As filed with the Securities and Exchange Commission on May 14, 2003
Registration Statement 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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ARCH WIRELESS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 31-1358569
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1800 WEST PARK DRIVE, SUITE 250
WESTBOROUGH, MASSACHUSETTS 01581
(508) 870-6700
(Address, including zip code, and telephone number, including area code, of
the registrant's principal executive offices)
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C. EDWARD BAKER, JR.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
1800 WEST PARK DRIVE, SUITE 250
WESTBOROUGH, MASSACHUSETTS 01581
(508) 870-6700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPY TO:
DAVID A. WESTENBERG, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
(617) 526-6000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date hereof.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ____________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF SHARES TO BE REGISTERED PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE(2)
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Common Stock, $.001 par value per share 1,978,050 $3.34 $6,606,687.00 $535
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(1) Estimated solely for purposes of calculating the amount of the registration
fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended,
based on the average of the bid and asked price of the registrant's common
stock on the OTC Bulletin Board on May 9, 2003.
(2) Pursuant to Rule 457(p), the full amount of the filing fee due with respect
to this registration statement is being paid by applying a portion of the
$125,000 filing fee paid in connection with the Registration Statement on
Form S-3 of Arch Wireless, Inc., filed on February 9, 2001 (File Number
333-55372), which was subsequently withdrawn.
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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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. The
selling stockholders named in this prospectus may not sell these securities
until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these
securities and the selling stockholders named in this prospectus are not
soliciting offers to buy these securities in any jurisdiction where the offer or
sale is not permitted.
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SUBJECT TO COMPLETION, DATED MAY 14, 2003
PROSPECTUS
[LOGO "ARCH WIRELESS"] 1,978,050 SHARES
ARCH WIRELESS, INC.
COMMON STOCK
This prospectus relates to resales of shares of common stock previously
issued by Arch Wireless, Inc. to funds affiliated with Franklin Resources, Inc.
in connection with our emergence from bankruptcy in May 2002.
We will not receive any proceeds from the sale of the shares.
The selling stockholders identified in this prospectus, or their pledgees,
donees, transferees or other successors-in-interest, may offer the shares from
time to time through public or private transactions at prevailing market prices,
at prices related to prevailing market prices or at privately negotiated prices.
We do not know when or in what amounts a selling stockholder may offer
shares for sale. The selling stockholders may not sell any or all of the shares
offered by this prospectus.
Our common stock trades on the Boston Stock Exchange under the symbol "AWL"
and on the OTC Bulletin Board under the symbol "AWIN." On May 13, 2003, the last
reported per share sale price of our common stock on the OTC Bulletin Board was
$3.88. You are urged to obtain current market quotations for the common stock.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR
ANY STATE SECURITIES REGULATORS 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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WE URGE YOU TO CAREFULLY READ THE "RISK FACTORS"
SECTION BEGINNING ON PAGE 2 BEFORE YOU MAKE ANY
DECISION TO INVEST IN OUR COMMON STOCK.
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THE DATE OF THIS PROSPECTUS IS MAY , 2003
TABLE OF CONTENTS
Prospectus Summary..................................................1
The Offering........................................................1
Risk Factors........................................................2
Special Note Regarding Forward-Looking Information..................8
Use of Proceeds.....................................................9
Selling Stockholders................................................9
Description of Capital Stock.......................................10
Plan of Distribution...............................................14
Change in Accountants..............................................16
Legal Matters......................................................16
Experts............................................................16
Where You Can Find More Information................................18
Incorporation of Certain Documents by Reference....................18
Our executive offices are located at 1800 West Park Drive, Suite 250,
Westborough, Massachusetts 01581, and our telephone number is (508) 870-6700.
Our address on the world wide web is www.arch.com. The information on our web
site is not incorporated by reference into this prospectus and should not be
considered a part of this prospectus.
Arch Wireless, Inc. is the parent company of the Arch group of companies.
It conducts substantially all of its business through its subsidiaries and its
assets consist primarily of the stock of its operating subsidiaries. The
predecessor of Arch Wireless, Inc., Arch Communications Group, Inc., was
incorporated in January 1986 in Delaware. References in this offering memorandum
to "Arch," "we" or "us" refer to the entire Arch group of companies unless the
context otherwise requires.
Arch, Arch Wireless, Arch Paging and PageNet are our service marks. This
prospectus also contains other trademarks, service marks and trade names that
are the property of other parties.
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling stockholders are offering to sell, and
seeking offers to buy, shares of our common stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of the common stock.
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
This summary does not contain all of the information you should consider before
buying shares of our common stock. You should read the entire prospectus
carefully, especially the risks of investing in our common stock discussed under
"Risk Factors" on page 2 of this prospectus.
ARCH WIRELESS, INC.
We are a leading provider of wireless messaging and information services in
the United States. Currently, we provide one and two-way wireless messaging
services. One-way messaging consists of numeric and alphanumeric messaging
services. Numeric messaging services enable subscribers to receive messages that
are composed entirely of numbers, such as a phone number, while alphanumeric
messages may include numbers and letters, which enable subscribers to receive
text messages. Two-way messaging services enable subscribers to send and receive
messages to and from other messaging devices, including pagers, personal digital
assistants, also called PDAs, and personal computers. We also offer wireless
information services, such as stock quotes, news, sports and weather updates,
voice mail, personalized greeting, message storage and retrieval and equipment
loss and/or maintenance protection for both one and two-way messaging
subscribers. Our services are commonly referred to as wireless messaging and
information services.
We provide one and two-way messaging services and wireless information
services throughout the United States, including the 100 largest markets, and in
the U.S. Virgin Islands and Puerto Rico. These services are offered on a local,
regional and nationwide basis employing digital networks that cover more than
90% of the United States population.
On May 29, 2002, we emerged from proceedings under chapter 11 of the
bankruptcy code. Pursuant to our plan of reorganization, all of our former
equity securities were cancelled and the holders of approximately $1.8 billion
of our former indebtedness received securities which represent substantially all
of our consolidated capitalization, consisting of $200 million aggregate
principal amount of 10% senior subordinated secured notes, $100 million
aggregate principal amount of 12% subordinated secured compounding notes and
approximately 95% of our currently outstanding common stock. As of May 14, 2003,
we have redeemed $116.7 million of the 10% senior notes issued on May 29, 2002,
and there was $83.3 million principal amount of 10% senior notes outstanding. We
have announced that we will redeem an additional $23.26 million of the 10%
senior notes on May 15, 2003. Upon completion of the May 15, 2003 redemption, we
will have redeemed a total of $140 million principal amount of the 10% senior
notes and there will be $60 million principal amount outstanding.
