PROSPECTUS
SHARED TECHNOLOGIES CELLULAR, INC.
8,904,694 SHARES OF COMMON STOCK
$.01 PAR VALUE PER SHARE
This Prospectus relates to the offer and sale from time to time by the
"Selling Shareholders" named in this Prospectus of up to 8,904,694 shares of
Common Stock, $0.01 par value per share (the "Common Stock"), of Shared
Technologies Cellular, Inc., a Delaware corporation (the "Company"), as follows:
(i) up to 5,686,361 shares of Common Stock ("Issued Shares") which have
heretofore been issued by the Company to certain Selling Shareholders and (ii)
up to 3,218,333 shares of Common Stock ("Warrant Shares") which may be issued by
the Company to certain Selling Shareholders upon the exercise by such
shareholders of certain Common Stock Purchase Warrants held by such shareholders
("Company Warrants"). See "Selling Shareholders."
This offering (the "Offering") is not being underwritten. The shares of
Common Stock being offered hereunder may be sold by the Selling Shareholders
and/or their registered representatives from time to time at prices to be
determined at the time of such sales. No minimum purchase is required and no
arrangement has been made to have funds received by such Selling Shareholders
and/or their registered representatives placed in an escrow, trust or similar
account or arrangement, unless the proceeds come from a purchaser residing in a
state in which the sale of those securities has not yet been qualified. See
"Plan of Distribution."
The Common Stock is traded on the Nasdaq Smallcap market ("Nasdaq")
under the symbol "STCL." The shares of Common Stock to be offered for sale
pursuant to this Prospectus may be offered for sale on Nasdaq or in privately
negotiated transactions. On November 6, 1997, the closing price for the Common
Stock as reported on Nasdaq was $5.22 per share.
THE SECURITIES OFFERED HEREBY INVOLVE CERTAIN RISKS TO THE PURCHASERS
OF SUCH SECURITIES. SEE "RISK FACTORS" BEGINNING ON PAGE ONE OF THIS PROSPECTUS.
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 COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Underwriting Discounts Proceeds to
Public (1) and Commissions (2) Selling Shareholders (2)(3)
---------- ------------------- ---------------------------
<S> <C> <C> <C>
Per Share of Common Stock........ $5.08 -0- $45,235,845.52
Total(3)......................... $5.08 -0- $45,235,845.52
</TABLE>
_________________
(1) Estimated prices solely for the purpose of this Prospectus based on the high
and low prices for the Common Stock of $5.22 and $4.94, respectively, as
reported on Nasdaq on November 6, 1997.
(2) The Offering is not being underwritten. The Selling Shareholders will be
responsible for any commissions for the sale of the shares of Common Stock
offered in this Prospectus. The distribution of the shares by the Selling
Shareholders may be effected in one or more transactions that may take place on
Nasdaq, including ordinary broker's transactions, privately negotiated
transactions, or through sales to one or more dealers for the resale of such
shares as principals, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, or at negotiated prices. Usual and
customary or specifically negotiated brokerage fees or commission may be paid by
the Selling Shareholders in connection with such sales. See "Selling
Shareholders" and "Plan of Distribution."
(3) The Company will receive no part of the proceeds from the sale of the shares
of Common Stock by the Selling Shareholders. The Company expects to incur
expenses in connection with this offering in the amount of approximately
$25,000. See "Use of Proceeds."
-------------------------------
The date of this Prospectus is November 6, 1997
<PAGE>
TABLE OF CONTENTS
Page Page
The Company................ 1 Legal Matters....................... 19
Risk Factors............... 1 Experts............................. 19
Use of Proceeds............ 5 Information Incorporated by
Reference.......................... 19
Selling Shareholders....... 6 Recent Developments................. 20
Plan of Distribution....... 17 Indemnification..................... 21
Transfer Agent............. 19
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"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and should be available at the Commission's Regional
Offices at 7 World Trade Center, New York, New York 10048, and 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material also can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission also maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission,
including the Company. The address of such site is http://www.sec.gov. The
Common Stock of the Company is quoted on the Nasdaq Smallcap market ("Nasdaq")
under the symbol "STCL". Reports and other information concerning the Company
may be inspected at the National Association of Securities Dealers, Inc. 1735 K
Street, N.W., Washington, D.C. 20006.
NO DEALER, SALESMAN, OR ANY OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING SHAREHOLDERS. ALL
INFORMATION IN THIS PROSPECTUS IS AS OF THE DATE OF THIS PROSPECTUS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE SECURITIES COVERED BY THIS PROSPECTUS, NOR DOES
IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE
SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER
OF SOLICITATION MAY NOT BE LAWFULLY MADE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
-ii-
<PAGE>
THE COMPANY
The following summary does not purport to be complete and is qualified
in its entirety by and should be read in conjunction with the more detailed
information and financial statements (including the notes thereto) incorporated
into this Prospectus. The Company utilizes a fiscal year ending December 31 and
each year referred to herein shall be referred to as "fiscal." Investors should
carefully consider the information set forth under the heading "Risk Factors."
Shared Technologies Cellular, Inc. (the "Company"), a Delaware
corporation incorporated in 1989, is a national cellular service provider
offering rental or prepaid services in over 640 of approximately 950 Cellular
Geographical Service Areas ("CGSA") within the United States, and cellular
activation services in over 690 CGSA's. As a reseller or agent for cellular and
PCS carriers, the Company can offer cellular service to approximately 94% of the
US population. The Company rents portable cellular telephones to business and
leisure travelers, the press, attendees, and participants at conventions,
sporting events and government agencies. The Company also operates as a cellular
agent at certain locations which involves selling, installing and providing
airtime services for cellular customers. The Company also performs nationwide
cellular activation services through major retail chains, automobile dealers and
mail order distribution companies. Most recently, the Company began supporting
the activation, customer service and collection services for national prepaid
(debit) cellular service operation. The principal offices of the Company are
located at 100 Great Meadow Road, Wethersfield, Connecticut 06109. The Company's
telephone number at its principal office is (860) 258-2500.
RISK FACTORS
The securities offered hereby are highly speculative. Investors should
carefully consider the following matters in connection with an investment in the
Common Stock in addition to the other information contained or incorporated by
reference in this Prospectus. Information contained or incorporated by reference
in this Prospectus contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, which can be identified by
the use of forward-looking terminology such as "may," "will," "would," "could,"
"intend," "plan," "expect," "anticipate," "estimate," or "continue," or the
negative thereof or other variations thereon or comparable terminology. The
following matters constitute cautionary statements identifying important factors
with respect to such forward-looking statements, including certain risks and
uncertainties, that could cause actual results to differ materially from those
in such forward-looking statements.
