As filed with the Securities and Exchange Commission on February 26, 2002
Registration No. 333-83174
Post-effective Amendment No. 3 to Registration No. 333-71167
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
AT&T Corp.
(Exact name of registrant as specified in its charter)
New York 4811 13-4924710
(State or other jurisdiction (Primary Standard (I.R.S. employer
of incorporation or Industiral Classification identification number)
organization) Code Number)
---------------------------
32 Avenue of the Americas
New York, New York 10013-2412
(212) 387-5400
(Address, including zip code, and telephone
number, including area code, of registrant's principal
executive offices)
---------------------------
Marilyn J. Wasser, Esq.
Vice President--Law and Secretary
AT&T Corp.
295 North Maple Avenue
Basking Ridge, NJ 07920
(908) 221-2000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
---------------------------
Copy to:
Charles S. Whitman, III, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------------
Pursuant to Rule 429(a) under the Securities Act of 1933, the prospectus
contained in this registration statement relates to securities registered under
this registration statement and the securities registered and remaining unsold
under AT&T Corp.'s registration statement on Form S-3 (Registration No.
333-71167) initially filed on January 26, 1999. Pursuant to Rule 429(b), this
registration statement, which is a new registration statement, also constitutes
Post-Effective Amendment No. 3 to AT&T Corp.'s registration statement on Form
S-3 (Registration No. 333-71167), and such Post-Effective Amendment No. 3 shall
hereafter become effective concurrently with the effectiveness of this
registration statement and in accordance with Section 8(c) of the Securities
Act of 1933. In the event that securities previously registered under AT&T
Corp.'s registration statement on Form S-3 (Registration No. 333-71167) are
offered and sold prior to the effective date of this registration statement,
the amount of such previously registered securities so sold will not be
included in the prospectus hereunder.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
PROSPECTUS
$5,000,000,000
[AT&T CORP. LOGO]
Debt Securities
Preferred Stock
Common Stock
Depositary Shares
Warrants
Units
------------
We may offer any combination of the securities described in this
prospectus in different series from time to time in amounts, at prices and on
terms to be determined at or prior to the time of the offering. We will provide
you with specific terms of the applicable offered securities in one or more
supplements to this prospectus. The aggregate initial offering price of the
securities that we may issue under this prospectus will not exceed
$5,000,000,000.
We urge you to read this prospectus and any accompanying prospectus
supplement carefully before you make your investment decision. This prospectus
may not be used to make sales of the offered securities unless it is
accompanied by a prospectus supplement describing the method and terms of the
offering of those offered securities. We may sell the securities, or we may
distribute them through underwriters or dealers. In addition, the underwriters
may overallot a portion of the securities.
Our common stock is listed for trading on the New York Stock Exchange,
Inc. under the symbol "T." Unless we state otherwise in a prospectus
supplement, we will not list any other of these securities on any securities
exchange. On February 25, 2002, the last reported sale price of our common
stock on the New York Stock Exchange was $15.50. Prospective purchasers of
common stock are urged to obtain current information as to the market prices of
the common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus or any accompanying prospectus supplement is truthful or
complete. Any representation to the contrary is a criminal offense.
Our principal office is located at 32 Avenue of the Americas, New York,
New York 10013. Our telephone number is (212) 387-5400. Our website can be
found at www.att.com. Information on this website is not incorporated by
reference in this prospectus.
The date of this prospectus is February 26, 2002.
TABLE OF CONTENTS
Page
----
WHERE YOU CAN FIND MORE INFORMATION...........................................1
FORWARD-LOOKING STATEMENTS....................................................2
ABOUT THIS PROSPECTUS.........................................................4
ABOUT AT&T CORP...............................................................4
RECENT DEVELOPMENTS...........................................................4
USE OF PROCEEDS...............................................................5
RATIO OF EARNINGS TO FIXED CHARGES............................................5
DESCRIPTION OF SECURITIES.....................................................5
DESCRIPTION OF DEBT SECURITIES................................................5
DESCRIPTION OF PREFERRED STOCK...............................................12
DESCRIPTION OF COMMON STOCK..................................................17
DESCRIPTION OF DEPOSITARY SHARES.............................................18
DESCRIPTION OF WARRANTS......................................................20
DESCRIPTION OF UNITS.........................................................22
LEGAL OWNERSHIP AND BOOK ENTRY ISSUANCE......................................24
PLAN OF DISTRIBUTION.........................................................27
LEGAL MATTERS................................................................28
EXPERTS......................................................................28
GLOSSARY.....................................................................29
We may not sell these securities or accept any offer to buy these
securities until we deliver this prospectus and an accompanying prospectus
supplement in final form. We are not using this prospectus and any accompanying
prospectus supplement to offer to sell these securities or to solicit offers to
buy these securities in any place where the offer or sale is not permitted.
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this prospectus and any accompanying prospectus
supplement in connection with the offer contained in this prospectus and any
accompanying prospectus supplement and, if given or made, such information or
representations must not be relied upon as having been authorized by AT&T Corp.
or any underwriters. This prospectus and any accompanying prospectus supplement
do not constitute any offer or solicitation by anyone in any jurisdiction in
which such offer or solicitation is not authorized or in which the person
making such offer or solicitation is not qualified to do so or to anyone to
whom it is unlawful to make such offer or solicitation.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information we file at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference room. Our SEC filings also are available to the public from
commercial documents retrieval services and at the Internet site maintained by
the SEC at www.sec.gov.
The SEC allows us to "incorporate by reference" information in this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus,
except for any information superseded by information contained directly in this
prospectus. This prospectus incorporates by reference the documents set forth
below that we have previously filed with the SEC. These documents contain
important information about us and our financial condition.
AT&T SEC Filings (File No. 1-1105) Period
---------------------------------- ------
Annual Report on Form 10-K.......... Year ended December 31, 2000, filed on
April 2, 2001 (as amended April 17,
2001)
Quarterly Reports on Form 10-Q...... Quarter ended March 31, 2001, filed on
May 15, 2001 (as amended July 3, 2001
and August 10, 2001), quarter ended
June 30, 2001, filed on August 14, 2001
and quarter ended September 30, 2001,
filed on November 13, 2001
Current Reports on Form 8-K......... Filed on February 16, 2001, March 1,
2001, March 28, 2001, March 29, 2001
(as amended April 11, 2001), April 19,
2001, April 27, 2001, May 22, 2001,
June 19, 2001, July 19, 2001, July 24,
2001, September 24, 2001, October 23,
2001, December 21, 2001, January 4,
2002, February 5, 2002 and February 21,
2002
Proxy Statements.................... Filed on March 30, 2001, May 11, 2001
(as amended July 3, 2001) and February
11, 2002
We also incorporate by reference additional documents that may be filed
with the SEC pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 from the date of this prospectus prior to the termination
of the offering. These include periodic reports, such as Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well
as proxy statements. If you are a shareholder, we may have sent you some of the
documents incorporated by reference, but you can obtain any of them through us,
the SEC or the SEC's Internet world wide web site as described above. Documents
incorporated by reference are available from us without charge, excluding all
exhibits unless we have specifically incorporated by reference such exhibits in
this prospectus. Any person, including any beneficial owner, to whom this
document is delivered may obtain documents incorporated by reference in this
prospectus by requesting them in writing, or by telephone, from us at the
following address:
AT&T Corp.
32 Avenue of the Americas
New York, New York 10013-2412
Tel: (212) 387-5400
Attn: Office of the Corporate Secretary
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
information that is different from what is contained in this prospectus. This
prospectus is dated February 26, 2002. You should not assume that the
information contained in this prospectus is accurate as of any date other than
that date.
FORWARD-LOOKING STATEMENTS
Statements in this prospectus and the documents incorporated herein by
reference that are not historical facts are hereby identified as
"forward-looking statements" for the purpose of the safe harbor provided by
Section 21E of the Exchange Act and Section 27A of the Securities Act of 1933,
as amended. The words "estimate," "project," "intend," "expect," "believe,"
"plan" and similar expressions are intended to identify forward-looking
statements. These forward-looking statements are found at various places
throughout this prospectus and throughout the other documents incorporated
herein by reference, including, but not limited to, our 2000 Annual Report on
Form 10-K, our Current Report on Form 8-K dated September 24, 2001 and any
other amendments to the annual report, and our Proxy Statement dated
February 11, 2002.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this document.
These forward-looking statements, including, without limitation, those
relating to our restructuring plan, proposed merger transaction for our
broadband business, financial condition, businesses and strategies, future
business prospects, revenues, working capital, liquidity, capital needs,
network build out, interest costs and income, and other matters, in each case,
relating to us and our groups and subsidiaries, wherever they occur in this
prospectus and the documents incorporated herein by reference, are necessarily
estimates reflecting the best judgment of senior management and involve a
number of risks and uncertainties that could cause actual results to differ
materially from those suggested by the forward-looking statements. These
forward-looking statements should, therefore, be considered in light of various
important factors, including those set forth in the documents incorporated
herein by reference. Various factors could cause actual results to differ
materially from estimates or projections contained in the forward-looking
statements including, without limitation:
2
o the risk factors described in the documents incorporated herein by
reference,
o changes in our businesses, operations, results and prospects,
including those due to our restructuring plan, our proposed merger
transaction for our broadband business and other events,
o the effects of new business strategies, including the operations of
new systems and technologies,
o the prospects of operations of our main business units operating as
separate entities as opposed to a part of an integrated
telecommunications provider following completion of our restructuring
plan, our proposed merger transaction with Comcast Corporation for
our broadband business and other transactions,
o the actions and effects of existing and new competitors in the
markets in which our groups compete,
o the impact of oversupply of capacity resulting from excessive
deployment of network capacity,
o the ongoing global and domestic trend towards consolidation in the
telecommunications industry, which trend may have the effect of
making the competitors larger and better financed and afford these
competitors with extensive resources and greater geographic reach,
allowing them to compete more effectively,
o the availability and cost of capital and the consequences of
increased leverage,
o the successful execution of plans to dispose of non-strategic assets
as part of an overall corporate deleveraging plan,
o the impact of any unusual items resulting from ongoing evaluations of
the business strategies of our groups,
o the requirements imposed on our groups or latitude allowed to
competitors by the Federal Communications Commission or state
regulatory commissions under the Telecommunications Act of 1996 or
other applicable laws and regulations,
o the results of litigation filed or which may be filed against us,
o the possibility of one or more of the markets in which our groups
compete being impacted by changes in political, economic or other
factors, such as monetary policy, legal and regulatory changes or
other external factors over which we have no control, and
o events related to our investments and joint ventures.
