AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 25, 1998
REGISTRATION NO. 333-____________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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INTERNATIONAL FIBERCOM, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Arizona 8-0271282
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(State or Other Jurisdiction of (Irs Employer
Incorporation or Organization) Identification Number)
3410 East University, Suite 180
Phoenix, Arizona 85034
(602) 941-1900
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(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
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Mr. Joseph P. Kealy
International Fibercom, Inc.
3410 East University, Suite 180
Phoenix, Arizona 85034
(602) 941-1900
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(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service of Service)
---------------
The Commission is requested to send copies of all communications to:
Christian J. Hoffmann, III
Streich Lang, P.a.
2 North Central Avenue
Phoenix, Arizona 85004-2391
(602) 229-5200
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO PUBLIC:
From time to time after the Registration Statement becomes effective as
determined by market conditions and the needs of the Selling Shareholders.
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]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
Title of Each Class Amount Proposed Maximum Proposed Maximum Amount of
of Security to be to be offering Price Aggregate Offering Registration
Registered Registered(1) Per Unit(2) Price(2) Fee
- ------------------------------------------------------------------------------------
Common Stock,
no par value 2,036,873 $8.00 $16,294,984 $4,530
====================================================================================
</TABLE>
(1) In the event of a stock split stock dividend, or similar transaction
involving the Company's Common Stock, in order to prevent dilution, the
number of shares registered shall automatically be increased to cover the
additional shares in accordance with Rule 416(a) under the Securities Act.
(2) Estimated for purposes of calculating the amount of registration fee only.
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, AS AMENDED (THE "SECURITIES ACT") OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE>
INTERNATIONAL FIBERCOM, INC.
2,036,873 SHARES OF COMMON STOCK, NO PAR VALUE
---------------
These shares of common stock are being sold by the Selling Shareholders
listed in the "Selling Shareholders Table" on page 14. We will not receive any
part of the proceeds from the sale. See "Risk Factors" and "Plan of
Distribution."
Our common stock is listed on the NASDAQ national market under the symbol
"ifci" and on the Philadelphia Stock Exchange under the symbol "IFC." On
November 16, 1998, the reported last sales price of the Common Stock on the
NASDAQ National Market was $7.71875 Per share.
Unless the context indicates otherwise, all references to "we," "our," the
"company" or "IFC" refer to International Fibercom, Inc. and its subsidiaries.
Our principal executive offices are located at 3410 East University, Suite 180,
Phoenix, Arizona 85034. Our telephone number is (602) 941-1900.
SEE "RISK FACTORS" ON PAGE 7 FOR A DISCUSSION OF CERTAIN RISKS
RELATED TO AN INVESTMENT IN THE COMMON STOCK.
---------------
THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SEC OR ANY STATE SECURITIES COMMISSION NOR HAVE
THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is November _____, 1998
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC=s public reference rooms in Washington, D.C., New York, NY and Chicago,
Illinois. Please call the SEC at 1800SEC0330 for further information on the
public reference rooms. Our SEC filings are also available to the public at the
SEC=s web site at http://www.sec.gov.
The SEC allows us to Aincorporate by reference@ the information we file
with it, which means we can disclose important information to you by referring
to those documents. The information incorporated by reference is considered to
be a part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act of
1934 until the Selling Shareholders sell all of their shares. This prospectus is
part of a registration statement we filed with the SEC (Registration No.
333________).
+ Annual Report on Form 10KSB for the fiscal year ended December 31,
1997;
+ Quarterly Reports on Form 10QSB for the quarter ended March 31, 1998
and June 30, 1998;
+ Current Reports on Form 8K dated February 12, 1998, August 10, 1998,
October 1, 1998 and November 13, 1998; and
+ The description of the Common Stock contained in our Registration of
Certain Classes of Securities Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934 on Form 8A, dated August 9, 1994, as
amended from time to time.
You may request a copy or these filings, at no cost, by writing or
telephoning us at our principal executive offices at the following address and
phone number:
Secretary
International FiberCom, Inc.
3410 East University, Suite 180
Phoenix, Arizona 85034
(602) 9411900
You should rely on information incorporated by reference or provided in
this prospectus or any supplement. We have not authorized anyone else to provide
you with different information. The Selling Shareholders will not make an offer
of these shares in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any supplement is accurate as
of any date other than the date on the front of these documents.
3
<PAGE>
SUMMARY OF INTERNATIONAL FIBERCOM=S BUSINESS
We offer a wide variety of services and equipment to the
telecommunications, cable television and other related industries through our
eight whollyowned subsidiaries in the following three principal business
segments:
CONSTRUCTION SERVICES Our Construction Services segment includes our Fiber
Optic Cable and CATV Services Division which
specializes in the design, installation and
maintenance of fiberoptic and other cable services
for the telecommunication and other CATV industries.
This segment also includes our Systems Integration
Services and Products Division specializing in
systems integration services which includes design,
engineering, installation and maintenance of
structured cable systems, network hardware and
software, workstation peripherals and
intercommunications systems, primarily within
commercial, industrial and government facilities. We
have four subsidiaries in this segment:
+ Kleven Communications, Inc. ("Kleven")
+ Kleven Communications C", Inc. ("KlevenC"")
+ Concepts in Communication, Inc. ("Concepts")
+ General Communications, Inc. ("General")
ENGINEERING Our Engineering segment specializes in video, voice
and data network development using state of the art,
fiberoptic distribution platforms. We have one
subsidiary in this segment:
+ Compass Communications, Inc. ("Compass")
EQUIPMENT SALES Our Equipment Sales segment subsidiaries purchase,
sell and deal in new and used telecommunications
equipment used in the digital access, switching and
transport systems of leading telecommunications
companies, Regional Bell Operating Companies,
telecommunications hardware resellers and other
Fortune 500 companies. We have three subsidiaries in
this segment:
+ Southern Communications Products, Inc.
("Southern")
+ Diversitec, Inc. ("Diversitec")
+ United Tech, Inc. ("United Tech")
Our strategy is to be a onestop solution for the telecommunications
marketplace. This strategy involves offering a wide range of engineering,
consulting and maintenance services for fiberoptic and broadband networks and
systems integrated with local area network (ALAN@) and wide area network (AWAN@)
expertise and capabilities. A LAN is a group of personal computers linked
together in a building or campus to share programs, data, email, peripherals
and other resources. A WAN is a network that covers a large geographic area,
such as a state or country.
4
<PAGE>
In 1997 we began to implement this strategy through the strategic
acquisitions of businesses that complement and enhance our services or products.
