AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 2001
REGISTRATION NO. 333-74884
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AT&T WIRELESS SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 4812 91-1379052
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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7277 164TH AVENUE NE, BUILDING 1
REDMOND, WASHINGTON 98052
(425) 580-6000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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GREGORY P. LANDIS
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
AT&T WIRELESS SERVICES, INC.
7277 164TH AVENUE NE, BUILDING 1
REDMOND, WASHINGTON 98052
(425) 580-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
ANDREW BOR
PERKINS COIE LLP
1201 THIRD AVENUE, SUITE 4800
SEATTLE, WASHINGTON 98101-3099
(206) 583-8888
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
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If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1993, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 21, 2001
PROSPECTUS
AT&T WIRELESS SERVICES, INC.
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COMMON STOCK
PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK
DEBT SECURITIES
CONVERTIBLE DEBT SECURITIES
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We may offer common stock, preferred stock, convertible preferred stock,
debt securities or convertible debt securities from time to time. When we decide
to sell a particular class or series of securities, we will provide specific
terms of the offered securities in a prospectus supplement. The securities
offered by this prospectus will have an aggregate public offering price of up to
$4,000,000,000.
You should read this prospectus and any prospectus supplement carefully
before you invest. We may not use this prospectus to sell securities unless it
includes a prospectus supplement.
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Our common stock is traded on the New York Stock Exchange under the symbol
AWE. On December 19, 2001, the closing sale price of our common stock as quoted
on the New York Stock Exchange was $13.17 per share.
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INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE THE SECTION
ENTITLED "RISK FACTORS" THAT APPEARS ON PAGE 5 AND IN THE PROSPECTUS SUPPLEMENT
ACCOMPANYING THIS PROSPECTUS.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed on the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is December 21, 2001.
TABLE OF CONTENTS
PAGE
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ABOUT THIS PROSPECTUS....................................... 1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........... 1
WHERE YOU CAN FIND MORE INFORMATION......................... 3
INFORMATION INCORPORATED BY REFERENCE....................... 4
RISK FACTORS................................................ 5
AT&T WIRELESS SERVICES...................................... 13
OUR RELATIONSHIP WITH AT&T CORP. ........................... 14
USE OF PROCEEDS............................................. 14
RATIO OF EARNINGS TO FIXED CHARGES.......................... 14
DESCRIPTION OF CAPITAL STOCK................................ 15
DESCRIPTION OF DEBT SECURITIES.............................. 21
DESCRIPTION OF CONVERTIBLE DEBT SECURITIES.................. 29
DOCOMO STRATEGIC INVESTMENT................................. 38
PLAN OF DISTRIBUTION........................................ 42
ERISA CONSIDERATIONS........................................ 43
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES................................ 44
LEGAL MATTERS............................................... 45
EXPERTS..................................................... 46
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission using a shelf registration process. Under
this shelf process, we may sell the common stock, preferred stock, convertible
preferred stock, debt securities or convertible debt securities described in
this prospectus in one or more offerings. This prospectus provides you with a
general description of the securities we may offer. Each time we offer
securities, we will provide you with a prospectus supplement that will describe
the specific amounts, prices and terms of the offered securities. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read carefully both this prospectus and any prospectus
supplement together with additional information described below.
This prospectus does not contain all the information provided in the
registration statement we filed with the Commission. For further information
about us or the securities offered hereby, you should refer to that registration
statement, which you can obtain from the Commission as described below under
"Where You Can Find More Information."
You should rely only on the information contained or incorporated by
reference in this prospectus or a prospectus supplement. We have not authorized
any other person to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this prospectus
or any prospectus supplement, as well as information we have previously filed
with the Commission and incorporated by reference, is accurate as of the date on
the front of those documents only. Our business, financial condition, results of
operations and prospects may have changed since those dates.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Our disclosure and analysis in this prospectus, in any prospectus
supplement and in the documents incorporated by reference contain
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 with respect to, among other things:
- Our relationship with our former parent, AT&T Corp., following our
separation from AT&T Corp. in July 2001,
- AT&T Corp.'s intention to sell, exchange or monetize the shares of our
common stock that it holds,
- financial condition,
- results of operations,
- cash flows,
- dividends,
- financing plans,
- business strategies,
- operating efficiencies or synergies,
- budgets,
- capital and other expenditures,
- network build out and upgrade,
- competitive positions,
- availability of capital,
- growth opportunities for existing products,
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- our acquisition and growth strategy,
- benefits from new technologies,
- availability and deployment of new technologies,
- our decision to exit the fixed wireless business,
- our agreement to acquire TeleCorp, PCS Inc.,
- plans and objectives of management, and
- other matters.
Statements in this document, or that are incorporated by reference into
this document, that are not historical facts are hereby identified as
forward-looking statements. These forward-looking statements, including, without
limitation, those relating to the future business prospects, revenues, working
capital, liquidity, capital needs, network build out, interest costs and income,
in each case, relating to us, wherever they occur in this document, 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 this document. Important factors
that could cause actual results to differ materially from estimates or
projections contained in the forward-looking statements include, without
limitation:
- the risks associated with the implementation of a third-generation
network and business strategy, including risks relating to the operations
of new systems and technologies, substantial required expenditures and
potential unanticipated costs, the need to enter into roaming agreements
with third parties, uncertainties regarding the adequacy of suppliers on
whom we must rely to provide both network and consumer equipment and
consumer acceptance of the products and services to be offered;
- the potential impact of NTT DoCoMo's investment in us, including
provisions of the agreements that restrict our future operations, and
provisions that may require the repurchase of NTT DoCoMo's investment if
we fail to meet specified conditions, under certain circumstances;
- the risks associated with operating as an independent entity as opposed
to as part of an integrated telecommunications provider with AT&T Corp.,
our former parent, including the inability to rely on the financial and
operational resources of the combined company and having to provide
services that were previously provided by a different part of the
combined company;
- the impact of existing and new competitors in the markets in which we
compete, including competitors that may offer less expensive products and
services, more desirable or innovative products, technological
substitutes, or have extensive resources or better financing;
- the introduction or popularity of new products and services, including
pre-paid phone products, which could increase churn;
- the impact of oversupply of capacity resulting from excessive deployment
of network capacity in the markets we serve;
- the ongoing global and domestic trend towards consolidation in the
telecommunications industry, which trend may have the effect of making
our competitors larger and better financed and afford these competitors
with extensive resources and greater geographic reach, allowing them to
compete more effectively;
- the effects of vigorous competition in the markets in which we operate
and for more valuable customers, which may decrease prices charged,
increase churn and change the customer mix, profitability and average
revenue per user;
- the ability to enter into agreements to provide, and the cost of entering
new markets necessary to provide, nationwide services;
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- the ability to establish a significant market presence in new geographic
and service markets;
- the availability and cost of capital and the consequences of increased
leverage;
- the impact of any unusual items resulting from ongoing evaluations of our
business strategies;
- the requirements imposed on us or latitude allowed to competitors by the
FCC or state regulatory commissions under the Telecommunications Act of
1996 or other applicable laws and regulations;
- the risks and costs associated with the need to acquire additional
spectrum for current and future services;
- the risks associated with technological requirements, technology
substitution and changes and other technological developments;
- the risks and potential unanticipated costs associated with exiting the
fixed wireless business;
- the risks and uncertainties associated with the consummation of the
TeleCorp, PCS Inc. acquisition and integration of TeleCorp, PCS Inc.'s
business and operations;
- the results of litigation filed or to be filed against us, or of some
types of litigation filed or to be filed against AT&T Corp. for which we
have agreed to assume liability under the split-off agreements between
AT&T Corp. and us;
- the possibility of one or more of the markets in which we 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
- those factors discussed in the section entitled "Risk Factors."
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 document.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this document. Moreover, in the
future, we may make forward-looking statements about the matters described in
this document or other matters concerning us.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, as well as registration and
proxy statements and other information, with the Securities and Exchange
Commission. These documents may be read and copied at the Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549, or at the Commission's
regional offices located at 233 Broadway, New York, New York 10279, and at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
In addition, copies of these reports and other information may be obtained at
prescribed rates from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549. You can get further information about the
Commission's Public Reference Room by calling 1-800-SEC-0330. The Commission
also maintains a Web site at http://www.sec.gov that contains reports,
registration statements and other information regarding registrants like us that
file electronically with the Commission.
This prospectus is part of a registration statement on Form S-3 filed by us
with the Commission under the Securities Act of 1933. As permitted by the
Commission, this prospectus does not contain all the information in the
registration statement filed with the Commission. For a fuller understanding of
this offering, you should refer to the complete registration statement on Form
S-3 that may be obtained from the locations described above. Statements
contained in this prospectus or in any prospectus supplement about the contents
of any contract or other document are not necessarily complete. If we have filed
any contract or other document as an exhibit to the registration statement or
any other document incorporated by reference in the registration statement, you
should read the exhibit for a more complete understanding of the document or
matter involved. Each statement regarding a contract or other document is
qualified in its entirety by reference to the actual document.
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INFORMATION INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and the information that we file later
with the Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any additional documents
filed by us with the Commission under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until we complete our offering of the
securities:
- Current Report on Form 8-K dated December 12, 2001, filed on December 21,
2001.
- Quarterly Report on Form 10-Q for the quarter ended September 30, 2001,
filed on November 7, 2001.
- Current Report on Form 8-K, filed on October 12, 2001.
- Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, filed
on August 14, 2001.
- Prospectus filed pursuant to Rule 424(b)(1) on July 9, 2001 (Commission
File Number 333-60472).
You can obtain any of the documents incorporated by reference 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
exhibits thereto unless we have specifically incorporated by reference such
exhibits in this prospectus. Any person, including any beneficial owner, to whom
this prospectus is delivered may obtain documents incorporated by reference in,
but not delivered with, this prospectus by requesting them in writing or by
telephone at the following address:
AT&T Wireless Services, Inc.
7277 164th Avenue NE, Building 1
Redmond, Washington 98052
(425) 580-6000
Attn: Corporate Secretary
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RISK FACTORS
You should carefully consider each of the following risks and uncertainties
associated with our company and ownership of our securities, as well as all of
the other information set forth in this document or incorporated by reference
into this document.
OUR PLAN TO EXIT THE FIXED WIRELESS BUSINESS MAY HAVE UNFORESEEN NEGATIVE
IMPACTS TO OUR BUSINESS.
On December 12, 2001, our board of directors approved a plan to exit our
fixed wireless business. We currently anticipate that our decision to exit our
fixed wireless business will result in fourth quarter pre-tax charges of
approximately $1.3 billion, reflecting a write-down of the assets of the fixed
wireless business and the impact of phased exit charges. The decision to exit a
business involves special risks and uncertainties, some of which may not be
foreseeable or within our control, such as unforeseen severance costs,
contractual liabilities, disputes with customers, suppliers, vendors, terminated
employees, or a buyer of the fixed wireless business or certain assets.
In addition, we face a number of other uncertainties and risks relating to
our exit from the fixed wireless business including the following:
- we may not be able to sell or otherwise monetize any part of the assets
of the fixed wireless business on attractive terms or at all;
- the time it takes us and the costs we incur to exit from the fixed
wireless business may be affected by regulatory concerns and other
matters;
- our implementation of the exit strategy may disrupt other operations and
distract management from other needs of our business; and
- perceived uncertainties as to our future direction may result in the loss
of employees or business partners.
Such unforeseen costs and uncertainties could have a material adverse effect on
our business, financial condition and results of operations.
WE MAY SUBSTANTIALLY INCREASE OUR DEBT IN THE FUTURE, WHICH COULD SUBJECT US TO
VARIOUS RESTRICTIONS AND HIGHER INTEREST COSTS AND DECREASE OUR CASH FLOW AND
EARNINGS.
We may substantially increase our debt in the future which could subject us
to various restrictions and higher interest costs and decrease our cash flow and
earnings. We may also encounter difficulties in obtaining all the financing we
need to fund our business and growth strategy on desirable terms. We anticipate
requiring substantial additional financing for the foreseeable future to fund
capital expenditures, license purchases and costs and expenses in connection
with funding our operations, domestic and international investments and growth
strategy. We are exploring and evaluating the relative advantages and
disadvantages of various funding mechanisms. Other funding mechanisms that still
may be considered include other forms of public and private debt facilities. The
decision on debt composition is dependent on, among other things, our business
and financial plans and the market conditions at the time of financing. The
agreements governing this indebtedness may contain financial and other covenants
that could impair our flexibility and restrict our ability to pursue growth
opportunities.
OUR RELATIONSHIP WITH NTT DOCOMO, INC. CONTAINS FEATURES THAT COULD ADVERSELY
AFFECT OUR FINANCIAL CONDITION OR THE WAY IN WHICH OUR BUSINESS IS CONDUCTED.
DoCoMo, a leading Japanese wireless communications company, is our largest
stockholder, and the agreements relating to DoCoMo's investment contain
requirements and contingencies that could materially adversely affect our
financial condition and technology strategies. The terms of the DoCoMo
investment enable DoCoMo to terminate its investment and require repayment of
its $9.8 billion investment, plus interest, if we fail, under some
circumstances, to commence service using an agreed-on technology in at least 13
of the top 50 domestic markets by June 30, 2004. If DoCoMo requires repayment,
we will have to fund the entire
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repurchase obligation. If DoCoMo requires repayment of its investment, it may
also terminate the technology rights provided to us in connection with its
investment. We need to obtain DoCoMo's consent to make any fundamental change in
the nature of our business or to allow another wireless operator to acquire more
than 15% but less than 50% of our equity. These limitations could prevent us
from taking advantage of some business opportunities or relationships that we
might otherwise pursue.
OUR SIGNIFICANT NETWORK BUILD-OUT REQUIREMENTS MAY NOT BE COMPLETED AS PLANNED.
We need to complete significant build-out activities, including completion
of regularly required build-out activities in some of our existing wireless
markets. Failure or delay to complete the build-out of our network and launch of
operations, or increased costs of this build-out and launch of operations, could
have a material adverse effect on our operations and financial condition. As we
continue to build out our network, we must, among other things, continue to:
- lease, acquire or otherwise obtain rights to a large number of cell and
switch sites;
- obtain zoning variances or other local governmental or third-party
approvals or permits for network construction;
- complete the radio frequency design, including cell site design,
frequency planning and network optimization, for each of our markets; and
- expand and maintain customer care, network management, billing and other
financial and management systems.
In addition, in the next several years, we will be upgrading our network to
implement the next generation of digital technology. These events may not occur
in the time frame we assume or that the FCC requires, at the cost we assume, or
at all.
In addition, problems in vendor equipment availability, technical resources
or system performance could delay the launch of new or expanded operations in
new or existing markets or result in increased costs in all markets. We intend
to rely on the services of various companies that are experienced in design and
build-out of wireless networks in order to accomplish our build-out schedule.
However, we may not be able to obtain satisfactory contractors on economically
attractive terms or ensure that our contractors will perform as we expect.
WE HAVE SUBSTANTIAL CAPITAL REQUIREMENTS THAT WE MAY NOT BE ABLE TO FUND.
Our strategy and business plan will continue to require substantial
capital, which we may not be able to obtain on favorable terms or at all. A
failure to obtain necessary capital would have a material adverse effect on us,
and result in the delay, change or abandonment of our development or expansion
plans and the failure to meet regulatory build out requirements. We currently
estimate that our capital expenditures for the build out of our mobility
networks will total approximately $5.0 billion during 2001, as compared to $3.7
billion in 2000. We also expect to incur substantial capital expenditures in
future years. The actual amount of the funds required to finance our network
build-out and other capital expenditures may vary materially from management's
estimate. We have entered into various contractual commitments associated with
the development of our third-generation strategy, of which approximately $1.9
billion were outstanding at September 30, 2001. These include purchase
commitments for network equipment, as well as handsets. In addition, we
anticipate that we will enter into material purchase commitments in the future.
We also may require substantial additional capital for, among other uses,
acquisitions of providers of wireless services, spectrum license or system
acquisitions, system development and network capacity expansion. We have also
entered into agreements for investments and ventures which have required or will
require substantial capital, including our agreement to invest $2.6 billion in
exchange for a combination of a non-controlling equity interest in, and debt
securities issued by, Alaska Native Wireless, which was the successful bidder
for licenses costing approximately $2.9 billion in the recently concluded 1900
megahertz auction. These agreements also may contain provisions potentially
requiring substantial additional capital in future circumstances, such as
allowing the other investors to require us to purchase assets or investments.
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THE ACTUAL AMOUNT OF FUNDS NECESSARY TO IMPLEMENT OUR STRATEGY AND BUSINESS PLAN
MAY MATERIALLY EXCEED CURRENT ESTIMATES, WHICH COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The actual amount of funds necessary to implement our strategy and business
plan may materially exceed our current estimates in the event of various factors
including: departures from our current business plan, unforeseen delays, cost
overruns, unanticipated expenses, regulatory developments, engineering design
changes, and technological and other risks. If actual costs do materially exceed
our current estimates for these or other reasons, this could have a material
adverse effect on our financial condition and results of operations.
OUR BUSINESS AND OPERATIONS WOULD BE ADVERSELY AFFECTED IF WE FAIL TO ACQUIRE
ADEQUATE RADIO SPECTRUM IN FCC AUCTIONS OR THROUGH OTHER TRANSACTIONS.
