As filed with the Securities and Exchange Commission on April 10, 2002
Registration No. 333-84694
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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AGILENT TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 77-0518772
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
395 Page Mill Road
Palo Alto, California 94306
(650) 752-5000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-----------------
Edward W. Barnholt
President and Chief Executive Officer
Agilent Technologies, Inc.
395 Page Mill Road
Palo Alto, California 94306
(650) 752-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
D. Craig Nordlund, Esq. William H. Hinman, Jr., Esq.
Marie Oh Huber, Esq. Simpson Thacher & Bartlett
Agilent Technologies, Inc. 3330 Hillview Avenue
395 Page Mill Road Palo Alto, California 94304
Palo Alto, California 94306 (650) 251-5000
(650) 752-5000
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Approximate date of commencement of proposed sale to public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered in 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, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] ______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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Proposed
Amount to be Proposed Maximum Maximum Aggregate Amount of
Title of Each Class of Securities to be Registered Registered (1) Offering Price Offering Price Registration Fee (1)
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3% Senior Convertible Debentures Due 2021 Principal Amount:
$1,150,000,000 100% $1,150,000,000 $105,800 (2)
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Common Stock, $0.01 par value per share 35,692,117 shares (3) (4) (4) (4)
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(1) Calculated at the statutory rate of .000092 of the proposed maximum
aggregate offering price, which price is exclusive of accrued interest and
is estimated solely for the purpose of calculating the registration fee.
(2) A registration fee of $105,800 was paid with the initial filing.
(3) This number represents the total number of shares of common stock that are
initially issuable upon conversion of the debentures registered hereby at
the conversion rate of $32.22 per share.
(4) No additional consideration will be received for the common stock.
Therefore, no additional registration fee is required pursuant to Rule
457(i).
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, 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.
================================================================================
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 it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 10, 2002
PROSPECTUS
$1,150,000,000
[LOGO OF AGILENT TECHNOLOGIES]
3% Senior Convertible Debentures Due 2021
and the Common Stock Issuable upon Conversion of the Debentures
-----------------
We originally issued the debentures in a private placement in November 2001.
This prospectus will be used by selling security holders to resell their
debentures and the shares of common stock issuable upon conversion of their
debentures.
The debentures are our senior unsecured unsubordinated obligations. The
debentures bear interest at an initial rate of 3%. On June 1, 2006, June 1,
2011 and June 1, 2016, the interest rate on the debentures will be reset to a
rate per annum equal to the interest rate payable 120 days prior to such reset
date on 5-year U.S. Treasury Notes minus 1.13%. However, in no event will such
interest rate be reset below 3% per annum or above 5% per annum. On December 1,
2021, the maturity date of the debentures, holders of debentures will receive
$1,000 (plus accrued and unpaid interest) for each debenture.
On or after December 6, 2004, we may redeem for cash all or part of the
debentures that have not been previously converted for 100% of the principal
amount of the debentures to be purchased plus accrued and unpaid interest.
Holders may require us to repurchase for cash all or part of their debentures
on December 1, 2006, December 1, 2011 or December 1, 2016 at a price equal to
100% of the principal amount of the debentures plus accrued and unpaid interest
up to but not including the date of repurchase. In addition, upon a Fundamental
Change prior to the repurchase date, as described in this prospectus, each
holder may require us to repurchase for cash all or a portion of such holder's
debentures not previously called for redemption.
The debentures are convertible at the option of the holder into our common
stock at an initial conversion price of $32.22 per share of common stock,
subject to certain adjustments. Holders may surrender debentures for conversion
at any time prior to maturity, unless previously redeemed. Our common stock is
listed on the New York Stock Exchange under the symbol "A." On April 9, 2002,
the last reported sale price on the New York Stock Exchange for our common
stock was $32.80 per share.
-----------------
Investing in the debentures or the common stock into which the debentures
are convertible involves risks. Please carefully consider the "Risk Factors"
beginning on page 6 of this prospectus.
-----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this prospectus is , 2002
TABLE OF CONTENTS
Page
----
WHERE YOU CAN FIND MORE INFORMATION..................................... 1
INCORPORATION BY REFERENCE.............................................. 1
FORWARD-LOOKING STATEMENTS.............................................. 2
PROSPECTUS SUMMARY...................................................... 3
RISK FACTORS............................................................ 6
USE OF PROCEEDS......................................................... 14
RATIO OF EARNINGS TO FIXED CHARGES...................................... 14
DIVIDEND POLICY......................................................... 14
DESCRIPTION OF DEBENTURES............................................... 15
REGISTRATION RIGHTS..................................................... 27
DESCRIPTION OF CAPITAL STOCK............................................ 29
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES............................ 34
SELLING SECURITY HOLDERS................................................ 41
PLAN OF DISTRIBUTION.................................................... 51
LEGAL MATTERS........................................................... 52
EXPERTS................................................................. 52
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934 (the Exchange Act). Therefore, we file periodic reports, proxy
statements and other information with the Securities and Exchange Commission
(SEC). Such reports, proxy statements and other information may be obtained:
. by writing to the Public Reference Section or visiting the Public
Reference Room of the SEC, Room 1024--Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 (you may obtain information on the
operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330);
. at the public reference facilities of the SEC's regional offices located
at The Woolworth Building, 233 Broadway, New York, New York 10048 or
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661; or
. from the website maintained by the SEC at http://www.sec.gov, which
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC.
Some locations may charge prescribed or modest fees for the copies.
INCORPORATION BY REFERENCE
The following documents filed with the SEC are incorporated into this
prospectus by reference:
. our annual report on Form 10-K for the year ended October 31, 2001, as
amended;
. our quarterly report on Form 10-Q for the quarter ended January 31,
2002; and
. the description of our common stock in our registration statement on
Form 8-A filed with the SEC on October 18, 1999 (incorporating by
reference the description of our capital stock contained in our
registration statement on Form S-1 filed on August 16, 1999 (File No.
333-85249)), including any amendment or report updating such description.
All documents that we file with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act from the date of this prospectus to the end of the
offering of the debentures and common stock under this document shall also be
deemed to be incorporated herein by reference.
Any statement contained in a document incorporated or deemed to be
incorporated by reference into this prospectus shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference into this prospectus
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this prospectus.
Our common stock is quoted on the New York Stock Exchange. You may inspect
reports and other information concerning us at the offices of the New York
Stock Exchange, 11 Wall Street, New York, New York 10005.
We will provide without charge to each person to whom a copy of this
prospectus has been delivered, upon the written or oral request of such person,
a copy of any and all of the documents that have been or may be incorporated by
reference in this prospectus, other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into such documents.
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You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Investor Relations Department
Agilent Technologies, Inc.
395 Page Mill Road
Palo Alto, California 94306
(877) 942-4200
www.investor.agilent.com
The information contained on our website is not incorporated into this
prospectus.
You should rely only on the information incorporated by reference or
provided in this prospectus or a prospectus supplement or amendment. 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 assume that the information appearing in this prospectus
or a prospectus supplement or amendment or any documents incorporated by
reference therein is accurate only as of the date on the front cover of the
applicable document. Our business, financial condition, results of operations
and prospects may have changed since that date.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated herein contain
forward-looking statements including, without limitation, statements regarding
our restructuring plan and our liquidity position, that involve risks and
uncertainties. You should not rely on forward-looking statements in this
prospectus or in the documents incorporated herein. Our actual results could
differ materially from the results contemplated by these forward-looking
statements due to certain factors, including those discussed in the "Risk
Factors" section of this prospectus and those included in the documents
incorporated by reference.
2
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere or incorporated by
reference in this prospectus. You should read the entire prospectus carefully,
including "Risk Factors," the incorporated consolidated financial statements
and related notes, and the documents incorporated by reference into this
prospectus, before deciding to invest.
Agilent Technologies, Inc.
Agilent is a global technology company providing market-leading products for
the communications, electronics and life sciences industries. We have three
primary businesses:
. test and measurement provides test instruments, standard and customized
test, measurement and monitoring systems for the design, manufacture and
support of electronic and communication devices and networks, and
software for the design of high-frequency electronic and communication
devices and networks;
. semiconductor products provides fiber optic communications devices and
assemblies, integrated circuits for wireless applications, application
specific integrated circuits for networking, computing and printing,
general purpose optoelectronics and image sensors; and
. life sciences and chemical analysis provides analytical instruments,
data systems, services and consumables for liquid and gas
chromatography, mass spectrometry, microfluidics-based lab-on-a-chip and
microarrays.
We were incorporated in Delaware in May 1999 and, prior to our initial
public offering, our operations comprised Hewlett-Packard's test and
measurement, semiconductor products, healthcare solutions and chemical analysis
businesses, related portions of Hewlett-Packard Laboratories, and associated
infrastructure. In August 2001, we completed the sale of our healthcare
solutions business to Koninklijke Philips Electronics (Philips). Our principal
executive offices are located at 395 Page Mill Road, Palo Alto, California
94306, and our telephone number is (650) 752-5000.
Recent Announcement
On February 27, 2002, we announced that Alain Couder, our executive vice
president and chief operating officer, had decided to leave our company in
order to pursue other opportunities. As of March 1, 2002, Bill Sullivan, who
had been the senior vice president and general manager of our Semiconductor
Products Group (SPG), became our executive vice president and chief operating
officer. Dick Chang, formerly the vice president and general manager of the
Network Solutions Division within SPG, became the senior vice president and
general manager of SPG to replace Bill Sullivan.
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The Offering
Issuer...................... Agilent Technologies, Inc.
Securities offered.......... $1,150,000,000 aggregate principal amount of
3.00% Senior Convertible Debentures due 2021 and
shares of our common stock issuable upon
conversion of the debentures.
Interest.................... The debentures bear interest at an annual rate of
3.00%, which will be reset on June 1, 2006, June
1, 2011, and June 1, 2016 to a rate per annum
equal to the interest rate payable 120 days prior
to such reset date on 5-year U.S. Treasury Notes
minus 1.13%. In no event, however, will the
interest rate be reset below 3.00% or above 5.00%
per annum. Interest is payable on June 1 and
December 1 of each year, beginning on June 1,
2002.
Maturity date............... December 1, 2021.
Conversion rights........... Holders may convert all or some of their
debentures at any time prior to the close of
business on the business day immediately
preceding the maturity date at a conversion price
of $32.22 per share. The initial conversion price
is equivalent to a conversion rate of 31.0366
shares per $1,000 principal amount of debentures.
The conversion price is subject to adjustment.
Upon conversion, holders will not receive any
cash representing accrued interest. See
"Description of Debentures--Conversion of
Debentures."
Ranking..................... The debentures are senior unsecured obligations
and rank equally with all of our other senior
unsecured indebtedness. See "Description of
Debentures--Ranking."
Sinking fund................ None.
Optional redemption......... We may redeem some or all of the debentures on or
after December 6, 2004 at 100% of the principal
amount of the debentures plus accrued and unpaid
interest to, but excluding, the redemption date.
See "Description of Debentures--Optional
Redemption by Agilent."
Purchase of debentures by us
at the option of the
holder.................... Holders may require us to repurchase all or a
portion of their debentures on December 1, 2006,
December 1, 2011, and December 1, 2016 in cash at
100% of the principal amount of the debentures to
be repurchased, plus accrued and unpaid interest
to, but excluding, the repurchase date. See
"Description of Debentures--Repurchase at Option
of the Holder on Put Dates."
Fundamental Change.......... If we undergo a Fundamental Change, as described
in this prospectus, holders will have the option
to require us to repurchase for cash all or any
portion of their debentures not previously called
for redemption.
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We will pay a repurchase price equal to 100% of
the principal amount of the debentures to be
repurchased plus accrued and unpaid interest to,
but excluding, the repurchase date. See
"Description of Debentures--Repurchase at Option
of the Holder Upon a Fundamental Change."
Registration rights......... We have agreed to file a shelf registration
statement, of which this prospectus forms a part,
with the SEC with respect to the debentures and
the common stock issuable upon conversion of the
debentures. We have agreed to use reasonable
efforts to keep the registration statement
effective for specified periods. If we fail to
fulfill these and other obligations, we will pay
additional amounts on the registrable securities
until we fulfill these obligations.
Use of proceeds............. All of the debentures and the shares of our
common stock issuable upon conversion of the
debentures are being sold by the selling security
holders or their pledgees, donees, transferees or
other successors in interest. We will not receive
any proceeds from the sale of the debentures or
the shares of our common stock issuable upon
conversion of the debentures. See "Use of
Proceeds."
Common stock................ Our common stock is listed on The New York Stock
Exchange under the symbol "A."
5
RISK FACTORS
You should carefully consider the risks described below, together with other
information included or incorporated by reference in this prospectus, before
investing in our securities. The risks and uncertainties described below are
not the only ones we face. If any of the following risks actually occurs, our
business, financial condition or results or operations could be materially and
adversely affected. In such case, our ability to make payments on the
debentures could be impaired, the trading price of the debentures and our
common stock could decline, and you could lose all or part of your investment.
Risks Relating to Our Business
Our operating results and financial condition could continue to be harmed if
the industries into which we sell our products, such as the communications,
electronics and semiconductor industries, remain depressed.
The current economic downturn has resulted in reduced purchasing and capital
spending in many of the markets that we serve worldwide. In particular, the
communications, semiconductor and electronics industries have been in a
downward cycle characterized by diminished product demand, excess manufacturing
capacity and the increasing erosion of average selling prices.
We are uncertain how long the current downturn will last. Any further
decline in our customers' markets or in general economic conditions would
likely result in a further reduction in demand for our products and services
and could harm our consolidated financial position, results of operations, cash
flows and stock price, and could limit our ability to reach our goals for
restoring profitability. In addition, we may be required to secure additional
debt or equity financing at some time in the future, and we cannot assure you
that such financing will be available when required on acceptable terms.
The actions we have taken in response to the recent slowdown in demand for our
products and services could have long-term adverse effects on our business.
Our semiconductor and test and measurement businesses have been experiencing
lower revenues due to decreased or cancelled customer orders. From the third
quarter of 2000 up until the end of fiscal 2001, we experienced declines in
orders. To scale back our operations and to reduce our expenses in response to
this decreased demand for our products and services and lower revenue, we have
reduced our workforce, frozen hiring, cut back significantly on our use of
temporary workers and reduced discretionary spending. We also have initiated
short-term facility closures to reduce production levels.
In calendar year 2001, we implemented plans to reduce our workforce by
approximately 8,000 people by the middle of 2002. In addition, from May 1 to
October 31 of 2001, we instituted a 10 percent pay reduction applicable to all
employees globally, wherever legally permissible, which was reinstated for
approximately 2,000 of our senior managers starting from the first quarter of
fiscal 2002. A 5 percent reduction in pay for our other employees, wherever
legally permissible, began in February of 2002. The reductions in pay took
effect via a reduction in hours for certain employees, in accordance with local
law. In addition to these measures, we are continuing our initiatives to
streamline our operations.
There are several risks inherent in our efforts to transition to a new cost
structure. These include the risk that we will not be able to reduce
expenditures quickly enough and sustain them at a level necessary to restore
profitability, and that we may have to undertake further restructuring
initiatives that would entail additional charges. In addition, there is the
risk that cost-cutting initiatives will impair our ability to effectively
develop and market products and remain competitive in the industries in which
we compete. Each of the above measures could have long-term effects on our
business by reducing our pool of technical talent, decreasing or slowing
improvements in our products, making it more difficult for us to respond to
customers, limiting our ability to
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increase production quickly if and when the demand for our products increases
and limiting our ability to hire and retain key personnel. These circumstances
could cause our earnings to be lower than they otherwise might be.
As demand for our products does not match our manufacturing capacity, our
earnings may continue to suffer.
Because we cannot immediately adapt our production capacity and related cost
structures to rapidly changing market conditions, when demand does not meet our
expectations, our manufacturing capacity will likely exceed our production
requirements. Currently, we have excess manufacturing capacity as a result of
the recent decrease in purchasing and capital spending in the communications,
electronics and semiconductor industries. The fixed costs associated with
excess manufacturing capacity have adversely affected, and may continue to
adversely affect, our earnings. Conversely, if during a market upturn, we
cannot increase our manufacturing capacity to meet product demand, we will not
be able to fulfill orders in a timely manner, which in turn may have a negative
effect on our earnings and overall business.
Failure to adjust our orders for parts due to changing market conditions could
adversely affect our earnings.
Our earnings could be harmed if we are unable to adjust our orders for parts
to market fluctuations. In order to secure components for the production of
products, we may enter into non-cancelable purchase commitments with vendors,
or at times make advance payments to suppliers, which could impact our ability
to adjust our inventory to declining market demands. Prior commitments of this
type have resulted in an excess of parts as demand for our communications,
semiconductor and electronics products has decreased. For example, in the year
ended October 31, 2001 we incurred approximately $459 million of
inventory-related charges. If the demand for our products continues to
decrease, we may experience an excess of parts again and be forced to incur
additional charges. By contrast, during a market upturn, our results could be
materially and adversely impacted if we cannot increase our parts supply
quickly enough to meet increasing demand for our products. Certain parts may be
available only from a single supplier or a limited number of suppliers. In
addition, suppliers may cease manufacturing certain components that are
difficult to substitute without significant reengineering of our products.
Suppliers may also extend lead times, limit supplies or increase prices due to
capacity constraints or other factors.
Fluctuations in our quarterly operating results may cause volatility in the
price of our common stock and the debentures.
Given the nature of the markets in which we participate, we cannot reliably
predict future revenue and profitability. As demand for our products has
decreased in recent periods, our quarterly sales and operating results have
become highly dependent on the volume and timing of orders received during the
quarter, which are difficult to forecast. The reduction in the backlog of our
orders also has significantly affected our ability to efficiently plan
production and inventory levels, which has led to fluctuations in operating
results. In addition, a significant portion of our operating expenses is
relatively fixed in nature due to our significant sales, research and
development and manufacturing costs. If we cannot adjust spending quickly
enough to compensate for a revenue shortfall, this may magnify the adverse
impact of a revenue shortfall on our results of operations. Fluctuations in our
operating results may cause volatility in the price of our common stock and the
debentures.
We are in the process of implementing new information systems, and problems
with the redesign and implementation of these new systems could interfere with
our operations.
