ADC TELECOMMUNICATIONS,
INC.
GLOBAL STOCK INCENTIVE PLAN
21,329,775 shares of Common Stock
($.20 par value)
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This document constitutes part of a
prospectus covering securities that have been registered under the
Securities Act of 1933.
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These securities have not been
approved or disapproved by the Securities and Exchange Commission
or any state securities commission, nor has the Securities and
Exchange Commission or any state securities commission passed upon
the accuracy or adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
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No
person is authorized to give any information or to make any
representations, other than those contained in this prospectus, in
connection with the offer described in this prospectus. If any
other information or representations are made, you may not rely
upon them as having been authorized by ADC. This prospectus is not
an offer to sell, or a solicitation of an offer to buy, securities
in any jurisdiction to any person to whom it is unlawful to make an
offer or solicitation in that jurisdiction. Neither the delivery of
this prospectus nor any sale made under it shall, under any
circumstances, create an implication that the information contained
in this prospectus is correct as of any time after the date of this
prospectus.
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The date of this prospectus is
January 10, 2007.
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Page
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INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
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1
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2
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INFORMATION ABOUT THE PLAN
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2
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2
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3
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3
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Transferability of Awards
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4
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5
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5
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5
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Amendments or Termination of the Plan
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5
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5
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FEDERAL INCOME TAX CONSEQUENCES
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6
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Tax Consequences with Respect to
Awards
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6
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Non-Qualified Stock Options
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6
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7
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Stock Appreciation Rights
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9
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9
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11
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Special Rules for Executive Officers and
Directors Subject to Section 16(b)
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11
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12
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INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
The following
documents that we have filed with the U.S. Securities and Exchange
Commission (the “Commission”) are incorporated by
reference in this prospectus:
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(a)
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our
Annual Report on Form 10-K for the fiscal year ended
October 31, 2006; and
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(b)
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the
description of our Common Stock and Common Stock Purchase Rights
contained in any of our registration statements filed under the
U.S. Securities Act of 1933, as amended (the “Securities
Act”), or in any report filed under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and any
amendment or report filed for the purpose of updating the
description.
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All documents
filed by us under Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act after the date of this prospectus and prior to the
filing of a post-effective amendment with the Commission which
indicates that all securities offered by this prospectus have been
sold, or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this prospectus
and to be a part of this prospectus from the respective dates of
filing of such documents.
We will provide
you, without charge, upon your written or oral request, a copy of
any or all of the following:
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(a)
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the
documents referred to above that have been or may be incorporated
in this prospectus (not including exhibits, unless the exhibits are
specifically incorporated by reference into such
documents);
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(b)
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our
annual report to shareholders for our latest fiscal year;
and
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(c)
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any
report, proxy statement or other communication distributed by us to
our shareholders generally.
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Requests for
copies of these documents should be directed to Jeffrey D. Pflaum,
Corporate Secretary, ADC Telecommunications, Inc., 13625 Technology
Drive, Eden Prairie, Minnesota 55344 (telephone number
(952) 938-8080).
1
An investment in
our Common Stock involves risk. We encourage you to review our
Annual Report on Form 10-K for the fiscal year ended
October 31, 2006, as filed with the Commission. This report
sets forth the significant risk factors involved in an investment
in our Common Stock in Item 1A of such report under the
captions “Risks Related to Our Business” and
“Risks Related to Our Common Stock.”
INFORMATION ABOUT THE
PLAN
The information in
this prospectus relates to the ADC Telecommunications, Inc. Global
Stock Incentive Plan, which we call the “Plan” in this
prospectus. The Plan was initially adopted by our Board of
Directors in November 1990 and was approved by our
shareholders on February 26, 1991. The Plan became effective
immediately upon shareholder approval. The Board adopted amendments
to the Plan in November 1992, December 1994,
November 1996, December 1998, December 1999,
December 2000, December 2001 and December 2002, and
our shareholders approved these amendments on February 23,
1993, February 28, 1995, February 25, 1997,
February 23, 1999, February 22, 2000, February 27,
2001, February 19, 2002, March 4, 2003 and March 2,
2004, respectively. In December 1996, the Board adopted an
amendment to the Plan that did not require shareholder approval.