At the beginning of 1997 Kleven was our only operating subsidiary. During 1997
we completed the acquisition of Concepts, Compass and Southern, which resulted
in a significant increase in our revenues and net income.
To date in 1998 we have completed two additional material acquisitions and
four smaller acquisitions:
+ Effective September 1, 1998, we acquired United Tech in exchange for
1,502,000 restricted shares of Common Stock.
+ Also, effective September 1, 1998, we acquired Diversitec in exchange
for 1,752,000 restricted shares of Common Stock.
+ We also acquired several smaller companies including General and
Communications Center, Inc. (both now a part of Concepts), Riley
Communications, Inc. (now Kleven-CA) and Dumbauld & Associates (now a
part of Compass).
To date in 1998, we have operations in Arizona, California, Tennessee,
Florida, Georgia and Virginia. Our customers include, among others, Cox
Communications, BellSouth Telecommunications, AT&T Network Systems, Ameritech,
Lucent Technologies, US West, Time Warner, Motorola, MediaOne, Australia=s Optus
Vision, and the City of Phoenix.
5
<PAGE>
SUMMARY OF THE OFFERING
SECURITIES OFFERED 2,036,873 shares of Common Stock, no par value
CAPITAL STOCK OUTSTANDING
COMMON STOCK 26,343,682 shares, no par value outstanding,
as of November 23, 1998 (1)
SERIES C CONVERTIBLE
PREFERRED STOCK 400 shares outstanding
COMMON STOCK MARKET SYMBOLS Nasdaq National Market "IFCI"
Philadelphia Stock Exchange "IFC"
ESTIMATED NET PROCEEDS The net proceeds of the sale of the shares will
be received directly by each Selling
Shareholder. No proceeds will be received by us
from the sale of the shares offered by this
prospectus. See "Use of Proceeds."
RISK FACTORS This offering involves a high degree of risk.
See "Risk Factors" on the following page.
(1) Does not include (i) up to 123,684 shares issuable upon conversion of the
remaining Series C Preferred; (ii) 480,000 shares issuable upon exercise of
currently outstanding Common Stock purchase warrants issued in connection
with our private placement of Series B Convertible Preferred Stock (ASeries
B Preferred@); (iii) 267,000 shares issuable upon exercise of Common Stock
purchase warrants issued in connection with our private placement of Common
Stock, 5.5% Convertible Subordinated Debentures ("5.5% Debentures") and
Series C Convertible Preferred Stock ("Series C Preferred"); and (iv)
1,350,000 shares issuable upon exercise of stock options not covered by the
registration statement of which this prospectus is a part. All of these
shares, except 835,000 shares issuable upon exercise of stock options
granted to our officers and directors, are included either in our
Registration Statement on Form SB2 which was declared effective on
February 12, 1998 or on our Registration Statement on Form S8 which was
filed on December 8, 1997.
6
<PAGE>
RISK FACTORS
INVESTING IN OUR COMMON STOCK INVOLVES A NUMBER OF RISKS. YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING FACTORS, IN ADDITION TO THE RISKS AND
INVESTMENT CONSIDERATIONS DISCUSSED ELSEWHERE IN THIS PROSPECTUS, BEFORE
PURCHASING ANY OF THE SHARES.
RISKS OF THE COMPANY
ACQUISITION STRATEGY A key element of our growth to date and our strategy
for the future is expansion through the acquisition
of companies that have complementary businesses, that
can utilize or enhance our existing capabilities and
resources or that expand our existing range of
services or products in the telecommunications or
CATV industries.
As a result, we continually evaluate potential
acquisition opportunities, some of which may be large
in size or scope when compared to our size.
Acquisitions involve a number of special risks,
including the time associated with identifying and
evaluating possible acquisitions, the diversion of
management=s attention to the integration of the
operations and personnel of the acquired companies,
the incorporation of acquired products or services
into our products and services, possible adverse
shortterm effects on our operating results, the
realization of acquired intangible assets and the
loss of key employees of the acquired companies.
We completed three major acquisitions in 1997 and two
major and four smaller acquisitions to date in 1998.
To accomplish future acquisitions we may issue equity
securities and other forms of consideration that
could cause dilution to investors purchasing our
Common Stock. There can be no assurance that we will
be able to identify additional suitable acquisition
candidates, consummate or finance any such
acquisitions, or integrate any such acquisitions
successfully into our operations.
MANAGEMENT OF GROWTH We are currently experiencing a period of rapid
growth resulting from recent acquisitions and the
internal expansion of our operations, both of which
have placed significant demands on our resources. Our
success in managing this growth will require us to
continue to improve our operational, financial and
management information systems, and to motivate and
effectively manage our employees. Prior to our 1997
acquisitions, we had no prior experience in the
systems integration, engineering or telecommunication
equipment fields. Therefore, we have relied primarily
upon the former management of Concepts, Compass and
Southern to provide a base of knowledge in these
fields until our management gains sufficient
experience. Further, we have retained, and are
relying on, certain key employees in each of the
businesses we acquired in 1998 to manage such
businesses.
We cannot assure you that we will successfully
assimilate our new acquisitions into our existing
business operations. We can also give you no
assurance that we will be successful in expanding the
businesses of our new acquisitions, that new
customers can be attracted as anticipated, or that
there will be a continued, if any, demand for the
services of our new acquisitions= technology,
products or expertise in new and competitive markets.
If our management is unable to manage growth
effectively, to maintain the quality of our products
and services, and to retain key personnel our
business, financial condition and results of
operations could be materially adversely affected.
7
<PAGE>
DEPENDENCE ON THE Demand for a substantial portion of our services, and
TELECOMMUNICATIONS therefore future increases in our net sales and net
AND CATV INDUSTRIES income, depends primarily on capital spending by CATV
operators, telecommunications and other companies for
constructing, rebuilding, maintaining or upgrading
their telecommunications systems. However, we expect
our future revenue increases to come primarily from
upgrading, retrofitting, rebuilding and maintaining
existing cable systems with fiberoptic and other
cables, rather than from constructing completely new
systems and from the sale of telecommunications
equipment.
The amount of capital spending by CATV operators and
telecommunications companies and, therefore, our
sales and profitability, are affected by a variety of
factors, including general economic conditions,
access by cable operators to financing, government
regulation of cable operators, demand for cable
services and technological developments in the
broadband communications industry. We cannot assure
you that such capital spending will occur or occur at
the level announced by the various telecommunications
and CATV companies. Federal regulations rolling back
rates for basic tier CATV services may have a
negative impact on the capital spending plans of the
CATV companies and thus have a material adverse
affect on our business.