HISTORY OF LOSSES
Generally, since the Company's inception in 1989, the Company has
experienced continuing losses, although such losses substantially decreased in
1997.
DEPENDENCE ON KEY RELATIONSHIPS
The Company is dependent upon its relationships with certain major car
rental companies, which collectively accounted for approximately 47%, 40% and
46% of the
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<PAGE>
Company's revenues during 1995, 1996 and the first eight months of 1997,
respectively. In some cases, these agreements may be terminated on relatively
short notice. In addition, the Company derives a substantial portion of its
revenues from its relationship with Thorn Americas ("Thorn"). The Company
provides debit (i.e. prepaid) cellular services through Thorn. In 1996 and the
first eight months of 1997, this relationship accounted for 6% and 27% of the
Company's revenues, respectively.
UNCERTAINTY OF CELLULAR MARKETPLACE
While the market for cellular communications products and services has
grown substantially in recent years, there can be no assurance that such growth
will continue at the same rate. Moreover, the Company's foray into the debit
(i.e. prepaid) cellular services business represents particular uncertainty with
respect to the market for such services as well as the Company's ability to
achieve profitable growth within such market.
PRICE OF SERVICES
The price of cellular services may decrease, and thus negatively impact
profitability, as new wireless technologies are developed and compete with
traditional cellular telephony.
COMPETITION AND TECHNOLOGICAL OBSOLESCENCE
The telecommunications industry in general, and the cellular telephone
industry in particular, is highly competitive. Competitive factors include
price, customer service, geographical coverage and the ability to increase
revenues through marketing. The Company's short-term portable service competes
with both regional and national cellular service companies, some of which have
substantially more experience and greater financial, technical and other
resources than the Company. In the agency and activation business, the Company
faces competition mainly from other resellers, mass merchants, carriers and
agents, many of which may have substantially more experience and greater
financial, marketing, technical and other resources than the Company. Such
competition may have a material adverse impact on the results of operations of
the Company. In addition to competition from other businesses, there is also a
significant array of wireless technologies currently under development in the
marketplace. Such technological advances may have a material adverse effect on
the business of the Company.
SEASONALITY
The Company has experienced a reduction of revenues in the winter
months due to the reduction in business travel during the holiday season and
inclement weather. The Company expects such a trend to continue.
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<PAGE>
GOVERNMENT REGULATION
From time to time, federal and state legislators and regulators have
proposed legislation and regulations that could potentially affect the Company,
either beneficially or adversely. Any such legislation or regulation, if
adopted, could have a material adverse impact on the Company's operations.
UNCERTAIN ABILITY TO ACHIEVE AND MANAGE PLANNED EXPANSION
The Company's future success and continued growth may depend on its
ability to acquire other companies and/or expand its operations. The Company's
expansion would be dependent on a number of factors, including its ability to
hire, train, retain and assimilate competent management and other employees, the
adequacy of the Company's financial resources and the Company's ability to
identify new markets in which it can successfully compete and to adapt its
management information and other systems to accommodate expanded operations. In
addition, the Company may enter new markets in which it has no prior operating
experience. No assurance can be given that the Company will be able to achieve
any planned expansion or that such expansion will be profitable. Any expansion,
including growth through acquisitions, will place increasing pressure on the
Company's management controls. The failure to manage successfully any planned
expansion would adversely affect the Company's business. No assurance can be
given that any expansion will lead to profitability.
RISKS ASSOCIATED WITH ACQUISITIONS
The Company's growth strategy may include acquisitions. No assurance can
be given that the Company will successfully identify suitable acquisition
candidates, complete acquisitions, integrate acquired operations into existing
operations or expand into new markets. No assurance can be given that
acquisitions will not have a material adverse effect upon the Company's
operating results, particularly in the fiscal quarters immediately following the
consummation of such transactions, while operations of the acquired businesses
are being integrated into the Company's operations. Once integrated, acquired
operations may not achieve profitability.
FINANCING GROWTH
Future expansions through acquisitions, development of new products, or
growth of existing operations will require significant capital. To date, the
Company has financed such expansion substantially through the sale of equity.
The Company currently has no bank financing or line of credit in place, although
it is engaged in
discussions with various sources of financing from time to time. No assurance
can be given that the Company will obtain such sources of financing at favorable
terms, if at all. If such sources do not provide sufficient funds, the Company
will be unable to pursue its growth strategy, which would have a material
adverse effect on the Company's ability to increase its revenues.
FLUCTUATING STOCK PRICE
The market price of the Company's Common Stock has fluctuated since the
Company's initial public offering in April 1995. There is no assurance that the
market price of the Common Stock will be subject to continuous fluctuations in
the future. The Common
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<PAGE>
Stock is traded on the Nasdaq Smallcap market, which market has experienced and
is likely to experience in the future significant price and volume fluctuations
that could adversely affect the market price of the Common Stock without regard
to the operating performance of the Company. The Company believes factors such
as quarterly fluctuations in financial results, announcements of new
technologies or announcements by the Company or competitors may cause the market
price of the Common Stock to fluctuate, perhaps substantially. These factors, as
well as general economic conditions such as recessions or high interest rates,
may adversely affect the market price of the Common Stock.
DEPENDENCE ON KEY PERSONNEL
The Company's future performance depends on the continued contributions
of certain key management personnel, including Anthony D. Autorino, its founder,
Chairman of the Board of Directors, Chief Executive Officer, and a significant
shareholder. There is no assurance that the Company will be able to retain any
key members of management or that they will be able to successfully manage the
Company's existing operations or achieve any expansion plans. The Company's
ability to grow and earn revenues also depends on its ability to attract and
retain other management personnel, of which no assurance can be given.
Mr. Autorino is currently also the Chairman and Chief Executive Officer
of Shared Technologies Fairchild, Inc. ("STFI"), a major shareholder of the
Company and holder of the STFI Shares. STFI has announced that it is in the
process of being acquired by Tel-Save Holdings, Inc. ("Tel-Save") in a
stock-for-stock merger transaction. The Company is not involved in such
transaction and Mr. Autorino's position with the Company is not effected by the
transaction. The Company anticipates, however, that such transaction will be
completed by the end of calendar 1997, at which time Mr. Autorino will no longer
serve as a director, officer or employee of STFI.
NO DIVIDENDS
The Company has not paid any dividends to its stockholders since its
inception and does not plan to pay any dividends in the foreseeable future. The
Company intends to reinvest earnings, if any, in the development and expansion
of its business.
