As filed with the Securities and Exchange Commission on September 21, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
RSL COMMUNICATIONS, LTD.
(Exact name of registrant as specified in its charter)
BERMUDA 4813 N/A
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
RSL COMMUNICATIONS, LTD.
CLARENDON HOUSE
CHURCH STREET
HAMILTON HM CX
BERMUDA
PHONE: 441 295-2832
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
PAUL B. DOMORSKI
PRESIDENT & CHIEF EXECUTIVE OFFICER
RSL COMMUNICATIONS, N. AMERICA, INC.
810 SEVENTH AVENUE
NEW YORK, NY 10153
PHONE: (212) 445-7400 FAX: (212) 445-7531
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copy to:
GEORGE E.B. MAGUIRE, ESQ.
DEBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NY 10022
PHONE: (212) 909-6072 FAX: (212) 909-6836
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Approximate date of commencement of proposed sale to the public: From time
to time, or at one time, after the effective date of this registration statement
as the selling stockholders (defined in the prospectus) determine.
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. |_|
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CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Each Class of Offering Aggregate Amount of
Securities to be Amount to be Price per Offering Registration
Registered Registered Share (1)(2) Price (2) Fee (3)
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Class A Common Shares, 3,500,000 $3.5938 $12,578,300 $3,320.67
par value $0.00457,
issued to the Selling
Shareholders (as
defined in the
prospectus)
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(1) The Selling Shareholders will determine the proposed maximum initial
offering price per share.
(2) Estimated solely for the purpose of calculating the registration fee,
based on the closing price for shares of the Class A common shares on
September 19, 2000.
(3) Calculated pursuant to Rule 457 of the rules and regulations under 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 THE 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. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ("SEC") IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURSDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
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SUBJECT TO COMPLETION, DATED SEPTEMBER 21, 2000
P R O S P E C T U S
RSL COMMUNICATIONS, LTD.
3,500,000 Class A Common Shares
This prospectus applies to:
o Class A common shares of some of our shareholders who have the right to have
us register their Class A common shares for resale by them ("Existing
Shareholders"); and
o Class A common shares we issued to minority shareholders ("Minority
Interestholders") of some of our subsidiaries who had the right to exchange
shares of subsidiaries' stock for our Class A common shares ("Roll-Up Rights")
and have the right to have us register these Class A common shares for resale by
them.
From time to time, any of the Existing Shareholders and the Minority
Interestholders (together, the "Selling Shareholders") may offer and sell the
Class A common shares described above at prices they determine. We will not sell
any shares ourselves under this prospectus.
The Selling Shareholders may sell the shares directly to investors, or to
or through agents, dealers, or brokers. See "Plan of Distribution."
Before making your investment decisions, carefully read this prospectus.
Our Class A common shares are listed on The Nasdaq Stock Market under the
trading symbol "RSLC."
Our headquarters are located at Clarendon House, Church Street, Hamilton
HM CX, phone 441 295-2832. We also maintain executive offices for some of our
operations at 810 Seventh Avenue, 39th Floor, New York, New York 10153.
Investing in the shares involves risks. See "Risk Factors" beginning on
page 3.
Neither the SEC nor any state securities commission has approved or
disapproved of these shares or determined if this prospectus is accurate or
adequate. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2000.
<PAGE>
TABLE OF CONTENTS
PAGE
RISK FACTORS.................................................................3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS............................4
ABOUT OUR COMPANY............................................................5
SELLING SHAREHOLDERS.........................................................6
USE OF PROCEEDS..............................................................6
DESCRIPTION OF CAPITAL STOCK.................................................7
PLAN OF DISTRIBUTION........................................................12
LEGAL MATTERS...............................................................13
EXPERTS.....................................................................13
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES...........................13
WHERE YOU CAN FIND MORE INFORMATION.........................................14
INCORPORATION OF INFORMATION WE FILE WITH THE SEC...........................14
INDEMNIFICATION.............................................................15
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RISK FACTORS
Investing in our Class A common shares involves risks. Some risks relate
to matters that, if they occurred, could be substantial and adversely affect our
business, financial condition or results of operations. Before buying shares,
carefully consider the following information on these risks, together with the
other information in this prospectus, Annual Report for the year ended December
31, 1999, as amended, filed on Form 10-K/A (including the risk factors applying
to our business in general) and other documents filed with the SEC and
incorporated in this prospectus by reference.
Sales, or the availability for sale, of substantial amounts of Class A common
shares could adversely affect the market price of the Class A common shares.
