AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 22, 2002
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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L-3 COMMUNICATIONS L-3 COMMUNICATIONS
HOLDINGS, INC. CORPORATION
(Exact Name of Registrants as Specified in Their Charters)
DELAWARE DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
13-3937434 13-3937436
(I.R.S. Employer Identification Number)
600 THIRD AVENUE 600 THIRD AVENUE
NEW YORK, NEW YORK 10016 NEW YORK, NEW YORK 10016
(212) 697-1111 (212) 697-1111
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrants' Principal Executive Offices)
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SEE TABLE OF ADDITIONAL REGISTRANTS
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CHRISTOPHER C. CAMBRIA, ESQ.
600 THIRD AVENUE
NEW YORK, NY 10016
(212) 697-1111
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
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Copy to:
VINCENT PAGANO, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3954
(212) 455-2000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the Registration Statement becomes effective as determined by
market conditions and other factors.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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. [ ]
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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. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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(Continued on following page)
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(Continued from previous page)
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE OFFERING MAXIMUM AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER SECURITY(1) OFFERING PRICE(1) FEE
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Debt Securities, Preferred Stock,
Common Stock, Stock Purchase Contracts,
Stock Purchase Units and Warrants(2) ................. $1,000,000,000 100%(3) $1,000,000,000(3) $ 92,000.00
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Guarantees of L-3 Communications
Holdings, Inc. of Debt Securities
of L-3 Communications Corporation and
Guarantees of Subsidiary Guarantors of
Debt Securities of L-3 Communications
Holdings, Inc. and L-3 Communications Corporation .... (4) (4) (4) None
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Common Stock(5) ....................................... 500,000 shares $111.26(6) $ 55,630,000(6) $ 5,117.96
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(1) Pursuant to General Instructions II. D to Form S-3, the Amount to be
Registered, the Proposed Maximum Aggregate Offering Price Per Security
and Proposed Maximum Aggregate Offering Price have been omitted for each
class of securities which are registered hereby, other than with respect
to the specified shares of common stock to be sold by the selling
stockholders.
(2) The Debt Securities registered hereby include such additional amount as
may be necessary so that, if Debt Securities are issued with an original
issue discount, the aggregate initial offering prices of all Debt
Securities will equal no more than $1,000,000,000. The initial public
offering price of any Debt Securities denominated in any foreign
currency shall be the U.S. dollar equivalent thereof based on the
prevailing exchange rates at the respective times such securities are
first offered. There are also being registered hereunder an
indeterminate number of shares of Common Stock as shall be issuable upon
conversion or redemption of Preferred Stock or Debt Securities
registered hereby.
(3) Estimated solely for purposes of calculating the registration fee.
(4) No separate consideration will be received for the Guarantees. Pursuant
to Rule 457(n) of the Securities Act of 1933 there is no filing fee with
respect to the Guarantees.
(5) Represents shares of common stock to be sold by certain selling
stockholders identified herein.
(6) Estimated solely for the purpose of determining the registration fee and
calculated in accordance with Rule 457(c) under the Securities Act on
the basis of the last price of L-3 Holdings' common stock on March 22,
2002.
Any securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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TABLE OF ADDITIONAL REGISTRANTS
STATE OR OTHER ADDRESS, INCLUDING ZIP CODE,
JURISDICTION OF IRS EMPLOYER AND TELEPHONE NUMBER, INCLUDING
EXACT NAME OF REGISTRANT INCORPORATION OR IDENTIFICATION AREA CODE, OF REGISTRANT'S
AS SPECIFIED IN ITS CHARTER ORGANIZATION NUMBER PRINCIPAL EXECUTIVE OFFICES
- ------------------------------------------------ ------------------ ---------------- --------------------------------
AMI Instruments, Inc. Oklahoma 73-1122637 600 Third Avenue
New York, NY 10016
(212) 697-1111
Apcom, Inc. Maryland 52-1291447 600 Third Avenue
New York, NY 10016
(212) 697-1111
Celerity Systems Incorporated California 77-0365380 600 Third Avenue
New York, NY 10016
(212) 697-1111
Coleman Research Corporation Florida 59-2039476 600 Third Avenue
New York, NY 10016
(212) 697-1111
EER Systems, Inc. Virginia 54-1349668 600 Third Avenue
New York, NY 10016
(212) 697-1111
Electrodynamics, Inc Arizona 36-3140903 600 Third Avenue
New York, NY 10016
(212) 697-1111
Henschel, Inc. Delaware 23-2554418 600 Third Avenue
New York, NY 10016
(212) 697-1111
Hygienetics Environmental Services, Inc. Delaware 13-3992505 600 Third Avenue
New York, NY 10016
(212) 697-1111
Interstate Electronics Corporation California 95-1912832 600 Third Avenue
New York, NY 10016
(212) 697-1111
KDI Precision Products, Inc. Delaware 31-0740721 600 Third Avenue
New York, NY 10016
(212) 697-1111
L-3 Communications AIS GP Corporation Delaware 13-4137187 600 Third Avenue
New York, NY 10016
(212) 697-1111
L-3 Communications Analytics Corporation California 54-1035921 600 Third Avenue
New York, NY 10016
(212) 697-1111
L-3 Communications Atlantic Science and New Jersey 22-2547554 600 Third Avenue
Technology Corporation New York, NY 10016
(212) 697-1111
L-3 Communications Aydin Corporation Delaware 23-1686808 600 Third Avenue
New York, NY 10016
(212) 697-1111
L-3 Communications DBS Microwave, Inc. California 68-0281617 600 Third Avenue
New York, NY 10016
(212) 697-1111
L-3 Communications ESSCO, Inc. Delaware 04-2281486 600 Third Avenue
New York, NY 10016
(212) 697-1111
L-3 Communications ILEX Systems, Inc. Delaware 13-3992952 600 Third Avenue
New York, NY 10016
(212) 697-1111
L-3 Communications Investments, Inc. Delaware 51-0260723 600 Third Avenue
New York, NY 10016
(212) 697-1111
L-3 Communications SPD Technologies, Inc. Delaware 23-2869511 600 Third Avenue
New York, NY 10016
(212) 697-1111
L-3 Communications Storm Control Systems, Inc. California 77-0268547 600 Third Avenue
New York, NY 10016
(212) 697-1111
STATE OR OTHER ADDRESS, INCLUDING ZIP CODE,
JURISDICTION OF IRS EMPLOYER AND TELEPHONE NUMBER, INCLUDING
EXACT NAME OF REGISTRANT INCORPORATION OR IDENTIFICATION AREA CODE, OF REGISTRANT'S
AS SPECIFIED IN ITS CHARTER ORGANIZATION NUMBER PRINCIPAL EXECUTIVE OFFICES
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L-3 Communications Integrated Systems L.P. Delaware 03-0391841 600 Third Avenue
New York, NY 10016
(212) 697-1111
Microdyne Communications Technologies Maryland 59-3500774 600 Third Avenue
Incorporated New York, NY 10016
(212) 697-1111
Microdyne Corporation Maryland 52-0856493 600 Third Avenue
New York, NY 10016
(212) 697-1111
Microdyne Outsourcing Incorporated Maryland 33-0797639 600 Third Avenue
New York, NY 10016
(212) 697-1111
MPRI, Inc. Delaware 54-1439937 600 Third Avenue
New York, NY 10016
(212) 697-1111
Pac Ord, Inc. Delaware 23-2523436 600 Third Avenue
New York, NY 10016
(212) 697-1111
Power Paragon, Inc. Delaware 33-0638510 600 Third Avenue
New York, NY 10016
(212) 697-1111
Southern California Microwave, Inc. California 13-0478540 600 Third Avenue
New York, NY 10016
(212) 697-1111
SPD Holdings, Inc. Delaware 23-2977238 600 Third Avenue
New York, NY 10016
(212) 697-1111
SPD Electrical Systems, Inc. Delaware 23-2457758 600 Third Avenue
New York, NY 10016
(212) 697-1111
SPD Switchgear, Inc. Delaware 23-2510039 600 Third Avenue
New York, NY 10016
(212) 697-1111
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 22, 2002
PROSPECTUS
$1,000,000,000
[L-3 COMMUNICATIONSS LOGO]
L-3 COMMUNICATIONS HOLDINGS, INC.
COMMON STOCK
DEBT SECURITIES
PREFERRED STOCK
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
L-3 COMMUNICATIONS HOLDINGS, INC.
500,000 SHARES OF COMMON STOCK
L-3 COMMUNICATIONS CORPORATION
GUARANTEED DEBT SECURITIES
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We, L-3 Communications Holdings, Inc., may offer and sell from time to time, in
one or more series:
o our Common Stock,
o our unsecured Debt Securities consisting of notes, debentures or other
evidences of indebtedness which may be our senior Debt Securities,
senior subordinated Debt Securities or subordinated Debt Securities,
o our Preferred Stock,
o Warrants to purchase our Preferred Stock, our Common Stock or our Debt
Securities.
o our Stock Purchase Contracts, and
o our Stock Purchase Units,
or any combination of these securities. Our Debt Securities may be guaranteed
by substantially all of our wholly-owned domestic subsidiaries.
Our wholly-owned subsidiary, L-3 Communications Corporation, may offer and
sell from time to time, in one or more series of its unsecured Debt Securities
consisting of notes, debentures or other evidence of indebtedness which may be
of L-3 Communications, senior Debt Securities, senior subordinated Debt
Securities or subordinated Debt Securities, which in each case will be fully and
unconditionally guaranteed by us and may be further guaranteed by substantially
all of our wholly-owned domestic subsidiaries.
We will provide more specific information about the terms of an offering of
any of these securities in supplements to this prospectus.
YOU SHOULD READ THIS PROSPECTUS, PARTICULARLY THE RISK FACTORS BEGINNING ON
PAGE 5, AND ANY SUPPLEMENT CAREFULLY BEFORE INVESTING.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
PAGE
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Prospectus Summary ...................... 3
Risk Factors ............................ 5
The Company ............................. 12
Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and
Preferred Stock Dividends ............ 12
Use of Proceeds ......................... 12
Dividend Policy ......................... 13
Description of Debt Securities .......... 14
Description of Capital Stock ............ 20
PAGE
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Description of Stock Purchase Contracts
and Stock Purchase Units ............. 24
Description of Warrants ................. 24
Selling Stockholders .................... 25
Plan of Distribution .................... 25
Legal Matters ........................... 26
Experts ................................. 26
Available Information ................... 26
Incorporation of Certain Documents by
Reference ............................ 26
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2
PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus and does
not contain all of the information that may be important to you. This prospectus
provides you with a general description of: (1) the Debt Securities (which may
be guaranteed by substantially all of our domestic wholly-owned subsidiaries),
Preferred Stock, Common Stock, Stock Purchase Contracts, Stock Purchase Units
and Warrants that we may offer, (2) the Debt Securities (which will be
guaranteed by us and may be further guaranteed by substantially all of our
domestic wholly-owned subsidiaries) that L-3 Communications Corporation may
offer and (3) the Common Stock that may be offered by the selling stockholders
named herein (we collectively refer to all the securities mentioned above as the
"Offered Securities"). A prospectus supplement that will describe the specific
amounts, prices and other terms of the securities being offered will be provided
to you in connection with each sale of Offered Securities. The prospectus
supplement may also add, update or change information contained in this
prospectus. To understand the terms of the Offered Securities, you should
carefully read this document with the applicable prospectus supplement.
Together, these documents will give the specific terms of the Offered Securities
we are offering. You should also read the documents we have incorporated by
reference in this prospectus described below under "Incorporation of Certain
Documents By Reference."
"L-3 Holdings" refers to L-3 Communications Holdings, Inc. and "L-3
Communications" refers to L-3 Communications Corporation, a wholly-owned
operating subsidiary of L-3 Holdings. Unless the context otherwise indicates,
"L-3," "we," "us" and "our" refer to L-3 Holdings and its subsidiaries,
including L-3 Communications. "Predecessor Company" refers to the ten initial
business units we purchased from Lockheed Martin Corporation ("Lockheed Martin")
in 1997. Except for its outstanding 5.25% Convertible Senior Subordinated Notes
due 2009 and for its outstanding 4.00% Senior Subordinated Convertible
Contingent Debt Securities (CODES) due 2011, L-3 Holdings has no assets or
liabilities and conducts no operations other than through L-3 Communications.