The Plan was amended and restated through August 1, 2005 to
reflect the 1-for-7 reverse stock split undertaken by the Company
effective May 10, 2005, and was amended and restated through
December 12, 2006 to reflect a change in the calculation of
“Fair Market Value” under the Plan. Under the current
terms of the Plan, the Plan will expire on March 2,
2009.
The Plan is
intended to help us recruit, retain and develop key employees
capable of assuring the future success of ADC, to attract and
retain the services of experienced and knowledgeable outside
directors, and to offer these employees incentives to put forth
maximum efforts for the success of our business and to provide
these employees and outside directors an opportunity to acquire a
proprietary interest in ADC. All key employees of ADC and of our
subsidiaries and affiliates in which we have a significant equity
interest and all nonemployee directors of ADC are eligible to
receive awards under the Plan.
A total of
21,329,775 shares of our Common Stock, par value $.20 per share,
are available as of November 1, 2001 for the issuance of
shares under outstanding awards and for the granting of awards
under the Plan. The types of awards that may be granted under the
Plan are described below. Awards granted under the Plan may be
granted only during a period commencing February 26, 1991 and
ending on March 2, 2009. However, unless otherwise expressly
provided in the Plan or in an applicable award agreement, any award
granted may extend beyond March 2, 2009.
The Plan is not
subject to any provisions of the Employee Retirement Income
Security Act of 1974 and is not qualified under Section 401(a) of
the U. S. Internal Revenue Code of 1986, as amended.
You may obtain
additional information about the Plan and its administrators by
writing to Jeffrey D. Pflaum, Corporate Secretary, ADC
Telecommunications, Inc., 13625 Technology Drive, Eden Prairie,
Minnesota 55344, or by calling (952) 938-8080.
2
The Plan is
administered by a committee of the Board consisting of three or
more nonemployee directors. The members of the committee are
appointed by the Board. The committee has the authority to
establish rules for the administration of the Plan; to select the
key employees to whom awards are granted; to determine the types of
awards to be granted and the number of shares of Common Stock
covered by the awards; and to set the terms and conditions of the
awards. The committee may also determine whether the payment of any
amounts received under any award shall or may be deferred and may
authorize payments representing dividends in connection with any
deferred award of shares of Common Stock. Determinations and
interpretations under the Plan are made in the sole discretion of
the committee, and are binding on all interested parties. The
committee may correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any award in the manner and to the
extent it deems desirable to carry the Plan into effect. The
committee may delegate to one or more officers the right to grant
awards to employees who are not subject to Section 16(b) of the
Exchange Act.
Awards under the
Plan are granted for no cash consideration or for such minimal cash
consideration as may be required by applicable law. Awards may
provide that upon their grant or exercise, the holder will receive
shares of Common Stock, cash or any combination thereof, as the
committee determines. No employee may be granted any award or
awards under the Plan, the value of which award or awards is based
solely on an increase in the value of the Common Stock after the
date of grant of the award or awards, for more than 571,428 shares
of Common Stock, in the aggregate, in any one calendar
year.
The Plan permits
the granting of:
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(a)
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stock options, including
“incentive stock options” meeting the requirements of
Section 422 of the Internal Revenue Code (the
“Code”) and “nonqualified stock options”
that do not meet these requirements;
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(b)
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stock appreciation rights (or
“SARs”);
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(c)
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restricted stock and restricted
stock units;
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(d)
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performance awards payable in shares
of Common Stock; and
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(e)
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dividend equivalents.
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Under the Plan,
the number of shares of Common Stock that may be issued pursuant to
restricted stock, restricted stock units and performance awards
granted after March 2, 2004 is limited to
4,285,714.
Options .
