crusader, thanks. I was just curious. here is some data from the S-1. tp
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering there has been no public market for our common stock.
Future sales of substantial amounts of our common stock in the open market, or
the availability of these shares for sale, could adversely affect the price of
our common stock.
Upon completion of this offering, we will have 62,779,807 outstanding shares
of our common stock, or 64,092,307 shares if the underwriters exercise their
over-allotment option in full. These shares will be freely tradeable without
restriction under the Securities Act, except for any shares which may be
acquired by an affiliate of Stratos, as "affiliate" is defined in Rule 144 under
the Securities Act. Persons who may be deemed to be affiliates generally include
individuals or entities that control, are controlled by, or are under common
control with, Stratos and may include our directors and officers as well as
significant stockholders of Stratos, if any.
Generally, Rule 144 provides that a person who has beneficially owned
"restricted" shares for at least one year will be entitled to sell on the open
market in brokers' transactions within any three-month period a number of shares
that does not exceed the greater of one percent of the then outstanding shares
of common stock and the average weekly trading volume in the common stock in the
open market during the four calendar weeks preceding this sale. Sales under
Rule 144 also are subject to post-sale notice requirements and the availability
of current public information about us.
The shares of our common stock that will continue to be held by Methode
after the offering constitute "restricted securities" within the meaning of
Rule 144, and will be eligible for sale by Methode in the open market after the
offering, subject to contractual lockup provisions described below and the
applicable requirements of Rule 144. We have granted registration rights to
Methode which are also described below.
Methode has announced that it plans to complete its divestiture of Stratos
six to twelve months after the offering by distributing all of its shares of
Stratos common stock to the holders of Methode Class A and Class B common stock.
Any shares distributed by Methode will be eligible for immediate resale in the
public market without restrictions by persons other than affiliates of Stratos.
Affiliates of Stratos would be subject to the restrictions of Rule 144 described
above.
Methode, our directors and executive officers and we have agreed not to
offer or sell any shares of our common stock for a period of 180 days after the
date of this prospectus, without the prior written consent of Lehman Brothers
Inc. on behalf of the underwriters. Notwithstanding the foregoing, Methode will
be permitted, without the prior written consent of Lehman Brothers, to effect
the proposed spin-off. See "Underwriting."
An aggregate of 4,500,000 shares of our common stock are reserved for
issuance under our 2000 Stock Plan. We intend to file a registration statement
on Form S-8 covering the issuance of shares of our common stock pursuant to the
2000 Stock Plan. Accordingly, the shares issued pursuant to the 2000 Stock Plan
generally will be freely tradeable, subject to the lockup restrictions described
above and the restrictions on resales by affiliates under Rule 144.
As part of our separation from Methode, we have granted Methode registration
rights. For a description of these rights, see "Arrangements between Methode
Electronics and Stratos Lightwave--Registration Rights Agreement."
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UNDERWRITING
Under the underwriting agreement, which is filed as an exhibit to the
registration statement relating to this prospectus, the underwriters named
below, for whom Lehman Brothers Inc., CIBC World Markets Corp., U.S. Bancorp
Piper Jaffray Inc., Robert W. Baird & Co. Incorporated, Tucker Anthony
Incorporated and Fidelity Capital Markets, a division of National Financial
Services Corporation, are acting as representatives, have each agreed to
purchase from us the respective number of shares of common stock set forth
opposite its name below:
UNDERWRITERS NUMBER OF SHARES
------------ ----------------
Lehman Brothers Inc.........................................
CIBC World Markets Corp.....................................
U.S. Bancorp Piper Jaffray Inc..............................
Robert W. Baird & Co. Incorporated..........................
Tucker Anthony Incorporated.................................
Fidelity Capital Markets, a division of National Financial
Services Corporation......................................
---------
Total..................................................... 8,750,000
The underwriting agreement provides that the underwriters' obligations to
purchase shares of common stock depend on the satisfaction of the conditions
contained in the underwriting agreement, and that if any of the shares of common
stock are purchased by the underwriters under the underwriting agreement, then
all of the shares of common stock which the underwriters have agreed to purchase
under the underwriting agreement must be purchased. The conditions contained in
the underwriting agreement include the requirement that the representations and
warranties made by us to the underwriters are true, that there is no material
change in the financial markets and that we deliver to the underwriters
customary closing documents.
The following table shows the per share and total underwriting discounts and
commissions to be paid to the underwriters by us. These amounts are shown
assuming both no exercise and full exercise of the underwriters' option to
purchase 1,312,500 additional shares.
PAID BY STRATOS NO EXERCISE FULL EXERCISE
--------------- ----------- -------------
Per Share............................................ $ $
Total................................................
The representatives have advised us that the underwriters propose to offer
the shares of common stock directly to the public at the public offering price
set forth on the cover page of this prospectus, and to dealers, who may include
the underwriters, at the public offering price less a selling concession not in
excess of $ share. The underwriters may allow, and the dealers may reallow,
a concession not in excess of $ per share to brokers and dealers. After the
offering, the underwriters may change the offering price and other selling
terms.