LIMITATION ON OFFICERS AND DIRECTORS LIABILITIES
Pursuant to the Company's Restated Certificate of Incorporation, as
authorized under applicable Delaware law, (a) directors of the Company are not
liable for monetary damages for breach of fiduciary duty, except in connection
with a breach of duty of loyalty, for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, for dividend
payments or stock repurchases illegal under Delaware law or for any transaction
in which a director has derived an improper personal benefit, and (b) the
Company shall indemnify its officers and directors to the fullest extent
permitted by Delaware law for expenses, fines and judgments (including
reasonable attorney's fees)
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<PAGE>
incurred in the defense and settlement of any actions against such persons in
connection with their having served as officers and directors of the Company
with respect to matters in which the director or officer acted in good faith and
in a manner he reasonably believed to be not opposed to the best interest of the
Company, and, with respect to any criminal action, had reasonable cause to
believe his conduct was lawful. For a more detailed explanation of these
provisions, see "Indemnification."
ANTITAKEOVER EFFECTS; DELAWARE LAW AND CERTAIN CHARTER PROVISIONS; PREFERRED
STOCK
The Company's Restated Certificate of Incorporation, as amended, as
well as Delaware corporate law, contain certain provisions that could have the
effect of delaying, deferring or preventing a change in control of the Company
and could adversely affect the prevailing market price of the Common Stock.
Certain of such provision impose various procedural and other requirements that
could make it more difficult for stockholders to effect certain corporate
actions. Other provisions allow the Company to issue, without stockholder
approval, preferred stock having rights senior to those of the Common Stock. The
preferred stock may be issued in one or more series, the terms of which may be
determined at the time of issuance by the board of directors, without further
action by stockholders, and may include voting rights, preferences as to
dividends and liquidation, conversion and redemption rights and sinking fund
provisions. The issuance of any preferred stock could adversely affect the
rights of the holders of the Common Stock, and therefore reduce the value of the
Common Stock. In particular, specific rights granted to future holders of
preferred stock could be used to restrict the Company's ability to merge with or
sell its assets to at third party, thereby preserving control of the Company by
its then owners.
FUTURE SALES OF COMMON STOCK
The Company's board of directors has the authority, without action or
vote of the stockholders, to issue all or part of any authorized but unissued
shares of Common Stock, including shares authorized but unissued under the
Company's stock option plans. Any such issuance will dilute the percentage of
ownership interest of stockholders and may further dilute the book value of the
Common Stock. In addition, holders of options may exercise them at a time when
the Company would otherwise be able to obtain additional equity capital on terms
more favorable to the Company.
The sale, or availability for sale, of a substantial number of shares
of Common Stock in the public market as a result of or following this offering
could adversely affect the market price for the Common Stock and could impair
the Company's ability to raise additional capital through the sale of its equity
securities.
USE OF PROCEEDS
The Company will receive no part of the proceeds from the sale of the
shares of Common Stock by the Selling Shareholders. The Company expects to incur
expenses in connection with this offering in the amount of approximately $25,000
for filing, legal,
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<PAGE>
accounting and miscellaneous fees and expenses. The Company will not pay for,
among other expenses, commissions and discounts of brokers, dealers or agents or
the fees and expenses of counsel for the Selling Shareholders. See "Selling
Shareholders" and "Plan of Distribution."
SELLING SHAREHOLDERS
This Prospectus relates to the offer and sale from time to time by the
Selling Shareholders named in this Prospectus of up to (i) 5,686,361 shares of
Common Stock ("Issued Shares") which have heretofore been issued by the Company
to certain Selling Shareholders and (ii) 3,218,333 shares of Common Stock
("Warrant Shares") which may be issued by the Company to certain Selling
Shareholders upon the exercise by such shareholders of certain Common Stock
Purchase Warrants ("Company Warrants") held by such shareholders.
The Issued Shares and the Warrant Shares are being registered to permit
public secondary trading of the shares from time to time by the Selling
Shareholders. Such securities are being registered at the expense of the
Company. The Company will not pay for the fees and expenses of the Selling
Shareholders, their attorneys or other representatives, as a result of the sale
of such securities by the Selling Shareholders. See "Use of Proceeds" and "Plan
of Distribution."
The Company has previously issued the Issued Shares to certain Selling
Shareholders in various private transactions between the Company and such
shareholders. Such Issued Shares may be sold publicly hereunder. Certain of the
Issued Shares (the "STFI Shares") are held by Shared Technologies Fairchild Inc.
("STFI"), a former parent and former majority shareholder of the Company, which
currently holds approximately 25.4% of the Company's issued and outstanding
shares of Common Stock. Certain Selling Shareholders listed below currently hold
warrants to purchase the STFI Shares from STFI ("STFI Warrants"). The STFI
Warrants were issued to such Selling Shareholders in various private
transactions. Under this Prospectus, (i) STFI may sell the STFI Shares to the
Selling Shareholders who hold STFI Warrants, and, from time to time, such
Selling Shareholders may resell their STFI Shares to the public or (ii) upon the
cancellation or expiration of the STFI Warrants, STFI may sell the STFI Shares
to the public. The STFI Warrants expire on May 1, 1999. STFI has announced that
it is in the process of being acquired by Tel-Save Holdings, Inc. ("Tel-Save")
in a stock-for-stock merger transaction which may be consummated by the end of
calendar 1997. Upon the consummation of such merger, Tel-Save will therefore be
the holder of the STFI Shares and entitled to resell such shares hereunder as a
Selling Shareholder. To the Company's knowledge, no other Issued Shares are
subject to similar warrants or purchase rights.
The Company may, from time to time, issue the Warrant Shares to certain
Selling Shareholders, but only upon the exercise by such shareholders of Company
Warrants currently held by such Selling Shareholders. The Company Warrants were
issued to certain Selling Shareholders by the Company from 1995 to 1997 in
various private transactions.
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<PAGE>
The Company Warrants expire at various times. No assurance can be given that any
Selling Shareholders will exercise their Company Warrants, and the Company
cannot predict when, and to what extent the holders of any Company Warrants will
exercise their warrants, if at all. The Warrant Shares, when purchased from the
Company, may be sold publicly hereunder.
Additional information concerning Selling Shareholders holding Issued
Shares and Warrant Shares is contained in the following table, which sets forth
certain information to the best of the Company's knowledge concerning the
Selling Shareholders, the number of shares to be offered and sold by each
Selling Shareholder and the amount of Common Stock that will be owned by each
Selling Shareholder following the offering (assuming sale of all shares of
Common Stock being offered hereby) by the Selling Shareholders.
