Registration No. 333-57810
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WESTELL TECHNOLOGIES, INC.
AND
WESTELL CAPITAL TRUST I
(Exact name of registrants as specified in their charters)
DELAWARE 36-3154957
DELAWARE (APPLICATION OF WESTELL CAPITAL TRUST I PENDING)
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
750 NORTH COMMONS DRIVE
AURORA, ILLINOIS 60504
(630) 898-2500
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
NICHOLAS HINDMAN
CHIEF FINANCIAL OFFICER
WESTELL TECHNOLOGIES, INC.
750 N. COMMONS DRIVE
AURORA, ILLINOIS 60504
(630) 898-2500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
Neal J. White
Scott N. Gierke
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
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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.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of Proposed Maximum
Securities to be Registered Aggregate Offering Price(1) Amount of Registration fee(2)(3)
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Debt Securities
Class A Common Stock (par value $.01 per share)
Preferred Stock
Depositary Shares $60,000,000(5) $15,000(6)
Subscription Rights to purchase Class A Common
Stock, Preferred Stock or Debt Securities
Warrants
Stock Purchase Contracts (4)
Stock Purchase Units (4)
Preferred Securities of Westell Capital Trust I (4)
Guarantees of Preferred Securities of Westell
Capital Trust I by Westell Technologies, Inc.(4)
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(1) If any pay-in-kind debt securities or pay-in-kind preferred stock are
issued, then the securities registered shall include such additional debt
securities or preferred stock. Any securities registered under this registration
statement may be sold separately or as units with other securities registered
under this registration statement. Debt securities may be issued and sold to
Westell Capital Trust I in connection with the issuance of its preferred
securities in which event those debt securities may be distributed to the
holders of the preferred securities upon a dissolution or liquidation of such
trust. No separate consideration will be received for the debt securities
distributed upon any liquidation or dissolution of such trust. There are also
being registered under this registration statement such indeterminate number of
shares of Class A Common Stock and preferred stock and an indeterminate amount
of debt securities as may be issued upon the exchange, exercise, conversion or
settlement (as applicable) of debt securities, preferred stock, depositary
shares, warrants, stock purchase contracts, stock purchase units or subscription
rights.
(2) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933, and reflects the offering price rather than
the principal amount of any Debt Securities issued at a discount. (3) Previously
paid.
(4) Registrant is also registering all other obligations that it may have with
respect to the preferred securities of Westell Capital Trust I, including its
back-up undertakings under the applicable declaration of trust, indenture and
supplemental indenture, if any. No separate consideration will be received from
purchasers of Preferred Securities of Westell Capital Trust I with respect to
these guarantees and, therefore, no registration fee is attributable to those
securities.
(5)The securities registered hereunder may be sold separately, or as units with
other securities registered hereby. The proposed maximum offering price per unit
will be determined by us in connection with the issuance of the securities. In
no event will the aggregate offering price of all securities issued from time to
time pursuant to this Registration Statement exceed $60,000,000 or the
equivalent thereof in one or more foreign currencies, foreign currency units or
composite currencies. The aggregate amount of common stock registered hereunder
is further limited to that which is permissible under Rule 415(a)(4) under the
Securities Act, to the extent permissible.
(6) Previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
[SIDE LEGEND]
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
securities and exchange commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy the securities
[END OF SIDE LEGEND]
SUBJECT TO COMPLETION, DATED JULY 16, 2001
PROSPECTUS
$60,000,000
WESTELL TECHNOLOGIES, INC.
WESTELL CAPITAL TRUST I
DEBT SECURITIES, PREFERRED STOCK, DEPOSITARY SHARES, SUBSCRIPTION RIGHTS,
WARRANTS, STOCK PURCHASE CONTRACTS, STOCK PURCHASE UNITS,
AND CLASS A COMMON STOCK
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We may sell from time to time for proceeds of up to $60,000,000:
o debt securities;
o shares of our class A common stock;
o depositary shares;
o preferred stock;
o subscription rights;
o warrants;
o stock purchase contracts;
o stock purchase units; or
o any combination of the foregoing.
In addition, Westell Technologies, Inc., in conjunction with our trust
subsidiary, Westell Capital Trust I, may sell:
o trust preferred securities, guaranteed as described in this
prospectus, by Westell Technologies, Inc.
We will provide specific terms of the securities which we may offer in
supplements to this prospectus. You should read this prospectus and any
supplement carefully before you invest.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN
FACTORS THAT YOU SHOULD CONSIDER BEFORE PURCHASING ANY SECURITIES.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
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The date of this Prospectus is _______________, 2001.
ABOUT THIS PROSPECTUS..........................................................1
WHERE YOU CAN FIND MORE INFORMATION............................................1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS..............................2
WESTELL TECHNOLOGIES, INC......................................................2
WESTELL CAPITAL TRUST I........................................................3
RISK FACTORS...................................................................3
RATIO OF EARNINGS TO FIXED CHARGES............................................16
ACCOUNTING TREATMENT RELATING TO TRUST SECURITIES.............................16
DESCRIPTION OF DEBT SECURITIES................................................16
DESCRIPTION OF CAPITAL STOCK..................................................21
DESCRIPTION OF DEPOSITARY SHARES..............................................23
DESCRIPTION OF SUBSCRIPTION RIGHTS............................................25
DESCRIPTION OF WARRANTS.......................................................26
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS..............27
DESCRIPTION OF TRUST PREFERRED SECURITIES.....................................28
DESCRIPTION OF TRUST PREFERRED SECURITIES GUARANTEE...........................30
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE DEBT SECURITIES AND
THE TRUST PREFERRED SECURITIES GUARANTEE................................32
PLAN OF DISTRIBUTION.........................................................34
LEGAL OPINIONS...............................................................35
EXPERTS 35
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC using a "shelf" registration process. Under this process, we may sell
any combination of the securities described in this prospectus in one or more
offerings up to a total dollar amount of $60,000,000. This prospectus provides
you with a general description of the securities we may offer. Each time we
offer to sell securities, we will provide a supplement to this prospectus that
will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with the additional information described under the heading
"Where You Can Find More Information" below.
We have not included separate financial statements of our trust
subsidiary, Westell Capital Trust I, in this prospecuts. We do not consider that
such financial statements are material to holders of the trust preferred
securities because:
o the trust is a special purpose entity;
o the trust has not had any operating history or independent
operations; and
o the trust is not engaged in, nor will it engage in, any activity
other than issuing trust preferred and trust common securities,
investing in and holding Westell's debt securities and engaging in
related activities.
We do not expect that the trust will file reports with the SEC under
the Securities Exchange Act of 1934.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy reports, statements or
other information at the SEC's public reference rooms in Washington, D.C., New
York, New York or Chicago, Illinois. You can call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the SEC at "http://www.sec.gov."
As noted above, we have filed with the SEC a registration statement on
Form S-3 to register the securities. This prospectus is part of that
registration statement and, as permitted by the SEC's rules, does not contain
all of the information set forth in the registration statement. For further
information you should refer to the registration statement and to the exhibits
and schedules filed as part of the registration statement. You can review and
copy the registration statement and its exhibits and schedules at the public
reference facilities maintained by the SEC as described above. The registration
statement, including its exhibits and schedules, is also available on SEC's web
site.
The SEC allows us to "incorporate by reference" into this prospectus
the information that we and other registrants 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 with the SEC later will
automatically update and supersede this information. We incorporate by reference
in this prospectus the following:
o our Annual Report on Form 10-K for the year ended March 31, 2001;
o the Annual Report on Form 10-K of Teltrend, Inc. for the year
ended July 31, 1999;
o the Quarterly Reports of Teltrend, Inc. on Form 10-Q for the
quarters ended October 30, 1999 and January 29, 2000;
o our Schedule 14A dated November 28, 2000;
o our Current Report on Form 8-K dated May 22, 2000;
o our Current Report on Form 8-K dated February 23, 2001;
o our Current Report on Form 8-K dated March 6, 2001;
o our Current Report on Form 8-K dated April 16, 2001;
o the description of our common stock included in our Form 8-A
Registration Statement; and
o any future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, until
we sell all of the securities.
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You may request a copy of these filings, at no cost, by writing or
telephoning us at Westell Technologies, Inc., 750 North Commons Drive, Aurora,
Illinois 60504, telephone: (630) 898-2500, Attention: Secretary.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different or additional information. You should
not assume that the information in this prospectus or any supplement is accurate
as of any date other than the date on the front of those documents.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this prospectus and any prospectus
supplement or in the information incorporated by reference may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such information may involve known and unknown
risks, uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.
WESTELL TECHNOLOGIES, INC.
Since 1980, we have developed telecommunications products that address
the needs of telephone companies to upgrade their existing network
infrastructures in order to deliver advanced data and voice services to their
customers. We design, manufacture, market and service a broad range of digital
and analog products used by telephone companies to deliver services primarily
over existing copper telephone wires that connect end users to a telephone
company's central office. This is commonly referred to as the local loop or the
local access network. We also market our products and services to other
telecommunications and information service providers seeking direct access to
end user customers.
Traditionally, telephone companies have provided services using analog
transmission, which involves the transmission of wave signals that correspond to
the information being transmitted. Analog transmission, however, is unable to
provide the requisite volume, speed and reliability to support the growing
demands for services over telephone wires. In contrast, digital transmission
makes it possible to reduce all forms of images, sounds and data to simple
digital signals of ones and zeros and consequently permits high-speed,
high-volume and highly reliable data transmission. In the U.S. , the digital
conversion of the analog network has been built on a format known as T-1. T-1
transmission utilizes a data rate that is 24 times faster than standard analog
transmission, or a rate equal to 1.54 megabits per second. Further, T-1
transmission can be aggregated or subdivided into channels that can deliver data
transmission tailored to specific end user requirements.
Our products can be categorized into three groups:
o TAP products: products that maintain, repair and monitor special
circuits in the local loop that have higher capacity than normal
telephone circuits. Special circuits are those that enable
high-speed digital transmission at rates that are called T-1 or
DS-3 rates in the U.S. and E-1 rates outside the U. S.
o Customer Premise Equipment products commonly known as CPE: modems
that reside at end-user locations based on digital subscriber line
(DSL) technology. DSL technology allows the simultaneous
transmission of data at speeds up to 140 times faster than
traditional analog telephone service in one direction, or 8
megabits per second, and up to 17 times faster than traditional
analog telephone service in the reverse direction, or 1 megabit
per second, while also providing traditional analog telephone
service over a single pair of copper telephone wires at distances
of up to 18,000 feet, depending on the transmission rates.
o Transport systems products: products that include DSL equipment
used in telephone companies' and service providers' equipment
offices, commonly referred to as central offices, as well as
products that monitor, maintain, and safeguard wireless networks
and the points between wireless and traditional phone networks
that are used in central offices, in outdoor locations and on
customers' premises.
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We also provide audio, video, and data conferencing services through
Conference Plus, Inc., our 88% owned subsidiary. Businesses and individuals use
these services to hold voice, video or data conferences with many people and
locations at the same time. Conference Plus sells its services directly to large
customers, including Fortune 100 companies, and also serves end user customers
indirectly through its private reseller program.
Westell was incorporated in 1980 under the laws of the State of
Delaware and has its principal executive offices at 750 North Commons Drive,
Aurora, Illinois 60504 (telephone number: 630-898-2500). Internet users can
obtain information about Westell at http://www.westell.com although the contents
of this website are not a part of this prospectus.
WESTELL CAPITAL TRUST I
The trust is a statutory business trust formed under the Delaware
Business Trust Act and is governed by a declaration of trust (as it may be
amended and restated from time to time) among the trustees of the trust and us.
We will execute, together with the relevant trustees, a declaration of trust
that provides for the issuance of the trust preferred securities if and when we
issue them. When the trust issues its trust preferred securities, you and the
other holders of the trust preferred securities will own all of the issued and
outstanding trust preferred securities of the trust. Westell will acquire,
directly or indirectly, all of the issued and outstanding trust common
securities of the trust, representing an undivided beneficial interest in a
specified percentage of the assets of the trust.
The trust will exist primarily for the purposes of:
o issuing its trust preferred and trust common securities;
o investing the proceeds from the sale of its securities in
Westell's debt securities; and
o engaging in only such other activities as are necessary or
incidental to issuing its securities and purchasing and holding
Westell's debt securities.
The number of trustees of the trust initially will be three. Two of the
trustees will be individuals who are officers or employees of Westell, as
regular trustees. We will appoint a third trustee which will act as property
trustee and will hold for your benefit a trust preferred securities guarantee,
which will be separately qualified under the Trust Indenture Act of 1939. Unless
otherwise provided in the applicable prospectus supplement, because Westell will
own, directly or indirectly, all of the trust common securities of the trust,
Westell will have the exclusive right to appoint, remove or replace trustees and
to increase or decrease the regular number of trustees. The term of the trust
will be described in the applicable prospectus supplement, but it may dissolve
earlier if so provided in the applicable prospectus supplement. The rights of
the holders of the trust preferred securities of the trust, including economic
rights, rights to information and voting rights, and the duties and obligations
of the trustees of the trust, will be contained in and governed by the
declaration (as it may be amended and restated from time to time), the Delaware
Business Trust Act and the Trust Indenture Act of 1939.
The address of the principal office of the trust is 750 North Commons
Drive, Aurora, Illinois 60504 (telephone number: 630-898-2500).
RISK FACTORS
You should carefully consider the risks described below in addition to the other
information contained and incorporated by reference in this prospectus. If any
of the following risks occurs, our business, operating results or financial
condition would likely suffer, and the market price for our securities could
decline.
WE HAVE INCURRED AND CONTINUE TO EXPECT LOSSES.
Due to our significant ongoing investment in DSL technology, which can
be used by telephone companies and other service providers to increase the
transmission speed and capacity of copper telephone wires, we have incurred and
anticipate that our losses may extend at least through fiscal 2002. To date, we
have incurred operating losses, net losses and negative cash flow on both an
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annual and quarterly basis. For the year ended March 31, 2001, we had net losses
of $93.9 million.
We believe that our future revenue growth and profitability will depend
on:
o creating sustainable DSL sales opportunities;
o lowering our DSL product costs through design and manufacturing
enhancements and volume reductions,
o developing new and enhanced T-1 products;
o developing other niche products for both DSL and T-1 markets; and
o growing our teleconference service revenues.
In addition, we expect to continue to evaluate new product
opportunities. As a result, we will continue to invest heavily in research and
development and sales and marketing, which will adversely affect our short-term
operating results. We can offer no assurances that we will achieve profitability
in the future.
