<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): October 23, 1997
LCC INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21213 54-1807038
- ---------------------------- ------------ ---------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification
Number)
7925 Jones Branch Drive
McLean, VA 22102
- ----------------------------------------- ---------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (703) 873-2000
<PAGE> 2
ITEM 5. OTHER EVENTS. On October 23, 1997, LCC International, Inc. (the
"Company") and MCI Telecommunications Corporation ("MCI") agreed that the
Company will not exercise its annual conversion rights under the Company's
Subordinated Notes Due 2000, dated June 28, 1994, to MCI, as amended, in the
aggregate principal amount of $50,000,000 (the "Notes") into the Company's Class
A Common Stock, par value $.01 per share ("Class A Common Stock"). The Notes are
convertible into 2,841,099 shares of Class A Common Stock. Such conversion right
applied during the period between August 25, 1997 and October 8, 1997 and was
extended by mutual agreement until October 23, 1997. The Notes will continue to
be convertible during the period between June 27, 1998 and August 10, 1998, at
MCI's option, and during the period between August 25, 1998 and October 8, 1998,
at the Company's option, and in each case during the same periods in 1999. The
Notes are also convertible upon certain extraordinary events, such as a certain
mergers, a sale of all of the assets of the Company and certain tender offers
and asset distributions, and, as described below, are partially convertible (up
to 1 million shares) during certain periods in 1998.
The Company and MCI have also agreed that, effective immediately, the
annual interest rate on the Notes is reduced from 6.8% to 4.4%. The reduction
in interest represents an annual pre-tax savings of approximately $1.2 million.
In addition, the Company and MCI have agreed that if, prior to June 26, 1998,
the Company proposes to register any of its shares of common stock under the
Securities Act of 1933, as amended, whether for its own account or for the
account of other security holders or both, on any form other than S-8, S-4 (or
Form S-3 if such registration covers an offering of the type contemplated by
Form S-8) or any successor forms, MCI shall have the opportunity to partially
convert the Notes into up to 1 million shares of Class A Common Stock for sale
in connection with such registration. In connection with the foregoing, the
Company, MCI and RF Investors, L.L.C., a Delaware limited liability company and
major shareholder of the Company ("RF Investors"), have agreed that, in event
that such registration is made in connection with an underwritten offering and
the managing underwriter for the proposed offering concludes that it would be
advisable, from a marketing standpoint, to reduce the number of shares to be
included therein from the total number requested by the Company and all other
security holders to be registered, the number of shares requested by MCI to be
registered shall be reduced only if all other shares requested by all other
security holders having rights to be included in such registration have been
excluded therefrom. The foregoing matters are set forth in amendments to the
Notes and to the Registration Rights Agreement, dated as of July 25, 1996, among
the Company, MCI and RF Investors, which amendments were entered into on October
23, 1997. Copies of such amendments are filed as exhibits to this Form 8-K and
are incorporated herein by reference.
The foregoing description does not purport to be complete and is
qualified in its entirety by the terms and conditions of such amendments.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
2.1 Second Amendment to Subordinated Note Due 2000 and Amendment to
Registration Rights Agreement, dated October 23, 1997, by and between
the Company and MCI as to the Note amendment, and among the Company,
MCI and RF Investors as the Registration Rights Agreement amendment.
2.2 Fourth Amendment to Subordinated Note Due 2000 and Amendment to
Registration Rights Agreement, dated October 23, 1997, by and between
the Company and MCI as to the Note amendment, and among the Company,
MCI and RF Investors as the Registration Rights Agreement amendment.
99. Press Release, dated October 23, 1997 regarding the agreement of the
Company and MCI to delay conversion of existing note agreement.
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 24, 1997 LCC INTERNATIONAL, INC.
By: /s/ RICHARD HOZIK
-------------------------
Richard Hozik
Senior Vice President, Treasurer
and Chief Financial Officer
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE NUMBER IN
EXHIBIT NUMBER EXHIBIT SEQUENTIAL NUMBERING SYSTEM
- -----------------------------------------------------------------------------------------
<S> <C>
2.1 Second Amendment to Subordinated
Note Due 2000 and Amendment to
Registration Rights Agreement, dated
October 23, 1997, by and between the
Company and MCI as to the Note
amendment, and among the Company,
MCI and RF Investors as the Registration
Rights Agreement amendment.
2.2 Fourth Amendment to Subordinated
Note Due 2000 and Amendment to
Registration Rights Agreement, dated
October 23, 1997, by and between the
Company and MCI as to the Note
amendment, and among the Company,
MCI and RF Investors as the Registration
Rights Agreement amendment.
