<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)*
DIGITAL LIGHTWAVE, INC.
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(NAME OF ISSUER)
Common Stock, $.0001 par value
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(TITLE OF CLASS OF SECURITIES)
253855 10 0
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(CUSIP NUMBER)
Robert E. Freitas, Esq.
Orrick, Herrington & Sutcliffe LLP
1020 Marsh Road
Menlo Park, CA 94025
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS)
May 11, 2000
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(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 |_|.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
(Continued on following pages)
---------------------------
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect for the subject class of securities and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the act (however, see the
Notes).
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CUSIP NO. SCHEDULE
253855 10 0 13D
--------------------
---------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS Dr. Bryan J. Zwan
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS PF
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION United States
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NUMBER OF SHARES (7) SOLE VOTING POWER 17,941,750
(Subject to the Memorandum of Understanding
described in Item 4(d). 5,165,000 of which
shares are subject to forward sale agreements
and pledge agreements. See Item 4(a). 2,000,000
of which shares are subject to a legal dispute.
See Item 6.)
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OWNED (8) SHARED VOTING POWER 0
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BY EACH REPORTING (9) SOLE DISPOSITIVE POWER 17,941,750
(5,165,000 of which shares are subject to
forward sale agreements and pledge agreements.
See Item 4(a). 2,000,000 of which shares are
subject to a legal dispute. See Item 6.)
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PERSON WITH (10) SHARED DISPOSITIVE POWER 0
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON 17,941,750
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(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 59.6%
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(14) TYPE OF REPORTING PERSON IN
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2
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CUSIP NO. SCHEDULE
253855 10 0 13D
--------------------
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(1) NAMES OF REPORTING PERSONS ZG Nevada Limited Partnership
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS OO
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION Nevada
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NUMBER OF SHARES (7) SOLE VOTING POWER 14,941,750
(Subject to the Memorandum of Understanding
described in Item 4(d). 4,165,000 of which
shares are subject to forward sale agreements
and pledge agreements. See Item 4(a).)
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OWNED (8) SHARED VOTING POWER 0
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BY EACH REPORTING (9) SOLE DISPOSITIVE POWER 14,941,750
(4,165,000 of which shares
are subject to forward sale
agreements and pledge agreements.
See Item 4(a).)
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PERSON WITH (10) SHARED DISPOSITIVE POWER 0
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON 14,941,750
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(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 49.7%
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON PN
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3
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CUSIP NO. SCHEDULE
253855 10 0 13D
--------------------
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(1) NAMES OF REPORTING PERSONS ZG Nevada, Inc.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS 00
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION Nevada
---------------------------------------------------------------------
NUMBER OF SHARES (7) SOLE VOTING POWER 14,941,750
(Subject to the Memorandum of Understanding
described in Item 4(d). 4,165,000 of which
shares are subject to forward sale agreements
and pledge agreements. See Item 4(a).)
--------------------------------------------------------
OWNED (8) SHARED VOTING POWER 0
--------------------------------------------------------
BY EACH REPORTING (9) SOLE DISPOSITIVE POWER 14,941,750
(4,165,000 of which shares are
subject to forward sales agreements
and pledge agreements. See Item 4(a).)
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PERSON WITH (10) SHARED DISPOSITIVE POWER 0
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON 14,941,750
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(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 49.7%
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON CO
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4
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ITEM 1. SECURITY AND ISSUER
-------------------
This Amendment No. 3 to Schedule 13D ("Amendment") relates to the Common
Stock, $.0001 par value per share ("Common Stock") of Digital Lightwave, Inc.
(the "Issuer"). The principal executive offices of the Issuer are located at
15550 Lightwave Drive, Clearwater, Florida, 33760.
ITEM 2. IDENTITY AND BACKGROUND
-----------------------
(A, B, C AND F) This Amendment is being filed by (i) Dr. Bryan J. Zwan,
(ii) ZG Nevada Limited Partnership, a limited partnership formed under the laws
of the State of Nevada ("ZG Partnership") and (iii) ZG Nevada, Inc. a Nevada
corporation ("ZG Inc."). ZG Inc. is the sole general partner of ZG Partnership
and Dr. Zwan is the sole limited partner of ZG Partnership. Dr. Zwan is the sole
shareholder and executive officer of ZG Inc. Dr. Zwan and Monte L. Miller are
the directors of ZG Inc.
Dr. Zwan's address is c/o Orrick, Herrington & Sutcliffe LLP, 1020
Marsh Road, Menlo Park, California 94025, Attn: Robert E. Freitas, Esq. Dr.