Our domestic business depends on the ability to use portions of the radio
spectrum licensed by the FCC. We could fail to obtain sufficient spectrum
capacity in new and existing markets, whether through FCC auctions or other
transactions, in order to meet the expanded demands for our existing services,
as well as to enable development of third-generation services. This type of
failure would have a material adverse impact on the quality of our services or
our ability to roll out such future services in some markets. We intend to
continue to acquire more spectrum through a combination of alternatives,
including participation in spectrum auctions, purchase of spectrum licenses from
companies that own them or purchase of these companies outright. As required by
law, the FCC periodically conducts auctions for licenses to use some parts of
the radio spectrum. The decision to conduct auctions, and the determination of
what spectrum frequencies will be made available for auction, are provided for
by laws administered by the FCC. The FCC may not allocate spectrum sufficient to
meet the demands of all those wishing to obtain licenses. Even if the FCC
determines to conduct further auctions in the future, we may not be successful
in those future auctions in obtaining the spectrum that we believe are necessary
to implement our business and technology strategies. We may also seek to acquire
radio spectrum through purchases and swaps with other spectrum licensees or
otherwise, including by purchases of other licensees outright. However, we may
not be able to acquire sufficient spectrum through these types of transactions,
and we may not be able to complete any of these transactions on favorable terms.
OUR BUSINESS AND OPERATIONS COULD BE HURT IF WE ARE UNABLE TO ESTABLISH NEW
AFFILIATES TO EXPAND OUR DIGITAL NETWORK OR IF OUR EXISTING OR ANY NEW
AFFILIATES DO NOT OR CANNOT DEVELOP THEIR SYSTEMS IN A MANNER CONSISTENT WITH
OUR SYSTEMS.
To accelerate the build out of widescale coverage of the United States by a
digital mobile wireless network operating on the technical standards we have
adopted, we have entered into affiliation agreements with other entities that
provide wireless service or hold spectrum licenses. Through contractual
arrangements between us and these affiliates, our customers are able to obtain
service in the affiliates' territories, and the affiliates' customers are able
to obtain service in our territory. In all markets where these affiliates
operate, we are at risk because we do not control the affiliates. As a result,
these affiliates are not obligated to implement our third-generation strategy.
Our ability to provide service on a nationwide level and to implement our third-
generation strategy would be adversely affected if these affiliates decide not
to participate in the further development of our digital network. We may
establish additional affiliate relationships to accelerate build out of our
digital mobile network. If we are unable to establish such affiliate
relationships, or if any such affiliates are unable to or do not develop their
systems in a manner consistent with our network, our ability to service our
customers and expand the geographic coverage of our digital network could be
adversely affected.
IF THE FCC DENIES ALASKA NATIVE WIRELESS'S APPLICATION TO ACQUIRE LICENSES FOR
WHICH IT WAS THE SUCCESSFUL BIDDER IN THE RECENT SPECTRUM AUCTION, OR, IN THE
FUTURE, REVOKES LICENSES AWARDED TO ALASKA NATIVE WIRELESS, OUR ABILITY TO
IMPLEMENT OUR THIRD-GENERATION STRATEGY COULD BE ADVERSELY AFFECTED OR WE COULD
BECOME OBLIGATED TO REPURCHASE OTHER INVESTORS' INTERESTS IN ALASKA NATIVE
WIRELESS.
We have agreed to invest $2.6 billion in exchange for a combination of a
non-controlling equity interest in and debt securities issued by Alaska Native
Wireless, which was the successful bidder for licenses costing $2.9 billion in
the recently concluded 1900 megahertz auction, which occurred in early 2001. One
auction
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participant has challenged the qualifications of Alaska Native Wireless to
acquire "closed" licenses, which constituted most of the licenses for which
Alaska Native Wireless was the successful bidder. If the FCC determines that
Alaska Native Wireless was not qualified, the FCC could refuse to grant Alaska
Native Wireless the closed licenses. On June 22, 2001, a federal appeals court
ruled in favor of the trustee in the Chapter 11 bankruptcy proceeding of
NextWave Telecom, Inc. and the unsecured creditors of NextWave with respect to
the litigation they commenced relating to the 1900 megahertz auction. The court
ruled that the FCC had acted improperly in repossessing from NextWave the
spectrum offered in the 1900 megahertz auction. The United States, the FCC,
NextWave Telecom, Inc. and several of its affiliates and certain winning bidders
in the 1900 megahertz auction, including Alaska Native Wireless, signed a
settlement agreement effective as of November 26, 2001. Under the settlement
agreement, NextWave and its affiliates would return all of those licenses to the
FCC, which thereafter would award the licenses in accordance with the auction.
The settlement is subject to a number of conditions, including bankruptcy court
approval and the adoption of federal legislation necessary to implement the
terms of the settlement on or before December 31, 2001. If this settlement does
not become effective, or if the appeals court decision is not appealed or
otherwise settled, or if Alaska Native Wireless is otherwise unable to acquire
the licenses for which it was the successful bidder, it could have a significant
adverse impact on our opportunity to provide or enhance services in key new and
existing markets. In specified circumstances, if a winning bid of Alaska Native
Wireless in the recently concluded 1900 megahertz spectrum auction is rejected
or if any license granted to it is revoked, we would become obligated to
compensate other investors for making capital available to the venture. In
specified circumstances, if the grant of those licenses is challenged, we may be
obligated to purchase the interests of other investors.
IF WE ARE UNABLE TO REACH AGREEMENT WITH ALASKA NATIVE WIRELESS REGARDING THE
DEVELOPMENT AND USE OF LICENSES FOR WHICH IT WAS THE SUCCESSFUL BIDDER IN THE
RECENT SPECTRUM AUCTION, OUR ABILITY TO IMPLEMENT OUR THIRD-GENERATION STRATEGY
MAY BE ADVERSELY AFFECTED.
We have not reached any agreements with Alaska Native Wireless as to
whether it will participate in our digital mobile wireless network. Alaska
Native Wireless is not obligated to use or develop any spectrum it acquires in a
manner that will further, or be consistent with, our strategic objectives,
although Alaska Native Wireless is obligated to use technology that is
compatible and interoperable with our digital mobile wireless network. If Alaska
Native Wireless does not enter into agreements with us regarding the use and
development of this spectrum similar to those we have entered into with our
affiliates for our existing networks, we could experience a material adverse
impact on the timing and cost of implementing our third-generation strategy.
POTENTIAL ACQUISITIONS MAY REQUIRE US TO INCUR SUBSTANTIAL ADDITIONAL DEBT AND
INTEGRATE NEW TECHNOLOGIES, OPERATIONS AND SERVICES, WHICH MAY BE COSTLY AND
TIME-CONSUMING.
An element of our strategy is to expand our network, which we intend to
accomplish in part through the acquisition of TeleCorp PCS, Inc. and which we
may pursue through other acquisitions of licenses, systems and wireless
providers. The acquisition of TeleCorp PCS, Inc. will result in our assumption
of substantial additional indebtedness. Further, other acquisitions may cause us
to incur substantial additional indebtedness to finance such acquisitions or to
assume indebtedness of the entities that are acquired. In addition, we may
encounter difficulties in integrating those acquired operations into our own
operations, including as a result of different technologies, systems, services
or service offerings. These actions could prove costly or time-consuming or
divert our management's attention from other business matters.
FAILURE TO DEVELOP FUTURE BUSINESS OPPORTUNITIES MAY HAVE AN ADVERSE EFFECT ON
OUR GROWTH POTENTIAL.
We intend to pursue a number of new growth opportunities, primarily related
to wireless data services. The ability to deploy and deliver these services
relies, in many instances, on new and unproven technology. Our existing
technology may not perform as expected and we may not be able to successfully
develop new technology to effectively and economically deliver these services.
These opportunities also require substantial capital outlays and spectrum
availability to deploy on a large scale. This capital or spectrum may not be
available to support these services. The success of wireless data services is
substantially dependent on the ability of others to develop applications for
wireless devices and to develop and manufacture devices that
8
support wireless applications. These applications or devices may not be
developed or developed in sufficient quantities to support the deployment of
wireless data services. These services may not be widely introduced and fully
implemented at all or in a timely fashion. These services may not be successful
when they are in place, and customers may not purchase the services offered. If
these services are not successful or costs associated with implementation and
completion of the rollout of these services materially exceed those currently
estimated by us, our financial condition and prospects could be materially
adversely affected.
WE FACE SUBSTANTIAL COMPETITION.
There is substantial competition in the wireless telecommunications
industry. We expect competition to intensify as a result of the entry of new
competitors and the development of new technologies, products and services.
Other two-way wireless providers, including other cellular and personal
communications services, operators and resellers, serve each of the markets in
which we compete. A majority of U.S. markets likely will have five or more
commercial mobile radio service providers, and all of the top 50 U.S.
metropolitan markets likely will have at least four, and in some cases as many
as seven or more, facilities-based wireless service providers offering wireless
services on cellular, personal communications services or specialized mobile
radio frequency. Competition also may increase to the extent that smaller,
stand-alone wireless providers transfer licenses to larger, better capitalized
and more experienced wireless providers.
MARKET PRICES FOR WIRELESS SERVICES MAY DECLINE IN THE FUTURE.
We anticipate that market prices for two-way wireless services generally
will decline in the future due to increased competition. We expect significant
competition among wireless providers, including from new entrants, to continue
to drive service and equipment prices lower. We also expect that there will be
increases in advertising and promotional spending, along with increased demands
on access to distribution channels. All of this may lead to greater choices for
customers, possible consumer confusion, and increasing movement of customers
between competitors, which we refer to as "churn." We may also adopt customer
policies or programs to be more competitive, including credit policies, which
policies or programs may also affect churn. Our ability to compete successfully
also will depend on marketing, and on our ability to anticipate and respond to
various competitive factors affecting the industry, including new services,
changes in consumer preferences, demographic trends, economic conditions and
discount pricing strategies by competitors.
CONSOLIDATION IN THE WIRELESS COMMUNICATIONS INDUSTRY MAY ADVERSELY AFFECT US.
The wireless communications industry has been experiencing significant
consolidation and we expect that this consolidation will continue. The
previously announced mergers or joint ventures of Bell Atlantic Corporation/GTE
Corporation/Vodafone AirTouch, now called Verizon, SBC/BellSouth, now called
Cingular, and Deutsche Telekom/VoiceStream Wireless, have created large,
well-capitalized competitors with substantial financial, technical, marketing
and other resources to respond to our offerings. These mergers or ventures have
caused our ranking to decline to third in U.S. revenue and U.S. subscriber
share. In terms of U.S. population covered by licenses, we, including our
partnership and affiliates, rank third. As a result, these competitors may be
able to offer nationwide services and plans more quickly and more economically
than us, to obtain roaming rates that are more favorable than those obtained by
us, and may be better able to respond to our offers.
SIGNIFICANT TECHNOLOGICAL CHANGES IN THE WIRELESS INDUSTRY COULD MATERIALLY
ADVERSELY AFFECT US.
The wireless communications industry is experiencing significant
technological change. This change includes the increasing pace of digital
upgrades in existing analog wireless systems, evolving industry standards,
ongoing improvements in the capacity and quality of digital technology, shorter
development cycles for new products, enhancements and changes in end-user needs
and preferences and increased importance of data and broadband capabilities. The
pace and extent of customer demand may not continue to increase, and airtime and
monthly recurring charges may continue to decline. As a result, the future
prospects of the industry and of us and the success of our competitive services
remain uncertain. Also, alternative technologies may develop for the provision
of services to customers that may provide wireless communications service or
9
alternative service superior to that available from us. Technological
developments may therefore materially adversely affect us.
TERMINATION OR IMPAIRMENT OF OUR RELATIONSHIP WITH A SMALL NUMBER OF KEY
SUPPLIERS COULD ADVERSELY AFFECT OUR REVENUES AND RESULTS OF OPERATIONS.
We have developed relationships with a small number of key vendors,
including Nokia Mobile Phones, Inc., Telefonaktiebolaget LM Ericsson, Mitsubishi
Corporation, and Motorola, Inc., for our supply of wireless handsets, Lucent
Technologies, Inc., Nortel Networks, Inc., Ericsson and Nokia Networks, Inc. for
our supply of telecommunications infrastructure equipment and Convergys
Information Management Group for our billing services. We do not have
operational or financial control over our key suppliers and have limited
influence with respect to the manner in which these key suppliers conduct their
businesses. If these key suppliers were unable to honor their obligations to us,
we could experience disruptions of our business and adverse effects on our
revenues and results of operations.
OUR TECHNOLOGY MAY NOT BE COMPETITIVE WITH OTHER TECHNOLOGIES OR BE COMPATIBLE
WITH NEXT GENERATION TECHNOLOGY.
There are three existing digital transmission technologies, none of which
is compatible with the others. We selected time division multiple access
technology for our second-generation network because we believe that this
technology offers several advantages over other second-generation technologies.
However, a number of other wireless service providers chose code division
multiple access or global system for mobile communications as their digital
wireless technology. For our path to next generation technology, we have chosen
a global system for mobile communications platform to make available enhanced
data services using general packet radio service technology, and
third-generation capabilities using enhanced data rates for global evolution and
ultimately universal mobile telecommunications systems technologies. These
technologies may not provide the advantages we expect. Other wireless providers
have chosen a competing wideband technology as their third-generation
technology. If the universal mobile telecommunications standard does not gain
widespread acceptance, it would materially adversely affect our business,
financial condition and prospects. As we implement our plans for deployment of
technology for third-generation capabilities, we will continue to incur
substantial costs associated with maintaining our time division multiple access
networks. Also, these networks are not compatible, and customers with phones
that operate on one network will not initially be able to use those phones on
the other network. There are risks inherent in the development of new
third-generation equipment and we may face unforeseen costs, delays or problems
that may have a material adverse effect on us.
WE RELY ON FAVORABLE ROAMING ARRANGEMENTS, WHICH WE MAY BE UNABLE TO CONTINUE TO
OBTAIN.
We may not continue to be able to obtain or maintain roaming agreements
with other providers on terms that are acceptable to us. Our customers
automatically can access another provider's analog cellular or digital system
only if the other provider allows our customers to roam on its network. We rely
on agreements to provide roaming capability to our customers in many areas of
the United States that our network does not serve. Some competitors, because of
their call volumes or their affiliations with, or ownership of, wireless
providers, however, may be able to obtain roaming rates that are lower than
those rates obtained by us. In addition, the quality of service that a wireless
provider delivers during a roaming call may be inferior to the quality of
service we or an affiliated company provides, the price of a roaming call may
not be competitive with prices of other wireless providers for such call, and
our customers may not be able to use any of the advanced features, such as
voicemail notification, that the customer enjoys when making calls within our
network. Finally, we may not be able to obtain favorable roaming agreements for
our third-generation products and services that we intend to offer using the
technologies we plan to deploy for interim enhanced data and third-generation
services.
10
OUR BUSINESS IS SEASONAL AND WE DEPEND ON FOURTH QUARTER RESULTS, WHICH MAY NOT
CONTINUE TO BE STRONG.
The wireless industry, including us, has experienced a trend of generating
a significantly higher number of customer additions and handset sales in the
fourth quarter of each year as compared to the other three fiscal quarters. A
number of factors contribute to this trend, including the increasing use of
retail distribution, which is dependent upon the year-end holiday shopping
season, the timing of new product and service announcements and introductions,
competitive pricing pressures, and aggressive marketing and promotions. Strong
fourth quarter results for customer additions and handset sales may not continue
for the wireless industry or for us. In the future, the number of our customer
additions and handset sales in the fourth quarter could decline for a variety of
reasons, including our inability to match or beat pricing plans offered by
competitors, failure to adequately promote our products, services and pricing
plans, or failure to have an adequate supply or selection of handsets. If in any
year fourth quarter results fail to significantly improve upon customer
additions and handset sales from the year's previous quarters, this could
adversely impact our results for the following year.
MEDIA REPORTS HAVE SUGGESTED RADIO FREQUENCY EMISSIONS MAY BE LINKED TO VARIOUS
HEALTH CONCERNS AND INTERFERE WITH VARIOUS MEDICAL DEVICES, AND WE MAY BE
SUBJECT TO POTENTIAL LITIGATION RELATING TO THESE HEALTH CONCERNS.
Media and other reports have linked radio frequency emissions from wireless
handsets to various health concerns, including cancer, and to interference with
various electronic medical devices, including hearing aids and pacemakers.
Research and studies are ongoing. Whether or not such research or studies
conclude there is a link between radio frequency emissions and health, these
concerns over radio frequency emissions may discourage the use of wireless
handsets or expose us to potential litigation, which could have a material
adverse effect on our results of operations. Several class action lawsuits have
been filed against us, several other wireless service operators and several
wireless phone manufacturers, asserting products liability, breach of warranty
and other claims relating to radio frequency transmissions to and from wireless
phones. The complaints seek damages for personal injuries and the costs of
headsets for wireless phone users as well as injunctive relief.
OUR OPERATIONS ARE SUBJECT TO GOVERNMENT REGULATION THAT COULD HAVE ADVERSE
EFFECTS ON OUR BUSINESS.
The licensing, construction, operation, sale, resale and interconnection
arrangements of wireless communications systems are regulated to varying degrees
by the FCC, and, depending on the jurisdiction, state and local regulatory
agencies. These regulations may include, among other things, required service
features and capabilities, such as number portability or emergency 911 service.
