AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 20, 2001
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SIRIUS SATELLITE RADIO INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 4899 52-1700207
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
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1221 AVENUE OF THE AMERICAS, 36TH FLOOR
NEW YORK, NEW YORK 10020
212-584-5100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------
PATRICK L. DONNELLY
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
SIRIUS SATELLITE RADIO INC.
1221 AVENUE OF THE AMERICAS, 36TH FLOOR
NEW YORK, NEW YORK 10020
212-584-5100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
-------------------
COPY TO:
PAUL D. GINSBERG
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
212-373-3000
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APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: From time to time after the
effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
(continued on next page)
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CALCULATION OF REGISTRATION FEE
===================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT OFFERING AGGREGATE AMOUNT OF
OF SECURITIES TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SECURITY PRICE FEE(1)
- -------------------------------------------------------------------------------------------------------------------
First Tranche Warrants to purchase common stock,
par value $0.001 per share....................... 525,000 N/A(1) N/A(1) N/A(1)
- -------------------------------------------------------------------------------------------------------------------
Second Tranche Warrants to purchase common stock,
par value $0.001 per share....................... 1,050,000 N/A(1) N/A(1) N/A(1)
- -------------------------------------------------------------------------------------------------------------------
Third Tranche Warrants to purchase common stock,
par value $0.001 per share....................... 525,000 N/A(1) N/A(1) N/A(1)
- -------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.001 per share(2)........ 2,100,000(3)(4) $7.59(5) $15,939,000(6) $3,985
===================================================================================================================
(1) In accordance with Rule 457(g) under the Securities Act, no separate
registration fee is payable in respect of the warrants to purchase common
stock.
(2) This registration statement also applies to rights under our rights
agreement, which are attached to and tradable only with the shares of common
stock registered under this registration statement. No registration fees are
required for these rights as they will be issued for no additional
consideration.
(3) Represents the shares of common stock issuable upon the exercise of the
warrants.
(4) In accordance with Rule 416 under the Securities Act, we are also
registering an indeterminate number of additional shares of common stock and
other securities that may become issuable from time to time in accordance
with the adjustment provisions of the warrants.
(5) These shares are to be sold by the Selling Security holders at prices not
presently determinable. The offering price is estimated solely for purposes
of calculating the registration fee in accordance with Rule 457(c) using
$7.59, the average of the high and low sales price of the common stock
on the Nasdaq National Market on July 19, 2001.
(6) Estimated solely for the purpose of calculating the registration fee under
Rule 457(g) of the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE AMENDED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS
[SIRIUS SATELLITE LOGO]
525,000 FIRST TRANCHE WARRANTS TO PURCHASE COMMON STOCK
1,050,000 SECOND TRANCHE WARRANTS TO PURCHASE COMMON STOCK
525,000 THIRD TRANCHE WARRANTS TO PURCHASE COMMON STOCK
2,100,000 SHARES OF COMMON STOCK
This prospectus relates to 2,100,000 warrants to purchase our common stock
and 2,100,000 shares of our common stock which may be issued upon exercise of
these warrants.
Each warrant may be exercised to purchase one share of our common stock at a
price of $29.00 per share.
The holders of the warrants may offer to sell their warrants and the shares
of common stock issuable upon exercise of their warrants from time to time
following the effective date of the registration statement. The selling holders
will receive all the proceeds from the sale of the warrants and the common stock
sold by them. We will receive the proceeds of any exercise of the warrants.
The warrants are divided into three tranches: 525,000 first tranche
warrants, 1,050,000 second tranche warrants and 525,000 third tranche warrants.
We issued the warrants on December 27, 2000. The first tranche warrants vested
on December 27, 2000, the second tranche warrants vested on March 7, 2001 and
the third tranche warrants vested on April 4, 2001. Unless exercised, the
warrants will expire ten years after their respective vesting dates.
Our common stock is traded on the Nasdaq National Market under the symbol
'SIRI.' On July 19, 2001, the last reported sale price of our common stock on
the Nasdaq National Market was $7.39.
INVESTING IN OUR WARRANTS AND COMMON STOCK INVOLVES RISK, INCLUDING THE RISKS
DESCRIBED IN THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS. YOU
SHOULD CAREFULLY CONSIDER THE IMPORTANT RISK FACTORS SET FORTH IN THE DOCUMENTS
INCORPORATED BY REFERENCE IN THIS PROSPECTUS BEFORE INVESTING IN OUR WARRANTS OR
COMMON STOCK.
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.
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Prospectus dated , 2001
TABLE OF CONTENTS
PAGE
----
Special Note Regarding Forward-Looking Statements........... 2
Summary..................................................... 3
Risk Factors................................................ 6
Use of Proceeds............................................. 6
Price Range of Common Stock................................. 6
Dividend Policy............................................. 6
Description of the Warrants................................. 7
Book Entry; Delivery and Form............................... 11
U.S. Federal Income Tax Considerations...................... 13
Selling Security Holders.................................... 15
Plan of Distribution........................................ 15
Legal Matters............................................... 17
Experts..................................................... 17
Where You Can Obtain Additional Information................. 17
Incorporation by Reference.................................. 17
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS MAY ONLY BE USED WHERE IT IS
LEGAL TO SELL THESE SECURITIES. THE INFORMATION IN THIS PROSPECTUS MAY ONLY BE
ACCURATE ON THE DATE OF THIS PROSPECTUS.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The following cautionary statements identify important factors that could
cause our actual results to differ materially from those projected in the
forward-looking statements made in this prospectus. Any statements about our
expectations, beliefs, plans, objectives, assumptions or future events or
performance are not historical facts and may be forward-looking. These
statements are often, but not always, made through the use of words or phrases
such as 'will likely result,' 'are expected to,' 'will continue,' 'is
anticipated,' 'estimated,' 'intends,' 'plans,' 'projection' and 'outlook.' Any
forward-looking statements are qualified in their entirety by reference to the
factors discussed throughout this prospectus and in other reports and documents
published by us from time to time, and particularly the risk factors referenced
under 'Risk Factors' in this prospectus. Among the significant factors that
could cause our actual results to differ materially from those expressed in
forward-looking statements are:
unavailability of radios capable of receiving our service and our
dependence on third parties to manufacture and distribute them;
the potential risk of delay in implementing our business plan;
unproven market for our service; and
our need for additional financing.
The risk factors referred to above could cause actual results or outcomes to
differ materially from those expressed in any forward-looking statements made by
us or on our behalf. Accordingly, you should not place undue reliance on any of
these forward-looking statements. In addition, any forward-looking statement
speaks only as of the date on which it is made, and we undertake no obligation
to update any forward-looking statement or statements to reflect events or
circumstances after the date on which the statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time, and it
is not possible for us to predict which will arise or to assess with any
precision the impact of each factor on our business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements.
Please see the documents identified under 'Where You Can Obtain Additional
Information' for a discussion of the factors that affect our business.
2
SUMMARY
This summary highlights information contained elsewhere in this prospectus.
Because it is a summary, it may not contain all of the information that is
important to you. To understand this offering fully, you should read this entire
prospectus carefully and the documents incorporated by reference into this
prospectus.
ABOUT OUR BUSINESS
From our three orbiting satellites, we will directly broadcast up to 100
channels of digital-quality radio to vehicles, homes and portable users
throughout the continental United States for a monthly subscription fee of
$12.95. We will deliver 50 channels of commercial-free music in virtually every
genre, and up to 50 channels of news, sports, talk, comedy and children's
programming. Sirius' broad and deep range of almost every music format as well
as its news, sports and entertainment programming are not available on
conventional radio in any market in the United States. We hold one of only two
licenses issued by the Federal Communications Commission to operate a national
satellite radio system.