L-3 Holdings has guaranteed the bank credit facilities of L-3 Communications.
THE SECURITIES WE MAY OFFER
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
the shelf registration process, we may offer and sell from time to time up to an
aggregate of $1,000,000,000 of any of the following securities:
o Common Stock;
o Debt Securities;
o Preferred Stock;
o Stock Purchase Contracts;
o Stock Purchase Units; and
o Warrants.
In addition, L-3 Communications may offer and sell from time to time its Debt
Securities that will be guaranteed by us and may be guaranteed by certain of
its subsidiaries. Additionally, certain selling stockholders named herein may
offer and sell from time to time up to an aggregate of 500,000 shares of our
Common Stock owned by them. See "Selling Stockholders". We will not receive any
proceeds from the sale of Common Stock sold by the selling stockholders.
COMMON STOCK
We may issue shares of our Common Stock, par value $.01 per share. Holders
of shares of our Common Stock are entitled to receive dividends when declared by
our Board of Directors, subject to the rights of holders of our Preferred Stock.
Each holder of our Common Stock is entitled to one vote per share. The holders
of our Common Stock have no preemptive rights or cumulative voting rights.
3
In addition, certain selling stockholders named herein may offer and sell
from time to time up to an aggregate of 500,000 shares of our Common Stock owned
by them.
DEBT SECURITIES
We may offer Debt Securities, which may be either senior, senior
subordinated or subordinated, and may be guaranteed by substantially all of our
wholly-owned subsidiaries. We may issue Debt Securities either separately, or
together with, upon conversion of or in exchange for other securities. L-3
Communications may offer its Debt Securities, which may be either senior, senior
subordinated or subordinated and will be guaranteed by us and may be further
guaranteed by substantially all of our wholly-owned subsidiaries.
The Debt Securities issued by L-3 Holdings will be issued under an
indenture between us and The Bank of New York, as trustee. The Debt Securities
issued by L-3 Communications will be issued under an indenture among L-3
Communications, L-3 Holdings, as guarantor, and The Bank of New York, as
trustee. We have summarized general features of the Debt Securities under
"Description of Debt Securities." We encourage you to read the indentures, forms
of which are included as exhibits to the registration statement of which this
prospectus forms a part.
PREFERRED STOCK
We may issue shares of our Preferred Stock, $.01 par value per share, in
one or more series. Our Board of Directors will determine the dividend, voting,
conversion and other rights of the series of Preferred Stock being offered.
STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue Stock Purchase Contracts representing contracts obligating
holders to purchase from us and us to sell to the holders a specified number of
shares of Common Stock or Preferred Stock at a future date or dates. The price
per share of Common Stock or Preferred Stock may be fixed at the time the Stock
Purchase Contracts are issued or may be determined by reference to a specific
formula set forth in the Stock Purchase Contracts.
The Stock Purchase Contracts may be issued separately or as a part of
units, often known as Stock Purchase Units, consisting of a Stock Purchase
Contract and either of the following:
o Debt Securities, or
o Debt obligations of third parties, including U.S. Treasury securities,
securing the holder's obligations to purchase the Common Stock or Preferred
Stock under the Stock Purchase Contracts.
WARRANTS
We may issue Warrants for the purchase of Debt Securities, Preferred Stock
or Common Stock. We may issue Warrants independently or together with other
securities. Each Warrant will entitle the holder to purchase the principal
amount of Debt Securities, or the number of shares of Preferred Stock or Common
Stock at the exercise price set forth in, or calculable as set forth in, the
prospectus supplement.
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We are incorporated in Delaware, and the address of our principal executive
offices is 600 Third Avenue, New York, New York 10016. Our telephone number is
(212) 697-1111.
L-3 Communications is incorporated in Delaware, and the address of its
principal executive offices is 600 Third Avenue, New York, New York 10016. L-3
Communications' telephone number is (212) 697-1111.
4
RISK FACTORS
Investing in the Offered Securities involves risks, including the risks
described in this prospectus and in the other documents which are incorporated
herein by reference. Additional risks, including those that relate to any
particular securities that we or L-3 Communications will offer, will be included
in the applicable prospectus supplement. You should carefully consider the risk
factors before investing in any of the Offered Securities.
OUR SIGNIFICANT LEVEL OF DEBT MAY ADVERSELY AFFECT OUR FINANCIAL AND OPERATING
ACTIVITY.
We have incurred substantial indebtedness to finance our acquisitions. As
of December 31, 2001, we had $1,325.0 million of outstanding debt, excluding
outstanding letters of credit (which aggregated $102.4 million) under our senior
credit facilities . As of March 21, 2002, we had $2,207.5 million of outstanding
debt, excluding outstanding letters of credit (which aggregated approximately
$166.5 million) under our senior credit facilities . In addition, available
borrowings under our bank credit facilities after reductions for outstanding
letters of credit were $497.6 million as of December 31, 2001 and approximately
$201.0 million as of March 21, 2002. The increase in our additional debt for
December 31, 2001 to March 21, 2002 was principally related to the financing of
our acquisition of Aircraft Integration Systems (AIS) business from the Raytheon
Company which we completed on March 8, 2002. Our ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred stock dividends
were both 2.8 to 1.0 for the year ended December 31, 2001. In the future we
may borrow more money, subject to limitations imposed on us by our debt
agreements.
Based on our current level of operations and anticipated improvements to
our operations, we believe that our cash flow from operations and amounts we are
able to borrow under our senior credit facilities will be adequate to meet our
anticipated requirements for working capital, capital expenditures, research and
development expenditures, program and other discretionary investments, interest
payments and scheduled principal payments for the foreseeable future, at least
for the next three years. Our ability to make scheduled payments of principal
and interest on our indebtedness and to refinance our indebtedness depends on
our future performance. We do not have complete control over our future
performance because it is subject to economic, political, financial,
competitive, regulatory and other factors affecting the aerospace and defense
industry. It is possible that in the future our business may not generate
sufficient cash flow from operations to allow us to service our debt and make
necessary capital expenditures. If this situation occurs, we may have to sell
assets, restructure debt or obtain additional equity capital. We cannot be sure
that we would be able to do so or do so without additional expense.
Our level of indebtedness has important consequences to you and your
investment in the Offered Securities. These consequences may include:
o requiring a substantial portion of our cash flow from operations to be
used to pay interest and principal on our debt and therefore be
unavailable for other purposes including capital expenditures, research
and development and other investments;
o limiting our ability to obtain additional financing for acquisitions or
working capital to make investments or other expenditures, which may
limit our ability to carry out our acquisition strategy;
o higher interest expenses due to increases in interest rates on our
borrowings that have variable interest rates;
o heightening our vulnerability to downturns in our business or in the
general economy and restricting us from making acquisitions,
introducing new technologies and products or exploiting business
opportunities; and
5
o covenants that limit our ability to borrow additional funds, dispose of
assets or pay cash dividends. Failure to comply with such covenants
could result in an event of default which, if not cured or waived,
could have a material adverse effect on our financial position and
results of operations due to financial and restrictive covenants.
Additionally, on December 31, 2001, we had contractual obligations,
including outstanding indebtedness, of $1,680.2 million and contingent
commitments, including outstanding letters of credit under our senior credit
facilities, of $261.1 million. These contractual obligations and contingent
commitments are described in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2001, which is incorporated herein by reference.
OUR ACQUISITION STRATEGY INVOLVES RISKS, AND WE MAY NOT SUCCESSFULLY IMPLEMENT
OUR STRATEGY.
We seek to acquire companies that complement our business. We cannot assure
you, however, that we will be able to identify acquisition candidates on
commercially reasonable terms or at all. If we make additional acquisitions, we
also cannot be sure that any benefits anticipated from the acquisitions will
actually be realized. Likewise, we cannot be sure that we will be able to obtain
additional financing for acquisitions. Such additional financing could be
restricted by the terms of our debt agreements.
The process of integrating acquired operations, including our recent
acquisitions, into our existing operations may result in unforeseen operating
difficulties and may require significant financial and managerial resources that
would otherwise be available for the ongoing development or expansion of our
existing operations. Possible future acquisitions could result in the incurrence
of additional debt and related interest expense, contingent liabilities and
amortization expenses related to certain purchased intangible assets, all of
which could have a materially adverse effect on our financial condition,
operating results and cash flow. We consider and execute strategic acquisitions
on an ongoing basis and may be evaluating acquisitions or engaged in acquisition
negotiations at any given time. We regularly evaluate potential acquisitions and
joint venture transactions, and, except as disclosed in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2001, we have not entered into
any agreements with respect to any material transactions.
WE RELY ON SALES TO U.S. GOVERNMENT ENTITIES, AND THE LOSS OF SUCH CONTRACTS
WOULD HAVE A MATERIAL IMPACT ON OUR OPERATING RESULTS.
Our government sales are predominantly derived from contracts with agencies
of, and prime contractors to, the U.S. Government. Approximately 64.7%, or
$1,519 million, of our sales for the year ended December 31, 2001 were made
directly or indirectly to the U.S. Department of Defense ("DoD"). At December
31, 2001, the number of contracts with a value exceeding $1.0 million was
approximately 575. Our largest program is a long-term, fixed-price contract for
secure terminal equipment that we sell to the U.S. Armed Services, intelligence
and securities agencies that provided approximately 3.9% of our sales for the
year ended December 31, 2001. No other program provided more than 3.2% of our
sales for the year ended December 31, 2001. The loss of all or a substantial
portion of our sales to the U.S. Government would have a material adverse effect
on our financial condition, results of operations and cash flow.
OUR GOVERNMENT CONTRACTS ENTAIL CERTAIN RISKS.
o Government contracts are dependent upon the U.S. defense budget.
The reduction in the U.S. defense budget in the early 1990s caused most
defense-related government contractors to experience decreased sales, increased
downward pressure on operating margins and, in certain cases, net losses. Our
predecessor company experienced a substantial decline in sales during that
period. A significant decline in U.S. military expenditures in the future could
materially adversely affect our sales, earnings and cash flow. The loss or
significant reduction in government funding of a large program in which we
participate could also materially adversely affect our future sales, earnings
and cash flows and thus our ability to meet our financial obligations. U.S.
Government contracts are also conditioned upon the continuing approval by
Congress of the amount of necessary spending. Congress usually appropriates
funds for a given program each fiscal year even though contract periods of
performance may exceed one year. Consequently, at the beginning of a major
program, the contract is usually partially funded, and additional monies are
normally committed to the contract only if appropriations are made by Congress
for future fiscal years.
6
o Government contracts contain unfavorable termination provisions and are
subject to audit and modification.
Companies engaged primarily in supplying defense-related equipment and
services to U.S. Government agencies are subject to certain business risks
peculiar to the defense industry. These risks include the ability of the U.S.
Government to unilaterally:
o suspend us from receiving new contracts pending resolution of alleged
violations of procurement laws or regulations;
o terminate existing contracts;
o reduce the value of existing contracts;
o audit our contract-related costs and fees, including allocated indirect
costs; and
o control and potentially prohibit the export of our products.
All of our U.S. Government contracts can be terminated by the U.S.
Government either for its convenience or if we default by failing to perform
under the contract. Termination for convenience provisions provide only for our
recovery of costs incurred or committed, settlement expenses and profit on the
work completed prior to termination. Termination for default provisions provide
for the contractor to be liable for excess costs incurred by the U.S.
Government in procuring undelivered items from another source. Our contracts
with foreign governments generally contain similar provisions relating to
termination at the convenience of the customer.
The U.S. Government may review our costs and performance on their
contracts, as well as our accounting and general business practices. Based on
the results of such audits, the U.S. Government may adjust our contract-related
costs and fees, including allocated indirect costs. In addition, under U.S.
Government purchasing regulations, some of our costs, including most financing
costs, amortization of goodwill, portions of research and development costs,
and certain marketing expenses may not be reimbursable under U.S. Government
contracts. Further, as a U.S. Government contractor, we are subject to
investigation, legal action and/or liability that would not apply to a
commercial company.
o Government contracts are subject to competitive bidding and we are
required to obtain licenses for non-U.S. sales.
