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) February 1, 1994
Lincoln Telecommunications Company
(Exact name of registrant as specified in its charter)
Nebraska 2-70020 47-0632436
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification No.)
1440 M Street, Lincoln, Nebraska 68508
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (402) 474-2211
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
I. AGREEMENT BETWEEN LINCOLN TELECOMMUNICATIONS COMPANY AND
SAHARA ENTERPRISES, INC.
On February 1, 1994, Lincoln Telecommunications Company (the
"Company") entered into an agreement (the "Agreement") with Sahara
Enterprises, Inc. ("Sahara") in connection with a proposed firm commitment
underwritten public offering (the "Offering") of 2,449,500 shares of the
Company's Common Stock, $.25 par value (and attached Common Stock Purchase
Rights) (the "Common Stock") pursuant to a Registration Statement on Form
S-3 (the "Registration Statement") which will be filed with the Securities
and Exchange Commission (the "Commission") immediately following the
filing of this Form 8-K. The following is a summary of the Agreement,
which is attached in its entirety as an exhibit to this Form 8-K.
(a) Company Right of First Refusal.
The Agreement provides that until the first to occur of (i) 5:00
o'clock p.m. on the 120th day following the date of the Agreement; (ii)
the closing of the Offering; or (iii) the date on which each of the
Company and Sahara agree that the Registration Statement is to be
withdrawn under Rule 477 of the Securities Act of 1933, as amended, Sahara
will not sell, transfer or distribute any of its 5,412,976 shares of
Common Stock (including the Common Stock to be offered pursuant to the
Registration Statement) unless it first provides notice to the Company
("Transfer Notice") of the identity of the proposed transferee, the number
of shares proposed to be transferred, the proposed price, the method of
payment, and any other terms and conditions of the transaction. Such
Transfer Notice will constitute an irrevocable offer by Sahara to sell to
the Company the Common Stock proposed to be transferred (the "Offered
Shares") at the price per share and on the terms set forth in the Transfer
Notice. If the proposed transfer is by way of a distribution to
shareholders of Sahara or by way of charitable contribution, pledge or
gift, the price per share at which the Company may purchase such shares
shall be the last sale price of the Common Stock on the NASDAQ National
Market ("NASDAQ") on the date on which the Transfer Notice is given. Upon
receiving the Transfer Notice, the Company will have forty-five (45) days
to accept the offer from Sahara. If the Company does not accept such
offer within the forty-five (45) day period, the Offered Shares may be
sold, pursuant to the terms set forth in the Transfer Notice subject to
certain time limitations.
(b) Indemnification.
The Agreement sets forth the respective obligations of the
Company and Sahara regarding losses, liabilities, costs, damages and other
expenses relating to claims against any or both of the Company and Sahara
for violations of federal or state securities laws.
(c) Sale of Shares to Employee Trust.
Under the Agreement, Sahara will sell to a Company employee
benefit plan or trust and the Company will cause such plan or trust to
purchase 250,000 shares of Common Stock at a price equal to the public
offering price, less two percent (2%).
(d) Expenses of the Offering.
Sahara will indemnify and reimburse the Company against payment
of an amount not to exceed the first $200,000 of the Company's out-of-
pocket expenses in connection with the Offering.
Item 7. Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits
Designation Description
28 Agreement dated February 1, 1994 between the Company and
Sahara Enterprises, Inc.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 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.
LINCOLN TELECOMMUNICATIONS COMPANY
By: FRANK H. HILSABECK
Frank H. Hilsabeck
President and Chief Executive Officer
Dated: February 1, 1994
<PAGE>
Exhibit Index
Exhibit Page
28 Agreement dated February 1, 1994 Between the
Company and Sahara Enterprises, Inc.
AGREEMENT
AGREEMENT, dated as of February 1, 1994 by and between Sahara
Enterprises, Inc., a Delaware corporation (the "Shareholder"), and Lincoln
Telecommunications Company, a Nebraska corporation (the "Company").
RECITALS:
The Shareholder owns beneficially and of record 5,412,976 shares
(such 5,412,976 shares herein referred to as the "Total Shares") of the
Company's Common Stock, $.25 par value per share (the "Common Stock").
The Company is about to file with the Securities and Exchange
Commission ("SEC") a registration statement on Form S-3 (the "registration
statement") covering a proposed firm commitment underwritten public
offering of 2,449,500 of the Total Shares, including shares of Common
Stock subject to the underwriters' over-allotment option (such 2,449,500
shares, or such greater number of shares as are included in the
registration statement by amendment thereof or, if the registration
statement becomes effective, such lesser number of shares as are covered
by the prospectus included in the registration statement at the time of
such effectiveness are herein referred to as the "S-3 Shares").