WE COULD INCUR CHARGES FOR EXCESS AND OBSOLETE INVENTORY AND FOR ADJUSTING
INVENTORY TO NET REALIZABLE VALUE.
Due to rapidly changing technology and volatile customer demands,
product cycles tend to be short. Therefore, from time to time, we may need to
write off inventory as excess or obsolete. In the past, we have experienced such
write-offs. For example, the Company recognized an inventory adjustment to net
realizable value and charges for excess and obsolete inventory of $37.1 million
during fiscal year 2001. If we incur substantial inventory expenses that we are
not able to recover because of changing market conditions, it could have a
material adverse effect on our business, financial condition and results of
operations.
WE HAVE NEGATIVE CASH FLOW AND MAY NOT HAVE SUFFICIENT CASH TO EFFECTIVELY
MANAGE OUR WORKING CAPITAL REQUIREMENTS AND FUND OUR OPERATIONS.
We have limited cash and credit available and may be unable to raise
additional financing or establish additional lines of credit. At December 31,
2000, February 28, 2001 and March 31, 2001, we were not in compliance with
target EBITDA and the interest coverage ratio contained in our revolving credit
facility agreement. During the first half of 2001, we have entered into several
amendments and waivers with our lenders under which our covenant violations were
waived and we were required to obtain equity financing. On June 29, 2001, we
amended the revolving credit facility which will remain available until June 30,
2002. We cannot guaranty that we will be able to comply with the amended
financial covenants. As a result of the new covenants and other requirements,
outstanding borrowings under the credit facility have been classified as a
current liability. We cannot guaranty that the credit facility will be timely
renewed or that the bank will not require immediate repayment of the callable
debt. Due to our net losses, the continuing operations of our business requires
substantial capital infusions. If we are unable to borrow or otherwise obtain
additional funds to finance our operations when needed, we will not be able to
operate our business.
IF WE CANNOT INCREASE OUR AVAILABLE CASH RESOURCES IN THE NEAR FUTURE, WE MAY
NOT BE ABLE TO OPERATE OUR BUSINESS.
Our current cash resources, together with existing sources of
liquidity, may not be sufficient to fund our anticipated short-term cash needs
and that we may be required to obtain additional financing in the very near
future. We are currently engaged in active discussions and review of proposals
regarding potential financing alternatives. However, we may not be able to
obtain such financing on acceptable terms, if at all, due to a number of
factors, including market conditions and our operating performance. In addition,
if we raise funds through the issuance of equity or equity-related securities,
the securities may have rights, preferences and privileges senior to those of
our common stock, and the holders of our common stock may suffer significant
dilution. If we are unable to satisfy our liquidity needs through a combination
of additional financing and cost reduction measures, we will not be able to
continue to conduct our business as currently anticipated, and there will be a
severe adverse impact on our operating results and financial condition.
Moreover, in connection with the State of Wisconsin Investment Board's
purchase of 1,657,459 shares of our stock in April 2001, we agreed to insert
provisions in our bylaws that would prevent us from selling securities having
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forward pricing provisions or from granting options at than the fair market
value of our stock without first obtaining majority stockholder approval. These
provisions could impair our ability to obtain the financing needed to fund our
operations.
OUR STOCK PRICE IS VOLATILE AND COULD CHANGE UNEXPECTEDLY.
Our stock has and likely will continue to demonstrate extreme
volatility as valuations, trading volume and prices move significantly. This
volatility may result in a material decline in the market price of our
securities, and may have little relationship to our financial results or
prospects.
Our stock volatility is due to factors such as:
o Our actual and anticipated quarterly and annual operating results;
o Variations between our actual results and analyst and investor
expectations;
o Announcements by us or others and developments affecting our
business;
o Investor and analyst perceptions of our company and comparable
public companies;
o Our future sales of debt or equity securities;
o The activities of short sellers and risk arbitrageurs regardless
of our performance; and
o Conditions and trends in the technology, data communications and
Internet-related industries.
Many of the factors listed above are not within our control. In the
past, companies that have experienced volatility in the market price of their
stock have been the subject of securities class litigation.
WE FACE SECURITIES CLASS LITIGATION WHICH COULD SIGNIFICANTLY HARM OUR BUSINESS.
In fiscal 2000, Westell Technologies, Inc. and certain of its officers
and directors were named in a consolidated class action filed in the United
States District Court for the Northern District of Illinois. The case alleges
generally that the defendants violated the antifraud provisions of the federal
securities laws by allegedly issuing material false and misleading statements
and/or allegedly omitting material facts necessary to make the statements made
not misleading thereby allegedly inflating the price of Westell stock for
certain time periods. Two derivative actions have been filed against certain of
our officers and directors in the Court of Chancery for the State of Delaware,
New Castle County. The derivative cases allege generally that the defendants
issued material false and misleading statements and/or allegedly omitted
material facts necessary to make the statements made not misleading thereby and
allegedly inflating the price of Westell stock for certain time periods, engaged
in insider trading, misappropriated corporate information, and breached their
fiduciary duties to our stockholders. The cases seek damages allegedly sustained
by plaintiffs and the class by reason of the acts and transactions alleged in
the complaints as well as interest on any damage award, reasonable attorneys'
fees, expert fees, and other costs. Certain of the officers and directors of
Westell were also named in another derivative action filed in the United States
District Court for the Northern District of Illinois, alleging that the
defendants made false and misleading statements and omissions, misappropriated
corporate information, and breached their fiduciary duties to Westell's
shareholders. In the Illinois derivative action the plaintiff seeks the damages
allegedly sustained by Westell by reason of the acts and transactions alleged in
the complaint, including pre-judgment interest, as well as reasonable attorneys'
fees and costs. In addition, certain of the officers and directors of Westell
were named in a derivative action filed in the Circuit Court of Kane County,
Illinois. This action is similar to the previously filed derivative actions
except for the addition of additional directors of Westell as defendants.
We cannot predict what the outcome of these lawsuits will be. It is
possible that we may be required to pay substantial damages or settlement costs
in excess of our insurance coverage, which could have a material adverse effect
on our financial condition and results of operation. Any verdict against us
could harm our business. Even if we are meritorious in such litigation, we could
also incur substantial legal costs, and management's attention and resources
could be diverted from our business which could cause our business to suffer.
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IF DSL PRODUCTS FAIL TO GAIN WIDESPREAD COMMERCIAL ACCEPTANCE, WE WILL NOT BE
SUCCESSFUL AND OUR STOCK PRICE WILL DECLINE.
We expect to continue to invest significant resources in the
development of DSL products. Any failure of the DSL market to grow as
anticipated will harm our business. Commercial acceptance of DSL products
depends on many factors, including the following:
o Commercial viability and the success services enabled by DSL
technology;
o Lower DSL product prices;
o Continued growth and use of the Internet;
o Customer acceptance of DSL products over alternative technologies;
o Significant improvements in the interoperability among vendors'
equipment used in the delivery of high speed data transmission;
and
o The ability continually improve DSL products to satisfy demands
for increasing bandwidth over telephone wires.
Even if DSL technology gains commercial acceptance, our business will
suffer if our DSL sales do not increase. Our DSL revenues have been difficult to
forecast as our customers have only recently begun to consider implementing DSL
products in their networks and our customers' DSL purchases have not been
consistent. Even if our customers elect to commercially deploy DSL products, our
customers are not contractually bound to purchase our DSL systems. Our non-DSL
products and services, such as our Network Interface Units and our
teleconferencing services, are not expected to generate sufficient revenues or
profits to offset any losses that we may experience due to a lack of DSL product
sales. If we fail to generate significant revenues from DSL product sales, we
will not be able to implement our business goals and our business and operating
results would suffer significantly.
PRICING PRESSURES ON OUR PRODUCTS MAY AFFECT OUR ABILITY TO BECOME PROFITABLE.
Due to competition in the DSL market, many bids for recent trials and
deployments of DSL products reflect:
o the forward pricing of DSL products below production costs to take
into account the expectation of large future volumes and
corresponding reductions in manufacturing costs; and/or
o suppliers that provide DSL products at a lower price as part of a
sale of a package of products and/or services.
We have and may in the future offer DSL products based upon forward
pricing. Forward pricing will cause us to incur losses on DSL products sales
unless we can reduce manufacturing costs. We believe that manufacturing costs
may decrease if:
o more cost-effective transceiver technologies become available,
o product design efficiencies and component integration are
obtained, and
o we achieve economies of scale related to increased volume.
There is no guaranty that we will be able to secure significant
additional DSL orders and reduce per unit manufacturing costs that we have
factored into our forward pricing of DSL products. As a result, we could
continue to incur losses in connection with sales of DSL products even if our
DSL unit volume increases. Losses from our sales of DSL products could result in
fluctuations in our quarterly operating results and would materially and
adversely affect our ability to achieve profitability and implement our business
goals.
OUR PRODUCTS FACE COMPETITION FROM OTHER EXISTING PRODUCTS, PRODUCTS UNDER
DEVELOPMENT AND CHANGING TECHNOLOGY, AND IF WE DO NOT REMAIN COMPETITIVE, OUR
BUSINESS WILL SUFFER AND WE WILL NOT BECOME PROFITABLE.
The markets for our products are characterized by:
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o intense competition within the DSL market and from other
industries such as cable and wireless industries;
o rapid technological advances;
o evolving industry standards;
o changes in end-user requirements;
o frequent new product introductions and enhancements; and
o evolving customer requirements and service offerings.
New products introductions or changes in services offered by telephone
companies or over the Internet could render our existing products and products
under development obsolete and unmarketable. For example High Bit-Rate DSL, a
product that enhances the signal quality of the transmission over copper
telephone wire, may reduce the demand for our Network Interface Units which
provide performance monitoring of copper telephone wires. Our Network Interface
Units accounted for approximately 50%, 35% and 16% of our revenues in fiscal
1999, 2000 and 2001, respectively. Further, we believe that the domestic market
for many of our traditional analog products is decreasing, and will likely
continue to decrease, as high capacity digital transmission becomes less
expensive and more widely deployed. Our future success will largely depend upon
our ability to continue to enhance and upgrade our existing products and to
successfully develop and market new products on a cost-effective and timely
basis.
In addition, our current product offerings primarily enable telephone
companies to deliver digital communications over copper telephone wires in the
local access network. Telephone companies also face competition in the delivery
of digital communications from cable operators, new telephone companies, and
wireless service providers. If end users obtain their high speed data
transmission services from these alternative providers, then the overall demand
for DSL products will decline.
To remain competitive we must develop new products to meet the demands
of these emerging transmission media and new local access network providers. Our
business would be severely harmed if our products become obsolete or fail to
gain widespread commercial acceptance due to competing products and
technologies.
DUE TO RAPID TECHNOLOGICAL CHANGES IN OUR INDUSTRY, OUR PRODUCTS MAY BECOME
OBSOLETE BEFORE WE CAN REALIZE SIGNIFICANT REVENUES FOR OUR PRODUCTS, WHICH
COULD FORCE US TO WRITE OFF INVENTORY AND HARM OUR BUSINESS.
The telecommunications industry is subject to rapid technological
change, which results in a short product commercial life before a product
becomes obsolete. As a result, we have in the past and may in the future devote
disproportionate resources to a product that has an unexpected short commercial
life and/or does not generate the sales that we anticipated when we stocked our
inventory of a product. As a result, we have in the past and may have to in the
future write off inventory, which would harm our business and our results of
operations.
WE FACE LITIGATION FROM OUR SUPPLIERS WHICH, IF RESOLVED AGAINST US, COULD
SIGNIFICANTLY HARM OUR BUSINESS AND OPERATING RESULTS.
Three of our subcontract suppliers sued us for breach of contract.
Celsian Technologies, Inc. sued us for approximately $13.4 million for
nonpayment of product delivered. Virata Corporation sued us for $6.4 million and
unspecified additional amounts for nonacceptance of products. Alcatel sued us
for $13.0 million for nonpayment for delivered goods. We believe that the
Celsian product is defective and therefore that we have meritorious defenses to
this lawsuit. We are currently reviewing the Alcatel and Virata complaints.
However, we cannot guarantee that we will be meritorious in any of the lawsuits
described above and a verdict against us in any lawsuit could materially
adversely affect our business and operating results.
ANY UNEXPECTED INCREASE IN DEMAND FOR DSL PRODUCTS COULD ADVERSELY IMPACT OUR
ABILITY TO MANUFACTURE SUFFICIENT QUANTITIES OF DSL PRODUCTS, WHICH WOULD HARM
OUR CUSTOMER SALES.
Without proper lead times, we may not have the ability to cost
effectively acquire and develop the capabilities necessary to satisfy an
unexpected increase in demand for our products. We depend upon subcontractors to
manufacture a portion of our DSL products and expect that our reliance on these
subcontractors will increase if demand for our DSL products increases. Reliance
on subcontractors involves several risks, including the potential lack of
adequate capacity and reduced control over product quality, delivery schedules,
manufacturing yields and costs. The use of subcontractors could result in
-7-
material delays or interruption of supply as a consequence of required
re-tooling, retraining and other activities related to establishing and
developing subcontractor relationships. Any manufacturing disruption would
impair our ability to fulfill orders and harm our revenues and customer
relationships.
THE FAILURE TO MAINTAIN AND FURTHER DEVELOP PARTNERS AND ALLIANCES WOULD HARM
OUR BUSINESS.
Instead of directly competing with large telecommunications equipment
suppliers, we have begun to develop and maintain partnerships and alliances with
other companies in order to secure complementary technologies, to lower costs,
and to better market and sell our products. These partnerships and alliances
provide important resources and channels for us to compete successfully. Some of
our partnerships provide us with third party technology that we rely on to
manufacture our products. In addition, instead of directly competing with large
suppliers such as Fujitsu in the DSL market, we have entered into alliances with
these companies to offer our products within a package of products sold by these
companies to telephone companies. We cannot provide any assurances that these
partnerships will continue in the future. As competition increases in the DSL
market, these alliances will become even more important to us. A loss of one or
more partnerships and alliances could affect our ability to sell our products
and therefore could materially adversely affect our business and operating
results.
WE ARE DEPENDENT ON THIRD PARTY TECHNOLOGY, THE LOSS OF WHICH WOULD HARM OUR
BUSINESS.
We rely on third parties to gain access to technologies that are used
in our current products and in products under development. For example, our
ability to produce DSL products is dependent upon third party transceiver
technologies. Our licenses for DSL transceiver technology are nonexclusive and
the transceiver technologies have been licensed to numerous other manufacturers.