Zwan's principal occupation is investor. Dr. Zwan is a United States citizen.
The principal business of ZG Partnership is investing. The principal office of
ZG Partnership is Suite 850, 101 Convention Center Drive, Las Vegas, Nevada
89109. The principal business of ZG Inc. is investing. The principal office of
ZG Inc. is Suite 850, 101 Convention Center Drive, Las Vegas, Nevada 89109. Mr.
Miller is the President of Nevada Holding Services, Inc., a corporate service
provider. Mr. Miller's address is Suite 850, 101 Convention Center Drive, Las
Vegas, Nevada 89109. Mr. Miller is a United States citizen.
(D AND E) During the last five years, none of Dr. Zwan, ZG Partnership,
ZG Inc. nor Mr. Miller has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors); or (ii) was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities law or finding any violation
with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
-------------------------------------------------
Not Applicable
5
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ITEM 4. PURPOSE OF THE TRANSACTION
--------------------------
(a)(A) On December 8, 1999, Dr. Zwan entered into a forward sale
agreement (the "Zwan Agreement") relating to up to 1,000,000 shares
(the "Base Amount") of Common Stock. The Zwan Agreement provides that
Dr. Zwan will deliver on December 8, 2004 (the "Maturity Date") a
number of shares of Common Stock (or, at the option of Dr. Zwan, the
cash equivalent of such shares) equal to the product of (1) the Base
Amount and (2) the Exchange Rate, which will be determined as follows:
(i) If the average closing price (the "Maturity Price")
of the Common Stock on the 20 trading days beginning
30 trading days prior to the Maturity Date is less
than or equal to $31.5505 (the "Issue Price"), the
Exchange Rate will be one;
(ii) If the Maturity Price is greater than the Issue Price
but less than $37.8606 (the "Threshold Price"), the
Exchange Rate will be equal to the Issue Price
divided by the Maturity Price; and
(iii) If the Maturity Price is equal to or greater than the
Threshold Price, the Exchange Rate will be .8333.
Pursuant to the Zwan Agreement, Dr. Zwan received a purchase price
of $23,790,580. In connection with the Zwan Agreement, Dr. Zwan entered
into the Pledge Agreement dated December 8, 1999 among Dr. Zwan, CSFB
SAILS Corp. and Credit Suisse First Boston Corporation. Up to 1,000,000
shares of the Common Stock beneficially owned by Dr. Zwan are subject
to this pledge agreement. See Item 7 below.
(B) On February 9, 2000, ZG Partnership entered into a binding term
sheet outlining the terms of forward sale arrangements with respect to
1,500,000 shares of Common Stock. On March 1, 2000, ZG Partnership
entered into a forward sale agreement ("Agreement I") relating to up to
750,000 shares (the "Base Amount") of Common Stock. Agreement I
provides that ZG Partnership will deliver on March 1, 2005 (the
"Maturity Date") a number of shares of Common Stock (or, at the option
of ZG Partnership, the cash equivalent of such shares) equal to
the product of (i) the Base Amount and (ii) the Exchange Rate, which
will be determined as follows:
(a) If the average closing price (the "Maturity Price") of
the Common Stock on the 20 trading days beginning 30
trading days prior to the Maturity Date is less than or
equal to $63.095 (the "Issue Price"), the Exchange Rate
will be one;
(b) If the Maturity Price is greater than the Issue Price but
less than $75.714 (the "Threshold Price"), the Exchange
Rate will be equal to the Issue Price divided by the
Maturity Price; and
(c) If the Maturity Price is equal to or greater than the
Threshold Price, the Exchange Rate will be .8333.
In consideration therefor, ZG Partnership received a purchase price of
$36,535,854.00. In connection with Agreement I, ZG Partnership entered
into the Pledge Agreement dated March 1, 2000 among ZG Partnership,
CSFB SAILS Corp. and Credit Suisse First Boston Corporation. Up to
750,000 shares are subject to this pledge agreement. See Item 7 below.
6
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(C) On February 9, 2000, ZG Partnership entered into a binding term
sheet outlining the terms of forward sale arrangements with respect to
1,500,000 shares of Common Stock. On March 1, 2000, ZG Partnership
entered into a forward sale agreement ("Agreement II") relating to up
to 750,000 shares (the "Base Amount") of Common Stock. Agreement II
provides that ZG Partnership will deliver on March 1, 2003 (the
"Maturity Date") a number of shares of Common Stock (or, at the option
of ZG Partnership, the cash equivalent of such shares) equal to the
product of (i) the Base Amount and (ii) the Exchange Rate, which will
be determined as follows:
(a) If the average closing price (the "Maturity Price") of
the Common Stock on the 20 trading days beginning 30
trading days prior to the Maturity Date is less than or
equal to $64.39 (the "Issue Price"), the Exchange Rate
will be one;
(b) If the Maturity Price is greater than the Issue Price
but less than $77.268 (the "Threshold Price"), the
Exchange Rate will be equal to the Issue Price divided
by the Maturity Price; and
(c) If the Maturity Price is equal to or greater than the
Threshold Price, the Exchange Rate will be .8333.