We are in the process of implementing new information systems to eventually
replace our current systems, which are largely based on legacy systems that we
created when we were a part of Hewlett-Packard. We may not be successful in
implementing these new systems and transitioning data. As a part of this
effort, we are implementing new enterprise resource planning software
applications to manage our business operations. Failure
7
to smoothly and successfully implement this and other systems could temporarily
interrupt our operations and adversely impact our ability to run our business.
In addition, any failure or significant downtime in our legacy or new
information systems could prevent us from taking customer orders, shipping
products or billing customers and could harm our business.
If we do not introduce successful new products and services in a timely manner,
our products and services will become obsolete, and our operating results will
suffer.
We generally sell our products in industries that are characterized by rapid
technological changes, frequent new product and service introductions and
changing industry standards. Without the timely introduction of new products,
services and enhancements, our products and services will become
technologically obsolete over time, in which case our revenue and operating
results would suffer. The success of our new product and service offerings will
depend on several factors, including our ability to:
. properly identify customer needs;
. innovate and develop new technologies, services and applications;
. successfully commercialize new technologies in a timely manner;
. manufacture and deliver our products in sufficient volumes on time;
. differentiate our offerings from our competitors' offerings;
. price our products competitively; and
. anticipate our competitors' announcements of new products, services or
technological innovations.
Economic, political and other risks associated with international sales and
operations could adversely affect our results of operations.
Since we sell our products worldwide, our business is subject to risks
associated with doing business internationally. We anticipate that revenue from
international operations will continue to represent a substantial portion of
our total revenue. In addition, many of our manufacturing facilities and
suppliers are located outside the United States. Accordingly, our future
results could be harmed by a variety of factors, including:
. interruption to transportation flows for delivery of parts to us and
finished goods to our customers;
. changes in foreign currency exchange rates;
. changes in a specific country's or region's political or economic
conditions;
. trade protection measures and import or export licensing requirements;
. negative consequences from changes in tax laws;
. difficulty in staffing and managing widespread operations;
. differing labor regulations;
. differing protection of intellectual property; and
. unexpected changes in regulatory requirements.
The current U.S. and international response against terrorism could
exacerbate these risks. For example, there may be an increased risk of
political unrest in regions such as Southeast Asia, where we have significant
manufacturing operations. This could disrupt our ability to manufacture
products or important parts as well as cause interruptions and/or delays in our
ability to transport products to our customers or parts to other locations for
continued manufacture and assembly. Any such delay or interruption could have
an adverse effect on our results of operations.
8
Our business will suffer if we are not able to retain and hire key personnel.
Our future success depends partly on the continued service of our key
research, engineering, sales, marketing, manufacturing, executive and
administrative personnel. If we fail to retain and hire a sufficient number of
these personnel, we will not be able to maintain or expand our business.
Although the labor market has changed dramatically within the past year, and
our attrition rate has dropped, there is still intense competition for certain
highly technical specialties in geographic areas where we continue to recruit.
Our acquisitions, strategic alliances, joint ventures and divestitures may
result in financial results that are different than expected.
In the normal course of business, we frequently engage in discussions with
third parties relating to possible acquisitions, strategic alliances, joint
ventures and divestitures. As a result of such transactions, our financial
results may differ from the investment community's expectations in a given
quarter. In addition, acquisitions and strategic alliances may require us to
integrate a different company culture, management team and business
infrastructure. We may have difficulty developing, manufacturing and marketing
the products of a newly-acquired company in a way that enhances the performance
of our combined businesses or product lines to realize the value from expected
synergies. Depending on the size and complexity of an acquisition, our
successful integration of the entity depends on a variety of factors, including:
. the retention of key employees;
. the management of facilities and employees in separate geographic areas;
. the retention of key customers; and
. the integration or coordination of different research and development,
product manufacturing and sales programs and facilities.
A successful divestiture depends on various factors, including our ability to:
. effectively transfer liabilities, contracts, facilities and employees to
the purchaser;
. identify and separate the intellectual property to be divested from the
intellectual property that we wish to keep; and
. reduce fixed costs previously associated with the divested assets or
business.
All of these efforts require varying levels of management resources, which
may divert our attention from other business operations. If we do not realize
the expected benefits or synergies of such transactions, our consolidated
financial position, results of operations and stock price could be negatively
impacted.
If sales of custom integrated circuits to Hewlett-Packard decline, our
semiconductor products revenue will suffer, and we are limited in our ability
to sell these integrated circuits to other companies.
Historically, our semiconductor products business has sold custom products
to Hewlett-Packard and has engaged in product development efforts with
divisions of Hewlett-Packard. For the three months ended January 31, 2002,
Hewlett-Packard accounted for approximately 6.9 percent of our total net
revenue and approximately 30.2 percent of our semiconductor products business'
net revenue.
We have a license agreement with Hewlett-Packard that covers integrated
circuit technology used in custom integrated circuits for Hewlett-Packard's
printers, scanners and computers. The license agreement provides that, until
November 2002 in some cases and until November 2009 in other cases, we are
prohibited, with some exceptions, from using this integrated circuit technology
for the development and sale of integrated circuits for use in inkjet products,
printer products (including printer supplies, accessories and components),
document scanners and computing products to third parties other than
Hewlett-Packard.
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Although we have entered into a supply agreement for the sale to
Hewlett-Packard of custom integrated circuits used in printers, scanners and
computers, the agreement does not require Hewlett-Packard to purchase a minimum
amount of product from us. In the event that Hewlett-Packard reduces its
purchases of our custom integrated circuits, we would be unable to address this
reduction through sales of these kinds of integrated circuits for these types
of products to other customers.
We may face significant costs in order to comply with laws and regulations
regarding the manufacture, processing, and distribution of chemicals, or
regarding notification about chemicals, and if we fail to comply, we could be
subject to civil or criminal penalties or be prohibited from distributing our
products.
Some of our chemical analysis business' products are used in conjunction
with chemicals whose manufacture, processing, distribution and notification
requirements are regulated by the United States Environmental Protection Agency
under the Toxic Substances Control Act, and by regulatory bodies in other
countries with laws similar to the Toxic Substances Control Act. We must
conform the manufacture, processing, distribution of and notification about
these chemicals to these laws and adapt to regulatory requirements in all
countries as these requirements change. If we fail to comply with these
requirements in the manufacture or distribution of our products, then we could
be made to pay civil penalties, face criminal prosecution and, in some cases,
be prohibited from distributing our products in commerce until the products or
component substances are brought into compliance.
Environmental contamination from past operations could subject us to
unreimbursed costs and could harm on-site operations and the future use and
value of the properties involved.
Some of our properties are undergoing remediation by Hewlett-Packard for
subsurface contaminations that were known at the time of our separation from
Hewlett-Packard. Hewlett-Packard has agreed to retain the liability for this
subsurface contamination, perform the required remediation and indemnify us
with respect to claims arising out of that contamination. The determination of
the existence and cost of any additional contamination caused by us could
involve costly and time-consuming negotiations and litigation. In addition,
Hewlett-Packard will have access to our properties to perform remediation.
While Hewlett-Packard has agreed to minimize interference with on-site
operations at those properties, remediation activities and subsurface
contamination may require us to incur unreimbursed costs and could harm on-site
operations and the future use and value of the properties. We cannot be sure
that Hewlett-Packard will fulfill its indemnification or remediation
obligations.
We have agreed to indemnify Hewlett-Packard for any liability associated
with contamination from past operations at all other properties transferred
from Hewlett-Packard to us other than those properties currently undergoing
remediation by Hewlett-Packard. While we are not aware of any material
liabilities associated with existing subsurface contamination at any of those
properties, subsurface contamination may exist, and we may be exposed to
material liability as a result of the existence of that contamination.
Environmental contamination caused by ongoing operations could subject us to
substantial liabilities in the future.
Our semiconductor and other manufacturing processes involve the use of
substances regulated under various international, federal, state and local laws
governing the environment. We may be subject to liabilities for environmental
contamination, and these liabilities may be substantial. Although our policy is
to apply strict standards for environmental protection at our sites inside and
outside the United States, even if not subject to regulations imposed by
foreign governments, we may not be aware of all conditions that could subject
us to liability.
10
We and our customers are subject to various governmental regulations,
compliance with which may cause us to incur significant expenses, and if we
fail to maintain satisfactory compliance with certain regulations, we may be
forced to recall products and cease their manufacture and distribution, and we
could be subject to civil or criminal penalties.
Our businesses are subject to various significant international, federal,
state and local, health and safety, packaging, product content and labor
regulations. These regulations are complex, change frequently and have tended
to become more stringent over time. We may be required to incur significant
expenses to comply with these regulations or to remedy violations of these
regulations. Any failure by us to comply with applicable government regulations
could also result in cessation of our operations or portions of our operations,
product recalls or impositions of fines and restrictions on our ability to
carry on or expand our operations. In addition, because many of our products
are regulated or sold into regulated industries, we must comply with additional
regulations in marketing our products.
Our products and operations are also often subject to the rules of
industrial standards bodies, like the International Standards Organization, as
well as regulation of other agencies such as the United States Federal
Communications Commission. We also must comply with work safety rules. If we
fail to adequately address any of these regulations, our businesses will be
harmed.
We are subject to laws and regulations governing government contracts, and our
failure to address these laws and regulations or comply with government
contracts could harm our business.
We have agreements relating to the sale of our products to government
entities and, as a result, we are subject to various statutes and regulations
that apply to companies doing business with the government. The laws governing
government contracts differ from the laws governing private contracts. For
example, many government contracts contain pricing terms and conditions that
are not applicable to private contracts. We are also subject to investigation
for compliance with the regulations governing government contracts.
Third parties may claim that we are infringing their intellectual property, and
we could suffer significant litigation or licensing expenses or be prevented
from selling products.
Third parties may claim that we are infringing their intellectual property
rights, and we may be found to infringe those intellectual property rights.
While we do not believe that any of our products infringe the valid
intellectual property rights of third parties, we may be unaware of
intellectual property rights of others that may cover some of our technology,
products and services.
Any litigation regarding patents or other intellectual property could be
costly and time-consuming and could divert our management and key personnel
from our business operations. The complexity of the technology involved and the
uncertainty of intellectual property litigation increase these risks. Claims of
intellectual property infringement might also require us to enter into costly
royalty or license agreements. However, we may not be able to obtain royalty or
license agreements on terms acceptable to us, or at all. We also may be subject
to significant damages or injunctions against development and sale of certain
of our products.
We often rely on licenses of intellectual property useful for our
businesses. We cannot assure you that these licenses will be available in the
future on favorable terms or at all. In addition, our position with respect to
the negotiation of licenses has changed as a result of our separation from
Hewlett-Packard. In the past, as a part of Hewlett-Packard, we benefited from
our access to Hewlett-Packard's entire intellectual property portfolio when
asserting counterclaims and negotiating cross-licenses with third parties. Our
current patent cross-license agreement with Hewlett-Packard gives us only a
limited right to sublicense a portion of Hewlett-Packard's intellectual
property portfolio. Accordingly, we may be unable to obtain agreements on terms
as favorable as we may have been able to obtain if we could have sublicensed
Hewlett-Packard's entire intellectual property portfolio. Nothing restricts
Hewlett-Packard from competing with us other than some restrictions on the use
of patents licensed to Hewlett-Packard by us.
11
Third parties may infringe our intellectual property, and we may expend
significant resources enforcing our rights or suffer competitive injury.
Our success depends in large part on our proprietary technology. We rely on
a combination of patents, copyrights, trademarks, trade secrets,
confidentiality provisions and licensing arrangements to establish and protect
our proprietary rights. If we fail to successfully enforce our intellectual
property rights, our competitive position could suffer, which could harm our
operating results.
Our pending patent and trademark registration applications may not be
allowed, or competitors may challenge the validity or scope of these patents or
trademark registrations. In addition, our patents may not provide us a
significant competitive advantage.
We may be required to spend significant resources to monitor and police our
intellectual property rights. We may not be able to detect infringement and our
competitive position may be harmed before we do so. In addition, competitors
may design around our technology or develop competing technologies.
Intellectual property rights may also be unavailable or limited in some foreign
countries, which could make it easier for competitors to capture market share.
If we suffer loss to our factories, facilities or distribution system due to
catastrophe, our operations could be seriously harmed.
Our factories, facilities and distribution system are subject to
catastrophic loss due to fire, flood, terrorism or other natural or man-made
disasters. In particular, several of our facilities could be subject to a
catastrophic loss caused by earthquake due to their location. We have
significant facilities in areas with above average seismic activity, such as
our production facilities, headquarters and Agilent Laboratories in California
and our production facilities in Washington and Japan. If any of these
facilities were to experience a catastrophic loss, it could disrupt our
operations, delay production, shipments and revenue, and result in large
expenses to repair or replace the facility. We self-insure against such losses
and do not carry catastrophic insurance policies to cover potential losses
resulting from earthquakes.
Periodic power supply problems in California could harm our business.
Our corporate headquarters, a portion of our research and development
activities, other critical business operations and a certain number of our
suppliers are located in California. California has experienced periodic power
shortages. Power outages could cause disruptions to our operations and the
operations of our suppliers, distributors, resellers and customers. We
self-insure against such disruptions and do not carry catastrophic insurance
policies to cover potential losses resulting from power shortages or outages.
In addition, California has recently experienced rising energy costs that could
negatively impact our results.
Risks Relating to the Offering
We may be unable to repurchase the debentures upon a Fundamental Change.
Upon a Fundamental Change, as defined in "Description of
Debentures--Repurchase at Option of the Holder Upon a Fundamental Change," we
may be required to repurchase all or a portion of the debentures. If a
Fundamental Change were to occur, we may not have enough funds to pay the
repurchase price for all tendered debentures. Our current credit agreements
contain, and our future credit agreements or other agreements relating to our
indebtedness may also contain, provisions that prohibit the repurchase of the
debentures upon a Fundamental Change. Such agreements may also provide that a
Fundamental Change constitutes an event of default under the agreement. If a
Fundamental Change occurs at a time when we are prohibited from repurchasing
the debentures, we could seek the consent of our lenders to repurchase the
debentures or could attempt to refinance this debt. If we were not able to
obtain this consent, we could not repurchase the debentures.
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A public market may not develop for the debentures.
There is no established public trading market for the debentures. We cannot
be sure that any market for the debentures will develop or, if one does
develop, that it will be maintained. If an active market for the debentures
fails to develop or continue, the trading price of the debentures could be
harmed. We do not intend to apply for listing of the debentures on any
securities exchange or other stock market.
Debenture holders should consider the U.S. federal income tax consequences of
owning the debentures and the shares issuable upon conversion of the debentures.
We and each holder agree in the indenture to treat the debentures as
indebtedness that is subject to U.S. Treasury regulations governing contingent
payment debt instruments. The following discussion assumes that the debentures
will be so treated, and we cannot assure holders that the Internal Revenue
Service will not assert that the debentures should be treated differently.
Under the contingent payment debt regulations, a holder will be required to
include amounts in income, as original issue discount, in advance of cash such
holder receives on a debenture, and to accrue interest on a constant yield to
maturity basis at a rate comparable to the rate at which we would borrow in a
noncontingent, nonconvertible borrowing, even though the debenture will have a
significantly lower yield to maturity. A holder will recognize taxable income
significantly in excess of cash received while the debentures are outstanding.
In addition, under the indenture, a holder will recognize ordinary income, if
any, upon a sale, exchange, conversion or redemption of the debentures at a
gain. In computing such gain, the amount realized by a holder will include, in
the case of a conversion, the amount of cash and the fair market value of
shares received. Holders are urged to consult their own tax advisors as to the
U.S. federal, state and other tax consequences of acquiring, owning and
disposing of the debentures and shares. See "Certain U.S. Federal Income Tax
Consequences."
The market price of our common stock is volatile, which may adversely affect
the price of the debentures.
The stock market in general, and the stock prices of technology companies in
particular, have recently experienced volatility that has often been unrelated
to the operating performance of any particular company or companies. If market
or industry-based fluctuations continue, our stock price could decline
regardless of our actual operating performance. In addition, the market price
of our common stock will fluctuate in response to a number of other factors,
including:
. quarterly variations in our results of operations;
. announcements of new products or product enhancements by us, our
competitors or our customers;
. technological innovations by us or our competitors;
. changes in earnings estimates or buy/sell recommendations by financial
analysts;
. changes in the ratings of our debentures or other securities;
. the operating and stock price performance of comparable companies; and
. general market conditions or market conditions specific to particular
industries.
The volatility in our stock price caused by the factors listed above may
cause our stock price to decline, which could adversely affect the price of the
debentures.
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USE OF PROCEEDS
All of the debentures and the shares of our common stock issuable upon
conversion of the debentures are being sold by the selling security holders or
their pledgees, donees, transferees or other successors in interest. We will
not receive any proceeds from the sale of the debentures or the shares of our
common stock issuable upon conversion of the debentures. See "Selling Security
Holders."
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the periods indicated.
Three Months
Ended
January 31, Years Ended October 31,
------------ ---------------------------
2002 2001 2001 2000 1999 1998 1997
---- ----- ---- ----- ----- ---- -----
Ratio of Earnings to Fixed Charges.......... (a) 24.9x (a) 31.8x 14.6x 6.5x 22.8x
--------
(a) In the first quarter of fiscal year 2002 and in fiscal year 2001, our ratio
of earnings to fixed charges was less than one to one due to our loss from
continuing operations in those periods. In order to cover fixed charges in
those periods, our earnings from operations would have had to increase by
$423 million and $477 million, respectively.
For purposes of determining the ratio of earnings to fixed charges, earnings
are defined as income from continuing operations before income taxes, plus
fixed charges. Fixed charges consist of interest expense on all indebtedness
and that portion of operating lease rental expense that is a reasonable
approximation of the interest factor.
DIVIDEND POLICY
We have never declared or paid cash dividends on our common stock other than
a dividend of the net proceeds of our initial public offering to our former
parent, Hewlett-Packard. We intend to retain any earnings for use in our
business and, therefore, do not anticipate paying any cash dividends in the
foreseeable future. Our revolving credit facilities currently prevent the
payment by us of dividends (other than the dividend of equity securities).
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DESCRIPTION OF DEBENTURES
We issued the debentures under an indenture, dated as of November 27, 2001,
between us and Citibank, N.A., as trustee. The terms of the debentures include
those provided in the indenture and those provided in the registration rights
agreement that we entered into with the initial purchasers.
The following description is only a summary of the material provisions of
the debentures, the indenture and the registration rights agreement. We urge
you to read these documents in their entirety because they, and not this
description, define the rights of holders of these debentures.
