<PAGE> 1
Filed Pursuant To Rule 424(b)(3)
Registration No. 33-69122
PROSPECTUS
2,000,000 Shares
Series 2 6.50% Cumulative Senior
Perpetual Convertible Preferred Stock
currently convertible into
2,116,543 Shares of Common Stock
LDDS COMMUNICATIONS, INC.
------------------------------
This Prospectus relates to 2,000,000 shares of Series 2 6.50% Cumulative
Senior Perpetual Convertible Preferred Stock, par value $.01 per share (the
"Series 2 Preferred Stock"), which are convertible into 2,116,543 shares
(subject to anti-dilution adjustments) of Common Stock, par value $.01 per
share (the "Common Stock") (the Series 2 Preferred Stock and the Common Stock
are collectively referred to herein as the "Shares"), of LDDS Communications,
Inc., a Georgia corporation d/b/a LDDS Metromedia Communications (the
"Company"). The Series 2 Preferred Stock presently is held by The 1818 Fund,
L.P. (the "Selling Shareholder"). See "Selling Shareholder."
The Company will not receive any proceeds from the sale of Shares by the
Selling Shareholder. All expenses incurred in connection with this offering
are being borne by the Company, other than any commissions or discounts paid or
allowed by the Selling Shareholder to underwriters, dealers, brokers or agents.
The Selling Shareholder directly, or through agents designated from time to
time, or through dealers or underwriters also to be designated, may sell the
Shares from time to time on terms to be determined at the time of sale. To the
extent required, the purchase price, public offering price, the names of any
such agent, dealer or underwriter, and any applicable commission or discount
with respect to a particular offering will be set forth in an accompanying
Prospectus Supplement. The aggregate proceeds to the Selling Shareholder from
the sale of the Shares will be the purchase price thereof less the aggregate
agent's commission or underwriter's discount, if any, and other expenses of
distribution not borne by the Company. Sales of the Shares may also be made
through negotiated transactions or otherwise. The Selling Shareholder and the
brokers and dealers through which the sales of the Shares may be made may be
deemed to be "underwriters," as defined in the Securities Act of 1933, as
amended, and their commissions and discounts and other compensation may be
regarded as underwriters' compensation. See "Plan of Distribution."
Prior to this offering, there has been no public market for the Series 2
Preferred Stock, and there can be no assurance that one will develop. The
Common Stock is traded in the Nasdaq National Market System under the symbol
"LDDS." The last reported sale price of the Common Stock as reported in the
National Market System on October 14, 1993 was $52.25 per share.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
------------------------------
The date of this Prospectus is October 18, 1993.
<PAGE> 2
No dealer, salesman or other person has been authorized to give any
information or to make any representation other than those contained in or
incorporated by reference to this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or any underwriter, dealer or agent. Neither the delivery of
this Prospectus nor any sale made hereunder shall under any circumstances
create any implication that there has been no change in the affairs of the
Company since the date hereof. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy the Shares by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to
any person to whom it is unlawful to make such offer or solicitation in such
jurisdiction.
Available Information
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and Seven World
Trade Center, Suite 1300, New York, New York 10048. Copies of such material
also can be obtained from the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
A Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), has been filed with the Commission with respect to the
shares of Common Stock and Series 2 Preferred Stock offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, omits
certain information contained in the Registration Statement, including exhibits
thereto. For further information with respect to the Company and the Common
Stock and the Series 2 Preferred Stock, reference is made to the Registration
Statement and exhibits thereto, copies of which may be inspected at the offices
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 or obtained
from the Commission at the same address at prescribed rates.
Incorporation By Reference
The following documents filed by the Company (formerly Resurgens
Communications Group, Inc.) ("Resurgens") with the Commission are hereby
incorporated by reference into this Prospectus and made a part hereof:
(i) Transition Report on Form 10-K for the period from
December 31, 1992 to June 30, 1993, as amended on
Form 10-K/A on October 18, 1993;
(ii) Annual Report on Form 10-K for the year ended June 30,
1992, which was filed under cover of Form 8 on October
10, 1992 and amended under cover of Form 8 on October 27,
1992 and Forms 10-K/A on July 13, 1993 and August 4,
1993;
<PAGE> 3
(iii) Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1992, December 31, 1992 and March 31, 1993,
each of which was amended by Forms 10-Q/A on July 13,
1993;
(iv) Current Reports on Form 8-K dated August 12, 1992 (filed
on August 20, 1992), August 19, 1992 (filed on August 20,
1992), September 2, 1992 (filed on September 16, 1992),
October 23, 1992 (filed on October 26, 1992), January 18,
1993 (filed on January 27, 1993), February 25, 1993
(filed on March 4, 1993), March 26, 1993 (filed on
April 6, 1993), May 14, 1993 (filed on May 24, 1993) and
July 13, 1993 (filed on July 16, 1993), September 13,
1993 (filed on September 14, 1993), September 15, 1993
(filed on such date), and September 15, 1993 (filed on
September 30, 1993);
(v) The description of Resurgens' Common Stock as contained
in Item 1 of Resurgens' Registration Statement on
Form 8-A dated December 12, 1989, and any amendment or
report filed for the purpose of updating such
description; and
(vi) The Joint Proxy Statement/Prospectus dated August 11,
1993, filed by Resurgens as part of its Registration
Statement on Form S-4 (File No. 33-62746) with respect to
the Special Meeting of Shareholders held on September 14,
1993 (the "Joint Proxy Statement/Prospectus"), and any
subsequent amendments thereof, but excluding the material
set forth under the following captions:
"Summary Information -- Opinion of Resurgens'
Financial Advisors" and "-- Opinion of LDDS'
Financial Advisor"
"Proposals No. 1 and 2 -- The Proposed Merger --
Opinions of Financial Advisors -- Resurgens-M/R
Merger," "-- Resurgens-LDDS Merger" and "-- LDDS"
"Appendix C -- Fairness Opinion of J.C. Bradford
& Co."
"Appendix D -- Fairness Opinion of Donaldson,
Lufkin & Jenrette Securities Corp."
"Appendix E -- Fairness Opinion of Breckenridge
Securities Corp."