Sales of substantial amounts of Class A common shares in the public
market, and the availability of shares for future sale, could adversely affect
the market price of the Class A common shares and impair our ability to raise
capital through offerings of our equity securities. Class A common shares
available for future sale include such shares issuable upon:
o converting shares of preferred stock or Class B common shares; or
o exercising outstanding options, warrants or other rights to acquire
shares of Class A common shares.
We have not paid dividends on our common shares, and do not intend to pay
dividends in the foreseeable future. Also, our ability to pay cash dividends may
be limited by the terms of our debt facilities and under Bermuda law.
We have never paid dividends on common shares, and do not anticipate doing
so in the foreseeable future. Also, our ability to declare and pay dividends is
limited by:
o our debt facilities and the trust indentures governing our
outstanding debt securities; and
o Bermuda law (which generally limits dividends to the amount of our
"surplus").
If we or any of our foreign subsidiaries were deemed to be a foreign personal
holding company or passive foreign investment company, our US shareholders could
be adversely affected.
To the extent consistent with other business goals, we will seek to manage
our affairs (and our subsidiaries' affairs) so that neither we (nor any of our
foreign corporate subsidiaries) will be, under the US Internal Revenue Code of
1986, as amended:
o a passive foreign investment company ("PFIC"); or
o once we (or such a subsidiary) become profitable, a foreign personal
holding company ("FPHC").
If we were a PFIC, each US holder of our stock (or any warrants to
purchase our stock, or debt securities convertible or exchangeable into our
stock) would, upon certain distributions by us, or upon disposing of these
securities at a gain, be liable to pay tax at the then prevailing rates on
ordinary income plus an interest charge, generally as if the distribution or
gain had been recognized ratably over the US
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holder's holding period (for PFIC purposes) for those securities. However, a US
holder of our stock may be able to make:
o a "qualified electing fund" election so that, instead, the holder
includes in the holder's income each year a pro rata share of our
ordinary earnings and net capital gain. (US holders of warrants to
purchase our stock, or debt securities convertible or exchangeable
into our stock, may not make this election.)
o a mark-to-market election so that the holder includes as ordinary
income (or deducts from ordinary income) annual increases (or
decreases) in share value by marking-to-market the value of the
shares at the end of each year.
If we (or any such subsidiary) were a FPHC, any of our (or our foreign
corporate subsidiaries') undistributed foreign personal holding company income
(generally, the taxable income, with certain adjustments) would be included in
the income of our US shareholders as a dividend on a pro rata basis.
While we intend to manage our affairs (and the affairs of our corporate
subsidiaries) to avoid PFIC status (or, once profitable, FPHC status) to the
extent consistent with our other business goals, we cannot assure you that we
will succeed in doing so.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Any statements in this prospectus (or incorporated herein by reference)
about our expectations, beliefs, plans, objectives, assumptions or future events
or performance are not historical facts and are 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. These statements are often, but not
always, made through the use of words or phrases such as "will likely result,"
"expect," "will continue," "anticipate," "estimate," "intend," "plan,"
"projection," "would" and "outlook." Accordingly, these statements involve
estimates, assumptions and uncertainties that could cause actual results to
differ materially from those expressed in them. Any forward-looking statements
are qualified in their entirety by reference to the factors discussed throughout
this document. 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 document. Among the key factors that
have a direct bearing on our results of operation are:
o general economic and business conditions;
o changes in political, social and economic conditions;
o changes in, or failure to comply with, government regulations;
o deregulation of the telecommunications market;
o changes in marketing and technology in the telecommunications
industry;
o competition in the telecommunications industry;
o general risks of the telecommunications industry;
o success of acquisition and operating initiatives;
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o management of growth; and
o availability, terms and deployment of capital.
These factors and the risk factors referred to above could cause actual
results or outcomes to differ materially from those expressed in any
forward-looking statements we make. You should not place undue reliance on any
such forward-looking statements. Further, 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 to reflect events or circumstances after the date
on which such 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 them. In addition, we cannot assess 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.
For a discussion of important risks of an investment in our securities,
including factors that could cause actual results to differ materially from
results referred to in the forward-looking statements, see the section in this
prospectus entitled "Risk Factors" as well as the section entitled "Risk
Factors" in our Annual Report for the year ended December 31, 1999, as amended,
filed on Form 10-K/A and incorporated in this prospectus by reference. You
should carefully consider the information discussed in those sections. In light
of these risks, uncertainties and assumptions, the forward-looking events
discussed in or incorporated by reference in this offering circular might not
occur.
