1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 6, 1997
REGISTRATION NO. 33-96186
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
AMENDMENT NO. 7
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------
LCI INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3498232
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8180 GREENSBORO DRIVE, SUITE 800
MCLEAN, VIRGINIA 22102
(703) 442-0220
(Address, including zip code and telephone number, including
area code, of registrant's principal executive offices)
-------------------------------------
LCI INTERNATIONAL MANAGEMENT SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 31-1115867
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4650 LAKEHURST COURT
DUBLIN, OHIO 43016
(614) 798-6000
(Address, including zip code and telephone number, including
area code, of registrant's principal executive offices)
-------------------------
LCI INTERNATIONAL TELECOM CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 39-1455803
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4650 LAKEHURST COURT
DUBLIN, OHIO 43016
(614) 798-6000
(Address, including zip code and telephone number, including
area code, of registrant's principal executive offices)
-------------------------------------------------------
2
LCI INTERNATIONAL SC, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 31-1450971
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4650 LAKEHURST COURT
DUBLIN, OHIO 43016
(614) 798-6000
(Address, including zip code and telephone number, including
area code, of registrant's principal executive offices)
------------------------------------------------------
---------------------
LCI INTERNATIONAL OF VIRGINIA, INC.
(Exact name of registrant as specified in its charter)
------------------------------------------------------
DELAWARE 54 - 1838322
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
8180 Greensboro Drive, Suite 800
McLean, Virginia 22102
(703) 442-0220
(Address including zip code and telephone number, including
area code, of registrant's principal executive offices)
-------------------------------------------------------------
LEE M. WEINER
VICE PRESIDENT & GENERAL COUNSEL
LCI INTERNATIONAL, INC.
8180 GREENSBORO DRIVE, SUITE 800
MCLEAN, VIRGINIA 22102
(703) 442-0220
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
with a copy to:
WILLIAM N. DYE
WILLKIE FARR & GALLAGHER
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(212) 821-8000
-------------------------------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
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 that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
==============================================================================
3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICIATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION,
DATED MARCH 6, 1997
$300,000,000
LCI INTERNATIONAL, INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
LCI International, Inc. (the "Company") may offer from time to time,
in one or more classes or series (a) unsecured debt securities (the "Debt
Securities") which may be either senior ("Senior Securities") or subordinated
("Subordinated Securities"), (b) shares of its Preferred Stock, par value $.01
per share (the "Preferred Stock"), (c) shares of its Common Stock, par value
$.01 per share (the "Common Stock"), and (d) warrants or other rights to
purchase Common Stock or Preferred Stock (the "Warrants"), with an aggregate
initial public offering price of up to $300,000,000 (or the equivalent in
foreign denominated currency, composite currency or currencies or currency
units based on or relating to foreign currencies) on terms to be determined at
the time or times of offering. The Debt Securities, Preferred Stock, Common
Stock and Warrants (collectively, the "Securities") may be offered, separately
or together, in separate classes or series, in amounts, at prices and on terms
to be set forth in a supplement to this Prospectus (a "Prospectus Supplement").
Certain terms of the Securities in respect of which this Prospectus is
being delivered, such as, (i) in the case of Debt Securities, the specific
designation, ranking, priority, aggregate principal amount, currency or
currencies, denominations, maturity, premium or discount, if any, interest
rate, time of payment of interest, terms for redemption at the option of the
Company or repayment at the option of the holder, terms for sinking fund
payments, terms for conversion or exchange and form and any other terms in
connection with the offer and sale of Debt Securities; (ii) in the case of
Common Stock and Preferred Stock, the specific title, number of shares,
dividend, liquidation, conversion or exchange, voting and any other rights in
connection with the offer and sale of the Common Stock and Preferred Stock;
(iii) in the case of Warrants, the duration, offering price, exercise price,
exercise dates and detachability and any other terms in connection with the
offer and sale of the Warrants; and (iv) in the case of any Security, the net
proceeds, initial public offering price and any other terms will be set forth
in the applicable Prospectus Supplement. Debt Securities may be guaranteed by
certain of the Company's wholly owned subsidiaries, including LCI International
Management Services, Inc., LCI International Telecom Corp., LCI International
SC, Inc. and LCI International of Virginia, Inc. (the "Guarantors"). Any Debt
Securities that are guaranteed will be fully and unconditionally guaranteed,
jointly and severally, by the Guarantors. The applicable Prospectus Supplement
will also contain information, where applicable, about certain United States
federal income tax considerations relating to the Securities and any listing on
a securities exchange of the Securities covered by such Prospectus Supplement.
The Securities may be sold by the Company through underwriters or
dealers, through agents, directly to purchasers, or through a combination of
any such methods of sale. If any agents, dealers or underwriters are involved
in the sale of any of the Securities, their names, and any applicable purchase
price, fee, commission or discount arrangement between or among them, will be
set forth, or will be calculable from the information set forth, in the
applicable Prospectus Supplement. See "Plan of Distribution." No Securities may
be sold without delivery of the Prospectus Supplement describing the method and
terms of the offering of such class or series of Securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1997
4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company with the Commission can
be inspected and copied at 450 Fifth Street, NW, Washington, D.C. 20549, and at
the following regional offices of the Commission: 7 World Trade Center, Suite
1300, New York, New York 10048, and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, NW, Washington,
D.C. 20549, at prescribed rates. The Commission also maintains a World Wide
Web site (http://www.sec.gov) containing these reports, proxy statements and
other information. The Common Stock is listed on the New York Stock Exchange,
and these records and other information can also be inspected at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all exhibits and amendments, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Securities offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain portions of which are omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Securities, reference is made
to the Registration Statement, including the exhibits and schedules. The
Registration Statement may be inspected, without charge, at the Commission's
principal office at 450 Fifth Street, NW, Washington, D.C. 20549, and also at
the regional offices of the Commission listed above. Copies of such material
may also be obtained from the Commission upon the payment of prescribed rates.
The Registration Statement may also be accessed from the Commission's World
Wide Web site listed above.
Statements contained in the Prospectus as to any contracts, agreements
or other documents filed as an exhibit to the Registration Statement are not
necessarily complete, and in each instance reference is hereby made to the copy
of such contract, agreement or other document filed as an exhibit to the
Registration Statement for a full statement of the provisions thereof, and each
such statement in the Prospectus is qualified in all respects by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the
Commission pursuant to the Exchange Act and are hereby incorporated by
reference into this Prospectus:
(a) the Company's Annual Report on Form 10-K for the year
ended December 31, 1995;
(b) the Company's Proxy Statement relating to the Annual
Meeting of Stockholders held on May 7, 1996;
(c) the Company's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 1996, June 30, 1996
(as amended by the Form 10-Q/A filed on February 20, 1997)
and September 30, 1996;
2
5
(d) the Company's Current Reports on Form 8-K dated August 22,
1995 (as amended by the Form 8-K/A filed on October 6, 1995),
December 17, 1995, June 3, 1996 and January 22, 1997; and
(e) the description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A filed under the
Exchange Act and any amendments or reports filed for the
purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing such documents (provided, however, that the
information referred to in item 402(a)(8) of Regulation S-K of the Commission
shall not be deemed specifically incorporated by reference herein).
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in the applicable Prospectus Supplement) or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, upon
the written or oral request of any such person, a copy of any or all of the
documents incorporated by reference in this Prospectus (other than exhibits and
schedules thereto, unless such exhibits or schedules are specifically
incorporated by reference into the information that this Prospectus
incorporates). Written or oral requests for copies of these documents should be
directed to LCI International, Inc., c/o LCI International Management Services,
Inc., 4650 Lakehurst Court, Dublin, Ohio 43016, Attention: James D. Heflinger
(telephone: (614) 798-6000).
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR AN APPLICABLE PROSPECTUS
SUPPLEMENT, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER,
DEALER OR AGENT. NEITHER THIS PROSPECTUS NOR ANY APPLICABLE PROSPECTUS
SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED HEREBY, NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
3
6
THE COMPANY
The following summary is qualified in its entirety by the more
detailed discussions set forth in the Company's periodic reports filed under
the Exchange Act incorporated herein by reference, including the discussions
under the captions "Business" and "Management's Discussion and Analysis of
Financial Condition and Results of Operation."
LCI International, Inc. ("LCI" or the "Company") is a facilities-based
long distance telecommunications carrier that provides domestic and
international telecommunications service offerings in all market segments:
commercial, residential and wholesale. The Company serves its customers
primarily through owned and leased digital fiber optic facilities spanning the
U.S. LCI's network also includes switches strategically located throughout the
U.S., connecting LCI to metropolitan areas that account for 95% of U.S. call
volume.
The Company provides a broad array of long distance telecommunications
service to its customers, which include residential, small, medium-sized and
large businesses, national accounts, other carriers, government agencies and
academic institutions. The Company's switched services include basic long
distance, accessible via "1 plus" dialing or dialing a five digit access code,
and a variety of long distance services for larger customers available through
switched or dedicated lines. The Company seeks to attract and retain a wide
range of commercial, wholesale and residential customers through introduction
of new services, as well as continued provision of high quality service at
competitive prices. Although the Company provides long distance services to a
wide range of market segments, the Company does not seek to compete with every
service offered by the Company's competitors.
The Company focuses on differentiating LCI through simple, fair and
inexpensive telecommunications services which provide residential customers
with competitive and easy-to-understand rates that primarily vary based on
whether a call is placed during or after business hours and not by the distance
of a call. The Company does not attach any complex conditions to its
residential services, such as minimum monthly usage or requiring customers to
sign up other customers to earn full discounts. An additional element is added
to this strategy for commercial customers, where LCI also focuses on offering a
full complement of high quality, competitively priced services to small,
medium-sized and large customers including calling card services, "800
services," audioconferencing and specialized high-volume data transmission
services. The Company's strategic direction is supported by growth through
expansion in sales offices and network operating facilities, sales agent and
distributor relationships, service offerings to each market segment and
selective acquisitions. This approach is dependent on maintaining efficient,
low cost operations in order to preserve pricing flexibility and operating
margins.
The Company is also involved in state regulatory proceedings in
various states to secure approval to resell local service, which would enable
the Company to provide combined local and long distance services to existing
and prospective customers. The local service industry is estimated to be a $95
billion market. The Company believes that it has significant opportunities in
this industry. As of February 28, 1997, the Company had received approval to
resell local services in 21 states and the District of Columbia and had
applications for local service authority pending in seven other states. The
Company expects to pursue applications for and obtain approval to resell
local services in additional states.
4
7
The Company provides long distance service to its customers through
digital fiber optic facilities which are owned and leased. Collectively,
these facilities constitute the Company's network. The Company has agreements
with certain interexchange carriers, local exchange carriers and third party
vendors to lease facilities for originating, terminating and transport
services. Certain of these agreements require the Company to maintain minimum
monthly and/or annual billings based on usage. The third party carriers
include WorldCom Network Services, Inc. d/b/a WilTel, Sprint Corporation
and MCI Telecommunications Corp. In addition, the Company uses
services provided by each Regional Bell Operating Company, GTE Telephone
Operating Companies and other smaller local exchange carriers. The Company
currently has one significant contract with a particular third party carrier.
Subject to the ability of such carrier to meet LCI's operational requirements,
the Company is obligated to use this carrier for a significant percentage of
the services that the Company provides through its leased facilities. The
amounts payable under that contract, however, represent less than 10% of the
Company's revenue on an annual basis. The Company has engineered its network
to minimize the impact on its customers of a service failure and has
established contingency plans to reroute traffic as quickly as possible if a
service failure by a third party carrier should occur. Although most service
failures that the Company has experienced have been corrected in a relatively
short time period, a catastrophic service failure could interrupt the provision
of service by both the Company and its competitors for a lengthy time period.
The restoration period for a catastrophic service failure cannot be reasonably
determined. The Company has not, however, experienced a catastrophic service
failure in its history.
LCI, a Delaware corporation, was incorporated in 1988 and is a holding
company. The Company's operations are conducted through its wholly owned
subsidiaries. The Company's principal executive offices are located at 8180
Greensboro Drive, Suite 800, McLean, Virginia 22102 (telephone number (703)
442-0220). The Company maintains a home page on the World Wide Web located at
http://www.lci.com. Information contained in the Company's World Wide Web site
shall not be deemed part of this Prospectus. As used in this Prospectus,
references to "LCI" and the "Company" refer to LCI and its wholly owned
subsidiaries, unless otherwise indicated or the context otherwise requires.
The following wholly owned subsidiaries of LCI may be Guarantors of
Debt Securities:
LCI International Management Services, Inc., a Delaware corporation
("LCIM"), was incorporated in 1984. LCIM is a subsidiary of LCI and owns the
network and certain other facilities used in providing long distance service.
