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): MAY 15, 2007
SUNCOM WIRELESS HOLDINGS, INC.
(Exact name of Registrant as specified in charter)
DELAWARE 1-15325 23-2974475
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
1100 CASSATT ROAD
BERWYN, PENNSYLVANIA 19312
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (610) 651-5900
NOT APPLICABLE.
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
---------------------
ITEM 1.01. ENTRY INTO MATERIAL DEFINITIVE AGREEMENT; AMENDMENTS OF MATERIAL
DEFINITIVE AGREEMENTS.
On May 15, 2007, in connection with the closing of the transactions contemplated
by that certain Exchange Agreement, dated as of January 31, 2007 (the "Exchange
Agreement"), by and among SunCom Wireless Holdings, Inc., a Delaware corporation
(the "Company"), SunCom Wireless Investment Company LLC, a Delaware limited
liability company and a direct, wholly-owned subsidiary of the Company ("SunCom
Investment"), SunCom Wireless, Inc., a Delaware corporation and an indirect,
wholly-owned subsidiary of the Company ("SunCom Wireless"), and certain holders
(the "Consenting Noteholders") of the 9-3/8% Senior Subordinated Notes due 2011
(the "9-3/8% Notes") and 8-3/4% Senior Subordinated Notes due 2011 of SunCom
Wireless (the "8-3/4% Notes" and collectively with the 9-3/8% Notes, the "SunCom
Wireless Subordinated Notes"), the Company, SunCom Investment and the Consenting
Noteholders entered into Amendment No. 1 to Exchange Agreement (the "Exchange
Agreement Amendment"). The Exchange Agreement Amendment amended the Exchange
Agreement to, among other things: (1) add an additional affiliated Consenting
Noteholder to the Exchange Agreement as a Consenting Noteholder; (2) amend
Schedule I to the Exchange Agreement, setting forth the SunCom Wireless
Subordinated Notes of each Consenting Noteholder to be tendered in the exchange
and the Class A common stock, par value $0.01 per share ("Class A Common
Stock"), of the Company to be received by each Consenting Noteholder in respect
thereof; and (3) effect certain changes regarding the appointment of directors
of the Company's Board of Directors following the closing of the transactions
contemplated by the Exchange Agreement.
Also on May 15, 2007, in connection with the closing of the transactions
contemplated by the Exchange Agreement, as amended, the Company and the
Consenting Noteholders entered into a Registration Rights Agreement (the
"Registration Rights Agreement") granting the Consenting Noteholders certain
registration rights in respect of their Class A Common Stock received in the
exchange. In general, the Registration Rights Agreement contemplates that the
Company will file with the Securities and Exchange Commission a shelf
registration statement covering resale of the Class A Common Stock issued in the
exchange within 20 days of the closing of the exchange. In addition, the holders
of at least 15% of the Class A Common Stock subject to the Registration Rights
Agreement can require the Company to undertake an underwritten offering of such
Class A Common Stock upon the terms and conditions described in the Registration
Rights Agreement.
Additionally, on May 15, 2007, in connection with the closing of the
transactions contemplated by the Exchange Agreement, as amended, SunCom
Wireless, together with The Bank of New York, as trustee, and the subsidiary
guarantors party thereto, entered into Supplemental Indentures (the
"Supplemental Indentures") with respect to each of that certain Indenture, dated
as of January 19, 2001, governing the 9-3/8% Notes and that certain Indenture,
dated as of November 14, 2001, governing the 8-3/4% Notes (collectively, the
"Indentures"). The Supplemental Indentures remove substantially all of the
restrictive covenants and certain of the events of default from the Indentures.
The foregoing descriptions are qualified in their entirety by reference to the
Exchange Agreement Amendment, the Supplemental Indentures and the Registration
Rights Agreement filed as Exhibits 2.1, 4.1, 4.2 and 10.1, respectively, to this
report.
ITEM 2.01. ACQUISITION OF A MATERIAL AMOUNT OF ASSETS.
On May 15, 2007, in connection with the closing of the transactions contemplated
by the Exchange Agreement, as amended, SunCom Investment acquired, in exchange
for an aggregate of 52,028,376 shares of Class A Common Stock, an aggregate of
$731,620,000 principal amount of the SunCom Wireless Subordinated Notes. SunCom
2
Investment currently intends to contribute these SunCom Wireless Subordinated
Notes to SunCom Wireless for retirement.
ITEM 5.02 RESIGNATION AND APPOINTMENT OF DIRECTORS.
