to adjustment as described below. A holder may
convert fewer than all of such holder's debentures so long as the debentures
converted are an integral multiple of $1,000 principal amount.
Upon conversion, we may choose to deliver, in lieu of shares of our common
stock, cash or a combination of cash and shares of our common stock, as
described below.
Except as otherwise described below, you will not receive any cash payment
representing accrued and unpaid interest, including additional interest, upon
conversion of a debenture and we will not adjust the conversion rate to account
for the accrued and unpaid interest, including additional interest. Upon
conversion we will deliver to you shares of our common stock or cash in lieu
thereof, or a combination of the foregoing, and any cash payment to account for
fractional shares ("conversion payment"), as described below. The cash payment
for fractional shares will be based on the last reported sale price of our
common stock on the trading day immediately prior to the conversion settlement
date. Delivery of the conversion payment will be deemed to satisfy in full our
obligation to pay any accrued and unpaid interest on a debenture, and no portion
of any such accrued and unpaid interest will be canceled, extinguished or
forfeited. The fair market value of the conversion payment will be treated as a
payment, to the extent thereof, first, in exchange for any such accrued and
unpaid interest and second, in exchange for the principal amount of the
debenture.
If a holder converts debentures, we will pay any documentary, stamp or
similar issue or transfer tax due on the issue of any shares of our common stock
upon the conversion, unless the tax is due because the holder requests the
shares to be issued or delivered to a person other than the holder, in which
case the holder will pay that tax.
To convert your debenture you must do the following:
- complete and manually sign the notice of conversion on the back of the
debenture or facsimile of the notice of conversion and deliver this
notice to the conversion agent,
- surrender the debenture to the conversion agent,
- if required by the conversion agent, furnish appropriate endorsements and
transfer documents
- if required, pay all transfer or similar taxes and
- if required, pay funds equal to interest payable on the next interest
payment date.
If your interest is a beneficial interest in a global debenture, to convert
you must comply with the last two requirements listed above and comply with
DTC's procedures for converting a beneficial interest in a global debenture. The
conversion date will be the date on which all of the foregoing requirements have
been satisfied. The debentures will be deemed to have been converted, and you
will be deemed a record holder of any shares of common stock deliverable upon
conversion, immediately prior to the close of business on the conversion date. A
certificate for the number of full shares of our common stock into which any
debentures are converted, or cash in lieu thereof, or a combination of the
foregoing, together with any cash payment for fractional shares, will be
delivered through the conversion agent set forth below under "-- Payment Upon
Conversion."
If a holder has already delivered a purchase notice as described under
either "-- Purchase of Debentures by Us at the Option of the Holder" or
"-- Fundamental Change Requires Purchase of Debentures by Us at the Option of
the Holder" with respect to a debenture, however, the holder may not surrender
that debenture for conversion until the holder has withdrawn the purchase notice
in accordance with the indenture, and if your interest is a beneficial interest
in a global debenture, the holder has complied with DTC's procedures.
13
Holders of debentures at the close of business on a record date will
receive payment of interest, payable on the corresponding interest payment date,
notwithstanding the conversion of such debentures at any time after the close of
business on such record date. Debentures surrendered for conversion by a holder
during the period from the close of business on any record date to the opening
of business on the immediately following interest payment date must be
accompanied by payment of an amount equal to the interest that the holder is to
receive on the debentures; provided, however, that no such payment need be made
if (1) we have specified a redemption date that is after a record date and on or
prior to the immediately following interest payment date, (2) we have specified
a purchase date following a Fundamental Change that is during such period or (3)
any overdue interest exists at the time of conversion with respect to such
debentures, to the extent of such overdue interest.
PAYMENT UPON CONVERSION
Conversion on or Prior to the Final Notice Date. In the event that we
receive your notice of conversion on or prior to the day that is 20 days prior
to maturity or, with respect to debentures we have called for redemption, on or
prior to the date that is 20 days prior to the applicable redemption date (the
"final notice date"), the following procedures will apply:
If we choose to satisfy all or any portion of our obligation (the
"conversion obligation") in cash, we will notify you through the trustee of the
dollar amount to be satisfied in cash (which must be expressed either as 100% of
the conversion obligation or as a fixed dollar amount) at any time on or before
the date that is two business days following receipt of your notice of
conversion ("cash settlement notice period"). If we timely elect to pay cash for
any portion of the shares otherwise issuable to you, you may retract the
conversion notice at any time during the two business day period beginning on
the day after the final day of the cash settlement notice period ("conversion
retraction period"); no such retraction can be made (and a conversion notice
shall be irrevocable) if we do not elect to deliver cash in lieu of shares
(other than cash in lieu of fractional shares). If the conversion notice has not
been retracted, then settlement (in cash and/or shares) will occur on the
business day following the final day of the 10 trading day period beginning on
the day after the final day of the conversion retraction period (the "cash
settlement averaging period").
If we choose to satisfy the entire conversion obligation in shares, then
settlement will occur on the conversion date.
Settlement amounts will be computed as follows:
- If we elect to satisfy the entire conversion obligation in shares, we
will deliver to you a number of shares equal to (1) the aggregate
principal amount of debentures to be converted divided by 1,000
multiplied by (2) the applicable conversion rate.
- If we elect to satisfy the entire conversion obligation in cash, we will
deliver to you cash in an amount equal to the product of:
- a number equal to (1) the aggregate principal amount of debentures to be
converted divided by 1,000 multiplied by (2) the conversion rate and
- the average of the last reported sale prices of our common stock during
the cash settlement averaging period.
- If we elect to satisfy a fixed portion (other than 100%) of the
conversion obligation in cash, we will deliver to you such cash amount
("cash amount") and a number of shares, for each $1,000 principal amount
of debenture, equal to the applicable conversion rate, minus the number
of shares equal to the cash amount divided by the average of the last
reported sale prices of our common stock during the cash settlement
averaging period; provided, however, that the number of shares will not
be less than zero.
Conversion After the Final Notice Date. In the event that we receive your
notice of conversion after the final notice date, we will not send individual
notices of our election to satisfy all or any portion of the conversion
obligation in cash. Instead, if we choose to satisfy all or any portion of the
conversion obligation in
14
cash, we will send a single notice to the trustee of the dollar amount to be
satisfied in cash (which must be expressed either as 100% of the conversion
obligation or as a fixed dollar amount) at any time on or before the final
notice date. Settlement amounts will be computed and settlement dates will be
determined in the same manner as set forth above under "-- Conversion on or
Prior to the Final Notice Date" except that the "cash settlement averaging
period" shall be the 10 trading day period beginning on the day after receipt of
your notice of conversion (or in the event we receive your notice of conversion
on the business day prior to the maturity date, the 10 trading day period
beginning on the day after the maturity date). Settlement will occur on the
business day following the final day of such cash settlement averaging period.
If we do not elect to satisfy all or any portion of the conversion obligation in
cash, settlement will occur on the conversion date.
Conversion After Irrevocable Election to Pay Principal in Cash. At any
time prior to maturity, we may irrevocably elect in our sole discretion without
the consent of the holders of the debentures, by notice to the trustee and the
holders of the debentures to satisfy in cash 100% of the principal amount of the
debentures converted after the date of such election. After making such an
election, we still may satisfy our conversion obligation to the extent it
exceeds the principal amount in cash or common stock or a combination of cash
and common stock. If we choose to satisfy all or a portion of the remainder of
our conversion obligation in cash, we will provide notice of our election in the
same manner as set forth above under either "-- Conversion on or Prior to the
Final Notice Date" or "-- Conversion After to the Final Notice Date," whichever
is applicable. Settlement amounts will be computed and settlement dates will be
determined in the same manner as set forth above under "-- Conversion on or
Prior to the Final Notice Date" and "-- Conversion After the Final Notice Date,"
as applicable. If we choose to satisfy all of the remainder of our conversion
obligation in common stock, your notice of conversion will not be retractable as
set forth above under "-- Conversion on or Prior to the Final Notice Date" and
"-- Conversion After the Final Notice Date."
"Trading day" means a day during which trading in securities generally
occurs on the New York Stock Exchange or, if our common stock is not listed on
the New York Stock Exchange, on the principal other U.S. national or regional
securities exchange on which our common stock is then listed or, if our common
stock is not listed on a U.S. national or regional securities exchange, on the
Nasdaq National Market or, if our common stock is not reported by the Nasdaq
National Market, on the principal other market on which our common stock is then
traded.
The "last reported sale price" of our common stock on any date means the
closing sale price per share (or if no closing sale price is reported, the
average of the bid and asked prices or, if more than one in either case, the
average of the average bid and the average asked prices) on that date as
reported in composite transactions for the principal U.S. securities exchange on
which our common stock is traded or, if our common stock is not listed on a U.S.
national or regional securities exchange, as reported by the Nasdaq National
Market. If our common stock is not listed for trading on a U.S. national or
regional securities exchange and not reported by the Nasdaq Market on the
relevant date, the "last reported sale price" will be the last quoted bid price
for our common stock in the over-the-counter market on the relevant date as
reported by the National Quotation Bureau or similar organization. If our common
stock is not so quoted, the "last reported sale price" will be the average of
the mid-point of the last bid and asked prices for our common stock on the
relevant date from each of at least three nationally recognized independent
investment banking firms selected by us for this purpose.
CONDITIONS TO CONVERSION
Holders may surrender their debentures for conversion into shares of our
common stock prior to stated maturity only under the circumstances described
below. For a discussion of the federal income tax consequences of a conversion
of the debentures into our common stock, see "Certain U.S. Federal Income Tax
Consequences."
Conversion Upon Satisfaction of Sale Price Condition. A holder may
surrender any of its debentures for conversion into shares of our common stock:
- in any calendar quarter commencing after March 31, 2004 and prior to
December 31, 2022 (and only during such calendar quarter) if the last
reported sale price of our common stock for at least 20 trading days
during the period of 30 consecutive trading days ending on the last
trading day of the previous
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calendar quarter is greater than or equal to 130% of the applicable
conversion price as of the last day of such previous calendar quarter
(initially 130% of $60.39, or $78.51, which we refer to as the conversion
trigger price) and
- at any time after December 31, 2022 and prior to maturity, if the last
reported sale price of our common stock is greater than or equal to the
conversion trigger price on any day after December 31, 2022.
Conversion Upon Redemption. If we elect to redeem the debentures, holders
may convert debentures into our common stock at any time after we call the
debenture for redemption and prior to the close of business on the business day
immediately preceding the redemption date, even if the debentures are not
otherwise convertible at such time.
Conversion Upon Specified Corporate Transactions. If we elect to:
- distribute to all holders of our common stock certain rights or warrants
entitling them to purchase, for a period expiring within 45 days after
the date of the distribution, shares of our common stock at less than the
last reported sale price of a share of our common stock on the trading
day immediately preceding the declaration date of the distribution or
- distribute to all holders of our common stock our assets, debt securities
or certain rights to purchase our securities, which distribution has a
per share value as determined by our board of directors exceeding 10% of
the last reported sale price of a share of our common stock on the
trading day immediately preceding the declaration date for such
distribution,
we must notify the holders of the debentures at least 20 business days prior to
the ex-dividend time for such distribution. Once we have given such notice,
holders may surrender their debentures for conversion at any time until the
earlier of the close of business on the business day immediately prior to the
ex-dividend time or our announcement that such distribution will not take place,
even if the debentures are not otherwise convertible at such time; provided,
however, that a holder may not exercise this right to convert if the holder may
participate in the distribution without conversion. The "ex-dividend time" is
the first date upon which a sale of the common stock does not automatically
transfer the right to receive the relevant dividend from the seller of the
common stock to its buyer.
In addition, if we are party to a consolidation, merger or binding share
exchange pursuant to which our common stock would be converted into cash,
securities or other property, a holder may surrender debentures for conversion
at any time from and after the date which is 15 days prior to the anticipated
effective date of the transaction until 15 days after the actual effective date
of such transaction (or if such transaction constitutes a Fundamental Change,
until the applicable Fundamental Change purchase date) even if the debentures
are not otherwise convertible at such time. If we engage in certain
reclassifications of our common stock or are a party to a consolidation, merger,
binding share exchange or transfer of all or substantially all of our assets
pursuant to which our common stock is converted into cash, securities or other
property, then at the effective time of the transaction, the right to convert a
debenture into our common stock will be changed into a right to convert a
debenture into the kind and amount of cash, securities or other property that
the holder would have received if the holder had converted its debentures
immediately prior to the transaction. If the transaction also constitutes a
Fundamental Change, as defined below, a holder can require us to purchase all or
a portion of its debentures as described below under "-- Fundamental Change
Requires Purchase of Debentures by Us at the Option of the Holder."
Conversion Upon Credit Ratings Event. A holder may convert debentures into
our common stock during any period in which the credit rating assigned to the
debentures by either Moody's or S&P is lower than Baa3 or BBB-, respectively, or
the debentures are no longer rated by at least one of S&P or Moody's.
16
CONVERSION RATE ADJUSTMENTS
The conversion rate will be subject to adjustment, without duplication,
upon the occurrence of any of the following events:
(1) the payment of dividends and other distributions on our common
stock payable exclusively in shares of our common stock,
(2) the issuance to all holders of our common stock of rights or
warrants that allow the holders to purchase shares of our common stock for
a period expiring within 45 days from the date of issuance of the rights or
warrants at less than the market price on the record date for the
determination of shareholders entitled to receive the rights or warrants,
(3) subdivisions or combinations of our common stock,
(4) distributions to all holders of our common stock of our assets,
debt securities, shares of our capital stock or rights or warrants to
purchase our securities (excluding (A) any dividend, distribution or
issuance covered by clause (1) or (2) above and (B) any dividend or
distribution paid exclusively in cash), in which event the conversion rate
will be adjusted by multiplying:
- the conversion rate by
- a fraction, the numerator of which is the current market price of our
common stock and the denominator of which is the current market price
of our common stock minus the fair market value, as determined by our
board of directors, except as described in the following paragraph, of
the portion of those assets, debt securities, shares of capital stock
or rights or warrants so distributed applicable to one share of common
stock.