99. Press Release, dated October 23, 1997
regarding the agreement of the Company
and MCI to delay conversion of
existing note agreement.
</TABLE>
<PAGE> 1
EXHIBIT 2.1
SECOND AMENDMENT TO SUBORDINATED NOTE DUE 2000
AND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This Second Amendment to Subordinated Note Due 2000 is made by and
between LCC International, Inc., a Delaware corporation (the "Company"), and MCI
Telecommunications Corporation, a Delaware corporation ("MCI") and this
Amendment to Registration Rights Agreement is made among the Company, MCI and RF
Investors, L.L.C., a Delaware limited liability company and major stockholder of
the Company ("RF Investors"), in each case as of this 23rd day of October, 1997
(the foregoing amendments are collectively referred to herein as "this
Amendment").
WHEREAS, MCI is the holder of that certain Subordinated Note Due 2000 of
the Company (originally issued by LCC, L.L.C. on June 28, 1994 and assumed by
the Company on September 27, 1996) in the aggregate principal amount of
$20,000,000 with interest thereon at an annual rate of 6.8%, as amended (the
"Note"); and
WHEREAS, Section 3 of the Note contains a provision for exchange of the
Note for an aggregate of 1,136,440 shares of Class A Common Stock, par value
$.01 per share, of the Company ("Class A Common Stock"), in certain instances;
and
WHEREAS, the Company and MCI desire to amend the Note to provide for a
reduction in the annual rate of interest thereon and to provide MCI with an
additional right to exchange the Note for Class A Common Stock; and
WHEREAS, the Company, MCI and RF Investors are parties to that certain
Registration Rights Agreement, dated as of July 25, 1996 (the "Registration
Rights Agreement"); and
WHEREAS, in consideration of the reduction in the annual rate of
interest on the Note provided for below, the parties have agreed to amend the
Registration Rights Agreement in certain respects.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Note.
<PAGE> 2
2. Effective on October 23, 1997 the Note shall bear interest until paid
in full at an annual rate of 4.4%. Interest on the Note shall continue to be
payable semi-annually in arrears on the last day of each June and December.
3. Each of Sections 3(a), 3(c) and 3(d) of the Note is hereby amended by
added after the words "to be issued by the Company" in the first sentence
thereof the words "less the number of shares, if any, for which this Note was
partially exchanged pursuant to the second paragraph of Section 3(b)." Section
3(b) of the Note is hereby amended in its entirety as follows:
(b) At the Option of Investor. This Note may be exchanged, in whole
but not in part, at the option of Investor, together with the Telcom Note, for
an aggregate of 1,136,440 shares of Class A Common Stock to be issued by the
Company less the number of shares, if any, for which this Note was partially
exchanged pursuant to the following paragraph, subject to adjustment as provided
in paragraph (e) below, by written notice of Investor to the Company (i) at any
time during the 45 calendar day period commencing on each of June 27, 1997, June
27, 1998 and June 27, 1999, which notice shall set forth the effective date
(subject to the provisions of paragraph (f) below) of the exchange which shall
be a date not later than 60 days following the date of such notice, (ii) if the
Company has delivered a Prepayment Notice, at any time on or prior to the
Prepayment Date, (iii) if the Company has delivered notice to Investor of the
occurrence of a Section 3(a) Event, and at such time there shall have occurred
and be continuing an Event of Default, at any time prior to the occurrence of
such Section 3(a) Event, (iv) at any time from the commencement of a tender
offer other than by MCI or any Affiliate thereof (as defined in the
Securityholders Agreement) for 25% or more of the outstanding common stock of
the Company until the completion or withdrawal of such tender offer or (v) at
any time from the public announcement by the Company of its intention to effect
a distribution (through dividend or otherwise) of assets representing 5% or more
of the fair market value of its total assets pro rata to its shareholders of
record through the record date for such distribution. This Note may not be
exchanged by Investor pursuant to this paragraph of this Section 3(b) unless it
shall simultaneously exchange the Telcom Note pursuant to the first paragraph of
Section 3(b) thereof.