If our DSL transceiver licensors fail to deliver commercially ready or standards
compliant transceiver solutions to us and other alternative sources of DSL
transceiver technologies are not available to us at commercially acceptable
terms, then our business and operating results would be materially and adversely
affected.
Any impairment in our relationships with the licensors of technologies
used in our products would force us to find other developers on a timely basis
or develop our own technology. There is no guaranty that we will be able to
obtain the third-party technology necessary to continue to develop and introduce
new and enhanced products, that we will obtain third-party technology on
commercially reasonable terms or that we will be able to replace third-party
technology in the event such technology becomes unavailable, obsolete or
incompatible with future versions of our products. We would have severe
difficulty competing if we cannot obtain or replace much of the third-party
technology used in our products. Any absence or delay would materially adversely
affect our business and operating results.
WE ARE DEPENDENT ON SOLE OR LIMITED SOURCE SUPPLIERS, THE LOSS OF WHICH WOULD
HARM OUR BUSINESS.
Integrated circuits and other electronic components used in our
products are currently available from only one source or a limited number of
suppliers. For example, we currently depend on Alcatel, Microelectronics and
Virata to provide critical integrated transceiver circuits used in our DSL
products. Our inability to obtain sufficient key components or to develop
alternative sources for key components as required, could result in delays or
reductions in product deliveries, and consequently severely harm our customer
relationships and our business and operating results. Furthermore, additional
sole-source components may be incorporated into our future products, thereby
increasing our supplier risks. If any of our sole-source manufacturers delay or
halt production of any of their components, or fail to supply their components
on commercially reasonable terms, then our business and operating results would
be harmed.
Some of the electronic components used in our products are currently in
short supply and are provided on an allocation basis to us and other users based
upon past usage. For example, integrated transceiver circuits and electronic
components are key components in all of our products and are fundamental to our
business strategy of developing new and succeeding generations of products at
reduced unit costs without compromising functionality or serviceability.
In the past we have experienced delays in the receipt of key components
which have resulted in delays in related product deliveries. We anticipate that
integrated circuit production capacity and availability of some electronic
-8-
components may be insufficient to meet the demand for such components in the
future. There is no guaranty that we will be able to continue to obtain
sufficient quantities of key components as required, or that such components, if
obtained, will be available to us on commercially reasonable terms.
WE HAVE NO LONG TERM CONTRACTS OR ARRANGEMENT WITH SUPPLIERS WHICH COULD
ADVERSELY AFFECT OUR ABILITY TO PURCHASE COMPONENTS AND TECHNOLOGIES USED IN OUR
PRODUCTS.
We have no long-term contracts or arrangements with any of our
suppliers. We may not be able to obtain components at competitive prices, in
sufficient quantities or under other commercially reasonable terms. If we enter
into a high-volume or long-term supply arrangement and subsequently decide that
we cannot use the products or services provided for in the supply arrangement,
then our business would also be harmed.
WE WILL NOT BE ABLE TO SUCCESSFULLY COMPETE, DEVELOP AND SELL NEW PRODUCTS IF WE
FAIL TO RETAIN KEY PERSONNEL AND HIRE ADDITIONAL KEY PERSONNEL.
Because of our need to continually evolve our business with new product
developments and strategies, our success is dependent on our ability to attract
and retain qualified technical, marketing, sales and management personnel. To
remain competitive we must maintain top management talent, employees who are
involved in product development and testing and employees who have developed
strong customer relationships. Because of the high demand for these types of
employees, it is difficult to retain existing key employees and attract new key
employees. While most of our executive officers, have severance agreements in
which the officers agreed not to compete with us and not to solicit any of our
employees for a period of one year after termination of the officer's employment
in most circumstances, we do not have similar noncompetition and nonsolicitation
agreements for other employees who are important in our product development and
sales. Our inability to attract and retain additional key employees could harm
our ability to successfully sell existing products and develop new products and
implement our business goals.
OUR QUARTERLY OPERATING RESULTS ARE LIKELY TO FLUCTUATE SIGNIFICANTLY AND SHOULD
NOT BE RELIED UPON AS INDICATIONS OF FUTURE PERFORMANCE.
We expect to continue to experience significant fluctuations in
quarterly operating results. Due to the risks identified below and elsewhere in
"Risk Factors," sales to our largest customers have fluctuated and are expected
to fluctuate significantly between quarters. Sales to our customers typically
involve large purchase commitments, and customers purchasing our products may
generally reschedule or cancel orders without penalty. As a result, our
quarterly operating results have fluctuated significantly in the past. Other
factors that have had and may continue to influence our quarterly operating
results include:
o the impact of changes in the DSL customer mix or product mix sold;
o timing of product introductions or enhancements by us or our
competitors;
o changes in operating expenses which can occur because of product
development costs, timing of customer reimbursements for research
and development, pricing pressures; availability and pricing of
key components;
o write-offs for obsolete inventory; and
o the other risks that are contained in this "Risk Factors" section.
Due to our fluctuations in quarterly results, we believe that
period-to-period comparisons of our quarterly operating results are not
necessarily meaningful. Our quarterly fluctuations make it more difficult to
forecast our revenues. It is likely that in some future quarters our operating
results will be below the expectations of securities analysts and investors,
which may adversely affect our stock price. As long as we continue to depend on
DSL products and new products, there is substantial risk of widely varying
quarterly results, including the so-called "missed quarter" relative to investor
expectations.
WE MAY EXPERIENCE DELAYS IN THE DEPLOYMENT OF NEW PRODUCTS.
Our past sales have resulted from our ability to anticipate changes in
technology, industry standards and telephone company service offerings, and to
develop and introduce new and enhanced products and services. Our continued
ability to adapt to such changes will be a significant factor in maintaining or
improving our competitive position and our prospects for growth. Factors
resulting in delays in product development include:
-9-
o rapid technological changes in the telecommunications industry;
o our customers' lengthy product approval and purchase processes;
and
o our reliance on third-party technology for the development of new
products.
There can be no assurance that we will successfully introduce new
products on a timely basis or achieve sales of new products in the future. In
addition, there can be no assurance that we will have the financial and
manufacturing resources necessary to continue to successfully develop new
products or to otherwise successfully respond to changing technology standards
and telephone company service offerings. If we fail to deploy new products on a
timely basis, then our product sales will decrease, our quarterly operating
results could fluctuate, and our competitive position and financial condition
would be materially and adversely affected.
THE TELECOMMUNICATIONS INDUSTRY IS A HIGHLY COMPETITIVE MARKET AND THIS
COMPETITION MAY RESULT IN OPERATING LOSSES, A DECREASE IN OUR MARKET SHARE AND
FLUCTUATIONS IN OUR REVENUE.
We expect competition to increase in the future especially as the DSL
market develops. Because we are significantly smaller than most of our
competitors, we may lack the financial resources needed to increase our market
share. Many of our larger competitors can offer a wide array of different
products and services that are required for all of a telephone company's
business. Conversely, our products are used to enhance transmission from the
telephone company's central office to the end user, which is just one element of
a telephone company's network. Our inability to form successful alliances
through which we can market and develop our products would harm our ability to
successfully compete in the DSL market which would harm our business.
In addition, we expect continued aggressive tactics from our
competitors such as:
o Forward pricing of products;
o Early announcements of competing products;
o Bids that bundle DSL products with other product offerings;
o Customer financing assistance; and
o Intellectual property disputes.
OUR LACK OF BACKLOG MAY AFFECT OUR ABILITY TO ADJUST TO AN UNEXPECTED SHORTFALL
IN ORDERS.
Because we generally ship products within a short period after receipt
of an order, we typically do not have a material backlog (or known quantity) of
unfilled orders, and our revenues in any quarter are substantially dependent on
orders booked in that quarter. Our expense levels are based on anticipated
future revenues and are relatively fixed in the short-term. Therefore, we may be
unable to adjust spending in a timely manner to compensate for any unexpected
shortfall of orders. Accordingly, any significant shortfall of demand in
relation to our expectations or any material delay of customer orders would have
an immediate adverse impact on our business and operating results.
INDUSTRY CONSOLIDATION COULD MAKE COMPETING MORE DIFFICULT.
Consolidation of companies offering high-speed telecommunications
products is occurring through acquisitions, joint ventures and licensing
arrangements involving our competitors, our customers and our customers'
competitors. We cannot provide any assurances that we will be able to compete
successfully in an increasingly consolidated telecommunications industry. Any
heightened competitive pressures that we may face may have a material adverse
effect on our business, prospects, financial condition and result of operations.
WE DEPEND ON A LIMITED NUMBER OF CUSTOMERS WHO ARE ABLE TO EXERT A HIGH DEGREE
OF INFLUENCE OVER US.
We have and will continue to depend on the large Regional Bell
Operating Companies, those companies emerging from the break-up of AT&T, as well
as and other telephone carriers including smaller local telephone carriers and
new alternative telephone carriers such as Qwest, for substantially all of our
revenues. Sales to the Regional Bell Operating Companies accounted for
approximately 46.6%, 51.4% and 50.6% of our revenues in fiscal 1999, 2000 and
2001, respectively. Consequently, our future success will depend upon:
-10-
o the timeliness and size of future purchase orders from the
Regional Bell Operating Companies;
o the product requirements of the Regional Bell Operating Companies;
o the financial and operating success of the Regional Bell Operating
Companies; and
o the success of the Regional Bell Operating Companies' services
that use our products.
The Regional Bell Operating Companies and our other customers are
significantly larger than we are and are able to exert a high degree of
influence over us. Customers purchasing our products may generally reschedule
orders without penalty to the customer. Even if demand for our products is high,
the Regional Bell Operating Companies have sufficient bargaining power to demand
low prices and other terms and conditions that may materially adversely affect
our business and operating results.
Any attempt by a Regional Bell Operating Company or our other customers
to seek out additional or alternative suppliers or to undertake the internal
production of products would have a material adverse effect on our business and
operating results. The loss of any or our customer could result in an immediate
decrease in product sales and materially and adversely affect our business.
Conference Plus's customer base is very concentrated as its top ten
customers represent a large portion of revenue. Customers of Conference Plus
have expanded their requirements for our services, but there can be no assurance
that such expansion will increase in the future. Additionally, Conference Plus's
customers continually undergo review and evaluation of their conferencing and
meeting services to evaluate the merits of bringing those services in-house
rather than outsourcing those services. There can be no assurance in the future
that Conference Plus's customers will bring some portion or all of their
conferencing and meeting services in-house. Conference Plus must continually
provide higher quality, lower cost services to provide maintain and grow its
customer base. Any loss of a major account, would have a material adverse effect
on Conference Plus. In addition, any merger or acquisition of a major customer
could have a material adverse effect on Conference Plus.
OUR CUSTOMERS HAVE LENGTHY PURCHASE CYCLES THAT AFFECT OUR ABILITY TO SELL OUR
PRODUCTS.
Prior to selling products to telephone companies, we must undergo
lengthy approval and purchase processes. Evaluation can take as little as a few
months for products that vary slightly from existing products or up to a year or
more for products based on new technologies such as DSL products. Accordingly,
we are continually submitting successive generations of our current products as
well as new products to our customers for approval. The length of the approval
process can vary and is affected by a number of factors, including:
o the complexity of the product involved;
o priorities of telephone companies;
o telephone companies' budgets; and
o regulatory issues affecting telephone companies.
The requirement that telephone companies obtain FCC approval for most
new telephone company services prior to their implementation has in the past
delayed the approval process. Such delays in the future could have a material
adverse affect on our business and operating results. While we have been
successful in the past in obtaining product approvals from our customers, there
is no guaranty that such approvals or that ensuing sales of such products will
continue to occur.
OUR INTERNATIONAL OPERATIONS EXPOSE US TO THE RISKS OF CONDUCTING BUSINESS
OUTSIDE THE UNITED STATES.
International revenues represented 9.2%, 9.0% and 16.0% of our revenues
in fiscal 1999, 2000 and 2001, respectively. The Company also has a relationship
with Fujitsu Telecom Europe, Ltd. for the supply of DSL equipment to British
Telecom. Because Conference Plus has expanded its conference call business in
Europe by opening offices in Dublin, Ireland, we believe that our exposure to
international risks may increase in the future. These risks include:
o foreign currency fluctuations;
o tariffs, taxes and trade barriers;
-11-
o difficulty in accounts receivable collection;
o political unrest; and
o burdens of complying with a variety of foreign laws and
telecommunications standards.
The occurrence of any of these risks would impact our ability to
increase our revenue and become profitable, or could require us to modify
significantly our current business practices.
OUR SERVICES ARE AFFECTED BY UNCERTAIN GOVERNMENT REGULATION AND CHANGES IN
CURRENT OR FUTURE LAWS OR REGULATIONS COULD RESTRICT THE WAY WE OPERATE OUR
BUSINESS.
Many of our customers are subject to regulation from federal and state
agencies, including the FCC and various state public utility and service
commissions. While these regulations do not affect us directly, the effects of
regulations on our customers may adversely impact our business and operating
results. For example, FCC regulatory policies affecting the availability of
telephone company services and other terms on which telephone companies conduct
their business may impede our penetration of local access markets.
In addition, our business and operating results may also be adversely
affected by the imposition of tariffs, duties and other import restrictions on
components that we obtain from non-domestic suppliers or by the imposition of
export restrictions on products that we sell internationally. Internationally,
governments of the United Kingdom, Canada, Australia and numerous other
countries actively promote and create competition in the telecommunications
industry. Changes in current or future laws or regulations, in the U.S. or
elsewhere, could materially and adversely affect our business and operating
results.
POTENTIAL PRODUCT RECALLS AND WARRANTY EXPENSES COULD ADVERSELY AFFECT OUR
ABILITY TO BECOME PROFITABLE.
Our products are required to meet rigorous standards imposed by our
customers. Most of our products carry a limited warranty ranging from one to
seven years. In addition, our supply contracts typically require us to accept
returns of products or indemnify customers against certain liabilities arising
out of the use of our products. Complex products such as those offered by us may
contain undetected errors or failures when first introduced or as new versions
are released. Because we rely on new product development to remain competitive,
we cannot predict the level of warranty claims that we will experience in the
future. Despite our quality control program, there is no guaranty that our
products will not suffer from defects or other deficiencies or that we will not
experience material product recalls, product returns, warranty claims or
indemnification claims in the future. Such recalls, returns or claims and the
associated negative publicity could result in the loss of or delay in market
acceptance of our products and affect our product sales, our customer
relationships and our ability to generate a profit
INVESTORS COULD BE ADVERSELY AFFECTED BY FUTURE ISSUANCES AND SALES OF OUR
SECURITIES.
