AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1999
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------
TEL-SAVE.COM, INC.
FORMERLY, TEL-SAVE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 23-28277736
(State or other jurisdiction (I.R.S. Employee
of incorporation or organization) Identification Number)
6805 ROUTE 202
NEW HOPE, PENNSYLVANIA. 18938
(215) 862-1500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
TEL-SAVE. COM, INC. 1998 LONG-TERM INCENTIVE PLAN;
OPTION AGREEMENTS GRANTED TO EMPLOYEES AND DIRECTORS
(Full Title of Plans)
ALOYSIUS T. LAWN, IV
GENERAL COUNSEL AND SECRETARY
TEL-SAVE.COM, INC.
6805 ROUTE 202 NEW HOPE, PA 18938
(215) 862-1500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
PROPOSED PROPOSED
TITLE OF EACH CLASS OF MAXIMUM MAXIMUM
SECURITIES TO BE OFFERING PRICE PER AGGREGATE
REGISTERED AMOUNT TO BE SHARE(2) OFFERING AMOUNT OF
REGISTERED(1) PRICE(2) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.01 par value per
share 7,660,000 $9.18 $70,318,800 $19,548.63
==========================================================================================================
</TABLE>
(1) Pursuant to Rule 416 promulgated under the Securities Act of 1933, as
amended (the "Act"), this registration statement covers an indeterminate
number of securities to be offered as a result of any adjustment from stock
splits, stock dividends or similar events.
(2) Calculated pursuant to Rule 457 under the Securities Act of 1933 for the
shares of Common Stock currently being registered hereunder. Filing fees
with respect to 1,245,900, 2,750,000 and 4,986,000 shares of Common Stock
of $517.86, $8,643.58 and $18,439.31, respectively, to which this
registration statement also relates pursuant to Rule 429 under the Act have
been previously paid.
PURSUANT TO RULE 429 UNDER THE ACT, THIS REGISTRATION STATEMENT ALSO SERVES AS
POST-EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRANT'S REGISTRATION STATEMENTS ON
FORM S-8 (FILE NOS. 333-04479 AND 333-05923) AND INCLUDES AS PART OF THE REOFFER
PROSPECTUS FILED HEREWITH COVERING 1,893,553 SHARES OF COMMON STOCK ISSUED ON
THE EXERCISE OF STOCK OPTIONS GRANTED UNDER THE REGISTRANT'S 1995 EMPLOYEE STOCK
OPTION PLAN OR OTHER COMPENSATORY ARRANGEMENTS.
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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE>
PART I
INFORMATION REQUIRED IN PROSPECTUS
A reoffer prospectus prepared in accordance with the requirements
of Part I of Form S-3 is being filed with the Securities and Exchange Commission
("Commission") as part of this registration statement. The Section 10(a)
prospectus is omitted from this registration statement in accordance with Rule
428 under the Securities Act of 1933, as amended, and the Note to Part I of Form
S-8.
I-1
<PAGE>
PROSPECTUS
TEL-SAVE.COM, INC.
FORMERLY TEL-SAVE HOLDINGS, INC.
5,323,563 SHARES OF COMMON STOCK
The persons listed in this Prospectus under "Selling Stockholders" may
offer and sell from time to time an aggregate of up to 5,323,563 shares of
common stock that they have acquired or may acquire upon exercise of stock
options granted by us under stock option plans or other compensatory
arrangements.
The Selling Stockholders may offer their shares through public or
private transactions, on or off the Nasdaq National Market, at prevailing market
prices or at privately negotiated prices. We will not receive any of the
proceeds from the sale of shares by the Selling Stockholders.
Our common stock is quoted on the Nasdaq National Market and traded
under the symbol "TALK."
Our principal executive offices are located at 6805 Route 202, New
Hope, Pennsylvania 18938, and our telephone number is (215) 862-1500.
------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN
MATERIAL FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH AN INVESTMENT IN
OUR COMMON STOCK.
------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is January 22, 1999
<PAGE>
================================================================================
TABLE OF CONTENTS
PAGE
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Risk Factors...................................................................3
Use Of Proceeds...............................................................10
Selling Stockholders..........................................................10
Plan Of Distribution..........................................................11
Legal Matters.................................................................12
Experts.......................................................................12
Where You Can Find More Information...........................................12
------------------
================================================================================
THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE CERTAIN FORWARD
LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 WITH RESPECT TO OUR BUSINESS, FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, INCLUDING, WITHOUT LIMITATION, STATEMENTS UNDER THE CAPTIONS
"BUSINESS" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" IN OUR ANNUAL AND QUARTERLY REPORTS. THESE FORWARD
LOOKING STATEMENTS REFLECT OUR PLANS, EXPECTATIONS AND BELIEFS AND, ACCORDINGLY,
ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT
ANY OF SUCH FORWARD LOOKING STATEMENTS WILL BE REALIZED. FACTORS THAT MAY CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD
LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FACTORS DISCUSSED IN THE SECTION
OF THIS PROSPECTUS ENTITLED "RISK FACTORS."
