As filed with the Securities and Exchange Commission on December 21, 2001
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INTERNET COMMERCE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3645702
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
805 Third Avenue
New York, New York 10022
(212) 271-7640
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
G. MICHAEL CASSIDY
President and Chief Executive Officer
INTERNET COMMERCE CORPORATION
805 Third Avenue
New York, New York 10022
(212) 271-7640
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copy to:
PETER S. KOLEVZON, ESQ.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022-3903
(212) 715-9100
--------------------
Approximate date of commencement of proposed sale to the public: at such
time or times after the effective date of this Registration Statement as the
selling stockholders may determine.
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. |_|
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed
Amount Proposed maximum
Title of each class to be maximum aggregate Amount of
of securities to be registered offering price offering price registration
registered (1) per share (2) (2) fee(2)
- --------------------------------------------------------------------------------
class A common
stock, par value
$.01 per share 1,507,631 $3.94 $5,940,066 $1,419.67
- --------------------------------------------------------------------------------
(1) Includes shares of class A common stock that are issuable upon exercise of
warrants. Also includes an indeterminate number of shares of class A
common stock that may be issuable upon exercise of the warrants pursuant
to the anti-dilution provisions of the warrants.
(2) The proposed maximum aggregate offering price was estimated solely to
calculate the registration fee under Rule 457(c) of the Securities Act of
1933 based upon the average of the highest and lowest prices per share of
the class A common stock on the Nasdaq National Market reported on
December 19, 2001.
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 section 8(a), may
determine.
PROSPECTUS
INTERNET COMMERCE CORPORATION
o This prospectus relates to the public offering from time to time by the
persons listed on page 15 below, referred to in this prospectus as selling
stockholders, of up to 1,507,631 shares of our class A common stock.
o Our class A common stock is traded on the Nasdaq National Market under the
symbol ICCA. On December 20, 2001, the last sale price for the class A
common stock was $4.27.
o Any selling stockholder may sell the class A common stock on the Nasdaq
National Market or in privately negotiated transactions, whenever he
decides and at the price he sets. The price at which any of the shares of
class A common stock are sold and the commissions paid, if any, may vary
from transaction to transaction. We will not receive any proceeds from the
sale of these shares.
o We filed a registration statement on form S-3 (file no. 333-80043) which
became effective on October 18, 1999 covering the resale of up to
5,476,280 shares of our class A common stock, of which approximately
828,000 shares had not been sold as of December 7, 2001.
o We filed a registration statement on form S-3 (file no. 333-93301) which
became effective on March 1, 2000 covering the resale of up to 955,289
shares of our class A common stock, of which approximately 368,000 shares
had not been sold as of December 7, 2001.
o In connection with our acquisition of Intercoastal Data Corporation, or
IDC, we filed a registration statement on form S-3 (file no. 333-45868)
which became effective on December 7, 2000 covering the resale of up to
238,579 shares of our class A common stock, of which approximately 238,000
shares had not been sold as of December 7, 2001.
o In connection with our acquisition of Research Triangle Commerce, Inc., or
RTCI, we filed a registration statement on form S-3 (file no. 333-52450)
which became effective on June 25, 2001 covering the resale of up to
2,590,386 shares of our class A common stock, of which approximately
2,261,000 shares had not been sold as of December 7, 2001.
o This investment involves a high degree of risk. You should carefully
consider the risk factors beginning on page 4 of this prospectus before
you decide to invest.
The information in this prospectus is not complete and may be changed. The
selling securityholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is December __, 2001
TABLE OF CONTENTS
Page
----
Prospectus Summary...........................................................3
Risk Factors.................................................................4
Risks Relating to ICC......................................................4
Risks Relating to the Internet and Online Commerce Aspects of
Our Business...............................................................7
Risks Relating to this Offering............................................8
Forward-Looking Statements...................................................9
Use Of Proceeds..............................................................9
Business....................................................................10
Selling Stockholders........................................................12
Plan Of Distribution........................................................13
Description Of Securities...................................................14
Legal Matters...............................................................19
Experts.....................................................................19
Where You Can Find More Information.........................................19
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this
prospectus. This summary may not contain all of the information that you should
consider before purchasing shares of our class A common stock. You should read
the entire prospectus carefully, including Risk Factors commencing on page 4,
before making an investment decision.
Internet Commerce Corporation, or ICC
Internet Commerce Corporation, a leader in the e-commerce
business-to-business communication services market, provides complete electronic
commerce ("EC") infrastructure solutions.
Our business operates in three segments. These three segments are:
o ICC.NET (formerly named CommerceSense(R)) - Our ICC.NET service, the
Company's global Internet-based value added network, or VAN, uses the
Internet and our proprietary technology to deliver our customers'
documents and data files to members of their trading communities, many
of which may have incompatible systems, by translating the documents
and data files into any format required by the receiver. We believe
that our ICC.NET service has significant advantages over traditional
VANs, and email-based and other Internet-based systems, because our
service has a lower cost, greater transmission speed and more features.
o Professional Services - Our professional services segment facilitates the
development and operation of comprehensive business-to-business e-commerce
solutions.
o Service Bureau - Our service bureau manages and translates the data of
small and mid-sized companies that exchange EDI data with large companies.
The mailing address of our principal executive offices is 805 Third
Avenue, New York, New York 10022, and our telephone number at that address is
(212) 271-7640.
The Offering
Class A common stock offered
by the selling stockholders....................................1,507,631 shares
Class A common stock to be
outstanding after the offering............................ 11,325,612 shares (1)
Nasdaq National Market symbol.............................................ICCA
- ---------------------------
(1) This information is based on the number of shares of class A common stock
(including restricted stock) outstanding on November 30, 2001. It includes
all of the shares of class A common stock being offered by this prospectus
by the selling stockholders. It excludes (a) 1,634,220 shares of class A
common stock issuable upon exercise of warrants, except for the warrants
held by the selling stockholders, (b) 507,891 Shares of Class A common
stock issuable upon conversion of series A convertible redeemable preferred
stock, series C convertible redeemable preferred stock and class B common
stock outstanding on that date, and (c) 6,434,583 shares of class A common
stock issuable under outstanding options or reserved for issuance under our
stock option plans as of November 30, 2001.
3
RISK FACTORS
You should carefully consider each of the following risk factors in
addition to the other information contained in this prospectus before purchasing
shares of our class A common stock. Investing in our class A common stock
involves a high degree of risk. Any of the following risks could materially and
adversely affect our business, operating results, financial condition and the
market price of our class A common stock and could result in the complete loss
of your investment.
Risks Relating to ICC
We have a limited operating history and there is insufficient historical
information to determine whether we will successfully implement any of our
business strategies. We were founded in November 1991 under the name Infosafe
Systems, Inc. and from 1991 to 1997 we conducted limited operations and
developed certain products that we were unable to exploit commercially and
consequently discontinued. In 1997, we shifted our business emphasis to focus
exclusively on the development and marketing of our ICC.NET service, formerly
known as our CommerceSense(R) service, and changed our name to Internet Commerce
Corporation in September 1998 to reflect this shift. As a result, we have only a
limited operating history and there is little historical information on which to
evaluate our business and prospects. We may not be successful in implementing
any of our business strategies.
We have never earned a profit and expect to incur losses in the future,
and cannot assure that we will be profitable in the future on an operating basis
or otherwise. We have incurred significant losses since we were founded in 1991.
We have never earned a profit in any fiscal quarter and, as of October 31, 2001,
we had an accumulated deficit of approximately $71.4 million.
Our revenue is primarily dependent on the number of customers who
subscribe to our ICC.NET VAN service and the volume of the data, documents or
other information they send or retrieve utilizing this service. The success of
our ICC.NET VAN service and our other services depends to a large extent on the
future of business-to-business electronic commerce using the Internet, which is
uncertain. In addition, we expect our expenses to increase in the areas of
information technology, sales and marketing. As a result, we expect to incur
additional losses in the future.
If we continue to incur losses, if our revenues decline or grow at a
slower rate and we are unable to adjust spending in a timely manner or if our
expenses increase without commensurate increases in revenues, our operating
results will suffer and we may not ever achieve profitability.
We currently depend primarily on our ICC.NET service. We are primarily
focusing on our ICC.NET service and as a result, our expected revenue growth for
the foreseeable future is almost entirely dependent on the success of this
service, including, but not limited to, the number of customers who subscribe to
the service and the volume (in kilocharacters) of the data, documents or other
information they send or retrieve utilizing our service, and revenue derived
from our acquisitions of RTCI and IDC. We will need to generate significant
additional revenue to achieve and maintain profitability. If we do not increase
our revenue significantly, we will continue to be unprofitable.