We obtain many of our U.S. Government contracts through a competitive
bidding process. We cannot assure you that we will continue to win
competitively awarded contracts or that awarded contracts will generate sales
sufficient to result in our profitability. We are also subject to risks
associated with the following:
o the frequent need to bid on programs in advance of the completion of
their design, which may result in unforeseen technological difficulties
and/or cost overruns;
o the substantial time and effort including the relatively unproductive
design and development required to prepare bids and proposals for
competitively awarded contracts that may not be awarded to us;
o design complexity and rapid technological obsolescence; and
o the constant need for design improvement.
In addition to these U.S. Government contract risks, we are required to
obtain licenses from U.S. Government agencies to export many of our products
and systems. Additionally, we are not permitted to export some of our products.
We cannot be sure of our ability to gain any licenses required to export our
products, and failure to receive required licenses would eliminate our ability
to sell our products outside the United States.
OUR FIXED-PRICE AND COST-REIMBURSABLE CONTRACTS MAY COMMIT US TO UNFAVORABLE
TERMS.
We provide our products and services primarily through fixed-price or
cost-reimbursable contracts. Fixed-price contracts provided 68.3% of our sales
for the year ended December 31, 2001.
7
Under a fixed-price contract we agree to perform the scope of work required by
the contract for a predetermined contract price. Although a fixed-price contract
generally permits us to retain profits if the total actual contract costs are
less than the estimated contract costs, we bear the risk that increased or
unexpected costs may reduce our profit or cause us to sustain losses on the
contract. Therefore, we fully absorb cost overruns on fixed-price contracts and
this reduces our profit margin on the contract. Those cost overruns may result
in a loss. A further risk associated with fixed-price contracts is the
difficulty of estimating sales and costs that are related to performance in
accordance with contract specifications and the possibility of obsolescence in
connection with long-term procurements. Failure to anticipate technical
problems, estimate costs accurately or control costs during performance of a
fixed-price contract may reduce our profitability or cause a loss.
Cost-reimbursable contracts provided 31.7% of our sales for the year ended
December 31, 2001. On a cost-reimbursable contract we are paid up to
predetermined funding levels determined by our customers, our allowable incurred
costs and generally a fee representing a profit on those costs, which can be
fixed or variable depending on the contract's pricing arrangement. Therefore, on
a cost-reimbursable contract we do not bear the risks of unexpected cost
overruns. U.S. Government regulations require that we notify our customer of any
cost overruns or underruns on a cost-reimbursable contract on a timely basis. If
we incur costs in excess of the funding limitation specified in a
cost-reimbursable contract, we may not be able to recover those cost overruns.
We record sales and profits on substantially all of our contracts using
percentage-of-completion methods of accounting. As a result, revisions made to
our estimates of sales and profits are recorded in the period in which the
conditions that require such revisions become known and can be estimated.
Although we believe that adequate provisions for losses for our fixed-price
contracts are recorded in our financial statements, as required under generally
accepted accounting principles in the United States, we cannot assure you that
our contract loss provisions, which are based on estimates, will be adequate to
cover all actual future losses.
OUR OPERATIONS INVOLVE RAPIDLY EVOLVING PRODUCTS AND TECHNOLOGICAL CHANGE.
The rapid change of technology is a key feature of all of the industries in
which our businesses operate, including the commercial communications industry
in particular. To succeed in the future, we will need to continue to design,
develop, manufacture, assemble, test, market and support new products and
enhancements on a timely and cost-effective basis. Historically, our technology
has been developed through both customer-funded and internally funded research
and development. We cannot guarantee that we will continue to maintain
comparable levels of research and development. In the past we have allocated
substantial funds to capital expenditures, programs and other investments. This
practice will continue to be required in the future. Even so, we cannot assure
you that we will successfully identify new opportunities and continue to have
the needed financial resources to develop new products in a timely or
cost-effective manner. At the same time, products and technologies developed by
others may render our products and systems obsolete or non-competitive.
WE MAY NOT SUCCESSFULLY IMPLEMENT OUR PLAN TO EXPAND INTO COMMERCIAL MARKETS.
Our revenues have primarily come from business with the DoD and other U.S.
Government agencies. In addition to continuing to pursue these market areas, we
will continue applying our technical capabilities and expertise to related
commercial markets. Some of our commercial products, such as airport security
equipment, voyage recorders and Prime Wave fixed wireless loop products, have
only recently been introduced.
These new commercial products are subject to certain risks and may require
us to:
o develop and maintain marketing, sales and customer support
capabilities;
o secure sales and customer support capabilities;
o obtain customer and/or regulatory certification;
8
o respond to rapidly changing technologies including those developed by
others that may render our products and systems obsolete or
non-competitive; and
o obtain customer acceptance of these products and product performance.
Our efforts to expand our presence in commercial markets require
significant resources, including additional working capital and capital
expenditures, as well as the use of our management's time. Our ability to sell
certain commercial products, particularly our broadband wireless communications
products, depends to a significant degree on the efforts of independent
distributors or communications service providers and on the financial viability
of our existing and target customers for the commercial products. Certain of our
existing and target customers are agencies or affiliates of governments of
emerging and under-developed countries or private business enterprises operating
in those countries. In addition, we have made equity investments in entities
that plan to commence operations as communications service providers using some
of our commercial products. We can give no assurance that these distributors or
service providers will be able to market our products or their services
successfully or that we will be able to realize a return of investment in them.
We also cannot assure you that we will be successful in addressing these risks
or in developing these commercial business opportunities.
CONSOLIDATION AND INTENSE COMPETITION IN THE INDUSTRIES IN WHICH OUR BUSINESSES
OPERATE COULD LIMIT OUR ABILITY TO ATTRACT AND RETAIN CUSTOMERS.
The communications equipment industry and the other industries in which our
businesses operate, and the market for defense applications, is highly
competitive. The defense industry has experienced substantial consolidation due
to declining defense budgets and increasing pressures for cost reductions. We
expect that the DoD's increased use of commercial off-the-shelf products and
components in military equipment will continue to encourage new competitors to
enter the market. We also expect that competition for original equipment
manufacturing business will increase due to the continued emergence of merchant
suppliers. Our ability to compete for defense contracts largely depends on the
following factors:
o the effectiveness and innovations of our research and development
programs;
o our ability to offer better performance than our competitors at a lower
cost to the U.S. Government; and
o the readiness of our facilities, equipment and personnel to undertake
the programs for which we compete.
In some instances, the U.S. Government directs all work for a particular
project to a single supplier, commonly known as a sole-source project. In such
cases, other suppliers who may otherwise be able to compete for the programs
involved can only do so if the U.S. Government chooses to reopen the particular
program to competition. Additionally, many of our competitors are larger than
us and have substantially greater financial and other resources than we have.
OUR DEBT AGREEMENTS RESTRICT OUR ABILITY TO FINANCE OUR FUTURE OPERATIONS AND,
IF WE ARE UNABLE TO MEET OUR FINANCIAL RATIOS, COULD CAUSE OUR EXISTING DEBT TO
BE ACCELERATED.
Our debt agreements contain a number of significant provisions that, among
other things, restrict our ability to:
o sell assets;
o incur more indebtedness;
o repay certain indebtedness;
o pay dividends;
o make certain investments or acquisitions;
9
o repurchase or redeem capital stock;
o engage in mergers or consolidations; and
o engage in certain transactions with subsidiaries and affiliates.
These restrictions could hurt our ability to finance our future operations
or capital needs or engage in other business activities that may be in our
interest. In addition, some of our debt agreements also require us to maintain
compliance with certain financial ratios, including total consolidated earnings
before interest, taxes, depreciation and amortization to total consolidated
cash interest expense and total consolidated debt to total consolidated
earnings before interest, taxes, depreciation and amortization, and to limit
our capital expenditures. Our ability to comply with these ratios and limits
may be affected by events beyond our control. A breach of any of these
agreements or our inability to comply with the required financial ratios or
limits could result in a default under those debt agreements. In the event of
any such default, the lenders under those debt agreements could elect to:
o declare all outstanding debt, accrued interest and fees to be due and
immediately payable;
o require us to apply all of our available cash to repay our outstanding
senior debt; and
o prevent us from making debt service payments on our other debt.
If we were unable to repay any of these borrowings when due, the lenders
under our senior credit facilities could proceed against their collateral,
which consists of a first priority security interest in the capital stock of
our material subsidiaries, including L-3 Communications. If the indebtedness
under the existing debt agreements were to be accelerated, we cannot assure you
that our assets would be sufficient to repay such indebtedness in full.
IF WE ARE UNABLE TO ATTRACT AND RETAIN KEY MANAGEMENT AND PERSONNEL, WE MAY
BECOME UNABLE TO OPERATE OUR BUSINESS EFFECTIVELY.
Our future success depends to a significant degree upon the continued
contributions of our management, including Messrs. Lanza and LaPenta, and our
ability to attract and retain other highly qualified management and technical
personnel. We do not maintain any key person life insurance policies for
members of our management. As of March 15, 2002, Messrs. Lanza and LaPenta
benefically owned, in the aggregate 12.3% of our outstanding Common Stock. We
have entered into employment agreements with Messrs. Lanza and LaPenta. We face
competition for management and technical personnel from other companies and
organizations. Failure to attract and retain such personnel would damage our
prospects.
ENVIRONMENTAL LAWS AND REGULATION MAY SUBJECT US TO SIGNIFICANT LIABILITY.
Our operations are subject to various U.S. federal, state and local as
well as certain foreign environmental laws and regulations within the countries
in which we operate relating to the discharge, storage, treatment, handling,
disposal and remediation of certain materials, substances and wastes used in
our operations.
New laws and regulations, stricter enforcement of existing laws and
regulations, the discovery of previously unknown contamination or the
imposition of new clean-up requirements may require us to incur costs in the
future that could have a negative effect on our financial condition, results of
operations or cash flow.
TERMINATION OF OUR BACKLOG OF ORDERS COULD NEGATIVELY IMPACT OUR SALES.
We currently have a backlog of orders, primarily under contracts with the
U.S. Government. The U.S. Government may unilaterally modify or terminate these
contracts. Accordingly, most of our backlog could be modified or terminated by
the U.S. Government. We cannot assure you that our existing backlog will result
in sales. Further, we cannot be sure that the margin we record on sales from
any contract included in backlog will be profitable.
10
OUR PENSION PLAN LIABILITIES MAY RESULT IN SIGNIFICANT EXPENSES.
We have assumed certain liabilities relating to defined benefit pension
plans for present and former employees and retirees of certain businesses which
we acquired. Prior to our formation, Lockheed Martin received a letter from the
Pension Benefit Guaranty Corporation (the "PBGC") which requested information
regarding the transfer of these pension plans and indicated that the PBGC
believed certain of these pension plans were underfunded using its actuarial
assumptions. These assumptions resulted in a larger liability for accrued
benefits than the assumptions used for financial reporting under Statement of
Financial Accounting Standards No. 87.
With respect to these plans, Lockheed Martin entered into an agreement
with us and the PBGC dated as of April 30, 1997. Under that agreement, Lockheed
Martin agreed, upon the occurrence of certain circumstances, either to:
o assume sponsorship of the subject plans; or
o provide another form of financial support.
If Lockheed Martin did assume sponsorship of these plans, it would be
primarily liable for the costs associated with funding these plans or any costs
associated with the termination of them, but we would be required to reimburse
Lockheed Martin for its obligations. To date, the impact on our pension expense
and funding requirements resulting from this arrangement has not been material
to our results of operations, financial position or cash flow. However, should
Lockheed Martin assume sponsorship of the subject plans, or if these plans were
terminated, the impact of any increased pension expenses or funding
requirements could be material to us.
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS, WHICH MAY NOT BE CORRECT.
Certain of the matters discussed concerning our operations, economic
performance and financial condition, including in particular, the likelihood of
our success in developing and expanding our business and the realization of
sales from backlog, include forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934 ("Exchange Act"). Statements that are predictive in nature, that
depend upon or refer to future events or conditions or that include words such
as "expects," "anticipates," "intends," "plans," "believes," "estimates" and
similar expressions are forward-looking statements. Although we believe that
these statements are based upon reasonable assumptions, we can give no
assurance that their goals will be achieved.