<TABLE>
<CAPTION>
Beneficial Number of Shares Beneficial Percentage of
Selling Shareholder Ownership of of Common Stock to Ownership of Common Stock
------------------- Common Stock Prior be Offered Common Stock After Beneficially
to Offering ------------------ Offering Owned After
------------------ ------------------ Offering
-------------
<S> <C> <C> <C> <C>
1. Shared Technologies 1,832,070 (1) 1,832,070 (1) 0 *
Fairchild Inc. ("STFI")
2. North Hampton Holdings 34,649 (2) 34,649 (2) 0 *
Corporation III
3. The Jenifer Altman 38,215 (3) 38,215 (3) 0 *
Foundation
4. The Ennismore 1,666,666 (4) 1,666,666 (4) 0 *
Corporation
5. RHI Holdings, Inc. 1,000,000 (5) 1,000,000 (5) 0 *
("RHI")
6. H.J. Meyers 36,000 (6) 36,000 (6) 0 *
7. Vertical Financial Ltd. 126,383 (7) 126,383 (7) 0 *
8. International Capital 681,667 (8a) 671,667 (8b) 10,000 (8c) *
Partners, Inc. ("ICP")
9. Consulting for 30,000 (9) 30,000 (9) 0 *
Strategic Growth, Ltd.
10. Estate of Carol F. 129,666 (10) 116,666 (10) 13,000 *
Autorino
11. Vincent DiVincenzo 280,382 (11a) 258,715 (11b) 21,667 (11c) *
12. Sean P. Hayes 123,048 (12a) 79,715 (12b) 43,333 (12c) *
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<PAGE>
Beneficial Number of Shares Beneficial Percentage of
Selling Shareholder Ownership of of Common Stock to Ownership of Common Stock
------------------- Common Stock Prior be Offered Common Stock After Beneficially
to Offering ------------------ Offering Owned After
------------------ ------------------ Offering
-------------
13. Kenneth M. Dorros 100,938 (13a) 85,105 (13b) 15,833 (13c) *
14. Donna D. DiBella 236,666 (14) 236,666 (14) 0 *
15. Thomas H. Decker 125,666 (15a) 111,666 (15b) 14,000 (15c) *
16. John Lovkay 47,001 (16a) 18,334 (16b) 28,667 (16c) *
17. Ismael Pinho 31,666 (17a) 21,666 (17b) 10,000 (17c) *
18. Jon Sorenson 30,834 (18a) 5,834 (18b) 25,000 (18c) *
19. Emelio Bassini 100,000 (19) 100,000 (19) 0 *
Retirement Plan
20. Piers Playfair 33,334 (20) 33,334 (20) 0 *
21. George William Mauerman 50,000 (21) 50,000 (21) 0 *
22. Adrien W. Mauerman 116,666 (22) 116,666 (22) 0 *
Testamentary Trust
23. Anthony D. Autorino 2,092,833 (23a) 602,764 (23b) 81,333 (23c) *
24. Jeffrey J. Steiner 300,000 (24) 300,000 (24) 0 *
25. Richard P. Webb 33,333 (25) 33,333 (25) 0 *
26. Paul R. Barry 163,438 (26a) 145,105 (26b) 18,333 (26c) *
27. Patricia LaPierre 102,500 (27a) 100,000 (27b) 2,500 (27c) *
28. Mary van Schuyler Raiser 9,554 (28) 9,554 (28) 0 *
29. Kevin Schottlander 20,000 (29) 20,000 (29) 0 *
30. Wesley Skorski 35,000 (30a) 30,000 (30b) 5,000 (30c) *
31. Edythe M. Brewster 18,667 (31a) 15,000 (31b) 3,667 (31c) *
32. Linda L. Fazzina 16,664 (32a) 15,000 (32b) 1,664 (32c) *
33. Jennifer Rieber 8,904 (33a) 4,737 (33b) 4,167 (33c) *
-8-
<PAGE>
Beneficial Number of Shares Beneficial Percentage of
Selling Shareholder Ownership of of Common Stock to Ownership of Common Stock
------------------- Common Stock Prior be Offered Common Stock After Beneficially
to Offering ------------------ Offering Owned After
------------------ ------------------ Offering
-------------
34. Donald E. Miller 25,000 (34) 25,000 (34) 0 *
35. Jo McKenzie 25,000 (35) 25,000 (35) 0 *
36. Estate of Edward J. 25,000 (36) 25,000 (36) 0 *
McCormack, Jr.
37. Natalia Hercot 25,000 (37) 25,000 (37) 0 *
38. Renee Autorino 16,667 (38a) 5,000 (38b) 11,667 (38c) *
39. Maryann Elkas 14,167 (39a) 2,500 (39b) 11,667 (39c) *
40. S. Robert Pye 39,485 (40a) 29,485 (40b) 10,000 (40c) *
41. Robin Craig 3,500 (41a) 2,500 (41b) 1,000 (41c) *
42. Niels Pederson 3,500 (42a) 2,500 (42b) 1,000 (42c) *
43. Michael Riccardi 3,500 (43a) 2,500 (43b) 1,000 (43c) *
44. Peggy J. McGill 2,500 (44) 2,500 (44) 0 *
45. James L. Green 10,515 (45a) 515 (45b) 10,000 (45c) *
46. The North Fork Group 8,325 (46) 8,325 (46) 0 *
47. Triad Capital Partners, 16,675 (47) 16,675 (47) 0 *
Inc.
48. General Capital 62,763 (48) 62,763 (48) 0 *
Holdings, Ltd.