When we refer to "we", "us", "our" or "Agilent" in this section, we refer
only to Agilent Technologies, Inc. and not its subsidiaries.
General
The debentures are our senior unsecured obligations and rank equally with
all of our other senior unsecured indebtedness. The debentures are convertible
into common stock as described under the caption "--Conversion of Debentures."
The indenture is subject to and governed by the Trust Indenture Act of 1939, as
amended.
We issued $1,150,000,000 aggregate principal amount of debentures, including
$150,000,000 aggregate principal amount of debentures issued pursuant to the
exercise by the initial purchasers of their option to purchase additional
debentures. The debentures were issued only in denominations of $1,000 and
multiples of $1,000. The debentures will mature on December 1, 2021 unless
earlier converted, redeemed at our option or repurchased by us at a holder's
option on the Put Dates or upon a Fundamental Change.
We are not subject to any financial covenants under the indenture. In
addition, we are not restricted under the indenture from paying dividends,
incurring debt or issuing or repurchasing our securities.
Holders are not afforded protection in the event of a highly leveraged
transaction or a change in control of us under the indenture except to the
extent described below under the caption "--Repurchase at Option of the Holder
Upon a Fundamental Change."
The debentures bear interest at the annual rate of three percent (3.00%).
Interest will be calculated on the basis of a 360-day year of twelve 30-day
months. On June 1, 2006, June 1, 2011 and June 1, 2016, the interest rate on
the debentures will be reset to a rate per annum equal to the interest rate
payable 120 days prior to such reset date on 5-year U.S. Treasury Notes minus
1.13%. However, in no event will such interest rate be reset below 3.00% per
annum or above 5.00% per annum. We will pay interest on June 1 and December 1
of each year, beginning on June 1, 2002 to record holders at the close of
business on the preceding May 15 and November 15, as the case may be, except:
. interest payable upon redemption will be paid to the person to whom
principal is payable, unless the redemption date is an interest payment
date, in which case interest shall be paid to the record holder on the
relevant record date; and
. as set forth in the next sentence.
If debentures are converted into common stock during the period after any
record date but prior to the next interest payment date, either:
. we will not be required to pay interest on the interest payment date if
the debenture has been called for redemption on a redemption date that
occurs during this period, but accrued and unpaid interest on such
debenture will be paid on the redemption date; or
15
. we will not be required to pay interest on the interest payment date if
the debenture is to be repurchased in connection with a Put Date or a
Fundamental Change on a Put Date or a repurchase date that occurs during
this period, but accrued and unpaid interest on such debenture will be
paid on the Put Date or the repurchase date, as applicable; or
. if otherwise, any debenture not called for redemption that is submitted
for conversion during this period must also be accompanied by an amount
equal to the interest due on the interest payment date on the converted
principal amount, unless at the time of the conversion there is a
default in the payment of interest on the debentures. See "--Conversion
of Debentures."
We will maintain an office in New York City for the payment of interest,
which shall initially be an office or agency of the trustee.
We may pay interest either:
. by check mailed to a holder's address as it appears in the debenture
register, provided that if the holder has an aggregate principal amount
in excess of $2.0 million, that holder shall be paid, at the holder's
written election, by wire transfer in immediately available funds; or
. by transfer to an account maintained by the holder in the United States.
However, payments to The Depository Trust Company, New York, New York, which
we refer to as DTC, or its nominee will be made by wire transfer of immediately
available funds to the account of DTC or its nominee.
Holders are not required to pay a service charge for registration or
transfer of their debentures. We may, however, require holders to pay any tax
or other governmental charge in connection with the transfer. We are not
required to exchange or register the transfer of:
. any debenture or portion selected for redemption;
. any debenture or portion surrendered for conversion; or
. any debenture or portion surrendered for repurchase but not withdrawn in
connection with a Put Date or a Fundamental Change.
Tax Treatment
Under the indenture, we and each holder have agreed, for U.S. federal income
tax purposes, to treat the debentures as indebtedness that is subject to the
regulations governing contingent payment debt instruments and, for purposes of
those regulations, to treat the fair market value of the common stock received
on the conversion as a contingent payment, and the discussion herein assumes
that such treatment is correct. However, the characterization of instruments
such as the debentures and the application of such regulations are uncertain in
several respects. See "Certain U.S. Federal Income Tax Consequences."
Conversion of Debentures
Holders may convert debentures, in whole or in part, into our common stock
at any time prior to the close of business on the business day immediately
preceding the maturity date, subject to prior redemption of the debentures. If
we call debentures for redemption, holders may convert the debentures only
until the close of business on the business day prior to the redemption date
unless we fail to pay the redemption price. If holders have submitted
debentures for repurchase on a Put Date or upon a Fundamental Change, they may
convert debentures only if they withdraw their election. Holders may convert
debentures in part so long as that part is $1,000 principal amount or an
integral multiple of $1,000. If any debentures not called for redemption are
converted after a record date for any interest payment date and prior to the
next interest payment date, the
16
debentures must be accompanied by an amount equal to the interest payable on
the next interest payment date on the converted principal amount unless a
default exists at the time of conversion.
The conversion price for the debentures is $32.22 per share of common stock,
subject to adjustment as described below. We will not issue fractional shares
of common stock upon conversion of debentures. Instead, we will pay cash based
on the average market price of the common stock on the five trading days
preceding such conversion date for all fractional shares of common stock.
Unless holders convert debentures on an interest payment date and except as
described below, they will not receive any accrued interest or dividends upon
conversion.
To convert a debenture (other than a debenture held in book-entry form
through DTC) into common stock a holder must:
. complete and manually sign the conversion notice on the back of the
debenture or facsimile of the conversion notice and deliver this notice
to the conversion agent;
. surrender the debenture to the conversion agent;
. if required, furnish appropriate endorsements and transfer documents;
. if required, pay all transfer or similar taxes; and
. if required, pay funds equal to interest payable on the next interest
payment date.
Holders of debentures held in book-entry form through DTC must follow DTC's
customary practices. The date a holder complies with these requirements is the
conversion date under the indenture. As promptly as practicable on or after the
conversion date, but no later than three business days after the conversion
date, we will issue and deliver to the conversion agent certificates for the
number of full shares of common stock issuable upon conversion, together with
any cash payment for fractional shares.
If a holder delivers a debenture for conversion, that holder will not be
required to pay any taxes or duties for the issue or delivery of common stock
on conversion. However, we will not pay any transfer tax or duty payable as
result of the issuance or delivery of the common stock in a name other than
that of the holder of the debenture. We will not issue or deliver common stock
certificates unless we have been paid the amount of any transfer tax or duty or
we have been provided satisfactory evidence that the transfer tax or duty has
been paid.
We will adjust the conversion price if the following events occur:
(1) we issue common stock as a dividend or distribution on our common
stock;
(2) we issue to all holders of common stock specified rights or warrants
to purchase our common stock at a price per share less than the then current
market price per share, unless we elect to distribute or reserve these
rights or warrants for distribution to the holders of the debentures upon
the conversion of the debentures, provided that the conversion price will be
readjusted to the extent that such rights or warrants are not exercised
prior to their expiration;
(3) we subdivide or combine our common stock;
(4) we distribute to all common stockholders capital stock, evidences of
indebtedness or assets, including securities but excluding:
. rights or warrants listed in (2) above;
. dividends or distributions listed in (1) above; and
. cash distributions listed in (5) below;
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(5) we make a dividend or distribution consisting exclusively of cash to
all holders of common stock if the aggregate amount of these distributions
combined together with (A) all other all-cash distributions made within the
preceding 12 months in respect of which we made no adjustment plus (B) any
cash and the fair market value of other consideration payable in any tender
offers by us or any of our subsidiaries for common stock within the
preceding 12 months in respect for which we made no adjustment, exceeds 10%
of our market capitalization, being the product of the then current market
price of the common stock multiplied by the number of shares of our common
stock then outstanding;
(6) the purchase of common stock pursuant to a tender offer made by us or
any of our subsidiaries involves an aggregate consideration that, together
with (A) any cash and the fair market value of any other consideration
payable in any other tender offer by us or any of our subsidiaries for
common stock expiring within the 12 months preceding the expiration of the
tender offer plus (B) the aggregate amount of any such all-cash
distributions referred to in (5) above to all holders of common stock within
the 12 months preceding the expiration of the tender offer, in each case,
for which we have made no adjustment, exceeds 10% of our market
capitalization on the expiration of such tender offer; and
(7) someone other than us or one of our subsidiaries makes a payment in
respect of a tender offer or exchange offer in which, as of the closing date
of the offer, our Board of Directors is not recommending rejection of the
offer. The adjustment referred to in this clause (7) will only be made if:
. the tender offer or exchange offer is for an amount that increases
the offeror's ownership of common stock to more than 25% of the total
shares of common stock outstanding; and
. the cash and value of any other consideration included in the payment
per share of common stock exceeds the current market price per share
of common stock on the business day next succeeding the last date on
which tenders or exchanges may be made pursuant to the tender or
exchange offer.
However, the adjustment referred to in this clause (7) will generally not be
made if, as of the closing of the offer, the offering documents disclose a plan
or an intention to cause us to engage in a consolidation or merger of Agilent
or a sale of all or substantially all of our assets.
To the extent Agilent's stockholders' rights plan is in effect upon
conversion of the debentures into common stock, holders will receive, in
addition to the common stock, rights under the rights plan, provided that the
debentures are converted prior to the earlier of a distribution date (as
defined in the rights agreement) and the expiration of such rights. See
"Description of Capital Stock--Stockholders' Rights Plan."
If we reclassify our common stock, consolidate, merge or combine with
another person or sell or convey our property and assets as an entirety or
substantially as an entirety, each debenture then outstanding will, without the
consent of the holder of any debenture, become convertible only into the kind
and amount of securities, cash and other property receivable upon such
reclassification, consolidation, merger, combination, sale or conveyance by a
holder of the number of shares of common stock into which the debenture was
convertible immediately prior to the reclassification, consolidation, merger,
combination, sale or conveyance. This calculation will be made based on the
assumption that the holder of common stock failed to exercise any rights of
election that the holder may have to select a particular type of consideration.
The adjustment will not be made for a consolidation, merger or combination that
does not result in any reclassification, conversion, exchange or cancellation
of our common stock.
We may, from time to time, reduce the conversion price for a period of at
least 20 days if our Board of Directors has made a determination that this
reduction would be in our best interests. Any such determination by our Board
of Directors will be conclusive. We would give holders at least 15 days' notice
of any reduction in the conversion price. In addition, we may reduce the
conversion price if our Board of Directors deems it advisable to avoid or
diminish any income tax to holders of common stock resulting from any stock or
rights distribution or due to the non-occurrence of such a distribution. See
"Certain U.S. Federal Income Tax Consequences."
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We will not be required to make an adjustment in the conversion price unless
the adjustment would require a change of at least 1% in the conversion price.
However, we will carry forward any adjustments that are less than 1% of the
conversion price. Except as described above in this section, we will not adjust
the conversion price for any issuance of our common stock or convertible or
exchangeable securities or rights to purchase our common stock or convertible
or exchangeable securities.
Optional Redemption by Agilent
The debentures are not entitled to any sinking fund. At any time on or after
December 6, 2004, we may redeem the debentures in whole or in part for cash at
100% of the principal amount of the debentures plus accrued and unpaid interest
to, but excluding, the redemption date. Subject to the next sentence, we will
pay accrued and unpaid interest to the same holder that receives the redemption
payment. However, if the redemption date is an interest payment date, interest
shall be paid to the record holder on the relevant record date. We are required
to give notice of redemption by mail to holders not more than 60 but not less
than 15 days prior to the redemption date.
If less than all of the outstanding debentures are to be redeemed, the
trustee shall select the debentures to be redeemed in principal amounts of
$1,000 or multiples of $1,000 by lot, pro rata or by another method the trustee
considers fair and appropriate. If a portion of a holder's debentures are
selected for partial redemption and that holder converts a portion of their
debentures, the converted portion shall be deemed to be of the portion selected
for redemption.
Repurchase at Option of the Holder on Put Dates
On the Put Dates of December 1, 2006, December 1, 2011 and December 1, 2016,
each holder will have the right to require us to repurchase all or any portion
of their debentures that is equal to $1,000 or a whole multiple of $1,000 for
which such holder has delivered, and not withdrawn, a written purchase notice,
subject to certain additional conditions. Holders may submit debentures for
repurchase to the paying agent at any time from the opening of business on the
date that is 30 days prior to an applicable Put Date until the close of
business on the date that is five business days prior to such Put Date.
We shall repurchase the debentures at a price equal to 100% of the principal
amount to be repurchased plus accrued and unpaid interest to, but excluding,
the applicable Put Date. We will pay interest on the applicable Put Date to the
record holder on the relevant record date.
We will give notice on a date not less than 30 days prior to each Put Date
to all record holders, stating among other things, the procedures that must be
followed to require us to repurchase debentures.
The repurchase notice given by holders electing to require us to repurchase
debentures shall state:
. the certificate numbers of debentures to be delivered for repurchase;
. the portion of the principal amount at maturity of debentures to be
repurchased, which must be $1,000 or an integral multiple of $1,000; and
. that the debentures are to be repurchased by us pursuant to the
applicable provisions of the debentures and the indenture.
Holders may withdraw any repurchase notice by delivering a written notice of
withdrawal to the paying agent prior to the close of business on the business
day prior to the applicable Put Date, which shall state the principal amount at
maturity being withdrawn, the certificate numbers of the debentures being
withdrawn, and the principal amount at maturity of the debentures that remains
subject to the repurchase notice, if any.
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We will comply with all applicable provisions of Rule 13e-4 and any other
tender offer rules under the Exchange Act in connection with any repurchase
offer.
Payment of the repurchase price for a debenture for which holders have
delivered, and not validly withdrawn, a repurchase notice is conditioned upon
delivery of the debenture, together with necessary endorsements, to the paying
agent at any time after delivery of the repurchase notice. We will promptly pay
the repurchase price for the debenture following the later of the applicable
Put Date or the time of delivery of the debenture.
If the paying agent holds money or securities sufficient to pay the
repurchase price of the debenture on the business day following the applicable
Put Date in accordance with the terms of the indenture, then, immediately after
the applicable Put Date, the debenture will cease to be outstanding and
interest on such debenture will cease to accrue, whether or not the debenture
is delivered to the paying agent. Thereafter, all other rights of the holder
shall terminate, other than the right to receive the repurchase price upon
delivery of the debenture.
Our ability to repurchase debentures may be limited by the terms of our then
existing borrowing or financial agreements.
We may not repurchase debentures at the option of holders if there has
occurred and is continuing an event of default with respect to the debentures,
other than a default in the payment of the repurchase price with respect to
such debentures.
Repurchase at Option of the Holder Upon a Fundamental Change
If a Fundamental Change occurs prior to December 1, 2021, holders will have
the right to require us to repurchase all or any portion of their debentures
that is equal to $1,000 or a whole multiple of $1,000, on a repurchase date
that is no earlier than 25 days and no later than 35 days after the date of our
notice of the Fundamental Change.
We shall repurchase the debentures at a price equal to 100% of the principal
amount to be repurchased, plus accrued and unpaid interest to, but excluding,
the repurchase date. If the repurchase date is an interest payment date, we
will pay interest on the interest payment date to the record holder on the
relevant record date. Otherwise, we will pay accrued and unpaid interest to the
same holder that receives the principal amount to be repurchased.
We will mail to all record holders a notice of the Fundamental Change within
15 days after the occurrence of the Fundamental Change. The notice must
describe the Fundamental Change, the right to elect repurchase of the
debentures and the repurchase date. We are also required to deliver to the
trustee a copy of the Fundamental Change notice. If holders elect to exercise
their repurchase right, they must deliver to us or our designated agent at any
time from the date of our notice of Fundamental Change until the close of
business on the date that is five business days prior to the repurchase date,
written notice of their exercise of their repurchase right, together with any
debentures to be repurchased, duly endorsed for transfer. Following the
repurchase date we will pay promptly the repurchase price for debentures
surrendered for redemption.
A Fundamental Change will be considered to have occurred if:
. our common stock or other common stock into which the debentures are
convertible is no longer listed for trading on a U.S. national
securities exchange nor approved for trading on the Nasdaq National
Market System or another established automated over-the-counter trading
market in the United States; or
. one of the following "change in control" events occurs:
-- any person or group is a beneficial owner of more than 50% of the
voting power of our outstanding securities entitled to generally vote
for directors;
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-- our stockholders approve any plan or proposal for our liquidation,
dissolution or winding up;
-- we consolidate with or merge into any other corporation or any other
corporation merges into us and, as a result, our outstanding common
stock is changed or exchanged for other assets or securities unless
our stockholders immediately before the transaction own, directly or
indirectly, immediately following the transaction more than 50% of
the combined voting power of the corporation resulting from the
transaction in substantially the same proportion as their ownership
of our voting stock immediately before the transaction;
-- we convey, transfer or lease all or substantially all of our assets
to any person; or
-- continuing directors do not constitute a majority of our Board of
Directors at any time.
However, a change in control will not be deemed to have occurred if:
. the last sale price of our common stock for any five trading days during
the 10 trading days immediately before the change in control is equal to
at least 105% of the conversion price, or
. All of the consideration, excluding cash payments for fractional shares
in the transaction constituting the change in control, consists of
common stock traded on a U.S. national securities exchange or quoted on
the Nasdaq National Market System, and as a result of the transaction
the debentures become convertible solely into that common stock.
The term "continuing director" means at any date a member of our Board of
Directors:
. who was a member of our Board of Directors on October 31, 2001; or
. who was nominated or elected by at least a majority of the directors who
were continuing directors at the time of the nomination or election or
whose election to our Board of Directors was recommended by at least a
majority of the directors who were continuing directors at the time of
the nomination or election or by the nominating committee comprised of
our independent directors.
Under the above definition of continuing directors, if the current Board of
Directors resigns after approving new directors, no change in control would
occur, even though our current directors would then cease to be directors.
The interpretation of the phrase "all or substantially all" used in the
definition of change in control would likely depend on the facts and
circumstances existing at the time. As a result, there may be uncertainty as to
whether or not a sale or transfer of "all or substantially all" of our assets
has occurred.
We will comply with any applicable provisions of Rule 13e-4 and any other
tender offer rules under the Exchange Act in the event of a Fundamental Change.
These repurchase rights could discourage a potential acquiror of Agilent.