2
<PAGE>
RISK FACTORS
You should consider carefully the following factors and other
information in this prospectus and in our current and future reports before
deciding to invest in the shares of our common stock offered in this prospectus.
DEPENDENCY ON AOL AGREEMENT AND ELECTRONIC COMMERCE
At the beginning of 1997, we launched a major initiative for marketing
and selling our telecommunication services online. At that time, we entered into
an innovative telecommunications marketing agreement with America Online, Inc.
("AOL"). With the continued focus of our business on the sale and support of our
telecommunications services online and through e-commerce channels, we believe
that our business is currently dependent to a material extent upon our
agreements and relationship with AOL.
In January 1999, we completed substantial amendments to our agreement
and relationship with AOL, including an extension of the term of our AOL
marketing period and a restructuring of our marketing fee payments to AOL. From
and after June 2000, AOL has the right to market on a non-exclusive basis the
telecommunications services previously marketed on an exclusive basis in
exchange for the elimination of the fixed quarterly payments that would
otherwise continue to be payable by us. We cannot currently predict what impact
the elimination of our exclusivity period would have on our AOL business or
whether the minimum exclusivity period is of sufficient length to give us an
enduring competitive advantage in maintaining our AOL customer base. We believe
that the success or failure of our telecommunications agreement with AOL and
similar online initiatives will have a material effect on our business,
financial condition and results of operations. There can be no assurance that
our arrangement with AOL will be profitable for the Company on a quarter to
quarter basis or that our current experience with our AOL Long Distance business
is a fair indication of future results under the AOL Agreement or generally in
our e-commerce business.
Although we have expended substantial sums on marketing our AOL service
offerings, and under the new agreement will continue to expend substantial sums
related to marketing, there can be no assurance that these expenditures will
prove adequate to attract substantial additional customers to our service, or
that any such subscribers will remain our customers for a period of time
sufficient to recoup the costs of such marketing expenditures. See
"--Maintenance of End User Base."
The success of our online telecommunications sales and marketing
business depends in part on our ability quickly to establish telephone service
following an AOL subscriber's order. The provisioning of new customers has been
adversely affected by "PIC freezes" established by local telephone companies.
These "PIC freezes," though perhaps designed to avoid unauthorized transfers of
telephone service, have the effect, we believe, of interfering with a customer's
choice to switch service to a better priced product, such as our AOL Long
Distance service, by requiring the customer to contact his or her local phone
company directly to change long distance carriers. This requirement
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deprives new customers of the ability to take full advantage of our online
provisioning service, where a customer can sign-up and authorize a change to AOL
Long Distance entirely online through our innovative online customer care and
billing systems. The Federal Communications Commission is currently engaged in
rule-making proceedings that could modify the rules governing the offering,
implementation and lifting of PIC freezes. There can be no assurance, however,
that any such rules that are finally adopted will effectively limit the harmful
effects of PIC freezes that impede authorized transfers of service.
The success of our online initiatives depends on our ability to develop
and maintain complex systems to support our online subscription and billing
services. We have developed, and will seek to continue to develop and to
improve, our systems for customer care and billing services, including online
sign-up, call detail and billing reports and credit card payment in connection
with the AOL Agreement and other online initiatives. We will be required to
find, employ and retain skilled programmers to develop and maintain these
complex systems. Unanticipated delays or difficulties in developing these
systems or in hiring personnel could materially adversely affect our online
business, including our AOL telecommunications business.
DEPENDENCE ON AT&T
We have recently entered into long term agreements with AT&T, which,
among other things, significantly lower the overall costs of the services we
acquire from AT&T. There can be no assurances, however, that we would be able to
negotiate further amendments in the future to our agreements with AT&T should it
become necessary to maintain the profitability of our business. Circumstances
also may arise that could give rise to the termination of any of our agreements
with AT&T or otherwise result in the loss of our ability to obtain services from
AT&T. Any termination of our contracts with AT&T, the loss or reduction of
telecommunication services from AT&T, or the inability to negotiate cost
reductions with AT&T to meet competitive prices, could have a material adverse
effect on our financial condition and results of operations.
RECENT RAPID GROWTH
Since the inception of our business in 1989, as a reseller of AT&T
telecommunications services, we have grown dramatically in terms of revenues and
number of employees and have expanded rapidly the nature and scope of our
business. Although we have experienced significant growth in a relatively short
period of time and regularly consider growth opportunities through acquisitions,
joint ventures and partnerships as well as other business expansion
opportunities, there can be no assurance that the growth we have experienced
will continue or we will be able to achieve the growth contemplated by our
business strategy.
Continued growth of our current business will continue to place
significant demands on our management (many of whom, including the new
President, Chief Executive Officer, and Chairman of the Board of Directors, have
recently joined the
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<PAGE>
Company), operational, financial and other resources and will require us to
enhance further our operations, management, financial and information systems
and controls and to expand, train and manage our employee base in certain areas
including customer service support and financial, marketing and administrative
resources. Success in this regard depends, among other things, on our ability to
fund or finance significant investments of resources and to manage, attract and
retain qualified personnel, competition for whom is intense. Our strategy also
has resulted in significantly increased financial management requirements.
