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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): December 10, 1998
SMARTALK TELESERVICES, INC.
(Exact name of registrant as specified in its charter)
California 0-21579 95-4502740
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
5080 Tuttle Crossing Boulevard
Dublin, Ohio 43016-3566
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (614) 789-8500
No change
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
As indicated on the SmarTalk Teleservices, Inc.'s (the "Company") Form 8-K
filed with the Securities and Exchange Commission (the "Commission") on June 10,
1998, the Company acquired the outstanding shares of Worldwide Direct, Inc.
("Worldwide"). In consideration for the outstanding shares of Worldwide, the
Company issued 2,715,000 shares of Common Stock.
As previously disclosed in the Company's Form 10-Q filed with the
Commission on November 16, 1998, the Company entered into Agreement and Release
contracts (collectively, the "Agreements") with certain former stockholders (the
"Stockholders") of Worldwide. The Agreements restructure the terms relating to
the Company's acquisition of all the outstanding shares of Worldwide to provide
for the issuance of additional equity and/or debt securities based on the
occurrence of certain conditions and the release by the Stockholders of any and
all claims, known or unknown.
Pursuant to the Agreements, if the average stock price of the Company over
a specified 30-day or 45-day period set by the Company (the "Measurement Period
Stock Price") falls below a certain target price as adjusted based on the
performance of the Nasdaq Composite Index from June 10, 1998 to the end of the
specified measurement period (the "Target Price"), the Company will convey to
each Stockholder an amount equal to the difference between the Target Price per
share and Measurement Period Stock Price per share multiplied by the number of
shares of the Company's Common Stock received by each Stockholder pursuant to
the merger agreement (the "Adjustment Amount"). The Adjustment Amount, if
applicable, will also be paid to the Stockholders if a Change of Control, as
defined in the Agreements, occurs before the specified measurement period. The
Adjustment Amount can be paid, at the Company's option, by either a distribution
of the Company's Common Stock (valued at the Measurement Period Stock Price), or
the issuance of a convertible subordinated note with a principal amount equal to
the Adjustment Amount.
The Agreements also require the Company to use its best efforts to cause an
effective registration statement concerning the shares of the Company's Common
Stock issued pursuant to the Agreements and/or the merger agreement described
above to be filed with the Commission.
The foregoing is a summary of the transactions described above. Reference
is made to the exhibits filed herewith for a complete text of the documents
summarized above which exhibits are incorporated by reference herein in their
entirety.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
10.1 Form of Agreement and Release among the Company and certain Preferred
Stockholders.
10.2 Form of Agreement and Release among the Company and certain Common
Stockholders.
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.
Date: December 10, 1998
SMARTALK TELESERVICES, INC.
(Registrant)
/s/Thaddeus Bereday
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(Signature)
Thaddeus Bereday
Vice President and General Counsel
Exhibit Index
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(c) The Exhibits furnished in accordance with Item 601 of Regulation S-K
are:
10.1 Form of Agreement and Release among the Company and certain Preferred
Stockholders.
10.2 Form of Agreement and Release among the Company and certain Common
Stockholders.