11
THE COMPANY
We are a leading merchant supplier of sophisticated secure communication
systems and specialized communications, avionics and ocean products. We produce
secure, high data rate communication systems, training and simulation systems,
engineering development and integration support, avionics and ocean products,
fuzing products, telemetry, instrumentation, space and guidance products and
microwave components. These systems and products are critical elements of
virtually all major communication, command and control, intelligence gathering
and space systems. Our systems and specialized products are used to connect a
variety of airborne, space, ground-and sea-based communication systems and are
used in the transmission, processing, recording, monitoring and dissemination
functions of these communication systems. Our customers include the U.S.
Department of Defense ("DoD"), certain U.S. Government intelligence agencies,
major aerospace and defense contractors, foreign governments, commercial
customers and certain other U.S. federal, state and local government agencies.
RATIO OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to fixed charges, deficiency of earnings to cover
fixed charges and earnings to combined fixed charges and preferred stock
dividends presented below should be read together with the financial statements
and the notes accompanying them and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" found in our Annual Report on
Form 10-K for the year ended December 31, 2001, incorporated into this
prospectus by reference. In calculating the ratio of earnings to fixed charges
and earnings to combined fixed charges and preferred stock dividends, earnings
consist of income (loss) before income taxes plus fixed charges. Fixed charges
consist of interest on indebtedness plus the amortization of deferred debt
issuance costs and that portion of lease rental expense representative of the
interest element. Preferred stock dividends are the pre-tax equivalent, at our
effective tax rate, of dividends earned on outstanding preferred stock.
L-3 PREDECESSOR COMPANY
-------------------------------------------------------------- --------------------
NINE MONTHS
YEAR ENDED DECEMBER 31,(1) ENDED THREE MONTHS
--------------------------------------------- DECEMBER 31, ENDED
2001 2000 1999 1998 1997(2) MARCH 31, 1997
--------- --------- --------- --------- -------------- --------------------
Ratio of Earnings to Fixed
Charges: 2.8x 2.3x 2.4x 2.0x 1.7x --(3)
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends: 2.8x 2.3x 2.4x 2.0x 1.7x --(3)
- ----------
(1) Our results of operations are impacted significantly by our
acquisitions, which are described in this prospectus or in documents
incorporated herein by reference.
(2) Reflects the acquisition of our predecessor company and the
commencement of our operations effective April 1, 1997.
(3) Earnings were insufficient to cover fixed charges and combined fixed
charges and preferred stock dividends by $0.5 million for the three
months ended March 31, 1997.
USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, L-3 Holdings and
L-3 Communications, as the case may be, will use all or a portion of the net
proceeds from the sale of the Offered Securities for general working capital
purposes, including acquisitions. General working capital purposes may include
repayment of other debt, capital expenditures, possible acquisitions and any
other purposes that may be stated in any prospectus supplement. The net
proceeds may be invested temporarily or applied to repay short-term or
revolving debt until they are used for their stated purposes.
12
We will not receive any proceeds from the sale of any shares of Common
Stock offered by the selling stockholders.
DIVIDEND POLICY
L-3 Holdings currently intends to retain its earnings to finance future
growth and, therefore, does not anticipate paying any cash dividends on its
Common Stock in the foreseeable future. Any determination as to the payment of
dividends will depend upon the future results of operations, capital
requirements and financial condition of L-3 Holdings and its subsidiaries and
such other facts as the board of directors of L-3 Holdings may consider,
including any contractual or statutory restrictions on L-3 Holdings' ability to
pay dividends. Moreover, L-3 Holdings is a holding company and its ability to
pay dividends is dependent upon receipt of dividends, distributions, advances,
loans or other cash transfers from L-3 Communications. Certain outstanding debt
instruments of L-3 Communications limit its ability to pay dividends or other
distributions on L-3 Communications' common stock or to make advances, loans or
other cash transfers to L-3 Holdings.
13
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities summarizes
certain general terms that will apply to the Debt Securities offered by us or
by L-3 Communications, as the case may be. The description is not complete, and
we refer you to the indentures, forms of which are included as exhibits to the
registration statement of which this prospectus is a part. In addition, the
terms described below may be amended, supplemented or otherwise modified
pursuant to one or more supplemental indentures. Any such amendments,
supplements or modifications will be set forth in the applicable prospectus
supplement. For your reference, in several cases below we have noted the
section in the indentures that the paragraph summarizes. Capitalized items have
the meanings assigned to them in the indentures. The referenced sections of the
indentures and the definitions of capitalized terms are incorporated by
reference in the following summary.
The Debt Securities issued by L-3 Communications will be senior, senior
subordinated or subordinated debt of L-3 Communications and will be guaranteed
by us and may be further guaranteed by substantially all of our other
wholly-owned subsidiaries. The Debt Securities issued by us will be senior,
senior subordinated or subordinated debt of ours and may be guaranteed by
substantially all of our other wholly-owned subsidiaries. We may issue Debt
Securities either separately, or together with, upon conversion of or in
exchange for other securities. The Debt Securities issued by us will be issued
under an indenture between us and The Bank of New York, as Trustee (the
"Holdings Indenture"). The Debt Securities to be issued by L-3 Communications
will be issued under an indenture among L-3 Communications, L-3 Holdings as
guarantor, and The Bank of New York, as trustee (the "Communications
Indenture," and together with the Holdings Indenture referred to herein as the
"Indentures"). The Indentures are substantially identical, except for the
provisions relating to L-3 Holdings' guarantee of the Debt Securities that may
be issued by L-3 Communications. For purposes of the summary set forth below,
obligors refers to L-3 Holdings in the case of Debt Securities issued by L-3
Holdings and the Holdings Indenture and L-3 Communications and L-3 Holdings, as
guarantor, in the case of Debt Securities issued by L-3 Communications and the
Communications Indenture. This summary of the Indentures is qualified by
reference to the Indentures. You should refer to the Indentures in addition to
reading this summary. The summary is not complete and is subject to the
specific terms of the Indentures.
GENERAL
Under the Holdings Indenture and the Communications Indenture, L-3
Holdings and L-3 Communications, respectively, will be able to issue from time
to time in one or more series an unlimited amount of Debt Securities. Each time
that L-3 Holdings or L-3 Communications issues a new series of Debt Securities,
the supplement to the prospectus relating to that new series will specify the
terms of those Debt Securities, including:
o Designation, amount and denominations;
o Percentage of principal amount at which Debt Securities will be issued;
o Maturity date;
o Interest rate and payment dates;
o Terms and conditions of exchanging or converting Debt Securities for
other securities;
o Currency of issue;
o Redemption terms;
o Whether the Debt Securities will be guaranteed by subsidiaries of L-3
Holdings;
o Whether the Debt Securities and/or any guarantees will be senior,
senior subordinated or subordinated; and
o Any other specific terms of the Debt Securities, including any deleted,
modified or additional events of default or remedies or additional
covenants provided with respect to the Debt Securities, and any terms
that may be required by or advisable under applicable laws or
regulations.
14
Unless otherwise specified in any prospectus supplement, the Debt
Securities will be issuable in registered form without coupons and in
denominations of $1,000 and any integral multiple thereof. No service charge
will be made for any transfer or exchange of any Debt Securities, but the
issuer may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Debt Securities may bear interest at a fixed rate or a floating rate. Debt
Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate may be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to discounted Debt Securities or to some Debt
Securities issued at par that are treated as having been issued at a discount
for United States federal income tax purposes will be described in the
applicable prospectus supplement.
In determining whether the holders of the requisite aggregate principal
amount of outstanding Debt Securities of any series have given any request,
demand, authorization, direction, notice, consent or waiver under the
Indentures, the principal amount of any series of Debt Securities originally
issued at a discount from their stated principal amount that will be deemed to
be outstanding for such purposes will be the amount of the principal thereof
that would be due and payable as of the date of the determination upon a
declaration of acceleration of the maturity thereof.
Payments relating to the Debt Securities generally will be paid by L-3
Holdings or L-3 Communications, as the case may be, at The Bank of New York's
corporate trust office. However, L-3 Holdings or L-3 Communications, as the
case may be, may elect to pay interest by mailing checks directly to the
registered holders of the Debt Securities. You can transfer your Debt
Securities at The Bank of New York's corporate trust office.
RANKING
Unless otherwise described in the prospectus supplement for any series,
the Debt Securities issued by L-3 Holdings or L-3 Communications, as the case
may be, will be unsecured and will rank on a parity with all of the other
unsecured and unsubordinated indebtedness issued by L-3 Holdings or L-3
Communications, as the case may be.
We are a holding company and conduct substantially all of our operations
through subsidiaries and L-3 Communications, our wholly-owned subsidiary,
conducts a material amount of operations through subsidiaries. Our and L-3
Communications' right to participate as a shareholder in any distribution of
assets of any subsidiary (and thus the ability of holders of the Debt
Securities issued by us or L-3 Communications, as the case may be, to benefit
as creditors of us or L-3 Communications, as the case may be, from such
distribution) is junior to creditors of that subsidiary. As a result, claims of
holders of the Debt Securities issued by us or L-3 Communications will
generally have a junior position to claims of creditors of our or L-3
Communications' subsidiaries, except to the extent that we or L-3
Communications, as the case may be, may be recognized as a creditor of those
subsidiaries or those subsidiaries guarantee the Debt Securities.
REOPENING OF ISSUE
L-3 Holdings and L-3 Communications, as the case may be, may, from time to
time, reopen an issue of Debt Securities without the consent of the holders of
the Debt Securities and issue additional Debt Securities with the same terms
(including maturity and interest payment terms) as Debt Securities issued on an
earlier date. After such additional Debt Securities are issued they will be
fungible with the previously issued Debt Securities to the extent specified in
the applicable prospectus supplement.
DEBT GUARANTEES
L-3 Holdings will fully and unconditionally guarantee, pursuant to the
Communications Indenture, the due and prompt payment of the principal of and
premium, if any, and interest on the
15
Debt Securities issued by L-3 Communications when and as the same shall become
due and payable, whether at the stated maturity, by declaration of
acceleration, call for redemption or otherwise. Debt Securities of L-3 Holdings
may be guaranteed by, and Debt Securities of L-3 Communications may be further
guaranteed by, additional subsidiaries of L-3 Holdings, the "subsidiary
guarantors". If Debt Securities are guaranteed by subsidiary guarantors, that
guarantee will be set forth in the applicable Indenture or a supplemental
indenture.
Payments with respect to the guarantee by L-3 Holdings of the senior
subordinated Debt Securities and subordinated Debt Securities issued by L-3
Communications will be subordinated in right of payment to the prior payment in
full of all senior indebtedness of L-3 Holdings to the same extent and manner
that payments with respect to the senior subordinated Debt Securities and
subordinated Debt Securities issued by L-3 Communications are subordinated in
right of payment to the prior payment in full of all senior indebtedness of L-3
Communications. Likewise, payments with respect to subsidiary guarantees of
senior subordinated Debt Securities and subordinated Debt Securities of L-3
Holdings and L-3 Communications, as the case may be, will be subordinated in
right of payment to the prior payment in full of all senior indebtedness of
each such subsidiary guarantor to the same extent and manner that payments with
respect to the senior subordinated Debt Securities and subordinated Debt
Securities of L-3 Holdings and L-3 Communications, as the case may be, are
subordinated in right of payment to the prior payment in full of all senior
indebtedness of the issuer of such Debt Securities.
MERGER AND CONSOLIDATION
Unless otherwise described in the prospectus supplement of any series,
each of L-3 Holdings and L-3 Communications may under the applicable Indenture,
without the consent of the holders of Debt Securities, consolidate with, merge
with or into or transfer all or substantially all of our assets to any other
corporation organized under the laws of the United States or any of its
political subdivisions provided that:
o the surviving corporation assumes all the obligations of L-3 Holdings
and L-3 Communications, as the case may be, under the applicable
Indenture;
o at the time of such transaction, no event of default, and no event
which, after notice or lapse of time, would become an event of default,
shall have happened and be continuing; and
o certain other conditions are met.
