<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON May 29,1998
REGISTRATION NO. __________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
SHARED TECHNOLOGIES CELLULAR, INC.
----------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
--------
(State or Other Jurisdiction of Incorporation or Organization)
06-1386411
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(IRS Employer Identification Number)
100 GREAT MEADOW ROAD, WETHERSFIELD, CT 06109
(860) 258-2500
--------------
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
ANTHONY D. AUTORINO
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
SHARED TECHNOLOGIES CELLULAR, INC.
100 GREAT MEADOW ROAD
WETHERSFIELD, CT 06109
(860) 258-2500
--------------
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
THE COMMISSION IS REQUESTED TO SEND COPIES OF ALL COMMUNICATIONS TO:
MARIANNE GILLERAN, ESQ.
MICHAEL J. CASHTON, ESQ.
GADSBY & HANNAH LLP
225 FRANKLIN STREET
BOSTON, MA 02110
(617) 345-7000
--------------
<PAGE> 2
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------------- --------------------- ---------------------- --------------------- ---------------------
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED(1)(2) SHARE (3) PRICE REGISTRATION FEE
- ----------------------- --------------------- ---------------------- --------------------- ---------------------
- ----------------------- --------------------- ---------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
COMMON STOCK, PAR
VALUE $0.01 PER SHARE 800,000 $6.25 $5,000,000 $1,475
("COMMON STOCK")
- ----------------------- --------------------- ---------------------- --------------------- ---------------------
</TABLE>
(1) PURSUANT TO RULE 416, THIS REGISTRATION STATEMENT ALSO COVERS SUCH
ADDITIONAL SECURITIES AS MAY BECOME ISSUABLE PURSUANT TO STOCK SPLITS OR
SIMILAR TRANSACTIONS.
(2) REPRESENTS 800,000 SHARES OF COMMON STOCK WHICH MAY BE ISSUED BY THE
REGISTRANT TO CERTAIN SHAREHOLDERS UPON THE EXERCISE BY SUCH SHAREHOLDERS
OF CERTAIN WARRANTS HELD BY SUCH SHAREHOLDERS.
(3) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE
PURSUANT TO RULE 457(C), BASED ON THE AVERAGE OF THE HIGH AND LOW PRICES OF
THE COMMON STOCK, $6.50 AND $6.00, RESPECTIVELY, AS REPORTED BY THE NASDAQ
SMALLCAP MARKET ON May 27, 1998.
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<PAGE> 3
SUBJECT TO COMPLETION, DATED MAY 29, 1998. INFORMATION CONTAINED
HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING
TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE
TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 4
PROSPECTUS
SHARED TECHNOLOGIES CELLULAR, INC.
800,000 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 800,000 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:
up to 800,000 shares of Common Stock ("Warrant Shares") which may be issued by
the Company to the 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 registered representatives of the Selling Shareholders 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 such 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 __________, 1998, the closing price for the Common
Stock as reported on Nasdaq was $____ 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........... $____ -0- $___________
Total(3)............................ $____ -0- $___________
</TABLE>
(1) Estimated prices solely for the purpose of this Prospectus based on the high
and low prices for the Common Stock of $_____ and $_____, respectively, as
reported on Nasdaq on ___________, 1998.
(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 $5,000.
See "Use of Proceeds."
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The date of this Prospectus is __________, 1998
<PAGE> 5
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page Page
<S> <C> <C> <C>
The Company.................................... 1 Legal Matters..................................... 9
Risk Factors................................... 1 Experts........................................... 9
Use of Proceeds................................ 5 Information Incorporated by Reference............. 9
Selling Shareholders........................... 5 Recent Developments............................... 10
Plan of Distribution........................... 8 Indemnification................................... 10
Transfer Agent................................. 9
</TABLE>
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.
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<PAGE> 6
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 and prepaid services through most of the United States, and
cellular activation services in over 690 Cellular Geographical Service Areas. As
a reseller or agent for cellular and PCS carriers, the Company can offer
cellular service to approximately 94% of the U.S. 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 a variety of retail and commercial outlets, 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
57% of the Company's revenues during 1995, 1996 and 1997, respectively. In some
cases, these agreements may be terminated on
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<PAGE> 7
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 1997,
this relationship accounted for 6% and 26% of the Company's revenues,
respectively. Most recently, the Company expanded its debit operations to other
national distribution channels.
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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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 and
a recent debt financing. 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 not be subject to continuous fluctuations
in the future. The Common 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
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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 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.
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) 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
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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 $5,000
for filing, legal, 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 800,000 shares of
Common Stock ("Warrant Shares") which may be issued by the Company to the
Selling Shareholders upon the exercise by such shareholders of certain Common
Stock Purchase Warrants ("Company Warrants") held by such shareholders.
