e424b3
Filed Pursuant to Rule 424(b)(3)
File No.: 333-91972
PROSPECTUS
ADC TELECOMMUNICATIONS, INC.
ADCInvestDirect
Direct Stock Purchase Plan
142,857 Shares of Common Stock
Our Direct Stock Purchase Plan provides you with a convenient
and economical way of purchasing shares of ADC common stock
without a broker at low transaction costs.
You may also transfer shares easily or sell your shares at low
cost.
The Plan may purchase ADC common stock directly from ADC or on
the open market, as periodically determined by ADC. The purchase
price for shares purchased in the open market will be the
weighted average price at which the shares are actually
purchased by the Plan Administrator. The purchase price of
shares purchased from ADC will be the average of the high and
low sale prices quoted on the NASDAQ National Market on the date
of purchase.
Our common stock is traded on The NASDAQ National
Market®
under the symbol ADCT. On January 24, 2006, the
last sale price of our common stock as reported on The NASDAQ
National Market was $25.02 per share.
A summary of important Plan features is contained on page 1 of
this prospectus. A complete description of the Plan begins on
page 12 of this prospectus.
Please read this prospectus carefully before investing and
retain it for your future reference.
Investment in our securities involves a number of risks. See
section titled Risk Factors beginning on page 2
to read about certain factors you should consider before buying
our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
ADC Telecommunications, Inc.
13625 Technology Drive
Eden Prairie, Minnesota 55344-2252
(952) 938-8080
The date of this prospectus is January 27, 2006.
TABLE OF CONTENTS
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You should rely only on the information contained in this
prospectus. We have not authorized anyone to provide information
that is different. Neither the delivery of this prospectus nor
any sale made hereunder shall, under any circumstances, create
any implication that information herein is correct at any time
subsequent to the date hereof.
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A SUMMARY OF IMPORTANT PLAN FEATURES
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Current Shareowners If you are a
registered holder of ADC common stock, you may participate in
the Plan by completing and returning a Plan Authorization Form.
If you own ADC common stock, but your shares are held by a bank
or broker in its name (i.e., street name), you will
need to either withdraw your shares from your brokerage account
and register them in your own name or enroll in the Plan in the
same manner as a new shareowner. |
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Open to Nonshareowners If you
currently do not own shares of ADC common stock, you may enroll
in the Plan by completing and returning a Plan Authorization
Form, paying a one-time account set-up fee of $10, and either
making an initial investment of at least $500 or authorizing
automatic monthly cash investments of at least $50. |
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Investments You may make
investments in common stock of a minimum of $50 per investment
up to an aggregate of $250,000 per year. Investments may be made
by automatic monthly electronic funds transfer or by check or
money order at weekly or less frequent intervals, whichever you
prefer. |
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Full Investment of Plan
Funds Funds invested in the Plan are
fully invested through the purchase of fractional shares, as
well as full shares. |
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Fees There are certain
enrollment, transaction and service fees associated with the
Plan, which we describe further in this prospectus. |
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Account Statements Account
statements detailing your Plan activities are mailed to you
following each Plan transaction. |
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Plan Administrator The Plan
Administrator is: |
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Computershare Trust Company, Inc |
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Attention: ADCInvestDirect |
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P.O. Box A3309 |
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Chicago, IL 60690-3309 |
OUR BUSINESS
We are a leading global provider of communications network
infrastructure solutions and services. Our products and services
provide connections for communications networks over copper,
fiber, coaxial and wireless media and enable the use of
high-speed Internet, data, video and voice services by
residences, businesses and mobile communications subscribers.
Our products include fiber optic, copper and coaxial based
frames, cabinets, cables, connectors, cards and other physical
components essential to enable the delivery of communications
for wireline, wireless, cable, and broadcast networks by service
providers and enterprises. Our products also include network
access devices such as high-bit-rate digital subscriber line and
wireless coverage solutions. Our products are primarily used in
the last mile/kilometer portion of networks. This
network of copper, coaxial cable, fiber lines, wireless
facilities and related equipment link voice, video and data
traffic from the end-user of the communications service to the
serving office of our customer. In addition, we provide
professional services relating to the design, equipping and
building of networks. The provision of such services also allows
us additional opportunities to sell our hardware products,
thereby complementing our hardware business.
Our customers include local and long-distance telephone
companies, private enterprises that operate their own networks,
cable television operators, wireless service providers, new
competitive service providers, broadcasters, governments, system
integrators and communications equipment manufacturers and
distributors. We offer broadband connectivity systems,
enterprise systems, wireless transport and coverage
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optimization systems, business access systems and professional
services to our customers through the following two reportable
business segments:
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Broadband Infrastructure and Access; and |
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Professional Services (previously known as Integrated Solutions). |
Our Broadband Infrastructure and Access business provides
network infrastructure products for wireline, wireless, cable,
broadcast and enterprise network applications. These products
consist of:
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connectivity systems and components that provide the
infrastructure to networks to connect Internet, data, video and
voice services over copper, coaxial and fiber-optic
cables; and |
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access systems used in the last mile/kilometer of wireline and
wireless networks to deliver high-speed Internet, data and voice
services. |
Our Professional Services business provides integration
services for broadband, multiservice communications over
wireline, wireless, cable and enterprise networks. Professional
services are used to plan, deploy and maintain communications
networks that deliver Internet, data, video and voice services.
We were incorporated in Minnesota in 1953 as Magnetic Controls
Company. We adopted our current name in 1985. Our world
corporate headquarters are located at 13625 Technology Drive,
Eden Prairie, Minnesota 55344-2252, and our telephone number is
(952) 938-8080. The address of our web site is www.adc.com.
RISK FACTORS
Our business faces many risks, all of which may not be described
below. Additional risks of which we are currently unaware or
believe to be immaterial may also result in events that could
impair our business operations. If any of the events or
circumstances described in the following risks actually occur,
our business, financial condition or results of operations may
suffer, and the trading price of our common stock could decline.
Risks Related to Our Business
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Our operating results were adversely affected by the
significant downturn in the communications equipment industry
and the slowdown in the United States economy that occured
generally from 2001-2003, and there can be no assurance that we
will consistently maintain operating profitability in the
future. |
Our operating results during fiscal 2001, 2002 and 2003 were
significantly impacted by the substantial downturn in the
telecommunications equipment industry. We incurred significant
losses from continuing operations in our fiscal years 2001, 2002
and 2003. While we returned to profitability in fiscal 2004 and
are currently profitable, it is not clear that we will be able
to continue to achieve revenue and gross margin levels needed to
sustain profitability. Further, the increase in our 2004 revenue
was primarily because of our acquisition of KRONE in May 2004.
During this downturn, many of our customers reduced their
equipment purchases and deferred capital spending. Our customers
are dependent on the level of end-user demand for communications
services, and they are likely to defer significant network
expansions when they do not believe there is significant demand
for greater Internet, data, video and voice services. During the
downturn of the telecommunications industry that occurred in our
fiscal years 2001, 2002 and 2003, some of our customers
experienced serious financial difficulties, including bankruptcy
filings or cessation of operations.