We may not be able to compete effectively in the business-to-business
electronic commerce market, which could limit our market share and harm our
financial performance. Our principal competitors include: Peregrine Systems,
Inc., GE Global Exchange Services, a subsidiary of GE Information Services,
Inc., International Business Machines Corporation Global Services, Sterling
Commerce, Inc., a subsidiary of SBC Communications Inc., EasyLink Corp. and
WorldCom, Inc. Each of these competitors has an established VAN that has
provided EDI for at least several years and has long-established relationships
with the users of EDI, including many of our prospective customers.
4
Our market is characterized by rapidly-changing technology, customer
demands and intense competition. The Internet's recent growth and the intense
competition in our industry require us to continue to develop strategic business
and Internet solutions that enhance and improve the customer service features,
functions and responsiveness of our ICC.NET VAN and other proposed services and
that keep pace with continuing changes in information technology and customer
requirements. If we are not successful in developing and marketing enhancements
to our ICC.NET VAN service or other proposed services that respond to
technological change or customer demands, or we are otherwise not able to
compete effectively against our current and future competitors, we may lose
customers, may need to lower our prices, may experience reductions in gross
margins, increases in marketing costs or losses in market share, or we may
experience a combination of these problems and, as a result, our business will
suffer.
Many of our current and potential competitors have significant existing
customer relationships and vastly larger financial, marketing, customer support,
technical and other resources than we do. As a result, they may be able to
respond more quickly to changing technology and changes in customer requirements
or be able to undertake more extensive marketing campaigns, adopt more
aggressive pricing policies and make more attractive offers to potential
customers and employees, or be able to devote greater resources to the
development, promotion and sale of their services than we can. As a result, we
may not be successful in competing against competitors.
Furthermore, we rely on many of our competitors to interconnect at
reasonable cost with our service. In September 2001, one of our competitors
terminated an existing interconnect agreement and we made alternative
arrangements to serve our customers that were affected by this termination.
If we are successful in utilizing our ICC.NET platform to provide new
services, we may enter into different markets and may face the same or
additional competitors, most of which will have substantially greater financial
and other resources than we do.
If we are unable to obtain necessary future capital, our business will
suffer. As of October 31, 2001, we had unrestricted cash and marketable
securities in the amount of approximately $4 million. We may need to raise
additional funds if competitive pressures or technological changes are greater
than anticipated, if we are unable to increase revenue at anticipated rates, if
our expenses increase significantly or if our customers further delay payment of
our receivables. We cannot assure you that any additional financing will be
available on reasonable terms or at all.
Raising additional funds in the future by issuing securities could
adversely affect our stockholders and negatively impact our operating results.
If we raise additional funds through the issuance of debt securities, the
holders of the debt securities will have a claim to our assets that will have
priority over any claim of our stockholders. The interest on these debt
securities would increase our costs and negatively impact our operating results.
If we raise additional funds through the issuance of class A common stock or
securities convertible into or exchangeable for class A common stock, the
percentage ownership of our then-existing stockholders will decrease and they
may experience additional dilution. In addition, any convertible or exchangeable
securities may have rights, preferences and privileges more favorable to the
holders than those of the class A common stock.
If we lose our net operating loss carryforward of approximately $72
million, our financial results will suffer. Section 382 of the Internal Revenue
Code contains rules designed to discourage persons from buying and selling the
net operating losses of companies. These rules generally operate by focusing on
ownership changes among stockholders owning directly or indirectly 5% or more of
the common stock of a company or any change in ownership arising from a new
issuance of stock by a company. In general, the rules limit the ability of a
company to utilize net operating losses after a change of ownership of more than
50% of its common stock over a three-year period. Purchases of our class A
common stock in amounts greater than specified levels could inadvertently create
a limitation on our ability to utilize our net operating losses for tax purposes
in the future. We are currently subject to a limitation on the utilization of
our net operating loss carryforward.
5
If we are unable to manage our growth, our financial results will suffer.
Our ability to implement our business plan successfully in a new and
rapidly-evolving market requires effective planning and growth management. If we
cannot manage our anticipated growth effectively, our business and financial
results will suffer. We expect that we will need to continue to manage and to
expand multiple relationships with customers, Internet service providers and
other third parties. We also expect that we will need to continue to improve our
financial systems, procedures and controls and will need to expand, train and
manage our workforce, particularly our information technology and sales and
marketing staffs.
We may face capacity constraints which impede our revenue growth and
business profitability. The satisfactory performance, reliability and
availability of our network infrastructure, customer support and document
delivery systems and our web site are critical to our reputation and our ability
to attract customers and maintain adequate customer service levels. Any
significant or prolonged capacity constraints could prevent customers from
sending or gaining access to their documents or other data or accessing our
customer support services for extended periods of time. This would decrease our
ability to acquire and retain customers and prevent us from achieving the
necessary growth in revenue to achieve profitability. If the amount of traffic
increases substantially and we experience capacity constraints, we will need to
expand further and upgrade our technology and network infrastructure. We may be
unable to predict the rate or timing of increases in the use of our services to
enable us to upgrade our operating systems in a timely manner.
If we do not keep pace with rapid technological changes, customer demands
and intense competition, we will not be successful. Our market is characterized
by rapidly changing technology, customer demands and intense competition. If we
cannot keep pace with these changes, our ICC.NET service could become
uncompetitive and our business will suffer. The Internet's recent growth and the
intense competition in our industry require us to continue to develop strategic
business and Internet solutions that enhance and improve the customer service
features, functions and responsiveness of our ICC.NET VAN and other proposed
services and that keep pace with continuing changes in information technology
and customer requirements. If we are not successful in developing and marketing
enhancements to our ICC.NET VAN service or other proposed services that respond
to technological change or customer demands, our business will suffer.
If we cannot successfully expand our business outside of the United
States, our revenues and operating results will be adversely affected. Our
current and future customers are conducting their businesses internationally. As
a result, an important component of our business strategy is to expand our
international marketing and sales efforts and if we do not successfully expand
our business in this way, we may lose current and future customers. Although we
have established alliances with Cable & Wireless and Triaton to sell our service
in certain foreign markets, we cannot predict their success. Loss of customers
will adversely affect our business, operating results and financial condition.
If we cannot hire and retain highly qualified employees, our business and
financial results will suffer. We are substantially dependent on the continued
services and performance of our executive officers and other key employees.
Competition for employees in our industry is intense. If we are unable to
attract, assimilate and retain highly qualified employees, our management may
not be able to effectively manage our business, exploit opportunities and
respond to competitive challenges and our business and financial results will
suffer. Many of our competitors may be able to offer more lucrative compensation
packages which include stock options and other stock-based compensation and
higher-profile employment opportunities than we can.
We depend on our intellectual property, which may be difficult and costly
to protect. If we fail to adequately protect our proprietary rights, competitors
could offer similar products relying on technologies we developed, potentially
harming our competitive position and decreasing our revenues. We attempt to
protect our intellectual property rights by limiting access to the distribution
of our software, documentation, and other proprietary information and by relying
on a combination of patent, copyright, trademark and trade secret laws. In
addition, we enter into confidentiality agreements with our employees and
certain customers, vendors and strategic partners. In some circumstances,
however, we may, if required by a business relationship, provide our licensees
with access to our data model and other proprietary information underlying our
licensed applications.
6
Despite the precautions we take, it may be possible for unauthorized third
parties to copy aspects of our current or future products or to obtain and use
information that we regard as proprietary. Policing unauthorized use of software
is difficult, and some foreign laws do not protect proprietary rights to the
same extent as United States laws. Litigation may be necessary in the future to
enforce our intellectual property rights, to protect our trade secrets or to
determine the validity and scope of the proprietary rights of others, any of
which could be costly and adversely affect our revenues and operating results.
Intellectual property infringement claims against us could harm our
business. Our business activities and our ICC.NET service may infringe upon the
proprietary rights of others and other parties may assert infringement claims
against us. Any such claims and any resulting litigation could subject us to
significant liability for damages and could result in invalidation of our
proprietary rights. We could be required to enter into royalty and licensing
agreements, which may be costly or otherwise burdensome or, which may not be
available on terms acceptable to us.
We may suffer systems failures and business interruptions which would harm
our business. Our success depends in part on the efficient and uninterrupted
operation of our service that is required to accommodate a high volume of
traffic. Almost all of our network operating systems are located at the
Securities Industry Automation Corporation, or SIAC. SIAC runs all computing
operations for the New York Stock Exchange and the American Stock Exchange. Our
systems are vulnerable to events such as damage from fire, power loss,
telecommunications failures, break-ins and earthquakes. This could lead to
interruptions or delays in our service, loss of data or the inability to accept,
transmit and confirm customer documents and data. Our business may suffer if our
service is interrupted. Although we have implemented network security measures,
our servers may be vulnerable to computer viruses, electronic break-ins,
attempts by third parties deliberately to exceed the capacity of our systems and
similar disruptions.