49. Peoples Telephone 100,000 (49) 100,000 (49) 0 *
Company
50. Thomas S. Parigian 1,980 (50) 1,980 (50) 0 *
51. William F. Masucci 2,475 (51) 2,475 (51) 0 *
52. Michael A. Bresner 11,975 (52) 11,975 (52) 0 *
53. Robert J. Setteducati 3,960 (53) 3,960 (53) 0 *
54. Michael Vanechanos 1,238 (54) 1,238 (54) 0 *
55. Joseph Galligan 1,238 (55) 1,238 (55) 0 *
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<PAGE>
Beneficial Number of Shares Beneficial Percentage of
Selling Shareholder Ownership of of Common Stock to Ownership of Common Stock
------------------- Common Stock Prior be Offered Common Stock After Beneficially
to Offering ------------------ Offering Owned After
------------------ ------------------ Offering
-------------
56. James C. Witzel 1,485 (56) 1,485 (56) 0 *
57. Alza Corporation 30,000 (57) 30,000 (57) 0 *
Retirement Plan
58. Tenet Healthcare Corp. 82,087 (58) 82,087 (58) 0 *
Master Trust
59. Asphalt Green, Inc. 16,000 (59) 16,000 (59) 0 *
60. Brearley School 19,107 (60) 19,107 (60) 0 *
Endowment Fund
61. Chapin School Ltd. 28,661 (61) 28,661 (61) 0 *
Endowment Fund
62. Demvest Equities L.P. 19,107 (62) 19,107 (62) 0 *
63. Fred & Lucy Giampino 9,555 (63) 9,555 (63) 0 *
JTWROS
64. HBL Charitable Unitrust 19,107 (64) 19,107 (64) 0 *
65. Helen Hunt 19,107 (65) 19,107 (65) 0 *
66. Jeanne L. Morency 9,553 (66) 9,553 (66) 0 *
67. Psychology Associates 9,555 (67) 9,555 (67) 0 *
68. Arthur D. Little 150,000 (68) 150,000 (68) 0 *
Employees Investment
Plan
69. City of Milford 76,430 (69) 76,430 (69) 0 *
Employee Pension Fund
70. National Federation of 38,215 (70) 38,215 (70) 0 *
Independent Business
Employee Pension Trust
71. Norwalk Employees 38,215 (71) 38,215 (71) 0 *
Pension Plan
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<PAGE>
Beneficial Number of Shares Beneficial Percentage of
Selling Shareholder Ownership of of Common Stock to Ownership of Common Stock
------------------- Common Stock Prior be Offered Common Stock After Beneficially
to Offering ------------------ Offering Owned After
------------------ ------------------ Offering
-------------
72. Planned Parenthood of 19,107 (72) 19,107 (72) 0 *
New York City
73. Roanoke College 57,323 (73) 57,323 (73) 0 *
74. Tab Products Company 38,215 (74) 38,215 (74) 0 *
Pension Plan
75. Warren Investment 19,107 (75) 19,107 (75) 0 *
Group, Ltd.
76. Warren Otologic Group 19,107 (76) 19,107 (76) 0 *
P/S Trust
77. William B. Lazar 9,554 (77) 9,554 (77) 0 *
78. Wells Family LLC 95,538 (78) 95,538 (78) 0 *
79. Harold & Grace Willens 19,107 (79) 19,107 (79) 0 *
JTWROS
80. Public Employee 538,333 (80) 538,333 (80) 0 *
Retirement System of
Idaho
81. City of Stamford 126,667 (81) 126,667 (81) 0 *
Firemen's Pension Fund
82. State of Oregon/ZCG 791,667 (82) 791,667 (82) 0 *
83. Van Loben Sels 95,000 (83) 95,000 (83) 0 *
Charitable Foundation
84. Raiser Marital Trust 38,216 (84) 38,216 (84) 0 *
</TABLE>
- ------------------
* Less than 1%
(1) Includes 1,832,070 Issued Shares ("STFI Shares") which are subject to
purchase from STFI by certain Selling Shareholders pursuant to the STFI
Warrants. Under this Prospectus (i) STFI may sell the STFI Shares to
the Selling Shareholders who hold STFI Warrants, and, from time to
time, such Selling Shareholders may resell their STFI Shares to the
public or (ii) upon the cancellation or expiration of the STFI
Warrants, STFI may sell the STFI Shares to the public. The STFI
Warrants expire on May 1, 1999. STFI has announced that it is in the
process of being acquired by Tel-Save Holdings, Inc. ("Tel-Save") in a
stock-for-stock merger transaction which may be consummated by the end
of calendar 1997. Upon the consummation of such merger, Tel-Save will
therefore be the holder of the STFI Shares and entitled to resell such
shares hereunder as a Selling Shareholder.
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<PAGE>
(2) Includes 34,649 Warrant Shares.
(3) Includes 38,215 Issued Shares.
(4) Includes 833,333 Issued Shares and 833,333 Warrant Shares.
(5) Includes 500,000 Issued Shares and 500,000 Warrant Shares. RHI is a
principal stockholder of STFI. Mr. Steiner (see Selling Shareholder
number 24) beneficially owns a majority of the voting stock of RHI's
parent, The Fairchild Corporation.
(6) Includes 36,000 Warrant Shares. H.J. Meyers was the underwriter of the
Company's initial public offering.
(7) Includes 95,000 Warrant Shares and 31,383 Issued Shares.
(8a) Includes 65,000 STFI Shares, 540,000 Warrant Shares, 66,667 Issued
Shares and 10,000 shares issuable upon exercise of options.
(8b) Includes 65,000 STFI Shares, 540,000 Warrant Shares, and 66,667 Issued
Shares.
(8c) Includes 10,000 shares issuable upon exercise of options.
(9) Includes 30,000 Warrant Shares.
(10) Includes 58,333 Warrant Shares and 58,333 Issued Shares. Carol F.
Autorino was the spouse of Anthony D. Autorino, the Chairman and Chief
Executive Officer of the Company (see Selling Shareholder number 23).
(11a) Mr. DiVincenzo is the Treasurer, Chief Financial Officer, and a
director of the Company. Includes 21,667 shares issuable upon exercise
of options, 194,000 STFI Shares, 16,667 Warrant Shares and 48,048
Issued Shares.
(11b) Includes 194,000 STFI Shares, 16,667 Warrant Shares and 48,048 Issued
Shares.
(11c) Includes 21,667 shares issuable upon exercise of options.
(12a) Mr. Hayes is a Vice President of the Company. Includes 43,333 shares
issuable upon exercise of options, 35,000 STFI Shares, 6,667 Warrant
Shares and 38,048 Issued Shares.
(12b) Includes 35,000 STFI Shares, 6,667 Warrant Shares and 38,048 Issued
Shares.
(12c) Includes 43,333 shares issuable upon exercise of options.
(13a) Mr. Dorros was formerly the Vice President, General Counsel and
Secretary of the Company. Includes 15,833 shares issuable upon exercise
of options, 50,000 STFI Shares, 5,000 Warrant Shares and 30,105 Issued
Shares.
(13b) Includes 50,000 STFI Shares, 5,000 Warrant Shares and 30,105 Issued
Shares.
(13c) Includes 15,833 shares issuable upon exercise of options.
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<PAGE>
(14) Includes 58,333 Warrant Shares, 58,333 Issued Shares and 120,000 STFI
Shares. Ms. DiBella is the spouse of William A. DiBella, a director of
and a consultant to the Company.
