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, 2000
----------------
WINSTAR COMMUNICATIONS, INC.
----------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 1-10726 13-3585278
- ----------------------------- -------------- --------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
685 Third Avenue, New York, New York 10017
- ------------------------------------- ---------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 792-9800
--------------
Not Applicable
------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS
Private Placement of Preferred Stock
On February 1, 2000, Winstar Communications, Inc. ("Company") consummated
the previously announced private placement of 900,000 shares of the Company's
Series G Senior Cumulative Participating Convertible Preferred Stock ("Series G
Stock") for an aggregate purchase price of $900,000,000 to Credit Suisse First
Boston Equity Partners, L.P. ("CSFBEP"), Welsh, Carson, Anderson & Stowe VIII,
L.P. ("WCAS"), Microsoft Corporation ("Microsoft") and certain other purchasers.
The sale was made pursuant to a Securities Purchase Agreement dated as of
December 15, 1999 by and among the Company, WinStar Credit Corp., CSFBEP, WCAS,
Microsoft and the other purchasers listed on the signature pages thereto.
A copy of the press release is annexed hereto as Exhibit 99.1.
Amendment to Rights Agreement
Effective February 1, 2000, the Board of Directors of the Company approved
a third amendment (the "Third Amendment") to the Rights Agreement dated as of
July 2, 1997, as amended on June 3, 1999 and July 15, 1999 (as so amended, the
"Rights Agreement"), by and between the Company and Continental Stock Transfer
and Trust Company, as Rights Agent (the "Rights Agent"). The Rights issued under
the Rights Agreement were previously registered with the Securities and Exchange
Commission ("SEC") on Form 8-A on July 2, 1997. The Third Amendment was adopted
to (i) revise the definition of "Acquiring Person" by replacing references in
the Rights Agreement to "Company Common Stock" with "Voting Stock", (ii) revise
the definition of "Beneficial Owner" (and the correlative terms "beneficially
own" and "Beneficial Ownership") to exclude therefrom any shares of a class of
Voting Stock issued or deemed issued by the Company in payment of dividends on,
or as a result of the failure of the Company to pay cash dividends on,
outstanding shares of Series G Stock pursuant to the terms of the instrument
providing for the creation of the Series G Stock and (iii) amend or remove
certain related provisions.
A complete copy of the Third Amendment is attached hereto as Exhibit 4.4
and is incorporated herein by reference. A copy of the Rights Agreement, as
previously amended, is incorporated herein by reference to Exhibit 4 to the Form
8-A filed with the SEC on July 2, 1997, to Exhibit 4.2 to the Form 8-A/A filed
with the SEC on June 3, 1999 and to Exhibit 4.3 to the Form 8-A/A filed with the
SEC on July 16, 1999.
2
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) Exhibits
4.1 Rights Agreement dated as of July 2, 1997 between the
Company and the Rights Agent (incorporated by reference to
Exhibit 4 to the Form 8-A filed on July 2, 1997)
4.2 Amendment to the Rights Agreement dated as of June 3, 1999
between the Company and the Rights Agent (incorporated by
reference to Exhibit 4.2 to the Form 8-A/A filed on June 3,
1999)
4.3 Second Amendment to the Rights Agreement dated as of July
15, 1999 between the Company and the Rights Agent
(incorporated by reference to Exhibit 4.3 to the Form 8-A/A
filed on July 16, 1999)
4.4 Third Amendment to the Rights Agreement dated as of February
1, 2000 between the Company and the Rights Agent (filed
herewith)
99.1 Press Release, dated February 2, 2000 (filed herewith)
3
<PAGE>
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 hereunto duly authorized.
Dated: February 10, 2000 WINSTAR COMMUNICATIONS, INC.