Risks Relating to the Internet and Online Commerce Aspects of Our Business
If Internet usage does not continue to grow or its infrastructure fails,
our business will suffer. If the Internet does not gain increased acceptance for
business-to-business electronic commerce, our business will not grow or become
profitable. We cannot be certain that the infrastructure or complementary
services necessary to maintain the Internet as a useful and easy means of
transferring documents and data will continue to develop. The Internet
infrastructure may not support the demands that growth may place on it and the
performance and reliability of the Internet may decline.
Privacy concerns may prevent customers from using our services. Concerns
about the security of online transactions and the privacy of users may inhibit
the growth of the Internet as a means of delivering business documents and data.
We may need to incur significant expenses and use significant resources to
protect against the threat of security breaches or to alleviate problems caused
by security breaches. We rely upon encryption and authentication technology to
provide secure transmission of confidential information. If our security
measures do not prevent security breaches, we could suffer operating losses,
damage to our reputation, litigation and possible liability. Advances in
computer capabilities, new discoveries in the field of cryptography or other
developments that render current encryption technology outdated may result in a
breach of our encryption and authentication technology and could enable an
outside party to steal proprietary information or interrupt our operations.
Failure of our third-party providers to provide adequate Internet and
telecom-munications service could result in significant losses of revenue. Our
operations depend upon third parties for Internet access and telecommunications
service. Frequent or prolonged interruptions of these services could result in
significant losses of revenues. Each of them has experienced outages in the past
and could experience outages, delays and other difficulties due to system
failures unrelated to our on-line architecture. These types of occurrences could
also cause users to perceive our services as not functioning properly and
therefore cause them to use other methods to deliver and receive information. We
have limited control over these third parties and cannot assure you that we will
be able to maintain satisfactory relationships with any of them on acceptable
commercial terms or that the quality of services that they provide will remain
at the levels needed to enable us to conduct our business effectively.
7
Government regulation and legal uncertainties relating to the Internet
could harm our business. Changes in the regulatory environment in the United
States and other countries could decrease our revenues and increase our costs.
The Internet is largely unregulated and the laws governing the Internet remain
unsettled, even in areas where there has been some legislative action. It may
take years to determine whether and how existing laws such as those governing
intellectual property, privacy and taxation apply to the Internet. In addition,
because of increasing popularity and use of the Internet, any number of laws and
regulations may be adopted in the United States and other countries relating to
the Internet or other online services covering issues such as:
o user privacy;
o security;
o pricing and taxation;
o content; and
o distribution.
Costs of transmitting documents and data could increase, which would harm
our business and operating results. The cost of transmitting documents and data
over the Internet could increase. We may not be able to increase our prices to
cover these rising costs. Also, foreign and state laws and regulations relating
to the provision of services over the Internet are still developing. If
individual states or foreign countries impose taxes or laws that negatively
impact services provided over the Internet, our cost of providing our ICC.NET
and other services may increase.
Risks Relating to this Offering
Shares eligible for future sale by our existing stockholders may adversely
affect our stock price and may render it difficult to sell class A common stock.
The average weekly trading volume of our class A common stock on the Nasdaq
National Market was approximately 120,000 shares for the quarter ended October
31, 2001, approximately 157,000 shares for the quarter ended July 31, 2001,
approximately 321,000 shares for the quarter ended April 30, 2001 and
approximately 483,000 shares for the quarter ended January 31, 2001. From
November 1, 2001 through December 7, 2001, the average weekly trading volume of
our class A common stock on the Nasdaq National Market was approximately 290,000
shares. On October 18, 1999, our registration statement on form S-3 became
effective. This registration statement covers the sale of up to 5,476,280 shares
of class A common stock by holders of our class A common stock and holders of
our series A preferred stock, class B common stock and warrants that may be
converted into or exchanged for class A common stock, of which approximately
828,000 shares had not been sold as of December 7, 2001. On March 1, 2000,
another registration statement on form S-3 became effective. This registration
statement covers the sale of up to 955,289 shares of class A common stock by
holders of our class A common stock and by holders of our series A preferred
stock and warrants that may be converted into or exercised for class A common
stock, of which approximately 368,000 shares had not been sold as of December 7,
2001. In connection with our acquisition of IDC, we filed a registration
statement on form S-3, which became effective on December 7, 2000, covering the
resale of up to 238,579 shares of our class A common stock, of which
approximately 238,000 shares had not been sold as of December 7, 2001. In
connection with our acquisition of RTCI, we filed a registration statement on
form S-3, which became effective on June 25, 2001, covering the resale of up to
2,590,386 shares of our class A common stock, of which approximately 2,261,000
shares had not been sold as of December 7, 2001. The market price of our class A
common stock could be materially and adversely affected by sales of even a small
percentage of these shares or the perception that these sales could occur.
Our stock price may be extremely volatile and this volatility could affect
your ability to sell your shares of class A common stock at a favorable price.
Since August 1, 2000, the price of our class A common stock has fluctuated from
a low of $1.50 to a high of $18.00. The market price of our class A common stock
is likely to fluctuate substantially in the future. In the past, companies that
have experienced volatility in the market price of their stock have been subject
to securities class action litigation. If we were subject to a securities class
action lawsuit, it could result in substantial costs and a significant diversion
of resources, including management time and attention.
8
The market for our class A common stock may be illiquid, which would
restrict your ability to sell your shares of class A common stock. Our class A
common stock is currently trading on the Nasdaq National Market. It is possible
that the trading market for the class A common stock in the future will be thin
and illiquid, which could result in increased volatility in the trading prices
for our class A common stock. The price at which our class A common stock will
trade in the future cannot be predicted and will be determined by the market.
The price may be influenced by many factors, including investors' perceptions of
our business, our financial condition, operating results and prospects, the use
of the Internet for business purposes and general economic and market
conditions.
Our board of directors can issue preferred stock with rights adverse to
the holders of class A common stock. Our board of directors is authorized,
without further stockholder approval, to determine the provisions of and to
issue up to 4,979,825 shares of preferred stock. Issuance of preferred shares
with rights to dividends and other distributions, voting rights or other rights
superior to the class A common stock could be adverse to the holders of class A
common stock.
We may have to spend significant resources indemnifying our officers and
directors or paying for damages caused by their conduct. The Delaware General
Corporation Law provides for broad indemnification by corporations of their
officers and directors and permits a corporation to exculpate its directors from
liability for their actions. Our bylaws and certificate of incorporation
implement this indemnification and exculpation to the fullest extent permitted
under this law as it currently exists or as it may be amended in the future.
Consequently, subject to this law and to some limited exceptions in our
certificate of incorporation, none of our directors will be liable to us or to
our stockholders for monetary damages resulting from conduct as a director.
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference a number of
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Specifically, all statements other than statements of historical facts included
in this prospectus, or incorporated by reference in this prospectus, regarding
our financial position, business strategy and plans and objectives of management
for future operations are forward-looking statements. These forward-looking
statements are based on the beliefs of management, as well as assumptions made
by and information currently available to management. When used in this
prospectus, including the information incorporated by reference, the words
anticipate, believe, estimate, expect, may, will, continue, intend and plan and
words or phrases of similar import, as they relate to our financial position,
business strategy and plans, or objectives of management, are intended to
identify forward-looking statements. These cautionary statements reflect our
current view regarding future events and are subject to risks, uncertainties and
assumptions related to various factors which include but may not be limited to
those listed under the heading Risk Factors starting on page 4 and other
cautionary statements in this prospectus and in the information incorporated in
this prospectus by reference.
Although we believe that our expectations are reasonable, we cannot assure
you that our expectations will prove to be correct. Based upon changing
conditions, should any one or more of these risks or uncertainties materialize,
or should any underlying assumptions prove incorrect, actual results may vary
materially from those described in this prospectus as anticipated, believed,
estimated, expected, intended or planned. All subsequent written and oral
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by these cautionary statements.
USE OF PROCEEDS
The selling stockholders are selling all the shares of class A common
stock covered by this prospectus for their own account. We will not receive any
proceeds from the sale of shares of class A common stock by the selling
stockholders.
9
BUSINESS
Internet Commerce Corporation, or ICC
Business Description
Internet Commerce Corporation, a leader in the e-commerce
business-to-business communication services market, provides complete electronic
commerce infrastructure solutions.