NEED FOR ADDITIONAL The expansion of our business and the continued
FINANCING implementation of our acquisition strategy may
require us to seek additional financing that may
include bank financing or the issuance of debt or
equity securities. Our ability to obtain bank
financing or raise additional debt or equity capital
will depend upon our financial condition, results of
operations, covenants and limitations of any
outstanding debt obligations at that time, and
general economic conditions. We cannot assure you
that we will be able to obtain additional capital or,
if available, that such capital will be available at
terms acceptable to us or that would not result in
substantial dilution of the equity interest of
existing shareholders.
FEDERAL REGULATION CATV operators are subject to federal regulation. In
1992, Congress passed an act that repealed the 1984
deregulation of cable television and subjected cable
systems to rate regulation and other FCCenforced
obligations. In 1996 Congress passed the 1996
Telecommunications Act which repeals many of the
major provisions of the 1992 Act. Current FCC rules
regulating cable service rates will be repealed in
three years, except for the "basic tier" of cable
programming. Price caps are repealed for "small"
cable companies (less than $25 million in annual
revenues) immediately or for any cable system once it
faces "effective competition" from a local telephone
company providing "comparable" video programming
services. It is difficult to predict the impact, if
any, this legislation might have on the
telecommunications industry in general or our
business in particular.
IMPACT OF STATE Our ability to pursue our business activities is
REGULATION regulated, directly or indirectly, by various
agencies and departments of state governments.
Licenses from public utilities commissions are
frequently required prior to the commencement of
services by us and our clients. There can be no
assurance that we or our customers will be successful
in our or their efforts to obtain necessary licenses
or regulatory approvals. Our inability or the
inability of any of our customers to secure any
necessary licenses or approvals could have a material
adverse effect on our business.
8
<PAGE>
In addition to specific regulations, we are subject
to all federal, state and local rules and regulations
imposed upon businesses generally. The cost of
compliance with regulations is an additional cost of
doing business for us.
TECHNOLOGICAL Our services and products are subject to significant
DEVELOPMENTS AND RISKS technological change and innovation. Technological
OF TECHNOLOGICAL developments are occurring rapidly in the
OBSOLESCENCE communications and systems integration industries
and, while the effects of such developments are
uncertain, they may have a material adverse effect on
the demand for our services. For example, in the CATV
industry, technologies are being developed that would
bypass existing cable systems and permit the
transmission of signals directly into households. Our
success will generally depend on our ability to
penetrate and retain markets for our existing
services and to retain our expertise in installing
and repairing telecommunications, CATV cable and
integrated systems on a costeffective and timely
basis. We cannot assure you that we will be able to
remain competitive or that our products and services
will not be subject to technological obsolescence.
COMPETITION All segments of our business are highly competitive.
We compete with national, regional and local
companies. Many of our competitors or potential
competitors are substantially larger and have greater
resources. In addition, because of the convergence of
the CATV, telecommunications and computer industries
and rapid technological development, new competitors
may seek to enter the market.
DEPENDENCE UPON MAJOR The CATV industry is highly concentrated with most of
CUSTOMERS AND LARGE U.S. domestic subscribers being served by
CONTRACTS approximately 25 major multisystem operators
("MSO"). We have customers that have accounted for
more than 10% of our revenues on a historical basis.
Any decision by these major customers to cease or
reduce their use of our services may have a material
adverse effect on our business. A number of our
contracts are substantial in size. The failure to
timely or adequately replace a large contract upon
its completion or termination with one or more new
contracts or customers may materially adversely
affect our business and operations.
RISKS OF POSSIBLE COST On an historical basis a substantial portion of our
ESCALATION UNDER FIXED revenues have been generated principally under firm
PRICE CONTRACTS fixedprice contracts. Fixedprice contracts carry
certain inherent risks, including underestimating
costs, problems with new technologies and economic
and other changes that may occur over the contract
period. We recognize revenues using the
percentageofcompletion method. Under this method
revenue is recognized based on actual costs incurred
in relation to total estimated costs to complete the
contract. This method may result in irregular and
uneven quarterly results. Unforeseen events and
circumstances can alter our estimate of the costs and
potential profit associated with a particular
contract. To the extent that original cost estimates
are modified, estimated costs to complete increase,
delivery schedules are delayed, or progress under a
contract is otherwise impeded, cash flow, revenue
recognition and profitability from a particular
contract may be adversely affected.
INSURANCE AND We maintain liability insurance to protect against
POTENTIAL EXCESS damages to persons or property which may result from
LIABILITY our work. If we were to incur liability in excess of
our policy coverage, our financial condition could be
adversely affected.
9
<PAGE>
ARIZONA ANTITAKEOVER The Arizona Corporate Takeover Act ("Takeover Act")
STATUTE was adopted in 1987. The policy of the Takeover Act
is to prevent unfriendly corporate takeover attempts
by third parties. The Takeover Act prohibits certain
types of transactions, including "green mail," limits
voting rights of certain individuals acquiring shares
in the market and regulates certain business
combinations respecting corporate transactions
proposed by insiders and as part of a takeover plan.
The Company is subject to the foregoing provisions.
The Takeover Act enhances the possibility that a
potential bidder for our control will be required to
act through arm'slength negotiation with respect to
a major transaction, such as a merger, consolidation
or purchase of substantially all of our assets. The
Takeover Act may also have the effect of discouraging
tender offers or other stock acquisitions, giving our
management power to reject certain transactions which
might be desired by the owners of the majority of our
voting securities. The Takeover Act could also be
deemed to benefit incumbent management to the extent
that the Act deters such offers by persons who would
wish to make changes in management or exercise
control over management.
Our Board of Directors does not presently know any
third party that plans to make an offer to acquire
the Company through a tender offer, merger or
purchase of all or substantially all of the assets of
the Company.
DEPENDENCE UPON We do not have written agreements with our suppliers.
SUPPLIERS It is possible that we may encounter shortages in
parts, components, or other elements vital to our
operations in the future. If such shortages occur, we
cannot guarantee that we would be able to locate
other satisfactory suppliers, or even if other
suppliers could be located, that we would be able to
establish commercial relationships with any such
suppliers. If we are unable to establish commercial
relationships with other suppliers, we may be
required to suspend or curtail some of our services.
Suspension or curtailment of services could have a
material adverse effect on us.