In addition, the financial statements of LDDS Communications, Inc., a
Tennessee corporation ("LDDS-TN"), which was merged into the Company on
September 15, 1993, which appear in the following filings by LDDS-TN, are
incorporated herein by reference:
(i) LDDS-TN's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, as amended on Form 10-K/A on
August 4, 1993;
(ii) LDDS-TN's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993, as amended on Form 10-Q/A on May
20, 1993 and on Form 10-Q/A (Amendment No. 2) on August
4, 1993 and for the second quarter ended June 30, 1993,
as amended on Form 10-Q/A on August 18, 1993; and
<PAGE> 4
(iii) LDDS-TN's Current Reports on Form 8-K dated February 25,
1993, May 14, 1993 and July 8, 1993, respectively.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Shares shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in any subsequently filed document incorporated herein by reference
which statement is also incorporated herein by reference is inconsistent with
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Copies of all documents incorporated by reference into this
Prospectus, other than exhibits to such documents (unless the exhibits are
specifically incorporated by reference into such documents), will be provided
without charge to each person to whom this Prospectus is delivered, upon oral
or written request by such person to Charles T. Cannada, Chief Financial
Officer, LDDS Communications, Inc., 515 East Amite Street, Jackson, Mississippi
39201-2702, telephone (601) 360-8600.
The Company
LDDS Communications, Inc., a Georgia corporation (the "Company"), is
the surviving corporation of two successive mergers between Resurgens and
Metromedia Communications Corporation, a Delaware corporation ("MCC"), and
LDDS-TN. At separate meetings held on September 14, 1993, (i) the shareholders
of Resurgens approved the merger agreements relating to the successive mergers
of MCC with and into Resurgens, and of LDDS-TN with and into Resurgens, and
(ii) the shareholders of LDDS-TN approved the merger agreement relating to the
merger of LDDS-TN with and into Resurgens (the "LDDS Merger"). The mergers
became effective shortly before 9:00 a.m. Eastern time on September 15, 1993.
The name of the surviving corporation was changed upon effectiveness of the
mergers to LDDS Communications, Inc. The Company currently does business under
the name LDDS Metromedia Communications. The separate corporate existences of
LDDS-TN and MCC terminated upon the effectiveness of the successive mergers.
Upon effectiveness of the mergers, each share of the outstanding Class
A Common Stock of LDDS-TN was converted into the right to receive 0.9595 shares
of Common Stock, $.01 par value, of the Company. The 500,000 shares of LDDS-TN
Series B 6.5% Cumulative Senior Perpetual Convertible Preferred Stock held by
the Selling Shareholder were converted into 2,000,000 shares of Series 2
Preferred Stock. As a result of the consummation of both of the mergers,
Metromedia Company, the sole stockholder of MCC, received 1,379,310 shares of
Common Stock, warrants to purchase 2,500,200 shares of Common Stock, 10,896,785
shares of Series 1 $2.25 Cumulative Senior Perpetual Convertible Preferred
Stock of the Company (the "Series 1 Preferred Stock"), and $150 million in
cash. Following completion of the mergers, there were approximately 58,716,234
shares of LDDS Common Stock issued and outstanding.
The Common Stock ceased trading on the American Stock Exchange
following the close of business on September 14, 1993. The Class A Common
Stock of LDDS-TN ceased quotation in the National Market System of Nasdaq at
the close of business on September 14, 1993. The Common Stock commenced
<PAGE> 5
quotation in the National Market System under the symbol "LDDS" at the opening
of trading on September 15, 1993.
Upon consummation of the mergers, the Company, as the surviving
corporation, assumed all of the business and operations of Resurgens, LDDS-TN
and MCC and offers long distance telecommunications services throughout the
continental United States. The pro forma income statement of the Company for
the fiscal year ended December 31, 1992 reflects revenues of $1.4 billion,
operating income of $211.0 million before amortization and depreciation of
$128.8 million and restructuring and other charges of $79.8 million, and a net
loss of $69.5 million before an extraordinary item of $5.8 million, which
amounts include the pre-acquisition results of companies acquired by LDDS-TN
since the beginning of its current fiscal year.
The mergers are more fully described in the Joint Proxy
Statement/Prospectus dated August 11, 1993, with respect to the shareholders'
meetings held in connection with the mergers. Portions of such document are
incorporated by reference into this Prospectus, and copies are available upon
request to the Company. See "Incorporation by Reference."
The Company's principal executive offices are located at 515 East
Amite Street, Jackson, Mississippi 39201-2702, and its telephone number is
(601) 360-8600. Unless otherwise indicated, references in this Prospectus to
the "Company" refer to LDDS Communications, Inc., its predecessors and its
subsidiaries.
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
The following table sets forth the unaudited ratio of earnings to
combined fixed charges and preferred stock dividends for the Company for the
periods indicated, which ratios are based on the historical consolidated
financial statements of LDDS-TN. The table also sets forth the pro forma
combined data for the year ended December 31, 1992 and the six months ended
June 30, 1993, which data give effect to the LDDS Merger as if it occurred on
January 1, 1992. The LDDS Merger was accounted for as a purchase transaction.
For accounting purposes only, LDDS-TN is deemed to be the surviving corporation
of the LDDS Merger. The pro forma combined data are presented for comparative
purposes only and are not intended to be indicative of actual results had the
transactions occurred as of the date indicated above, nor do they purport to
indicate results which may be attained in the future.
<TABLE>
<CAPTION>
Historical Pro Forma Combined
--------------------------------------------------------------- ----------------------
Six Months Year Ended December 31, Six Months
Ended ------------------------------------------------ Ended Year Ended
June 30, 1993 1992 1991 1990 1989 1988 June 30, December
1993 31, 1992
--------------------------- ------------- -------- -------- -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges and preferred stock
dividends.................. 3.34:1 0.92:1 2.27:1 2.38:1 2.12:1 2.55:1 1.39:1 0.22:1
</TABLE>
<PAGE> 6
For the purpose of computing the ratio of earnings to fixed charges
and preferred stock dividends, earnings consist of income before income taxes
and fixed charges and preferred stock dividends, and fixed charges consist of
interest (including capitalized interest, but excluding amortization of amounts
previously capitalized) on all indebtedness, amortization of debt discount and
expense and that portion of rental expense which the Company believes to be
representative of interest. A statement setting forth the unaudited
computations of the ratio of earnings to fixed charges and preferred stock
dividends is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
Description of Capital Stock
The Company is authorized to issue up to 200,000,000 shares of Common
Stock, par value $.01 per share, and up to 20,000,000 shares of Preferred
Stock, par value $.01 per share. As of September 15, 1993, there were
58,716,234 shares of Common Stock outstanding. The Company also had
outstanding on such date the following series of Preferred Stock: 10,896,785
shares of Series 1 Preferred Stock, with a liquidation preference of $50 per
share, and 2,000,000 shares of Series 2 Preferred Stock, with a liquidation
preference of $25 per share. The Series 1 Preferred Stock and the Series 2
Preferred Stock rank on a parity with each other with respect to dividends and
liquidation preference.