Upon commencing commercial operations, we expect our primary source of
revenues will be subscription fees, which we expect will be included in the sale
or lease of certain new vehicles. In addition, we expect to derive revenues from
directly selling or bartering limited advertising on our non-music channels.
We have exclusive agreements with Ford Motor Company, DaimlerChrysler
Corporation and BMW of North America, LLC that contemplate manufacturing and
selling vehicles that include radios capable of receiving our broadcasts. These
agreements cover all brands and affiliates of these automakers, including, Ford,
Chrysler, Mercedes, BMW, Jaguar, Mazda and Volvo. Our agreement with
DaimlerChrysler also makes us the preferred provider of satellite radio in
Freightliner and Sterling heavy trucks. In 2000, Ford, DaimlerChrysler and BMW
sold or leased approximately 7.5 million vehicles in the continental United
States, which was approximately 43% of all new cars and trucks sold or leased in
the continental United States last year.
In addition, in the autosound aftermarket, we expect that radios capable of
receiving our broadcasts will be available for sale at various national and
regional retailers, such as Best Buy, Circuit City, Tweeter Home Entertainment
Group and Good Guys. In 2000, approximately 11 million car radios were sold
through consumer electronics retailers.
We have entered into agreements with numerous consumer electronics
manufacturers, including Alpine Electronics Inc., Clarion Co., Ltd., Delphi
Delco Electronics Systems, Kenwood Corporation, Matsushita Communication
Industrial Corporation of USA, Recoton Corporation, Sony Electronics Inc. and
Visteon Automotive Systems, to develop radios capable of receiving our
broadcasts. As these radios become available in commercial quantities, they will
be sold to automakers for inclusion in new vehicles and consumer electronics
retailers for sale in the autosound aftermarket.
Sirius Satellite Radio Inc. was incorporated in the State of Delaware as
Satellite CD Radio, Inc. on May 17, 1990. On December 7, 1992, we changed our
name to CD Radio Inc., and we formed a wholly owned subsidiary, Satellite CD
Radio, Inc., that is the holder of our FCC license. On November 18, 1999, we
changed our name again to Sirius Satellite Radio Inc. Our executive offices are
located at 1221 Avenue of the Americas, New York, New York 10020, our telephone
number is (212) 584-5100 and our internet address is siriusradio.com.
Siriusradio.com is an inactive text reference only, meaning that the information
contained on the website is not part of this prospectus and is not incorporated
in this prospectus by reference.
3
THE OFFERING
SECURITIES OFFERED................... 2,100,000 warrants, each to purchase one share of our common
stock, and 2,100,000 shares of our common stock issuable
upon the exercise of the warrants. The warrants are divided
into three tranches: 525,000 first tranche warrants,
1,050,000 second tranche warrants and 525,000 third tranche
warrants.
Holders of the warrants will be entitled to acquire an
aggregate of 2,100,000 shares of our common stock. The
number of shares of our common stock to be issued under the
warrants will be adjusted in some cases if we issue
additional shares of common stock, options, warrants or
convertible securities and in some other events.
EXPIRATION DATES..................... The expiration date for the first tranche warrants is
December 27, 2010, for the second tranche warrants is March
7, 2011 and for the third tranche warrants is April 4, 2011.
EXERCISE............................. Warrant holders may exercise their warrants on any business
day.
Warrant holders may exercise their warrants only if (1) the
issuance of the warrant shares is covered by an effective
registration statement under the Securities Act or (2) the
exercise of the warrants is exempt from the registration
requirements under the Securities Act, and the warrant
shares are qualified for sale or exempt from qualification
under state or local laws. We are not required in many
instances to have a registration statement available.
EXERCISE PRICE....................... $29.00 per share. Lehman Brothers may exchange any of the
first tranche warrants for new first tranche warrants with
an exercise price of $29.91 which would be eligible for
resale under Section 144A of the Securities Act. The second
tranche warrants and the third tranche warrants are eligible
for resale under Rule 144A of the Securities Act and,
therefore, they are not subject to an exchange or a change
in exercise price.
RIGHTS AS STOCKHOLDERS............... Holders of unexercised warrants will not have any of the
rights which our stockholders possess.
WARRANT AGENT........................ United States Trust Company of New York.
REGISTRATION RIGHTS.................. We are registering the warrants and the shares that will be
issued upon exercise of the warrants on a shelf registration
statement as required under the amended and restated warrant
agreement between us and the warrant agent.
After September 30, 2001, holders of warrants and warrant
shares also have the right to include their warrants and
warrant shares in registration statements we file under the
Securities Act for our account or for holders of our common
equity securities, with some exceptions.
Assuming we comply with our registration rights obligations
with respect to a 'piggy-back' registration of warrants or
warrant shares, all holders of the warrants and warrant
shares will be required, at the request of the underwriters
of a public offering of our common stock or securities
convertible into our common stock, not to sell or dispose of
any warrants and shares issued
4
upon the exercise of the warrants for a period not to exceed
30 days prior to, and 90 days after, the completion of that
offering.
USE OF PROCEEDS...................... We will not receive any proceeds from the sale of the
warrants or sales of common stock issued upon exercise of
the warrants, although we will receive the proceeds of any
exercise of the warrants. Assuming that all the warrants are
exercised, the entire exercise price is paid in cash and
Lehman Brothers does not exchange the first tranche warrants
for warrants eligible for resale under Section 144A of the
Securities Act, the total proceeds to us from the issuance
of shares upon exercise of the warrants will be $60.9
million.
NASDAQ NATIONAL MARKET SYMBOL........ SIRI
DIVIDED POLICY....................... We have never declared or paid any cash dividends on our
common stock and do not anticipate paying cash dividends in
the foreseeable future.
5
RISK FACTORS
Investing in our warrants and common stock involves risk, including the
risks described in the documents incorporated by reference in this prospectus.
You should carefully consider the risk factors before investing in our warrants
or common stock. These risk factors are set forth in the documents incorporated
by reference in this prospectus and, in particular, in our Annual Report on
Form 10-K for the year ended December 31, 2000, and any filings made with the
Securities and Exchange Commission after the date of this prospectus pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the warrants or common
stock by the holders thereof, although we will receive the proceeds of any
exercise of the warrants. Assuming all the warrants are exercised at $29.00 per
warrant share and the entire exercise price is paid in cash, the total proceeds
to us from the issuance of the warrant shares will be $60.9 million. The selling
holders of the warrants will receive all the proceeds from the sale of the
warrants.
PRICE RANGE OF COMMON STOCK
Our common stock began trading on the Nasdaq Small Cap Market on
September 13, 1994. From October 24, 1997 to January 11, 2000, our common stock
was traded on the Nasdaq National Market under the symbol 'CDRD.' On
January 12, 2000, our common stock began trading on the Nasdaq National Market
under the symbol 'SIRI.'
The following table sets forth the high and low sales prices for our common
stock, as reported by the Nasdaq National Market, for the periods indicated.
1999:
First Quarter........................................ $38 5/8 $20 1/2
Second Quarter....................................... 32 19 1/2
Third Quarter........................................ 38 1/2 23 1/4
Fourth Quarter....................................... 48 1/2 23 1/8
2000:
First Quarter........................................ 69 7/16 37
Second Quarter....................................... 55 5/8 30
Third Quarter........................................ 60 33 7/8
Fourth Quarter....................................... 57 7/16 20 1/2
2001:
First Quarter........................................ 35 1/2 11 9/16
Second Quarter....................................... 19.15 6.125
Third Quarter (through July 19, 2001)................ 11.50 7.20
On July 19, 2001, the last reported sale price of our common stock on
the Nasdaq National Market was $7.39 per share. On June 30, 2001, there were
approximately 374 holders of record of our common stock.