On May 15, 2007, in connection with the closing of the transactions contemplated
by the Exchange Agreement, the size of the Board of Directors of the Company was
increased to 10 members. Also, effective concurrently with the closing of the
exchange, each of Messrs. Eric Haskell, Mathias DeVito and Arnold Sheiffer
resigned as directors of the Company. Mr. Haskell will continue to serve as the
Company's Executive Vice President and Chief Financial Officer. Messrs. DeVito,
Haskell and Sheiffer did not have any disagreement with the Company's
operations, policies or practices, and their resignations were contemplated
under the Exchange Agreement. In connection with their resignations, all
unvested shares of restricted stock held by Messrs. DeVito and Sheiffer were
fully vested, and each of Mr. DeVito and Mr. Sheiffer agreed to not sell or
otherwise dispose of any of the shares subject to this accelerated vesting for a
period of 90 days following the closing under the Exchange Agreement without the
prior written consent to the Company. The foregoing description of the
accelerated vesting letter agreements is qualified in its entirety by reference
to the letter agreements filed Exhibits 10.2 and 10.3 to this report.
In addition, effective as of the closing of the exchange, each of Messrs. G.
Edward Evans, Karim Samii, Joseph Thornton, Niles K. Chura, Patrick K. Daugherty
and James J. Volk were elected as directors of the Company. Committee
assignments have not yet been determined for the incoming directors, but it is
expected that the Company's Board of Directors will make such determinations at
the first regular meeting of the Board of Directors, which is currently
scheduled for May 30, 2007, and the Company will file a current report on Form
8-K to report these assignments. A summary of the employment history of each of
the newly elected directors of the Company is set forth below.
Niles K. Chura, 37 (Class II - term expires in 2007), is a Portfolio
Manager at Highland Capital Management, L.P. Prior to joining Highland, Mr.
Chura was a member of the media and telecommunications portfolio management
group at Bank of America and the finance and planning group at American
Airlines. Mr. Chura was also a field artillery officer in the U.S. Army.
Patrick H. Daugherty, 40 (Class I - term expires in 2009), is Head of
Distressed and Special Situations Investing, and a Senior Portfolio Manager at
Highland Capital Management, L.P. Mr. Daugherty formerly served as General
Counsel to Highland. Mr. Daugherty is Chairman of the board of directors of
Trussway Holdings, Inc and its affiliates, Home Interiors & Gifts, Inc. and its
affiliates, Nexpak Corporation and its affiliates and Moll Industries and its
affiliates, and serves on the board of directors of Safety-Kleen HoldCo., Inc.
G. Edward Evans, 46 (Class I - term expires in 2009), is the Chairman and
CEO of Stelera Wireless, LLC. Previously, Mr. Evans served as Chief Executive
Officer of Syniverse Holdings Inc. until January of 2006 and, from January to
December 2006, he served as Chairman of Syniverse Holdings. Prior to that he was
the President and Chief Operating Officer of Dobson Communications Corporation.
Mr. Evans is a member of the board of directors of the Cellular
Telecommunications and Internet Association. In addition, Mr. Evans is a board
member of the Alliance for Telecommunications Industry Solutions and the Federal
Communications Commission Network Reliability and Interoperability Council. Mr.
Evans is a distinguished director of the University of Florida.
Karim Samii, 45 (Class I - term expires in 2009), is the President and
Chief Investment Officer of Pardus Capital Management L.P. Prior to joining
Pardus, Mr. Samii served as a restructuring and distressed company specialist
for WR Huff Asset Management Co., a multibillion-dollar investment advisory and
3
fund management complex, and as the Managing Director of an emerging market high
yield research effort for Credit Suisse First Boston.
Joseph Thornton, 45 (Class II - term expires in 2007), is a Vice President
and Portfolio Manager of Pardus Capital Management L.P. Prior to joining Pardus,
Mr. Thornton was an attorney at the international law firm of Rogers & Wells
(now Clifford Chance) and was subsequently recruited to join WR Huff Asset
Management Co. Mr. Thornton has also served on the boards of directors of
several portfolio companies.
James J. Volk, 43 (Class III - term expires in 2008) is the Chief
Financial Officer of VoiceVerified, Inc., a provider of voice biometric
verification technology and services. From July 2001 to July 2006, Mr. Volk was
the Chief Financial Officer at UbiquiTel Inc., a Sprint Nextel affiliate. Prior
to that, Mr. Volk held senior positions with Cingular Wireless and Comcast
Cellular. Mr. Volk is a certified public accountant and holds a B.S. in
accounting from the University of Delaware and an M.B.A. from Villanova
University.
As described above, Mr. Chura and Mr. Daugherty are affiliated with
Highland Capital Management, L.P. and Mr. Samii and Mr. Thornton are affiliated
with Pardus Capital Management L.P. Affiliates of Highland Capital Management,
L.P. and Pardus Capital Management L.P. were parties to the Exchange Agreement
and are parties to the Registration Rights Agreement. Pursuant to the Exchange
Agreement, as amended, affiliates of Highland Capital Management, L.P. exchanged
$261,378,000 aggregate principal amount of the SunCom Wireless Subordinated
Notes for 18,587,616 shares of Class A Common Stock, and an affiliate of Pardus
Capital Management L.P. exchanged $153,000,000 aggregate principal amount of the
SunCom Wireless Subordinated Notes for 10,880,433 shares of Class A Common
Stock. These shares of Class A Common Stock are subject to registration rights
pursuant to the Registration Rights Agreement described above in Item 1.01
above.