LCIM also provides management facilities and services to its affiliated
companies.
LCI International Telecom Corp., a Delaware corporation ("LCIT"), was
incorporated in 1983. LCIT is a subsidiary of LCIM and provides long distance
service on a national and international basis. LCIT's principal assets are its
customer list, equipment, accounts receivable and goodwill.
LCI International SC, Inc., a Delaware corporation ("LCISC"), was
incorporated in 1995. LCISC is a subsidiary of LCI and provides customer
service to LCI customers. LCISC's principal assets are office equipment.
LCI International of Virginia, Inc., a Delaware corporation ("LCIVA"),
was incorporated in 1997. LCIVA is a subsidiary of LCIT and will provide local
telecommunications service in the state of Virginia. LCIVA's principal assets
will be its accounts receivable.
The executive offices for these subsidiaries (other than LCIVA) are
located at 4650 Lakehurst Court, Dublin, Ohio 43016 (telephone number
(614) 798-6000). LCIVA's principal executive offices are located at 8180
Greensboro Drive, Suite 800, McLean, Virginia 22102 (telephone number
(703) 442-0220).
All executive officers and directors of the Guarantors are officers
and/or directors of LCI.
5
8
USE OF PROCEEDS
Any Prospectus Supplement will contain a detailed description of the
use of proceeds from the sale of the Securities offered thereby. Except as
otherwise provided in the applicable Prospectus Supplement, net proceeds from
the sale of the Securities offered hereby will be used for repayment of
indebtedness, acquisitions, working capital and general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES AND TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following are the consolidated ratios of earnings to fixed
charges, earnings to combined fixed charges and preferred stock dividends and
the deficiency in earnings to cover fixed charges and preferred stock dividends
(coverage deficiency), where applicable, for the nine month periods ended
September 30, 1996 and 1995 and each of the years in the five-year period ended
December 31, 1995:
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------- -----------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges 4.33 4.61 4.60 n/m n/m n/m n/m
Ratio of earnings to combined fixed
charges and preferred stock
dividends 3.68 3.18 3.27 n/m n/m n/m n/m
Coverage deficiency in earnings to
cover fixed charges (in 000's) --- --- --- $17,156 $1,660 $42,043 $28,276
Coverage deficiency in earnings to
cover combined fixed charges and
preferred stock dividends (in 000's) --- --- --- $22,906 $3,868 $47,270 $33,105
For purposes of computing the ratio of earnings to fixed charges,
income before income taxes plus fixed charges has been divided by fixed
charges. For purposes of computing the ratio of earnings to combined fixed
charges and preferred stock dividends, income before income taxes plus fixed
charges has been divided by fixed charges and the amount of pre-tax earnings
required to cover preferred stock dividends. As discussed below under
"Description of Outstanding Capital Stock," the Company effected a redemption
of its 5% Cumulative Convertible Exchangeable Preferred Stock ("Convertible
Exchangeable Preferred Stock") on September 3, 1996. Fixed charges consist
principally of interest expense, capitalized interest expense, and that portion
of rentals representative of an interest factor (estimated at 33.3%). The
pre-tax earnings required to cover preferred stock dividends have been computed
by dividing preferred stock dividends by one minus the effective income tax
rate except in those years when the Company experienced a negative effective
income tax rate. Earnings were inadequate to cover fixed charges and combined
fixed charges and preferred stock dividends for each of the years in the
four-year period ended December 31, 1994.
6
9
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and
provisions of the Debt Securities to which this Prospectus and any Prospectus
Supplement may relate. The particular terms of the Debt Securities being
offered and the extent to which such general provisions may apply will be set
forth in the applicable Indenture or in one or more indentures supplemental
thereto and described in a Prospectus Supplement relating to such Debt
Securities. The forms of the Senior Indenture (as defined herein) and the
Subordinated Indenture (as defined herein) have been filed as exhibits to the
Registration Statement of which this Prospectus is a part.
The Debt Securities will be direct, unsecured obligations of the
Company and may be either Senior Securities or Subordinated Securities. The
Debt Securities will be issued under one or more indentures. Senior Securities
and Subordinated Securities will be issued pursuant to separate indentures
(respectively, a "Senior Indenture" and a "Subordinated Indenture"), in each
case between the Company, the Guarantors and a trustee (each, a "Trustee"), and
substantially in the form that has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part, subject to such amendments or
supplements as may be adopted from time to time. The Senior Indenture and the
Subordinated Indenture, as amended or supplemented from time to time, are
sometimes hereinafter referred to collectively as the "Indentures." The
Indentures will be subject to and governed by the Trust Indenture Act of 1939,
as amended (the "TIA"). The statements made under this heading relating to the
Debt Securities and the Indentures are summaries of the anticipated provisions
thereof, do not purport to be complete and are qualified in their entirety by
reference to the Indentures and the applicable Prospectus Supplement.
Capitalized terms used and not defined herein shall have the meanings assigned
to them in the applicable Indenture.
The Second Amended and Restated Credit Agreement, dated as of February
14, 1996, by and among LCI, as Borrower, the Lenders referred to therein, First
Union National Bank of North Carolina as Managing Agent and Credit Agent and
NationsBank of Texas, N.A., as Managing Agent and Administrative Agent, as
amended (the "Credit Agreement"), limits the amount and type of debt which the
Company and its subsidiaries may incur or guarantee and restricts the ability
of the Company and its subsidiaries to incur liens, prepay, redeem or
repurchase certain debt, capital stock or other ownership interests and
restricts the Company's ability to convert preferred stock to debt.
7
10
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED INDENTURES
GENERAL
The indebtedness represented by the Subordinated Securities will be
subordinated in right of payment to the prior payment in full of the Senior
Indebtedness of the Company as described under "Subordinated Indenture
Provisions -- Subordination." The particular terms of the Debt Securities
offered by a Prospectus Supplement and any applicable United States federal
income tax considerations will be described in the applicable Prospectus
Supplement, along with any applicable modifications or additions to the general
terms of the Debt Securities as described herein and in the applicable
Indenture. Accordingly, for a description of the terms of any series of Debt
Securities, reference must be made to both the Prospectus Supplement relating
thereto and the description of the Debt Securities set forth in this
Prospectus.
The Debt Securities to be offered by this Prospectus will be limited
to the amounts described on the cover page of this Prospectus. The Indentures,
however, do not limit the amount of Debt Securities that can be issued
thereunder and provide that Debt Securities of any series may be issued
thereunder up to the aggregate principal amount authorized from time to time by
the Company. All Debt Securities of one series need not be issued at the same
time and, unless otherwise provided, a series may be reopened, without the
consent of the holders of the Debt Securities of the series, for issuance of
additional Debt Securities of the series.
Each Indenture will provide that the Company may, but need not,
designate more than one Trustee thereunder, each with respect to one or more
series of Debt Securities. Any Trustee under an Indenture may resign or be
removed with respect to one or more series of Debt Securities and a successor
Trustee may be appointed to act with respect to the series. In the event that
two or more persons are acting as Trustee with respect to different series of
Debt Securities, each Trustee shall be a Trustee of a trust under the
applicable Indenture separate and apart from the trust administered by any
other Trustee, and except as otherwise indicated herein, any action described
herein to be taken by such Trustee may be taken by such Trustee with respect
to, and only with respect to, the one or more series of Debt Securities for
which it is Trustee under the applicable Indenture.
The following summaries set forth certain general terms and provisions
of the Indentures and the Debt Securities. The Prospectus Supplement relating
to the series of Debt Securities being offered will contain further terms of
such Debt Securities, including the following specific terms:
(1) The title of such Debt Securities and whether such Debt
Securities are Senior Securities or Subordinated Securities;
(2) The aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) The price (expressed as a percentage of the principal amount)
at which such Debt Securities will be issued and, if other than
the principal amount thereof, the portion of the principal
amount thereof payable upon declaration of acceleration of the
maturity thereof;
(4) If convertible or exchangeable in whole or in part into or for
Common Stock, Preferred Stock or other Debt Securities, the
terms on which such Debt Securities are convertible
8
11
or exchangeable, including the initial conversion or exchange
price or rate (or method of determining the same), the portion
that is convertible or exchangeable, the conversion or exchange
period and any other conversion or exchange provision;
(5) The date or dates, or the method for determining the date or
dates, on which the principal of such Debt Securities will be
payable;
(6) The rate or rates (which may be fixed or variable), or the
method by which the rate or rates will be determined, at which
such Debt Securities will bear interest;
(7) The date or dates, or the method for determining the date or
dates, from which any such interest will accrue, the dates on
which any such interest will be payable, the record dates for
the interest payment dates, or the method by which the dates
will be determined, the persons to whom the interest will be
payable and the basis upon which interest will be calculated;
(8) The place or places where the principal of (and premium, if
any) and interest, if any, on such Debt Securities will be
payable, where such Debt Securities may be surrendered for
conversion or registration of transfer or exchange and where
notices or demands to or upon the Company in respect of such
Debt Securities and the applicable Indenture may be served;
(9) The period or periods, if any, within which, the price or
prices at which and the other terms and conditions upon which
such Debt Securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed, in whole or in part, at the
option of the Company, if the Company is to have such an
option;
(10) The obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or
analogous provision or at the option of a holder thereof, and
the period or periods within which or the date or dates on
which, the price or prices at which and the other terms and
conditions upon which such Debt Securities will be redeemed,
repaid or purchased, in whole or in part, pursuant to such
obligation;
(11) If other than U.S. dollars, the Currency or Currencies in which
such Debt Securities are denominated and payable, which may be
a foreign Currency or units of two or more foreign Currencies
or a composite Currency or Currencies, and the terms and
conditions relating thereto;
(12) Whether the amount of payments of principal of (and premium, if
any) or interest, if any, on such Debt Securities may be
determined with reference to an index, formula or other method
(which index, formula or method may, but need not, be based on
a Currency, Currencies, Currency unit or units or composite
Currency or Currencies) and the manner in which the amounts
will be determined;
(13) Whether such Debt Securities will be issued in certificated or
book-entry form and, if so, the identity of the depository for
such Debt Securities;
(14) Whether such Debt Securities will be in Registered or Bearer
form and, if in registered form, the denominations thereof if
other than $1,000 and any integral multiple thereof
9
12
and, if in Bearer form, the denominations thereof if other than
$5,000 and terms and conditions relating thereto;
(15) The applicability, if any, of the defeasance and covenant
defeasance provisions described herein or set forth in the
applicable Indenture, or any modification thereof;
(16) Whether and under what circumstances the Company will pay any
additional amounts on such Debt Securities in respect of any
tax, assessment or governmental charge and, if so, whether the
Company will have the option to redeem such Debt Securities in
lieu of making such payment;
(17) Any deletions from, modifications of or additions to the events
of default or covenants of the Company, to the extent different
from those described herein or set forth in the applicable
Indenture with respect to such Debt Securities, and any change
in the right of any Trustee or any of the holders to declare
the principal amount of any of such Debt Securities due and
payable;
(18) If other than the applicable Trustee, the identity of each
security registrar and/or paying agent;
(19) The date of which any Bearer Securities of a series and any
temporary Debt Security issued in global form representing
Securities of a series will be dated if other than the date of
original issuance of the first Debt Security of the series to
be issued;
(20) The person to whom any interest on any Registered Security of
the series will be payable, if other than the Person in whose
name such Registered Security is registered at the close of
business on the Regular Record Date for such interest, the
manner in which, or the person to whom, any interest on any
Bearer Security of the series will be payable, if otherwise
than upon presentation and surrender of the coupons
appertaining thereto as they severally mature, and the extent
to which, or the manner in which, any interest payable on a
temporary Debt Security issued in global form will be paid if
other than in the manner provided in the applicable Indenture;
(21) If such Debt Securities are to be issuable in definitive form
(whether upon original issue or upon exchange of a temporary
Debt Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other
conditions, the form and/or terms of such certificates,
documents or conditions;
(22) The provisions, if any, granting special rights to the holders
of such Debt Securities upon the occurrence of such events as
may be specified; and
(23) Any other terms of such Debt Securities not inconsistent with
the provisions of the applicable Indenture.
If so provided in the applicable Prospectus Supplement, the Debt
Securities may be issued at a discount below their principal amount and provide
for less than the entire principal amount thereof to be payable upon
declaration of acceleration of the maturity thereof ("Original Issue Discount
Securities"). In these cases, any special U.S. federal income tax, accounting
and other considerations applicable to Original Issue Discount Securities will
be described in the applicable Prospectus Supplement.
10
13
The Debt Securities will be obligations exclusively of the Company.