Our business operates in three segments. These three segments are:
o ICC.NET (formerly named CommerceSense(R)) - Our ICC.NET service,
the Company's global Internet-based VAN, uses the Internet and
our proprietary technology to deliver our customers' documents
and data files to members of their trading communities, many of
which may have incompatible systems, by translating the documents
and data files into any format required by the receiver. We
believe that our ICC.NET service has significant advantages over
traditional VANs, and email-based and other Internet-based
systems, because our service has a lower cost, greater
transmission speed and more features. ICC.NET provides the
following services:
o Traditional VAN services -- our ICC.NET service provides the
full suite of traditional VAN services, but uses the Internet
to provide cost savings and increased capabilities for our
customers;
o Electronic data interchange ("EDI") for web-based retailers --
our ICC.NET service provides an electronic document and data
file delivery link between web-based retailers and their
vendors that require that documents and data files be
transmitted using EDI format;
o EDI-to-fax service -- our ICC.NET service can translate
electronic documents into fax format and send the documents by
fax to our customers' trading partners that cannot receive
electronically transmitted documents; and
o Large-scale electronic document management and delivery -- our
ICC.NET service can transmit large-scale non-EDI electronic
documents and data files and provide real-time delivery,
archiving, security, authentication and audit services.
o Professional Services - Our professional services segment
facilitates the development and operation of comprehensive
business-to-business e-commerce solutions. We provide the following
professional services:
o EC infrastructure solutions by providing mission critical
e-commerce consulting, software, outsourced services,
translation/mapping and technical resource management;
o On-site and off-site data mapping services to maximize
productivity and efficiency in managing inter-company and
intra-company data transaction requirements;
o HIPAA (Health Insurance Portability and Accountability Act)
impact and data gap analysis for health care providers and
payers. We can design, build, test and rollout systems to
ensure compliance with Federally mandated standards for health
care data; and
o A series of product-independent EDI seminars for e-commerce
users. The seminars are hosted by leading universities and
training facilities in the United States. We also develop
in-house EDI training programs and offer public seminars for
understanding and implementing HIPAA regulations.
10
o Service Bureau - Our service bureau manages and translates the data
of small and mid-sized companies that exchange EDI data with large
companies and provides the following services:
o Receives electronic purchase orders from large retailers and
converts the purchase orders into hard copies or other
alternative formats and delivers those documents to their
suppliers that are our customers;
o Converts paper or other alternatively formatted invoices from
our customers into EDI format that is transmitted to their
trading partners;
o Provides UPC (Universal Product Code ) services for ASN
(Advanced Ship Notice) Casing & UCC (Uniform Code Council)
128 labels; and
o Maintains UPC catalogs allowing our customers to generate the
UPC numbers and tickets for the items in the UPC catalogs.
Business Strategy
We believe that our ICC.NET service provides a platform with many
applications that will allow our customers to fulfill a substantial portion of
their electronic document and data delivery requirements with significantly less
administrative effort and cost. We believe that ICC.NET will allow our customers
to send us the majority of their important documents and data files which we
will then be able to transmit to each of the intended recipients in any form
requested by the recipient. Our customers will thus be able to integrate a
substantial portion of their document and data file delivery methods into a
single, seamless process.
A large company that uses EDI to communicate with its vendors is referred
to as a hub; its trading partners, vendors or customers are referred to as
spokes. We intend to continue to market ICC.NET as a one-stop electronic
document and data delivery service to the 2,500 largest hub companies in the
United States. Due to the cost to the spoke companies of implementing EDI and
using VANs and other electronic document delivery methods, large hub companies
are currently connected electronically to only a small percentage of their
potential spoke companies.
We intend to continue to market ICC.NET to new customers with an
increasing focus on industries in which ICC.NET has enjoyed significant
penetration and revenues. Those industries include book retailing and
publishing, pharmaceutical manufacturing, footwear manufacturing, office
supplies and transportation logistics.
We believe that a significant number of these hub companies intend to
expand the use of electronic commerce to more of their spoke companies. Small
spoke companies using our ICC.NET service require only an Internet connection
and a web browser to receive and transmit documents electronically and, we
believe, will also be able to receive electronic documents using our ICC.NET fax
service. As a result, large hub companies may now be able to request or
encourage electronic commerce with their small spoke companies. In turn, many of
these spoke companies may become the hub companies for their suppliers, which
should further broaden the reach of our ICC.NET service.
Additionally, we will focus on marketing ICC.NET to other members of the
trading communities of our existing customers and we will pursue opportunities
to cross-sell our services to the customers of our several business segments.
Our current customers conduct their business internationally, and we are
servicing these customers and pursuing new international customers in Europe and
other places outside the United States.
We intend to encourage the use of our ICC.NET service through exceptional
customer service. We currently offer technical support to our customers
twenty-four hours a day, seven days a week. Due to the multiple redundancies of
all of our systems and the stability of the Securities Industry Automation
Corporation, or SIAC, which is the location of our data center, our ICC.NET
service has been fully operational more than 99% of the time. SIAC runs all
computing operations for the New York Stock Exchange and the American Stock
Exchange.
11
We expect to experience seasonality in our business that reflects the
seasonality of the businesses of our customers. We believe that period-to-period
comparisons of our operating results for any particular period will not
necessarily indicate our future performance.
SELLING STOCKHOLDERS
On October 29, 2001, we sold in a private placement 1,159,716 shares of
class A common stock and warrants to purchase 347,915 shares of class A common
stock for in gross proceeds of $3,189,219. The warrants are immediately
exercisable and have an exercise price of $3.58 per share. The selling
stockholders named below purchased the shares of class A common stock and
warrants in the private placement. In connection with the private placement, we
incurred fees of $152,511. Of such Fees, $35,500 will be paid in cash and
$117,511 will be paid by issuing warrants to purchase 50,000 shares of class A
common stock. These warrants will have substantially the same terms and
conditions as the warrants issued to the selling stockholders in the private
placement. The shares of class A common stock issuable upon exercise of these
warrants are not covered by this prospectus.
The table below sets forth information, as of November 30, 2001, regarding
the beneficial ownership of the shares of class A common stock by the selling
stockholders. The information regarding the selling stockholders' beneficial
ownership after this offering assumes that all the shares of class A common
stock offered by this prospectus are sold. The presentation is based on
10,997,697 shares of our class A common stock outstanding as of November 30,
2001, which includes all of the shares of class A common stock being offered by
this prospectus.
Number of
Shares of Class A
Number of Shares Common Stock,
Of Class A including Shares
Common Stock Issuable Upon Class A Common Stock
Beneficially the Exercise of Beneficially Owned
Owned Warrants, After Offering
Selling Stockholders Before Offering Offered Number Percent
-------------------- --------------- ------- ------ -------
Steven Richman 115,000 47,272 115,000 1.1%
Amaranth Trading, LLC 0 472,727 0 *
Samuel R. Staggers 0 23,635 0 *
BlueWater Venture Fund II, 763,638 236,363 763,638 6.9%
L.L.C. (1)
Michael Solomon 20,000 23,635 20,000 *
TCMP3 0 70,909 0 *
Cheryl A. Ulie 25,200 283,635 25,200 *
Henry Steeneck 8,000 35,454 8,000 *
Hermann Mueller 0 8,509 0 *
Walter M. Pstzur (2) 117,999 (3) 9,454 117,999 (3) 1.1%
Gerhard Waldschutz 0 23,635 0 *
Rhoderick A. Parker 80,000 21,272 0 *
Spencer I. Browne (4) 10,000 23,635 10,000 *
Robert L. Rosen 0 23,635 0 *
David C. Hubbard (5) 188,999 (6) 9,454 188,999 (6) 1.7%
Harvey Blitz 13,750 26,000 13,750 *
Robert W. Main 25,000 23,635 25,000 *
Katahdin, LLC 0 97,500 0 *
Stephen J. Posner 72,845 26,000 72,845 *
CCJ Trust 0 21,272 0 *
- -----------------
* Less than 1%
12
(1) Kim D. Cooke, a director of the Company, is a managing director of Blue
Water Capital II, L.L.C., the managing member of Blue Water Venture
Fund II, L.L.C.
(2) Mr. Psztur is the Company's Chief Financial Officer and Secretary.
(3) Includes options to purchase 112,999 shares of class A common stock that
are fully exercisable within 60 days of November 30, 2001.
(4) Mr. Browne became a director of the Company on November 6, 2001.
(5) Mr. Hubbard is the Company's Chief Technology Officer and Senior Vice
President of Engineering.
(6) Includes options to purchase 179,999 shares of class A common stock that
are fully vested and exercisable within 60 days.
