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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
Date of Report (Date of Earliest Event Reported): July 13, 2000
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PICTURETEL CORPORATION
(Exact name of Registrant as specified in charter)
DELAWARE I-9434 04-2835972
(State or other jurisdiction (Commission File (I.R.S. employer
of incorporation) Number) identification No.)
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100 Minuteman Rd., Andover, MA, 01810
(Address of Principal Executive Offices) (Zip Code)
(978) 292-5000
Registrant's Telephone number including area code
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ITEM 5. OTHER EVENTS.
Intel Corporation, the State of Wisconsin Investment Board, Halpern Denny
Fund II, L.P., and twelve directors and senior managers of PictureTel have
executed a Stock Purchase and Investors Rights Agreement with PictureTel (the
"Agreement") and agreed to invest $21.8 million in Series B Preference Shares of
PictureTel, subject to satisfaction of closing conditions in the Agreement. The
parties contemplate a closing on July 24, 2000. An aggregate of 8,738,000 shares
will be purchased at a cash purchase price of $2.50 per share.
The new series of non-voting Series B Preference Stock is convertible into
the same number of shares of PictureTel Common Stock (subject to anti-dilution
protection) and is entitled to a cumulative 8% preferred dividend, payable when
and if declared, and therefafter to participating dividend rights with the
Common Stock and Series A Preference Stock of PictureTel. Under the Agreement,
each of the investors has ancillary rights to acquire its pro rata share of
certain additional issuances of equity securities offered by PictureTel in the
future.
The Agreement also contains various other ancillary provisions, including
those relating to maintaining the confidentiality of information, registration
rights and information to be provided to the investors in connection with the
acquired securities, indemnification and related provisions relating to
representations and warranties by the parties in the Agreement, provisions
relating to compliance with the Hart-Scott-Rodino Anti-Trust Improvements Act of
1976, pertaining to any conversion by Intel of its Series B Preference Stock
into PictureTel Common Stock and provision for specified minority investments
(including on a fully-diluted basis 3% each for Intel Corporation and the State
of Wisconsin Investment Board, 0.63% for Halpern Denny Fund II, L.P., and 0.27%
in the aggregate for the PictureTel directors and senior managers that are
purchasing Series B Preference Shares) in 1414c, Inc., a PictureTel subsidiary
formed earlier this year to develop Internet-based communication products and
services such as multi-point videoconferencing and voice-over-IP.
The definitive terms of the new Series B Preference Stock to be purchased
by the investors will be set forth in a Certificate of Designation constituting
an amendment to PictureTel's Certificate of Incorporation. Such terms will be
supplemented by certain contractual provisions in the Agreement, including the
purchase rights described above.
PictureTel mailed a notice dated July 13, 2000 to its shareholders of
record under Nasdaq Rule 4460, referring to the contemplated $21.8 million
issuance of Series B Preference Stock and advising stockholders of Nasdaq's
waiver of its requirement for stockholder approval of such issuance, which was
granted upon PictureTel's application, in light of PictureTel's financial
position following its "going concern" auditor's opinion for fiscal 1999 and the
establishment by PictureTel's senior lenders of certain prerequisites, including
the raising of additional equity capital, for permanent senior debt refinancing
for PictureTel, that the delay in seeking such stockholder approval would
seriously jeopardize PictureTel's financial viability, and upon the approval by
the Audit Committee of the Board of Directors of PictureTel of this exception to
the Nasdaq requirement. No approval of the
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issuance of the Series B Preference Stock is required by PictureTel's
Certificate of Incorporation or the General Corporation Law of Delaware.
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ITEM 7. FINANCIAL STATEMENT AND EXHIBITS.
(c) EXHIBITS
EXHIBIT NUMBER TITLE
1 Press release dated July 13, 2000.
2 Ten Day Notice to Shareholders Pursuant to
NASDAQ Rule 4460 dated July 13, 2000.
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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.
PICTURETEL CORPORATION
/s/ Ralph Takala
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Ralph Takala
Chief Financial Officer
Date: July 14, 2000
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