The exercise price per share under any stock option will not be
less than 100% of (i) the average of the high and low daily
trading prices (rounded down to the nearest whole cent) of a share
as reported on the Nasdaq National Market System, if the shares are
then quoted on the Nasdaq National Market System or (ii) the
average of the high and low daily trading prices (rounded down to
the nearest whole cent) of a share on a national securities
exchange, if the shares are then being traded on a national
securities
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exchange on the
date of grant of the option. Options will be exercisable by payment
in full of the exercise price, either in cash or, at the discretion
of the committee, in whole or in part by the tendering of shares of
our Common Stock or other consideration having a fair market value
on the date the option is exercised equal to the option exercise
price. Determinations of fair market value under the Plan will be
made in accordance with methods and procedures established by the
committee. For purposes of the Plan, the fair market value of
shares of our Common Stock on a given date will be (a) the
last sale price of the shares as reported on the Nasdaq Stock
Market on that date, if the shares are then being quoted on the
Nasdaq Stock Market, or (b) the closing price of the shares on
that date on a national securities exchange, if the shares are then
being traded on a national securities exchange.
SARs . The
grant price of any SAR will not be less than 100% of the exercise
price per share under any stock option (determined as described in
the preceding paragraph) on the date of grant of the SAR. The
holder of a SAR will be entitled to receive the excess of the fair
market value of a specified number of shares of our Common Stock
(calculated as of the exercise date of the SAR or, if the committee
so determines, as of any time during a specified period before or
after the exercise date) over the grant price of the
SAR.
Restricted
Stock and Restricted Stock Units . Restricted stock and
restricted stock units are subject to restrictions imposed by the
committee during a restriction period determined by the committee.
Restricted stock and restricted stock units may not be transferred
by the holder until these restrictions established by the committee
lapse. If the holder’s employment terminates during the
restriction period, all restricted stock and restricted stock units
will be forfeited unless the committee determines
otherwise.
The holder of
restricted stock may have all of the rights of our shareholders,
including the right to vote the shares subject to the restricted
stock award and to receive any dividends with respect thereto, or
these rights may be limited.
Holders of
restricted stock units shall have the right, subject to any
restrictions imposed by the committee, to receive shares of Common
Stock at some future date. After the lapse or waiver of any
applicable restrictions, holders of restricted stock units will be
issued such shares.
Performance
Awards . Holders of performance awards have the right to
receive shares of our Common Stock upon the achievement of
specified performance goals during performance periods established
by the committee. A performance award granted under the Plan may be
payable in shares of Common Stock or restricted stock.
Dividend
Equivalents . Dividend equivalents will entitle the holders
thereof to receive payments (in cash or shares, as determined by
the committee) equivalent to the amount of cash dividends with
respect to a specified number of shares.
Transferability of Awards
You may not
assign, transfer, pledge or otherwise encumber any award granted
under the Plan, except for transfers by will, by designation of a
beneficiary or by the laws of descent and distribution. You may,
however, transfer all or a portion of a nonqualified stock option
to specified members of your immediate family or to certain family
trusts, partnerships or other entities in accordance with the terms
of the Plan.
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Each award is
exercisable only by you, by a permitted transferee or, if
permissible under applicable law, by your guardian or legal
representative.
If any shares of
our Common Stock subject to an award or to which an award relates
are not purchased or are forfeited, or if any award terminates
without the delivery of shares or other consideration, the shares
previously used for these awards will be available for future
awards under the Plan. Except as otherwise provided under
procedures adopted by the committee to avoid double-counting with
respect to awards granted in tandem with or in substitution for
other awards, all shares relating to awards granted will be counted
against the aggregate number of shares available for granting
awards under the Plan. Shares that are used by a participant as
full or partial payment to ADC of the purchase price of shares
acquired upon exercise of a stock option or to satisfy applicable
tax withholding requirements upon the exercise or vesting of an
award will be available for future awards under the
Plan.
Under the Plan,
appropriate adjustments will be made to the Plan and to the number
of outstanding options in the event of changes in our Common Stock
through merger, consolidation, reorganization, recapitalization,
stock dividend, stock split or other change in corporate
structure.
Amendments
or Termination of the Plan
The Board may
amend, alter or discontinue the Plan at any time, but
may
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