DEPENDENCE UPON KEY We are dependent on the services of Joseph P. Kealy
PERSONNEL and Terry W. Beiriger, our principal executive
officers. We entered into a fiveyear employment
agreement with each of these individuals, effective
as of December 1995. When we acquired Concepts,
Compass, Southern, United Tech and Diversitec, we
entered into employment agreements with numerous
"key" employees and consulting agreements with
certain executives of these companies.
We must compete with much larger companies that have
significantly greater resources to attract and retain
personnel. We cannot assure you that we will be
successful in this regard or, if successful, that the
services of such personnel can be secured on terms
deemed favorable to us. The loss of the services of
any of the individuals mentioned above or our
inability to attract other qualified employees could
materially and adversely affect our business and
operations.
ECONOMIC AND GENERAL Our success will depend upon factors that are beyond
RISKS OF THE BUSINESS our control and that cannot clearly be predicted at
this time. Such factors include general economic
conditions, both nationally and internationally,
changes in tax laws, fluctuating operating expenses
including energy costs, changes in governmental
regulations, including regulations imposed under
federal, state or local environmental laws, labor
laws, and trade laws and other trade barriers.
10
<PAGE>
RISKS RELATING TO OFFERING
POSSIBLE DEPRESSIVE Our officers and directors own an aggregate of
EFFECT ON MARKET PRICE 2,284,599 shares of Common Stock, including
OF SECURITIES ELIGIBLE exercisable stock options. All but 835,000 of such
FOR FUTURE SALE shares are eligible for sale either under a
Registration Statement on Form S3 which was declared
effective on October 15, 1998 or under the
Registration Statement on Form S8 which was filed on
December 9, 1997. Sales of substantial amounts of
Common Stock by our other shareholders or even the
potential for such sales, could have a depressive
effect on the market price of shares of Common Stock
and could impair our ability to raise capital through
the sale of our Common or Preferred Stock.
POSSIBLE VOLATILITY OF The market price of our Common Stock increased
STOCK PRICE significantly during 1997 and the first three
quarters of 1998. The period was marked by generally
favorable industry conditions, acquisitions of new
businesses and substantially improving operating
results, including revenue and net income from the
recently acquired businesses.
The trading price of our Common Stock in the future
could be subject to wide fluctuations in response to
many factors including:
+ quarterly variations in our operating results
or those of our competitors;
+ actual or anticipated announcements of new
acquisitions by us or our competitors;
+ actual or anticipated announcements of new
contracts by us or our competitors;
+ technical innovations or new products by our
competitors;
+ changes in analysts= estimates of our
financial performance;
+ changes in capital plans of our cable and
other customers; and
+ general industry, economic and financial
conditions in the United States.
In addition, the stock market has experienced extreme
price and volume fluctuations which have particularly
affected the market prices for many technology and
telecommunications companies and which have been, in
come cases, unrelated to the operating performance of
such companies. These broad market fluctuations and
other factors may adversely affect the market price
of our Common Stock.
EXERCISE PRICE NOT The exercise prices of the warrants issued in
NECESSARILY RELATED TO connection with our private placement of Series B and
ESTABLISHED CRITERIA Series C Preferred were set through negotiations
OF VALUE conducted prior to the time of their sale, with
reference to the public trading price of our Common
Stock. The price of our Common Stock in such
exercises may not necessarily bear any relationship
to our asset value, net worth, earnings or any other
established criteria of value at the time of
exercise.
11
<PAGE>
POSSIBLE ISSUANCE OF We reserved 441,707 shares of Common Stock for
OPTIONS MAY DILUTE issuance under our 1994 Incentive Stock Option and
INTEREST OF Restricted Stock Purchase Plans, 1,200,000 shares of
STOCKHOLDERS Common Stock for issuance under our 1997 Incentive
Stock Option and Restricted Stock Plans and 2,000,000
shares for issuance under our Employee Stock Purchase
Plan. As of December 31, 1997, all of the options
available under the Incentive Stock Option Plans had
been granted and 104,036 shares had been purchased
under the Stock Purchase Plan.
On April 2, 1998 our Board of Directors approved an
amendment to the 1997 Incentive Stock Option Plan to
increase the number of shares reserved for issuance
under the Plan from 1,200,000 to 3,200,000. This
amendment was approved by the shareholders at our
1998 Annual Meeting of Shareholders held July 10,
1998. Concurrent with such approval, 100,000 options
which had been previously granted to our officers
under the 1997 Incentive Stock Option Plan became
effective. We also issued 300,000 stock options to
our directors who are not employees of the Company
and 835,000 shares to various officers and directors
outside of our Stock Option and Restricted Stock
Plans.
To the extent that stock options are granted and
exercised, dilution to the interests of our
stockholders may occur. Moreover, the terms upon
which we will be able to obtain additional equity
capital may be adversely affected since the holders
of the outstanding options can be expected to
exercise them at a time when we would, in all
likelihood, be able to obtain any needed capital on
terms more favorable to us than those provided in
outstanding options.
WARRANTS MAY ADVERSELY In connection with our 1997 private placement of
AFFECT MARKET PRICE OF Series B Preferred, we issued 700,000 common stock
COMMON STOCK purchase warrants (ASeries B Warrants@), 480,000 of
which remain outstanding as of November 16, 1998. The
Series B Warrants are exercisable to purchase one
share of Common Stock at varying exercise prices
depending on the tranche of the Series B Preferred
with which it was issued. All warrants issued with
the first tranche of Series B Preferred have been
exercised. The exercise price for the warrants issued
with the second tranche is $2.15625 per share, which
warrants are exercisable until April 2002, and the
exercise price for warrants issued with the third
tranche is $2.75 per share, which warrants are
exercisable until May 2002.
For the lives of the Series B Warrants, the holders
will have the opportunity to profit from an increase
in the price of our Common Stock. The existence of
these Warrants may adversely affect the market price
of our Common Stock and the terms on which we can
obtain additional financing. The holders of these
Warrants can be expected to exercise them at a time
when we would, in all likelihood, be able to obtain
additional capital by an offering of our unissued
Common Stock on terms more favorable to us than those
provided by such Warrants.
ISSUANCE OF SENIOR Our Articles of Incorporation authorize the issuance
SECURITIES of up to 10,000,000 shares of preferred stock
("Preferred Stock"). As of November 16, 1998, our
Board of Directors had designated 4,400 shares as
Series A Preferred, all of which have been converted
and canceled, 4,400 shares as Series B Preferred, all
of which have been converted and canceled, and 1,000
shares as Series C Preferred, of which 400 remain
outstanding.