In addition, the FCC, together with the U.S. Federal Aviation Administration,
regulates tower marking and lighting. Any of these agencies having jurisdiction
over our business could adopt regulations or take other actions that could
adversely affect our business. FCC licenses to provide wireless services or
personal communications services are subject to renewal and revocation. There
may be competition for our licenses upon their expiration and it is possible
that the FCC will not renew them. FCC rules require all wireless and personal
communications services licensees to meet specified build out requirements. We
may not be able to meet these requirements in each market. Failure to comply
with these requirements in a given license area could result in revocation or
forfeiture of our license for that license area or the imposition of fines on us
by the FCC.
WE MAY BE SUBJECT TO POTENTIAL LITIGATION RELATING TO THE USE OF WIRELESS PHONES
WHILE DRIVING.
Some studies have indicated that some aspects of using wireless phones
while driving may impair drivers' attention in some circumstances, making
accidents more likely. These concerns could lead to potential litigation
relating to accidents, deaths or serious bodily injuries, or to new restrictions
or regulations on wireless phone use, any of which also could have material
adverse effects on our results of operations.
11
STATE AND LOCAL LEGISLATION RESTRICTING OR PROHIBITING WIRELESS PHONE USE WHILE
DRIVING COULD CAUSE SUBSCRIBER USAGE TO DECLINE.
Some state and local legislative bodies have proposed legislation
restricting or prohibiting the use of wireless phones while driving motor
vehicles. Similar laws have been enacted in other countries. On June 28, 2001,
New York State enacted a law prohibiting the use of handheld wireless phones
while driving motor vehicles other than through the use of hands-free equipment.
To date, a small number of communities in the United States have also passed
restrictive local ordinances. These laws, or if passed, other laws prohibiting
or restricting the use of wireless phones while driving, could have the effect
of reducing subscriber usage, which could cause a material adverse effect on our
results of operations.
WE MAY BE UNABLE TO MAKE THE CHANGES NECESSARY TO OPERATE AS AN INDEPENDENT
ENTITY AND MAY INCUR GREATER COSTS.
We have been part of an integrated telecommunications provider since our
acquisition by AT&T Corp. in 1994. Following the split-off from AT&T Corp. on
July 9, 2001, however, AT&T Corp. has no obligation to provide financial,
operational or organizational assistance to us other than limited services. We
may not be able to implement successfully the changes necessary to operate
independently. We may also incur additional costs relating to operating
independently that would cause our cash flow and results of operations to
decline materially. In addition, although we may be able to participate in some
of AT&T Corp.'s supplier arrangements where those arrangements permit or the
vendors agree, our supplier arrangements may not be as favorable as has
historically been the case. Agreements that we have has entered into in
connection with the split-off provide that our business will be conducted
differently and that our relationship with AT&T Corp. will be different from
what it has historically been prior to the split-off. These differences may have
a detrimental effect on our results of operations or financial condition.
THE HISTORICAL FINANCIAL INFORMATION OF AT&T WIRELESS GROUP MAY NOT BE
REPRESENTATIVE OF OUR RESULTS AS AN INDEPENDENT ENTITY AND, THEREFORE, MAY NOT
BE RELIABLE AS AN INDICATOR OF OUR HISTORICAL OR FUTURE RESULTS.
The historical financial information of AT&T Wireless Group may not reflect
what our results of operations, financial position and cash flows would have
been had we been an independent entity during the periods presented. This is
because the financial information reflects allocations for services provided to
AT&T Wireless Group by AT&T Corp., which allocations may not reflect the costs
we incur for similar or incremental services as an independent entity.
WE WILL GENERALLY BE RESPONSIBLE FOR TAX LIABILITY IF THE SPLIT-OFF IS TAXABLE.
Under the separation and distribution agreement between us and AT&T Corp.,
subject to limited exceptions, we will be responsible for any tax liability and
any related liability that results from the split-off failing to qualify as a
tax-free transaction. If the split-off failed to qualify as a tax-free
transaction, this liability would have a material adverse effect on us.
WE MAY NO LONGER RECEIVE TAX SHARING PAYMENTS FROM AT&T CORP. SINCE WE CEASED TO
BE A MEMBER OF THE AT&T CORP. CONSOLIDATED TAX RETURN GROUP, AND WE MAY INCUR
OTHER TAX LIABILITIES AS A RESULT OF THE SPLIT-OFF AND PRE-SPLIT-OFF
TRANSACTIONS.
As a result of the split-off, we ceased to be a member of the consolidated
federal income tax return group of which AT&T Corp. is the common parent.
Consequently, taxable income and losses, and our other tax attributes in
post-split-off taxable periods can generally no longer offset taxable income or
losses and other tax attributes of the AT&T Corp. consolidated tax return group.
For two taxable years after the split-off, under U.S. federal income tax rules,
we would generally be able to carry back any such tax losses, subject to
limitations, against taxable income, if any, of members of AT&T Wireless Group
for pre-split-off periods. Under our tax sharing agreement with AT&T Corp.,
however, we generally may only carry back net operating losses (and not other
tax attributes) from post-split-off taxable periods to pre-split-off taxable
periods, and
12
only if those losses are significant and with the consent of AT&T Corp., which
consent AT&T Corp. has agreed not to withhold unreasonably. To the extent we
have tax losses in post-split-off taxable periods, we would generally no longer
receive current tax sharing payments with respect to those losses. Instead,
except where those losses can be carried back, we would benefit from those
losses only if and when we generated sufficient taxable income in future years
to utilize those tax losses on a stand-alone basis. In addition, there may be
tax costs associated with the split-off that result from our ceasing to be a
member of the AT&T Corp. consolidated tax return group, as well as from
pre-split-off transactions. If incurred, these costs could be material to our
results.
VARIOUS FACTORS MAY INTERFERE WITH OUR ABILITY TO ENGAGE IN DESIRABLE STRATEGIC
TRANSACTIONS AND EQUITY ISSUANCES.
We may be prevented from engaging in some desirable strategic transactions.
The Internal Revenue Code restricts the ability of a company which has undergone
a tax-free split-off from particular issuances of shares generally within a
two-year period after the split-off. In addition, the separation and
distribution agreement prohibits us, for a period of 30 months following the
split-off, from entering into particular transactions that could render the
split-off taxable. This may discourage, delay or prevent a merger, change of
control, or other strategic or capital raising transactions involving our
issuance of equity. Provisions of our amended and restated certificate of
incorporation and by-laws, rights plan, applicable law and the DoCoMo agreements
may also have the effect of discouraging, delaying or preventing change of
control transactions that our stockholders find desirable.
WE MAY LOSE RIGHTS UNDER AGREEMENTS WITH AT&T CORP. IF A CHANGE OF CONTROL
OCCURS.
Some of the agreements that we have entered into with AT&T Corp. in
connection with the split-off, including the brand license agreement, master
carrier agreement and other commercial agreements, contain provisions that give
one party rights in the event of a change of control of the other party. These
provisions may deter a change of control. In the event of a change of control,
the exercise of these rights could have a material adverse effect on us.
AT&T CORP.'S RESTRUCTURING MAY ADVERSELY IMPACT OUR COMPETITIVE POSITION.
In connection with AT&T Corp.'s restructuring, there is a risk that we and
AT&T Corp.'s other separated business units may not be able to create effective
intercompany agreements to facilitate effective cost sharing or to maintain or
enter into arrangements for combining our respective services in customer
offerings or other forms of bundling arrangements. Competition between us and
the other AT&T Corp. units in overlapping markets could result in more downward
price pressure. We expect that the different businesses and companies will share
the AT&T brand after the restructuring, which will likely increase this level of
competition. In addition, any incremental costs associated with implementing
AT&T Corp.'s restructuring plan may materially adversely affect the different
businesses and companies, including our business.
AT&T WIRELESS SERVICES
We are one of the largest wireless communications service providers in the
United States. We seek to expand our customer base and revenue stream by
providing high-quality, innovative wireless services. As of September 30, 2001,
we had 17.1 million consolidated subscribers. For the year ended December 31,
2000 we had:
- $10.4 billion of consolidated revenues, and
- $658 million of consolidated net income.
We operate one of the largest U.S. digital wireless networks. As of
September 30, 2001, we and our affiliates and partner held 850 megahertz and
1900 megahertz licenses to provide wireless services covering 98% of the U.S.
population. As of that date, we, our affiliates and our partner covered
approximately 83% of the U.S. population with at least 30 megahertz of wireless
spectrum. At the same date, our networks and those
13
of our affiliates and partner operated in markets including over 77% of the U.S.
population and in all 50 of the largest U.S. metropolitan areas. We supplement
our operations with roaming agreements that allow our subscribers to use other
providers' wireless services in regions where we do not have operations. With
these roaming agreements, we are able to offer customers wireless services
covering over 95% of the U.S. population. We plan to continue to increase our
coverage and the quality of our services by expanding our coverage area and the
capacity of our network through new network construction, acquisitions, and
partnerships with other wireless providers.
We were incorporated in 2001 as a Delaware corporation. Our principal
executive offices are located at 7277 164th Avenue NE, Building 1, Redmond,
Washington 98052. The telephone number is (425) 580-6000.
OUR RELATIONSHIP WITH AT&T CORP.
On July 9, 2001, we split off from AT&T Corp. as an independent public
company. Prior to the split-off, our business was run as a division of AT&T
referred to as AT&T Wireless Group, the economic value of which was intended to
be reflected by AT&T Wireless Group tracking stock, which was a class of common
stock of AT&T that was listed on the New York Stock Exchange under the symbol
"AWE." AT&T Wireless Group was an integrated set of businesses, assets and
liabilities consisting of AT&T's wireless operations. We continue to have
contractual and commercial relationships with AT&T following the split-off.
Immediately after the split-off, AT&T held approximately 91 million shares or
3.6% of our stock which it intends to sell, exchange or monetize within six
months of the split-off.
In this prospectus "we," "our," "us," and "AT&T Wireless Services" refer to
AT&T Wireless Services, Inc. and its consolidated subsidiaries. "AT&T" refers to
AT&T Corp., our former parent.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying prospectus supplement, we
expect to use the net proceeds from the sale of the offered securities for
general corporate purposes. Pending use of the net proceeds, we intend to invest
the net proceeds in interest-bearing, investment-grade securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the periods indicated. Earnings represent earnings before net undistributed
equity earnings or losses in equity investees, minority interest income or
expense in the loss or income of majority-owned consolidated subsidiaries,
income tax expense, and fixed charges (excluding capitalized interest). Fixed
charges consist of interest (including capitalized interest), preferred stock
dividend requirements of consolidated subsidiaries, and the estimated portion of
rental expense that is representative of the interest factor. Our ratio of
earnings to combined fixed charges and preferred stock dividends is the same as
our ratio of earnings to fixed charges for all periods presented. Therefore the
calculation of our ratio of earnings to combined fixed charges and preferred
stock dividends is not separately presented.
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------
2001 2000 1999 1998 1997 1996
------------- ---- ---- ---- ---- ----
Ratio.................................... 2.0 1.9 (0.4)* 1.9 1.2 2.4
---------------
* Due primarily to the asset impairment and restructuring charges recorded in
1999, earnings were not sufficient to cover fixed charges for the year ended
December 31, 1999. Additional earnings of $553 million would be required to
obtain a ratio of earnings to fixed charges of 1:1 for the year ended December
31, 1999.
14
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
Our authorized capital stock consists of 1,000,000,000 shares of preferred
stock, par value $.01, and 10,000,000,000 shares of common stock, par value
$0.01. Approximately 2.53 billion shares of our common stock were outstanding as
of September 30, 2001. No shares of our preferred stock are outstanding.
OUR COMMON STOCK
The holders of our common stock are entitled to one vote for each share on
all matters voted on by stockholders, including elections of directors, and,
except as otherwise required by law or provided in any resolution adopted by our
board of directors with respect to any series of preferred stock (a "preferred
stock designation"), the holders of our common stock possess all of the voting
power. Our charter does not provide for cumulative voting in the election of
directors. Subject to any preferential rights of any outstanding series of our
preferred stock created by our board of directors from time to time, the holders
of our common stock are entitled to the dividends as may be declared from time
to time by our board of directors from funds legally available for dividends,
and, upon liquidation, are entitled to receive pro rata all assets available for
distribution to the holders of our common stock.
OUR PREFERRED STOCK
Our charter authorizes our board of directors to establish one or more
series of preferred stock and to determine, with respect to any series of
preferred stock, the terms and rights of such series, including, but not limited
to:
- the designation of the series;
- the number of shares of the series, which number our board of directors
may later, except where otherwise provided in the preferred stock
designation, increase or decrease, but not below the number of shares
thereof then outstanding;
- whether dividends, if any, will be cumulative or noncumulative, and, in
the case of shares of any series having cumulative dividend rights, the
date or dates or method of determining the date or dates from which
dividends on the shares of the series having cumulative dividend rights
shall be cumulative;
- the rate of any dividends, or method of determining the dividends,
payable to the holders of the shares of the series, any conditions upon
which the dividends will be paid and the date or dates or the method for
determining the date or dates upon which the dividends will be payable;
- the redemption rights and price or prices, if any, for shares of the
series;
- the terms and amounts of any sinking fund provided for the purchase or
redemption of shares of the series;
- the amounts payable on and the preferences, if any, of shares of the
series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of our affairs;
- whether the shares of the series will be convertible or exchangeable into
shares of any other class or series, or any other security, of us or any
other corporation, and, if so, the specification of the other class or
series or the other security, the conversion or exchange price or prices
or rate or rates, any adjustments thereof, the date or dates as of which
the shares will be convertible or exchangeable and all other terms and
conditions upon which the conversion or exchange may be made;
- restrictions on the issuance of shares of the same series or of any other
class or series; and
- the voting rights, if any, of the holders of the shares of the series.
We believe that the ability of our board of directors to issue one or more
series of preferred stock will provide us with flexibility in structuring
possible future financings and acquisitions, and in meeting other
15
corporate needs that might arise. The authorized shares of our preferred stock,
as well as shares of our common stock, are available for issuance without
further action by our stockholders unless required by applicable law or the
rules of any stock exchange or automated quotation system on which our
securities may be listed or traded. The New York Stock Exchange currently
requires stockholder approval as a prerequisite to listing shares in several
instances, including where the present or potential issuance of shares could
result in an increase of at least 20% in the number of outstanding shares of
common stock, or in the amount of voting securities, outstanding. If the
approval of our stockholders is not required for the issuance of shares of our
preferred stock or common stock, our board of directors may determine not to
seek stockholder approval.
Although we believe our board of directors will have no intention of
immediately doing so, it could issue a series of preferred stock that could,
depending on the terms of the series, impede the completion of a merger, tender
offer or other takeover attempt. Our board of directors will make any
determination to issue the shares of preferred stock based on its judgment as to
the best interests of us and our stockholders. Our board of directors, in so
acting, could issue preferred stock having terms that could discourage an
acquisition attempt through which an acquiror may be able to change the
composition of our board of directors, including a tender offer or other
transaction that some, or a majority, of our stockholders might believe to be in
their best interests or in which our stockholders might receive a premium for
their stock over the then-current market price of our common stock.
50,000,000 shares of our Series A junior participating preferred stock are
reserved for issuance upon exercise of the rights issued under our rights
agreement. For a more complete discussion of our rights plan, see "-- Rights
Agreement."
DIVIDEND POLICY
We currently do not expect to pay dividends on shares of our common stock
in the foreseeable future.
ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF OUR CHARTER AND BY-LAWS
BOARD OF DIRECTORS
Our charter provides that, except as otherwise provided in any preferred
stock designation relating to the rights of the holders of any class or series
of preferred stock to elect additional directors under specified circumstances,
the number of directors will be fixed from time to time exclusively by a
resolution adopted by a majority of the total number of directors that we would
have if there were no vacancies, or the whole board, but shall not be less than
three. Our directors, other than those who may be elected by the holders of any
class or series of our preferred stock having the right under a preferred stock
designation to elect additional directors under specified circumstances, will be
classified into three classes, as nearly equal in number as possible, one class
originally to be elected for a term expiring at the annual meeting of
stockholders to be held in 2002, another class to be originally elected for a
term expiring at the annual meeting of stockholders to be held in 2003 and
another class to be originally elected for a term expiring at the annual meeting
of stockholders to be held in 2004, with each director to hold office until his
or her successor is duly elected and qualified. Commencing with the 2002 annual
meeting of stockholders, directors elected to succeed directors whose terms then
expire will be elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election, with each director to hold
office until such person's successor is duly elected and qualified.
Our charter provides that, except as otherwise provided in any preferred
stock designation relating to the rights of the holders of any class or series
of preferred stock to elect directors under specified circumstances, newly
created directorships resulting from any increase in the number of directors and
any vacancies on our board of directors resulting from death, resignation,
disqualification, removal or other cause will be filled by the affirmative vote
of a majority of the remaining directors then in office, even though less than a
quorum of the board of directors, and not by the stockholders. Any director
elected in accordance with the preceding sentence will hold office for the
remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until the director's
successor shall have been duly elected and qualified. No decrease in the number
of directors constituting our board of directors will shorten
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the term of any incumbent director. Subject to the rights of any class or series
of preferred stock having the right under a preferred stock designation to elect
directors under specified circumstances, any director may be removed from office
only for cause by the affirmative vote of the holders of at least a majority of
the voting power of all voting stock then outstanding, voting together as a
single class.
These provisions would preclude a third party from removing incumbent
directors and simultaneously gaining control of our board by filling the
vacancies created by removal with its own nominees. Under the classified board
provisions described above, it would take at least two elections of directors
for any individual or group to gain control of our board of directors.