All but one of our former directors have been replaced by new directors,
although no significant changes have occurred in our senior management. We
continued to operate our business throughout the chapter 11 proceedings and, as
a part of our overall effort to increase operating margins, we have continued to
reduce expenses primarily through facilities closings, a reduction in the number
of networks we operate and headcount reductions.
THE OFFERING
Common Stock offered by selling stockholder..... 1,978,050 shares
Use of proceeds................................. We will not receive any proceeds from
the sale of shares in this offering
Boston Stock Exchange Symbol.................... AWL
OTC Bulletin Board Symbol....................... AWIN
RISK FACTORS
Investing in our common stock involves substantial risks. Before purchasing
our common stock, you should carefully consider the risks and uncertainties
described below and in our Securities and Exchange Commission filings. The risks
and uncertainties described below and in our filings with the Securities and
Exchange Commission are not the only ones we face. Additional risks and
uncertainties not known to us on the date of this prospectus or that we
currently consider immaterial may also impair our business operations. If any of
these risks actually occur, our business, financial condition or results of
operations would likely suffer. In that case, the trading price of our common
stock could fall, and you may lose all or part of the money you paid to buy our
common stock.
RISKS RELATING TO OUR BUSINESS
Recent declines in our units in service will likely continue or even accelerate;
this trend may impair our financial results.
In 2000, units in service decreased by 2,073,000, excluding the addition of
subscribers from our acquisition of PageNet; a decrease of 888,000 units was the
result of subscriber cancellations and a decrease of 1,185,000 units was due to
definitional changes made after the MobileMedia and PageNet acquisitions to
reflect a common definition of units in service. During 2001, units in service
decreased by an additional 3,394,000 units due to subscriber cancellations.
During 2002, units in service decreased by a further 2,584,000 units due to
subscriber cancellations and 276,000 units due to the partial divestiture of our
interests in two Canadian subsidiaries. Units in service declined an additional
477,000 during the three months ended March 31, 2003, due to subscriber
cancellations. We believe that demand for one-way messaging services has been
declining since 1999 and will continue to decline for the foreseeable future. We
also believe the market for two-way messaging is uncertain, having experienced
declines in units in service during each of the quarters ended December 31, 2002
and March 31, 2003. Additionally, management actions to reduce operating
expenses, such as reductions in the number of sales representatives and efforts
to consolidate subscribers onto fewer networks could lead to further subscriber
cancellations. Based on all of the factors discussed above, we expect to
continue to experience significant declines in units in service and revenues for
the foreseeable future.
Reductions in the number of units in service can significantly affect the
results of operations of wireless messaging service providers. The sale and
marketing costs associated with attracting new subscribers are substantial
compared to the costs of providing service to existing customers. Additionally,
because the network-related operating expenses of wireless messaging businesses
are largely fixed in the short term, subscriber cancellations can directly and
adversely affect net cash provided by operating activities.
Revenues and operating results may fluctuate, leading to possible liquidity
problems.
We believe that future fluctuations in revenues and operating results may
occur due to many factors, particularly the decreased demand for one-way
messaging services and the uncertain market for two-way messaging services. If
the rate of decline of messaging units exceeds our expectations, revenues will
be negatively impacted, and such impact could be material. Our network
rationalization program may also negatively impact revenues as subscribers
experience a reduction in and possible disruptions of service in certain areas.
Our debt repayment levels are based in part on past expectations as to future
revenues. We may be unable to adjust spending in a timely manner to compensate
for any future revenue shortfall. It is possible that, due to these
fluctuations, our revenues or operating results may not meet the expectations of
investors and creditors, or may cause us not to meet the debt repayment
schedules or the various financial
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covenants contained in our debt instruments. Failure to make required debt
payments or comply with financial covenants would enable creditors to accelerate
repayment of our debt. In this circumstance, it is unlikely that we would have
sufficient liquidity to repay the debt, which would significantly impair the
value of our debt and equity securities and could ultimately result in us having
to file for bankruptcy protection.
Operating expenses may not decline at a rate that matches the decline in
revenues, leading to a reduction in net cash provided by operating activities,
possible liquidity problems and an inability to service or refinance outstanding
debt.
In order to continue to generate net cash provided by operating activities
sufficient to service outstanding debt, we anticipate significant reductions in
operating expenses to offset the decline in revenues. In particular, lease
payments on transmitter locations and telephone expense are the most significant
costs associated with the operation of our messaging networks, accounting for
32.7% of our service, rental and maintenance, selling and general and
administrative expenses in 2002 and during the first quarter of 2003. Reductions
in these expenses are dependent on our ability to successfully rationalize
existing messaging networks, ultimately resulting in fewer locations on which we
are required to pay monthly lease and telephone interconnection costs. Many of
our leases for transmitter locations are consolidated under master lease
agreements with a few large national vendors. There can be no assurance that our
negotiations with these or other lessors that arise as a result of our network
rationalization program will result in a reduction of future lease payments that
is consistent with our strategy.
If our assumed reductions in operating expenses are not met, or if revenues
decline at a more rapid rate than anticipated and that decline cannot be offset
with additional expense reductions, then net cash provided by operating
activities would be adversely affected. Lower than expected net cash provided by
operating activities could cause us to fail to make required debt repayments or
comply with certain financial covenants contained in our debt instruments,
either of which would enable creditors to accelerate repayment of our
outstanding debt. In this circumstance, it is unlikely that we would have
sufficient liquidity to repay our debt and could ultimately result in us having
to file for bankruptcy protection.
We are dependent on net cash provided by operating activities as our
principal source of liquidity. If we are not able to achieve anticipated levels
of net cash provided by operating activities, we may not be able to amend or
refinance our existing debt obligations and we may be precluded from incurring
additional indebtedness due to restrictions under existing or future debt
instruments. Further, it is unlikely that additional external sources of
financing will be available to us under these circumstances. If we were to fail
to make required debt repayments or fail to comply with financial covenants
contained in our debt instruments, creditors could accelerate repayment of our
outstanding debt. In this circumstance, it is unlikely that we would have
sufficient liquidity to repay the debt, which would significantly impair the
value of our debt and equity securities and could ultimately result in us having
to file for bankruptcy protection.
Competition from mobile, cellular and PCS telephone companies is intense. Many
companies have introduced phones and services with substantially the same
features and functions as the one and two-way messaging products and services
provided by us, and have priced such devices and services competitively.