The Company believes that the sale of the S-3 Shares may lead to
a broader distribution of the Common Stock and thereby improve the market
for the Common Stock.
Concurrently with the sale of the S-3 Shares, the Shareholder
has agreed to sell 250,000 of the Total Shares to a Company employee
benefit program.
In consideration of the Company's agreement to file the
registration statement under the Securities Act of 1933, as amended (the
"1933 Act"), and the mutual agreements set forth herein, the parties
hereto agree as follows:
1. Grant of Right of First Refusal.
(a) (i) Until the Expiration Date (as hereinafter
defined), other than for S-3 Shares sold as contemplated in the
registration statement, none of the Total Shares shall be transferred,
including without limitation as a distribution to a shareholder of the
Shareholder or by pledge, nor shall the Shareholder enter into any
contract, arrangement or other understanding contemplating the transfer of
any of the Total Shares, unless at least forty-five days prior to the
transfer, contract, arrangement or understanding the Company is given
notice of the proposed transfer (the "Transfer Notice") containing the
identity of the proposed transferee, the number of shares proposed to be
transferred, the proposed price, the method of payment, any other terms
and conditions of the transaction (it being understood that in the case of
a proposed open market sale, the notice may state that fact and omit the
transferee's identity and the proposed price), if available, a copy of any
writing evidencing the contract, arrangement or understanding and a
statement by the Shareholder that it has a bona fide intention to sell
Common Stock pursuant to such contract, arrangement or understanding. The
Transfer Notice shall constitute an irrevocable offer by the Shareholder
to sell the Common Stock proposed to be transferred (the "Offered Shares")
to the Company at a price per share equal to the price per share at which
the Offered Shares are proposed to be transferred (it being understood
that in a case in which such price is payable, in whole or in part, other
than in cash, such price shall be the fair market value per share of the
consideration), except that in the case in which the transfer is by way of
a distribution to shareholders of the Shareholder, a pledge, a charitable
contribution or other gift, or an open market sale, the price per share
shall be the last sale price of the Common Stock on the NASDAQ National
Market (the "NASDAQ-NM") (or if the principal market for such Stock is not
the NASDAQ-NM, in the principal market in which the Common Stock is then
traded) on the Trading Day (as hereinafter defined) on which such notice
is given (or if there is no trading on such Trading Day, at the average of
the last bid and asked prices for such Trading Day).
(ii) The Company shall have forty-five days after the day on
which the Transfer Notice is given to accept such offer (it being
understood that such offer may be accepted with respect to less than all
Offered Shares in the case of a proposed open market transfer,
distribution to shareholders of the Shareholder or a charitable
contribution or other gift but must be accepted with respect to all
Offered Shares if the proposed transfer is to be made other than in such
cases) and shall do so by notice given to the Shareholder. If the
Shareholder is notified that such offer will not be accepted or if no such
notice is given within such forty-five day period, the Offered Shares may
be transferred in accordance with the Transfer Notice but any transfer
must be closed within fifty-five days after the Transfer Notice is given
and if not closed within such fifty-five day period, the provisions of
this Section 1 shall again apply to the Offered Shares (but not beyond the
Expiration Date).
(b) "Expiration Date" means the first to occur of (i) 5:00
p.m. Central Time on the date that is 120 days after the date of this
Agreement, (ii) the closing of the offering contemplated by the
registration statement, and (iii) the Withdrawal Date. "Withdrawal Date"
means the day on which each of the Company and the Shareholder agree that
the registration statement is to be withdrawn under Rule 477 of the 1933
Act. It is understood that the withdrawal of the Registration Statement
by the Company, after a request of the Commission, the Shareholder or any
other person to do so, shall not be sufficient to constitute the
occurrence of the Withdrawal Date unless the Company has also agreed that
the registration statement is to be withdrawn. "Trading Day" means any
day on which NASDAQ (or if the Common Stock is not traded on NASDAQ, the
principal market in which the Common Stock is traded) is open for trading
and trading thereon occurs during substantially all of the period from the
regularly scheduled opening to the regularly scheduled close.
