AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 1, 1997.
REGISTRATION STATEMENT NO. 333-25065
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1 TO FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TELEGROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
IOWA 4813 42-1344121
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
2098 NUTMEG AVENUE
FAIRFIELD, IOWA 52556
(515) 472-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DOUGLAS A. NEISH
CHIEF FINANCIAL OFFICER
TELEGROUP, INC.
2098 NUTMEG AVENUE
FAIRFIELD, IOWA 52556
(515) 472-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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COPIES TO:
JOHN J. KLUSARITZ, ESQ. DENNIS J. FRIEDMAN, ESQ.
MORRIS F. DEFEO, JR., ESQ. CHADBOURNE & PARKE LLP
SWIDLER & BERLIN, CHARTERED 30 ROCKEFELLER PLAZA
3000 K STREET, N.W., SUITE 300 NEW YORK, NY 10112
WASHINGTON, D.C. 20007 (212) 408-5100
(202) 424-7500
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
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, check the following box: [_]
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: [_]
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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 THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The table below sets forth the expenses to be incurred by the Company in
connection with the issuance and distribution of the shares registered for
offer and sale hereby, other than underwriting discounts and commissions. All
amounts shown represent estimates except the Securities Act registration fee
and the NASD filing fee.
Registration fee under the Securities Act of 1933............... $43,561
NASD filing fee................................................. 14,875
Nasdaq National Market fee....................................... *
Printing expenses................................................ *
Registrar and Transfer Agent's fees and expenses................. *
Accountants' fees and expenses................................... *
Legal fees and expenses (not including Blue Sky)................. *
Blue Sky fees and expenses....................................... *
Miscellaneous.................................................... *
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Total........................................................ $ *
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* To be completed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Iowa Business Corporation Act confers broad powers upon corporations
incorporated in Iowa with respect to indemnification of any person against
liabilities incurred by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another Corporation or other business entity. These provisions are not
exclusive of any other rights to which those seeking indemnification may be
entitled under any bylaw, agreement or otherwise.
The Company's Articles will contain a provision that eliminates the personal
liability of the Company's directors to the Company or its shareholders for
monetary damages for breach of fiduciary duty as a director, except (i) for
liability for any breach of the director's duty of loyalty to the Corporation
or its shareholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or knowing violation of the law, (iii) for any
transaction from which the director derived an improper personal benefit, or
(iv) for unlawful distributions in violation of Section 490.833 of the Iowa
Business Corporation Act. Any repeal or amendment of this provision by the
shareholders of the Corporation will not adversely affect any right or
protection of a director existing at the time of such repeal or amendment.
The Company's Bylaws will contain a provision entitling officers and
directors to be indemnified and held harmless by the Company against expenses,
liabilities and costs (including attorneys' fees) actually and reasonably
incurred by such person, to the fullest extent permitted by the Iowa Business
Corporation Act.
The Company has applied for a director and officer liability policy,
under which each director and certain officers of the Company would be insured
against certain liabilities. In addition, prior to the effectiveness of the
Offering, the Company will enter into indemnity agreements with each of its
officers and directors.
Prior to completion of the Offering, the Company intends to enter into
indemnification agreements with certain of its executive officers and
directors.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The following paragraphs of this Item 15 describe all offers and sales of
securities by the Company within the last three years which were not
registered under the Securities Act of 1933, other than securities issued in
connection with stock reclassifications, stock dividends or stock splits:
II-1
On April 23, 1996, the Company issued 94,707 shares of Class B Common
Stock to Michael Lackman for the aggregate consideration of $20,946.53 paid
by Mr. Lackman with a promissory note in the principal amount of
$20,946.53.
On April 26, 1996, the Company issued 142,061 shares of Class B Common
Stock to Ronald Stakland for the aggregate consideration of $31,419.80 paid
by Mr. Stakland with a promissory note in the principal amount of
$31,419.80.
On August 21, 1996, in connection with the Plan and Agreement of
Reorganization between the Company, George Apple and Telegroup South
Europe, Inc. ("TGSE"), the Company issued 47,832 shares of Class A Common
Stock and made a cash payment to George Apple in exchange for substantially
all of the assets of TGSE.
Amended and Restated 1996 Telegroup, Inc. Stock Option Plan. See
"Management--Amended and Restated 1996 Telegroup, Inc. Stock Option Plan"
incorporated by reference herein from the Prospectus included in Part I of
this Registration Statement.
November 27, 1996 Issuance of Senior Subordinated Notes and Warrants. On
November 27, 1996, the Company completed a $20 million private placement of
its 12.0% Senior Subordinated Notes, together with warrants to purchase 4.0%
of the Company's fully-diluted Common Stock. See "Certain Transactions--
Subordinated Note Placement" and "Description of Capital Stock--Warrants."
Each issuance of securities described above was made in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act as
a transaction by an issuer not involving any public offering. The recipients
of securities in each such transaction represented their intention to acquire
the securities for investment only and not with a view to or for sale in
connection with any distribution thereof and appropriate legends were affixed
to the share certificates issued in such transactions. All recipients had
adequate access, through their relationships with the Company, to information
about the Company.
ITEM 16(A). EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
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*1.1 Form of Underwriting Agreement
*2.1 Plan and Agreement of Reorganization Between the
Company, George Apple and Telegroup South Europe,
Inc. Dated September 6, 1996
3.1 Restated Articles of Incorporation of Telegroup, Inc.
3.2 Form of Second Restated Articles of Incorporation of
Telegroup, Inc.