(15a) Mr. Decker is a director of the Company. Includes 6,000 shares issuable
upon exercise of options, 45,000 STFI Shares, 33,333 Warrant Shares and
33,333 Issued Shares.
(15b) Includes 45,000 STFI Shares, 33,333 Warrant Shares and 33,333 Issued
Shares.
(15c) Includes 6,000 shares issuable upon exercise of options.
(16a) Mr. Lovkay is a Vice President of the Company. Includes 28,667 shares
issuable upon exercise of options, 5,000 STFI Shares, 6,667 Warrant
Shares and 6,667 Issued Shares.
(16b) Includes 5,000 STFI Shares, 6,667 Warrant Shares and 6,667 Issued
Shares.
(16c) Includes 28,667 shares issuable upon exercise of options.
(17a) Mr. Pinho is Controller of the Company. Includes 10,000 shares issuable
upon exercise of options, 15,000 STFI Shares, 3,333 Warrant Shares and
3,333 Issued Shares.
(17b) Includes 15,000 STFI Shares, 3,333 Warrant Shares, and 3,333 Issued
Shares.
(17c) Includes 10,000 shares issuable upon exercise of options.
(18a) Mr. Sorenson is a Vice President of the Company. Includes 25,000 shares
issuable upon exercise of options, 2,500 STFI Shares, 1,667 Warrant
Shares and 1,667 Issued Shares.
(18b) Includes 2,500 STFI Shares, 1,667 Warrant Shares and 1,667 Issued
Shares.
(18c) Includes 25,000 shares issuable upon exercise of options.
(19) Includes 50,000 Warrant Shares and 50,000 Issued Shares.
(20) Includes 16,667 Warrant Shares and 16,667 Issued Shares.
(21) Includes 25,000 Warrant Shares and 25,000 Issued Shares.
(22) Includes 58,333 Warrant Shares and 58,333 Issued Shares.
(23a) Mr. Autorino is Chairman and Chief Executive Officer of the Company,
and until approximately December 1, 1997 will serve as Chairman and
Chief Executive Officer of STFI. Includes 58,333 shares issuable upon
exercise of options. Includes 129,666 shares owned by the Estate of
Carol F. Autorino, of which Mr. Autorino disclaims beneficial ownership
(see Selling Shareholder number 10 and note 10). Includes the 1,832,070
STFI Shares offered hereunder, as to which Mr. Autorino disclaims
beneficial ownership (see Selling Shareholder number 1 and note 1);
however, Mr. Autorino does not disclaim beneficial ownership of 540,000
STFI Shares which he may purchase from STFI pursuant to STFI Warrants
held by him. Includes 62,764 Issued Shares.
(23b) Includes 540,000 STFI Shares and 62,764 Issued Shares.
(23c) Includes 58,333 shares issuable upon exercise of options, and the
13,000 shares to be held by the Estate of Carol F. Autorino after this
offering, of which Mr. Autorino disclaims beneficial ownership.
Reflects the sale of (i) all of Mr. Autorino's shares to be offered by
him hereunder (see note 23b), (ii)
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<PAGE>
all STFI Shares offered hereunder, and (iii) all of the 116,666 shares
offered hereunder by the Estate of Carol F. Autorino (see note 10).
(24) Includes 300,000 STFI Shares.
(25) Includes 33,333 STFI Shares.
(26a) Mr. Barry is a consultant to the Company. Includes 120,000 STFI Shares,
18,333 shares issuable upon exercise of options and 25,105 Issued
Shares.
(26b) Includes 120,000 STFI Shares and 25,105 Issued Shares.
(26c) Includes 18,333 shares issuable upon exercise of options.
(27a) Ms. LaPierre is a consultant to the Company. Includes 2,500 shares
issuable upon exercise of options and 100,000 STFI Shares.
(27b) Includes 100,000 STFI Shares.
(27c) Includes 2,500 shares issuable upon exercise of options.
(28) Includes 9,554 Issued Shares.
(29) Includes 20,000 STFI Shares.
(30a) Mr. Skorski is an employee of the Company. Includes 5,000 shares
issuable upon exercise of options and 30,000 STFI Shares.
(30b) Includes 30,000 STFI Shares.
(30c) Includes 5,000 shares issuable upon exercise of options.
(31a) Ms. Brewster is an employee of STFI and a consultant to the Company.
Includes 3,667 shares issuable upon exercise of options and 15,000 STFI
Shares.
(31b) Includes 15,000 STFI Shares.
(31c) Includes 3,667 shares issuable upon exercise of options.
(32a) Ms. Fazzina is General Counsel and Secretary of the Company. Includes
1,664 shares issuable upon exercise of options and 15,000 STFI Shares.
(32b) Includes 15,000 STFI Shares.
(32c) Includes 1,664 shares issuable upon exercise of options.
(33a) Ms. Rieber is an employee of the Company. Includes 4,167 shares
issuable upon exercise of options and 4,737 STFI Shares.
(33b) Includes 4,737 STFI Shares.
(33c) Includes 4,167 shares issuable upon exercise of options.
(34) Includes 25,000 STFI Shares.
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<PAGE>
(35) Includes 25,000 STFI Shares.
(36) Includes 25,000 STFI Shares.
(37) Includes 25,000 STFI Shares.
(38a) Ms. Autorino is an employee of the Company and is the daughter-in-law
of Mr. Autorino. Includes 11,667 shares issuable upon exercise of
options and 5,000 STFI Shares.
(38b) Includes 5,000 STFI Shares.
(38c) Includes 11,667 shares issuable upon exercise of options.
(39a) Ms. Elkas is an employee of the Company. Includes 11,667 shares
issuable upon exercise of options and 2,500 STFI Shares.
(39b) Includes 2,500 STFI Shares.
(39c) Includes 11,667 shares issuable upon exercise of options.
(40a) Mr. Pye is an employee of the Company. Includes 10,000 shares issuable
upon exercise of options, 5,000 STFI Shares, and 24,485 Warrant Shares.
(40b) Includes 5,000 STFI Shares and 24,485 Warrant Shares.
(40c) Includes 10,000 shares issuable upon exercise of options.
(41a) Ms. Craig is an employee of the Company. Includes 1,000 shares issuable
upon exercise of options and 2,500 STFI Shares.
(41b) Includes 2,500 STFI Shares.
(41c) Includes 1,000 shares issuable upon exercise of options.
