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UNITED STATES
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) April 13, 1999
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STM WIRELESS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-19923 95-3758983
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No)
One Mauchly, Irvine, California 92618
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (949) 753-7864
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Not Applicable
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(Former name or former address, if changed since last report)
Page 1 of 4
Exhibit Index on Page 4
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Items 1 through 4, 6, 8 and 9 are not applicable.
Item 5 Other Events.
On April 13, 1999, STM Wireless, Inc. ("STM") and REMEC, Inc. ("REMEC")
entered into a Letter of Intent with respect to the proposed acquisition by
REMEC of all of the outstanding shares of Common Stock of STM. Reference is
made to the Letter of Intent attached hereto as Exhibit 99.1.
Reference is also made to the press release issued to the public by STM
on April 14, 1999, the text of which is attached hereto as Exhibit 99.2, for a
description of the events reported pursuant to this Form 8-K.
Item 7 Financial Statements and Exhibits
(a) Financial Statements
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
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Exhibit No. Description
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<S> <C>
99.1 Letter of Intent between STM Wireless, Inc. and
REMEC, Inc. dated April 13, 1999.
99.2 Press Release dated April 14, 1999.
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Page 2 of 4
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SIGNATURE
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 thereunto duly authorized.
STM WIRELESS INC.
Date: April 15, 1999 By: /s/ JOSEPH WALLACE
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Joseph Wallace
Vice President, Finance,
Chief Financial Officer and Secretary
Page 3 of 4
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EXHIBIT INDEX
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Exhibit No. Description
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<S> <C>
99.1 Letter of Intent between STM Wireless, Inc. and REMEC, Inc.
dated April 13, 1999.
99.2 Press Release dated April 14, 1999.
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Page 4 of 4
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EXHIBIT 99.1
April 13, 1999
CONFIDENTIAL
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Mr. Frank T. Connors
President
STM Wireless, Inc.
One Mauchly
Irvine, California 92718
Letter of Intent re Proposed Merger
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Dear Frank:
This letter sets forth our mutual understanding with respect to the proposed
acquisition by REMEC, Inc. ("REMEC") of STM Wireless, Inc. ("STM"). If STM is
prepared to go forward on the terms outlined in this letter, please countersign
the letter below, after which we will proceed to finalizing our due diligence
and the definitive documentation.
1. The Merger Transaction. On the conditions set forth below, REMEC or a
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subsidiary of REMEC would merge with STM (the "Merger"). In the Merger, the
current shareholders of STM would receive Common Stock of REMEC in exchange for
their shares of Common Stock of STM based on the exchange ratio described below.
2. Exchange Ratio. Upon consummation of the Merger, each 3.8 shares of STM
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Common Stock owned by a STM shareholder will be converted into the right to
receive one (1) share of Common Stock of REMEC (the "Exchange Ratio"). All
outstanding securities of STM that are convertible into STM Common Stock will be
convertible into REMEC Common Stock after adjustment in number of shares
issuable and exercise price to account for the Exchange Ratio and will be
otherwise convertible post-Merger in accordance with the existing terms of such
convertible securities of STM.
3. Terms and Conditions. Based on our preliminary review of STM, in
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addition to customary terms and conditions, it is anticipated that the
definitive Merger
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agreement will contain the following terms and conditions:
(a) REMEC and STM will have received all required regulatory approvals
and material third party consents, in each case without the imposition of any
condition reasonably unacceptable to either party.
(b) The respective Boards of Directors of REMEC and STM will have
approved a definitive agreement as soon as is reasonably practicable.
(c) The shareholders of STM will have approved the Merger on the terms
set forth in the definitive Merger agreement as soon as reasonably practicable.
(d) REMEC will have received a favorable tax opinion or other comfort
to its reasonable satisfaction to the effect that (i) the Merger will constitute
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, and (ii) the Merger will accounted for as a pooling of interests.
(e) STM will have received an opinion of its financial adviser to the
effect that the Merger is fair from a financial point of view to its
shareholders.