Except for our ongoing obligations to disclose material information under
U.S. federal securities laws, we undertake no obligation to publicly release
any revisions to these forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events. Moreover, in the future, we, through our senior
management team, may make forward-looking statements about the matters
described in this document or other matters concerning us and our groups and
subsidiaries.
3
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, we may sell any combination of the securities described in
this prospectus in one or more offerings up to a total dollar amount of
proceeds of $5,000,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering and the manner in which the securities will be
offered. This prospectus does not contain all of the information included in
the registration statement. For a more complete understanding of the offering
of the securities, you should refer to the registration statement, including
its exhibits. Prospectus supplements may also add, update or change information
contained in this prospectus. We urge you to read both this prospectus and any
prospectus supplement, together with additional information described under the
heading "Where You Can Find More Information."
The information in this prospectus speaks only as of the date indicated on
the cover of this document unless the information specifically indicates that
another date applies.
References in this prospectus to the terms "we" or "us" or other similar
terms mean AT&T Corp., unless we state otherwise or the context indicates
otherwise.
ABOUT AT&T CORP.
AT&T Corp. was incorporated in 1885 under the laws of the State of New
York and has its principal executive offices at 32 Avenue of the Americas, New
York, New York 10013-2412 (telephone number 212-387-5400).
We are among the world's communications leaders, providing voice, data and
video communications services to large and small businesses, consumers and
government entities. We and our subsidiaries furnish domestic and international
long distance, regional and local communications services, cable (broadband)
television and Internet communications.
RECENT DEVELOPMENTS
On December 19, 2001, AT&T and AT&T Broadband Corp., a wholly owned
subsidiary of AT&T, entered into a Separation and Distribution Agreement
providing, subject to the terms and conditions thereof, that AT&T would
separate its broadband business from its other businesses, transfer its
broadband business to AT&T Broadband and distribute shares of common stock of
AT&T Broadband to shareholders of AT&T. Also, on that day, AT&T, AT&T Broadband
and Comcast Corporation entered into a Merger Agreement pursuant to which,
subject to the terms and conditions thereof, AT&T Broadband would combine with
Comcast and shareholders of AT&T Broadband would receive shares of the combined
entity in exchange for their shares of AT&T Broadband. For additional
information about these transactions, see "Where You Can Find More
Information."
AT&T also announced that it intends to proceed with other aspects of
its previously announced restructuring, including the creation of a tracking
stock for its consumer services unit, which is expected, subject to shareholder
approval and other conditions, to be distributed to AT&T shareholders later
this year.
4
USE OF PROCEEDS
Unless we inform you otherwise in a prospectus supplement, we intend to
use the net proceeds of any securities sold for general corporate purposes,
which may include, among other things, additions to working capital, repayment
or refinancing of existing indebtedness or other corporate obligations,
financing of capital expenditures and acquisitions, investment in existing and
future projects, and repurchases and redemptions of securities. Pending any
specific application, we may initially invest funds in short-term marketable
securities or apply them to the reduction of short-term indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratios of earnings to fixed charges for the periods indicated below
were as follows:
Nine Months Ended
Year Ended December 31, September 30,
----------------------------------------------- -----------------
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
12.4 x 11.7 x 14.9 x 5.0 x 2.9 x *
* AT&T's loss for the nine months ended September 30, 2001, was inadequate
to cover fixed charges, dividend requirements on preferred stock and interest
on trust preferred securities in the amount of $6.2 billion.
This ratio shows the coverage of earnings from continuing operations
before income taxes to fixed charges, which consist primarily of interest and
debt expense.
For the purpose of calculating the ratio of earnings to fixed charges, we
calculate earnings by adding fixed charges excluding capitalized interest to
income from continuing operations before income taxes, and by adding AT&T's
share of net equity investment losses, net of distributions in
less-than-fifty-percent-owned affiliates. By fixed charges we mean total
interest, including capitalized interest, dividend requirements on preferred
stock and interest on trust preferred securities and a portion of rentals,
which we believe is representative of the interest factor of our rental
expense.
DESCRIPTION OF SECURITIES
This prospectus contains a summary of the debt securities, preferred
stock, common stock, depositary shares, warrants and units that we may offer.
These summaries are not meant to be a complete description of each security.
However, this prospectus and the accompanying prospectus supplement contain the
material terms and conditions for each security.
Any of the securities described herein and in a prospectus supplement may
be issued separately or as part of a unit consisting of two or more securities,
which may or may not be separable from one another.
DESCRIPTION OF DEBT SECURITIES
The debt securities are to be issued under an indenture, dated as of
September 7, 1990, between us and The Bank of New York, as Trustee, as amended
by the First Supplemental Indenture, dated as of October 30, 1992, between AT&T
and the Trustee (we refer to this indenture, as amended, including the
provisions becoming a part thereof, or superseding provisions thereof, pursuant
to the Trust Indenture
5
Reform Act of 1990 (P.L. 10 1-550), as the "indenture"). A copy of the
indenture is filed as an exhibit to this prospectus.
This prospectus briefly outlines the main indenture provisions. The
indenture has been filed as an exhibit to the registration statement and you
should read the indenture for provisions that may be important to you.
In the summary below, we have included references to section numbers of
the indenture so that you can easily locate these provisions.
General
The debt securities will rank equally with all of our other unsecured and
unsubordinated debt. The indenture does not limit the amount of debt we may
issue under the indenture or otherwise. We may issue the debt securities in one
or more series with the same or various maturities, at a price of 100% of their
principal amount or at a premium or a discount.
The prospectus supplement relating to any series of debt securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
o The total principal amount of the debt securities
o The percentage of the principal amount at which the debt securities
will be issued
o The date or dates on which principal will be payable and whether the
debt securities will be payable on demand on any date
o The interest rate or rates and the method for calculating the
interest rate
o The interest payment dates
o Optional or mandatory redemption terms
o The terms, if any, upon which the debt securities may be convertible
into or exchanged for securities or indebtedness of any kind of us or
of any other issuer or obligor and the terms and conditions upon
which such conversion or exchange shall be effected, including the
initial conversion or exchange price or rate, the conversion period
and any other additional provisions
o Authorized denominations
o The currency in which the debt securities will be denominated
o Whether the principal of and any premium or interest is payable in a
different currency than the currency in which the debt securities are
denominated, including a currency other than U.S. dollars
o The manner in which any payments of principal of and any premium or
interest will be calculated, if the payment will be based on an index
or formula
6
o Whether the debt securities are to be issued as individual
certificates to each holder or in the form of global securities held
by a depositary on behalf of holders or in uncertificated form
o Whether the debt securities will be issued as registered securities
or as bearer securities
o Information describing any book-entry features
o Whether and under what circumstances we will pay additional amounts
on any debt securities held by a person who is not a United States
person for tax purposes and whether we can redeem the debt securities
if we have to pay additional amounts
o Any other terms
We may issue debt securities of any series as registered securities or
bearer securities or both. In addition, we may issue uncertificated securities.
Unless we state otherwise in a prospectus supplement, we will not offer, sell
or deliver any bearer debt securities, including any bearer securities issued
in temporary or permanent global form, to any United States person. By United
States person we mean a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or of any of its political subdivisions, or an estate
or trust whose income is subject to United States federal income taxation
regardless of its source.
Payment and Transfer
Unless we state otherwise in a prospectus supplement, we will make
principal and interest payments at the office of the paying agent or agents we
name in the prospectus supplement or by mailing a check to you at the address
we have for you in the register. We will pay interest on bearer securities when
you present and surrender the interest coupon for that interest payment at the
office of our paying agent located outside the United States.
Bearer securities and coupons are transferable by delivery. Unless we
describe other procedures in a prospectus supplement, you will be able to
transfer registered debt securities at the office of the transfer agent or
agents we name in the prospectus supplement.
You may also exchange registered debt securities at the office of the
transfer agent for an equal aggregate principal amount of registered debt
securities of the same series having the same maturity date, interest rate and
other terms as long as the debt securities are issued in authorized
denominations. A prospectus supplement will describe the procedures for
exchanging bearer debt securities, if applicable. Registered debt securities
can never be exchanged for bearer debt securities.
Neither AT&T nor the Trustee will impose any service charge for any
transfer or exchange of a debt security, however, we may ask you to pay any
taxes or other governmental charges in connection with a transfer or exchange
of debt securities.
Unless we indicate otherwise in a prospectus supplement, we will issue
debt securities only in denominations of $25,000 and integral multiples of
$1,000 over $25,000. If we issue debt securities in a foreign currency, we will
specify the authorized denominations in the prospectus supplement.
If we issue original issue discount debt securities, we will describe the
special United States federal income tax and other considerations of a purchase
of original issue discount debt securities in the prospectus supplement.
Original issue discount debt securities are securities that are issued at a
7
substantial discount below their principal amount because they pay no interest
or pay interest that is below market rates at the time of issuance.
Temporary Global Securities
If so specified in the relevant prospectus supplement, all or any portion
of the debt securities of a series that are issuable as bearer securities
initially will be represented by one or more temporary global securities,
without interest coupons, to be deposited with a common depository in London
for Morgan Guaranty Trust Company of New York, Brussels Office, as operator of
the Euroclear System ("Euroclear"), and Clearstream Banking, S.A.