(c) Any acceptance of an offer by the Company of the
Offered Shares under Section 1 shall be closed (a "Closing") on the fifth
business day after acceptance, against delivery of certificates
representing the Offered Shares duly endorsed for transfer, all of which
shares shall be free and clear of all liens, encumbrances and rights of
persons other than the Company. The price payable for the Offered Shares
sold and purchased hereunder shall be payable by wire transfer of
immediately available funds. Each Closing shall take place in the offices
of Foley & Lardner, One IBM Plaza, Chicago, Illinois, at noon on the date
provided therefor herein.
2. Certain Claims.
(a) If at any time after the date on which the
Registration Statement (as such term, which includes the documents deemed
incorporated in the Registration Statement, is defined in the Purchase
Agreement with the underwriters entered into by the Company and the
Shareholder, such Purchase Agreement being herein referred to as the
"Purchase Agreement" and such underwriters being herein referred to as the
"Underwriters") is declared effective, any person commences (including by
way of third party complaint) a proceeding against the Shareholder or the
Company seeking damages or other monetary amounts (a "Proceeding") and
which alleges that the Registration Statement (or any amendment thereto),
including any information deemed to be contained therein pursuant to Rule
430A under the 1933 Act, contained any untrue statement of a material fact
or omitted a material fact required to be stated therein or necessary to
make the statements therein not misleading, or which alleges that any
preliminary prospectus (as such term, which includes the document
incorporated in the preliminary prospectus, is defined in the Purchase
Agreement) relating to the Registration Statement or the Prospectus (as
such term, which includes the documents incorporated in the Prospectus, is
defined in the Purchase Agreement) (or any amendment or supplement
thereto) contained any untrue statement of a material fact or omitted a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading (any
such actual untrue statement herein referred to as an "Untrue Statement"
and any such actual omission herein referred to as an "Omission"), the
Company and the Shareholder shall bear all losses, liabilities, costs,
damages and expenses, including without limitation, legal fees and
expenses (collectively "Covered Items") arising from such Proceeding as
follows:
(i) If in a final judgment not subject to appeal it is
determined that there was an Untrue Statement or an Omission (other than
an Untrue Statement or Omission with regard to information equivalent to
the information referred to in the letter, of even date herewith, from the
Selling Shareholder to the Company as such letter may be supplemented by
the Selling Shareholder in writing to include additional information on or
prior to the closing of the offering contemplated by the registration
statement), the Company shall indemnify and hold harmless the Shareholder
against all Covered Items.
(ii) If a Proceeding is concluded, including without limitation
through voluntary dismissal, settlement or final judgment not subject to
appeal, in any manner which is not covered by the foregoing clause (i),
the Covered Items of the Shareholder and the Company shall be aggregated
and each of the Shareholder and the Company shall bear one-half of the
aggregate amount and neither shall have any additional claim against the
other.
3. Contribution. In the event Section 2(a)(i) is by its terms
applicable but the indemnification under Section 2(a)(i) is not available,
the Company and Shareholder shall contribute to Covered Items arising from
the circumstances described in Section 2(a)(i) in proportion to their
relative fault, which fault the parties hereto agree shall be deemed to be
entirely the Company's in such circumstances. In the event Section
2(a)(ii) is by its terms applicable but the allocation under Section
2(a)(ii) is not available, the Company and Shareholder shall contribute to
Covered Items arising from the circumstances described in Section 2(a)(ii)
in proportion to the relative benefits received by and the relative fault
of each, which benefits and fault the parties agree shall be equal in such
circumstances.
4. Procedure.
(a) Neither the Shareholder nor the Company shall settle
or agree to settle any Proceeding containing allegations concerning an
Untrue Statement or an Omission without the written consent of the other
party hereto to such settlement.
(b) In the event there is more than one Proceeding, the
provisions of Sections 2 and 3 shall apply separately to each Proceeding.
In the event a Proceeding contains allegations in addition to those
concerning an Untrue Statement or an Omission, the Covered Items shall be
only those that relate to the Untrue Statement or Omission and the
remainder of such Proceeding shall not be subject to this Agreement.
(c) Anything herein to the contrary notwithstanding, the
liability of the Shareholder under Sections 2(a) and 3 hereof shall not
exceed (i) the product of multiplying the number of S-3 Shares by the
price per share at which such shares are sold to the Underwriters pursuant
to the Purchase Agreement minus (ii) the out-of-pocket expenses of the
Company for which Shareholder is responsible under Section 6 hereof.