We face competition from other messaging providers in all markets in which
we operate, as well as from cellular, PCS and other mobile wireless telephone
companies. Competitors providing wireless messaging and information services
continue to create significant competition for a depleting customer
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base and providers of mobile wireless phone services such as AT&T Wireless,
Cingular, WorldCom, Sprint PCS, Verizon, T-Mobile and Nextel include wireless
messaging as an adjunct service to voice services. In addition, the availability
of coverage for mobile phone services has increased, making the two types of
service and product offerings more comparable. Cellular and PCS companies
seeking to provide wireless messaging services have been able to bring their
products to market faster, at lower prices or in packages of products that
consumers and businesses find more valuable than those we provide. In addition,
many of these competitors, particularly cellular and PCS phone companies,
possess greater financial, technical and other resources than those available to
us.
Deductions for tax purposes from future activities and from retained tax
attributes may be insufficient to offset future federal taxable income and/or
significant changes in the ownership of our common stock may increase income tax
payments.
We currently anticipate generating taxable losses for the next several
years and estimate that, at December 31, 2003, our tax net operating losses will
be between $175 million and $200 million. Under current tax law, these net
operating losses will not expire until December 31, 2023. We currently
anticipate that we will have sufficient tax deductions from our operations
following our emergence from chapter 11 proceedings, including from the federal
income tax attributes that we retained after our emergence from chapter 11, to
offset future federal taxable income (before these deductions) for the next
several years. The extent to which these tax attributes will be available to
offset future federal taxable income depends on certain factual and legal
matters that are subject to varying interpretations. Therefore, despite our
expectations, it is possible that we may not have sufficient tax attributes to
offset future federal taxable income.
A change in ownership, as defined in sections 382 and 383 of the Internal
Revenue Code, of our stock could significantly limit the amounts and timing of
the use of various tax attributes that existed as of our emergence from chapter
11 and of any tax attributes generated between our emergence from chapter 11 and
the date of such change in ownership, including our tax net operating losses at
December 31, 2003. Generally, a change in ownership will occur if a greater than
50% cumulative change in ownership of our stock occurs over any three-year
period beginning at any time after we emerged from chapter 11. We believe, based
on available information, that since our emergence from chapter 11 we have
undergone a cumulative change in ownership of approximately 20%.
If the deductions associated with future activities including from tax
attributes that we retained after our emergence from chapter 11 are insufficient
to offset future federal taxable income, or if a change in ownership occurs and
such deductions are limited, whether due to circumstances within or beyond our
control, we would likely generate taxable income and would be required to make
current income tax payments. Any such payments would result in lower net cash
provided by operating activities, which would have otherwise been available to
repay our outstanding debt. In addition, depending on the timing of any such
change in ownership and the amount of taxable income generated, the required tax
payments could result in insufficient cash being available to service our debt
obligations. If we were to fail to make required debt repayments, creditors
could accelerate repayment of our outstanding debt. In this circumstance, it is
unlikely that we would have sufficient liquidity to repay the debt, which could
ultimately result in our having to file for bankruptcy protection.
To help protect these tax benefits, the board of directors has approved,
subject to stockholder approval, a merger agreement providing for the merger of
our company with a wholly-owned subsidiary. In the merger, outstanding shares of
common stock will be converted into the right to receive new shares of Class A
common stock, which will be subject to the following restrictions. After a
cumulative change in ownership of our stock of more than 40%, any transfer of
Class A common stock by or to a holder of 5% or more of our outstanding stock
will be prohibited unless the transferee or transferor provides notice
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of the transfer to us and our board of directors approves the transfer. Our
board of directors will approve a transfer of Class A common stock if it
determines in good faith that the transfer (1) would not result in a cumulative
change in ownership of our stock of more than 42% or (2) would not increase the
cumulative change in ownership of our stock. Prior to a cumulative change in
ownership of our stock of more than 40%, transfers of Class A common stock will
not be prohibited except to the extent that they result in a cumulative change
in ownership of more than 42%, but any transfer by or to a holder of 5% or more
of our outstanding stock would require a notice to us. Similar restrictions will
apply to the issuance or transfer of an option to purchase Class A common stock
if the exercise of the option would result in a transfer that would be
prohibited pursuant to the restrictions described above. Transfers by or to us
and any transfer pursuant to a merger approved by the board of directors or any
tender offer to acquire all of our outstanding stock where a majority of the
shares have been tendered will be exempt from these restrictions. Once the
transfer restrictions are no longer necessary to protect the tax benefits
associated with our federal income tax attributes, the Class A common stock will
be subject to conversion back into common stock without transfer restrictions on
a share-for-share basis.
We cannot assure you that the merger, even if it receives all required
approvals, will prevent a change in ownership or otherwise enable us to avoid
significant limitations on the amounts and timing of the use of our tax
attributes.
Our operations may be disrupted if we are unable to obtain equipment from vendor
sources in the future.
We do not manufacture any of the messaging devices or other equipment that
our customers need to take advantage of our services. The equipment used in our
operations were generally available for purchase from only a few sources.
Historically, we purchased messaging devices primarily from Motorola and
purchased terminals and transmitters primarily from Glenayre Electronics, Inc.
Motorola discontinued the production of messaging devices in 2002. We
entered into a last time purchase arrangement which ended September 30, 2002,
that allowed us to purchase specific quantities of certain models of one and
two-way messaging devices. Since that time:
- we have entered into a development agreement with PerComm Inc. for
two-way messaging devices,
- we have commenced ordering new one-way messaging devices from two
alternative sources,
- we have purchased reconditioned one-way messaging devices in the
secondary market, and
- we are evaluating several additional vendors as alternative sources of
one- and two-way messaging devices.
We believe that our existing inventory of Motorola devices and purchases
from other available sources of new and reconditioned devices will be sufficient
to meet our expected two-way device requirements through the end of 2003 and our
one-way device requirements for the foreseeable future.
Glenayre discontinued the production of the network equipment that we had
purchased from them. However, we have entered into an agreement with Glenayre
which will provide us with certain continued services. In addition, we currently
have excess network equipment as a result of our efforts to rationalize and
deconstruct many of our one-way messaging networks and from prior acquisitions
of network equipment. Additional equipment for our two-way messaging network is
available from two other vendors, Sonik Technologies, Inc. and TGA Technologies.
Significant delays in developing alternative sources of equipment could
lead to disruptions in operations and adverse financial consequences. There can
be no assurance that our efforts, as described
5
above, will be sufficient to secure alternative sources of messaging devices and
required network equipment as certain aspects of these projects are outside our
control, such as research and development, specific parts procurement and
manufacturing timelines.