(42a) Mr. Pedersen is an employee of the Company. Includes 1,000 shares
issuable upon exercise of options and 2,500 STFI Shares.
(42b) Includes 2,500 STFI Shares.
(42c) Includes 1,000 shares issuable upon exercise of options.
(43a) Mr. Riccardi is an employee of the Company. Includes 1,000 shares
issuable upon exercise of options and 2,500 STFI Shares.
(43b) Includes 2,500 STFI Shares.
(43c) Includes 1,000 shares issuable upon exercise of options.
(44) Ms. McGill is an employee of the Company. Includes 2,500 STFI Shares.
(45a) Mr. Green is an employee of the Company. Includes 10,000 shares
issuable upon the exercise of options, and 515 Warrant Shares.
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<PAGE>
(45b) Includes 515 Warrant Shares.
(45c) Includes 10,000 shares issuable upon exercise of options.
(46) Includes 8,325 Warrant Shares.
(47) Includes 16,675 Warrant Shares.
(48) Includes 62,763 Issued Shares.
(49) Includes 100,000 Issued Shares.
(50) Includes 1,980 Warrant Shares.
(51) Includes 2,475 Warrant Shares.
(52) Includes 11,975 Warrant Shares.
(53) Includes 3,960 Warrant Shares.
(54) Includes 1,238 Warrant Shares.
(55) Includes 1,238 Warrant Shares.
(56) Includes 1,485 Warrant Shares.
(57) Includes 30,000 Issued Shares.
(58) Includes 82,087 Issued Shares.
(59) Includes 16,000 Issued Shares.
(60) Includes 19,107 Issued Shares.
(61) Includes 28,661 Issued Shares.
(62) Includes 19,107 Issued Shares.
(63) Includes 9,555 Issued Shares.
(64) Includes 19,107 Issued Shares.
(65) Includes 19,107 Issued Shares.
(66) Includes 9,553 Issued Shares.
(67) Includes 9,555 Issued Shares.
(68) Includes 150,000 Issued Shares.
(69) Includes 76,430 Issued Shares.
(70) Includes 38,215 Issued Shares.
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<PAGE>
(71) Includes 38,215 Issued Shares.
(72) Includes 19,107 Issued Shares.
(73) Includes 57,323 Issued Shares.
(74) Includes 38,215 Issued Shares.
(75) Includes 19,107 Issued Shares.
(76) Includes 19,107 Issued Shares.
(77) Includes 9,554 Issued Shares.
(78) Includes 95,538 Issued Shares.
(79) Includes 19,107 Issued Shares.
(80) Includes 283,333 Issued Shares and 255,000 Warrant Shares.
(81) Includes 66,667 Issued Shares and 60,000 Warrant Shares.
(82) Includes 416,667 Issued Shares and 375,000 Warrant Shares.
(83) Includes 50,000 Issued Shares and 45,000 Warrant Shares.
(84) Includes 38,216 Issued Shares.
The Selling Shareholders are not restricted as to the price or prices
at which they may sell their securities, except that STFI may sell the STFI
Shares to certain Selling Shareholders at prices determined by the STFI
Warrants. Sales of the securities offered hereunder at less than the market
price may depress the market price of the Company's Common Stock. Except with
respect to sales of the STFI Shares from STFI to certain Selling Shareholders
holding STFI Warrants, it is anticipated that the sale of the securities being
offered hereby, when made, will be made through customary channels either
through broker-dealers acting as agents or brokers for the seller, or through
broker-dealers acting as principals, who, may then resell the shares in the
over-the-counter market, or at private sales in the over-the-counter market or
otherwise, at negotiated prices related to prevailing market prices at the time
of the sales, or by a combination of such methods. Thus, the period for the sale
of such securities by the Selling Shareholders may occur over an extended period
of time.
PLAN OF DISTRIBUTION
The Common Stock offered hereunder may be offered and sold from time to
time by the Selling Shareholders. See "Selling Shareholders." The shares of
Common Stock covered by this Prospectus may be sold by the Selling Shareholders
in one or more transactions on Nasdaq, or otherwise at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The shares of Common Stock may be sold by one or more
of the following methods: (a) a block trade in
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<PAGE>
which the broker or dealer so engaged will attempt to sell the shares of Common
Stock as agent but may position and resell a portion of the block as principal
in order to facilitate the transaction; (b) a purchase by a broker or dealer as
principal, and the resale by such broker or dealer for its account pursuant to
this Prospectus, including resale to another broker or dealer; or (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers.
Thus, the period of distribution of such shares of Common Stock may occur over
an extended period of time. In effecting sales, brokers or dealers engaged by a
Selling Shareholder may arrange for other brokers or dealers to participate.
Usual and customary or specifically negotiated brokerage fees or commissions may
be paid by the Selling Shareholders in connection with such sales.
The Company will receive no part of the proceeds from the sale of the
shares of Common Stock by the Selling Shareholders. The Company may receive up
to approximately $11,679,852 from the exercise of the Company Warrants by
certain Selling Shareholders, of which no assurance can be given. The Company
cannot predict when and to what extent the holders of any Company Warrants will
exercise their warrants, if at all. The Company intends to apply the proceeds of
any exercise of the Company Warrants to the Company's general working capital
requirements. The Company expects to incur expenses in connection with this
offering in the amount of approximately $25,000 for filing, legal, accounting
and miscellaneous fees and expenses. The Company will not pay for, among other
expenses, commissions and discounts of underwriters, dealers or agents or the
fees and expenses of counsel for the Selling Shareholders.
In offering the securities, the Selling Shareholders and any
broker-dealers and any other participating broker-dealers who execute sales for
the Selling Shareholders may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933, as amended, in connection with such sales, and
any profits realized by the Selling Shareholders and the compensation such
broker-dealer may be deemed to be underwriting discounts and commissions. In
addition, any shares covered by this Prospectus which qualify for sale pursuant
to Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus.
The Company intends to advise the Selling Shareholders that during such
time as they may be engaged in a distribution of securities included herein they
are required to comply with Regulation M under the Exchange Act (as described in
more detail below) and, in connection therewith, that they may not engage in any
stabilization activity, except as permitted under the Exchange Act, are required
to furnish each broker-dealer through which Common Stock included herein may be
offered copies of this Prospectus, and may not bid for or purchase any
securities of the company or attempt to induce any person to purchase any
securities except as permitted under the Exchange Act.
Regulation M under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Regulation M also governs bids and purchases
made in order to stabilize the price of a security in connection with a
distribution of the security.