Sales of substantial amounts of our common stock in the public market
could adversely affect the market price of our securities. Westell has
64,802,574 shares of common stock outstanding as of June 15, 2001, and has the
following obligations to issue additional class A common stock as of June 15,
2001:
o options to purchase 8,297,600 shares of class A common stock,
3,981,033 of which are currently exercisable;
o 3,005,268 shares reserved for issuance under its employee stock
purchase plan;
o warrants to purchase 909,000 shares of class A common stock for
$5.92 per shares;
o warrants to purchase 512, 820 shares of class A common stock
granted to Penny family members in consideration of the guarantee
of $10 million; and
Our management believes that we may raise funds through the issuance of
equity or equity related securities. The securities may have rights, preferences
and privileges senior to those of our common stock. These obligations could
result in substantial future dilution with respect to our common stock.
WE RELY ON OUR INTELLECTUAL PROPERTY THAT WE MAY BE UNABLE TO PROTECT, OR WE MAY
BE FOUND TO INFRINGE THE RIGHTS OF OTHERS.
Our success will depend, in part, on our ability to protect trade
secrets, obtain or license patents and operate without infringing on the rights
of others. We rely on a combination of technical leadership, trade secrets,
copyright and trademark law and nondisclosure agreements to protect our
-12-
non-patented proprietary expertise. These measures, however, may not provide
meaningful protection for our trade secrets or other proprietary information.
Moreover, our business and operating results may be materially adversely
affected by competitors who independently develop substantially equivalent
technology.
In addition, the laws of some foreign countries do not protect our
proprietary rights to the same extent as U.S. law. The telecommunications
industry is also characterized by the existence of an increasing number of
patents and frequent litigation based on allegations of patent and other
intellectual property infringement. From time to time we receive communications
from third parties alleging infringement of exclusive patent, copyright and
other intellectual property rights to technologies that are important to us.
There is no guaranty that third parties will not:
o assert infringement claims against us in the future, and that such
assertions will not result in costly litigation; or
o that we would prevail in any such litigation or be able to license
any valid and infringed patents from third parties on commercially
reasonable terms.
Further, such litigation, regardless of its outcome, could result in
substantial costs to and diversion of our efforts. Any infringement claim or
other litigation against or by us could have a material adverse effect on our
business and operating results.
EVOLVING INDUSTRY STANDARDS MAY ADVERSELY AFFECT OUR ABILITY TO SELL OUR
PRODUCTS AND CONSEQUENTLY HARM OUR BUSINESS.
Industry wide standardization organizations such as the American
National Standards Institute and the European Telecommunications Standards
Institute are responsible for setting transceiver technology standards for DSL
products. We are dependent on transceiver technologies from third parties to
manufacture our products. If transceiver technologies needed for standards-based
products are not available to us in a timely manner and under reasonable terms,
then our DSL revenues would significantly decrease and our business and
operating results would suffer significantly.
In addition, the introduction of competing standards or implementation
specifications could result in confusion in the market and delay any decisions
regarding deployment of DSL systems. Delay in the announcement of standards
would materially and adversely impact our DSL sales and would severely harm our
business.
Due to the rapid technological changes in our industry, our products
may become obsolete before we can realize significant revenues for our products,
which would harm our business.
The telecommunications industry is subject to rapid technological
change, which results in a short product commercial life before a product
becomes obsolete. As a result, we have in the past and may in the future devote
disproportionate resources to a product that has an unexpected short commercial
life and/or have to write off excess and obsolete inventory, each of which would
harm our operating results and financial condition and harm our business.
Any unexpected increase in demand for DSL products could adversely
impact our ability to manufacture sufficient quantities of DSL products, which
would affect our ability to attract and retain customers.
Any unexpected increase in demand for DSL products could adversely
impact our ability to supply DSL products in a timely manner, which would harm
our business. Without proper lead times, we may not have the ability to, or may
have to pay a premium to, acquire and develop the necessary capabilities to
satisfy an unexpected increase in demand for our products. We depend upon
subcontractors to manufacture a portion of our DSL products and expect that our
reliance on these subcontractors will increase if demand for our DSL products
increases. Reliance on subcontractors involves several risks, including the
potential lack of adequate capacity and reduced control over product quality,
delivery schedules, manufacturing yields and costs. The use of subcontractors
could result in material delays or interruption of supply as a consequence of
required re-tooling, retraining and other activities related to establishing and
developing subcontractor relationships. Any manufacturing disruption would
-13-
impair our ability to fulfill orders, and if this occurs, our revenues and
customer relationships would be materially adversely affected. Any material
delays or difficulties in connection with increased manufacturing production or
the use of subcontractors could severely harm our business. Our failure to
effectively manage any increase in demand for our products would harm our
business.
WE MAY BE UNABLE TO SUCCESSFULLY INTEGRATE OUR ACQUISITION OF TELTREND, INC.
In March 2000, we completed the acquisition of Teltrend, Inc. This
transaction is accompanied by a number of risks, any of which could adversely
affect our business or stock price, including:
o the difficulty of integrating the operations, facilities and
personnel of Teltrend;
o the potential disruption of each company's business;
o distraction of our management team;
o possible unanticipated expenses related to the integration;
o potential impairment of customer and employee relationships; and
o potential liabilities associated with Teltrend.
In addition, the market price of our common stock could decline if we
do not achieve the perceived benefits of the acquisition as rapidly or to the
extent anticipated by financial analysts or the combined financial results are
not consistent with the expectations of financial analysts.
OUR ACQUISITIONS COULD BE DIFFICULT TO INTEGRATE, DISRUPT OUR BUSINESS, DILUTE
STOCKHOLDER VALUE AND ADVERSELY AFFECT OUR OPERATING RESULTS.
We expect to continue to review potential acquisitions and we may
acquire businesses, products or technologies in the future. In order to fund
such acquisitions, we could:
o issue equity securities that could dilute our current
stockholders' percentage ownership;
o incur substantial debt; or
o assume contingent liabilities.
These events could harm our business and/or the price of our common
stock. Acquisitions also entail numerous integration risks that could adversely
affect our business, such as those listed as risks associated with the
acquisition of Teltrend.
WE WILL NEED ADDITIONAL FINANCING IF WE DO NOT MEET OUR BUSINESS PLAN OR WE WILL
NOT BE ABLE TO FUND OUR OPERATIONS.
We must continue to enhance and expand our product and service
offerings in order to maintain our competitive position and to increase our
market share. As a result and due to our net losses, the continuing operations
of our business may require substantial capital infusions. Whether or when we
can achieve cash flow levels sufficient to support our operations cannot be
accurately predicted. Unless such cash flow levels are achieved, we may require
additional borrowings or the sale of debt or equity securities, or some
combination thereof, to provide funding for our operations. If we cannot
generate sufficient cash flow from our operations, or are unable to borrow or
otherwise obtain additional funds to finance our operations when needed, our
financial condition and operating results would be materially adversely affected
and we would not be able to operate our business.
WE MAY ENGAGE IN FUTURE ACQUISITIONS THAT COULD DILUTE OUR CURRENT STOCKHOLDERS
We expect to continue to review potential acquisitions and we may
acquire businesses, products or technologies in the future. In order to fund
such acquisitions, we could:
o issue equity securities that could dilute our current
stockholders' percentage ownership;
o incur substantial debt; or
o assume contingent liabilities.
-14-
These events could harm our business and/or the price of our common
stock. Acquisitions also entail numerous integration risks that could adversely
affect our business, such as those listed as risks associated with the
acquisition of Teltrend.
CONFERENCE PLUS'S LARGE COMPETITORS COULD ADVERSELY AFFECT CONFERENCE PLUS'S
ABILITY TO MAINTAIN OR INCREASE ITS MARKET SHARE.
Conference Plus participates in the highly competitive industry of
voice, video, and multimedia conferencing and meeting services. Competitors
include stand-alone conferencing companies and major telecommunications
providers. Conference Plus's ability to sustain growth and performance is
dependent on its:
o maintenance of high quality standards and low cost position;
o international expansion; and
o evolving technological capability.
Any increase in competition could reduce our gross margin, require
increased spending on research and development and sales and marketing, and
otherwise materially adversely affect our business and operating results.
OUR PRINCIPAL STOCKHOLDERS CAN EXERCISE SIGNIFICANT INFLUENCE THAT COULD
DISCOURAGE TRANSACTIONS INVOLVING A CHANGE OF CONTROL AND MAY AFFECT YOUR
ABILITY TO RECEIVE A PREMIUM FOR CLASS A COMMON STOCK THAT YOU PURCHASE.
As of March 31, 2001, as trustees of a voting trust containing common
stock held for the benefit of the Penny family and the Simon family, Robert C.
Penny III and Melvin J. Simon have the exclusive power to vote over 60% of the
votes entitled to be cast by the holders of our common stock. In addition, all
members of the Penny family who are beneficiaries under this voting trust are
parties to a stock transfer restriction agreement which prohibits the
beneficiaries from transferring any class B common stock or their beneficial
interests in the voting trust without first offering such class B common stock
to the other Penny family members. Consequently, we are effectively under the
control of Messrs. Penny and Simon, as trustees, who have sufficient voting
power to elect all of the directors and to determine the outcome of most
corporate transactions or other matters submitted to the stockholders for
approval. Such control may have the effect of discouraging transactions
involving an actual or potential change of control, including transactions in
which the holders of class B common stock might otherwise receive a premium for
their shares over the then-current market price.
-15-
RATIO OF EARNINGS TO FIXED CHARGES
Because we have an excess of fixed charges over earnings, our earnings
are inadequate to cover fixed charges. The dollar amounts (in thousands) needed
to cover the deficiency are as follows:
Year Ended March 31,
---------------------------------------------------------------------------
2001 2000 1999 1998 1997
-------------- ------------- ------------- -------------- --------------
Westell and Subsidiaries $93,856 $ 11,782 $ 34,992 $ 19,108 $ 24,521
For purposes of calculating earnings and fixed charges, earnings
consist of pre-tax losses excluding interest expense, and fixed charges consist
of interest expensed, capitalized and included in rent expense.
ACCOUNTING TREATMENT RELATING TO TRUST SECURITIES
The financial statements of the trust will be consolidated with our
financial statements, with the trust preferred securities shown on our
consolidated financial statements outside of stockholders' equity, as the
securities of are Westell obligated mandatorily redeemable preferred securities
of a subsidiary trust holding solely Westell debt securities. Our financial
statements will include a footnote that discloses, among other things, that the
assets of the trust consist of our debt securities and will specify the
designation, principal amount, interest rate and maturity rate of the debt
securities.
DESCRIPTION OF DEBT SECURITIES
We may offer debt securities under this prospectus, any of which may be
issued as convertible and/or exchangeable debt securities. The following
description of the terms of the debt securities sets forth certain general terms
and provisions of the debt securities to which any prospectus supplement may
relate. We will set forth the particular terms of the debt securities we offer
in a prospectus supplement. The extent, if any, to which the following general
provisions apply to particular debt securities, will be described in the
applicable prospectus supplement. The following description of general terms
relating to the debt securities and the Indenture (as defined below) are
summaries only and therefore are not complete. You should read the Indenture and
the prospectus supplement regarding any particular issuance of debt securities.
The debt securities will represent our unsecured general obligations,
unless otherwise provided in the prospectus supplement.
Our ability to service our indebtedness, including the debt securities,
is dependent to some extent upon the receipt of funds from our subsidiaries. The
payment of dividends or the making of loans and advances to us by our
subsidiaries are subject to contractual, statutory or regulatory restrictions,
are contingent upon the earnings of those subsidiaries and are subject to
various business considerations. Further, any right we may have to receive
assets of any of our subsidiaries upon liquidation or recapitalization of any
such subsidiaries (and the consequent right of the holders of debt securities to
participate in those assets) will be subject to the claims of our subsidiaries'
creditors. Even in the event that we are recognized as a creditor of a
subsidiary, our claims would still be subject to any security interest in the
assets of such subsidiary and any indebtedness of such subsidiary senior to our
claim.
The debt securities will be issued under an Indenture (the "Indenture")
that we will enter into with an indenture trustee (the "Trustee"). A copy of the
form of Indenture has been filed as an exhibit to the Registration Statement of
which this prospectus is a part, and is available as described above under
"Where You Can Find More Information." The Indenture is subject to, and is
governed by, the Trust Indenture Act of 1939, as amended.
Except as may be set forth in a prospectus supplement, the Indenture
does not contain any covenants or restrictions that afford holders of the debt
securities special protection in the event of a change of control or highly
leveraged transaction.
The following summary of certain provisions of the debt securities and
the Indenture is not complete. You should read carefully the provisions of
particular debt securities we may issue and the Indenture, including the
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definitions in those documents of certain terms and of those terms made a part
of those documents by the Trust Indenture Act. All capitalized terms used but
not defined below have the meanings set forth in the Indenture.
GENERAL
The Indenture does not limit the aggregate principal amount of debt
securities which may be issued under it and provides that debt securities may be
issued in one or more series, in such form or forms, with such terms and up to
the aggregate principal amount that we may authorize from time to time. We will
establish the terms of each series of debt securities and such terms will be set
forth or determined in the manner provided in an officers' certificate or by a
supplemental indenture. The particular terms of the debt securities offered
pursuant to any prospectus supplement will be described in the prospectus
supplement. All debt securities of one series need not be issued at the same
time and, unless otherwise provided, a series may be reopened, without the
consent of any holder, for issuances of additional debt securities of that
series.
Unless otherwise provided in the prospectus supplement, debt securities
may be presented for registration of transfer and exchange and for payment or,
if applicable, for conversion and/or exchange at the office of the applicable
Trustee. At our option, the payment of interest may also be made by check mailed
to the address of the person entitled to such payment as it appears in the debt
security register.
