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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): OCTOBER 14, 1998 (OCTOBER 13,
1998)
WORLD ACCESS, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 0-19998 65-0044209
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
945 E. PACES FERRY ROAD, SUITE 2240, ATLANTA, GEORGIA 30326
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (404) 231-2025
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ITEM 5. OTHER EVENTS
On October 13, 1998, World Access, Inc. ("World Access") and Telco Systems,
Inc. ("Telco Systems") announced that they had agreed in principle to amend the
Agreement and Plan of Merger and Reorganization, dated as of June 4, 1998 (the
"Merger Agreement"), among World Access, WAXS INC., a wholly owned subsidiary of
World Access, Tail Acquisition Corporation, a wholly owned subsidiary of WAXS,
and Telco Systems in order to, among other things, establish a minimum purchase
price to be paid by World Access of $12.00 per Telco Systems common share and to
provide World Access with the option to pay the purchase price using either
World Access common stock or a combination of World Access common stock and
cash, subject to a minimum of 45% of the purchase price being paid in the form
of World Access common stock to ensure tax-free treatment to Telco Systems'
stockholders in respect of the World Access common stock that they receive. The
companies' agreement in principle provides that the deadline for completing the
merger contemplated by the Merger Agreement (the "Merger") will be extended
until December 31, 1998.
The value of the World Access common stock included in the purchase price
will be determined based upon the average of the last reported sales prices of
the World Access common stock during a 20 trading-day period prior to the
effective time of the Merger. The companies' agreement in principle provides
that, if such average sales price is less than $12.00, then World Access will be
permitted to terminate the Merger Agreement.
The amendment to the Merger Agreement contemplated by the agreement in
principle (the "Amendment") is expected to be executed in the near future,
subject to the companies' agreement as to the form of the Amendment and the
approval of each of their Boards of Directors. Until the execution of the
Amendment, the Merger Agreement will remain unchanged and in full force and
effect in accordance with its terms.
A copy of the press release announcing the companies' agreement in
principle is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits. The following exhibit is filed herewith by direct
transmission via "EDGAR".
Exhibit 99.1 Press Release dated October 13, 1998
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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.
WORLD ACCESS, INC.
By: /s/ MARTIN D. KIDDER
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Martin D. Kidder
Its Vice President, Controller and
Secretary
Dated as of October 14, 1998
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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99.1 Press Release dated October 13, 1998
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SUMMARY: WORLD ACCESS, INC. AND TELCO SYSTEM, INC.
AGREE TO AMEND MERGER AGREEMENT
FOR IMMEDIATE RELEASE
ATLANTA, GEORGIA -- October 13, 1998 -- World Access, Inc. (Nasdaq: WAXS) and
Telco Systems, Inc. (Nasdaq: TELC) announced today that they have agreed in
principle to amend their existing agreement to merge the two companies. The
amendment will establish a minimum purchase price to be paid by World Access of
$12.00 per Telco Systems' common share and provide World Access the option to
pay the purchase price using either World Access common stock or a combination
of World Access common stock and cash. A minimum of 45% of the purchase price
will be paid in the form of World Access common stock to ensure tax-tree
treatment to Telco Systems shareholders in respect of the World Access common
stock they receive. If the value of World Access common stock, as defined in the
merger agreement, is less than $12.00 per share, World Access will have the
right to terminate the agreement.
World Access and Telco Systems have instructed their respective counsel to
prepare an amendment to the merger agreement to provide for the revised terms.
The amendment is subject to approval by the boards of directors of both
companies and is expected to be executed in the near future. The proposed merger
is also subject to the approval of the stockholders of both companies.
Definitive proxy materials are currently expected to be mailed shortly to the
stockholders of World Access and Telco Systems, and the merger is expected to be
consummated in late November.
Steven A. Odom, Chairman and Chief Executive Officer of World Access, said, "The
amendment to the merger agreement is in response to the recent decline in
trading prices of both World Access and Telco Systems' common stock. Despite
continued positive trends reported by both companies, the stock market has
established short-term market valuations for World Access and Telco Systems that
dictated an adjustment in purchase price and structure would be required to
ensure the merger is consummated. We view the merger with Telco Systems as a key
element of our long-term strategy and are excited about the proprietary
technology, advanced product offerings, strong customer relationships and
management experience that Telco Systems will bring to World Access."
Dr. William B. Smith, President and Chief Executive Officer of Telco Systems,
said, "We are pleased by this amendment to our merger agreement with World
Access as a response to market conditions. With this agreement for a minimum
price for our shareholders removing uncertainty related to the merger, we stand
ready to continue with the integration process, which has already uncovered a
number of opportunities based on the synergy between our two companies."
World Access, Inc. develops, manufactures and markets wireline and wireless
switching, transport and access products for the global telecommunications
markets. The Company's products allow telecommunications service providers to
build and upgrade their central office and outside plant networks in order to
provide a wide array of voice, data and video services to their business and
residential customers. World Access offers digital switches, billing and network
telemanagement systems, cellular base stations, fixed wireless local loop
systems, intelligent multiplexers, microwave and millimeterwave radio systems
and other telecommunications network products. To support and complement its
product sales, the Company also provides its customers with a broad range of
design, engineering, manufacturing, testing, installation, repair and other
value-added services. Telco Systems' integrated access solutions -- that are
deployed at the network edge -- provide organizations with a flexible,
cost-effective means of transmitting voice, data, video and image traffic over
public and private networks. These products are used in a wide variety of
applications by network service providers, such as interexchange carriers, local
exchange carriers, government agencies, utilities and wireless service
providers, as well as by corporations around the world.
This press release contains forward-looking statements that involve risks and
uncertainties. Actual results, including the level of earnings of both World
Access and Telco Systems, and the success of the proposed merger may differ from
the results discussed in the forward-looking statements. Factors that might
cause such a difference include, but are not limited to, risks associated with
acquisitions, such as difficulties in the assimilation of operations,
technologies and products of the acquired companies, risks of entering new
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markets, competitive response, and a downturn in the telecommunications
industry. For a more detailed description of the risk factors associated with
World Access and Telco Systems, please refer to the SEC filings of the
respective companies.
CONTACT: World Access, Inc. Mark A. Gergel or Nancy de Jonge
(404-231-2025)
Telco Systems, Inc. William J. Stuart or Betty Rock
(781-551-0300)