The Board of Directors of the Company has the power, without further
action by the shareholders unless action is required by applicable laws or
regulations or by the terms of any outstanding Preferred Stock, including the
Series 2 Preferred Stock, to issue Preferred Stock in one or more series and to
fix the designations, preferences and voting rights, and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions applicable thereto. The Board of Directors may
cause Preferred Stock to be issued to obtain additional financing, in
connection with acquisitions and for other proper corporate purposes. Issuance
of shares of Preferred Stock by the Company may have the effect, under certain
circumstances, alone or in combination with certain of the provisions of the
Company's Amended and Restated Articles of Incorporation, of rendering more
difficult or discouraging an acquisition of the Company deemed undesirable by
the Board of Directors.
The following summary does not purport to be complete and is subject
to, and qualified in its entirety by, the Company's Amended and Restated
Articles of Incorporation, including the terms of the Series 1 Preferred Stock
set forth in Exhibit A thereto (the "Series 1 Preferred Terms") and the terms
of the Series 2 Preferred Stock set forth in Exhibit B thereto (the "Series 2
Preferred Terms"), all of which are incorporated by reference as exhibits to
the Registration Statement of which this Prospectus is a part.
Description of the Series 2 Preferred Stock
General
Upon effectiveness of the LDDS Merger, 2,000,000 shares of Company
Preferred Stock were issued and designated as "Series 2 6.50% Cumulative Senior
Perpetual Convertible Preferred Stock" (the "Series 2 Preferred Stock"). In
connection with the consummation of the LDDS Merger all of the Series 2
Preferred Stock was issued to the record owner of the shares of LDDS Preferred
<PAGE> 7
Stock, the Selling Shareholder, in exchange for the 500,000 shares of LDDS-TN
preferred stock which were issued by LDDS-TN to the Selling Shareholder on
July 17, 1992.
Ranking
The Series 2 Preferred Stock ranks as to dividends and liquidation
preference on parity with the Company's Series 1 Preferred Stock and senior to
all other classes of capital stock of the Company, including the Common Stock.
The issuance of shares of Company Preferred Stock ranking as to dividends and
liquidation preference senior to or on a parity with the Series 2 Preferred
Stock is subject to the class voting requirements described below.
Dividends
The Series 2 Preferred Stock provides for cumulative dividends at the
rate of 6.5% annually, payable quarterly.
Holders of the Series 2 Preferred Stock shall be entitled to receive
special distributions upon the occurrence of certain events, including the
payment of any dividend or special distribution to holders of Common Stock,
other than a regular dividend or a dividend paid solely in shares of Common
Stock. The amount of such special distribution payable to holders of the
Series 2 Preferred Stock shall be the amount that would be payable to a holder
of the number of shares of Common Stock into which the Series 2 Preferred Stock
would be convertible on the record date for such dividend or distribution.
Voting Rights
In addition to any voting rights provided by law, holders of shares of
Series 2 Preferred Stock are entitled to vote together with holders of Common
Stock and Series 1 Preferred Stock, as a single class, with each holder of
shares of Series 2 Preferred Stock being entitled to cast the number of votes
per share as is equal to the number of votes that such holder would be entitled
to cast had such holder converted its shares of Series 2 Preferred Stock into
Common Stock on the record date for determining the shareholders of the Company
eligible to vote on any such matters.
In addition, unless the consent or approval of the holders of a
greater number of shares shall then be required by law, the affirmative vote of
the holders of at least 66-2/3% of the outstanding shares of the Series 2
Preferred Stock, voting as a separate class, is required in order to, among
other things: (i) authorize or issue shares of stock ranking senior to or on a
parity with the Series 2 Preferred Stock or securities exchangeable for,
convertible into or evidencing the right to receive such securities; (ii)
authorize or issue shares of Company stock having a mandatory redemption date
earlier than June 6, 1996; (iii) amend, alter or repeal the Amended and
Restated Articles of Incorporation of the Company so as to affect adversely the
shares of Series 2 Preferred Stock; or (iv) subject to certain exceptions,
effect the voluntary liquidation, dissolution, winding up, recapitalization or
reorganization of the Company, or the consolidation or merger of the Company
with or into another person, or the sale or distribution to another person of
all or substantially all of the assets of the Company.
<PAGE> 8
An extraordinary transaction (described in clause (iv) above) may be
consummated notwithstanding the failure to receive the affirmative vote of the
holders of at least 66-2/3% of the outstanding shares of Series 2 Preferred
Stock if, prior to consummation of such transaction, the Company has redeemed
all outstanding shares of the Series 2 Preferred Stock at a price per share
equal to 125% of the liquidation preference of such share, plus accrued and
unpaid dividends thereon, and in accordance with the Series 2 Preferred Terms.
Limitations on Restricted Payments
Whenever any quarterly dividends payable on any shares of Series 2
Preferred Stock are not paid in full, at such time and thereafter until all
unpaid dividends payable, whether or not declared, on the outstanding shares of
Series 2 Preferred Stock have been paid in full or declared and irrevocably set
apart for payment or whenever the Company has not converted or exchanged shares
of Series 2 Preferred Stock at a time required by the Series 2 Preferred Terms,
at such time and thereafter until all the conversion and exchange obligations
provided in the Series 2 Preferred Terms that have come due have been satisfied
or all necessary funds have been set apart for payment, the Company shall not:
(i) declare or pay dividends, or make any other distributions, on any shares of
any capital stock of the Company ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series 2 Preferred Stock (the
"Series 2 Junior Stock"), (ii) declare or pay dividends, or make any other
distributions, on any shares of any capital stock of the Company ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series 2 Preferred Stock (the" Series 2 Parity Stock"), except
dividends or distributions paid ratably on the Series 2 Preferred Stock and all
Series 2 Parity Stock on which dividends are payable or in arrears, in
proportion to the total amounts to which the holders of all shares of the
Series 2 Preferred Stock and such Series 2 Parity Stock are then entitled, or
(iii) redeem, purchase or otherwise acquire for consideration any shares of
Series 2 Junior Stock, or Series 2 Parity Stock, provided, however, that (A)
the Company may accept shares of any Series 2 Parity Stock or Series 2 Junior
Stock for conversion into Series 2 Junior Stock and (B) the Company may at any
time redeem, purchase or otherwise acquire shares of the Series 2 Preferred
Stock pursuant to mandatory redemption, put, sinking fund or other similar
obligations contained in such Series 2 Parity Stock, pro rata with the Series 2
Preferred Stock in proportion to the total amount then required to be applied
to the Company to redeem, repurchase, convert, exchange or otherwise acquire
shares of Series 2 Preferred Stock and shares of such Series 2 Parity Stock.