Since the operations of the Company are conducted through its subsidiaries, the
cash flow and the consequent ability to service debt, including the Debt
Securities, of the Company, are wholly dependent upon the earnings of its
subsidiaries and the distribution of those earnings to, or upon loans or other
payments of funds by those subsidiaries to, the Company. The subsidiaries are
separate and distinct legal entities and, except for the Guarantees (as defined
below) of the Guarantors, if applicable, have no obligation, contingent or
otherwise, to pay any amounts due pursuant to the Debt Securities or to
make any funds available therefor, whether by dividends, loans or other
payments. In addition, the payment of dividends and the making of loans and
advances to the Company by its subsidiaries may be subject to statutory or
contractual restrictions, are contingent upon the earnings of those
subsidiaries and are subject to various business considerations.
Any right of the Company to receive assets of any of its subsidiaries
upon their liquidation or reorganization (and the consequent right of the
holders of the Debt Securities to participate in those assets) will be
effectively subordinated to the claims of that subsidiary's creditors
(including trade creditors), except to the extent that the Company is itself
recognized as a creditor of such subsidiary, in which case the claims of the
Company would still be subordinate to any valid security interests in the
assets of such subsidiary and any indebtedness of such subsidiary senior to
that held by the Company.
Except as may be set forth in any Prospectus Supplement, the Debt
Securities will not contain any provisions that would limit the ability of the
Company to incur indebtedness or that would afford holders of Debt Securities
protection in the event of a highly leveraged or similar transaction involving
the Company. However, the general provisions of the Senior Indenture do
provide that neither the Company nor any Restricted Subsidiary (as defined
below) will subject certain of its property or assets to any mortgage or other
encumbrance unless the Indenture Securities issued thereunder are secured
equally and ratably with or prior to such other indebtedness thereby secured.
See "Senior Indenture Provisions -- Limitation on Liens" and "Senior Indenture
Provisions -- Limitation on Sale and Leaseback Transactions." Reference is
made to the applicable Prospectus Supplement for information with respect to
any deletions from, modifications of or additions to the events of default or
covenants of the Company that are described below, including any addition of a
covenant or other provision providing event risk or similar protection.
Under the Indentures, the Company has the ability to issue Debt
Securities with terms different from those of Debt Securities previously issued
thereunder and, without the consent of the holders thereof, to issue additional
amounts of a series of Debt Securities (with different dates for payments,
different rates of interest and in different currencies or currency), in an
aggregate principal amount determined by the Company. The applicable Debt
Securities referred to on the cover page of this Prospectus and any additional
debt securities issued under an Indenture are herein collectively referred to,
when a single Trustee is acting for all debt securities issued under such
Indenture, as the "Indenture Securities." Each Indenture also provides that
there may be more than one Trustee thereunder, each with respect to one or more
different series of Indenture Securities. See also "Resignation of Trustee"
herein. At a time when two or more Trustees are acting under either Indenture,
each with respect to only certain series, the term "Indenture Securities," as
used herein, will mean the one or more series with respect to which each
respective Trustee is acting. In the event that there is more than one Trustee
under either Indenture, the powers and trust obligations of each Trustee as
described herein will extend only to the one or more series of Indenture
Securities for which it is Trustee. If two or more Trustees are acting under
either Indenture, then the Indenture Securities for which each Trustee is
acting would in effect be treated as if issued under separate indentures.
11
14
GUARANTEES
The Debt Securities may be fully and unconditionally, and jointly and
severally, guaranteed as to the payment of principal (and premium, if any) and
interest, if any, by the Guarantors pursuant to guarantees (the "Guarantees").
Certain regulatory approvals may be required prior to LCIT and LCIVA becoming
Guarantors of any Debt Securities.
As wholly owned subsidiaries of the Company, the Guarantors are
subject to control by the Company with respect to their financing activities,
the disposition of their assets and otherwise. The Indentures will contain no
restriction on the ability of the Guarantors to transfer their assets to the
Company, by dividend or otherwise, or on the ability of the Company to dispose
of or encumber the Guarantors' assets to finance or satisfy obligations of the
Company, except to the extent limited by the covenants described in
"Limitations on Liens" and "Limitations on Sale and Leaseback Transactions"
herein. Accordingly, there can be no assurance that the Guarantors would have
sufficient assets available to satisfy any claim of the holders of the Debt
Securities under the Guarantees. Although the Company has no present intent to
transfer by dividend or otherwise, dispose of, or otherwise encumber the assets
of the Guarantors to finance or satisfy obligations of the Company, the
Guarantors may from time to time transfer, dispose of or encumber their assets
as permitted by the Indentures.
The Guarantors will consist of certain wholly owned subsidiaries of
the Company. The Guarantees will be full, unconditional, joint and several.
Commencing with the Company's Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 1996, condensed combined financial information of
the Guarantors have been included in the notes to the Company's quarterly and
annual financial statements. These financial statements are incorporated
herein by reference.
In addition, various laws, including laws relating to fraudulent
conveyances, enacted for the protection of creditors may be utilized to
challenge the Guarantees to the extent that any of the Guarantors did not
receive fair consideration or reasonably equivalent value for the Guarantees.
To the extent that the Guarantees were voided or held unenforceable as a
fraudulent conveyance or otherwise, the holders of the Debt Securities would
cease to be creditors of the applicable Guarantors, and would be creditors
solely of the Company. In such event, the claims of the holders of the Debt
Securities against the assets of the applicable Guarantors would be subject, to
such extent, to the prior payment of all liabilities of such Guarantors.
CONVERSION AND EXCHANGE
If any Debt Securities will, by their terms, be convertible into or
exchangeable for Common Stock, Preferred Stock or other Debt Securities, the
Prospectus Supplement relating thereto will set forth the terms and conditions
of such conversion or exchange, including the conversion price or exchange
ratio (or the method of calculating the same), the conversion or exchange
period (or the method of determining the same), whether conversion or exchange
will be mandatory or at the option of the holder or the Company, provisions for
adjustment of the conversion price or the exchange ratio and provisions
affecting conversion or exchange in the event of the redemption of such Debt
Securities. Such terms may also include provisions under which the number of
shares of Common Stock, shares of Preferred Stock or the number or amount of
other Debt Securities to be received by the holders of such Debt Securities
upon such conversion or exchange would be calculated according to the market
price of the Common Stock, Preferred Stock or such other Debt Securities as of
a time stated in the Prospectus Supplement.
12
15
PAYMENT AND PAYING AGENTS
Unless otherwise provided in the applicable Prospectus Supplement, the
Place of Payment for a series issuable solely as Registered Securities will be
The City of New York, and the Company will initially designate the office of
the Trustee under the Senior Indenture (the "Senior Trustee") and the office of
the Trustee under the Subordinated Indenture (the "Subordinated Trustee"),
respectively for this purpose. Notwithstanding the foregoing, at the option of
the Company, interest, if any, may be paid on Registered Securities (i) by
check mailed to the address of the Person entitled thereto as such Person's
address appears in the Security Register or (ii) by wire transfer to an account
located in the United States maintained by the Person entitled thereto as
specified in the Security Register. Unless otherwise provided in the
applicable Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the Person in whose name such Registered
Security is registered at the close of business on the Regular Record Date for
such interest.
The Company may from time to time designate additional offices or
agencies, approve a change in the location of any office or agency and, except
as provided above, rescind the designation of any office or agency.
Unless otherwise provided in the applicable Prospectus Supplement, all
payments of principal of (and premium, if any) and interest, if any, on any
Debt Security that is payable in a Currency other than U.S. dollars will be
made in U.S. dollars in the event that such Currency (i) is a currency, and it
ceases to be used both by the government of the country that issued the
currency and by a central bank or other public institution of or within the
international banking community for the settlement of transactions, (ii) is the
European Currency Unit ("ECU"), and it ceases to be used both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities or (iii) is any other
currency unit (or composite currency) other than the ECU, and it ceases to be
used for the purposes for which it was established.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Unless otherwise provided in the applicable Prospectus Supplement,
each Indenture will provide that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (a) default
for 30 days in the payment of any installment of interest on any Debt Security
of the series; (b) default in the payment of principal of (or premium, if any,
on) any Debt Security of the series when due and payable, (c) default in the
deposit of any sinking fund payment as required for any Debt Security of the
series; (d) default in the performance, or breach, of any other covenant or
warranty of the Company contained in the applicable Indenture (other than a
covenant included in the applicable Indenture solely for the benefit of a
series of Debt Securities issued thereunder other than the series), continued
for 60 days after written notice as provided in the applicable Indenture; (e)
certain events of bankruptcy, insolvency or reorganization or court appointment
of a receiver, liquidator or trustee affecting the Company and (f) any other
event of default provided with respect to a particular series of Debt
Securities.
Each Indenture provides that the Trustee shall, within 90 days after
the occurrence of a default thereunder, give to the holders of Debt Securities
notice of all uncured defaults known to it; provided that, except in the case
of default in the payment of the principal of (or premium, if any) or interest,
if any, on any of the Debt Securities or in the payment of any sinking fund
installment, the Trustee may withhold notice to the holders of Debt Securities
if in good faith it determines that the withholding of such notice is the
interest of the holders of the Debt Securities.
13
16
If an Event of Default with respect to Debt Securities of a series has
occurred and is continuing, the applicable Trustee or the holders of not less
than 25% in principal amount of outstanding Debt Securities of that series may
declare the principal amount (or, if any Debt Securities of that series are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal amount as may be specified in the terms thereof) of all of the Debt
Securities of that series due and payable immediately.
Subject to the provisions of the applicable Indenture relating to the
duties of the Trustee thereunder, in case an Event of Default with respect to
Debt Securities of a series has occurred and is continuing, that Trustee is
under no obligation to exercise any of its rights or powers under such
Indenture at the request, order or direction of the applicable holders of Debt
Securities of that series, unless such holders have offered such Trustee
reasonable indemnity against the expenses and liabilities which might be
incurred by it in compliance with such request. Subject to such provisions for
the indemnification of the applicable Trustee, the holders of a majority in
principal amount of the outstanding Debt Securities of such series will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to such Trustee, or exercising any trust or power
conferred on such Trustee with respect to the Debt Securities of that series.
The holders of not less than a majority in principal amount of the
outstanding Debt Securities of a series may, on behalf of the holders of all
Debt Securities of such series and any related coupons, waive any past default
under the applicable Indenture with respect to such series and its
consequences, except a default (i) in the payment of the principal of (or
premium, if any) or interest, if any, on any Debt Security of such series or
(ii) in respect of a covenant or provision that cannot be modified or amended
without the consent of the holder of each outstanding Debt Security of such
series affected thereby.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year, a certificate from the principal executive officer,
principal financial officer or principal accounting officer as to such
officer's knowledge of the Company's compliance with all conditions and
covenants under each Indenture.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Company may, without the consent of the holders of any outstanding
Debt Securities, consolidate with, or merge with or into any Person or convey
or transfer all or substantially all of its assets to any Person, provided that
(a) either the Company shall be the continuing entity, or the successor entity
(if other than the Company) formed by or resulting from any consolidation or
merger or which shall have received the transfer of the assets expressly
assumes the Company's obligations to pay principal of (and premium, if any) and
interest on all of the Debt Securities and the due and punctual performance and
observance of all of the covenants and conditions contained in each Indenture;
and (b) immediately after giving effect to the transaction and treating any
indebtedness that becomes an obligation of the Company or any subsidiary
thereof as a result thereof as having been incurred by the Company or the
subsidiary at the time of the transaction, no event of default under the
applicable Indenture, and no event which, after notice or the lapse of time, or
both, would become an event of default, shall have occurred and be continuing.
In addition, under the Senior Indenture, no such consolidation, merger or
transfer may be made if as a result thereof any property or assets of the
Company or a subsidiary would become subject to any mortgage or other
encumbrance, unless either (i) such mortgage or other encumbrance could be
created pursuant to such Indenture without equally and
14
17
ratably securing the Senior Securities issued under such Indenture or (ii) such
Senior Securities are secured equally and ratably with or prior to the debt
secured by such mortgage or other encumbrance.