The applicable prospectus supplement will describe the following terms
of any debt securities in respect of which this prospectus is being delivered
(to the extent applicable to the debt securities):
o the designation (including whether they are senior debt
securities, senior subordinated debt securities or subordinated
debt securities and whether such debt securities are convertible
and/or exchangeable) and aggregate principal amount of the debt
securities;
o the percentage of the principal amount at which debt securities
will be issued;
o the date or dates (and whether fixed or extendable) on which the
principal of the debt securities is payable or the method of
determination thereof;
o the rate or rates (which may be fixed, floating or adjustable) at
which the debt securities will bear interest, if any, the method
of calculating such rates, the date or dates from which such
interest will accrue or the manner of determining such dates, the
interest payment dates on which such interest shall be payable and
the record dates for the determination of the holders of debt
securities to whom interest will be payable;
o the place where the principal of, premium, if any, and interest,
if any, on the debt securities will be payable;
o any provisions relating to the issuance of the debt securities at
an original issue discount;
o the terms and conditions upon which the debt securities may be
redeemed (including the form or method of payment if other than in
cash, which may include securities of other issuers);
o the obligation, if any, that we may have to redeem, purchase or
repay the debt securities pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of the
holder of any debt securities and the terms and conditions of such
redemption, purchase or repayment (including the form or method of
payment if other than in cash, which may include securities of
other issuers), and any provisions for the remarketing of such
debt securities;
o if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which the debt securities shall be
issuable;
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o if other than the principal amount thereof, the portion of the
principal amount of the debt securities which will be payable upon
declaration of acceleration of the maturity thereof or in
bankruptcy;
o any Events of Default in lieu of or in addition to those described
in this prospectus and remedies relating to such Events of
Default;
o whether the debt securities are convertible or exchangeable and,
if so, the securities or rights into which they are convertible or
exchangeable and the terms and conditions upon which such
conversion or exchange will be effected;
o any trustees, authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the debt
securities;
o the currency or currencies, including composite currencies, in
which the debt securities will be denominated if other than the
currency of the United States of America;
o if other than the coin or currency in which the debt securities
are denominated, the coin or currency in which payment of the
principal of, premium, if any, or interest on the debt securities
will be payable (and the manner in which the equivalent of the
principal amount thereof in the currency of the United States is
to be determined for any purpose, including for determining the
principal amount outstanding);
o if the principal of, premium, if any, or interest on the debt
securities will be payable, at our election or the election of a
holder thereof, in a coin or currency other than that in which the
debt securities are denominated and terms and conditions upon
which, such election may be made;
o if the amount of payments of principal of, premium, if any, and
interest on the debt securities may be determined with reference
to the value, rate or price of one or more specified commodities,
currencies or indices, the manner in which such amounts shall be
determined;
o whether and under what circumstances we will pay additional
amounts on the debt securities held by a person who is not a
United States of America person in respect of any tax, assessment
or governmental charge withheld or deducted and, if so, whether we
will have the option to redeem such debt securities rather than
pay such additional amounts;
o if receipt of certain certificates or other documents or
satisfaction of other conditions will be necessary for any
purpose, including, without limitation, as a condition to the
issuance of the debt securities in definitive form (whether upon
original issue or upon exchange of a temporary debt security), the
form and terms of such certificates, documents or conditions; or
any other affirmative or negative covenants with respect to the
debt securities;
o whether the debt securities will be issued in whole or in part in
the form of one or more global securities and, in such case, the
depositary for such a global security and the circumstances under
which any global security may be exchanged for debt securities
registered in the name of, and under which any transfer of such
global security may be registered in the name of, any person other
than the depositary;
o whether the debt securities are defeasible; and
o any other specific terms of the debt securities.
Unless otherwise indicated in the prospectus supplement relating to the
debt securities, principal of and any premium or interest on the debt securities
will be payable, and the debt securities will be exchangeable and transfers
thereof will be registrable, at the office of the Trustee at its principal
executive offices. However, at our option, payment of interest may be made by
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check mailed to the address of the person entitled thereto as it appears in the
debt security register. Any payment of principal and any premium or interest
required to be made on an interest payment date, redemption date or at maturity
which is not a business day need not be made on such date, but may be made on
the next succeeding business day with the same force and effect as if made on
the applicable date, and no interest shall accrue for the period from and after
such date.
Unless otherwise indicated in the applicable prospectus supplement
relating to debt securities, the debt securities will be issued only in fully
registered form, without coupons, in denominations of $1,000 or any integral
multiple thereof. No service charge will be made for any transfer or exchange of
the debt securities, but we may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection with a transfer or
exchange.
Debt securities may be issued under the Indenture as original issue
discount securities to be offered and sold at a substantial discount from their
stated principal amount. In addition, under Treasury Regulations it is possible
that the debt securities which are offered and sold at their stated principal
amount would, under certain circumstances, be treated as issued at an original
issue discount for federal income tax purposes, federal income tax consequences
and other special considerations applicable to any such original issue discount
securities (or other debt securities treated as issued at an original issue
discount) will be described in the prospectus supplement relating to such
securities. "Original issue discount security" means any debt security that does
not provide for the payment of interest prior to maturity or which is issued at
a price lower than its principal amount and which provides that upon redemption
or acceleration of its stated maturity an amount less than its principal amount
shall become due and payable.
GLOBAL SECURITIES
Unless otherwise specified in the applicable prospectus supplement, the
debt securities of a series will be issued in the form of one or more global
securities that will be deposited with a depositary or its nominees identified
in the prospectus supplement relating to the debt securities. In such a case,
one or more global securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
outstanding debt securities of the series to be represented by such global
security or securities.
Unless and until it is exchanged in whole or in part for debt
securities in definitive registered form, a global security may not be
registered for transfer or exchange except as a whole by the depositary for such
global security to a nominee of the depositary and except in the circumstances
described in the prospectus supplement relating to the debt securities. The
specific terms of the depositary arrangement with respect to a series of debt
securities will be described in the prospectus supplement relating to such
series.
MODIFICATION OF THE INDENTURE
We and the Trustee may modify the Indenture with respect to the debt
securities of any series, with or without the consent of the holders of debt
securities, under certain circumstances to be described in a prospectus
supplement.
DEFEASANCE; SATISFACTION AND DISCHARGE
The prospectus supplement will outline the conditions under which we
may elect to have certain of our obligations under the Indenture discharged and
under which the Indenture obligations will be deemed satisfied.
SPECIAL COVENANTS APPLICABLE TO ISSUANCE OF DEBT SECURITIES TO OUR TRUST
Unless otherwise disclosed in a prospectus supplement, if we issue debt
securities to the trust or a trustee of such trust in connection with the
issuance of trust preferred securities of such trust, for so long as such trust
preferred securities remain outstanding, we will:
o maintain 100 percent direct or indirect ownership of the common
securities of such trust; provided, however, that any permitted
successor of ours under the relevant indenture may succeed to our
ownership of such common securities;
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o use our reasonable efforts to cause such trust:
o to remain a statutory business trust, except in
connection with the distribution of debt securities, the
redemption of all of such trust preferred securities of
such trust, or certain mergers, consolidations or
amalgamations, each as permitted by the declaration of
such trust; and
o to otherwise continue not to be treated as an association
taxable as a corporation or partnership for United States
federal income tax purposes; and
o to use our reasonable efforts to cause each holder of
trust preferred securities to be treated as owning an
individual beneficial interest in the debt securities.
DEFAULTS AND NOTICE
The debt securities will contain Events of Default to be specified in
the applicable prospectus supplement, including, without limitation:
o failure to pay the principal of, or premium, if any, on any debt
security of such series when due and payable (whether at maturity,
by call for redemption, through any mandatory sinking fund, by
redemption at the option of the holder, by declaration or
acceleration or otherwise);
o failure to make a payment of any interest on any debt security of
such series when due;
o failure to perform or observe any other covenants or agreements in
the Indenture or in the debt securities of such series;
o certain events of bankruptcy, insolvency or reorganization with
respect to us; and
o certain cross defaults.
In addition, unless otherwise disclosed in a prospectus supplement,
with respect to any of our debt securities issued to our trust in consideration
of the proceeds of trust preferred securities issued by our trust, the following
will also be an event of default:
o the voluntary or involuntary dissolution, winding up or
termination of such trust, except in connection with the
distribution of debt securities to the holders of the guaranteed
trust preferred securities in liquidation of such trust, the
redemption of all of the guaranteed trust preferred securities of
such trust or certain mergers, consolidations or amalgamations,
each as permitted by the declaration of such trust.
If an Event of Default with respect to debt securities of any series
shall occur and be continuing, the Trustee or the holders of not less than 25%
in aggregate principal amount of the then outstanding debt securities of such
series may declare the principal amount (or, if the debt securities of such
series are issued at an original issue discount, such portion of the principal
amount as may be specified in the terms of the debt securities of such series)
of all debt securities of such series and/or such other amount or amounts as the
debt securities or supplemental indenture with respect to such series may
provide, to be due and payable immediately.
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default, give to holders of debt securities of any series notice
of all uncured defaults with respect to such series known to it. However, in the
case of a default that results from the failure to make any payment of the
principal of, premium, if any, or interest on the debt securities of any series,
or in the payment of any mandatory sinking fund installment with respect to debt
securities of such series, the Trustee may withhold such notice if it in good
faith determines that the withholding of such notice is in the interest of the
holders of debt securities of such series.
The Indenture contains a provision entitling the Trustee to be
indemnified by holders of debt securities before proceeding to exercise any
trust or power under the Indenture at the request of such holders. The Indenture
provides that the holders of a majority in aggregate principal amount of the
then outstanding debt securities of any series may direct the time, method and
place of conducting any proceedings for any remedy available to the Trustee, or
of exercising any trust or power conferred upon the Trustee with respect to the
debt securities of such series. However, the Trustee may decline to follow any
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such direction if, among other reasons, the Trustee determines in good faith
that the actions or proceedings as directed may not lawfully be taken, would
involve the Trustee in personal liability or would be unduly prejudicial to the
holders of the debt securities of such series not joining in such direction.
The right of a holder to institute a proceeding with respect to the
Indenture is subject to certain conditions including, that the holders of a
majority in aggregate principal amount of the debt securities of such series
then outstanding make a written request upon the Trustee to exercise its power
under the Indenture, indemnify the Trustee and afford the Trustee reasonable
opportunity to act. Even so, the holder has an absolute right to receipt of the
principal of, premium, if any, and interest when due, to require conversion or
exchange of debt securities if the Indenture provides for convertibility or
exchangeability at the option of the holder and to institute suit for the
enforcement of such rights.
CONCERNING THE TRUSTEES
The prospectus supplement with respect to particular debt securities
will describe any relationship that we may have with the Trustee for such debt
securities.
REPORTS TO HOLDERS OF DEBT SECURITIES
We intend to furnish to holders of debt securities all quarterly and
annual reports which we furnish to holders of our class A common stock.
SUBSEQUENT DISTRIBUTION TO HOLDERS OF TRUST SECURITIES
If we issue debt securities to the trust in connection with the
issuance of trust preferred and trust common securities by the trust, those debt
securities subsequently may be distributed to the holders of the trust preferred
and trust common securities either:
o upon the dissolution of the trust; or
o upon the occurrence of events that we will describe in the
prospectus supplement.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock currently consists of 85,000,000 shares of
class A common stock, 25,000,000 shares of class B common stock, and 1,000,000
shares of preferred stock, each with a par value of $0.01 per share. As of March
16, 2001, 42,450,685 shares of class A common stock, 19,124,869 shares of class
B common stock were issued and outstanding and no shares of preferred stock were
outstanding.
VOTING RIGHTS
Holders of class A common stock are entitled to one vote per share and
holders of class B common stock are entitled to four votes per share on all
matters voted on by the stockholders. Westell's common stock will vote as a
single class on all matters submitted to a vote of stockholders except:
o with respect to issuances of class B common stock which must be
approved by the affirmative vote of a majority of each class of
Westell's common stock, voting separately as a class, unless the
class B common stock is being issued as payment of stock dividends
on class B common stock or in a stock split, reclassification or
other subdivision of the shares of common stock; and
o as otherwise required by law.
DIVIDENDS
Holders of record of shares of class A common stock are entitled to
receive dividends when, if and as may be declared by our Board of Directors out
of funds legally available for such purposes, although no dividends may be
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declared or paid with respect to our class A common stock unless a dividend, at
the same rate per share, is simultaneously declared or paid with respect to our
class B common stock. In the case of a stock dividend or distribution, holders
of class A common stock are entitled to receive the same percentage dividend or
distribution as holders of class B common stock except that stock dividends and
distributions shall be made in shares of class A common stock to the holders of
class A common stock and in shares of class B common stock to the holders of
class B common stock.
CONVERTIBILITY
Each share of class B common stock is convertible, at the option of its
holder, into one share of class A common stock. In addition, each share of class
B common stock will automatically convert into one share of class A common stock
in the event:
o such share is transferred to any person other than a "permitted
transferee;" or
o the number of shares of class B common stock outstanding at any
time represents less than 10% of the total number of outstanding
shares of class B common stock and class A common stock.
A "permitted transferee" includes (i) any other holder of class B
common stock, (ii) any member of Robert C. Penny, III's family or Melvin J.
Simon's family, (iii) Gary F. Seamans, his spouse or any of their descendants,
and (iv) certain other permitted transferees.
OTHER PROVISIONS
Each share of common stock will share equally upon our liquidation,
dissolution or winding-up with respect to all assets available for distributions
after payment in full to creditors. Neither class of common stock has any
preemptive, subscription, or cumulative voting rights. If we enter into a
merger, consolidation or business combination, then each holder of common stock
must receive identical per share consideration as the other holders of common
stock. In addition, no class of common stock may be subdivided, consolidated,
reclassified or otherwise changed unless the other class of common stock
concurrently is subdivided, consolidated, reclassified or otherwise changed in
the same proportion and manner.
PREFERRED STOCK
Our Board has the authority to issue up to 1,000,000 shares of
preferred stock in one or more series and has the authority to fix the rights,
preferences, privileges and restrictions thereof, such as dividend rights,
conversion rights, voting rights, terms of redemption, and liquidation
preferences, and the number of shares constituting any series or the designation
of such series, without any further vote or action by stockholders. The issuance
of preferred stock could adversely affect the voting power of the holders of
common stock and restrict their rights to receive payments upon our liquidation.
It also could delay, defer or prevent a change of control.
DELAWARE LAW AND CERTAIN CHARTER PROVISIONS
We are a Delaware corporation and are subject to Section 203 of the
Delaware General Corporation Law. In general, Section 203 prevents an
"interested stockholder" (defined generally as a person owning 15% or more of
our outstanding voting stock) from engaging in a "business combination" (as
defined in Section 203) with us for three years following the date that person
becomes an interested stockholder unless:
o before that person became an interested stockholder, our Board of
Directors approved the transaction in which the interested
stockholder became an interested stockholder or approved the
business combination;
o upon completion of the transaction that resulted in the interested
stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the voting stock outstanding at
the time the transaction commenced, excluding stock held by
directors who are also our officers and by employee stock plans
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that do not provide employees with the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or
o following the transaction in which that person became an
interested stockholder, the business combination is approved by
our Board of Directors and authorized at a meeting of stockholders
by the affirmative vote of the holders of at least two-thirds of
the outstanding voting stock not owned by the interested
stockholder.