In the event that we make a distribution to all holders of our common
stock consisting of capital stock of, or similar equity interests in, a
subsidiary or other business unit of ours, the conversion rate will be
adjusted based on the market value of the securities so distributed
relative to the market value of our common stock, in each case based on the
average of the last reported sales prices of those securities for each of
the 10 trading days commencing on and including the fifth trading day after
the date on which "ex-distribution trading" commences for such dividend or
distribution on the New York Stock Exchange or such other national or
regional exchange or market on which the securities are then listed or
quoted.
(5) distributions by us consisting exclusively of cash to all holders
of our common stock, excluding any cash dividend on our common stock to the
extent that the aggregate cash dividend per share of our common stock (i)
in any quarter does not exceed $0.23 and (ii) in any calendar year does not
exceed $0.92 (each such number, the "dividend threshold amount") (the
dividend threshold amount is subject to adjustment on an inversely
proportional basis whenever the conversion rate is adjusted, provided that
no adjustment will be made to the dividend threshold amount for any
adjustment made to the conversion rate pursuant to this clause (5)), in
which event the conversion rate will be adjusted by multiplying:
- the conversion rate by
- a fraction, the numerator of which will be the current market price of
our common stock and the denominator of which will be the current
market price of our common stock minus the amount per share of such
dividend increase (as determined below) or distribution.
If an adjustment is required to be made under this clause (5) as a
result of a distribution that is a quarterly or annual dividend, the
adjustment would be based, without duplication, upon the amount by which
the distribution exceeds the dividend threshold amount (the dividend
increase). If an adjustment is required to be made under this clause (5) as
a result of a distribution that is not a quarterly or annual dividend, the
adjustment would be based upon the full amount of the distribution.
(6) a payment by us or one of our subsidiaries in respect of a tender
offer or exchange offer for our common stock (other than offers not subject
to Rule 13e-4 under the Exchange Act) to the extent that the cash and value
of any other consideration included in the payment per share of our common
stock
17
exceeds the last reported sale price of our common stock on the trading day
next succeeding the last date on which tenders or exchanges may be made
pursuant to such tender or exchange offer, in which event the conversion
rate will be adjusted by multiplying:
- the conversion rate by
- a fraction, the numerator of which will be the sum of (x) the fair
market value, as determined by our board of directors, of the
aggregate consideration payable for all shares of our common stock we
purchase in such tender or exchange offer and (y) the product of the
number of shares of our common stock outstanding less any such
purchased shares and the last reported sale price of our common stock
on the trading day next succeeding the expiration of the tender or
exchange offer and the denominator of which will be the product of the
number of shares of our common stock outstanding, including any such
purchased shares, and the last reported sale price of our common stock
on the trading day next succeeding the expiration of the tender or
exchange offer.
To the extent that we have a rights plan in effect upon conversion of the
debentures into common stock, the holder will receive (except to the extent we
settle our conversion obligation in cash), in addition to the common stock, the
rights under the rights plan unless the rights have separated from the common
stock prior to the time of conversion, in which case the conversion rate will be
adjusted at the time of separation as if we distributed to all holders of our
common stock our assets, debt securities, shares of our capital stock or rights
or warrants to purchase our securities as described in clause (4) above.
In addition to these adjustments, we may increase the conversion rate as
our board of directors considers advisable to avoid or diminish any income tax
to holders of our common stock or rights to purchase our common stock resulting
from any dividend or distribution of stock (or rights to acquire stock) or from
any event treated as such for income tax purposes. We may also, from time to
time, to the extent permitted by applicable law, increase the conversion rate by
any amount for any period of at least 20 business days if our board of directors
has determined that such increase would be in our best interests. If our board
of directors makes such a determination, it will be conclusive. We will give
holders of debentures at least 15 days notice of such an increase in the
conversion rate.
As used in this prospectus, "current market price" means the average of the
last reported sale prices per share of our common stock for the 20 trading day
period ending on the applicable date of determination (if the applicable date of
determination is a trading day or, if not, then on the last trading day prior to
the applicable date of determination), appropriately adjusted to take into
account the occurrence, during the period commencing on the first of the trading
days during the 20 trading day period and ending on the applicable date of
determination, of any event that would result in an adjustment of the conversion
rate under the indenture.
The applicable conversion rate will not be adjusted:
- upon the issuance of any shares of our common stock pursuant to any
present or future plan providing for the reinvestment of dividends or
interest payable on our securities and the investment of additional
optional amounts in shares of our common stock under any plan,
- upon the issuance of any shares of our common stock or options or rights
to purchase those shares pursuant to any present or future employee,
director or consultant benefit plan or program of or assumed by us or any
of our subsidiaries,
- upon the issuance of any shares of our common stock pursuant to any
option, warrant, right or exercisable, exchangeable or convertible
security not described in the preceding bullet and outstanding as of the
date the debentures were first issued,
- for a change in the par value of the common stock or
- for accrued and unpaid interest, including additional interest, if any.
Adjustments to the applicable conversation rate will be calculated to the
nearest 1/10,000th of a share. No adjustment in the applicable conversion rate
will be required unless the adjustment would require an increase or decrease of
at least 0.50% of the applicable conversion rate. If the adjustment is not made
because
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the adjustment does not change the applicable conversion rate by more than
0.50%, then the adjustment that is not made will be carried forward and taken
into account in any future adjustment.
In the event of:
- a taxable distribution to holders of shares of common stock which results
in an adjustment of the conversion rate or
- an increase in the conversion rate at our discretion,
the holders of the debentures may, in certain circumstances, be deemed to
have received a distribution subject to U.S. federal income tax as a dividend.
In addition, non-U.S. holders of debentures in certain circumstances may be
deemed to have received a distribution subject to U.S. federal withholding tax
requirements. See "Certain U.S. Federal Income Tax Consequences -- Consequences
to U.S. Holders -- Constructive Distributions" and "-- Consequences to Non-U.S.
Holders -- Dividends and Constructive Dividends."
OPTIONAL REDEMPTION
No sinking fund is provided for the debentures. Prior to July 20, 2009, the
debentures are not redeemable. On or after July 20, 2009, we may redeem for cash
all or part of the debentures at any time, upon not less than 20 nor more than
60 days notice before the redemption date by mail to the trustee, the paying
agent and each holder of debentures, for a price equal to 100% of the principal
amount of the debentures to be redeemed plus any accrued and unpaid interest,
including additional interest, if any, to the redemption date.
If we decide to redeem fewer than all of the outstanding debentures, the
trustee will select the debentures to be redeemed (in principal amounts of
$1,000 or integral multiples thereof) by lot, on a pro rata basis or by another
method the trustee considers fair and appropriate.
If the trustee selects a portion of your debenture for partial redemption
and you convert a portion of the same debenture, the converted portion will be
deemed to be from the portion selected for redemption.
In the event of any redemption in part, we will not be required to issue,
register the transfer of or exchange any debenture during a period of 15 days
before the mailing of the redemption notice.
PURCHASE OF DEBENTURES BY US AT THE OPTION OF THE HOLDER
Holders have the right to require us to purchase all or a portion of the
debentures on July 15, 2009, January 15, 2014 and January 15, 2019 (each, a
"purchase date"). Any debentures purchased by us on a purchase date will be paid
for in cash. We will be required to purchase any outstanding debentures for
which a holder delivers a written purchase notice to the paying agent. This
notice must be delivered during the period beginning at any time from the
opening of business on the date that is 20 business days prior to the relevant
purchase date until the close of business on the business day prior to the
purchase date. If the purchase notice is given and withdrawn during such period,
we will not be obligated to purchase the related debentures. Our purchase
obligation will be subject to some additional conditions as described in the
indenture. Also, as described in the "Risk Factors" section of this prospectus
under the caption "Risks Related to the Debentures -- We may not have the
ability to raise the funds necessary to purchase the debentures upon a
Fundamental Change or other purchase date, as required by the indenture
governing the debentures," we may not have funds sufficient to purchase the
debentures when we are required to do so. Our failure to purchase the debentures
when we are required to do so will constitute an event of default under the
indenture with respect to the debentures. If a holder has delivered a purchase
notice as described herein with respect to a debenture, the holder may not
surrender that debenture for conversion until the holder has withdrawn the
purchase notice as set forth below.
The purchase price payable will be equal to 100% of the principal amount of
the debentures to be purchased plus any accrued and unpaid interest, including
additional interest, if any, to such purchase date. For a discussion of the U.S.
federal income tax treatment of a holder receiving cash, see "Certain U.S.
Federal Income Tax Consequences."
19
On or before the 20th business day prior to each purchase date, we will
provide to the trustee, the paying agent and to all holders of the debentures at
their addresses shown in the register of the registrar, and to beneficial owners
as required by applicable law, a notice stating, among other things:
- the purchase price,
- the name and address of the paying agent and the conversion agent,
- the conversion rate and any adjustments to the conversion rate,
- the debentures with respect to which a purchase notice has been given by
the holder may be converted only if the holder withdraws the purchase
notice in accordance with the terms of the indenture, and
- the procedures that holders must follow to require us to purchase their
debentures.
In connection with providing such notice, we will issue a press release and
publish a notice containing this information in a newspaper of general
circulation in The City of New York or publish the information on our web site
or through such other public medium as we may use at that time.
A notice electing to require us to purchase your debentures must state:
- if certificated debentures have been issued, the certificate numbers of
the debentures,
- the portion of the principal amount of debentures to be purchased, in
integral multiples of $1,000, and
- that the debentures are to be purchased by us pursuant to the applicable
provisions of the debentures and the indenture.
If the debentures are not in certificated form, your notice must comply with
appropriate DTC procedures.
We may not purchase any debentures at the option of holders if the principal
amount of the debentures has been accelerated, and such acceleration has not
been rescinded.
You may withdraw any purchase notice in whole or in part by a written
notice of withdrawal delivered to the paying agent prior to the close of
business on the business day prior to the purchase date. The notice of
withdrawal must state:
- the principal amount of the withdrawn debentures,
- if certificated debentures have been issued, the certificate numbers of
the withdrawn debentures, and
- the principal amount, if any, that remains subject to the purchase
notice.
If the debentures are not in certificated form, your withdrawal notice must
comply with appropriate DTC procedures.
You must either effect book-entry transfer or deliver the debentures,
together with necessary endorsements, to the office of the paying agent after
delivery of the purchase notice to receive payment of the purchase price. You
will receive payment promptly following the later of the purchase date and the
time of book-entry transfer or the delivery of the debentures. If the paying
agent holds money or securities sufficient to pay the purchase price of the
debentures on the business day following the purchase date, then:
- the debentures will cease to be outstanding and interest, including
additional interest, will cease to accrue (whether or not book-entry
transfer of the debentures is made or whether or not the debentures are
delivered to) the paying agent, and
- all other rights of the holder will terminate (other than the right to
receive the purchase price upon delivery or transfer of the debentures).
FUNDAMENTAL CHANGE REQUIRES PURCHASE OF DEBENTURES BY US AT THE OPTION OF THE
HOLDER
If a Fundamental Change (as defined below in this section) occurs at any
time prior to maturity, holders will have the right, at their option, to require
us to purchase any or all of their debentures for cash, or any
20
portion of the principal amount thereof, that is equal to $1,000 or an integral
multiple of $1,000. The cash price we are required to pay is equal to the
principal amount of the debentures to be purchased plus accrued and unpaid
interest, including additional interest, if any, to but excluding the
Fundamental Change purchase date, unless such Fundamental Change purchase date
falls after a record date and on or prior to the corresponding interest payment
date, in which case we will pay the full amount of accrued and unpaid interest
payable on such interest payment date to the holder of record at the close of
business on the corresponding record date. For a discussion of the U.S. federal
income tax treatment of a holder receiving cash, see "Certain U.S. Federal
Income Tax Consequences." If a holder has delivered a purchase notice as
described herein with respect to a debenture, the holder may not surrender that
debenture for conversion until the holder has withdrawn the purchase notice as
set forth below.
A "Fundamental Change" will be deemed to have occurred at any time after
the debentures are originally issued that any of the following occurs:
(1) our common stock or other common stock into which the debentures
are convertible is neither listed for trading on a United States national
securities exchange nor approved for trading on the Nasdaq National Market
or another established automated over-the-counter trading market in the
United States,
(2) a "person" or "group" within the meaning of Section 13(d) of the
Exchange Act other than us, our subsidiaries or our or their employee
benefit plans, files a Schedule TO or any schedule, form or report under
the Exchange Act disclosing that such person or group has become the direct
or indirect ultimate "beneficial owner," as defined in Rule 13d-3 under the
Exchange Act, of our common equity representing more than 50% of the voting
power of our common equity entitled to vote generally in the election of
directors,
(3) consummation of any share exchange, consolidation or merger of us
pursuant to which our common stock will be converted into cash, securities
or other property or any sale, lease or other transfer in one transaction
or a series of transactions of all or substantially all of the consolidated
assets of us and our subsidiaries, taken as a whole, to any person other
than us or one or more of our subsidiaries; provided, however, that a
transaction where the holders of our common equity immediately prior to
such transaction have directly or indirectly, more than 50% of the
aggregate voting power of all classes of common equity of the continuing or
surviving corporation or transferee entitled to vote generally in the
election of directors immediately after such event shall not be a
Fundamental Change or
(4) continuing directors (as defined below in this section) cease to
constitute at least a majority of our board of directors.
A Fundamental Change will not be deemed to have occurred in respect of any
of the foregoing, however, if either:
(1) the last reported sale price of our common stock for any five
trading days within the 10 consecutive trading days ending immediately
before the later of the Fundamental Change or the public announcement
thereof, equals or exceeds 105% of the applicable conversion price of the
debentures in effect immediately before the Fundamental Change or the
public announcement thereof, as the case may be, or
(2) at least 90% of the consideration, excluding cash payments for
fractional shares, in the transaction or transactions constituting the
Fundamental Change consists of shares of capital stock traded on a national
securities exchange or quoted on the Nasdaq National Market or which will
be so traded or quoted when issued or exchanged in connection with a
Fundamental Change (these securities being referred to as "publicly traded
securities") and as a result of this transaction or transactions the
debentures become convertible into such publicly traded securities,
excluding cash payments for fractional shares.