Restrictions under debt instruments prevent us from declaring dividends,
incurring debt, making acquisitions or taking actions that management may
consider beneficial.
Our debt instruments limit or restrict, among other things, our operating
subsidiaries ability to pay dividends, making investments, incur secured or
unsecured indebtedness, incur liens, dispose of assets, enter into transactions
with affiliates, engage in any merger, consolidation or sale of substantially
all of our assets or cause our subsidiaries to sell or issue stock.
We might be prevented from taking some of these actions because we could
not obtain the necessary consents even though we believe taking such actions
would be beneficial.
Loss of our key personnel could adversely impact our operations
Our success will depend, to a significant extent, upon the continued
service of a relatively small group of key executive and management personnel.
We have employment agreements with our chairman of the board and chief executive
officer, our president and chief operating officer and our executive vice
president and chief financial officer, and we have issued restricted stock,
vesting over three years, to ten members of our senior management.
The loss or unavailability of one or more of our executive officers or the
inability to attract or retain key employees in the future could have a material
adverse effect on our future operating results, financial position and cash
flows.
RISKS RELATING TO AN INVESTMENT IN OUR COMMON STOCK
We are proposing to impose transfer restrictions on the ability of some
stockholders to transfer their shares of our common stock, which would adversely
affect the ability of these stockholders to sell their shares of common stock.
Our board of directors has approved a merger, subject to stockholder
approval, to help protect the tax benefits associated with our federal income
tax attributes, including tax attributes that may be used to offset future
federal taxable income. If the merger is approved by stockholders and becomes
effective, all outstanding common stock will be converted into the right to
receive a new class of security called Class A common stock, $.0001 par value.
The Class A common stock will be subject to the transfer restrictions that will
prohibit certain transfers of our common stock after there has been a cumulative
change in ownership of our stock of more than 40%, unless approved by the board
of directors, and will prohibit any transfer of our common stock to the extent
that it would result in a cumulative change in ownership of our stock of more
than 42%. These levels were chosen so that inadvertent transfers would not
trigger a change in ownership and we would also have some capacity to issue
additional shares without triggering such a change.
For a more complete description of the proposed merger and transfer
restrictions, please see "Description of Common Stock-- Proposed Transfer
Restrictions on Common Stock."
The transfer restrictions resulting from our proposed merger could have
anti-takeover effects or result in a loss of liquidity for our shares.
6
Our board of directors has approved the merger, subject to stockholder
approval, to help protect the tax benefits associated with our federal income
tax attributes, including tax attributes that may be used to offset future
federal taxable income. The merger will result in the imposition of restrictions
on the transfer of our common stock that our board believes may enable us to
avoid significant limitations on the amount and timing of the use of our tax
attributes.
If the merger is approved, the transfer restrictions on shares of our stock
could have the effect of preventing or delaying a change in control of our
company. However, the transfer restrictions are not being proposed in response
to any specific effort to acquire control of our company and should not
interfere with any merger or any other business combination approved by the
board of directors or any tender or exchange offer for any and all of our stock,
provided that such offer is accepted by the holders of a majority of our
outstanding stock and the offeror has committed to undertake a second-step
merger to acquire the remainder of our outstanding stock for the same type and
amount of consideration paid in the offer.
In addition, if the merger is approved and the transfer restrictions become
effective, stockholders may encounter difficulty in selling their shares because
transfers by or to holders of 5% or more of our outstanding stock will be
prohibited after there has been a cumulative change in ownership of our stock of
more than 40%, unless approved by the board of directors, and any transfer will
be prohibited to the extent that it would result in a cumulative change in
ownership of our stock of more than 42%. These transfer restrictions could have
the effect of decreasing the liquidity of your shares.
For a description of the proposed merger and transfer restrictions, please
see "Description of Common Stock-- Proposed Transfer Restrictions on Common
Stock."
Trading prices of our common stock have fluctuated significantly in the past and
may continue to be volatile so that we cannot predict whether or when holders of
common stock can resell their stock at a profit.
The market price of our old common stock fluctuated substantially, even
before our bankruptcy proceedings commenced. Shares of our old common stock
traded between a high of $16.25 and a low of $.47 in fiscal year 2000, between a
high of $2.31 and a low of $.01 in fiscal year 2001 and between a high of $.02
and a low of less than one cent in fiscal year 2002 through May 29, 2002.
Our common stock currently trades on the Boston Stock Exchange and the OTC
Bulletin Board. Between May 29, 2002 and May 13, 2003, the price of our new
common stock has ranged from a high of $6.00 to a low of $.32 per share.
The trading price of our common stock will be affected by the risk factors
referred to in this prospectus, as well as prevailing economic and financial
trends and conditions in the public securities markets. Share prices of wireless
messaging companies such as ours have exhibited a high degree of volatility
during recent periods. Shortfalls in revenues or in net cash provided by
operating activities from the levels anticipated by the public markets could
have an immediate and significant adverse effect on the trading price of our
common stock in any given period. The trading price of our stock may also be
affected by developments which may not have any direct relationship with our
business or long-term prospects. These include reported financial results and
fluctuations in the trading prices of the shares of other publicly held
companies in the wireless messaging industry.
No prediction can be made as to the future trading volume of our common stock.
Our common stock is listed on the Boston Stock Exchange and on the OTC
Bulletin Board. Our old common stock, which was cancelled in connection with the
bankruptcy proceedings, had traded on the
7
OTC Bulletin Board after being delisted from the Nasdaq National Market
effective April 30, 2001. No prediction can be made as to future trading volumes
of our common stock on the Boston Stock Exchange or the OTC Bulletin Board.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus includes and incorporates forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. All statements, other than statements of
historical facts, included or incorporated in this prospectus regarding our
strategy, future operations, financial position, future revenues, projected
costs, prospects, plans and objectives of management are forward-looking
statements. The words "anticipates," "believes," "estimates," "expects,"
"intends," "may," "plans," "projects," "will," "would" and similar expressions
are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. We cannot guarantee
that we actually will achieve the plans, intentions or expectations disclosed in
our forward-looking statements and you should not place undue reliance on our
forward-looking statements. Actual results or events could differ materially
from the plans, intentions and expectations disclosed in the forward-looking
statements we make. We have included important factors in the cautionary
statements included or incorporated in this prospectus, particularly under the
heading "Risk Factors", that we believe could cause actual results or events to
differ materially from the forward-looking statements that we make. Our
forward-looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or investments we may make.
We do not assume any obligation to update any forward-looking statements.
8
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares offered
pursuant to this prospectus.