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
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expense of the Company. The Company will not pay for the fees and expenses of
the Selling Shareholders, the attorneys for the Selling Shareholders 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 may, from time to time, issue the Warrant Shares to the
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 the Selling Shareholders by the Company at various times in private
transactions from April, 1996 to April, 1998 and expire at various times between
April, 1999 and April, 2003. No assurance can be given that the Selling
Shareholders will exercise the Company Warrants, and the Company cannot predict
when, and to what extent the Selling Shareholders will exercise the Company
Warrants, if at all. The Warrant Shares, when purchased from the Company, may be
sold publicly hereunder.
Additional information concerning the Selling Shareholders 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 the Selling Shareholders and the amount of Common Stock
that will be owned by the Selling Shareholders 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 Shareholders Ownership of of Common Stock Ownership of Common Stock
-------------------- Common Stock to be Offered Common Stock Beneficially
Prior to Offering ------------- After Offering Owned After
----------------- -------------- Offering
--------
<S> <C> <C> <C> <C>
1. Summit Assurance, 604,000 (1a) 400,000 (1b) 204,000 (1c) 2.4%
Inc. ("Summit")
2. Salomon Brothers 200,000 (2a) 200,000 (2b) 0 --
Holding Company, Inc.
3. Anthony D. Autorino 1,000,763 (3a) 100,000 (3b) 900,763 (3c) 9.9%
4. Beatrice Wittouck Lunt 50,000 (4a) 50,000 (4b) 0 --
5. International Capital 731,667 (5a) 50,000 (5b) 681,667 (5c) 7.7%
Partners, Inc.
</TABLE>
- ----------------
(1a) Includes 400,000 Warrant Shares, 200,000 shares of Common Stock and
4,000 shares of Common Stock issuable upon exercise of various stock
options granted to Craig A. Marlar, a former director of the Company.
Mr. Marlar is the sole stockholder and director of Summit.
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(1b) Includes 400,000 Warrant Shares.
(1c) Includes 200,000 shares of Common Stock and 4,000 shares of Common
Stock issuable upon exercise of various stock options.
(2a) Includes 200,000 Warrant Shares.
(2b) Includes 200,000 Warrant Shares.
(3a) Mr. Autorino is Chairman and Chief Executive Officer of the Company.
Includes 100,000 Warrant Shares, 72,764 shares of Common Stock, 158,333
shares of Common Stock issuable upon exercise of stock options, 540,000
shares of Common Stock which underly warrants to purchase such number
of shares from Shared Technologies Fairchild Inc. ("STFI"), and 129,666
shares of Common Stock held by the Estate of Mr. Autorino's late spouse
(including shares underlying convertible securities), of which Mr.
Autorino disclaims beneficial ownership.
(3b) Includes 100,000 Warrant Shares.
(3c) Includes 72,764 shares of Common Stock, 158,333 shares of Common Stock
currently issuable upon exercise of stock options, 540,000 shares of
Common Stock which underly warrants to purchase such number of shares
from STFI, and 129,666 shares of Common Stock held by the Estate of Mr.
Autorino's late spouse (including shares underlying convertible
securities), of which Mr. Autorino disclaims beneficial ownership.
(4a) Includes 50,000 Warrant Shares.
(4b) Includes 50,000 Warrant Shares.
(5a) Includes 50,000 Warrant Shares, 66,667 shares of Common Stock, 10,000
shares of Common Stock currently issuable upon exercise of stock
options, 540,000 shares of Common Stock issuable upon exercise of
additional warrants to purchase shares of Common Stock from the
Company, and 65,000 shares of Common Stock which underly warrants to
purchase such number of shares from STFI.
(5b) Includes 50,000 Warrant Shares.
(5c) Includes 66,667 shares of Common Stock, 10,000 shares of Common Stock
issuable upon exercise of stock options, 540,000 shares of Common Stock
issuable upon exercise of additional warrants to purchase shares of
Common Stock from the Company, and 65,000 shares of Common Stock which
underly warrants to purchase such number of shares from STFI.
The Selling Shareholders are not restricted as to the price or prices
at which the Selling Shareholders may sell the securities offered hereunder.
Sales of the securities offered hereunder at less than the market price may
depress the market price of the Company's Common Stock. 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.
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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 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 the Selling
Shareholders 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 $3,700,000 from the exercise of the Company Warrants by the
Selling Shareholders, of which no assurance can be given. The Company cannot
predict when and to what extent the Selling Shareholders will exercise the
Company Warrants, if at all. The Company intends to apply the proceeds of any
exercise of the Company Warrants to the Company's general corporate and working
capital requirements. The Company expects to incur expenses in connection with
this offering in the amount of approximately $5,000 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 the
Selling Shareholders are required to comply with Regulation M under the Exchange
Act (as described in more detail below) and, in connection therewith, that the
Selling Shareholders may not engage in any stabilization activity, except as
permitted under the Exchange Act, is 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.
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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.
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, 1996
and December 31, 1997, 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, 1997, included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1997, which is
incorporated by reference in this Prospectus, has been incorporated herein in
reliance on the report 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:
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(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, filed on March 31, 1998;
(2) The Company's Proxy Statement filed April 29, 1998 in connection
with the Company's Annual Meeting of Stockholders held on May 22,
1998;
(3) 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; and
(4) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the
annual report referred to in (1) above.