Accordingly, these provisions could discourage a third party from initiating a
proxy contest, making a tender offer or otherwise attempting to gain control of
us.
NO STOCKHOLDER ACTION BY WRITTEN CONSENT; SPECIAL MEETINGS
Our charter and by-laws provide that stockholders must effect any action
required or permitted to be taken at a duly called annual or special meeting of
stockholders and that those actions may not be effected by any consent in
writing by the stockholders. Except as otherwise required by law or by any
preferred stock designation, special meetings of stockholders may be called only
by a majority of the whole board or by our chairman. No business other than that
stated in the notice of meeting may be transacted at any special meeting. These
provisions may have the effect of delaying consideration of a stockholder
proposal until the next annual meeting unless a special meeting is called by our
board or the chairman of the board of directors.
ADVANCE NOTICE PROCEDURES
Our by-laws establish an advance notice procedure for stockholders to make
nominations of candidates for election as directors or to bring other business
before an annual meeting of stockholders. These stockholder notice procedures
provide that only persons who are nominated by our board of directors, or by a
stockholder who was a stockholder of record at the time of giving notice and has
given timely written notice to our secretary before the meeting at which
directors are to be elected, will be eligible for election as directors. These
stockholder notice procedures will also provide that at an annual meeting only
the business as has been brought before the meeting by our board of directors,
or by a stockholder who has given timely written notice to our secretary of the
stockholder's intention to bring the business before the meeting, may be
conducted. Under these stockholder notice procedures, for notice of stockholder
nominations to be made at an annual meeting to be timely, the notice must be
received by our secretary not later than the close of business on the 90th
calendar day nor earlier than the close of business on the 120th calendar day
before the first anniversary of the preceding year's annual meeting, except
that, if the date of the annual meeting is more than 30 calendar days before or
more than 60 calendar days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the close of
business on the 120th calendar day before the annual meeting and not later than
the close of business on the later of the 90th calendar day before the annual
meeting or the tenth calendar day following the day on which public announcement
of a meeting date is first made by us.
Nevertheless, if the number of directors to be elected to our board of
directors is increased and there is no public announcement by us naming all of
the nominees for director or specifying the size of our increased board of
directors at least 100 calendar days before the first anniversary of the
preceding year's annual meeting, a stockholder's notice also will be considered
timely, but only with respect to nominees for any new positions created by the
increase, if it shall be delivered not later than the close of business on the
10th calendar day following the day on which the public announcement is first
made by us. Under these stockholder notice procedures, for notice of a
stockholder nomination to be made at a special meeting at which directors are to
be elected to be timely, we must receive notice not earlier than the close of
business on the 120th calendar day before the special meeting and not later than
the close of business on the later of the 90th calendar day before the special
meeting or the 10th calendar day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
our board to be elected at the meeting.
In addition, under these stockholder notice procedures, a stockholder's
notice to us proposing to nominate a person for election as a director or
relating to the conduct of business other than the nomination of directors
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will be required to contain some specified information. If the chairman of a
meeting determines that an individual was not nominated, or other business was
not brought before the meeting, in accordance with our stockholder notice
procedure, the individual will not be eligible for election as a director, or
the business will not be conducted at the meeting, as the case may be.
AMENDMENT
Our charter provides that the affirmative vote of the holders of at least
80% of our voting stock then outstanding, voting together as a single class, is
required to amend provisions of our charter relating to stockholder action; the
number, election and tenure of directors; the nomination of director candidates
and the proposal of business by stockholders; the filling of vacancies; and the
removal of directors. Our charter further provides that the related by-laws
described above, including the stockholder notice procedure, may be amended only
by the affirmative vote of a majority of the whole board or by the affirmative
vote of the holders of at least 80% of the voting power of the outstanding
shares of voting stock, voting together as a single class. The affirmative vote
of holders of at least 66 2/3% of the voting power of outstanding shares of
voting stock, voting as a single class, is required to amend our by-laws.
RIGHTS AGREEMENT
Our board of directors has adopted a rights agreement. Under the rights
agreement, we have issued one preferred share purchase right for each
outstanding share of our common stock. Each right entitles the registered holder
to purchase from us one one-hundredth of a share of our Series A junior
participating preferred stock, par value $.01 per share, at a price of $100,
subject to adjustment in some circumstances. The description and terms of the
rights is set forth in a rights agreement between us and the designated rights
agent. The description set forth below is intended as a summary only and is
qualified in its entirety by reference to the form of the rights agreement.
The rights will be evidenced by the certificates representing our common
stock until the earlier to occur of:
- ten days following a public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership of at
least 15% or more of the outstanding shares of our common stock; or
- ten business days or a later date determined by our board of directors
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the completion of which would result in
the beneficial ownership by a person or group of 15% or more of such
outstanding shares of our common stock (the "distribution date").
The rights agreement exempts NTT DoCoMo's ownership of more than 15% of our
common stock, but only to the extent of the shares of our common stock that
DoCoMo owns as a result of its January 22, 2001 investment in us and any shares
of common stock that DoCoMo could purchase as a result of their investment
rights, as described under "DoCoMo Strategic Investment." The rights agreement
provides that, until the distribution date or earlier redemption or expiration
of the rights, the rights will be transferred with and only with our common
stock. Until the distribution date or earlier redemption or expiration of the
rights, our common stock certificates will contain a notation incorporating the
rights agreement by reference. As soon as practicable following the distribution
date, separate certificates evidencing the rights will be mailed to holders of
record of our common stock as of the close of business on the distribution date
and the separate right certificates alone will evidence the rights.
The rights will not be exercisable until the distribution date. The rights
will expire on the 10th anniversary of the rights agreement, unless the final
expiration date is extended or unless the rights are earlier redeemed or
exchanged by us, in each case, as summarized below.
In the event that any person or group of affiliated or associated persons
becomes an acquiring person, proper provision shall be made so that each holder
of a right, other than rights beneficially owned by the acquiring person, which
will thereafter be void, will later have the right to receive upon exercise that
number
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of shares of our common stock having a market value of two times the exercise
price of the right. If we are acquired in a merger or other business combination
transaction or 50% or more of our consolidated assets or earning power are sold
after a person or group of affiliated or associated persons becomes an acquiring
person, proper provision will be made so that each holder of a right will
thereafter have the right to receive, upon the exercise thereof at the
then-current exercise price of the right, that number of shares of common stock
of the acquiring company which at the time of the transaction will have a market
value of two times the exercise price of the right.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of our outstanding
common stock and before the acquisition by the person or group of 50% or more of
our outstanding common stock, our board of directors may exchange the rights,
other than rights owned by the person or group which, have become void, in whole
or in part, at an exchange ratio of one share of our common stock, or one
one-hundredth of one of our junior preferred shares, or of a share of a class or
series of preferred stock having equivalent rights, preferences and privileges,
per right subject to adjustment.
At any time before the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of our outstanding
common stock, our board of directors may redeem the rights in whole, but not in
part, at a price of $.01 per right, as adjusted. The redemption of the rights
may be made effective at such time on such basis and with such conditions as our
board of directors, in its sole discretion, may establish. Immediately upon any
redemption of the rights, the right to exercise the rights will terminate and
the only right that the holders of the rights will be eligible to receive will
be the redemption price.
The terms of the rights may be amended by our board of directors without
the consent of the holders of the rights; provided, however, that, our board may
not reduce the threshold at which a person or group becomes an acquiring person
to below 10% of our outstanding common stock, and from and after such time as
any person or group of affiliated or associated persons becomes an acquiring
person, no amendment may adversely affect the interests of the holders of the
rights.
Until a right is exercised, the holder of that right, as a holder, will
have no additional rights as our stockholder solely by virtue of holding that
right, including, without limitation, the right to vote or to receive dividends.
The number of outstanding rights and the number of one one-hundredths of
our junior preferred shares issuable upon exercise of each right also will be
subject to adjustment in the event of a stock split of our common stock or a
stock dividend on our common stock payable in our common stock or subdivisions,
consolidations or combinations of our common stock occurring, in any case,
before the distribution date.
The purchase price payable, and the number of our junior preferred shares
or other securities or property issuable, upon exercise of the rights will be
subject to adjustment from time to time to prevent dilution:
- in the event of a stock dividend on, or a subdivision, combination or
reclassification of, our junior preferred shares;
- upon the grant to holders of our junior preferred shares of some rights
or warrants to subscribe for or purchase our junior preferred shares at a
price, or securities convertible into our junior preferred shares with a
conversion price, less than the then-current market price of our junior
preferred shares; or
- upon the distribution to holders of our junior preferred shares of
evidences of indebtedness or assets excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends payable
in our junior preferred shares or of subscription rights or warrants
other than those referred to above.
With some exceptions, no adjustment in the purchase price will be required
until cumulative adjustments require an adjustment of at least 1% in the
purchase price. No fractional junior preferred shares will be issued, other than
fractions that are integral multiples of one one-hundredth of one of our junior
preferred shares, which may, at our election, be evidenced by depositary
receipts and instead, an adjustment in cash will be made based on the market
price of our junior preferred shares on the last trading day before the date of
exercise.
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Our junior preferred shares purchasable upon exercise of the rights will
not be redeemable. Each of our junior preferred shares will be entitled to a
minimum preferential quarterly dividend payment of $1.00 per share but will be
entitled to an aggregate dividend of 100 times the dividend declared per share
of our common stock. In the event of liquidation, the holders of our junior
preferred shares will be entitled to a minimum preferential liquidation payment
of $100 per share but will be entitled to an aggregate payment of 100 times the
payment made per share of common stock. Each of our junior preferred shares will
have 100 votes voting together with our common stock. Finally, in the event of
any merger, consolidation or other transaction in which shares of common stock
are exchanged, each one of our junior preferred shares will be entitled to
receive 100 times the amount received per one share of common stock. These
rights are protected by customary anti-dilution provisions.
Due to the nature of our junior preferred shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in one of our junior
preferred shares purchasable upon exercise of each right should approximate the
value of one share of common stock.
The rights have anti-takeover effects. The rights will cause substantial
dilution to a person or group of persons that attempts to acquire us on terms
not approved by our board of directors. The rights should not interfere with any
merger or other business combination approved by our board before the time that
a person or group has acquired beneficial ownership of 15% percent or more of
the common stock since the rights may be redeemed by us at the redemption price
until such time.
DELAWARE BUSINESS COMBINATION STATUTE
Section 203 of the Delaware General Corporation Law provides that, subject
to some exceptions, an interested stockholder of a Delaware corporation shall
not engage in any business combination, including mergers or consolidations or
acquisitions of additional shares of the corporation, with the corporation for a
three-year period following the date that the stockholder becomes an interested
stockholder unless:
- before the date of the business combination, the board of directors of
the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested
stockholder;
- upon completion of the transaction that resulted in the stockholder
becoming an "interested stockholder," the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding some shares; or
- on or after that date, the business combination is approved by the board
of directors of the corporation and authorized at an annual or special
meeting of stockholders by the affirmative vote of at least 66 2/3% of
the outstanding voting stock that is not owned by the interested
stockholder.
Except as otherwise specified in Section 203, an interested stockholder is
defined to include:
- any person that is the owner of 15% or more of the outstanding voting
stock of the corporation, or is an affiliate or associate of the
corporation and was the owner of 15% or more of the outstanding voting
stock of the corporation at any time within three years immediately
before the date of determination; and
- the affiliates and associates of the stockholder.
Under some circumstances, Section 203 makes it more difficult for a person
that would be an interested stockholder to effect various business combinations
with a corporation for a three-year period. We are not electing to be exempt
from the restrictions imposed under Section 203. However AT&T Corp. and its
affiliates are excluded from the definition of interested stockholder for
purposes of Section 203. The provisions of Section 203 may encourage persons
interested in acquiring us to negotiate in advance with our board, since the
stockholder approval requirement would be avoided if a majority of the directors
then in office approves either the business combination or the transaction that
results in any person becoming an interested stockholder. These provisions also
may have the effect of preventing changes in our management. It is possible that
these
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provisions could make it more difficult to accomplish transactions which our
stockholders may otherwise deem to be in their best interests.
DOCOMO STANDSTILL
Under the terms of its investment in us, NTT DoCoMo is subject to
standstill restrictions that limit its ability to acquire or participate with
any other person seeking to acquire control of our company. These restrictions
are described under "DoCoMo Strategic Investment."
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is Equiserve. Its
address is PO Box 43010 Providence, RI 02940-3010, and its telephone number at
this location is 866-367-6357.
DESCRIPTION OF DEBT SECURITIES
The following briefly summarizes certain general terms and provisions of
the debt securities. The debt securities will be issued under an indenture among
AT&T Wireless Services and a trustee. The form of indenture, which includes the
form of debt securities, has been filed with the Commission as an exhibit to the
registration statement of which this prospectus is a part.
The prospectus supplements will describe the particular terms and
provisions of any series of debt securities. Therefore, you should rely on the
information in the applicable prospectus supplement, in particular if the
information in the prospectus supplement is different from the information
provided below. Where any provision in any prospectus supplement is inconsistent
with any provision in this summary, the prospectus supplement will control.
GENERAL
The indenture does not limit the aggregate principal amount of debt
securities that may be issued under the indenture. We may issue debt securities
from time to time in one or more series. Unless otherwise specified in the
applicable prospectus supplement, the debt securities will be unsecured
obligations of ours and will rank equally with our other unsecured and
unsubordinated indebtedness.
You should refer to the prospectus supplement that accompanies this
prospectus for a description of the specific series of debt securities we are
offering by that prospectus supplement. The terms may include:
- the title of the debt securities and the series in which the debt
securities will be included;
- the authorized denominations and aggregate principal amount of the debt
securities;
- the date or dates on which the debt securities will mature or the method
for determining those dates;
- the rate or rates, which may be fixed or variable, per annum at which the
debt securities will bear interest, if there is any interest, and if such
rate is variable, the manner of calculation of interest and the date from
which interest will accrue or the method for determining such date or
dates;
- the place or places where the principal of and any premium and interest
on the debt securities will be payable;
- the dates on which the interest will be payable and the corresponding
record dates;
- the period or periods within which, the price or prices at which, and the
terms and conditions on which, the debt securities may be redeemed, in
whole or in part, at the option of AT&T Wireless Services;
- any mandatory or optional sinking fund or purchase fund or analogous
provisions;
- the terms and conditions of any redemption of the debt securities and any
redemption price;
- the denominations in which the debt securities are authorized to be
issued;
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- the portion of the principal amount of the debt securities payable upon
declaration of the acceleration of the maturity of the debt securities
and any method by which that portion will be payable;
- the person to whom any interest on any debt security shall be payable if
other than the person in whose name the debt security is registered on
the applicable record date;
- any additional events of default or covenants applicable to the debt
securities;
- if applicable, provisions related to the issuance of debt securities in
book-entry form; and
- any other special terms pertaining to the debt securities.
Unless otherwise specified in the applicable prospectus supplement, the
debt securities will not be listed on any securities exchange.
Unless otherwise specified in the applicable prospectus supplement, we will
issue the debt securities in fully registered form without coupons. If we issue
debt securities of any series in bearer form, the applicable prospectus
supplement will describe the special restrictions and considerations, including
special offering restrictions and special federal income tax considerations,
applicable to those debt securities and to payment on and transfer and exchange
of those debt securities.
The debt securities may be sold at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate that at the
time of issuance is below market rates. The applicable prospectus supplement
will describe the federal income tax consequences and special considerations
applicable to those debt securities.
PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Subject to any applicable laws or regulations, we will make payments on the
debt securities at a designated office or agency, unless the applicable
prospectus supplement sets forth otherwise. At our option, however, we may also
make interest payments on the debt securities in registered form:
- by checks mailed by the trustee to the holders of debt securities
entitled to interest payments at their registered addresses, or
- by wire transfer to an account maintained by the person entitled to
interest payments as specified in the debt register.
Unless the applicable prospectus supplement indicates otherwise, we will
pay any installment of interest on debt securities in registered form to the
person in whose name the debt security is registered at the close of business on
the regular record date for that installment of interest.
Unless the applicable prospectus supplement sets forth otherwise, debt
securities issued in registered form will be transferable or exchangeable at the
agency we may designate from time to time. Debt securities may be transferred or
exchanged without service charge, other than any tax or other governmental
charge imposed in connection with the transfer or exchange.
BOOK-ENTRY PROCEDURES
The applicable prospectus supplement for each series of debt securities
will state whether those debt securities will be subject to the following
provisions.
Unless debt securities in physical form are issued, the debt securities
will be represented by one or more fully registered global certificates, in
denominations of $1,000 or any integral multiple of $1,000. Each global
certificate will be deposited with, or on behalf of, The Depository Trust
Company (DTC), and registered in its name or in the name of Cede & Co., its
nominee. No holder of debt securities initially issued as a global certificate
will be entitled to receive a certificate in physical form, except as set forth
below.
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DTC has advised that:
- DTC is:
-- a limited purpose trust company organized under the laws of the State
of New York;
-- a member of the Federal Reserve System;
-- a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
-- a "clearing agency" registered pursuant to Section 17A of the
Securities Exchange Act.
- DTC was created to hold securities for DTC participants and to facilitate
the clearance and settlement of securities transactions between DTC
participants through electronic book entries, thereby eliminating the
need for physical movement of certificates.