DIVIDEND POLICY
We have never declared or paid cash dividends on our capital stock. We
intend to retain any future earnings for use in our business and do not
anticipate paying any cash dividends in the foreseeable future. The indentures
governing our senior secured notes, our senior secured discount notes and our
convertible subordinated notes and our term loan agreement contain provisions
that limit our ability to pay dividends on our preferred stock and our common
stock. The certificates of designation for our preferred stock contain
provisions that also limit our ability to pay dividends on our common stock.
6
DESCRIPTION OF THE WARRANTS
GENERAL
We issued the warrants under an amended and restated warrant agreement,
dated as of December 27, 2000, between us, as issuer, and United States Trust
Company of New York, as warrant agent.
The following is a summary of the material provisions of this warrant
agreement. Because it is a summary, it is not necessarily complete and is
subject to, and qualified in its entirety by reference to, all the provisions of
the warrants and the warrant agreement, including the definitions of terms
contained in the agreement.
The warrant agreement is available upon request from us or the warrant
agent. For definitions of specific terms used in this summary, see ' -- Certain
Definitions -- ' below.
One warrant will entitle its registered holder to purchase from us one share
of our common stock at an exercise price of $29.00 per share of common stock
issuable upon exercise of the warrants. The expiration dates are as follows:
EXPIRATION DATE
NUMBER 5:00 P.M.
TRANCHE OF SHAREHOLDERS NEW YORK CITY TIME ON
------- --------------- ---------------------
1st tranche warrants.............................. 525,000 December 27, 2010
2nd tranche warrants.............................. 1,050,000 March 7, 2011
3rd tranche warrants.............................. 525,000 April 4, 2011
Both the exercise price and the number of securities issuable upon exercise of
the warrants are subject to adjustments as provided in the warrant agreement.
Lehman Brothers, one of the initial holders of the first tranche warrants,
may exchange any of the first tranche warrants for new first tranche warrants
with an exercise price of $29.91 which would be eligible for resale under
Section 144A of the Securities Act. The second tranche warrants and the third
tranche warrants are eligible for resale under Rule 144A of the Securities Act
and, therefore, they are not subject to an exchange or a change in exercise
price.
The terms of each of the three tranches of warrants are otherwise the same
and this description of the warrants applies to all three tranches. Holders may
exercise warrants on any business day before the expiration date for each
tranche of warrants. Any warrant not exercised before 5:00 P.M., New York City
time, on the expiration date for the applicable tranche of warrants will become
void, and all rights of the holder will cease.
EXERCISE
Holders may exercise warrants by:
surrendering the warrant certificate evidencing their warrants after duly
completing and executing the form of election to purchase shares of common
stock shown on the reverse side of the warrant certificate; and
paying the exercise price for the warrants in full at the office or agency
designated for that purpose, which initially is the corporate trust office
or agency of the warrant agent in New York, New York.
A holder may exercise a warrant only in whole. The exercise price may be
paid in full, at the option of the holder, either:
in cash or by certified or official bank check or by wire transfer of funds
to an account we have designated for such purpose;
by a cashless exercise (as defined below); or
by any combination of the above.
7
To effect a 'cashless exercise,' the holder is entitled to exercise a warrant or
warrants without payment of the exercise price in cash by surrendering (which
surrender will be evidenced by cancellation of the number of warrants
represented by any warrant certificate presented in connection with a cashless
exercise) the warrant or warrants (represented by one or more warrant
certificates), and, in exchange for them, receiving the number of shares of
common stock obtained by multiplying:
(1) the number of shares of common stock for which the warrant or
warrants are exercisable with payment in cash of the exercise price
as of the date of exercise, and
(2) the cashless exercise ratio (as defined below).
The 'cashless exercise ratio' is a fraction, the numerator of which is the
excess of the current market value per share of common stock on the date of
exercise over the exercise price per share as of the date of exercise and the
denominator of which is the current market value per share of common stock on
the date of exercise.
If a holder surrenders a warrant certificate representing more than one
warrant in connection with the holder's option to elect a cashless exercise, the
number of shares of common stock deliverable upon a cashless exercise will be
equal to the cashless exercise ratio multiplied by the product of (1) the number
of warrants that the holder specifies is to be exercised as part of the cashless
exercise and (2) the number of shares of common stock for which each warrant is
exercisable (without giving effect to the cashless exercise).
All provisions of the warrant agreement will be applicable with respect to
the surrender of a warrant certificate as part of a cashless exercise in
connection with the exercise of less than the full number of warrants
represented by the certificate. We will make no payment or adjustment on account
of any dividends on our common stock which may be issued upon exercise of a
warrant.
Holders of warrant certificates may surrender them for exercise or exchange,
and register the transfer of warrant certificates, at our office or agency
maintained for this purpose, which initially is the corporate trust office of
the warrant agent in New York, New York. We issued the warrant certificates
initially in certificated form and in registered form as definitive warrant
certificates. We will impose no service charge for any exercise, exchange or
registration of transfer of warrant certificates, but we may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection with the transfer.
We are not required to issue fractional shares of common stock upon exercise
of warrants. We will pay a cash adjustment instead of fractional shares, except
in limited circumstances.
NO RIGHTS AS STOCKHOLDERS
Except as expressly described in the warrant agreement, the holders of
unexercised warrants are not entitled, in this capacity, to receive dividends or
other distributions, receive notice of any meeting of stockholders, consent to
any action of stockholders or receive notice of any other stockholder
proceedings, or to any other rights exercised by our stockholders.
DISTRIBUTION RIGHTS; ADJUSTMENT TO EXERCISE RATE; MERGER OR CONSOLIDATION
The number of warrant shares issuable upon exercise of a warrant (the
'exercise rate') will be adjusted from time to time when specific events occur,
including:
some dividends or distributions on shares of our common stock payable in
shares of common stock or some of our other capital stock;
subdivisions, combinations or some reclassifications of shares of our
common stock;
the distribution to all holders of our common stock of any of our assets
(including cash), debt securities, preferred stock or any rights or
warrants to purchase any of these securities, other than ordinary cash
dividends at a rate not exceeding the rate specified in the warrant
agreement;
8
our issuance of shares of our common stock or of securities convertible
into or exchangeable or exercisable for shares of common stock at a price
below the lesser of the then current market value and the closing price per
share of common stock as of the date we agree in writing to issue such
shares, other than issuances:
(1) upon the exercise of the warrants,
(2) upon the exercise, conversion or exchange of any right, option, warrant
or security, the issuance of which has previously required an
adjustment as provided in the warrant agreement,
(3) upon the exercise, conversion or exchange of any right, option,
warranty or security outstanding on December 27, 2000 (to the extent
as provided under the terms of those securities as in effect on
that date).
Notwithstanding the above, no adjustment in the exercise rate will be required
upon the issuance, conversion, exchange or exercise of options to acquire shares
of common stock by our officers, directors or employees; provided that the
aggregate number of shares of common stock issued or issuable under those
options shall not exceed 4% of our common stock on a fully diluted basis on
December 27, 2000.