COMPETITION
The long distance telecommunications industry is highly competitive and
affected by the introduction of new services by, and the market activities of,
major industry participants. Changes in the regulation of the telecommunications
industry may affect our competitive position, as may consolidation and alliances
across geographic regions and across industry segments. Competition in the long
distance business is based upon pricing, customer service, billing services and
perceived quality. We compete against numerous long distance carriers that offer
essentially the same services as we do. Several of our competitors are
substantially larger and have greater financial, technical and marketing
resources than we do.
Although we believe that we have the human and technical resources to
pursue our strategy and compete effectively in this competitive environment, our
success will depend upon our continued ability to provide high quality, high
value services at prices generally competitive with, or lower than, those
charged by our competitors. While OBN makes us more price competitive,
reductions in long distance prices charged by competitors still may have a
material adverse impact on our profitability. We also from time to time consider
providing telecommunications services we have not previously provided, which new
services, if offered, would face the same competitive pressures that affect our
existing services.
MAINTENANCE OF END USER BASE
End users are not obligated to purchase any minimum usage amount and
can discontinue service, without penalty, at any time. There can be no assurance
that end users will continue to buy their long distance telephone service
through us or through "partitions," independent carriers and marketing companies
that purchase services from us. If a significant portion of our end users were
to decide to purchase long distance service from other long distance service
providers, there can be no assurance that we would be able to replace them.
5
<PAGE>
A high level of customer attrition is inherent in the long distance
industry, and our financial results are affected by such attrition. Attrition is
attributable to a variety of factors, including the initiatives of existing and
new competitors as they engage in, among other things, national advertising
campaigns, telemarketing programs and cash payments and other forms of
incentives, as well as our termination of customers for non-payment.
DIRECT MARKETING RISKS
Both federal and state officials are tightening and increasing
enforcement of the rules governing the direct marketing, including the
telemarketing of telecommunications services and the requirements imposed on
carriers seeking to acquire customers in that manner. Customer complaints of
unauthorized conversion or "slamming" are widespread in the long distance
industry and are beginning to occur with respect to newly competitive local
services. The Company has discontinued its internal telemarketing operations
which may reduce our exposure to customer complaints and federal, state or local
enforcement actions with respect to such direct telemarketing practices.
However, certain government officials have made inquiries with respect to the
marketing of our services and there remains a risk that we could be held
accountable under applicable federal and state laws for the direct marketing
activities of third parties carried out for our benefit. There also is the risk
of enforcement actions by virtue of our prior telemarketing and other marketing
efforts, our ongoing support of our customer/partitions and telemarketing and
other marketing done in connection with our online marketing agreements.
RELIANCE ON INDEPENDENT CARRIER AND MARKETING COMPANIES; LACK OF CONTROL OVER
MARKETING ACTIVITIES
Historically, we have marketed a significant portion of our services
through partitions, which generally have entered into non-exclusive agreements
with us. Most partitions to date have made no minimum use or revenue commitments
to us under these agreements. If we were to lose access to services on the AT&T
network or billing services or experience difficulties with OBN, our agreements
with partitions could be adversely affected.
Provisions in our agreements with the partitions mandate that they
comply with state and federal statutes and regulations, including those
regulating telemarketing. See "--Government Regulation" and "--Direct Marketing
Risks." Because our partitions are independent carriers and marketing companies,
however, we are unable to control their activities. We are also unable to
predict the extent of their compliance with applicable regulations or the effect
of increased regulatory review. Increased regulatory review could also affect
possible future acquisitions of new business from new partitions or other
resellers.
GOVERNMENT REGULATION
The Federal Communications Commission (the "FCC") and various state
public service and public utility commissions regulate us as a non-dominant
provider of long distance services. There can be no assurance that the FCC,
state regulators or other
6
<PAGE>
government entities will not take action having an adverse effect on our
business, financial condition or results of operations. FCC or state regulatory
or enforcement action also could affect the partitions adversely. We also are
subject to applicable regulatory standards for marketing activities, and the
increased FCC and state attention to certain marketing practices could be
significant to us. See "--Direct Marketing Risks."
ADVERSE EFFECT OF RAPID CHANGE IN TECHNOLOGY AND SERVICE
The telecommunications industry has been characterized by rapid
technological change, frequent new service introductions and evolving industry
standards. We believe that our future success will depend on our ability to
anticipate such changes and to offer on a timely basis services that meet or
compete with these evolving standards. There can be no assurance that we will
have sufficient resources to make necessary investments or to introduce new
services that would satisfy an expanded range of partition and end user needs.