Under Section 203, these restrictions do not apply to certain business
combinations proposed by an interested stockholder following the announcement or
notification of one of certain extraordinary transactions involving us and a
person who was not an interested stockholder during the previous three years or
who became an interested stockholder with the approval of a majority of our
directors, if that extraordinary transaction is approved or not opposed by a
majority of the directors who were directors before any person became an
interested stockholder in the previous three years or who were recommended for
election or elected to succeed such directors by a majority of such directors
then in office.
Our charter contains provisions that:
o limit the right of stockholders to call special stockholder
meetings;
o require stockholders to follow an advance notification procedure
for certain stockholder nominations of candidates to the Board of
Directors and for new business to be conducted at stockholder
meetings;
o provide that the Board of Directors without action by the
stockholders, may issue and fix the rights and preferences of
shares of preferred stock.
These provisions may delay, defer or prevent a change of control, may discourage
bids for our common stock at a premium over its market price and may adversely
affect the market price or voting rights of our common stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the class A common stock is
LaSalle National Trust, N.A.
DESCRIPTION OF DEPOSITARY SHARES
The following information outlines some of the provisions of the
deposit agreement, the depositary shares and the depositary receipts. This
information may not be complete in all respects and is qualified entirely by
reference to the relevant deposit agreement and depositary receipts with respect
to the depositary shares relating to any particular series of preferred stock.
The specific terms of any series of depositary shares will be described in the
relevant prospectus supplement. If so described in the prospectus supplement,
the terms of that series of depositary shares may differ and supersede some or
all of the terms presented below.
GENERAL
We may elect to offer fractional interests in shares of preferred stock
instead of whole shares of preferred stock. If so, we will allow a depositary to
issue depositary shares to the public, each of which will represent a fractional
interest in a share of the relevant series of preferred stock, as described in
the relevant prospectus supplement, of a share of preferred stock.
The shares of the preferred stock underlying any depositary shares will
be deposited under a separate deposit agreement between us and a bank or trust
company acting as depositary with respect to that series. The depositary will
have its principal office in the United States and have a combined capital and
surplus of at least $50,000,000. The relevant prospectus supplement relating to
a series of depositary shares will mention the name and address of the
depositary. Under the relevant deposit agreement, each owner of a depositary
share will be entitled, in proportion to its fractional interest in a share of
the preferred stock underlying that depositary share, to all the rights and
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preferences of that preferred stock, including dividend, voting, redemption,
conversion, exchange and liquidation rights.
Depositary shares will be evidenced by one or more depositary receipts
issued under the relevant deposit agreement.
Pending the preparation of definitive engraved depositary receipts, a
depositary may, upon our order, issue temporary depositary receipts
substantially identical to and entitling their holders to all the rights
pertaining to the definitive depositary receipts, but not in definitive form.
Definitive depositary receipts will be prepared without unreasonable
delay, and the temporary depositary receipts will be exchangeable for definitive
depositary receipts at our expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions in respect of the preferred stock to the record depositary
shareholders based on the number of the depositary shares owned by that holder
on the relevant record date. The depositary will distribute only that amount
which can be distributed without attributing to any depositary shareholders a
fraction of one cent, and any balance not so distributed will be added to and
treated as part of the next sum received by the depositary for distribution to
the depositary shareholders of record.
If there is a distribution other than in cash, the depositary will
distribute property to the depositary shareholders of record on a pro rata
basis, unless the depositary determines that it is not feasible to make that
distribution. In that case, the depositary may, with our consultation, adopt a
method it deems equitable and practicable for making that distribution,
including any sale of property and the distribution of the net proceeds from
that sale to the concerned holders.
Each deposit agreement will also contain provisions relating to the
manner in which any subscription or similar rights we offer to preferred
stockholders of the relevant series will be made available to depositary
shareholders.
WITHDRAWAL OF STOCK
Upon surrender of depositary receipts at the depositary's office, the
holder of the relevant depositary shares will be entitled to the number of whole
shares of the related series of preferred stock and any money or other property
those depositary shares represent. Depositary shareholders will be entitled to
receive whole shares of the related preferred stock series on the basis
described in the relevant prospectus supplement, but holders of those whole
preferred stock shares will not afterward be entitled to receive depositary
shares in exchange for their shares. If the depositary receipts the holder
delivers evidence a depositary share number exceeding the whole share number of
the related preferred stock series to be withdrawn, the depositary will deliver
to that holder a new depositary receipt evidencing the excess depositary share
number.
REDEMPTION; LIQUIDATION
The terms on which the depositary shares relating to the preferred
stock of any series may be redeemed, and any amounts distributable upon our
liquidation, dissolution or winding up, will be described in the relevant
prospectus supplement.
CONVERSION
The depositary shares, as such, are not convertible or exchangeable
into our common stock or any of our other securities or property. Nevertheless,
the prospectus supplement relating to an offering of depositary shares may
provide that the holders of depositary receipts may surrender their depositary
receipts to the depositary with written instructions to the depositary to
instruct us to cause the conversion or exchange of the preferred stock
represented by these depositary shares.
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VOTING
Upon receiving notice of any meeting at which preferred stockholders of
any series of preferred stock underlying the depositary shares are entitled to
vote, the depositary will mail the information contained in that notice to the
depositary shareholders of record relating to that series of preferred stock.
Each depositary shareholder on the record date will be entitled to instruct the
depositary on how to vote the shares of preferred stock underlying that holder's
depositary shares. The depositary will vote the preferred stock shares
underlying those depositary shares according to those instructions, and we will
take actions we deem necessary to enable the depositary to do so. If the
depositary does not receive specific instructions from the depositary
shareholders relating to that series of preferred stock, it will abstain from
voting those preferred stock shares, unless otherwise mentioned in the relevant
prospectus supplement.
AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The depositary receipt form evidencing the depositary shares and the
relevant deposit agreement may be amended by us and the depositary. However, any
amendment that significantly affects the rights of the depositary shareholders
will not be effective unless a majority of the outstanding depositary
shareholders approve that amendment. We or the depositary may terminate a
deposit agreement only if:
o we have redeemed or reacquired all outstanding depositary shares
relating to the deposit agreement;
o all preferred stock of the relevant series has been withdrawn;
o there has been a final distribution in respect of the relevant
series of preferred stock in connection with our liquidation,
dissolution or winding up and that distribution has been made to
the relevant depositary shareholders;
o all outstanding depository shares have been converted into or
exchanged for other securities; or
o upon determination by Westell to terminate the deposit agreement.
CHARGES OF DEPOSITARY
We will pay all charges of each depositary in connection with the
initial deposit and any redemption of the preferred stock. Depositary
shareholders will be required to pay any other transfer and other taxes and
governmental charges and any other charges expressly provided in the deposit
agreement to be for their accounts.
Each depositary will forward to the relevant depositary shareholders
all reports and communications that we are required to furnish to our preferred
stockholders.
Neither any depositary nor Westell will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under any deposit agreement. The obligations of each depositary
under any deposit agreement will be limited to performance in good faith of
their duties under that agreement, and they will not be obligated to prosecute
or defend any legal proceeding in respect of any depositary shares or preferred
stock unless they are provided with satisfactory indemnity. They may rely upon
written advice of counsel or accountants, or information provided by persons
presenting preferred stock for deposit, depositary shareholders or other persons
believed to be competent, and on documents believed to be genuine.
TITLE
We, each depositary and any of their agents may treat the registered
owner of any depositary share as the absolute owner of that share, whether or
not any payment for that depositary share is overdue and despite any notice to
the contrary, for any purpose.
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RESIGNATION AND REMOVAL OF DEPOSITARY
A depositary may resign at any time by delivering to us notice of its
election to resign, and we may remove a depositary, and resignation or removal
will take effect upon the appointment of a successor depositary and its
acceptance of appointment.
DESCRIPTION OF SUBSCRIPTION RIGHTS
GENERAL
We may issue subscription rights to purchase our debt securities, our
class A common stock, our preferred stock, depositary shares, trust preferred
securities of our trust, or warrants to purchase debt securities, common stock,
preferred stock, depositary shares or trust preferred securities. We may issue
subscription rights independently or together with any other offered security.
The subscription rights may or may not be transferable by the recipient of the
subscription rights. In connection with any subscription rights offering to our
stockholders, we may enter into a standby underwriting arrangement with one or
more underwriters or stockholders providing for the underwriters) to purchase
any offered securities remaining unsubscribed for after the subscription rights
offering. In connection with a subscription rights offering to our stockholders,
certificates evidencing the subscription rights and a prospectus supplement will
be distributed to our stockholders on the record date for receiving subscription
rights in the subscription rights offering set by us.
The applicable prospectus supplement will describe the following terms
of subscription rights in respect of which this prospectus is being delivered:
o the title of the subscription rights;
o the securities for which the subscription rights are exercisable;
o the exercise price for the subscription rights;
o the number of subscription rights issued to each stockholder;
o the extent to which the subscription rights are transferable;
o if applicable, a discussion of the material United States federal
income tax considerations applicable to the issuance or exercise
of the subscription rights;
o any other terms of the subscription rights, including terms,
procedures and limitations relating to the exchange and exercise
of the subscription rights;
o the date on which the right to exercise the subscription rights
will commence, and the date on which the right will expire;
o the extent to which the subscription rights include an
over-subscription privilege with respect to unsubscribed
securities; and
o if applicable, the material terms of any standby underwriting
arrangement entered into by us in connection with the subscription
rights offering.
EXERCISE OF SUBSCRIPTION RIGHTS
Each subscription right will entitle the holder of subscription rights
to purchase for cash the principal amount of debt securities, shares of our
preferred stock, depositary shares, our common stock, warrants or any
combination of those securities at the exercise price as will be set forth in,
or be determinable as set forth in, the applicable prospectus supplement.
Subscription rights may be exercised at any time up to the close of business on
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the expiration date for such subscription rights set forth in the applicable
prospectus supplement. After the close of business on the expiration date, all
unexercised subscription rights will become void.
Subscription rights may be exercised as set forth in the applicable
prospectus supplement. Upon receipt of payment and the subscription rights
certificate properly completed and duly executed at the corporate trust office
of the subscription rights agent or any other office indicated in the prospectus
supplement, we will, as soon as practicable, forward the securities purchaseable
upon such exercise. In the event that not all of the subscription rights issued
in any offering are exercised, we may determine to offer any unsubscribed
offered securities directly to persons other than stockholders, to or through
agents, underwriters or dealers or through a combination of such methods,
including pursuant to standby underwriting arrangements, as set forth in the
applicable prospectus supplement.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities, preferred
shares, common shares or trust preferred securities of our trust. Warrants may
be issued independently or together with debt securities, preferred shares or
common shares offered by any prospectus supplement and may be attached to or
separate from any such offered securities. Each series of warrants will be
issued under a separate warrant agreement to be entered into between us and a
bank or trust company, as warrant agent. The warrant agent will act solely as
our agent in connection with the warrants and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
warrants. The following summary of certain provisions of the warrants does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the provisions of the warrant agreement that will be filed with
the SEC in connection with the offering of such warrants.
DEBT WARRANTS
The prospectus supplement relating to a particular issue of debt
warrants will describe the terms of such debt warrants, including the following:
o the title of such debt warrants;
o the offering price for such debt warrants, if any;
o the aggregate number of such debt warrants;
o the designation and terms of the debt securities that may be
purchased upon exercise of such debt warrants;
o if applicable, the designation and terms of the debt securities
with which such debt warrants are issued and the number of such
debt warrants issued with each such debt security;
o if applicable, the date from and after which such debt warrants
and any debt securities issued therewith will be separately
transferable;
o the principal amount of debt securities that may be purchased upon
exercise of a debt warrant and the price at which such principal
amount of debt securities may be purchased upon exercise (which
price may be payable in cash, securities, or other property);
o the date on which the right to exercise such debt warrants shall
commence and the date on which such right shall expire;
o if applicable, the minimum or maximum amount of such debt warrants
that may be exercised at any one time;
o whether the debt warrants represented by the debt warrant
certificates or debt securities that may be issued upon exercise
of the debt warrants will be issued in registered or bearer form;
o information with respect to book-entry procedures, if any;
o the currency or currency units in which the offering price, if
any, and the exercise price are payable;
o if applicable, a discussion of material United States federal
income tax considerations;
o the antidilution provisions of such debt warrants, if any;
o the redemption or call provisions, if any, applicable to such debt
warrants; and
o any additional terms of such debt warrants, including terms,
procedures, and limitations relating to the exchange and exercise
of such debt warrants.
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SHARE WARRANTS
The prospectus supplement relating to any particular issue of preferred
share warrants or common share warrants will describe the terms of such
warrants, including the following:
o the title of such warrants;
o the offering price for such warrants, if any;
o the aggregate number of such warrants;
o the designation and terms of the common shares or preferred shares
that may be purchased upon exercise of such warrants;
o if applicable, the designation and terms of the offered securities
with which such warrants are issued and the number of such
warrants issued with each such offered security;
o if applicable, the date from and after which such warrants and any
offered securities issued therewith will be separately
transferable;
o the number of common shares or preferred shares that may be
purchased upon exercise of a warrant and the price at which such
shares may be purchased upon exercise;
o the date on which the right to exercise such warrants shall
commence and the date on which such right shall expire;
o if applicable, the minimum or maximum amount of such warrants that
may be exercised at any one time;
o the currency or currency units in which the offering price, if
any, and the exercise price are payable;
o if applicable, a discussion of material United States federal
income tax considerations;
o the antidilution provisions of such warrants, if any;
o the redemption or call provisions, if any, applicable to such
warrants; and
o any additional terms of such warrants, including terms, procedures
and limitations relating to the exchange and exercise of such
warrants.