If, in a single transaction or through a series of related transactions, we
consolidate with or merge with or into any other person or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of our
properties and assets to another person or group of affiliated persons or are a
party to a merger or binding share exchange which reclassifies or changes our
outstanding common stock (a 'fundamental transaction'), then, as a condition to
consummating any of these transactions, the person formed by or surviving the
consolidation or merger (if other than us) or the person to whom the transfer
has been made (the 'surviving person') will enter into a supplemental warrant
agreement. The supplemental warrant agreement will provide:
that the holder of a warrant then outstanding is entitled to exercise it
for the kind and amount of securities, cash or other assets which the
holder could have received immediately after the fundamental transaction if
the holder had exercised the warrant immediately before the effective date
of the transaction (regardless of whether the warrants are then exercisable
and without giving effect to the cashless exercise option), assuming (to
the extent applicable) that the holder:
(1) was not a constituent person or an affiliate of a constituent person to
the transaction;
(2) made no election with respect to the transaction; and
(3) was treated alike with the plurality of non-electing holders; and
that the surviving person will succeed to and be substituted for all of our
rights and obligations under the warrant agreement and the warrants.
Notwithstanding the above, if we enter into a fundamental transaction with
another person (other than one of our subsidiaries) and consideration is payable
to holders of the shares of capital stock (or other securities or property)
issuable or deliverable upon exercise of the warrants that are exercisable in
exchange for their shares in connection with the fundamental transaction which
consists solely of cash, then the holders of warrants shall be entitled to
receive distributions on the date of the event on an equal basis with holders of
those shares (or other securities issuable upon exercise of the warrants) as if
the warrants had been exercised immediately before the event, less the exercise
price for the warrants. Upon receipt of this payment, if any, the rights of a
holder of a warrant shall terminate and cease and the holder's warrants shall
expire.
In the event of a taxable distribution to holders of our common stock which
results in an adjustment to the number of shares of common stock or other
consideration for which a warrant may be exercised, the holders of the warrants
may, in some circumstances, be deemed under applicable law to have received a
distribution subject to United States federal income tax as a dividend. See
'U.S. Federal Income Tax Considerations.'
9
AMENDMENT OR MODIFICATION OF WARRANTS TO WARRANT AGREEMENT
We may amend and modify some of the provisions of the warrant agreement
without the prior approval of the holders. In addition, we and the warrant agent
may amend and modify most provisions of the warrant agreement with the consent
of the holders of the warrants representing a majority in number of warrants
then outstanding.
CERTAIN COVENANTS
We will file the reports that we are required to file under the Exchange Act
and the rules, regulations and policies adopted by the Securities and Exchange
Commission under this statute in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if at any time we
are not required to file those reports, we will, upon the request of any holder
or beneficial owner of warrants, make available the information necessary to
permit sales in accordance with Rule 144A under the Securities Act.
We will also comply with all applicable laws, including the Securities Act
and any applicable state securities laws, in connection with the offer and sale
of common stock (and other securities and property deliverable) upon exercise of
the warrants.
REGISTRATION RIGHTS
WARRANTS
Under the warrant agreement, we agreed to file and use our reasonable best
efforts to cause to be declared effective no later than September 30, 2001, a
shelf registration statement regarding the warrants and the warrant shares.
This prospectus is a part of the shelf registration statement that we filed
in satisfaction of this obligation.
We may suspend the availability of the shelf registration statement for up
to three periods of up to 30 consecutive days (except for the 45 consecutive-day
period immediately prior to the applicable expiration date) but no more than an
aggregate of 60 days during any 365-day period, if any event occurs as a result
of which it is necessary, in the good faith determination of our board of
directors, to amend the warrant shelf registration statement or amend or
supplement any related prospectus or prospectus supplement, so that each of
these documents does not include any untrue statement of fact or omit to state a
material fact necessary to make the statements in these documents not misleading
in light of the circumstances under which they were made.
PIGGY-BACK REGISTRATION
Holders of warrants and warrant shares also have the right to include their
warrants or warrant shares in any registration statement under the Securities
Act that we file for our own account or for the account of any of our security
holders covering the sale of our common equity securities (other than (a) a
registration statement on Form S-4 or S-8 or (b) a registration statement filed
in connection with an offer of securities solely to existing security holders
for sale on the same terms and conditions as our securities or the other selling
security holders included in the registration statement.
CERTAIN DEFINITIONS
We have used the following definitions in this prospectus:
'current market value' per share of our common stock or any other security
at any date means:
(1) if the security is not registered under the Exchange Act,
(a) the value of the security, determined in good faith by our board of
directors and certified in a board resolution, based on the most
recently completed arms-length
10
transaction between us and a person other than one of our affiliates
and the closing of which occurs on that date or shall have occurred
within the six-month period preceding that date, or
(b) if no transaction of the type described above shall have
occurred on that date or within the six-month period, the fair
market value of the security as determined by a nationally or
regionally recognized independent financial expert (provided
that, in the case of the calculation of current market value for
determining the cash value of fractional shares, any
determination within six months that is, in the good faith
judgment of our board of directors, a reasonable determination
of value, may be utilized) or
(2) if the security is registered under the Exchange Act,
(a) the average of the daily closing sales prices of the securities for
the 20 consecutive trading days immediately preceding that date, or
(b) if the securities have been registered under the Exchange Act
for less than 20 consecutive trading days before that date, then
the average of the daily closing sales prices for all of the
trading days before that date for which closing sales prices are
available,
in the case of each of (2)(a) and (2)(b), as certified to the warrant agent by
our President, any Vice President or our Chief Financial Officer. The closing
sales price for each of those trading days shall be:
in the case of a security listed or admitted to trading on any United
States national securities exchange or quotation system, the closing sales
price, regular way, on that day or, if no sale takes place on that day, the
average of the closing bid and asked prices on that day,
in the case of a security not then listed or admitted to trading on any
United States national securities exchange or quotation system, the last
reported sale price on that day or, if no sale takes place on that day, the
average of the closing bid and asked prices on that day, as reported by a
reputable quotation source that we designate,
in the case of a security not then listed or admitted to trading on any
United States national securities exchange or quotation system and as to
which no reported sale price or bid and asked prices are available, the
average of the reported high bid and low asked prices on that day, as
reported by a reputable quotation service, or a newspaper of general
circulation in the Borough of Manhattan, City and State of New York,
customarily published on each business day that we designate, or, if there
shall be no bid and asked prices on that day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than
30 days before the date in question) for which prices have been so
reported, and
if there are no bid and asked prices reported during the 30 days before the
date in question, the current market value shall be determined as if the
securities were not registered under the Exchange Act; and
'person' means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
of a government.
BOOK ENTRY; DELIVERY AND FORM
We issued the certificates representing the warrants in fully registered
form. The first tranche warrants were delivered in certificated form only (the
'certificated warrants').
We and Lehman Brothers agreed that the second tranche warrants and third
tranche warrants were eligible for resale to 'qualified institutional buyers'
('QIBs') in reliance on Rule 144A. The second tranche warrants and the third
tranche warrants are represented by permanent global
11
warrants (the 'global warrants') in definitive, fully registered form which were
registered in the name of a nominee of The Depository Trust Company (the
'depository') and were deposited with the warrant agent as custodian for the
depository for credit to Lehman Brothers (or to any other accounts as it may
have directed) at the depository.
GLOBAL WARRANTS
Upon issuance of a global warrant, the depository credits, on its internal
system, the respective amounts of the individual beneficial interests in the
global warrant to persons who have participant accounts with the depository
('participants'). Ownership of beneficial interests in a global warrant will be
shown on, and the transfer of these beneficial interests will be effected only
through, records maintained by the depository or its nominee (with respect to
interests of participants) and the records of participants (with respect to
interests of persons other than participants). Investors may hold their
interests in a global warrant directly through the depository if they are
participants, or indirectly through organizations which are participants.