The general slowdown in the United States economy in the early
part of this decade negatively impacted our business and
operating results. If general economic conditions in the United
States and globally do not continue to improve, and especially
if they worsen, we may experience material adverse effects on
our business, financial condition and results of operations.
Further, when our customers
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announce spending initiatives that might positively impact sales
of one or more of our products, it is possible these customers
contemporaneously will reduce spending in a manner that would
negatively impact one or more of our other products.
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Shifts in our product mix may result in declines in our
gross margin. |
Our gross margins vary among our product groups and have
fluctuated from quarter to quarter as a result of shifts in
product mix (that is, how much of each product type we sell in
any particular quarter), the introduction of new products,
decreases in average selling prices and our ability to reduce
manufacturing and other costs. We expect such fluctuation in
gross profit to continue in the future. Both KRONE and FONS
historically sold certain products at margins lower than the
margins at which the majority of our products sold. The
integration of KRONE has negatively impacted our gross profit
margins, and it is likely that the integration of FONS will do
so as well. In addition, our gross margins could decrease based
on the amount of new products we sell that have lower startup
gross margins.
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We are becoming increasingly dependent on significant
capital deployment initiatives driven by our customers. |
Increasingly our business is focused upon the sale of products
serving significant customer initiatives for increased broadband
capabilities deep into their networks. Examples of products
serving these initiatives include our FTTX products, wireless
coverage solutions and products used in enterprise networks.
These products generally are utilized outside the central
offices, where we traditionally sold most of our products, of
our customer and often are deployed in connection with the
construction of specific network projects. To date, our
experience has been that the deployment of capital for such
network projects is driven by our customers priorities and
the needs of specific projects. For this reason, the demand for
our products can fluctuate significantly from quarter to
quarter. In addition, the competition to sell our products can
be very intense as the projects often utilize new products that
are not incumbent to networks. The continued sale of these
products by us will also be contingent upon the continued
build-out by our customers of networks that utilize these
products and the acceptance of our products into such networks.
We cannot assure that these deployments will continue or that
our products will be selected for these deployments on a
consistent basis.
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Consolidation among our customers could result in our
losing a customer or experiencing a slowdown as integration
takes place. |
We believe there likely will be continued consolidation among
our customers in order for them to increase market share,
diversify product portfolios and achieve greater economies of
scale. Consolidation may impact our business as our customers
focus on integrating their operations. We believe that in
certain instances customers engaged in integrating large-scale
acquisitions may scale back their purchases of network equipment
while the integration is ongoing. Further, once consolidation
occurs, our customers may choose to pare down the number of
vendors they use to source their equipment, although we have not
yet seen this impact. After a consolidation occurs, there can be
no assurance that we will continue to supply equipment to the
surviving communications service provider. The impact of
significant mergers on our business is likely to be unclear
until sometime after such transactions have closed.
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Our sales could be negatively impacted if one or more of
our key customers substantially reduces orders for our
products. |
Our customer base is relatively concentrated, with our top ten
customers accounting for 42.7%, 46.9%, and 56.7% of net sales
for fiscal years 2005, 2004, and 2003, respectively. While our
acquisition of KRONE diversified our customer base, our recent
acquisitions of FONS may have the effect of mitigating some of
this diversification. If we lose a significant customer for any
reason, including consolidation among our customer base, our
sales and gross margins would be negatively impacted. Further,
in the product areas where we believe the potential for revenue
growth is most pronounced (e.g., FTTX initiatives and wireless
products), our sales remain highly concentrated with the major
telephone companies. The loss of
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sales due to a decrease in orders from a key customer could
require us to record additional impairment and restructuring
charges or exit a particular business or product line.
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In the aftermath of Hurricane Katrina, we may experience a
change in the sales of our products and services. |
We sell our products and services to customers operating in some
of the areas hardest hit by Hurricane Katrina. Communications
networks have been impacted adversely, along with other
infrastructure in this area. Although we are not certain about
the effect that Hurricane Katrina may have on sales of our
products and services, it is possible that we will experience
slower sales in the near term while affected customers work to
stabilize their networks and normalize operations. Moving
forward, there may also be a temporary upturn in our sales as
our customers work to replace damaged or destroyed network
elements in the areas impacted by the hurricane. Conversely, our
sales could decrease as our customers divert money from other
parts of their budgets to spend on rebuilding.
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Our market is subject to rapid technological change, and
to compete effectively, we must continually introduce new
products that achieve market acceptance. |
The communications equipment industry is characterized by rapid
technological changes, evolving industry standards, changing
market conditions and frequent new product and service
introductions and enhancements by our competitors. The
introduction of products using new technologies or the adoption
of new industry standards can make our existing products or
products under development obsolete or unmarketable. For
example, it is possible that FTTX initiatives may negatively
impact sales of non-fiber products. In order to grow and remain
competitive, we will need to adapt to these rapidly changing
technologies, to enhance our existing solutions and to introduce
new solutions to address our customers changing demands.
We may not accurately predict technological trends or the
success of new products in the communications equipment market.
New product development often requires long-term forecasting of
market trends, development and implementation of new
technologies and processes and a substantial capital commitment.
In addition, we do not know whether our products and services
will meet with market acceptance or be profitable. Many of our
competitors have greater engineering and product development
resources than we do. Although we expect to continue to invest
substantial resources in product development activities, our
efforts to achieve and maintain profitability will require us to
be more selective and focused with our research and development
expenditures. If we fail to anticipate or respond in a
cost-effective and timely manner to technological developments,
changes in industry standards or customer requirements, or if we
have any significant delays in product development or
introduction, our business, operating results and financial
condition could be materially adversely affected.
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Strategic changes to our product portfolio may not yield
the benefits that we expect. |
In connection with the downturn in the communications industry,
we divested or ceased operating numerous product lines and
businesses that either were not profitable or did not match our
new strategic focus. We may make further divestitures or
closures of product lines and businesses. In addition, we have
recently made acquisitions that we believe are aligned with our
current strategic focus.
The impact of potential changes to our product portfolio and the
effect of such changes on our business, operating results and
financial condition are evolving and not fully known at this
time. If we acquire other businesses in our areas of strategic
focus, we may have difficulty assimilating these businesses and
their products, services, technologies and personnel into our
operations. These difficulties could disrupt our ongoing
business, distract our management and workforce, increase our
expenses and adversely affect our operating results and
financial condition. Furthermore, we may not be able to retain
key management, technical and sales personnel after an
acquisition. In addition to these integration risks, if we
acquire new businesses, we may not realize all of the
anticipated benefits of these acquisitions.
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Divestitures or elimination of existing businesses or product
lines could also have disruptive effects and may cause us to
incur material expenses.
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If we are unable to garner customer support for our
combined portfolio following the FONS acquisition, we may not be
able to realize the gains we anticipated. |
Both ADC and FONS rely heavily on the business generated from
one customer for a large percentage of sales in the FTTX space.
If this particular customer decreases the amount of products it
purchases, or seeks out additional suppliers for products rather
than allowing us to consolidate the combined revenue share of
both ADC and FONS, the efficiencies that we projected with this
acquisition may not materialize.