The Company shall not permit any subsidiary of the Company, or cause any other
person, to purchase or otherwise acquire for consideration any shares of
capital stock of the Company unless the Company could pursuant to the Series 2
Preferred Terms, purchase such shares at such time and in such manner.
Board of Directors Representation
In the event the Company fails to pay the required dividends with
respect to the Series 2 Preferred Stock for two quarterly dividend periods
(whether consecutive or not), the Board of Directors of the Company will be
automatically expanded to create an additional position for the holders of
Series 2 Preferred Stock to fill with a person of their choosing. Such person
shall serve as a director until such time as the dividends have been paid in
<PAGE> 9
full or upon conversion or exchange of the Series 2 Preferred Stock in
accordance with the Series 2 Preferred Terms.
Redemption
Except pursuant to a "Change of Control" (defined below) or the
approval by at least 66 2/3% of the outstanding shares of Series 2 Preferred
Stock is not obtained for a business combination transaction which is otherwise
required to be obtained ("Lack of Approval"), the Series 2 Preferred Stock may
not be redeemed by the Company prior to June 5, 1996. Thereafter, provided a
"Change of Control" of the Company or "Lack of Approval" has not occurred, the
Series 2 Preferred Stock may be redeemed in whole or in part, on not less than
30 days' notice of the date of redemption (which must be a business day), in
integral multiples of $10.0 million, at prices expressed as a percentage of the
liquidation preference of $25 per share, if redeemed in the 12-month period
commencing June 5 in the years indicated below, plus accrued and unpaid
dividends, whether or not declared or payable, to the date fixed for
redemption, as set forth in the following table:
<TABLE>
<CAPTION>
Year Optional
Redemption Price
------------------------ ----------------
<C> <C>
1996.................... 108.000%
1997.................... 106.667%
1998.................... 105.333%
1999.................... 104.000%
2000.................... 102.667%
2001.................... 101.333%
2002 and thereafter..... 100.000%
</TABLE>
If less than all shares of the Series 2 Preferred Stock are to be
redeemed, the shares to be redeemed shall be redeemed pro rata from each holder
or, if the shares thereof are then publicly held, by lot.
In addition, the Series 2 Preferred Stock may be redeemed, in whole
but not in part, at any time on or after a "Change of Control" of the Company
or "Lack of Approval," at a price per share equal to 125% of the liquidation
preference of such share, plus accrued and unpaid dividends to the date of
redemption.
A "Change of Control" is defined to include the following transactions:
(i) a person or "group" (within the meaning of Section 13(d)(3) of
the Exchange Act) becomes the beneficial owner of Company
stock entitling such person or group to exercise 50% or more
of the combined voting power of all classes of Company stock
<PAGE> 10
(excluding votes entitled to be cast by holders of Series 2
Preferred Stock);
(ii) a change occurs in the composition of the Company's Board of
Directors so that a majority of the members thereof are not
"Continuing Directors" (defined as directors serving on the
original issue date of the Preferred Stock and any person who
succeeds any such director and who is recommended or elected
by a majority of Continuing Directors);
(iii) if immediately following a merger, consolidation,
reclassification or recapitalization Bernard J. Ebbers,
President and Chief Executive Officer of the Company, shall
have increased his beneficial ownership of shares of Company
stock by 10% or more and he shall then be the beneficial owner
of Company stock entitling him to exercise 50% or more of the
total voting power of all classes of Company stock and, in
connection with such increase in Mr. Ebbers' holdings of
Company stock, the Company shall have incurred indebtedness in
an amount equal to at least 50% of the consideration payable
in the transaction pursuant to which such increase occurs,
unless the holders of shares of Series 2 Preferred Stock
participate in the transaction on a pari passu basis with
Mr. Ebbers, provided that if the holders of Series 2 Preferred
Stock are entitled to a class vote with respect to the
transaction and vote in favor thereof the transaction will not
be deemed a "Change of Control";
(iv) upon the occurrence of a reorganization, merger or
consolidation where following the consummation thereof holders
of Company stock immediately prior to the transaction
beneficially own, in the aggregate, less than 50% of the
combined voting power of all classes of Company stock
(exclusive of voting power associated with the Series 2
Preferred Stock or shares of stock that holders thereof are
entitled to receive in the transaction);
(v) upon the occurrence of a sale of all or substantially all of
the assets of the Company;
(vi) in the event Mr. Ebbers sells or transfers to a person or
"group' (as defined above), whether in one transaction or a
series of transactions, (A) 20% or more of the shares of the
Company's Common Stock owned by him within any period of 365
consecutive days, or (B) 40% or more of the shares of
Company's Common Stock issued in respect of shares owned by
him as of March 20, 1992 (including shares underlying stock
options then held by Mr. Ebbers), unless the Selling
Shareholder shall have participated in such sales of stock on
a pari passu basis with Mr. Ebbers; and
(vii) upon the occurrence of any transaction the result of which
would be that the Company's Common Stock would not be required
to be registered under the Exchange Act and the holders of the
Company's Common Stock would not receive common stock of the
survivor to the transaction which is required to be registered
under the Exchange Act.
<PAGE> 11
Upon the occurrence of a Change of Control, the dividend rate with
respect to the Series 2 Preferred Stock will increase from 6.5% per annum to
13% per annum unless and until the Company exercises its right to redeem said
shares.
Liquidation Preference
In the event of any liquidation, dissolution or winding up of the
affairs of the Company, whether voluntary or otherwise, no distribution shall
be made (i) to the holders of shares of Series 2 Junior Stock unless, prior
thereto, the holders of shares of Series 2 Preferred Stock have received (a)
if a voluntary liquidation event shall have occurred, the optional redemption
price with respect to each share and (b) if a voluntary liquidation event shall
not have occurred, the liquidation preference of $25 per share (the
"Liquidation Preference"), plus all accrued and unpaid dividends, whether or
not declared or currently payable, to the date of distribution, with respect to
each share, of (ii) to the holders of shares of Series 2 Parity Stock, except
distributions made ratably on the Series 2 Preferred Stock and all other Series
2 Parity Stock in proportion to the total amounts to which the holders of all
shares of the Series 2 Preferred Stock and other Series 2 Parity Stock are
entitled upon such liquidation, dissolution or winding up.