For purposes of the above paragraph the term capital stock of any person
means any and all shares, interests, participations or other equivalents however
designated of corporate stock or other equity participations, including
partnership interests, whether general or limited, of such person and any rights
(other than
21
debt securities convertible or exchangeable into an equity interest), warrants
or options to acquire an equity interest in such person.
"Continuing director" means a director who either was a member of our board
of directors on the date that the debentures were originally issued or who
becomes a member of our board of directors subsequent to that date and whose
appointment, election (or re-election) or nomination (or re-nomination) for
election by our stockholders is duly approved by a majority of the continuing
directors on our board of directors at the time of such approval, either by a
specific vote or by approval of the proxy statement issued by us on behalf of
the board of directors in which such individual is named as nominee for
director.
On or before the 30th day after the occurrence of a Fundamental Change, we
will provide to all holders of the debentures and the trustee and paying agent a
notice of the occurrence of the Fundamental Change and of the resulting purchase
right. Such notice shall state, among other things:
- the events causing a Fundamental Change,
- the date of the Fundamental Change,
- the last date on which a holder may exercise the purchase right,
- the Fundamental Change purchase price,
- the Fundamental Change purchase date,
- the name and address of the paying agent and the conversion agent,
- the applicable conversion rate and any adjustments to the applicable
conversion rate,
- the debentures with respect to which a Fundamental Change purchase notice
has been given by the holder may be converted only if the holder
withdraws the Fundamental Change purchase notice in accordance with the
terms of the indenture, and
- the procedures that holders must follow to require us to purchase their
debentures.
In connection with providing such notice, we will issue a press release and
publish a notice containing this information in a newspaper of general
circulation in the City of New York or publish the information on our web site
or through such other public media as we may use at the time.
To exercise the purchase right, holders must deliver, before the close of
business on the business day immediately preceding the Fundamental Change
purchase date, the debentures to be purchased, duly endorsed for transfer,
together with the form entitled "Form of Fundamental Change Purchase Notice"
duly completed, to the paying agent. Their purchase notice must state:
- if certificated, the certificate numbers of their debentures to be
delivered for purchase,
- the portion of the principal amount of debentures to be purchased, which
must be $1,000 or an integral multiple thereof, and
- that the debentures are to be purchased by us pursuant to the applicable
provisions of the debentures and the indenture.
If the debentures are not in certificated form, the purchase notice must comply
with appropriate DTC procedures.
Holders may withdraw any purchase notice (in whole or in part) by a written
notice of withdrawal delivered to the paying agent prior to the close of
business on the business day prior to the Fundamental Change purchase date. The
notice of withdrawal shall state:
- the principal amount of the withdrawn debentures,
- if certificated debentures have been issued, the certificate numbers of
the withdrawn debentures, and
- the principal amount, if any, that remains subject to the purchase
notice.
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If the debentures are not in certificated form, the withdrawal notice must
comply with appropriate DTC procedures.
We will be required to purchase the debentures no less than 20 and no more
than 35 business days after the date of our notice of the occurrence of the
relevant Fundamental Change, subject to extension to comply with applicable law.
You must either effect book-entry transfer or deliver the debentures, together
with necessary endorsements, to the office of the paying agent after delivery of
the purchase notice to receive payment of the purchase price. Holders will
receive payment of the Fundamental Change purchase price promptly following the
later of the Fundamental Change purchase date or the time of book-entry transfer
or the delivery of the debentures. If the paying agent holds money or securities
sufficient to pay the Fundamental Change purchase price of the debentures on the
business day following the Fundamental Change purchase date, then:
- the debentures will cease to be outstanding and interest, including
additional interest, if any, will cease to accrue (whether or not
book-entry transfer of the debentures is made or whether or not the
debenture is delivered to the paying agent), and
- all other rights of the holder will terminate (other than the right to
receive the Fundamental Change purchase price upon delivery or transfer
of the debentures).
The rights of the holders to require us to purchase their debentures upon a
Fundamental Change could discourage a potential acquirer of us. The Fundamental
Change purchase feature, however, is not the result of management's knowledge of
any specific effort to accumulate shares of our common stock, to obtain control
of us by any means or part of a plan by management to adopt a series of
anti-takeover provisions. Instead, the Fundamental Change purchase feature is a
standard term contained in other offerings of debt securities similar to the
debentures that have been marketed by certain of the initial purchasers. The
terms of the Fundamental Change purchase feature resulted from negotiations
between the initial purchasers and us.
The term Fundamental Change is limited to specified transactions and may
not include other events that might adversely affect our financial condition. In
addition, the requirement that we offer to purchase the debentures upon a
Fundamental Change may not protect holders in the event of a highly leveraged
transaction, reorganization, merger or similar transaction involving us.
No debentures may be purchased at the option of holders upon a Fundamental
Change if the principal amount of the debentures has been accelerated, and such
acceleration has not been rescinded.
The definition of Fundamental Change includes a phrase relating to the
conveyance, transfer, sale, lease or disposition of "all or substantially all"
of the consolidated assets of us and our subsidiaries, taken as a whole. There
is no precise, established definition of the phrase "substantially all" under
applicable law. Accordingly, the ability of a holder of the debentures to
require us to purchase its debentures as a result of the conveyance, transfer,
sale, lease or other disposition of less than all of our assets may be
uncertain.
If a Fundamental Change were to occur, we may not have enough funds to pay
the Fundamental Change purchase price or we may be prohibited from doing so
under the terms of our then-existing indebtedness. See "Risk Factors" under the
caption "Risks Related to the Debentures -- We may not have the ability to raise
the funds necessary to purchase the debentures upon a Fundamental Change or
other purchase date, as required by the indenture governing the debentures." Our
failure to purchase the debentures when required following a Fundamental Change
will constitute an event of default under the indenture with respect to the
debentures. In addition, we have, and may in the future incur, other
indebtedness with similar change in control provisions permitting holders to
accelerate or to require us to purchase our indebtedness upon the occurrence of
similar events or on some specific dates.
RESTRICTIVE COVENANTS
We will be subject to the following negative covenants with respect to the
debentures only during the time when we are subject to these negative covenants
with respect to the three tranches of senior notes issued on
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the same day as the debentures. We refer to the termination of our obligations
under these covenants as a "covenant termination event."
Limitation on Liens. The indenture provides that the Company will not
create or assume, or permit any Restricted Subsidiary (as defined below) to
create or assume, any mortgage, pledge, security interest or lien ("Mortgage")
of or upon any Principal Property (as defined below) or shares of capital stock
or indebtedness of any Restricted Subsidiary, unless the debentures are secured
by such a Mortgage equally and ratably with all other indebtedness thereby
secured. Such covenant does not apply to:
(a) Mortgages on any Principal Property, shares of stock or
indebtedness of any corporation existing at the time such corporation
becomes a Restricted Subsidiary;
(b) Mortgages on any Principal Property acquired, constructed or
improved by the Company or any Restricted Subsidiary after the date of the
indenture which are created or assumed contemporaneously with such
acquisition, construction or improvement or within 120 days after the
latest of the acquisition, completion of construction (including any
improvement on any existing property) or commencement of commercial
operation of such property;
(c) Mortgages on any Principal Property or shares of stock or
indebtedness acquired from a corporation merged with or into the Company or
a Restricted Subsidiary;
(d) Mortgages on any Principal Property to secure indebtedness of a
Restricted Subsidiary to the Company or another Restricted Subsidiary;
(e) Mortgages on any Principal Property in favor of the United States
of America or any State thereof or The Commonwealth of Puerto Rico or any
political subdivisions thereof to secure progress or other payments or to
secure indebtedness incurred for the purpose of financing the cost of
acquiring, constructing or improving such Principal Property (including
Mortgages incurred in connection with pollution control, industrial
revenue, Title XI maritime financings or similar financings);
(f) Mortgages existing on the date of the indenture; and
(g) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Mortgage referred to
in the foregoing clauses (a) to (f), inclusive.
Notwithstanding the foregoing, the Company and its Restricted Subsidiaries
may, without securing the debentures, create or assume Mortgages (which would
otherwise be subject to the foregoing restrictions) securing indebtedness in an
aggregate amount which, together with all other Exempted Debt (as defined) of
the Company and its Restricted Subsidiaries, does not at the time exceed 10% of
the Company's consolidated net tangible assets (defined in the indenture as
total assets less current liabilities and intangible assets).
Sale and Lease-Back Transactions. The indenture provides that Sale and
Lease-Back Transactions (as defined) by the Company or any Restricted Subsidiary
of any Principal Property are prohibited except in the event that (a) the
Company or such Restricted Subsidiary would be entitled to incur indebtedness
secured by a Mortgage on the Principal Property to be leased equal in amount to
the Attributable Debt (as defined) with respect to such Sale and Lease-Back
Transaction without equally or ratably securing the debentures; or (b) the
Company applies an amount equal to the fair value of the property sold to the
purchase of Principal Property or to the retirement of Long-Term Indebtedness
(as defined) of the Company within 120 days of the effective date of any such
Sale and Lease-Back Transaction. In lieu of applying such amount to such
retirement the Company may deliver debentures to the trustee for cancellation,
such debentures to be credited at the cost thereof to the Company.
Notwithstanding the foregoing, the Company or any Restricted Subsidiary may
enter into any Sale and Lease-Back Transaction (which would otherwise be subject
to the foregoing restrictions) as long as the Attributable Debt resulting from
such Sale and Lease-Back Transaction, together with all other Exempted Debt (as
defined) of the Company and its Restricted Subsidiaries, does not at the time
exceed 10% of the Company's consolidated net tangible assets.
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The term "Principal Property" means the Company's principal office building
and each manufacturing plant or research facility located within the territorial
limits of the States of the United States of America or The Commonwealth of
Puerto Rico (but not within any other territorial possession) of the Company or
a Subsidiary except such as the Board of Directors by resolution reasonably
determines (taking into account, among other things, the importance of such
property to the business, financial condition and earnings of the Company and
its consolidated Subsidiaries taken as a whole) not to be a Principal Property.
The term "Subsidiary" means any corporation the outstanding securities of
which having ordinary voting power to elect a majority of the board of directors
of such corporation are at the time owned or controlled by the Company or by one
or more Subsidiaries or by the Company and one or more Subsidiaries, other than
a Subsidiary which is engaged primarily in financing receivables, making loans,
extending credit, providing financing from foreign sources or other activities
of a character conducted by a finance company. The term "Restricted Subsidiary"
means any Subsidiary which owns a Principal Property.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with, merge into, or sell or convey its property and
assets substantially as an entirety to another entity unless (i) the successor
entity assumes all of our obligations under the indenture and the debentures,
(ii) after giving effect thereto, no default or Event of Default shall have
occurred and be continuing, (iii) such successor entity shall be incorporated
under the laws of the United States or any State and (iv) we have delivered to
the trustee an officers' certificate and a legal opinion confirming that we have
complied with the indenture. Thereafter, except in the case of a conveyance by
way of lease, all such obligations of ours shall terminate. The indenture
further provides that we will not, and will not permit any Restricted Subsidiary
to, merge or consolidate with another corporation, or sell all or substantially
all of its assets to another corporation for a consideration other than the fair
value thereof in cash, if such other corporation has outstanding obligations
secured by a mortgage which, after such transaction, would extend to any
Principal Property owned by us or such Restricted Subsidiary prior to such
transaction, unless we or such Restricted Subsidiary shall have effectively
provided that the debentures will be secured by a mortgage which, upon
completion of the aforesaid transaction, will rank prior to such mortgage of
such other corporation on any Principal Property; provided, that this sentence
will cease to apply if a covenant termination event occurs.
If we engage in certain reclassifications of our common stock or are a
party to a consolidation, merger, binding share exchange or transfer of all or
substantially all of our assets pursuant to which our common stock is converted
into cash, securities or other property, then at the effective time of the
transaction, the right to convert a debenture into our common stock will be
changed into a right to convert a debenture into the kind and amount of cash,
securities or other property that the holder would have received if the holder
had converted its debentures immediately prior to the transaction. If the
transaction also constitutes a Fundamental Change, as defined below, a holder
can require us to purchase all or a portion of its debentures as described below
under "-- Fundamental Change Requires Purchase of Debentures by Us at the Option
of the Holder."
Certain of these transactions could constitute a Fundamental Change (as
defined above) permitting each holder to require us to purchase the debentures
of such holder as described above.
The provisions of the indenture do not afford holders of the debentures
protection in the event of a highly leveraged or other transaction involving us
that may adversely affect holders of the debentures.
EVENTS OF DEFAULT
An Event of Default is defined under the indenture as being:
(a) default in payment of any principal of the debentures, either at
maturity, upon any redemption or repurchase, by declaration or otherwise;
(b) failure to deliver our common stock, or cash in lieu thereof, or a
combination of the foregoing, upon conversion of any debenture and such
failure continues for 10 days following the scheduled settlement date for
such conversion;
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(c) default for 30 days in payment of any interest on any debentures;
(d) default for 90 days after written notice in the observance or
performance of any other covenant or agreement in the debentures or the
indenture;
(e) certain events of bankruptcy, insolvency or reorganization; and
(f) failure to provide notice of a Fundamental Change for 10 days
after written notice from the trustee or the holders of not less than 25%
in principal amount of the debentures.
The indenture provides that (i) if an Event of Default described in the
foregoing clauses (a), (b), (c), (d) or (f) shall have occurred and be
continuing, either the trustee or the holders of not less than 25% in principal
amount of the debentures then outstanding may then declare the principal of all
debentures and interest accrued thereon to be due and payable immediately; and
(ii) if an Event of Default described in the foregoing clause (e) shall have
occurred and be continuing, either the trustee or the holders of not less than
25% in principal amount of all series of debt securities then outstanding under
the base indenture may declare the principal of all debentures and interest
accrued thereon to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults may be waived by the holders
of a majority in principal amount of the debentures of all such affected series
then outstanding.