The Exchange Agreement, as amended, provided for the nomination of the six
new directors identified above as follows: Messrs. Chura and Daugherty were
nominated for election by Highland Capital Management, L.P.; Messrs. Evans,
Samii and Thornton were nominated for election by Pardus Capital Management
L.P.; and Mr. Volk was nominated for election by DiMaio Ahmad Capital LLC.
The Exchange Agreement, as amended, also provides that two additional
directors submitted for nomination, one each by Highland Capital Management,
L.P. and DiMaio Ahmad Capital LLC, will be considered by the Company's Board of
Directors after the closing of the exchange to fill the two remaining vacancies
on the Board.
4
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Pro Forma Financial Information
Unaudited pro forma financial information for SunCom Wireless
Holdings, Inc. and its subsidiaries reflecting the exchange
transaction described in Item 2.01 of this report and the
related merger effecting a 1-for-10 reverse stock split is
being filed as Exhibit 99.1 to this report.
(c) Not applicable.
(d) Exhibits
2.1 Amendment No. 1 to Exchange Agreement, dated as of May 15,
2007, by and among SunCom Wireless Holdings, Inc., SunCom
Wireless Investment Company LLC, and the holders of the 9-3/8%
Senior Subordinated Notes due 2011 and 8-3/4% Senior
Subordinated Notes due 2011 of SunCom Wireless, Inc. party
thereto.
4.1 Supplemental Indenture, dated as of May 15, 2007, to
Indenture, dated January 19, 2001, governing the 9-3/8% Senior
Subordinated Notes due 2011 of SunCom Wireless, Inc., by and
among SunCom Wireless, Inc., the guarantors party thereto, and
The Bank of New York, as Trustee.
4.2 Supplemental Indenture, dated as of May 15, 2007, to
Indenture, November 14, 2001, governing the 8-3/4% Senior
Subordinated Notes due 2011 of SunCom Wireless, Inc., by and
among SunCom Wireless, Inc., the guarantors party thereto, and
The Bank of New York, as Trustee.
10.1 Registration Rights Agreement, dated as of May 15, 2007, by
and among SunCom Wireless Holdings, Inc., SunCom Wireless
Investment Company LLC, and the holders of the 9-3/8% Senior
Subordinated Notes due 2011 and 8-3/4% Senior Subordinated
Notes due 2011 of SunCom Wireless, Inc. party thereto.
10.2 Letter Agreement, dated May 10, 2007, between SunCom Wireless
Holdings, Inc. and Mathias DeVito.*
10.3 Letter Agreement, dated May 10, 2007, between SunCom Wireless
Holdings, Inc. and Arnold Arnold Sheiffer.*
99.1 Pro Forma Financial Information.
--------------------------------------------------------------------
* Management contract or compensatory plan.
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
SUNCOM WIRELESS HOLDINGS, INC.
Date: May 21, 2007 By /s/Eric Haskell
------------------------------------
Name: Eric Haskell
Title: Executive Vice President
and Chief Financial Officer
6
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
2.1 Amendment No. 1 to Exchange Agreement, dated
as of May 15, 2007, by and among SunCom
Wireless Holdings, Inc., SunCom Wireless
Investment Company LLC, and the holders of
the 9-3/8% Senior Subordinated Notes due
2011 and 8-3/4% Senior Subordinated Notes
due 2011 of SunCom Wireless, Inc. party
thereto.
4.1 Supplemental Indenture, dated as of May 15,
2007, to Indenture, dated January 19, 2001,
governing the 9-3/8% Senior Subordinated
Notes due 2011 of SunCom Wireless, Inc., by
and among SunCom Wireless, Inc., the
guarantors party thereto, and The Bank of
New York, as Trustee.
4.2 Supplemental Indenture, dated as of May 15,
2007, to Indenture, November 14, 2001,
governing the 8-3/4% Senior Subordinated
Notes due 2011 of SunCom Wireless, Inc., by
and among SunCom Wireless, Inc., the
guarantors party thereto, and The Bank of
New York, as Trustee.
10.1 Registration Rights Agreement, dated as of
May 15, 2007, by and among SunCom Wireless
Holdings, Inc., SunCom Wireless Investment
Company LLC, and the holders of the 9-3/8%
Senior Subordinated Notes due 2011 and
8-3/4% Senior Subordinated Notes due 2011 of
SunCom Wireless, Inc. party thereto.
10.2 Letter Agreement, dated May 10, 2007,
between SunCom Wireless Holdings, Inc. and
Mathias DeVito.
10.3 Letter Agreement, dated May 10, 2007,
between SunCom Wireless Holdings, Inc. and
Arnold Arnold Sheiffer.
99.1 Pro Forma Financial Information.
7