Neither the consolidation or merger of the Company with or into any
other person nor the sale or other distribution to another person of all or
substantially all the assets, property or business of the Company, in each case
when otherwise permitted, shall be deemed to be a liquidation, dissolution or
winding up of the Company for purposes of this liquidation preference section.
Conversion Price
The shares of Series 2 Preferred Stock will be convertible into shares
of Common Stock at a conversion price of $23.62342 per share, subject to
adjustment as described below. The right to convert shares of Series 2
Preferred Stock called for redemption or exchange into notes (as described
below) will terminate at the close of business on the date fixed for redemption
or exchange, and will be lost if not exercised prior to that time, unless the
Company defaults in the payments due upon such redemption or in the performance
of its obligation to exchange the shares to be exchanged.
The conversion price is subject to adjustment upon the occurrence of
certain events, including the issuance of Common Stock as a dividend or
distribution on the Common Stock; subdivisions, combinations and certain
reclassifications of Common Stock; the issuance of shares (or certain rights or
warrants to subscribe for shares) of Common Stock at less than 90% of the then
current market price per share (as determined in the manner set forth in the
Series 2 Preferred Terms); and a distribution to all holders of Common Stock of
any assets or debt securities or any rights or warrants to purchase assets or
debt securities.
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least one percent of the conversion
price then in effect; provided, however, that any adjustment that would
otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment.
<PAGE> 12
Optional Exchange for Notes
The Company has the right, at any time and from time to time (subject
to the provisions of the Certificate of Designation for the Series 2 Preferred
Stock) to exchange the outstanding shares of Series 2 Preferred Stock, in
integral multiples of $10.0 million, for 6.5% Convertible Subordinated Notes
due June 5, 1998 (the "Optional Notes"), at a price per share equal to the
Liquidation Preference per share plus an amount equal to all accrued and unpaid
dividends thereon to the date fixed for exchange thereof. The Optional Notes
will bear interest at the rate of 6.5% per annum, payable quarterly, but upon
and after a Change of Control, the interest rate will increase to 13% per
annum. Interest on overdue principal and interest payments shall accrue at the
rate of 8.5% per annum or, if a Change of Control occurs on or prior to June 5,
1996, at the rate of 15% per annum on and after such Change of Control.
Holders of the Optional Notes shall be entitled to receive special
distributions upon the occurrence of certain events, including the payment of
any dividend or special distribution to holders of Common Stock, other than a
regular dividend or a dividend paid solely in shares of Common Stock. The
amount of such special distribution payable to holders of the Optional Notes
shall be the amount that would be payable to a holder of the number of shares
of Common Stock into which the Optional Notes would be convertible on the
record date for such dividend or distribution.
The Optional Notes are not redeemable by the Company prior to June 5,
1996. On and after June 5, 1996, the Optional Notes are redeemable (provided
there has not been a Change of Control) in whole or in part, in integral
multiples of $10.0 million in outstanding principal amount, on not less than 30
days notice of the date fixed for redemption (which must be a business day), at
a price expressed as a percentage of the principal amount to be redeemed, plus
accrued and unpaid interest to the date fixed for redemption, as set forth
below:
June 5, 1996 to June 4, 1997 ..... 108.000%
June 5, 1997 to June 4, 1998 ..... 106.667%
If less than all outstanding Optional Notes are to be redeemed, then
Optional Notes shall be redeemed in part pro rata to all other outstanding
Optional Notes, on the basis of the outstanding principal amount of such
Optional Notes.
In the event of a Change of Control or certain other events, the
Company may redeem all, but not less than all, of the outstanding Optional
Notes at a redemption price equal to 125% of the principal amount of the
Optional Notes to be redeemed, plus accrued and unpaid interest to the date
fixed for redemption.
The Optional Notes will be convertible at any time or from time to
time, at the option of the holder thereof, into shares of Common Stock at the
then conversion price of the Series 2 Preferred Stock. The right to convert an
Optional Note called for redemption will terminate as to the portion of the
Optional Note called for redemption at the close of business on the date fixed
for redemption, and will be lost if not exercised prior to that time unless the
Company defaults in the payments due upon such redemption.
<PAGE> 13
The Optional Notes are subordinate in right of payment of interest and
principal, and any amounts otherwise payable on redemption or repurchase of the
Optional Notes, to Senior Indebtedness (as defined in the Optional Notes) of
the Company, including Senior Indebtedness existing at the time of the issuance
of the Optional Notes and thereafter incurred.
Mandatory Exchange for Stock or Notes
At any time on or after May 6, 1997, to and including May 6, 2002,
holders of 50% or more of the then outstanding shares of Series 2 Preferred
Stock have the right to require the Company to exchange all of the shares of
Series 2 Preferred Stock for notes having a floating interest rate ("Mandatory
Notes") or for Common Stock, or any combination of the two, at the option of
the Company. Shares are to be exchanged in integral multiples of $5.0 million,
by liquidation preference (currently $25), at a price per share equal to the
liquidation preference of such share plus all accrued and unpaid dividends
thereon (whether or not declared or payable) to the applicable exchange date,
with any shares of Common Stock to be exchanged valued for such purpose at 95%
of the Current Market Price (as defined) as of the date immediately preceding
the applicable exchange date and with any Mandatory Notes valued for such
purpose at their face value. The Mandatory Notes will be subordinated
nonconvertible notes having a floating interest rate, a final maturity date the
same as that of all other such Mandatory Notes (but in any event no later than
June 5, 2002) and such other terms and conditions as shall result in a
determination that such Mandatory Notes have a fair market value at least equal
to their face value as of the date of their proposed issuance. Such exchange
shall occur within the period beginning 40 days following the notice of
exchange to the third anniversary of such notice.
Registration of Notes
If the Company determines to issue any Optional Notes or Mandatory
Notes at a time when the Series 2 Preferred Stock is publicly held, such notes
will be issued under an indenture qualified under the Trust Indenture Act of
1939, as amended, and will be registered under the Securities Act.