MODIFICATION OF THE INDENTURES
Modifications of and amendments to an Indenture may be made by the
Company and the Trustee thereunder without the consent of any holder for any of
the following purposes: (i) to evidence the succession of another Person to
the Company as obligor under such Indenture; (ii) to add to the covenants of
the Company for the benefit of the holders of all or any series of Indenture
Securities issued thereunder and any related coupons or to surrender any right
or power conferred upon the Company thereunder; (iii) to add Events of Default
for the benefit of the holders of all or any series of Indenture Securities;
(iv) to add or change any provisions of such Indenture to facilitate the
issuance of, or to liberalize certain terms of, Bearer Securities; (v) to
change or eliminate any provisions of such Indenture, provided that any such
change or elimination will become effective only when there are no such
Indenture Securities outstanding of any series created prior thereto which are
entitled to the benefit of such provisions; (vi) in the case of the Senior
Securities, to secure the Indenture Securities under the Senior Indenture;
(vii) to establish the form or terms of Indenture Securities of any series and
any related coupons, including any provisions and procedures relating to
conversion or exchange; (viii) to provide for the acceptance of appointment by
a successor Trustee or facilitate the administration of the trusts under such
Indenture by more than one Trustee; (ix) to cure any ambiguity, defect or
inconsistency in such Indenture, provided such action does not adversely affect
the interests of holders of Indenture Securities of a series issued thereunder
or any related coupons in any material respect; or (x) to supplement any of the
provisions of such Indenture to the extent necessary to permit or facilitate
defeasance and discharge of any series of Indenture Securities thereunder,
provided that such action shall not adversely affect the interests of the
holders of any such Indenture Securities and any related coupons or of any
other series of Indenture Securities in any material respect.
Modifications of and amendments to an Indenture will be permitted to
be made with the consent of the holders of not less than a majority in
principal amount of all outstanding Indenture Securities issued under the
Indenture affected by such modification or amendment; provided, however, that
no such modification or amendment may, without the consent of the holder of
each Indenture Security affected thereby, (i) change the Stated Maturity of the
principal of (or premium, if any, on) or any installment of principal of or
interest on any such Indenture Security; (ii) reduce the principal amount of,
the rate of interest on or in respect of, or any premium payable upon the
redemption of, any such Indenture Security; (iii) change any obligation of the
Company to pay Additional Amounts in respect of any such Indenture Security;
(iv) reduce the portion of the principal of an Original Issue Discount Security
or Indexed Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof or provable in bankruptcy; (v) adversely
affect any right of repayment at the option of the holder of any such Indenture
Security; (vi) change the place or currency of payment of principal of, or any
premium or interest on, any such Indenture Security; (vii) impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof; (viii) adversely affect any right to convert or exchange any
such Indenture Security as may be provided pursuant to such Indenture; (ix)
reduce the percentage in principal amount of such outstanding Indenture
Securities (or of such outstanding Indenture Securities of any series, as the
case may be), the consent of whose holders is required to amend or waive
compliance with certain provisions of such Indenture or to waive certain
defaults thereunder; (x) reduce the voting or quorum requirements; or (xi)
modify any of the provisions relating to supplemental indentures requiring the
consent of holders, relating to the waiver of past defaults or relating to the
waiver of certain covenants, except to increase the percentage of such
outstanding Indenture Securities required for such actions or to provide that
certain other provisions of
15
18
such Indenture cannot be modified or waived without the consent of the holder
of each outstanding Indenture Security affected thereby.
In addition, under the Subordinated Indenture, no modification or
amendment thereof may, without the consent of the holder of each outstanding
Subordinated Security affected thereby, modify any of the provisions of such
Indenture relating to the subordination of the Subordinated Securities in a
manner adverse to the holders thereof and no such modification or amendment may
adversely affect the rights of any holder of Senior Indebtedness with respect
to the payment of Senior Indebtedness prior to the Subordinated Securities in
certain circumstances (described under the caption "Subordinated Indenture
Provisions -- Subordination") without the consent of such holder of Senior
Indebtedness.
The holders of a majority in aggregate principal amount of outstanding
Indenture Securities have the right to waive compliance by the Company with
certain covenants in the applicable Indenture.
SATISFACTION AND DISCHARGE
An Indenture will cease to be of further effect with respect to any
series of Debt Securities when
(1) either
(A) all Debt Securities of such series theretofore
authenticated and delivered and all coupons, if any, appertaining thereto
(other than certain Debt Securities and coupons) have been delivered to the
Trustee for cancellation; or
(B) all Debt Securities of such series and, in the case
of (i) or (ii) below, any coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Company,
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust
for such purpose an amount in the Currency in which the Debt Securities of such
series are payable, sufficient to pay and discharge the entire indebtedness on
such Debt Securities and such coupons not theretofore delivered to the Trustee
for cancellation, for principal (and premium, if any) and interest, if any, to
the date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable with respect to the Debt Securities of such series; and
(3) the Company has delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent in the Indenture relating to the satisfaction and discharge of the
Indenture as to such series have been complied with.
16
19
DEFEASANCE AND COVENANT DEFEASANCE
The Company may elect either (i) to defease and be discharged from any
and all obligations with respect to such Debt Securities and coupons (except
for the obligations to register the transfer or exchange of such Debt
Securities and coupons; to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities and coupons; to maintain one or more offices or agencies
in respect of such Debt Securities and coupons; to hold moneys for payment in
trust; and to pay Additional Amounts, if any) ("defeasance") or (ii) to be
released (a) in the case of any such Debt Securities that are Senior
Securities, from its obligations described under "Senior Indenture Provisions
- -- Limitation on Liens" and "Senior Indenture Provisions -- Limitation on Sale
and Leaseback Transactions" or (b) in the case of any such Debt Securities
(whether they are Senior or Subordinated Securities), if so provided in the
applicable Prospectus Supplement, from its obligations with respect to any
other covenant relating to such Debt Securities and, in the case of either (a)
or (b) above, any omission to comply with such obligations will not constitute
a default or an Event of Default with respect to such Debt Securities and
coupons ("covenant defeasance"), in either case upon the irrevocable deposit by
the Company with the applicable Trustee (or other qualifying trustee), in
trust, of (1) an amount (in the Currency or Currencies in which such Debt
Securities and coupons are then specified as payable at Stated Maturity), (2)
Government Obligations applicable to such Debt Securities and coupons (with
such applicability being determined on the basis of the Currency in which such
Debt Securities are then specified as payable at Stated Maturity) that, through
the payment of principal and interest in accordance with their terms, will
provide money in an amount, or (3) a combination thereof, sufficient to pay the
principal of (and premium, if any) and interest, if any, on such Debt
Securities and coupons, and any mandatory sinking fund or analogous payments
thereon, on the scheduled due dates therefor.
Such a trust may only be established if, among other things, the
Company has delivered to the applicable Trustee an Opinion of Counsel to the
effect that the holders of such Debt Securities and related coupons to be
defeased will not recognize income, gain or loss for United States federal
income tax purposes as a result of such defeasance or covenant defeasance and
will be subject to United States federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred, and such Opinion of
Counsel, in the case of defeasance under clause (i) above, must refer to and be
based upon a ruling of the Internal Revenue Service or a change in applicable
United States federal income tax law occurring after the date of the applicable
Indenture.
BOOK-ENTRY DEBT SECURITIES
Debt Securities of a series may be issued in whole or in part in
global form that will be deposited with, or on behalf of, a depository
identified in the Prospectus Supplement. Global securities may be issued in
either registered or bearer form and in either temporary or permanent form (as
defined below). Unless otherwise provided in the Prospectus Supplement, Debt
Securities that are represented by a global security will be issued in
denominations of $1,000 and any integral multiple thereof, and will be issued
in registered form only, without coupons (each, a "Registered Global
Security"). Payments of principal of (and premium, if any) and interest, if
any, on Debt Securities represented by a Registered Global Security will be
made by the Company to the applicable Trustee and then by such Trustee to the
depository.
The Company anticipates that any Registered Global Securities will be
deposited with, or on behalf of, The Depository Trust Company ("DTC"), New
York, New York, that such Registered Global Securities will be registered in
the name of DTC's nominee, and that the following provisions
17
20
will apply to the depository arrangements with respect to any such Registered
Global Securities. Additional or differing terms of the depository
arrangements will be described in the applicable Prospectus Supplement.
So long as DTC or its nominee is the registered owner of a Registered
Global Security, DTC or its nominee, as the case may be, will be considered the
sole holder of the Debt Securities represented by such Registered Global
Security for all purposes under the applicable Indenture. In addition, as the
sole holder of the Debt Securities, DTC or its nominee will be the only entity
with the right to sue the Company under the TIA for nonpayment of principal (or
premium, if any) or interest, if any, on the Debt Securities. Owners of
beneficial interests in Debt Securities must rely on the procedures of the
depository arrangements with respect to such nonpayments. Except as provided
below, owners of beneficial interests in a Registered Global Security will not
be entitled to have Debt Securities represented by such Registered Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities in certificated form and will not be
considered the owners or holders thereof under the applicable Indenture. The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in certificated forms; accordingly, such laws may
limit the transferability of beneficial interests in a Registered Global
Security.
If DTC is at any time unwilling or unable to continue as depository
and a successor depository is not appointed by the Company within 90 days
following notice to the Company or the Company determines, in its sole
discretion, not to have any Debt Securities represented by one or more
Registered Global Securities, then the Company will issue individual Debt
Securities in certificated form in exchange for beneficial interests in such
Registered Global Securities. In any such instance, an owner of a beneficial
interest in a Registered Global Security will be entitled to physical delivery
of individual Debt Securities in certificated form of like tenor and rank,
equal in principal amount to such beneficial interest and to have such Debt
Securities in certificated form registered in its name.
The following is based on information furnished by DTC:
DTC will act as securities depository for the Debt Securities. The
Debt Securities will be issued as fully registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One fully registered Debt
Security certificate is issued with respect to each $200 million of principal
amount of the Debt Securities of a series, and additional certificates will be
issued with respect to any remaining principal amount of such series.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants
are on file with the Commission.
18
21
Purchases of Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debt
Securities on DTC's records. The ownership interest of each actual purchaser
of each Debt Security ("Beneficial Owner") is in turn recorded on the Direct
and Indirect Participants' records. A Beneficial Owner does not receive
written confirmation from DTC of its purchase, but such Beneficial Owner is
expected to receive a written confirmation providing details of the
transaction, as well as periodic statements of its holdings, from the Direct or
Indirect Participant through which such Beneficial Owner entered into the
transaction. Transfers of ownership interests in Debt Securities are
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners do not receive certificates representing
their ownership interests in Debt Securities, except in the event that use of
the book-entry system for the Debt Securities is discontinued.
To facilitate subsequent transfers, the Debt Securities are registered
in the name of DTC's partnership nominee, Cede & Co. The deposit of the Debt
Securities with DTC and their registration in the name of Cede & Co. effects no
change in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Debt Securities; DTC records reflect only the identity of the
Direct Participants to whose accounts Debt Securities are credited, which may
or may not be the Beneficial Owners. The Participants remain responsible for
keeping account of their holdings on behalf of their customers.
Delivery of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners are governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of
the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Debt Securities. Under its usual procedures, DTC mails a proxy (an "Omnibus
Proxy") to the issuer as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Debt Securities are credited on the record
date (identified on a list attached to the Omnibus Proxy).
Payment of principal (and premium, if any) and interest, if any, on
the Debt Securities will be made to DTC. DTC's practice is to credit Direct
Participants' accounts on the payable date in accordance with their respective
holdings as shown on DTC's records unless DTC has reason to believe that it
will not receive payment on the payable date. Payments by Participants to
Beneficial Owners 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
such Participant and not of DTC, the Paying Agent or the Company, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of principal (and premium, if any) and interest, if any, to DTC is the
responsibility of the Company or the Paying Agent, disbursement of such
payments to Direct Participants is the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as securities depository
with respect to the Debt Securities at any time by giving reasonable notice to
the Company or the Paying Agent. Under such
19
22
circumstances, in the event that a successor securities depository is not
appointed, Debt Security certificates are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Debt Security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources (including DTC) that the Company believes
to be reliable, but the Company takes no responsibility for the accuracy
thereof.
Unless stated otherwise in the applicable Prospectus Supplement, the
underwriters or agents with respect to a series of Debt Securities issued as
Registered Global Securities will be Direct Participants in DTC.
None of the Company, any underwriter or agent, the applicable Trustee
or any applicable Paying Agent will have any responsibility or liability for
any aspect of the records relating to, or payments made on account of
beneficial interests in a Registered Global Security, or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
AUTHENTICATION AND DELIVERY
At any time and from time to time after the execution and delivery of
an Indenture, the Trustee thereunder will, upon delivery to such Trustee of
Debt Securities of any series, executed by the Company, together with a written
order of the Company, authenticate and deliver such Debt Securities in
accordance with such Company order. Each Registered Security will be dated the
date of its authentication and each Bearer Security will be dated as of the
date specified in the applicable Prospectus Supplement.
A Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Debt Securities. An authenticating agent may
authenticate Debt Securities whenever the Trustee may do so.
CERTAIN DEFINITIONS
"Additional Amounts" means any additional amounts which are required
by a Security or by or pursuant to a resolution of the Board of Directors,
under circumstances specified therein, to be paid by the Company in respect of
certain taxes imposed on certain holders and which are owing to such holders.