In addition to the exchange right of Investor set forth in the preceding
paragraph, this Note may be exchanged, at the option of Investor, as follows. In
the event that, prior to June 26, 1998, the Company proposes to register shares
of Class A Common Stock or the Company's Class B Common Stock, par value $.01
per share, under the Securities Act of 1933, as amended, whether for its own
account or for the account of other security holders or both, including without
limitation in connection with the exercise by RF Investors, L.L.C. ("RF
Investors") of its rights under Section 1.2 of the Registration Rights
Agreement, dated as of July 25, 1996, among the Company, Investor and RF
Investors (the "Registration Rights Agreement") on any form other than S-8, S-4
(or Form S-3 if such registration covers an offering of the type contemplated by
Form S-8) or any successor forms (a
<PAGE> 3
"Share Registration"), the Company shall give Investor prompt notice thereof (a
"Registration Notice"). This Note may be exchanged in part, at the option of
Investor, for such number of shares of Class A Common Stock not in excess of
400,000, subject to adjustment as provided in paragraph (e) below, requested by
Investor (subject to reduction as described below), which shares shall be
registered for sale in connection with such Share Registration. Investor may
exercise this option by giving the Company written notice stating the number of
shares for which it desires to exchange this Note (the "Shares Requested to Be
Registered") at any time prior to 5:00 p.m., Washington, D.C. time, on the tenth
Business Day following the receipt by Investor of a Registration Notice, which
exchange shall be effective to the extent of the number of shares registered
(subject to the provisions of paragraph (f) below) immediately prior to the
closing of the Share Registration. The obligations of the Company and Investor
with respect to such Share Registration shall be as set forth in the
Registration Rights Agreement with respect to Investor's so-called "piggy-back
registration rights" as set forth in Section 1.3 thereof, as modified by the
following sentence. In the event that such Share Registration is made in
connection with an underwritten offering and the managing underwriter for the
proposed offering concludes that it would be advisable, from a marketing
standpoint, to reduce the number of shares to be included therein from the total
number requested by the Company and all other security holders to be registered,
the number of Shares Requested To Be Registered shall be reduced only if all
other shares requested by all other security holders having rights to be
included in such Share Registration have been excluded therefrom and then, to
the extent recommended by the managing underwriter. Upon the effectiveness of
any partial exchange of this Note pursuant to this paragraph, the outstanding
principal balance thereof shall be reduced by an amount equal to the product of
(x) the number of shares of Class A Common Stock for which this Note has been
partially exchanged and (y) $17.5988.
4. The Company, MCI and RF Investors agree that the Registration Rights
Agreement is hereby amended so as to reflect the provisions set forth in the
amendment of Section 3(b) of the Note provided in paragraph 3 above.
5. In all other respects, the Note and the Registration Rights Agreement
shall continue in full force and effect.
<PAGE> 4
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Amendment in one or more counterparts as of the day and year above written.
LCC INTERNATIONAL, INC.
By:/s/ PIYUSH SODHA
--------------------------------------
Piyush Sodha
President and
Chief Executive Officer
MCI TELECOMMUNICATIONS
CORPORATION
By:/s/ W.S. ARMISTEAD
--------------------------------------
Its: Vice President
------------------------------------
Executed solely for purposes of the foregoing amendment of the Registration
Rights Agreement:
RF INVESTORS.L.L.C.
By:/s/ RAJENDRA SINGH
--------------------------------------
Its: President
------------------------------------
<PAGE> 1
EXHIBIT 2.2
FOURTH AMENDMENT TO SUBORDINATED NOTE DUE 2000
AND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This Fourth Amendment to Subordinated Note Due 2000 is made by and
between LCC International, Inc., a Delaware corporation (the "Company"), and MCI
Telecommunications Corporation, a Delaware corporation ("MCI") and this
Amendment to Registration Rights Agreement is made among the Company, MCI and RF
Investors, L.L.C., a Delaware limited liability company and major stockholder of
the Company ("RF Investors"), in each case as of this 23rd day of October, 1997
(the foregoing amendments are collectively referred to herein as "this
Amendment").
WHEREAS, MCI is the holder of that certain Subordinated Note Due 2000 of
the Company (originally issued by TelcomVentures, L.L.C. on June 28, 1994 and
assumed by the Company on September 27, 1996) in the aggregate principal amount
of $30,000,000 with interest thereon at an annual rate of 6.8%, as amended (the
"Note"); and
WHEREAS, Section 3 of the Note contains a provision for exchange of the
Note for an aggregate of 1,704,659 shares of Class A Common Stock, par value
$.01 per share, of the Company ("Class A Common Stock"), in certain instances;
and
WHEREAS, the Company and MCI desire to amend the Note to provide for a
reduction in the annual rate of interest thereon and to provide MCI with an
additional right to exchange the Note for Class A Common Stock; and
WHEREAS, the Company, MCI and RF Investors are parties to that certain
Registration Rights Agreement, dated as of July 25, 1996 (the "Registration
Rights Agreement"); and
WHEREAS, in consideration of the reduction in the annual rate of
interest on the Note provided for below, the parties have agreed to amend the
Registration Rights Agreement in certain respects.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Note.