4. Shareholders' Agreements. Concurrently with the execution of this letter
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or as soon as is reasonably practicable thereafter, REMEC will have received
written voting agreements from the significant shareholders of STM listed below
that such shareholders will (i) vote all of their shares of STM capital stock in
favor of the Merger, (ii) agree not to sell or agree to sell such shares of
capital stock to any other person prior to the anticipated date of the Merger
other than in connection with a transaction that is subject to the exception set
forth in paragraph 5 below and (iii) agree to comply with all applicable
securities laws (or laws or regulations governing the anticipated tax and
accounting treatment of the Merger) in connection with any post-Merger
disposition of securities of REMEC to be received in the Merger, including any
requirements reasonably necessary to ensure that the Merger is accounted for as
a pooling of interests. The significant shareholders who will sign voting
agreements are: (a) Emil Youssefzadeh; and (b) Pequot Capital Management, Inc.
5. Exclusive Negotiations. After acceptance of this letter and until the
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termination of this letter as provided in paragraph 11, STM shall not solicit
any offer or
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engage in any negotiations other than with REMEC for the merger or sale of the
business or assets of STM or any material part thereof or for any tender or
exchange offer for STM's capital stock, except to the extent that independent
legal counsel to STM has advised the Board of Directors of STM that the failure
to pursue an unsolicited offer received by STM is reasonably likely to result in
a breach of the directors' fiduciary duties.
6. Conduct of Business. Until the termination of this letter as provided in
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paragraph 11, STM will conduct its business only in the ordinary course and
consistent with past practices and will maintain its books and records in
accordance with past practices.
7. Access. Until termination of this letter as specified in paragraph 11,
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REMEC and its representatives will have access at reasonable times to the
properties, books and records and management of, and consultants to, STM for
purposes of conducting such due diligence, investigations or audits as REMEC
deems necessary or advisable in the circumstances. Until termination of this
letter as specified in paragraph 11, STM and its representatives will have
access at reasonable times to the properties, books and records and management
of, and consultants to, REMEC for purposes of conducting such due diligence,
investigations or audits as STM deems necessary or advisable in the
circumstances.
8. Publicity. Neither party shall issue any press release, publicity
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statement or other public notice relating to the proposed Merger or this letter
without the prior consent of the other party unless required under applicable
securities laws. Notwithstanding the foregoing, concurrently herewith, the
parties have agreed to a mutual press release regarding this letter.
9. No Finder's Fees. After the date of this letter and though termination of
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this letter as specified in paragraph 11, each party will not engage or
authorize nor pay any broker, financial advisor, investment banking firm, finder
or similar agent who would be entitled to a commission or other fee in respect
of the proposed Merger or any other similar transaction involving either party,
except for any fee payable upon issuance of a fairness opinion or any fee
payable by STM to CIBC Oppenheimer. At completion of the Merger, neither party
shall be obligated to pay any broker, financial advisor, investment banking
firm, finder or similar agent a commission or other fee in respect of the
proposed Merger or any other similar transaction involving either party, except
for any fee payable upon issuance of a fairness opinion or any fee payable by
STM to CIBC Oppenheimer.
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10. Not an Offer of Securities to Shareholders. This letter is not intended
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as an offer to shareholders of STM. Any offer and sale of any securities of
REMEC in connection with the Merger will be made only after satisfaction of
applicable state and federal securities laws.
11. Effect of Letter; Enforceability; Term. Except as provided in this
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paragraph 11, this letter is not intended to be, and does not constitute, a
binding or enforceable agreement, but is merely an outline of intention to enter
into, and consummate, the Merger, and to facilitate the negotiation and
preparation of a definitive agreement and related documents. Notwithstanding
the preceding sentence, if and when this letter is countersigned by STM, the
provisions set forth in paragraphs 5 through 9 shall constitute a binding and
enforceable agreement between REMEC and STM relating to the matters addressed in
those paragraphs, enforceable against each party in accordance with the terms
contained in those paragraphs. This letter, unless extended by mutual agreement,
shall terminate at midnight on May 5, 1999 or earlier upon the execution of a
definitive Merger agreement.