12
<PAGE>
Additional shares of Preferred Stock may be issued by
our Board of Directors from time to time in one or
more series for such consideration and with such
relative rights and preferences as our Board of
Directors may determine. Any shares of Preferred
Stock that may be issued in the future could be given
voting and conversion rights that could dilute the
voting power and equity of holders of shares of
Common Stock, and have preferences over shares of
Common Stock with respect to dividends and in
liquidation.
LACK OF DIVIDENDS Holders of Preferred Stock and Common Stock are
entitled to receive any dividends that may be
declared by our Board of Directors. To date, we have
not paid any cash dividends on our Common Stock and
do not expect to pay cash dividends on either our
Preferred Stock or Common Stock in the near term. We
intend to retain future earnings, if any, to provide
funds for operations of the business. Investors who
anticipate the need for dividends from investments
should refrain from purchasing our Common Stock.
FUNDS LEGALLY We may not pay distributions or dividends if we are
AVAILABLE FOR PAYMENT insolvent or would be rendered insolvent by such a
OF DIVIDENDS ON dividend or distribution. Under the General
PREFERRED STOCK Corporation Law of the State of Arizona, "insolvency"
means the inability of a corporation to pay its debts
as they become due in the ordinary course of its
business. There can be no assurance that we will
generate any or sufficient earning to pay dividends
on the Preferred Stock.
YEAR 2000 DISCLOSURE We are currently working to mitigate the extent of
any AYear 2000" problems that we may have and that
may have an effect on our business, but we have not
yet completed this evaluation. However, based on our
work to date, we do not expect the costs to address
the problem will be material, and we do not expect
that the consequences of incomplete or untimely
resolution of the problem will materially impact the
operation of our business. We have not incurred, and
we do not expect to incur, any specific quantifiable
cost that can be directly and solely related to the
Year 2000 issue.
FORWARDLOOKING This Prospectus contains certain forwardlooking
INFORMATION statements and information within the meaning of
Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. The
cautionary statements made in this paragraph and
elsewhere in this Prospectus should be read as being
applicable to all related forwardlooking statements
wherever they appear in this Prospectus.
Forwardlooking statements, by their very nature,
include risks and uncertainties. Accordingly, our
actual results could differ materially from those
discussed herein. A wide variety of factors could
cause or contribute to such differences and could
adversely impact revenues, profitability, cash flows
and capital needs. Such factors, many of which are
beyond our control, include the following: our
success in obtaining new contracts; the volume and
type of work orders that are received under such
contracts; the accuracy of the cost estimates for the
projects; our ability to complete our projects on
time and within budget; levels of, and ability to,
collect accounts receivable; availability of trained
personnel and utilization of our capacity to complete
work; competition and competitive pressures on
pricing; and economic conditions in the United States
and in the region we serve.
13
<PAGE>
USE OF PROCEEDS
All of the proceeds of this offering will be received by the Selling
Shareholders, we will not receive any proceeds from the sale of the Common Stock
registered hereunder.
DETERMINATION OF OFFERING PRICE
This Prospectus may be used from time to time by the Selling Shareholders
to sell the Common Stock listed below in the Selling Shareholders table. The
price at which those shares will be sold will be determined by the Selling
Shareholder and may be based on market prices prevailing at the time of sale, at
prices relating to such prevailing market prices, or at negotiated prices.
14
<PAGE>
SELLING SHAREHOLDERS
The following table provides certain information with respect to the Common
Stock beneficially owned by the Selling Shareholders who are entitled to use
this Prospectus. The information in the table is as of the date of this
Prospectus. Except as described below, no Selling Shareholder has had a material
relationship with the Company within the past three years other than as a result
of the ownership of Common Stock. The Common Stock listed below may be offered
from time to time by the Selling Shareholders named below or their nominees:
SHARES AVAILABLE PERCENT OWNED
NAME AND ADDRESS SHARES FOR SALE UNDER AFTER COMPLETION
OF SELLING SHAREHOLDER OWNED(1) THIS PROSPECTUS OF THE OFFERING (1)
- ---------------------- -------- --------------- -------------------
Thomas M. Clayton 876,000 876,000
9502 Bonney Lea Court
Richmond, VA 23236
Steven R. Shapiro 876,000 876,000
3708 Sovereign Lane
Richmond, VA 23233
Randy C. Jensen 735,980 100,000
2078 High Vista Dr.
Lakeland, FL 33813
Terry D. Lipham 766,020 100,000
9940 Golf Boulevard
Treasure Island, FL 33706
Robert and Karla Forney 41,885 41,885
8261 North 31st Lane
Phoenix, AZ 85051
Robert J. Mahlum 25,131 25,131
7600 Pebblestone Court
Raleigh, NC 276113
Richard Jennings 17,857(2) 17,857(2)
7051 7th Road
Bartlett, TN 38135
Patricia Jennings 17,857(3) 17,857(3)
7051 7th Road
Bartlett, TN 38135
(1) Because (i) a Selling Shareholder may offer all or some of the shares of
Common Stock which he holds pursuant to the offerings contemplated by this
Prospectus, (ii) the offerings of shares of Common Stock are not
necessarily being underwritten on a firm commitment basis, and (iii) a
Selling Shareholder could purchase additional shares of Common Stock from
time to time, no estimate can be given as to the amount of shares of Common
Stock that will be held by any Selling Shareholder upon termination of such
offerings. See "PLAN OF DISTRIBUTION."
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<PAGE>
(2) Includes 8,929 shares of Common Stock owned of record by Mr. Jennings=
wife. Mr. Jennings is the husband of Patricia Jennings. Mr. Jennings
disclaims beneficial ownership of shares owned by Mrs. Jennings.
(3) Includes 8,928 shares of Common Stock owned of record by Mrs. Jennings=
husband. Mrs. Jennings is the wife of Richard Jennings. Mrs. Jennings
disclaims beneficial ownership of shares owned by Mr. Jennings.
-16-
<PAGE>
PLAN OF DISTRIBUTION
We are registering the Shares on behalf of the Selling Shareholders. As
used herein, ASelling Shareholders@ includes donees and pledgees selling shares
received from a named Selling Shareholder after the date of this prospectus. All
costs, expenses and fees in connection with the registration of the Shares
offered hereby will be borne by the Company. Brokerage commissions and similar
selling expenses, if any, attributable to the sale of Shares will be borne by
the Selling Shareholders. Sales of Shares may be effected by Selling
Shareholders from time to time in one or more types of transactions (which may
include block transactions) on the Nasdaq National Market, in the overthecounter
market, in negotiated transactions, through put or call options transactions
relating to the Shares, through the short sale of Shares, or a combination of
such methods of sale, at market prices prevailing at the time of sale, or at
negotiated prices. Such transactions may or may not involve brokers or dealers.
