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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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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): January 18, 1999
PICTURETEL CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 1-9434 04-2835972
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(State or other jurisdiction of (Commission File Number (I.R.S. Employer
incorporation or organization Identification No.)
100 MINUTEMAN ROAD, ANDOVER, MA. 01810
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(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER: 978-292-5000
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Item 5. Other Events
PictureTel and Intel have entered into a Distribution and Joint Product
Development agreement. Under terms of the agreement, Intel will provide
PictureTel with distribution rights to sell the Intel(R) ProShare(R) Video
System 500, and exclusive worldwide distribution rights to sell and support the
Intel(R) TeamStation(TM) System. In addition to its expertise in
videoconferencing distribution, sales and marketing, PictureTel will provide its
complete line of professional, managed and maintenance support services for both
products. These Intel products augment PictureTel's existing product line of
group, compact, and desktop videoconferencing systems.
By utilizing their respective strengths in PC technology innovation and
visual collaboration, the two companies will develop high-quality PC-based
solutions for customers' diverse communication needs and make it easier for
customers to access global services and support. The jointly developed products
will take advantage of rapidly emerging markets and technologies, including the
next-generation Internet, broadband, cable modems, XDSL, and others. The
companies expect the result of their collaboration to be a larger, more
competitive videoconferencing industry that distributes products and building
blocks through a wider range of channels.
Intel and PictureTel also agreed to begin joint development of
videoconferencing and collaboration products based on a common PC-based
architecture. The common platform will be the foundation for future products
that will feature communication and multimedia capabilities such as
collaboration over LANs,
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streaming audio and video, and real-time conferencing. The full benefit of this
joint development agreement can be expected in the year 2000. These future
products -- which will operate over multiple networks, including IP, ISDN and
ATM -- will complement PictureTel's existing product line and will be marketed
under the PictureTel brand name. Intel plans to market the resulting
building-block components to other manufacturers and integrators.
In connection with the Distribution and Joint Product Development Agreement
signed January 18, 1999, Intel will also invest $30.5 million in PictureTel,
subject to completion of closing conditions in a Stock Purchase and Investor
Rights Agreement between the two companies signed concurrently.
The shares of a new series of non-voting Series A Preference Stock,
convertible into the same number of shares of PictureTel Common Stock (with
anti-dilution protection for stock splits and the like), was established by vote
of PictureTel's Board of Directors pursuant to its authority under the Company's
charter and will represent on an as-converted basis an investment in
approximately 10% of PictureTel Common Stock. This security is to be sold by
PictureTel in consideration of the payment by Intel of cash of $6.81 per share
(or, if lower, the average of the closing prices of a share of PictureTel Common
Stock on NASDAQ NMS during a specified trading period prior to the closing) and
Intel's entering into the Distribution and Joint Product Development Agreement
referenced above. Under the Stock Purchase and Investor Rights Agreement Intel
has certain ancillary rights to acquire additional securities of
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PictureTel in order to maintain, subject to the specified terms and conditions,
its percentage ownership of PictureTel's equity.
The Stock Purchase and Investor Rights Agreement contemplates a closing by
February 17, 1999, subject to satisfaction (or waiver) of specified closing
conditions (including completion of due diligence by Intel) and contains
indemnification and related provisions relating to the representation and
warranties by the parties to the Stock Purchase and Investor Rights Agreement.
The terms of the new Series A Preference Stock to be purchased by Intel will be
set forth in a Certificate of Designation to be filed by PictureTel in Delaware
in connection with the Closing.
The Agreement also contains various other ancillary provisions, including
those relating to registration rights and information to be provided to Intel in
connection with the acquired securities, maintaining the confidentiality of
information, notice to Intel and other related provisions in connection with
important corporate events of PictureTel, and provisions relating to compliance
with the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, pertaining to
any conversion by Intel into PictureTel Common Stock.
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A copy of the Stock Purchase and Investor Rights Agreement will be filed
with the PictureTel Report on Form 10-K for the year ending December 31, 1998,
to be filed in March 1999.
Item 7. Financial Statement and Exhibits.
(c) Exhibits
99.1. Press release dated January 19, 1999
99.2. Press release dated January 19, 1999
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SIGNATURE
Pursuant to the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
PICTURETEL CORPORATION
/s/ Arthur L. Fatum
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Arthur L. Fatum
Vice President and Chief Financial Officer
(Principal Financial Officer)
January 22, 1999
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Exhibit 99.1
INTEL, PICTURETEL TEAM TO ACCELERATE GROWTH OF VIDEOCONFERENCING
COMPANIES TO JOINTLY DEVELOP NEW PC-BASED PRODUCTS;
INTEL TO INVEST $30.5 MILLION IN PICTURETEL
HILLSBORO, Ore., - Jan. 19, 1999 - Intel Corporation and PictureTel Corporation
(Nasdaq: PCTL) announced today that they have entered into a distribution and
joint product development agreement to accelerate growth of videoconferencing
worldwide. Intel also will invest $30.5 million in PictureTel.
In combining their respective strengths in PC technology innovation and
visual collaboration, the two companies will develop high-quality PC-based
solutions for customers' diverse communication needs and make it easier for
customers to access global services and support. The jointly developed products
will take advantage of rapidly emerging markets and technologies, including the
next-generation Internet, broadband, cable modems, XDSL, and others. The
companies expect the result of their collaboration to be a larger, more
competitive videoconferencing industry that distributes products and building
blocks through a wider range of channels.
