<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Equalnet Holding Corp.
- -----------------------------------------------------------------------------
(Name of the Issuer)
Common Stock, par value $.01 per share
- -----------------------------------------------------------------------------
(Title of Class of Securities)
294408109
- -----------------------------------------------------------------------------
(CUSIP Number)
Dean H. Fisher
1250 Wood Branch Park Dr.
Houston, Texas 77079
281/529-4686
- -----------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 12, 1998
- -----------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Page 1 of 9 Pages
Exhibit Index on Page 9
<PAGE> 2
CUSIP No. 294408109 13D Page 2 of 9 Pages
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Willis Group, LLC (76-0537286)
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b) x
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- -------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- -------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF
SHARES 9,581,633
BENEFICIALLY --------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED -0-
BY --------------------------------------------------------------
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 9,581,633
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,581,633 shares of Common Stock underlying currently exercisable
warrants and a convertible note or issuable, in the form of shares or
warrants, pursuant to existing agreements
- -------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
60%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- -------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
CUSIP No. 294408109 13D Page 3 of 9 Pages
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael T. Willis
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b) x
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- -------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- -------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF -0-
SHARES --------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED 9,581,633
BY ---------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON --------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
9,581,633
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,581,633 shares of Common Stock underlying currently exercisable
warrants and a convertible note or issuable, in the form of shares or
warrants, pursuant to existing agreements.
- -------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
60%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- -------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
CUSIP No. 294408109 13D Page 4 of 9 Pages
- -------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Mark Willis
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b) x
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- -------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER
OF -0-
SHARES ---------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED 9,581,633
BY ---------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON -0-
WITH ---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
9,581,633
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,581,633 shares of Common Stock underlying currently exercisable
warrants and a convertible note or issuable, in the form of shares or
warrants, pursuant to existing agreements.
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
60%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
CUSIP No. 294408109 13D Page 5 of 9 Pages
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James T. Harris
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b) x
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- -------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- -------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED 8 SHARED VOTING POWER
BY 9,581,633
EACH --------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
9,581,633
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,581,633 shares of Common Stock underlying currently exercisable
warrants and a convertible note or issuable, in the form of shares
or warrants, pursuant to existing agreements.
- -------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
60%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- -------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
CUSIP No. 294408109 13D Page 6 of 9 Pages
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On February 12, 1998, The Willis Group, LLC ("The Willis Group")
entered into an Amendment to Switch Agreement with the Issuer and its
subsidiary (the "Switch Amendment") pursuant to which it will receive (i) in
exchange for the Switches and subject to certain conditions, an additional
1,000,000 shares of Common Stock and (ii) subject to a guaranty of certain
financing, a warrant for the purchase of an additional 500,000 shares of Common
Stock at $1.00 per share. Additionally, pursuant to the Switch Amendment, the
terms of the warrant for the purchase of 400,000 shares of Common Stock were
amended to change the exercise price to $1.00.
ITEM 4. PURPOSE OF TRANSACTION.
The Filing Persons acquired their shares of Common Stock as part of
their previously described plan to acquire control of the Issuer. The Filing
Persons currently do not intend to acquire additional shares of the Common
Stock materially above their current ownership, however, the Filing Persons
intend to review their investment in the Issuer on a continuing basis and,
depending upon the price of the Common Stock, subsequent developments affecting
the Issuer, the Issuer's business and prospects, general stock market and
economic conditions, tax considerations and other factors deemed relevant, may
decide to increase or decrease their investment in the Common Stock of the
Issuer.
On February 12, 1998, the Filing Persons entered into the agreement
described in Item 3 above (collectively with certain agreements described in
Amendment No. 1 to this Schedule 13D, the "Agreements"). The Filing Persons
intend to control the board of directors of the Issuer as a result of its
potential acquisition of these and additional shares of Common Stock. There
can be no assurance, however, that the Filing Persons and the Issuer will
complete the transactions contemplated in the Agreements.
Except as set forth above in this Item 4, none of the Filing Persons
nor, to the best of each Filing Person's knowledge, none of the executive
officers or directors of such Filing Persons, as applicable, has any plans or
proposals that relate to or would result in any of the actions specified in
clauses (a) through (j) of Item 4 to Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The Filing Persons beneficially own, directly or indirectly, the
right, in the form of currently exercisable warrants and a convertible note, or
pursuant to the Agreements, to acquire 9,581,633 shares of Common Stock of the
Issuer, which constitutes 60% of the Common Stock outstanding based on the
number of securities assumed to be outstanding on the Record Date (6,282,271)
as contained in the Issuer's Preliminary Proxy Statement on Schedule 14A, filed
with the Securities and Exchange Commission on February 17, 1998 and including
as outstanding the 9,581,633 shares issuable to The Willis Group under
currently exercisable warrants, a convertible note and the Agreements. Such
securities, or the rights thereto, were acquired pursuant to the transactions
described in Item 3 hereof, the initial filing of and Amendment No. 1 to this
Schedule 13D.