Throughout this prospectus (or incorporated by reference herein) we have
used industry data obtained from internal surveys, market research, publicly
available information and industry publications. Industry publications generally
state that the information they contain has been obtained from sources believed
to be reliable but that the accuracy and completeness of that information is not
guaranteed. Although these data have been correctly reproduced in this
prospectus (or incorporated by reference herein) from the internal surveys,
market research, publicly available information and industry publications, we
have not independently verified the data.
ABOUT OUR COMPANY
We are a growing facilities-based communications company that provides a
broad range of voice, data/Internet and value-added products and service
solutions primarily to small and medium-sized businesses and residential
customers in selected markets around the globe.
We have built a local presence and currently have revenue-generating
operations in Australia, Austria, Belgium, Denmark, Finland, France, Germany,
Italy, Luxembourg, Mexico, the Netherlands, New Zealand, Portugal, Spain,
Sweden, Switzerland, the United Kingdom, the United States and Venezuela.
Through our subsidiary, deltathree.com, we also own and operate a
privately-managed Internet Protocol (IP) telephony network with 107 points of
presence in over 40 countries around the world.
Over our network, we currently offer, or are in the process of launching,
in selected markets various voice, data/Internet and value-added services,
including:
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Voice Data/Internet Value-added
-------------------------- --------------------------- -------------------------
o international long o Internet services o conference calling
distance
o voice-over Internet o unified messaging
o national long distance Protocol
o voice-mail
o wireless o Integrated Services
Digital Network (ISDN) o video conferencing
o private line
o Digital Subscriber
o pre-paid/post-paid Line (DSL)
calling card
o X.25 (packet data)
o toll-free dialing services
o frame-relay
o Asynchronous Transfer
Mode (ATM)
o remote access data
services
SELLING SHAREHOLDERS
The following table shows the Selling Shareholders, the amount of Class A
common shares they may sell in the offering, and the amounts of Class A common
shares they will hold before and after the offering. (All references in the
table to "Shares" are to Class A common shares.)
<TABLE>
<CAPTION>
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Selling Number of shares Number of shares Number of shares Percentage of
Shareholder to be sold in the held before the held after the shares held
offering offering offering after the offering
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<S> <C> <C> <C> <C>
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</TABLE>
USE OF PROCEEDS
We will not receive any proceeds from sales of shares under this
prospectus.
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DESCRIPTION OF CAPITAL STOCK
Introduction
The following description of our stock is qualified in its entirety by
reference to the Memorandum of Association and Bye-Laws. You can get copies of
these from the SEC. (See "Where You Can Find More Information.")
In September 1997, in connection with our initial public offering, we
effected a 2.19-for-one stock split and increased our authorized common shares
and preferred stock. We are now authorized to issue 438,000,000 common shares
(which we may issue as shares of Class A common shares or Class B common shares)
and 65,700,000 shares of preferred stock. We have in the past used, and intend
in the future to use, shares of capital stock to pay for acquisitions.
Rights of Holders of Class A Common Shares
As at August 31, 2000, we had 34,381,743 Class A common shares issued and
outstanding. Holders of Class A common shares:
o have one vote per share, voting as a single class together with the
holders of any preferred stock with voting rights and holders of
Class B common shares on matters requiring shareholder approval
(except when The Companies Act 1981 of Bermuda requires class
voting);
o are entitled to receive dividends as and when declared by the board
of directors (equally with the holders of Class B common shares) out
of funds legally available for dividends after we pay any dividends
declared but unpaid on outstanding shares of preferred stock;
o have no preemptive rights;
o have no cumulative voting rights;
o have no rights to convert Class A common shares into any other
securities; and
o on our liquidation, dissolution or winding up, are entitled to
receive (equally and proportionally with the holders of Class B
common shares) our net assets remaining after we pay all debts and
other liabilities and distribute in full preferential amounts to
holders of preferred stock.
Our ability to pay dividends to our shareholders or to make other
distributions is limited by:
o our debt facilities and the trust indentures governing our
outstanding debt securities; and
o Bermuda law (which generally limits dividends to the amount of our
"surplus").
Other Information on Class A Common Shares
Our Class A common shares are listed on The Nasdaq Stock Market under the
trading symbol "RSLC."
American Stock Transfer & Trust Company is our transfer agent and
registrar for the Class A common shares.
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Class B Common Shares
As at August 31, 2000, we had 24,267,283 Class B common shares issued and
outstanding. The holders of the Class B common shares:
o have 10 votes per share; and
o can convert their Class B common shares on a share-for-share basis
into Class A common shares at any time.