MODIFICATION
Generally, the rights and obligations of L-3 Holdings and L-3
Communications, as the case may be, and the holders' rights may be modified
with the consent of holders of a majority of the outstanding Debt Securities of
each series affected by such modification. However, unless otherwise described
in the prospectus supplement of any series, no modification or amendment may
occur without the consent of the affected holder of the Debt Security if that
modification or amendment would do any of the following:
o Change the stated maturity date of the principal of, or any installment
of interest on, any of the holder's Debt Security.
o Reduce the principal amount of, or the interest (or premium, if any)
on, the Debt Security (including in the case of a discounted Debt
Security, the amount payable upon acceleration of maturity or provable
in bankruptcy).
o Change the currency of payment of the Debt Security.
o Impair the right to institute suit for the enforcement of any payment
on the Debt Security or adversely affect the right of repayment, if
any, at the option of the holder.
o Reduce the percentage of holders of Debt Securities necessary to modify
or amend the Indentures or to waive any past default.
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o Release a guarantor from its obligations under its guarantee, other
than in accordance with the terms thereof.
o Modify the obligations of L-3 Holdings or L-3 Communications, as the
case may be, to maintain an office or agency in New York City.
A modification which changes a covenant or provision expressly included
solely for the benefit of holders of one or more particular series will not
affect the rights of holders of Debt Securities of any other series. (Section
9.02)
Each Indenture provides that the Obligors and The Bank of New York, as
trustee, may make modifications without the consent of the Debt Securities
holders in order to do the following: (Section 9.01)
o Evidence the assumption by a successor entity of the obligations of any
of the Obligors under that Indenture.
o Convey security for the Debt Securities to The Bank of New York.
o Add covenants, restrictions or conditions for the protection of the
Debt Security holders.
o Provide for the issuance of Debt Securities in coupon or fully
registered form.
o Establish the form or terms of Debt Securities of any series.
o Cure any ambiguity or correct any defect in the applicable Indenture
which does not adversely affect the interests of a holder.
o Evidence the appointment of a successor trustee or more than one
trustee.
o Surrendering any right or power conferred upon L-3 Holdings or L-3
Communications, as the case may be.
o Complying with the requirements of the Securities and Exchange
Commission in order to maintain the qualification of the Indentures
under the Trust Indenture Act of 1939, as amended.
o Adding or modifying any other provisions with respect to matters or
questions arising under the Indentures which L-3 Holdings or L-3
Communications, as the case may be, and The Bank of New York may deem
necessary or desirable and which will not adversely affect the
interests of holders of Debt Securities.
o Modify the existing covenants and events of default solely in respect
of, or add new covenants or events of default that apply solely to,
Debt Securities not yet issued and outstanding.
o To provide for guarantees of the Debt Securities and to specify the
ranking of the obligations of the guarantors under their respective
guarantees.
EVENTS OF DEFAULT
In the Indentures, an Event of Default means, unless otherwise described
in the prospectus supplement of any series, any one of the following:
o Failure to pay interest on a Debt Security for 30 days;
o Failure to pay principal and premium, if any, when due;
o Failure to pay or satisfy a sinking fund installment when due;
o Failure by us or L-3 Communications, as the case may be, or by a
guarantor of the Debt Securities to perform any other covenant in the
Indenture that continues for 60 days after receipt of notice;
o Certain events in bankruptcy, insolvency or reorganization; or
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o A guarantee being held in any judicial proceeding to be unenforceable
or invalid.
An Event of Default relating to one series of Debt Securities does not
necessarily constitute an Event of Default with respect to any other series
issued under the applicable Indenture. If an Event of Default exists with
respect to a series of Debt Securities, The Bank of New York or the holders of
at least 25% of the outstanding Debt Securities of that series may declare the
principal of that series due and payable.
Any Event of Default with respect to a particular series of Debt
Securities may be waived by the holders of a majority of the outstanding Debt
Securities of that series, except for a failure to pay principal premium or
interest on the Debt Security. (Sections 5.01, 5.02 and 5.08)
The Bank of New York may withhold notice to the holder of the Debt
Securities of any default (except in payment of principal, premium, interest or
sinking fund payment) if The Bank of New York thinks it is in the interest of
the holders. (Section 6.02)
Subject to the specific duties that arise under the applicable Indenture
if an Event of Default exists, The Bank of New York is not obligated to
exercise any of its rights or powers under the applicable Indenture at the
request of the holders of the Debt Securities unless they provide reasonable
indemnity satisfactory to it. (Sections 6.01 and 6.03) Generally, the holders
of a majority of the outstanding Debt Securities can direct the proceeding for
a remedy available to The Bank of New York or for exercising any power
conferred on The Bank of New York as the trustee. (Section 5.08)
TRUSTEE'S RELATIONSHIP
The Bank of New York or its affiliates may from time to time in the future
provide banking and other services to us in the ordinary course of their
business. The Indentures provide that L-3 Holdings or L-3 Communications, as
the case may be, will indemnify The Bank of New York against any and all loss,
liability claim, damage or expense incurred that arises from the trust created
by the applicable Indenture unless the loss, liability or expense results from
The Bank of New York's negligence or willful misconduct. (Sections 6.01 and
6.07)
GLOBAL SECURITIES
L-3 Holdings and L-3 Communications may issue some of the Debt Securities
as Global Securities that will be deposited with a depository identified in a
prospectus supplement. Global Securities may be issued in registered form and
may be either temporary or permanent. A prospectus supplement will contain
additional information about depository arrangements.
Registered Global Securities will be registered in the depository's name
or in the name of its nominee. When we issue a Global Security, the depository
will credit that amount of Debt Securities to the investors that have accounts
with the depository or its nominee. The underwriters or the Debt Security
holders' agent will designate the accounts to be credited, unless the Debt
Securities are offered and sold directly by us or L-3 Communications, in which
case, we or L-3 Communications, as the case may be, will designate the
appropriate account to be credited.
Investors who have accounts with a depository, and people who have an
interest in those institutions, are the beneficial owners of Global Securities
held by that particular depository.
Neither we nor L-3 Communications will maintain records regarding
ownership or the transfer of Global Securities held by a depository or to
nominee. If you are the beneficial owner of Global Securities held by a
depository, you must get information directly from the depository.
As long as a depository is the registered owner of a Global Security, that
depository will be considered the sole owner of the Debt Securities represented
by that Global Security. Except as set forth below, beneficial owners of Global
Securities held by a depository will not be entitled to:
o Register the represented Debt Securities in their names;
o Receive physical delivery of the Debt Securities; or
18
o Be considered the owners or holders of the Global Security under the
Indenture.
Payments on Debt Securities registered in the name of a depository or its
nominee will be made to the depositary or its nominee. (Section 2.03)
When a depository receives a payment, it must immediately credit the
accounts in amounts proportionate to the account holders' interests in the
Global Security. The beneficial owners of a Global Security should, and are
expected to, establish standing instructions and customary practices with their
investor that has an account with the depository, so that payments can be made
with regard to securities beneficially held for them, much like securities held
for the accounts of customers in bearer form or registered in "street name."
A Global Security can only be transferred in whole by the depository to a
nominee of such depository, or to another nominee of a depository. If a
depository is unwilling or unable to continue as a depository and we do not
appoint a successor depository within (90) days, we will issue Debt Securities
in exchange for all of the Global Securities held by that depository. In
addition, we may eliminate all Global Securities at any time and issue Debt
Securities in exchange for them. Further, we may allow a depository to
surrender a Global Security in exchange for Debt Securities on any terms that
are acceptable to us and the depository. Finally an interest in the Global
Security is exchangeable for a definitive Debt Security if an event of default
has occurred as described above under "Events of Default." (Section 3.07)
If any of these events occur, L-3 Holdings and L-3 Communications, as the
case may be, will execute and The Bank of New York will authenticate and
deliver to the beneficial owners of the Global Security in question a new
registered security in an amount equal to and in exchange for that person's
beneficial interest in the exchange Global Security. The depository will
receive a new Global Security in an amount equal to the difference, if any,
between the amount of the surrendered Global Security and the amount of Debt
Securities delivered to the beneficial owners. Debt Securities issued in
exchange for Global Securities will be registered in the same names and in the
same denominations as indicated by the depository's records and in accordance
with the instructions from its direct and indirect participants. (Section 3.07)
The laws of certain jurisdictions require some people who purchase
securities to actually take physical possession of those securities. The
limitations imposed by these laws may impair your ability to transfer your
beneficial interestsin a Global Security.
19
DESCRIPTION OF CAPITAL STOCK
GENERAL
The current certificate of incorporation of L-3 Holdings (the "Certificate
of Incorporation") authorizes 100,000,000 shares of Common Stock with a par
value of $.01 per share and 25,000,000 shares of Preferred Stock. As of March
15, 2002, the outstanding capital stock of L-3 Holdings consisted of 39,608,831
shares of Common Stock. The following summaries of certain provisions of our
capital stock do not purport to be complete and are subject to, and qualified
in their entirety by, the provisions of the Certificate of Incorporation,
including the Certificate of Designations pursuant to which any outstanding
series of Preferred Stock may be issued, and bylaws of L-3 Holdings and by
applicable law.
COMMON STOCK
Voting Rights. Holders of our Common Stock are entitled to one vote per
share on all matters to be voted upon by stockholders of L-3 Holdings, and do
not have cumulative voting rights.
Dividend Rights. The holders of our Common Stock are entitled to receive
ratably such dividends, if any, as may be declared from time to time by the
Board of Directors out of funds legally available for that purpose, subject to
preferences that may be applicable to any outstanding Preferred Stock and any
other provisions of our Certificate of Incorporation. L-3 Holdings does not,
however, anticipate paying any cash dividends in the foreseeable future.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of L-3 Holdings, after payment of the
debts and other liabilities of L-3 Holdings, and subject to the rights of
holders of shares of Preferred Stock, holders of Common Stock are entitled to
share in any distribution to the stockholders on a pro-rata basis.
Miscellaneous. All of the outstanding shares of Common Stock of L-3
Holdings are, and the shares of Common Stock offered hereby will be, fully paid
and non-assessable. Holders of Common Stock have no preemptive or other rights
to subscribe for additional shares. No shares of Common Stock are subject to
redemption or a sinking fund.
PREFERRED STOCK
General. Our Certificate of Incorporation authorizes our Board of
Directors to cause Preferred Stock to be issued in one or more series, without
stockholder action. The Board of Directors is authorized to issue up to
25,000,000 shares of Preferred Stock, par value $.01 per share, and can
determine the number of shares of each series, and the rights, preference and
limitations of each series. We may amend our Certificate of Incorporation to
increase the number of authorized shares of preferred stock in a manner
permitted by our Certificate of Incorporation and the Delaware General
Corporation Law.
The particular terms of any series of Preferred Stock being offered by us
under this shelf registration will be described in the prospectus supplement
relating to that series of Preferred Stock. Those terms may include:
o The number of shares of the series of Preferred Stock being offered;
o The title and liquidation preference per share of that series of the
Preferred Stock;
o The purchase price of the Preferred Stock;
o The dividend rate (or method for determining such rate);
o The dates on which dividends will be paid;
o Whether dividends on that series of Preferred Stock will be cumulative
or noncumulative and, if cumulative, the dates from which dividends
shall commence to accumulate;
20
o Any redemption or sinking fund provisions applicable to that series of
Preferred Stock;
o Any conversion or exchange provisions applicable to that series of
Preferred Stock;
o Whether we have elected to offer Depositary Shares with respect to that
series of Preferred Stock; and
o Any additional dividend, liquidation, redemption, sinking fund and other
rights and restrictions applicable to that series of preferred stock.
If the terms of any series of Preferred Stock being offered differ from
the terms set forth herein, those terms will also be disclosed in the
prospectus supplement relating to that series of Preferred Stock. The following
summary is not complete. You should refer to the Certificate of Designations
relating to the series of the Preferred Stock for the complete terms of that
Preferred Stock. That Certificate of Designations will be filed with the
Securities and Exchange Commission promptly after the offering of the Preferred
Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Voting Rights. Except as indicated in the prospectus supplement, or
except as expressly required by applicable law, the holders of Preferred Stock
will not be entitled to vote.