We have granted to the underwriters an option to purchase up to an aggregate
of 1,312,500 additional shares of common stock, exercisable to cover
over-allotments, if any, at the public offering price less the underwriting
discounts and commissions shown on the cover page of this prospectus. The
underwriters may exercise this option at any time until 30 days after the date
of the underwriting agreement. If this option is exercised, each underwriter
will be committed, so long as the conditions of the underwriting agreement are
satisfied, to purchase a number of additional shares of common stock
proportionate to the underwriter's initial commitment as indicated in the
preceding table and we will be obligated, under the over-allotment option, to
sell the shares of common stock to the underwriters.
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We have agreed that, without the prior consent of Lehman Brothers Inc., we
will not directly or indirectly offer, sell or otherwise dispose of any shares
of our common stock or any securities which may be converted into or exchanged
for any shares of our common stock for a period of 180 days from the date of
this prospectus. All of our executive officers and directors and Methode have
agreed under the lock-up agreements that, without the prior written consent of
Lehman Brothers Inc., they will not, directly or indirectly, offer, sell or
otherwise dispose of any shares of our common stock or any securities which may
be converted into or exchanged for any shares for the period ending 180 days
after the date of this prospectus. All of the shares of our common stock held by
Methode and by our executive officers and directors will be subject to this
agreement. Notwithstanding the foregoing, Methode will be permitted, without the
prior written consent of Lehman Brothers, to effect the proposed spin-off. See
"Shares Eligible for Future Sale."
Prior to the offering, there has been no public market for the shares of our
common stock. The initial public offering price has been negotiated between the
representatives and us. In determining the initial public offering price of our
common stock, the representatives will consider prevailing market conditions,
our historical performance and capital structure, estimates of our business
potential and earning prospects, an overall assessment of our management and the
consideration of the above factors in relation to market valuation of companies
in related businesses.
We have applied for a listing of our common stock on the Nasdaq National
Market under the symbol "STLW."
We have agreed to indemnify the underwriters against liabilities, including
liabilities under the Securities Act of 1933 and liabilities arising from
breaches of the representations and warranties contained in the underwriting
agreement, and to contribute to payments that the underwriters may be required
to make for these liabilities.
We estimate that the total expenses of the offering, excluding underwriting
discounts and commissions, will be approximately $2.5 million, $1.0 million of
which is payable by Methode and $1.5 million of which is payable by Stratos.
Until the distribution of our common stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the underwriters and
selling group members to bid for and purchase shares of our common stock. As an
exception to these rules, the representatives are permitted to engage in
transactions that stabilize the price of our common stock. These transactions
may consist of bids or purchases for the purposes of pegging, fixing or
maintaining the price of our common stock.
The underwriters may create a short position in our common stock in
connection with the offering, which means that they may sell more shares than
are set forth on the cover page of this prospectus. If the underwriters create a
short position, then the representatives may reduce that short position by
purchasing our common stock in the open market. The representatives also may
elect to reduce any short position by exercising all or part of the
over-allotment option.
The underwriters have informed us that they do not intend to confirm sales
to accounts over which the underwriters have discretionary authority that exceed
5% of the total number of shares of common stock offered by them.
The representatives also may impose a penalty bid on underwriters and
selling group members. This means that if the representatives purchase shares of
our common stock in the open market to reduce the underwriters' short position
or to stabilize the price of our common stock, 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.
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In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of those purchases. The
imposition of a penalty bid might have an effect on the price of a security to
the extent that it were to discourage resales of the security by purchasers in
an offering.
Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of our common stock. In addition, neither
we nor any of the underwriters makes any representation that the representatives
will engage in these transactions or that these transactions, once commenced,
will not be discontinued without notice.
Any offers in Canada will be made only under an exemption from the
requirements to file a prospectus in the relevant province of Canada where the
sale is made.
Purchasers of the shares of common stock offered in this prospectus may be
required to pay stamp taxes and other charges under the laws and practices of
the country of purchase, in addition to the public offering price shown on the
cover page of this prospectus.
At our request, the underwriters have reserved up to 700,000 shares of the
common stock offered by this prospectus for sale to our officers, directors,
employees, consultants and their family members and to our business associates
at the initial public offering price set forth on the cover page of this
prospectus. These persons must commit to purchase no later than the close of
business on the day following the date of this prospectus and following
effectiveness of the registration statement. The number of shares available for
sale to the general public will be reduced to the extent these persons purchase
the reserved shares. To the extent that reserved shares are purchased by our
executive officers and directors, those reserved shares will also be subject to
the lock up agreements signed by these persons.
Fidelity Capital Markets, a division of National Financial Services
Corporation, is acting as an underwriter of this offering, and will be
facilitating electronic distribution of information through the Internet. |