Holders may transfer Class B common shares only to:
o other original holders of Class B common shares;
o members of the original holder's family by gift, devise or otherwise
through laws of inheritance, descent or distribution;
o a trust established by the holder for the holder's family members;
o corporations the majority of beneficial owners of which are or will
be owned by holders of Class B common shares; and
o where the holder is a corporation or partnership, to its
shareholders or partners.
In other respects, the rights of holders of Class B common shares are the
same as those of holders of Class A common shares.
Preferred Shares
As at August 31, 2000, we had 2,300,000 preferred shares issued and
outstanding. We issued these shares as 7 1/2% Series A convertible preferred
shares in a private placement in February and March 2000. Each of these shares:
o generally has no voting rights (unless we have not declared or paid
dividends for six quarterly periods);
o accrues dividends at the rate of 7 1/2% per year, payable quarterly;
o is convertible, at the holder's option, at an initial conversion
price that would convert each of these shares into 2.2584 Class A
common shares;
o is redeemable by us for a predetermined redemption price plus
accrued dividends, from February 2005;
o if still outstanding on February 1, 2012, must be redeemed by us at
a redemption price of $50 plus accrued and unpaid dividends; and
o has a liquidation preference of $50.
In connection with our offering of these preferred shares, we amended our
Bye-Laws to give our board of directors the authority, without further
shareholder action, to issue from time to time preferred shares in series and to
fix the designations, preferences, rights, qualifications, limitations and
restrictions
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for a series (including voting rights, dividend rights, dividend rates,
conversion rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares in a series).
Issuing preferred shares could have the following adverse effects on
holders of our common shares:
o if the preferred shares have voting rights: decreasing the voting
power of holders of common stock;
o if the preferred shares have conversion rights: potentially
increasing the number of shares of common shares outstanding to the
authorized amount;
o decreasing the amount of earnings and assets available for
distribution to holders of common shares; and
o delaying, deterring or preventing a change in control.
Anti-Takeover Protections
A shareholder's (or group of shareholders') ability to acquire sufficient
influence over the election of directors and other matters to change our control
or management could be substantially impeded by the voting provisions of
preferred stock and Class B common shares issued and outstanding (or issued in
future). These provisions may have an anti-takeover effect and may delay or
prevent a tender offer or takeover attempt that a shareholder might consider to
be in that shareholder's best interest (including attempts that might result in
a premium over the market price for Class A common shares).
Certain Provisions of Bermuda Law
The Bermuda Monetary Authority has designated us a non-resident under the
Exchange Control Act of 1972 and permitted us to issue Class A common shares.
Our non-resident designation means that we can undertake transactions in
currencies other than the Bermuda dollar. The Bermuda Monetary Authority does
not guarantee our performance or creditworthiness and is not liable for the
correctness of any opinions in this prospectus.
No specific consent is needed to:
o issue Class A common shares after an offering to, or by, persons
regarded as resident outside Bermuda for exchange control purposes;
or
o transfer Class A common shares between such persons.
Issues and transfers of shares involving any person regarded as resident
in Bermuda for exchange control purposes require specific prior approval under
the Control Act.
If you are resident outside Bermuda for exchange control purposes, you are
not restricted in exercising rights to hold or vote your Class A common shares.
Because we have been designated as a non-resident for Bermuda exchange control
purposes, we are not restricted in transferring funds in and out of Bermuda or
paying dividends to holders who are United States residents (other than in local
Bermuda currency).
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In accordance with Bermuda law, we only issue share certificates in the
names of corporations, partnerships or individuals. If you are acting in a
special capacity (for example, as a trustee), you may ask that your certificate
record this capacity. However:
o we are not bound to investigate, or incur any responsibility in
respect of, the proper administration of any trust; and
o we will take no notice of any trust applying to any of our shares
whether or not we have notice of that trust.
As an "exempted company," we are exempt from Bermuda laws restricting the
percentage of share capital that non-Bermudians may hold. However, we may not
participate in certain business transactions, including:
o acquiring or holding land in Bermuda (except land needed for our
business and held under a lease or tenancy for terms of not more
than 21 years);
o taking mortgages on land in Bermuda to secure more than $50,000
(unless the Minister of Finance of Bermuda consents);
o acquiring securities created or issued by, or any interest in, any
local company or business (other than certain types of Bermuda
government securities or another "exempted" company, partnership or
other corporation resident in Bermuda but incorporated abroad); or
o carrying on business of any kind in Bermuda, except in furtherance
of the business we carry on outside Bermuda (or with the permission
of, or under a license granted by, the Minister of Finance of
Bermuda).