Dividend Rights. Holders of Preferred Stock of each series will be
entitled to receive, when, as and if declared by the Board of Directors, cash
dividends at the rates and on the dates set forth in the prospectus supplement.
Dividend rates may be fixed or variable or both. Different series of Preferred
Stock may be entitled to dividends at different dividend rates or based upon
different methods of determination. Each dividend will be payable to the
holders of record as they appear on our stock books on record dates determined
by the Board of Directors. Dividends on any series of the Preferred Stock may
be cumulative or noncumulative, as specified in the prospectus supplement. If
the Board of Directors fails to declare a dividend on any series of Preferred
Stock for which dividends are noncumulative, then the right to receive that
dividend will be lost, and we will have no obligation to pay the dividend for
that dividend period, whether or not dividends are declared for any future
dividend period.
No full dividends will be declared or paid on any series of Preferred
Stock, unless full dividends for the dividend period commencing after the
immediately preceding dividend payment date (and cumulative dividends still
owing, if any) have been or contemporaneously are declared and paid on all
other series of Preferred Stock that have the same rank as, or rank senior to,
that Preferred Stock. When those dividends are not paid in full, dividends will
be declared pro rata, so that the amount of dividends declared per share on
that series of Preferred Stock and on each other series of preferred stock
having the same rank as, or ranking senior to, that series of Preferred Stock
will in all cases bear to each other the same ratio that accrued dividends per
share on that series of Preferred Stock and the other preferred stock bear to
each other. In addition, generally, unless full dividends, including cumulative
dividends still owing, if any, on all outstanding shares of any series of
Preferred Stock have been paid, no dividends will be declared or paid on the
Common Stock and generally we may not redeem or purchase any Common Stock. No
interest, or sum of money in lieu of interest, will be paid in connection with
any dividend payment or payments which may be in arrears.
Unless otherwise described in the prospectus supplement, the amount of
dividends payable for each dividend period will be computed by annualizing the
applicable dividend rate and dividing by the number of dividend periods in a
year, except that the amount of dividends payable for the initial dividend
period or any period shorter than a full dividend period shall be computed on
the basis of a 360-day year consisting of twelve 30-day months and, for any
period less than a full month, the actual number of days elapsed in the period.
Rights Upon Liquidation. In the event we liquidate, dissolve or wind-up
our affairs, either voluntarily or involuntarily, the holders of each series of
Preferred Stock will be entitled to receive liquidating distributions in the
amount set forth in the prospectus supplement relating to each series of
Preferred Stock, plus an amount equal to accrued and unpaid dividends, if any,
before any distribution
21
of assets is made to the holders of Common Stock. If the amounts payable with
respect to Preferred Stock of any series and any stock having the same rank as
that series of Preferred Stock are not paid in full, the holders of Preferred
Stock and of such other stock will share ratably in any such distribution of
assets in proportion to the full respective preferential amounts to which they
are entitled. After the holders of each series of Preferred Stock and any stock
having the same rank as the Preferred Stock are paid in full, they will have no
right or claim to any of our remaining assets. Neither the sale of all or
substantially all our property or business nor a merger or consolidation by us
with any other corporation will be considered a dissolution, liquidation or
winding up by us of our business affairs.
Redemption. Any series of Preferred Stock may be redeemable, in whole or
in part, at our option. In addition, any series of Preferred Stock may be
subject to mandatory redemption, including pursuant to a sinking fund. The
redemption provisions that may apply to a series of Preferred Stock, including
the redemption dates and the redemption prices for that series, will be set
forth in the prospectus supplement.
If a series of Preferred Stock is subject to mandatory redemption, the
prospectus supplement will specify the year we can begin to redeem shares of
the Preferred Stock, the number of shares of the Preferred Stock we can redeem
each year, and the redemption price per share. We may pay the redemption price
in cash, stock or in cash that we have received specifically from the sale of
our capital stock, as specified in the prospectus supplement. If the redemption
price is to be paid only from the proceeds of the sale of our capital stock,
the terms of the series of Preferred Stock may also provide that, if no such
capital stock is sold or if the amount of cash received is insufficient to pay
in full the redemption price then due, the series of Preferred Stock will
automatically be converted into shares of the applicable capital stock pursuant
to conversion provisions specified in the prospectus supplement.
If fewer than all the outstanding shares of any series of Preferred Stock
are to be redeemed, whether by mandatory or optional redemption, the Board of
Directors will determine the method for selecting the shares to be redeemed,
which may be by lot or pro rata or by any other method determined to be
equitable. From and after the redemption date, dividends will cease to accrue
on the shares of Preferred Stock called for redemption and all rights of the
holders of those shares (except the right to receive the redemption price) will
cease.
In the event that full dividends, including accrued but unpaid dividends,
if any, have not been paid on any series of Preferred Stock, we may not redeem
that series in part and we may not purchase or acquire any shares of that
series of Preferred Stock, except by any offer made on the same terms to all
holders of that series of Preferred Stock.
Miscellaneous. The Preferred Stock will, when issued, be fully paid and
nonassessable. The Preferred Stock will have no preemptive rights.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our Common Stock is EquiServe Trust
Company, N.A. The transfer agent and registrar for our Preferred Stock will be
set forth in the applicable prospectus supplement.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF OUR CHARTER AND BYLAWS
The certificate of incorporation of L-3 Holdings provides for our board of
directors to be divided into three classes, with staggered three-year terms. As
a result, only one class of directors will be elected at each annual meeting of
stockholders, with the other classes continuing for the remainder of their
respective three-year terms. Stockholders have no cumulative voting rights, and
the stockholders representing a majority of the shares of Common Stock
outstanding are able to elect all of the directors.
22
The certificate of incorporation of L-3 Holdings also requires that any
action required or permitted to be taken by our stockholders must be effected
at a duly called annual or special meeting of the stockholders and may not be
effected by a consent in writing. Our stockholders may amend our bylaws or
adopt new bylaws, by the affirmative vote of 662/3% of the outstanding voting
securities. A special meeting of the stockholders may be called by our
Chairman, Chief Executive Officer or stockholders owning 10% or more of the
outstanding voting capital stock. These provisions may have the effect of
delaying, deferring or preventing a change in control.
The classification of the board of directors and lack of cumulative voting
will make it more difficult not only for another party to obtain control of us
by replacing our board of directors, but also for our existing stockholders to
replace our board of directors. Since the board of directors has the power to
retain and discharge our officers, these provisions could also make it more
difficult for existing stockholders or another party to effect a change in
management.
Our anti-takeover and other provisions may have the effect of deterring
hostile takeovers or delaying changes in control or management. They are
intended to enhance the likelihood of continued stability in the composition of
our board of directors and in the policies of our board of directors and to
discourage certain types of transactions that may involve an actual or
threatened change in control. Additionally, these provisions are designed to
reduce our vulnerability to an unsolicited acquisition proposal. The provisions
also are intended to discourage certain tactics that may be used in proxy
fights. However, such provisions could have the effect of discouraging others
from making tender offers for our shares and, as a consequence, they also may
inhibit fluctuations in the market price of our shares that could result from
actual or rumored takeover attempts. Such provisions also may have the effect
of preventing changes in our management.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
We, as a Delaware corporation, are subject to Section 203 of the Delaware
General Corporation Law, which, subject to certain exceptions, prohibits us
from engaging in any business combination with any interested stockholder for a
period of three years following the time that such stockholder became an
interested stockholder, unless:
o prior to such time, our board of directors approved either the business
combination or the transaction that resulted in the stockholder
becoming an interested holder;
o upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85.0% of our outstanding voting stock at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding those shares owned (a) by persons who are directors and
also officers and (b) by employee stock plans in which employee
participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or
exchange offer; or
o at or subsequent to such time, the business combination is approved by
our board of directors and authorized at an annual or special meeting
of stockholders, and not by written consent, by the affirmative vote of
at least 662/3% of our outstanding voting stock that is not owned by
the interested stockholder.
In general, Section 203 defines "business combination" to include the
following:
o any merger or consolidation involving the interested stockholder and
us;
o any sale, transfer, pledge or other disposition of 10% or more of
assets involving the interested stockholder;
o subject to certain exceptions, any transaction that results in our
issuance or transfer of any of our stock to the interested stockholder;
o any transaction involving us that has the effect of increasing the
proportionate share of the stock or any class or series of our stock
beneficially owned by the interested stockholder; or
23
o the receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits by or through
us.
In general, Section 203 defines "interested stockholder" as an entity or
person beneficially owning 15% or more of our outstanding voting stock and any
entity or person affiliated with or controlling or controlled by such entity or
person.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue Stock Purchase Contracts representing contracts obligating
holders to purchase from us and us to sell to the holders a specified number of
shares of Common Stock or Preferred Stock at a future date or dates. The price
per share of Common Stock or Preferred Stock may be fixed at the time the Stock
Purchase Contracts are issued or may be determined by reference to a specific
formula set forth in the Stock Purchase Contracts.
The Stock Purchase Contracts may be issued separately or as a part of
units, often known as Stock Purchase Units, consisting of a Stock Purchase
Contract and either of the following:
o Debt Securities, or
o Debt obligations of third parties, including U.S. Treasury securities,
securing the holder's obligations to purchase the Common Stock or Preferred
Stock under the Stock Purchase Contracts. The Stock Purchase Contracts may
require us to make periodic payments to the holders of the Stock Purchase Units
or vice versa, and such payments may be unsecured or prefunded on some basis.
The Stock Purchase Contracts may require holders to secure their obligations in
a specified manner and in certain circumstances we may deliver newly issued
prepaid Stock Purchase Contracts, often known as prepaid securities, upon
release to a holder of any collateral securing each holder's obligations under
the original Stock Purchase Contract.
The applicable prospectus supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units and, if applicable, prepaid
securities. The description in the prospectus supplement will not contain all
of the information that you may find useful. For more information, you should
review the Stock Purchase Contracts, the collateral arrangements and depositary
arrangements, if applicable, relating to such Stock Purchase Contracts or Stock
Purchase Units and, if applicable, the prepaid securities and the document
pursuant to which the prepaid securities will be issued, which will be filed
with the SEC promptly after the offering of such Stock Purchase Contracts or
Stock Purchase Units and, if applicable, prepaid securities.
DESCRIPTION OF WARRANTS
We may issue Warrants for the purchase of Debt Securities, Preferred Stock
or Common Stock. We may issue Warrants independently or together with other
securities. Each series of Warrants will be issued under a separate Warrant
Agreement to be entered into between us and a bank or trust company, as warrant
agent. You should refer to the Warrant Agreement relating to the specific
Warrants being offered for the complete terms of the Warrant Agreement and the
Warrants.
Each Warrant will entitle the holder to purchase the principal amount of
Debt Securities, or the number of shares of Preferred Stock, or Common Stock at
the exercise price set forth in, or calculable as set forth in, the prospectus
supplement. The exercise price may be subject to adjustment upon the occurrence
of certain events, as set forth in the prospectus supplement. After the close
of business on the expiration date of the Warrant, unexercised Warrants will
become void. The place or places where, and the manner in which, Warrants may
be exercised shall be specified in the prospectus supplement.
The applicable prospectus supplement will describe the following terms,
where applicable, of the Warrants in respect of which this prospectus is being
delivered:
o the title of the Warrants;
o the aggregate number of the Warrants;
24
o the price or prices at which the Warrants will be issued;
o the designation, aggregate principal amount and terms of the securities
purchasable upon exercise of the Warrants;
o the designation and terms of the securities with which the Warrants are
issued and the number of the Warrants issued with each such security;
o if applicable, the date on and after which the Warrants and the related
securities will be separately transferable;
o the price at which the securities purchasable upon exercise of the
Warrants may be purchased;
o the date on which the right to exercise the Warrants will commence and
the date on which the right will expire;
o the minimum or maximum amount of the Warrants that may be exercised at
any one time;
o information with respect to book-entry procedures, if any;
o a discussion of certain United States Federal income tax
considerations; and
o any other terms of the Warrants, including terms, procedures and
limitations relating to the exercise of the Warrants.