("Clearstream") for credit to the respective accounts of the beneficial owners
of such debt securities (or to such other accounts as they may direct). On and
after the exchange date determined as provided in any such temporary global
security and described in the relevant prospectus supplement, the interest in
such temporary global security will be exchangeable for definitive debt
securities in bearer form, registered form, or permanent global form, or any
combination thereof, as specified in the relevant prospectus supplement.
The prospectus supplement will set forth the procedures for payment of
interest in respect of any portion of a temporary global security payable on an
Interest Payment Date (as defined in the prospectus supplement) occurring prior
to the issuance of definitive debt securities.
Permanent Global Securities
If any debt securities of a series are issuable in either bearer or
registered permanent global form, the applicable prospectus supplement will
describe the circumstances, if any, under which beneficial owners of interests
in any such permanent global security may exchange their interests for debt
securities of such series and of like tenor and principal amount in any
authorized form and denomination. A person having a beneficial interest in a
permanent global security, except with respect to payment of principal of,
premium, if any, and any interest on the permanent global security, will be
treated as a holder of the principal amount of outstanding debt securities
represented by the permanent global security. This amount shall be specified in
a written statement of the holder of the permanent global security, or in the
case of a permanent global security in bearer form, of Euroclear or
Clearstream, which is produced to the Trustee by such person. Principal of,
premium, if any, and any interest on a permanent global security will be
payable in the manner described in the relevant prospectus supplement.
Covenants
We have agreed to some restrictions on our activities for the benefit of
holders of the debt securities. The restrictive covenants summarized below will
apply, unless the covenants are waived or amended, so long as any of the debt
securities are outstanding. The prospectus supplement may contain different
covenants. We have provided a Glossary at the end of this prospectus to define
the capitalized words used in describing the covenants. In the covenants, all
references to us mean AT&T Corp. only.
Limitation on Secured Indebtedness. We have agreed in our indenture dated
as of September 7, 1990 that we will not, and we will not permit any of our
Restricted Subsidiaries to, create, assume, incur or guarantee any Secured
Indebtedness unless we secure these debt securities to the same extent as such
Secured Indebtedness. However, we may incur Secured Indebtedness without
securing these debt securities if, immediately after incurring the Secured
Indebtedness, the aggregate amount of all Secured Indebtedness and the
discounted present value of all net rentals payable under leases entered into
in connection with sale and leaseback transactions would not exceed 10% of
Consolidated Net Tangible Assets. The aggregate amount of all Secured
Indebtedness in the preceding sentence excludes Secured
8
Indebtedness which is secured to the same extent as these debt securities and
Secured Indebtedness that is being repaid concurrently. (Section 4.03).
Limitation on Sale and Leaseback Transactions. We have agreed that we will
not, and we will not permit any of our Restricted Subsidiaries to, enter into
any lease longer than three years, excluding leases of newly acquired, improved
or constructed property, covering any Principal Property of AT&T or any
Restricted Subsidiary that is sold to any other person in connection with such
lease, unless either
immediately thereafter, the sum of
o the discounted present value of all net rentals payable under all
such leases entered into after April 1, 1986 (except for any lease
entered into by a Restricted Subsidiary before it became a Restricted
Subsidiary) and
o the aggregate amount of all Secured Indebtedness, excluding Secured
Indebtedness which is secured to the same extent as these debt
securities
does not exceed 10% of Consolidated Net Tangible Assets, or
an amount equal to the greater of
o the net proceeds to AT&T or a Restricted Subsidiary from such sale
and
o the discounted present value of all net rentals payable thereunder,
is used within 180 days to retire long-term debt of AT&T or a Restricted
Subsidiary. However, debt which is subordinate to these debt securities or
which is owed to AT&T or a Restricted Subsidiary may not be retired.
(Section 4.04)
Consolidation, Merger or Sale
We have agreed not to consolidate with or merge into any other corporation
or convey or transfer substantially all of our properties and assets to any
person, unless
o that person is authorized to acquire and operate our property and
o the successor corporation expressly assumes by a supplemental
indenture the due and punctual payment of the principal of and any
premium or any interest on all the debt securities and the
performance of every covenant in the indenture that we would
otherwise have to perform. (Section 5.01)
Modification of the Indenture
Under the indenture, our rights and obligations and the rights of the
holders may be modified if the holders of a majority in aggregate principal
amount of the outstanding debt securities of each series affected by the
modification consent to it. No modification of the principal or interest
payment terms, and no modification reducing the percentage required for
modifications, is effective against any holder without its consent. (Sections
9.01 & 9.02.)
9
Events of Default
When we use the term Event of Default in the indenture, here are some
examples of what we mean.
Unless otherwise specified in a prospectus supplement, an Event of Default
with respect to a series of debt securities occurs if:
o we fail to pay the principal or any premium on any debt security when
due
o we fail to pay interest when due on any debt security for 90 days
o we fail to perform any other covenant in the indenture and this
failure continues for 90 days after we receive written notice of it
from the Trustee or from the holders of 25% in principal amount of
the outstanding debt securities of such series or
o we or a court take certain actions relating to the bankruptcy,
insolvency or reorganization of our company for the benefit of our
creditors.
The supplemental indenture or the form of security for a particular series
of debt securities may include additional Events of Default or changes to the
Events of Default described above. For the Events of Default applicable to a
particular series of debt securities, see the prospectus supplement relating to
such series.
A default under our other indebtedness will not be a default under the
indenture, and a default under one series of debt securities under the
indenture will not necessarily be a default under another series.
The Trustee may withhold notice to the holders of debt securities of any
default, except in the payment of principal or interest, if it considers such
withholding of notice to be in the best interests of the holders. By default we
mean any event which is an Event of Default described above or would be an
Event of Default but for the giving of notice or the passage of time. (Section
7.05)
If an Event of Default for any series of debt securities occurs and
continues, the Trustee or the holders of at least 25% in aggregate principal
amount of the debt securities of the series may require us to repay
immediately:
o the entire principal of the debt securities of such series or
o if the debt securities are original issue discount securities, such
portion of the principal as may be described in the applicable
prospectus supplement. (Section 6.01)
The holders of a majority of the aggregate principal amount of the debt
securities of the affected series can rescind this accelerated payment
requirement or waive any past default or Event of Default or allow us to not
comply with any provision of the indenture. However, among other things, they
cannot waive a default in payment of principal of, premium, if any, or interest
on, any of the debt securities of such series. (Sections 6.01 and 6.06)
Other than its duties in case of a default, the Trustee is not obligated
to exercise any of its rights or powers under the indenture at the request,
order or direction of any holders, unless the holders offer the Trustee
reasonable indemnity. (Section 7.01) If they provide this reasonable indemnity,
the holders of a majority in principal amount of any series of debt securities
may, subject to certain limitations, direct the
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time, method and place of conducting any proceeding or any remedy available to
the Trustee, or exercising any power conferred upon the Trustee, for any series
of debt securities. (Section 6.06)
We are not required to provide the Trustee with any certificate or other
document saying that we are in compliance with the indenture or that there are
no defaults.
Defeasance
When we use the term defeasance, we mean discharge from some or all of our
obligations under the indenture. If we deposit with the Trustee sufficient cash
or government securities to pay the principal, interest, any premium and any
other sums due to the stated maturity date or a redemption date of the debt
securities of a particular series, then at our option:
o we will be discharged from our obligations with respect to the debt
securities of such series or
o we will no longer be under any obligation to comply with certain
restrictive covenants under the indenture, and certain Events of
Default will no longer apply to us.
If this happens, the holders of the debt securities of the affected series
will not be entitled to the benefits of the indenture except for registration
of transfer and exchange of debt securities and replacement of lost, stolen or
mutilated debt securities. Such holders may look only to such deposited funds
or obligations for payment.
We must deliver to the Trustee an opinion of counsel to the effect that
the deposit and related defeasance would not cause the holders of the debt
securities to recognize income, gain or loss for Federal income tax purposes.
We must also deliver a ruling to such effect received from or published by the
United States Internal Revenue Service if we are discharged from our
obligations with respect to the debt securities.
Concerning the Trustee
The Trustee has loaned money to us and provided other services to us in
the past and may do so in the future as a part of its regular business.
Conversion and Exchange
We will summarize in a related prospectus supplement the terms, if any, on
which debt securities of any series will be convertible into or exchangeable
for our common stock or preferred stock, property or cash, or a combination of
any of the foregoing. These terms may include provisions for conversion or
exchange, either on a mandatory basis, at the option of the holder, or at our
option, in which case the number of our shares of common stock or preferred
stock to be received by the holders of the debt securities would be calculated
according to the factors and at the time summarized in the related prospectus
supplement. The prospectus supplement will also summarize the material federal
income tax consequences applicable to the convertible or exchangeable debt
securities.
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DESCRIPTION OF PREFERRED STOCK
Authorized Preferred Stock
Our restated certificate of incorporation authorizes us to issue
100,000,000 shares of preferred stock, par value $1.00 per share. Of these
100,000,000 authorized preferred shares, our restated certificate of
incorporation specifically provides for 2,000,000 authorized preferred shares
to constitute a series designated as Subsidiary Exchangeable Preferred Stock,
or the Subsidiary Preferred Stock. The specific terms of Subsidiary Preferred
Stock are described below under "Description of Subsidiary Preferred Stock".
We may issue shares of preferred stock from time to time in one or more
series, without stockholder approval, when authorized by our board of
directors. Under our restated certificate of incorporation, we cannot pay
dividends (other than dividends payable in common shares) on our common shares
unless full cumulative dividends on all outstanding shares of preferred stock
for all past dividend periods and for the current dividend period have been
paid or declared and set apart for payment.