"Bearer Security" means any Security established pursuant to the
Senior Indenture or the Subordinated Indenture which is payable to bearer.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Currency" means any currency or currencies, composite currency or
currency unit or currency units, including, without limitation, the ECU, issued
by the government of one or more countries or by any reorganized confederation
or association of such governments.
20
23
"Government Obligations" means securities which are (i) direct
obligations of the United States or the government which issued the foreign
Currency in which the Debt Securities of that series are payable, for the
payment of which its full faith and credit is pledged, or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality
of the United States or the government which issued such foreign Currency, as
the case may be, the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States or such other government,
which, in either case, are not callable or redeemable at the option of the
issuer thereof. Such term also includes a depository receipt issued by a bank
or trust company as custodian with respect to any such Government Obligation or
a specific payment of interest on or principal of any such Government
Obligation held by such custodian for the account of the holder of a depository
receipt; provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from the amount received by such custodian in respect of the
Government Obligation or the specific payment of interest on or principal of
the Government Obligations evidenced by such depository receipt.
"Indexed Security" means a Security as to which all or certain
interest payments and/or the principal amount payable at maturity are
determined by reference to prices, changes in prices, or differences between
prices, of securities, Currencies, intangibles, goods, articles or commodities
or by such other objective price, economic or other measures as are specified
in the applicable Prospectus Supplement.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (or premium, if any) or interest, if any, on any Securities or
coupons on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Payment" when used with respect to the Securities of or
within any series, means the place or places where the principal of (and
premium, if any) and interest, if any, on such Securities are payable as
specified and as contemplated by the Senior Indenture or the Subordinated
Indenture.
"Redemption Date," when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to the Senior Indenture or the Subordinated Indenture, as applicable.
"Registered Security" shall mean any Security which is registered in
the security register.
"Special Record Date" for the payment of any defaulted interest on the
Registered Securities of or within any series means a date fixed by the Senior
Trustee or Subordinated Trustee, as applicable.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable, as such date may be extended pursuant
to the provisions of the Senior Indenture or the Subordinated Indenture, as
applicable.
21
24
SENIOR INDENTURE PROVISIONS
LIMITATION ON LIENS
Except as may otherwise be provided in the applicable Prospectus
Supplement, the Senior Indenture will contain a covenant that the Company will
not, nor will it permit any Restricted Subsidiary to, create, incur, assume or
suffer to exist any mortgage, security interest, pledge, lien or other
encumbrance (herein referred to as "mortgage" or "mortgages") upon any
Principal Property (as defined below) of the Company or any Restricted
Subsidiary or any shares of stock or indebtedness of any Restricted Subsidiary,
whether owned at the date of such Indenture or thereafter acquired, without
effectively securing the Indenture Securities issued under the Senior Indenture
equally and ratably with or prior to such indebtedness. The foregoing
restriction will not apply to: (i) mortgages on any assets acquired,
constructed or improved after the date of the Senior Indenture or existing
mortgages on property acquired after the date of such Indenture if such
mortgages have been created to secure, finance, refinance or refund the cost of
the acquisition of such assets; (ii) mortgages existing on the date of the
Senior Indenture; (iii) existing mortgages on any property, shares of stock or
indebtedness acquired from a corporation which is consolidated with or merged
into, or substantially all of the assets of which are acquired by, the Company
or a Restricted Subsidiary so long as such mortgages are limited to the assets
so acquired; (iv) mortgages on property of any corporation existing at the time
it becomes a Restricted Subsidiary so long as such mortgages are limited to the
assets of such Restricted Subsidiary; (v) mortgages securing indebtedness owed
by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;
(vi) deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (vii) sales of receivables that are reflected as
secured indebtedness; (viii) certain other liens not related to the borrowing
of money; and (ix) extensions, renewals or replacements of the foregoing.
Notwithstanding the foregoing restrictions, the Company may, and may
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any mortgage that would otherwise be subject to such restrictions without
equally and ratably securing the Indenture Securities issued under the Senior
Indenture provided that the aggregate amount of all indebtedness then
outstanding secured by such mortgages plus the Attributable Debt (generally
defined as the discounted present value of net rental payments) associated with
Sale and Leaseback Transactions existing at such time (other than Sale and
Leaseback Transactions the proceeds of which have been or will be applied as
set forth in clause (iii) or (iv) under "Limitation on Sale and Leaseback
Transactions" below, and other than Sale and Leaseback Transactions in which
the property involved would have been permitted to be mortgaged under clause
(i) above), does not exceed the greater of $50,000,000 and 10% of the total
shareowners' equity (including preferred stock) of the Company as shown on the
audited consolidated balance sheet contained in the latest annual report to
stockholders of the Company.
The term "Principal Property" is defined in the Senior Indenture to
include the Company's owned digital fiber optic network.
The term "Restricted Subsidiary," unless indicated otherwise in the
applicable Prospectus Supplement, is defined in the Senior Indenture to mean,
any Subsidiary whose total assets or consolidated revenue is equal to or
greater than 5% of the consolidated total assets or consolidated revenues, as
the case may be, of the Company and the Subsidiaries as of the date of the
latest available consolidated financial statements of the Company.
22
25
The term "Subsidiary" is defined in the Senior Indenture to mean a
corporation a majority of the outstanding voting stock of which is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries, or
by the Company and one or more other Subsidiaries.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
Except as otherwise may be provided in the applicable Prospectus
Supplement, the Senior Indenture will contain a covenant that the Company will
not nor will it permit any Restricted Subsidiary to enter into any arrangement
with any Person providing for the leasing to the Company or any Restricted
Subsidiary of any Principal Property (except for temporary leases for a term,
including renewals, of not more than three years and except for leases between
the Company and a Restricted Subsidiary or between Restricted Subsidiary) which
has been or is to be sold by the Company or such Restricted Subsidiary to such
Person unless the net proceeds are at least equal to the fair value (as
determined by the Board of Directors) of such property and either (i) the
Company or such Restricted Subsidiary would be entitled to incur indebtedness
secured by a mortgage on such Principal Property without securing the Indenture
Securities issued under the Senior Indenture under clause (i) of the first
paragraph under "Limitation on Liens" above; (ii) the Attributable Debt
associated therewith would be an amount permitted under the second paragraph
under "Limitation on Liens" above; (iii) the Company applies an amount equal to
the fair value of such Principal Property to the retirement of Indenture
Securities or certain long-term indebtedness of the Company or a Restricted
Subsidiary, as the case may be; or (iv) the Company enters in to a bona fide
commitment to expend for the acquisition or improvement of a Principal Property
an amount at least equal to the fair value of such property.
SUBORDINATED INDENTURE PROVISIONS
SUBORDINATION
The Subordinated Securities, will be subordinated and subject, to the
extent and in the manner set forth in the Subordinated Indenture and the
applicable Prospectus Supplement, in right of payment to the prior payment in
full of all Senior Indebtedness (as defined in the Subordinated Indenture).
Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization, the payment of the principal of (and
premium, if any) and interest, if any, on Subordinated Securities is to be
subordinated to the extent provided in the Subordinated Indenture in right of
payment to the prior payment in full of all Senior Indebtedness, but the
obligation of the Company to make payment of principal (and premium, if any) or
interest, if any, on Subordinated Securities will not otherwise be affected.
No payment may be made, either directly or indirectly, by or on behalf
of the Company, in cash, property or securities on account of principal of
(premium, if any), interest on or other fees, costs and expenses and amounts
accrued or incurred in connection with, the Subordinated Securities, or to
purchase, redeem, retire, exchange, defease, or otherwise acquire any of the
Subordinated Securities for cash, property or securities, or on account of the
redemption or defeasance provisions or any other provision of the Subordinated
Indenture providing for the acquisition or retirement of the Subordinated
Securities (i) upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, unless and until all principal thereof (premium, if
any) and interest thereon and all other fees, costs, expenses and other amounts
accrued or incurred pursuant to the terms thereof, shall first be paid in full
or waived, or (ii) in the event that the Company defaults in the payment of any
principal of (premium, if any), interest on or other fees, costs or expenses
and amounts accrued or incurred or owing pursuant to
23
26
the terms of any Senior Indebtedness when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise, unless and until such default shall have been cured or waived or
shall have ceased to exist.
Upon the occurrence of an event of default with respect to any Senior
Indebtedness, as such event of default is defined therein, permitting the
holders to accelerate the maturity thereof (other than a default in payment of
the principal of (premium, if any) and interest on or other fees, costs,
expenses or amounts accrued or incurred pursuant to the terms of such Senior
Indebtedness) and, upon written notice thereof given to the Company and the
Trustee by one or more holders of such Senior Indebtedness or their
representative ("Default Notice"), then, unless and until such default has been
cured or waived or has ceased to exist or the Trustee receives notice from such
holder or holders of Senior Indebtedness (or such representative) terminating
the Blockage Period (as defined below), no payment may be made, either directly
or indirectly, by or on behalf of the Company, in cash, property or securities,
with respect to the principal of (premium, if any), interest, if any on, or
other fees, costs, expenses and other amounts accrued or incurred in connection
with, the Subordinated Securities or to purchase, redeem, retire, exchange,
defease or otherwise acquire any of the Subordinated Securities including on
account of the redemption or defeasance provisions or any other provision set
forth in the Subordinated Indenture providing for the acquisition or retirement
of the Subordinated Securities; provided, however, that if such Senior
Indebtedness has not been accelerated or become the subject of judicial
proceedings within 179 days after the delivery of such Default Notice (the
"Blockage Period"), then, subject to the paragraph above relating to the
distribution of the Company's assets upon dissolution, winding up, liquidation
or reorganization, the Company will resume making any and all required payments
in respect of the Securities. At the expiration of such Blockage Period the
Company will, subject to the paragraph above relating to the distribution of
the Company's assets upon dissolution, winding up, liquidation or
reorganization, promptly pay to the Trustee all sums not paid during such
Blockage Period as a result of this provision. Notwithstanding the foregoing,
(i) not more than one Default Notice may be given within a period of 360
consecutive days, (ii) no event of default which existed or was continuing on
the date of any Default Notice may be made the basis for the giving of a
subsequent Default Notice, (iii) if the Company or the Trustee receives any
Default Notice, a similar notice relating to or arising out of the same default
or facts giving rise to such default (whether or not such default is on the
same issue of Senior Indebtedness) will not be effective for purposes of this
provision and (iv) no Default Notice may be given by a holder or holders of
less $5,000,000 principal amount of Senior Indebtedness.
In the event that, notwithstanding the foregoing, any such payment by
the Company is received by the Subordinated Trustee or the holders of any of
the Subordinated Securities before all Senior Indebtedness is paid in full,
such payment or distribution will be paid over to the holders of such Senior
Indebtedness or on their behalf for application to the payment of all such
Senior Indebtedness remaining unpaid until all such Senior Indebtedness has
been paid in full, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness. Subject to the
payment in full of all Senior Indebtedness upon such distribution of assets of
the Company, the holders of the Subordinated Securities will be subrogated to
the rights of the holders of the Senior Indebtedness to the extent of payments
made to the holders of such Senior Indebtedness out of the distributive share
of the Subordinated Securities. By reason of such subordination, in the event
of a distribution of assets upon insolvency, certain general creditors of the
Company may recover more, ratably, than holders of the Subordinated Securities.
The Subordinated Indenture provides that the subordination provisions thereof
will not apply to money and securities held in trust pursuant to the defeasance
provisions of the Subordinated Indenture.
24
27
Senior Indebtedness is defined in the Subordinated Indenture to
include the principal of (and premium, if any) and unpaid interest on (i)
indebtedness of the Company (including indebtedness of others guaranteed by the
Company), whether outstanding on the date of the Subordinated Indenture or
thereafter created, incurred, assumed or guaranteed, for money borrowed (other
than the Indenture Securities issued under the Subordinated Indenture), unless
in the instrument creating or evidencing the same or pursuant to which the same
is outstanding it is provided that such indebtedness is not senior or prior in
right of payment to the Subordinated Securities and (ii) renewals, extensions,
modifications and refundings of any such indebtedness.
If this prospectus is being delivered in connection with the offering
of a series of Subordinated Securities, the accompanying Prospectus Supplement
or the information incorporated by reference will set forth the appropriate
amount of Senior Indebtedness outstanding as of a recent date.
DESCRIPTION OF PREFERRED STOCK
GENERAL
The following summary description of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. The statements below describing the
Preferred Stock do not purport to be complete and are in all respects subject
to and qualified in their entirety by reference to the applicable provisions of
the Company's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation"), the Amended and Restated By-laws of the
Company (the "By-laws") and any applicable certificate of designations (each, a
"Preferred Stock Designation") and may be modified, supplemented or varied in
the applicable Prospectus Supplement.