In consideration therefor, ZG Partnership received a purchase price of
$38,152,131.00. In connection with Agreement II, ZG Partnership entered
into the Pledge Agreement dated March 1, 2000 among ZG Partnership,
CSFB SAILS Corp. and Credit Suisse First Boston Corporation. Up to
750,000 shares are subject to this pledge agreement. See Item 7 below.
(D) On February 28, 2000, ZG Partnership entered into a binding term
sheet outlining the terms of a forward sale arrangement with respect to
865,000 shares of Common Stock. On March 8, 2000, ZG Partnership entered
into a forward sale agreement ("Agreement III") relating to up to
865,000 shares (the "Base Amount") of Common Stock. Agreement III
provides that ZG Partnership will deliver on March 8, 2005 (the
"Maturity Date") a number of shares of Common Stock (or, at the option
of ZG Partnership, the cash equivalent of such shares) equal to the
product of (i) the Base Amount and (ii) the Exchange Rate, which will be
determined as follows:
(a) If the average closing price (the "Maturity Price") of
the Common Stock on the 20 trading days beginning 30
trading days prior to the Maturity Date is less than or
equal to $84.1243 (the "Issue Price"), the Exchange Rate
will be one;
(b) If the Maturity Price is greater than the Issue Price but
less than $100.9491 (the "Threshold Price"), the Exchange
Rate will be equal to the Issue Price divided by the
Maturity Price; and
(c) If the Maturity Price is equal to or greater than the
Threshold Price, the Exchange Rate will be .8333.
In consideration therefor, ZG Partnership received a purchase price of
$56,497,953.00. In connection with Agreement III, ZG Partnership
entered into the Pledge Agreement dated March 8, 2000 among ZG
Partnership, CSFB SAILS Corp. and Credit Suisse First Boston
Corporation. Up to 865,000 shares are subject to this pledge agreement.
See Item 7 below.
(E) On May 11, 2000, ZG Partnership entered into a binding term sheet
outlining the terms of forward sale arrangements with respect to
1,000,000 shares of Common Stock. On June 23, 2000, ZG Partnership
entered into a forward sale agreement ("Agreement IV") relating to up
to 475,000 shares (the "Base Amount") of Common Stock. ZG Partnership's
obligation to enter into forward sale arrangements with respect to an
additional 525,000 shares has terminated. Agreement IV provides that ZG
Partnership will deliver on June 23, 2004 (the "Maturity Date") a
number of shares of Common Stock (or, at the option of ZG Partnership,
the cash equivalent of such shares) equal to the product of (i) the
Base Amount and (ii) the Exchange Rate, which will be determined as
follows:
(a) If the average closing price (the "Maturity Price") of
the Common Stock on the 20 trading days beginning 30
trading days prior to the Maturity Date is less than or
equal to $64.5697 (the "Issue Price"), the Exchange Rate
will be one;
(b) If the Maturity Price is greater than the Issue Price but
less than $77.4837 (the "Threshold Price"), the Exchange
Rate will be equal to the Issue Price divided by the
Maturity Price; and
(c) If the Maturity Price is equal to or greater than the
Threshold Price, the Exchange Rate will be .8333.
In consideration therefor, ZG Partnership received a purchase price of
$24,094,001. In connection with Agreement IV, ZG Partnership entered
into the Pledge Agreement dated June 23, 2000 among ZG Partnership,
CSFB SAILS Corp. and Credit Suisse First Boston Corporation. Up to
475,000 shares are subject to this pledge agreement. See Item 7 below.
7
<PAGE> 8
(F) On June 20, 2000, ZG Partnership transferred 500,000 shares of
Common Stock to the Issuer following which the Issuer was to transfer
1,800,000 shares of Common Stock to the plaintiffs as part of a
settlement of a class action lawsuit commenced in 1998 against the
Issuer and several other individuals, including Dr. Zwan.