The selling stockholders will pay any expenses incurred by the selling
stockholders for brokerage, accounting, tax or legal services or any other
expenses incurred by the selling stockholders in disposing of the shares. We
will bear all other costs, fees and expenses incurred in effecting the
registration of the shares covered by this prospectus, including, without
limitation, all registration and filing fees and fees and expenses of our
counsel and our independent accountants.
SELLING STOCKHOLDERS
We issued the shares of common stock covered by this prospectus in
connection with our emergence from chapter 11 on May 29, 2002. The following
table sets forth, to our knowledge, certain information about the selling
stockholders as of April 16, 2003.
We do not know when or in what amounts a selling stockholder may offer
shares for sale. The selling stockholders may not sell any or all of the shares
offered by this prospectus. Because the selling stockholders may offer all or
some of the shares pursuant to this offering, and because there are currently no
agreements, arrangements or understandings with respect to the sale of any of
the shares, we can not estimate the number of shares that will be held by the
selling stockholders after completion of the offering.
However, for purposes of this table, we have assumed that, after completion
of the offering, none of the shares covered by this prospectus will be held by
the selling stockholders.
Beneficial ownership is determined in accordance with the rules of the SEC,
and includes voting or investment power with respect to shares. Unless otherwise
indicated below, to our knowledge, all persons named in the table have sole
voting and investment power with respect to their shares of common stock. The
inclusion of any shares in this table does not constitute an admission of
beneficial ownership for the person named below.
SHARES OF
SHARES OF COMMON STOCK COMMON STOCK TO BE
BENEFICIALLY OWNED PRIOR BENEFICIALLY OWNED
TO OFFERING NUMBER OF SHARES AFTER OFFERING
------------------------ OF COMMON STOCK ---------------------
NAME OF SELLING STOCKHOLDER(1) NUMBER PERCENTAGE BEING OFFERED NUMBER PERCENTAGE
------------------------------ --------- ----------- ---------------- ------ -----------
Franklin Floating Rate Trust............ 1,908,741 9.5% 1,908,741 -- --
Franklin CLO I, Limited................. 61,205 * 61,205 -- --
Franklin Floating Rate Master Series.... 8,104 * 8,104 -- --
(1) The term "selling stockholders" includes donees, pledges, transferees or
other successors-in-interest selling shares received after the date of this
prospectus from a selling stockholder as a gift, pledge, partnership
distribution or other non-sale related transfer.
* Less than 1%.
None of the selling stockholders has held any position or office with, or
has otherwise had a material relationship with, us or any of our subsidiaries
within the past three years.
9
DESCRIPTION OF CAPITAL STOCK
GENERAL
Our authorized capital stock consists of 50,000,000 shares of common stock.
Each share of common stock has a par value of $.001 per share. As of April 16,
2003, we had issued and outstanding 18,731,031 shares of common stock and an
additional 1,268,969 shares of common stock were reserved for issuance pursuant
to our plan of reorganization.
Holders of our common stock are entitled to one vote per share held of
record on all matters submitted to a vote of stockholders. They are entitled to
receive dividends when and if declared by our board of directors and to share,
on the basis of their shareholdings, in our assets that are available for
distribution to our stockholders in the event of liquidation. Holders of our
common stock have no preemptive, subscription, redemption or conversion rights.
Holders of our common stock do not have cumulative voting rights.
FOREIGN OWNERSHIP RESTRICTIONS
Under the Communications Act of 1934, not more than 25% of our capital
stock may be owned or voted by aliens or their representatives, a foreign
government or its representative or a foreign corporation if the Federal
Communications Commission finds that the public interest would be served by
denying such ownership. Accordingly, our restated certificate of incorporation
provides that we may redeem outstanding shares of our stock from holders if the
continued ownership of our stock by those holders, because of their foreign
citizenship or otherwise, would place the Federal Communications Commission
licenses held by us in jeopardy. Required redemptions, if any, will be made at a
price per share equal to the lesser of the fair market value of the shares, as
defined in our restated certificate of incorporation or, if such shares were
purchased within one year prior to the redemption, the purchase price of such
shares.
PROPOSED TRANSFER RESTRICTIONS ON COMMON STOCK
To help protect the tax benefits associated with our federal income tax
attributes, the board of directors has approved, subject to stockholder approval
at our 2003 annual meeting, the merger of our company with a wholly-owned
subsidiary.
In the merger, Arch Wireless, Inc. will merge with a wholly-owned
subsidiary. The subsidiary will be newly-formed for the specific purpose of the
merger and will have conducted no operations and have no assets or liabilities.
Arch Wireless, Inc. will be the surviving entity in the merger, and will
continue to engage in the business of providing one and two-way wireless
messaging and information services.
In the merger, each issued and outstanding share of common stock, $.001 par
value, will be converted into the right to receive one share of a new class of
security called Class A common stock, $.0001 par value. The rights of the Class
A common stock, $.0001 par value, will be identical in all respects to the
common stock, $.001 par value, except for the transfer restrictions described
below and the different par value. Immediately following the merger, no shares
of common stock, $.001 par value, will be outstanding. Once the transfer
restrictions are no longer necessary to protect the tax benefits associated with
our federal income tax attributes, the Class A common stock will be subject to
conversion back into common stock without transfer restrictions on a
share-for-share basis. We cannot predict if or when the transfer restrictions
will no longer be necessary to protect these tax benefits or, as a result, if or
when the Class A common stock will be subject to conversion back into common
stock, because this is dependent
10
on, among other things, the timing and amount of our future tax attributes and
the future value of our stock.
If the merger is approved by stockholders and becomes effective, all
outstanding common stock will be converted into the right to receive Class A
common stock, which will be subject to the restrictions described below. After a
cumulative change in ownership of our stock of more than 40%, the following
transfers will be prohibited unless the transferor or transferee provides notice
of the transfer to us and the board of directors approves the transfer: (1)
transfers of Class A common stock by stockholders to a stockholder that holds 5%
or more of our outstanding stock, (2) transfers of Class A common stock by
stockholders who hold 5% or more of our outstanding stock to any person, entity
or group and (3) transfers of Class A common stock by stockholders to any
person, entity or group that, if consummated, would result in their ownership of
5% or more of our outstanding stock. In some circumstances, a stockholder may be
attributed the ownership of stock held by another person or entity for purposes
of determining whether the stockholder holds 5% or more of our outstanding
stock, and a holder of less than 5% of our outstanding stock may be considered a
holder of 5% or more of our outstanding stock for purposes of the restrictions
if that holder is treated as a 5% shareholder under section 382 of the Internal
Revenue Code.