Subject to certain limitations, the holders of a majority in principal
amount of the outstanding debentures 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.
The indenture provides that no holder of debentures may institute any
action under the indenture (except actions for payment of overdue principal or
interest) unless such holder previously shall have given to the trustee written
notice of default and continuance thereof and unless the holders of not less
than 25% in principal amount of the debentures then outstanding shall have
requested the trustee to institute such action and shall have offered the
trustee reasonable indemnity, the trustee shall not have instituted such action
within 60 days of such request and the trustee shall not have received direction
inconsistent with such written request by the holders of a majority in principal
amount of the debentures.
The indenture contains a covenant that we will file annually with the
trustee a certificate of no default or a certificate specifying any default that
exists.
A default in the payment of the debentures, or a default with respect to
the debentures that causes them to be accelerated, may give rise to a cross
default under our credit facilities or other indebtedness we may incur in the
future.
SATISFACTION AND DISCHARGE OF THE INDENTURE
The indenture will generally cease to be of any further effect with respect
to the debentures, if:
- we have delivered to the trustee for cancellation all outstanding
debentures (with certain limited exceptions) or
- all debentures not previously delivered to the trustee for cancellation
have become due and payable, whether at stated maturity or any redemption
date or any purchase date (including upon the occurrence of a Fundamental
Change), or upon conversion or otherwise, and we have deposited with the
trustee as trust funds the entire amount (including our common stock, as
applicable) sufficient to pay all of the outstanding debentures,
- and if, in either case, we also pay or cause to be paid all other sums
payable under the indenture by us.
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LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The debentures will not be subject to any defeasance provisions under the
indenture.
MODIFICATION AND WAIVER
The indenture provides that we and the trustee may enter into supplemental
indentures without the consent of the holders of the debentures to:
(a) secure any debentures;
(b) evidence the assumption by a successor corporation of the
obligations of ours;
(c) add covenants for the protection of the holders of debentures;
(d) cure any ambiguity or correct any inconsistency in the indenture
or conform the indenture to the description of debentures in this
prospectus; and
(e) evidence the acceptance of appointment by a successor trustee.
The indenture also contains provisions permitting us and the trustee, with
the consent of the holders of not less than a majority in principal amount of
the debentures, to add any provisions to, or change in any manner or eliminate
any of the provisions of, the indenture or modify in any manner the rights of
the holders of the debentures; provided that we and the trustee may not, without
the consent of the holder of each outstanding debenture affected thereby,
(a) extend the final maturity of the principal of the debentures or
reduce the principal amount thereof or reduce the rate or extend the time
of payment of interest thereon or reduce any amount payable on the
redemption or repurchase thereof or change the currency in which the
principal thereof (including any amount in respect of original issue
discount) or interest thereon is payable or reduce the amount of any
original issue discount security payable upon acceleration or provable in
bankruptcy or impair the right to institute suit for the enforcement of any
payment on any debenture when due;
(b) make any change that adversely affects the right to convert the
debentures or reduces the amount payable upon conversion;
(c) reduce the aforesaid percentage in principal amount of debentures,
the consent of the holders of which is required for any such modification;
or
(d) modify any of the foregoing provisions except to increase the
aforesaid percentage or to provide that other provisions of the indenture
may not be amended or waived without the consent of the holder of each
outstanding debenture affected thereby.
CALCULATIONS IN RESPECT OF DEBENTURES
We will be responsible for making all calculations called for under the
debentures. These calculations include, but are not limited to, determinations
of the market prices of our common stock, anti-dilution adjustments and the
conversion rate of the debentures. We will make all these calculations in good
faith and, absent manifest error, our calculations will be final and binding on
holders of debentures. We will provide a schedule of our calculations to each of
the Trustee and the conversion agent, and each of the Trustee and conversion
agent is entitled to rely upon the accuracy of our calculations without
independent verification. The Trustee will forward our calculations to any
holder of debentures upon the request of that holder.
BOOK-ENTRY SYSTEM
The debentures are represented by one or more global securities. Each
global security has been deposited with, or on behalf of, DTC and registered in
the name of a nominee of DTC.
Upon the issuance of a global security, DTC will credit on its book-entry
registration and transfer system the accounts of persons designated by the
initial purchasers with the respective principal amounts of the
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debentures represented by the global security. Ownership of beneficial interests
in a global security will be limited to persons that have accounts with DTC or
its nominee ("participants") or persons that may hold interests through
participants. Ownership of beneficial interests in a global security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by DTC or its nominee (with respect to interests of persons
other than participants). The laws of some states require that some purchasers
of securities take physical delivery of the securities in certificated form.
Such limits and such laws may impair the ability to transfer beneficial
interests in a global security.
Principal and interest payments, if any, on debentures registered in the
name of DTC or its nominee will be made to DTC or its nominee, as the case may
be, as the registered owner of the relevant global security. Neither we, the
trustee, any paying agent or the security registrar for the debentures have any
responsibility or liability for any aspect of the records relating to nor
payments made on account of beneficial interests in a global security or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
or interest, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of the relevant global security as shown on the records of DTC or its
nominee. We also expect that payments by participants to owners of beneficial
interests in a global security held through these participants will be governed
by standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of the participants.
Beneficial owners of interests in global securities who desire to convert
their interests into common stock or have us redeem or repurchase their
interests pursuant to the indenture should contact their brokers or other
participants or indirect participants through whom they hold such beneficial
interests to obtain information on procedures, including proper forms and
cut-off times, for submitting requests for conversion.
Unless and until they are exchanged in whole or in part for debentures in
certificated form, the global securities may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC. Transfers between participants in DTC will be effected in the
ordinary way in accordance with DTC rules and will be settled in same-day funds.
If an event of default has occurred and is continuing and all principal and
accrued interest in respect of the debentures have become immediately due and
payable or DTC at any time is unwilling, unable or ineligible to continue as a
depositary, and a successor depositary is not appointed by us within 90 days, we
will issue debentures in certificated form in exchange for the global securities
relating to the debentures. In addition, we may at any time and in our sole
discretion determine not to have the debentures or portions of the debentures
represented by one or more global securities and, in that event, we will notify
the trustee and issue individual debentures in exchange for the global security
or securities representing the debentures. Holders of beneficial interests in a
global security may exchange such beneficial interests for debentures in a
certificated form upon request in accordance with customary procedures.
Debentures so issued in certificated form will be issued as registered
debentures in denominations of $1,000 and integral multiples thereof, unless
otherwise specified by us. Such debentures will be subject to certain
restrictions on registration of transfers as described under "Transfer
Restrictions" and will bear the legend set forth thereunder.
NOTICES
Notices to holders of the notes will be published in authorized newspapers
in the Borough of Manhattan, the City of New York and in London. It is expected
that publication will be made in the City of New York in The Wall Street Journal
and in London in the Financial Times. We will be deemed to have given such
notice on the date of each publication or, if published more than once, on the
date of the first such publication.
THE TRUSTEE
JPMorgan Chase Bank is the initial trustee, conversion agent, paying agent,
transfer agent and registrar with respect to the debentures.
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GOVERNING LAW
The indenture and the debentures are governed by, and construed in
accordance with, the laws of the State of New York.
REGISTRATION RIGHTS
We entered into a registration rights agreement with the initial
purchasers. In the registration rights agreement we agreed, for the benefit of
the holders of the debentures and the shares of common stock issuable upon
conversion of the debentures, which we refer to as the registrable securities,
that we will, at our expense:
- file with the SEC, within 90 days after the date the debentures are
originally issued, a shelf registration statement, of which this
prospectus is a part, covering resales of the registrable securities,
- use our reasonable efforts to cause the shelf registration statement to
be declared effective under the Securities Act within 180 days after the
date the debentures are originally issued and
- use our reasonable efforts to keep effective the shelf registration
statement during the periods referred to below until the earlier of (i)
the date all registrable securities (excluding any shares of common stock
issuable upon conversion of debentures so sold) have been sold pursuant
to the shelf registration statement or Rule 144 under the Securities Act,
or any successor provision and (ii) the expiration of the holding period
with respect to the registrable securities under Rule 144(k) under the
Securities Act, or any successor provision.
The registration rights agreement permits us, if we possess material
nonpublic information the disclosure of which would have a material adverse
effect on us and our subsidiaries taken as a whole, to postpone for a reasonable
period not to exceed 90 days without causing a registration default, our
obligation to use reasonable efforts to cause the shelf registration statement
to be declared effective within 180 days after the initial issuance of the
debentures. We will provide notice to all holders of debentures if we do
postpone the effective date of the shelf registration statement.
Notwithstanding the foregoing, holders of registrable securities will only
be entitled to sell such securities under the shelf registration statement
during the following periods, which we refer to as window periods:
- following the date the shelf registration statement is effective, the 20
calendar day period commencing on the date we are required to have filed
any of our Quarterly Reports on Form 10-Q or Annual Reports on Form 10-K.
We anticipate those dates to be:
- 40 days after the end of the fiscal quarters ended June 30, 2004 and
September 30, 2004;
- 60 days after the end of the fiscal years ended December 31, 2004 and
December 31, 2005; and
- 35 days after the end of the fiscal quarters ended March 31, 2005, June
30, 2005 and September 30, 2005;
- in connection with our option to purchase the debentures, the period
commencing on the date we call the debentures for redemption and ending
on the redemption date;
- in connection with any Fundamental Change, the period commencing on the
date we send a Fundamental Change purchase notice and ending the
Fundamental Change purchase date unless we elect to pay all conversions
during this period in cash; and
- in connection with conversions upon specified corporate transactions (see
"Description of the Debentures -- Conditions to Conversion -- Conversion
Upon Specified Corporate Transactions"), the period commencing on the
date we send notice of such transaction and ending the earlier of the
business day following the ex-dividend date for such transaction or our
public announcement that such transaction will not take place unless we
elect to pay all conversions during this period in cash.
We may, upon written notice to holders of registrable securities, suspend
the use of the shelf registration statement during any of the window periods
described in the first bullet point above without causing a
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registration default. If we suspend the use of the shelf registration statement
at any time during any of those window periods, we will make the shelf
registration statement available for the sale of registrable securities as soon
as possible for another 20 calendar day period. We will notify holders of
registrable securities at least five calendar days in advance of the
commencement of such 20 calendar day period.
A holder who elects to sell any registrable securities pursuant to the
shelf registration statement:
- will be required to be named as a selling securityholder in the related
prospectus,
- may be required to deliver a prospectus to purchasers,
- may be subject to certain civil liability provisions under the Securities
Act in connection with those sales and
- will be bound by the provisions of the registration rights agreement that
apply to a holder making such an election, including certain
indemnification provisions.
Additional interest will accrue on the debentures if any of the following
events occurs, which we call "registration defaults":
- on or prior to the 90th day following the date the debentures were
originally issued, a shelf registration statement, of which this
prospectus is a part, has not been filed with the SEC,
- on or prior to the 180th day following the date the debentures were
originally issued, which we refer to as the "effectiveness target date,"
the shelf registration statement is not declared effective, subject to
our right to postponement, as described above,
- at any time after the effectiveness target date, the shelf registration
statement ceases to be effective or fails to be useable during a window
period, subject to our right to postponement or suspension, as described
above, or
- we fail to perform any of our obligations to file any amendment or
supplement to the shelf registration statement and related prospectus by
the date therein prescribed.
If a registration default occurs, additional interest will accrue on any
debentures that are then restricted securities, from and including the day
following the registration default to but excluding the day on which the
registration default has been cured. Additional interest will be paid
semiannually in arrears, with the first semiannual payment due on the first
interest payment date following the date on which the additional interest began
to accrue.
The rates at which additional interest will accrue will be as follows:
- 0.25% of the principal amount per annum to and including the 90th day
after the registration default, and
- 0.50% of the principal amount per annum from and after the 91st day after
the registration default.
Additional interest will accrue until the earlier of the following:
- the time the shelf registration statement becomes effective, and
- the earlier of (i) the date all registrable securities have been sold
pursuant to the shelf registration statement or Rule 144 under the
Securities Act, or any successor provision and (ii) the expiration of the
holding period with respect to the registrable securities under Rule
144(k) under the Securities Act, or any successor provision.
We agreed in the registration rights agreement to use our reasonable best
efforts to cause the shares of common stock issuable upon conversion of the
debentures to be listed on the New York Stock Exchange. However, if the common
stock is not then listed on the New York Stock Exchange, we will use our
reasonable best efforts to cause the shares of common stock issuable upon
conversion of the debentures to be quoted or listed on whichever market or
exchange the common stock is then primarily traded, upon effectiveness of the
shelf registration statement.
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This summary of certain provisions of the registration rights agreement is
not complete and is subject to, and qualified in its entirety by reference to,
all the provisions of the registration rights agreement, a copy of which was
filed as an exhibit to the shelf registration statement, of which this
prospectus is a part.
DESCRIPTION OF CAPITAL STOCK
GENERAL
Our Restated Certificate of Incorporation authorizes the issuance of
2,405,000,000 shares of capital stock, of which 2,400,000,000 shares are common
stock with a par value of $0.33 1/3 per share and 5,000,000 shares are preferred
stock with a par value of $2.50 per share. As of the close of business on
December 31, 2003, our outstanding capital stock consisted of 1,332,451,733
shares of common stock and 16,934 shares of convertible preferred stock issued
and outstanding. The following summaries of certain provisions of our capital
stock do not purport to be complete and are subject to, and qualified in their
entirety by (i) the provisions of our Restated Certificate of Incorporation,
including the Certificate of Designations pursuant to which any series of
preferred stock may be issued, (ii) the By-laws; and (iii) the Delaware General
Corporation Law.
COMMON STOCK
Voting Rights. Each holder of common stock is entitled to one vote per
share on all matters to be voted upon by stockholders of the Company, and do not
have cumulative voting rights.