(G) On July 24, 2000, ZG Partnership entered into a binding term sheet
outlining the terms of forward sale arrangements with respect to
2,000,000 shares of Common Stock. On September 8, 2000, ZG Partnership
entered into a forward sale agreement ("Agreement V") relating to up to
1,325,000 shares (the "Base Amount") of Common Stock. ZG Partnership's
obligation to enter into forward sale arrangements with respect to an
additional 675,000 shares has terminated. Agreement V provides that ZG
Partnership will deliver on September 8, 2004 (the "Maturity Date") a
number of shares of Common Stock (or, at the option of ZG Partnership,
the cash equivalent of such shares) equal to the product of (i) the
Base Amount and (ii) the Exchange Rate, which will be determined as
follows:
(a) If the average closing price (the "Maturity Price") of
the Common Stock on the 20 trading days beginning 30
trading days prior to the Maturity Date is less than or
equal to $101.2424 (the "Issue Price"), the Exchange Rate
will be one;
(b) If the Maturity Price is greater than the Issue Price but
less than $121.4909(the "Threshold Price"), the Exchange
Rate will be equal to the Issue Price divided by the
Maturity Price; and
(c) If the Maturity Price is equal to or greater than the
Threshold Price, the Exchange Rate will be .8333.
In consideration therefor, ZG Partnership received a purchase price of
$106,764,799. In connection with Agreement V, ZG Partnership entered
into the Pledge Agreement dated September 8, 2000 among ZG Partnership,
CSFB SAILS Corp. and Credit Suisse First Boston Corporation. Up to
1,325,000 shares are subject to this pledge agreement. See Item 7
below.
Except as noted above with respect to the shares of Common Stock, none
of Dr. Zwan, ZG Partnership nor ZG Inc. presently has any plans or
proposals that relate to or would result in the acquisition by any
person of additional securities of the Issuer, or the disposition of
securities of the Issuer (See Item 6);
(b) None of Dr. Zwan, ZG Partnership nor ZG Inc. presently has any
plans or proposals that relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Issuer or any of its subsidiaries;
(c) None of Dr. Zwan, ZG Partnership nor ZG Inc. presently has any
plans or proposals that relate to or would result in a sale or transfer
of a material amount of assets of the Issuer or of any of its
subsidiaries;
(d) On October 14, 1999, the Issuer and Dr. Zwan entered into a
Memorandum of Understanding pursuant to which the parties agreed,
among other things, that (i) the size of the board of directors will
be increased from four to five members, (ii) two new outside directors
will be appointed to the board of directors upon the approval of Dr.
Zwan and a majority of the current board of directors, (iii) Mr.
William Seifert, a current outside director, will step down, (iv) Dr.
Zwan shall vote his shares of Common Stock at the Issuer's annual
meeting in the year 2000 in favor of the election of Messrs. Hamilton,
Chastelet and Zwan and the new directors if appointed prior to the
year 2000 meeting, and (v) the Issuer will enter into agreements
containing provisions with respect to change of control, severance and
non-compete with current senior management. Dr. Zwan resigned as a
director of the Issuer on August 22, 2000.
Dr. Zwan does not intend to stand for reelection as a director at
the Issuer's 2000 Annual Meeting. The Issuer has not expressed any
objection to this decision.
On September 11, 2000, Dr. Zwan notified the Issuer, pursuant to
Section 2(c) of the Issuer's bylaws, of his intention to nominate Gerry
Chastelet, Dr. William F. Hamilton, Peter Guglielmi, Robert F. Hussey
and Gerald A. Fallon for election as directors of the Issuer at the
Issuer's 2000 Annual Meeting.
Except as noted above in this subsection (d), none of Dr. Zwan, ZG
Partnership nor ZG Inc. presently has any plans or proposals that
relate to or would result in any change in the present board of
directors or management of the Issuer, including any plans or proposals
to change the number or term of directors or to fill any existing
vacancies on the board;
(e) None of Dr. Zwan, ZG Partnership nor ZG Inc. presently has any
plans or proposals that relate to or would result in any material
change in the present capitalization or dividend policy of the Issuer;
(f) None of Dr. Zwan, ZG Partnership nor ZG Inc. presently has any
plans or proposals that relate to or would result in any material
change in the Issuer's business or corporate structure;
(g) None of Dr. Zwan, ZG Partnership nor ZG Inc. presently has any
plans or proposals that relate to or would result in any change in the
Issuer's charter, bylaws or instruments corresponding thereto or other
actions which may impede the acquisition of control of the Issuer by
any person;
(h) None of Dr. Zwan, ZG Partnership nor ZG Inc. presently has any
plans or proposals that relate to or would cause a class of securities
of the Issuer to be delisted from a national securities exchange or to
cease to be authorized to be quoted in the inter-dealer quotation
system of a registered national securities association;
(i) None of Dr. Zwan, ZG Partnership nor ZG Inc. presently has any
plans or proposals that relate to or would cause a class of equity
securities of the Issuer to become eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Act of
1933, as amended;
(j) Except as set forth above, none of Dr. Zwan, ZG Partnership nor ZG
Inc. presently has any plans or proposals that relate to any action
similar to any of those enumerated above.