The board of directors will approve a transfer of Class A common stock if
it determines in good faith that the transfer (1) would not result in a
cumulative change in ownership of our stock of more than 42% or (2) would not
increase the cumulative change in ownership of our stock. The board of directors
may require an opinion of counsel, at the expense of the transferor and/or
transferee, that the transfer would satisfy the conditions for approving the
transfer discussed in the preceding sentence. A transfer by a holder of 5% or
more of our outstanding stock who acquired such stock after our emergence from
chapter 11 generally will not increase the cumulative change in ownership of our
stock if that transfer occurs within three years of the holder's acquisition of
the stock.
Prior to a cumulative change in ownership of our stock of more than 40%, no
transfers of Class A common stock will be prohibited, but a transferor or
transferee must provide notice to us of any transfer by or to a holder of 5% or
more of our outstanding stock. However, notwithstanding the foregoing, any
transfer of Class A common stock will be prohibited to the extent that it would
result in a cumulative change in ownership of our stock of more than 42%. Any
transfer prohibited by the restrictions discussed above would not be given
effect and in general the shares would instead be transferred to an agent who
would be required to dispose of the shares to other purchasers that would not
own 5% or more of our outstanding stock following the transfer.
Similar restrictions will apply to the issuance or transfer of an option to
purchase Class A common stock, if the exercise of the option would result in a
transfer that would be prohibited pursuant to the restrictions described above.
Transfers by or to us and any transfer pursuant to (1) any merger,
consolidation or similar transaction approved in advance by the board of
directors or (2) any tender or exchange offer for any and all of our stock as to
which a majority of our outstanding stock is tendered, as long as the offeror
has committed to acquire any shares not tendered for the same type and amount of
consideration paid in the offer, will be exempt from these restrictions.
The merger will not change the proportionate equity interest of any
stockholder in our company. The Class A common stock will trade in the
over-the-counter market under the same symbol, AWIN, under which the common
stock traded prior to the merger. We have filed a listing application with, and
anticipate that the Class A common stock will trade on, the Boston Stock
Exchange under the same symbol, AWL, under which the common stock traded prior
to the merger. We will continue to file
11
periodic and other reports with the Securities and Exchange Commission. The
merger will not result in any changes to our certificate of incorporation,
except as described in the following paragraph, or any significant changes to
our by-laws.
The exchange of common stock for Class A common stock pursuant to the
merger will not be taxable to our stockholders. The tax basis and holding period
for the shares of Class A common stock received by stockholders will be the same
as the tax basis and holding period of the shares of common stock exchanged
pursuant to the merger. In addition, the merger will not have any significant
accounting consequences to us and will not have any significant tax consequences
to us other than the intended benefits described above.
If the merger is approved and the transfer restrictions become effective,
stockholders may encounter difficulty in selling their shares because transfers
by or to holders of 5% or more of our outstanding stock will be prohibited after
there has been a cumulative change in ownership of our stock of more than 40%,
unless approved by the board of directors, and any transfer will be prohibited
to the extent that it would result in a cumulative change in ownership of our
stock of more than 42%. These transfer restrictions could have the effect of
decreasing the liquidity of your shares.
The transfer restrictions resulting from the merger, if approved by the
stockholders, could have the effect of preventing or delaying a change in
control of our company. However, the transfer restrictions are not being
proposed in response to any specific effort to acquire control of our company
and should not interfere with any merger or any other business combination
approved by the board of directors or any tender or exchange offer for any and
all of our stock, provided that such offer is accepted by the holders of a
majority of our outstanding stock and the offeror has committed to undertake a
second-step merger to acquire the remainder of our outstanding stock for the
same type and amount of consideration paid in the offer.
The proposed merger and related amendment will be presented to stockholders
for approval at the 2003 annual meeting of stockholders. The merger agreement
must be adopted by the affirmative vote of the holders of a majority of the
issued and outstanding shares of common stock. The merger must also be approved
by the holders of a majority in principal amount of the outstanding 10% notes
and 12% notes issued by our wholly-owned subsidiary, Arch Wireless Holdings,
Inc. We have requested this consent and anticipate receiving it prior to the
annual meeting.
The merger also requires prior Federal Communications Commission approval
of the transfer of control of certain of our licenses. We filed all applications
requiring prior approval on March 21, 2003. The Federal Communications
Commission granted the applications on April 14, 2003. The Federal
Communications Commission requires that the approved merger be consummated by
June 13, 2003 and that it be notified by July 14, 2003. Both of these deadlines
can be extended by submitting a request to the Federal Communications
Commission. Although no prior Federal Communications Commission approval is
required for the pro forma transfer of control of the remainder of our licenses,
we must notify the Federal Communications Commission within 30 days of closing
on the merger that the merger has occurred. No other federal or state regulatory
approvals are required to complete the merger, other than the filing of a
certificate of merger in Delaware following receipt of the approvals described
above.
If we obtain the required stockholder approval at our 2003 annual meeting,
we plan to complete the merger promptly following receipt of the other approvals
required for the merger. However, we cannot assure you that the merger, even if
it receives all required approvals, will prevent a change in ownership or
otherwise enable us to avoid significant limitations on the amounts and timing
of the use of our tax attributes.
12
DELAWARE LAW AND OUR CHARTER PROVISIONS
We are subject to the provisions of Section 203 of the General Corporation
Law of Delaware. Section 203 prohibits a publicly held Delaware corporation from
engaging in a business combination with an interested stockholder for a period
of three years after the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. A business combination
includes mergers, asset sales and other transactions resulting in a financial
benefit to the interested stockholder. An interested stockholder generally is a
person who, together with affiliates and associates, owns, or within the prior
three years did own, 15% or more of the corporation's voting stock.
Our restated certificate of incorporation contains provisions permitted
under the General Corporation Law of Delaware relating to the liability of
directors. The provisions eliminate a director's liability for monetary damages
for a breach of fiduciary duty, except in circumstances involving wrongful acts,
such as the breach of a director's duty of loyalty or acts or omissions that
involve intentional misconduct or a knowing violation of law. Further, our
restated certificate of incorporation contains provisions to indemnify our
directors and officers to the fullest extent permitted by the General
Corporation Law of Delaware, and we have entered into indemnification agreements
with 18 persons, including each director and executive officer, to the same
effect. We believe that these provisions will assist us in attracting and
retaining qualified individuals to serve as directors.