RISKS RELATED TO OBN
In 1997, we deployed our own nationwide telecommunications network, One
Better Net, or OBN. At December 31, 1998, we provided services over OBN to
approximately 80% of the lines using our services. Operation as a switch-based
provider subjects us to risk of significant interruption in the provision of
services on OBN in the event of damage to our facilities (switching equipment or
connections to transmission facilities) such as fire or natural disaster could
cause. To the extent that we, rather than AT&T or another carrier, are
principally responsible for providing end users with telecommunications
services, interruption or failure to provide such services may subject us to
claims from end users who suffer damages as a result of such interruption or
failure. Thus, interruptions or other difficulties in operating OBN could have a
material adverse effect on our financial condition and results of operations.
ABSENCE OF DIVIDENDS
We have not paid cash dividends since inception and do not anticipate
paying any cash dividends in the foreseeable future.
ANTI-TAKEOVER CONSIDERATIONS
We have an authorized class of 5,000,000 shares of preferred stock that
may be issued by our board of directors on such terms and with such rights,
preferences and designations as our board may determine. Issuance of such
preferred stock, depending upon its rights, preferences and designations, may
have the effect of delaying, deterring or preventing a change in control. A
change of control also may be delayed or prevented by provisions of the Delaware
General Corporation Law and our bylaws, as well as our charter, which divides
our board of directors into three classes, each of which is elected for three
year terms. Such anti-takeover effects may deter a third party from acquiring us
7
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or engaging in a similar transaction affecting control in which our stockholders
might receive a premium for their shares over the then-current market value.
SHARES ELIGIBLE FOR FUTURE SALE
Future sales of substantial amounts of our common stock could adversely
affect the market price of our common stock. Although the Company believes that
as of January 11, 1999, each of Mr. Borislow and Mr. Paul Rosenberg beneficially
owned less that 10% of the outstanding common stock of the Company, a decision
by either of Mr. Borislow or Mr. Rosenberg to sell his shares could adversely
affect the market price of the common stock. Each of Mr. Borislow and Mr.
Rosenberg has a registration rights agreement with the Company covering the
shares of common stock owned by him.
As of January 11, 1999 our employees and directors had outstanding
options to purchase 10,230,810 shares of common stock. In addition, as of such
date, there were warrants outstanding to purchase up to 2,721,984 shares of
common stock and 4,596,698 shares reserved for issuance upon the conversion of
our outstanding 4-1/2% Convertible Subordinated Notes due 2002 and our 5%
Convertible Subordinated Notes due 2004. Holders of warrants also have
registration rights under certain conditions.
Sales of substantial amounts of our common stock in the public market,
or the perception that such sales could occur, may adversely affect the market
price of our common stock.
YEAR 2000 RISKS
The "Year 2000" issue refers to the potential harm from computer
programs that identify dates by the last two digits of the year rather than
using the full four digits. As such, dates after January 1, 2000 could be
misidentified and such programs could fail.
If such a failure occurs to our internal computer-based systems or if
the computer-based systems, on which our business depends, that are operated by
others were to malfunction, we could be unable to continue to provide
telecommunications services, to sign up new customers or to bill existing
customers for services. Such failures, if they occur, would have a material
adverse effect on our business and financial condition. However, because of the
complexity of the issues and the number of parties involved whose actions could
affect us and the fact that many of the issues are outside our control, it is
difficult for us to predict the nature or likelihood of such effects.
We are dependent upon computer systems operated by third parties, such
as local exchange carriers, AT&T, AOL and other vendors. Other parties whose
ability to deal with Year 2000 issues could affect us include our partitions and
the credit card companies through which most of our and AOL's customers are
billed. We are generally not in a
8
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position to require either that these other companies give assurances to the
Company as to their continued provision of services or that such companies take
the necessary actions to assure that they will be ready for the Year 2000.
Accordingly, while none of these other companies on which we depend have told us
that they do not expect to be ready for Year 2000 issues, we do not believe we
can project the likelihood of such parties' abilities to provide uninterrupted
services to us. Given the nature of our relationships with most of these
significant suppliers, it may be impracticable for us to replace them should
they be unable to continue to provide these services. The failure of any of
these companies to provide uninterrupted service to us likely would have a
material adverse effect on our business and results of operations and financial
condition.
9
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USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock offered hereby. We will use the net proceeds, if any, realized from the
exercise the options for working capital and for general corporate purposes, at
the discretion of management.
SELLING STOCKHOLDERS
The following list of Selling Stockholders have received or will receive
their shares of Common Stock upon the exercise of stock options granted under
the Company's stock option plans or other compensatory arrangements. This
prospectus covers the offer and sale by each Selling Stockholder of their common
stock. Set forth below are (i) the names of each Selling Stockholder, (ii) the
nature of their position, office or other material relationship that they have
had within the past three years with the Company or any of its predecessors or
affiliates, (iii) the number of shares of common stock they beneficially owned
as of January 12, 1999, (iv) the number of shares that may be offered and sold
by or on their behalf and (v) the amount of common stock to be owned by them
upon the completion of the offering if all shares are sold.