PLAN OF DISTRIBUTION
ICC is registering the shares of class A common stock on behalf of the
selling stockholders. As used herein, "selling stockholders" includes donees and
pledgees selling shares of class A common stock received from a named selling
stockholder after the date of this prospectus. We anticipate that the selling
stockholders may sell all or a portion of the shares of class A common stock
offered by this prospectus from time to time on the Nasdaq National Market, on
other securities exchanges or in private transactions, at fixed prices, at
market prices prevailing at the time of sale or at prices reasonably related to
the market price, at negotiated prices, or by a combination of these methods of
sale through:
o ordinary brokerage transactions and transactions in which the broker
solicits purchases;
o sales to one or more brokers or dealers as principal, and the resale by
those brokers or dealers for their account, including resales to other
brokers and dealers;
o block trades in which a broker or dealer will attempt to sell the shares
of class A common stock as agent but may position and resell a portion of
the block as principal to facilitate the transaction; or
o privately negotiated transactions with purchasers.
We are not aware as of the date of this prospectus of any agreements
between the selling stockholders and any broker-dealers regarding the sale of
the shares of class A common stock offered by this prospectus, although we have
made no inquiry in that regard. In connection with distributions of the shares
of class A common stock, the selling stockholders may enter into hedging
transactions with broker-dealers. In connection with these transactions:
o broker-dealers may engage in short sales of the shares of class A common
stock covered by this prospectus in the course of hedging the positions
they assume with selling stockholders;
o the selling stockholders may sell shares of class A common stock short and
deliver the shares of class A common stock offered by this prospectus to
close out their short positions;
o the selling stockholders may enter into option or other transactions with
broker-dealers that require the delivery to the broker-dealer of the
shares of class A common stock offered by this prospectus, which the
broker-dealer may resell according to this prospectus; and
o the selling stockholders may pledge the shares of class A common stock
offered by this prospectus to a broker or dealer and upon a default, the
broker or dealer may effect sales of the pledged shares of class A common
stock according to this prospectus.
13
The selling stockholders and any broker, dealer or other agent executing
sell orders on behalf of the selling stockholders may be considered to be
underwriters within the meaning of the Securities Act. If so, commissions
received by any of these brokers, dealers or agents and profit on any resale of
the shares of class A common stock may be considered to be underwriting
commissions under the Securities Act. These commissions received by a broker,
dealer or agent may be in excess of customary compensation.
All costs, fees and expenses of registration incurred in connection with
the offering will be borne by us. All selling and other expenses incurred by the
selling stockholders will be borne by the selling stockholders. We have agreed
to indemnify or provide contributions to the selling stockholders for certain
liabilities, including liabilities arising under the Securities Act of 1933, as
amended (the "Securities Act").
The selling stockholders also may resell all or a portion of the shares of
class A common stock offered by this prospectus in reliance upon Rule 144 under
the Securities Act, provided that they meet the criteria and conform to the
requirements of that Rule.
We have notified the selling stockholders that they will be subject to
applicable provisions of the Securities Exchange Act of 1934 and its rules and
regulations, including, among others, Rule 102 under Regulation M. These
provisions may limit the timing of purchases and sales of any of the shares of
class A common stock by the selling stockholders. Rule 102 under Regulation M
provides, with some exceptions, that it is unlawful for the selling stockholders
or their affiliated purchasers to, directly or indirectly, bid for or purchase,
or attempt to induce any person to bid for or purchase, for an account in which
the selling stockholders or affiliated purchasers have a beneficial interest,
any securities that are the subject of the distribution during the applicable
restricted period under Regulation M. All of the above may affect the
marketability of the shares of class A common stock. To the extent required by
law, we may require the selling stockholders, and their brokers if applicable,
to provide a letter that acknowledges compliance with Regulation M under the
Exchange Act before authorizing the transfer of the selling stockholders' shares
of class A common stock.
DESCRIPTION OF SECURITIES
The following summary description of the material terms of our capital
stock and warrants is not intended to be complete. The terms of our capital
stock are also governed by the provisions of our certificate of incorporation
and bylaws, which are included as exhibits to the registration statement, and
the Delaware General Corporation Law. You should read our certificate of
incorporation and bylaws very carefully. The relevant provisions of our
certificate of incorporation and bylaws and the Delaware General Corporation Law
are discussed under the heading Delaware Law and Certificate of Incorporation
and Bylaw Provisions beginning on page 22 of this prospectus.
We have the authority to issue up to 40,000,000 shares of class A common
stock, 2,000,000 shares of class B common stock and 5,000,000 shares of
preferred stock, which includes 10,000 shares of series A preferred stock, 175
shares of series S preferred stock and 10,000 shares of series C preferred
stock.
Common Stock
Class A common stock
As of November 30, 2001, there were 10,977,697 shares of class A common
stock outstanding, held of record by approximately 256 stockholders. Class A
common stock is currently traded on the Nasdaq National Market under the symbol
ICCA.
Holders of class A common stock are entitled to one vote per share on all
matters to be voted on by our common stockholders. Subject to the preferences of
the preferred stock, the holders of class A common stock are entitled to a
proportional distribution of any dividends that may be declared by the board of
directors, provided that if any distributions are made to the holders of class A
common stock, identical per-share distributions must be made to the holders of
the class B common stock, even if the distributions are in class A common stock.
In the event of a liquidation, dissolution or winding up of ICC, the holders of
class A common stock are entitled to share equally with
14
holders of the class B common stock in all assets remaining after liabilities
and amounts due to holders of preferred stock have been paid in full or set
aside. Class A common stock has no preemptive, redemption or conversion rights.
The rights of holders of common stock are subject to, and may be adversely
affected by, the rights of the holders of shares of series A preferred stock,
series S preferred stock, series C preferred stock or any other series of
preferred stock that ICC may designate and issue in the future.
Class B common stock
As of November 30, 2001, there were 1,930 shares of class B common stock
outstanding, held of record by one stockholder.
Class B common stock is convertible into class A common stock on a
one-for-one basis both upon request of the holder of the class B common stock or
automatically upon transfer of the class B common stock to a stockholder that
does not hold any class B common stock before the transfer. Class B common stock
is entitled to six votes per share rather than one vote per share, but in all
other respects each share of class B common stock is identical to one share of
class A common stock.
Preferred Stock
Our certificate of incorporation authorizes our board of directors,
without any approval of our stockholders, to issue up to 5,000,000 shares of
preferred stock from time to time and in one or more series and to fix the
number of shares of any series and the designation, conversion, dividend and
other rights of the series. The board of directors has designated 10,000 shares
of preferred stock as series A preferred stock, 175 shares of preferred stock as
series S preferred stock and 10,000 shares of preferred stock as series C
preferred stock.
Future issuances of preferred stock may have the effect of delaying or
preventing a change in control of ICC. The issuance of preferred stock could
decrease the amount of earnings and assets available for distribution to the
holders of common stock or could adversely affect the rights and powers,
including voting rights, of the holders of our common stock. In some
circumstances, the issuance of preferred stock could have the effect of
decreasing the market price of our common stock.
Series A preferred stock
As of November 30, 2001, ICC had 175 shares of series A preferred stock
outstanding, held of record by two stockholders.
Series A preferred stock is convertible, at the option of the holder, into
class A common stock. Each share of series A preferred stock is convertible into
a number of shares of class A common stock determined by dividing $1,000 by 75%
of the average market price of the class A common stock for the ten trading days
before the conversion date. However,
o if 75% of the average market price is less than $3 per share, the
series A preferred stock provides that 75% of the average market
price will be considered to be $3 per share, which results in a
maximum of 333 shares which may be issued upon conversion of one
share of series A preferred stock; and
o if 75% of the average market price is greater than $5 per share, the
series A preferred stock provides that 75% of the average market
price will be considered to be $5 per share, which results in a
minimum of 200 shares which may be issued upon conversion of one
share of series A preferred stock.
15
If all of the series A preferred stock were converted on November 30,
2001, 57,971 shares of class A common stock would be issued in this conversion.
The minimum and maximum conversion rates apply even if at the time of conversion
the class A common stock is not traded on the Nasdaq National Market. No fewer
than 25 shares of series A preferred stock may be converted at one time unless
the holder then holds fewer than 25 shares and converts all of the holder's
shares at that time.
Series A preferred stock is redeemable, in whole or in part, by ICC,
commencing on the third anniversary of the date of issuance. The redemption
price for each share of series A preferred stock is $1,000 plus unpaid
dividends. Notice of redemption must be given 30 days before the redemption
date.
Subject to the rights of stockholders holding any series of ICC preferred
stock that is senior to the series A preferred stock, upon a liquidation,
dissolution or winding up of ICC, the holders of series A preferred stock are
entitled to receive an amount equal to $1,000 per share of series A preferred
stock before any distribution is made to holders of common stock.