3.3 Bylaws of Telegroup, Inc.
3.4 Form of Amended and Restated Bylaws of Telegroup, Inc.
*4.1 Form of Common Stock Certificate of Telegroup, Inc.
4.2 Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4
4.3 Note and Warrant Purchase Agreement dated as of
November 27, 1996
4.4 Form of Warrant to Purchase Class A Common Stock of
Telegroup, Inc.
4.5 Indenture dated as of November 27, 1996 between
Telegroup, Inc. and The Chase Manhattan Bank
*5.1 Opinion of Swidler & Berlin, Chartered
10.1 Loan Agreement Dated as of March 28, 1997 by and
between the Company and American National Bank and
Trust Company of Chicago
II-2
EXHIBIT
NUMBER DESCRIPTION
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10.2 Amended and Restated 1996 Telegroup, Inc. Stock Option
Plan
10.3 Form of Employment Agreement between the Company and
Fred Gratzon
10.4 Form of Employment Agreement between the Company and
Clifford Rees
10.5 Form of Indemnification Agreement
10.6 Registration Rights Agreement among Telegroup, Inc.,
Greenwich Street Capital Partners, L.P., Greenwich
Street Capital Offshore Fund, Ltd., TRV Employees
Fund, L.P., The Travelers Insurance Company and The
Travelers Life and Annuity Company Dated as of
November 27, 1996
10.7 Form of Registration Rights Agreement between the
Company and certain shareholders of the Company
*11.1 Statement Regarding Computation of Per Share Earnings
*21.1 Subsidiaries of Telegroup, Inc.
**23.2 Consent of KPMG Peat Marwick, LLP
*23.3 Consent of Swidler & Berlin, Chartered (to be included
in Exhibit 5.1 to this Registration Statement)
**24.1 Power of Attorney
**27.1 Financial Data Schedule
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* To be filed by amendment.
** Previously filed.
ITEM 16(B). FINANCIAL STATEMENT SCHEDULES.
II--Valuation and Qualifying Accounts (previously filed)
All other schedules are omitted either because they are not applicable or
are not material, or the information presented therein is contained in the
Financial Statements or notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF FAIRFIELD, STATE OF
IOWA, ON MAY 1, 1997.
Telegroup, Inc.
*
By: ____________________________
CLIFFORD REES PRESIDENT AND
CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON MAY 1, 1997.
SIGNATURE TITLE
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* Chairman of the Board and Director
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FRED GRATZON
* Chief Executive Officer, President
- ------------------------------------- and Director (Principal Executive
CLIFFORD REES Officer)
* Vice President--Finance, Chief
- ------------------------------------- Financial Officer, Treasurer and
DOUGLAS A. NEISH Director (Principal Financial
Officer)
* Director of Finance and Controller
- ------------------------------------- (Principal Accounting Officer)
GARY KORF
Senior Vice President, International
- ------------------------------------- Services and Director
RONALD B. STAKLAND
* Charles Johanson, by signing his name hereto, signs this document on behalf
of each of the persons so indicated above pursuant to powers of attorney
duly executed by such person and filed with the Securities and Exchange
Commission.
/s/ Charles Johanson Attorney-in-Fact
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CHARLES JOHANSON
II-4
EXHIBIT INDEX
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
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*1.1 Form of Underwriting Agreement
*2.1 Plan and Agreement of Reorganization Between the
Company, George Apple and Telegroup South Europe,
Inc. Dated September 6, 1996
3.1 Restated Articles of Incorporation of Telegroup, Inc.
3.2 Form of Second Restated Articles of Incorporation of
Telegroup, Inc.
3.3 Bylaws of Telegroup, Inc.
3.4 Form of Amended and Restated Bylaws of Telegroup, Inc.
*4.1 Form of Common Stock Certificate of Telegroup, Inc.
4.2 Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4
4.3 Note and Warrant Purchase Agreement dated as of
November 27, 1996
4.4 Form of Warrant to Purchase Class A Common Stock of
Telegroup, Inc.
4.5 Indenture dated as of November 27, 1996 between
Telegroup, Inc. and The Chase Manhattan Bank
*5.1 Opinion of Swidler & Berlin, Chartered
10.1 Loan Agreement Dated as of March 28, 1997 by and
between the Company and American National Bank and
Trust Company of Chicago
10.2 Amended and Restated 1996 Telegroup, Inc. Stock Option
Plan
10.3 Form of Employment Agreement between the Company and
Fred Gratzon
10.4 Form of Employment Agreement between the Company and
Clifford Rees
10.5 Form of Indemnification Agreement
10.6 Registration Rights Agreement among Telegroup, Inc.,
Greenwich Street Capital Partners, L.P., Greenwich
Street Capital Offshore Fund, Ltd., TRV Employees
Fund, L.P., The Travelers Insurance Company and The
Travelers Life and Annuity Company Dated as of
November 27, 1996
10.7 Form of Registration Rights Agreement between the
Company and certain shareholders of the Company
*11.1 Statement Regarding Computation of Per Share Earnings
*21.1 Subsidiaries of Telegroup, Inc.
**23.2 Consent of KPMG Peat Marwick, LLP
*23.3 Consent of Swidler & Berlin, Chartered (to be included
in Exhibit 5.1 to this Registration Statement)
**24.1 Power of Attorney
**27.1 Financial Data Schedule
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* To be filed by amendment.
** Previously filed.