<TABLE>
<CAPTION>
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SHARES SHARES COVERED SHARES
BENEFICIALLY OWNED BY THIS BENEFICIALLY OWNED
NAME AND POSITION/RELATIONSHIP PRIOR TO OFFERING (1) PROSPECTUS AFTER OFFERING (1)
------------------------------ ---------------------- ----------- --------------------
NUMBER PERCENT NUMBER PERCENT
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<S> <C> <C> <C> <C> <C>
Gabriel Battista
Chairman, Chief Executive Officer and President 682,500 1.2% 1,650,000 32,500 *
- ---------------------------------------------------------------------------------------------------------------------------
Daniel Borislow(2) 5,480,834 9.2% 1,050,000 4,430,834 7.6%
- ---------------------------------------------------------------------------------------------------------------------------
Emanuel J. DeMaio
Chief Operations Officer 978,257 1.7% 898,178 80,079 *
- ---------------------------------------------------------------------------------------------------------------------------
George Farley
Chief Financial Officer 481,385 * 250,000 231,385 *
- ---------------------------------------------------------------------------------------------------------------------------
Harold First
Director 88,205 * 84,004 4,201 *
- ---------------------------------------------------------------------------------------------------------------------------
Gary W. McCulla
President and Director of Sales and Marketing 1,422,455 2.4% 1,293,447 129,008 *
- ---------------------------------------------------------------------------------------------------------------------------
Ronald R. Thoma
Director 102,831 * 97,934 4,897 *
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
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* Less than 1%.
(1) The number of shares of common stock outstanding prior to and after
this offering includes (i) shares of common stock held as of January 12,
1999 and (ii) with respect to each person, the shares of common stock
issuable by the Company pursuant to options held by such persons which may
be exercised within 60 days following January 12, 1999 ("Presently
Exercisable Options") and rights to purchase shares of Common Stock to be
issued to holders of record and holders of shares and options as of
December 31, 1998. Beneficial ownership is determined in accordance with
the rules of the Securities and Exchange Commission that deem shares to be
beneficially owned by any person or group who has or
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shares voting and investment power with respect to such shares. Presently
Exercisable Options are deemed to be outstanding and to be beneficially
owned by the person holding such options for the purpose of computing the
percentage ownership of such person, but are not treated as outstanding
for the purpose of computing the percentage ownership of any other person
or group.
(2) Former Chairman, Chief Executive Officer and Director.
PLAN OF DISTRIBUTION
We are registering shares of our common stock on behalf of the Selling
Stockholders. We will pay for all costs, expenses and fees in connection with
the registration of the shares. The Selling Stockholders will pay for all
selling discounts and commissions, if any. The Selling Stockholders may offer
and sell their shares from time to time in one or more of the following types of
transactions (including block transactions):
o on the Nasdaq National Market,
o in the over-the-counter market,
o in privately negotiated transactions,
o through put or call options transactions relating to the shares, or
o a combination of such methods of sale.
The Selling Stockholders may sell their shares at prevailing market
prices, or at privately negotiated prices. Such transactions may or may not
involve brokers or dealers. The Selling Stockholders have advised us that they
have not entered into any agreements, understanding or arrangements with any
underwriters or broker-dealers regarding the sale of their shares, nor is there
an underwriter or coordinating broker acting in connection with the proposed
sale of shares by the Selling Stockholders.
The Selling Stockholders may offer and sell their shares directly to
purchasers or to or through broker-dealers, which may act as agents or
principals. Such broker-dealers may receive compensation in the form of
discounts, concessions, or commissions from the Selling Stockholders and/or the
purchasers of shares. The Selling Stockholders and any broker-dealers or agents
that participate with the Selling Stockholders in sales of the shares may be
deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act.
The Selling Stockholders may pledge, hypothecate or grant a security
interest in some or all of the shares that they own. In the event of a
foreclosure or event of default in connection with such pledges, the shares may
be transferred to the persons to whom the shares have been pledged. If such a
transfer occurs, the transferees will be deemed to be Selling Stockholders under
this plan of distribution. At the same time, the Selling Stockholders whose
shares were transferred will beneficially own less shares. The plan of
distribution for the shares of the Selling Stockholders will otherwise remain
unchanged.
<PAGE>
Selling Stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such rule.
LEGAL MATTERS
Aloysius T. Lawn, IV, our General Counsel and Secretary, has rendered
an opinion to the effect that the shares of common stock offered by this
prospectus are duly authorized, legally issued, fully paid and non-assessable.
Mr. Lawn owns 153,650 shares of Common Stock, an option covering 50,000
shares of Common Stock, and rights covering 10,183 shares of Common Stock.
EXPERTS
The consolidated financial statements and schedule of the Company and
its subsidiaries incorporated by reference in this prospectus have been audited
by BDO Seidman, LLP, independent certified public accountants, to the extent and
for the periods set forth in their reports incorporated in this prospectus by
reference, and are incorporated in this prospectus in reliance upon such reports
given upon the authority of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's web site at http://www.sec.gov.