However, this repurchase feature is not the result of management's knowledge of
any specific effort to obtain control of Agilent by means of a merger, tender
offer or solicitation, or part of a plan by management to adopt a series of
anti-takeover provisions. The term "Fundamental Change" is limited to certain
specified transactions and may not include other events that might adversely
affect our financial condition. Our obligation to offer to repurchase the
debentures upon a Fundamental Change would not necessarily afford a holder
protection in the event of a highly leveraged transaction, reorganization,
merger or similar transaction involving Agilent.
We may be unable to repurchase the debentures in the event of a Fundamental
Change. If a Fundamental Change were to occur, we may not have enough funds to
pay the repurchase price for all tendered debentures. In addition, a
Fundamental Change could result in an event of default under loan agreements we
may enter into in the future. Our current loan agreements do, and our future
loan agreements could, prohibit, in certain situations, repurchases of the
debentures. Any future credit facilities or other agreements relating to our
indebtedness may contain similar provisions, or expressly prohibit the
repurchase of the debentures.
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We may not repurchase debentures at the option of holders if there has
occurred and is continuing an event of default with respect to the debentures,
other than a default in the payment of the repurchase price with respect to
such debentures.
Ranking
The debentures will be our senior unsecured obligations and will rank
equally with all our other senior unsecured debt.
We are obligated to pay reasonable compensation to the trustee and to
indemnify the trustee against certain losses, liabilities or expenses incurred
by the trustee in connection with its duties relating to the debentures. The
trustee's claims for these payments will generally be senior to those of
holders of debentures in respect of all funds collected or held by the trustee.
The debentures are obligations exclusively of Agilent. As a result, our cash
flow and our ability to service our indebtedness, including the debentures, is
partially dependent upon the earnings of our subsidiaries. In addition, we are
partially dependent on the distribution of earnings, loans or other payments by
our subsidiaries to us. Our subsidiaries are separate and distinct legal
entities. Our subsidiaries have no obligation to pay any amounts due on the
debentures or to provide us with funds for our payment obligations, whether by
dividends, distributions, loans or other payments. In addition, any payment of
dividends, distributions, loans or advances by our subsidiaries to us could be
subject to statutory or contractual restrictions. Payments to us by our
subsidiaries will also be contingent upon our subsidiaries' earnings and
business considerations. Our right to receive any assets of any subsidiary upon
its liquidation or reorganization, and, therefore, right to participate in
those assets, will be effectively subordinated to the claims of that
subsidiary's creditors, including trade creditors. In addition, even if we were
a creditor of any of our subsidiaries, our right as a creditor would be
subordinate to any security interest in the assets of our subsidiaries and any
indebtedness of our subsidiaries senior to that held by us.
Events of Default
Each of the following constitutes an event of default under the indenture:
(1) default in paying interest on the debentures when it becomes due and the
default continues for a period of 30 days or more;
(2) default in paying principal, or premium, if any, or the repurchase price
in connection with a Put Date or a Fundamental Change on the debentures
when due;
(3) default in the performance, or breach, of any covenant in the indenture
(other than defaults specified in clause (1) or (2) above) and the
default or breach continues for a period of 60 days or more after
written notice has been given to us by the trustee, or to us and the
trustee by the holders of at least 25% in aggregate principal amount of
the outstanding debentures;
(4) failure to give notice to holders of optional repurchase upon a
Fundamental Change; or
(5) the occurrence of events of bankruptcy, insolvency or similar
proceedings with respect to us or any of our significant subsidiaries.
For purposes of the above, "significant subsidiary" has the meaning given to
that term in Rule 1-02 of Regulation S-X under the Exchange Act, except that
references to income from continuing operations are changed to revenues.
If an event of default, other than an event of default described in clause
(5) above with respect to us, occurs and is continuing, then the trustee or the
holders of at least 25% in principal amount of the outstanding debentures may,
and the trustee at the request of the holders of not less than 25% in principal
amount of the
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outstanding debentures will, by written notice require immediate repayment of
the entire principal amount of the outstanding debentures, together with all
accrued and unpaid interest. If any event of default described in clause (5)
above with respect to us occurs, the principal amount of all the debentures
will automatically become immediately due and payable.
After a declaration of acceleration described above, the holders of a
majority in principal amount of outstanding debentures may, under conditions
set forth in the indenture, rescind this accelerated payment requirement if all
existing Events of Default, except for nonpayment of the principal and interest
on the debentures that has become due solely as a result of the accelerated
payment requirement, have been cured or waived and if the rescission of
acceleration would not conflict with any judgment or decree. The holders of a
majority in principal amount of the outstanding debentures also have the right
to waive past defaults, except a default in paying principal or interest on any
outstanding debenture, or in respect of a covenant or a provision that cannot
be modified or amended without the consent of all holders of the debentures.
Holders of at least 25% in principal amount of the outstanding debentures
may seek to institute a proceeding only after they have made written request
and offered indemnity reasonably satisfactory to the trustee to institute a
proceeding and the trustee has failed to do so within 60 days after it received
this notice. In addition, within this 60-day period the trustee must not have
received directions inconsistent with this written request by holders of a
majority in principal amount of the outstanding debentures. These limitations
do not apply, however, to a suit instituted by a holder of a debenture for the
enforcement of the payment of principal or interest on or after the due dates
for payment.
During the existence of an event of default, the trustee is required to
exercise the rights and powers vested in it under the indenture and use the
same degree of care and skill in its exercise as a prudent person would under
the circumstances in the conduct of that person's own affairs. If an event of
default has occurred and is continuing, the trustee is not under any obligation
to exercise any of its rights or powers at the request or direction of any of
the holders unless the holders have offered to the trustee indemnity reasonably
satisfactory to the trustee. Subject to limited exceptions, the holders of a
majority in principal amount of the outstanding debentures have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee, or exercising any trust or power conferred on the
trustee.
The trustee will, within 60 days after any default occurs, give notice of
the default to the holders of the debentures, unless the default was already
cured or waived. However, unless there is a default in paying principal or
interest when due, the trustee can withhold giving notice to the holders if it
determines in good faith that the withholding of notice is in the interest of
the holders.
We are required to furnish to each trustee an annual statement as to
compliance with all conditions and covenants under the indenture.
Modification and Waiver
The indenture may be amended or modified without the consent of any holder
in order to:
. cure ambiguities, defects or inconsistencies;
. provide for the assumption of our obligations in the case of a merger or
consolidation of us;
. make any change that would provide any additional rights or benefits to
the holders;
. secure the debentures;
. evidence and provide for the acceptance of appointment under the
indenture by a successor trustee; or
. make any change that does not adversely affect the rights of any holder.
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Other amendments and modifications of the indenture or the debentures issued
may be made with the consent of the holders of not less than a majority of the
aggregate principal amount of the outstanding debentures. However, no
modification or amendment may, without the consent of the holder of each
outstanding debenture affected:
. change the record or payment dates for interest payments or reduce the
rate of interest on any debenture;
. extend the stated maturity of any debenture;
. reduce the principal amount, redemption price or repurchase price in
connection with either a Put Date or a Fundamental Change with respect
to any debenture;
. make any debenture payable in money or securities other than that stated
in the debenture;
. make any change that adversely affects the right of a holder to convert
any debenture;
. make any change that adversely affects the right to require us to
purchase a debenture;
. impair the right to convert, or receive payment with respect to, a
debenture, or right to institute suit for the enforcement of any payment
with respect to, or conversion of, the debentures;
. change the provisions in the indenture that relate to modifying or
amending the indenture; or
. extend time for payment or otherwise waive a payment default with
respect to the debentures.
Consolidation, Merger or Sale of Assets
We will not consolidate or combine with or merge with or into or, directly
or indirectly, sell, assign, convey, lease, transfer or otherwise dispose of
all or substantially all of our properties and assets to any person or persons
in a single transaction or series of transactions, unless:
. we shall be the continuing person or the resulting, surviving or
transferee person (the surviving entity) is a corporation or limited
liability company organized and existing under the laws of the United
States or any State or the District of Columbia;
. the surviving entity will expressly assume all of our obligations under
the debentures and the indenture, and will execute a supplemental
indenture which will be delivered to the trustee and will be in form and
substance reasonably satisfactory to the trustee;
. immediately after giving effect to the transaction, no default shall
have occurred and be continuing; and
. we or the surviving entity will have delivered to the trustee an opinion
of counsel stating that the transaction or series of transactions and
the supplemental indenture, if any, comply with the applicable
provisions of the indenture.
If any consolidation or merger or any sale, assignment, conveyance, lease,
transfer or other disposition of all or substantially all of our properties and
assets occurs in accordance with the indenture, the successor corporation will
succeed to, and be substituted for, and may exercise every right and power we
have under the indenture with the same effect as if such successor corporation
had been named as Agilent. Except for any lease, we will be discharged from all
obligations and covenants under the indenture and the debentures.
Discharge
The indenture provides that we may terminate our obligations under the
indenture at any time by delivering all outstanding debentures to the trustee
for cancellation if we have paid all sums payable by us under the indenture. At
any time (i) within 30 days before the maturity of the debentures or the
redemption of all the debentures or (ii) after all of the debentures have
become due and payable as a result of the holders' exercise of their option to
have their debentures repurchased, we may terminate our substantive obligations
under the
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indenture, other than our obligations to pay the principal of, and interest on,
the debentures, by depositing with the trustee money or U.S. Government
obligations sufficient to pay all remaining indebtedness on the debentures and
all other sums payable under the indenture when due.
Governing Law
The laws of the State of New York govern the indenture and the debentures.
Information Concerning the Trustee
Citibank, N.A., as trustee under the indenture, has been appointed by us as
paying agent, conversion agent, registrar and custodian with regard to the
debentures. The trustee 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.
Book-Entry System
We initially issued the debentures in the form of a global security issued
in reliance on Rule 144A. Upon the issuance of a global security DTC (referred
to as the depository) or its nominee credited the accounts of persons holding
through it with the respective principal amounts of the debentures represented
by such global security. Such accounts were designated by the initial
purchasers with respect to debentures placed by the initial purchasers for us.
Ownership of beneficial interests in a global security were limited to persons
that have accounts with the depository (participants) or persons that may hold
interests through participants. Ownership of beneficial interests by
participants in a global security will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by the
depository for such global security. Ownership of beneficial interests in such
global security by persons that hold through participants will be shown on, and
the transfer of those ownership interests through such participant will be
effected only through, records maintained by such participant. The foregoing
may impair the ability to transfer beneficial interests in a global security.
We will make payment of principal and interest on debentures represented by
any such global security to the depository or its nominee, as the case may be,
as the sole holder of the debentures represented thereby for all purposes under
the indenture. None of Agilent, the trustee, or the initial purchasers, or any
agent of Agilent, the trustee or the initial purchasers, will have any
responsibility or liability for any aspect of the depository's records relating
to or payments made on account of beneficial ownership interests in a global
security representing any debentures or for maintaining, supervising or
reviewing any of the depository's records relating to such beneficial ownership
interests.
We have been advised by the depository that, upon receipt of any payment of
principal or interest on any global security, the depository will immediately
credit, on its book-entry registration and transfer system, the accounts of
participants with payments in amounts proportionate to their respective
beneficial interests in the principal amount of such global security as shown
on the records of the depository. Payments by participants to owners of
beneficial interests in a global security held through such participants will
be governed by standing instructions and customary practices as is now the case
with securities held for customer accounts registered in "street name," and
will be the sole responsibility of such participants.
A global security may not be transferred except as a whole by the depository
for such global security to a nominee of such depository or by a nominee of
such depository to such depository or another nominee of such depository or by
such depository or any such nominee to a successor of such depository or a
nominee of such successor. If the depository is at any time unwilling or unable
to continue as depository and a successor depository is not appointed by us or
the depository within 90 days, we will issue debentures in definitive form in
exchange for the global security. In either instance, an owner of a beneficial
interest in the global security will be entitled to have debentures equal in
principal amount to such beneficial interest registered in its name and will be
entitled to physical delivery of such debentures in definitive form. Debentures
so issued in definitive form will be
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issued in denominations of $1,000 and integral multiples thereof and will be
issued in registered form only, without coupons. We will pay principal and
interest on the debentures and the debentures may be presented for registration
of transfer or exchange at the offices of the trustee.
So long as the depository for a global security, or its nominee, is the
registered owner of such global security, such depository or such nominee, as
the case may be, will be considered the sole holder of the debentures
represented by such global security for the purposes of receiving payment on
the debentures, receiving notices and for all other purposes under the
indenture and the debentures. Beneficial interests in debentures will be
evidenced only by, and transfers thereof will be effected only through, records
maintained by the depository and its participants. The depository has nominated
Cede & Co. as the nominee. Except as provided above, owners of beneficial
interests in a global security will not be entitled to have the debentures
represented by the global security registered in their name, will not be
entitled to receive physical delivery of certificated debentures and will not
be considered the holders thereof for any purposes under the indenture.
Accordingly, any such person owning a beneficial interest in such a global
security must rely on the procedures of the depository, and, if any such person
is not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a holder under the
indenture. The indenture provides that the depository may grant proxies and
otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a
holder is entitled to give or take under the indenture. We understand that
under existing industry practices, in the event that we request any action of
holders or that an owner of a beneficial interest in such a global security
desires to give or take any action which a holder is entitled to give or take
under the indenture, the depository would authorize the participants holding
the relevant beneficial interest to give or take such action and such
participants would authorize beneficial owners owning through such participants
to give or take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
We will send any redemption notices to Cede & Co. We understand that if less
than all of the debentures are being redeemed, DTC's practice is to determine
by lot the amount of the holdings of each participant to be redeemed.
We also understand that neither DTC nor Cede & Co. may consent or vote with
respect to the debentures. We have been advised that under its usual
procedures, DTC will mail an "omnibus proxy" to us as soon as possible after
the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting
rights to those participants to whose accounts the debentures are credited on
the record date identified in a listing attached to the omnibus proxy.
A person having a beneficial interest in debentures represented by the
global security may be unable to pledge an interest to persons or entities that
do not participate in the DTC system, or to take other actions in respect of
that interest, because that beneficial interest is not represented by a
physical certificate.
The depository has advised us that the depository is a limited-purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered under the
Exchange Act. The depository was created to hold the securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the
need for physical movement of securities certificates. The depository's
participants include securities brokers and dealers (including the initial
purchasers), banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own the depository.
Access to the depository's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies, that clear through or maintain
a custodial relationship with a participant, either directly or indirectly.
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REGISTRATION RIGHTS
We entered into a registration rights agreement with the initial purchasers
on November 27, 2001. The following summary of the registration rights provided
in the registration rights agreement is not complete. We urge you to refer to
the registration rights agreement for a full description of the registration
rights that apply to the debentures and the common stock into which the
debentures are convertible.
We agreed, pursuant to the registration rights agreement, to file the shelf
registration statement of which this prospectus forms a part under the
Securities Act of 1933 within 120 days after the issuance of the debentures to
register resales of the debentures and the shares of common stock into which
the debentures are convertible (referred to herein as registrable securities).
We will use our reasonable efforts to have this shelf registration statement
declared effective as soon as practicable after it is filed and, in any event,
within 180 days after the issuance of the debentures, and to keep it effective
until the earliest of (1) the date when all registrable securities have been
registered under the Securities Act of 1933 and disposed of, (2) the date on
which all registrable securities are sold to the public pursuant to Rule 144
under the Securities Act of 1933, (3) the date on which all registrable
securities cease to be outstanding and (4) the date when certain transfer
restrictions on the registrable securities are terminated as a result of the
application of Rule 144(k) (such shortest time period being referred to herein
as the effectiveness period).
If we fail to comply with the above provisions of the registration rights
agreement, additional amounts will become payable in respect of the registrable
securities as follows:
(1) if the shelf registration statement were not filed within 120 days after
the issuance of the debentures, then commencing on the day after such
date, additional amounts would accrue on the registrable securities at a
rate of 0.5% per annum on the amount of registrable securities;
(2) if the shelf registration statement were not declared effective by the
SEC on or prior to the 180th day following the issuance of the
debentures, then commencing on the day after such date, additional
amounts would accrue on the registrable securities at a rate of 0.5% per
annum on the amount of registrable securities; and
(3) if the shelf registration statement were to be declared effective and
then cease to be effective at any time during the effectiveness period
(other than for a permitted suspension, as described below), then
additional amounts would accrue on the registrable securities at a rate
of 0.5% per annum on the amount of registrable securities;
provided, however, that additional amounts on the registrable securities may
not accrue under more than one of the foregoing clauses (1), (2) or (3) at any
one time; provided, further, however, that upon the filing of the shelf
registration statement as required hereunder (in the case of clause (1) above),
upon the effectiveness of the shelf registration as required hereunder (in the
case of clause (2) above), or upon the effectiveness of a shelf registration
which has ceased to remain effective (in the case of (3) above), additional
amounts on the registrable securities as a result of such clause (or the
relevant subclause thereof), as the case may be, shall cease to accrue. It is
understood and agreed that, notwithstanding any provision to the contrary, so
long as any registrable security is then covered by an effective shelf
registration statement, no additional amounts shall accrue on such registrable
security.
Any additional amounts due pursuant to clause (1), (2) or (3) above will be
payable in cash on the same dates as the interest payment dates for the
debentures.
The term "amount of registrable securities" means (1) with respect to the
debentures, the aggregate principal amount of all such debentures outstanding,
(2) with respect to the shares of common stock into which the debentures are
convertible, the aggregate number of such shares of common stock outstanding
multiplied by the conversion price (as defined in the indenture relating to the
debentures) or, if no debentures are then outstanding, the last conversion
price that was in effect under such indenture when any such debentures were
last outstanding, and (3) with respect to combinations thereof, the sum of (1)
and (2) for the relevant registrable securities.
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We shall have the right to suspend the effectiveness of the shelf
registration statement for up to 30 consecutive days in any 90-day period, and
for up to a total of 90 days in any 365-day period, without being required to
pay additional amounts. However, if our suspension relates to a previously
undisclosed proposed or pending material business transaction, the disclosure
of which would impede our ability to consummate such transaction, we may extend
the foregoing suspension period from 30 days to 60 days.
A holder who elects to sell registrable securities pursuant to the shelf
registration statement of which this prospectus forms a part will be required
to:
. be named as a selling stockholder in this prospectus or a prospectus
supplement;
. deliver the prospectus to purchasers; and
. be subject to the provisions of the registration rights agreement,
including indemnification provisions.