Outstanding Warrants
Lauder Warrants: As consideration for, among other things, his previous
guarantee of a revolving credit facility, Ronald S. Lauder received warrants to
buy 459,900 Class B common shares. The exercise price, exercise period and other
terms of these warrants are substantially the same as the terms of the warrants
issued in the debt offering described below (except for the class of stock to be
issued upon their exercise). The warrants issued to Mr. Lauder were exercisable
beginning on October 3, 1997.
In July 2000 we signed an agreement with Mr. Lauder under which Mr. Lauder
has provided us with an unsecured loan facility for $100 million available until
June 30, 2001. As well as paying interest on amounts drawn under the facility,
we will issue to Mr. Lauder warrants to buy 75,000 Class A common shares at
$11.50 per share for each $5 million we drawdown under the facility. As of the
date of this prospectus, we have issued 375,000 warrants to Mr. Lauder in
connection with this facility.
Warrants issued in 1996 Offering: In October 1996, we issued 300,000 warrants to
buy Class A common shares under a warrant agreement, dated as of October 6,
1996, between us and The Chase Manhattan Bank (as warrant agent). As of August
31, 200, there were 180,130 of these warrants outstanding.
Each warrant is evidenced by a certificate and currently entitles the
holder to buy 3.97485 Class A common shares from us at an exercise price of
$0.00457 per share (subject to adjustment as provided in the warrant agreement).
Holders may exercise the warrants any time before the close of business on
October 3, 2007. Warrants not exercised by then expire.
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The warrant agreement has provisions (to which there are certain
exceptions) adjusting the exercise price and the number of Class A common shares
or other securities issuable upon exercise of a warrant if we:
o divide, consolidate or reclassify the Class A common shares;
o issue rights, options, warrants or convertible or exchangeable
securities to all holders of Class A common shares entitling them to
subscribe for or buy Class A common shares at a price per share
lower than the then current value per Class A common share (subject
to certain exceptions);
o issue Class A common shares at a price per share lower than their
then current value (except for issues in connection with an
acquisition, merger or similar transaction with a third party);
o make certain distributions to all holders of Class A common shares
of evidences of indebtedness or assets; or
in the discretion of our board of directors, in certain other circumstances.
The Class A common shares issuable upon exercise of the warrants were
registered under a registration statement on Form S-1.
Other Rights to Acquire Class A Common Shares
Roll-Up Rights: We have granted to a number of minority interestholders:
o the right to exchange their minority interests in certain of our
subsidiaries for Class A common shares; and
o piggyback registration rights for Class A common shares they acquire
by exercising these Roll-Up Rights.
As at June 30, 2000, roll-up rights were held by minority interestholders
of the following subsidiaries: RSL COM Italia (and certain of its subsidiaries),
Alo Comunicaciones (formerly known as RSL COM Spain), RSL COM Schweiz, PCM, VIP
Pietopalvelut Oy (a subsidiary of RSL COM Finland) and Telecom Direct Limited (a
subsidiary of RSL COM USA).
The number of shares of Class A common stock issuable upon exercise of the
Roll-Up Rights will be based upon valuations of the minority interests and the
Class A common stock at the time of exercise. We estimate that, as of August 31,
2000, approximately 3.7 million Class A common shares are issuable upon exercise
of all outstanding Roll-Up Rights, of which 2.7 million Class A common shares
are issuable upon exercise of currently exercisable Roll-Up Rights.
Incentive units: We have also granted to certain employees of our subsidiaries:
o incentive units (some of which are currently exercisable); and
o the right to exchange these incentive units for shares of Class A
common stock (or, in certain circumstances, at our option, cash).
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All shares of Class A common stock issuable upon exchange of incentive
units will be issued under the 1997 stock incentive plan. We estimate that
approximately 760,000 shares of Class A common stock are issuable upon exchange
of currently exercisable incentive units.
Conversion rights: Holders of Series A preferred shares may convert those shares
into Class A common shares, as noted in "Preferred Stock" above.
PLAN OF DISTRIBUTION
Methods of Sale
The Selling Shareholders (or their pledgees, donees, transferees or other
successors in interest) may dispose of their shares covered by this prospectus
from time to time in one or more transactions through any one or more of:
o a block trade, in which a broker or dealer tries to sell the shares
as agent but may position and resell a part of the block as
principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by that
broker or dealer for its account;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o an exchange distribution in accordance with the rules of an exchange
or transactions in the over-the-counter market;
o purchases by the buyers directly; and
o the pledge of the shares as security for any loan or obligation
(including pledges to brokers or dealers who may, from time to time,
themselves effect distributions of the shares or interests in the
shares).