The holders of the outstanding shares of series A preferred stock are
entitled to a 4% annual dividend payable in cash or in shares of class A common
stock, at the option of ICC. These dividends are payable on each July 1 and
commenced on July 1, 1999. ICC elected to issue 14,641 shares of class A common
stock in payment of the dividend due on July 1, 1999, a total of $181,772 in
cash in payment of the dividend due on July 1, 2000 and 7,601 shares of class A
common stock in payment of the dividend due on July 1, 2001.
Series A preferred stock has no voting rights except as expressly required
by law.
Series S preferred stock
As of November 30, 2001, ICC had no outstanding shares of series S
preferred stock. ICC does not intend to issue any shares of series S preferred
stock in the future.
Series C preferred stock
As of November 30, 2001, ICC had 10,000 shares of series C preferred stock
outstanding, held by one stockholder.
Series C preferred stock is convertible, at the option of the holder, into
class A common stock. Each share of series C preferred stock is convertible into
a number of shares of class A common stock determined by dividing $1,000 by the
conversion price at the date of conversion. The conversion price for the series
C preferred stock is $22.34 per share, which is subject to adjustment in the
case of a reclassification, subdivision or combination of ICC's common stock and
upon a consolidation, merger or sale of substantially all of the assets of ICC.
Series C preferred stock is redeemable, in whole or in part, by ICC,
commencing on the fifth anniversary of the date of issuance. The redemption
price for each share of series C preferred stock is $1,000 plus unpaid
dividends. Notice of redemption must be given not less than fifteen days nor
more than 45 days before the redemption date.
Upon a liquidation, dissolution or winding up of ICC, the holders of
series C preferred stock are entitled to receive an amount equal to $1,000 per
share of series C preferred stock plus unpaid dividends before any distribution
is made to holders of series A preferred stock or common stock.
The holders of the outstanding shares of series C preferred stock are
entitled to a 4% annual dividend payable in cash or in shares of class A common
stock (valued at the then market price of the class A common stock), at the
option of ICC. These dividends are payable on each January 1 and commenced on
January 1, 2001. ICC elected to issue 111,142 shares of class A common stock in
payment of the dividend due on January 1, 2001 and the board of directors of ICC
has declared a dividend on the series C preferred stock payable in shares of
class A common stock on January 1, 2002.
16
Each share of series C preferred stock is entitled to a number of votes
equal to the number of whole shares of common stock into which each share of
series C preferred is convertible as of the record date for the determination of
stockholders entitled to vote on any matter submitted to stockholders. As of the
date of this prospectus, each share of class C preferred stock is entitled to
approximately 44.76 votes.
Warrants
As of November 30, 2001, there were 234,140 class A warrants outstanding.
Each class A warrant entitles the holder upon exercise to purchase 1.36891
shares of class A common stock and one class B warrant, which is described
below. Each class A warrant is exercisable for $29.16 and expires in February
2002.
As of November 30, 2001, there were 263,835 class B warrants outstanding.
Each class B warrant entitles the holder upon exercise to purchase 1.36891
shares of class A common stock. Each class B warrant is exercisable for $39.23
and expires in February 2002.
The class A and class B warrants are traded in the over-the-counter market
on the OTC Bulletin Board. The number of class A and class B warrants and the
exercise prices of the class A and class B warrants are subject to adjustment in
the event of any subdivision or combination of the outstanding class A common
stock, any stock dividend payable in shares of class A common stock paid to
holders of class A common stock, or any sale of any shares of class A common
stock, or of any rights, warrants, options or securities convertible into or
exercisable for class A common stock, for consideration valued at less than the
market price of the class A common stock at that time.
The class A and class B warrants are subject to redemption by ICC, at
$0.25 per class A or class B warrant, on not less than 30 days notice in the
event that the average closing bid price for the class A common stock, if the
class A common stock is then traded on the Nasdaq National Market, or the last
reported sales price, if the class A common stock is then traded on a national
securities exchange, exceeds $44.50 in the case of the redemption of the class A
warrants and $61.25 in the case of the redemption of the class B warrants, for
the thirty consecutive business days ending within 15 days of the date of the
notice of redemption. All warrants of a class must be redeemed if any of that
class are redeemed. The date set for redemption of the class B warrants may not
be earlier than 31 days after the date set for redemption of the class A
warrants. The rights of holders of class A and class B warrants to exercise the
warrants terminate at 5:00 p.m., New York time, on the business day immediately
preceding the date set for redemption.
Investors in our 1998 bridge financing purchased 10% notes with warrants
attached. For each $1 of notes, a purchaser was entitled to 0.3 warrants and we
issued a total of 778,500 warrants in this transaction. Each of these warrants
entitles the holder upon exercise to purchase one share of class A common stock
for $2.50. These warrants expire between January and July 2002. As of November
30, 2001, there were 116,000 of these warrants outstanding.
Three finders introduced us to investors in our 1998 bridge financing and
received a total of 66,600 warrants for these services. Each of these warrants
entitles the holder upon exercise to purchase one share of class A common stock
for $2.50. These warrants expire in January 2002. As of November 30, 2001, there
were 8,910 of these warrants outstanding.
Several NASD registered broker/dealers provided services in connection
with our April 1999 private placement of series A preferred stock and received a
total of 173,250 warrants for these services. Each of these warrants entitles
the holder upon exercise to purchase one share of class A common stock for $5.00
and expires in April 2002. As of November 30, 2001, there were 43,350 of these
warrants outstanding.
The warrants issued in our 1998 bridge financing to investors and finders
are redeemable by ICC for $2.50 per warrant within 10 days of mailing an
acceleration notice at any time after one year from issuance if the bid price of
the class A common stock exceeds $7.50 (subject to adjustment for stock splits,
dividends or combinations) for 10 consecutive trading days.
17
The number and exercise price of the warrants issued to financial advisors
in connection with our 1998 bridge financing and our April 1999 private
placement are subject to adjustment in the event of any stock dividend payable
in shares of class A common stock paid to holders of class A common stock or any
subdivision or combination of the outstanding class A common stock.
In April 1999, a consultant received 18,000 warrants for consulting
services performed for ICC. Each of these warrants entitles the holder upon
exercise to purchase one share of class A common stock for $9.94 and expires in
March 2004. As of November 30, 2001, all of these warrants were outstanding.
In connection with our strategic global alliance with Cable & Wireless, we
issued to Cable & Wireless 400,000 warrants to purchase shares of our class A
common stock. Each of these warrants entitles the holder upon exercise to
purchase one share of class A common stock for $22.21 per share and expires in
January 2005. The number and exercise price of these warrants are subject to
appropriate adjustment in the event of any stock dividend, subdivision or
combination of the outstanding class A common stock. As of November 30, 2001,
all of these warrants were outstanding.
In connection with the our acquisition of Research Triangle Commerce Inc.
in November 2000, warrants to purchase shares of RTCI common stock were
exchanged for warrants to purchase an aggregate of 45,760 shares of ICC class A
common stock at $5.77 per share. These warrants expire in January 2003. As of
November 30, 2001, 45,760 of these warrants were outstanding.
On October 24, 2001, we sold in a private placement 1,159,716 shares of
class A common stock and warrants to purchase 347,915 shares of class A common
stock for gross proceeds of 43,189,129 to the selling stockholders named in this
prospectus. The warrants are immediately exercisable and have an exercise price
of $3.58 per share. In connection with the private placement, the Company
incurred fees of $152,111. Of such fees, $35,000 will be paid in cash and
$117,511 will be paid by issuing warrants to purchase 50,000 shares of class a
common stock. The warrants will have substantially the same terms and conditions
as the warrants issued to the selling stockholders the private placement.
Delaware Law and Certificate of Incorporation and Bylaw Provisions
The following is a summary description of material provisions of the
Delaware General Corporation Law and our certificate of incorporation and
bylaws. For further information you should refer to our certificate of
incorporation and bylaws.
We must comply with the provisions of Section 203 of the Delaware General
Corporation Law. Section 203 prohibits a publicly-held Delaware corporation from
engaging in a business combination with an interested stockholder for three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
A business combination includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder. An interested
stockholder is generally a person who, together with affiliates and associates,
owns, or within the past three years did own, 15% of the corporation's voting
stock.