SELLING STOCKHOLDERS
The table below presents certain information regarding the beneficial
ownership of the Common Stock outstanding as of March 15, 2002 by Frank C.
Lanza, our Chairman, Chief Executive Officer and Director, and Robert V.
LaPenta, our President, Chief Financial Officer and Director.
NUMBER OF SHARES OF COMMON
STOCK BENEFICALLY OWNED AFTER
SHARES OF COMMON STOCK MAXIMUM NUMBER OF THE SALE OF MAXIMUM NUMBER OF
BENEFICIALLY OWNED SHARES OF COMMON SHARES OF COMMON STOCK
------------------------ STOCK TO BE SOLD ---------------------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENTAGE HEREUNDER NUMBER PERCENTAGE
- --------------------------- ----------- ------------ ------------------ ---------------- ----------------
Frank C. Lanza ............ 2,389,957 5.9% 250,000 2,139,957 5.3%
Robert V. LaPenta ......... 2,567,593 6.4% 250,000 2,317,593 5.7%
PLAN OF DISTRIBUTION
L-3 Holdings, L-3 Communications and the selling stockholders may sell the
Offered Securities through underwriters, dealers or agents or directly to one or
more purchasers including through a dividend reinvestment program. The
applicable prospectus supplement will list the names of any underwriters or
agents involved in the sale of the Offered Securities and any applicable
commissions or discounts. In addition, the applicable prospectus supplement will
list any securities exchanges on which the Offered Securities may be listed.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account. The underwriters may resell
the Offered Securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The Offered Securities may be offered through an
underwriting syndicate represented by many underwriters. The obligations of the
underwriters to purchase the Offered Securities will be subject to certain
conditions. The underwriters will be obligated to purchase all the Offered
Securities if any are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
These Offered Securities may be sold directly by us and the selling
stockholders or through agents. Any agent will be named, and any commissions
payable to that agent will be set forth in the prospectus supplement. Unless
otherwise indicated in the prospectus supplement, any agent will be acting on a
best efforts basis.
25
We and the selling stockholders may authorize agents, underwriters or
dealers to solicit offers by specified institutions to purchase Offered
Securities pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. These contracts will be subject only
to those conditions set forth in the prospectus supplement. The prospectus
supplement will set forth the commission payable for soliciting such contracts.
We and the selling stockholders may agree to indemnify underwriters,
dealers or agents against certain civil liabilities, including liabilities under
the Securities Act of 1933, and may also agree to contribute to payments which
the underwriters, dealers or agents may be required to make.
LEGAL MATTERS
The validity of each of the securities offered by this prospectus will be
passed upon for us by Simpson Thacher & Bartlett, New York, New York.
EXPERTS
The following financial statements have been incorporated by reference in
this registration statement in reliance of the reports of PricewaterhouseCoopers
LLP, independent accountants, given on their authority as experts in accounting
and auditing:
o Our consolidated financial statements as of December 31, 2001 and 2000
and for the three years ended December 31, 2001 incorporated by
reference in this registration statement from our Annual Report on Form
10-K for the year ended December 31, 2001; and
o The combined financial statements of Aircraft Integration Systems
Business as of December 31, 2001 and 2000 and for the three years ended
December 31, 2001 incorporated by reference in this registration
statement from our Current Report on Form 8-K dated March 22, 2002.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, file reports and other
information with the SEC. Such reports and other information can be inspected
and copied at the Public Reference Section of the SEC located at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549 and at a
regional public reference facility maintained by the SEC located at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can be obtained from the Public Reference Section of the SEC at
prescribed rates. Such material may also be accessed electronically by means of
the SEC's home page on the Internet (http://www.sec.gov).
So long as we are subject to the periodic reporting requirements of the
Securities Exchange Act, we are required to furnish the information required to
be filed with the SEC to the trustee and the holders of the notes. We have
agreed that, even if we are not required under the Securities Exchange Act to
furnish such information to the SEC, we will nonetheless continue to furnish
information that would be required to be furnished by us by Section 13 of the
Securities Exchange Act to the trustee and the holders of the notes as if it
were subject to such periodic reporting requirements.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information contained
in documents that we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus.
Information in this prospectus supersedes information incorporated by reference
that we filed with the SEC prior to the date of this prospectus, while
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we will make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
26
o Our Annual Report on Form 10-K for the fiscal year ended December 31,
2001; and
o Our Current Report on Form 8-K dated March 22, 2002.
You can request a copy of these filings at no cost, by writing or calling
us at the following address:
L-3 Communications Holdings, Inc.
600 Third Avenue
New York, New York 10016
(212) 697-1111
Attention: Corporate Secretary.
YOU SHOULD ONLY RELY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY SUPPLEMENT TO THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY
SUPPLEMENT TO THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT OF THOSE DOCUMENTS. YOU SHOULD READ ALL INFORMATION SUPPLEMENTING
THIS PROSPECTUS.
27
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of all fees and expenses, other than
underwriting discounts and commissions, incurred or expected to be incurred by
L-3 Communications Holdings, Inc. in connection with the issuance and
distribution of the securities being registered hereby. All but the Securities
and Exchange Commission registration fee are estimates and remain subject to
future contingencies.
Securities and Exchange Commission registration fee ......... $ 97,118
Legal fees and expenses ..................................... 250,000
Accounting fees and expenses ................................ 100,000
Trustees' fees and expenses ................................. 2,500
Printing and engraving fees ................................. 100,000
Miscellaneous expenses ...................................... 50,000
--------
Total .................................................... $599,618
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") provides
for, among other things:
(i) permissive indemnification for expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by designated persons, including directors and
officers of a corporation, in the event such persons are parties to
litigation other than stockholder derivative actions if certain
conditions are met;
(ii) permissive indemnification for expenses (including attorneys' fees)
actually and reasonably incurred by designated persons, including
directors and officers of a corporation, in the event such persons
are parties to stockholder derivative actions if certain conditions
are met;
(iii) mandatory indemnification for expenses (including attorneys' fees)
actually and reasonably incurred by designated persons, including
directors and officers of a corporation, in the event such persons
are successful on the merits or otherwise in defense of litigation
covered by (i) and (ii) above; and
(iv) that the indemnification provided for by Section 145 is not deemed
exclusive of any other rights which may be provided under any
by-law, agreement, stockholder or disinterested director vote, or
otherwise.
In addition to the indemnification provisions of the DGCL described above,
our Certificate of Incorporation (the "Certificate of Incorporation") provides
that we shall, to the fullest extent permitted by the DGCL, (i) indemnify our
officers and directors and (ii) advance expenses incurred by such officers or
directors in relation to any action, suit or proceeding.
Our Bylaws (the "Bylaws") require the advancement of expenses to an
officer or director (without a determination as to his conduct) in advance of
the final disposition of a proceeding if such person furnishes a written
affirmation of his good faith belief that he has met the applicable standard of
conduct and furnishes a written undertaking to repay any advances if it is
ultimately determined that he is not entitled to indemnification. In connection
with proceedings by or in the right of the Registrant, the Bylaws provide that
indemnification shall include not only reasonable expenses, but also judgments,
fines, penalties and amounts paid in settlement. The Bylaws provide that the
Registrant may, subject to authorization on a case by case basis, indemnify and
advance expenses to employees or agents to the same extent as a director or to
a lesser extent (or greater, as permitted by law) as determined by the board of
directors.
The Bylaws purport to confer upon officers and directors contractual
rights to indemnification and advancement of expenses as provided therein.
II-1
Our Certificate of Incorporation limits the personal liability of our
directors to us or our stockholders for monetary damages for breach of the
fiduciary duty as a director, other than liability as a director (i) for breach
of duty of loyalty to us or our 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 DGCL (certain illegal distributions) or
(iv) for any transaction for which the director derived an improper personal
benefit.
We maintain officers' and directors' insurance covering certain
liabilities that may be incurred by officers and directors in the performance
of their duties.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrants have been
informed 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.
ITEM 16. EXHIBITS
The following exhibits are filed as part of this registration statement:
EXHIBIT
NO. DESCRIPTION
- -------- --------------------------------------------------------------------------------------------
1.1 Form of Debt Underwriting Agreement*
1.2 Form of Equity Underwriting Agreement*
1.3 Form of Preferred Stock Underwriting Agreement*
1.4 Form of Warrants Underwriting Agreement*
1.5 Form of Stock Purchase Units Underwriting Agreement*
1.6 Form of Stock Purchase Contracts Underwriting Agreement*
4.1 Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 of L-3
Communications Holdings, Inc.'s Registration Statement on Form S-1, as filed with the
Commission on February 27, 1998 (File No. 333-46975))
4.2 By-laws (incorporated herein by reference to Exhibit 3.2 of L-3 Communications Holdings,
Inc.'s Registration Statement on Form S-1, as filed with the Commission on February 27,
1998 (File No. 333-46975))
4.3 Form of stock certificate (incorporated herein by reference to Exhibit 4.1 of L-3
Communications Holdings, Inc.'s Registration Statement on Form S-1 (File No. 333-46975))
4.4 Stockholders Agreement dated as of April 30, 1997 among L-3 Communications Holdings,
Inc. and the stockholders parties thereto (incorporated by reference to Exhibit 10.3 to L-3
Communications Holdings, Inc.'s Registration Statement on Form S-1 No. 333-46975)
4.5 Form of L-3 Holdings Indenture**
4.6 Form of L-3 Communications Indenture**
4.7 Form of L-3 Holdings Debt Security*
4.8 Form of L-3 Communications Debt Security*
4.9 Form of Guarantee under Holdings Indenture*
4.10 Form of Guarantee under Communications Indenture*
4.11 Form of Preferred Stock share certificate.*
4.12 Form of Purchase Contract Agreement relating to Stock Purchase Contracts and Stock
Purchase Units*
4.13 Form of Pledge Agreement for Stock Purchase Contracts and Stock Purchase Units.*
4.14 Form of Warrant Agreement*
5.1 Opinion of Simpson Thacher & Bartlett**
12 Statements re: Computation of Ratios (incorporated by reference to Exhibit 12 to L-3
Commuications Holdings, Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 2001)
23.1 Consent of PricewaterhouseCoopers LLP**
23.2 Consent of Simpson Thacher & Bartlett (contained in their opinion filed as Exhibit 5.1)
24 Power of Attorney of L-3 Communications Holdings, Inc., L-3 Communications Corporation
and the Additional Registrants (included on the signature pages hereto)
25.1 Statement of Eligibility of Trustee on Form T-1 under the Holdings Indenture**
25.2 Statement of Eligibility of Trustee on Form T-1 under the Communications Indenture**
- ----------
* To be filed with a subsequent 8-K
** Filed herewith
II-2
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;
(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 that a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered 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) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a
registrant of expenses incurred or paid by a director, officer or
controlling person of such registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's
Annual Report on Form 10-K 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.
(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-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that is has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
city of New York, state of New York, on March 22, 2002.
L-3 COMMUNICATIONS HOLDINGS, INC.
By: /s/ Christopher C. Cambria
------------------------------------
Christopher C. Cambria, Senior Vice President --
General Counsel and Secretary
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Christopher C.