DESCRIPTION OF THE STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and us to sell to the holders, a specified number
of shares of class A common stock at a future date or dates, which we refer to
herein as "stock purchase contracts." The price per share of class A common
stock and the number of shares of class A common stock may be fixed at the time
the stock purchase contracts are issued or may be determined by reference to a
specific formula set forth in the stock purchase contracts, and may be subject
to adjustment under anti-dilution formulas. The stock purchase contracts may be
issued separately or as part of units consisting of a stock purchase contract
and debt securities, preferred stock, trust preferred securities, debt
obligations of third parties, including U.S. treasury securities, any other
securities described in the applicable prospectus supplement or any combination
of the foregoing, which may secure the holders' obligations to purchase the
class A common stock under the stock purchase contracts, which we refer to
herein as "stock purchase units." The stock purchase contracts may require
holders to secure their obligations thereunder in a specified manner, and in
some circumstances we may deliver newly issued prepaid class A common stock
purchase contracts, which are referred to as "prepaid securities", upon release
to a holder of any collateral securing that holder's obligations under the
original purchase contract. The stock purchase contracts also may require us to
make periodic payments to the holders of the stock purchase contracts or stock
purchase units, as the case may be, or vice versa, and such payments may be
unsecured or prefunded on some basis.
The applicable prospectus supplement will describe the terms of the
stock purchase contracts or stock purchase units and, if applicable, prepaid
securities. This description is not complete and the description in the
prospectus supplement will not necessarily be complete, and reference is made to
the stock purchase contracts, and, if applicable, collateral or depositary
arrangements, relating to the stock purchase contracts or stock purchase units.
If any particular terms of the stock purchase contracts or stock purchase units
described in the prospectus supplement differ from any of the terms described
herein, then the terms described herein will be deemed superseded by that
prospectus supplement. Material United States federal income tax considerations
applicable to the stock purchase units and the stock purchase contracts will
also be discussed in the applicable prospectus supplement.
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DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The terms of the trust preferred securities will include those stated
in the declaration of trust (as it may be amended and restated from time to
time) and those made a part of that declaration by the Trust Indenture Act of
1939. For a complete description of the trust preferred securities, we encourage
you to read the applicable prospectus supplement and the declaration of trust, a
form of which will be filed with the SEC. The summary of selected provisions of
the trust preferred securities and the declaration of trust appearing below and
in the applicable prospectus supplement are not complete and are subject to, and
qualified entirely by reference to, all of the provisions of the trust preferred
securities and the declaration of trust, which provisions are incorporated by
reference in this prospectus.
The following description sets forth selected general terms and
provisions of the trust preferred securities and the declaration of trust. Other
specific terms of the trust preferred securities and the declaration of trust
may be described in a prospectus supplement. If any particular terms of the
trust preferred securities or the declaration of trust described in the
prospectus supplement differ from any of the terms described below, then the
terms described below will be deemed to have been superseded by that prospectus
supplement.
The prospectus supplement relating to trust preferred securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following, whether denominated in foreign, or, U.S.
currency or any combination thereof:
o the designation of the trust preferred securities;
o the number of trust preferred securities issued by the trust;
o the annual distribution rate and the method for determining such
rate and any conditions upon which distributions are payable, the
distribution payment dates, the record dates for distribution
payments, the additional amounts, if any, that may be payable with
respect to the trust preferred securities;
o whether distributions will be cumulative and, if so, the dates
from which distributions will be cumulative;
o the amounts that will be paid out of the assets of the trust,
after the satisfaction of liabilities to creditors of the trust,
to the holders of trust preferred securities upon liquidation or
dissolution;
o any repurchase or redemption provisions;
o any preference or subordination rights upon a default or
liquidation of the trust;
o any voting rights of the trust preferred securities in addition to
those, if any, required by law;
o terms for any conversion or exchange of the trust preferred
securities into other securities or property or conditions upon
which assets of the trust would be distributed to holders;
o any rights to defer distributions on the trust preferred
securities by extending the interest payment period on the related
debt securities;
o if applicable, the exchange listing;
o whether the trust preferred securities will be issuable in the
form of global securities; and
o any other relevant terms, rights, preferences, privileges,
limitations or restrictions of the trust preferred securities.
The regular trustees, on behalf of the trust and pursuant to the
declaration of trust, will issue one class of trust preferred securities and one
class of trust common securities. Unless otherwise stated in the applicable
prospectus supplement, all of the trust common securities will be owned,
directly or indirectly, by Westell Technologies, Inc. The trust securities will
represent undivided beneficial ownership interests in the assets of the trust.
The declaration of trust will authorize its regular trustee to issue on its
behalf one series of common securities having terms including distributions,
redemption, voting, liquidation rights or restrictions as shall be set forth in
the declaration. The terms of the common securities issued by the trust will be
substantially identical to the terms of its trust preferred securities and the
common securities will rank equally, and payments will be made thereon pro rata,
with the trust preferred securities except that, upon an event of default under
the declaration, the rights of the holders of the common securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the trust's
preferred securities. Except in certain limited circumstances, the common
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securities will also carry the right to vote to appoint, remove or replace any
of the trust's trustees.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
If an event of default under the declaration of the trust occurs and is
continuing, then the holders of its trust preferred securities would have to
rely on the Delaware trustee enforcing against us its rights as a holder of the
debt securities. In addition, the holders of a majority in liquidation amount of
the trust preferred securities will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Delaware
trustee or to direct the exercise of any trust or power conferred upon the
Delaware trustee under the declaration, including the right to direct the
Delaware trustee to exercise the remedies available to it as a holder of the
debt securities. If the Delaware trustee fails to enforce its rights under the
debt securities, a holder of trust preferred securities may not institute a
legal proceeding directly against us to enforce the Delaware trustee's rights
under the applicable series of debt securities. Notwithstanding the foregoing,
if an event of default under the declaration has occurred and is continuing and
that event is attributable to our failure to pay interest or principal on the
applicable series of debt securities when due, then a holder of trust preferred
securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or interest on the applicable series of debt
securities having a principal amount equal to the aggregate liquidation amount
of such holder's trust preferred securities on or after the respective due date
for the applicable series of debt securities. In connection with such a direct
action brought by a holder, we will be subrogated to the rights of such holder
of trust preferred securities under the declaration to the extent of any payment
made by us to such holder of preferred securities in such direct action.
Except as described in the applicable prospectus supplement, the trust
preferred securities will rank equally in right of payment and upon liquidation
of the trust, and payments will be made thereon proportionately, with the trust
common securities. The trust will use the proceeds from the issuance of its
trust securities to purchase debt securities of Westell. The property trustee of
the trust will hold the debt securities in trust for the benefit of the holders
of the trust securities. We will execute a guarantee agreement for the benefit
of the holders of the trust preferred securities. The guarantee will not
guarantee the payment of distributions on the trust preferred securities or any
amounts payable on redemption or liquidation of the trust preferred securities
to the extent the trust does not have funds on hand available to make such
payments. Accordingly, the ability of the trust to make distributions and other
payments on the trust preferred securities will depend upon the trust's receipt
of interest and other payments made by Westell Technologies, Inc. on the debt
securities purchased by the trust. If we do not make a required payment on the
debt securities purchased by the trust, then the trust will not have sufficient
funds to make the related distributions or other payments on the trust preferred
securities.
In the prospectus supplement we will also describe certain material
United States federal income tax consequences and special considerations
applicable to the trust preferred securities.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES GUARANTEE
Westell will guarantee payments on the trust preferred securities as
described in this section pursuant to a preferred securities guarantee
agreement. The preferred securities guarantee agreement will be qualified as an
indenture under the Trust Indenture Act. For a complete description of the trust
preferred securities guarantees, we encourage you to read the prospectus
supplement and the form of preferred securities guarantee agreement, which form
will be filed with the SEC. The summary of selected provisions of the trust
preferred securities guarantee and the preferred securities guarantee agreement
appearing below and in any prospectus supplement are not complete and are
subject to, and qualified entirely by reference to, all of the provisions of the
preferred securities guarantee agreement, which provisions are incorporated by
reference in this prospectus.
The following description sets forth selected general terms and
provisions of the trust preferred securities guarantee and the preferred
securities guarantee agreement. Other specific terms of the trust preferred
securities guarantee and the preferred securities guarantee agreement may be
described in the applicable prospectus supplement. If any particular terms of
the trust preferred securities guarantee or the preferred securities guaranty
agreement described in a prospectus supplement differ from any of the terms
described below, then the terms described below will be deemed to have been
superseded by that prospectus supplement.
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In this description of the trust preferred securities guarantee, the
words "Westell," "we," "us" or "our" and similar references refer only to
Westell Technologies, Inc. and not to any of our subsidiaries, unless we
otherwise expressly state or the context otherwise requires.
The property trustee, will hold the guarantee for the benefit of the
holders of trust preferred securities.
We will agree to pay to the holders of trust preferred securities the
following amounts to the extent not paid by the trust:
o any accumulated, if applicable, and unpaid distributions and any
additional amounts with respect to the trust preferred securities
and any redemption price for trust preferred securities called for
redemption by the trust, if and only to the extent that the trust
has funds available to make those payments; and
o payments upon the dissolution of the trust equal to the lesser of:
o the liquidation amount plus all accumulated, if
applicable, and unpaid distributions and additional
amounts, if any, on the trust preferred securities, if
any, to the extent the trust has funds available to make
those payments; and
o the amount of assets of the trust remaining legally
available for distribution to the holders of trust
preferred securities in liquidation of the trust.
We will fix the redemption price and the liquidation amount and any
additional amounts at the time the trust preferred securities are issued.
We will not be required to make these liquidation payments if:
o the trust distributes the debt securities to the holders of trust
preferred securities in exchange for their trust preferred
securities; or
o the trust redeems the trust preferred securities in full upon the
maturity or redemption of the debt securities; or
o if applicable, all of the trust preferred securities are converted
into or exchanged for other securities.
We may satisfy our obligation to make a guarantee payment either by
making payment directly to the holders of trust preferred securities or to the
property trustee for remittance to the holders or by causing the applicable
trust to make the payment to them.
A GUARANTEE IS A GUARANTEE FROM THE TIME OF ISSUANCE OF THE TRUST
PREFERRED SECURITIES. THE GUARANTEE ONLY COVERS, HOWEVER, DISTRIBUTIONS AND
OTHER PAYMENTS ON TRUST PREFERRED SECURITIES IF AND TO THE EXTENT THAT WE HAVE
MADE CORRESPONDING PAYMENTS ON THE DEBT SECURITIES TO THE PROPERTY TRUSTEE. IF
WESTELL DOES NOT MAKE THOSE CORRESPONDING PAYMENTS ON THE DEBT SECURITIES, THE
TRUST WILL NOT HAVE FUNDS AVAILABLE FOR PAYMENTS AND WE WILL HAVE NO OBLIGATION
TO MAKE A GUARANTEE PAYMENT.
Our obligations under the declaration of trust for the trust, the
guarantee, the debt securities and the associated indenture taken together will
provide a full and unconditional guarantee of payments due on the trust
preferred securities as described herein and we will describe in greater
specificity, in a prospectus supplement.
Our obligations under the trust preferred securities guarantee may be
our unsecured and unsubordinated obligations or our unsecured subordinated
obligations. In the case of subordinated obligations, those obligations may be
subordinated or junior subordinated obligations or may have such other relative
ranking as is described in the applicable prospectus supplement.
We will also separately guarantee the obligations of the trust with
respect to its trust common securities to the same extent as the trust preferred
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securities guarantee, except that, in some cases, holders of the trust preferred
securities will have priority over holders of the trust common securities with
respect to distributions and payments on liquidation, redemption or otherwise.
Selected covenants of Westell which will be included in the preferred
securities guarantee agreement will be described in the applicable prospectus
supplement.
AMENDMENTS AND ASSIGNMENT
We and the property trustee may amend the preferred securities
guarantee agreement without the consent of any holder of trust preferred
securities if the amendment does not adversely affect the rights of the holders
in any material respect. In all other cases, we and the property trustee may
amend the preferred securities guarantee agreement only with the prior approval
of the holders of at least a majority of outstanding trust preferred securities
issued by the trust.
We may assign our obligations under the guarantees only to the
surviving or transferee entity in connection with a consolidation, merger or
asset sale involving us permitted under the indenture governing the debt
securities held by the trust.
TERMINATION OF THE GUARANTEE
The trust preferred securities guarantee will terminate upon:
o full payment of the redemption price of, plus accumulated and
unpaid distributions on, all trust preferred securities of the
trust;
o distribution of the related debt securities to the holders of the
trust preferred securities or, if applicable, conversion or
exchange of all of the outstanding trust preferred securities into
our class A common stock or other securities; or
o full payment of the amounts payable upon liquidation of the trust.
The trust preferred securities guarantee will, however, continue to be
effective or will be reinstated if any holder of trust preferred securities must
repay any amounts paid on those trust preferred securities or under the trust
preferred securities guarantee.
ENFORCEMENT OF THE GUARANTEE
Our obligations under a guarantee may be unsecured and effectively
junior to all debt and preferred stock of our subsidiaries. BY YOUR ACCEPTANCE
OF THE TRUST PREFERRED SECURITIES, YOU AGREE TO ANY SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE RELATED GUARANTEE. We will specify in a prospectus supplement
the ranking of each guarantee with respect to our capital stock and other
liabilities, including other guarantees.
The property trustee will have the right to enforce the guarantee on
your behalf. In most cases, the holders of a majority of outstanding trust
preferred securities issued by the trust will have the right to direct the time,
method and place of:
o conducting any proceeding for any remedy available to the property
trustee; or
o exercising any trust or other power conferred upon that property
trustee under the guarantee.
The trust preferred securities guarantee will constitute a guarantee of
payment and not merely of collection. This means that the property trustee may
institute a legal proceeding directly against us to enforce the payment rights
under the guarantee without first instituting a legal proceeding against any
other person or entity.
If the property trustee fails to enforce the guarantee or we fail to
make any of our payments or other obligations under the guarantee, you may
institute a legal proceeding directly against us to enforce your rights under
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the guarantee without first instituting a legal proceeding against the trust,
the property trustee or any other person or entity.