In effecting sales, brokers or dealers may arrange for other brokers or
dealers to participate.
The Selling Shareholders may dispose of their shares covered by this
prospectus by means other than under this prospectus (e.g. under Rule 144, under
private transactions, or by devise or gift). We cannot assure you that the
Selling Shareholders will sell their shares covered by this prospectus, or that
they will sell these shares in a manner described in this prospectus.
Price
The securities may be distributed from time to time in one or more
transactions at:
o a fixed price or prices (which may be changed from time to time);
o market prices prevailing at the time of sale;
o prices related to the prevailing market prices; or
o negotiated prices.
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"Underwriters"
The Selling Shareholders, and any broker or dealer participating in the
distribution, may be "underwriters" under the Securities Act of 1933. Therefore,
any discounts or commissions they receive, and any profit they realize, may be
underwriting discounts and commissions under that Act. If the Selling
Shareholders are "underwriters", they may be subject to statutory liabilities
under the Act (including sections 11, 12 and 17) and Rule 10b-5 under the
Securities Exchange Act of 1934.
To the best of our knowledge, the Selling Shareholders do not have any
current plans, arrangements or understandings with any broker, dealer or
underwriter to sell shares covered by this prospectus.
Marketability
We do not expect the Class A common shares to be listed on a securities
exchange other than The Nasdaq Stock Market. Any dealers will not be obligated
to make a market in the shares. We cannot predict the activity or liquidity of
any trading in the shares offered under this prospectus.
LEGAL MATTERS
Certain matters relating to the shares are being passed upon for us by
Conyers, Dill & Pearman, Hamilton, Bermuda.
EXPERTS
The Consolidated Financial Statements and the related financial statement
schedules incorporated in this prospectus by reference from our Annual Report
for the year ended December 31, 1999, as amended, filed on Form 10-K/A, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon its authority as experts in
accounting and auditing.
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES
We are a Bermuda corporation. Some of our directors and officers, and some
of the experts referred to in this prospectus, are not United States residents.
All, or a substantial portion, of these persons' assets may be outside the
United States. Therefore, you may not be able to effect service of process
within the United States upon these persons or to enforce United States
judgments against them. Our legal counsel in Bermuda (Conyers, Dill & Pearman)
has advised us that:
o there is doubt whether the Bermuda courts would enforce liabilities
under US federal securities laws in original actions or in actions
to enforce US judgments;
o however, Bermuda courts will enforce foreign judgments for
liquidated amounts in civil matters (subject to certain conditions
and exceptions).
13
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. You
may read and copy these reports, proxy statements and other information at the
SEC's Public Reference Room at:
Room 1024
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549.
You may also call the SEC's Public Reference Room on 1-800-SEC-0330.
You may also get information about us from the SEC's regional offices at:
500 West Madison Street 7 World Trade Center
Suite 1400 13th Floor
Chicago, Illinois 60661 New York, New York 10048
You may obtain copies of materials at prescribed rates.
Our SEC filings are also available on the SEC's home page on the Internet
(http://www.sec.gov), and at the offices of The Nasdaq Stock Market at:
Nasdaq Stock Market
1735 K Street, N.W.
Washington, D.C. 20006.
We have filed with the SEC a registration statement on Form S-3. This
prospectus, which is a part of the registration statement, omits certain
information in the registration statement.
Statements in this prospectus about the contents of any contract,
agreement or other document are not necessarily complete. For each contract,
agreement or other document filed as an exhibit to the registration statement,
we refer you to that exhibit for a more complete description, and each statement
about that document is qualified in its entirety to that reference.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the information we file
with it. This means that we can disclose important information to you by
referring you to filed documents. We incorporate by reference in this prospectus
the following documents:
o our Annual Report for the year ended December 31, 1999, as amended,
filed on Form 10-K/A, filed on April 4, 2000;
o our Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 2000 and June 30, 2000;
o our current reports on Form 8-K dated January 25, 2000, February 10,
2000, March 2, 2000, March 16, 2000, May 2, 2000, May 24, 2000, July
17, 2000, July 20, 2000 and August 3, 2000.
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<PAGE>
We also incorporate by reference in this prospectus the description of the
Class A common shares in the registration statement filed on Form 8-A dated
September 26, 1997.