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If we seek to secure additional financing, we may not be
able to obtain it. Also, if we are able to secure additional
financing, our shareowners may experience dilution of their
ownership interest or we may be subject to limitations on our
operations. |
We currently anticipate that our available cash resources, which
include existing cash, cash equivalents and available-for sale
securities, will be sufficient to meet our anticipated needs for
working capital and capital expenditures to execute our
near-term business plan, based on current business operations
and economic conditions. If our estimates are incorrect and we
are unable to generate sufficient cash flows from operations, we
may need to raise additional funds. In addition, if one or more
of our strategic acquisition opportunities exceeds our existing
resources, we may be required to seek additional capital. We do
not currently have any significant available lines of credit or
other significant credit facilities, and we are not certain that
we can obtain commercial bank financing on acceptable terms. If
we raise additional funds through the issuance of equity or
equity-related securities, our shareowners may experience
dilution of their ownership interests and the newly issued
securities may have rights superior to those of common stock.
See Risks Related to our Common Stock below. If we
raise additional funds by issuing debt, we may be subject to
restrictive covenants that could limit our operating flexibility
and interest payments could dilute earnings per share.
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Our industry is highly competitive and subject to
significant downward pricing pressure for our products. |
Competition in the communications equipment and related services
industry is intense. We believe our success in competing with
other manufacturers of communications equipment products and
related services will depend primarily on our engineering,
manufacturing and marketing skills, the price, quality and
reliability of our products, our delivery and service
capabilities and our control of operating expenses. We have
experienced and anticipate greater pricing pressures from
current and future competitors as well as our customers. Our
industry is currently characterized by many vendors pursuing
relatively few and very large customers, which provides our
customers with the ability to exert significant pressure on
their suppliers, both in terms of pricing and contractual terms.
Many of our competitors have more extensive engineering,
manufacturing, marketing, financial and personnel resources than
we do. As a result, other competitors may be able to respond
more quickly to new or emerging technologies or changes in
customer requirements, or offer more aggressive price reductions.
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Possible consolidation among our competitors could result
in a loss of sales. |
We expect to see continued consolidation among communication
equipment vendors. This could result in our competitors becoming
financially stronger and obtaining broader product portfolios.
It is possible that such consolidation could lead to a loss of
sales for us as our competitors increase their resources through
consolidation.
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Our operating results fluctuate significantly, and if we
miss quarterly financial expectations, our stock price could
decline. |
Our operating results are difficult to predict and may fluctuate
significantly from quarter to quarter. It is likely that our
operating results in some periods will be below investor
expectations. If this happens, the market price of our common
stock is likely to decline. Fluctuations in our future quarterly
earnings may be caused by many factors, including without
limitation:
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the volume and timing of orders from and shipments to our
customers; |
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work stoppages and other developments affecting the operations
of our customers; |
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the timing of and our ability to obtain new customer contracts
and sales recognition; |
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the timing of new product and service announcements; |
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the availability of products and services; |
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the overall level of capital expenditures by our customers; |
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market acceptance of new and enhanced versions of our products
and services; |
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variations in the mix of products and services we sell; |
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the location and utilization of our production capacity and
employees; and |
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the availability and cost of key components. |
Our expense levels are based in part on expectations of future
revenues. If revenue levels in a particular period are lower
than expected, our operating results will be affected adversely.
In addition, prior to fiscal 2001 and during fiscal 2004, our
operating results were subject to seasonal factors. We
historically had stronger demand for our products and services
in our fourth fiscal quarter ending October 31. Conversely,
we typically experienced weaker demand for our products and
services in the first fiscal quarter, primarily as a result of
the number of holidays in late November, December and early
January, the development of annual capital budgets by our
customers, as well as a general industry slowdown, during that
period. In our fourth fiscal quarter of 2005, we did not
experience this historical pattern of seasonality, primarily
because of less predictable spending patterns for our FTTX and
wireless products.
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The regulatory environment in which our customers operate
is changing. |
Although our business is not subject to a significant amount of
direct regulation, the communications service industry in which
our customers operate is subject to significant and evolving
federal and state regulation in the United States as well as
regulation in other countries. The United States
Telecommunications Act of 1996 (the Act) lifted
certain restrictions on the ability of companies, including the
major telephone companies and other ADC customers, to compete
with one another. The Act also made other significant changes in
the regulation of the telecommunications industry. These changes
generally increased our opportunities to provide solutions for
our customers Internet, data, video and voice needs. The
established telecommunications providers have stated that some
of these changes have diminished the profitability of additional
investments made by them in their networks, which reduces their
demand for our products. Recently, however, the Federal
Communications Commission (FCC) ended the practice
of forced
line-sharing,
which means that major telephone companies are no longer legally
mandated to lease space to DSL resellers. This ruling also
included language allowing major telephone companies to maintain
sole ownership of newly built networks that include fiber
deployment (i.e., FTTX). While it is anticipated that this
ruling will benefit us, there can be no assurance that it will
have any impact on sales of our products.
Additional regulatory changes affecting the communications
industry are anticipated both in the United States and
internationally. A European Union directive on waste electrical
and electronic
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equipment (WEEE) and the restriction of hazardous
substances (RoHS) in such equipment is in the
process of being implemented in member states. The directive
sets a framework for producers obligations in relation to
manufacturing (including the amounts of named hazardous
substances contained in products sold), labeling, and treatment,
recovery and recycling of electronic products in the European
Union. We have established policies and procedures to comply
with these directives as they are implemented in various member
states. Detailed regulations on practices and procedures related
to WEEE and RoHS are evolving in member states.
These changes could affect our customers and alter demand for
our products. Recently announced or future changes could also
come under legal challenge and be altered, thereby reversing the
effect of such regulations or changes and the impact we
expected. In addition, competition in our markets could
intensify as the result of changes to existing or new
regulations. Accordingly, changes in the regulatory environment
could adversely affect our business and results of operations.
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Customer payment defaults could have an adverse effect on
our financial condition and results of operations. |
As a result of adverse conditions in the communications market,
some of our customers have experienced and may continue to
experience serious financial difficulties. In some cases these
difficulties have resulted or may result in bankruptcy filings
or cessation of operations. If customers experiencing financial
problems default on paying amounts owed to us, we may not be
able to collect these amounts or recognize expected revenue. It
is possible those customers from whom we expect to derive
substantial revenue will default or that the level of defaults
will increase. Any material payment defaults by our customers
would have an adverse effect on our results of operations and
financial condition.
Some of our competitors engage in financing transactions with
some of their customers for the purchase of equipment. To remain
competitive, it may become necessary for us to offer similar
financing arrangements. If such financings occur, it would be
our intent to sell all or a portion of these commitments and
outstanding receivables to third parties. In the past, we have
sold some receivables with recourse and have had to compensate
the purchaser for the related losses.