<PAGE> 2
2. Effective on October 23, 1997 the Note shall bear interest until paid
in full at an annual rate of 4.4%. Interest on the Note shall continue to be
payable semi-annually in arrears on the last day of each June and December.
3. Each of Sections 3(a), 3(c) and 3(d) of the Note is hereby amended by
added after the words "to be issued by LCC International" in the first sentence
thereof the words "less the number of shares, if any, for which this Note was
partially exchanged pursuant to the second paragraph of Section 3(b)." Section
3(b) of the Note is hereby amended in its entirety as follows:
(b) At the Option of Investor. This Note may be exchanged, in whole
but not in part, at the option of Investor, together with the LCC Note, for an
aggregate of 1,704,659 shares of Class A Common Stock to be issued by LCC
International less the number of shares, if any, for which this Note was
partially exchanged pursuant to the following paragraph, subject to adjustment
as provided in paragraph (e) below, by written notice of Investor to the Company
(i) at any time during the 45 calendar day period commencing on each of June 27,
1997, June 27, 1998 and June 27, 1999, which notice shall set forth the
effective date (subject to the provisions of paragraph (f) below) of the
exchange which shall be a date not later than 60 days following the date of such
notice, (ii) if the Company has delivered a Prepayment Notice, at any time on or
prior to the Prepayment Date, (iii) if the Company has delivered notice to
Investor of the occurrence of a Section 3(a) Event, and at such time there shall
have occurred and be continuing an Event of Default, at any time prior to the
occurrence of such Section 3(a) Event, (iv) at any time from the commencement of
a tender offer other than by MCI or any Affiliate thereof (as defined in the
Securityholders Agreement) for 25% or more of the outstanding common stock of
LCC International until the completion or withdrawal of such tender offer or (v)
at any time from the public announcement by LCC International of its intention
to effect a distribution (through dividend or otherwise) of assets representing
5% or more of the fair market value of its total assets pro rata to its
shareholders of record through the record date for such distribution. This Note
may not be exchanged by Investor pursuant to this paragraph of this Section 3(b)
unless it shall simultaneously exchange the LCC Note pursuant to the first
paragraph of Section 3(b) thereof.
In addition to the exchange right of Investor set forth in the preceding
paragraph, this Note may be exchanged, at the option of Investor, as follows. In
the event that, prior to June 26, 1998, the Company proposes to register shares
of Class A Common Stock or the Class B Common Stock, par value $.01 per share,
of LCC International under the Securities Act of 1933, as amended, whether for
its own account or for the account of other security holders or both, including
without limitation in connection with the exercise by RF Investors, L.L.C. ("RF
Investors") of its rights under Section 1.2 of the Registration Rights
Agreement, dated as of July 25, 1996, among the Company, Investor and RF
Investors (the "Registration Rights Agreement") on any form other than S-8, S-4
(or Form S-3 if such registration covers an offering of the type contemplated by
Form S-8) or any
<PAGE> 3
successor forms (a "Share Registration"), the Company shall give Investor prompt
notice thereof (a "Registration Notice"). This Note may be exchanged in part, at
the option of Investor, for such number of shares of Class A Common Stock not in
excess of 600,000, subject to adjustment as provided in paragraph (e) below,
requested by Investor (subject to reduction as described below), which shares
shall be registered for sale in connection with such Share Registration.
Investor may exercise this option by giving the Company written notice stating
the number of shares for which it desires to exchange this Note (the "Shares
Requested to Be Registered") at any time prior to 5:00 p.m., Washington, D.C.
time, on the tenth Business Day following the receipt by Investor of a
Registration Notice, which exchange shall be effective to the extent of the
number of shares registered (subject to the provisions of paragraph (f) below)
immediately prior to the closing of the Share Registration. The obligations of
the Company and Investor with respect to such Share Registration shall be as set
forth in the Registration Rights Agreement with respect to Investor's so-called
"piggy-back registration rights" as set forth in Section 1.3 thereof, as
modified by the following sentence. In the event that such Share Registration is
made in connection with an underwritten offering and the managing underwriter
for the proposed offering concludes that it would be advisable, from a marketing
standpoint, to reduce the number of shares to be included therein from the total
number requested by the Company and all other security holders to be registered,
the number of Shares Requested To Be Registered shall be reduced only if all
other shares requested by all other security holders having rights to be
included in such Share Registration have been excluded therefrom and then, to
the extent recommended by the managing underwriter. Upon the effectiveness of
any partial exchange of this Note pursuant to this paragraph, the outstanding
principal balance thereof shall be reduced by an amount equal to the product of
(x) the number of shares of Class A Common Stock for which this Note has been
partially exchanged and (y) $17.5988.