Description of the Series 1 Preferred Stock
General
The Company has designated 10,896,785 shares of the Company's
Preferred Stock as "Series 1 $2.25 Cumulative Senior Perpetual Convertible
Preferred Stock" (the "Series 1 Preferred Stock"). In connection with the
consummation of the LDDS Merger, all of the issued and outstanding shares of
Series 1 Preferred Stock was issued to Metromedia Company, a Delaware general
partnership and the owner of all of the outstanding common stock of MCC prior
to the mergers, in exchange for its shares of Class A Common Stock of the
surviving corporation of the merger between Resurgens and MCC.
<PAGE> 14
Ranking
The Series 1 Preferred Stock ranks as to dividends and liquidation
preference on parity with the Series 2 Preferred Stock and senior to all other
classes of capital stock of the Company, including the Common Stock. The
issuance of shares of Preferred Stock ranking as to dividends and liquidation
preference senior to or on a parity with the Series 1 Preferred Stock is
subject to the class voting requirements described below.
Dividends
The Series 1 Preferred Stock provides for cumulative annual dividends
of $24.5 million per year ($2.2484 per share), payable quarterly.
Voting Rights
In addition to any voting rights provided by law and, generally except
with respect to election of directors, holders of shares of Series 1 Preferred
Stock are entitled to vote together with holders of Common Stock and Series 2
Preferred Stock, as a single class, with each holder of shares of Series 1
Preferred Stock being entitled to cast the number of votes per share as is
equal to the number of votes that such holder would be entitled to cast had
such holder converted its shares of Series 1 Preferred Stock into Common Stock
on the record date for determining the shareholders of the Company eligible to
vote on any such matters.
In addition, unless the consent or approval of the holders of a
greater number of shares shall then be required by law, the affirmative vote of
the holders of at least 66-2/3% of the outstanding shares of the Series 1
Preferred Stock, voting as a separate class, is required in order to, among
other things: (i) authorize or issue shares of stock ranking senior to or on a
parity with the Series 1 Preferred Stock or securities exchangeable for,
convertible into or evidencing the right to receive such securities; (ii)
authorize or issue shares of Company stock having a mandatory redemption date
earlier than the third anniversary of the LDDS Merger; or (iii) amend, alter or
repeal the Amended and Restated Articles of Incorporation of the Company so as
to affect adversely the shares of Series 1 Preferred Stock.
Board of Directors Representation
The terms of the Series 1 Preferred Stock set forth in the Company's
Amended and Restated Articles of Incorporation (the "Series 1 Preferred Terms")
fix the number of directors constituting the entire Board of Directors of the
Surviving Corporation at ten. The Series 1 Preferred Terms, however, further
provide that the number of members of the Company's Board of Directors may be
increased by the Company in connection with the issuance of shares of Common
Stock by the Company in certain specified acquisitions where the Company issues
equity securities to an acquired entity or its shareholders. The increase in
the size of the Board cannot exceed the acquired entity's shareholders'
percentage of the Company's fully diluted equity (i.e., to expand the Board
from ten to eleven, the acquired entity or its shareholders must own at least
1/11th of the Company's fully diluted equity). The restrictions on the size of
the Board of Directors will terminate when neither Metromedia nor any affiliate
thereof owns any Series 1 Preferred Stock. In addition, the Series 1 Preferred
Terms will provide that the holders of a majority of the shares of the Series 1
<PAGE> 15
Preferred Stock will be entitled to elect three members (or two members under
certain circumstances) of the Company's Board of Directors until the third
anniversary of the LDDS Merger; thereafter, the Series 1 Preferred Stock will
be entitled to elect two members of the Company's Board of Directors.
Notwithstanding the foregoing, from and after the occurrence of any sale by
Metromedia to a non-affiliate of any Series 1 Preferred Stock or any shares of
Common Stock issued upon conversion of Series 1 Preferred Stock, if the
Series 1 Preferred Stock (and shares of Common Stock held by Metromedia and its
affiliates and shares of Common Stock issuable pursuant to derivative
securities of the Company held by Metromedia and its affiliates):
(i) constitute at least 5% of the fully diluted shares of Common Stock but less
than 10% of the fully diluted shares of Common Stock, the holders of a majority
of the shares of Series 1 Preferred Stock (the "Majority Holders") shall be
entitled to designate two members of the Company's Board of Directors,
(ii) constitute at least 2-1/2% of the fully diluted shares of Common Stock but
less than 5% of the fully diluted shares of Common Stock, the Majority Holders
will be entitled to designate one member of the Company's Board of Directors
and (iii) constitute less than 2-1/2% of the fully diluted shares of Common
Stock, the Majority Holders will not be entitled to designate any members of
the Company's Board of Directors.
In the event the Company shall have failed to pay the required
dividends with respect to the Series 1 Preferred Stock for two quarterly
dividend periods (whether consecutive or not), the Board of Directors of the
Company will be automatically expanded to create an additional position for the
holders of Series 1 Preferred Stock to fill such vacancy with a person of their
choosing. Such person shall serve as a director until such time as the
dividends have been paid in full or upon conversion of the Series 1 Preferred
Stock in accordance with the Series 1 Preferred Terms.
Redemption
The Series 1 Preferred Stock may not be redeemed by the Company prior
to the third anniversary of the LDDS Merger. Thereafter, the Series 1
Preferred Stock may be redeemed in whole or in part in integral multiples of
$100 million, at prices which include premiums over the liquidation preference
of $50 per share, which prices range from 105.53% at such date declining to
100% on and after the tenth anniversary of the LDDS Merger.
Conversion Price
The shares of Series 1 Preferred Stock will be convertible into shares
of Common Stock at a conversion price equal to $49.809375 per share, subject to
adjustment in the event of stock dividends, subdivisions, combinations,
reclassifications and other distributions with respect to Common Stock, and in
certain other instances.
Description of the Common Stock
The Company has never paid cash dividends on its Common Stock and has
no plans to pay cash dividends in the foreseeable future. The policy of
Company's Board of Directors is to retain all available earnings for use in the
operation and expansion of the Company's business. Any future dividends will
depend upon the Company's earnings, capital requirements, financial condition
and other relevant factors.
<PAGE> 16
The holders of shares of Common Stock are entitled to receive such
dividends, if any, that may be declared from time to time by the Company's
Board of Directors in its discretion from funds legally available therefor,
subject to the dividend priority of the holders of Preferred Stock. The
holders of shares of Common Stock also are entitled to share in any
distribution to Company shareholders upon liquidation, dissolution or winding
up of the Company, subject to the prior liquidation rights of the holders of
Preferred Stock.