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Conditions in global markets could affect our
operations. |
Our sales outside the United States accounted for approximately
45.4%, 39.5%, and 24.8% of our net sales in fiscal 2005, 2004,
and 2003, respectively. We expect
non-U.S. sales to
remain a significant percentage of net sales in the future. In
addition to sales and distribution in numerous countries, we own
or lease operations located in Australia, Austria, Belgium,
Brazil, Canada, Chile, France, Germany, Hungary, India,
Indonesia, Ireland, Italy, Japan, Malaysia, Mexico, New Zealand,
Norway, Philippines, Puerto Rico, Russia, Singapore,
South Africa, South Korea, Spain, Sweden, Taiwan, Thailand,
the United Arab Emirates, the United Kingdom, the United States,
Venezuela and Vietnam. Due to our
non-U.S. sales and
our
non-U.S. operations,
we are subject to the risks of conducting business globally.
These risks include, without limitation:
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local economic and market conditions; |
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political and economic instability; |
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unexpected changes in or impositions of legislative or
regulatory requirements; |
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fluctuations in foreign currency exchange rates; |
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tariffs and other barriers and restrictions; |
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longer payment cycles; |
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difficulties in enforcing intellectual property and contract
rights; |
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greater difficulty in accounts receivable collection; |
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potentially adverse taxes; and |
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the burdens of complying with a variety of
non-U.S. laws and
telecommunications standards. |
We also are subject to general geopolitical and environmental
risks, such as terrorism, political and economic instability,
changes in the costs of key resources such as oil, changes in
diplomatic or trade relationships and natural disasters.
Economic conditions in many of the
non-U.S. markets
in which we do business represent significant risks to us.
We cannot predict whether our sales and business operations in
these markets will be affected adversely by these conditions.
Instability in
non-U.S. markets,
which we believe is most likely to occur in the Middle East,
Asia and Latin America, could have a negative impact on our
business, financial condition and operating results. The wars in
Afghanistan and Iraq and other turmoil in the Middle East and
the global war on terror also may have negative effects on the
operating results of some of our businesses. In addition to the
effect of global economic instability on
non-U.S. sales,
sales to United States customers having significant
non-U.S. operations
could be impacted negatively by these conditions.
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Our intellectual property rights may not be adequate to
protect our business. |
Our future success depends in part upon our proprietary
technology. Although we attempt to protect our proprietary
technology through patents, trademarks, copyrights and trade
secrets, these protections are limited. Accordingly, we cannot
predict whether such protection will be adequate, or whether our
competitors can develop similar technology independently without
violating our proprietary rights. In addition, rights that may
be granted under any patent application in the future may not
provide competitive advantages to us. Intellectual property
protection in foreign jurisdictions may be limited or
unavailable. In addition, many of our competitors have
substantially larger portfolios of patents and other
intellectual property rights than us.
As the competition in the communications equipment industry
intensifies and the functionality of the products further
overlaps, we believe that companies are becoming increasingly
subject to infringement claims. We have received and may
continue to receive notices from third parties, including some
of our competitors, claiming that we are infringing third-party
patents or other proprietary rights. We have also asserted
certain of our patents against third parties. We cannot predict
whether we will prevail in any litigation over third-party
claims, or whether we will be able to license any valid and
infringed patents on commercially reasonable terms. It is
possible that unfavorable resolution of such litigation could
have a material adverse effect on our business, results of
operations or financial condition. Any of these claims, whether
with or without merit, could result in costly litigation, divert
our managements time, attention and resources, delay our
product shipments or require us to enter into royalty or
licensing agreements, which could be expensive. A third party
may not be willing to enter into a royalty or licensing
agreement on acceptable terms, if at all. If a claim of product
infringement against us is successful and we fail to obtain a
license or develop or license non-infringing technology, our
business, financial condition and operating results could be
affected adversely.
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We are dependent upon key personnel. |
Like all technology companies, our success is dependent on the
efforts and abilities of our employees. Our ability to attract,
retain and motivate skilled employees is critical to our
success. In addition, because we may acquire one or more
businesses in the future, our success will depend, in part, upon
our ability to retain and integrate our own personnel with
personnel from acquired entities who are necessary to the
continued success or the successful integration of the acquired
businesses.
Our recent initiatives to focus our business on core operations
and products by restructuring and streamlining operations,
including substantial reductions in our workforce, have created
uncertainty on the part of our remaining employees regarding
future employment with us. This uncertainty, together with our
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recent past history of operating losses and general industry
uncertainty, may have an adverse effect on our ability to retain
and attract key personnel.
Although we have now completed the documentation and testing of
the effectiveness of our internal control over financial
reporting for fiscal 2005, as required by Section 404 of
the Sarbanes-Oxley Act of 2002, we expect we will have to incur
continuing costs, including increased accounting fees and
increased staffing levels, in order to maintain compliance with
that section of the Sarbanes-Oxley Act. Further, if we complete
acquisitions in the future, our ability to integrate operations
of the acquired company could impact our compliance with
Section 404. In the future, if we fail to complete the
Sarbanes-Oxley 404 evaluation in a timely manner, or if our
independent registered public accounting firm cannot attest in a
timely manner to our evaluation or to the efficacy of our
internal controls, we could be subject to regulatory scrutiny
and a loss of public confidence in our internal controls. In
addition, any failure to implement required new or improved
controls, or difficulties encountered in their implementation,
could harm our operating results or cause us to fail to meet our
reporting obligations.
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Integration of Key Finance Employees. |
In recent weeks, we have hired many new employees in our
internal finance and accounting staff. Until such personnel
become familiar with our operations, our ability to maintain
effective internal controls over financial reporting could be
impaired.
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Product defects could cause us to lose customers and
revenue or to incur unexpected expenses. |
If our products do not meet our customers performance
requirements, our customer relationships may suffer. Also, our
products may contain defects. Any failure or poor performance of
our products could result in:
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delayed market acceptance of our products; |
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delayed product shipments; |
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unexpected expenses and diversion of resources to replace
defective products or identify and correct the source of errors; |
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damage to our reputation and our customer relationships; |
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delayed recognition of sales or reduced sales; and |
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product liability claims or other claims for damages that may be
caused by any product defects or performance failures. |
Our products are often critical to the performance of
communications systems. Many of our supply agreements contain
limited warranty provisions. If these contractual limitations
are unenforceable in a particular jurisdiction or if we are
exposed to product liability claims that are not covered by
insurance, a successful claim could harm our business.
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We may encounter difficulties obtaining raw materials and
supplies needed to make our products and the prices of these
materials and supplies are subject to fluctuation. |
Our ability to produce our products is dependent upon the
availability of certain raw materials and supplies. The
availability of these raw materials and supplies is subject to
market forces beyond our control. From time to time, there may
not be sufficient quantities of raw materials and supplies in
the marketplace to meet the customer demand for our products. In
addition, the costs to obtain these raw materials and supplies
are subject to price fluctuations because of global market
demands. Further, some raw materials or supplies may be subject
to regulatory actions, which may affect available supplies. Many
companies utilize the same raw materials and supplies in the
production of their products as we use in our
9
products. Companies with more resources than our own may have a
competitive advantage in obtaining raw materials and supplies
due to greater purchasing power. Reduced supply and higher
prices of raw materials and supplies may affect our business,
operating results and financial condition adversely.