Under the registration rights agreement we will:
. pay all expenses of the shelf registration statement;
. provide each registered holder copies of the prospectus;
. notify holders when the shelf registration statement has become
effective; and
. take other actions as are required to permit unrestricted resales of the
registrable securities.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 2,000,000,000 shares of common
stock, $.01 par value, and 125,000,000 shares of undesignated preferred stock,
$.01 par value. The following description of our capital stock is subject to
and qualified in its entirety by our certificate of incorporation and bylaws
and by the provisions of applicable Delaware law.
Common Stock
As of March 31, 2002, there were 464,188,396 shares of our common stock
outstanding that were held by approximately 73,901 stockholders of record.
The holders of common stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Subject to preferences that may
be applicable to any outstanding preferred stock, the holders of 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. In the event of our liquidation, dissolution or winding up, the
holders of common stock are entitled to share ratably in all assets remaining
after payment of liabilities, subject to prior distribution rights of preferred
stock, if any, then outstanding. The holders of common stock have no preemptive
or conversion rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to the common stock.
Preferred Stock
The board of directors has the authority, without action by the
stockholders, to designate and issue preferred stock in one or more series and
to designate the rights, preferences and privileges of each series, which may
be greater than the rights of the common stock. It is not possible to state the
actual effect of the issuance of any shares of preferred stock upon the rights
of holders of the common stock until the board of directors determines the
specific rights of the holders of such preferred stock. However, the effects
might include, among other things:
. restricting dividends on the common stock;
. diluting the voting power of the common stock;
. impairing the liquidation rights of the common stock; or
. delaying or preventing a change in control of Agilent without further
action by the stockholders.
There are no shares of preferred stock outstanding as of the date of this
prospectus.
Stockholders' Rights Plan
On April 24, 2000, pursuant to a rights agreement that we entered into with
Harris Trust and Savings Bank, as the rights agent, our board of directors
declared a dividend of one right for each share of our common stock held by our
stockholders of record as of the close of business on June 5, 2000 and further
authorized and directed the issuance of one right for each share of our common
stock that would become outstanding after this record date through the earlier
of a distribution date, as described below, and the expiration of such rights.
Each right will entitle the right-holder to purchase one one-thousandth of a
share of our Series A Participating Preferred Stock at a purchase price of $500.
The following summary of the principal terms of the rights agreement is only
a general description and does not fully capture the detailed terms and
conditions of the rights agreement. A copy of the rights agreement is attached
as Exhibit 1 to the Form 8-A registration statement that we filed with the SEC
on May 24, 2000. See "Where You Can Find More Information" for information on
how to obtain a copy.
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Distribution Date
The rights will separate from the common stock, certificates evidencing the
rights will be issued and the rights will become exercisable upon the earlier
of:
. the tenth day (or such later date as may be determined by our board of
directors) after a person or group of affiliated or associated persons
(whom we refer to as the acquirer) has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of our outstanding
common stock; or
. ten business days (or such later date as may be determined by a majority
of our board of directors) following the commencement or announcement of
a tender offer or exchange offer that, if consummated, would result in
the acquirer having a beneficial ownership of 15% or more of our
outstanding common stock.
We refer to the earlier of these two dates as the distribution date.
Expiration of Rights
The rights will expire upon the earlier of either June 5, 2010 or the
exchange or redemption of the rights as described under the sections captioned
"Exchange Provision" and "Redemption" below.
Right to Buy Shares of Our Common Stock
Unless the rights are earlier redeemed, in the event that an acquirer
becomes the beneficial owner of 15% or more of our outstanding common stock,
each holder of a right that has not been previously exercised (other than those
rights beneficially owned by the acquirer) will have the right to receive, upon
exercise of such right, shares of our common stock having a value equal to two
times the purchase price that the right-holder paid for our Series A
Participating Preferred Stock. The rights, however, will not be exercisable
following this event until such time as the rights are no longer redeemable by
us. See "Redemption" below.
Right to Buy the Acquiring Company's Stock
Similarly, unless the rights are earlier redeemed, in the event that an
acquirer becomes the beneficial owner of 15% or more of our outstanding common
stock and either:
. our company is acquired in a merger or other business combination
transaction, or
. 50% or more of our consolidated assets or earning power are sold (other
than in transactions in the ordinary course of business),
each holder of a right that has not been previously exercised (other than those
rights beneficially owned by the acquirer) will have the right to receive, upon
exercise of such right, shares of the acquiring company's common stock having a
value equal to two times the purchase price that the right-holder paid for our
Series A Participating Preferred Stock.
Exchange Provision
At any time after an acquirer has obtained 15% or more of our outstanding
common stock but before the acquirer has obtained 50% or more of our
outstanding common stock, our board of directors may exchange the rights (other
than those rights beneficially owned by the acquirer), in whole or in part, at
an exchange ratio of one share of our common stock per right.
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Redemption
At any time on or before the close of business on the earlier of:
. the fifth day following the date that an acquirer publicly announces
that such acquirer has become the beneficial owner of 15% or more of our
outstanding common stock (or such later date as may be determined by our
board of directors and publicly announced by us), or
. June 5, 2010,
we may redeem the rights in whole, but not in part, at a price of $0.001 per
right.
Adjustments to Prevent Dilution
The purchase price of our Series A Participating Preferred Stock, the number
of rights and the number of shares of our Series A Participating Preferred
Stock, our common stock or other securities or property issuable upon exercise
of the rights are subject to customary adjustments from time to time to prevent
dilution that would otherwise result from our dilutive issuances.
No Stockholders' Rights Prior to Exercise
Until a right is exercised, the right-holder, as such, will not have the
same rights as those of our stockholders (other than any rights resulting from
such right-holder's ownership of our common stock), including, without
limitation, the right to vote or to receive dividends.
Amendment of Rights Agreement
On or before the distribution date, the terms of the rights and the rights
agreement may be amended in any respect without the consent of the
right-holders. After the distribution date, the terms of the rights and the
rights agreement may be amended to cure any ambiguities or to make changes that
do not adversely affect the interests of the right-holders (other than the
acquirer) without the consent of the right-holders.
Rights and Preferences of Our Series A Participating Preferred Stock
Each one one-thousandth of a share of our Series A Participating Preferred
Stock has rights and preferences that are substantially equivalent to the
rights and preferences of one share of our common stock.
Certain Anti-Takeover Effects
Essentially, the rights are designed to protect and maximize the value of
our stockholders' outstanding equity interests in our company in the event of
an unsolicited attempt by an acquirer to take over our company in a manner that
is, or on terms that are, not approved by our board of directors. Such takeover
attempts frequently include coercive tactics that unfairly deprive our board of
directors and our stockholders of any real opportunity to determine the destiny
of our company. These tactics include a gradual initial accumulation of shares
in the open market of 15% or more followed by a merger or a partial tender
offer that does not treat all stockholders equally.
The rights, however, are not intended to prevent a takeover of our company
and will not do so. Because we may redeem the rights at any time before the
distribution date, the rights should not interfere with any merger or business
combination transaction approved by our board of directors.
Issuance of the rights does not in any way weaken the financial strength of
our company or interfere with its business plans. The issuance of the rights
itself has no dilutive effect, will not affect reported earnings per share,
should not be taxable to our company or to our stockholders and will not change
the way in which our company's shares are presently traded.
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Anti-Takeover Effects of Our Certificate and Bylaws and Delaware Law
Some provisions of Delaware law and our certificate of incorporation and
bylaws could make the following more difficult:
. acquisition of Agilent by means of a tender offer;
. acquisition of Agilent by means of a proxy contest or otherwise; or
. removal of our incumbent officers and directors.
These provisions, summarized below, are expected to discourage coercive
takeover practices and inadequate takeover bids. These provisions are also
designed to encourage persons seeking to acquire control of us to first
negotiate with our board. We believe that the benefits of increased protection
give us the potential ability to negotiate with the proponent of an unfriendly
or unsolicited proposal to acquire or restructure us and outweigh the
disadvantages of discouraging such proposals because negotiation of such
proposals could result in an improvement of their terms.
Election and Removal of Directors
Our board of directors is divided into three classes. The directors in each
class will serve for a three-year term, one class being elected each year by
our stockholders. This system of electing and removing directors may discourage
a third party from making a tender offer or otherwise attempting to obtain
control of our company because it generally makes it more difficult for
stockholders to replace a majority of the directors.
Stockholder Meetings
Under our bylaws, only the board of directors and the chairman of the board
may call special meetings of stockholders.
Requirements for Advance Notification of Stockholder Nominations and Proposals
Our bylaws establish advance notice procedures with respect to stockholder
proposals and the nomination of candidates for election as directors, other
than nominations made by or at the direction of the board of directors or a
committee of the board of directors.
Delaware Anti-Takeover Law
We are subject to Section 203 of the Delaware General Corporation Law, an
anti-takeover law. In general, Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years following the date the person became
an interested stockholder, unless the business combination or the transaction
in which the person became an interested stockholder is approved in a
prescribed manner. Generally, a "business combination" includes a merger, asset
or stock sale, or other transaction resulting in a financial benefit to the
interested stockholder. Generally, an "interested stockholder" is a person who,
together with affiliates and associates, owns or within three years prior to
the determination of interested stockholder status, did own, 15% or more of a
corporation's voting stock. The existence of this provision may have an
anti-takeover effect with respect to transactions not approved in advance by
the board of directors, including discouraging attempts that might result in a
premium over the market price for the shares of common stock held by
stockholders.
Elimination of Stockholder Action By Written Consent
Our certificate of incorporation eliminates the right of stockholders to act
by written consent without a meeting.
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Elimination of Cumulative Voting
Our certificate of incorporation and bylaws do not provide for cumulative
voting in the election of directors.
Amendment of Charter Provisions
The amendment of any of the above provisions may be effected by an
affirmative vote of the holders of at least 80% of the outstanding common stock.
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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material U.S. federal income tax
consequences of the purchase, ownership, and disposition of the debentures and,
where noted, our common stock, as of the date of this prospectus. Except where
noted, this summary deals only with a debenture held as a capital asset by a
U.S. holder and does not deal with special situations. For example, this
summary does not address:
. tax consequences to holders who may be subject to special tax treatment,
such as dealers in securities or currencies, traders in securities that
elect to use the mark-to-market method of accounting for their
securities, financial institutions, regulated investment companies, real
estate investment trusts, tax-exempt entities or insurance companies;
. tax consequences to persons holding the debentures as part of a hedging,
integrated, constructive sale or conversion transaction or a straddle;
. tax consequences to holders of the debentures whose "functional
currency" is not the U.S. dollar;
. alternative minimum tax consequences, if any; or
. any state, local or foreign tax consequences.
The discussion below is based upon the provisions of the Internal Revenue
Code of 1986, as amended (the Code), and regulations, rulings and judicial
decisions as of the date of this prospectus. Those authorities may be changed,
perhaps retroactively, so as to result in U.S. federal income tax consequences
different from those discussed below.
If a partnership holds the debentures, the tax treatment of a partner will
generally depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding the debentures, you
should consult your own tax advisors.
No statutory, administrative or judicial authority directly addresses the
treatment of the debentures or instruments similar to the debentures for U.S.
federal income tax purposes. No rulings have been sought or are expected to be
sought from the Internal Revenue Service (the IRS) with respect to any of the
U.S. federal income tax consequences discussed below. As a result, we cannot
assure you that the IRS will agree with the tax characterizations and the tax
consequences described below.
Holders should consult their own tax advisors concerning the U.S. federal
income tax consequences in light of their particular situation and any
consequences arising under the laws of any other taxing jurisdiction.
U.S. Holders
The following discussion is a summary of certain U.S. federal income tax
consequences that will apply to U.S. holders of debentures.
For purposes of this discussion, a U.S. holder is a beneficial owner of a
debenture that is:
. a citizen or resident of the United States;
. a corporation or partnership created or organized in or under the laws
of the United States or any political subdivision of the United States;
. an estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
. a trust if it (1) is subject to the primary supervision of a court
within the United States and one or more U.S. persons have authority to
control all substantial decisions of the trust or (2) has a valid
election in effect under applicable U.S. Treasury regulations to be
treated as a U.S. person.
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Classification of the Debentures
Under the indenture governing the debentures, we and each holder of the
debentures agree, for U.S. federal income tax purposes, to treat the debentures
as indebtedness that is subject to the regulations governing contingent payment
debt instruments (the Contingent Debt Regulations) in the manner described
below. The remainder of this discussion assumes that the debentures will be so
treated and does not address any possible differing treatments of the
debentures. However, the application of the Contingent Debt Regulations to
instruments such as the debentures is uncertain in several respects, and no
rulings have been sought from the IRS or a court with respect to any of the tax
consequences discussed below. Accordingly, no assurance can be given that the
IRS or a court will agree with the treatment described herein. Any differing
treatment could affect the amount, timing and character of income, gain or loss
in respect of an investment in the debentures. In particular, a holder might be
required to accrue original issue discount at a lower rate, might not recognize
income, gain or loss upon conversion of the debentures to common stock, and
might recognize capital gain or loss upon a taxable disposition of its
debentures. Holders should consult their own tax advisors concerning the tax
treatment of holding the debentures.
Accrual of Interest
Under the Contingent Debt Regulations, actual cash payments on the
debentures, if any, will not be reported separately as taxable income, but will
be taken into account under such regulations. As discussed more fully below,
the effect of these Contingent Debt Regulations will be to:
. require holders, regardless of their usual method of tax accounting, to
use the accrual method with respect to the debentures;
. require holders to accrue original issue discount at the comparable
yield (as described below) which will be substantially in excess of
interest payments actually received; and
. generally result in ordinary rather than capital treatment of any gain,
and to some extent loss, on the sale, exchange, repurchase or redemption
of the debentures.
Holders will be required to accrue an amount of original issue discount for
U.S. federal income tax purposes, for each accrual period prior to and
including the maturity date of the debentures that equals:
. the product of (i) the adjusted issue price (as defined below) of the
debentures as of the beginning of the accrual period and (ii) the
comparable yield to maturity (as defined below) of the debentures,
adjusted for the length of the accrual period;
. divided by the number of days in the accrual period; and
. multiplied by the number of days during the accrual period that the
holder held the debentures.
The issue price of a debenture is the first price at which a substantial
amount of the debentures was sold to the public, excluding bond houses, brokers
or similar persons or organizations acting in the capacity of underwriters,
placement agents or wholesalers. The adjusted issue price of a debenture will
be its issue price increased by any original issue discount previously accrued,
determined without regard to any adjustments to original issue discount
accruals described below, and decreased by the projected amounts of any
payments previously made with respect to the debentures. If a holder purchases
a debenture at a price other than its issue price, see the discussion under
"Purchasers of Debentures at a Price Other than the Adjusted Issued Price."
Under the Contingent Debt Regulations, holders will be required to include
original issue discount in income each year, regardless of their usual method
of tax accounting, based on the comparable yield of the debentures. We have
determined the comparable yield of the debentures based on the rate, as of the
initial issue date, at which we would issue a fixed rate nonconvertible debt
instrument with no contingent payments but with terms and conditions similar to
the debentures. Accordingly, we have determined that the comparable yield is an
annual rate of 8.75%, compounded semi-annually.
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We are required to furnish to holders the comparable yield and, solely for
tax purposes, a projected payment schedule that includes the actual interest
payments, if any, on the debentures and estimates the amount and timing of
contingent interest payments and payment upon maturity on the debentures taking
into account the fair market value of the common stock that might be paid upon
a conversion of the debentures. Holders may obtain the projected payment
schedule by submitting a written request for it to us at the address set forth
in "Where You Can Find More Information." By purchasing the debentures, holders
agree in the indenture to be bound by our determination of the comparable yield
and projected payment schedule. For U.S. federal income tax purposes, holders
must use the comparable yield and the schedule of projected payments in
determining their original issue discount accruals, and the adjustments thereto
described below, in respect of the debentures.
The comparable yield and the projected payment schedule are not provided for
any purpose other than the determination of a holder's original issue discount
and adjustments thereof in respect of the debentures and do not constitute a
projection or representation regarding the actual amount of the payments on a
debenture.
Adjustments to Interest Accruals on the Debentures
If the actual contingent payments made on the debentures differ from the
projected contingent payments, adjustments will be made for the difference. If,
during any taxable year, a holder receives actual payments with respect to the
debentures for that taxable year that in the aggregate exceed the total amount
of projected payments for the taxable year, that holder will incur a positive
adjustment equal to the amount of such excess. Such positive adjustment will be
treated as additional original issue discount in such taxable year. For these
purposes, the payments in a taxable year include the fair market value of
property received in that year. If a holder receives in a taxable year actual
payments with respect to the debentures for that taxable year that in the
aggregate are less than the amount of projected payments for that taxable year,
that holder will incur a negative adjustment equal to the amount of such
deficit. A negative adjustment will:
. first, reduce the amount of original issue discount required to be
accrued in the current year;
. second, any negative adjustments that exceeds the amount of original
issue discount accrued in the current year will be treated as ordinary
loss to the extent of that holder's total prior original issue discount
inclusions with respect to the debentures, reduced to the extent such
prior original issue discount was offset by prior negative adjustments;
and
. third, any excess negative adjustments will be treated as regular
negative adjustments in the succeeding taxable year.
Sale, Exchange, Conversion or Redemption
Upon the sale, exchange, conversion, repurchase or redemption of a
debenture, a holder will recognize gain or loss equal to the difference between
the amount realized and the holder's adjusted tax basis in the debenture. A
holder of a debenture agrees that, under the Contingent Debt Regulations, the
amount realized will include the fair market value of our stock received on
conversion as a contingent payment. Such gain on a debenture generally will be
treated as ordinary income. Loss from the disposition of a debenture will be
treated as ordinary loss to the extent of a holder's prior net original issue
discount inclusions with respect to the debentures. Any loss in excess of that
amount will be treated as capital loss, which will be long-term if the
debentures were held for more than one year. The deductibility of net capital
losses by individuals and corporations is subject to limitations.
Special rules apply in determining the tax basis of a debenture. The basis
in a debenture is generally increased by original issue discount (before taking
into account any adjustments) a holder previously accrued on the debentures,
and reduced by the projected amount of any payments previously scheduled to be
made.
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Under this treatment, the tax basis in the common stock received upon
conversion of a debenture will equal the then current fair market value of such
common stock. The holding period for our common stock received will commence on
the day of conversion.