The Selling Shareholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
brokerdealers regarding the sale of their securities, nor is there an
underwriter or coordinating broker acting in connection with the propped sale of
Shares by the Selling Shareholders.
The Selling Shareholders may effect such transactions by selling Shares
directly to purchasers or to or through brokerdealers, which may act as agents
or principals. Such brokerdealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders and/or the
purchasers of Shares for whom such brokerdealers may act as agents or to whom
they sell as principal, or both, which compensation as to a particular
brokerdealer might be in excess of customary commissions.
The Selling Shareholders and any brokerdealers that act in connection with
the sale of Shares might be deemed to be Aunderwriters@ within the meaning of
Section 2(11) of the Securities Act, and any commissions received by such
brokerdealers and any profit on the resale of the Shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act. Because Selling Shareholders may be deemed to be
Aunderwriters@ within the meaning of Section 2(11) of the Securities Act, the
Selling Shareholders will be subject to prospectus delivery requirements of the
Securities Act. The Company has informed the Selling Shareholders that the
antimanipulative provisions of Regulation M promulgated under the Exchange Act
may apply to their sales in the market.
Selling Shareholders also may resell all or a portion of the Shares in open
market transactions in reliance upon Rule 144 under the Securities Act, provided
they meet the criteria and conform to the requirements of such Rule.
Upon our notification by a Selling Shareholder that any material
arrangement has been entered into with a brokerdealer for the sale of Shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Shareholder and of
the participating brokerdealer(s), (ii) the number of Shares involved, (iii) the
price at which such Shares were sold, (iv) the commissions paid or discounts or
concessions allowed to such brokerdealer(s), where applicable, (v) that such
brokerdealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus and (vi) other facts
material to the transaction. In addition, upon our notification by a Selling
Shareholder that a donee or pledgee intends to sell more than 500 shares, a
supplement to this prospectus will be filed.
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<PAGE>
LEGAL MATTERS
The legality of the securities offered hereby has been passed upon for us
by Streich Lang, P.A., Phoenix, Arizona. One or more members of such law firm
own shares of our Common Stock constituting less than 1% of our total
outstanding Common Stock.
EXPERTS
The consolidated financial statements and the related financial statement
schedules incorporated in this Prospectus by reference from our Annual Report on
Form 10KSB for the fiscal year ended December 31, 1997 have been audited by
Semple & Cooper, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
MATERIAL CHANGES
No material changes have occurred in our affairs since the end of the last
fiscal year for which certified financial statements were included in the latest
annual report to security holders and which has not been described in a report
on Form 10QSB or Form 8K filed under the Exchange Act.
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<PAGE>
======================================= =======================================
NO DEALER, SALESMAN OR ANY OTHER PERSON
HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY INTERNATIONAL FIBERCOM, INC.
REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER
MADE BY THIS PROSPECTUS. IF GIVEN OR
MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO
WHICH IT RELATES OR AN OFFER TO ANY 2,036,873 SHARES
PERSON IN ANY JURISDICTION IN WHICH NO PAR VALUE
SUCH AN OFFER WOULD BE UNLAWFUL.
NEITHER DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION
THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF THIS PROSPECTUS.
--------
TABLE OF CONTENTS
PAGE
---- PROSPECTUS
AVAILABLE INFORMATION............... 3
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE............ 3
PROSPECTUS SUMMARY.................. 4
RISK FACTORS........................ 7
USE OF PROCEEDS..................... 13
DETERMINATION OF OFFERING PRICE..... 13
SELLING SHAREHOLDERS................ 14
PLAN OF DISTRIBUTION................ 15
LEGAL MATTERS....................... 16
EXPERTS............................. 16
MATERIAL CHANGES.................... 16 NOVEMBER ___, 1998
======================================= =======================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated costs and expenses of the
Company in connection with the offering described in the Registration Statement.
Securities and Exchange Commission Registration Fee $ 4,530
Legal Fees and Expenses 25,000
Accounting Fees and Expenses 7,500
Other Expenses 1,000
-------
Total Expenses $38,030
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
ARTICLE XII of the Articles of Incorporation of the Registrant provides as
follows:
The Corporation shall indemnify any person against expenses, including
without limitation, attorney=s fees, judgements, fines and amounts paid in
settlement, actually and reasonably incurred by reason of the fact that he or
she is or was a director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, in all circumstances in which, to the extent that, such
indemnification is specifically permitted and provided for by the laws of the
State of Arizona as then in effect.
ARTICLE XII of the Bylaws of the registrant provide as follows:
12.01 Indemnification. To the full extent permitted by Arizona law, the
Corporation shall indemnify and pay the expenses of any person who is or was
made, or threatened to be made, a party to an action or proceeding (whether
civil, criminal, administrative or investigative) by reason of the fact that he
is or was a director, officer, employee, trustee or agent of or for the
Corporation or is or was serving at the request or with the prior approval of
the Corporation as a director, officer, employee, trustee or agent of another
corporation, trust or enterprise, against any liability asserted against him and
incurred by him in any capacity or arising out of his status as such, whether or
not the Corporation would have the power to indemnify him against such liability
under the provisions of these Bylaws.
Section 10202(B)(1) and Chapter 8, Article 5 (Section 10850 et seq.) of the
General Corporation Law of Arizona, as amended, apply to registrant and provide
as follows:
Section 10202(B). The articles of incorporation shall set forth:
1. If elected by the incorporators, a provision eliminating or limiting
the liability of a director to the corporation or its shareholders for
money damages for any action taken or any failure to take any action
as a director, except for any of the following:
(a) The amount of any financial benefit received by a director to
which the director is not entitled.
(b) An intentional infliction of harm on the corporation or the
shareholders.
(c) A violation of Section 10833.
(d) An intentional violation of criminal law.
As indicated above, the Registrant has included in its Articles of
Incorporation a provision limiting director liability in accordance with the
statute.
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Chapter 8--Directors and Officers, Article 5--Indemnification.
Section 10850. Definitions
1. "Corporation" includes any domestic or foreign predecessor entity of a
corporation in a merger or other transaction in which the predecessor's
existence ceased on consummation of the transaction.