5. Sale of Shares to Employee Trust. Concurrently with the
closing of the public offering contemplated by the registration statement,
the Shareholder shall sell to a Company employee benefit program (which
may be, among other programs, the ESOP account in the Company's Savings
and Stock Ownership Plan or a grantor trust as contemplated in the
registration statement) (any such program is herein referred to as an
"Employee Trust"), and the Company shall cause the Employee Trust to
purchase, 250,000 shares of the Total Shares at price equal to the public
offering price in such public offering less 2% of such public offering
price. The provisions of Section 1(c) hereof shall apply to such sale,
except that such sale shall occur at the same place as the sale of Common
Stock to the Underwriters pursuant to the Purchase Agreement. The
agreement of the Selling Shareholder to sell such shares shall expire
immediately after the Expiration Date.
6. Expenses. The Shareholder shall be responsible for, and
shall indemnify the Company against, payment of an amount not to exceed
the first $200,000 of Out-of-Pocket Expenses in connection with the public
offering contemplated by the registration statement and the sale of shares
to the Employee Trust, and the Company shall be responsible for, and shall
indemnify and reimburse the Shareholder against, all remaining Out-of-
Pocket Expenses in connection with such offering and sale. "Out-of-Pocket
Expenses" means the following, to the extent incurred by the Company (i)
legal fees and expenses, including for "blue sky" services, but excluding
legal fees and expenses incurred in connection with any periodic reports
under Section 13(a) of the Securities Exchange Act of 1934, as amended (or
the failure to file the same), of The Lincoln Telephone and Telegraph
Company (the expenses within such exclusion are herein referred to as
"Periodic Report Expenses"), (ii) accounting fees and expenses, other than
Periodic Report Expenses, (iii) printing costs and expenses, including
shipping and distribution, (iv) "blue sky" filing fees, and (v) the SEC
registration fee. It is understood that (i) any stock transfer taxes,
underwriting discounts or commissions payable upon or with respect to the
sale of the Common Stock sold by the Shareholder to the Underwriters and
the fees and disbursements of counsel to the Shareholder or any other
advisors retained by the Shareholder are not Out-of-Pocket Expenses and
shall not be borne by the Company, (ii) each party shall be responsible
for the travel, telephone and other out-of-pocket expenses of its
employees, and (iii) no Covered Item shall be an Out-of-Pocket Expense.
Any indemnification and reimbursement under this Section 6 shall be made
promptly after notice is given of the amount thereof accompanied by
reasonable supporting detail of the reimbursed expenses to be so
indemnified against and reimbursed.
7. Covenants of the Shareholder. Until the time at which the
Company no longer has any rights under Section 1, except in accordance
with the provisions of this Agreement, the Shareholder agrees not to:
(a) sell, transfer, pledge, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, assignment or
other disposition of, any of the Total Shares; or
(b) deposit any of the Total Shares into a voting trust or
enter into a voting agreement with respect to any of the Total Shares; or
(c) solicit or encourage any party to acquire the Company
or any Common Stock.
8. Representations and Warranties of the Shareholder.
(a) The Shareholder represents and warrants to Company as
follows:
(i) the Shareholder has the right, power and authority to
execute and deliver this Agreement and to sell such of the Total Shares as
may be sold hereunder; such execution, delivery and sale will not violate
or breach any law, rule or regulation or any outstanding agreement or
instrument to which the Shareholder is a party; and this Agreement
constitutes a legal, valid and binding agreement on the part of the
Shareholder;
(ii) except for S-3 Shares offered and sold as
contemplated by the registration statement, the Total Shares are now and,
until the Company and the Employee Trust no longer have any rights under
Section 1 or Section 5 hereof, will continue to be, held or controlled by
the Shareholder, free and clear of all liens, claims, encumbrances and
security interests other than pursuant to this Agreement; and
(iii) upon purchase of any of the Total Shares, the
Company or the Employee Trust, as the case may be, shall receive good and
marketable title to such of the Total Shares as are purchased, free of all
liens, claims, encumbrances and security interests.
(b) At the time the Purchase Agreement is executed, the
Shareholder will be deemed to have made to the Company under this
Agreement, the representations and warranties which are contained in
Section 1(b) of the Purchase Agreement.
9. Representations and Warranties of Company.
(a) The Company hereby represents and warrants to the
Shareholder that it has all requisite power and authority to enter into
and perform all of its obligations under this Agreement; that the
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary action on the part of the Company will not violate or breach any
law, rule or regulation; that this Agreement has been duly executed and
delivered by the Company; and that on acceptance of the offer under
Section 1, such acceptance will constitute a legal, valid and binding
obligation of the Company to purchase the portion of the Total Shares
subject thereto.