Each holder of Common Stock is entitled to one vote for each share
held of record for all matters to be voted upon by the shareholders. Because
the shareholders do not have cumulative voting rights, the holders of a
plurality of the shares of Common Stock voting for the election of directors
(subject to the provisions of the outstanding Preferred Stock) may elect all of
the directors.
All of the outstanding shares of Common Stock are fully paid and
nonassessable. The holders of Common Stock do not have preemptive rights.
Certain Provisions of the Company's Amended and Restated Articles of
Incorporation
The Company's Amended and Restated Articles of Incorporation include a
provision that requires the approval by the holders of at least 70% of the
voting power of the outstanding shares of any class of stock of the Company
entitled to vote generally in the election of directors as a condition for
Business Transactions (as defined) involving the Company and a Related Person
(as defined) or in which a Related Person has an interest, unless (a) the
Business Transaction is approved by a majority of the Company's Continuing
Directors (as defined) then serving on the Board of Directors, but if the votes
of such Continuing Directors would have been insufficient to constitute an act
of the Board of Directors, then such transaction must have been approved by the
unanimous vote of such Continuing Directors so long as there were at least
three such Continuing Directors serving on the Board of Directors at the time
of such unanimous vote, provided that no such Continuing Director is a Related
Person who has an interest in the Business Transaction (other than a
proportionate interest as a shareholder of the Company), or (b) certain minimum
price and procedural requirements are met.
"Business Transaction" is defined to mean:
(i) any merger, share exchange or consolidation involving the
Company or any of its subsidiaries;
(ii) any sale, lease, exchange, transfer or other disposition by
the Company or any of its subsidiaries of more than 20% of
its assets;
(iii) any sale, lease, exchange, transfer or disposition of more
than 20% of the assets of an entity to the Company or a
subsidiary of the Company;
(iv) the issuance, sale, exchange, transfer or other disposition
by the Company or a subsidiary of the Company of any
securities of the Company or any subsidiary in exchange for
<PAGE> 17
cash, securities or other properties having an aggregate
fair market value of $15 million or more;
(v) any merger, share, exchange or consolidation between the
Company and any subsidiary of the Company in which the
Company is not the survivor and the charter of the
surviving corporation does not contain provisions similar
to this provision;
(vi) any recapitalization or reorganization of the Company or
reclassification of its securities which would have the
effect of increasing the voting power of a Related Person;
(vii) any liquidation, spin off, split off, split up or
dissolution of the Company; and
(viii) any agreement, contract or other arrangement providing for
any of the Business Transactions defined or having a
similar purpose or effect.
"Related Person" is defined to mean a beneficial owner which, together
with its Affiliates and Associates (as defined), beneficially owns 10% or more
of the Company's outstanding voting stock or who had such level of beneficial
ownership: (i) at the time of entering into the definitive agreement providing
for the Business Transaction; (ii) at the time of adoption by the Board of
Directors of a resolution approving such transaction; or (iii) as of the record
date for the determination of shareholders entitled to vote on or consent to
the Business Transaction.
"Continuing Director" is defined to mean a director of the Company who
either was a member of the Board of Directors at the time of the LDDS Merger,
or who became a director of the Company subsequent to such date and whose
election, or nomination for election by the shareholders, was approved by a
majority of the Continuing Directors then on the Board of Directors. If the
votes of such Continuing Directors would have been insufficient to constitute
an act of the Board of Directors, then such election or nomination must have
been approved by the unanimous vote of the Continuing Directors so long as
there were at least three such Continuing Directors on the Board of Directors
at the time of such unanimous vote.
"Affiliate" is defined to mean a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such specified person.
"Associate" is defined to mean: (i) any corporation, partnership or
other organization of which such specified person is an officer or partner;
(ii) any trust or other estate in which such specified person has a substantial
beneficial interest or as to which such specified person serves as trustee or
in a similar fiduciary capacity; (iii) any relative or spouse of such specified
person, or any relative of such spouse, who has the same home as such specified
person or who is a director or officer of the Company or any of its
subsidiaries; and (iv) any person who is a director, officer or partner of such
specified person or of any corporation (other than the Company or any wholly
owned subsidiary of the Company), partnership or other entity which is an
Affiliate of such specified person.
<PAGE> 18
The affirmative vote of holders of at least 70% of the Company's
voting stock generally is required to amend or repeal the foregoing provision
of the Amended and Restated Articles of Incorporation.
The foregoing provision could have the effect of delaying, deferring
or preventing a change in control of the Company that is opposed by the Board
of Directors but which might be beneficial to shareholders. In addition, the
Board of Directors of the Company could, with certain restrictions, issue
additional shares of Common Stock and Preferred Stock without any further
shareholder action. The issuance of such shares of Common Stock and Preferred
Stock could be used as an anti-takeover measure by the Company's Board of
Directors.
The Amended and Restated Articles of Incorporation contain a provision
permitting the Company to redeem shares of its capital stock from certain
foreign shareholders in order to enable the Company to continue to hold certain
common carrier radio licenses. These provisions are intended to cause the
Company to remain in compliance with the Communications Act and the regulations
of the FCC promulgated thereunder.
Under these provisions, at such time as the percentage of capital
stock owned by foreign shareholders or certain affiliates thereof exceeds 20%,
the Company has the right to redeem the "excess shares" held by such persons at
the fair market value thereof. Following any determination that such excess
shares exist, such excess shares shall not be deemed outstanding for purposes
of determining the vote required on any matter brought to the attention of the
shareholders of the Company, and such excess shares shall have no right to
receive any dividends or other distributions, including distributions in
liquidation. If such shares are traded on a national securities exchange or in
the over-the-counter market, such fair market value is the average closing
price for the 45 trading days immediately preceding the date of redemption. If
such shares are not so traded, such fair market value shall be established by
the Board of Directors of the Company. In the event there is a foreign
shareholder who acquired shares within 120 days of the date of redemption,
however, the redemption price shall not exceed the price per share paid by such
shareholder. At least 30 days' notice of redemption must be given, and the
redemption price may be paid in cash, securities or any combination thereof.
The Company may require confirmation of citizenship from any record or
beneficial owner of shares of its capital stock, and from any transferee
thereof, as a condition to the registration or transfer of those shares.
Registration Rights
The Company has registration rights agreements with certain principal
shareholders (which include the Selling Shareholder), granting them the right
to require the Company to effect registration of any or all of their Common
Stock. In addition, they have the right to have any or all of such Common
Stock included in any registration statement relating to the Common Stock filed
by the Company, subject to the right of the underwriter of that offering to
limited the number of shares of such Common Stock to be included in that
registration.