So long as the depository, or its nominee, is the registered owner or holder
of a global warrant, the depository or the nominee, as the case may be, will be
considered the sole owner and holder of the warrants represented by the global
warrant for all purposes under the warrant agreement and the warrants. No
beneficial owner of an interest in a global warrant will be able to transfer its
interest except in accordance with the depository's procedures, in addition to
those provided for under the warrant agreement.
We will make payments and distributions in respect of the global warrants to
the depository or its nominee, as the case may be. We and the warrant agent have
no responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global
warrants or for maintaining, supervising or reviewing any records relating to
those beneficial ownership interests.
We expect that the depository or its nominee, upon receipt of any payment of
any dividends or other distributions in respect of a global warrant, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the global warrant or the number of warrants
represented by the global warrant, as the case may be, as shown on the records
of the depository or its nominee.
We also expect that payments by participants to owners of beneficial
interests in the global warrant held through those participants will be governed
by standing instructions and customary practice as is now the case with
securities held for the accounts of customers registered in the names of
nominees for the customers. Those payments will be the responsibility of the
participants.
Transfers between participants in the depository will be effected in the
ordinary way through the depository's same-day funds system in accordance with
the depository's rules and will be settled in immediately available funds. If a
holder requires physical delivery of a certificated warrant for any reason,
including to sell warrants to persons in states which require physical delivery
of the warrants or to pledge the warrants, the holder must transfer its interest
in the global warrant in accordance with the normal procedures of the depository
and with the procedures set forth in the warrant agreement.
The depository has advised us as follows: The depository is a limited
purpose trust company organized under the laws of the State of New York, a
'banking organization' within the meaning of New York Banking Law, a member of
the Federal Reserve System, a 'clearing corporation' within the meaning of the
Uniform Commercial Code and a 'clearing agency' registered pursuant to the
provisions of Section 17A of the Exchange Act. The depository was created to
hold securities for its participants and facilitate the clearance and settlement
of securities transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and certain other
organizations. Indirect access to the depository system is available to others
such as banks, brokers, dealers and
12
trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
Although the depository and its participants have agreed to the foregoing
procedures in order to facilitate transfers of interests in the global warrants
among participants, they are under no obligation to perform these procedures,
and these procedures may be discontinued at any time. We and the warrant agent
will have no responsibility for the performance by the depository or its
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
CERTIFICATED WARRANTS
The first tranche warrants were not eligible for resale under Rule 144A and
accordingly were issued as certificated warrants under the warrant agreement.
Lehman Brothers may exchange these certificated first tranche warrants for first
tranche warrants with a higher exercise price equal to $29.91 per share, which
new warrants would be eligible for resale in reliance on Rule 144A of the
Securities Act. If Lehman Brothers exercises this right, these first tranche
warrants issued as certificated warrants could be exchanged for global warrants.
Owners of beneficial interests in the global warrants will be entitled to
receive certificated warrants if the depository is at any time unwilling or
unable to continue as, or ceases to be, a 'clearing agency' registered under
Section 17A of the Exchange Act, and we fail to appoint a successor to the
depository registered as a 'clearing agency' under Section 17A of the Exchange
Act within 90 days.
Any certificated warrants issued in exchange for beneficial interests in the
global warrants will be registered in the name or names that the depository
shall instruct the warrant agent. It is expected that these instructions will be
based upon directions received by the depository from participants with respect
to ownership of beneficial interests in the global warrants.
REPLACEMENT, EXCHANGE AND TRANSFERS
If any warrant at any time is mutilated, defaced, destroyed, stolen or lost,
the warrant may be replaced at the cost of the applicant (including our legal
fees and those of the warrant agent) at the office of the warrant agent, upon
provision of evidence satisfactory to the warrant agent that the warrant was
destroyed, stolen or lost, together with any indemnity that we and the warrant
agent may require. Mutilated or defaced warrants must be surrendered before
replacements will be issued.
Any beneficial interest in one of the global warrants that is transferred to
a person who takes delivery in the form of an interest in another global warrant
will, upon transfer, cease to be an interest in the first global warrant and,
accordingly, will after that time be subject to all transfer restrictions, if
any, and other procedures applicable to beneficial interests in the other global
warrant for as long as it remains an interest in that global warrant.
Certificated warrants may be exchanged or transferred in whole or in part by
surrendering the certificated warrants at the office of the warrant agent with a
written instrument of transfer as provided in the warrant agreement. In
addition, if the certificated warrants being exchanged or transferred contain a
restrictive legend, additional certifications to the effect that the exchange or
transfer is in compliance with the restrictions contained in the legend may be
required.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes the certain United States federal income
tax consequences that may be relevant to holders of the warrants who are United
States Persons that hold their warrants as capital assets. The discussion is
intended only as a summary and does not purport to be a complete analysis or
listing of all potential tax considerations that may be relevant to holders of
warrants. The discussion does not include special rules that may apply to some
holders (including insurance companies, tax-exempt organizations, financial
institutions or broker-
13
dealers whose functional currency is not the United States dollar, persons
holding the warrants as part of a 'straddle,' 'hedge,' 'constructive sale' or
'conversion transaction' and investors who are not United States Persons) and
does not address the tax consequences of the law of any state, locality or
foreign jurisdiction. The discussion is based upon currently existing provisions
of the Internal Revenue Code of 1986, existing and proposed Treasury regulations
under the Internal Revenue Code and current administrative rulings and court
decisions. Everything listed in the previous sentence may change and any change
could affect the continuing validity of this discussion.
As used in this prospectus, 'United States Person' means a beneficial owner
of the warrants who or that (1) is a citizen or resident of the United States,
(2) is a corporation, partnership or other entity created or organized in or
under the laws of the United States or political subdivision of the United
States, (3) is an estate, the income of which is subject to U.S. federal income
taxation regardless of its source, (4) is a trust if (A) a U.S. court is able to
exercise primary supervision over the administration of the trust and (B) one or
more U.S. fiduciaries have authority to control all substantial decisions of the
trust or (5) is otherwise subject to U.S. federal income tax on a net income
basis in respect of the warrants.
THE FOLLOWING DISCUSSION IS FOR GENERAL INFORMATION ONLY. THE TAX TREATMENT
MAY VARY DEPENDING UPON A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT
THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF
PURCHASING, HOLDING AND DISPOSING OF THE WARRANTS, INCLUDING THE APPLICABILITY
AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
THE WARRANTS
A holder's initial tax basis in a warrant will be equal to the holder's
purchase price for the warrant. A holder generally will not recognize gain or
loss upon a warrant's exercise for cash (except to the extent cash is received
instead of fractional shares). Furthermore, a holder's tax basis in the common
stock received upon the exercise of a warrant will equal the exercise price of
the warrants plus the holder's tax basis in the warrant before its exercise. The
holding period of common stock received upon a warrant's exercise will begin
with and include the day the warrant was exercised.
If a warrant is not exercised and is allowed to expire, the holder of the
warrant will recognize a loss equal to the holder's tax basis in the warrant.
The loss will be a capital loss and will be long-term or short-term depending on
the holder's holding period for the warrant.
Although there is no authority directly on point, we believe that a holder
of warrants that acquires shares of our common stock through a cashless exercise
of warrants should not recognize gain or loss except with respect to cash, if
any, received in lieu of fractional shares. The Internal Revenue Service may
argue, however, that the surrender of warrants in payment of the exercise price
results in a taxable disposition in which the holder would recognize gain or
loss. If the cashless exercise is not treated as a taxable event, the U.S.
holder's holding period in the shares of our common stock received would include
the holding period of the warrants exercised (provided the warrants were held as
capital assets). If a cashless exercise is treated as a taxable transaction for
U.S. federal income tax purposes, a holder's holding period in the shares of our
common stock received will commence on the day after the cashless exercise.