There are provisions in our certificate of incorporation, our bylaws and
Delaware law that make it more difficult for a third party to obtain control of
ICC, even if doing so would be beneficial to our stockholders. This could
depress our stock price. However, these provisions enhance the likelihood of
continuity and stability in the composition of the policies formulated by the
board of directors. In addition, these provisions are intended to ensure that
the board of directors will have sufficient time to act in what it believes to
be in the best interests of ICC and its stockholders. These provisions also are
designed to reduce the vulnerability of ICC to an unsolicited proposal for a
takeover of ICC that does not contemplate the acquisition of all of its
outstanding shares or an unsolicited proposal for the restructuring or sale of
all or part of ICC. The provisions are also intended to discourage some tactics
that may be used in proxy fights.
18
Classified Board of Directors
Our board of directors is divided into three classes of directors. The
classes are as nearly equal in number as possible and serve staggered three-year
terms. One class of directors is elected each year to serve a three-year term.
The classified board provision will help to assure the continuity and stability
of the board of directors and the business strategies and policies of ICC as
determined by the board of directors. The classified board provision could have
the effect of discouraging a third party from making a tender offer for our
shares or attempting to obtain control of ICC. In addition, the classified board
provision could delay stockholders who do not agree with the policies of the
board of directors from replacing a majority of the board of directors for two
years.
Indemnification
We have included in our certificate of incorporation and bylaws provisions
to (1) eliminate the personal liability of our directors for monetary damages
resulting from breaches of their fiduciary duty to the extent permitted by the
Delaware General Corporation Law, and (2) indemnify our directors and officers
to the fullest extent permitted by the Delaware General Corporation Law,
including circumstances in which indemnification is discretionary.
We believe that these provisions are necessary to attract and retain
qualified persons as directors and officers.
Transfer Agent and Registrar
The transfer agent and registrar for our class A common stock is American
Stock Transfer and Trust Company.
LEGAL MATTERS
The legality of the shares of class A common stock being offered by this
prospectus has been passed upon by Kramer Levin Naftalis & Frankel LLP, New
York, New York.
EXPERTS
The financial statements and related financial statement schedule for the
years ended July 31, 2001 and 2000, incorporated in this prospectus by reference
from Internet Commerce Corporation's annual report on form 10-K for the year
ended July 31, 2001 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and has been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
Richard A. Eisner & Company, LLP, our previous independent auditors, have
audited our financial statements and related financial statement schedule for
the year ended July 31, 1999, as stated in their report included in our annual
report on form 10-K for the year ended July 31, 2001, which is incorporated in
this prospectus by reference. Our financial statements for the year ended July
31, 1999 are incorporated by reference in reliance on the report of Richard A.
Eisner & Company, LLP, and related financial statement schedule, given on
their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
o Government Filings. We file annual, quarterly and special reports,
proxy statements and other information with the SEC. Our SEC filings
are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at
the SEC's public reference room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain information on the operation of the SEC's
public reference room in Washington, D.C. by calling the SEC at
1-800-SEC-0330.
19
We have filed with the SEC a registration statement on form S-3 to
register the shares of class A common stock to be offered. This prospectus is
part of that registration statement and, as permitted by the SEC's rules, does
not contain all the information included in the registration statement. For
further information about us and our class A common stock, you should refer to
that registration statement and to the exhibits and schedules filed as part of
that registration statement, as well as the documents we have incorporated by
reference which are discussed below. You can review and copy the registration
statement, its exhibits and schedules, as well as the documents we have
incorporated by reference, at the public reference facilities maintained by the
SEC as described above. The registration statement, including its exhibits and
schedules, are also available on the SEC's web site, given above.
o Stock Market. Shares of our class A common stock are traded on the
Nasdaq National Market.
o Information Incorporated by Reference. The SEC allows us to incorporate
by reference the information we file with it, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is an important
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 further
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act, until this offering has been completed:
o Our annual report on form 10-K for the year ended July 31, 2001;
o Our quarterly report on form 10-Q for the quarter ended October 31,
2001 to be filed after the date of this prospectus but prior to the
effective date of this registration statement; and
o The description of our class A common stock contained in our Rule
424 prospectus filed with the SEC on June 18, 1995, including any
amendments or reports filed for the purpose of updating the
description. See also Description of Securities on pages 17 to 23 of
this prospectus.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Internet Commerce Corporation
805 Third Avenue
New York, New York 10022
(212) 271-7640
Attn: Victor Bjorge
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 or any prospectus supplement is accurate as of any date other than
the date on the front of those documents. We have not authorized anyone to
provide you with, and you should not rely on, information other than that which
is in this prospectus, any prospectus supplement or which is incorporated in
this prospectus by reference.
20
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection with
the distribution of the securities covered by this Registration Statement. All
of the expenses will be borne by ICC except as otherwise indicated.
SEC Registration Fee (actual).................................$ 1,419.67
Printing and engraving fees and expenses......................$ 1,000.00
Legal fees and expenses.......................................$20,000.00
Accounting fees and expenses..................................$10,000.00
Miscellaneous.................................................$ 580.33
----------
Total.........................................................$33,000.00
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware,
referred to as the DGCL, provides that a corporation may indemnify directors and
officers as well as other employees and individuals against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement in connection
with specified actions, suits, proceedings whether civil, criminal,
administrative, or investigative, other than action by or in the right of the
corporation, known as a derivative action, if they acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses, including attorneys' fees, incurred in connection with the
defense or settlement of the action, and the statute requires court approval
before there can be any indemnification where the person seeking indemnification
has been found liable to the corporation. The statue provides that it is not
exclusive of other indemnification that may be granted by a corporation's
charter, bylaws, disinterested director vote, stockholder vote, agreement, or
otherwise. Section 145 thus makes provision for indemnification in terms
sufficiently broad to cover officers and directors, under certain circumstances,
for liabilities arising under the Securities Act of 1933, as it may be amended
from time to time (the "Securities Act").
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that 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, except for liability for (i) any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) payment of unlawful dividends or unlawful
stock purchases or redemptions, or (iv) any transaction from which the director
derived an improper personal benefit.
Article VII of our bylaws and Article Seventh of our Amended and Restated
Certificate of Incorporation, as further amended, both provide that we shall
indemnify, to the fullest extent permitted by Section 145 of the DGCL, each
person that Section 145 grants us power to indemnify. Article VIII of our bylaws
and Article Seventh of our Amended and Restated Certificate of Incorporation, as
further amended, both provide that no director shall be liable to us or any of
our stockholders for monetary damages for breach of fiduciary duty as a
director, except with respect to (1) a breach of the director's duty of loyalty
to the corporation or its stockholders, (2) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (3)
liability under Section 174 of the DGCL or (4) a transaction from which the
director derived an improper personal benefit, and that it is the intention of
the foregoing provisions to eliminate the liability of our directors to ICC and
our stockholders to the fullest extent permitted by Section 102(b)(7) of the
DGCL.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have 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. If a claim for indemnification against such liabilities (other
than the payment by ICC of expenses incurred or paid by a director, officer or
controlling person of ICC in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection
II-1
with the securities being registered, we will, unless in the opinion of our
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by ICC is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
Item 16. Exhibits.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated in this registration statement
