<PAGE> 1
================================================================================
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 2, 2000
METROCALL, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<CAPTION>
Delaware 0-21924 54-1215634
-------- ------- ----------
<S> <C> <C>
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation)
</TABLE>
6677 Richmond Highway, Alexandria, Virginia 22306
------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 660-6677
================================================================================
<PAGE> 2
Item 5 - Other Events.
EXCHANGE OF SERIES C CONVERTIBLE PREFERRED STOCK (SERIES C PREFERRED)
On February 2, 2000, Metrocall and AT&T Wireless Services, Inc. (Wireless)
entered into a Securities Exchange Agreement under which Wireless, as the sole
holder of Metrocall's Series C Preferred, agreed to exchange 10,378 shares of
Series C Preferred, representing all of the issued and outstanding shares of the
Series C Preferred, into 13,250,000 shares of Metrocall common stock and, if
applicable, non-voting common stock equivalents in the form of a new series of
Metrocall preferred stock. Voting interests of Wireless will be limited to 19.9%
of the total outstanding Metrocall common stock. To the extent 13,250,000 shares
of Metrocall common stock exceeds 19.9% of the total issued and outstanding
Metrocall common stock, Wireless will receive shares of Series D Non-Voting
Participating Convertible Preferred Stock (the Series D Preferred). The Series D
Preferred will have rights substantially equivalent to those of the common
stock, except that it will have limited voting rights. Wireless may convert the
Series D Preferred shares at any time. Metrocall has the right to convert the
Series D Preferred into common stock so long as the number of converted shares
of common stock does not exceed 20% of the issued and outstanding common stock
at the time of the conversion.
The consummation of the exchange is subject to the expiration of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the HSR Act), and the receipt of any required consent of
the Federal Communications Commission (FCC) and other customary closing
conditions.
Wireless has agreed to deliver to Metrocall an irrevocable proxy granting a
person designated by Metrocall full power and authority, for one year commencing
on the consummation of the exchange, to vote all shares of Metrocall common
stock that Wireless receives from the exchange in accordance with the
recommendation of the Board of Directors for Metrocall. This proxy will not
apply to any matter to which a holder of the Series D Preferred has the right to
vote under the Certificate of Designation for that series or applicable law.
Wireless has limited rights to sell all or a portion of the shares it
receives from the exchange at any time more than six months after consummation
of the exchange in privately negotiated sales to any person or group that
Metrocall and Wireless has not designated as restricted and subject to
Metrocall's right of negotiation and the transferee's consent to be bound by the
Securities Exchange Agreement. In addition, Wireless may sell all or portion of
the shares of Metrocall common stock it receives from the exchange at any time
more than twelve months after consummation of the exchange in one or more sales
in any available over-the-counter market for the common stock and/or through any
exchange on which the common stock is then traded, subject to the following
permitted period sales:
<TABLE>
<CAPTION>
PERIOD (AFTER CONSUMMATION) PERMITTED SALES
-----------------------------------------------------------------------------
<S> <C>
12 months - 18 months 2,650,000 shares
-----------------------------------------------------------------------------
18 months - 24 months 2,650,000 shares
-----------------------------------------------------------------------------
24 months - 30 months 2,650,000 shares
-----------------------------------------------------------------------------
After 30 months 5,300,000 shares
-----------------------------------------------------------------------------
</TABLE>
Upon consummation of the exchange, Metrocall has agreed to register for
resale the shares of Metrocall common stock Wireless receives from the exchange
180 days after consummation of the exchange.
Page 2
<PAGE> 3
The Series C Preferred had an accrued liquidation preference of
approximately $104.8 million at December 31, 1999. Metrocall issued the Series C
Preferred to Wireless in connection with Metrocall's acquisition on October 2,
1998 of Wireless' Advanced Messaging Division.
COMMON STOCK INVESTMENTS
On February 2, 2000, Metrocall entered into common stock purchase
agreements with each of three equity investors: PSINet Inc. (PSINet), Aether
Systems, Inc. (Aether) and HMTF Bridge MC I, LLC, an affiliate of Hicks, Muse,
Tate & Furst Incorporated (HMT&F). Each of the three companies will acquire
approximately 7.8 million shares of common stock, which would amount to 9.9% of
Metrocall's issued and outstanding shares of common stock after giving effect to
the completion of these investments and exchange of the Series C Preferred
discussed above. Each investor will pay $2.19 per share or a total of
approximately $17.0 million. Each of the three entities will have the right to
nominate a representative to Metrocall's Board of Directors. Metrocall will use
the proceeds from the sale of its common stock to reduce outstanding debt.
Each transaction is subject to the completion of Series C Preferred
exchange, the expiration of the applicable HSR waiting period, the receipt of
any required consent of the FCC, the completion of the other common stock equity
investments and other customary closing conditions.
Metrocall also granted HMT&F two options to purchase additional shares of
Metrocall common stock. Metrocall granted an option to purchase 8,333,333 shares
of common stock (Option I), at an exercise price of $3.00 per share, subject to
adjustment under certain events. Option I may be exercised by HMT&F in whole but
not in part, at any time on or before the first anniversary of the closing.