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If this letter is satisfactory to you as a basis for proceeding toward a
definitive agreement, please so signify by countersigning this letter below and
send an executed copy to the undersigned by facsimile (fax no. 619 560-4512).
If you have any additional questions, please telephone the undersigned at (619)
505-3114.
REMEC, INC.
By ____________________________________
Ronald E. Ragland
Chairman and Chief Executive Officer
AGREED AND ACCEPTED:
STM WIRELESS, INC.
By _________________________ Date: April 13, 1999
Frank T. Connors
President
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EXHIBIT 99.2
For Further Information, Contact:
Investor Relations:
Lippert/Heilshorn & Associates
Keith Lippert
(212) 838-3777
Kris Otridge
(415) 433-3777
Company Communications:
STM Wireless, Inc.
Frank T. Connors
(949) 753-7864
Web Site: www.stmi.com
STM WIRELESS, INC. ANNOUNCES INTENT TO
MERGE WITH REMEC, INC.
IRVINE, CALIFORNIA, April 14, 1999 - STM WIRELESS, INC. (STM), (NASDAQ NM
Symbol: STMI) today announced it has entered into a letter of intent with REMEC,
Inc. (REMEC) (NASDAQ NM Symbol: REMC) which provides for the merger of STM with
REMEC, or a subsidiary of REMEC. The merger will be structured as a tax-free,
pooling of interests transaction. Each stockholder of STM will receive one
share of REMEC common stock for every 3.8 shares of STM common stock currently
owned by the stockholder.
The transaction is subject to the preparation and execution of a definitive
merger agreement, final approval of the board of directors of STM and REMEC,
approval by STM stockholders and other customary terms and conditions. The
parties intend to proceed to a definitive merger agreement as soon as
practicable.
Emil Youssefzadeh, Chairman and Chief Executive Officer of STM, commented
"We have been working closely with REMEC for over three years. They are
responsible for the implementation and manufacture of our innovative SpaceWeb
and SpacePhone terminals. We believe that the melding of our international
communications market presence, product concepts and systems capability with the
design and manufacturing prowess of REMEC and its strong financial resources
will allow STM to reach its full potential."
Commenting on the proposed merger, Ronald Ragland, REMEC's Chairman and
Chief Executive Officer, said "The merging of REMEC and STM is a further step in
our
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strategy to vertically integrate our capabilities to the systems and product
level. We expect to achieve substantial synergies in the combination of our
talented teams."
STM Wireless, Inc., headquartered in Irvine, California (Web Site:
www.stmi.com), is an international provider of communication solutions for rural
telephony applications and satellite data networks with equipment installed in
over 90 countries. The Company operates as two independent, but complementary
businesses: STM Network Systems (STM-NS), which supplies satellite network
systems worldwide and Direc-to-Phone International, Inc. (DTPI) (Web Site:
www.directophone.com), a majority-owned subsidiary, which is a leading provider
of fixed-station telephony services in countries and regions with low telephone
density. DTPI uses products manufactured by STM-NS to enter into long-term
agreements with local partners to provide satellite communications services.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
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1995:
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This release contains forward looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, in Section 21E of the Securities
Exchange Act of 1934, as amended, which involve risks and uncertainties that may
cause actual future results or results different materially and adversely from
those described in the forward looking statements. For example, there can be no
assurance that the Company will enter into a definitive merger agreement or
consummate the transaction. In such event, the Company would be required to
obtain potentially dilutive debt or equity financing from other sources.
Additional important factors that may cause a difference between projected and
actual results for the Company include, but are not limited to, future capital
requirements, the long-term cycle involved in completing major contracts,
particularly in foreign markets, political and economic risks involved in
foreign markets and foreign currencies, increasing competitive pressures, and
general economic conditions, technological advances, the timing of new product
introductions, and the timing of operating and other expenditures, and other
factors discussed in the Company's filings from time to time with the Securities
Exchange Commission, including but not limited to the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 and the Form 10-Q's for the first
three quarters of fiscal 1998. The Company disclaims any obligation to revise
or update any forward looking statement that may be made from time to time by it
or on its behalf.