- DTC participants include securities brokers and dealers, banks, trust
companies and clearing corporations.
- Access to DTC's book-entry system is also available to others, such as
banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a DTC participant, either directly
or indirectly.
Holders that are not DTC participants but desire to purchase, sell or
otherwise transfer ownership of, or other interests in, the debt securities may
do so only through DTC participants. In addition, holders of the debt securities
will receive all distributions of principal and interest from the trustee
through DTC participants. Under the rules, regulations and procedures creating
and affecting DTC and its operation, DTC is required to make book-entry
transfers of debt securities among DTC participants on whose behalf it acts and
to receive and transmit distributions of principal of, and interest on, the debt
securities. Under the book-entry system, holders of debt securities may
experience some delay in receipt of payments, since the trustee will forward
such payments to Cede & Co., as nominee for DTC, and DTC, in turn, will forward
the payments to the appropriate DTC participants.
DTC participants will be responsible for distributions to holders of debt
securities, which distributions will be made in accordance with customary
industry practices. Although holders of debt securities will not have possession
of the debt securities, the rules of DTC provide a mechanism by which those
holders will receive payments and will be able to transfer their interests.
Although the DTC participants are expected to convey the rights represented by
their interests in any global security to the related holders, because DTC can
only act on behalf of DTC participants, the ability of holders of debt
securities to pledge the debt securities to persons or entities that are not DTC
participants or to otherwise act with respect to the debt securities may be
limited due to the lack of physical certificates for the debt securities.
Neither AT&T Wireless Services nor the trustee under the indenture nor any
agent of any of them will be responsible or liable for any aspect of the records
relating to, or payments made on account of, beneficial ownership interests in
the debt securities or for supervising or reviewing any records relating to such
beneficial ownership interests. Since the only "holder of debt securities," for
purposes of the indenture, will be Cede & Co., as nominee of DTC, the trustee
will not recognize holders of debt securities as "holders of debt securities,"
and holders of debt securities will be permitted to exercise the rights of
holders only indirectly through DTC and DTC participants. DTC has advised us
that it will take any action permitted to be taken by a holder of debt
securities under the indentures only at the direction of one or more DTC
participants to whose accounts with DTC the related debt securities are
credited.
All payments we make to the trustee will be in immediately available funds
and will be passed through to DTC in immediately available funds.
Physical certificates will be issued to holders of a global security, or
their nominees, if:
- DTC advises the trustee in writing that DTC is no longer willing, able or
eligible to discharge properly its responsibilities as depository and we
are unable to locate a qualified successor, or
- we decide in our sole discretion to terminate the book-entry system
through DTC.
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In such event, the trustee under the indenture will notify all holders of
debt securities through DTC participants of the availability of such physical
debt securities. Upon surrender by DTC of the definitive global note
representing the debt securities and receipt of instructions for reregistration,
the trustee will reissue the debt securities in physical form to holders or
their nominees.
Debt securities in physical form will be freely transferable and
exchangeable at the office of the trustee upon compliance with the requirements
set forth in the indenture.
No service charge will be imposed for any registration of transfer or
exchange, but payment of a sum sufficient to cover any tax or other governmental
charge may be required.
CONSOLIDATION, MERGER OR SALE BY AT&T WIRELESS SERVICES
The indenture provides that we may merge or consolidate with or into any
other corporation or sell, convey, transfer, lease or otherwise dispose of all
or substantially all of our assets to any person, if:
- in the case of a merger or consolidation, we are the surviving
corporation;
- in the case of either a merger or consolidation where we are not the
surviving corporation, or a sale, conveyance or other disposition of all
or substantially all of our assets to another person:
-- the resulting, successor or acquiring person is a corporation organized
and existing under the laws of the United States or any state thereof;
and
-- that corporation expressly assumes by supplemental indenture all our
obligations under the debt securities, any related coupons and the
indentures;
- immediately after giving effect to the merger or consolidation, or the
sale, conveyance, transfer, lease or other disposition, no default or
event of default under the indenture will have occurred and be
continuing; and
- certain other conditions are met.
If a successor corporation assumes our obligations, then that successor
corporation will succeed to and be substituted for us under the indenture and
under the debt securities and any related coupons, and all our obligations will
terminate.
CERTAIN 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. We have provided a list of certain definitions at
the end of this section to define the capitalized words used in describing the
covenants.
Limitation on Secured Indebtedness. We have agreed 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 the debt securities
equally and ratably with (or prior to) such Secured Indebtedness. However, we
may incur Secured Indebtedness without securing the debt securities if,
immediately after incurring the Secured Indebtedness, the aggregate amount of
all Secured Indebtedness and the aggregate amount of Attributable Debt then
outstanding pursuant to Sale and Leaseback Transactions would not exceed 15% of
Consolidated Net Tangible Assets. The aggregate amount of all Secured
Indebtedness in the preceding sentence excludes Secured Indebtedness which is
secured equally and ratably with the debt securities and Secured Indebtedness
that is being repaid concurrently.
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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 Sale and Leaseback Transaction, unless either
- immediately thereafter, the sum of
- the Attributable Debt to be outstanding pursuant to such Sale and
Leaseback Transaction and all other Sale and Leaseback Transactions
entered into by us or a Restricted Subsidiary after April 26, 2000 (or,
in the case of a Restricted Subsidiary, the date on which it became a
Restricted Subsidiary, if later than April 26, 2000) and
- the aggregate amount of all Secured Indebtedness, excluding Secured
Indebtedness which is secured to the same extent as the debt securities
does not exceed 15% of Consolidated Net Tangible Assets, or
- an amount equal to the greater of
- the net proceeds to us or a Restricted Subsidiary from such sale and
- the Attributable Debt to be outstanding pursuant to such Sale and
Leaseback Transaction, is used within 180 days to retire long-term debt
of AT&T Wireless Services or a Restricted Subsidiary. However, debt which
is subordinate to the debt securities or which is owed to AT&T Wireless
Services or a Restricted Subsidiary may not be retired.
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
Events of default under the indenture for a series of debt securities are
defined as:
- default for 90 days in payment of any interest on any debt security of
that series or any related coupon or any additional amount payable for
the debt securities of that series as specified in the applicable
prospectus supplement when due;
- default for ten days in payment of principal or premium, if any, on
redemption or otherwise, or in the making of a mandatory sinking fund
payment of any debt securities of that series when due;
- default for 60 days after notice to us by the trustee, or to us and the
trustee by the holders of 25% or more in aggregate principal amount of
the outstanding debt securities of that series, in the performance of any
other agreement applicable to the debt securities of that series, in the
indenture or in any supplemental indenture under which the debt
securities of that series may have been issued; and
- certain events of bankruptcy, insolvency or reorganization.
If an event of default specified in the indenture for the debt securities
of any series occurs and is continuing, either the trustee for that series or
the holders of 25% or more in aggregate principal amount of the outstanding debt
securities of that series, by written notice to us, may:
- declare the principal of all the debt securities of that series to be due
and payable, or
- in the case of original issue discount debt securities or indexed debt
securities, declare the portion of the principal amount specified in the
applicable prospectus supplement to be due and payable.
If the holders of debt securities of a series give notice of the
declaration of acceleration to us, then they are also required to give notice to
the trustee for that series.
The trustee for any series of debt securities is required to give notice to
the holders of the debt securities of that series of all uncured defaults within
90 days after the occurrence of a default known to it on debt securities of that
series. However, that notice will not be given until 60 days after the
occurrence of a default on debt securities of that series involving a failure to
perform a covenant other than the obligation to pay principal, premium, if any,
or interest, if any, or make a mandatory sinking fund payment. In addition, the
trustee may withhold that notice if and so long as a committee of its
responsible officers in good faith determines that withholding that notice is in
the interest of the holders of the debt securities of that series,
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except in the case of a default in payment on the debt securities of that
series. Default means any event that is, or, after notice or passage of time or
both, would be, an event of default.
The trustee will be under no obligation to exercise any of its rights or
powers under the indenture at the request or direction of any of the holders of
debt securities, unless those holders have offered the trustee reasonable
indemnity. Subject to those trustee indemnification provisions, the holders of
not less than a majority in aggregate principal amount of the debt securities of
each series affected (with each series voting as a class) may direct the time,
method and place of conducting any proceeding for any remedy available to the
trustee for that series, or exercising any trust or power conferred on the
trustee.
We will file annually with the trustee a certificate as to our compliance
with all conditions and covenants of the indenture.
The holders of at least a majority in aggregate principal amount of any
series of debt securities, by notice to the trustee for that series, may waive,
on behalf of the holders of all debt securities of that series, any past default
or event of default with respect to that series and its consequences, and may
rescind and annul a declaration of acceleration with respect to that series.
However, a default or event of default in the payment of the principal of, or
premium or interest on, any debt security and certain other defaults may not be
waived.
MODIFICATION OF THE INDENTURES
We, as well as the trustee for a series of debt securities, may enter into
one or more supplemental indentures, without the consent of the holders of any
of the debt securities, in order to:
- evidence the succession of another corporation to AT&T Wireless Services
and the assumption of our covenants by a successor;
- add to our covenants or surrender any of our rights or powers;
- add additional events of default for any series;
- add, change or eliminate any provision affecting debt securities that are
not yet issued;
- secure the debt securities;
- establish the form or terms of debt securities not yet issued;
- evidence and provide for successor trustees;
- permit payment in respect of debt securities in bearer form in the United
States, if allowed without penalty under applicable laws and regulations;
- correct or supplement any inconsistent provisions or add any other
provisions, on the condition that this action does not adversely affect
the interests of any holder of debt securities of any series issued under
the indenture in any material respect; or
- cure any ambiguity or correct any mistake.
In addition, with the consent of the holders of a majority in aggregate
principal amount of the outstanding debt securities of each series affected by
the supplemental indenture, AT&T Wireless Services and the trustee may execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the indenture or any supplemental indenture or modifying
the rights of the holders of debt securities of that series. However, no such
supplemental indenture may, without the consent of the holder of each debt
security that is affected:
- change the time for payment of principal or interest on any debt
security;
- reduce the principal of, or any installment of principal of, or interest
on, any debt security;
- reduce the amount of premium, if any, payable upon the redemption of any
debt security;
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- reduce the amount of principal payable upon acceleration of the maturity
of an original issue discount debt security;
- impair the right to institute suit for the enforcement of any payment on
or for any debt security;
- reduce the percentage in principal amount of the outstanding debt
securities of any series the consent of whose holders is required for
modification or amendment of the indenture or for waiver of compliance
with certain provisions of the indenture or for waiver of certain
defaults;
- change our obligation to maintain an office or agency in the places and
for the purposes specified in the indenture;
- modify the provisions relating to waiver of some defaults or any of the
foregoing provisions; or
- change the currency of payment.
Any supplemental indenture will be filed with the Commission as an exhibit
to:
- a post-effective amendment to the registration statement of which this
prospectus is a part;
- an annual report on Form 10-K;
- a quarterly report on Form 10-Q; or
- a current report on Form 8-K.
DEFEASANCE AND COVENANT 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 obligations to pay the principal, interest, any premium and any
mandatory sinking fund or analogous payments due to the stated or a redemption
date of the debt securities of a particular series, then at our option:
- we will be discharged from our obligations for the debt securities of
that series, which is referred to as "defeasance," or
- we will no longer be under any obligation to comply with certain
covenants under the indenture, and some events of default will no longer
apply to us, which is referred to as "covenant defeasance."
If this happens, the holders of the debt securities of the affected series
will no longer 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. Those holders may look only to the
deposited funds or obligations for payment.
Unless otherwise specified in the applicable prospectus supplement and
except as described below, the conditions to both defeasance and covenant
defeasance are as follows:
- it must not result in a breach or violation of, or constitute a default
or event of default under, the indenture, or result in a breach or
violation of, or constitute a default under, any other of our material
agreements or instruments;
- certain bankruptcy-related defaults or events of default with respect to
us must not be occurring during the period commencing on the date of the
deposit of the trust funds to defease the debt securities and ending on
the 91st day after that date;
- we must deliver to the trustee an opinion of counsel to the effect that
the holders of the debt securities:
-- will not recognize income, gain or loss for federal income tax purposes
as a result of the covenant defeasance and
-- will be subject to federal income tax on the same amounts and in the
same manner and at all the same times as would have been the case if
the covenant defeasance had not occurred;
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- we must deliver to the trustee an officer's certificate and an opinion of
counsel addressing compliance with the conditions of the defeasance or
covenant defeasance; and
- we must comply with any other conditions to the defeasance or covenant
defeasance that the indenture may impose on us.
The indenture requires that a nationally recognized firm of independent
public accountants deliver to the trustee a written certification as to the
sufficiency of the trust funds deposited for the defeasance or covenant
defeasance of the debt securities.
If indicated in the prospectus supplement, in addition to obligations of
the United States or an agency or instrumentality of the United States,
government obligations may include obligations of the government or an agency or
instrumentality of the government issuing the currency in which debt securities
of such series are payable. In the event that government obligations deposited
with the trustee for the defeasance of such debt securities decrease in value or
default subsequent to their being deposited, we will have no further obligation,
and the holders of the debt securities will have no additional recourse against
us, for any decrease in value or default.
We may exercise our defeasance option for the debt securities even if we
have already exercised our covenant defeasance option. If we exercise our
defeasance option, payment of the debt securities may not be accelerated because
of default or an event of default. If we exercise our covenant defeasance
option, payment of the debt securities may not be accelerated because of default
or an event of default with respect to the covenants to which the covenant
defeasance is applicable. However, if acceleration occurs, the realizable value
at the acceleration date of the money and government obligations in the
defeasance trust could be less than the principal and interest then due on the
debt securities, because the required deposit in the defeasance trust is based
on scheduled cash flow rather than market value, which will vary depending on
interest rates and other factors.
CERTAIN DEFINITIONS
"Attributable Debt" means, as of the date of its determination, the present
value (discounted semiannually at an interest rate implicit in the terms of the
lease) of the obligation of a lessee for rental payments pursuant to any Sale
and Leaseback Transaction (reduced by the amount of the rental obligations of
any sublessee of all or part of the same property) during the remaining term of
such Sale and Leaseback Transaction (including any period for which the lease
relating thereto has been extended), such rental payments not to include amounts
payable by the lessee for maintenance and repairs, insurance, taxes, assessments
and similar charges and for contingent rates (such as those based on sales),
provided, however, that in the case of any Sale and Leaseback Transaction in
which the lease is terminable by the lessee upon the payment of a penalty,
Attributable Debt shall mean the lesser of the present value of (i) the rental
payments to be paid under such Sale and Leaseback Transaction until the first
date (after the date of such determination) upon which it may be so terminated
plus the then applicable penalty upon such termination and (ii) the rental
payments required to be paid during the remaining term of such Sale and
Leaseback Transaction (assuming such termination provision is not exercised).
"Consolidated Net Tangible Assets" means the total assets of us and our
Subsidiaries, less current liabilities and certain intangible assets (other than
product development costs).
"Restricted Subsidiary" means any Subsidiary of AT&T Wireless Services
which has substantially all its property in the United States in which the
investment of AT&T Wireless Services and all its Subsidiaries exceeds .25% of
Consolidated Net Tangible Assets as of the date of such determination, other
than certain financing Subsidiaries. In addition, our Board of Directors may
designate any other Subsidiary as a Restricted Subsidiary.
"Sale and Leaseback Transaction" means any arrangement with any person
providing for the leasing by us or any Restricted Subsidiary of any property
(whether such property is now owned or hereafter acquired) located within the
United States and having an acquisition cost plus capitalized improvement of
[0.25]% of Consolidated Net Tangible Assets that has been or is to be sold or
transferred by us or such Restricted
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Subsidiary to such person, other than (i) temporary leases for a term, including
renewals at the option of the lessee, of not more than three years; (ii) leases
between us and a Restricted Subsidiary or between Restricted Subsidiaries; and
(iii) leases of executed by the time of, or within 180 days after the latest of,
the acquisition, the completion of construction or improvement, or the
commencement of commercial operation of such property.
"Secured Indebtedness" means:
- indebtedness of us or any Restricted Subsidiary secured by any lien upon
any property located within the United States and having an acquisition
cost plus capitalized improvement of .25% of Consolidated Net Tangible
Assets or the stock or indebtedness of a Restricted Subsidiary or
- any conditional sale or other title retention agreement covering any
property located within the United States and having an acquisition cost
plus capitalized improvement of .25% of Consolidated Net Tangible Assets
or Restricted Subsidiary but does not include any indebtedness secured by
any lien or any conditional sale or other title retention agreement:
- outstanding on April 26, 2000,
- incurred or entered into after April 26, 2000 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,
- on property located within the United States and having an acquisition
cost plus capitalized improvement of .25% of Consolidated Net Tangible
Assets or the stock or indebtedness of Restricted Subsidiaries and
existing at the time of acquisition of the property, stock or
indebtedness,
- owing to us or any other Restricted Subsidiary,
- existing at the time a corporation becomes a Restricted Subsidiary,
- incurred to finance the acquisition or construction of property in
favor of any country or any of its political subdivisions, and
- replacing, extending or renewing any such indebtedness (to the extent
such indebtedness is not increased).
"Subsidiary" means any corporation of which we at the time own or control,
directly or indirectly, more than 50% of the shares of outstanding stock having
general voting power under ordinary circumstances to elect a majority of the
Board of Directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency).
