UNITED STATES
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 28, 1999
BTI TELECOM CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NORTH CAROLINA 333-41723 56-2047220
(STATE OR OTHER (COMMISSION (I.R.S. EMPLOYER
JURISDICTION FILE NUMBER) IDENTIFICATION NO.)
OF INCORPORATION)
4300 SIX FORKS ROAD, RALEIGH, NORTH CAROLINA 27609
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (800) 849-9100
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT.)
ITEM 5. OTHER EVENTS.
BTI Telecom Corp. ("BTI") received a $200 million investment
on December 28, 1999, from Welsh, Carson, Anderson & Stowe VIII, L.P.,
a New York-based private equity firm, and two affiliated funds
(together, "WCAS"). BTI plans to use the proceeds from the investment
to expand its current operations. Specifically, the Company plans to
add to its telecommunications network and fiber optic infrastructure as
well as to enhance its data services such as DSL high-speed Internet
access. In addition, BTI used $65 million of the proceeds to repurchase
a portion of the Company's outstanding shares of common stock, at a
price of $8.55 per share.
The Company issued 200,000 shares of Series A Preferred Stock
to WCAS, each share of which may be converted initially into 116.959
shares of Common Stock, subject to adjustment for certain dilutive
issuances. The Series A Preferred Stock has a six percent accrued
dividend payable upon conversion in cash or in kind at the election of
BTI. WCAS can redeem the Series A Preferred Stock at a price equal to
the greater of liquidation value or fair market value upon the later of
December 28, 2006 or six months after the date on which all amounts
owing under BTI's 10-1/2% Senior Notes due 2007 are paid in full. In
addition, BTI issued WCAS warrants to purchase 4,500,000 shares of
Common Stock (subject to adjustment for certain dilutive issuances),
which may be canceled based on the Company's future performance. Two
WCAS general partners will join BTI's Board of Directors.
Forward-Looking Statements
Statements contained in this Form 8-K regarding planned
financial transactions and other events are forward-looking statements,
subject to uncertainties and risks, including but not limited to the
Company's negative cash flow after capital expenditures, significant
capital requirements, and ability to manage growth and expansion
(including into the local services market). These and other applicable
risks are summarized in the Company's Registration Statement on Form
S-1 (File No. 333-83101) filed with the SEC on July 16, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
3.1 Articles of Restatement of BTI Telecom Corp.
3.2 Second Amended and Restated Bylaws of BTI Telecom
Corp.
10.21 Shareholders Agreement, among BTI Telecom Corp.,
Peter T. Loftin, Welsh, Carson, Anderson & Stowe
VIII, L.P., WCAS Information Partners, L.P., and BTI
Investors LLC, dated December 28, 1999.
10.22 Redemption Agreement, among BTI Telecom Corp., Welsh,
Carson, Anderson & Stowe VIII, L.P., WCAS Information
Partners, L.P., and BTI Investors LLC, dated December
28, 1999.
10.23 Investor Rights Agreement, among BTI Telecom Corp.,
Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS
Information Partners, L.P., and BTI Investors LLC,
dated December 28, 1999.
10.24 Common Stock Purchase Warrant issued by BTI Telecom
Corp. to Welsh, Carson, Anderson & Stowe VII, L.P.,
dated December 28, 1999.
10.25 Common Stock Purchase Warrant issued by BTI
Telecom Corp. to WCAS Information Partners, L.P.,
dated December 28, 1999.
10.26 Common Stock Purchase Warrant issued by BTI Telecom
Corp. to BTI Investors LLC, dated December 28, 1999.
10.27 Series A Preferred Stock Purchase Agreement, among
BTI Telecom Corp., FS Multimedia, Inc., Welsh,
Carson, Anderson & Stowe VIII, L.P., WCAS Information
Partners, L.P., and BTI Investors LLC, dated December
28, 1999.
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: January 12, 2000
By: /s/ Brian Branson
------------------------
Brian Branson
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description
3.1 Articles of Restatement of BTI Telecom Corp.
3.2 Second Amended and Restated Bylaws of BTI Telecom Corp.
10.21 Shareholders Agreement, among BTI Telecom Corp., Peter T. Loftin,
Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS Information Partners,
L.P., and BTI Investors LLC, dated December 28, 1999.
10.22 Redemption Agreement, among BTI Telecom Corp., Welsh, Carson, Anderson
& Stowe VIII, L.P., WCAS Information Partners, L.P., and BTI Investors
LLC, dated December 28, 1999.
10.23 Investor Rights Agreement, among BTI Telecom Corp., Welsh, Carson,
Anderson & Stowe VIII, L.P., WCAS Information Partners, L.P., and BTI
Investors LLC, dated December 28, 1999.
10.24 Common Stock Purchase Warrant issued by BTI Telecom Corp. to Welsh,
Carson, Anderson & Stowe VII, L.P., dated December 28, 1999.
10.25 Common Stock Purchase Warrant issued by BTI Telecom Corp. to WCAS
Information Partners, L.P., dated December 28, 1999.
10.26 Common Stock Purchase Warrant issued by BTI Telecom Corp. to BTI
Investors LLC, dated December 28, 1999.
10.27 Series A Preferred Stock Purchase Agreement, among BTI Telecom Corp.,
FS Multimedia, Inc., Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS
Information Partners, L.P., and BTI Investors LLC, dated December 28,
1999.