2. "Director" means an individual who is or was a director of a corporation
or an individual who, while a director of a corporation, is or was serving at
the corporation's request as a director, officer, partner, trustee, employee or
agent of another foreign or domestic corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise. A director is considered to be
serving an employee benefit plan at the corporation's request if his duties to
the corporation also impose duties on or otherwise involve services by him to
the plan or to participants in or beneficiaries of the plan. Director includes
the estate or personal representative of a director.
3. "Expenses" includes attorney fees and all other costs and expenses
reasonably related to a proceeding.
4. "Liability" means the obligation to pay a judgment, settlement, penalty
or fine, including an excise tax assessed with respect to an employee benefit
plan, or reasonable expenses incurred with respect to a proceeding and includes
obligations and expenses than have not yet been paid by the indemnified person
but that have been or may be incurred.
5. "Official capacity" means, if used with respect to a director, the
office of director in a corporation and, if used with respect to an individual
other than a director, as contemplated in Section 10856, the office in a
corporation held by the officer or the employment or agency relationship
undertaken by the employee or agent on behalf of the corporation. Official
capacity does not include service for any other foreign or domestic corporation
or any partnership, joint venture, trust, employee benefit plan or other
enterprise.
6. "Outside director" means a director who, when serving as a director, was
not an officer, employee or holder of more than five per cent of the outstanding
shares of any class of stock of the corporation.
7. "Party" includes an individual who was, is or is threatened to be made a
named defendant or respondent in a proceeding.
8. "Proceeding" means any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative and whether
formal or informal.
Section 10851. Authority to indemnify
A. Except as provided in subsection D of this section and in Section 10854,
a corporation may indemnify an individual made a party to a proceeding because
the individual is or was a director against liability incurred in the proceeding
if all of the following conditions exist:
1. The individual's conduct was in good faith
2. The individual reasonably believed:
(a) In the case of conduct in an official capacity with the
corporation, that the conduct was in its best interests.
(b) In all other cases, that the conduct was at least not opposed to
its best interests.
3. In the case of any criminal proceedings, the individual had no
reasonable cause to believe the conduct was unlawful
B. A director's conduct with respect to an employee benefit plan for a
purpose reasonably believed to be in the interests of the participants in and
beneficiaries of the plan is conduct that satisfies the requirements of
subsection A, paragraph 2, subdivision (a) of this section.
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<PAGE>
C. The termination of a proceeding by judgment, order, settlement or
conviction or on a plea of no contest or its equivalent is not of itself
determinative that the director did not meet the standard of conduct described
in this section.
D. A corporation may not indemnify a director under this section either:
1. In connection with a proceeding by or in the right of corporation
in which the director was adjudged liable to the corporation.
2. In connection with any other proceeding charging improper
personal benefit to the director, whether or not involving action
in the director's official capacity, in which the director was
adjudged liable on the basis that personal benefit was improperly
received by the director.
E. Indemnification permitted under this section in connection with a
proceeding by or in right of the corporation is limited to reasonable expenses
incurred during the proceeding.
Section 10852. Mandatory indemnification
A. Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was the prevailing party, on the merits or otherwise,
in the defense of any proceeding to which the director was a party because the
director is or was a director of the corporation against reasonable expenses
incurred by the director in connection with the proceeding.
B. Unless limited by its articles of incorporation, Section 10851,
subsection D or subsection C of this section, a corporation shall indemnify an
outside director against liability. Unless limited by its articles of
incorporation or subsection C of this section, a corporation shall pay an
outside director's expenses in advance of a final disposition of the proceeding,
if the director furnishes the corporation with a written affirmation of the
director's good faith belief that the director met the standard of conduct
described in Section 10851, subsection A and the director furnishes the
corporation with a written undertaking executed personally, or on the director's
behalf, to repay the advance if it is ultimately determined that the director
did not meet the standard of conduct. The undertaking required by this
subsection is an unlimited general obligation of the director but need not be
secured and shall be accepted without reference to the director's financial
ability to make repayment.
C. A corporation shall not provide the indemnification or advance payment
of expenses described in subsection B if this section if a court of competent
jurisdiction has determined before payment that the outside director failed to
meet the standards described in Section 10851, subsection A, and a court of
competent jurisdiction does not otherwise authorize payment of indemnification
or expenses under subsection B of this section for more than sixty days after a
request is made unless ordered to do so by a court of competent jurisdiction.
Section 10853. Advance for expenses
A. A corporation may pay for or reimburse the reasonable expenses incurred
by a director who is a party to a proceeding in advance of final disposition of
the proceeding if the following conditions exist:
1. The director furnishes the corporation with a written affirmation
of the director's good faith belief that the director met the
standard of conduct described in Section 10851.
2. The director furnishes the corporation with a written undertaking
executed personally, or on the director's behalf, to repay the
advance if it is ultimately determined that the director did not
meet the standard of conduct.
3. A determination is made that the facts then known to those making
the determination would not preclude indemnification under this
article.
B. The undertaking required by subsection A, paragraph 2 of this section is
an unlimited general obligation of the director but need not be secured and
shall be accepted without reference to the director's financial ability to make
repayment.
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<PAGE>
C. Determinations and authorizations of payments under this section shall
be made in the manner specified in Section 10855.
D. This section does not apply to the advancement of expenses to or for the
benefit of an outside director. Advances to outside directors shall be made
pursuant to Section 10852.
Section 10854. Court ordered indemnification
Unless the corporation's articles of incorporation provide otherwise, a
director of the corporation who is a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another court of
competent jurisdiction. On receipt of an application, the court after giving
notice the court considers necessary may order indemnification if it determines
either:
1. The director is entitled to mandatory indemnification under
Section 10852, in which case the court shall also order the
corporation to pay the director's reasonable expenses incurred to
obtain court ordered indemnification.
2. The director is fairly and reasonably entitled to indemnification
in view of all the relevant circumstances, whether or not the
director met the standard of conduct set forth in Section 10851
or was adjudged liable as described in Section 10851, subsection
D, but if the director was adjudged liable under Section 10851,
subsection D, indemnification is limited to reasonable expenses
incurred.
Section 10855. Determination and authorization of indemnification
A. A corporation may not indemnify a director under Section 10851 unless
authorized in the specific case after determination has been made that
indemnification of the director is permissible in the circumstances because the
director has met the standard of conduct set forth in Section 10851.
B. The determination shall be made either:
1. By the board of directors by a majority vote of the directors not
at the time parties to the proceeding.
2. By special legal counsel:
(a) Selected by majority vote of the disinterested directors.
(b) If there are no disinterested directors, selected by
majority vote of the board.
3. By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the
proceeding shall not be voted on the determination.