DESCRIPTION OF CONVERTIBLE DEBT SECURITIES
The following briefly summarizes certain general terms and provisions of
the convertible debt securities. The convertible debt securities offered
pursuant to this prospectus will be unsecured obligations and will be either
senior unsubordinated debt or subordinated debt. Convertible senior debt will be
issued under a convertible senior debt indenture. Convertible subordinated debt
will be issued under a convertible subordinated debt indenture. The form of
convertible debt indenture, which includes the form of convertible debt
securities, has been filed with the Commission as an exhibit to the registration
statement of which this prospectus is a part.
Where we make no distinction between convertible senior unsubordinated debt
securities and convertible subordinated debt securities or between the
convertible senior debt indenture and the convertible subordinated debt
indenture, those summaries refer to any debt securities and either indenture.
The prospectus supplements will describe the particular terms and provisions of
any series of convertible debt securities. Therefore, you should rely on the
information in the applicable prospectus supplement, especially when the
information in the
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prospectus supplement is different from the information provided below. The
provision of the prospectus supplement will control to the extent that any
provision in any prospectus supplement is inconsistent with any provision in
this summary.
Because the following description is a summary, it does not describe every
aspect of the convertible debt securities, and is qualified in its entirety by
the detailed information appearing in the relevant prospectus supplements.
GENERAL
The indenture does not limit the aggregate principal amount of convertible
debt securities that may be issued under the indenture. We may issue convertible
debt securities from time to time in one or more series under the indenture. The
convertible senior debt securities will be unsecured and unsubordinated
obligations of ours and will rank equally with our other unsecured and
unsubordinated indebtedness. The convertible subordinated debt securities will
be unsecured obligations of ours and, as set forth below under "Convertible
Subordinated Debt Securities," will be subordinated in right of payment to all
of our senior indebtedness.
You should refer to the prospectus supplement which accompanies this
prospectus for a description of the specific series of convertible debt
securities we are offering by that prospectus supplement. The terms may include:
- the specific designation of the convertible debt securities, including
whether they are senior debt securities or subordinated debt securities;
- the aggregate principal amount of the convertible debt securities;
- the maturity date or dates of the principal of the convertible debt
securities or the method of determining the maturity date or dates;
- the rate or rates, which may be fixed or variable, at which the
convertible debt securities will bear interest, if there is any interest,
or the method of calculating the interest rate or rates;
- the date or dates that interest will accrue or the method of determining
that date or dates;
- the date or dates that interest will be payable and the record date or
dates for the interest payment date or dates;
- the place or places where principal of or premium, if there is a premium,
and interest on the convertible debt securities will be payable;
- if we may redeem, at our option, the convertible debt securities in whole
or in part,
-- the period or periods for the redemption,
-- the price or prices for the redemption, and
-- the terms and conditions for the redemption;
- if we are obligated to redeem or purchase the convertible debt securities
in whole or in part, pursuant to any sinking fund or similar provisions,
upon the happening of specified events or at the option of a holder of
the convertible debt securities,
-- the period or periods for the redemption,
-- the price or prices for the redemption, and
-- the terms and conditions for the redemption;
- the denominations of the convertible debt securities that we are
authorized to issue;
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- the terms and conditions upon which conversion will be effected,
including:
-- the conversion price,
-- the conversion period, and
-- other conversion provisions;
- if other than the principal amount, the portion of the principal amount
of the convertible debt securities that will be payable upon declaration
of the acceleration of the maturity, or the method by which that portion
will be determined;
- the person to whom any interest on any convertible debt security will be
payable, if other than the person in whose name that convertible debt
security is registered on the applicable record date;
- any addition to, or modification or deletion of, any event of default or
any covenant of ours specified in the applicable indenture;
- the application of the means of covenant defeasance specified for the
convertible debt securities;
- whether the convertible debt securities are to be issued in whole or in
part in the form of one or more temporary or permanent global securities
and, if so, the identity of the depositary for the global security or
securities;
- any addition to, or modification or deletion of, any provision of the
indenture related to the subordination of the convertible debt
securities; and
- any other special terms of the convertible debt securities.
Unless the applicable prospectus supplement specifies otherwise, the
convertible debt securities will not be listed on any securities exchange.
Unless the applicable prospectus supplement specifies otherwise, we will
issue the convertible debt securities in fully registered form without coupons.
If we issue convertible debt securities of any series in bearer form, the
applicable prospectus supplement will describe the special restrictions and
considerations, including special offering restrictions and special federal
income tax considerations, applicable to those convertible debt securities and
to payment on and transfer and exchange of those convertible debt securities.
Convertible debt securities issued in bearer form will be transferable by
delivery.
The convertible debt securities may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate that at
the time of issuance is below market rates. The applicable prospectus supplement
will describe the federal income tax consequences and special considerations
applicable to those convertible debt securities.
PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Subject to any applicable laws or regulations, we will make payments on the
convertible debt securities at a designated office or agency, unless the
applicable prospectus supplement sets forth otherwise. At our option, however,
we may make interest payments on the convertible debt securities in registered
form:
- by checks mailed by the applicable trustee to the holders of convertible
debt securities entitled to interest payments at their registered
addresses or
- by wire transfer to an account maintained by the person entitled to
interest payments as specified in the debt register.
Unless the applicable prospectus supplement indicates otherwise, we will
pay any installment of interest on convertible debt securities in registered
form to the person in whose name the convertible debt security is registered at
the close of business on the regular record date for that installment of
interest.
Unless the applicable prospectus supplement sets forth otherwise,
convertible debt securities issued in registered form will be transferable or
exchangeable at the agency we may designate from time to time.
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Convertible debt securities may be transferred or exchanged without service
charge, other than any tax or other governmental charge imposed in connection
with the transfer or exchange.
CONVERSION RIGHTS
An applicable prospectus supplement will set forth the terms on which the
convertible debt securities of any series are convertible into common stock.
Those terms will address whether conversion is mandatory, at the option of the
holder or at our option. The terms may also provide that the number of shares of
our common stock to be received by the holders of the convertible debt
securities will be calculated according to the market price of our common stock
as of a time stated in the prospectus supplement.
CONVERTIBLE SUBORDINATED DEBT SECURITIES
For any convertible subordinated debt securities, the following provisions
will apply.
Before we pay the principal of, and premium and interest on, the
convertible subordinated debt securities, we must be current and not in default
on payment in full of all of our senior indebtedness. Senior indebtedness
includes all of our indebtedness unless the indebtedness, by its terms, is
subordinate in right of payment to or equal with the convertible subordinated
debt securities. Indebtedness means the principal of, premium, if any, and any
accrued and unpaid interest (including post-petition interest, whether or not
allowable as a claim in bankruptcy) on:
- indebtedness for money borrowed;
- indebtedness evidenced by notes, debentures, bonds or other instruments
of indebtedness;
- obligations for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction; and
- obligations under capitalized leases and equipment leases.
Indebtedness does not include amounts owed to trade creditors in the
ordinary course of business.
We may not pay the principal of, premium, if any, or interest on the
convertible subordinated debt securities if:
- any of our senior indebtedness is not paid when due (following the
expiration of any applicable grace period); or
- any other default on our senior indebtedness occurs and the maturity of
any senior indebtedness is accelerated in accordance with its terms;
unless, in either case:
- the failure to pay or the acceleration relates to senior indebtedness in
an aggregate amount equal to or less than $50 million;
- the default has been cured or waived or has ceased to exist;
- the acceleration has been rescinded; or
- the senior indebtedness has been paid in full.
A failure to make any payment on the convertible subordinated debt
securities as a result of the foregoing provisions will not limit the right of
the holders of the convertible subordinated debt securities to accelerate the
maturity as a result of the payment default.
If any distribution of our assets is made upon any dissolution, total or
partial liquidation or reorganization of or similar proceeding relating to AT&T
Wireless Services, the holders of senior indebtedness will be entitled to
receive payment in full before the holders of the convertible subordinated debt
securities are entitled to receive any payment. Because of this subordination,
in the event of insolvency, our creditors who
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hold senior indebtedness or other unsubordinated indebtedness may recover a
greater percentage of the debt owed to them than the holders of the convertible
subordinated debt securities.
BOOK-ENTRY PROCEDURES
The applicable prospectus supplement for each series of convertible debt
securities will state whether those convertible debt securities will be subject
to the following provisions.
Unless convertible debt securities in physical form are issued, the
convertible debt securities will be represented by one or more fully registered
global certificates, in denominations of $1,000 or any integral multiple of
$1,000. Each global certificate will be deposited with, or on behalf of, DTC,
and registered in its name or in the name of Cede & Co., its nominee. No holder
of convertible debt securities initially issued as a global certificate will be
entitled to receive a certificate in physical form, except as set forth below.
DTC has advised us that:
- DTC is:
-- a limited purpose trust company organized under the laws of the State
of New York,
-- a member of the Federal Reserve System,
-- a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and
-- a "clearing agency" registered pursuant to Section 17A of the
Securities Exchange Act.
- DTC was created to hold securities for DTC participants and to facilitate
the clearance and settlement of securities transactions between DTC
participants through electronic book entries, thereby eliminating the
need for physical movement of certificates.
- DTC participants include securities brokers and dealers, banks, trust
companies and clearing corporations.
- Access to DTC's book-entry system is also available to others, such as
banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a DTC participant, either directly
or indirectly.
Holders that are not DTC participants but desire to purchase, sell or
otherwise transfer ownership of, or other interests in, the convertible debt
securities may do so only through DTC participants. In addition, holders of the
convertible debt securities will receive all distributions of principal and
interest from the trustee through DTC participants. Under the rules, regulations
and procedures creating and affecting DTC and its operation, DTC is required to
make book-entry transfers of convertible debt securities among DTC participants
on whose behalf it acts and to receive and transmit distributions of principal
of, and interest on, the convertible debt securities. Under the book-entry
system, holders of convertible debt securities may experience some delay in
receipt of payments, since the trustee will forward such payments to Cede & Co.,
as nominee for DTC, and DTC, in turn, will forward the payments to the
appropriate DTC participants.
DTC participants will be responsible for distributions to holders of
convertible debt securities, which distributions will be made in accordance with
customary industry practices. Although holders of convertible debt securities
will not have possession of the convertible debt securities, DTC rules provide a
mechanism by which those holders will receive payments and be able to transfer
their interests. DTC participants are expected to convey the rights represented
by their interests in any global security to the related holders, but DTC can
act only on behalf of DTC participants. Consequently, the ability of holders of
convertible debt securities to pledge the convertible debt securities to persons
or entities that are not DTC participants or to otherwise act with respect to
the convertible debt securities may be limited due to the lack of physical
certificates for the convertible debt securities.
Neither AT&T Wireless Services nor the trustees under the indenture nor any
respective agent will be responsible or liable for any aspect of the records
relating to, or payments made on account of, beneficial ownership interests in
the convertible debt securities or for supervising or reviewing any records
relating to
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such beneficial ownership interests. Since the only "holder of convertible debt
securities," for purposes of the indenture, will be Cede & Co., as nominee of
DTC, the trustee will not recognize holders of convertible debt securities as
"holders of convertible debt securities," and holders of convertible debt
securities will be permitted to exercise the rights of holders only indirectly
through DTC and DTC participants. DTC has advised us that it will take any
action permitted to be taken by a holder of convertible debt securities under
the indenture only at the direction of one or more DTC participants to whose
accounts with DTC the related convertible debt securities are credited.
All payments we make to the trustees will be in immediately available funds
and will be passed through to DTC in immediately available funds.
We will issue physical certificates to holders of beneficial interests in a
global certificate, or their nominees, if:
- DTC advises the trustee in writing that it is no longer willing, able or
eligible to discharge properly its responsibilities as depository and we
are unable to locate a qualified successor or
- we decide in our sole discretion to terminate the book-entry system
through DTC.
In such event, the trustee under the applicable indenture will notify all
holders of convertible debt securities through DTC participants of the
availability of such physical convertible debt securities. Upon surrender by DTC
of the definitive global note representing the convertible debt securities and
receipt of instructions for reregistration, the trustee will reissue the
convertible debt securities in physical form to holders or their nominees.
Convertible debt securities in physical form will be freely transferable
and exchangeable at the office of the applicable trustee upon compliance with
the requirements set forth in the applicable indenture.
No service charge will be imposed for any registration of transfer or
exchange, but payment of a sum sufficient to cover any tax or other governmental
charge may be required.
CONSOLIDATION, MERGER OR SALE BY AT&T WIRELESS SERVICES
The indenture provides that we may merge or consolidate with or into any
other corporation or sell, convey, transfer, lease or otherwise dispose of all
or substantially all of our assets to any person, if:
- in the case of a merger or consolidation, we are the surviving
corporation;
- in the case of either a merger or consolidation where we are not the
surviving corporation, or a sale, conveyance or other disposition of all
or substantially all of our assets to another person:
-- the resulting successor or acquiring person is a corporation organized
and existing under the laws of the United States or any state thereof;
and
-- that corporation expressly assumes by supplemental indenture all our
obligations under the convertible debt securities, any related coupons
and the indentures;
- immediately after giving effect to the merger or consolidation, or the
sale, conveyance, transfer, lease or other disposition, no default or
event of default under the indenture will have occurred and be
continuing; and
- certain other conditions are met.
If a successor corporation assumes our obligations, then that successor
corporation will succeed to and be substituted for us under the indentures and
under the convertible debt securities and any related coupons, and all our
obligations will terminate.
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EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
Events of default under the indenture for a series of convertible debt
securities are defined as:
- default for 90 days in payment of any interest on any convertible debt
security of that series or any related coupon or any additional amount
payable for the convertible debt securities of that series as specified
in the applicable prospectus supplement when due;
- default for ten days in payment of principal or premium, if any, on
redemption or otherwise, or in the making of a mandatory sinking fund
payment of any convertible debt securities of that series when due;
- default for 60 days after notice to us by the trustee, or to us and the
trustee by the holders of 25% or more in aggregate principal amount of
the outstanding convertible debt securities of that series, in the
performance of any other agreement applicable to the convertible debt
securities of that series, in the indenture or in any supplemental
indenture under which the convertible debt securities of that series may
have been issued; and
- certain events of bankruptcy, insolvency or reorganization.
If an event of default specified in the indenture for the convertible debt
securities of any series occurs and is continuing, either the trustee for that
series or the holders of 25% or more in aggregate principal amount of the
outstanding convertible debt securities of that series, by written notice to us,
may
- declare the principal of all the convertible debt securities of that
series to be due and payable, or
- in the case of original issue discount convertible debt securities or
indexed convertible debt securities, declare the portion of the principal
amount specified in the applicable prospectus supplement to be due and
payable.
If the holders of convertible debt securities of a series give notice of
the declaration of acceleration to us, then they are also required to give
notice to the trustee for that series.
The trustee for any series of convertible debt securities is required to
give notice to the holders of the convertible debt securities of that series of
all uncured defaults within 90 days after the occurrence of a default known to
it on convertible debt securities of that series. However, that notice will not
be given until 60 days after the occurrence of a default on convertible debt
securities of that series involving a failure to perform a covenant other than
the obligation to pay principal, premium, if any, or interest, if any, or make a
mandatory sinking fund payment. In addition, the trustee may withhold that
notice if and so long as a committee of its responsible officers in good faith
determines that withholding that notice is in the interest of the holders of the
convertible debt securities of that series, except in the case of a default in
payment on the convertible debt securities of that series. Default means any
event that is, or, after notice or passage of time or both, would be, an event
of default.
The trustee will be under no obligation to exercise any of its rights or
powers under the indenture at the request or direction of any of the holders of
convertible debt securities, unless those holders have offered the trustee
reasonable indemnity. Subject to those trustee indemnification provisions, the
holders of not less than a majority in aggregate principal amount of the
convertible debt securities of each series affected (with each series voting as
a class) may direct the time, method and place of conducting any proceeding for
any remedy available to the trustee for that series, or exercising any trust or
power conferred on the trustee.
We will file annually with the trustees a certificate as to our compliance
with all conditions and covenants of the indenture.
The holders of at least a majority in aggregate principal amount of any
series of convertible debt securities, by notice to the trustee for that series,
may waive, on behalf of the holders of all convertible debt securities of that
series, any past default or event of default with respect to that series and its
consequences, and may rescind and annul a declaration of acceleration with
respect to that series. However, a default or event of default in the payment of
the principal of, or premium or interest on, any convertible debt security and
certain other defaults may not be waived.
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MODIFICATION OF THE INDENTURES
We, as well as the trustee for a series of convertible debt securities, may
enter into one or more supplemental indentures, without the consent of the
holders of any of the convertible debt securities, in order to:
- evidence the succession of another corporation to AT&T Wireless Services
and the assumption of our covenants by a successor;
- add to our covenants or surrender any of our rights or powers;
- add additional events of default for any series;
- add, change or eliminate any provision affecting convertible debt
securities not yet issued;
- secure the convertible debt securities;
- establish the form or terms of convertible debt securities not yet
issued;
- evidence and provide for successor trustees;
- if allowed without penalty under applicable laws and regulations, permit
payment in respect of convertible debt securities in bearer form in the
United States;
- correct or supplement any inconsistent provisions or add any other
provisions, on the condition that this action does not adversely affect
the interests of any holder of convertible debt securities of any series
issued under the indenture in any material respect; or
- cure any ambiguity or correct any mistake.