8
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To the knowledge of Dr. Zwan, ZG Partnership and ZG Inc., Mr. Miller
has no plans or proposals relating to any of the foregoing.
ITEM 5. INTEREST IN SECURITIES OF ISSUER
--------------------------------
(a) Dr. Zwan may be deemed to be the beneficial owner of 17,941,750
shares (including the 5,165,000 shares of Common Stock subject to the forward
sale agreements and pledge agreements described in Item 4 (a) above and
2,000,000 shares of Common Stock subject to a legal dispute described in Item 6
below) or 59.6% of the outstanding shares of Common Stock (based on the Issuer's
Form 10-Q for the quarter ended June 30, 2000). Each of ZG Partnership and ZG
Inc. may be deemed to be the beneficial owner of 14,941,750 shares or 49.7% of
the outstanding shares of Common Stock of the Issuer (including the 4,165,000
shares of Common Stock subject to forward sale agreements and pledge agreements
described in Item 4(a) above).
To the knowledge of Dr. Zwan, ZG Inc. and ZG Partnership, Mr. Miller
does not beneficially own any securities of the Issuer.
(b) Number of shares as to which such Reporting Person has:
(i) Sole power to vote or direct the vote:
Dr. Zwan has sole power to vote or direct the vote of
17,941,750 shares of Common Stock. (Subject to the
Memorandum of Understanding. See Item 4(d) above. In
addition, 5,165,000 of such shares are subject to the
forward sale agreements and the pledge agreements
described in Item 4(a) above and 2,000,000 of
such shares are subject to a legal dispute described
in Item 6 below.) Each of ZG Partnership and ZG
Inc. has sole power to vote or direct the vote of
14,941,750 shares of Common Stock. (Subject to the
Memorandum of Understanding. See Item 4(d) above.)
In addition, 4,165,000 shares of Common Stock are
subject to forward sale agreements and pledge
agreements described in Item 4(a) above.
(ii) Shared power to vote or direct the vote:
Not applicable.
(iii) Sole power to dispose or to direct the disposition
of:
Dr. Zwan has the sole power to dispose or to direct
the disposition of 17,941,750 shares of Common Stock
(5,165,000 of such shares are subject to the forward
sale agreements and the pledge agreements described
in Item 4(a) above and 2,000,000 of such shares are
subject to a legal dispute described in Item 6
below). Each of ZG Partners and ZG Inc. has sole
power to dispose or direct the disposition of
14,941,750 shares of Common Stock (including the
4,165,000 shares of Common Stock subject to forward
sale agreements and pledge agreements described in
item 4(a)above).
(iv) Shared power to dispose or to direct the disposition
of:
Not applicable.
9
<PAGE> 10
(c) Transactions not previously reported on Schedule 13D:
As described in clause (E) of Item 4(a) above, ZG Partnership entered
into a binding term sheet outlining the terms of a forward sale arrangement and
thereafter ZG Partnership entered into a forward sale agreement and pledge
agreement with respect to an aggregate of 475,000 shares of Common Stock. See
Item 4(a) above.
As described in clause (F) of Item 4(a) above, ZG Partnership
transferred 500,000 shares of Common Stock to the issuer following which the
Issuer was to transfer 1,800,000 shares of Common Stock to the plaintiffs as
part of a settlement of a class action lawsuit.
As described in clause (G) of Item 4(a) above, ZG Partnership entered
into a binding term sheet outlining the terms of a forward sale arrangement and
thereafter ZG Partnership entered into a forward sale arrangement and pledge
agreement with respect to an aggregate of 1,325,000 shares of Common Stock. See
Item 4(a) above.
(d) Except as described in Item 4(a) and in this Item 5, no other
person is known to Dr. Zwan, ZG Partnership or ZG Inc. to have the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, any shares of Common Stock beneficially owned by Dr. Zwan, ZG
Partnership or ZG Inc.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERTAKINGS OR RELATIONSHIPS WITH RESPECT TO
----------------------------------------------------------------------
SECURITIES OF THE ISSUER.
-------------------------
Term Sheets
On February 9, 2000, ZG Partnership entered into a binding term sheet
outlining the terms of forward sale arrangements with respect to 1,500,000
shares of Common Stock.