4. The Company, MCI and RF Investors agree that the Registration Rights
Agreement is hereby amended so as to reflect the provisions set forth in the
amendment of Section 3(b) of the Note provided in paragraph 3 above.
5. In all other respects, the Note and the Registration Rights Agreement
shall continue in full force and effect.
<PAGE> 4
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Amendment in one or more counterparts as of the day and year above written.
LCC INTERNATIONAL, INC.
By:/s/ PIYUSH SODHA
-------------------------------------
Piyush Sodha
President and
Chief Executive Officer
MCI TELECOMMUNICATIONS
CORPORATION
By:/s/ W.S. ARMISTEAD
-------------------------------------
Its: Vice President
-----------------------------------
Executed solely for purposes of the foregoing amendment of the Registration
Rights Agreement:
RF INVESTORS.L.L.C.
By:/s/ RAJENDRA SINGH
-------------------------------------
Its: President
-----------------------------------
<PAGE> 1
EXHIBIT 99
FOR IMMEDIATE RELEASE Contact: Tricia Drennan
Director of Corporate Communications &
Investor Relations
(703) 873-2390 (phone)
(703) 873-2300 (fax)
LCC INTERNATIONAL, INC. AND MCI TELECOMMUNICATIONS
CORPORATION DELAY CONVERSION OF EXISTING NOTE AGREEMENT
McLEAN, VIRGINIA, October 23, 1997 -- LCC International, Inc., (NASDAQ: LCCI),
one of the world's largest providers of radio frequency engineering and network
implementation services and products to the international wireless
telecommunications industry, today announced that it has agreed with MCI
Telecommunications Corporation to defer conversion of the existing convertible
subordinated notes issued to MCI in June of 1994 in the aggregate principal
amount of $50 million.
As previously disclosed, the notes are convertible into 2,841,099 shares of
LCC's Class A common stock, par value $0.01 per share, which assumes a
conversion rate of $17.60 per share. As part of the agreement, interest payable
under the notes will be reduced from 6.8% to 4.4% per annum, representing an
annual pre-tax savings of approximately $1.2 million. The notes are convertible
during the period between June 27, 1998 and August 10, 1998, at MCI's option and
then, at LCC's option, during the period between August 25, 1998 and October 8,
1998, and during the same periods in 1999. The notes are also convertible upon
the happening of specified extraordinary corporate events including certain
tender offers, sales of substantially all of LCC's assets, and are partially
convertible (up to 1 million shares) in the event of an underwritten public
offering during certain periods in 1998.
A spokesperson for MCI said, "LCC has developed core competencies in engineering
and system tools which are of strategic importance in the wireless industry.
These capabilities are of great value to a number of prominent players in the
industry."
(more)
<PAGE> 2
LCC AND MCI DELAY CONVERSION OF EXISTING NOTE AGREEMENT - - 2/2/2
Piyush Sodha, LCC's president and chief executive officer said, "LCC values the
relationship that has been formed over the past several years and would like to
continue that association. The cost associated with carrying the existing notes
is insignificant relative to the potential opportunity which could be realized
through an association with MCI."
LCC International, Inc. (http://www.lcc.com) is one of the world's largest
providers of radio frequency engineering and network implementation services and
products to the international wireless telecommunications industry.
Headquartered just outside Washington, D.C. in McLean, Virginia, the company has
provided these services to more than 200 wireless systems in more than 40
countries worldwide. Founded in 1983 with the advent of the wireless industry,
the company is engaged in five principal areas of business:
- - RF engineering and design services for wireless telecommunications
networks;
- - Site acquisition, zoning, construction and program management services;
- - Asset management services;
- - Development of specialized software to support the design and operation
of wireless networks; and
- - Development of wireless field test measurement equipment.
This press release contains forward-looking statements or implications that are
subject to risks and uncertainties. Actual results or performance could differ
materially from those expressed or implied by such forward-looking statements,
including, but without limitation, statements regarding expectations of future
operating results, as a result of risks and uncertainties including changes
adversely impacting demand for LCC's products and services, risks from
competition, rapid technological change and those described from time to time in
LCC's reports to the U.S. Securities and Exchange Commission, including its
Registration Statement on Form S-1 effective September 24, 1996, its Annual
Report on Form 10-K, news releases and other communications.
# # #