The Credit Agreement restricts the Company's ability to pay dividends
or make distributions on, or to redeem, its capital stock. The Credit
Agreement provides in substance that (a) the Company may pay dividends in
shares of its capital stock or other ownership interests, (b) any subsidiary of
the Company may pay cash dividends to the Company or any other wholly owned
subsidiary, (c) as long as no Default or Event of Default (as such terms are
defined in the Credit Agreement) has occurred and is continuing, the Company
may pay cash dividends on any preferred stock the terms of which have been
approved by the managing agents under the Credit Agreement, (d) in addition to
other permitted dividends, as long as no Default or Event of Default has
occurred and is continuing, the Company and its subsidiaries may pay cash
dividends on shares of their capital stock or other ownership interests in an
aggregate amount not exceeding $10,000,000 in any fiscal year, (e) as long as
no Default or Event of Default has occurred and is continuing, the Company and
its subsidiaries may make additional cash distributions with the prior written
approval of the managing agents and the lenders holding 66-2/3% of the
outstanding debt under the Credit Agreement, and (f) the Company may redeem
shares of its capital stock not exceeding in the aggregate $100,000,000 during
the term of the Credit Agreement.
The Company may issue up to 10,400,000 shares of Preferred Stock.
25
28
TERMS
Subject to the limitations prescribed by the Certificate of
Incorporation, the Board of Directors is authorized to fix the number of shares
constituting each series of Preferred Stock and the designations, preferences,
conversion, exchange or other rights, participations, voting powers, options,
restrictions, limitations, special rights or relations, limitations as to
dividends, qualifications, terms and conditions of redemption and such other
subjects or matters as may be fixed by resolution of the Board of Directors.
The Preferred Stock will, when issued, be fully paid and nonassessable and will
have no preemptive rights.
Reference is made to the applicable Prospectus Supplement relating to
the shares of Preferred Stock offered thereby for specific terms, including:
(i) the title and stated value of such Preferred Stock; (ii) the number of
shares of such Preferred Stock offered, the liquidation preference per share
and the offering price of such Preferred Stock; (iii) the relative ranking and
preferences of such Preferred Stock as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of the Company; (iv) the
dividend rate(s), period(s) and/or payment date(s) or method(s) of calculation
thereof applicable to such Preferred Stock; (v) the terms and conditions, if
applicable, upon which such Preferred Stock will be convertible into or
exchangeable for shares of Common Stock or other Securities, including the
conversion or exchange price (or manner of calculation thereof); (vi) the
provision for redemption, if applicable, of such Preferred Stock; (vii) the
voting rights, if any, for such Preferred Stock; (viii) any listing of such
Preferred Stock on any securities exchange; (ix) any other specific terms,
preferences, rights, limitations or restrictions of such Preferred Stock; (x) a
discussion of United States federal income tax considerations applicable to
such Preferred Stock; and (xi) any limitations on issuance of any series of
Preferred Stock ranking senior to or on a parity with such series of Preferred
Stock as to dividend rights and rights upon liquidation, dissolution or winding
up of the affairs of the Company.
RANK
Unless otherwise specified in the applicable Prospectus Supplement,
the Preferred Stock will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the Company, rank (i) senior to all
classes or series of Common Stock and to all other equity securities ranking
junior to such Preferred Stock ("Junior Stock"), (ii) on a parity with all
equity securities issued by the Company the terms of which specifically provide
that such equity securities rank on a parity with the Preferred Stock, and
(iii) junior to all equity securities issued by the Company the terms of which
specifically provide that such equity securities rank senior to the Preferred
Stock. The term "equity securities" does not include convertible debt
securities.
DIVIDENDS
Holders of Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of
assets of the Company legally available for payment, cash dividends at such
rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such dividend will be payable to holders of record as they
appear on the stock
26
29
transfer books of the Company on such record dates as shall be fixed by the
Board of Directors of the Company and specified in the applicable Prospectus
Supplement.
Dividends on any series of Preferred Stock may be cumulative or
noncumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Directors of the Company
fails to declare a dividend payable on a dividend payment date on any series of
Preferred Stock for which dividends are noncumulative, then the holders of such
series of Preferred Stock will have no right to receive a dividend in respect
of the dividend period ending on such dividend payment date, and the Company
will have no obligation to pay the dividend accrued for such period, whether or
not dividends on such series are declared payable on any future dividend
payment date.
The Company may not (i) declare or pay dividends (except in shares of
Junior Stock) or make any other distributions on any Junior Stock, or (ii)
purchase, redeem or otherwise acquire Junior Stock or set aside funds for such
purpose, if there are arrearages in dividends or failure in the payment of the
Company's sinking fund or redemption obligations on any of its Preferred Stock
and, in the case of (i) above, if dividends in full for the current quarterly
dividend period have not been paid or declared on any of its Preferred Stock.
Dividends in full may not be declared or paid or set apart for payment
on any series of Preferred Stock unless (i) there are no arrearages in
dividends for any past quarterly dividend periods on any series of Preferred
Stock and (ii) to the extent that such dividends are cumulative, dividends in
full for the current quarterly dividend period have been declared or paid on
all Preferred Stock. Any dividends declared or paid when dividends are not so
declared, paid or set apart in full will be shared ratably by the holders of
all series of Preferred Stock in proportion to such respective arrearages and
undeclared and unpaid current quarterly cumulative dividends. No interest, or
sum of money in lieu of interest, will be payable in respect of any dividend
payment or payments that may be in arrears.
CONVERSION AND EXCHANGE
If the Preferred Stock will be convertible into or exchangeable for
Common Stock or other Securities, the applicable Prospectus Supplement will set
forth the terms and conditions of such conversion or exchange, including the
conversion price or exchange ratio (or the method of calculating the same), the
conversion or exchange period (or the method of determining the same), whether
conversion or exchange will be mandatory or at the option of the holder or the
Company, the events requiring an adjustment of the conversion price or the
exchange ratio and provisions affecting conversion or exchange in the event of
the redemption of such Preferred Stock. Such terms may also include provisions
under which the number of shares of Common Stock or the number or amount of
other Securities to be received by the holders of such Preferred Stock upon
such conversion or exchange would be calculated according to the market price
of the Common Stock or such other Securities as of a time stated in such
Prospectus Supplement.
27
30
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company, the holders of each series of the Preferred Stock
will be entitled to receive out of assets of the Company available for
distribution to stockholders, before any distribution of assets is made to
holders of any Junior Stock, liquidating distributions in the amount set forth
in the Prospectus Supplement plus all accrued and unpaid dividends. If, upon
any voluntary or involuntary liquidation, dissolution or winding up of the
Company, the amounts payable with respect to the Preferred Stock are not paid
in full, the holders of Preferred Stock of each series will share ratably in
any such distribution of assets of the Company in proportion to the full
respective preferential amounts to which they are entitled. After payment of
the full amount of the liquidating distribution to which they are entitled, the
holders of the Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Company. A consolidation or
merger of the Company with or into any other corporation or corporations or a
sale of all or substantially all of the assets of the Company will not be
deemed to be a liquidation, dissolution or winding up of the Company.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the Preferred
Stock will be redeemable in whole or in part at the option of the Company, at
the times and at the redemption prices set forth therein.
If dividends on any series of Preferred Stock are in arrears or the
Company has failed to fulfill its sinking fund or redemption obligations with
respect to any series of Preferred Stock, the Company may not purchase or
redeem any shares of Preferred Stock or any other capital stock ranking on a
parity with the Preferred Stock as to dividends or upon liquidation, nor permit
any subsidiary to do so, without in either case the consent of the holders of
at least two-thirds of all shares of Preferred Stock then outstanding;
provided, however, that (i) to meet its purchase, retirement or sinking fund
obligations with respect to any series of Preferred Stock, the Company may use
shares of such Preferred Stock acquired prior to such arrearages or failure of
payment and then held as treasury stock and (ii) the Company may complete the
purchase or redemption of shares of Preferred Stock for which a contract was
entered into for any purchase, retirement or sinking fund purposes prior to
such arrearages or failure of payment.
VOTING RIGHTS
Holders of shares of Preferred Stock will not have any voting rights,
except as set forth below or as otherwise from time to time required by law or
as indicated in the applicable Prospectus Supplement.
Whenever dividends on any shares of Preferred Stock shall be in
arrears for the equivalent of six quarterly dividends (whether or not
consecutive), the holders of such shares of Preferred Stock (voting separately
as a class with all other series of Preferred Stock upon which like voting
rights have been conferred and are exercisable) will be entitled to vote for
the election of two additional directors of the Company until all dividends
that were accrued and unpaid shall have been fully paid or declared and a sum
sufficient for the payment thereof set aside for payment. In such case, the
entire Board of Directors of the Company will be increased by two directors.
Upon any termination of such rights to vote for directors, the term of office
of all directors so elected shall terminate.
28
31
Unless provided otherwise for any series of Preferred Stock, so long
as any shares of Preferred Stock remain outstanding, the Company will not,
without the affirmative vote or consent of the holders of two-thirds of the
shares of each series of Preferred Stock outstanding at the time, (i) authorize
or create, or increase the authorized or issued amount of, any class or series
of capital stock ranking prior to such series of Preferred Stock with respect
to the payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up or reclassify any authorized capital stock of the
Company into any such shares, or create, authorize or issue any obligation or
security convertible into or evidencing the right to purchase any such shares,
or (ii) amend, alter or repeal the provisions of the Certificate of
Incorporation or Preferred Stock Designation for such series of Preferred
Stock, whether by merger, consolidation or otherwise, so as to affect adversely
any right, preference, privilege or voting power of such series of Preferred
Stock or the holders thereof.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of such series of Preferred Stock
shall have been redeemed or called for redemption and sufficient funds shall
have been deposited in trust to effect such redemption.
TRANSFER AGENT AND REGISTRAR
The transfer agent for each series of Preferred Stock will be set
forth in the applicable Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The following summary description of the Common Stock sets forth
certain general terms and provisions of the Common Stock to which any
Prospectus Supplement may relate. The statements below describing the Common
Stock do not purport to be complete and are in all respects subject to and
qualified in their entirety by reference to the Company's Certificate of
Incorporation and By-laws.
All shares of Common Stock currently outstanding are fully paid and
nonassessable. The Common Stock to be issued hereunder will, when issued, be
fully paid and nonassessable. The holders of Common Stock are entitled to one
vote per share on all matters voted on by stockholders, including elections of
directors, and, except as otherwise required by law or as provided in any
Preferred Stock Designation, the holders of such shares exclusively possess all
voting power. The Certificate of Incorporation does not provide for cumulative
voting in the election of directors.
Subject to any preferential rights of any outstanding series of
Preferred Stock, the holders of Common Stock are entitled to such distributions
as may be declared from time to time by the Board of Directors from funds
legally available therefor, and upon liquidation are entitled to receive pro
rata all assets of the Company available for distribution to such holders.
Holders of Common Stock are not entitled to any preemptive rights. See
"Description of Preferred Stock" for a discussion of certain restrictions
contained in the Credit Agreement.
The Transfer Agent for the Common Stock is Fifth Third Bank.
29
32
DESCRIPTION OF OUTSTANDING CAPITAL STOCK
Under the Company's Certificate of Incorporation, the total number of
shares of all classes of capital stock that the Company has authority to issue
is 315,000,000 shares, consisting of 300,000,000 shares of Common Stock and
15,000,000 shares of Preferred Stock (of which 10,400,000 shares of Preferred
Stock may be issued). At January 31, 1997, the Company had outstanding
77,561,762 shares of Common Stock and no shares of Preferred Stock. The
Company's Common Stock is listed on the New York Stock Exchange under the
symbol "LCI." The Company's 5% Cumulative Convertible Exchangeable Preferred
Stock was retired through conversions and redemptions during 1996.
WARRANTS
Under the terms of a note purchase agreement dated as of March 31,
1993, the Company issued Warrants (the "1993 Warrants") to purchase an
aggregate of 5,408,900 shares of Common Stock, of which 1993 Warrants to
purchase 5,162,776 shares of Common Stock were outstanding as of January 31,
1997. The 1993 Warrants are exercisable through April 1, 2000 at an exercise
price of $2.83 per share. The exercise price may be adjusted in certain
circumstances to prevent dilution of the number of shares of Common Stock
purchasable upon exercise of the 1993 Warrants.
CLASSIFIED BOARD OF DIRECTORS
The Certificate of Incorporation classifies the Board of Directors
into three classes. The term of Class I directors expires at the annual
meeting of stockholders in 1997, the term of Class II directors expires at the
annual meeting of stockholders in 1998 and the term of Class III directors
expires at the annual meeting of the stockholders in 1999. The classification
of directors of the Company's Board of Directors will have the effect of making
it more difficult to change the composition of the Board of Directors. At
least two annual meetings of stockholders, instead of one, generally will be
required to effect a change in the majority of the Board of Directors. In
addition, the provision in the Certificate of Incorporation establishing a
classified Board of Directors may only be amended by the affirmative vote of at
least 66-2/3% of the issued and outstanding voting stock of the Company.