On February 28, 2000, ZG Partnership entered into a binding term sheet
outlining the terms of forward sale arrangements with respect to 865,000 shares
of Common Stock.
On May 11, 2000, ZG Partnership entered into a binding term sheet
outlining the terms of a forward sale arrangement with respect to up to
1,000,000 shares of Common Stock.
On July 24, 2000 ZG Partnership entered into a binding term sheet
outlining the terms of a forward sale arrangement with respect to up to
2,000,000 shares of Common Stock.
Forward Sale Agreements
On December 8, 1999, Dr. Zwan entered into the Zwan Agreement relating
to up to 1,000,000 shares of Common Stock, as described in Item 4(a) above.
On March 1, 2000, ZG Partnership entered into Agreement I and Agreement
II relating to up to 750,000 and 750,000 shares of Common Stock, respectively,
as described in item 4(a) above.
On March 8, 2000, ZG Partnership entered into Agreement III relating to
up to 865,000 shares of Common Stock, as described in item 4(a) above.
On June 23, 2000 ZG Partnership entered into Agreement IV relating to
up to 475,000 shares of Common Stock, as described in item 4(a) above. ZG
Partnership's obligation to enter into forward sale arrangements with respect to
an additional 525,000 shares has terminated.
On September 8, 2000 ZG Partnership entered into Agreement V relating
to up to 1,325,000 shares of Common Stock, as described in item 4(a) above. ZG
Partnership's obligation to enter into forward sale arrangements with respect to
an additional 675,000 shares has terminated.
10
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Pledge Agreements
On December 8, 1999, Dr. Zwan entered into the Pledge Agreement in
favor of CSFB SAILS Corp. to secure the performance by Dr. Zwan of his
obligations under the Agreement. Up to 1,000,000 shares of the Common Stock
beneficially owned by Dr. Zwan are subject to the Pledge Agreement. See Item 7
below.
On March 1, 2000, ZG Partnership entered into a Pledge Agreement in
favor of CSFB SAILS Corp. to secure the performance by ZG Partnership of its
obligations under Agreement I. Up to 750,000 shares of Common Stock beneficially
owned by ZG Partnership are subject to this pledge agreement. See Item 4(a)
above and Item 7 below.
On March 1, 2000, ZG Partnership entered into a Pledge Agreement in
favor of CSFB SAILS Corp. to secure the performance by ZG Partnership of its
obligations under Agreement II. Up to 750,000 shares of Common Stock
beneficially owned by ZG Partnership are subject to this pledge agreement. See
Item 4(a) above and Item 7 below.
On March 8, 2000, ZG Partnership entered into a Pledge Agreement in
favor of CSFB SAILS Corp. to secure the performance by ZG Partnership of its
obligations under Agreement III. Up to 865,000 shares of Common Stock
beneficially owned by ZG Partnership are subject to this pledge agreement. See
Item 4(a) above and Item 7 below.
On June 23, 2000 ZG Partnership entered into a Pledge Agreement in
favor of CSFB SAILS Corp. to secure the performance by ZG Partnership of its
obligations under Agreement IV. Up to 475,000 shares of Common Stock are
subject to this pledge agreement. See item 4(a) above and Item 7 below.
On September 8, 2000, ZG Partnership entered into a Pledge Agreement in
favor of CSFB SAILS Corp. to secure the performance by ZG Partnership of its
obligations under Agreement V. Up to 1,325,000 shares of Common Stock are
subject to this pledge agreement. See Item 4(a) above and Item 7 below.
Legal Dispute
Up to 2,000,000 shares of Common Stock beneficially owned by Dr. Zwan
are subject to a legal dispute between Dr. Zwan and H. Brian Haney and HBH
Assets, Ltd. over the validity of an option which if valid could entitle HBH
Assets, Ltd., as assignee, to purchase such shares upon exercise of the option
during the option term.
Dr. Zwan believes that the disputed option is invalid and believes
that Mr. Haney's and HBH Assets' claims are without merit. Dr. Zwan has
defended, and intends to continue to vigorously defend, against the claims in
the legal dispute. However, in the event H. Brian Haney and HBH Assets, Ltd.
prevailed on their claims in the legal dispute and if the court made an order
for specific performance of the disputed option, HBH Assets, Ltd., as
assignee, could exercise the option for some or all of such 2,000,000 shares
of Common Stock.
Memorandum of Understanding
See Item 4(d) above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
--------------------------------
The following documents are filed as exhibits hereto:
1. Joint Filing Agreement between Bryan J. Zwan, ZG Nevada Limited
Partnership and ZG Nevada, Inc.