In addition, with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding convertible debt securities of
each series affected by the supplemental indenture, AT&T Wireless Services and
the trustee may execute supplemental indentures adding any provisions to or
changing or eliminating any of the provisions of the indenture or any
supplemental indenture or modifying the rights of the holders of convertible
debt securities of that series. However, no supplemental indenture may, without
the consent of the holder of each convertible debt security that is affected:
- change the time for payment of principal or interest on any convertible
debt security;
- reduce the principal of, or any installment of principal of, or interest
on any convertible debt security;
- reduce the amount of premium, if any, payable upon the redemption of any
convertible debt security;
- reduce the amount of principal payable upon acceleration of the maturity
of an original issue discount convertible debt security;
- impair the right to institute suit for the enforcement of any payment on
or for any convertible debt security;
- modify the conversion rights or provisions with respect to subordination
in a manner adverse to the holders;
- reduce the percentage in principal amount of the outstanding convertible
debt securities of any series the consent of whose holders is required
for modification or amendment of the indenture or for waiver of
compliance with certain provisions of the indenture or for waiver of
certain defaults;
- change our obligation to maintain an office or agency in the places and
for the purposes specified in the indenture;
- modify the provisions relating to waiver of some defaults or any of the
foregoing provisions; or
- change the currency of payment.
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Any supplemental indenture will be filed with the Commission as an exhibit
to:
- a post-effective amendment to the registration statement of which this
prospectus is a part;
- an annual report on Form 10-K;
- a quarterly report on Form 10-Q; or
- a current report on Form 8-K.
COVENANT DEFEASANCE
If the applicable prospectus supplement so indicates, we may elect to be
released from our obligations for certain covenants applicable to the
convertible debt securities of any series upon deposit with the related trustee
of an amount sufficient to discharge the indebtedness evidenced by the
convertible debt securities of that series. The deposit must consist of either
money or obligations of the United States or any agency or instrumentality of
the United States the payment of which is backed by the full faith and credit of
the United States, which, through the payment of principal and interest on those
obligations and complying with their terms, will provide funds in an aggregate
amount sufficient to pay when due, including as a consequence of redemption in
respect of which notice is given on or prior to the date of irrevocable deposit,
the principal of, premium, if any, and interest on all convertible debt
securities of the series.
When a covenant defeasance occurs, we will:
- be released only from our obligations to comply with certain covenants
contained in the indenture relating to the convertible debt securities,
- continue to be obligated in all other respects under those convertible
debt securities, and
- continue to be contingently liable for the payment of principal, premium
and interest for those convertible debt securities.
Unless the applicable prospectus supplement specifies otherwise and except
as described below, the conditions to covenant defeasance are as follows:
- the covenant defeasance must not result in a breach or violation of, or
constitute a default or event of default under, the applicable indenture
or any other of our material agreements or instruments;
- certain bankruptcy-related defaults or events of default with respect to
us must not have occurred and be continuing during the period commencing
on the date of the deposit of the trust funds to defease the convertible
debt securities and ending on the 91st day after that date;
- we must deliver to the trustee an opinion of counsel to the effect that
the holders of the convertible debt securities:
-- will not recognize income, gain or loss for federal income tax purposes
as a result of the covenant defeasance and
-- will be subject to federal income tax on the same amounts and in the
same manner and at all the same times as would have been the case if
the covenant defeasance had not occurred;
- we must deliver to the trustee an officer's certificate and an opinion of
counsel addressing compliance with the conditions precedent to covenant
defeasance; and
- we must comply with any additional conditions to the covenant defeasance
that may be imposed on us pursuant to the applicable indenture.
The indenture requires that a nationally recognized firm of independent
public accountants deliver to the trustee a written certification as to the
sufficiency of the trust funds deposited for covenant defeasance of the
convertible debt securities. Holders of the convertible debt securities do not
have recourse against that firm under the indenture.
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If we exercise our covenant defeasance option, payment of the convertible
debt securities may not be accelerated because of a default or an event of
default for the covenants to which the covenant defeasance is applicable.
However, if acceleration occurs, the realizable value at the acceleration date
of the money and government obligations in the defeasance trust could be less
than the principal and interest then due on the convertible debt securities,
because the required deposit in the defeasance trust is based on scheduled cash
flow rather than market value, which will vary depending on interest rates and
other factors.
The applicable prospectus supplement may further describe the provisions,
if any, applicable to covenant defeasance for convertible debt securities of a
particular series.
DOCOMO STRATEGIC INVESTMENT
On January 22, 2001 NTT DoCoMo, Inc., a leading Japanese wireless
communications company, invested approximately $9.8 billion for shares of a new
class of AT&T Corp. preferred stock which were convertible into 406,255,889
shares of AT&T Wireless Group tracking stock, which were called "DoCoMo wireless
tracking stock," and that were intended to reflect approximately 16% of the
financial performance and economic value of AT&T Wireless Group. As part of this
investment, DoCoMo also received five-year warrants to purchase the equivalent
of an additional 41,748,273 shares of AT&T Wireless Group tracking stock at $35
per share, and AT&T Wireless and DoCoMo formed a strategic alliance to develop
the next generation of mobile multimedia services on a global-standard,
high-speed wireless network. Of the 406,255,889 AT&T Wireless Group tracking
stock share equivalents issued to DoCoMo, 228,128,307 shares represented new
share equivalents at $27.00 each, and the remaining 178,127,582 share
equivalents represented a reduction of the retained portion of the value of AT&T
Wireless Group by the AT&T Common Stock Group (which consisted of the operations
of AT&T other than those attributed to AT&T tracking stocks) at $20.50 each.
Accordingly, AT&T Common Stock Group retained $3,651,615,431 of the proceeds of
the DoCoMo investment and allocated $6,159,464,289 to AT&T Wireless Group.
Immediately before the completion of the split-off, each share of DoCoMo
wireless tracking stock automatically was converted into 500 shares of AT&T
Wireless Group tracking stock, subject to anti-dilution protection, and was
redeemed in exchange for 406,255,889 shares of our common stock on the same
terms as all other shares of AT&T Wireless Group tracking stock in the
split-off. Each warrant is exercisable for 500 shares of the our common stock at
an exercise price of $35 per share, subject to adjustments to reflect the
exchange ratio and customary anti-dilution adjustments. The warrants are subject
to the transfer restrictions described below. The shares of our common stock
issuable upon exercise of the warrant will represent newly issued interests.
DoCoMo owns approximately 16% of our common stock and have warrants at an
exercise price of $35 per common stock equivalent that would represent
approximately an additional 1.6% of our common stock.
The following is a summary of the material provisions of the agreements
among DoCoMo, AT&T Corp. and us that apply to us after our split-off from AT&T
Corp. This summary is qualified in its entirety by reference to the full text of
these documents.
WARRANTS
DoCoMo acquired 83,496.546 warrants, each of which is exercisable for 500
shares of our common stock, or a total of 41,784,273 shares, at an exercise
price of $35 per share, subject to customary anti-dilution adjustments. The
warrants are subject to the transfer restrictions described under "-- DoCoMo
Investment Rights and Obligations."
DOCOMO INVESTMENT RIGHTS AND OBLIGATIONS
In addition to the rights inherent in the shares of our common stock, under
the agreements, DoCoMo has additional rights and obligations with respect to its
investment in us.
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Transfer Restrictions. Without our consent, for 18 months following the
investment, DoCoMo may not transfer any warrants or any shares of our common
stock that it receives on conversion of DoCoMo wireless tracking stock, except
if specified events occur. Those events are:
- a sale of all or substantially all of our assets or business through
merger or other business combination unless our stockholders continue to
own two-thirds of the successor corporation;
- our acquisition or acquisitions of business or assets, other than radio
spectrum rights, totaling more than $25 billion; or
- a tender offer or exchange offer approved by our board of directors.
In addition, subject to a limited exception, without our consent, DoCoMo
may not transfer any of our securities to any person if after the transfer the
recipient's interest in us would exceed 6%, or exceed 10% in the case of
recipients, principally financial institutions, who are eligible to report their
interest on Schedule 13G under the Securities Exchange Act.
None of DoCoMo's special rights are transferable by DoCoMo along with the
shares, except that DoCoMo may transfer its demand registration rights described
below to any transferee of more than $1 billion of our securities, and DoCoMo
may transfer one demand registration right to a transferee of the warrants. Any
transfer of registration rights will be subject to overall limitations on the
registration rights and will not increase our aggregate registration
obligations.
Repurchase Obligations for failure to meet primary third-generation
technology benchmarks within specified time frame. DoCoMo may require us to
repurchase the warrants and the stock that DoCoMo still holds if, prior to June
30, 2004:
- We abandon wideband code division multiple access as our primary
technology for third-generation services, or
- We fail to launch services based on a wireless communications technology
known as universal mobile telecommunications systems, or wideband code
division multiple access, in at least 13 of the top 50 U.S. markets,
unless
-- DoCoMo ceases to actively support and promote wireless services using
wideband code division multiple access technology as its standard for
wireless third-generation services;
-- such failure is due to factors outside our reasonable power to affect
or control, including due to the unavailability, or a delay in the
availability, of equipment, software, spectrum, or cell sites;
-- such failure is due to our inability to obtain regulatory approvals,
permits, or licenses without the imposition of burdensome conditions or
restrictions; or
-- our board of directors determines that, due to regulatory or legal
issues, or other external factors, deployment of such a system is no
longer advisable from a business perspective.
The repurchase price will be DoCoMo's original purchase price plus interest
of a predetermined rate. If DoCoMo requires repayment because of our failure to
commence service using an agreed technology as described above, we will be
obligated to fund the entire amount of the repurchase obligation, which is $9.8
billion, plus interest. In lieu of paying all or a portion of the repurchase
price, we will have the right to cause DoCoMo to sell any portion of its shares
in a registered sale, and to pay DoCoMo the difference between the repurchase
price and the proceeds from the registered sales. We also have the right to pay
a portion of the repurchase price attributable to the warrants with our common
stock.
Standstill. Until the fifth anniversary of the closing of the investment,
DoCoMo, its controlled subsidiaries, when acting on behalf of DoCoMo, its
officers, directors or agents, or any subsidiary to which
39
DoCoMo has disclosed confidential information regarding its investment may not
take a number of actions, including the following, without our consent:
- acquire or agree to acquire any voting securities of AT&T or us, except
in connection with DoCoMo's exercise of its preemptive rights, conversion
rights or warrants;
- solicit proxies with respect to AT&T's or our voting securities or become
a participant in any election contest relating to the election of the
directors of AT&T or us;
- call or seek to call a meeting of the AT&T or our stockholders or
initiate a stockholder proposal;
- contest the validity of the standstill in a manner that would lead to
public disclosure;
- form or participate in a group that would be required to file a Schedule
13D with the SEC as a "person" within the meaning of Section 13(d)(3) of
the Securities Exchange Act; or
- act in concert with any person for the purpose of effecting a transaction
that would result in a change of control of AT&T or us.
After the fifth year anniversary of the investor agreement, DoCoMo will
continue to be subject to the standstill for so long as DoCoMo has the right to
nominate at least one director. However, DoCoMo will be released from the
standstill 91 days after the resignations of all of its representatives on our
board of directors, all of DoCoMo's nominated committee members and all of
DoCoMo's nominated management. After these resignations, we may take steps to
terminate or sequester all of the other DoCoMo nominated employees.
If NTT, which owns approximately two-thirds of DoCoMo, or any of NTT's
subsidiaries other than DoCoMo takes any action contrary to the standstill
restrictions and the action leads to any vote of our stockholders, then DoCoMo
either must vote its shares as our board of directors directs, or must vote its
shares in proportion to the votes cast by the stockholders that are not
affiliated with either DoCoMo or NTT. In addition, if NTT or any of its
subsidiaries commences a tender offer for AT&T or our securities, DoCoMo cannot
tender or transfer any of its securities into that offer until all of the
conditions to that offer have been satisfied.
The standstill provisions described above will terminate in the following
circumstances:
- a third party unaffiliated with us commences a tender or exchange offer
of 15% of our outstanding voting securities and we do not publicly
recommend that our stockholders reject to the offer;
- we enter into a definitive agreement to merge into or sell all or
substantially all of our assets to a third party unless our stockholders
retain at least 50% of the economic and voting power of the surviving
corporation; or
- we enter into a definitive agreement that would result in any one person
or groups of persons acquiring more than 35% of our voting power, unless,
among other things, this person or group agrees to a standstill.
The standstill provisions terminate with respect to AT&T Corp. two years
after the split-off (or, if sooner, upon any of the foregoing three events as
applied to AT&T Corp.).
Registration Rights. Subject to certain exceptions and conditions, DoCoMo
is entitled to require us to register shares of our common stock on up to seven
occasions, provided that each demand meets certain minimum offering size
conditions. DoCoMo cannot exercise more than one demand right in any seven and a
half month period. DoCoMo also is entitled to require us to register securities
for resale in an unlimited number of incidental registrations, commonly known as
piggy-back registrations. DoCoMo will cease to be entitled to these registration
rights if it owns less than $1 billion of our securities, as the case may be,
and securities reflecting less than 2% of the financial performance and economic
value of us.
Board Representation. DoCoMo is entitled to nominate a number of
representatives on our board of directors proportional to its economic interest
acquired as a result of its investment. The DoCoMo nominees for these board
seats must be senior officers of DoCoMo that are reasonably acceptable to us.
DoCoMo will
40
lose these board representation rights if its economic interest in us falls
below 10% for 60 consecutive days. However, as long as it retains 62.5% of the
shares of its original investment or shares of our common stock, DoCoMo will
lose its board representation rights only if its economic interest in us falls
below 8% for 60 consecutive days.
Management Rights. Subject to our reasonable approval, DoCoMo can appoint
between two and five of its employees as our employees, such as the
Manager-Finance and Director of Technology. DoCoMo will lose these rights under
the same circumstances as it would lose board representation rights.
Right to Approve Specified Actions. We may not take any of the following
actions without DoCoMo's prior approval:
- change the scope of our business such that our businesses (including
those in its business plan) cease to constitute our primary businesses;
or
- enter into a strategic alliance with another wireless operator so that
the wireless operator would own more than 15% but less than 50% of the
economic interest in us.
DoCoMo will lose these approval rights under the same circumstances as it
would lose board representation rights.
Preemptive Rights. DoCoMo has limited preemptive rights that entitle it to
maintain its ownership interest by purchasing shares in our new equity
issuances. In the event of a new equity issuance, then:
- if DoCoMo holds 12% or more of the economic interest of us at the time of
the new issuance, DoCoMo may purchase a number of additional shares that
would bring DoCoMo's economic interest back up to 16%; and
- if DoCoMo holds less than 12% of the economic interest of us at the time
of the new issuance, DoCoMo may purchase a number of additional shares
that would maintain DoCoMo's economic interest at the level it was at
just before the new issuance.
In most cases, the purchase price for these additional shares will be the
issuance price. DoCoMo will lose these preemptive rights under the same
circumstances as it would lose board representation rights.
STRATEGIC ALLIANCE
In connection with DoCoMo's investment, we and DoCoMo formed a strategic
alliance to develop the next generation of mobile multimedia services on a
global-standard, high-speed wireless network. We have created a new, wholly
owned subsidiary to foster the development of multimedia content, applications
and services offerable over our current network, as well as on new, high-speed
wireless networks built to global standards for third-generation services. We
have contributed, among other things, our rights to content and applications
used in our PocketNet service to the new multimedia subsidiary. Both we and
DoCoMo provide technical resources and support staffing. In addition, we will be
able to license from DoCoMo, without additional payment, certain rights to
DoCoMo's "i-mode" service, which provides access to the Internet from wireless
telephones, and related technology.
The strategic alliance is expected to enable us and DoCoMo to offer
market-appropriate wireless services to customers throughout the United States
and Japan respectively. In addition, each of us has agreed, subject to technical
and commercial feasibility, to recognize the other as its primary and preferred
roaming partner in the other party's home territory.
We and DoCoMo have agreed to certain non-competition commitments that
restrict each other's ability to provide mobile wireless services in Japan and
the United States, respectively. We and DoCoMo have also agreed to limit the
extent to which we and DoCoMo will be able to participate in certain mobile
multimedia activities and investments in each other's home territory. We and
DoCoMo will generally be bound by the non-competition commitments until DoCoMo
loses its board representation and management rights, either due to any of the
events described under "-- Board Representation" and "-- Management Rights," or
due to voluntary relinquishment of such rights by DoCoMo.
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Some of DoCoMo's rights under the investment agreement, including the
repurchase rights and veto rights, could limit our flexibility to finance our
operations or engage in some types of strategic transactions that we might
otherwise pursue.
PLAN OF DISTRIBUTION
We may sell common stock, preferred stock, convertible preferred stock,
debt securities or convertible debt securities to or through underwriters or
dealers, through agents, directly to other purchasers, or through a combination
of these methods. We may distribute securities from time to time in one or more
transactions at:
- a fixed price or prices, which may be changed;
- market prices prevailing at the time of sale;
- prices related to the prevailing market prices at the time of sale; or
- negotiated prices.
The applicable prospectus supplement will describe the specific terms of
the offering of the securities, including:
- the name or names of any underwriters, and, if required, any dealers or
agents;
- the purchase price of the securities and the proceeds we will receive
from the sale;
- any underwriting discounts and commissions and other items constituting
underwriters' compensation;
- any initial public offering price;
- any discounts or concessions allowed or reallowed or paid to dealers; and
- any securities exchange or market on which the securities may be listed.