By: /s/ Kenneth J. Zinghini
-----------------------
Kenneth J. Zinghini
Senior Vice President
4
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
4.1 Rights Agreement dated as of July 2, 1997 between the Company and the
Rights Agent (incorporated by reference to Exhibit 4 to the Form 8-A
filed on July 2, 1997)
4.2 Amendment to the Rights Agreement dated as of June 3, 1999 between the
Company and the Rights Agent (incorporated by reference to Exhibit 4.2
to the Form 8-A/A filed on June 3, 1999)
4.3 Second Amendment to the Rights Agreement dated as of July 15, 1999
between the Company and the Rights Agent (incorporated by reference to
Exhibit 4.3 to the Form 8-A/A filed on July 16, 1999)
4.4 Third Amendment to the Rights Agreement dated as of February 1, 2000
between the Company and the Rights Agent (filed herewith)
99.1 Press Release, dated February 2, 2000 (filed herewith)
5
EXHIBIT 4.4
THIRD AMENDMENT TO THE RIGHTS AGREEMENT
THIS THIRD AMENDMENT TO THE RIGHTS AGREEMENT, made and entered into as of
this 1st day of February, 2000 (this "Third Amendment"), by and between WINSTAR
COMMUNICATIONS, INC. (the "Company") and CONTINENTAL STOCK TRANSFER AND TRUST
COMPANY, as Rights Agent (the "Rights Agent"), is being executed under the
following circumstances:
WHEREAS, the Company and the Rights Agent entered into a Rights Agreement,
dated as of July 2, 1997, an Amendment to the Rights Agreement, dated as of June
3, 1999, and the Second Amendment to the Rights Agreement, dated as of July 15,
1999 (as so amended, the "Rights Agreement");
WHEREAS, effective July 2, 1997 (the "Rights Dividend Declaration Date")
the Board of Directors of the Company authorized and declared a distribution of
one Right (each, a "Right") for each share of Common Stock, par value $.01 per
share, of the Company (the "Company Common Stock") outstanding at the Close of
Business (as defined in the Rights Agreement) on July 14, 1997 (the "Record
Date"), and authorized the issuance of one right (as such number may be adjusted
pursuant to the Rights Agreement) for each share of Company Common Stock issued
between the Record Date (whether originally issued or delivered from the
Company's treasury) and, except as otherwise provided in Section 22 of the
Rights Agreement, the Distribution Date, each Right initially representing the
right to purchase upon the terms and subject to the conditions set forth in the
Rights Agreement one Unit (as defined in the Rights Agreement) of Series B
Preferred Stock (as defined in the Rights Agreement); and
WHEREAS, the Board of Directors of the Company, by resolutions duly adopted
on January 12, 2000, authorized this Third Amendment to the Rights Agreement and
in accordance with Section 26 of the Rights Agreement.
NOW THEREFORE, the Company and the Rights Agent hereby amend the Rights
Agreement as follows, pursuant to Section 26 of the Rights Agreement:
Section 1. Amendments to the Rights Agreement. (a) The definition of
Acquiring Person contained in Section 1(a) of the Rights Agreement shall be
amended to read in its entirety as follows:
"Acquiring Person" shall mean any Person who or which, alone or together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 10% or more of the Voting Stock then outstanding, but shall not
include (x) the Company, any Subsidiary of the Company, any employee
benefit plan maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such capacity or
(y) any such Person who has become and is such a Beneficial Owner solely
<PAGE>
because (A) of a change in the aggregate number of shares of the Voting
Stock since the last date on which such Person acquired Beneficial
Ownership of any shares of the Voting Stock or (B) it acquired such
Beneficial Ownership in the good faith belief that such acquisition would
not (1) cause such Beneficial Ownership to exceed 10% of the Voting Stock
then outstanding and such Person relied in good faith in computing the
percentage of its Beneficial Ownership on publicly filed reports or
documents of the Company which are inaccurate or out-of-date or (2)
otherwise cause a Distribution Date or the adjustment provided for in
Section 11(a)(ii) to occur. Notwithstanding clause (B) of the prior
sentence, if any Person that is not an Acquiring Person due to such clause
(B) does not reduce its percentage of Beneficial Ownership of the Voting
Stock then outstanding to less than 10% by the Close of Business on the
fifth Business Day after notice from the Company (the date of notice being
the first day) that such person's Beneficial Ownership of the Voting Stock
then outstanding so equals or exceeds 10%, such Person shall at the end of
such five Business Day period, become an Acquiring Person (and such clause
(B) shall no longer apply to such Person). For purposes of this definition,
the determination whether any Person acted in "good faith" shall be
conclusively determined by the Board of Directors of the Company."