Given the uncertain tax treatment of instruments such as the debentures, a
holder should contact its own tax advisors concerning the tax treatment on
conversion of a debenture and the ownership of our common stock.
Purchasers of Debentures at a Price Other than the Adjusted Issue Price
If a holder purchases a debenture in the secondary market for an amount that
differs from the adjusted issue price of the debenture at the time of purchase,
such holder will be required to accrue interest income on the debenture in
accordance with the comparable yield even if market conditions have changed
since the date of issuance. A holder must reasonably determine whether the
difference between the purchase price for a debenture and the adjusted issue
price of a debenture is attributable to a change in expectations as to the
contingent amounts potentially payable in respect of the debenture, a change in
interest rates since the debentures were issued, or both, and allocate the
difference accordingly. Adjustments allocated to a change in interest rates
will cause, as the case may be, a "positive adjustment" or a "negative
adjustment" to a holder's interest inclusion. If the purchase price of a
debenture is less than its adjusted issue price, a positive adjustment will
result, and if the purchase price is more than the adjusted issue price of a
debenture, a negative adjustment will result. To the extent that an adjustment
is attributable to a change in interest rates, it must be reasonably allocated
to the daily portions of interest over the remaining term of the debenture.
To the extent that the difference between a holder's purchase price for the
debenture and the adjusted issue price of the debenture is attributable to a
change in expectations as to the contingent amounts potentially payable in
respect of the debenture (and not to a change in the market interest rates),
such holder will be required to reasonably allocate that difference to the
contingent payments. Adjustments allocated to the contingent payments will be
taken into account when the contingent payments are made. Any negative or
positive adjustment of the kind described above made by a holder will decrease
or increase, respectively, the holder's tax basis in the debenture.
Certain U.S. holders will receive Forms 1099-OID reporting interest accruals
on their debentures. Those forms will not, however, reflect the effect of any
positive or negative adjustments resulting from the purchase of a debenture in
the secondary market at a price that differs from its adjusted issue price on
the date of purchase. Holders are urged to consult their own tax advisors as to
whether, and how, such adjustments should be made to the amounts reported on
any Form 1099-OID.
Constructive Distributions
The conversion price of the debentures will be adjusted in certain
circumstances. Under Section 305(c) of the Code, adjustments (or failures to
make adjustments) that have the effect of increasing a holder's proportionate
interest in our assets or earnings may in some circumstances result in a deemed
distribution to the holder. Any deemed distributions will be taxable as a
dividend, return of capital or capital gain in accordance with the earnings and
profits rules under the Code.
Non-U.S. Holders
The following is a summary of the U.S. federal tax consequences that will
apply to non-U.S. holders of debentures or shares of common stock. The term
"non-U.S. holder" means a beneficial owner of a debenture or share of common
stock that is not a U.S. holder.
Special rules may apply to certain non-U.S. holders such as "controlled
foreign corporations", "passive foreign investment companies", "foreign
personal holding companies", corporations that accumulate earnings to
37
avoid federal income tax or, in certain circumstances, individuals that are
U.S. expatriates. Such non-U.S. holders should consult their own tax advisors
to determine the U.S. federal, state, local and other tax consequences that may
be relevant to them.
Payments with respect to the Debentures
The 30% U.S. federal withholding tax will not apply to any payment to a
holder of principal or interest (including amounts taken into income under the
accrual rules described above under "--U.S. Holders" and a payment of common
stock pursuant to a conversion) on a debenture, provided that:
. such holder does not actually or constructively own 10% or more of the
total combined voting power of all classes of our stock that are
entitled to vote within the meaning of Section 871(h)(3) of the Code;
. such holder is not a controlled foreign corporation that is related to
us through stock ownership;
. such holder is not a bank whose receipt of interest (including original
issue discount) on a debenture is described in Section 881(c)(3)(A) of
the Code;
. our common stock continues to be actively traded within the meaning of
Section 871(h)(4)(C)(v)(1) of the Code and we are not a "U.S. real
property holding corporation"; and
. (a) such holder provides its name and address and certifies, under
penalties of perjury, that it is not a U.S. person (which certification
may be made on an IRS Form W-8BEN (or successor form)) or (b) such
holder holds its debentures through certain foreign intermediaries and
it satisfies the certification requirements of applicable U.S. Treasury
regulations. Special certification rules apply to holders that are
pass-through entities.
If a holder cannot satisfy the requirements described above, payments of
interest (including original issue discount) will be subject to the 30% U.S.
federal withholding tax, unless we are provided with a properly executed (1)
IRS Form W-8BEN (or successor form) claiming an exemption from or reduction in
withholding under the benefit of an applicable tax treaty or (2) IRS Form
W-8ECI (or successor form) stating that interest (including original issue
discount) paid on the debentures is not subject to withholding tax because it
is effectively connected with a holder's conduct of a trade or business in the
United States.
If a holder is engaged in a trade or business in the United States and
interest (including original issue discount) on a debenture is effectively
connected with the conduct of that trade or business, that holder will be
subject to U.S. federal income tax on that interest on a net income basis
(although exempt from the 30% withholding tax) in the same manner as if it were
a U.S. person as defined under the Code. In addition, if a holder is a foreign
corporation, it may be subject to a "branch profits tax" equal to 30% (or lower
applicable treaty rate) of its earnings and profits for the taxable year,
subject to adjustments, that are effectively connected with its conduct of a
trade or business in the United States. For this purpose, interest (including
original issue discount) will be included in the earnings and profits of such
foreign corporation.
Payments on Common Stock and Constructive Dividends
Any dividends paid to a holder with respect to the shares of common stock
(and any deemed dividends resulting from certain adjustments, or failure to
make adjustments, to the number of shares of common stock to be issued upon
conversion, see "--Constructive Distributions" above) will be subject to
withholding tax at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty. However, dividends that are effectively connected
with the conduct of a trade or business within the United States and, where a
tax treaty applies, are attributable to a U.S. permanent establishment, are not
subject to the withholding tax, but instead are subject to U.S. federal income
tax on a net income basis at applicable graduated individual or corporate
rates. Certain certification and disclosure requirements must be complied with
in order for effectively connected income to be exempt from withholding. Any
such effectively connected dividends received by a foreign
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corporation may, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty.
A non-U.S. holder of shares of common stock who wishes to claim the benefit
of an applicable treaty rate is required to satisfy applicable certification
and other requirements. If a non-U.S. holder is eligible for a reduced rate of
U.S. withholding tax pursuant to an income tax treaty, that holder may obtain a
refund of any excess amounts withheld by filing an appropriate claim for refund
with the IRS.
As more fully described under "Description of Debentures--Registration
Rights," upon the occurrence of certain enumerated events we may be required to
pay additional amounts to the holders. Payments of such additional amounts may
be subject to federal withholding.
Sale, Exchange or Redemption of Shares of Common Stock
Any gain realized upon the sale, exchange, redemption or other disposition
of a share of common stock generally will not be subject to U.S. federal income
tax unless:
. that gain is effectively connected with the conduct of a trade or
business in the United States by the non-U.S. holder;
. the non-U.S. holder is an individual who is present in the United States
for 183 days or more in the taxable year of that disposition, and
certain other conditions are met; or
. we are or have been a "U.S. real property holding corporation" for U.S.
federal income tax purposes.
An individual non-U.S. holder described in the first bullet point above will
be subject to U.S. federal income tax on the net gain derived from the sale. An
individual non-U.S. holder described in the second bullet point above will be
subject to a flat 30% U.S. federal income tax on the gain derived from the
sale, which may be offset by U.S. source capital losses, even though the holder
is not considered a resident of the United States. A non-U.S. holder that is a
foreign corporation and is described in the first bullet point above will be
subject to tax on gain under regular graduated U.S. federal income tax rates
and, in addition, may be subject to a "branch profits tax" at a 30% rate or a
lower rate if so specified by an applicable income tax treaty.
We believe that we are not and do not anticipate becoming a "U.S. real
property holding corporation" for U.S. federal income tax purposes.
U.S. Federal Estate Tax
The U.S. federal estate tax will not apply to debentures owned by holders at
the time of their death, provided that (1) they do not own 10% or more of the
total combined voting power of all classes of our voting stock (within the
meaning of the Code and the U.S. Treasury regulations) and (2) interest on the
debentures would not have been, if received at the time of their death,
effectively connected with their conduct of a trade or business in the United
States. However, shares of common stock held by holders at the time of their
death will be included in their gross estate for U.S. federal estate tax
purposes unless an applicable estate tax treaty provides otherwise.
Backup Withholding and Information Reporting
For U.S. holders of debentures, information reporting requirements will
generally apply to all payments we make to them and the proceeds from a sale of
a debenture or share of common stock made to them, unless they are an exempt
recipient such as a corporation. A backup withholding tax will apply to those
payments if a holder fails to provide a taxpayer identification number, or a
certification of exempt status, or if that holder fails to report in full
interest income.
39
In general, a non-U.S. holder will not be subject to backup withholding and
information reporting with respect to payments that we make to that holder
provided that we do not have actual knowledge or reason to know the holder is a
U.S. person and has given us the statement described above under "--Payments
With Respect to the Debentures." We must report annually to the IRS and to each
non-U.S. holder the amount of dividends paid to such holder and the tax
withheld with respect to such dividends, regardless of whether withholding was
required.
In addition, a non-U.S. holder will not be subject to backup withholding or
information reporting with respect to the proceeds of the sale of a debenture
or share of common stock within the United States or conducted through certain
U.S.-related financial intermediaries, if the payor receives the statement
described above and does not have actual knowledge that such holder is a U.S.
person, as defined under the Code, or the holder otherwise establishes an
exemption.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against a holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.
40
SELLING SECURITY HOLDERS
We originally issued the debentures to the initial purchasers in a private
placement in November 2001. The debentures were resold by the initial
purchasers to qualified institutional buyers under Rule 144A of the Securities
Act. Selling security holders may offer and sell the debentures and the
underlying common stock pursuant to this prospectus.
The following table sets forth information as of April 9, 2002 about the
principal amount of debentures and the underlying common stock beneficially
owned by each selling security holder that may be offered using this prospectus.
Unless otherwise described below, to our knowledge, no selling security
holder nor any of its affiliates has held any position or office with, been
employed by or otherwise had any material relationship with us or our
affiliates during the three years prior to the date of this prospectus.
A selling security holder may offer all or some portion of the debentures
and shares of common stock issuable upon conversion of the debentures from time
to time. Accordingly, no estimate can be given as to the amount or percentage
of debentures or shares that will be held by the selling security holders upon
termination of any particular offering. See "Plan of Distribution." In
addition, the selling security holders identified below may have sold,
transferred or disposed of all or a portion of their debentures since the date
on which they provided the information regarding their holdings in transactions
exempt from the registration requirements of the Securities Act.
Principal
Amount of Number of
Debentures Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Debentures That May Be Common Stock
Name of Selling Security Holder May Be Sold Outstanding Sold (1) Outstanding (2)
------------------------------- ------------ ------------- ------------ ---------------
Acacia Life Insurance Company....................... $ 180,000 * 5,586 *
AIG/National Union Fire Insurance................... 350,000 * 10,862 *
Ailgemeine Pensionskasse Der Snissair Group......... 290,000 * 9,000 *
Akela Capital Master Fund, Ltd...................... 2,000,000 * 62,073 *
Allstate Insurance Company.......................... 1,500,000 * 46,554 *(3)
Allstate Life Insurance Company..................... 5,850,000 * 181,564 *
Alta Partners Holdings LDC.......................... 9,000,000 * 279,329 *
American Century Equity Income...................... 6,831,000 * 212,011 *
American Country Insurance Company.................. 250,000 * 7,759 *
American Founders Life Insurance Company............ 350,000 * 10,862 *
American Pioneer Life Insurance Company
of New York........................................ 40,000 * 1,241 *
American Progressive Life & Health Insurance Company
of New York....................................... 40,000 * 1,241 *
American Public Entity Excess Pool.................. 40,000 * 1,241 *
Ameritas Life Insurance Company..................... 350,000 * 10,862 *
AmerUS Life Insurance Company....................... 1,000,000 * 31,036 *
Arbitex Master Fund LP.............................. 21,000,000 1.83% 651,769 *
Argent Classic Convertible Arbitrage Fund (Bermuda)
Ltd............................................... 14,500,000 1.26% 450,031 *
Argent Classic Convertible Arbitrage Fund L.P....... 6,000,000 * 186,219 *
Argent Convertible Arbitrage Fund Ltd............... 11,000,000 * 341,402 *
Argent LowLev Convertible Arbitrage Fund LLC........ 1,000,000 * 31,036 *
Arkansas PERS....................................... 670,000 * 20,794 *
Arkansas Teachers Retirement System................. 3,237,000 * 100,465 *
Associated Electric & Gas Insurance Services
Limited........................................... 1,300,000 * 40,347 *
Attorneys' Title Insurance Fund Inc................. 200,000 * 6,207 *
41
Principal
Amount of Number of
Debentures Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Debentures That May Be Common Stock
Name of Selling Security Holder May Be Sold Outstanding Sold (1) Outstanding (2)
------------------------------- ------------ ------------- ------------ ---------------
Baltimore Life Insurance Company......................... 230,000 * 7,138 *
Banc of America Securities LLC (4)....................... 1,250,000 * 38,795 *(5)
Bank Austria Cayman Islands Ltd.......................... 12,035,000 1.05% 373,525 *
Bankers Trust Company Trustee for DaimlerChrysler Corp
Emp#1 Pension Plan dtd 4/1/89.......................... 4,400,000 * 136,561 *
Baptist Health of South Florida.......................... 509,000 * 15,797 *
Bay County PERS.......................................... 85,000 * 2,638 *
BCS Life Insurance Company............................... 550,000 * 17,070 *
Bear, Stearns & Co. Inc.................................. 9,000,000 * 279,329 *
BGI Global Investors c/o Forest Investment Mngt. L.L.C... 653,000 * 20,266 *
BH Trading PCC Ltd. (Palladin)........................... 250,000 * 7,759 *
BN Convertible Securities Top Fund....................... 330,000 * 10,242 *
BNP Paribas Equity Strategies SNC (6).................... 6,370,000 * 197,703 *(7)
Boilermakers Blacksmith Pension Trust.................... 845,000 * 26,225 *
BP Amoco Corporation Master Trust for Employee Pension
Plans.................................................. 7,000,000 * 217,256 *
BTES--Convertible Arb.................................... 1,000,000 * 31,036 *
BTPO Growth vs. Value.................................... 4,000,000 * 124,146 *
Buckeye State Mutual Insurance Company................... 10,000 * 310 *
CA State Automobile Assn Inter-Insurance................. 1,000,000 * 31,036 *
Castle Convertible Fund, Inc............................. 500,000 * 15,518 *
Catholic Family Life Insurance Company................... 150,000 * 4,655 *
Catholic Mutual Relief Society of America................ 350,000 * 10,862 *
Catholic Mutual Relief Society of America Retirement Plan
and Trust.............................................. 350,000 * 10,862 *
Catholic Relief Insurance Company of America............. 250,000 * 7,759 *
Celina Mutual Insurance Company.......................... 10,000 * 310 *
Central States Health and Life Company of Omaha.......... 210,000 * 6,517 *
CFFX, LLC................................................ 5,000,000 * 155,183 *
Cheyne Capital Management Limited........................ 7,800,000 * 242,085 *
Chrysler Corporation Master Retirement Trust............. 4,465,000 * 138,578 *
Chrysler Insurance Company............................... 750,000 * 23,277 *
Classics Fund Ltd........................................ 270,000 * 8,379 *
Clinton Multistrategy Master Fund, Ltd................... 5,500,000 * 170,701 *
Clinton Riverside Convertible Portfolio Limited.......... 5,500,000 * 170,701 *
Colonial Life Insurance Company of Texas................. 20,000 * 620 *
Colonial Lloyd Insurance Company......................... 5,000 * 155 *
Commerzbank AG........................................... 10,000,000 * 310,366 *
Commonwealth Dealers--CDLIC.............................. 100,000 * 3,103 *
Concord Life Insurance Company........................... 180,000 * 5,586 *
Conseco Annuity Assurance--Multi-Bucket Annuity
Convertible Bond Fund.................................. 4,750,000 * 147,423 *
Conseco Fund Group--Convertible Securities Fund.......... 500,000 * 15,518 *
Continental Assurance Company on behalf of its Separate
Account (E)............................................ 600,000 * 18,621 *
Continental Assurance Company Separate Account (E)....... 2,500,000 * 77,591 *
Continental Casualty Company............................. 4,400,000 * 136,561 *
Cooper Neff Convertible Strategies Fund, LP.............. 2,790,000 * 86,592 *
42
Principal
Amount of Number of
Debentures Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Debentures That May Be Common Stock
Name of Selling Security Holder May Be Sold Outstanding Sold (1) Outstanding (2)
------------------------------- ------------ ------------- ------------ ---------------
Credit Lyonnais Securities (USA) Inc..................... 3,000,000 * 93,109 *
Credit Suisse Asset Management........................... 250,000 * 7,759 *
Credit Suisse First Boston Corporation (8)............... 4,962,000 * 154,003 *
Credit Suisse First Boston, London Branch (8)............ 15,575,000 1.35% 483,395 *
CSA Fraternal Life Insurance Company..................... 70,000 * 2,172 *
Cumberland Insurance Company............................. 50,000 * 1,551 *
Cumberland Mutual Fire Insurance Company................. 150,000 * 4,655 *
D. E. Shaw Investments, L.P.............................. 4,000,000 * 124,146 *
D. E. Shaw Valence, L.P.................................. 16,000,000 1.39% 496,585 *
Deam Convertible FD...................................... 7,500,000 * 232,774 *
Delaware Group Premium Fund--Convertible Securities
Series................................................. 200,000 * 6,207 *
Delaware PERS............................................ 945,000 * 29,329 *
Delta Air Lines Master Trust............................. 1,165,000 * 36,157 *
Delta Pilots D&S Trust................................... 570,000 * 17,690 *
Deutsche Banc Alex. Brown Inc. (9)....................... 84,250,000 7.33% 2,614,835 *
Dodeca Fund, LP.......................................... 1,500,000 * 46,554 *
