SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): November 2, 2000
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Capsule Communications, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-30555 22-3055962
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Two Greenwood Square, 3331 Street Road, Suite 275
Bensalem, Pennsylvania 19020
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 633-9400
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Item 5. Other Events
On November 2, 2000, Capsule Communications, Inc. (the "Company") entered
into an Agreement and Plan of Reorganization(the "Merger Agreement") with
Startec Global Communications Corporation, a Delaware corporation
("Startec"),a wholly-owned subsidiary of Startec, Stars Acquisition Corp., a
Delaware corporation ("Stars"), Gold & Appel Transfer, S.A. ("Gold &
Appel")and Foundation for the International Non-Governmental Development of
Space ("FINDS"). Pursuant to the Merger Agreement and subject to the
conditions set forth in the Merger Agreement (including approval of the Merger
Agreement by the stockholders of each of the Company and Startec, receipt of
required regulatory approvals, effectiveness of a registration statement
registering the shares of Startec common stock to be issued in the Merger and
other customary closing conditions) Stars will merge with and into the
Company. The Company, the surviving corporation, will become a wholly-owned
subsidiary of Startec.
Under the terms of the Merger, subject to certain adjustments, Startec
will issue approximately 2.7 million shares of common stock to shareholders of
the Company. At the effective time of the Merger, each outstanding share of
Company common stock will be exchanged for 0.1333 shares of Startec common
stock, subject to increase if the weighted average of the high and low trade
prices of of Startec common stock, as reported on Nasdaq for the 15 trading
days before the closing of the Merger is less than $5.25 per share. In such
event, the Conversion Ratio will be increased to the extent necessary to cause
the consideration to be paid for each 7.5 shares of Company common stock to
equal $5.25, as more fully described in the Merger Agreement. In no event,
however, will the Conversion Ration increase above 0.1647. In addition,
outstanding options to purchase Company common stock will be assumed by
Startec, and the exercise price and number of shares subject to each option
will be appropriately adjusted to reflect the application of the above
Conversion Ratio.
Gold & Appel and FINDS, which together own approximately 74% of the
outstanding shares of the Company's common stock, have executed voting
agreements in which they have agreed, among other matters, to vote their
shares in favor of the Merger. As a result of these agreements, approval of
the Merger by Capsule's stockholders is assured. Gold & Appel and FINDS will
receive five-year unsecured balloon payment promissory notes with an aggregate
value of $3 million in lieu of receiving a portion of the shares of Startec
common stock they would otherwise receive in the Merger.
For the terms and conditions of the Merger Agreement and each of the
Voting Agreements, as well as the press release announcing the execution of
the Merger Agreement, reference is made to such documents attached hereto as
exhibits. All statements made herein concerning the foregoing agreements are
qualified by reference to such exhibits. Pending filing and clearance of the
requisite proxy materials with the Securities and Exchange Commission, neither
company has set a date for the special meeting of its stockholders to approve
the Merger.
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Item 7. Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
Exhibit 2.1 - Agreement and Plan of Reorganization dated as
of November 2, 2000 by and among Startec Global
Communications Corporation, Stars Acquisition
Corp., Capsule Communications, Inc., Gold &
Appel Transfer, S.A. and Foundation for the
International Non-Governmental Development of
Space (Incorporated by reference to Exhibit 2.1
to Current Report on Form 8-K of Startec Global
Communications Corporation filed with
the Securities and Exchange Commission on
November 13, 2000.)
Exhibit 99.1 - Voting Agreement dated as of November 2, 2000
between Startec Global Communications
Corporation, Stars Acquisition Corp., Walt
Anderson and Gold & Appel Transfer, S.A.
(Incorporated by reference to Exhibit 99.1
to Current Report on Form 8-K of Startec
Global Communications Corporation filed with
the Securities and Exchange Commission on
November 13, 2000.)
Exhibit 99.2 - Voting Agreement dated as of November 2, 2000
between Startec Global Communications
Corporation, Stars Acquisition Corp., Walt
Anderson and Foundation for the International
Non-Governmental Development of Space.
(Incorporated by reference to Exhibit 99.2
to Current Report on Form 8-K of Startec
Global Communications Corporation filed with
the Securities and Exchange Commission on
November 13, 2000.)
Exhibit 99.3 Joint Press Release dated November 6, 2000.
(Incorporated by reference to Exhibit 99.3
to Current Report on Form 8-K of Startec
Global Communications Corporation filed with
the Securities and Exchange Commission on
November 13, 2000.)
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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.
CAPSULE COMMUNICATIONS, INC.
/s/ David B. Hurwitz
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Date: November 13, 2000 By: David B. Hurwitz
Title: President and Chief Executive
Officer