REGISTRATION RIGHTS
Funds affiliated with Franklin Advisers, Inc. have demand and piggyback
registration rights relating to our common stock and the 10% senior subordinated
secured notes due 2007 and 12% subordinated secured compounding notes due 2009
issued by Arch Wireless Holdings, Inc, our intermediate holding company, in
connection with our emergence from bankruptcy in May 2002. The demand
registration rights entitle (1) the holders of at least 8% of our common stock
to require us to register all or any portion of their shares of our common stock
for public resale by the holders and (2) the holders of at least 8% of the
aggregate principal amount of the notes to require our intermediate holding
company to register all or a portion of their notes for public resale by the
holders. The demand registration rights for both the common stock and the notes,
collectively, may be exercised no more than twice. This prospectus relates to
the exercise by funds affiliated with Franklin Advisers, Inc. of their demand
registration rights with respect to our common stock owned by them.
The piggyback registration rights entitle the holders to include their
shares of our common stock in a registration statement for shares that we wish
to sell, unless the underwriters believe that the number of shares included in
the registration statement should be limited for marketing reasons. In that
case, holders would be entitled to include the same percentage of the shares
they own as the percentage of any other stockholder participating in the
offering is entitled to include. The piggyback registration rights also entitle
the holders to include their notes in a registration statement for notes that
the intermediate holding company wishes to sell, unless the underwriters believe
that the aggregate principal amount of notes included in the registration
statement should be limited for marketing reasons. In that case, holders would
be entitled to include the same percentage of notes they own as the percentage
of any other holder participating in the offering is entitled to include.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is EquiServe Trust
Company, N.A.
13
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time to
time by the selling stockholders. The term "selling stockholders" includes
donees, pledgees, transferees or other successors-in-interest selling shares
received after the date of this prospectus from a selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer. The selling
stockholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. Such sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
in negotiated transactions. The selling stockholders may sell their shares by
one or more of, or a combination of, the following methods:
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- block trades in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
- an over-the-counter distribution in accordance with the rules of the
Nasdaq National Market;
- in privately negotiated transactions; and
- in options transactions.
In addition, any shares that qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this prospectus.
To the extent required, this prospectus will be amended or supplemented
from time to time to describe a specific plan of distribution. In connection
with distributions of the shares or otherwise, the selling stockholders may
enter into hedging transactions with broker-dealers or other financial
institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the common stock in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders may also sell the common stock short and redeliver the
shares to close out such short positions. The selling stockholders may also
enter into option or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). The selling
stockholders may also pledge shares to a broker-dealer or other financial
institution, and, upon a default, such broker-dealer or other financial
institution, may effect sales of the pledged shares pursuant to this prospectus
(as supplemented or amended to reflect such transaction).
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the selling stockholders
and any broker-dealers who execute sales for the selling stockholders may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933 in
connection with such sales. Any profits realized by the selling stockholders and
the compensation of any broker-dealer may be deemed to be underwriting discounts
and commissions.
14
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
We have advised the selling stockholders that the anti-manipulation rules
of Regulation M under the Securities Exchange Act of 1934 may apply to sales of
shares in the market and to the activities of the selling stockholders and their
affiliates. In addition, we will make copies of this prospectus available to the
selling stockholders for the purpose of satisfying the prospectus delivery
requirements of the Securities Act. The selling stockholders may indemnify any
broker-dealer that participates in transactions involving the sale of the shares
against certain liabilities, including liabilities arising under the Securities
Act.
At the time a particular offer of shares is made, if required, a prospectus
supplement will be distributed that will set forth the number of shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling
price to the public.
We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.
We have agreed with the selling stockholders to keep the registration
statement of which this prospectus constitutes a part effective until the
earlier of (1) the second anniversary of the effective date of the registration
statement, (2) the date on which all of the shares registered under the
registration statement are sold by the selling stockholders or (3) the date on
which every selling stockholder is able to sell within any 90 day period 100% of
its shares of our common stock obtained pursuant to our plan of reorganization
in compliance with Rule 144 under the Securities Act.
15
CHANGE IN ACCOUNTANTS
On June 27, 2002, our board of directors and our audit committee dismissed
Arthur Andersen LLP as our independent accountants and engaged
PricewaterhouseCoopers LLP to serve as our independent accountants for the
fiscal year ending December 31, 2002, effective June 27, 2002. Arthur Andersen
LLP's audit report on our consolidated financial statements for each of the
fiscal years ended December 31, 2000 and 2001, respectively, contained an
explanatory paragraph regarding our ability to continue as a going concern.
Except as stated above, Arthur Andersen LLP's reports on our consolidated
financial statements for each of the fiscal years ended December 31, 2000 and
2001 did not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting principles.
During the fiscal years ended December 31, 2000 and 2001 and through June
27, 2002, there were no disagreements with Arthur Andersen LLP on any matter of
accounting principle or practice, financial statement disclosure, or auditing
scope or procedure which, if not resolved to Arthur Andersen LLP's satisfaction,
would have caused them to make reference to the subject matter in conjunction
with their report on our consolidated financial statements for such years; and
there were no reportable events as defined in Item 304(a)(1)(v) of Regulation
S-K.
We requested Arthur Andersen LLP to furnish us with a letter addressed to
the Securities and Exchange Commission stating whether or not it agrees with the
above statements. A copy of that letter, dated June 28, 2002, was included with
our current report on Form 8-K, filed with the Securities and Exchange
Commission on June 27, 2002.
Prior to their engagement, neither we, nor anyone acting on our behalf,
consulted PricewaterhouseCoopers LLP with respect to the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on our consolidated
financial statements, or any other matters or reportable events as set forth in
Items 304(a)(2)(i) and (ii) of Regulation S-K.
LEGAL MATTERS
The validity of the common stock described in this prospectus has been
passed upon by Hale and Dorr LLP.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K as of December 31, 2002, for the period from
January 1, 2002 to May 31, 2002 and for the period from June 1, 2002 to December
31, 2002 have been so incorporated in reliance on the reports (which contain an
explanatory paragraph relating to Arch Wireless, Inc.'s adoption of fresh-start
accounting as described in Note 3 to the financial statements) of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
Our financial statements as of December 31, 2001 and for each of the two
years in the period ended December 31, 2001 prior to the revision discussed in
Note 1 to the 2002 financial statements included or incorporated by reference in
this prospectus were audited by Arthur Andersen LLP, independent accountants who
have ceased operations. Arthur Andersen LLP expressed an unqualified opinion on
those financial statements in their report dated March 7, 2002 (except for the
matters discussed in Note 15 to the 2001 financial statements as to which the
date is May 29, 2002). The report of Arthur Andersen LLP is a copy of a report
previously issued by Arthur Andersen LLP, which has not been reissued by Arthur
Andersen LLP.