DUTIES OF PROPERTY TRUSTEE
The property trustee normally will perform only those duties
specifically set forth in the preferred securities guarantee agreement. If a
default occurs under the preferred securities guarantee agreement, the property
trustee will be required to use the same degree of care and skill in the
exercise of its powers under the guarantee as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs. The property
trustee is under no obligation to exercise any of its rights or powers under the
preferred securities guarantee agreement at the request or direction of holders
of trust preferred securities unless it is offered security and indemnity
satisfactory to it.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE DEBT SECURITIES AND
THE TRUST PREFERRED SECURITIES GUARANTEE
To the extent set forth in the trust preferred securities guarantee and
if the trust has funds available to make payments, we will irrevocably guarantee
the payment of distributions and other amounts due on the trust preferred
securities. If and to the extent we do not make payments on the debt securities
held by the trust, the trust will not have sufficient funds to pay distributions
or other amounts due on the trust preferred securities. The trust preferred
securities guarantee does not cover any payment of distributions or other
amounts due on the trust preferred securities unless the trust has sufficient
funds for the payment of such distributions or other amounts. In such event, a
holder of trust preferred securities may institute a legal proceeding directly
against us to enforce payment of such distributions or other amounts to such
holder after the respective due dates. We believe there is provided a full and
unconditional guarantee on payments of distributions and other amounts due on
the trust preferred securities, by virtue of our obligations under the
declaration of trust for the trust, the debt securities held by the trust, the
indenture and the guarantee taken together as described herein. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes what we mean by such guarantee. It is only the
combined operation of these documents that we refer to when we say there is
provided a full and unconditional guarantee of the trust's obligations under the
trust preferred securities. If any particular terms of the trust preferred
securities, the declaration of trust, the debt securities held by the trust, the
indenture or the guarantee described in the prospectus supplement differ from
any of the terms described herein, then the terms described herein will be
deemed to have been superceded by that prospectus supplement.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other amounts are made when due on
the debt securities held by the trust, such payments will be sufficient to cover
distributions and payments due on the trust securities because of the following
factors:
o the aggregate principal amount of the debt securities will be
equal to the sum of the aggregate stated liquidation amount of the
trust securities;
o the interest rate and the interest and other payment dates on the
debt securities will match the distribution rate and distribution
and other payment dates for the trust securities;
o we, as issuer of the debt securities, will pay, and the trust will
not be obligated to pay, directly or indirectly, any costs,
expenses, debts and obligations of the trust (other than with
respect to the trust securities); and
o the declaration of trust further provides that the trust will not
engage in any activity that is not consistent with the limited
purposes of the trust.
Notwithstanding anything to the contrary in the indenture, we have the
right to set-off any payment we are otherwise required to make thereunder
against and to the extent we have already made, or are concurrently on the date
of such payment making, a related payment under the guarantee.
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ENFORCEMENT RIGHTS OF HOLDERS OF TRUST PREFERRED SECURITIES
The declaration of trust, when executed, will provide that if we fail
to make interest or other payments on the debt securities when due (taking
account of any extension period), the holders of the trust preferred securities
may direct the property trustee to enforce its rights under the applicable
indenture. If the property trustee fails to enforce its rights under the
indenture in respect of an event of default under the indenture, any holder of
record of trust preferred securities may, to the fullest extent permitted by
applicable law, institute a legal proceeding against us to enforce the property
trustee's rights under the indenture without first instituting any legal
proceeding against the property trustee or any other person or entity.
Notwithstanding the foregoing, if an event of default under the declaration of
trust has occurred and is continuing and such event is attributable to our
failure to pay interest, premium or principal on the debt securities on the date
such interest, premium or principal is otherwise payable, then a holder of trust
preferred securities may institute a direct action against us for payment of
such holder's pro rata share. If a holder brings such a direct action, we will
be entitled to that holder's rights under the applicable declaration of trust to
the extent of any payment made by us to that holder.
If we fail to make payments under the guarantee, a holder of trust
preferred securities may institute a proceeding directly against us for
enforcement of the guarantee for such payments.
LIMITED PURPOSE OF TRUST
The trust preferred securities evidence undivided beneficial ownership
interests in the assets of the trust, and the trust exists for the sole purpose
of issuing and selling the trust securities and using the proceeds to purchase
our debt securities. A principal difference between the rights of a holder of
trust preferred securities and a holder of debt securities is that a holder of
debt securities is entitled to receive from us the principal amount of and
interest accrued on the debt securities held, while a holder of trust preferred
securities is entitled to receive distributions and other payments from the
trust (or from us under the guarantee) only if and to the extent the trust has
funds available for the payment of such distributions and other payments.
PLAN OF DISTRIBUTION
We and the trust may sell the securities separately or together. We and
the trust may sell securities on a negotiated or competitive bid basis to or
through one or more underwriters or dealers. We and the trust may also sell
securities directly to institutional investors or other purchasers or through
agents. Any underwriter, dealer or agent involved in the offer and sale of
securities, and any applicable commissions, discounts and other items
constituting compensation to such underwriters, dealers or agents, will be set
forth in the prospectus supplement.
We and the trust may effect distribution of securities from time to
time in one or more transactions at a fixed price, at prices that may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
Unless otherwise indicated in a prospectus supplement, the obligations
of any underwriters to purchase securities will be subject to certain conditions
and the underwriters will be obligated to purchase all of the applicable
securities if any are purchased. If a dealer is used in a sale, we may 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.
We or the trust or any of our agents may solicit offers to purchase
securities from time to time. Unless otherwise indicated in a prospectus
supplement, any agent will be acting on a best efforts basis for the period of
its appointment.
In connection with the sale of securities, underwriters or agents may
receive compensation (in the form of discounts, concessions or commissions) from
us or from purchasers of securities for whom they may act as agents.
Underwriters may sell securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
securities may be deemed to be underwriters as that term is defined in the
Securities Act of 1933, and any discounts or commissions received by them from
us and any profits on the resale of the securities by them may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933. Any
such underwriter or agent will be identified, and any such compensation received
from us will be described, in the related prospectus supplement.
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Underwriters, dealers and agents may be entitled, under agreements with
us, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act of 1933.
If so indicated in the prospectus supplement, we will authorize agents
and underwriters to solicit offers by certain specified institutions to purchase
securities at the public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on a
specified date in the future. Institutions with whom such contracts may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions but shall in all cases be subject to our approval. Such contracts
will be subject only to those conditions set forth in the prospectus supplement
and the prospectus supplement will set forth the commission payable for
solicitation of such contracts. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the securities
shall not be prohibited at the time of delivery under the laws of the
jurisdiction to which the purchaser is subject. The underwriters and other
agents will not have any responsibility in respect of the validity or
performance of such contracts.
Certain of the underwriters or agents and their associates may engage
in transactions with and perform services for us or our affiliates in the
ordinary course of their respective businesses.
The securities may or may not be listed on a national securities
exchange or traded in the over-the-counter market (other than the class A common
stock, which is quoted in the NASDAQ National Market). No assurance can be given
as to the liquidity of the trading market for any such securities.
If underwriters or dealers are used in the sale, until the distribution
of the securities is completed, SEC rules may limit the ability of any such
underwriters and selling group members to bid for and purchase the securities.
As an exception to these rules, representatives of any underwriters are
permitted to engage in certain transactions that stabilize the price of the
securities. Such transactions may consist of bids or purchases for the purpose
of pegging, fixing or maintaining the price of the securities. If the
underwriters sell more securities in connection with the offerings than are set
forth on the cover page of the prospectus supplement, which is known as a short
position, then the representatives of the underwriters may reduce that short
position by purchasing securities in the open market. The representatives of the
underwriters may also elect to reduce any short position by exercising all or
part of any over-allotment option described in the prospectus supplement. The
representatives of the underwriters may also impose a penalty bid on certain
underwriters and selling group members. This means that if the representatives
purchase securities in the open market to reduce the underwriters' short
position or to stabilize the price of the securities, they may reclaim the
amount of the selling concession from the underwriters and selling group members
who sold those shares as part of the offering. In general, purchases of a
security for the purpose of stabilization or to reduce a short position could
cause the price of the security to be higher than it might be in the absence of
such purchases. The imposition of a penalty bid might also have an effect on the
price of the securities to the extent that it discourages resales of the
securities. We make no representation or prediction as to the direction or
magnitude of any effect that the transactions described above may have on the
price of the securities. In addition, the representatives of any underwriters
may determine not to engage in such transactions or that such transactions, once
commenced, may be discontinued without notice.
LEGAL OPINIONS
McDermott, Will & Emery, Chicago, Illinois, will pass upon the legality
of the securities offered by this prospectus.
EXPERTS
The audited consolidated financial statements of Westell Technologies,
Inc. incorporated by reference in this prospectus and elsewhere in the
registration statement, to the extent and for the periods indicated in their
reports, have been audited by Arthur Andersen LLP, independent public
accountants, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said reports.
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The consolidated financial statements of Teltrend Inc. incorporated by
reference in Teltrend's Annual Report on Form 10-K for the year ended July 31,
1999, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon incorporated by reference therein and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
The consolidated financial statements of Westell Technologies, Inc.
incorporated by reference in Westell's Annual Report on Form 10-K for the year
ended March 31, 2001, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are the estimated expenses (other than the SEC
registration fee) of the issuance and distribution of the securities being
registered, all of which will be paid by the Company.
SEC registration fee.............................................. $ 15,000
Printing expenses................................................. 10,000
Fees and expenses of counsel...................................... 30,000
Fees and expenses of accountants.................................. 20,000
Trustees fees and expenses........................................ 15,000
Rating agency fees................................................ 10,000
Miscellaneous..................................................... 50,000
---------
Total.................................................... $ 150,000
========
*To be supplied by amendment to this registration statement.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law (Section 102) allows a corporation
to eliminate the personal liability of directors of a corporation to the
corporation or to any of its stockholders for monetary damage for a breach of
his/her fiduciary duty as a director, except in the case where the director
breached his/her duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or knowingly violated a law, authorized the payment of a
dividend or approved a stock repurchase in violation of Delaware corporate law
or obtained an improper personal benefit. The Company's Restated Certificate of
Incorporation contains a provision which eliminates directors' personal
liability as set forth above.
The Delaware General Corporation Law (Section 145) gives Delaware
corporations broad powers to indemnify their present and former directors and
officers and those of affiliated corporations against expenses incurred in the
defense of any lawsuit to which they are made parties by reason of being or
having been such directors or officers, subject to specified conditions and
exclusions; gives a director or officer who successfully defends an action the
right to be so indemnified; and authorizes the Company to buy directors' and
officers' liability insurance. Such indemnification is not exclusive of any
other right to which those indemnified may be entitled under any bylaw,
agreement, vote of stockholders or otherwise.
The Company's Restated Certificate of Incorporation provides for
indemnification to the fullest extent authorized by Section 145 of the Delaware
General Corporation Law for directors, officers and employees of the Company and
also to persons who are serving at the request of the Company as directors,
officers or employees of other corporations (including subsidiaries); provided
that, with respect to proceedings initiated by such indemnitee, indemnification
shall be provided only if such proceedings were authorized by the Board of
Directors. This right of indemnification is not exclusive of any other right
which any person may acquire under any statute, bylaw, agreement, contract, vote
of stockholders or otherwise.
The Company maintains a directors' and officers' liability insurance
and corporate reimbursement policy insuring directors and officers against loss
arising from claims made arising out of the performance of their duties.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
1 Forms of Underwriting Agreements(1).
II-1
4.1 Form of Indenture (previously filed).
4.2 Amended and Restated Certificate of Incorporation of the Company
(incorporated herein by reference to Exhibit 3.1 of the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2000).
4.3 Amended and Restated Bylaws of the Company (incorporated herein by
reference to the Exhibit 3.1 to the Registrant's Annual Report on
Form 10-K for the year ended March 31, 2001).
4.4 Form of Deposit Agreement (1).
4.5 Form of Warrant Agreement (1).
4.6 Form of Certificate of Trust of Westell Capital Trust I (1).
4.7 Form of Declaration of Trust of Westell Capital Trust I (1).
4.8 Form of Trust Preferred Security (1).
4.9 Form of Company preferred securities Guarantee Agreement (1).
+5 Opinion of McDermott, Will & Emery regarding legality.
*11 Statement regarding Computation of Ratio of Earnings to Fixed
Charges.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of McDermott, Will & Emery (included in Exhibit 5).
23.3 Consent of Ernst & Young LLP.
23.4 Consent of Ernst & Young LLP.
24 Power of Attorney (previously filed).
25 Statement of Eligibility of Trustee on Form T-1(1).
------------------
*
(1) To be filed subsequently as part of a Form 8-K.
+ To be filed by amendment
ITEM 17. UNDERTAKINGS.
1.(a) The undersigned registrant hereby undertakes to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
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maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that subparagraphs (a)(i) and (a)(ii) do not apply to the
extent that the information required to be included in a post-effective
amendment by those subparagraphs 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 (the "Exchange Act") that are incorporated
by reference in the Registration Statement.
(b) The undersigned registrant hereby undertakes that, for the purpose
of determining any liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) The registrant hereby undertakes 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.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by the registrants is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
4. The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act, (i) the information omitted
from the form of prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or Rule 497(h) under the Securities
Act shall be deemed to be part of this Registration Statement as of the time it
was declared effective, and (ii) each post-effective amendment that contains a
form of prospectus 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.
5. 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 (the "Act") in
accordance with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
6. With respect to a rights offering, the undersigned registrant hereby
undertakes to supplement the prospectus, after the expiration of the
subscription period, to set forth the results of the subscription offer, the
transactions by the underwriters during the subscription period, the amount of
unsubscribed securities to be purchased by the underwriters, and the terms of
any subsequent reoffering thereof. If any public offering by the underwriters is
to be made on terms differing from those set forth on the cover page of the
prospectus, a post-effective amendment will be filed to set forth the terms of
such offering.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
post-effective amendment to the registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Aurora, Illinois, on
the 16th day of July, 2001.
Westell Technologies, Inc.
By: /s/ Nicholas Hindman
--------------------------------------
Nicholas Hindman
Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this post-effective amendment to the Registration Statement has been signed
below by the following persons in the capacities and on the 16th day of July,
2001:
SIGNATURE TITLE
--------- -----
/s/ E. Van Cullens Chief Executive Officer and Director
------------------------------------------------------ (principal executive officer)
E. Van Cullens
*/s/ Melvin J. Simon Vice President and Chief Financial Officer
------------------------------------------------------ (principal financial officer and accounting officer)
Nicholas Hindman
*/s/ Melvin J. Simon Chairman and Director
------------------------------------------------------
John W. Seazholtz
*/s/ Melvin J. Simon Director
------------------------------------------------------
Robert C. Penny
*/s/ Melvin J. Simon Director
------------------------------------------------------
Paul A. Dwyer
/s/ Melvin J. Simon Assistant Secretary and Treasurer and Director
------------------------------------------------------
Melvin J. Simon
*/s/ Melvin J. Simon Director
------------------------------------------------------
Thomas A. Reynolds III
*/s/ Melvin J. Simon Director
------------------------------------------------------
Howard L. Kirby, Jr.
*/s/ Melvin J. Simon Director
------------------------------------------------------
Bernard F. Sergesketter
* /s/ Melvin J. Simon
-------------------------------------
pursuant to Power of Attorney
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