<PAGE> 19
Selling Shareholder
The Selling Shareholder is a Delaware limited partnership, which was
formed by Brown Brothers Harriman & Co. to provide a vehicle for institutional
and substantial corporate investors to acquire significant equity interests in
medium-sized publicly-owned United States corporations. Brown Brothers
Harriman & Co. is a New York partnership and the general partner of the Selling
Shareholder. In connection with the consummation of the LDDS Merger, the
Series 2 Preferred Stock was issued to the Selling Shareholder in exchange for
the 500,000 shares of Series B 6.50% Cumulative Senior Perpetual Convertible
Preferred Stock, no par value (the "LDDS Preferred Stock"), which were issued
by LDDS-TN to the Selling Shareholder on July 17, 1992. The shares of Series 2
Preferred Stock are currently convertible to 2,116,543 shares of Common Stock,
based upon an exercise price of $23.62342 per share. As of September 15, 1993,
the Selling Shareholder's total holdings of stock in the Company, assuming
conversion of the Series 2 Preferred Stock, would have equalled 3.48% of the
issued and outstanding Common Stock.
During the period from June 1992 to December 1992, the Selling
Shareholder had one representative on the Board of Directors of LDDS-TN.
Except for the Selling Shareholder's status as the holder of Series 2 Preferred
Stock, there is no current affiliation between the Company, its predecessors or
affiliates and the Selling Shareholder. The Selling Shareholder does not own
any shares of stock of the Company other than the Shares offered hereby.
Plan Of Distribution
The Shares offered hereby are being sold by the Selling Shareholder
acting as principal for its own account. The Company will not receive any of
the proceeds of this offering.
Any or all of the Shares may be offered and sold to purchasers
directly by or on behalf of the Selling Shareholder from time to time in the
over-the-counter market, in privately negotiated transactions, or otherwise at
prices prevailing in such market or as may be negotiated at the time of the
sale. In addition, any or all of the Common Stock may be offered and sold to
purchasers directly by or on behalf of the Selling Shareholder from time to
time on the National Market System of Nasdaq at prices prevailing in such
market. The Shares may also be publicly offered through agents, underwriters
or dealers. In such event the Selling Shareholder may enter into agreements
with respect to any such offering. Usual and customary commissions may be paid
by the Selling Shareholder. The broker, dealer, underwriter or market maker
may agree to sell a specified number of the Shares at a stipulated price per
Share and, to the extent that such person is unable to do so acting as an agent
for the Selling Shareholder, to purchase as principal any of the Shares
remaining unsold at a price per Share required to fulfill the person's
commitment to the Selling Shareholder. At the time a particular offer of the
Shares is made, to the extent required, a supplement to this Prospectus will be
distributed which will set forth the aggregate number of Shares being offered,
and the terms of the offering, including the public offering price thereof, the
name or names of any underwriters, dealers or agents, any underwriting
discounts, commissions and other items constituting compensation from, and the
resulting net proceeds to, such Selling Shareholder, any discounts, commissions
or concessions allowed or reallowed or paid to dealers and, if applicable, the
purchase price to be paid by any underwriter for Shares purchased from the
Selling Shareholder.
<PAGE> 20
A broker, dealer, underwriter or market maker who acquires the Shares
from the Selling Shareholder as a principal for its own account may thereafter
resell such Shares from time to time in transactions (which may involve block
or cross transactions and which may also involve sales to or through another
broker, dealer, underwriter, agent or market maker, including transactions of
the nature described above) in the Nasdaq market (the Common Stock only), in
negotiated transactions or otherwise, at market prices prevailing at the time
of the sale or at negotiated prices. In connection with such resales, the
broker, dealer, underwriter, agent or market maker may pay commissions to or
receive commissions from the purchasers of the Shares.
The Company is bearing all of the costs relating to the registration
of the Shares. Any commissions, discounts or other fees payable to a broker,
dealer, underwriter or market maker in connection with the sale of any of the
Shares will be borne by the Selling Shareholder or other persons selling the
Shares.
The Company has agreed, pursuant to the Registration Rights Agreement
between the Company and the Selling Shareholder, to indemnify the Selling
Shareholder, any "underwriter" and any person who controls the Selling
Shareholder or any underwriter against certain liabilities and expenses arising
out of or based upon the information set forth or incorporated by reference in
this Prospectus, and the Registration Statement of which this Prospectus is a
part, including liabilities under the Securities Act of 1933, as amended (the
"Act"). Any commissions paid or any discounts or concessions allowed to any
broker, dealer, underwriter or market maker and, if any such broker, dealer,
underwriter or market maker purchases any of the Shares as principal, any
profits received on the resale of such Shares, may be deemed to be underwriting
commissions or discounts under the Act.
Legal Matters
The legality of the Shares offered hereby will be passed upon for the
Company by Thompson & Mitchell, St. Louis, Missouri.
Experts
The consolidated financial statements and related schedules of
Resurgens at June 30, 1992 and 1991, and for each of the three fiscal years in
the period ended June 30, 1992, included or incorporated by reference in
(1) Resurgens' Annual Report (Form 10-K) for the fiscal year ended June 30,
1992 and (2) the Company's Transition Report on Form 10-K for the period from
December 31, 1992 to June 30, 1993, have been audited by Ernst & Young,
independent auditors, as set forth in their reports thereon included therein
and are incorporated herein by reference in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements and schedules of LDDS-TN as of
December 31, 1992 and 1991 and for the three years ended December 31, 1992 have
been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their report with respect thereto, and are included in (1) LDDS-
TN's Annual Report on Form 10-K for the year ended December 31, 1992 and (2)
the Company's Transition Report on Form 10-K for the period from December 31,
1992 to June 30, 1993, and are incorporated herein by reference, in reliance
<PAGE> 21
upon the authority of such firm as experts in accounting and auditing and
giving said reports.
The consolidated financial statements and related schedules of MCC as
of December 31, 1992 and 1991 and for each of the years in the three-year
period ended December 31, 1992 incorporated by reference herein and included in
the Company's Transition Report on Form 10-K for the period from December 31,
1992 to June 30, 1993, have been incorporated by reference herein, in reliance
upon reports of KPMG Peat Marwick, independent certified public accountants,
incorporated herein by reference, and upon the authority of said firm as
experts in accounting and auditing.