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We rely upon our contract manufacturing
relationships. |
We have significant reliance on contract manufacturers to make
certain of our products on our behalf. If these contract
manufacturers do not fulfill their obligations to us, or if we
do not properly manage these relationships, our existing
customer relationships may suffer. We may outsource additional
functions in the future.
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We may encounter litigation that has a material impact on
our business. |
We are a party to various lawsuits, proceedings and claims
arising in the ordinary course of business or otherwise. Many of
these disputes may be resolved amicably without resort to formal
litigation. The amount of monetary liability resulting from the
ultimate resolution of these matters cannot be determined at
this time. As of October 31, 2005, we had recorded
approximately $8.4 million in loss reserves for certain of
these matters. In light of the reserves we have recorded, at
this time we believe the ultimate resolution of these lawsuits,
proceedings and claims will not have a material adverse impact
on our business, results of operations or financial condition.
Because of the uncertainty inherent in litigation, it is
possible that unfavorable resolutions of these lawsuits,
proceedings and claims could exceed the amount currently
reserved and could have a material adverse affect on our
business, results of operations or financial condition.
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We are subject to risks associated with changes in
commodity prices, interest rates, security prices, and foreign
currency exchange rates. |
We face market risks from changes in certain commodity prices,
security prices and interest rates. Market fluctuations could
affect our results of operations and financial condition
adversely. At times, we reduce this risk through the use of
derivative financial instruments. However, we do not enter into
derivative instruments for the purpose of speculation.
Also, we are exposed to market risks from changes in foreign
currency exchange rates. From time to time, we hedge our foreign
currency exchange risk. The objective of this program is to
protect our net monetary assets and liabilities in
non-functional currencies from fluctuations due to movements in
foreign currency exchange rates. We attempt to minimize exposure
to currencies in which hedging instruments are unavailable or
prohibitively expensive by managing our operating activities and
net assets position. As a result of our increased international
exposure due to the KRONE acquisition, we may expand our foreign
currency hedging program in the future. At October 31,
2005, the principal currency for which we have implemented a
hedging strategy is the Australian dollar.
Risks Related to Our Common Stock
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Our stock price is volatile. |
Based on the trading history of our common stock and the nature
of the market for publicly traded securities of companies in our
industry, we believe that some factors have caused and are
likely to continue to cause the market price of our common stock
to fluctuate substantially. These fluctuations could occur from
day-to-day or over a
longer period of time. The factors that may cause such
fluctuations include, without limitation:
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announcements of new products and services by us or our
competitors; |
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quarterly fluctuations in our financial results or the financial
results of our competitors or our customers; |
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customer contract awards to us or our competitors; |
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increased competition with our competitors or among our
customers; |
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consolidation among our competitors or customers; |
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disputes concerning intellectual property rights; |
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the financial health of ADC, our competitors or our customers; |
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developments in telecommunications regulations; |
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general conditions in the communications equipment industry; |
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general economic conditions in the U.S. or
internationally; and |
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rumors or speculation regarding ADCs future business
results and actions. |
In addition, stocks of companies in our industry in the past
have experienced significant price and volume fluctuations that
are often unrelated to the operating performance of such
companies. This market volatility may adversely affect the
market price of our common stock.
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We have not in the past and do not intend in the
foreseeable future to pay cash dividends on our common
stock. |
We have not in the past and currently do not pay any cash
dividends on our common stock and do not anticipate paying any
cash dividends on our common stock in the foreseeable future. We
intend to retain future earnings, if any, to finance our
operations and for general corporate purposes.
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Anti-takeover provisions in our charter documents, our
shareowner rights plan and Minnesota law could prevent or delay
a change in control of our company. |
Provisions of our articles of incorporation and bylaws, our
shareowner rights plan (also known as a poison pill)
and Minnesota law may discourage, delay or prevent a merger or
acquisition that a shareowner may consider favorable and may
limit the market price for our common stock. These provisions
include the following:
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advance notice requirements for shareowner proposals; |
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authorization for our Board of Directors to issue preferred
stock without shareowner approval; |
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authorization for our Board of Directors to issue preferred
stock purchase rights upon a third partys acquisition of
15% or more of our outstanding shares of common stock; and |
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limitations on business combinations with interested shareowners. |
Some of these provisions may discourage a future acquisition of
ADC even though our shareowners would receive an attractive
value for their shares or a significant number of our
shareowners believe such a proposed transaction would be in
their best interest.
11
DESCRIPTION OF THE PLAN
Purposes
The ADCInvestDirect plan provides you with a convenient
and economical method of systematically increasing your
ownership interest in ADC through purchases of ADC common stock.
We may use the Plan to raise capital for general corporate
purposes through the sale to you of authorized but unissued
common stock.
Considerations
You should consider the following before you decide to
participate in the Plan:
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Transaction Fees You pay $0.05 for
each share of common stock purchased for your Plan account in
open market transactions. You pay $0.15 for each share of common
stock sold under the Plan. We expect that generally all Plan
purchases and sales will be affected in open market transactions. |
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Service Fees You also pay a service
fee as described in this prospectus for some Plan transactions,
whether or not the transactions are effected in open market
transactions. |
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Investment Timing; Price Risks Because
the prices at which Plan shares are purchased are determined as
of specified dates or as of dates otherwise beyond your control,
you may lose certain advantages otherwise available to you in
being able to select the timing of your investments. For
example, because the price charged to you for shares purchased
in the open market or in negotiated transactions is the weighted
average price at which the shares are actually purchased over a
period of up to five days following an investment, you may pay a
higher price for shares purchased under the Plan than for shares
purchased on the investment date outside of the Plan. |
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No Interest Paid No interest is paid
on your cash investments pending their investment in common
stock. |
Administration
As of the date of this prospectus, Computershare Trust Company,
Inc administers the Plan. As Plan Administrator, Computershare
is responsible for the clerical and ministerial administration
of the Plan, including receiving your investments, forwarding
funds received from you or on your behalf to a registered
broker/ dealer for purchases of common stock, issuing statements
of Plan account activities and performing certain other
administrative duties related to the Plan. You may contact the
Plan Administrator by writing to:
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Computershare Trust Company, Inc. |
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Attention: ADCInvestDirect |
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Post Office Box A3309 |
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Chicago, IL 60690-3309 |
or by calling the Plan Administrator toll free at 1-800-929-6782
or 1-312-360-5209 between 8:30 a.m. and 5:00 p.m.,
central time, on any business day. Written communications may
also be sent to the Plan Administrator by telefax at
1-312-601-4335.
The Plan Administrator is responsible for purchasing and selling
shares of common stock for your Plan account, including the
selection of the broker or dealer through which Plan purchases
and sales are made. ADC has no control over the times or prices
at which the Plan Administrator purchases shares in the open
market or the selection of the broker or dealer used by the Plan
Administrator for the purchases.
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Forms
Plan Authorization Form. A Plan Authorization Form
is used to enroll in the Plan and, at the time of enrollment,
authorize electronic funds transfers. A Plan Authorization Form
is enclosed with this prospectus.