Upon issuance of a particular series of preferred stock, our board of
directors is authorized to specify:
o the number of shares to be included in the series, and the
designation of the series;
o the dividend rate for the series and the date or dates from which
dividends shall be cumulative;
o the times when, the prices at which, and all other terms and
conditions upon which shares of the series may be redeemable;
o the amounts payable to holders upon our liquidation, dissolution or
winding up, which may vary based on the date of such event and
whether such event was voluntary or involuntary, except that the
maximum aggregate amount all outstanding shares of preferred stock
may receive upon involuntary liquidation, dissolution or winding up
cannot exceed $8,000,000,000;
o any purchase, retirement or sinking fund provisions for the purchase
or redemption of the series or for other corporate purposes, and the
operation of this fund;
o whether the series is convertible or exchangeable and, if so, the
price or prices of conversion or exchange, and the method, if any, of
adjusting this price;
o restrictions, if any, on the payment of dividends or making of other
distributions on, and upon the purchase or acquisition of, common
shares;
o restrictions, if any, upon the creation of indebtedness and upon the
issuance of additional shares ranking on a parity with or prior to
the shares of such series;
o the voting rights, if any, of such series in addition to the voting
rights provided in our restated certificate of incorporation; and
o any other rights, preferences and limitations relating to the series.
The ability of our board of directors to authorize, without stockholder
approval, the issuance of preferred stock with conversion and other rights, may
adversely affect the rights of holders of our common stock or other series of
preferred stock that may be outstanding.
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Specific Terms of a Series of Preferred Stock
The preferred stock we may offer will be issued in one or more series.
Shares of preferred stock, when issued against full payment of its purchase
price, will be fully paid and non-assessable. Their par value or liquidation
preference, however, will not be indicative of the price at which they will
actually trade after their issue. If necessary, the prospectus supplement will
provide a description of United States Federal income tax consequences relating
to the purchase and ownership of the series of preferred stock offered by that
prospectus supplement.
The preferred stock will have the dividend, liquidation, redemption and
voting rights discussed below, unless otherwise described in a prospectus
supplement relating to a particular series. A prospectus supplement will
discuss the specific features in the categories set forth above under
"--Authorized Preferred Stock" for the series of preferred stock to which it
relates.
Rank
Our preferred stock will have priority over our common stock with respect
to dividends and distribution of assets. All shares of preferred stock of all
series will rank equally and be identical in all respects, except for those
variations in rights, preferences and limitations permitted by our restated
certificate of incorporation. We describe these permitted areas of variation
above under "--Authorized Preferred Stock". All shares of any particular series
will rank equally, except that shares of one series issued at different times
may vary with respect to the date from which dividends shall be cumulative.
Dividends
Holders of each series of preferred stock shall be entitled to receive
cash dividends to the extent specified in the prospectus supplement when, as
and if declared by our board of directors, from funds legally available for the
payment of dividends. The rates and dates of payment of dividends of each
series of preferred stock will be stated in the prospectus supplement.
Dividends will be payable to the holders of record of preferred stock as they
appear on our books on the record dates fixed by our board of directors.
Dividends on any series of preferred stock will be cumulative from the date or
dates fixed with respect to that series.
Redemption
The terms, if any, on which shares of preferred stock of a series may be
redeemed will be discussed in the prospectus supplement.
Convertibility and Exchangeability
The applicable prospectus supplement will specify whether the preferred
stock being offered has any conversion or exchange features, and will describe
all the related terms and conditions.
Liquidation
Subject to the provisions of our restated certificate of incorporation,
including limits on the aggregate amount of distributions on preferred stock,
upon any voluntary or involuntary liquidation, dissolution or winding up of our
company, holders of each series of preferred stock will be entitled to receive
distributions upon liquidation in the amount described in the related
prospectus supplement, including all accumulated and unpaid dividends up to the
date of final distribution. These distributions will be made before any
distribution is made on any securities ranking junior to the preferred stock
with
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respect to liquidation, including our common stock. Holders of our preferred
stock will not be entitled to any other amounts from us after they have
received their full liquidation preference. The maximum aggregate amount all
outstanding shares of preferred stock are entitled to receive upon involuntary
liquidation, dissolution or winding up will not exceed $8,000,000,000. Our
restated certificate of incorporation specifies that the voluntary transfer of
all or substantially of the assets of our company or consolidation or merger of
our company with or into one or more other corporations will not constitute a
liquidation, dissolution or winding up of our company.
Voting Rights
Whenever there is preferred stock outstanding, we may not
o without the approval of the holders of at least 66 2/3% of the
outstanding shares of preferred stock, authorize any shares ranking
prior to the preferred stock or amend our restated certificate of
incorporation to adversely affect the shares of preferred stock; or
o without the approval of the holders of at least 66 2/3% of the
outstanding shares of any series of preferred stock, change any of
the provisions applicable to that series to adversely affect the
shares of such series; or
o without the approval of the holders of at least a majority of the
outstanding shares of preferred stock, increase the authorized number
of shares of preferred stock or of any other class of stock ranking
on parity with the preferred stock.
Also, at any time or time when dividends payable on shares of preferred
stock are in default in an aggregate amount equal to six full quarterly
dividends, the number of members of our board of directors will automatically
increase by two, and the holders of preferred stock will have the right to
elect these two new directors until all accumulated dividends through the
latest dividend payment date have been paid in full or declared and set apart
for payment.
Preemptive Rights
No holder of shares of preferred stock of any series will have any
preemptive rights to purchase any other shares of the corporation or shares
convertible into shares of the corporation.
Transfer Agent
The transfer agent for each series of preferred stock will be named and
described in the prospectus supplement for that series.
Description of Subsidiary Preferred Stock
The Subsidiary Preferred Stock has the rights and is subject to the terms
and conditions discussed below. As of the date of this prospectus, 759,792
shares of the Subsidiary Preferred Stock are held by our subsidiaries.
Rank
The Subsidiary Preferred Stock ranks, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of our preferred stock, and senior to our common stock.
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Dividends
Holders of shares of Subsidiary Preferred Stock are entitled to receive,
when, as and if declared by our board of directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the Quarterly
Dividend Payment Date, which is the first day of March, June, September and
December in each year, in an amount per share (rounded to the nearest cent)
equal to the greater of
o $1, or
o subject to the adjustments described below under "--Adjustments",
1000 times the aggregate per share amount of cash and 1000 times the
aggregate per share amount of all non-cash dividends or other
distributions declared on our common stock since the last quarterly
dividend payment date.
In lieu of any dividends payable in shares of our common stock or payable
as a result of a subdivision of the outstanding shares of common stock (by
reclassification or otherwise), the adjustments described below under
"--Adjustments" will be made. Accrued but unpaid dividends on shares of
Subsidiary Preferred Stock will not bear interest.
Certain Restrictions
We are subject to certain restrictions in the event that quarterly
dividends or other dividends or distributions payable on the Subsidiary
Preferred Stock are in arrears (which does not include any failure to make any
payment as a result of a waiver by the holders thereof). In this case,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Subsidiary Preferred Stock outstanding
have been paid in full, we cannot declare or pay dividends, or make any other
distributions:
o on any shares of stock ranking junior (either as to dividends or upon
liquidation) to the Subsidiary Preferred Stock; or
o on any shares of stock ranking on a parity (either as to dividends or
upon liquidation) with the Subsidiary Preferred Stock, except
dividends paid ratably on the Subsidiary Preferred Stock and all
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of these shares
are then entitled.
When dividends or distributions on Subsidiary Preferred Stock are in
arrears, we and any our subsidiaries also may not:
o acquire for consideration shares of any stock ranking junior (either
as to dividends or upon liquidation) to the Subsidiary Preferred
Stock. However, we may at any time acquire shares of any junior stock
in exchange for shares of any of our stock ranking junior (either as
to dividends or upon liquidation) to the Subsidiary Preferred Stock;
or
o acquire for consideration any shares of Subsidiary Preferred Stock,
or any shares of stock ranking on a parity with it, except in
accordance with a purchase offer made in writing or by publication to
all holders of these shares.
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Redemption
Our board of directors may redeem shares of Subsidiary Preferred Stock at
any time at a ratio of 1000 shares of our common stock per each share of
Subsidiary Preferred Stock, subject to the adjustments described below under
"--Adjustments".
Liquidation
Subject to (a) the provisions of our restated certificate of
incorporation, including limits on the aggregate amount of distributions on
preferred stock, and (b) the specific limit described in the last sentence of
this section, upon any voluntary or involuntary liquidation, dissolution or
winding up of our company, holders of shares of Subsidiary Preferred Stock have
the following rights:
o no distribution will be made on any securities ranking junior to the
Subsidiary Preferred Stock, including our common stock, until the
holders of shares of Subsidiary Preferred Stock have received $1000
per share, plus an amount equal to all accumulated and unpaid
dividends up to the date of final distribution; and
o subject to the adjustments described below under "Adjustments", each
share of Subsidiary Preferred Stock will be entitled to receive an
amount equal to 1000 times the aggregate amount to be distributed on
each share of our common stock.
If the liquidation amounts payable to the Subsidiary Preferred Stock and
any other securities ranking on a parity as to dividend or liquidation rights
are not paid in full, the holders of the Subsidiary Preferred Stock and all
parity stock will share ratably in proportion to the full liquidation
preferences of each security. The maximum aggregate amount all outstanding
shares of Subsidiary Preferred Stock are entitled to receive (before any
distributions are made on stock ranking junior to it) upon involuntary
liquidation, dissolution or winding up shall not exceed $500,000,000.
Consolidation, Merger, etc.
In the event our company is involved in a transaction in which shares of
our common stock are exchanged for other stock, cash and/or other property,
then in each case at the same time each share of Subsidiary Preferred Stock
shall be exchanged for an amount equal to 1000 times the aggregate amount of
consideration into which each share of our common stock is exchanged. This
amount for which each share of Subsidiary Preferred Stock would be exchanged is
subject to the adjustments described below under "--Adjustments".