Cambria, Michael T. Strianese, Frank C. Lanza, Robert V. LaPenta, or any of
them, as his attorney in fact and agent, with full power of substitution and
resubstitution, to execute, in his name and on his behalf, in any and all
capacities, this Registration Statement on Form S-3 and any amendments thereto
(and any additional registration statement related thereto permitted by Rule 462
(b) promulgated under the Securities Act of 1933 (and all further amendments
including post-effective amendments thereto) necessary or advisable to enable
the registrant to comply with the Securities Act of 1933, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
respect thereof, in connection with the registration of the securities which are
the subject of such registration statement, which amendments may make such
changes in such registration statement as such attorney may deem appropriate,
and with full power and authority to perform and do any and all acts and things
whatsoever which any such attorney or substitute may deem necessary or advisable
to be performed or done in connection with any or all of the above-described
matters, as fully as each of the undersigned could do if personally present and
acting, hereby ratifying and approving all acts of any such attorney or
substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ----------------------------- ------------------------------------------ ---------------
/s/ Frank C. Lanza Chairman, Chief Executive Officer and March 22, 2002
---------------------------- Director
Frank C. Lanza
/s/ Robert V. LaPenta President, Chief Financial Officer and March 22, 2002
---------------------------- Director
Robert V. LaPenta
/s/ Christopher C. Cambria Senior Vice President -- General Counsel March 22, 2002
---------------------------- and Secretary
Christopher C. Cambria
/s/ Michael T. Strianese Senior Vice President -- Finance March 22, 2002
----------------------------
Michael T. Strianese
/s/ Thomas A. Corcoran Director March 22, 2002
----------------------------
Thomas A. Corcoran
/s/ Robert B. Millard Director March 22, 2002
----------------------------
Robert B. Millard
/s/ John E. Montague Director March 22, 2002
----------------------------
John E. Montague
II-4
SIGNATURE TITLE DATE
- ---------------------------- ---------- ---------------
/s/ John M. Shalikashvili Director March 22, 2002
---------------------------
John M. Shalikashvili
/s/ Arthur L. Simon Director March 22, 2002
---------------------------
Arthur L. Simon
/s/ Alan H. Washkowitz Director March 22, 2002
---------------------------
Alan H. Washkowitz
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the city of New York, state of New York, on March 22, 2002.
L-3 COMMUNICATIONS CORPORATION
By: /s/ Christopher C. Cambria
------------------------------------
Christopher C. Cambria, Senior Vice President --
General Counsel and Secretary
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Christopher C.
Cambria, Michael T. Strianese, Frank C. Lanza, Robert V. LaPenta, or any of
them, as his attorney in fact and agent, with full power of substitution and
resubstitution, to execute, in his name and on his behalf, in any and all
capacities, this Registration Statement on Form S-3 and any amendments thereto
(and any additional registration statement related thereto permitted by Rule 462
(b) promulgated under the Securities Act of 1933 (and all further amendments
including post-effective amendments thereto) necessary or advisable to enable
the registrant to comply with the Securities Act of 1933, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
respect thereof, in connection with the registration of the securities which are
the subject of such registration statement, which amendments may make such
changes in such registration statement as such attorney may deem appropriate,
and with full power and authority to perform and do any and all acts and things
whatsoever which any such attorney or substitute may deem necessary or advisable
to be performed or done in connection with any or all of the above-described
matters, as fully as each of the undersigned could do if personally present and
acting, hereby ratifying and approving all acts of any such attorney or
substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ----------------------------- ---------------------------------------- ---------------
/s/ Frank C. Lanza Chairman, Chief Executive Officer and March 22, 2002
- ----------------------------- Director
Frank C. Lanza
/s/ Robert V. LaPenta President, Chief Financial Officer and March 22, 2002
- ----------------------------- Director
Robert V. LaPenta
/s/ Michael T. Strianese Senior Vice President -- Finance March 22, 2002
- -----------------------------
Michael T. Strianese
/s/ Thomas A. Corcoran Director March 22, 2002
- -----------------------------
Thomas A. Corcoran
/s/ Robert B. Millard Director March 22, 2002
- -----------------------------
Robert B. Millard
/s/ John E. Montague Director March 22, 2002
- -----------------------------
John E. Montague
/s/ John M. Shalikashvili Director March 22, 2002
- -----------------------------
John M. Shalikashvili
/s/ Arthur L. Simon Director March 22, 2002
- -----------------------------
Arthur L. Simon
/s/ Alan H. Washkowitz Director March 22, 2002
- -----------------------------
Alan H. Washkowitz
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
registrants certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of New York, state of New York, on March 22, 2002.
ELECTRODYNAMICS, INC.
L-3 COMMUNICATIONS DBS MICROWAVE, INC.
L-3 COMMUNICATIONS STORM CONTROL
SYSTEMS, INC.
MICRODYNE CORPORATION
By: /s/ Christopher C. Cambria
------------------------------------
Christopher C. Cambria, Vice President
and Secretary
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Christopher C.
Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in
fact and agent, with full power of substitution and resubstitution, to execute,
in his name and on his behalf, in any and all capacities, this Registration
Statement on Form S-3 and any amendments thereto (and any additional
registration statement related thereto permitted by Rule 462 (b) promulgated
under the Securities Act of 1933 (and all further amendments including
post-effective amendments thereto) necessary or advisable to enable the
registrants to comply with the Securities Act of 1933, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
respect thereof, in connection with the registration of the securities which
are the subject of such registration statement, which amendments may make such
changes in such registration statement as such attorney may deem appropriate,
and with full power and authority to perform and do any and all acts and things
whatsoever which any such attorney or substitute may deem necessary or
advisable to be performed or done in connection with any or all of the
above-described matters, as fully as each of the undersigned could do if
personally present and acting, hereby ratifying and approving all acts of any
such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ---------------------------------------- ---------------
/s/ Frank C. Lanza Chief Executive Officer and Director March 22, 2002
-----------------------------
Frank C. Lanza
/s/ Robert V. LaPenta Chief Financial Officer and Director March 22, 2002
-----------------------------
Robert V. LaPenta
/s/ Christopher C. Cambria Vice President, Secretary and Director March 22, 2002
-----------------------------
Christopher C. Cambria
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
registrants certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of New York, state of New York, on March 22, 2002.
AMI INSTRUMENTS, INC.
APCOM, INC.
CELERITY SYSTEMS INCORPORATED
COLEMAN RESEARCH CORPORATION
EER SYSTEMS, INC.
HENSCHEL INC.
HYGIENETICS ENVIRONMENTAL
SERVICES, INC.
INTERSTATE ELECTRONICS CORPORATION
KDI PRECISION PRODUCTS, INC.
L-3 COMMUNICATIONS AIS GP CORPORATION
L-3 COMMUNICATIONS ANALYTICS CORPORATION
L-3 COMMUNICATIONS ATLANTIC SCIENCE AND
TECHNOLOGY CORPORATION
L-3 COMMUNICATIONS AYDIN CORPORATION
L-3 COMMUNICATIONS ESSCO, INC.
L-3 COMMUNICATIONS ILEX SYSTEMS, INC.
L-3 COMMUNICATIONS INVESTMENTS, INC.
L-3 COMMUNICATIONS SPD
TECHNOLOGIES, INC.
MICRODYNE COMMUNICATIONS TECHNOLOGIES
INCORPORATED
MICRODYNE OUTSOURCING INCORPORATED
MPRI, INC.
PAC ORD INC.
POWER PARAGON, INC.
SPD ELECTRICAL SYSTEMS, INC.
SPD HOLDINGS, INC.
SPD SWITCHGEAR INC.
SOUTHERN CALIFORNIA MICROWAVE, INC.
By: /s/ Christopher C. Cambria
--------------------------------------
Christopher C. Cambria, Vice President
and Secretary
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Christopher C.
Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in
fact and agent, with full power of substitution and resubstitution, to execute,
in his name and on his behalf, in any and all capacities, this Registration
Statement on Form S-3 and any amendments thereto (and any additional
registration statement related thereto permitted by Rule 462 (b) promulgated
under the Securities Act of 1933 (and all further amendments including
post-effective amendments thereto) necessary or advisable to enable the
registrants to comply with the Securities Act of 1933, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
respect thereof, in connection with the registration of the securities which are
the subject of such registration statement, which amendments
II-8
may make such changes in such registration statement as such attorney may deem
appropriate, and with full power and authority to perform and do any and all
acts and things whatsoever which any such attorney or substitute may deem
necessary or advisable to be performed or done in connection with any or all of
the above-described matters, as fully as each of the undersigned could do if
personally present and acting, hereby ratifying and approving all acts of any
such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ----------------------------- ---------------
/s/ Frank C. Lanza Chief Executive Officer March 22, 2002
-----------------------------
Frank C. Lanza
/s/ Robert V. LaPenta Chief Financial Officer March 22, 2002
-----------------------------
Robert V. LaPenta
/s/ Christopher C. Cambria Vice President and Director March 22, 2002
-----------------------------
Christopher C. Cambria
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
registrants certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of New York, state of New York, on March 22, 2002.
L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.
By: L-3 COMMUNICATIONS AIS GP CORPORATION,
as General Partner
By: /s/ Christopher C. Cambria
-----------------------------------------
Name: Christopher C. Cambria
Title: Vice President and Secretary
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Christopher C.
Cambria, Frank C. Lanza, Robert V. LaPenta, or any of them, as his attorney in
fact and agent, with full power of substitution and resubstitution, to execute,
in his name and on his behalf, in any and all capacities, this Registration
Statement on Form S-3 and any amendments thereto (and any additional
registration statement related thereto permitted by Rule 462 (b) promulgated
under the Securities Act of 1933 (and all further amendments including
post-effective amendments thereto) necessary or advisable to enable the
registrants to comply with the Securities Act of 1933, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
respect thereof, in connection with the registration of the securities which are
the subject of such registration statement, which amendments may make such
changes in such registration statement as such attorney may deem appropriate,
and with full power and authority to perform and do any and all acts and things
whatsoever which any such attorney or substitute may deem necessary or advisable
to be performed or done in connection with any or all of the above-described
matters, as fully as each of the undersigned could do if personally present and
acting, hereby ratifying and approving all acts of any such attorney or
substitute.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ----------------------------- ---------------
/s/ Frank C. Lanza Chief Executive Officer March 22, 2002
-----------------------------
Frank C. Lanza
/s/ Robert V. LaPenta Chief Financial Officer March 22, 2002
-----------------------------
Robert V. LaPenta
/s/ Christopher C. Cambria Vice President and Director March 22, 2002
-----------------------------
Christopher C. Cambria
II-10
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- -------- ---------------------------------------------------------------------------------------------
1.1 Form of Debt Underwriting Agreement*
1.2 Form of Equity Underwriting Agreement*
1.3 Form of Preferred Stock Underwriting Agreement*
1.4 Form of Warrants Underwriting Agreement*
1.5 Form of Stock Purchase Units Underwriting Agreement*
1.6 Form of Stock Purchase Contracts Underwriting Agreement*
4.1 Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 of L-3
Communications Holdings, Inc.'s Registration Statement on Form S-1, as filed with the
Commission on February 27, 1998 (File No. 333-46975))
4.2 By-laws (incorporated herein by reference to Exhibit 3.2 of L-3 Communications Holdings,
Inc.'s Registration Statement on Form S-1, as filed with the Commission on February 27, 1998
(File No. 333-46975))
4.3 Form of stock certificate (incorporated herein by reference to Exhibit 4.1 of L-3
Communications Holdings, Inc.'s Registration Statement on Form S-1 (File No. 333-46975))
4.4 Stockholders Agreement dated as of April 30, 1997 among L-3 Communications Holdings, Inc.
and the stockholders parties thereto (incorporated by reference to Exhibit 10.3 to L-3
Communications Holdings, Inc.'s Registration Statement on Form S-1 No. 333-46975)
4.5 Form of L-3 Holdings Indenture**
4.6 Form of L-3 Communications Indenture**
4.7 Form of L-3 Holdings Debt Security*
4.8 Form of L-3 Communications Debt Security*
4.9 Form of Guarantee under Holdings Indenture*
4.10 Form of Guarantee under Communications Indenture*
4.11 Form of Preferred Stock share certificate*
4.12 Form of Purchase Contract Agreement relating to Stock Purchase Contracts and Stock
Purchase Units*
4.13 Form of Pledge Agreement for Stock Purchase Contracts and Stock Purchase Units*
4.14 Form of Warrant Agreement*
5.1 Opinion of Simpson Thacher & Bartlett**
12 Statements re: Computation of Ratios (incorporated by reference to Exhibit 12 to L-3
Commuications Holdings, Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 2001)
23.1 Consent of PricewaterhouseCoopers LLP**
23.2 Consent of Simpson Thacher & Bartlett (contained in their opinion filed as Exhibit 5.1)
24 Power of Attorney of L-3 Communications Holdings, Inc., L-3 Communications Corporation
and the Additional Registrants (included on the signature pages hereto)
25.1 Statement of Eligibility of Trustee on Form T-1 under the Holdings Indenture**
25.2 Statement of Eligibility of Trustee on Form T-1 under the Communications Indenture**
- ----------
* To be filed with a subsequent 8-K
** Filed herewith
II-11