We incorporate by reference all documents filed under Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and
before this offering ends. Information in these documents will automatically
update and supersede information in this prospectus. You will be deemed to have
notice of all information incorporated by reference in this prospectus as if
that information was included in the prospectus.
We will send you copies of documents incorporated by reference free of
charge (except for exhibits to the documents, unless the exhibits are
specifically incorporated by reference in the documents) if you write to us or
phone us at:
RSL COM
Clarendon House
Church Street
Hamilton HM CX
Phone 441 295-2832.
INDEMNIFICATION
Under Bermuda law and our Memorandum of Association and Bye-laws, we will
indemnify and hold harmless out of our assets each of our directors, secretary
and other officers and our liquidator or trustees (if any) acting in relation to
any of our affairs (and their heirs, executors and administrators) from and
against all actions, costs, charges, losses, damages and expenses which they
incur or sustain by, or by reason of, any act done, concurred in or omitted in
or about the execution of their duty, or supposed duty, or in their respective
offices or trusts.
Also, none of them will be answerable for:
o the acts, receipts, neglects or defaults of the others of them;
o joining in any receipts for the sake of conformity;
o any bankers or other persons with whom any of our moneys or effects
are lodged or deposited for safe custody;
o insufficiency or deficiency of any security upon which any of our
moneys is placed out on or invested; or
o any other loss, misfortune or damage which may happen in the
execution of, or in relation to, their respective offices or trusts.
This indemnity does not apply to any covered person who is fraudulent or
dishonest.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the SEC such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
We estimate that the expenses for the offering described in this
registration statement will be:
SEC registration fee.................................................. $
Legal fees and expenses...............................................
Accounting fees and expenses..........................................
Printing and engraving expenses.......................................
Miscellaneous expenses................................................
Total................................................................. $
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Bermuda law and our Memorandum of Association and Bye-laws, we will
indemnify and hold harmless out of our assets each of our directors, secretary
and other officers and our liquidator or trustees (if any) acting in relation to
any of our affairs (and their heirs, executors and administrators) from and
against all actions, costs, charges, losses, damages and expenses which they
incur or sustain by, or by reason of, any act done, concurred in or omitted in
or about the execution of their duty, or supposed duty, or in their respective
offices or trusts.
Also, none of them will be answerable for:
o the acts, receipts, neglects or defaults of the others of them;
o joining in any receipts for the sake of conformity;
o any bankers or other persons with whom any of our moneys or effects
are lodged or deposited for safe custody;
o insufficiency or deficiency of any security upon which any of our
moneys is placed out on or invested; or
o any other loss, misfortune or damage which may happen in the
execution of, or in relation to, their respective offices or trusts.
This indemnity does not apply to any covered person who is fraudulent or
dishonest.
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<PAGE>
ITEM 16. EXHIBITS.
(A) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
----------- --------------------------------------------------------------------
4.1* Form of Class A common share certificate.
4.2** Certificate of Incorporation of RSL Communications, Ltd., issued by
the Bermuda Registrar of Companies on March 14, 1996.
4.3** Memorandum of Association of RSL Communications, Ltd., filed with
the Bermuda Registrar of Companies on March 14, 1996.
4.4*** Bye-Laws of RSL Communications, Ltd., as amended to date.
5.1+ Opinion of Conyers, Dill & Pearman regarding the legality of the
securities.
23.1 Consent of Deloitte & Touche LLP.
23.2+ Consent of Conyers, Dill & Pearman (included in the opinion filed as
Exhibit 5.1 to this registration statement).
24.1 Power of Attorney from officers and directors (included in the
signature pages to this registration statement).
27.1++ Financial Data Schedule.
------------------------
* Incorporated by reference to the registration statement on Form S-1
(Registration No. 333-34281).
** Incorporated by reference to the registration statement on Form S-4
(Registration No. 333-25749).
*** Incorporated by reference to the Annual Report for the year ended December
31, 1999, as amended, filed on Form 10-K.
+ To be filed by an amendment to the registration statement.
++ Incorporated by reference to the Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 2000.
ITEM 17. UNDERTAKINGS.
We have been informed that the SEC considers that the indemnification
described under Item 15 is against public policy as expressed in the Securities
Act of 1933 (and therefore unenforceable) insofar as it indemnifies our
directors, officers and controlling persons for liabilities arising under the
Securities Act of 1933. If any director, office or controlling person claims
indemnification against these liabilities (other than our paying expenses
incurred or paid by him or her in the successful defense of any action, suit or
proceeding) in connection with the securities being registered, we will (unless
in the opinion of our counsel the matter has been settled by controlling
precedent) submit to a court of appropriate jurisdiction the question whether
this indemnification is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of this issue.