Dividend Rights. Holders of our common stock are entitled to receive
ratably such dividends, if any, as may be declared from time to time by the
Board of Directors out of funds legally available for that purpose, subject to
preferences that may be applicable to any outstanding preferred stock and any
other provisions of our Restated Certificate of Incorporation.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up, the holders of common stock are
entitled, after payment of the debts and other liabilities, and subject to the
rights of holders of shares of preferred stock, to share in any distribution to
the stockholders on a pro rata basis.
Miscellaneous. All of the outstanding shares of our common stock are fully
paid and non-assessable. Holders of common stock have no preemptive or other
rights to subscribe for additional shares. No shares of common stock are subject
to redemption or a sinking fund.
Listing. The common stock is listed on the New York Stock Exchange under
the symbol "WYE."
Common Stock Available for Issuance. As of December 31, 2003, we had
granted options under our stock incentive plans to purchase an aggregate of
133,141,939 shares of common stock (with options relating to 83,798,898 shares
of common stock currently exercisable) and we had an aggregate of 609,624 shares
of common stock that could be issued upon conversion of our convertible
preferred stock into common stock. As of that date, we held 89,930,211 shares of
common stock in treasury that could be used to satisfy our current obligations
under the stock incentive plans and convertible preferred stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is The Bank of New
York.
PREFERRED STOCK
The Restated Certificate of Incorporation authorizes our Board of Directors
to issue preferred stock from time to time in one or more series, without
stockholder action. The Board of Directors is authorized to issue up to
5,000,000 shares of preferred stock with a par value of $2.50 per share, and can
determine the number of shares of each series, dividend rates, redemption
prices, voting rights, preference and limitations of each series as well as any
other special rights and protective provisions.
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CONVERTIBLE PREFERRED STOCK
Voting Rights. Each holder of convertible preferred stock is entitled to
36 votes for each share on each matter submitted to a vote at a meeting of
shareholders. If we default in the payment of dividends on the convertible
preferred stock for a certain period of time, we will be required to increase
the number of directors that constitute our Board of Directors by two, and the
holders of preferred stock will be entitled to vote for these directors.
Dividend Rights. Holders of convertible preferred stock are entitled to
receive when, as and if declared by the Board of Directors, dividends with an
annual dividend rate of $2.00, payable in cash quarterly on January 1, April 1,
July 1 and October 1.
Redemption. The shares of convertible preferred stock are redeemable at
the option of the Board of Directors if at the time of mailing of the notice of
redemption, the average market price per share of the common stock is at least
$80.00 per share, or in the event that an adjustment in the number of shares
issuable upon conversion of preferred stock for shares of common stock shall
have occurred, then a market price per share equal to the product of multiplying
$60.00 per share by the reciprocal of the then current conversion rate. The
redemption price will be $60.00 per share in cash plus accrued but unpaid
dividends on the redemption date.
Conversion. The shares of convertible preferred stock are convertible at
the option of the holder, at any time, upon surrender to a transfer agent of the
certificate representing the shares to be converted into fully paid and
non-assessable shares of common stock of the Company at a rate of 0.75 shares of
common stock for each convertible preferred share, subject to adjustment. Upon
conversion, no payment or adjustment will be made for accrued but unpaid
dividends on any shares.
Rights Upon Liquidation. In the event of our voluntary liquidation,
dissolution or winding-up, holders of convertible preferred stock are entitled
to receive $60.00 per share prior to the receipt of any of our assets by holders
of common stock. In the case of our involuntary liquidation, dissolution or
winding-up, the holders of convertible preferred stock are entitled to receive
the amount of $52.50 per share prior to the receipt of any of our assets by
holders of common stock. In either case, holders of convertible preferred stock
will also receive an amount equal to all accrued but unpaid dividends to the
date of the liquidation, dissolution or winding-up.
Miscellaneous. The shares of convertible preferred stock are not subject
to the operation of any sinking fund to be applied to the purchase or redemption
of such shares. No fractional shares can be issued upon conversion, but the
stockholder is entitled to receive a cash payment equal to the value of the
fractional interest in a share.
Listing. The convertible preferred stock is listed on the New York Stock
Exchange under the symbol "WYEPR."
CERTAIN EFFECT OF AUTHORIZED BUT UNISSUED CAPITAL STOCK
We have shares of common stock and preferred stock available for future
issuance without stockholder approval. We may use these additional shares for a
variety of corporate purposes, including future public or private offerings to
raise additional capital, facilitating corporate acquisitions or paying a
dividend on our capital stock.
The existence of unissued and unreserved shares of common stock and
preferred stock may enable our Board of Directors to issue shares to persons
friendly to current management or to issue preferred stock with terms that could
render more difficult or discourage a third party's attempt to obtain control of
us by means of a merger, tender offer, proxy contest or otherwise, thereby
protecting the continuity of our management. In addition, our issuance of
preferred stock could adversely affect the voting power of holders of common
stock and the likelihood that such holders will receive dividend payments and
payments upon liquidation.
32
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF DELAWARE LAW AND OUR CHARTER AND BY-LAWS
Our Restated Certificate of Incorporation, By-laws and the Delaware General
Corporation Law include a number of provisions that could delay, defer or
prevent a transaction or change of control of us that might involve a premium
price for holders of our common stock or that our holders might believe to be in
their best interest.
RESTATED CERTIFICATE OF INCORPORATION; BY-LAWS
Constitution of Board of Directors. Our Restated Certificate of
Incorporation provides that, subject to any rights of holders of preferred stock
to elect additional directors under specified circumstances, the number of
directors will be fixed in the manner provided in our By-laws, and must consist
of not less than eight and not more than fifteen directors. Our Restated
Certificate of Incorporation and By-laws provide that any vacancies will be
filled only by the affirmative vote of a majority of the remaining directors,
even if those directors constitute less than a quorum.
Removal of Directors. Our Restated Certificate of Incorporation provides
that a majority of the Board of Directors may remove a director (except
directors elected by holders of preferred stock) for any cause deemed sufficient
by them. Any director may also be removed from office by the vote of the holders
of at least 80% of the voting power of all the outstanding shares of stock
entitled to vote generally in the election of directors, voting together as a
single class.
Stockholder Action. Our Restated Certificate of Incorporation and By-laws
provide that stockholder action can be taken only at an annual or special
meeting of stockholders and may not be taken by written consent in lieu of a
meeting. Our Restated Certificate of Incorporation and By-laws further provide
that, subject to any rights of holders of preferred stock, special meetings of
stockholders can be called only by our Chairman or Vice-Chairman of the Board of
Directors or the President, or by the Secretary on the written request of a
majority of all the directors.
Amendment. Pursuant to the Delaware General Corporation Law, our Restated
Certificate of Incorporation may generally be amended by the affirmative vote of
the holders of a majority of the voting power of the outstanding stock, provided
that the affirmative vote of the holders of at least 80% of the combined voting
power of the then outstanding shares of stock entitled to vote generally in the
election of directors, voting together as a single class, is required to amend
the provisions of the Restated Certificate of Incorporation and the By-laws
relating to special meetings, the power, number, election, term and vacancies of
the Board and the ability of stockholders to remove directors. Subject to the
supermajority voting requirements listed above, the By-laws may be amended by
the affirmative vote of the holders of a majority of the voting power of the
outstanding stock. All of the provisions of the Restated Certificate of
Incorporation and By-laws, other than those requiring supermajority stockholder
approval listed above, may also be amended by the Board of Directors by vote of
a majority of all the directors, subject to the right of the stockholders to
alter or repeal such amendments of the By-laws adopted by the Board of Directors
as described above.
DELAWARE LAW
We are a Delaware corporation subject to Section 203 of the Delaware
General Corporation Law. Section 203 provides that, subject to certain
exceptions specified in the law, a Delaware corporation shall not engage in
certain "business combinations" with any "interested stockholder" for a
three-year period following the time that the stockholder became an interested
stockholder unless:
- prior to such time, our board of directors approved either the business
combination or the transaction which resulted in the stockholder becoming
an interested stockholder;
- upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of our voting stock outstanding at the time the transaction
commenced, excluding certain shares; or
33
- at or subsequent to that time, the business combination is approved by
our board of directors and by the affirmative vote of holders of at least
66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder.
Generally, a "business combination" includes a merger, asset or stock sale
or other transaction resulting in a financial benefit to the interested
stockholder. Subject to certain exceptions, an "interested stockholder" is a
person who together with that person's affiliates and associates owns, or within
the previous three years did own, 15% or more of our voting stock.
Under certain circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period. The provisions of
Section 203 may encourage companies interested in acquiring our company to
negotiate in advance with our board of directors because the stockholder
approval requirement would be avoided if our board of directors approves either
the business combination or the transaction which results in the stockholder
becoming an interested stockholder. These provisions also may have the effect of
preventing changes in our board of directors and may make it more difficult to
accomplish transactions which stockholders may otherwise deem to be in their
best interests.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the material U.S. federal income tax
consequences of the ownership of debentures and certain consequences of
ownership of the shares of common stock into which the debentures may be
converted, as of the date hereof. Except where noted, it deals only with
debentures and shares of common stock held as capital assets. This summary does
not deal with special situations, such as:
- tax consequences to holders who may be subject to special tax treatment,
including dealers in securities or currencies, financial institutions,
regulated investment companies, real estate investment trusts, tax-
exempt entities, insurance companies, and traders in securities or
commodities that elect to use a mark-to-market method of accounting for
their securities holdings;
- tax consequences to persons holding debentures or shares of common stock
as a part of a hedging, integrated, conversion or constructive sale
transaction or a straddle;
- tax consequences to U.S. holders (as defined below) of debentures or
shares of common stock whose "functional currency" is not the U.S.
dollar;
- investors in pass-through entities;
- alternative minimum tax consequences, if any; or
- any state, local or foreign tax consequences.
The discussion below is based upon the provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), and regulations, rulings and judicial
decisions thereunder as of the date hereof, and such authorities may be
repealed, revoked or modified so as to result in U.S. federal income tax
consequences different from those discussed below.
If a partnership holds debentures or shares of common stock, the tax
treatment of a partner will generally depend upon the status of the partner and
the activities of the partnership. If you are a partner in a partnership holding
the debentures or shares of common stock, you should consult your tax advisors.
IF YOU ARE CONSIDERING THE PURCHASE OF DEBENTURES, YOU SHOULD CONSULT YOUR
OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO YOU IN
LIGHT OF YOUR PARTICULAR SITUATION AS WELL AS ANY CONSEQUENCES ARISING UNDER THE
LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING JURISDICTION.
As used herein, the term "U.S. holder" means a holder of debentures or
shares of common stock that is for U.S. federal income tax purposes:
- a citizen or resident of the U.S.;
34
- a corporation created or organized in or under the laws of the U.S. or
any political subdivision of the U.S.;
- an estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
- a trust if it (i) is subject to the primary supervision of a court within
the U.S. and one or more U.S. persons have the authority to control all
substantial decisions of the trust or (ii) has a valid election in effect
under applicable U.S. Treasury regulations to be treated as a U.S.
person.
A "non-U.S. holder" is a beneficial owner of debentures or shares of common
stock (other than a partnership) that is not a U.S. holder. Special rules may
apply to certain non-U.S.holders such as "controlled foreign corporations,"
"passive foreign investment companies" and "foreign personal holding companies."
Such entities should consult their own tax advisors to determine the U.S.
federal, state, local and other tax consequences that may be relevant to them.
CONSEQUENCES TO U.S. HOLDERS
PAYMENT OF INTEREST
Stated interest on a debenture will generally be taxable to you as ordinary
income at the time it is paid or accrued in accordance with your usual method of
accounting for tax purposes.
MARKET DISCOUNT
If you purchase a debenture for an amount that is less than its stated
redemption price at maturity, the amount of the difference will be treated as
"market discount" for U.S. federal income tax purposes, unless the difference is
less than a specified de minimis amount. Under the market discount rules, you
will be required to treat any payment, other than stated interest, on, or any
gain on the sale, exchange, retirement or other disposition of, a debenture as
ordinary income to the extent of the market discount that you have not
previously included in income and are treated as having accrued on the debenture
at the time of its payment or disposition. Any unrecognized market discount will
carry over to common stock received upon conversion or repurchase by us of the
debentures. In addition, you may be required to defer, until the maturity of the
debenture or its earlier disposition in a taxable transaction, the deduction of
all or a portion of the interest expense on any indebtedness attributable to the
debenture.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the debenture, unless you
elect to accrue on a constant interest method. Your election to accrue market
discount on a constant interest method is to be made for the taxable year in
which you acquired the debenture, applies only to that debenture and may not be
revoked without the consent of the Internal Revenue Service. You may elect to
include market discount in income currently as it accrues, on either a ratable
or constant interest method, in which case the rule described above regarding
deferral of interest deductions will not apply. Your election to include market
discount in income currently, once made, applies to all market discount
obligations acquired by you on or after the first taxable year to which your
election applies and may not be revoked without the consent of the Internal
Revenue Service. You should consult your own tax advisor before making either
election described in this paragraph.
AMORTIZABLE BOND PREMIUM
If you purchase a debenture for an amount in excess of the sum of all
amounts payable on the debenture after the purchase date other than stated
interest, you will be considered to have purchased the debenture at a "premium".
You generally may elect to amortize the premium over the remaining term of the
debenture on a constant yield method as an offset to interest when includible in
income under your regular account method. If you do not elect to amortize bond
premium, that premium will decrease the gain or increase the loss you would
otherwise recognize on disposition of the debenture. Your election to amortize
premium on a constant yield method will also apply to all debt obligations held
or subsequently acquired by you on or after the first day of the first taxable
year to which the election applies. You may not revoke the election without the
consent of the Internal Revenue Service. You should consult your own tax advisor
before making this election.
35
SALE, EXCHANGE, REDEMPTION, OR OTHER DISPOSITION OF DEBENTURES
Except as provided below under "-- Conversion of Debentures into Common
Stock, Cash or a Combination Thereof," you will generally recognize gain or loss
upon the sale, exchange, redemption or other disposition of a debenture equal to
the difference between the amount realized (less accrued interest, which will be
taxable as such) upon the sale, exchange, redemption or other disposition and
your adjusted tax basis in the debenture. Your tax basis in a debenture will
generally be equal to the amount you paid for the debenture increased by market
discount that you previously included in income and reduced by any bond premium
that the holder elects to amortize and any cash payments on the debenture other
than stated interest. Any gain or loss recognized on a taxable disposition of
the debenture will be capital gain or loss subject to the market discount
discussion above. If you are an individual and have held the debenture for more
than one year, such capital gain will be subject to reduced rates of taxation.