by reference to a prior filing of ICC under the Securities Act or the Exchange
Act as indicated in parenthesis:
Exhibit
Number Description
- ------ -----------
2.1 Agreement and Plan of Merger among ICC, ICC Acquisition
Corporation, Inc., a wholly-owned subsidiary of ICC, Research
Triangle Commerce, Inc., or RTCI, and the selling shareholders of
RTCI (13)
2.2 Agreement and Plan of Merger among ICC, IDC, and the selling
shareholders of IDC (14)
3(i).1 Amended and Restated Certificate of Incorporation (1)
3(i).2 Certificate of Merger merging Infosafe Systems, Inc. and
Internet Commerce Corporation (1)
3(i).3 Certificate of Amendment to the Amended and Restated Articles of
Incorporation (2)
3(i).4 Certificate of Designations-- Series A Convertible Redeemable
Preferred Stock (1)
3(i).5 Certificate of Designations-- Series S Preferred Stock (1)
3(i).6 Certificate of Designations-- Series C Preferred Stock (10)
3(ii).1 Bylaws (19)
4.1 Specimen Certificate for Class A Common Stock (3)
4.2 Form of Revised Subscription Agreement, dated March 31, 1999,
relating to the shares of Series A Convertible Redeemable
Preferred Stock sold in the 1999 private placement (1)
4.3 Form of Underwriter's Option (3)
4.4 Form of Warrant Agreement (3)
4.5 Escrow agreement, as amended (3)
4.6 Form of warrant expiring February 18, 2002 (3)
4.7 Warrant Agreement, dated February 10, 1997, by and among ICC,
American Stock Transfer and Trust Company as warrant agent and
D.H. Blair Investment Banking Corp. (4)
4.8 Amendment Agreement, dated February 10, 1997, to Warrant
Agreement dated January 25, 1995 by and among ICC, American Stock
Transfer and Trust Company as warrant agent and D.H. Blair
Investment Banking Corp. (4)
4.9 Form of Unit Purchase Option for D.H. Blair Investment Banking
Corp. dated February 18, 1997 (4)
4.10 Agreement, dated February 18, 1997, between ICC and D. H. Blair
Investment Banking Corp. to extend an agreement dated January 25,
1995 regarding mergers, acquisitions and similar transactions (4)
4.11 Form of Class A Bridge Warrant issued in the 1998 bridge
financing (1)
4.12 Warrant Agreement dated January 12, 2000, by and among ICC and
Cable and Wireless USA, Inc. (10)
4.13 RTCI Employee Stock Option Plan (15)
4.14 Amendment to RTCI Employee Stock Option Plan (15)
4.15 Form of Three-Year Incentive Stock Option Agreement (15)
4.16 Form of Four-Year Incentive Stock Option Agreement (15)
4.17 Form of Non-Qualified Stock Option Agreement (15)
4.18 Form of Buy-Sell Agreement for Optionholders (15)
4.19 Research Triangle Commerce, Inc. Restricted Stock Plan (16)
4.20 Warrant Agreement between ICC and Ben Brooks (20)
4.21 Warrant Agreement between ICC and Marion Bass Securities
Corporation (20)
4.22 Warrant Agreement between ICC and Rene Matthews Usher (20)
4.23 Warrant Agreement between ICC and Mark Yount (20)
II-2
4.24* Warrant Agreement between ICC and Richard Blume dated April 1,
1999
4.25 Form of Registration Rights Agreement dated as of October 29,
2001 by and among ICC and the purchasers identified therein (21)
4.26 Registration Rights Agreement dated as of October 29, 2001 by and
between ICC and Amaranth Trading LLC (21)
4.27* Form of Class A Common Stock Warrant issued in October 2001
private placement
5.1 * Opinion of Kramer Levin Naftalis & Frankel LLP regarding legality
of the shares of class A common stock being registered pursuant to
this Registration Statement
10.1 1992 Stock Option Plan (3)
10.2 1994 Stock Option Plan (3)
10.3 Lease Agreement between 805 Third Ave. Co. as landlord and ICC as
tenant relating to the rental of ICC's current principal
executive office (6)
10.4 Lease Agreement, dated as of May 21, 1999, between JB Squared LLC
and ICC relating to the rental of approximately 4,000 square feet at
the Lakeview Executive Center, 45 Research Way, East Setauket, New
York, 11733 (7)
10.5 Employment Agreement for Anthony D'Angelo dated as of April 16,
2000 (21)
10.6 Employment Agreement for G. Michael Cassidy dated as of April 16,
2000 (18)
10.7 Employment Agreement for David Hubbard dated as of April 16, 2000
(18)
10.8 Employment Agreement for Walter M. Psztur dated as of April 16,
2000 (18)
10.9 Settlement Agreement between ICC, Arthur R. Medici and Dr. Robert
H. Nagel (8)
10.10 Revised Settlement Agreement between ICC, Arthur R. Medici and
Dr. Robert H. Nagel (8)
10.11 Amendment to the Revised Settlement Agreement between ICC, Arthur
R. Medici and Dr. Robert H. Nagel (8)
10.12 Second Amendment to the Revised Settlement Agreement between ICC,
Arthur R. Medici and Dr. Robert H. Nagel (8)
10.13 Master Agreement between Cable & Wireless PLC and ICC executed on
November 24, 1999 (9)
10.14 Consulting Agreement, dated as of March 15, 2000, between Michele
Golden and ICC (11)
10.15 Amended and restated stock option plan (12)
10.16 First Amendment to Lease Agreement, dated as of January, 2000, by
and between JB Squared LLC and ICC relating to the rental of an
additional approximately 4,800 square feet at the Lakeview Executive
Center, 45 Research Way, East Setauket, New York, 11733 (18)
10.17 First Amendment of Lease Agreement between Madison Third Building
Companies LLC and ICC relating to the rental of additional office
space at 805 Third Avenue, New York, New York (18)
10.18 Lease Agreement, dated as of August 2, 2000, by and between IDC
Realty, LLC as landlord and ICC as tenant relating to the rental of
an approximately 8,000 square feet facility used by ICC's IDC
division (18)
10.19 Lease Agreement, dated as of November 1, 1999, by and between
Shannon Oaks Partnership as landlord and RTCI as tenant relating to
the rental of an approximately 8,000 square feet facility used by
ICC's professional services division (21)
10.20 Joint Services Agreement, between ICC and Hightech International
Services GmbH (a wholly-owned subsidiary of ThyssenKrupp Services
GmbH) executed on July 28, 2000 (21)
10.21 Letter agreement dated July 25, 2001 between ICC and Triaton GmbH
(f/k/a HighTech International Services, a wholly-owned subsidiary of
ThyssenKrupp Services GmbH) amending Joint Services Agreement (21)
10.22 Subscription Agreement dated as of October 29, 2001 by and
between ICC and Amaranth Trading LLC (21)
10.23 Form of Subscription Agreement dated as of October 29, 2001 by
and among ICC and the purchasers identified therein (21)
23(ii).1* Consent of Deloitte & Touche LLP
23(ii).2* Consent of Richard A. Eisner & Company, LLP
23(ii).4* Consent of Kramer Levin Naftalis & Frankel LLP (contained in
Exhibit 5.1 hereto)
(b) Financial Statement Schedules:
Not Applicable.
* Filed herewith
II-3
(1) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File no. 333-80043)
(2) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the year ended July 31, 1998
(3) Incorporated by reference to the Company's Registration Statement on Form
SB-2 (File no. 33-83940)
(4) Incorporated by reference to the Company's Report on Form 10-QSB dated
January 31, 1997
(5) Incorporated by reference to the Company's Report on Form 10-QSB dated
April 30, 1997
(6) Incorporated by reference to the Company's Report on Form 10-QSB dated
October 31, 1997
(7) Incorporated by reference to Amendment No. 3 to the Company's Registration
Statement on Form S-3 (File no. 333-80043)
(8) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File no. 333-91885)
(9) Incorporated by reference to the Company's Current Report on Form 8-K dated
December 1, 1999
(10) Incorporated by reference to Amendment No. 1 to the Company's Registration
Statement on Form S-3 (File No. 333-93301)
(11) Incorporated by reference to the Company's Current Report on Form 8-K dated
March 28, 2000
(12) Incorporated by reference to the Company's Proxy Statement for the annual
meeting of stockholders for the year ended July 31, 1999
(13) Incorporated by reference to the Company's Current Report on Form 8-K dated
June 15, 2000
(14) Incorporated by reference to the Company's Current Report on Form 8-K dated
August 11, 2000
(15) Incorporated by reference to the Company's Registration Statement on Form
S-8 (File no. 333-49372)
(16) Incorporated by reference to the Company's Registration Statement on Form
S-8 (File no. 333-493640)
(17) Incorporated by reference to the Company's Current Report on Form 8-K dated
December 1, 1999
(18) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the year ended July 31, 2000
(19) Incorporated by reference to the Company's Current Report on Form 8-K filed
with the SEC on July 1, 1999
(20) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File No. 333-52450)
(21) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended July 31, 2001
Item 17. Undertakings.
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; 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 clauses (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by such clauses is
contained in periodic reports filed by the registrant with the Commission
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.
II-4
(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.
(4) 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 (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-5
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 or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on the
21st day of December, 2001.
Internet Commerce Corporation
by: /s/ G. Michael Cassidy
--------------------------------------
G. Michael Cassidy
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ G. Michael Cassidy President and Chief December 21, 2001
- -------------------------- Executive Officer
G. Michael Cassidy (Principal Executive
Officer), Director
/s/ Walter M. Psztur Chief Financial Officer December 21, 2001
- -------------------------- (Principal Financial
Walter M. Psztur and Accounting Officer)
/s/ Richard J. Berman Director December 21, 2001
- --------------------------
Richard J. Berman
/s/ Spencer I. Browne Director December 21, 2001
- --------------------------
Spencer I. Browne
/s/ Peter J. Boni Director December 21, 2001
- --------------------------
Peter J. Boni
/s/ Sarah Byrne-Quinn Director December 21, 2001
- --------------------------
Sarah Byrne-Quinn
/s/ Kim D. Cooke Director December 21, 2001
- --------------------------
Kim D. Cooke
/s/ Charles C. Johnston Director December 21, 2001
- --------------------------
Charles C. Johnston
/s/ Arthur R. Medici Director December 21, 2001
- --------------------------
Arthur R. Medici