Voting Rights
Subject to the adjustments described below under "--Adjustments", each
share of Subsidiary Preferred Stock entitles its holder to 1000 votes on any
matter submitted to a vote of our shareholders. Except as required by law or by
the certificate of designations creating the Subsidiary Preferred Stock or any
other preferred or similar stock, the holders of Subsidiary Preferred Stock
vote together as a single class with all other holders of our capital stock
having general voting rights. Our restated certificate of incorporation may not
be amended in any way that would materially alter the rights and preferences of
the Subsidiary Preferred Stock in a manner adverse to these shares except with
the affirmative vote of at least two-thirds of the outstanding shares of
Subsidiary Preferred Stock, voting together as a single class. Other than the
special consent rights described in the preceding sentence, holders of
Subsidiary Preferred Stock have no special voting rights or consent rights with
respect to any corporate action except as required by law.
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Adjustments
The dividend and voting rights of the Subsidiary Preferred Stock and the
rights of the Subsidiary Preferred Stock in the event of a liquidation,
dissolution or winding up of our company or a consolidation or merger involving
our company are subject to the adjustments described in this section. In the
event we at any time declare or pay any dividend on our common stock payable in
shares of common stock, or effect a subdivision or combination or consolidation
of the outstanding shares of common stock (by reclassification or otherwise
than by payment of a dividend in shares of common stock) into a greater or
lesser number of shares of common stock, then in each case certain rights of
the Subsidiary Preferred Stock are subject to the following adjustments. The
rights are adjusted by multiplying
o in the case of the rights described above in the second bullet under
"--Dividends", the quarterly dividend amount payable on each share of
Subsidiary Preferred Stock,
o in the case of the rights described above under "--Voting Rights",
the number of votes per share of Subsidiary Preferred Stock,
o in the case of the rights described above in the second bullet under
"--Liquidation, Dissolution or Winding Up", the amount holders of
shares of Subsidiary Preferred Stock are to receive per share in the
event of a liquidation, dissolution or winding up of our company, and
o in the case of the rights described above under "--Consolidation,
Merger, etc.", the amount of consideration holders of shares of
Subsidiary Preferred Stock are to receive per share in the event our
company is involved in a transaction in which shares of our common
stock are exchanged for or changed into other stock, cash and/or
other property,
by a fraction, the numerator of which is the number of shares of our common
stock outstanding immediately after the distribution of our common stock and
the denominator of which is the number of shares of our common stock that were
outstanding immediately prior to the distribution of our common stock.
DESCRIPTION OF COMMON STOCK
Our certificate of incorporation authorizes us to issue up to 6 billion
shares of our common stock, par value $1. As of December 31, 2001 there were
3,542,405,744 shares of our common stock outstanding. All shares of AT&T common
stock are entitled to participate equally in dividends. Each shareholder has
one vote for each share registered in the shareholder's name. All shares of
AT&T common stock would rank equally in liquidation, and all shares of AT&T
common stock (including the shares of AT&T common stock offered by this
prospectus) are fully-paid and non-assessable by us. Holders of shares of AT&T
common stock have no preemptive rights.
We are authorized to issue shares of AT&T common stock under the
Shareowner Dividend Reinvestment and Stock Purchase Plan and various employee
benefit plans of us and our subsidiaries.
The rights of the holders of our common stock are subject to the rights
that our board of directors may from time to time confer on holders of our
preferred stock issued in the future. These rights may adversely affect the
rights of holders of our common stock.
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DESCRIPTION OF DEPOSITARY SHARES
Fractional Shares of Preferred Stock
We may elect to offer fractional interests in shares of our preferred
stock instead of whole shares of preferred stock. If so, we will allow a
depositary to issue to the public depositary shares, each of which will
represent a fractional interest as described in the prospectus supplement, of a
share of preferred stock.
Deposit Agreement
The shares of the preferred stock underlying any depositary shares will be
deposited under a separate deposit agreement between us and a bank or trust
company acting as depositary with respect to that series. The depositary will
have its principal office in the United States and have a combined capital and
surplus of at least $50,000,000. The prospectus supplement relating to a series
of depositary shares will include the name and address of the depositary. Under
the deposit agreement, each owner of a depositary share will be entitled, in
proportion of its fractional interest in a share of the preferred stock
underlying that depositary share, to all the rights and preferences of that
preferred stock, including dividend, voting, redemption, conversion, exchange
and liquidation rights.
Depositary shares will be evidenced by one or more depositary receipts
issued under the deposit agreement.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash
distributions in respect of the preferred stock to each record depositary
shareholder based on the number of the depositary shares owned by that holder
on the relevant record date. The depositary will distribute only that amount
which can be distributed without attributing to any depositary shareholders a
fraction of one cent, and any balance not so distributed will be added to and
treated as part of the next sum received by the depositary for distribution to
record depositary shareholders.
If there is a distribution other than in cash, the depositary will
distribute property to the entitled record depositary shareholders, unless the
depositary determines that it is not feasible to make that distribution. In
that case the depositary may, with our approval, adopt the method it deems
equitable and practicable for making that distribution, including any sale of
property and the distribution of the net proceeds from this sale to the
concerned holders.
Each deposit agreement will also contain provisions relating to the manner
in which any subscription or similar rights we offer to preferred stockholders
of the relevant series will be made available to depositary shareholders.
Withdrawal of Stock
Upon surrender of depositary receipts at the depositary's office, the
holder of the relevant depositary shares will be entitled to the number of
whole shares of the related preferred stock series and any money or other
property those depositary shares represent. Depositary shareholders will be
entitled to receive whole shares of the related preferred stock series on the
basis described in the prospectus supplement, but holders of those whole
preferred stock shares will not afterwards be entitled to receive depositary
shares in exchange for their shares. If the depositary receipts the holder
delivers evidence a depositary share number exceeding the whole share number of
the related preferred stock series to be
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withdrawn, the depositary will deliver to that holder a new depositary receipt
evidencing the excess number of depositary shares.
Redemption and Liquidation
The terms on which the depositary shares relating to the preferred stock
of any series may be redeemed, and any amounts distributable upon our
liquidation, dissolution or winding up, will be described in the prospectus
supplement.
Convertibility and Exchangeability
Shares of a series of preferred stock may be convertible or exchangeable
into shares of our common stock, another series of preferred stock or other
securities or property. The conversion or exchange may be mandatory or
optional. The applicable prospectus supplement will specify whether the
preferred stock being offered has any conversion or exchange features, and will
describe all the related terms and conditions.
Voting
Upon receiving notice of any meeting at which preferred stockholders of
any series are entitled to vote, the depositary will mail the information
contained in that notice to the record depositary shareholders relating to
those series of preferred stock. Each depositary shareholder on the record date
will be entitled to instruct the depositary on how to vote the shares of
preferred stock underlying that holder's depositary shares. The depositary will
vote the preferred stock shares underlying those depositary shares according to
those instructions, and we will take reasonably necessary actions to enable the
depositary to do so. If the depositary does not receive specific instructions
from the depositary shareholders relating to that preferred stock, it will
abstain from voting those preferred stock shares, unless otherwise discussed in
the prospectus supplement.
Amendment and Termination of Deposit Agreement
We and the depositary may amend the depositary receipt form evidencing the
depositary shares and the related deposit agreement. However, any amendment
that significantly affects the rights of the depositary shareholders will not
be effective unless holders of a majority of the outstanding depositary shares
approve that amendment. We or the depositary may terminate a deposit agreement
only if:
o we have redeemed or reacquired all outstanding depositary shares
relating to the deposit agreement,
o all preferred stock of the relevant series has been withdrawn, or
o there has been a final distribution in respect of the preferred stock
of any series in connection with our liquidation, dissolution or
winding up and such distribution has been made to the related
depositary shareholders.
Charges of Depositary
We will pay all charges of each depositary in connection with the initial
deposit and any redemption of the preferred stock. Depositary shareholders will
be required to pay any other transfer and other taxes and governmental charges
and any other charges expressly provided in the deposit agreement to be for
their accounts.
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Title
We and each depositary and any of our respective agents may treat the
registered owner of any depositary share as the absolute owner of that share,
whether or not any payment in respect of that depositary share is overdue and
despite any notice to the contrary, for any purpose. See "Legal Ownership and
Book-Entry Issuance" below.
Resignation and Removal of Depositary
A depositary may resign at any time by issuing us a notice of resignation,
and we may remove any depositary at any time by issuing it a notice of removal.
Resignation or removal will take effect upon the appointment of a successor
depositary and its acceptance of appointment. That successor depositary must:
o be appointed within 60 days after delivery of the notice of
resignation or removal,
o be a bank or trust company having its principal office in the United
States, and
o have a combined capital and surplus of at least $50,000,000.
Miscellaneous
Each depositary will forward to the relevant depositary shareholders all
our reports and communications that we are required to furnish to preferred
stockholders of any series.
Neither we nor the depositary will be liable if either of us is prevented
or delayed by law or any circumstance beyond its control in performing its
obligations under any deposit agreement. Our obligations and the obligations of
each depositary under any deposit agreement will be limited to performance in
good faith of their duties under that agreement, and they will not be obligated
to prosecute or defend any legal proceeding in respect of any depositary shares
or preferred stock unless they are provided with satisfactory indemnity. They
may rely upon written advice of counsel or accountants, or information provided
by persons presenting preferred stock for deposit, depositary shareholders or
other persons believed to be competent and on documents believed to be genuine.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of our debt securities, preferred
stock, common stock, depositary shares or units. Warrants may be issued
independently or together with debt securities, preferred stock, common stock,
depositary shares or units, and may be attached to or separate from those
securities.