The SEC allows us to incorporate by reference the information that we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings (File
No. 0-26728) we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934:
a. our annual report on Form 10-K for the year ended December 31,
1997 and the amendments to our annual report filed with the
SEC on April 17, 1998 and April 30, 1998;
b. our quarterly reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998;
c. our current reports on Form 8-K, dated March 10, 1998, August
27, 1998, September 18, 1998, October 29, 1998 and January
20, 1999; and
12
<PAGE>
d. the description of our capital stock contained in our
registration statement on Form 8-A, dated September 8, 1995.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Aloysius T. Lawn, IV
General Counsel and Secretary
Tel-Save.com, Inc.
6805 Route 202
New Hope, PA 18938
(215) 862-1500
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide information other than that
provided in this prospectus. We have authorized no one to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of this document.
13
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Tel-Save.com, Inc. (the
"Corporation" or the "Registrant") with the Commission are hereby incorporated
herein by reference:
(a) the Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997;
(b) the Corporation's quarterly reports on Form 10-Q for the
quarters ended March 31, 1998, June 30, 1998 and September
30, 1998;
(c) the Corporation's current reports on Form 8-K, dated March
10, 1998, August 27, 1998, September 18, 1998, October 29,
1998 and Form 8-K dated January 20, 1999; and
(d) the description of the Corporation's capital stock contained
in its registration statement on Form 8-A, dated September 8,
1995.
All documents filed by the Corporation after the date of this
Registration Statement pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment which indicates
that all of the Corporation's Common Stock offered hereby has been sold or which
withdraws from registration such Common Stock then remaining unsold, shall be
deemed to be incorporated in this Registration Statement by reference and be a
part hereof from the date of filing such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference in this
Registration Statement shall be deemed to be modified or superseded for purposes
of this Registration Statement 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 in this Registration Statement modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or so superseded, to constitute a part of this
Registration Statement.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Aloysius T. Lawn, IV, General Counsel and Secretary, has rendered an
opinion to the effect that the shares of common stock subject to this
Registration Statement are duly authorized and, as or when issued in accordance
with the terms of the plan and/or the agreements, have been or will be legally
issued, fully paid and non-assessable. Mr. Lawn
II-1
<PAGE>
owns 153,650 shares of common stock, an option covering 50,000 shares of Common
Stock and rights covering 10,183 shares of Common Stock
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law provides, in substance, that
Delaware corporations shall have the power, under specified circumstances, to
indemnify their directors, officers, employees and agents in connection with
actions or suits by or in the right of the corporation, by reason of the fact
that they were or are such directors, officers, employees and agents, against
expenses (including attorneys' fees) and, in the case of actions, suits or
proceedings brought by third parties, against judgment, fines and amounts paid
in settlement actually and reasonably incurred in any such action, suit or
proceeding.
The Company's Bylaws also provide for indemnification to the fullest
extent permitted by the Delaware General Corporation Law. Reference is made to
the Company's Bylaws.
As permitted by the Delaware General Corporation Law, the Company's
Bylaws eliminate the personal liability of its directors to the Company and its
stockholders, in certain circumstances, for monetary damages arising from a
breach of the director's duty of care. Additionally, the Company has entered
into indemnification agreements with some of its directors and officers. These
agreements provide for indemnification to the fullest extent permitted by law
and, in certain respects, may provide greater protection than that specifically
provided for by provide indemnification for, among other things, conduct which
is adjudged to be fraud, deliberate dishonesty or willful misconduct.
The Company has purchased an insurance policy that purports to insure
the officers and directors against certain liabilities incurred by them in the
discharge of their functions as officers and directors.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. EXHIBITS.
The exhibits listed on the Index of Exhibits on page II-_of this
Registration Statement are filed herewith or are incorporated herein by
reference to other filings.
Item 9. 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;
II-2
<PAGE>
(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 registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represents 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 form the low or high and 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 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(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
registration statement is on Form S-3, Form S-8 or Form F-3,
and 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 registrar 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.
(3) To remove from the 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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
(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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8 and has duly caused this pre-effective
amendment to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Solebury,
Commonwealth of Pennsylvania, on this 22nd day of January, 1999.
TEL-SAVE.COM, INC.