30
33
REMOVAL OF DIRECTORS
Under the Delaware General Corporation Law ("DGCL"), unless a
company's certificate of incorporation otherwise provides, directors on a
classified board of directors may be removed by stockholders only for cause.
The Company's Certificate of Incorporation does not contain any such provision
and therefore a director on the Board of Directors may be removed by the
stockholders only for cause.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
Generally, Section 203 of the DGCL prohibits certain Delaware
corporations from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless (i) prior to the date
of the business combination, the transaction is approved by the board of
directors of the corporation, (ii) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the outstanding voting stock, or (iii) on or
after such date the business combination is approved by the board and by the
affirmative vote of at least 66-2/3% of the outstanding voting stock which is
not owned by the interested stockholder. A "business combination" includes
mergers, asset sales and other transactions resulting in a financial benefit to
the stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15% or more of
the corporation's voting stock. A Delaware corporation may "opt out" from the
application of Section 203 of the DGCL through a provision in its certificate
of incorporation. The Company's Certificate of Incorporation has no such
provision and the Company has not "opted out" from the application of Section
203.
STOCKHOLDER RIGHTS PLAN
In connection with the adoption of a Stockholder Rights Plan in
January 1997, the Company's Board of Directors declared a dividend distribution
of one right (a "Right") for each share of Common Stock, payable to
stockholders of record on January 22, 1997, and attached to shares of Common
Stock issued thereafter until the occurance of certain events set forth in the
Stockholder Rights Plan. Each Right, when exercisable, entitles the registered
holder to purchase from the Company one one-thousandth of a share of Junior
Participating Preferred Stock, par value $.01 per share (the "Junior
Participating Preferred Stock"), at an exercise price of $100 or to purchase a
number of shares of Common Stock having a market value equal to twice such
exercise price. The Rights automatically trade with the Common Stock until
a person or group of persons acquires beneficial ownership of 15% or more (or
20% or more in the case of certain institutional investors) of the Common Stock
or commences a tender or exchange offer the consummation of which would result
in the ownership of 15% or more (or 20% or more in the case of the certain
institutional investors) of the Common Stock. Upon the occurance of either of
these events the Rights will trade separately from the Common Stock. The
Rights become exercisable only if a person or group of persons acquires 15% or
more (or 20% or more in the case of certain institutional investors) of the
Common Stock. Rights owned by such person or group, however, will not become
exercisable. In addition, if after the Rights become exercisable the Company
is acquired by merger or consolidation pursuant to which the Company is not the
surviving corporation or in connection with which outstanding shares of Common
Stock are exchanged for securities of another entity, or the Company disposes
of 50% or more of its consolidated assets or earning power, the Rights, other
than those owned by the acquiring person and its affiliates and associates,
become exercisable for that number of shares of Common Stock of the acquiring
company having a market value equal to twice the exercise price. The Company
may redeem the Rights in whole, but not in part, at a price of $.01 per Right
at any time
31
34
prior to (i) a date on which there has been public disclosure that a person or
entity has acquired 15% or more (or 20% or more in the case of certain
institutional investors) of the Common Stock or (ii) January 22, 2007, the
expiration date of the Rights.
The Stockholder Rights Plan is designed to encourage any person or
entity interested in acquiring the Company to negotiate with the Board of
Directors by enabling the existing stockholders to substantially dilute the
acquiror's equity interest by exercising the Rights. The Rights expire on
January 22, 2007, unless extended or earlier redeemed.
In connection with the Stockholder Rights Plan, the Company reserved
for issuance 500,000 shares of Junior Participating Preferred Stock. The
Junior Participating Preferred Stock will only be issued in the event Rights
issued pursuant to the Stockholder Rights Plan are exercised for shares of
Junior Participating Preferred Stock. Holders of shares of Junior
Participating Preferred Stock have a preference over holders of Common Stock in
the payment of dividends and upon any distributions. Each share of Junior
Participating Preferred Stock would entitle the holder thereof to 1,000 votes
on all matters submitted to a vote of the stockholders and would vote together
with the holders of Common Stock as one class. Each share of Junior
Participating Preferred Stock would also be entitled to a minimum preferential
quarterly dividend payment equal to the greater of $100 per share and 1,000
times any quarterly dividend declared per share of Common Stock. In the event
dividends on the Junior Participating Preferred Stock are in arrears in an
amount equal to six quarterly dividends, the holders of the Junior
Participating Preferred Stock obtain special rights pertaining to the election
of directors. Additionally, while any dividends or distributions on the Junior
Participating Preferred Stock are in arrears, the Company's right to make
distributions on or redeem shares of any stock ranking on a parity with or
junior to the Junior Participating Preferred Stock is restricted. In the event
of the liquidation, dissolution or winding up of the Company, the holders of
the shares of Junior Participating Preferred Stock would receive all accrued
and unpaid dividends plus a $1,000 preference per share. In the event of any
consolidation, merger, share exchange or other similar transaction by the
Company, each share of Junior Participating Preferred Stock would be exchanged
or changed into an amount per share equal to 1,000 times the aggregate amount
of stock, securities, cash and/or property into which each share of Common
Stock is changed or exchanged. The shares of Junior Participating Preferred
Stock would not be redeemable and would rank junior to all series of any other
class of Preferred Stock issued from time to time.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Common Stock or
Preferred Stock. Warrants may be issued independently or together with any
other Securities offered by any Prospectus Supplement and may be attached to or
separate from such Securities. Each series of Warrants will be issued under a
separate warrant agreement (each, a "Warrant Agreement") to be entered into
between the Company and a warrant agent specified in the applicable Prospectus
Supplement (the "Warrant Agent"). The Warrant Agent will act solely as an
agent of the Company in connection with the Warrants of such series and will
not assume any obligation or relationship of agency or trust for or with any
holders or beneficial owners of Warrants. The following sets forth certain
general terms and provisions of the Warrants offered hereby. Further terms of
the Warrants and the applicable Warrant Agreements will be set forth in the
applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the
Warrants in respect of which this Prospectus is being delivered, including,
where applicable, the following: (i) the title of such Warrants; (ii) the
aggregate number of such Warrants; (iii) the price or prices at which such
Warrants will be issued; (iv) the number of shares of Common Stock or Preferred
Stock purchasable upon exercise of such Warrants; (v) the designation and terms
of the other Securities with which such Warrants are issued and the number of
such Warrants issued with each such Security; (vi) the date, if any, on and
after which such Warrants and related Securities will be separately
transferable; (vii) the price at which each share of Common Stock or Preferred
Stock purchasable upon exercise of such Warrants may be purchased; (viii) the
date on which the right to exercise such Warrants will commence and the date on
which such right will expire; (ix) the minimum or maximum amount of such
Warrants which may be exercised at any one time; (x) information with respect
to book-entry procedures, if any; (xi) a discussion of certain United States
federal income tax considerations; and (xii) any other terms of such Warrants,
including terms, procedures and limitations relating to the exchange and
exercise of such Warrants.
The Company has no Warrants outstanding other than the 1993 Warrants.
See "Description of Outstanding Capital Stock -- Warrants."
PLAN OF DISTRIBUTION
The Company may sell the Securities offered hereby (i) through
underwriters or dealers; (ii) through agents; (iii) directly to purchasers; or
(iv) through a combination of any such methods of sale. Any such underwriter,
dealer or agent may be deemed to be an underwriter within the meaning of the
Securities Act. The Prospectus Supplement relating to the Securities will set
forth their offering terms, including the name or names of any underwriter,
dealers or agents, the purchase price of the
32
35
Securities and the proceeds to the Company from such sale, any underwriting
discounts, commissions and other items constituting compensation to
underwriters, dealer or agents, any initial public offering price, any
discounts or concessions allowed or reallowed or paid by underwriters or
dealers to other dealers, and any securities exchanges on which the Securities
may be listed.
If underwriters or dealers are used in the sale, the Securities will
be acquired by the underwriters or dealers for their own account and may be
resold from time to time in one or more transactions, at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, or at prices related to such prevailing market prices, or at negotiated
prices. The Securities may be offered to the public either through
underwriting syndicates represented by one more managing underwriters or
directly by one or more of such firms. Unless otherwise set forth in a
Prospectus Supplement, the obligations of underwriters or dealers to purchase
the Securities will be subject to certain conditions precedent and the
underwriters or dealers will be obligated to purchase all the Securities
offered if any are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid by underwriters or
dealers to other dealers may be changed from time to time.
Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer
or sale of the Securities in respect of which this Prospectus is delivered will
be named, and any commissions payable by the Company to such agent will be set
forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis
for the period of its appointment.
Underwriters, dealers and agents may be entitled under agreements
entered into with the Company to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution by the Company to payments they may be required to make in respect
thereof. The terms and conditions of such indemnification will be described in
the applicable Prospectus Supplement. Underwriters, dealers and agents may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for
the Company by Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd
Street, New York, New York.
EXPERTS
The audited financial statements and schedules of LCI International,
Inc., included or incorporated by reference in the Company's Annual Report on
Form 10-K, and incorporated by reference in this Prospectus and elsewhere in
the Registration Statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
The financial statements of Corporate Telemanagement Group, Inc. and
subsidiaries as of December 31, 1994 and 1993, and for the years then ended,
have been incorporated by reference herein and in the Registration Statement in
reliance upon the report of KPMG Peat Marwick LLP,
33
36
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. The
report of KPMG Peat Marwick LLP covering the 1993 financial statements refers
to a restatement of certain amounts in the 1993 financial statements.
The financial statements of Teledial America, Inc. (dba US Signal
Corporation) incorporated by reference in this Prospectus have been audited by
BDO Seidman, LLP, independent certified public accountants, to the extent and
for the periods set forth in their report incorporated herein by reference, and
are incorporated herein in reliance upon such report given upon the authority
of said firm as experts in auditing and accounting.
34
37
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the fees and expenses payable by the Registrant
in connection with this offering, other than underwriting discounts and
commissions. All the amounts shown are estimates, except the SEC registration
fee:
SEC registration fee................................ $103,448
New York Stock Exchange listing fee................. 40,000
Printing and engraving expenses..................... 100,000
Legal fees and expenses............................. 300,000
Accounting fees and expenses........................ 50,000
Transfer Agent and Registrar fees................... 10,000
Blue Sky qualification fees and expenses............ 25,000
Rating agency fees.................................. 50,000
Miscellaneous fees and expenses..................... 40,000
--------
Total............................................. $718,448
========
II-1
38
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that:
(a) a corporation may indemnify any person who was or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such
corporation) by reason of the fact that such person is or was an
officer or director of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent
of another corporation or enterprise. The indemnity may be against
expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful;
(b) a corporation may indemnify officers and directors in
an action by or in the right of the corporation to procure a judgment
in its favor under the same conditions, except that no indemnification
is permitted unless the Court of Chancery (or the Court in which such
suit or action was brought) finds, upon application, in view of all of
the circumstances, that such person is fairly and reasonably entitled
to indemnity for such expenses which the court may deem proper;
(c) where an officer or director is successful on the
merits or otherwise in defense of any action referred to above, the
corporation must indemnify him against the expenses (including
attorneys' fees) that he actually and reasonably incurred in
connection therewith;
(d) any indemnification set forth above shall be made by
the corporation only as authorized in the specific case upon a
determination that indemnification of the officer, director, employee
or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth above, and such determination
shall be made (1) by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such action,
suit or proceeding, or (2) if such a quorum is not obtainable, or,
even if obtainable a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (3) by the
stockholders;
(e) the indemnification of any officer or director of a
corporation continues after such person has ceased to be an officer or
director and inures to the benefit of such person's heirs, executors
and administrators;
(f) the indemnification provided is not deemed to be
exclusive of any other rights to which an officer or director may be
entitled under a corporation's bylaws, by agreement, vote or
otherwise;
(g) expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative
or investigative action, suit or proceeding may be paid upon receipt
of an undertaking by or on behalf of such director or officer to repay
such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the
II-2
39
corporation as described above. Such expenses (including attorneys'
fees) incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the board of directors deems
appropriate; and
(h) a corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify
him against such liability under this section.
Article X of the Company's Amended and Restated Certificate of
Incorporation reads as follows:
1. A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived any improper personal
benefit. If the Delaware General Corporation Law is amended after
approval by the stockholders of this Article to authorize corporate
action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall
be eliminated or limited to the fullest extent permitted by the
Delaware General Corporation Law, as so amended.