Warrant Agreements
Each series of warrants will be evidenced by certificates issued under a
separate warrant agreement to be entered into between us and a bank that we
select as warrant agent with respect to such series. The warrant agent will
have its principal office in the U.S. and have a combined capital and surplus
of at least $50,000,000. We will file the warrant agreement with respect to
each series of warrants with the prospectus supplement relating to that series
of warrants.
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General
The prospectus supplement relating to a series of warrants will include
the specific terms of the series, as follows:
o The offering price and currency
o The date on which the right to exercise the warrants will commence
and the date this right will expire
o If the warrants are not continuously exercisable, the specific date
or dates on which they can be exercised
o Whether the warrants will be issued in individual certificates to
holders or in the form of global securities held by a depositary on
behalf of holders
o The terms of the securities which holders of warrants can purchase
and the price to be paid to us on such exercise
o If the securities that can be purchased will be issued in bearer
form, any restrictions applicable to such a purchase
o If warrants are issued together with a series of securities, the name
of such securities, their terms, the number of warrants accompanying
each security, and the date the warrants and securities will become
separately transferable
o Any special tax implications of the warrants or their exercise
o Any other specific terms of the warrants.
Transfers and Exchanges
A holder will be able to exchange warrant certificates for new warrant
certificates of different denominations, or to transfer warrants, at the
corporate trust office of the warrant agent or any other office indicated in
the prospectus supplement. Prior to exercise, holders of warrants will have
none of the rights of holders of the underlying debt securities.
Exercise
Holders will be able to exercise warrants up to 5:00 P.M. New York City
time on the date set forth in the prospectus supplement as the expiration date.
After this time, unless we have extended it, the unexercised warrants will be
void.
Holders of warrants may exercise them by delivering to the warrant agent
at its corporate trust office the following:
o Warrant certificates properly completed
o Payment of the exercise price.
As soon as practicable after such delivery, we will issue and deliver to
the indicated holder the securities purchasable upon exercise. If a holder does
not exercise all the warrants represented by a particular certificate, we will
also issue a new certificate for the remaining number of warrants.
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No Rights of Security Holder Prior to Exercise
Prior to the exercise of their warrants, holders of warrants will not have
any of the rights of holders of the securities purchasable upon the exercise of
the warrants, and will not be entitled to:
o in the case of warrants to purchase debt securities, payments of
principal of, premium, if any, or interest, if any, on the debt
securities purchasable upon exercise; or
o in the case of warrants to purchase equity securities, the right to
vote or to receive dividend payments or similar distributions on the
securities purchasable upon exercise.
Enforceability of Rights By Holders of Warrants
Each warrant agent will act solely as our agent under the relevant warrant
agreement and will not assume any obligation or relationship of agency or trust
for any warrantholder. A single bank or trust company may act as warrant agent
for more than one issue of warrants. A warrant agent will have no duty or
responsibility in case we default in performing our obligations under the
relevant warrant agreement or warrant, including any duty or responsibility to
initiate any legal proceedings or to make any demand upon us.
Title
We and the warrant agents and any of our respective agents may treat the
registered holder of any warrant certificate as the absolute owner of the
warrants evidenced by that certificate for any purpose and as the person
entitled to exercise the rights attaching to the warrants so requested, despite
any notice to the contrary. See "Legal Ownership and Book-Entry Issuance"
below.
DESCRIPTION OF UNITS
We may issue units comprised of one or more debt securities, shares of
preferred stock, shares of common stock and warrants in any combination. Each
unit will be issued so that the holder of the unit is also the holder of each
security included in the unit. Thus, the holder of a unit will have the rights
and obligations of a holder of each included security. The unit agreement under
which a unit is issued may provide that the securities included in the unit may
not be held or transferred separately, at any time or at any time before a
specified date.
The prospectus supplement may describe:
o the designation and terms of the units and of the securities
comprising the units, including whether and under what circumstances
those securities may be held or transferred separately;
o any provisions of the governing unit agreement that differ from those
described below; and
o any provisions for the issuance, payment, settlement, transfer or
exchange of the units or of the securities comprising the units.
The provisions described in this section, as well as those described under
"Description of Debt Securities," "Description of Preferred Stock,"
"Description of Common Stock" and "Description of Warrants," will apply to each
unit and to any debt security, preferred stock, common stock or warrant,
respectively, included in each unit.
22
We may issue units in such amounts and in as many distinct series as we
wish. This section summarizes terms of the units that apply generally to all
series.
Unit Agreements
We will issue the units under one or more unit agreements to be entered
into between us and a bank or other financial institution, as unit agent. We
may add, replace or terminate unit agents from time to time. We will identify
the unit agreement under which each series of units will be issued and the unit
agent under that agreement in the prospectus supplement.
The following provisions will generally apply to all unit agreements
unless otherwise stated in the prospectus supplement.
Enforcement of Rights
The unit agent under a unit agreement will act solely as our agent in
connection with the units issued under that agreement. The unit agent will not
assume any obligation or relationship of agency or trust for or with any
holders of those units or of the securities comprising those units. The unit
agent will not be obligated to take any action on behalf of those holders to
enforce or protect their rights under the units or the included securities.
Except as indicated in the next paragraph, a holder of a unit may, without
the consent of the unit agent or any other holder, enforce its rights as holder
under any security included in the unit, in accordance with the terms of that
security and the indenture, warrant agreement or other instrument under which
that security is issued. Those terms are described elsewhere in this prospectus
under the sections relating to debt securities, preferred stock, common stock
and warrants.
Notwithstanding the foregoing, a unit agreement may limit or otherwise
affect the ability of a holder of units issued under that agreement to enforce
its rights, including any right to bring a legal action, with respect to those
units or any securities, other than debt securities, that are included in those
units. Limitations of this kind will be described in the prospectus supplement.
Modification Without Consent of Holders
Unless provided otherwise in an applicable prospectus supplement, we and
the applicable unit agent may amend any unit or unit agreement without the
consent of any holder:
o to cure any ambiguity;
o to correct or supplement any defective or inconsistent provision; or
o to make any other change that we believe is necessary or desirable
and will not adversely affect the interests of the affected holders
in any material respect.
We do not need any approval to make changes that affect only units to be issued
after the changes take effect. We may also make changes that do not adversely
affect a particular unit in any material respect, even if they adversely affect
other units in a material respect. In those cases, we do not need to obtain the
approval of the holder of the unaffected unit; we need only obtain any required
approvals from the holders of the affected units.
23
Modification With Consent of Holders
Unless provided otherwise in an applicable prospectus supplement, we may
not amend any particular unit or a unit agreement with respect to any
particular unit unless we obtain the consent of the holder of that unit, if the
amendment would:
o impair any right of the holder to exercise or enforce any right under
a security included in the unit if the terms of that security require
the consent of the holder to any changes that would impair the
exercise or enforcement of that right, or
o reduce the percentage of outstanding units or any series or class the
consent of whose holders is required to amend that series or class,
or the applicable unit agreement with respect to that series or
class, as described below.
Unless provided otherwise in an applicable prospectus supplement, any
other change to a particular unit agreement and the units issued under that
agreement would require the following approval:
o If the change affects only the units of a particular series issued
under that agreement, the change must be approved by the holders of a
majority of the outstanding units of that series, or
o If the change affects the units of more than one series issued under
that agreement, it must be approved by the holders of a majority of
all outstanding units of all series affected by the change, with the
units of all the affected series voting together as one class for
this purpose.
These provisions regarding changes with majority approval also apply to
changes affecting any securities issued under a unit agreement, as the
governing document.
In each case, the required approval must be given by written consent.
Unit Agreements Will Not Be Qualified Under Trust Indenture Act
No unit agreement will be qualified as an indenture, and no unit agent
will be required to qualify as a trustee, under the Trust Indenture Act.
Therefore, holders of units issued under unit agreements will not have the
protections of the Trust Indenture Act with respect to their units.
Title
We and the unit agents and any of our respective agents may treat the
registered holder of any unit certificate as an absolute owner of the units
evidenced by that certificate for any purpose and as the person entitled to
exercise the rights attaching to the units so requested, despite any notice to
the contrary. See "Legal Ownership and Book-Entry Issuance" below.
LEGAL OWNERSHIP AND BOOK-ENTRY ISSUANCE
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be accurate, but we assume no
responsibility for the accuracy thereof. We do not have any responsibility for
the performance by DTC or its participants of their respective obligations as
described herein or under the rules and procedures governing their respective
operations. None of us, any trustee, any registrar and transfer agent, any
warrant agent, any unit agent or any depositary, or any of their agents, will
have any responsibility for any aspect of DTC's or any
24
participant's records relating to, or for payments made on account of,
beneficial interests in a global security, or for maintaining, supervising or
reviewing any records relating to those beneficial interests.
Unless otherwise provided in the prospectus supplement, the debt
securities, preferred stock, warrants or units of a series may be issued in
whole or in part in the form of one or more global securities that will be
deposited with, or on behalf of, the depositary or its nominee identified in
the prospectus supplement relating to that series. The depositary will be DTC,
unless otherwise indicated in the applicable prospectus supplement for a
series. Book-entry securities may be issued only in fully registered form and
in either temporary or permanent form. Unless and until it is exchanged for the
individual securities that it represents, a book-entry security may not be
transferred except as a whole to a nominee of the depositary or to a successor
depositary or any nominee of the successor.
DTC has advised us that it is a limited purpose trust company organized
under the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC holds securities that its participants deposit with DTC. DTC
also facilitates the settlement among participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others, such as securities brokers and
dealers, banks and trust companies that clear through or maintain custodial
relationships with participants, either directly or indirectly. The rules
applicable to DTC and its participants are on file with the SEC. No fees or
costs of DTC will be charged to you.