Duke Endowment........................................... 170,000 * 5,276 *
Durango Investments L.P.................................. 2,000,000 * 62,073 *
Eagle Pacific Insurance Company.......................... 100,000 * 3,103 *
Educators Mutual Life Insurance Company.................. 200,000 * 6,207 *
Employees Retirement of N.O. Sewer/Water Board........... 725,000 * 22,501 *
Engineers Joint Pension Fund............................. 437,000 * 13,563 *
F.R. Convt. Sec. Fn...................................... 95,000 * 2,948 *
Family Service Life Insurance Co......................... 300,000 * 9,310 *
Farmers Home Mutual Insurance Company.................... 300,000 * 9,310 *
Farmers Mutual Protective Association of Texas........... 70,000 * 2,172 *
Federated Equity Funds, on behalf of its Federated New
Economy Fund........................................... 200,000 * 6,207 *
Federated Rural Electric Insurance Exchange.............. 250,000 * 7,759 *
Fidelity Advisor Series I: Fidelity Advisor Dividend
Growth Fund (10)....................................... 1,287,000 * 39,944 *
Fidelity Advisor Series I: Fidelity Advisor Equity Value
Fund (10).............................................. 54,000 * 1,675 *
Fidelity Charles Street Trust: Fidelity Asset
Manager (10)........................................... 6,330,000 * 196,461 *
Fidelity Charles Street Trust: Fidelity Asset Manager:
Growth (10)............................................ 3,090,000 * 95,903 *
Fidelity Charles Street Trust: Fidelity Asset Manager:
Income (10)............................................ 200,000 * 6,207 *
Fidelity Commonwealth Trust: Fidelity Mid-Cap Stock
Fund (10).............................................. 3,500,000 * 108,628 *(11)
Fidelity Devonshire Trust: Fidelity Equity-Income
Fund (10).............................................. 14,330,000 1.25% 444,754 *
Fidelity Financial Trust: Fidelity Convertible Securities
Fund (10).............................................. 15,920,000 1.38% 494,103 *
Fidelity Financial Trust: Fidelity Equity-Income II
Fund (10).............................................. 30,160,000 2.62% 936,064 *
43
Principal
Amount of Number of
Debentures Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Debentures That May Be Common Stock
Name of Selling Security Holder May Be Sold Outstanding Sold (1) Outstanding (2)
------------------------------- ------------ ------------- ------------ ---------------
Fidelity Management Trust Company on behalf of accounts
managed by it (10)(12)............................... 4,320,000 * 134,078 3.42%(13)
Fidelity Puritan Trust: Fidelity Puritan Fund (10)..... 8,250,000 * 256,052 *
Fidelity Securities Fund: Fidelity Dividend Growth
Fund (10)............................................ 8,100,000 * 251,396 *
Fidelity Securities Fund: Fidelity Growth & Income
Portfolio (10)....................................... 32,200,000 2.80% 999,379 *
First Dakota Indemnity Company......................... 10,000 * 310 *
First Mercury--Clarendon National...................... 220,000 * 6,828 *
First Mercury Insurance Company........................ 500,000 * 15,518 *
First Union Securities Inc. (14)....................... 20,000,000 1.74% 620,732 *
FIST--Franklin Convertible Securities Fund............. 1,500,000 * 46,554 *
FIST--Franklin Equity Income Fund...................... 2,400,000 * 74,487 *
Forest Alternative Strategies II....................... 184,000 * 5,710 *
Forest Fulcrum Fund L.L.P.............................. 2,528,000 * 78,460 *
Forest Global Convertible Fund Series A-5.............. 10,089,000 * 313,128 *
Founders Insurance Company............................. 20,000 * 620 *
Franklin and Marshall College.......................... 255,000 * 7,914 *
FTVIPT--Franklin Growth & Income Securities Fund....... 2,625,000 * 81,471 *
Fundamental Investors, Inc............................. 10,370,000 * 321,849 *(15)
Gemini Sammelstiftung Zur Forderling................... 110,000 * 3,414 *
Global Bermuda Limited Partnership..................... 1,650,000 * 51,210 *
Goldman, Sachs & Co. (16).............................. 5,500,000 * 170,701 *
Goodville Mutual Casualty Company...................... 30,000 * 931 *
Grace Brothers Management, LLC......................... 3,250,000 * 100,869 *
Grain Dealers Mutual Insurance......................... 150,000 * 4,655 *
Granville Capital Corporation.......................... 25,000,000 2.17% 775,915 *
Guarantee Trust Life Insurance Company................. 1,000,000 * 31,036 *
Guaranty Income Life Insurance Company................. 350,000 * 10,862 *
Guardian Life Insurance Co............................. 11,200,000 * 347,610 *
Guardian Pension Trust................................. 1,000,000 * 31,036 *
Gulf Investment Corporation............................ 160,000 * 4,965 *
Hannover Life Reassurance Company of America........... 750,000 * 23,277 *
HFR CA Select Fund..................................... 250,000 * 7,759 *
Holy Family Society.................................... 80,000 * 2,482 *
ICI American Holdings Trust............................ 340,000 * 10,552 *
IL Annuity and Insurance Company....................... 1,000,000 * 31,036 *
Indiana Lumbermens Mutual Insurance Company............ 450,000 * 13,966 *
Innovest Finanzdienstleistungs AG...................... 550,000 * 17,070 *
Integrity Mutual Insurance Company..................... 300,000 * 9,310 *
ISBA Mutual Insurance Company.......................... 110,000 * 3,414 *
J.P. Morgan Securities Inc. (17)....................... 37,850,000 3.29% 1,174,736 *(18)
JMG Convertible Investments, LP........................ 5,500,000 * 170,701 *
JMG Triton Offshore Fund, Ltd.......................... 2,000,000 * 62,073 *
Kanawha Insurance Company.............................. 500,000 * 15,518 *
KBC Financial Products USA Inc......................... 4,250,000 * 131,905 *
Kelvin Engineering Limited............................. 365,000 * 11,328 *
Koch Industries Inc. Master Pension Trust.............. 400,000 * 12,414 *
44
Principal
Amount of Number of
Debentures Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Debentures That May Be Common Stock
Name of Selling Security Holder May Be Sold Outstanding Sold (1) Outstanding (2)
------------------------------- ------------ ------------- ------------ ---------------
Lakeshore International Ltd............................ 6,600,000 * 204,841 *
Lancer Securities Cayman............................... 500,000 * 15,518 *
Landmark Life Insurance Company........................ 70,000 * 2,172 *
Lebanon Mutual Insurance Company....................... 70,000 * 2,172 *
Lincoln Heritage Life Insurance Company................ 50,000 * 1,551 *
Lincoln Individual/Memorial Life Insurance Company..... 100,000 * 3,103 *
Lipper Convertibles L.P................................ 17,600,000 1.53% 546,244 *
Lipper Offshore Convertibles, L.P...................... 11,400,000 * 353,817 *
Lipper Series II, L.P.................................. 2,000,000 * 62,073 *
Lord Abbott Bond Debenture Fund........................ 3,500,000 * 108,628 *
Louisiana CCRF......................................... 120,000 * 3,724 *
Loyal Christian Benefit Association.................... 180,000 * 5,586 *
Lumberman's Mutual Casualty............................ 627,000 * 19,459 *
Lutheran Brotherhood................................... 3,000,000 * 93,109 *(19)
Lyxor Master Fund c/o Forest Investment Mngt. L.L.C.... 2,854,000 * 88,578 *
Lyxor Master Fund Ref: Argent/LowLev CB................ 1,000,000 * 31,036 *
Main Street America Assurance Company.................. 400,000 * 12,414 *
Main Street America Holdings........................... 400,000 * 12,414 *
Marquette Indemnity and Life Insurance Company......... 80,000 * 2,482 *
Medico Life Insurance Company.......................... 700,000 * 21,725 *
Medmarc Insurance Company.............................. 300,000 * 9,310 *
Merrill Lynch, Pierce, Fenner & Smith, Inc............. 1,258,000 * 39,044 *
MFS Total Return Fund.................................. 2,900,000 * 90,006 *
Michigan Mutual Insurance Company...................... 600,000 * 18,621 *
Michigan Professional Insurance Exchange............... 100,000 * 3,103 *
Microsoft Corporation.................................. 1,490,000 * 46,244 *
Mid America Life Insurance Company..................... 25,000 * 775 *
Middle Cities Risk Management Trust.................... 150,000 * 4,655 *
Mid-State Surety Company............................... 40,000 * 1,241 *
MILIC/Woodsmill Limited 1.............................. 15,000 * 465 *
MILIC/Woodsmill Limited 2.............................. 5,000 * 155 *
MLQA Convertible Securities Arbitrage Ltd.............. 10,000,000 * 310,366 *
Morgan Stanley & Co. (20).............................. 10,000,000 * 310,366 *
Morgan Stanley Dean Witter Convertible Securities Trust 2,500,000 * 77,591 *
Motion Picture Industry Health Plan--Active Member Fund 310,000 * 9,621 *
Motion Picture Industry Health Plan--Retiree Member
Fund................................................. 155,000 * 4,810 *
Motion Pictures Industry............................... 507,000 * 15,735 *
Mutual Protective Insurance Company.................... 900,000 * 27,932 *
National Benefit Life Insurance Company................ 199,000 * 6,176 *
National Grange Mutual Insurance Company............... 520,000 * 16,139 *
National Mutual Insurance Company...................... 15,000 * 465 *
NCMIC.................................................. 500,000 * 15,518 *
New Era Life Insurance Company......................... 250,000 * 7,759 *
Nicholas Applegate Convertible Fund.................... 1,460,000 * 45,313 *
Nicholas Applegate Global Holdings LP.................. 35,000 * 1,086 *
Nicholas Applegate Investment Grade Convertible........ 15,000 * 465 *
Nomura Securities International, Inc................... 7,500,000 * 232,774 *(21)
45
Principal
Amount of Number of
Debentures Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Debentures That May Be Common Stock
Name of Selling Security Holder May Be Sold Outstanding Sold (1) Outstanding (2)
------------------------------- ------------ ------------- ------------ ---------------
NSMD................................................. 100,000 * 3,103 *
Oak Casualty Insurance Company....................... 30,000 * 931 *
OCM Convertible Trust................................ 2,475,000 * 76,815 *
Ondeo Nalco.......................................... 70,000 * 2,172 *
Onex Industrial Partners Limited..................... 5,160,000 * 160,148 *
Pacific Eagle Insurance Company...................... 60,000 * 1,862 *
Pacific Life Insurance Co............................ 1,500,000 * 46,554 *
Palladin Securities LLC.............................. 2,000,000 * 62,073 *
Partner Reinsurance Company Ltd...................... 535,000 * 16,604 *
Pebble Capital Inc................................... 1,760,000 * 54,624 *
Pensionskasse Ciba Spezialitatenchemie............... 480,000 * 14,897 *
Pensionskasse Der Lonza AG........................... 100,000 * 3,103 *
Phico Insurance Company.............................. 500,000 * 15,518 *
Physicians Life...................................... 169,000 * 5,245 *
Physicians Life Insurance Company.................... 300,000 * 9,310 *
Physicians Mutual Insurance Company.................. 300,000 * 9,310 *
PIMCO Convertible Fund............................... 1,150,000 * 35,692 *
Pioneer Insurance Company............................ 80,000 * 2,482 *
Premera Blue Cross................................... 1,200,000 * 37,243 *
Primerica Life Insurance Company..................... 703,000 * 21,818 *
Qwest Occupational Health Trust...................... 145,000 * 4,500 *
Radian Asset Guaranty................................ 2,500,000 * 77,591 *
Radian Guaranty Inc.................................. 3,000,000 * 93,109 *
Ram Trading Ltd...................................... 9,270,000 * 287,709 *
Ramius Capital Group................................. 595,000 * 18,466 *
RCG Halifax Master Fund, Ltd......................... 400,000 * 12,414 *
RCG Latitude Master Fund Ltd......................... 3,865,000 * 119,956 *
RCG Multi Strategy LP................................ 700,000 * 21,725 *
Relay II Holdings c/o Forest Investment Mngt. L.L.C.. 327,000 * 10,148 *
Republic Mutual Insurance Company.................... 10,000 * 310 *
RET Pension Plan of the CA State Automobile.......... 250,000 * 7,759 *
Robertson Stephens................................... 17,000,000 1.48% 527,622 *
Salomon Brothers Asset Management, Inc............... 28,000,000 2.43% 869,025 *
Salomon Smith Barney Inc. (22)....................... 3,141,000 * 97,486 *
San Diego City Retirement............................ 1,014,000 * 31,471 *
San Diego County Convertible......................... 1,536,000 * 47,672 *
San Diego County Employees Retirement Association.... 1,000,000 * 31,036 *
Scor Life Re Convertible Program..................... 250,000 * 7,759 *
Screen Actors Guild Pension Convertible.............. 465,000 * 14,432 *
SG Cowen Securities Corp. (23)....................... 3,000,000 * 93,109 *
SG Hambros Trust Company Ltd. as trustee of the Lyxor
Master Fund........................................ 500,000 * 15,518 *
Siemens/Convertible Global--Markets.................. 1,250,000 * 38,795 *
Silverado Arbitrage Trading, Ltd..................... 1,000 * 31 *
Silvercreek II Limited............................... 380,000 * 11,793 *
Silvercreek Limited Partnership...................... 1,600,000 * 49,658 *
Southern Farm Bureau Life Insurance.................. 800,000 * 24,829 *
Standard Mutual Insurance Company.................... 220,000 * 6,828 *
46
Principal
Amount of Number of
Debentures Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Debentures That May Be Common Stock
Name of Selling Security Holder May Be Sold Outstanding Sold (1) Outstanding (2)
------------------------------- ------------ ------------- ------------ ---------------
Starvest Combined Portfolio.............................. 370,000 * 11,483 *
Starvest Managed Portfolio............................... 50,000 * 1,551 *
State Employees' Retirement Fund of the State of Delaware 1,595,000 * 49,503 *
State National Insurance Company......................... 50,000 * 1,551 *
State of Connecticut Combined Investment Funds........... 3,495,000 * 108,472 *
State of Florida Division of Treasury.................... 1,150,000 * 35,692 *
State of Oregon--Equity.................................. 3,080,000 * 95,592 *
State Street Bank Custodian for GE Pension Trust......... 2,015,000 * 62,538 *
Sturgeon Limited......................................... 4,680,000 * 145,251 *
SunAmerica Style Select Series Equity Income Fund........ 529,000 * 16,418 *
Sylvan (IMA) Ltd. c/o Forest Investment Mngt. L.L.C...... 1,509,000 * 46,834 *
Syngenta AG.............................................. 175,000 * 5,431 *
TCW Group, Inc........................................... 41,565,000 3.61% 1,290,037 *
TD Securities (USA) Inc.................................. 36,750,000 3.20% 1,140,595 *
Teachers Insurance and Annuity Association............... 8,000,000 * 248,292 *
Texas Builders Insurance Company......................... 150,000 * 4,655 *
Texas Hospital Insurance Exchange........................ 25,000 * 775 *
The Class I C Company.................................... 2,000,000 * 62,073 *
The Green Tree Perpetual Assurance Company............... 130,000 * 4,034 *
The Income Fund of America, Inc.......................... 30,185,000 2.62% 936,840 *
The Investment Company of America........................ 4,445,000 * 137,957 *(24)
The Philanthropic Mutual Life Insurance Company.......... 80,000 * 2,482 *
The Travelers Indemnity Company.......................... 2,656,000 * 82,433 *
The Travelers Insurance Company--Life.................... 1,259,000 * 39,075 *
The Travelers Insurance Company--Separate
Account TLAC........................................... 87,000 * 2,700 *
The Travelers Life and Annuity Company................... 96,000 * 2,979 *
TransGuard Insurance Company of America, Inc............. 650,000 * 20,173 *
Travelers: Travelers Equity Income....................... 520,000 * 16,139 *
UBS AG London Branch..................................... 45,000,000 3.91% 1,396,648 *
UBS O'Connor LLC f/b/o UBS Global Convertible
Portfolio.............................................. 250,000 * 7,759 *
UBS O'Connor LLC f/b/o UBS Global Equity Arbitrage
Master Ltd............................................. 10,000,000 * 310,366 *
UFJ Investments Asia Limited............................. 2,500,000 * 77,591 *
United National Insurance Company........................ 250,000 * 7,759 *
Van Kampen Harbor Fund................................... 4,500,000 * 139,664 *(25)
Variable Insurance Products Fund II: Asset Manager:
Growth Portfolio....................................... 140,000 * 4,345 *
Variable Insurance Products Fund: Asset Manager Portfolio 910,000 * 28,243 *
Variable Insurance Products Fund: Equity-Income Portfolio 6,670,000 * 207,014 *
Variable Insurance Products Fund: Value Portfolio........ 6,000 * 186 *
Vermogensverwaltung Des Kantons Zurich................... 1,650,000 * 51,210 *
VESTA-INEX Insurance Exchange IASA....................... 220,000 * 6,828 *
Victory Capital Management as Agent for the Charitable
Convertible Securities Fund............................ 1,350,000 * 41,899 *
Victory Capital Management as Agent for the Charitable
Income Fund............................................ 190,000 * 5,896 *
47
Principal
Amount of Number of
Debentures Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Debentures That May Be Common Stock
Name of Selling Security Holder May Be Sold Outstanding Sold (1) Outstanding (2)
------------------------------- ------------ ------------- ------------ ---------------
Victory Capital Management as Agent for the
EB Convertible Securities Fund........................ 1,350,000 * 41,899 *
Victory Capital Management as Agent for the
Field Foundation of Illinois.......................... 70,000 * 2,172 *
Victory Capital Management as Agent for the GenCorp
Foundation............................................ 55,000 * 1,707 *
Victory Capital Management as Agent for the Key Trust
Convertible Securities Fund........................... 235,000 * 7,293 *
Victory Capital Management as Agent for the Key Trust
Fixed Income Fund..................................... 300,000 * 9,310 *
Victory Capital Management as Agent for the Parker Key/
Convertible........................................... 670,000 * 20,794 *
Victory Capital Management as Agent for the Victory
Convertible Securities Fund........................... 325,000 * 10,086 *
Victory Capital Management as Investment Advisor for the
Union Security Life Insurance Co...................... 40,000 * 1,241 *
Victory Capital Management as Investment Manager for
CompSource Oklahoma................................... 200,000 * 6,207 *
Victory Capital Management as Investment Manager for
Georgia Municipal Employees Retirement Trust Fdn...... 1,000,000 * 31,036 *
Victory Capital Management as Investment Manager for
Health Foundation of Greater Cincinnati............... 200,000 * 6,207 *
Victory Capital Management as Investment Manager for
Potlatch.............................................. 950,000 * 29,484 *
Victory Capital Management as Investment Manager for the
California State Auto Assoc Inter-Insurance........... 480,000 * 14,897 *
Victory Capital Management as Investment Manager for the
California State Auto Assoc Retirement Pension Plan... 100,000 * 3,103 *
Victory Capital Management as Investment Manager for the
Special Dist of Oregon Conv Secu...................... 25,000 * 775 *
Wachovia Bank National Association (26)................. 37,905,000 3.30% 1,176,443 *
Wachovia Securities International Ltd. (14)............. 10,000,000 * 310,366 *
Wake Forest University.................................. 632,000 * 19,615 *
Wake Forest University Convertible Arbitrage............ 395,000 * 12,259 *
West Virginia Fire Insurance Company.................... 5,000 * 155 *
Western Home Insurance Company.......................... 100,000 * 3,103 *
Westward Life Insurance Company......................... 150,000 * 4,655 *
White River Securities L.L.C............................ 9,000,000 * 279,329 *
Wisconsin Lawyers Mutual Insurance Company.............. 100,000 * 3,103 *
Wisconsin Mutual Insurance Company...................... 140,000 * 4,345 *
World Insurance Company................................. 200,000 * 6,207 *
WPG Convertible Arbitrage Overseas Master Fund, L.P..... 3,500,000 * 108,628 *
Writers Guild--Industry Health Fund..................... 274,000 * 8,504 *
Wyoming State Treasurer................................. 904,000 * 28,057 *
Zazove Hedged Convertible Fund L.P...................... 3,000,000 * 93,109 *
Zazove Income Fund L.P.................................. 2,000,000 * 62,073 *
Zeneca Holdings Trust................................... 240,000 * 7,448 *
Zurich Institutional Benchmark Master Fund Ltd.......... 2,000,000 * 62,073 *
48
Principal
Amount of Number of
Debentures Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Debentures That May Be Common Stock
Name of Selling Security Holder May Be Sold Outstanding Sold (1) Outstanding (2)
------------------------------- ------------ ------------- ------------ ---------------
Zurich Institutional Benchmarks Master Fund Ltd..... 2,500,000 * 77,591 *
Zurich Master Hedge Fund c/o Forest Investment
Mngt. L.L.C....................................... 1,183,000 * 36,716 *
Any other holder of debentures or future transferee,
pledgee, donee or successor of any holder (27).... 34,933,000 3.04% 1,084,202 *(28)
--------
* Less than 1%.