(b) A new section (u)(u) shall be added to the end of Section 1 of the
Rights Agreement as follows:
"(u)(u) "Voting Stock" shall mean any class of capital stock of the Company
which votes generally in the election of directors and on matters
prescribed for a vote of shareholders (in the case of stock other than
Common Stock together with the Common Stock), with each share of such stock
which has a number of votes other than the one vote per share being deemed
to be that number of shares of Voting Stock equal to the number of votes
which such share is entitled to cast."
(c) The proviso set forth at the end of Section 1(e) of the Rights
Agreement shall be deleted in its entirety and replaced with the following:
"provided, however, that under this paragraph (e) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, (A) securities tendered pursuant to a tender or
exchange offer made in accordance with Exchange Act Regulations by such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B) securities that may
be issued upon exercise of Rights at any time prior to the occurrence of a
Triggering Event, (C) securities that may be issued upon exercise of Rights
from and after the occurrence of a Triggering Event, which Rights were
acquired by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(c) or Section 22 or
pursuant to Section 11(i) in connection with an adjustment made with
respect to any such Rights or (D) any shares of a class of Voting Stock
issued or deemed issued by the Company in payment of dividends on, or as a
result of the failure of the Company to pay cash dividends on, outstanding
2
<PAGE>
shares of the Company's Series G Senior Cumulative Participating
Convertible Preferred Stock (the "Series G Preferred Stock") pursuant to
the terms of the instrument providing for the creation of the Series G
Preferred Stock."
(d) The first sentence of Section 3(a) of the Rights Agreement shall be
deleted and replaced by the following:
"Until the earlier of (i) the Close of Business on the tenth day after the
Stock Acquisition Date and (ii) the Close of Business on the tenth Business
Day (or such later date as may be determined by action of the Company's
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date that a tender or exchange offer by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity) is first
published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act Regulations or any successor rule, if upon consummation
thereof, such Person would be the Beneficial Owner of 10% of the Voting
Stock then outstanding (the earlier of (i) and (ii) above being the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for
shares of Company Common Stock registered in the names of the holders of
shares of Company Common Stock as of and subsequent to the Record Date
(which certificates for shares of Company Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates, and (y)
the Rights will be transferable only in connection with the transfer of the
underlying shares of Company Common Stock (including a transfer to the
Company)."
(e) The first sentence of Section 28(a) of the Rights Agreement shall be
deleted and replaced by the following:
"Except as otherwise provided in Section 1(e), for the purposes of this
Agreement, any calculation of the number of shares of Company Common Stock
or the Voting Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding
shares of Company Common Stock or Voting Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the Exchange Act Regulations as in effect on the
date hereof."
3
<PAGE>
(f) The second sentence of Section 34(a) of the Rights Agreement shall be
deleted and replaced by the following:
"Subject to such adjustment, each Right may be exchanged for that number of
Units of Preferred Stock obtained by dividing the Adjustment Spread (as
defined below) by the then current market price (determined pursuant to
Section 11(d)) per Unit of Preferred Stock on the earlier of (i) the date
on which any Person becomes an Acquiring Person and (ii) the date on which
a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) is first published or sent or given
within the meaning of Rule 14d-4(a) of the Exchange Act Regulations or any
successor rule, if upon consummation thereof such Person would be the
Beneficial Owner of 10% or more of the shares of Voting Stock then
outstanding (such exchange ratio being the "Section 34(a) Exchange
Ratio")."
Section 2. Full Force and Effect. The remainder of the Rights Agreement
shall remain unchanged, and the Rights Agreement as amended above, shall remain
in full force and effect.
Section 3. Governing Law. This Third Amendment shall be governed by, and
construed in accordance with, the laws of the State of Delaware.
Section 4. Counterparts. This Third Amendment may be executed in two or
more counterparts and each of such counterparts shall for all purposes be deemed
to be an original and all such counterparts shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Third Amendment by telecopier shall be as effective as delivery of a manually
executed counterpart of this Third Amendment.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly execute on their behalf as of the date first above written.
WINSTAR COMMUNICATIONS, INC.
/s/ Kenneth J. Zinghini
By: ______________________________
Name: Kenneth J. Zinghini
Title: Senior Vice President
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
/s/ Steven Nelson
By: ______________________________
Name: Steven Nelson
Title: Chairman
5
EXHIBIT 99.1
Winstar Closes $900 Million Investment From Microsoft and Leading Investment
Firms
NEW YORK--(BUSINESS WIRE)--Feb. 2, 2000--WINSTAR COMMUNICATIONS, INC. (NASDAQ:
WCII) today announced the closing of the previously announced $900 million
investment by the Microsoft Corporation and several leading investment firms
including Credit Suisse First Boston Equity Partners, L.P.; Welsh, Carson,
Anderson and Stowe, VIII, L.P.; and Cascade Investments.