Holders are urged to consult their own tax advisors regarding the treatment of a
cashless exercise of a warrant for U.S. federal income tax purposes.
Holders of warrants will recognize capital gain or loss on the sale or
taxable exchange of the warrants in an amount equal to the difference between
the amount of cash or property received and the holder's tax basis in the
warrants. The capital gain or loss will be long-term capital gain or loss if the
holder has held the warrants for longer than one year. Net capital gains of
individuals are subject to tax at lower rates than items of ordinary income. The
deductibility of capital losses is subject to limitations.
The number of shares of common stock receivable upon the exercise of a
warrant is subject to adjustment under some circumstances. Under Section 305 of
the Internal Revenue Code and the
14
Treasury Regulations under the Internal Revenue Code, holders of the warrants
will be treated as having received a constructive distribution, resulting in
ordinary income (subject to a possible dividends-received deduction in the case
of corporate stockholders) to the extent of our current and/or accumulated
earnings and profits, if, and to the extent that, specific adjustments in the
number of shares of our common stock receivable upon the exercise of a warrant
that may occur increase the proportionate interest of a holder of a warrant in
our fully diluted common stock, whether or not the holders ever exercises the
warrant. Generally, a holder's tax basis in a warrant will be increased by the
amount of any constructive dividend.
BACKUP WITHHOLDING
Under some circumstances, the failure of a holder of warrants to provide
sufficient information to establish that the holder is exempt from the backup
withholding provisions of the Internal Revenue Code will subject the holder to
backup withholding at a rate of 31 percent on the proceeds from a disposition of
the warrants. In general, backup withholding applies if a noncorporate holder
fails to furnish a correct taxpayer identification number, fails to report
dividend and interest income in full, or fails to certify that the holder has
provided a correct taxpayer identification number and that the holder is not
subject to withholding. An individual's taxpayer identification number is the
individual's Social Security number. Any amount withheld from a payment to a
holder under the backup withholding rules will be allowed as a credit against
the holder's U.S. federal income tax liability and may entitle the holder to a
refund, provided the required information is furnished to the Internal Revenue
Service.
The above summary does not discuss all aspects of federal income taxation
that may be relevant to a particular holder of warrants in light of his or her
particular circumstances and income tax situation. Each holder of warrants
should consult his or her tax advisor as to the specific tax consequences to the
holder of the ownership and disposition of the warrants including the
application and effect of state, local, foreign and other tax laws, or
subsequent revisions of these tax laws.
SELLING SECURITY HOLDERS
We originally issued the warrants in a private placement to Lehman Brothers
on December 27, 2000.
We will supplement this prospectus with the names and beneficial ownership
positions of any persons who use this prospectus to offer warrants or warrant
shares before those security holders use this prospectus in connection with an
offering of the warrants or warrant shares. We will also supplement this
prospectus to disclose whether any selling security holder has held a position
or office with, been employed by or otherwise has had a sustained relationship
with us or any of our affiliates during the three years before the date of the
prospectus supplement.
PLAN OF DISTRIBUTION
We have registered the warrants and the warrant shares for offer and sale by
the selling warrant holders so that the warrants will be freely tradable. The
warrants and the warrant shares may be sold from time to time to purchasers
directly by the selling security holders. Alternatively, the selling security
holders may offer the warrants or warrant shares to or through underwriters,
broker-dealers or agents, who may receive compensation in the form of
underwriting discounts, concessions or commissions from the selling security
holders or the purchasers of the warrants or warrant shares. The selling
security holders and any underwriters, broker-dealers or agents that participate
in the distribution of the warrants or warrant shares may be deemed to be
'underwriters' within the meaning of the Securities Act and any profit on the
sale of warrants or warrant shares by them and any discounts, commissions,
concessions or other compensation received by any of them may be deemed to be
underwriting discounts or commissions under the Securities Act. To the extent
the selling security holders may be deemed to be underwriters, they may be
subject to statutory liabilities, including Sections 11, 12 and 17 of the
Securities Act and Rule 10b-5 under the Exchange Act.
15
The selling security holders may offer and sell, from time to time, some or
all of the warrants or warrant shares covered by this prospectus in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. These
prices will be determined by the selling security holders or by agreement
between the selling security holders and underwriters and dealers who may
receive fees or commissions in connection with the offering of the warrants or
warrant shares. The selling security holders may sell the warrants or warrant
shares by a variety of methods, including the following (which may involve block
transactions):
purchases by a broker or dealer as principal and resale by the broker or
dealer for its account using this prospectus,
ordinary brokerage transactions and transactions in which the broker
solicits purchasers,
an exchange distribution in accordance with the rules of the exchange,
transactions between sellers and purchasers without a broker-dealer, or
through the writing of options.
If required, at the time a particular offering of warrants or warrant shares
is made, a prospectus supplement will be distributed which will show the
aggregate amount of warrants or warrant shares being offered and the terms of
the offering, including the name or names of any underwriters, broker-dealers or
agents, any discounts, commissions and other terms constituting compensation
from the selling security holders and any discounts, commissions or concessions
allowed or reallowed or paid to broker-dealers.
We do not intend to apply for listing of the warrants on any securities
exchange or for authorization for quotation of the warrants on any quotation
system. Our common stock is quoted on the Nasdaq National Market under the
symbol 'SIRI.'
To the best of our knowledge, there are currently no plans, arrangements or
understandings between any selling security holders and any underwriter, broker,
dealer or agent regarding the sale of the warrants or warrant shares by the
selling warrant holders. We cannot assure you that any selling security holders
will sell any or all of the warrants or warrant shares it offers with this
prospectus or that the selling security holders will not transfer, devise or
gift the warrants or warrant shares by other means not described in this
prospectus.
The selling security holders and any other person participating in the
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations under the Exchange Act, including Regulation M which
may limit the timing of purchases and sales of the warrants and warrant shares
by the selling security holders and other persons. Furthermore, Regulation M,
under the Exchange Act may restrict the ability of any person engaged in the
distribution of the warrants and warrant shares to engage in market-making
activities with respect to the particular warrants and warrant shares being
distributed for a period of up to five business days before the commencement of
the distribution. All of the foregoing may affect the marketability of the
warrants and warrant shares and the ability of any person or entity to engage in
market-making activities with respect to the warrants and warrant shares.
In accordance with the warrant agreement, we have agreed to indemnify the
selling security holders and the selling security holders have agreed to
indemnify us against specific liabilities, including some liabilities under the
Securities Act.
We will pay substantially all of the expenses incidental to the
registration, offering and sale of the warrants to the public other than
commissions, fees and discounts of underwriters, brokers, dealers and agents.
To comply with the securities laws of some jurisdictions, if applicable, the
warrants and the warrant shares may be offered or sold in those jurisdictions
only through registered or licensed brokers or dealers. In addition, in some
jurisdictions the warrants and the warrant shares may not be offered or sold
unless they have been registered or qualified for sale in those jurisdictions or
an exemption from registration or qualification is available.
16
LEGAL MATTERS
Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York, has passed
upon specific legal matters with respect to the warrants.
EXPERTS
The financial statements and schedules incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
the materials we file with the Securities and Exchange Commission at the
Securities and Exchange Commission's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Securities and Exchange Commission's
regional offices in Chicago, Illinois and New York, New York. You can request
copies of those documents, upon payment of a duplicating fee, by writing to the
Securities and Exchange Commission. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the operation of the
public reference rooms. Our filings with the Securities and Exchange Commission
are also available to the public at the Securities and Exchange Commission's
Internet site at http://www.sec.gov.