Purchases of book-entry securities within the DTC system must be made by
or through direct participants, which will receive a credit for the book-entry
securities on DTC's records. The beneficial ownership interest of each actual
purchaser of each book-entry security is in turn to be recorded on the direct
and indirect participants' records. Beneficial owners will not receive written
confirmation from DTC of their purchases, but beneficial owners are expected to
receive written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the direct or indirect participants
through which the beneficial owners purchased book-entry securities. Transfers
of ownership interests in the book-entry securities are to be accomplished by
entries made on the books of participants acting on behalf of beneficial
owners. Beneficial owners will not receive certificates representing their
ownership interests in book-entry securities, except in the event that use of
the book-entry system is discontinued. The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a global security.
To facilitate subsequent transfers, all book-entry securities deposited by
participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of book-entry securities with DTC and their registration
in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual beneficial owners of the book-entry securities; DTC's
records reflect only the identity of the direct participants to whose accounts
such book-entry securities are credited, which may or may not be the beneficial
owners. The participants will remain responsible for keeping account of their
holdings on behalf of their customers.
25
We expect that conveyance of notices and other communications by DTC to
direct participants, by direct participants to indirect participants, and by
direct participants and indirect participants to beneficial owners and the
voting rights of direct participants, indirect participants and beneficial
owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the book-entry securities.
Although voting with respect to the book-entry securities is limited to
the holders of record of the book-entry securities, in those instances in which
a vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to book-entry securities. Under its usual procedures, DTC would mail an
omnibus proxy to the relevant trustee as soon as possible after the record
date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to
those direct participants to whose accounts such book-entry securities are
credited on the record date (identified in a listing attached to the omnibus
proxy).
As long as the book-entry securities are held by DTC or its nominee and
DTC continues to make its same-day funds settlement system available to us, all
payments on the book-entry securities will be made by us in immediately
available funds to DTC. We have been advised that DTC's practice is to credit
direct participants' accounts on the relevant payment date in accordance with
their respective holdings shown on DTC's records, unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
participants to beneficial owners will be governed by standing instructions and
customary practices and will be the responsibility of such participant and not
of DTC or us, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment on book-entry securities to DTC is our
responsibility, disbursement of such payments to direct participants is the
responsibility of DTC and disbursements of such payments to the beneficial
owners is the responsibility of direct and indirect participants.
Unless otherwise provided in the applicable prospectus supplement, a
global security will be exchangeable for definitive securities registered in
the names of persons other than DTC or its nominee only if:
o DTC provides reasonable notice to us that it is unwilling or unable
to continue as depositary for that global security or if DTC ceases
to be a clearing agency registered under Exchange Act when it is
required to be so registered;
o we execute and deliver to the relevant registrar, transfer agent,
trustee, depositary, warrant agent and/or unit agent an order
complying with the requirements of our restated certificate of
incorporation and by-laws or the relevant indenture, deposit
agreement, warrant agreement and/or unit agreement that this global
security shall be so exchangeable; or
o there has occurred and is continuing a default in the payment of any
amount due in respect of the securities or, in the case of debt
securities, an event of default or an event that, with the giving of
notice or lapse of time, or both, would constitute an event of
default with respect to those debt securities.
Under those circumstances and unless provided otherwise in the applicable
prospectus supplement, if we do not appoint a successor depositary within 90
days, we will issue individual definitive securities in exchange for all the
global securities representing
26
the debt securities, preferred stock, warrants or units. In addition, we may at
any time and in our sole discretion determine not to have the debt securities,
preferred stock, warrants or units represented by global securities and, in
that event, will issue individual definitive securities in exchange for all the
global securities representing them. Individual definitive debt securities so
issued will be issued in denominations of $1,000 and any larger amount that is
an integral multiple of $1,000 and registered in such names as DTC shall
direct. Individual preferred securities will be issued in whole shares and
registered in such names as DTC shall direct. DTC will generally not be
required to notify its participants of the availability of definitive
securities.
Except as described above, a global security may not be transferred except
as a whole to DTC or another nominee of DTC, or to a successor depositary we
appoint. Except as described above, DTC may not sell, assign, transfer or
otherwise convey any beneficial interest in a global security unless the
beneficial interest is in an amount equal to an authorized denomination for
those securities.
PLAN OF DISTRIBUTION
We may sell the offered securities (a) through underwriters or dealers;
(b) through agents; or (c) directly to one or more purchasers.
Sale Through Underwriters
If we use underwriters in the sale, such underwriters will acquire the
securities for their own account. The underwriters may resell the securities in
one or more transactions, including negotiated transactions at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the securities will be subject to
certain conditions. The underwriters will be obligated to purchase all the
securities of the series offered if any of the securities are purchased. The
underwriters may change from time to time any initial public offering price and
any discounts or concessions allowed or re-allowed or paid to dealers.
Sale Through Agents
We may sell offered securities through agents designated by us. Unless
indicated in the prospectus supplement, the agents have agreed to use their
reasonable best efforts to solicit purchases for the period of their
appointment.
Direct Sales
We also may sell offered securities directly. In this case, no
underwriters or agents would be involved.
Delayed Delivery Contracts
We may authorize underwriters or agents to solicit offers by certain
institutions to purchase offered securities pursuant to delayed delivery
contracts, with the following features:
o The contracts provide for purchase of the securities at the public
offering price but at a specified later date
o Purchase of securities at the closing of such contracts is
conditioned solely on the purchase being permissible under laws
applicable to the purchasing institution
o The contracts and purchasing institutions are subject to our approval
27
o We will pay disclosed commissions to underwriters or agents if we
accept any contract.
General Information
Underwriters, dealers and agents that participate in the distribution of
the offered securities may be underwriters as defined in the Securities Act of
1933. Any discount or commissions received by them from us and any profit on
the resale of the offered securities by them may be treated as underwriting
discounts and commissions under the Securities Act. We will identify any
underwriters or agents, and describe their compensation, in a prospectus
supplement.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Act. We may also have agreements to contribute with respect to payments
which the underwriters, dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or our subsidiaries in the ordinary course of their
businesses.
LEGAL MATTERS
Legal matters relating to the securities offered hereby will be passed
upon for us by Robert S. Feit, Chief Counsel--Corporate and Financial Matters
of AT&T and for any underwriters by Davis Polk & Wardwell. As of December 31,
2001, Robert S. Feit owned approximately 3900 shares of AT&T common stock, and
had options to purchase additional shares of AT&T common stock.
EXPERTS
The audited financial statements incorporated in this Registration
Statement on Amendment No. 1 to Form S-3 by reference to AT&T's Current Report
on Form 8-K, filed on September 24, 2001, except as they relate to Liberty
Media Group, have been audited by PricewaterhouseCoopers LLP, independent
accountants (and insofar as they relate to Liberty Media Group, by KPMG LLP,
independent accountants), whose reports thereon are incorporated by reference.
Such financial statements have been incorporated by reference in reliance on
the reports of such independent accountants, given on the authority of such
firms as experts in auditing and accounting.
The combined financial statements of AT&T Wireless Group incorporated in
this Registration Statement on Amendment No. 1 to Form S-3 by reference to
AT&T's Annual Report on Form 10-K, filed on April 2, 2001 (as amended April 17,
2001), and the Current Report on From 8-K, filed on March 29, 2001 (as amended
on April 11, 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.
The combined balance sheets of Liberty Media Group ("New Liberty or
Successor") as of December 31, 2000 and 1999, and the related combined
statements of operations and comprehensive earnings, net attributed assets, and
cash flows for the year ended December 31, 2000 and for the period from March
1, 1999 to December 31, 1999 (Successor periods) and from January 1, 1999 to
February 28, 1999 and for the year ended December 31, 1998 (Predecessor
periods) which appear as an exhibit to the Annual Report on Form 10-K/A, dated
April 17, 2001, of AT&T, have been incorporated by reference herein in reliance
upon the report, dated February 26, 2001, of KPMG LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.
The KPMG LLP report dated February 26, 2001 refers to the fact that the
financial statements should be read in conjunction with the consolidated
financial statements of AT&T.
28
In addition, the KPMG LLP report contains an explanatory paragraph that
states that, effective March 9, 1999, AT&T, the owner of the assets comprising
New Liberty, acquired Tele-Communications, Inc., the owner of the assets
comprising Old Liberty, in a business combination accounted for as a purchase.
As a result of the acquisition, the combined financial information for the
periods after the acquisition is presented on a different cost basis than that
for the periods before the acquisition and, therefore, is not comparable.
The consolidated balance sheets of Tele-Communications, Inc. and its
subsidiaries as of December 31, 1998 and 1997, and the related consolidated
statements of operations and comprehensive earnings, stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1998, which appear in the Current Report on Form 8-K, dated March 28, 2001, of
AT&T have been incorporated by reference herein in reliance upon the report
dated March 9, 1999, of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
The consolidated balance sheets of MediaOne Group, Inc. as of December 31,
1999 and 1998, and the related consolidated statements of operations,
shareowners' equity and cash flows for each of the three years in the period
ended December 31, 1999, filed in AT&T's Form 8-K dated March 28, 2001,
incorporated by reference in this registration statement, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
GLOSSARY
We have used the following definitions in describing the restrictive
covenants that we have agreed to in the indenture. We describe these
restrictive covenants in this prospectus under Description of Debt Securities.
You can also find the precise legal definitions of these terms in Section 1.01
of the indenture.
"Secured Indebtedness" means:
o indebtedness of AT&T or any Restricted Subsidiary secured by any lien
upon any Principal Property or the stock or indebtedness of a
Restricted Subsidiary or
o any conditional sale or other title retention agreement covering any
Principal Property or Restricted Subsidiary but does not include any
indebtedness secured by any lien or any conditional sale or other
title retention agreement:
o outstanding on April 1, 1986
o incurred or entered into after April 1, 1986 to finance the
acquisition, improvement or construction of such property and
either secured by purchase money mortgages or liens placed on
such property within 180 days of acquisition, improvement or
construction
o on Principal Property or the stock or indebtedness of Restricted
Subsidiaries and existing at the time of acquisition of the
property, stock or indebtedness
29
o owing to AT&T or any other Restricted Subsidiary
o existing at the time a corporation becomes a Restricted
Subsidiary
o incurred to finance the acquisition or construction of property
in favor of any country or any of its political subdivisions and
o replacing, extending or renewing any such indebtedness (to the
extent such indebtedness is not increased).