By: /s/ Gabriel A. Battista
-----------------------
Gabriel A. Battista
Chairman of the Board of
Directors, Chief Executive
Officer and President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gabriel A. Battista and Aloysius T. Lawn,
IV, and each of them each with full power to act without the other, his true and
lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution, for such person and in his name, place and stead, in any and all
capacities, to sign any or all further amendments or supplements (including
post-effective amendments) to this Form S-8 Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange commission, granting unto each of
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully as to all intent and purposes as he might or could do in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated below:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Gabriel A. Battista Chairman of the Board of January 22, 1999
- ------------------------------- Directors, Chief Executive
Gabriel A. Battista Officer and President (Principal
Executive Officer)
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Gary W. McCulla Director January 22, 1999
- -------------------------------
Gary W. McCulla
/s/ Emanuel J. DeMaio Director January 22, 1999
- -------------------------------
Emanuel J. DeMaio
/s/ George P. Farley Chief Financial Officer January 22, 1999
- ------------------------------- and Director
George P. Farley Principal Financial Officer)
/s/ Kevin R. Kelly Controller (Principal January 22, 1999
- ------------------------------- Accounting Officer)
Kevin R. Kelly
/s/ Harold First Director January 22, 1999
- -------------------------------
Harold First
/s/ Ronald R. Thoma Director January 22, 1999
- -------------------------------
Ronald R. Thoma
</TABLE>
II-6
<PAGE>
INDEX OF EXHIBITS
-----------------
Exhibit 3.1 Amended and Restated Certificate of Incorporation, as amended,
of Tel-Save Holdings, Inc. (Incorporated herein b reference to
Exhibit 4.1 to the Company's registration statement on Form S-4
(File No. 333-38943)).
Exhibit 3.2 Bylaws of Tel-Save Holdings, Inc. (incorporated herein by
reference to Exhibit 3.2 to the Company's registration statement
on Form S-1 (File No. 33-94940).
Exhibit 3.3 Certificate of Ownership and Merger Merging Tel-Save.com, Inc.
into Tel-Save Holdings, Inc. dated as of November 16, 1998.
Filed herewith.
Exhibit 4.1 1998 Long-Term Incentive Plan (incorporated herein by reference
to Exhibit 10.17 to the Company's Report on Form 8-K filed on
January 20, 1999).
Exhibit 5.1 Opinion of Aloysius T. Lawn, IV, General Counsel and Secretary
of Tel-Save com, Inc. with respect to the validity of the Common
Stock being registered. Filed herewith.
Exhibit 23.1 Consent of BDO Seidman, LLP, certified public accountants. Filed
herewith.
Exhibit 23.2 Consent of Aloysius T. Lawn, IV (included in Exhibit 5.1).
Exhibit 24.1 Power of attorney of the directors an certain officers of the
Company (included in the signature page of this Registration
Statement at page II-5).
EXHIBIT 3.3
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
TEL-SAVE.COM, INC.
INTO
TEL-SAVE HOLDINGS, INC.
(to be renamed Tel-Save.com, Inc.)
Tel-Save Holdings, Inc., a corporation organized and existing under and
by virtue of the laws of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That this corporation was incorporated on the 13th day of June,
1995, pursuant to the General Corporation Law of the State of Delaware.
SECOND: That this corporation owns all of the outstanding shares of the
stock of Tel-Save.com, Inc., a corporation incorporated on the 16th day of
November, 1998, pursuant to the General Corporation Law of the State of
Delaware.
THIRD: That this corporation, by the following resolutions of its Board
of Directors, duly adopted at a meeting of the Board held on the 13th day of
November, 1998, determined to and did merge into itself said Tel-Save.com, Inc.:
RESOLVED, that Tel-Save Holdings, Inc. merge, and it hereby
does merge into itself said Tel-Save.com, Inc., and assumes all of its
obligations; and
RESOLVED, that the merger shall be effective upon the date of
filing with the Secretary of State of Delaware; and
RESOLVED, that upon such date of filing, the name of the
surviving corporation (Tel-Save Holdings, Inc.) shall be changed to
Tel-Save.com, Inc.; and
RESOLVED, that the terms and conditions of the merger are as
follows:
1. Upon the occurrence of such merger, all shares of
Tel-Save.com, Inc. shall be cancelled, and the shares of Tel-Save
Holdings, Inc. (renamed Tel-Save.com, Inc.) shall thereafter constitute
the shares of the surviving corporation.
2. The Certificate of Incorporation of Tel-Save
Holdings, Inc. shall remain and be the Certificate of Incorporation of
the surviving corporation
<PAGE>
until the same shall be altered or amended according to the provisions
thereof and in the manner permitted by the statutes of the State of
Delaware.
3. The Bylaws of Tel-Save Holdings, Inc. shall remain
and be the Bylaws of the surviving corporation until the same shall be
altered or amended according to the provisions thereof and in the
manner permitted by the statutes of the State of Delaware.
4. The first annual meeting of the shareholders of
the surviving corporation to be held after the effective date of the
merger shall be the annual meeting provided, by the Bylaws of the said
corporation, for the fiscal year 1998.
5. All persons who at the date when the merger shall
become effective shall be the executive or administrative officers of
Tel-Save Holdings, Inc. shall be and remain like officers of the
surviving corporation until the board of directors of such corporation
shall elect their respective successors.
6. The surviving corporation shall pay all expenses
of carrying this agreement into effect and of accomplishing this
merger.