Any initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in a sale, the securities will be acquired by the
underwriters for their own account and may be resold from time to time 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 securities may be
offered to the public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more firms acting as
underwriters. The applicable prospectus supplement will set forth the
underwriter or underwriters with respect to a particular underwritten offering
of securities and, if an underwriting syndicate is used, the managing
underwriter or underwriters will be stated on the cover of the prospectus
supplement. Unless otherwise set forth in the applicable prospectus supplement,
the obligations of the underwriters to purchase the offered securities will be
subject to certain conditions precedent, and the underwriters will be obligated
to purchase all the offered securities if any are purchased.
If a dealer is used in the sale of any of the securities, we or an
underwriter will sell the securities to the dealer, as principal. The dealer may
then resell the securities to the public at varying prices to be determined by
the dealer at the time of resale. To the extent required, we will set forth in
the prospectus supplement the name of the dealer and the terms of any such
transactions.
Agents may from time to time solicit offers to purchase the securities. If
required, we will name in the applicable prospectus supplement any agent
involved in the offer or sale of the securities and set forth the terms of any
such transactions. Unless otherwise indicated in the prospectus supplement, any
agent will be acting on a best efforts basis for the period of its appointment.
We may directly solicit offers to purchase the securities and we may make
sales of securities directly to institutional investors or others. To the extent
required, the prospectus supplement will describe the terms of any such sales,
including the terms of any bidding or auction process used.
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In connection with the sale of the securities, underwriters, dealers or
agents may receive compensation from us or from purchasers of the securities for
whom they act as agents in the form of discounts, concessions or commissions.
Underwriters may sell the securities to or through dealers, and those dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters or commissions from the purchasers for whom they may act
as agents. Underwriters, dealers and agents that participate in the distribution
of the securities, and any institutional investors or others that purchase
securities directly and then resell the securities, may be deemed to be
underwriters, and any discounts or commissions received by them from us and any
profit on the resale of the securities by them may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933.
We may provide indemnification to underwriters, dealers, agents and others
who participate in the distribution of the securities with respect to some
liabilities, including liabilities arising under the Securities Act, and provide
contribution with respect to payments that they may be required to make in
connection with such liabilities.
If indicated in the applicable prospectus supplement, we may authorize
underwriters or agents to solicit offers by specific institutions to purchase
the securities from us pursuant to contracts providing for payment and delivery
on a future date. Institutions with which these contracts may be made include,
among others:
- commercial and savings banks;
- insurance companies;
- pension funds;
- investment companies; and
- educational and charitable institutions.
In all cases, we must approve the contracting institutions. The obligations
of any purchaser under any payment and delivery contract will be subject to the
condition that the purchase of the securities is not, at the time of delivery,
prohibited by applicable law.
Unless otherwise indicated in the applicable prospectus supplement, we do
not intend to apply for the listing of any series of debt securities or
convertible debt securities on a national securities exchange. If any of the
securities of any series are sold to or through underwriters, the underwriters
may make a market in those securities, as permitted by applicable laws and
regulations. No underwriter is obligated, however, to make a market in those
securities, and any market-making that is done may be discontinued at any time
at the sole discretion of the underwriters. No assurance can be given as to the
liquidity of, or trading markets for, any of the securities.
Some of the underwriters, dealers or agents, or their affiliates, may
engage in transactions with or perform services for us in the ordinary course of
business.
ERISA CONSIDERATIONS
ERISA stands for the Employee Retirement Income Security Act of 1974 and
its amendments. ERISA imposes restrictions on many employee benefit plans and on
their fiduciaries. Before purchasing any of these securities on behalf of a
plan, a plan fiduciary should make sure that the plan's governing documents
permit the purchase. The plan fiduciary should also verify that the purchase is
prudent and appropriate in view of the plan's overall investment policy and its
existing investments.
ERISA Section 406 and Internal Revenue Code Section 4975 prohibit
transactions involving a plan's assets when the transaction is with a "party in
interest" under ERISA Section 3(14) or a "disqualified person" under Code
Section 4975. An underwriter and its affiliates involved in the sale of
securities might be parties in interest or disqualified persons with respect to
a plan purchasing securities. This is true because the underwriter or its
affiliate provides services to the plan. We might also be a party in interest or
a disqualified person with respect to a plan purchasing securities.
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A transaction to purchase securities that is prohibited under ERISA Section
406 or Code Section 4975 might result in personal liability for the plan's
fiduciaries, civil penalties being imposed on parties in interest or an excise
tax being imposed on disqualified persons. In addition, if the plan asset
involved in a prohibited transaction is an individual retirement account or an
individual retirement annuity (each an "IRA"), the IRA would lose its tax-exempt
status.
There are certain exemptions from the prohibited transaction provisions of
ERISA Section 406 and Code Section 4975, including:
- prohibited transaction class exemption (PTCE) 75-1, Part II or Part III,
exemptions for specific principal transactions involving sales or
purchases of securities between plans and parties in interest;
- PTCE 84-14, an exemption for specific transactions determined by an
independent qualified professional asset manager;
- PTCE 90-1, an exemption for specific transactions involving insurance
company pooled separate accounts;
- PTCE 91-38, an exemption for specific transactions involving bank
collective funds;
- PTCE 95-60, an exemption for specific transactions involving life
insurance company general accounts; and
- PTCE 96-23, an exemption for specific transactions involving in-house
asset managers.
Thus, if a plan fiduciary wants to enter into a transaction with a party in
interest or a disqualified person with respect to a plan, the fiduciary should
assure himself or herself that an exemption to the prohibited transaction
provisions of ERISA and Code Section 4975 applies to the purchase and holding of
the securities.
Any fiduciary of any pension plan, IRA or other employee benefit plan who
is considering the acquisition of any of these securities should consult with
his or her counsel prior to acquiring such securities.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses including attorneys' fees, judgments, fines and
amounts paid in settlement in connection with various actions, suits or
proceedings, whether civil, criminal, administrative or investigative other than
an action by or in the right of the corporation, a derivative action, if they
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, if they had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses including
attorneys' fees incurred in connection with the defense or settlement of such
actions, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's by-laws, disinterested
director vote, stockholder vote, agreement or otherwise.
Our certificate of incorporation provides that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person, or a person of whom such
person is the legal representative, is or was a director or officer of us or, is
or was serving at our request as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is the alleged action of such person in an official
capacity as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, will be indemnified and
held harmless by us to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, against all
expense, liability and loss reasonably incurred or suffered by such person in
connection therewith;
44
provided, however, that, except when such person is bringing action against us
to recover an unpaid claim of indemnification, we shall indemnify any such
person seeking indemnification in connection with a proceeding, or part thereof,
initiated by such person only if such proceeding, or part thereof, was
authorized by our board of directors. Our certificate of incorporation also
provides that we shall pay the expenses incurred in defending any such
proceeding in advance of its final disposition, subject to the provisions of the
Delaware General Corporation Law. Such rights are not exclusive of any other
right which any person may have or thereafter acquire under any statute,
provision of the certificate, by-law, agreement, vote of stockholders or
disinterested directors or otherwise. No repeal or modification of such
provision will in any way diminish or adversely affect the rights of any
director, officer, employee or agent of us thereunder in respect of any
occurrence or matter arising before any such repeal or modification. Our
certificate of incorporation also specifically authorizes us to maintain
insurance and to grant similar indemnification rights to our employees or
agents.
The Delaware General Corporation Law permits a corporation to provide in
its certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability for:
- any breach of the director's duty of loyalty to the corporation or its
stockholders,
- acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
- payments of unlawful dividends or unlawful stock repurchases or
redemptions, or
- any transaction from which the director derived an improper personal
benefit.
Our certificate of incorporation provides that none of our directors will
be personally liable to us or our stockholders for monetary damages for breach
of fiduciary duty as a director, except, if required by the Delaware General
Corporation Law as amended from time to time, for liability
- for any breach of the director's duty of loyalty to us or our
stockholders,
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
- under Section 174 of the Delaware General Corporation Law, which concerns
unlawful payments of dividends, stock purchases or redemptions, or
- for any transaction from which the director derived an improper personal
benefit.
Neither the amendment nor repeal of such provision will eliminate or reduce
the effect of such provision in respect of any matter occurring, or any cause of
action, suit or claim that, but for such provision, would accrue or arise before
such amendment or repeal.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement, the
validity of the common stock, preferred stock, convertible preferred stock, debt
securities and convertible debt securities will be passed on for us by Gregory
P. Landis, Senior Vice President and General Counsel of AT&T Wireless Services.
As of December 20, 2001, Mr. Landis was the beneficial owner of approximately
455,317 shares of our common stock and had unvested options to purchase an
additional 314,380 share of our common stock.
45
EXPERTS
The audited financial statements and the financial statement schedule
incorporated in this S-3 Registration Statement by reference to the Prospectus
filed pursuant to Rule 424(b)(1) on July 9, 2001 (No. 333-60472), except as they
relate to Vanguard Cellular Systems, Inc. and its subsidiaries, have been
audited by PricewaterhouseCoopers LLP, independent accountants, and, insofar as
they relate to Vanguard Cellular Systems, Inc., and its subsidiaries, by Arthur
Andersen LLP, independent public accountants, whose reports thereon are
incorporated by reference. Such financial statements have been so incorporated
in reliance on the reports of such independent accountants given on the
authority of such firms as experts in auditing and accounting.
46
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
$4,000,000,000
AT&T WIRELESS SERVICES, INC.
COMMON STOCK
PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK
DEBT SECURITIES
CONVERTIBLE DEBT SECURITIES
-------------------------
PROSPECTUS
-------------------------
December 21, 2001
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts and commissions,
are set forth in the following table. All amounts are estimated except the
Securities and Exchange Commission registration fee.
Securities and Exchange Commission registration fee......... $
Blue Sky fees and expenses.................................. *
Printing and engraving expenses............................. *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Trustee fees and expenses................................... *
Transfer agent and registrar fees........................... *
Miscellaneous............................................... *
-------
Total.................................................. $ *
=======
---------------
* To be provided 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 herein by reference.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses including attorneys' fees, judgments, fines and
amounts paid in settlement in connection with various actions, suits or
proceedings, whether civil, criminal, administrative or investigative other than
an action by or in the right of the corporation, a derivative action, if they
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, if they had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses including
attorneys' fees incurred in connection with the defense or settlement of such
actions, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's by-laws, disinterested
director vote, stockholder vote, agreement or otherwise.
Our certificate of incorporation provides that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person, or a person of whom such
person is the legal representative, is or was a director or officer of us or, is
or was serving at our request as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is the alleged action of such person in an official
capacity as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, will be indemnified and
held harmless by us to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, against all
expense, liability and loss reasonably incurred or suffered by such person in
connection therewith; provided, however, that, except when such person is
bringing action against us to recover an unpaid claim of indemnification, we
shall indemnify any such person seeking indemnification in connection with a
proceeding, or part thereof, initiated by such person only if such proceeding,
or part thereof, was authorized by our board of directors. Our certificate of
incorporation also provides that we shall pay the expenses incurred in defending
any such proceeding in advance of its final disposition, subject to the
provisions of the Delaware General
II-1
Corporation Law. Such rights are not exclusive of any other right which any
person may have or thereafter acquire under any statute, provision of the
certificate, by-law, agreement, vote of stockholders or disinterested directors
or otherwise. No repeal or modification of such provision will in any way
diminish or adversely affect the rights of any director, officer, employee or
agent of us thereunder in respect of any occurrence or matter arising before any
such repeal or modification. Our certificate of incorporation also specifically
authorizes us to maintain insurance and to grant similar indemnification rights
to our employees or agents.
The Delaware General Corporation Law permits a corporation to provide in
its certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability for:
- any breach of the director's duty of loyalty to the corporation or its
stockholders,
- acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
- payments of unlawful dividends or unlawful stock repurchases or
redemptions, or
- any transaction from which the director derived an improper personal
benefit.
Our certificate of incorporation provides that none of our directors will
be personally liable to us or our stockholders for monetary damages for breach
of fiduciary duty as a director, except, if required by the Delaware General
Corporation Law as amended from time to time, for liability
- for any breach of the director's duty of loyalty to us or our
stockholders,
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
- under Section 174 of the Delaware General Corporation Law, which concerns
unlawful payments of dividends, stock purchases or redemptions, or
- for any transaction from which the director derived an improper personal
benefit.
Neither the amendment nor repeal of such provision will eliminate or reduce
the effect of such provision in respect of any matter occurring, or any cause of
action, suit or claim that, but for such provision, would accrue or arise before
such amendment or repeal.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
ITEM 16. EXHIBITS
(a) The following Exhibits are filed as part of this registration
statement:
EXHIBIT
NUMBER DESCRIPTION
------- -----------
1.1 Form of Underwriting Agreement for Common Stock of AT&T
Wireless Services*
1.2 Form of Underwriting Agreement for Preferred Stock of AT&T
Wireless Services*
1.3 Form of Underwriting Agreement for Convertible Preferred
Stock of AT&T Wireless Services*
1.4 Form of Underwriting Agreement for Debt Securities of AT&T
Wireless Services*
1.5 Form of Underwriting Agreement for Convertible Debt
Securities of AT&T Wireless Services*
4.1 Form of Debt Securities Indenture of AT&T Wireless
Services**
4.2 Form of Convertible Debt Securities Indenture of AT&T
Wireless Services**
4.3 Form of Debt Securities of AT&T Wireless Services (included
in Exhibit 4.1)
4.4 Form of Convertible Debt Securities of AT&T Wireless
Services (included in Exhibit 4.2)
II-2
EXHIBIT
NUMBER DESCRIPTION
------- -----------
5.1 Opinion of counsel*
12.1 Computation of Ratio of Earnings to Fixed Charges of AT&T
Wireless Services**
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Arthur Andersen LLP with respect to financial
statements of Vanguard Cellular Systems, Inc
23.3 Consent of counsel (included in Exhibit 5.1)*
24.1 Power of Attorney**
25.1 Form T-1 Statement of Eligibility of Trustee under Debt
Securities Indenture of AT&T Wireless Services**
25.2 Form T-1 Statement of Eligibility of Trustee under
Convertible Debt Securities Indenture of AT&T Wireless
Services**
---------------
* 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 herein by reference.
**Previously filed.
ITEM 17. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(b) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this 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 Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that paragraphs (1)(a) and (1)(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-3
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefits plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
D. The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Trust Indenture Act.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Redmond, State of Washington, on the 20th day of
December, 2001.
AT&T WIRELESS SERVICES, INC.
By: /s/ JOSEPH MCCABE, JR.
------------------------------------
Name: Joseph McCabe, Jr.
Title: Executive Vice President
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities indicated below and on December 20, 2001.
SIGNATURE TITLE
--------- -----
/s/ JOHN D. ZEGLIS* Chairman of the Board, President and Chief
----------------------------------------------------- Executive Officer (Principal Executive
John D. Zeglis Officer)
/s/ JOSEPH MCCABE, JR. Executive Vice President, Chief Financial
----------------------------------------------------- Officer
Joseph McCabe, Jr. (Principal Financial and Accounting Officer)
/s/ WALTER Y. ELISHA* Director
-----------------------------------------------------
Walter Y. Elisha
/s/ DONALD V. FITES* Director
-----------------------------------------------------
Donald V. Fites
/s/ RALPH S. LARSEN* Director
-----------------------------------------------------
Ralph S. Larsen
/s/ JOHN W. MADIGAN* Director
-----------------------------------------------------
John W. Madigan
/s/ NOBUHARU ONO* Director
-----------------------------------------------------
Nobuharu Ono
/s/ WAYNE PERRY* Director
-----------------------------------------------------
Wayne Perry
/s/ A. BARRY RAND* Director
-----------------------------------------------------
A. Barry Rand
/s/ CAROLYN M. TICKNOR* Director
-----------------------------------------------------
Carolyn M. Ticknor
By: /s/ JOSEPH MCCABE, JR.
-------------------------------------------------
Attorney-in-Fact
II-5
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
1.1 Form of Underwriting Agreement for Common Stock of AT&T
Wireless Services*
1.2 Form of Underwriting Agreement for Preferred Stock of AT&T
Wireless Services*
1.3 Form of Underwriting Agreement for Convertible Preferred
Stock of AT&T Wireless Services*
1.4 Form of Underwriting Agreement for Debt Securities of AT&T
Wireless Services*
1.5 Form of Underwriting Agreement for Convertible Debt
Securities of AT&T Wireless Services*
4.1 Form of Debt Securities Indenture of AT&T Wireless
Services**
4.2 Form of Convertible Debt Securities Indenture of AT&T
Wireless Services**
4.3 Form of Debt Securities of AT&T Wireless Services (included
in Exhibit 4.1)
4.4 Form of Convertible Debt Securities of AT&T Wireless
Services (included in Exhibit 4.2)
5.1 Opinion of counsel*
12.1 Computation of Ratio of Earnings to Fixed Charges of AT&T
Wireless Services**
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Arthur Andersen LLP with respect to financial
statements of Vanguard Cellular Systems, Inc
23.3 Consent of counsel (included in Exhibit 5.1)*
24.1 Power of Attorney**
25.1 Form T-1 Statement of Eligibility of Trustee under Debt
Securities Indenture of AT&T Wireless Services**
25.2 Form T-1 Statement of Eligibility of Trustee under
Convertible Debt Securities Indenture of AT&T Wireless
Services**
---------------
* 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 herein by reference.
**Previously filed.