"Principal Property" means land, land improvements, buildings and
associated factory, laboratory, office and switching equipment (excluding all
products marketed by AT&T or any of its subsidiaries) constituting a
manufacturing, development, warehouse, service, office or operating facility
owned by or leased to AT&T or a Restricted Subsidiary, located within the
United States and having an acquisition cost plus capitalized improvements in
excess of .25 per cent of Consolidated Net Tangible Assets as of the date of
such determination, other than any such property financed through the issuance
of tax-exempt governmental obligations, or which the Board of Directors
determines is not of material importance to AT&T and its Restricted
Subsidiaries taken as a whole, or in which the interest of AT&T and all its
subsidiaries does not exceed 50%.
"Consolidated Net Tangible Assets" means the total assets of AT&T and its
subsidiaries, less current liabilities and certain intangible assets (other
than product development costs).
"Restricted Subsidiary" means any subsidiary of AT&T which has
substantially all its property in the United States, which owns or is a lessee
of any Principal Property and in which the investment of AT&T and all its
subsidiaries exceeds .25 per cent of Consolidated Net Tangible Assets as of the
date of such determination, other than certain financing subsidiaries and
subsidiaries formed or acquired after April 1, 1986 for the purpose of
acquiring the business or assets of another person and that do not acquire all
or any substantial part of the business or assets of AT&T or any Restricted
Subsidiary. In addition, the Board of Directors of AT&T may designate any other
subsidiary as a Restricted Subsidiary.
30
===============================================================================
No dealer, salesperson or other person is authorized to provide any information
or to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations. This prospectus is an offer to
sell only the securities offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
---------------------
$5,000,000,000
[AT&T Corp. logo]
Debt Securities
Preferred Stock
Common Stock
Depositary Shares
Warrants
Units
------------------
Preliminary Prospectus
---------------------
February 26, 2002
===============================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable in connection with the
offerings described in this registration statement, all of which will be paid
by the registrant. All such expenses other than the registration fee are
estimates.
Securities and Exchange Commission registration fee.......$ 34,040*
Legal fees and expenses................................... 500,000
Accounting fees and expenses.............................. 80,000
Printing and engraving expenses........................... 20,000
Rating agency fees........................................ 7,500
Trustee fees and expenses................................. 7,500
Miscellaneous expenses.................................... 7,500
--------
Total................................................$656,540
========
----------
* An amount equal to $1,287,140 of the $1,321,180 filing fee was
previously paid in connection with securities registered and
remaining unsold under the registration statement on Form S-3
(Registration No. 333-71167), which securities are being carried
forward pursuant to Rule 429.
Item 15. Indemnification of Directors and Officers.
Pursuant to the statutes of the State of New York, a director or officer
of a corporation is entitled, under specified circumstances, to indemnification
by the corporation against reasonable expenses, including attorney's fees,
incurred by him/her in connection with the defense of a civil or criminal
proceeding to which he/she has been made, or threatened to be made, a party by
reason of the fact that he/she was such director or officer. In certain
circumstances, indemnity is provided against judgments, fines and amounts paid
in settlement. In general, indemnification is available where the director or
officer acted in good faith, for a purpose he/she reasonably believed to be in
the best interests of the corporation. Specific court approval is required in
some cases. The foregoing statement is subject to the detailed provisions of
Sections 715, 717 and 721-725 of the New York Business Corporation Law.
The AT&T By-laws provide that AT&T is authorized, by (i) a resolution of
shareholders, (ii) a resolution of directors or (iii) an agreement providing
for such indemnification, to the fullest extent permitted by applicable law, to
provide indemnification and to advance expenses to its directors and officers
in respect of claims, actions, suits or proceedings based upon, arising from,
relating to or by reason of the fact that any such director or officer serves
or served in such capacity with AT&T or at the request of AT&T in any capacity
with any other enterprise.
AT&T has entered into contracts with its officers and directors, pursuant
to the provisions of New York Business Corporation Law Section 721, by which it
will be obligated to indemnify such persons, to the fullest extent permitted by
the New York Business Corporation Law, against expenses, fees, judgments, fines
and amounts paid in settlement in connection with any present or future
threatened, pending or completed action, suit or proceeding based in any way
upon or related to the fact that such person was an officer or director of AT&T
or, at the request of AT&T, an officer, director or other partner, agent,
employee or trustee of another enterprise. The contractual indemnification so
provided
will not extend to any situation where a judgment or other final adjudication
adverse to such person establishes that his/her acts were committed in bad
faith or were the result of active and deliberate dishonesty or that there
inured to such person a financial profit or other advantage.
The directors and officers of AT&T are covered by insurance policies
indemnifying against certain liabilities, including certain liabilities arising
under the Securities Act, that might be incurred by them in such capacities.
Item 16. Exhibits.
See Exhibit Index.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1993, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more 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 (1)(i) and (1)(ii) above do not apply if
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered 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.
II-2
The undersigned registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, State of New York, on the 26th day of
February, 2002.
AT&T CORP.
By: /s/ Marilyn J. Wasser
-------------------------------------
Marilyn J. Wasser
Vice President--Law and Secretary
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE CAPACITY
PRINCIPAL EXECUTIVE OFFICER:
*
------------------------------------------
C. Michael Armstrong Chairman and Chief Executive Officer
PRINCIPAL FINANCIAL OFFICER:
* Senior Executive Vice President
------------------------------------------ and Chief Financial Officer
Charles H. Noski
PRINCIPAL ACCOUNTING OFFICER:
*
------------------------------------------
Nicholas S. Cyprus Vice President and Controller
DIRECTORS
*
------------------------------------------
C. Michael Armstrong Director
*
------------------------------------------
J. Michael Cook Director
*
------------------------------------------
Kenneth T. Derr Director
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*
------------------------------------------
M. Kathryn Eickhoff Director
*
------------------------------------------
George M. C. Fisher Director
*
------------------------------------------
Amos B. Hostetter Director
*
------------------------------------------
Shirley A. Jackson Director
*
------------------------------------------
Donald F. McHenry Director
*
------------------------------------------
Louis A. Simpson Director
*
------------------------------------------
Michael I. Sovern Director
*
------------------------------------------
Sanford I. Weill Director
* By: /s/ Marilyn J. Wasser
------------------------------------
Marilyn J. Wasser
(Attorney-in-Fact)
Date: February 26th, 2002
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EXHIBIT INDEX
Exhibit
Number Description of Exhibits
------- -----------------------
1.1 - Form of Underwriting Agreement for Debt Securities (Exhibit 1A
to Form SE, dated December 11, 1991).
1.2** - Form of Underwriting Agreement for Securities other than Debt
Securities.
1.3 - Form of Distribution Agreement (Exhibit 1B to Form SE, dated
December 11, 1991).
1.4 - Form of International Distribution Agreement (Exhibit 1C to
Form SE, dated December 11, 1991).
4.1 - Indenture, dated as of September 7, 1990, between AT&T Corp.
and The Bank of New York, as Trustee, substantially in the form
executed (Exhibit 4.A to Form SE, dated September 10, 1990,
File No. 1-1105).
4.2 - First Supplemental Indenture, dated as of October 30, 1992,
between AT&T Corp. and The Bank of New York, as Trustee
(Exhibit 4.AA to Current Report on Form 8-K dated December 1,
1992).
4.3 - Form of Permanent Global Registered Fixed Rate Note (Exhibit 4B
to Form SE, dated September 10, 1990, File No. 1-1105).
4.4 - Form of Definitive Registered Fixed Rate Note (Exhibit 4C to
Form SE, dated September 10, 1990, File No. 1-1105).
4.5 - Form of Temporary Global Bearer Fixed Rate Note (Exhibit 4D to
Form SE, dated September 10, 1990, File No. 1-1105).
4.6 - Form of Permanent Global Bearer Fixed Rate Note (Exhibit 4E to
Form SE, dated September 10, 1990, File No. 1-1105).
4.7 - Form of Definitive Bearer Fixed Rate Note (Exhibit 4F to Form
SE, dated September 10, 1990, File No. 1-1105).
4.8 - Form of Medium Term Global Floating Rate Note, Registered
Security (Exhibit 4.H to Form 8-K dated December 1, 1992).
4.9 - Form of Medium Term Definitive Floating Rate Note, Registered
Security (Exhibit 4.I to Form 8-K dated December 1, 1992).
4.10** - Form of Certificates of Designation with respect to Preferred
Stock.
4.11** - Form of Deposit Agreement.
4.12** - Form of Depositary Receipts.
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4.13** - Form of Warrant Agreement.
4.14** - Form of Warrants.
4.15** - Form of Unit Agreement.
4.16** - Form of Units.
5.1*** - Opinion of Robert S. Feit, Esq.
5.2** - Opinion of [Insert Counsel].
12.1*** - Computation of Ratio of Earnings to Fixed Charges.
23.1*** - Consent of Robert S. Feit, Esq. (included in Exhibit 5.1).
23.2** - Consent of [Insert Counsel] (included in Exhibit 5.2).
23.3* Consent of PricewaterhouseCoopers LLP.
23.4* Consent of PricewaterhouseCoopers LLP.
23.5* - Consent of KPMG LLP.
23.6* Consent of KPMG LLP.
23.7* - Consent of Arthur Andersen LLP.
24.1*** - Powers of Attorney.
25.1*** - Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939 of the Trustee.
* Filed herewith.
** To be filed by amendment or as an exhibit to a filing with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934,
as amended, and incorporated by reference herein.
*** Previously filed.
II-7