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, 1997, 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.
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
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<PAGE> 16
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 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
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<PAGE> 17
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 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
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<PAGE> 18
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 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 Five Million Dollars ($5,000,000).
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<PAGE> 19
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses payable in
connection with the sale and distribution of the securities being registered,
other than underwriting discounts and commissions. All of the amounts shown are
estimates, except for the SEC registration fee. The Company does not expect its
expenses in connection with this offering to exceed $5,000.
SEC registration fee.............................$ 1,475.00
Accounting fees and expenses.....................$ 300.00
Legal fees and expenses..........................$ 3,000.00
Miscellaneous....................................$ 225.00
------------
Total...................................$ 5,000.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
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
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<PAGE> 20
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 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
II-2
<PAGE> 21
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 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
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<PAGE> 22
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 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 Five Million Dollars ($5,000,000).
ITEM 16. EXHIBITS
4.1 Restated Certificate of Incorporation of the Company (filed as
Exhibit 3.1 to the Company's Registration Statement on Form
SB-2 dated December 8, 1994 and hereby incorporated by
reference).
4.2 Certificates of Amendment of the Restated Certificate of
Incorporation of the Company dated January 5, 1995, March 23,
1995, and September 17, 1996 (filed as Exhibit 4.2 to the
Company's Registration Statement on Form S-3 filed October 28,
1997 and hereby incorporated by reference).
4.3 Restated Bylaws of the Company (filed as Exhibit 3(ii) to the
Company's Quarterly Report on Form 10-Q dated May 15, 1998 and
hereby incorporated by reference).
5 Opinion of Gadsby & Hannah LLP
23.1 Consent of Rothstein, Kass & Company, P.C.
23.2 Consent of Gadsby & Hannah LLP (included in Opinion filed as
Exhibit 5).
24 Power of Attorney
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<PAGE> 23
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) to include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a
II-5
<PAGE> 24
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
II-6
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wethersfield, State of Connecticut, on May 29,1998.
SHARED TECHNOLOGIES CELLULAR, INC.
By /s/ Anthony D. Autorino
------------------------------
Anthony D. Autorino,
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Anthony D. Autorino Chairman, Chief Executive May 29,1998
- ------------------------------------ Officer and Director
Anthony D. Autorino (Principal Executive Officer)
/s/ Thomas H. Decker Director May 29,1998
- ------------------------------------
Thomas H. Decker
/s/ William A. DiBella Director May 29,1998
- ------------------------------------
William A. DiBella
/s/ Vincent DiVincenzo Senior Vice President,
- ------------------------------------ Chief Financial Officer,
Vincent DiVincenzo Treasurer and Director
(Principal Financial and
Accounting Officer) May 29,1998
/s/ Ajit G. Hutheesing Director May 29,1998
- ------------------------------------
Ajit G. Hutheesing
/s/ Nicholas E. Sinacori Director May 29,1998
- ------------------------------------
Nicholas E. Sinacori
</TABLE>
II-7
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Shared Technologies Cellular, Inc. on Form S-3 of our report dated March 10,
1998, except for Notes 3 and 20 as to which the date is March 31, 1998, on our
audits of the consolidated financial statements and financial statement
schedule of Shared Technologies Cellular, Inc. as of December 31, 1997 and 1996
and for the years ended December 31, 1997, 1996 and 1995, which report is
included in the Annual Report on Form 10-K of Shared Technologies Cellular,
Inc. We also consent to the reference to our firm under the caption "Experts".
/s/ ROTHSTEIN, KASS & COMPANY, P.C.
------------------------------------
ROTHSTEIN, KASS & COMPANY, P.C.
Roseland, New Jersey
May 29, 1998
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Anthony D. Autorino and Vincent
DiVincenzo, individually, his attorneys-in-fact, with the power of substitution,
for him in any and all capacities, to sign any and all amendments to this
Registration Statement (including post-effective amendments), and to file the
same, with exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their respective substitutes, may do or cause to be
done by virtue hereof.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Anthony D. Autorino Chairman, Chief Executive
- ------------------------------------ Officer and Director
Anthony D. Autorino (Principal Executive Officer) May 29,1998
/s/ Thomas H. Decker Director May 29,1998
- ------------------------------------
Thomas H. Decker
/s/ William A. DiBella Director May 29,1998
- ------------------------------------
William A. DiBella
/s/ Vincent DiVincenzo Senior Vice President,
- ------------------------------------ Chief Financial Officer,
Vincent DiVincenzo Treasurer and Director
(Principal Financial and
Accounting Officer) May 29,1998
/s/ Ajit G. Hutheesing Director May 29,1998
- ------------------------------------
Ajit G. Hutheesing
/s/ Nicholas E. Sinacori Director May 29,1998
- ------------------------------------
Nicholas E. Sinacori
</TABLE>