16
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other documents with the Securities
and Exchange Commission. You may read and copy any document we file with the
Securities and Exchange Commission at the Securities and Exchange Commission's
public reference room at Judiciary Plaza Building, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. You should call 1-800-SEC-0330 for more
information on the public reference room. Our Securities and Exchange Commission
filings are also available to you on the Securities and Exchange Commission's
Internet site at http://www.sec.gov.
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission. The registration statement contains more
information than this prospectus regarding us and our common stock, including
certain exhibits and schedules. You can obtain a copy of the registration
statement from the Securities and Exchange Commission at the address listed
above or from the Securities and Exchange Commission's Internet site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" into this prospectus information that we file with the Securities and
Exchange Commission in other documents. This means that we can disclose
important information to you by referring to other documents that contain that
information. Any information that we incorporate by reference is considered part
of this prospectus. Information contained in this prospectus and information
that we file with the Securities and Exchange Commission in the future and
incorporate by reference in this prospectus automatically updates and supersedes
previously filed information. We incorporate by reference the documents listed
below and any future filings we make with the Securities and Exchange Commission
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
prior to the sale of all the shares covered by this prospectus.
(1) Our Annual Report on Form 10-K for the year ended December 31,
2002;
(2) Our Annual Report on Form 10-K/A for the year ended December 31,
2002;
(3) Our Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2003;
(3) All of our filings pursuant to the Securities Exchange Act of
1934 after the date of filing the initial registration statement
and prior to the effectiveness of the registration statement; and
(4) The description of our common stock contained in our registration
statement on Form 8-A filed with the Securities and Exchange
Commission on April 14, 2003, including any amendments or reports
filed for the purpose of updating that description.
You may request, orally or in writing, a copy of these documents, which
will be provided to you without charge, by contacting:
Arch Wireless, Inc.
1800 West Park Drive, Suite 250
Westborough, Massachusetts 01581
Attention: Investor Relations
Telephone: (508) 870-6700
17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by Arch. All amounts shown are estimates
except the Securities and Exchange Commission registration fee.
Filing Fee - Securities and Exchange Commission......... $498
Legal fees and expenses................................. $ *
Accounting fees and expenses............................ $ *
Printing and engraving expenses......................... $ *
Miscellaneous expenses.................................. $ *
----
Total Expenses................................. $ *
----
*To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law (the "DGCL") allows a
corporation to eliminate the personal liability of directors of a corporation to
the corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except where the director breached his duty of
loyalty, failed to act in good faith, engaged in intentional misconduct or
knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase in violation of Delaware corporate law or obtained an improper
personal benefit. Arch has included such a provision in its Certificate of
Incorporation.
Section 145 of the DGCL provides that a corporation has the power to
indemnify a director, officer, employee or agent of the corporation and certain
other persons serving at the request of the corporation in related capacities
against amounts paid and expenses incurred in connection with an action or
proceeding to which he is or is threatened to be made a party by reason of such
position, if such person shall have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, in any criminal proceeding, if such person had no reasonable
cause to believe his conduct was unlawful; provided that, in the case of actions
brought by or in the right of the corporation, no indemnification shall be made
with respect to any matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the adjudicating
court determines that such indemnification is proper under the circumstances.
Arch's Restated Certificate of Incorporation provides that Arch will, to
the fullest extent permitted by the DGCL, indemnify all persons whom it has the
power to indemnify against all costs, expenses and liabilities incurred by them
by reason of having been officers or directors of Arch, any subsidiary of Arch
or any other corporation for which such person acted as an officer of director
at the request of Arch. Arch has also entered into indemnification agreements
with 18 persons, including each director and executive officer, requiring Arch
to indemnify such persons to the fullest extent permitted by the Delaware
corporation statute.
II-1
Arch's Restated Certificate of Incorporation also provides that the
directors of Arch will not be personally liable for monetary damages to Arch or
its stockholders for any act or omission provided that the foregoing shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to Arch or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of the law, (iii) under Section 174 of the DGCL (relating to illegal
dividends or stock redemptions), or (iv) for any transaction from which the
director derived an improper personal benefit. If the DGCL is amended to permit
further elimination or limitation of the personal liability of directors, then
the liability of a director of Arch shall be eliminated or limited to the
fullest extent permitted by the DGCL as so amended.
Arch has purchased directors' and officers' liability insurance which would
indemnify its directors and officers against damages arising out of certain
kinds of claims which might be made against them based on their negligent acts
or omissions while acting in their capacity as such.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Hale and Dorr LLP (contained in exhibit 5.1)
24.1 Power of Attorney (See page II-4 of this Registration Statement)
-------------------
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(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 thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
registration statement or any material change to such information
in this registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed
II-2
by Arch pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purposes of determining any liability under
the Securities Act of 1933, each 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 the 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnification provisions described herein, 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.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Westborough, Commonwealth of Massachusetts, on May
14, 2003.
ARCH WIRELESS, INC.
By: /s/ C. EDWARD BAKER, JR.
------------------------------------
C. Edward Baker, Jr.
Chairman and Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints C. Edward Baker, Jr., J. Roy
Pottle, Patricia A. Gray, Gerald J. Cimmino, and David A. Westenberg as his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any related Rule 462(b) registration
statement or amendment thereto, and to file the same with all exhibits thereto
and any other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ C. EDWARD BAKER, JR. Chief Executive Officer (Principal Executive May 14, 2003
-------------------------------- Officer) and Director
C. Edward Baker, Jr.
/s/ J. ROY POTTLE Executive Vice President and Chief Financial May 14, 2003
-------------------------------- Officer (Principal Financial and Accounting
J. Roy Pottle Officer)
Director May __, 2003
--------------------------------
William C. Bousquette
/s/ JAMES V. CONTINENZA Director May 12, 2003
--------------------------------
James V. Continenza
II-4
/s/ ERIC GOLD Director May 13, 2003
--------------------------------
Eric Gold
/s/ CARROLL D. MCHENRY Director May 9, 2003
--------------------------------
Carroll D. McHenry
/s/ MATTHEW ORISTANO Director May 9, 2003
--------------------------------
Matthew Oristano
/s/ WILLIAM E. REDMOND, JR. Director May 9, 2003
--------------------------------
William E. Redmond, Jr.
/s/ SAMME L. THOMPSON Director May 14, 2003
--------------------------------
Samme L. Thompson
Director May __, 2003
--------------------------------
Carroll R. Wetzel, Jr.
II-5