Plan Transaction Form. A Plan Transaction Form is
used to make investments, transfer or sell your Plan shares, and
terminate your participation in the Plan. A Plan Transaction
Form is attached to each account statement mailed to you.
ACH Enrollment Form. An ACH Enrollment Form is
used to change or establish electronic funds transfers after
enrollment, change the amount of or terminate your electronic
funds transfers or change your record address.
All forms can be obtained from the Plan Administrator upon
request.
Eligibility
Any person or entity, whether or not currently a registered
holder of ADC common stock, may participate in the Plan by
enrolling in accordance with the procedures described in
Enrollment and Participation below. We reserve the
right to deny, modify, suspend or terminate participation by any
person or entity. See Other Information Denial
or Termination of Participation.
Enrollment and Participation
You may enroll in the Plan at any time by completing the Plan
Authorization Form enclosed with this prospectus and returning
it to the Plan Administrator at the address listed on the form.
Shareowners. If you are a registered holder of ADC
common stock, you must complete a Plan Authorization Form to
participate in the Plan. If you are a beneficial owner of common
stock whose only shares are held in names other than your own
(e.g., by brokers, trustees or bank nominees), you must complete
a Plan Authorization Form and either:
(a) become a shareowner of record by having the shares
registered in your name, or
(b) become a shareowner of record by enrolling in the Plan
in the same manner as a nonshareowner.
Nonshareowners. If you are not a registered holder
of ADC common stock, you must complete a Plan Authorization Form
and pay a one-time account set-up fee of $10. You must also make
an initial cash investment of at least $500 or authorize
automatic monthly cash investments of at least $50.
Investments
Initial Investment. If you are not a registered
owner of common stock, you must include an initial cash
investment of at least $500 with your completed Plan
Authorization Form or authorize automatic monthly cash
investments by electronic funds transfer of at least $50. For
automatic monthly cash investments, your first investment of at
least $50 must be made by check. In either case, you must also
pay a one-time account set-up fee of $10. See Enrollment
and Participation above. Initial investments and payment
of the account set-up fee must be made by check or money order
payable to Computershare in U.S. funds.
Additional Investments. You may make additional
investments at any time by personal check, money order or
electronic funds transfer from a designated U.S. bank
account. You may vary your investments from a minimum of
$50 per investment up to a maximum of $250,000 per
year. Initial investments are included in the year in which they
are made for purposes of determining whether the $250,000
maximum has been reached.
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Initial and additional investments are invested in shares of
common stock net of service fees as described below.
Check or Money Order. Investments made by check or
money order must be accompanied by a completed Plan Transaction
Form and received by the Plan Administrator no later than one
business day before an investment date to be invested on that
investment date; otherwise, investments are held by the Plan
Administrator for investment on the next investment date.
Investments made by check or money order must be payable to
Computershare in U.S. funds. Your check or
money order must be sent to the address listed on your Plan
statement. Checks or money orders sent to any other address will
not be considered validly delivered.
Electronic Funds Transfer. In addition to making
investments by check or money order, you may authorize automatic
monthly electronic funds transfers from a designated bank
account. Your bank account is debited on the 15th day of
each month or, if that day is not a business day, the business
day next following the 15th day. Funds are invested within
five business days following collection of the funds by the Plan
Administrator. You do not receive any confirmation of the
transfer of funds other than as reflected in the transaction
statements described below and in your bank account statements.
To authorize electronic funds transfers, complete and sign the
automatic funds transfer section of the Plan Authorization Form
and return it to the Plan Administrator together with a voided
blank check or deposit slip for the account from which funds are
to be transferred. Your automatic funds transfers will begin as
soon as practicable after the Plan Administrator receives the
Plan Authorization Form. You may change the amount of your
monthly transfer or terminate your monthly transfer altogether
by completing an ACH Enrollment Form and returning it to the
Plan Administrator. To be effective with respect to a particular
investment date, your change or termination request must be
received by the Plan Administrator at least 15 business days
before the investment date.
Investment Dates. Cash payments will be invested
promptly, but in no event later than five business days
following receipt of the cash payment (except where deferral is
necessary under applicable federal or state laws or regulations).
No interest is paid on funds held by the Plan Administrator
pending their investment in common stock. All investments,
including the initial investment, are subject to the collection
by the Plan Administrator of full face value in
U.S. funds.
Source of Shares. The shares you purchase under
the Plan are authorized but unissued shares of common stock or
common stock purchased by the Plan Administrator in the open
market or in negotiated transactions. The Plan Administrator
purchases shares in the open market or in negotiated
transactions as soon as practicable (but in no event more than
five business days) after receipt of your cash payment, subject
to any waiting periods required under applicable securities laws
or other regulations. We determine the source or sources of
shares used to fulfill Plan requirements and, subject to certain
regulatory restrictions on how often we can change our
determination, we may change the source of shares from time to
time without notice. We expect that generally all Plan purchases
will be effected in open market transactions.
Price of Shares. The purchase price per share of
authorized but unissued common stock is the average of the high
and low sale prices of the common stock (as quoted on the Nasdaq
National Market) on the applicable investment date or, if Nasdaq
is closed on the investment date, on the next preceding day
Nasdaq is open. The price of shares purchased in the open market
or in negotiated transactions is the weighted average price at
which the shares are actually purchased for the applicable
investment date. The Plan Administrator may in its discretion
commingle your funds with other participants funds for the
purpose of forwarding purchase orders and may offset purchase
and sale orders for the same investment date by forwarding the
net purchase or sale requirement. Because the prices at which
shares are purchased under the Plan are determined as of
specified dates or as of dates otherwise beyond your control,
you may lose any advantage otherwise available from being able
to select the timing of your investment.
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Transaction Fee, Service Fees and Other Costs
Account Set-Up. If you are not a registered holder
of ADC common stock, including persons authorizing automatic
monthly cash investments, you are charged a one-time account
set-up fee of $10. The fee must be paid by check or money order
and is due at the time of enrollment. The fee is in addition to
the minimum initial cash investment.
Transaction Fee. In addition to the service fees
discussed below, you pay $0.05 for each share of common stock
purchased for your Plan account in open market transactions,
even if a Plan sale order is used to offset your order. You pay
$0.15 for each share of common stock sold for your Plan account,
even if a Plan purchase order is used to offset your order. We
expect that generally all Plan purchases and sales will be
affected in open market transactions. Transaction fees payable
with respect to Plan purchases are deducted from the amount
invested on your behalf. Transaction fees payable with respect
to Plan sales are deducted from the proceeds payable to you.
Service Fees. For each investment made by check or
money order, you pay a service fee of $5, and for each
investment made by automatic electronic funds transfer, you pay
a service fee of $2. Investment service fees are in addition to
transaction fees and are deducted from the amount invested on
your behalf. You pay a service fee of $10 in connection with
sales of your Plan shares. The service fee is in addition to
transaction fees and is deducted from the proceeds payable to
you from the sale of shares, including a fractional share.
Fees Subject to Change. We may change from time to
time the amount fees charged to you upon 30 days prior
notice.