INCORPORATION BY REFERENCE
The Securities and Exchange Commission allows us to 'incorporate by
reference' in this prospectus other information we file with them, which means
that we can disclose important information to you by referring you to those
documents. This prospectus incorporates important business and financial
information about us that is not included in or delivered with this prospectus.
The information that we file later with the Securities and Exchange Commission
will automatically update and supersede the information included in and
incorporated by reference in this prospectus. We incorporate by reference the
documents listed below and any future filings made with the Securities and
Exchange Commission under Sections 13(a), 13(c), 14, or 15(d) of the Exchange
Act until we terminate the offering to which this prospectus relates.
1. Our Annual Report on Form 10-K for the year ended December 31, 2000.
2. Our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2001.
3. Our Current Reports on Form 8-K dated February 1, 2001, February 23, 2001
and February 28, 2001.
4. The description of our common stock contained in our Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the Exchange Act.
We have filed each of these documents with the Securities and Exchange
Commission and they are available from the Securities and Exchange Commission's
Internet site and public reference rooms described under 'Where You Can Obtain
Additional Information' in this
17
prospectus. You may also request a copy of these filings, at no cost, by writing
or calling us at the following address or telephone number:
Patrick L. Donnelly
Senior Vice President, General Counsel and Secretary
Sirius Satellite Radio Inc.
1221 Avenue of the Americas, 36th Floor
New York, New York 10020
(212) 584-5100
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information.
18
================================================================================
[SIRIUS SATELLITE LOGO]
525,000 FIRST TRANCHE WARRANTS TO PURCHASE COMMON STOCK
1,050,000 SECOND TRANCHE WARRANTS TO PURCHASE COMMON STOCK
525,000 THIRD TRANCHE WARRANTS TO PURCHASE COMMON STOCK
2,100,000 SHARES OF COMMON STOCK
------------------
PROSPECTUS
------------------
No person has been authorized to give any information or to make any
representation other than those contained in this prospectus, and, if
given or made, any information or representations must not be relied
upon as having been authorized. This prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any securities
other than the securities to which it relates or an offer to sell or the
solicitation of an offer to buy these securities in any circumstances in
which this offer or solicitation is unlawful. Neither the delivery of
this prospectus nor any sale made under this prospectus shall, under any
circumstances, create any implication that there has been no change in
the affairs of Sirius Satellite Radio Inc. since the date of this
prospectus or that the information contained in this prospectus is
correct as of any time subsequent to its date.
, 2001
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Shown below are estimates of the approximate amount of the fees and expenses
(other than underwriting commissions and discounts) we have incurred in
connection with this offering.
Securities and Exchange Commission registration fee......... $ 3,985
-------
Accounting fees and expenses................................ 10,000
Legal fees and expenses..................................... 50,000
Miscellaneous expenses...................................... 10,000
-------
Total................................................... $73,985
-------
-------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a corporation
to indemnify its directors, officers, employees and agents against certain
liabilities they may incur in such capacities, including liabilities under the
Securities Act, provided they act in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation. Our
amended and restated certificate of incorporation and amended and restated
by-laws require us to indemnify our officers and directors to the full extent
permitted by Delaware law.
Section 102 of the Delaware General Corporation Law authorizes a corporation
to limit or eliminate its directors' liability to the corporation or its
stockholders for monetary damages for breaches of fiduciary duties, other than
for (i) breaches of the duty of loyalty, (ii) acts or omissions involving bad
faith, intentional misconduct or knowing violations of the law, (iii) unlawful
payments of dividends, stock purchases or redemptions, or (iv) transactions from
which a director derives an improper personal benefit. Our amended and restated
certificate of incorporation contains provisions limiting the liability of the
directors to us and to our stockholders to the full extent permitted by Delaware
law.
Section 145 of the Delaware General Corporation Law authorizes a corporation
to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation against any liability
asserted against him and incurred by him or her in any such capacity, or arising
out of his or her status as such. Our amended and restated certificate of
incorporation and amended and restated by-laws provide that we may, to the full
extent permitted by law, purchase and maintain insurance on behalf of any
director, officer, employee or agent of ours against any liability that may be
asserted against him or her and we currently maintain such insurance. We have
acquired $10 million of liability insurance covering our directors and officers
for claims asserted against them or incurred by them in such capacity, including
claims brought under the Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The Exhibit Index beginning on page E-1 is incorporated by reference.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
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(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(c) That: (1) for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by us in
accordance with Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be a part of this registration statement as
of the time it was declared effective; and (2) for the purpose of
determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered in the registration statement, and the offering of those
securities at that time shall be deemed to be the initial bona fide
offering of those securities.
(d) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment hereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that paragraphs (i) and (ii) above do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, who was duly
authorized, in the City of New York, State of New York, on July 18, 2001.
SIRIUS SATELLITE RADIO INC.
By: /s/ PATRICK L. DONNELLY
..................................
PATRICK L. DONNELLY
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Patrick L. Donnelly and Edward
Weber, Jr. or either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to (i) act on, sign
and file with the Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration statement together
with all schedules and exhibits thereto, (ii) act on, sign and file such
certificates, instruments, agreements and other documents as may be necessary or
appropriate in connection therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement and (iv) take any and all
actions which may be necessary or appropriate in connection therewith, granting
unto such agent, proxy, and attorney-in-fact full power and authority to do and
perform each and every act and thing necessary or appropriate to be done, as
fully for all intents and purposes as he might or could do in person, hereby
approving, ratifying and confirming all that such agents, proxies and
attorneys-in-fact or any of their substitutes may lawfully do or cause to be
done by virtue thereof.
In accordance with the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ DAVID MARGOLESE Chairman and Chief Executive Officer July 18, 2001
......................................... (Principal Executive Officer)
DAVID MARGOLESE
/s/ JOHN J. SCELFO Senior Vice President and Chief July 18, 2001
......................................... Financial Officer
JOHN J. SCELFO (Principal Financial Officer)
/s/ EDWARD WEBER, JR. Vice President and Controller July 18, 2001
......................................... (Principal Accounting Officer)
EDWARD WEBER, JR.
/s/ LEON D. BLACK Director July 18, 2001
.........................................
LEON D. BLACK
/s/ LAWRENCE F. GILBERTI Director July 18, 2001
.........................................
LAWRENCE F. GILBERTI
/s/ PETER G. PETERSON Director July 18, 2001
.........................................
PETER G. PETERSON
/s/ JOSEPH V. VITTORIA Director July 18, 2001
.........................................
JOSEPH V. VITTORIA
II-3
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
4.1 -- Form of certificate for shares of common stock (incorporated by reference to Exhibit 4.3
to the Company's Registration Statement on Form S-1 (File No. 33-74782) (the 'S-1
Registration Statement')).
4.2 -- Form of certificate for shares of 10 1/2% Series C Convertible Preferred Stock
(incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form
S-4 (File No. 333-34761)).
4.3 -- Form of certificate for shares of 9.2% Series A Junior Cumulative Convertible Preferred
Stock (incorporated by reference to Exhibit 4.10.1 to the Company's Annual Report on Form
10-K for the year ended December 31, 1998 (the '1998 Form 10-K')).
4.4 -- Form of certificate for shares of 9.2% Series B Junior Cumulative Convertible Preferred
Stock (incorporated by reference to Exhibit 4.10.2 to the 1998 Form 10-K).
4.5 -- Form of certificate for shares of 9.2% Series D Junior Cumulative Convertible Preferred
Stock (incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form
10-K for the year ended December 31, 1999 (the '1999 Form 10-K')).