Your ability to deduct capital losses may be limited.
CONVERSION OF DEBENTURES INTO COMMON STOCK, CASH OR A COMBINATION THEREOF
Neither gain nor loss will be recognized by U.S. holders on the exchange of
debentures into shares of common stock upon conversion, except to the extent of
cash received, if any, including any cash received in lieu of a fractional share
and except to the extent of amounts received with respect to accrued interest,
which will be taxable as such.
If you receive solely cash in exchange for your debentures upon conversion,
your gain or loss will be determined in the same manner as if you disposed of
the debentures in a taxable disposition (as described above under "-- Sale,
Exchange, Redemption or other Disposition of Debentures").
If a combination of cash and common stock is received in exchange for your
debentures upon conversion, although the tax treatment is uncertain, we intend
to take the position that gain, but not loss, will be recognized equal to the
excess of the fair market value of the common stock and cash received (other
than amounts attributable to accrued interest, which will be treated as such,
and cash received in lieu of a fractional share) over your adjusted tax basis in
the debenture (excluding the portion of the tax basis that is allocable to any
fractional share), but in no event should the gain recognized exceed the amount
of cash received (excluding cash attributable to accrued interest or received in
lieu of a fractional share).
The amount of gain or loss recognized on the receipt of cash in lieu of a
fractional share will be equal to the difference between the amount of cash you
receive in respect of the fractional share and the portion of your adjusted tax
basis in the debenture that is allocable to the fractional share.
The tax basis of the shares of common stock received upon a conversion
(other than common stock attributable to accrued interest, the tax basis of
which will equal its fair market value) will equal the adjusted tax basis of the
debenture that was converted (excluding the portion of the tax basis that is
allocable to any fractional share), reduced by the amount of any cash received
(excluding cash received in lieu of a fractional share or cash attributable to
accrued interest), and increased by the amount of gain, if any, recognized
(other than with respect to a fractional share). Your holding period for shares
of common stock received upon conversion will include the period during which
you held the debentures, except that the holding period of any common stock
received with respect to accrued interest will commence on the day after the
date of receipt.
You should consult your tax advisors regarding the tax treatment of the
receipt of cash and stock in exchange for debentures upon conversion and the
ownership of our common stock.
CONSTRUCTIVE DISTRIBUTIONS
The conversion rate of the debentures will be adjusted in certain
circumstances as described under "Description of the Debentures -- Conversion
Rights." Under Section 305(c) of the Code, adjustments (or failures to make
adjustments) that have the effect of increasing your proportionate interest in
our assets or earnings may in some circumstances result in a deemed distribution
to you. Adjustments to the conversion rate made pursuant to a bona fide
reasonable adjustment formula that has the effect of preventing the dilution of
the interest of the holders of the debentures, however, will generally not be
considered to result in a deemed distribution to you. Certain of the possible
conversion rate adjustments provided in the debentures (including,
36
without limitation, adjustments in respect of taxable dividends to holders of
our common stock) will not qualify as being pursuant to a bona fide reasonable
adjustment formula. If such adjustments are made, you will be deemed to have
received a distribution even though you have not received any cash or property
as a result of such adjustments. Any deemed distributions will be taxable as a
dividend, return of capital, or capital gain in accordance with the rules under
the Code governing corporate distributions. It is not clear whether a
constructive dividend deemed paid to individuals would be eligible for the
preferential rates of U.S. federal income tax applicable in respect of certain
dividends received under recently enacted legislation. It is also unclear
whether corporate holders would be entitled to claim the dividends received
deduction with respect to any such constructive dividends.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Information reporting requirements generally will apply to payments of
interest on the debentures and dividends on shares of common stock and to the
proceeds of a sale of a debenture or share of common stock paid to you unless
you are an exempt recipient such as a corporation. A backup withholding tax will
apply to those payments if you fail to provide your taxpayer identification
number, or certification of foreign or other exempt status, or if you fail to
report in full interest and dividend income. Any amounts withheld under the
backup withholding rules will be allowed as a refund or a credit against your
U.S. federal income tax liability, provided the required information is timely
furnished to the Internal Revenue Service.
CONSEQUENCES TO NON-U.S. HOLDERS
PAYMENTS OF INTEREST
The 30% U.S. federal withholding tax will not apply to any payment to you
of interest on a debenture under the "portfolio interest rule," provided that:
- interest paid on the debenture is not effectively connected with your
conduct of a trade or business in the U.S.;
- you do not actually or constructively own 10% or more of the total
combined voting power of all classes of our stock that are entitled to
vote, within the meaning of section 871(h)(3) of the Code;
- you are not a controlled foreign corporation that is related to us
(actually or constructively) through stock ownership;
- you are not a bank whose receipt of interest on a debenture is described
in section 881(c)(3)(A) of the Code; and
- (a) you provide your name and address and certify, under penalties of
perjury, that you are not a U.S. person (which certification may be made
on an Internal Revenue Service Form W-8BEN (or successor form)) or (b)
you hold your debentures through certain foreign intermediaries or
certain foreign partnerships, and you satisfy the certification
requirements of applicable Treasury regulations.
Special certification rules apply to non-U.S. holders that are pass-through
entities.
If you cannot satisfy the requirements described above, payments of
interest will be subject to the 30% U.S. federal withholding tax, unless you
provide us with a properly executed (1) Internal Revenue Service Form W-8BEN (or
successor form) claiming an exemption from or reduction in withholding under the
benefit of an applicable income tax treaty or (2) Internal Revenue Service Form
W-8ECI (or successor form) stating that interest paid on the debenture is not
subject to withholding tax because it is effectively connected with your conduct
of a trade or business in the U.S. and is includible in your U.S. gross income.
If you are engaged in a trade or business in the U.S. and interest on the
debentures is effectively connected with the conduct of that trade or business
and, where a tax treaty applies, is attributable to a U.S. permanent
establishment, then, although exempt from the withholding tax discussed above,
you will be subject to U.S. federal income tax on that interest on a net income
basis in the same manner as if you were a U.S. holder. In addition, if you are a
foreign corporation, you may be subject to a branch profits tax equal to
37
30% (or lesser rate under an applicable income tax treaty) of your earnings and
profits for the taxable year, subject to adjustments, that are effectively
connected with your conduct of a trade or business in the U.S.
DIVIDENDS AND CONSTRUCTIVE DIVIDENDS
Any dividends paid to you with respect to shares of our common stock (and
any deemed dividends resulting from certain adjustments, or failure to make
adjustments, to the conversion rate, including, without limitation, adjustments
in respect of taxable dividends to holders of our common stock, see
"-- Constructive Distributions" above) will be subject to withholding tax at a
30% rate or such lower rate as may be specified by an applicable income tax
treaty. In the case of any constructive dividend, it is possible that this tax
would be withheld from interest, shares of your common stock or sales proceeds
subsequently paid or credited to you. However, dividends that are effectively
connected with the conduct of a trade or business within the U.S. and, where a
tax treaty applies, are attributable to a U.S. permanent establishment, are not
subject to the withholding tax, but instead are subject to U.S. federal income
tax on a net income basis at applicable graduated individual or corporate rates.
Certain certification requirements and disclosure requirements must be complied
with in order for effectively connected income to be exempt from withholding.
Any such effectively connected income received by a foreign corporation may,
under certain circumstances, be subject to an additional branch profits tax at a
30% rate or such lower rate as may be specified by an applicable income tax
treaty.
A non-U.S. holder of shares of common stock or debentures who wishes to
claim the benefit of an applicable treaty rate for dividends or constructive
dividends is required to satisfy applicable certification and other
requirements. If you are eligible for a reduced rate of U.S. withholding tax
pursuant to an income tax treaty, you may obtain a refund of any excess amounts
withheld by filing an appropriate claim for refund with the Internal Revenue
Service.
CONVERSION OF DEBENTURES INTO COMMON STOCK, CASH OR A COMBINATION THEREOF
Neither gain nor loss will be recognized by non-U.S. holders on the
exchange of debentures into shares of our common stock upon conversion, except
to the extent of cash received in lieu of a fractional share (which will be
treated as described below under "-- Sale, Exchange, Redemption or Other
Disposition of Debentures or Shares of Common Stock") and common stock
attributable to accrued interest (which will be treated as described above under
"-- Payments of Interest"). To the extent you receive cash (other than as
described in the preceding sentence) upon conversion of a debenture, the
conversion will be taxed in the same manner as described above under
"Consequences to U.S. Holders -- Conversion of Debentures into Common Stock,
Cash or a Combination Thereof." Any gain realized upon the conversion of the
debentures will be subject to tax in the manner described below under "-- Sale,
Exchange, Redemption or Other Disposition of Debentures or Shares of Common
Stock."
SALE, EXCHANGE, REDEMPTION OR OTHER DISPOSITION OF DEBENTURES OR SHARES OF
COMMON STOCK
Any gain realized upon the sale, exchange, redemption or other disposition
of a debenture or share of common stock generally will not be subject to U.S.
federal income tax unless:
- that gain is effectively connected with your conduct of a trade or
business in the U.S., and, where a tax treaty applies, that gain is
attributable to a U.S. permanent establishment;
- you are an individual who is present in the U.S. for 183 days or more in
the taxable year of that disposition, and certain other conditions are
met; or
- we are or have been during a specified period prior to such sale,
exchange, redemption or other disposition, a "U.S. real property holding
corporation" for U.S. federal income tax purposes.
We believe that we are not and do not anticipate becoming a "U.S. real
property holding corporation" for U.S. federal income tax purposes.
38
U.S. FEDERAL ESTATE TAX
Your estate will not be subject to U.S. federal estate tax on debentures
beneficially owned by you at the time of your death, provided that any payment
to you on the debentures would be eligible for exemption from the 30% U.S.
federal withholding tax under the "portfolio interest rule" described above
under "-- Payments of Interest," without regard to the statement requirement
described in the last bullet point, and, at the time of your death, payments
with respect to the debentures would not have been effectively connected with
the conduct by you of a trade or business in the U.S. However, shares of common
stock held by you at the time of your death will be included in your gross
estate for U.S. federal estate tax purposes unless an applicable estate tax
treaty provides otherwise.
INFORMATION REPORTING AND BACKUP WITHHOLDING
We must report annually to the Internal Revenue Service and to you the
amount of interest and dividends paid or deemed paid to you and the amount of
tax, if any, withheld with respect to those payments. Copies of the information
returns reporting such interest, dividends and withholding may also be made
available to the tax authorities in the country in which you reside under the
provisions of an applicable income tax treaty.
In general, you will not be subject to backup withholding with respect to
interest or dividends paid or deemed paid on the debentures or our common stock,
provided the statement described above in the last bullet point under
"-- Payments of Interest" has been received (and we do not have actual knowledge
or reason to know that you are a U.S. person that is not an exempt recipient).
In addition, you will be subject to information reporting and, depending on
the circumstances, backup withholding with respect to payments of the proceeds
of the sale of a debenture or share of common stock within the U.S. or conducted
through certain U.S.-related financial intermediaries, unless the statement
described above has been received (and we do not have actual knowledge or reason
to know that you are a U.S. person that is not an exempt recipient) or you
otherwise establish an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against your U.S. federal income tax liability, provided
the required information is timely furnished to the Internal Revenue Service.
SELLING SECURITYHOLDERS
We originally issued the debentures on December 16, 2003. The debentures
were resold by the initial purchasers to qualified institutional buyers under
Rule 144A under the Securities Act. Selling securityholders, including their
transferees, pledgees, donees or their successors, may offer and sell the
debentures and the underlying common stock pursuant to this prospectus.
The following table sets forth information as of April 29, 2004 about the
principal amount of debentures and the underlying common stock beneficially
owned by each selling securityholder that may be offered using this prospectus.
<Table>
<Caption>
PRINCIPAL AMOUNT OF PERCENTAGE OF NUMBER OF SHARES OF PERCENTAGE OF
DEBENTURES BENEFICIALLY DEBENTURES COMMON STOCK THAT COMMON STOCK
NAME OWNED THAT MAY BE SOLD OUTSTANDING MAY BE SOLD(1) OUTSTANDING(2)(4)
---- ----------------------- ------------- ------------------- -----------------
Advisory Convertible Arbitrage Fund
(I) LP............................. $1,100,000 * 18,215 *
AG Domestic Convertibles L.P. ....... 7,800,000 * 129,160 *
AG Offshore Convertible Limited...... 18,200,000 1.78% 301,374 *
Allstate Insurance Company........... 4,500,000 * 74,516 *
Allstate Insurance Company........... 9,000,000 * 149,031 *
AM Investment D Fund Limited......... 600,000 * 9,935 *
AM Investment F Fund Limited......... 3,200,000 * 52,989 *
</Table>
39
<Table>
<Caption>
PRINCIPAL AMOUNT OF PERCENTAGE OF NUMBER OF SHARES OF PERCENTAGE OF
DEBENTURES BENEFICIALLY DEBENTURES COMMON STOCK THAT COMMON STOCK
NAME OWNED THAT MAY BE SOLD OUTSTANDING MAY BE SOLD(1) OUTSTANDING(2)(4)
---- ----------------------- ------------- ------------------- -----------------
America Long Term Care Reinsurance
Group c/o Income Research &
Management......................... 1,130,000 * 18,712 *
American Investors Life Insurance
Company............................ 650,000 * 10,763 *
Amerus Life Insurance Company........ 4,000,000 * 66,236 *
Anima S.G.R.p.A...................... 6,000,000 * 99,354 *
Bank Austria Cayman Islands,
Limited............................ 4,000,000 * 66,236 *
Bankers Life Insurance Company of New
York............................... 100,000 * 1,656 *
Bear Stearns & Co. Inc. ............. 7,500,000 * 124,193 *
Blue Cross Blue Shield of
Louisiana.......................... 650,000 * 10,763 *
CA State Automobile Assn Inter-
Insurance.......................... 507,000 * 8,395 *
Christus Health Liability Retention
Trust.............................. 290,000 * 4,802 *
Chrysler Corporation Master
Retirement Trust................... 5,610,000 * 92,896 *
Citigroup Global Markets Inc. ....... 28,516,000 2.80% 472,196 *
City of Southfield Fire & Police
Retirement Sys. c/o Income Research
& Management....................... 175,000 * 2,898 *
CNH CA Master Account, L.P. ......... 500,000 * 8,280 *
Commonwealth Professional Assurance
Co. c/o Income Research &
Management......................... 415,000 * 6,872 *
Context Convertible Arbitrage Fund,
L.P. .............................. 1,500,000 * 24,839 *
Context Convertible Arbitrage
Offshore, Limited.................. 2,950,000 * 48,849 *
Convertible Securities Fund.......... 50,000 * 828 *
Convertible Securities Fund.......... 75,000 * 1,242 *
Credit Suisse Anlagestiftung on
behalf of CSA Equity-linked Bond
Portfolio.......................... 1,000,000 * 16,559 *
Credit Suisse Asset Management for
Credit Suisse Bond Fund Convert.