Account Statements
The Plan Administrator will maintain an account for you and will
send account statements to you as soon as practicable after each
investment and after any transfer, sale or withdrawal of Plan
shares. Your account will be credited with full and fractional
shares, computed to three decimal places. The account statements
provide you with records of purchases and sales and should be
retained for tax purposes.
Uncertificated Shares
Plan purchases are credited to your account and shown on your
account statement. We have uncertificated shares so you will not
receive certificates for your Plan shares.
Gifts of Shares and Share Transfers Within the Plan
You may purchase shares of common stock for others by making
investments on their behalf. To do this, you need only complete
a Plan Authorization Form in the name of the recipient and
return the completed form to the Plan Administrator together
with the one-time account set-up fee of $10 and either an
initial investment of at least $500 or an authorization for
automatic monthly cash investments of at least $50. For
automatic monthly cash investments, please remember to include a
check for your first investment of at least $50 with your
completed Plan Authorization Form.
Your Plan shares also may be transferred to a Plan account of
another person subject to compliance with any applicable laws.
To do this, you must complete a Plan Transaction Form and return
the completed Plan Transaction Form, together with an executed
stock assignment, to the Plan Administrator. Your signature on
the stock assignment must be medallion guaranteed by an eligible
financial institution. The form of stock assignment can be
obtained from the Plan Administrator. If the person to whom the
shares are gifted or transferred is not a participant in the
Plan, the Plan Administrator automatically will open an account
for the person and enroll him or her in the Plan.
You may not pledge or grant a security interest in Plan shares
or transfer Plan shares outside of the Plan.
15
Sale of Shares
You may sell some or all of your Plan shares by submitting the
appropriate information on the Plan Transaction Form or by
sending a written request to the Plan Administrator. Requests
may be faxed to the Plan Administrator. The Plan Administrator
may match or offset your sales orders against one or more
purchase orders of other participants in the Plan. If not
offset, the Plan Administrator will execute the order on your
behalf in the open market or in a negotiated transaction. Sales
orders generally are processed daily provided there is
sufficient volume and the request is received on a business day
when the Nasdaq market is open. If there is not sufficient
volume, sales orders will be processed at least once per week.
After settlement of the sale, the Plan Administrator will send
you a check for the net proceeds of the sale. The proceeds you
receive are based on the weighted average price at which the
shares were sold less service fees charged by the Plan
Administrator and applicable transfer taxes.
You will not have the authority or power to direct the date or
sales price at which Plan shares may be sold. Requests to sell
Plan shares must indicate the number of shares to be sold and
not the dollar amount to be attained. Any request that does not
indicate clearly the number of Plan shares to be sold will be
returned to you with no action taken. You should be aware that
prices may fluctuate during the period between a request for a
sale, receipt by the Plan Administrator of the request, and
ultimate sale in the open market no later than five business
days from the date of receipt by the Plan Administrator. You
will bear the risk of a price change.
Termination
You may terminate your participation in the Plan by submitting
the appropriate information on a Plan Transaction Form or by
sending a written request to the Plan Administrator. In
addition, if you are a participant who makes investments by
electronic funds transfers, your termination request must be
received by the Plan Administrator at least 15 business days
prior to the scheduled investment date to ensure that the
request is effective as to the next investment.
Upon termination of your participation in the Plan, unless you
have requested on the Plan Transaction Form that some or all of
your Plan shares be sold, the Plan Administrator will credit you
with uncertificated shares representing the number of full
shares in your Plan account and a check in the amount of the
market value of any fractional share. If you so request on the
Plan Transaction Form, the Plan Administrator will sell some or
all Plan shares on your behalf. After settlement of the sale,
the Plan Administrator will send you a check in the amount of
the net proceeds of the sale (plus the market value of any
fractional Plan share) and a direct registration advice
representing any full Plan shares not sold. The net proceeds you
receive are based on the weighted average price at which the
shares were sold less fees charged by the Plan Administrator and
applicable transfer taxes.
After termination, you may re-enroll in the Plan by submitting a
new Plan Authorization Form and complying with all other
enrollment procedures (see Enrollment and
Participation). In order to minimize unnecessary Plan
administrative costs and to encourage use of the Plan as a
long-term investment vehicle, we reserve the right to deny
participation in the Plan to previous participants who we or the
Plan Administrator believes have been excessive in their
enrollment and termination.
Other Information
Share Dividends and Stock Splits. Any shares
distributable to you pursuant to a share dividend or stock split
by ADC on shares registered in your name or credited to your
account under the Plan will be added to your account and will
not be mailed or delivered directly to you. If you send a notice
of termination or a request to sell shares to the Plan
Administrator between the record date and the payment date for a
stock distribution, the request will not be processed until the
stock distribution is credited to your account.
Cash Dividends. ADC currently does not pay cash
dividends with respect to the common stock. If in the future ADC
declares a cash dividend with respect to the common stock,
dividends paid on shares in
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your Plan account would be paid directly to you in the same
manner as to shareowners who are not participants in the Plan.
Voting Rights. Voting rights of shares purchased
under the Plan commence upon settlement of the transaction,
which normally is three business days after purchase.
Voting of Plan Shares. For each meeting of
shareowners, you will receive proxy materials that allow you to
vote your Plan shares by proxy. Alternatively, you may vote your
Plan shares in person at the meeting.
Limitation of Liability. ADC and the Plan
Administrator will not be liable for any good faith act or
omission to act, including but not limited to any claim of
liability:
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(a) |
arising out of the failure to terminate your account upon your
death prior to the Plan Administrators receipt of notice
in writing of your death, |
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(b) |
with respect to the prices or times at which shares are
purchased or sold, or |
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as to the value of the shares acquired for you. |
We reserve the right to interpret and regulate the Plan as we
deem necessary or advisable in connection with the Plans
operations.
Modification or Termination of the Plan. We may
suspend, modify or terminate the Plan at any time in whole or in
part or with respect to your participation in the Plan in some
jurisdictions. Notice of a suspension, modification or
termination will be sent to all affected participants. No such
event will affect any shares then credited to a
participants account. If your participation in the Plan is
terminated by us in whole or in part, you will receive all full
Plan shares and a check in the amount of the market value of any
fractional Plan share.
Denial or Termination of Participation. At our
direction, the Plan Administrator may terminate your
participation in the Plan if you do not own at least one full
share in your name or hold shares through the Plan. We also
reserve the right to deny, modify, suspend or terminate
participation in the Plan by otherwise eligible persons to the
extent we deem it advisable or necessary in our discretion to
comply with applicable laws or to eliminate practices that are
not consistent with the purposes of the Plan. Participants whose
participation in the Plan is terminated will receive all full
Plan shares and a check in the amount of the market value of any
fractional Plan share.