2. SAILS Mandatorily Exchangeable Securities Contract, dated as of
December 8, 1999, among Bryan J. Zwan, CSFB SAILS Corp. and Credit Suisse First
Boston Corporation. Incorporated by reference to Dr. Zwan's, ZG Partnership's
and ZG Inc.'s Amendment No. 1 to Schedule 13D filed on January 11, 2000.
3. SAILS Pledge Agreement dated December 8, 1999 among Bryan J. Zwan,
CSFB SAILS Corp. and Credit Suisse First Boston Corporation. Incorporated by
reference to Dr. Zwan's, ZG Partnership's and ZG Inc.'s Amendment No. 1 to
Schedule 13D filed on January 11, 2000.
4. Memorandum of Understanding dated October 14, 1999 by and between
Digital Lightwave, Inc. and Bryan J. Zwan. Incorporated by reference to Dr.
Zwan's, ZG Partnership's and ZG Inc.'s Amendment No. 1 to Schedule 13D filed on
January 11, 2000.
5. SAILS Mandatorily Exchangeable Securities Contract, dated as of
March 1, 2000, among ZG Nevada Limited Partnership, CSFB SAILS Corp. and Credit
Suisse First Boston Corporation ("Agreement I"). Incorporated by reference to
Dr. Zwan's, ZG Partnership's and ZG Inc.'s Amendment No. 2 to Schedule 13D
filed on March 14, 2000.
6. SAILS Pledge Agreement, dated as of March 1, 2000, among ZG Nevada
Limited Partnership, CSFB SAILS Corp. and Credit Suisse First Boston
Corporation. Incorporated by reference to Dr. Zwan's, ZG Partnership's and ZG
Inc.'s Amendment No. 2 to Schedule 13D filed on March 14, 2000.
7. SAILS Mandatorily Exchangeable Securities Contract, dated as of
March 1, 2000, among ZG Nevada Limited Partnership, CSFB SAILS Corp. and Credit
Suisse First Boston Corporation ("Agreement II"). Incorporated by reference to
Dr. Zwan's, ZG Partnership's and ZG Inc.'s Amendment No. 2 to Schedule 13D filed
on March 14, 2000.
8. SAILS Pledge Agreement, dated as of March 1, 2000, among ZG Nevada
Limited Partnership, CSFB SAILS Corp. and Credit Suisse First Boston
Corporation. Incorporated by reference to Dr. Zwan's, ZG Partnership's and ZG
Inc.'s Amendment No. 2 to Schedule 13D filed on March 14, 2000.
9. SAILS Mandatorily Exchangeable Securities Contract, dated as of
March 8, 2000, among ZG Nevada Limited Partnership, CSFB SAILS Corp. and Credit
Suisse First Boston Corporation ("Agreement III"). Incorporated by reference to
Dr. Zwan's, ZG Partnership's and ZG Inc.'s Amendment No. 2 to Schedule 13D filed
on March 14, 2000.
10. SAILS Pledge Agreement, dated as of March 8, 2000, among ZG
Nevada Limited Partnership, CFSB SAILS Corp. and Credit Suisse First Boston
Corporation. Incorporated by reference to Dr. Zwan's, ZG Partnership's and ZG
Inc.'s Amendment No. 2 to Schedule 13D filed on March 14, 2000.
11. SAILS Mandatorily Exchangeable Securities Contract, dated as of
June 23, 2000, among ZG Nevada Limited Partnership, CSFB SAILS Corp. and Credit
Suisse First Boston Corporation.
12. SAILS Pledge Agreement, dated as of June 23, 2000, among ZG
Nevada Limited Partnership, CSFB SAILS Corp. and Credit Suisse First Boston
Corporation.
13. SAILS Mandatorily Exchangeable Securities Contract, dated as
of September 8, 2000, among ZG Nevada Limited Partnership, CSFB SAILS Corp. and
Credit Suisse First Boston Corporation.
14. SAILS Pledge Agreement, dated as of September 8, 2000, among
ZG Nevada Limited Partnership, CSFB SAILS Corp. and Credit Suisse First Boston
Corporation.
15. Notice of Nomination dated September 11, 2000.
11
<PAGE> 12
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned hereby certify that the information set forth in
this statement is true, complete and correct.
Dated: September 20, 2000 BRYAN J. ZWAN.
By: /s/ Bryan J. Zwan
-------------------------------
Name: Bryan J. Zwan
Dated: September 20, 2000 ZG NEVADA LIMITED PARTNERSHIP
By: ZG Nevada, Inc., as
General Partner
By: /s/ Bryan J. Zwan
-------------------------------
Name: Bryan J. Zwan
Title: President
Dated: September 20, 2000 ZG NEVADA, INC.