(b) Of the shares beneficially owned by the Filing Persons, The Willis
Group has, or will have, sole voting power and power to dispose of the
9,581,633 shares of Common Stock they have the right to acquire under currently
exercisable warrants, a convertible note and the Agreements and each of Messrs.
Mike Willis, Mark Willis and Harris, as 47.5%, 47.5% and 5% membership interest
owners, respectively, of The Willis Group, have shared voting and dispositive
power with respect to all such shares.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
See Items 3 and 4 hereof.
<PAGE> 7
CUSIP No. 294408109 13D Page 7 of 9 Pages
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Amendment to Switch Agreement between EqualNet Holding Corp.,
EQ Acquisition Sub, Inc. and The Willis Group, LLC dated
February 12, 1998.
2. Joint Filing Agreement, dated as of February 18, 1998, among
The Willis Group, Michael T. Willis, Mark Willis and James T.
Harris.
<PAGE> 8
CUSIP No. 294408109 13D Page 8 of 9 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
THE WILLIS GROUP, LLC
February 18, 1998 By: /s/ MARK WILLIS
- ----------------- ------------------------------
Date Mark Willis, President
/s/ MICHAEL T. WILLIS
---------------------------------
Michael T. Willis
/s/ MARK WILLIS
---------------------------------
Mark Willis
/s/ JAMES T. HARRIS
---------------------------------
James T. Harris
The original statement shall be signed by each person on whose behalf
the statement is filed or his authorized representative. If the statement is
signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
<PAGE> 9
CUSIP No. 294408109 13D Page 9 of 9 Pages
EXHIBIT INDEX
Exhibit
1. Amendment to Switch Agreement between EqualNet Holding Corp.,
EQ Acquisition Sub, Inc. and The Willis Group, LLC dated
February 12, 1998.
2. Joint Filing Agreement, dated as of February 18, 1998, among
The Willis Group, Michael T. Willis, Mark Willis and James T.
Harris.
<PAGE> 1
EXHIBIT 1
AMENDMENT TO SWITCH AGREEMENT
This Amendment to Switch Agreement ("Amendment") is entered into between
EQUALNET HOLDING CORP. ("EqualNet"), EQ ACQUISITION SUB, INC. ("Sub"), and
WILLIS GROUP, LLC ("TWG") effective as of February 12, 1998.
Recitals
Each of the entities described in the preamble are parties to a Switch
Agreement dated December 2, 1997 (the "Agreement"). The parties desire to
amend the Agreement in accordance with the terms of this Amendment. Any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the Parties agree as follows:
1. Section 2(b) of the Agreement is amended as follows:
(a) Deletion of the word "and" at the end of clause (iii) thereof;
(b) Insertion of the following as a new clause (iv):
(iv) subject to the terms of Section 2(e), 1,000,000 of EqualNet
Common Shares; and,
(c) Renumbering the existing clause (iv) to "(v)" and amending
such clause by replacing the reference therein to "$1.50 per
share" with "$1.00 per share".
2. Section 2 of the Agreement is amended by adding the following as
subsection (e):
(e) AUTHORIZED SHARES. (i) If the Closing occurs and as of the
Closing Date the number of EqualNet Common Shares authorized
under EqualNet's Articles of Incorporation is not sufficient
to permit the issuance of all or any part of the 1,000,000
shares referred to in Section 2(b)(iv) (the "Unauthorized
Shares"), then at the Closing in lieu of issuing such
Unauthorized Shares EqualNet shall execute and deliver to
TWG a warrant the ("Unauthorized Shares Warrant") for the
number of shares constituting the Unauthorized Shares, such
warrant to have a term of ten years, to have an exercise
price of $0.01 per share, and to be otherwise substantially
similar to the form of Warrant attached as Exhibit B;
provided, the Unauthorized Share Warrant shall contain a
covenant on the part of EqualNet that it will use its best
efforts to cause the unreserved authorized number of
EqualNet Common Shares to be increased to permit the full
exercise of the Unauthorized Share Warrant and a limitation
on the holder of the Unauthorized Share Warrant to the
effect that the obligation of EqualNet to issue shares upon
an exercise of
<PAGE> 2
the Unauthorized Share Warrant in whole or in part shall be conditioned
upon EqualNet having a number of unreserved authorized EqualNet Common
Shares at such time sufficient to cover the number of shares relating to
the exercise.