C. Neither special legal counsel nor any shareholder has any liability
whatsoever for the determination made pursuant to this section. In voting
pursuant to subsection B of this section, directors shall discharge their duty
in accordance with Section 10830.
D. Authorization of indemnification and evaluation as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subsection B,
paragraph 2 of this section to select counsel.
Section 10856. Indemnification of officers, employees and agents
Unless a corporation's articles of incorporation provide otherwise:
1. An officer of the corporation who is not a director is entitled to
mandatory indemnification against liability under Section 10852 and is
entitled to apply for court ordered indemnification against liability
under Section 10854, in each case to the same extent as a director.
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<PAGE>
2. The corporation may indemnify against liability and advance expenses
under this article to an officer, employee or agent of the corporation
who is not a director to the same extent as to a director.
3. A corporation may also indemnify against liability and advance
expenses to an officer, employee or agent to the extent, consistent
with public policy, that indemnification may be provided by its
articles of incorporation, bylaws, general or specific action of its
board of directors or contract, provided that if the officer, employee
or agent is also a director, indemnification against liability arising
from serving as a director is limited to the other provisions of
chapters 1 through 17 of this title.
Section 10857. Insurance
A corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee or agent of the
corporation or who, while a director, officer, employee or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against liability asserted against or incurred by the individual in
that capacity or arising from the individual's status as a director, officer,
employee or agent, whether or not the corporation would have power to indemnify
the individual against the same liability under Section 10851 or Section 10852.
Section 10858. Application of article
A. A provision that treats a corporation's indemnification of or advance
for expenses to directors and that is contained in its articles of
incorporation, its bylaws, a resolution of its shareholders or board of
directors or a contract or otherwise is valid only if and to the extent the
provision is consistent with this article. If the articles of incorporation
limit indemnification or advances for expenses, indemnification and advances for
expenses are valid only to the extent consistent with the articles.
B. This article does not limit a corporation's power to pay or reimburse
expenses incurred by a director in connection with the director's appearance as
a witness in a proceeding at a time when the director has not been made a named
defendant or respondent to the proceeding.
The above discussion is qualified in its entirety by reference to the
Company's Articles of Incorporation and Bylaws. See Exhibits 3.1 through 3.7 to
this Registration Statement.
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ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION REFERENCE
- ------ ----------- ---------
3.1 Restated Articles of Incorporation of Registrant
dated October 21, 1981 (1)
3.2 Amendment to Articles of Incorporation of
Registrant dated April 18, 1986 (1)
3.3 Amendment to Articles of Incorporation of
Registrant dated May 20, 1987 (1)
3.4 Amendment to Articles of Incorporation of
Registrant dated February 4, 1988 (1)
3.5 Amendment to Articles of Incorporation of
Registrant dated August 15, 1991 (1)
3.6 Amendment to Articles of Incorporation of
Registrant dated June 3, 1994 (1)
3.7 Amended, Revised, and Restated Bylaws of
Registrant (1)
4.1 Form of Common Stock Certificate (1)
5.1 Opinion of Streich Lang, P.A. as to the legality
of securities being registered *
23.1 Consent of Semple & Cooper *
23.2 Consent of Streich Lang, P.A. (2)
27.1 Financial Data Schedule (3)
- ----------
* Filed herewith
(1) Filed with Registration Statement on Form SB2, No. 3379730, dated August
10, 1994
(2) Included in Exhibit 5.1
(3) Filed with report on Form 10QSB for the quarter ended June 30, 1998.
ITEM 17. UNDERTAKINGS
(a) Rule 415 Offering. The undersigned Registrant hereby undertakes:
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such posteffective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a posteffective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(e) Request for acceleration of effective date:
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the AAct@) may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, International
FiberCom, Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S3 and has duly caused this
Registration Statement on Form S3 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Phoenix and State of Arizona on
November 24, 1998.
INTERNATIONAL FIBERCOM, INC., an
Arizona corporation
/s/ Joseph P. Kealy
--------------------------------
Joseph P. Kealy, Chairman of the
Board and President (Chief
Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature and Title Date
------------------- ----
/s/ Joseph P. Kealy November 24, 1998
- ---------------------------------------
Joseph P. Kealy, Chairman of the Board,
President, Principal Executive Officer
and Director
/s/ V. Thompson Brown November 24, 1998
- ---------------------------------------
V. Thompson Brown, Director
/s/ John F. Kealy November 24, 1998
- ---------------------------------------
John F. Kealy, Director
/s/ Richard J. Seminoff November 24, 1998
- ---------------------------------------
Richard J. Seminoff, Director
/s/ Jerry A. Kleven November 24, 1998
- ---------------------------------------
Jerry A. Kleven, Director
/s/ John P. Stephens November 24, 1998
- ---------------------------------------
John P. Stephens, Director
S-1
[STREICH LANG LETTERHEAD]
November 25, 1998
Writer's Direct Line:
(602) 229-5336
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: INTERNATIONAL FIBERCOM, INC.
Ladies and Gentlemen:
This firm is counsel for International FiberCom, Inc., an Arizona
corporation (the "Company"). As such, we are familiar with the Articles of
Incorporation and Bylaws of the Company. We have also acted as counsel for the
Company with respect to certain matters in connection with the preparation of
the Registration Statement on Form S-3 registering 2,036,873 shares of Common
Stock, no par value (the "Shares"), under the Securities Act of 1933. In
addition, we have examined such documents and undertaken such further inquiry as
we consider necessary for rendering the opinion hereinafter set forth below.
Based upon the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing
under the laws of the Sate of Arizona.
2. The Shares, when issued, will be duly and validly issued, fully
paid and nonassessable.
We acknowledge that we are referred to under the heading "Legal Matters" of
the Prospectus which is part of the Registration Statement and we hereby consent
to the use of our name in such Registration Statement. Members of our firm,
including the undersigned, own shares of Common Stock of the Company, amounting
to less than 1% of the outstanding Common Stock of the Company. We further
consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement.
Very truly yours,
/s/ Christian J. Hoffmann, III
Christian J. Hoffmann, III
For the Firm
[LETTERHEAD OF SEMPLE & COOPER, LLP]
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the inclusion
of our report dated March 13, 1998, on the consolidated financial statements of
International Fibercom, Inc. and Subsidiaries for the years ended December 31,
1997 and 1996, in the Company's Form S-3 Registration Statement, and to the
reference to us under the caption "Experts" contained in the Prospectus.
/s/ Semple & Cooper, LLP
Semple & Cooper, LLP
Certified Public Accountants
Phoenix, Arizona
November 25, 1998