7. When the merger shall have become effective, all
and singular, the rights, privileges, powers and franchises of each of
the corporations parties to this merger, whether of a public or a
private nature, and all property, real, personal and mixed, and all
debts due to each of said corporations, on whatever account, as well
for stock subscriptions as all other things in action or belonging to
either of the said corporations shall be vested in the surviving
corporation; and all property, rights, privileges, powers and
franchises , and all and every other interest shall be thereafter as
effectually the property of the surviving corporation as they were of
the constituent corporations, and the title to any real or personal
property, whether by deed or otherwise, vested in each of such
constituent corporations shall not revert or be in any way impaired by
reason hereof; provided, however, that all rights of creditors and all
liens upon any property of each of said constituent corporations shall
be preserved unimpaired, limited in lien to the property affected by
such liens immediately prior to the time of the said merger, and all
debts, liabilities and duties of Tel-Save.com, Inc. shall thenceforth
attach to the surviving corporation and may be enforced against it to
the same extent as if said debts, liabilities and duties had been
incurred or contracted by it; and
FURTHER RESOLVED, that the proper officers of this
corporation be, and they hereby are, directed to make and execute a
Certificate of Ownership and Merger setting forth a copy of the
resolutions to merge said Tel-Save.com, Inc. and assume its liabilities
and obligations, and the date of adoption thereof, and to cause the
same to be filed with the Secretary of State and a certified copy
recorded in the office of the Recorder of Deeds of New Castle County
and to do all acts and things whatsoever, whether within or without the
<PAGE>
State of Delaware, which may be in anywise necessary or proper to
effect said merger.
FOURTH: That upon filing of this Certificate, the name of this
corporation shall be changed to Tel-Save.com, Inc. pursuant to Subsection (b) of
ss.253 of the General Corporation Law of the State of Delaware.
FIFTH: Anything herein or elsewhere to the contrary notwithstanding,
this merger may be amended or terminated and abandoned by the Board of Directors
of Tel-Save Holdings, Inc. at any time prior to the date of filing the merger
with the Secretary of State.
IN WITNESS WHEREOF, said Tel-Save Holdings, Inc. has caused this
Certificate to be signed and attested to by its duly authorized officers this
16th day of November, 1998.
TEL-SAVE HOLDINGS, INC.
(to be renamed Tel-Save.com, Inc.)
By: /s/Aloysius T. Lawn, IV
-----------------------
General Counsel and Secretary
Attest:
By: /s/ Emanuel De Maio
-------------------
Chief Operating Officer
EXHIBIT 5.1
January 22, 1999
Board of Directors
Tel-Save Holdings, Inc.
6805 Route 202
New Hope, Pennsylvania 18938
Gentlemen:
I am general counsel to Tel-Save.com, Inc., a Delaware corporation (the
"Company"), and have acted as such in connection with the Company's filing
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), of
the Registration Statement on Form S-8 (the "Registration Statement"), relating
to the issuance under the 1998 Long-Term Incentive Plan ("1998 Plan") of up to
5,000,000 shares ("Plan Shares") of the Company's Common Stock, $.01 par value
per share ("Common Stock") and of 2,660,000 shares (the "Option Shares") Common
Stock upon the exercise of certain non-qualified stock options (collectively,
the "Options") granted to employees and directors of the Company and it
subsidiaries. Certain of the Plan Shares and the Option Shares may be offered
and sold from time to time for the account of the persons referred to in the
Registration Statement as "Selling Stockholders."
I have examined such corporate records of the Company, including its
Amended and Restated Certificate of Incorporation, as amended, its Bylaws and
resolutions of its Board of Directors, as well as such other documents as deemed
necessary for rendering the opinion hereinafter expressed.
On the basis of the foregoing, I am of the opinion that (i) the 5,000,000
Plan Shares have been duly authorized by the Company and that, when issued upon
the exercise of options and stock appreciation rights or as incentive shares in
accordance with the terms of the 1998 Plan and for legal consideration of not
less than $0.01 per share, will be validly issued and will be fully paid and
nonassessable, and when issued pursuant to the award of restricted stock in
accordance with the terms of the 1998 Plan and for legal consideration of not
less than $0.01 per share, will be validly issued, and upon the lapse of
restrictions provided under such award, will be fully paid and nonassessable,
and (ii) the Option Shares have been duly authorized by the Board of Directors
of the Company and upon exercise of the Options and payment of the option price
of such Options as provided therein, the Option Shares will be legally issued,
fully paid and nonassessable.
<PAGE>
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name therein.
Sincerely yours,
/s/ Aloysius T. Lawn, IV
------------------------
Aloysius T. Lawn, IV
General Counsel and Secretary
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Tel-Save Holdings, Inc.
New Hope, Pennsylvania
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement or Form S-8 of our reports
dated February 5, 1998 relating to the consolidated financial statements and
schedule of Tel-Save Holdings, Inc. and subsidiaries (predecessors to
Tel-Save.com, Inc.) (the "Company") appearing in the Company's Annual Report on
Form 10-K for the year ended December 31, 1997.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
/s/ BDO Siedman, LLP
New York, New York
January 22, 1999