International...................... 250,000 * 4,140 *
Credit Suisse Asset Management for
Credit Suisse Bond Fund Convert.
International...................... 700,000 * 11,591 *
Credit Suisse First Boston LLC....... 2,250,000 * 37,258 *
Credit Suisse Asset Management, on
behalf of Swatch Group............. 500,000 * 8,280 *
Dakota Truck Underwriters............ 55,000 * 911 *
Delta Air Lines Master Trust......... 1,400,000 * 23,183 *
Delta Pilots Disability &
Survivorship Trust CV.............. 850,000 * 14,075 *
DKR Soundshore Oasis Holding Fund
Limited............................ 15,000,000 1.47% 248,385 *
DKR Soundshore Strategic Holding
Fund, Limited...................... 14,000,000 1.37% 231,826 *
Dodeca Fund, L.P. ................... 1,925,000 * 31,876 *
Excellus Health Plan c/o Income
Research & Management.............. 4,240,000 * 70,210 *
Fore Convertible Master Fund,
Limited............................ 3,572,000 * 59,149 *
</Table>
40
<Table>
<Caption>
PRINCIPAL AMOUNT OF PERCENTAGE OF NUMBER OF SHARES OF PERCENTAGE OF
DEBENTURES BENEFICIALLY DEBENTURES COMMON STOCK THAT COMMON STOCK
NAME OWNED THAT MAY BE SOLD OUTSTANDING MAY BE SOLD(1) OUTSTANDING(2)(4)
---- ----------------------- ------------- ------------------- -----------------
FrontPoint Convertible Arbitrage
Fund, L.P. ........................ 4,000,000 * 66,236 *
George Municipal Employers........... 1,202,000 * 19,904 *
Guggenheim Portfolio Co., XV, LLC.... 1,000,000 * 16,559 *
Guggenheim Portfolio Company VIII
(Cayman) Limited................... 1,035,000 * 17,139 *
Hamilton Multi-Strategy Master Fund,
LP................................. 2,938,000 * 48,650 *
HBK Master Fund L.P. ................ 21,000,000 2.06% 347,739 *
Independence Blue Cross.............. 773,000 * 12,800 *
Indianapolis Life Insurance
Company............................ 19,500,000 1.91% 322,901 *
Inflective Convertible Opportunity
Fund I, L.P. ...................... 75,000 * 1,242 *
Ingeborg Panitz...................... 50,000 * 828 *
International Truck & Engine
Corporation Non-Contributory
Retirement Plan Trust.............. 485,000 * 8,031 *
International Truck & Engine
Corporation Retiree Health Benefit
Trust.............................. 310,000 * 5,133 *
International Truck & Engine
Corporation Retirement Plan for
Salaried Employees Trust........... 945,000 * 15,648 *
JMG Capital Partners, L.P. .......... 14,500,000 1.42% 240,106 *
JMG Triton Offshore Fund, Limited.... 16,500,000 1.62% 273,224 *
Johann Jakob Sulzer Stiftumg......... 1,000,000 * 16,559 *
JPMorgan Securities Inc. ............ 62,145,000 6.09% 1,029,059 *
KBC Financial Products USA Inc. ..... 2,025,000 * 33,532 *
KBC Financial Products USA Inc. ..... 6,750,000 * 111,773 *
LDG Limited.......................... 1,325,000 * 21,941 *
Lexington Vantage Fund............... 342,000 * 5,663 *
Lincoln Memorial Life Insurance...... 250,000 * 4,140 *
Lyxor/AM Investment Fund Limited..... 70,000 * 1,159 *
Lyxor/Context Fund Limited........... 250,000 * 4,140 *
Lyxor/Zola Fund Limited.............. 1,250,000 * 20,699 *
Man Mac 2 Limited.................... 2,062,000 * 34,145 *
Man Mac I Limit...................... 1,035,000 * 17,139 *
Maystone Continuum Master Fund,
Limited............................ 2,000,000 * 33,118 *
Med America Insurance c/o Income
Research & Management.............. 650,000 * 10,763 *
Med America Insurance Co. Hartford
Trust c/o Income Research &
Management......................... 345,000 * 5,713 *
Med America New York Insurance c/o
Income Research & Management....... 1,100,000 * 18,215 *
Mellon HBV Master Convertible
Arbitrage Fund LP.................. 3,130,000 * 51,830 *
Mellon HBV Master Leveraged Multi-
Strategy Fund LP................... 322,000 * 5,332 *
Mellon HBV Master Multi-Strategy
Fund............................... 1,598,000 * 26,461 *
Michigan Professional Insurance
Exchange........................... 130,000 * 2,153 *
Microsoft Corporation................ 1,270,000 * 21,030 *
</Table>
41
<Table>
<Caption>
PRINCIPAL AMOUNT OF PERCENTAGE OF NUMBER OF SHARES OF PERCENTAGE OF
DEBENTURES BENEFICIALLY DEBENTURES COMMON STOCK THAT COMMON STOCK
NAME OWNED THAT MAY BE SOLD OUTSTANDING MAY BE SOLD(1) OUTSTANDING(2)(4)
---- ----------------------- ------------- ------------------- -----------------
Morgan Stanley Convertible Securities
Trust.............................. 3,000,000 * 49,677 *
Motion Picture Industry Health
Plan -- Active Member Fund......... 330,000 * 5,464 *
Motion Picture Industry Health
Plan -- Retiree Member Fund........ 230,000 * 3,809 *
Mutual Protective Insurance
Company............................ 870,000 * 14,406 *
National Bank of Canada.............. 500,000 * 8,280 *
National Bank of Canada.............. 800,000 * 13,247 *
Nations Convertible Securities
Fund............................... 7,950,000 * 131,644 *
Nations Convertible Securities
Fund............................... 9,925,000 * 164,348 *
Neveada General Insurance Co. ....... 45,000 * 745 *
Nomura Securities International
Inc. .............................. 15,000,000 1.47% 248,385 *
Nomura Securities International
Inc. .............................. 17,500,000 1.72% 289,783 *
Nomura Securities International
Inc. .............................. 20,000,000 1.96% 331,180 *
Nomura Securities International
Inc. .............................. 30,000,000 2.94% 496,770 *
Nomura Securities International
Inc. .............................. 32,500,000 3.19% 538,168 *
Nuveen Preferred & Convertible Fund
JQC................................ 8,500,000 * 140,752 *
Nuveen Preferred & Convertible Income
Fund JPC........................... 6,400,000 * 105,978 *
OCLC Online Computer Library Center
Inc................................ 50,000 * 828 *
OCM Convertible Trust................ 1,715,000 * 28,399 *
OCM Global Convertible Securities
Fund............................... 220,000 * 3,643 *
Ohio Bureau of Workers
Compensation....................... 176,000 * 2,914 *
Pacific Life Insurance Company....... 1,000,000 * 16,559 *
Partner Reinsurance Company
Limited............................ 865,000 * 14,324 *
Pfluges Bert......................... 50,000 * 828 *
PIMCO Convertible Fund............... 282,000 * 4,670 *
President & Fellows of Harvard
College............................ 5,000,000 * 82,795 *
Qwest Occupational Health Trust...... 295,000 * 4,885 *
Radian Asset Assurance Life.......... 1,600,000 * 26,494 *
Radian Asset Assurance Life.......... 2,500,000 * 41,398 *
Radian Group Convertible
Securities......................... 1,000,000 * 16,559 *
Radian Group Convertible
Securities......................... 1,400,000 * 23,183 *
Radian Guaranty...................... 3,400,000 * 56,301 *
Radian Guaranty...................... 5,000,000 * 82,795 *
Ramius Master Fund, Limited.......... 8,000,000 * 132,472 *
RCG Latitude Master Fund, Limited.... 13,000,000 1.27% 215,267 *
RCG Multi Strategy Master Fund,
Limited............................ 3,000,000 * 49,677 *
Ret Pension Plan of the CA State
Automobile Assn.................... 91,000 * 1,507 *
Salomon Brothers Asset Management,
Inc. .............................. 19,000,000 1.86% 314,621 *
Satellite Asset Management, L.P. .... 20,000,000 1.96% 331,180 *
Satellite Convertible Arbitrage
Master Fund, LLC................... 13,500,000 1.32% 223,547 *
SG Cowen Securities -- Convertible
Arbritage.......................... 5,000,000 * 82,795 *
</Table>
42
<Table>
<Caption>
PRINCIPAL AMOUNT OF PERCENTAGE OF NUMBER OF SHARES OF PERCENTAGE OF
DEBENTURES BENEFICIALLY DEBENTURES COMMON STOCK THAT COMMON STOCK
NAME OWNED THAT MAY BE SOLD OUTSTANDING MAY BE SOLD(1) OUTSTANDING(2)(4)
---- ----------------------- ------------- ------------------- -----------------
SG Cowen Securities Corp............. 5,000,000 * 82,795 *
Sphinx Fund.......................... 840,000 * 13,910 *
State Employees' Retirement Fund of
the State of Delaware.............. 1,595,000 * 26,412 *
State National Insurance Co. ........ 210,000 * 3,477 *
Sulzer Vorsorgeeinrichtung........... 10,000,000 * 165,590 *
TD Securities (USA) Inc. ............ 4,715,000 * 78,076 *
Thrivent Financial for Lutherans..... 500,000 * 8,280 *
TQA Master Fund Limited.............. 13,326,000 1.31% 220,665 *
TQA Master Plus Fund, Limited........ 275,000 * 4,554 *
TQA Master Plus Fund, Limited........ 275,000 * 4,554 *
TQA Master Plus Fund, Limited........ 19,986,000 1.96% 330,948 *
Travelers Indemnity Company --
Commercial Lines................... 190,000 * 3,146 *
Travelers Indemnity
Company -- Personal Lines.......... 185,000 * 3,063 *
Tribeca Investments Limited.......... 10,000,000 * 165,590 *
Tribeca Investments Limited.......... 17,000,000 1.67% 281,503 *
Trustmark Insurance.................. 348,000 * 5,763 *
Tufts Associated Health Plans c/o
Income Research & Management....... 1,315,000 * 21,775 *
UBS AG London........................ 35,000 * 580 *
UBS AG London Branch................. 84,000,000 8.24% 1,390,956 *
UBS AG London FBO Crt Prop........... 30,000,000 2.94% 496,770 *
UBS Credit Derivatives............... 20,000,000 1.96% 331,180 *
UBS Securities FBO Corp Bonds........ 600,000 * 9,935 *
UFJ International PLC................ 11,509,000 1.13% 190,578 *
University of Massachusetts c/o
Income Research & Management....... 180,000 * 2,981 *
University of Massachusetts Health
Care c/o Income Research &
Management......................... 215,000 * 3,560 *
University of Massachusetts Memorial
Investment Partnership c/o Income
Research & Management.............. 235,000 * 3,891 *
UnumProvident Corporation............ 445,000 * 7,369 *
Van Kampen Harbor Fund............... 4,500,000 * 74,516 *
Vanguard Convertible Securities Fund,
Inc. .............................. 29,060,000 2.85% 481,205 *
White River Securities LLC........... 7,500,000 * 124,193 *
Xavex Convertible Arbitrage 5 Fund... 1,000,000 * 16,559 *
Xavex Convertible Arbitrage 7 Fund... 3,025,000 * 50,091 *
Zola Partners, L.P. ................. 1,250,000 * 20,699 *
Zurich Institutional Benchmarks
Master Fund Limited................ 3,156,000 * 52,260 *
Any other holder of notes or future
transferee, pledgee, donee or
successor of any holder(3)(4)...... 149,714,000 14.68% 2,479,148 *
-------------- ------ ------------- ----
Total.............................. $1,020,000,000 100.0% 16,890,214.00 1.27%
</Table>
43
- ---------------
* Less than 1%
(1) Assumes conversion of all of the holder's debentures at the initial
conversion rate of 16.559 shares per debenture. The initial conversion rate
is subject to adjustment as described under "Description of
Debentures -- Conversion Rate Adjustments." As a result, the amount of
common stock issuable upon conversion of the debentures may increase or
decrease in the future.
(2) Calculated based on Rule 13d-3(d) of the Exchange Act, using 1,332,434,672
shares of common stock outstanding as of December 31, 2003. In calculating
this amount for holders of debentures, we treated as outstanding the number
of shares of common stock issuable upon conversion of all of that particular
holder's debentures. We did not, however, assume the conversion of any other
holder's debentures.
(3) Information about other selling securityholders will be set forth in an
amendment to the registration statement of which this prospectus is a part
or in prospectus supplements, as required.
(4) Assumes that any holders of debentures, or any future transferees, pledgees,
donees or successors of or from any such holders of debentures, do not
beneficially own any common stock other than the common stock issuable upon
conversion of the debentures.