Under terms of the agreement, Intel will provide PictureTel with
distribution rights to sell the Intel(R) ProShare(R) Video System 500, and
exclusive worldwide distribution rights to sell and support the Intel
TeamStation(TM) System. In addition to its expertise in videoconferencing
distribution, sales and marketing, PictureTel will provide its complete line of
professional, managed and maintenance support services for both products. These
Intel products augment PictureTel's existing product line of group, compact and
desktop videoconferencing systems.
Intel and PictureTel also agreed to begin joint development of
videoconferencing and collaboration products based on a common PC-based
technology platform. The common platform will be the foundation for future
products that will feature communication and multimedia capabilities such as
collaboration over
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INTEL, PICTURETEL, p. 2
LANs, streaming audio and video, and real-time conferencing. The full benefits
of this joint development agreement can be expected in the year 2000. These
future products - which will operate over multiple networks, including IP, ISDN
and ATM - will complement PictureTel's existing product line and will be
marketed under the PictureTel brand name. Intel plans to market the resulting
building-block components to other manufacturers and integrators.
"Through the strength of PictureTel's global distribution and service
network, we expect a significant worldwide increase in the use of PC-based
videoconferencing products," said Gerhard H. Parker, executive vice president of
Intel and general manager of the New Business Group. "We are delighted to have
the global leader in visual collaboration embrace the PC architecture as the
core building-block for emerging videoconferencing solutions."
The alliance will create the world's most comprehensive and widely
distributed visual collaboration solutions, which will be easier for customers
to deploy and use.
"The combination of Intel's market-leading PC technology and PictureTel's
global leadership in visual collaboration applications will propel
videoconferencing forward into the new millennium," said Bruce R. Bond, chairman
and CEO of PictureTel. "By working together to develop new products and market
segments, we will deliver the solutions that will enable customers around the
world to use visual collaboration in their mission-critical activities and make
their businesses more productive."
ABOUT INTEL TEAMSTATION SYSTEM
Intel TeamStation System is a conference room workstation that combines
videoconferencing, Internet access, corporate network access and PC applications
in one convenient system. Based on the Intel Pentium(R) II processor, the Intel
TeamStation is a turnkey, high-performance system that brings increased
productivity to conference rooms. Current manufacturer's suggested retail price
(MSRP) for the Intel TeamStation System with 128 Kbps capability is $8,999, and
$11,999 for 384 Kbps capability.
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INTEL, PICTURETEL, p. 3
ABOUT INTEL PROSHARE VIDEO SYSTEM 500
Intel ProShare Video System 500 is an add-in kit for desktop PCs. Priced at
$799 (U.S. dollars) MSRP, it provides excellent audio and video quality over
both ISDN and LAN transports, and offers fully integrated data-sharing
capabilities. With its single-board design, Intel ProShare Video System 500 can
be installed in approximately 30 minutes.
ABOUT PICTURETEL
PictureTel Corporation is the world leader in developing, manufacturing and
marketing a full range of visual- and audio-collaboration solutions. The
company's systems meet customers' collaboration needs from the desktop to the
boardroom. PictureTel also markets network conferencing servers and a
comprehensive portfolio of enterprisewide services. PictureTel collaboration
products and services eliminate the barrier of distance, enabling people to be
Anywhere Now(TM). Additional PictureTel information is available on the Internet
at www.picturetel.com.
ABOUT INTEL
Intel, the world's largest chip maker, is also a leading manufacturer of
computer, networking and communications products. Additional information about
Intel is available at www.intel.com/pressroom.
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*Third party marks and brands are property of their respective holders. Intel,
ProShare, and Pentium are registered trademarks and TeamStation is a trademark
of Intel Corporation. PictureTel is a registered trademark and Anywhere Now is a
trademark of PictureTel Corporation.
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Exhibit 99.2
Contact: Tom Waldrop Kevin Flanagan
Intel Corporation PictureTel Corporation
(408) 765-8478 (978) 292-5178
[email protected] [email protected]
INTEL AND PICTURETEL PROVIDE FURTHER DETAILS REGARDING INVESTMENT
SANTA CLARA, Calif., - Jan. 19, 1999 - Earlier today Intel Corporation and
PictureTel Corporation (Nasdaq: PCTL) announced that they have entered into a
distribution and joint product development agreement to accelerate growth of
videoconferencing worldwide. It was also announced that Intel would invest $30.5
million in PictureTel. In connection with the investment, Intel and PictureTel
entered into an agreement pursuant to which Intel would make a $30.5 million
investment for nonvoting Series A convertible preferred stock, comprising
approximately 10 percent of PictureTel's outstanding equity after the
investment. The preferred stock is convertible into PictureTel common stock on a
one-for-one basis. The closing of the transaction is subject to customary dosing
conditions, including the completion of due diligence to Intel's satisfaction.
The transaction is expected to close on or before February 17, 1999.
Intel, the world's largest chip maker, is also a leading manufacturer of
computer, networking and communications products. Additional information about
Intel is available at www.intel.com/pressroom.
PictureTel Corporation is the world leader in developing, manufacturing and
marketing a full range of visual- and audio-collaboration solutions. The
company's systems meet customers' collaboration needs from the desktop to the
boardroom. PictureTel also markets network conferencing servers and a
comprehensive portfolio of enterprise-wide services. PictureTel collaboration
products and services eliminate the barrier of distance, enabling people to be
Anywhere Now(TM). Additional PictureTel information is available on the Internet
at www.picturetel.com.
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PictureTel is a registered trademark and Anywhere Now is a trademark of Picture
Tel Corporation. Other brands or products are trademarks or registered
trademarks of their respective owners.