2. (a) Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a
"proceeding") (including an action by or in the right of the
Corporation), by reason of the fact that he is or was serving as a
director or officer of the Corporation (or is or was serving at the
request of the Corporation in a similar capacity with another entity,
including employee benefit plans), shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
Delaware General Corporation Law. This indemnification will cover all
expense, liability and loss (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and settlement amounts)
reasonably incurred by the director or officer in connection with a
proceeding. All such indemnification shall continue as to a director
or officer who has ceased to be a director or officer and shall
continue to the benefit of such director's or officer's heirs,
executors and administrators. Except as provided in paragraph (b)
hereof with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such director or
officer only if such proceeding was authorized by the Board of
Directors of the Corporation. The right to indemnification conferred
by this Section shall be a contract right and shall include the right
to be paid by the Corporation the expenses incurred in defending any
such proceeding in advance of its final disposition (hereinafter an
"advancement of expenses"). If the Delaware General Corporation Law
requires, an advancement of expenses incurred by a director in his
capacity as a director or an officer in his capacity as an officer
shall be made only upon delivery to the Corporation of an undertaking
by such director or officer to repay all amounts so advanced if it is
ultimately determined by final judicial decision
II-3
40
that such director or officer is not entitled to be indemnified for
such expenses under this Section or otherwise (hereinafter an
"undertaking").
(b) If a claim under paragraph (a) of this
Section is not paid in full by the Corporation within ninety days
after receipt of a written claim, the director or officer may bring
suit against the Corporation to recover the unpaid amount. (In the
case of a claim for advancement of expenses, the applicable period
will be twenty days.) If successful in any such suit, the director or
officer will also be entitled to be paid the expense of prosecuting
such suit. In an suit brought by the director or officer to enforce a
right to indemnification hereunder (but not in a suit brought by the
director or officer to enforce a right to an advancement of expenses)
it shall be a defense that the director or officer has not met the
applicable standard of conduct under the Delaware General Corporation
Law. In any suit by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, it shall be entitled
to recover such expenses upon a final adjudication that the director
or officer has not met the applicable standard of conduct set forth in
the Delaware General Corporation Law. Neither the failure of the
Board of Directors of the Corporation to determine prior to the
commencement of such suit that the director or officer has met the
applicable standard of conduct for indemnification set forth in the
Delaware General Corporation Law, nor an actual determination by the
Board of Directors of the Corporation that the director or officer has
not met such applicable standard of conduct, shall create a
presumption that the director or officer has not met such applicable
standard of conduct or, in the case of such a suit brought by the
director or officer, be a defense to such suit. In any suit brought
by the director or officer to enforce a right hereunder, or by the
Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the director or
officer is not entitled to be indemnified or to such advancement of
expenses under this Section or otherwise shall be on the Corporation.
(c) The rights to indemnification and to the
advancement of expenses conferred in this Section will not be
exclusive of any other right which any person may have or hereafter
acquires under any statute, this Amended and Restated Certificate of
Incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) The Corporation may maintain insurance, at
its expense, to protect itself and any director, officer, employee or
agent of the Corporation or other entity against any expense,
liability or loss, whether or not the Corporation would have the power
to indemnify such person under the Delaware General Corporation Law.
(e) The Corporation may, if authorized by the
Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation to
the same extent as for directors and officers of the Corporation.
The Company maintains a directors' and officers' liability insurance
policy. John L. Vogelstein and Douglas M. Karp, nominees of Warburg, Pincus
Capital Company, L.P. ("Warburg") to the Company's Board of Directors, are
entitled to indemnification by Warburg for liabilities incurred as a result of
their service as directors of the Company.
Agreements to be entered into by the Company and any underwriters,
dealers and agents may contain provisions for the indemnification of, among
others, controlling persons, directors and officers of the Company for certain
liabilities.
II-4
41
ITEM 16. EXHIBITS.
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1(a)* Form of Underwriting Agreement for Debt Securities.
1(b)* Form of Underwriting Agreement for Preferred Stock.
1(c)* Form of Underwriting Agreement for Common Stock.
1(d)* Form of Underwriting Agreement for Warrants.
4(a)+ Form of Senior Indenture.
4(a)(i)+ Form of Senior Security.
4(b)+ Form of Subordinated Indenture.
4(b)(i)+ Form of Subordinated Security.
4(c)(i)** Specimen Common Stock Certificate.
4(c)(ii)* Form of Preferred Stock Certificate.
4(d)* Form of Warrant Agreement (including form of Warrant).
4(e)*** Amended and Restated Certificate of Incorporation of LCI International, Inc.
4(f)** Amended and Restated By-laws of LCI International, Inc.
5+ Opinion of Willkie Farr & Gallagher regarding the validity of the securities being registered.
12+ Computation of Ratio of Earnings to Fixed Charges and to Combined Fixed Charges and Preferred Stock
Dividends.
15 Letter of Arthur Andersen LLP regarding unaudited interim financial information.
23(a) Consent of Arthur Andersen LLP.
23(b)+ Consent of Willkie Farr & Gallagher.
23(c) Consent of KPMG Peat Marwick LLP.
23(d) Consent of BDO Seidman, LLP.
24(a)+ Power of Attorney - LCI International, Inc. and Guarantors (other than LCI International SC, Inc. and LCI
International of Virginia, Inc.).
24(b)+ Power of Attorney - LCI International SC, Inc.
24(c)+ Power of Attorney - LCI International of Virginia, Inc.
25(a)* Statement of Eligibility and Qualification of Trustee on Form T-1 under the Senior Indenture.
25(b)* Statement of Eligibility and Qualification of Trustee on Form T-1 under the Subordinated Indenture.
- --------------------
+ Previously filed.
* To be filed by amendment or incorporated by reference at or prior to
the time of the offering of the related Securities.
** Incorporated by reference from the Registrant's Registration Statement
on Form S-1 (No. 33-60558).
*** Incorporated by reference from the Registrant's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1996.
II-5
42
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions
II-6
43
described under item 15 above, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Trust Indenture Act.
II-7
44
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 7 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of McLean, Commonwealth of
Virginia, on the 6th day of March, 1997.
LCI INTERNATIONAL, INC.
By: /s/ H. Brian Thompson
------------------------
H. Brian Thompson
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 7 to Registration Statement has been signed below
by the following persons, in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ H. Brian Thompson Chairman of the Board, March 6, 1997
- ---------------------------------- Chief Executive Officer
H. Brian Thompson and Director (principal
executive officer)
* Senior Vice President- March 6, 1997
- ---------------------------------- Finance and Development and
Joseph A. Lawrence Chief Financial Officer
(principal financial and
accounting officer)
* Director March 6, 1997
- ----------------------------------
Douglas M. Karp
* Director March 6, 1997
- ----------------------------------
George M. Perrin
* Director March 6, 1997
- ----------------------------------
Thomas J. Wynne
* By:/s/ H. Brian Thompson
---------------------
H. Brian Thompson
Attorney-in-fact
45
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 7 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of McLean, Commonwealth of
Virginia, on the 6th day of March, 1997.
LCI INTERNATIONAL MANAGEMENT
SERVICES, INC.
By: /s/ H. Brian Thompson
------------------------
H. Brian Thompson
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 7 to Registration Statement has been signed below
by the following persons, in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ H. Brian Thompson Chairman of the Board, March 6, 1997
- ---------------------------------- Chief Executive Officer
H. Brian Thompson and Director (principal
executive officer)
* Senior Vice President- March 6, 1997
- ---------------------------------- Finance and Development and
Joseph A. Lawrence Chief Financial Officer
(principal financial and
accounting officer)
* Director March 6, 1997
- ----------------------------------
Douglas M. Karp
* Director March 6, 1997
- ----------------------------------
George M. Perrin
* Director March 6, 1997
- ----------------------------------
John L. Vogelstein
* Director March 6, 1997
- ----------------------------------
Thomas J. Wynne
* By:/s/ H. Brian Thompson
-----------------------
H. Brian Thompson
Attorney-in-fact
46
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 7 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of McLean, Commonwealth of
Virginia, on the 6th day of March, 1997.
LCI INTERNATIONAL TELECOM CORP.
By: /s/ H. Brian Thompson
--------------------------
H. Brian Thompson
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 7 to Registration Statement has been signed below
by the following persons, in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ H. Brian Thompson Chairman of the Board, March 6, 1997
- -------------------------- Chief Executive Officer
H. Brian Thompson and Director (principal
executive officer)
* Senior Vice President- March 6, 1997
- -------------------------- Finance and Development and
Joseph A. Lawrence Chief Financial Officer
(principal financial and
accounting officer)
* Director March 6, 1997
- --------------------------
Douglas M. Karp
* Director March 6, 1997
- --------------------------
George M. Perrin
* Director March 6, 1997
- --------------------------
John L. Vogelstein
* Director March 6, 1997
- --------------------------
Thomas J. Wynne
* By:/s/ H. Brian Thompson
---------------------
H. Brian Thompson
Attorney-in-fact
47
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Amendment No. 7 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of McLean,
Commonwealth of Virginia, on the 6th day of March, 1997.
LCI INTERNATIONAL SC, INC.
By: /s/ H. Brian Thompson
------------------------------
H. Brian Thompson
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 7 to Registration Statement has been signed below
by the following persons, in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ H. Brian Thompson Chief Executive Officer March 6, 1997
- ----------------------------------- (principal executive officer)
H. Brian Thompson
* Senior Vice President- March 6, 1997
- ----------------------------------- Finance and Development,
Joseph A. Lawrence Chief Financial Officer and
Director (principal financial
and accounting officer)
* Director March 6, 1997
- -----------------------------------
John C. Taylor
* Director March 6, 1997
- -----------------------------------
Lee M. Weiner
* By:/s/ H. Brian Thompson
---------------------
H. Brian Thompson
Attorney-in-fact
48
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 7 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of McLean, Commonwealth of
Virginia, on the 6th day of March, 1997.
LCI INTERNATIONAL OF VIRGINIA, INC.
By: /s/ H. Brian Thompson
----------------------
H. Brian Thompson
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 7 to Registration Statement has been signed below by the
following persons, in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ H. Brian Thompson Chief Executive Officer March 6, 1997
- ----------------------------------- (principal executive officer)
H. Brian Thompson
* Senior Vice President- March 6, 1997
- ----------------------------------- Finance and Development,
Joseph A. Lawrence Chief Financial Officer and
Director (principal financial
and accounting officer)
* Director March 6, 1997
- -----------------------------------
Gregory M. Casey
* Director March 6, 1997
- -----------------------------------
Lee M. Weiner
*By: /s/ H. Brian Thompson
- -----------------------------------
H. Brian Thompson
Attorney-in-fact
49
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1(a)* Form of Underwriting Agreement for Debt Securities.
1(b)* Form of Underwriting Agreement for Preferred Stock.
1(c)* Form of Underwriting Agreement for Common Stock.
1(d)* Form of Underwriting Agreement for Warrants.
4(a)+ Form of Senior Indenture.
4(a)(i)+ Form of Senior Security.
4(b)+ Form of Subordinated Indenture.
4(b)(i)+ Form of Subordinated Security.
4(c)(i)** Specimen Common Stock Certificate.
4(c)(ii)* Form of Preferred Stock Certificate.
4(d)* Form of Warrant Agreement (including form of Warrant).
4(e)*** Amended and Restated Certificate of Incorporation of LCI International, Inc.
4(f)** Amended and Restated By-laws of LCI International, Inc.
5+ Opinion of Willkie Farr & Gallagher regarding the validity of the securities being registered.
12+ Computation of Ratio of Earnings to Fixed Charges and to Combined Fixed Charges and Preferred Stock
Dividends.
15 Letter of Arthur Andersen LLP regarding unaudited interim financial information.
23(a) Consent of Arthur Andersen LLP.
23(b)+ Consent of Willkie Farr & Gallagher.
23(c) Consent of KPMG Peat Marwick LLP.
23(d) Consent of BDO Seidman, LLP.
24(a)+ Power of Attorney - LCI International, Inc. and Guarantors (other than LCI International SC, Inc. and LCI
International of Virginia, Inc.).
24(b)+ Power of Attorney - LCI International SC, Inc.
24(c)+ Power of Attorney - LCI International of Virginia, Inc.
25(a)* Statement of Eligibility and Qualification of Trustee on Form T-1 under the Senior Indenture.
25(b)* Statement of Eligibility and Qualification of Trustee on Form T-1 under the Subordinated Indenture.
- -------------------
+ Previously filed.
* To be filed by amendment or incorporated by reference at or prior to
the time of the offering of the related Securities.
** Incorporated by reference from the Registrant's Registration
Statement on Form S-1 (No. 33-60558).
*** Incorporated by reference from the Registrant's Quarterly
Report on Form 10-Q for the quarterly period ended June 30,
1996.