4.6.1 -- Rights Agreement, dated as of October 22, 1997 (the 'Rights Agreement'), between the
Company and Continental Stock Transfer & Trust Company, as rights agent (incorporated by
reference to Exhibit 1 to the Company's Registration Statement on Form 8-A, filed with
the Securities and Exchange Commission on October 30, 1997 (the 'Form 8-A')).
4.6.2 -- Form of Right Certificate (incorporated by reference to Exhibit B to Exhibit 1 to the
Form 8-A).
4.6.3 -- Amendment to the Rights Agreement dated as of October 13, 1998 (incorporated by
reference to Exhibit 99.2 to the Company's Current Report on Form 8-K dated October 13,
1998).
4.6.4 -- Amendment to the Rights Agreement dated as of November 13, 1998 (incorporated by
reference to Exhibit 99.7 to the Company's Current Report on Form 8-K dated November 17,
1998).
4.6.5 -- Amended and Restated Amendment to the Rights Agreement dated as of December 22, 1998
(incorporated by reference to Exhibit 6 to the Amendment No. 1 to the Form 8-A filed on
January 6, 1999).
4.6.6 -- Amendment to the Rights Agreement dated as of June 11, 1999 (incorporated by reference
to Exhibit 4.1.8 to the Company's Registration Statement on Form S-4 (File No. 333-82303)
filed on July 2, 1999 (the '1999 Units Registration Statement')).
4.6.7 -- Amendment to the Rights Agreement dated as of September 29, 1999 (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on
October 13, 1999).
4.6.8 -- Amendment to the Rights Agreement, dated as of October 22, 1997, between the Company and
Continental Stock Transfer & Trust Company, as rights agent dated as of December 23, 1999
(incorporated by reference to Exhibit 99.4 to the Company's Current Report on Form 8-K
filed on December 29, 1999).
4.6.9 -- Amendment to the Rights Agreement, dated as of October 22, 1997, between the Company and
Continental Stock Transfer & Trust Company, as rights agent dated as of January 28, 2000
(incorporated by reference to Exhibit 4.6.9 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1999 (the '1999 Form 10-K').
4.6.10 -- Amendment to the Rights Agreement dated as of October 22, 1997, between the Company,
Continental Stock Transfer & Trust Company and the Bank of New York, as rights agent
dated as of August 7, 2000 (incorporated by reference to Exhibit 4.6.10 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2000).
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EXHIBIT DESCRIPTION
- ------- -----------
4.7 -- Indenture, dated as of November 26, 1997, between the
Company and IBJ Schroder Bank & Trust Company, as trustee,
relating to the Company's 15% Senior Secured Discount Note
due 2007 (incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-3 (File No.
333-34769) (the '1997 Units Registration Statement')).
4.8 -- Form of 15% Senior Secured Discount Note due 2007
(incorporated by reference to Exhibit 4.2 to the 1997
Units Registration Statement).
4.9 -- Warrant Agreement, dated as of November 26, 1997, between
the Company and IBJ Schroder Bank & Trust Company, as
warrant agent (incorporated by reference to Exhibit 4.3 to
the 1997 Units Registration Statement).
4.10 -- Form of Warrant (incorporated by reference to
Exhibit 4.4 to the 1997 Units Registration Statement).
4.11 -- Form of Preferred Stock Warrant Agreement, dated as of
April 9, 1997, between the Company and each warrantholder
thereof (incorporated by reference to Exhibit 4.12 to the
1997 Form 10-K).
4.12 -- Form of Common Stock Purchase Warrant granted by the
Company to Everest Capital Master Fund, L.P. and to The
Ravich Revocable Trust of 1989 (incorporated by reference
to Exhibit 4.11 to the 1997 Form 10-K).
4.13 -- Indenture, dated as of May 15, 1999, between the Company
and United States Trust Company of New York, as trustee,
relating to the Company's 14 1/2% Senior Secured Notes due
2009 (incorporated by reference to Exhibit 4.4.2 to the
1999 Units Registration Statement).
4.14 -- Form of 14 1/2% Senior Secured Note due 2009
(incorporated by reference to Exhibit 4.4.2 to the 1999
Units Registration Statement).
4.15 -- Indenture, dated as of September 29, 1999, between the
Company and United States Trust Company of Texas, N.A.,
relating to the Company's 8 3/4% Convertible Subordinated
Notes due 2009 (incorporated by reference to Exhibit 4.2
to the Company's Current Report on Form 8-K filed on
October 13, 1999).
4.16 -- First Supplemental Indenture, dated as of September 29,
1999, between the Company and United States Trust Company
of Texas, N.A., relating to the Company's 8 3/4%
Convertible Subordinated Notes due 2009 (incorporated by
reference to Exhibit 4.1 to the Company's Current Report
on Form 8-K filed on October 1, 1999).
4.17 -- Form of 8 3/4% Convertible Subordinated Note due 2009
(incorporated by reference to Article VII of Exhibit 4.01
to the Company's Current Report on Form 8-K filed on
October 11, 1999).
4.18 -- Warrant Agreement, dated as of May 15, 1999, between the
Company and United States Trust Company of New York, as
warrant agent (incorporated by reference to Exhibit 4.4.4
to the 1999 Units Registration Statement).
4.19 -- Amended and Restated Pledge Agreement, dated as of
May 15, 1999, among the Company, as pledgor, IBJ Whitehall
Bank & Trust Company, as trustee, United States Trust
Company of New York, as trustee, and IBJ Whitehall Bank &
Trust Company, as collateral agent (incorporated by
reference to Exhibit 4.4.5 to the 1999 Units Registration
Statement).
4.20 -- Collateral Pledge and Security Agreement, dated as of
May 15, 1999, between the Company, as pledgor, and United
States Trust Company of New York, as trustee (incorporated
by reference to Exhibit 4.4.6 to the 1999 Units
Registration Statement).
4.21 -- Intercreditor Agreement, dated May 15, 1999, by and
between IBJ Whitehall Bank & Trust Company, as trustee,
and United States Trust Company of New York, as trustee
(incorporated by reference to Exhibit 4.4.7 to the 1999
Units Registration Statement).
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EXHIBIT DESCRIPTION
- ------- -----------
4.23 -- Term Loan Agreement, dated as of June 1, 2000, among the
Company, Lehman Brothers Inc., as arranger and Lehman
Commercial Paper Inc., as syndication and administrative
agent (incorporated by reference to Exhibit 4.22 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2000).
4.24 -- Term Loan Agreement, dated as of February 23, 2001, among
the Company and Lehman Brothers Inc. (incorporated by
reference to Exhibit 1.01 to Company's Current Report on
Form 8-K filed on February 28, 2001).
4.25 -- Common Stock Purchase Warrant granted by the Company to
Ford Motor Company, dated June 11, 1999 (incorporated by
reference to Exhibit 4.4.2 to the 1999 Units Registration
Statement).
4.26 -- Common Stock Purchase Warrant granted by the Company to
DaimlerChrysler Corporation, dated January 28, 2000
(incorporated by reference to Exhibit 4.23 to the 1999
Form 10-K).
4.27 -- Amended and Restated Warrant Agreement, dated as of
December 27, 2000, between the Company and United States
Trust Company of New York, as warrant agent and escrow
agent (filed herewith).
5.1 -- Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
regarding legality (filed herewith).
23.1 -- Consent of Arthur Andersen LLP (filed herewith).
23.2 -- Consents of Paul, Weiss, Rifkind, Wharton & Garrison
(included in Exhibit 5.1).
24.1 -- Power of Attorney (included on signature page).
II-6