By: /s/ Bryan J. Zwan
-------------------------------
Name: Bryan J. Zwan
Title: President
12
<PAGE> 13
EXHIBIT INDEX
---------------
Exhibit
Sequentially
Numbered Page
---------------
1. Joint Filing Agreement between Bryan J. Zwan, ZG
Nevada Limited Partnership and ZG Nevada, Inc.
2. SAILS Mandatorily Exchangeable Securities Contract,
dated as of December 8, 1999, among Bryan J. Zwan,
CSFB SAILS Corp. and Credit Suisse First Boston
Corporation. Incorporated by reference to Dr.
Zwan's, ZG Partnership's and ZG Inc.'s Amendment No. 1
to Schedule 13D filed on January 11, 2000.
3. SAILS Pledge Agreement dated as of December 8, 1999,
among Bryan J. Zwan, CSFB SAILS Corp. and Credit
Suisse First Boston Corporation. Incorporated by reference
to Dr. Zwan's, ZG Partnership's and ZG Inc.'s
Amendment No. 1 to Schedule 13D filed on January 11, 2000.
4. Memorandum of Understanding dated October 14, 1999 by and between
Digital Lightwave, Inc. and Bryan J. Zwan. Incorporated by reference to
Dr. Zwan's, ZG Partnership's and ZG Inc.'s Amendment No. 1 to Schedule
13D filed on January 11, 2000.
5. SAILS Mandatorily Exchangeable Securities Contract,
dated as of March 1, 2000, among ZG Nevada Limited Partnership,
CSFB SAILS Corp. and Credit Suisse First Boston Corporation.
Incorporated by reference to Dr. Zwan's, ZG Partnership's and
ZG Inc.'s Amendment No. 2 to Schedule 13D filed on March 14, 2000.
6. SAILS Pledge Agreement, dated as of March 1, 2000, among ZG Nevada
Limited Partnership, CSFB SAILS Corp. and Credit Suisse First Boston
Corporation. Incorporated by reference to Dr. Zwan's, ZG Partnership's
and ZG Inc.'s Amendment No. 2 to Schedule 13D filed on March 14, 2000.
7. SAILS Mandatorily Exchangeable Securities Contract, dated as of March
1, 2000, among ZG Nevada Limited Partnership, CSFB SAILS Corp. and
Credit Suisse First Boston Corporation. Incorporated by reference to
Dr. Zwan's, ZG Partnership's and ZG Inc.'s Amendment No. 2 to Schedule
13D filed on March 14, 2000.
8. SAILS Pledge Agreement, dated as of March 1, 2000, among ZG Nevada
Limited Partnership, CSFB SAILS Corp. and Credit Suisse First Boston
Corporation. Incorporated by reference to Dr. Zwan's, ZG Partnership's
and ZG Inc.'s Amendment No. 2 to Schedule 13D filed on March 14, 2000.
9. SAILS Mandatorily Exchangeable Securities Contract, dated as of March
8, 2000, among ZG Nevada Limited Partnership, CSFB SAILS Corp. and
Credit Suisse First Boston Corporation. Incorporated by reference to
Dr. Zwan's, ZG Partnership's and ZG Inc.'s Amendment No. 2 to Schedule
13D filed on March 14, 2000.
10. SAILS Pledge Agreement, dated as of March 8, 2000, among ZG Nevada
Limited Partnership, CSFB SAILS Corp. and Credit Suisse First Boston
Corporation. Incorporated by reference to Dr. Zwan's, ZG Partnership's
and ZG Inc.'s Amendment No. 2 to Schedule 13D filed on March 14, 2000.
11. SAILS Mandatorily Exchangeable Securities Contract, dated as of June
23, 2000, among ZG Nevada Limited Partnership, CSFB SAILS Corp. and
Credit Suisse First Boston Corporation.
12. SAILS Pledge Agreement, dated as of June 23, 2000, among ZG Nevada
Limited Partnership, CSFB SAILS Corp. and Credit Suisse First Boston
Corporation.
13. SAILS Mandatorily Exchangeable Securities Contract, dated as of
September 8, 2000, among ZG Nevada Limited Partnership, CSFB SAILS
Corp. and Credit Suisse First Boston Corporation.
14. SAILS Pledge Agreement, dated as of September 8, 2000, among ZG Nevada
Limited Partnership, CSFB SAILS Corp. and Credit Suisse First Boston
Corporation.
15. Notice of Nomination dated September 11, 2000.
13