(ii) If by May 31, 1998, the number of EqualNet Common Shares
authorized under EqualNet's Articles of Incorporation has not been
increased to permit a full exercise of the Unauthorized Share Warrant, then
TWG shall have the right and option to repurchase the Switches from Sub for
$5,850,000 in cash by giving written notice of such exercise to EqualNet
and Sub. If such notice is given, then EqualNet and Sub agree that Sub will
convey good title to the Switches to TWG free and clear of any liens or
security interests (other than liens and security interests, if any, that
may encumber the Switches immediately prior to the Closing), and
contemporaneous with such conveyance TWG (x) shall return the Unauthorized
Share Warrant to EqualNet which shall be cancelled and (y) TWG shall return
any shares issued to TWG pursuant to Section 2(b)(iv). In connection with
any such repurchase, TWG shall retain the EqualNet Common Shares issued to
it pursuant to Section 2(b)(iii). During the period from the Closing Date
until the aforementioned May 31, 1998 date, EqualNet and Sub agree that Sub
shall not convey or encumber the Switches, or grant any options or rights
to purchase the Switches, except for liens and security interests securing
any financing used by Sub to acquire the Switches.
(iii) TWG agrees to affirmatively vote all EqualNet Common Shares
issued to TWG pursuant to this Agreement or any other agreement for such
increase in the authorized number of EqualNet Common Shares.
3. Section 5(u) of the Agreement is amended by adding the following
paragraph at the end of such Section:
If the Closing occurs and if necessary for EqualNet to
obtain financing for the acquisition of the Switches, TWG
will guarantee not more than 40% of the principal amount of
such financing. No such guaranty shall impose any obligation
or liability on the part of any member of TWG and TWG shall
not be required to pledge any collateral or provide any
other credit enhancement with respect to such guaranty. The
terms of any such guaranty shall be satisfactory to TWG. If
the Closing occurs and TWG gives such guaranty, as
consideration for such guaranty EqualNet shall issue to TWG
at the Closing a warrant (the "Guaranty Warrant") for
500,000 EqualNet Common Shares exercisable at $1.00 per
share, such warrant to have a term of ten years and to be
otherwise substantially similar to the form of warrant
attached as Exhibit B; provided, if at the Closing the
number of EqualNet Common Shares that are authorized under
EqualNet's Articles of Incorporation is not sufficient to
permit a full exercise of the Guaranty Warrant, then the
Guaranty Warrant shall contain a covenant on the part of
EqualNet that it will use its best efforts to cause
-2-
<PAGE> 3
such unreserved authorized number of shares to be increased to permit
the full exercise of the Guaranty Warrant and a limitation on the
holder of the Guaranty Warrant to the effect that the obligation of
EqualNet to issue shares upon an exercise of the Guaranty Warrant in
whole or in part shall be conditioned upon EqualNet having a number of
unreserved authorized EqualNet Common Shares at such time sufficient
to cover the number of shares relating to the exercise.
4. If the Closing occurs and as of the Closing Date the number of
EqualNet Common Shares authorized under EqualNet's Articles of Incorporation is
not sufficient to permit the issuance of all or any part of the EqualNet Common
Shares covered by the Warrant attached as Exhibit B to the Agreement, then as
of the Closing such Warrant shall be amended to include a covenant on the part
of EqualNet that it will use its best efforts to cause such unreserved
authorized number of shares to be increased to permit the full exercise of the
Warrant and a limitation on the holder of the Warrant to the effect that the
obligation of EqualNet to issue shares upon an exercise of the Warrant in whole
or in part shall be conditioned upon EqualNet having a number of unreserved
authorized EqualNet Common Shares at such time sufficient to cover the number
of shares relating to the exercise.
By entering into this Amendment, TWG does not waive by implication or
otherwise any of the conditions set forth in Section 6.1(a) of the Agreement.
This Amendment contains the entire understanding and agreement between the
Parties with respect to the subject matter of this Amendment and supersedes any
prior or contemporaneous statements, understandings or agreements with respect
to such subject matter
EQUALNET HOLDING CORP.
By: /s/ MICHAEL L. HLINAK
---------------------------
Name: Michael L. Hlinak
Title: Senior Vice President
EQ ACQUISITION SUB, INC.
By: /s/ MICHAEL L. HLINAK
---------------------------
Name: Michael L. Hlinak
Title: President
WILLIS GROUP, LLC
By: /s/ MARK A. WILLIS
---------------------------
Name: Mark A. Willis
Title: President
-3-
<PAGE> 1
EXHIBIT 2
JOINT FILING AGREEMENT
The undersigned, and each of them, do hereby agree and consent to the
filing of a single statement on behalf of all of them on Schedule 13D and
amendments thereto, in accordance with the provisions of Rule 13d-1(f)(1) of
the Securities Exchange Act of 1934, as amended.
Dated: February 18, 1998
THE WILLIS GROUP, LLC
By: /s/ MARK WILLIS
------------------------------
Mark Willis, President
/s/ MICHAEL T. WILLIS
-----------------------------------
Michael T. Willis
/s/ MARK WILLIS
-----------------------------------
Mark Willis
/s/ JAMES T. HARRIS
-----------------------------------
James T. Harris