Insufficient Funds Policy. In the event that any
check is returned to the Plan Administrator unpaid for any
reason, the Plan Administrator will consider the request for
investment of such money null and void and will remove from your
account Plan shares, if any, purchased upon the prior credit of
such money. The Plan Administrator will be entitled to sell
these shares to satisfy any uncollected amounts plus any
applicable fees. If the net proceeds of the sale of such shares
are insufficient to satisfy the balance of such uncollected
amounts, the Plan Administrator will be entitled to sell such
additional shares from your account as are necessary to satisfy
the uncollected balance.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The information set forth below summarizes certain
U.S. federal income tax consequences of participation in
the Plan. The information is not intended to be a complete
description of all such consequences, nor is it intended to be a
description of any kind of the state, local or foreign tax
consequences of participation in the Plan. The description of
federal income tax consequences may be affected by future
legislation, Internal Revenue Service rulings and regulations
and/or court decisions. For that reason, you should consult your
own tax advisor with respect to the federal income tax
consequences, as well as the state, local and foreign income tax
consequences, of participation in the Plan.
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Cost Basis of Shares. For federal income tax purposes,
the cost basis of shares purchased with your cash investments is
the purchase price of the shares plus any fees paid by you in
connection with open market purchases.
Gains and Losses from the Sale of Shares. You do not
realize any taxable income from the issuance of a direct
registration advice representing Plan shares. You may realize
gain or loss, however, at the time the shares are sold by the
Plan Administrator or by you after you withdraw your shares from
the Plan. The amount of realized gain or loss, if any, is based
on the difference between the amount you receive for the shares
and the cost basis of the shares.
IRS Reports. If, at your request, the Plan Administrator
sells Plan shares for you, the Plan Administrator will report
the proceeds from the sale to you and the Internal Revenue
Service on Form 1099-B.
FORWARD-LOOKING STATEMENTS
This prospectus contains various forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this
prospectus, the words anticipate,
believe, estimate, expect
and similar expressions are intended to identify forward-looking
statements. Forward-looking statements represent our
expectations or beliefs concerning future events, including any
statements regarding:
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future sales and cost reductions, profit percentages,
realization of deferred tax assets, earnings per share or other
results of operations; |
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the continuation of historical patterns and trends such as
seasonality in the buying pattern of our customers; |
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the sufficiency of our cash balances and cash generated from
operating and financing activities for our future liquidity and
capital resource needs; |
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the occurrence or impact of consolidation among our customers or
competitors; |
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the effect of legal and regulatory developments; and |
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the economy in general or the future of the communications
equipment and communications services industries on our business. |
Such statements reflect our current views with respect to future
events and are subject to certain risks, uncertainties and
assumptions, some of which are included in this prospectus under
Risk Factors. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those
described as anticipated, believed, estimated, or expected. We
do not intend to update these forward-looking statements after
the post-effective amendment to the registration statement of
which this prospectus forms a part becomes effective.
USE OF PROCEEDS
The proceeds from the sales, if any, of authorized but unissued
common stock under the Plan are expected to be used for general
corporate purposes. We have no basis for estimating either the
number of shares of common stock that will ultimately be sold
under the Plan or the prices at which the shares will be sold.
We will not receive any proceeds when shares of common stock are
purchased under the Plan in the open market.
LEGAL MATTERS
The validity of the issuance of the securities offered by this
prospectus has been passed upon for us by Dorsey & Whitney
LLP, Minneapolis, Minnesota.
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EXPERTS
Ernst & Young LLP, independent registered public accounting
firm, has audited our consolidated financial statements and
schedule included in our Annual Report on Form 10-K for the
year ended October 31, 2005, and managements
assessment of the effectiveness of our internal control over
financial reporting as of October 31, 2005, as set forth in
their reports, which are incorporated by reference in this
prospectus and elsewhere in the registration statement. Our
financial statements and schedule and managements
assessment are incorporated by reference in reliance upon
Ernst & Young LLPs reports, given on their
authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the with the Securities and Exchange
Commission (SEC). You may read and copy these
documents at the SECs public reference room at 100 F
Street, NE, Room 1580, Washington, DC 20549. Please call
the SEC at
1-800-SEC-0330 for
further information on the public reference rooms. The SEC also
maintains an internet site that contains reports, proxy and
information statements, and other information regarding issuers
like us that file electronically with the SEC. The address of
the SECs web site is http://www.sec.gov. Copies of our SEC
filings are also available through our website (www.adc.com) as
soon as reasonably practicable after we electronically file the
material with, or furnish it to, the SEC.
This prospectus is part of a Registration Statement on
Form S-3 that we filed with the SEC to register the shares
offered under the Plan. As allowed by SEC rules, this prospectus
does not contain all of the information that is required to be
in the registration statement and the exhibits and schedules to
the registration statement. For further information regarding
ADC Telecommunications, Inc., investors should refer to the
registration statement and its exhibits and schedules. A copy of
the registration statement may be inspected, without charge, at
the offices of the SEC at 100 F Street, NE, Washington, DC
20549, and copies of all or any part of the registration
statement may be obtained from the SECs public reference
room at 100 F Street, NE, Room 1580, Washington, DC 20549,
upon the payment of any fees required by the SEC. The
registration statement is also available on the SECs web
site at http://www.sec.gov.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the
information we file with it, which means that we can disclose
important information to you by referring you to those
documents. The information that we incorporate by reference is
considered to be part of this prospectus, and later information
that we file with the SEC will automatically update and
supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until our offering is completed:
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Our Annual Report on Form 10-K for the fiscal year ended
October 31, 2005; |
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Our Current Reports on Form 8-K filed on November 3,
2005, November 7, 2005, November 23, 2005 and
December 13, 2005; and |
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The description of our common stock and stock purchase rights
contained in any Registration Statement on Form 8-A we
filed and any amendment or report filed for the purpose of
updating this description. |
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We will provide, at no cost to you, upon your written or oral
request, a copy of any or all of the documents incorporated by
reference in this prospectus (other than exhibits, unless such
exhibits are specifically incorporated by reference into such
documents) and any report, proxy statement or other
communication distributed by us to our shareowners generally.
Please direct your requests for copies to the following address
and telephone number:
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ADC Telecommunications, Inc. |
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P.O. Box 1101 |
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Minneapolis, Minnesota 55440-1101 |
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Attention: Investor Relations |
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(952) 917-0991 |
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investor@adc.com |
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www.adc.com/investor |
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You should rely only on the information incorporated by
reference or provided in this prospectus or any supplement to
this prospectus. We have not authorized anyone else to provide
you with different information. You should not assume that the
information in this prospectus or any supplement to this
prospectus is accurate as of any date other than the date on
cover page of this prospectus or any supplement. Our business,
financial conditions, results of operations and prospectus may
have changed since that date. |
Neither the delivery of this prospectus nor any sales under
it shall under any circumstances create any implication that
there has been no change in our affairs since the date of this
prospectus. No dealer, broker, sales representative or any other
person has been authorized to give any information or to make
any representations, other than those contained in this
prospectus, in connection with the offering contained in this
prospectus, and information or representations not contained in
it, if given or made, must not be relied upon as having been
authorized by us. This prospectus does not constitute an
offering in any state or jurisdiction in which the offering may
not lawfully be made.
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PROSPECTUS
ADC TELECOMMUNICATIONS, INC.
ADCInvestDirect
A direct stock purchase plan for ADC