We prepared this table based on the information supplied to us by the
selling securityholders named in the table. The selling securityholders listed
in the above table may have sold or transferred, in transactions exempt from the
registration requirements of the Securities Act, some or all of their debentures
since the date on which the information is presented in the above table.
Information about the selling securityholders may change over time. Any changed
information may be set forth in amendments and/or prospectus supplements to the
registration statement of which this prospectus is a part.
Because the selling securityholders may offer all or some of their
debentures or the underlying common stock from time to time we cannot estimate
the amount or percentage of the debentures or the underlying common stock that
will be held by the selling securityholders upon the termination of any
particular offering. See "Plan of Distribution."
To our knowledge, none of the named selling securityholders nor any of
their affiliates, officers, directors or principal equity holders has held any
position or office with, been employed by or otherwise had any material
relationship with us or our affiliates during the three years prior to the date
of this prospectus.
PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the debentures and
the underlying common stock offered by this prospectus. The aggregate proceeds
to the selling securityholders from the sale of the debentures or underlying
common stock will be the purchase price of the debentures or underlying common
stock less any discounts and commissions. A selling securityholder reserves the
right to accept and, together with their agents, to reject, any proposed
purchase of debentures or common stock to be made directly or through agents.
The debentures and the underlying common stock may be sold from time to
time to purchasers:
- directly by the selling securityholders and their successors, which
includes their transferees, pledgees or donees or their successors, or
- through underwriters, broker-dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from
the selling securityholders or the purchasers of the debentures and the
underlying common stock. These discounts, concessions or commissions may
be in excess of those customary in the types of transactions involved.
The selling securityholders and any underwriters, broker-dealers or agents
who participate in the distribution of the debentures and the underlying common
stock may be deemed to be "underwriters" within the meaning of Section 2(11) of
the Securities Act. Any selling securityholder which is a broker-dealer or an
affiliate of a broker-dealer will be deemed to be an "underwriter" within the
meaning of Section 2(11) of the
44
Securities Act, unless such selling securityholder purchased in the ordinary
course of business, and at the time of its purchase of the debentures to be
resold, did not have any agreements or understandings, directly or indirectly,
with any person to distribute the debentures. As a result, any profits on the
sale of the debentures and the underlying common stock by selling
securityholders who are deemed to be underwriters and any discounts, commissions
or concessions received by any such broker-dealers or agents who are deemed to
be underwriters will be deemed to be underwriting discounts and commissions
under the Securities Act. Selling securityholders who are deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act will be
subject to prospectus delivery requirements of the Securities Act and to certain
statutory liabilities, including, but not limited to, those relating to Sections
11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange Act. To
our knowledge, none of the selling securityholders who are broker-dealers or
affiliates of broker-dealers, other than the initial purchasers, purchased the
debentures outside of the ordinary course of business or, at the time of the
purchase of the debentures, had any agreements or understandings, directly or
indirectly, with any person to distribute the debentures.
If the debentures and the underlying common stock are sold through
underwriters or broker-dealers, the selling securityholders will be responsible
for underwriting discounts or commissions or agent's commissions.
The debentures and the underlying common stock may be sold in one or more
transactions at:
- fixed prices;
- prevailing market prices at the time of sale;
- prices related to such prevailing market prices;
- varying prices determined at the time of sale; or
- negotiated prices.
These sales may be effected in transactions:
- on any national securities exchange or quotation service on which the
debentures and underlying common stock may be listed or quoted at the
time of the sale, including the New York Stock Exchange in the case of
the common stock;
- in the over-the-counter market;
- in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
- through the writing of options, whether such options are listed on an
options exchange or otherwise through the settlement of short sales.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
At the time a particular offering of the securities is made, if required, a
prospectus supplement will be distributed, which will set forth the names of the
selling securityholders, the aggregate amount and type of securities being
offered and the terms of the offering, including, to the extent required, (1)
the name or names of any underwriters, broker-dealers or agents, (2) any
discounts, commissions and other terms constituting compensation from the
selling securityholders and (3) any discounts, commissions or concessions
allowed or reallowed to be paid to broker-dealers.
To our knowledge, there are currently no plans, arrangements or
understandings between any selling securityholder and any underwriter,
broker-dealer or agent regarding the sale of the debentures and the underlying
common stock by the selling securityholders.
Our common stock trades on the New York Stock Exchange under the symbol
"WYE." We do not intend to apply for listing of the debentures on any securities
exchange or for quotation through NASDAQ. Accordingly, no assurances can be
given as to the development of liquidity or any trading market for the
debentures. See "Risk Factors-Risks related to the Debentures."
45
We cannot assure you that any selling securityholder will sell any or all
of the debentures or the underlying common stock with this prospectus. Further,
we cannot assure you that any such selling securityholder will not transfer,
devise or gift the debentures and the underlying common stock by other means not
described in this prospectus. In addition, any debentures or underlying common
stock covered by this prospectus that qualify for sale under Rule 144 or Rule
144A of the Securities Act may be sold under Rule 144 or Rule 144A rather than
under this prospectus. The debentures and the underlying common stock may be
sold in some states only through registered or licensed brokers or dealers. In
addition, in some states the debentures and underlying common stock may not be
sold unless they have been registered or qualified for sale or the sale is
entitled to an exemption from registration.
The selling securityholders and any other person participating in the sale
of debentures or the underlying common stock will be subject to the Exchange
Act. The Exchange Act rules include, without limitation, Regulation M, which may
limit the timing of purchases and sales of any of the debentures and the
underlying common stock by the selling securityholders and any other such
person. In addition, Regulation M of the Exchange Act may restrict the ability
of any person engaged in the distribution of the debentures and the underlying
common stock to engage in market-making activities with respect to the
particular debentures and the underlying common stock being distributed for a
period of up to five business days before the commencement of such distribution.
This may affect the marketability of the debentures and the underlying common
stock and the ability of any person or entity to engage in market-making
activities with respect to the debentures and the underlying common stock.
Under the registration rights agreement filed as an exhibit to the
registration statement of which this prospectus is a part, we and the selling
securityholders will be indemnified by the other against certain liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection with these liabilities.
We have agreed to pay substantially all of the expenses incidental to the
registration, offering and sale of the debentures and underlying common stock to
the public other than commissions, fees and discounts of underwriters, brokers,
dealers and agents. We estimate that the expenses for which we will be
responsible in connection with this offering will be approximately $703,000.
LEGAL MATTERS
The validity of the debentures and common stock issuable upon conversion of
the debentures offered by this prospectus will be passed upon for us by Simpson
Thacher & Bartlett LLP, our counsel.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 2003 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
46
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
<Table>
<Caption>
ESTIMATED
AMOUNTS
---------
Securities and Exchange Commission registration fee under
the 1933 Act.............................................. $ 129,234
Printing and engraving expenses............................. $ 20,000
Legal fees and expenses..................................... $ 50,000
Rating agency fees.......................................... $ 379,000
Accountants' fees and expenses.............................. $ 100,000
Blue Sky fees and expenses.................................. $ --
Trustee fees and expenses................................... $ 20,000
Miscellaneous............................................... $ 4,850
---------
Total....................................................... $ 703,084
=========
</Table>
- ---------------
* Except for the Securities and Exchange Commission registration fee, all fees
and expenses are estimated. All of the above fees and expenses will be borne
by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Nine of the Company's Restated Certificate of Incorporation
provides for the elimination of personal monetary liabilities of directors of
the Company for breaches of certain of their fiduciary duties to the full extent
permitted by Section 102(b)(7) of the General Corporation Law of Delaware (the
"GCL"). Section 102(b)(7) of the GCL enables a corporation in its certificate of
incorporation to eliminate or limit the personal liability of members of its
board of directors to the corporation or its shareholders for monetary damages
for violations of a director's fiduciary duty as a director. Such a provision
has no effect on the availability of equitable remedies, such as an injunction
or rescission, for breach of fiduciary duty. In addition, no such provision may
eliminate or limit the liability of a director for breaching his or her duty of
loyalty, failing to act in good faith, engaging in intentional misconduct or
knowingly violating the law, paying an unlawful dividend or approving an illegal
stock repurchase, or obtaining an improper personal benefit.
Section 145 of the GCL provides that a corporation may indemnify directors
and officers as well as other employees and individuals against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with specified actions, suits or proceedings, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation -- a "derivative action"), if they acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceedings, had no reasonable cause to believe their conduct was unlawful. A
similar standard is applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys' fees) actually
and reasonably incurred in connection with the defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's by-laws, disinterested
director vote, stockholder vote, agreement or otherwise.
The Company's By-laws provide that the Company is authorized to provide
indemnification and to advance expenses to its directors, officers and employees
in respect of claims, actions, suits or proceedings based upon, arising from,
relating to or by reason of the fact that any such director or officer serves in
such capacity with the Company or at the request of the Company in any capacity
with any other corporation or entity of which the Company is or was a
stockholder, creditor or otherwise interested.
II-1
The Company maintains directors' and officers' liability insurance which
insures against liabilities that directors or officers of the Company may incur
in such capacities.
ITEM 16. EXHIBITS
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Indenture dated as of April 10, 1992 between American Home
Products Corporation and Manufacturers Hanover Trust
Company, as trustee (incorporated by reference to Exhibit
4-a to the Registrant's Registration Statement on Form S-3
(File No. 33-57339), filed on January 18, 1995).
4.2 Supplemental Indenture dated October 13, 1992 between
American Home Products Corporation and Chemical Bank, as
trustee (incorporated by reference to Exhibit 4-b to the
Registrant's Registration Statement on Form S-3 (File No.
33-57339), filed on January 18, 1995).
4.3 Supplemental Indenture dated December 16, 2003 between Wyeth
and JPMorgan Chase Bank, as trustee (previously filed).
4.4 Registration Rights Agreement, dated December 16, 2003
between Wyeth and the Representatives of the Initial
Purchasers (previously filed).
4.5 Form of Floating Rate Convertible Senior Debenture due 2024
(included as Exhibit A to Exhibit 4.3)
5.1 Opinion of Simpson Thacher & Bartlett LLP as to legality of
the debt securities (previously filed).
12.1 Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to the Registrant's
Annual Report on Form 10-K, filed on March 12, 2004).
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
23.2 Consent of Simpson Thacher & Bartlett LLP (included in
Exhibit 5.1).
24.1 Power of Attorney of Wyeth (previously filed).
25 Form T-1 Statement of Eligibility of Trustee under the Trust
Indenture Act of 1939, as amended, of JPMorgan Chase Bank,
as trustee (previously filed).
</Table>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) to file during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act;
(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; 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 (1)(i) and (1)(ii) above do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the SEC by the registrant pursuant to section 13 or section 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
II-2
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby further undertakes that for purposes of
determining any liability under the Securities Act:
(1) each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Exchange Act (and, where applicable, each
filing of any employee benefit plan's annual report pursuant to section
15(d) of the Exchange Act) 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;
(2) the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(B)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective; and
(3) each post-effective amendment that contains a form of prospectus
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
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, except pursuant
to the insurance policies referred to in Item 15, 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 such registrant of expenses
incurred or paid by a director, officer or controlling person of such 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.
II-3
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 Madison, state of New Jersey, on May 3, 2004.
WYETH
By: /s/ KENNETH J. MARTIN
------------------------------------
Name: Kenneth J. Martin
Title: Executive Vice President
and Chief Financial
Officer
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 dated indicated.
<Table>
<Caption>
SIGNATURE TITLE DATE
--------- ----- ----
Principal Executive Officers:
/s/ ROBERT ESSNER* Chairman of the Board, President and May 3, 2004
- -------------------------------------- Chief Executive Officer
Robert Essner
Principal Financial Officer:
/s/ KENNETH J. MARTIN Executive Vice President and May 3, 2004
- -------------------------------------- Chief Financial Officer
Kenneth J. Martin
Principal Accounting Officer:
/s/ PAUL J. JONES* Vice President and Controller May 3, 2004
- --------------------------------------
Paul J. Jones
Directors:
/s/ CLIFFORD L. ALEXANDER, JR.* Director May 3, 2004
- --------------------------------------
Clifford L. Alexander, Jr.
/s/ FRANK A. BENNACK, JR.* Director May 3, 2004
- --------------------------------------
Frank A. Bennack, Jr.
</Table>
II-4
<Table>
<Caption>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ RICHARD L. CARRION* Director May 3, 2004
- --------------------------------------
Richard L. Carrion
/s/ JOHN D. FEERICK* Director May 3, 2004
- --------------------------------------
John D. Feerick
/s/ ROBERT S. LANGER* Director May 3, 2004
- --------------------------------------
Robert S. Langer
/s/ JOHN P. MASCOTTE* Director May 3, 2004
- --------------------------------------
John P. Mascotte
/s/ MARY LAKE POLAN, M.D., PH.D.,
M.P.H.* Director May 3, 2004
- --------------------------------------
Mary Lake Polan, M.D., Ph.D., M.P.H.
Director
- --------------------------------------
Ivan G. Seidenberg
/s/ WALTER V. SHIPLEY* Director May 3, 2004
- --------------------------------------
Walter V. Shipley
/s/ JOHN R. TORELL, III* Director May 3, 2004
- --------------------------------------
John R. Torell, III
*By: /s/ KENNETH J. MARTIN Executive Vice President and May 3, 2004
------------------------------ Chief Financial Officer
Kenneth J. Martin,
Attorney-in-Fact
</Table>
II-5
INDEX TO EXHIBITS
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.3 Supplemental Indenture dated December 16, 2003 between Wyeth
and JPMorgan Chase Bank, as trustee (previously filed).
4.4 Registration Rights Agreement, dated December 16, 2003
between Wyeth and the Representatives of the Initial
Purchasers (previously filed).
5.1 Opinion of Simpson Thacher & Bartlett LLP as to legality of
the debt securities (previously filed).
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
24.1 Power of Attorney of Wyeth (previously filed).
25 Form T-1 Statement of Eligibility of Trustee under the Trust
Indenture Act of 1939, as amended, of JPMorgan Chase Bank,
as trustee (previously filed).
</Table>