(1) Assumes conversion of all of the holders' debentures at a conversion price
of $32.22 per share of common stock. This conversion price, however, is
subject to adjustment as described under the section captioned
"Description of Debentures" in this prospectus. Accordingly, the amount of
common stock issuable upon conversion of the debentures may increase or
decrease in the future.
(2) Calculated based on Rule 13d-3(d) of the Exchange Act, using 464,188,396
shares of common stock outstanding as of March 31, 2002. In calculating
this amount, we treated as outstanding the number of shares of common
stock issuable upon conversion of all of that particular holder's
debentures. We did not, however, assume the conversion of any other
holder's debentures. Except as otherwise indicated, none of the selling
security holders beneficially owns any of our common stock other than the
shares of common stock issuable upon conversion of the debentures.
(3) Includes 27,321 shares of our common stock beneficially owned by Allstate
Insurance Company in addition to the shares of common stock that it will
own upon the conversion of the debentures.
(4) Banc of America Securities LLC acted as a co-manager in the private
placement of our debentures, and its affiliate, Bank of America, N.A., is
a lender under our Five Year Credit Agreement, dated as of November 5,
1999, as amended, and a lender under our Amended and Restated 364-Day
Credit Agreement, dated as of November 3, 2000, as renewed and amended.
(5) Includes 10,100 shares of our common stock beneficially owned by Banc of
America Securities LLC in addition to the shares of common stock that it
will own upon the conversion of the debentures.
(6) BNP Paribas Equity Strategies SNC's affiliate, BNP Paribas, is a lender
under our Amended and Restated 364-Day Credit Agreement, dated as of
November 3, 2000, as renewed and amended.
(7) Includes 131,841 shares of our common stock beneficially owned by BNP
Paribas Equity Strategies SNC in addition to the shares of common stock
that it will own upon the conversion of the debentures.
(8) Credit Suisse First Boston Corporation acted as a lead manager in the
private placement of our debentures, and its affiliate, Credit Suisse
First Boston, is the documentation agent and a lender under our Five Year
Credit Agreement, dated as of November 5, 1999, as amended, and the
documentation agent and a lender under our Amended and Restated 364-Day
Credit Agreement, dated as of November 3, 2000, as renewed and amended.
(9) Deutsche Banc Alex. Brown Inc. acted as a co-manager in the private
placement of our debentures, and its affiliate, Deutsche Bank AG, is a
lender under our Five Year Credit Agreement, dated as of November 5, 1999,
as amended, and a lender under our Amended and Restated 364-Day Credit
Agreement, dated as of November 3, 2000, as renewed and amended.
(10) An affiliate of this entity, Fidelity Employer Services Company LLC,
administers our payroll and provides certain administrative services for
our health and welfare plans.
(11) Includes 200,600 shares of our common stock beneficially owned by Fidelity
Commonwealth Trust: Fidelity Mid-Cap Stock Fund in addition to the shares
of common stock that it will own upon the conversion of the debentures.
(12) Fidelity Management Trust Company serves as trustee for both our 401(k)
plan and our deferred compensation plan.
(13) Includes 15,750,822 shares of our common stock beneficially owned by
Fidelity Management Trust Company in addition to the shares of common
stock that it will own upon the conversion of the debentures.
49
(14) An affiliate of this entity, Wachovia Bank, N.A., is a lender under our
Five Year Credit Agreement, dated as of November 5, 1999, as amended.
(15) Includes 2,500,000 shares of our common stock beneficially owned by
Fundamental Investors, Inc. in addition to the shares of common stock that
it will own upon the conversion of the debentures.
(16) Goldman, Sachs & Co. served as a lead underwriter in our initial public
offering and has, from time to time, provided other financial advisory
services to us.
(17) J.P. Morgan Securities Inc. acted as a lead manager in the private
placement of our debentures and is the syndication agent under our Five
Year Credit Agreement, dated as of November 5, 1999, as amended, and the
syndication agent under our Amended and Restated 364-Day Credit Agreement,
dated as of November 3, 2000, as renewed and amended. Moreover, its
affiliate, JP Morgan Chase Bank (formerly known as The Chase Manhattan
Bank), is a lender under our Five Year Credit Agreement, dated as of
November 5, 1999, as amended, and a lender under our Amended and Restated
364-Day Credit Agreement, dated as of November 3, 2000, as renewed and
amended.
(18) Includes 103,430 shares of our common stock beneficially owned by J.P.
Morgan Securities Inc. in addition to the shares of common stock that it
will own upon the conversion of the debentures.
(19) Includes 14,344 shares of our common stock beneficially owned by Lutheran
Brotherhood in addition to the shares of common stock that it will own
upon the conversion of the debentures.
(20) Morgan Stanley & Co. Incorporated served as a lead underwriter in our
initial public offering and has, from time to time, provided other
financial advisory services to us.
(21) Includes 298,849 shares of our common stock beneficially owned by Nomura
Securities International, Inc. in addition to the shares of common stock
that it will own upon conversion of the debentures.
(22) Salomon Smith Barney Inc. acted as a lead manager in the private placement
of our debentures and is the lead arranger and sole book manager under our
Five Year Credit Agreement, dated as of November 5, 1999, as amended, and
the lead arranger and sole book manager under our Amended and Restated
364-Day Credit Agreement, dated as of November 3, 2000, as renewed and
amended. An affiliate of Salomon Smith Barney Inc., Citicorp USA, Inc., is
the administrative agent and a lender under our Five Year Credit
Agreement, dated as of November 5, 1999, as amended, and the
administrative agent and a lender under our Amended and Restated 364-Day
Credit Agreement, dated as of November 3, 2000, as renewed and amended.
Salomon Smith Barney Inc. also serves as administrator for our employee
stock purchase plan.
(23) An affiliate of this entity, Societe Generale, is a lender under our Five
Year Credit Agreement, dated as of November 5, 1999, as amended.
(24) Includes 2,939,080 shares of our common stock beneficially owned by The
Investment Company of America in addition to the shares of common stock
that it will own upon the conversion of the debentures.
(25) Includes 1,449 shares of our common stock beneficially owned by Van Kampen
Life Investment Trust Asset Allocation Portfolio in addition to the shares
of common stock that Van Kampen Harbor Fund will own upon the conversion
of the debentures.
(26) Wachovia Bank, N.A. is a lender under our Five Year Credit Agreement,
dated as of November 5, 1999, as amended.
(27) Information about other selling security holders will be set forth in
prospectus supplements, if required.
(28) Assumes that other holders of debentures, or future transferees, pledgees,
donees or successors of any such other holders of debentures, do not
beneficially own any common stock other than the common stock issuable
upon conversion of the debentures at the initial conversion rate.
We prepared the above table based on the information supplied to us by the
selling security holders named in the table. Those holders may have sold or
transferred, in transactions exempt from the registration requirements of the
Securities Act, some or all of their debentures since they supplied the
information to us. The information listed in the table, therefore, may change
over time. If required, we will set forth any changed information in prospectus
supplements.
50
PLAN OF DISTRIBUTION
The debentures and the common stock into which the debentures are
convertible are being registered to permit public secondary trading of these
securities by the holders thereof from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale of the
debentures or the common stock by selling security holders.
The selling security holders, including their pledgees or donees, may sell
the debentures and the common stock directly to purchasers or through
underwriters, broker-dealers or agents. If the debentures or the common stock
are sold through underwriters or broker-dealers, the selling security holder
will be responsible for underwriting discounts or commissions or agent's
commissions. These discounts, concessions or commissions as to any particular
underwriter, broker-dealer or agent may be in excess of those customary in the
types of transactions involved.
The debentures and the common stock may be sold in one or more transactions
at fixed prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale, or at negotiated prices. Sales may be
effected in transactions, which may involve block transactions or crosses:
. on any national securities exchange or quotation service on which the
debentures or the common stock may be listed or quoted at the time of
sale;
. in the over-the-counter market;
. in transactions otherwise than on exchanges or quotation services or in
the over-the-counter market; or
. through the writing of options.
In connection with sales of the debentures and the common stock or
otherwise, the selling security holders may enter into hedging transactions
with broker-dealers, which may in turn engage in short sales of the debentures
and the common stock in the course of hedging the positions they assume. The
selling security holders may also sell short the debentures and the common
stock and deliver the debentures or the common stock to close out short
positions, or loan or pledge the debentures or the common stock to
broker-dealers that in turn may sell the securities.
The aggregate proceeds to the selling security holders from the sale of the
debentures or common stock offered by them hereby will be the purchase price of
the debentures or common stock less discounts and commissions, if any. Each of
the selling security holders reserves the right to accept and, together with
their agents from time to time, to reject, in whole or in part, any proposed
purchase of debentures or common stock to be made directly or through agents.
We will not receive any of the proceeds from this offering. We estimate that
the expenses for which we will be responsible in connection with this offering
will be approximately $1 million.
In order to comply with the securities laws of some states, if applicable,
the debentures and common stock may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states the
debentures and common stock may not be sold unless they have been registered or
qualified for sale or an exemption from registration or qualification
requirements is available and is complied with.
The selling security holders and any underwriters, broker-dealers or agents
that participate in the sale of the debentures and common stock may be
"underwriters" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act.
Selling security holders who are "underwriters" within the meaning of Section
2(11) of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act. They may also be subject to certain
statutory liabilities, including, but not limited to, those of Sections 11, 12
and 17 of the Securities Act and Rule 10b-5 under the Exchange Act. The selling
security holders have acknowledged that they understand their obligations to
comply with the provisions of the Exchange Act and the rules thereunder
relating to stock manipulation, particularly Regulation M.
51
We are not aware of any plans, arrangements or understandings between any
selling security holders and any underwriter, broker-dealer or agent regarding
the sale of the debentures and the common stock by the selling security
holders. We do not assure you that the selling security holders will sell any
or all of the debentures and the common stock offered by them pursuant to this
prospectus. In addition, we do not assure you that any selling security holder
will not transfer, devise or gift the debentures and the common stock by other
means not described in this prospectus. Moreover, any securities covered by
this prospectus that qualify for sale pursuant to Rule 144 or Rule 144A of the
Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to
this prospectus.
Our common stock is quoted on the New York Stock Exchange under the symbol
"A." We do not intend to apply for listing of the debentures on any securities
exchange or other stock market. Accordingly, we give you no assurance as to the
development of liquidity or any trading market for the debentures. See "Risk
Factors--A public market may not develop for the debentures."
To the extent required, the specific debentures or common stock to be sold,
the names of the selling security holders, the respective purchase prices and
public offering prices, the names of any agent, dealer or underwriter and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying prospectus supplement.
We entered into a registration rights agreement for the benefit of the
holders of the securities to register their debentures and common stock under
applicable federal and state securities laws under specific circumstances and
at specific times. The registration rights agreement provides for
cross-indemnification of the selling security holders and us and their and our
respective directors, officers and controlling persons against specific
liabilities in connection with the offer and sale of the debentures and the
common stock, including liabilities under the Securities Act. We have agreed,
among other things, to bear all expenses (other than underwriting discounts and
selling commissions) in connection with the registration and sale of the
debentures and the common stock covered by this prospectus.
LEGAL MATTERS
The validity of the debentures and the shares of common stock offered hereby
and certain tax matters will be passed upon for us by Simpson Thacher &
Bartlett, Palo Alto, California.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K/A of Agilent Technologies, Inc. for
the year ended October 31, 2001 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
52
[LOGO OF AGILENT TECHNOLOGIES]
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Agilent estimates that the expenses payable by it in connection with the
offerings described in this Registration Statement will be as follows:
Registration fee........................................... $ 105,800
Printing and engraving expenses............................ $ 70,000
Accounting fees and expenses............................... $ 12,000
Legal fees and expenses.................................... $ 321,000
Trustee and transfer agent fees and expenses............... $ 6,000
Rating agency fees and expenses............................ $ 463,000
Miscellaneous expenses..................................... $ 22,200
----------
Total................................................... $1,000,000
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Agilent is incorporated under the laws of the State of Delaware. Section 145
of the Delaware General Corporation Law provides that a Delaware corporation
may indemnify persons who were, are or are threatened to be made, parties to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of such corporation), by reason of the fact that such person is or was an
officer, director, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe that his conduct was illegal.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
enterprise, against any liability asserted against him and incurred by him in
any such capacity, arising out of his status as such, whether or not the
corporation would otherwise have the power to indemnify him under Section 145.
Agilent's Certificate of Incorporation and Bylaws provide for the
indemnification of officers and directors to the fullest extent permitted by
the Delaware General Corporation Law.
All of Agilent's directors and officers will be covered by insurance
policies maintained by Agilent against certain liabilities for actions taken in
their capacities as such, including liabilities under the Securities Act of
1933. In addition, Agilent has entered into indemnity agreements with its
directors and executive officers that obligate it to indemnify such directors
and executive officers to the fullest extent permitted by the Delaware General
Corporation Law.
ITEM 16. EXHIBITS.
See Exhibit Index.
II-1
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 462(b) if, in the aggregate, the
changes in volume and price represent no more than 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, or the Exchange Act, that are incorporated
by reference in this 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) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of Agilent's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions set forth in response to Item 15, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of Palo Alto, State of California, on April 10,
2002.
AGILENT TECHNOLOGIES, INC.
Date: April 10, 2002
By: /s/ MARIE OH HUBER
-----------------------------------
Marie Oh Huber
Vice President, Assistant
Secretary and Assistant General
Counsel
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed by the attorney-in-fact for the
following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* President, Chief Executive April 10, 2002
----------------------------- Officer and Director
Edward W. Barnholt (Principal Executive
Officer)
* Non-Executive Chairman of the April 10, 2002
----------------------------- Board of Directors
Gerald Grinstein
* Executive Vice President and April 10, 2002
----------------------------- Chief Financial Officer
Adrian T. Dillon (Principal Financial
Officer)
* Vice President and Controller April 10, 2002
----------------------------- (Principal Accounting
Dorothy D. Hayes Officer)
* Director April 10, 2002
-----------------------------
James Cullen
II-3
Signature Title Date
--------- ----- ----
* Director April 10, 2002
-----------------------------
Robert J. Herbold
* Director April 10, 2002
-----------------------------
Walter B. Hewlett
* Director April 10, 2002
-----------------------------
Heidi Kunz
* Director April 10, 2002
-----------------------------
David M. Lawrence
* Director April 10, 2002
-----------------------------
A. Barry Rand
*By: /s/ MARIE OH HUBER
-------------------------
Marie Oh Huber
Attorney-in-Fact
II-4
INDEX TO EXHIBITS
Exhibit Description
------- -----------
4.1 Amended and Restated Certificate of Incorporation. Incorporated by reference from Exhibit 3.1 of the
Company's Registration Statement on Form S-1, Registration No. 333-85249 ("S-1").
4.2 Amended and Restated Bylaws.
4.3 Indenture between Agilent Technologies, Inc. as Issuer and Citibank, N.A. as Trustee, dated as of
November 27, 2001. Incorporated by reference from Exhibit 99.2 of the Company's Form 8-K filed
November 27, 2001.
4.4 Registration Rights Agreement by and between Agilent Technologies, Inc. as Issuer and Credit Suisse
First Boston Corporation, J.P. Morgan Securities, Inc. and Salomon Smith Barney, Inc. as Initial
Purchasers, dated as of November 27, 2001. Incorporated by reference from Exhibit 99.3 of the
Company's Form 8-K filed November 27, 2001.
4.5 Form of Debenture (included in Exhibit 4.3).
5.1* Opinion of Counsel.
8.1* Tax Opinion of Simpson Thacher & Bartlett.
12.1* Statement re Computation of Ratios.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2* Consent of Counsel (included in Opinion filed as Exhibit 5.1).
23.3* Consent of Simpson Thacher & Bartlett (included in Exhibit 8.1).
24.1* Power of Attorney (included on signature page to Registration Statement).
25.1* Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Citibank, N.A., as Trustee
under the Indenture.
--------
* Previously filed