(b) At the time the Purchase Agreement is signed, the
Company will be deemed to have made to the Shareholder under this
Agreement, the representations and warranties which are contained in
Section 1(a) of the Purchase Agreement, provided, however, that this
Section 9(b) shall not entitle the Shareholder to any relief against the
Company in excess of the relief to which the Shareholder would be entitled
if the relief under Section 2 were available (it being understood that any
relief which the Shareholder obtains against the Company under Sections 2
or 3 shall be credited against and reduce the relief available under this
Section 9(b)).
10. Adjustments. In the event of any increase or decrease or
other change in the Common Stock by reason of stock dividends, split-ups,
recapitalizations, combinations, exchanges of shares or the like, the
number of shares of subject to this Agreement and the price per share
provided herein shall be appropriately adjusted.
11. Legend. At the request of the Company, the following
legend shall be placed on the certificates representing the Total Shares:
"The Common Stock represented by this certificate is subject to
an agreement, dated [date of this Agreement to be inserted] with
Lincoln Telecommunications Company, a copy of which agreement is
available from the Secretary of the Company."
Such legend shall be removed immediately after the Expiration Date or, if
earlier, (i) with respect to the Transfer of those Total Shares which are
Transferred in conformity with the provisions of Section 1(a)(ii) or (ii)
to prepare for the Transfer of the S-3 Shares at the closing of the
offering contemplated by the registration statement or the portion of the
Total Shares to be sold to the Employee Trust.
12. Further Assurances. Each party hereto shall perform such
further acts and execute such further documents as may reasonably be
required to carry out the provisions of this Agreement, including
instruments necessary or desirable to complete the transfer, sale and
assignment of such of the Total Shares as are sold hereunder.
13. Remedies. The parties agree that the Total Shares are
unique, the legal remedies for breach of this Agreement will be inadequate
and that this Agreement may be enforced by injunctive or other equitable
relief.
14. Assignment; Third Party Beneficiary. No party shall assign
any of its rights hereunder, other than in connection with the transfer of
substantially all of its business (whether by merger, sale of assets or
otherwise), in which case the party to whom such assets are transferred
shall expressly assume all obligations of the transferee, except that the
Company shall have the right to assign its rights under Section 1 hereof
to such person or persons as it may designate. No assignment shall
release the assignor from its obligations hereunder. The Employee Trust,
as it may be hereafter identified by the Company, is a third party
beneficiary of the provisions hereof relating to the purchase of the
shares of Common Stock by the Employee Trust.
15. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if (i) delivered personally,
(ii) one business day after mailing by Express Mail or delivery to Federal
Express or other nationally recognized delivery service (postage or
delivery charges prepaid) to the parties at the following addresses (or at
such other address for a party as shall be specified by notice from that
party given hereunder), or (iii) on the day on which a facsimile
transmission is sent to the parties at the following facsimile numbers (or
at such other facsimile number for a party as shall be specified by notice
from that party given hereunder) if the sending facsimile machine provides
written confirmation of receipt of the entire transmission and notice is
also given under the foregoing clause (ii):
(a) If to Shareholder:
Sahara Enterprises, Inc.
Suite 2000
Chicago, Illinois 60602
Attention: President
Facsimile: (312) 782-5152
(b) If to Company:
Lincoln Telecommunications Company
1440 M Street
Lincoln, Nebraska 68508
Attention: President and Chief Executive Officer
Facsimile: (402) 474-9195
16. Severability. It is the intention of the parties that if
any portion of Section 2 hereof is unlawful or is unenforceable under
applicable law, then all of Section 2 shall be deemed deleted from this
Agreement and shall be of no force or effect, it being understood that the
same shall not affect any other provision of this Agreement. It is the
intention of the parties that if any provision of this Agreement other
than the provisions of Section 2 is unlawful or is unenforceable under
applicable law, such provision shall be ineffective to the extent, but
only to the extent, that such provision is unlawful or unenforceable and
the remainder of such provision which is not unlawful or unenforceable,
and all other provisions of this Agreement, shall continue in full force
and effect in accordance with the terms hereof.
17. Amendment and Waiver. No amendment or waiver of the
provisions of this Agreement shall be effective unless such amendment or
waiver is in writing and signed by the party sought to be charged.
IN WITNESS WHEREOF, the Shareholder and the Company have
executed this Agreement on the date first written above by their duly
authorized officers.
Sahara Enterprises, Inc.
By: CHARLES N. WHEATLEY
Title: President
Lincoln Telecommunications Company
By: FRANK H. HILSABECK
Title: President