-18-
TRANSFER AGENT
The transfer agent for the Company's Common Stock is the Continental
Stock Transfer & Trust Company, 2 Broadway, New York, NY 10004.
LEGAL MATTERS
Certain legal matters relating to the Common Stock offered hereby has
been passed upon for the Company by Gadsby & Hannah LLP, 225 Franklin Street,
Boston, Massachusetts 02110.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1995
and December 31, 1996, and the related consolidated statements of operations,
cash flows and stockholders' equity and financial statement schedule for each of
the three years in the period ended December 31, 1996, included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996, which is
incorporated by reference in this Prospectus, has been incorporated herein in
reliance on the report, which report contains an explanatory paragraph relating
to the Company's ability to continue as a going concern, of Rothstein, Kass &
Company, P.C., independent accountants, on the authority of that firm as experts
in accounting and auditing.
INFORMATION INCORPORATED BY REFERENCE
This Prospectus constitutes a part of a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"), covering the Common
Stock included in this Prospectus. This Prospectus does not contain all of the
information constituting the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement,
copies of which may be obtained at prescribed rates upon request to the
Commission. Statements contained herein concerning the provisions of any
document are not necessarily complete, and in each instance reference is made to
the copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
The following documents filed by the Company with the Commission are
hereby incorporated by reference in this Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, filed on March 31, 1997, as amended by Form
10-K/A filed May 9, 1997;
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<PAGE>
(2) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1997, filed on May 14, 1997;
(3) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1997, filed on August 14, 1997;
(4) The Company's Current Report on Form 8-K filed January 23, 1997;
(5) The Company's Current Report on Form 8-K/A filed March 14, 1997,
amending the Company's Current Report on Form 8-K dated April 27,
1996;
(6) The Company's Proxy Statement filed April 30, 1997 in connection
with the Company's Annual Meeting of Stockholders held on May 23,
1997;
(7) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed December 20,
1994 and April 19, 1995.
All reports and other documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of this offering shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such reports and documents.
Any statement incorporated herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statements so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, upon written or oral
request of such person, a copy of any or all of the foregoing documents
incorporated herein by reference (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into such documents).
Requests for such documents should be made in writing to the Company at the
Company's principal executive offices at 100 Great Meadow Road, Wethersfield,
Connecticut 06109, Attention: Secretary, or by telephone at (860) 258-2400.
RECENT DEVELOPMENTS
No material changes in the Company's affairs have occurred since the
end of the Company's fiscal year ended December 31, 1996, which have not been
described in a report on an Annual Report on Form 10-K, a Quarterly Report on
Form 10-Q or Current Report on Form 8-K filed by the Company under the Exchange
Act.
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<PAGE>
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the following provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
Delaware General Corporation Law, Section 102(b)(7), enables a
corporation in its original certificate of incorporation or an amendment thereto
validly approved by stockholders to eliminate or limit personal liability of
members of its Board of Directors for violations of a director's fiduciary duty
of care. However, the elimination or limitation shall not apply where there has
been a breach of the duty of loyalty, failure to act in good faith, engaging in
intentional misconduct or knowingly violating a law, paying a dividend or
approving a stock repurchase which is deemed illegal or obtaining an improper
personal benefit. Article EIGHTH of the Company's Restated Certificate of
Incorporation includes the following language:
A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director for any act or omission; provided,
however, that the foregoing shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct for a knowing
violation of law, (iii) under Section 174 of the [Delaware General
Corporation Law ("GCL")], or (iv) for any transaction from which the
Director derived an improper personal benefit. If the GCL is hereafter
amended to permit further elimination or limitation of the personal
liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent
permitted by the GCL as so amended. Any repeal or modification of this
Article EIGHT by the stockholders of the Corporation or otherwise shall
not apply to or have any effect on the liability or alleged liability
of any director of the Corporation for or with respect to any acts or
omission of such director occurring prior to such amendment or repeal.
Delaware General Corporation Law, Section 145, permits a corporation
organized under Delaware law to indemnify directors and officers with respect to
any matter in which the director or officer acted in good faith and in a manner
he reasonably believed to be not opposed to the best interests of the Company,
and, with respect to any criminal action, had reasonable cause to believe his
conduct was lawful. Article NINTH of the Company's Restated Certificate of
Incorporation includes the following language:
(a) The Corporation shall, to the fullest extent
permitted by Section 145 of the GCL, indemnify any person [who] was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right if the
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<PAGE>
Corporation) against any and all of the expenses (including attorney's fees),
judgment, fines and amounts paid in settlement actually or reasonably incurred
by such person by reason of having been an officer, director, employee or agent
at the request of the Corporation, any subsidiary of the Corporation or of any
other corporation, partnership, joint venture, trust or other enterprise for
which any and all persons who acted as officer, director, employee or agent at
the request of the Corporation, if such person acted in good faith and in a
manner he reasonably believed to be in [or] not opposed to the best interests of
the Corporation, and, with respect to any criminal was unlawful. The termination
of any action, suit or proceeding by judgment, order settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceedings, had
reasonably cause to believe that his conduct was unlawful.
(b) The Corporation may indemnify any person who was
or is a party of is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he 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 or another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee
or agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsection (a) and (b)
of this section, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsection (a) and (b)
of this section (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
subsection (a) and (b) of this section. Such determination shall be made (1) by
the Board by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or even if
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obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by
an officer or director in defending any civil, criminal administrative or
investigative action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director, or officer to repay such
amount if it shall ultimately be determined that such person is not entitled to
be indemnified by the Corporation as authorized in the section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the Board deems appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in such person's official capacity and as to action in another
capacity while holding such office.
(g) The Corporation shall have the power to purchase
and maintain insurance on behalf of any person who 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 against any
liability asserted against and incurred by such person in any such capacity, or
arising out of such person's status as such, whether or not the Corporation
would have the power to indemnify a person against such liability under this
section.
(h) The indemnification and advancement of expenses
provided by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executor and administrator of such a person.
(i) If a claim for indemnification pursuant to this
section is not paid in full by the Corporation within thirty (30) days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expenses of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the applicable standard of conduct
set forth in the GCL for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the corporation (including its Board,
independent legal counsel or stockholders) to have made a determination prior to
the commencement of such action that indemnification of the claimant is proper
in the circumstances because he or she
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has met the applicable standard of conduct set forth in the GCL, nor an actual
determination by the Corporation (including its Board, independent legal counsel
or stockholders) that the claimant has not met such applicable standard of
conduct.
The Company maintains a directors, officers and corporate liability
insurance policy in the amount of Ten Million Dollars ($10,000,000).
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