Metrocall also granted HMT&F (i) an option to purchase 12,500,000 shares of
common stock at an exercise price of $4.00 per share plus, (ii) if HMT&F has not
exercised Option I, 8,333,333 shares of common stock at an exercise price per
share of $3.00, in each case subject to adjustment under certain events
(collectively, Option II). Option II may be exercised in whole or in part but
only in connection with the issuance of new equity for cash to finance a
business combination or acquisition (by means of merger, consolidation,
exchange, or acquisition of assets, or otherwise) involving Metrocall or any of
its subsidiaries and an aggregate transactional consideration to the other
entity or its equity and debt holders or to Metrocall and its equity and debt
holders having a fair value (as determined in good faith by Metrocall's Board of
Directors) of at least $50,000,000 (a Qualified Transaction). Option II will
terminate on the second anniversary of the closing, except that it can be
extended if there are pending active discussions with respect to a potential
Qualified Transaction or material changes in the terms of a Qualified
Transaction. The Option I and Option II transactions are subject to the
expiration of the applicable HSR Act waiting period, the receipt of any required
consent of the FCC, and other customary closing conditions.
PSINet and Aether will each deliver to Metrocall irrevocable proxies
pursuant to which their respective shares will be voted for the nominees of
Metrocall's Board of Directors for the election to the Board for the twelve
month period following the closing. PSINet and Aether will not, directly or
indirectly, sell, transfer or otherwise dispose of their shares for a period of
twelve months after the closing, with certain exceptions, unless the investor
has first delivered to Metrocall an offer for Metrocall to repurchase such
shares.
Each of the three equity investors also agreed to certain limitations, for
a period of twenty-four months after the closing. These limitations include the
following: each investor will not, directly or indirectly, (i) increase its
beneficial ownership of any securities or rights or options to acquire
beneficial ownership of any securities of Metrocall, except by way of stock
dividends, stock splits or distributions made by Metrocall to holders of common
stock (Aether may acquire up to 15% of the issued and outstanding common stock,
and HMT&F may acquire up to 15% of the issued and outstanding common stock,
which 15% ownership limit does not include the shares issuable under or
purchased pursuant to the Option Agreement); (ii) make any public announcement
with respect to or submit to Metrocall any proposal for the acquisition of
securities of Metrocall or for any merger, consolidation, or business
Page 3
<PAGE> 4
combination involving Metrocall or its affiliates or for a any purchase of a
substantial portion of the assets of Metrocall or its affiliates; (iii) make, or
in any way participate in, any "solicitation" of "proxies" to vote any voting
securities of Metrocall or become a participant in any "election contest" (as
those terms are defined in Regulation 14A under the Securities Exchange Act of
1934, as amended (the Exchange Act)); (iv) form, join, or in any way participate
in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with
respect to any voting securities of Metrocall; or (v) seek to influence or
influence the management or policies of Metrocall, with the exception of the
investor's designee on the Board of Directors may act to take action in his
capacity as a director of Metrocall.
INCISCENT
Metrocall has established a technology-based joint venture named Inciscent,
Inc. On February 8, 2000, the following investors entered into an agreement to
purchase a percentage of the Series A Convertible Preferred Stock of Inciscent,
for cash, notes and/or services totaling an aggregate value of $30 million. The
ownership splits for the preferred stock will be as follows:
<TABLE>
<S> <C>
Metrocall, Inc. 50.00%
Aether Systems, Inc. 33.00%
PSINet Inc. 6.33%
Hicks, Muse, Tate & Furst Incorporated 6.33%
DB Capital Partners, Inc. 2.67%
Other investors 1.67%
</TABLE>
The investments by Aether Systems, PSINet, and HMT&F are in addition
to their investments in Metrocall. Inciscent will have a seven person board of
directors, three of whom will be appointed by Metrocall, two by Aether Systems,
and one each by PSINet and HMT&F.
Inciscent, Inc. is a full service business-to-business wired-to-wireless
application service provider (ASP) that will offer a suite of technology
services to small office/home office (SOHO) and small to medium-sized
businesses. These services will include broadband Internet access, domain
hosting, e-mail services, auction notification and confirmation, data solutions
and wireless e-mail.
ADJUSTMENT TO WARRANTS
On November 15, 1996, Metrocall issued 159,600 warrants to purchase an
aggregate of 2,915,254 shares of common stock at an exercise price per share of
$7.40. In connection with the issuance of the warrants, Metrocall registered
2,915,254 shares of its common stock for resale on a Form S-3 filed on December
31, 1996. As a result of the common stock investments described above, the
exercise price of the warrants and the number of shares of common stock that may
be purchased upon exercise of the warrants have been adjusted. The exercise
price of the warrants is reduced to $2.74 per share. The number of shares of
common stock that may be purchased upon exercise has been increased to
2,957,529. The exercise price of the warrants and number of shares of common
stock that may be purchased upon exercise of the warrants may be adjusted in the
future as a result of anti-dilution and other provisions of the warrants.
Page 4
<PAGE> 5
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.
METROCALL, INC.
By: /s/ Vincent D. Kelly
-----------------------------
Vincent D. Kelly
Chief Financial Officer and Treasurer
Date: February 11, 2000
Page 5