We hereby undertake:
(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 of it) which, individually or
in the aggregate, represent a fundamental change in the
information contained in this registration statement.
Notwithstanding the
II-1
<PAGE>
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 SEC
pursuant to Rule 424(b) under the Securities Act of 1933 if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
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 the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports that we file with,
or furnish to, the SEC 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 in it, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering of those
securities.
(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.
We hereby undertake that, for purposes of determining any liability under
the Securities Act of 1933, each filing of our annual report pursuant to section
13(a) or section 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 the registration statement shall be deemed to be a new registration
statement relating to the securities offered in it, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering of
those securities.
We hereby undertake that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A
and contained in the form of prospectus we file pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, 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 it, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering of those securities.
II-2
<PAGE>
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 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 City of New York, State of New York, on the 21st day of
September, 2000.
RSL COMMUNICATIONS, LTD.
By: /s/ Paul B. Domorski
-------------------------------------
Paul B. Domorski
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints each of Paul B.
Domorski and Steven F. Schiffman his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place, and stead, in any and all capacities, to:
o sign any or all amendments (including post-effective amendments) to
this registration statement (and any related registration statement
filed under Rule 462(b) under the Securities Act of 1933); and
o file such documents (with all exhibits) and other related documents
with the SEC and any other instruments which either attorney-in-fact
and agent considers necessary or advisable to enable RSL
Communications, Ltd. to comply with the Securities Act of 1933, the
SEC's rules, regulations and requirements, and the securities or
Blue Sky laws of any State or other governmental subdivision,
and grants each attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as such person, hereby ratifying and confirming all that
either attorney-in-fact and agent (or his substitute or substitutes) may
lawfully do or cause to be done by virtue of this power of attorney.
II-3
<PAGE>
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.
<TABLE>
<CAPTION>
Signature Title Date
------------------------ ------------------------------------- -------------------
<S> <C> <C>
/s/ Ronald S. Lauder Director and Chairman of the Board September 21, 2000
------------------------ of Directors
(Ronald S. Lauder)
/s/ Paul B. Domorski President and Chief Executive Officer September 21, 2000
---------------------- (Principal Executive Officer)
(Paul B. Domorski)
/s/ Steven F. Schiffman Chief Financial Officer (Principal September 21, 2000
------------------------ Financial Officer)
(Steven F. Schiffman)
/s/ Joel S. Beckoff Global Controller (Controller and September 21, 2000
---------------------- Principal Accounting Officer)
(Joel S. Beckoff)
/s/ Jacob Z. Schuster Director September 21, 2000
----------------------
(Jacob Z. Schuster)
Director
----------------------
(Gustavo A. Cisneros)
/s/ Fred H. Langhammer Director September 21, 2000
------------------------
(Fred H. Langhammer)
/s/ Leonard A. Lauder Director September 21, 2000
----------------------
(Leonard A. Lauder)
/s/ Eugene Sekulow Director September 21, 2000
----------------------
(Eugene Sekulow)
/s/ Nicolas G. Trollope Director September 21, 2000
------------------------
(Nicolas G. Trollope)
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
EXHIBIT
NUMBER DESCRIPTION
----------- --------------------------------------------------------------------
4.1* Form of Class A common share certificate.
4.2** Certificate of Incorporation of RSL Communications, Ltd., issued by
the Bermuda Registrar of Companies on March 14, 1996.
4.3** Memorandum of Association of RSL Communications, Ltd., filed with
the Bermuda Registrar of Companies on March 14, 1996.
4.4*** Bye-Laws of RSL Communications, Ltd., as amended to date.
5.1+ Opinion of Conyers, Dill & Pearman regarding the legality of the
securities.
23.1 Consent of Deloitte & Touche LLP.
23.2+ Consent of Conyers, Dill & Pearman (included in the opinion filed as
Exhibit 5.1 to this registration statement).
24.1 Power of Attorney from officers and directors (included in the
signature pages to this registration statement).
27.1++ Financial Data Schedule.
------------------------
* Incorporated by reference to the registration statement on Form S-1
(Registration No. 333-34281).
** Incorporated by reference to the registration statement on Form S-4
(Registration No. 333-25749).
*** Incorporated by reference to the Annual Report for the year ended December
31, 1999, as amended, filed on Form 10-K.
+ To be filed by an amendment to the registration statement.
++ Incorporated by reference to the Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 2000.
II-5