The $900 million investment will be used to fund Winstar's business plan and
expand its network. The investment is in the form of convertible preferred
stock, which converts into common stock at $67.50 per share. Lawrence B. Sorrel,
a General Partner of Welsh, Carson, Anderson and Stowe, and Hartley R. Rogers,
Managing Director and Co-Head of Credit Suisse First Boston Equity Partners,
L.P., have joined Winstar's Board of Directors.
About Credit Suisse First Boston Equity Partners, L.P.
Credit Suisse First Boston Equity Partners, L.P., is a part of Credit Suisse
First Boston Private Equity Division, the global private equity arm of the
Credit Suisse Group, a global financial services company providing a
comprehensive range of banking and insurance products. Together with its
international private equity funds, the Credit Suisse First Boston Private
Equity Division now has committed capital of approximately $3.6 billion, with
dedicated professionals working in five offices around the world.
About Welsh, Carson, Anderson and Stowe
WCAS, founded in 1979, has $8 billion of assets under management. The firm
focuses exclusively on the information services, communications and healthcare
industries, and invests currently out of a $3.2 billion equity fund and a $1.4
billion subordinated debt fund. In addition to this investment in Winstar, WCAS
has sponsored a number of recent transactions with leading communications
companies, including Amdocs Ltd., BTI Telecom, Bridge Information Systems, Inc.,
Centennial Cellular Corp., SpectraSite Holdings, Valor Communications and SAVVIS
Communications. In aggregate, WCAS has committed approximately $1.8 billion of
capital to recent communications investments, making it one of the largest
private investors in the communications industry in the country.
About Winstar
Winstar Communications, Inc. (www.winstar.com) helps companies around the globe
engage in Frictionless Business(sm) through the use of seamless communications
and technology. Winstar provides its customers with a comprehensive set of
high-quality, digital-age broadband communications services, including
high-speed Internet access and data transport, Web-based information, Web
hosting and local and long distance services.
<PAGE>
Winstar offers its services in more than 70 markets throughout the U.S. and in
Europe, Asia and South America. It is the largest holder of broadband fixed
wireless spectrum, with licenses in the top 60 U.S. markets and in 10
international markets. Winstar's broadband fixed wireless capabilities
complement and extend the reach of its extensive fiber network. The company's
long-haul fiber network, which supports IP (Internet Protocol), ATM
(Asynchronous Transfer Mode) and frame relay, will extend more than 16,000 route
miles and connect the top 60 U.S. markets. Winstar's intracity fiber network
will consist of nearly 6,000 route miles in over 60 major domestic and
international markets.
Winstar's Tier 1 Internet backbone and enhanced Web service offerings, including
Web hosting and design, make Winstar one of the largest Internet companies in
the U.S. The company's innovative applications enable businesses to take
advantage of the new Internet economy. In 1999, the company launched Office.com,
A Service From Winstar(sm), (www.office.com) the new online business service for
small and medium-sized businesses. Office.com was ranked first overall among
Online Business Centers (OBCs) by Cahners In-Stat Group.
Winstar is based in New York City. The company has strategic relationships with
several leading corporations, including Lucent Technologies; Williams
Communications, Inc.; CBS Corporation; and Microsoft Corporation.
Except for any historical information contained herein, the matters discussed in
this press release contain forward-looking statements that involve risks and
uncertainties, which are described in Winstar's SEC reports, including the 10-K
for the period ended December 31, 1998, and the 10- Q for the period ended
September 30, 1999.
Winstar is a registered trademark, and Wireless Fiber and Frictionless Business
are service marks of Winstar Communications, Inc. Office.com is a service mark
of Winstar Communications, Inc., and is used under license.
CONTACT: WINSTAR
Financial Community:
Daniel Briggs
Director, Capital Market Relations
(212) 792-9032
[email protected]
or
Press:
Marianne Steiner
Vice President, Corporate Communications
(212) 792-9021
[email protected]
