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Filed by NorthPoint Communications Group, Inc.
Pursuant to Rule 425 under the Securities Act of 1933 and
Deemed Filed Pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: NorthPoint Communications Group, Inc.
Commission File No. 000-29828
THE FOLLOWING INFORMATION WAS DISSEMINATED TO EMPLOYEES OF NORTHPOINT
COMMUNICATIONS GROUP, INC. ON THE NORTHPOINT INTRANET BEGINNING ON AUGUST 24,
2000:
Verizon invests in NorthPoint top
Many of you have heard about our exciting agreement between NorthPoint and
Verizon. The merger combines NorthPoint's and Verizon's DSL networks, products,
strategic partnerships and management teams. "With this agreement, a new
NorthPoint is created," said NorthPoint's president and chief executive, Liz
Fetter, who will continue as CEO after the merger. "NorthPoint will be a
stronger competitor against cable and other broadband service providers,
delivering to customers the benefits that are always derived from competition:
innovation, increased choice and better service."
We expect to complete our transaction with Verizon by mid-2001. In the meantime,
we will continue to communicate our plans and answer questions throughout this
process. For answers to some of the most frequently asked questions about our
merger, please see our Got Questions? section of this newsletter.
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From our perspective the merger:
. accelerates the realization of our strategic business plan by
providing additional key resources sooner than expected -- financing
position, skilled employees, enhanced customer care and a network that
will double in size when the deal is completed. The funding secured
through this agreement will allow us to increase our efforts to expand
our network and continue to improve our service and delivery
processes. The addition of approximately 1,500 broadband-skilled
employees immediately expands our technical services capabilities upon
completion of the transaction.
. gives us the biggest footprint in the industry as the leading national
DSL service provider. Verizon will continue to serve as a retail DSL
services reseller and contribute all of its wholesale DSL business --
including $800 million in cash and its broadband network assets -- to
create a "new" NorthPoint. We've built our business on the strength of
delivering innovative service and quality products for our partner
channels.
. strengthens our efforts to develop new features, applications and
value-added services: content delivery, streaming media, voice over
DSL and a host of other products.
. allows us to perpetuate the pioneering culture you've come to know and
appreciate. Our management team will be in place to lead the day-to-
day
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operations. And moving forward, we'll keep the NorthPoint brand and
retain our sense of "a business venture with a start up personality."
. delivers true competitive choice -- we become an even more agile
competitor for the entrenched cable industry and other DSL players
(like SBC and Qwest).
. positions us to deliver the most advanced, technology driven,
broadband services and products in the industry. All in all, we
believe the merger provides a unique opportunity to strengthen our
capacity to serve our business partners in the future.
We look forward to continuing our partnership with you and we are excited about
this opportunity to perpetuate our fast-paced growth as the premier DSL provider
in the industry.
Got Questions?
This month our focus is on:
NorthPoint/Verizon Merger
OVERVIEW OF QUESTIONS
What has NorthPoint announced?
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What exactly is being merged?
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What are the combined strengths of the new company?
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What percentage of NorthPoint does Verizon now own?
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What impact will this have on existing customers?
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Why does this agreement put NorthPoint in a better position as a broadband
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leader?
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When do you expect the deal to close? Do you expect it to be approved quickly?
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As a current NorthPoint Partner, what does the Verizon announcement mean to my
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current relationship with NorthPoint?
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Is NorthPoint maintaining its wholesale strategy or will it launch a retail
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service?
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Will the addition of Verizon's retail channel and former Verizon wholesale
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partners, such as AOL, change my relative importance to NorthPoint as a
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channel partner?
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Will this announcement impact my current NorthPoint account team? Will my
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escalation process change?
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Will the Verizon announcement have any impacts on the operational processes by
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which I interface with NorthPoint today?
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Each month we answer some of the more frequently asked questions regarding
NorthPoint. These will vary from month to month in order to cover all aspects of
our company. If you have suggestions for future articles or questions about the
newsletter, please write our newsletter staff. For technical assistance, please
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contact our support department.
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You may obtain more information about NorthPoint Communications at
www.northpoint.net.
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What has NorthPoint announced? [_]
NorthPoint and Verizon have announced that they will merge their DSL assets to
form the leading national broadband company with unmatched assets and a greater
ability to deliver competitive choice for high-quality broadband services
nationwide. As part of the merger, Verizon will contribute $800 million in cash
to NorthPoint and
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its shareholders and will provide NorthPoint with its broadband network assets
creating a "new" NorthPoint and one of the world's best financed and
strategically positioned broadband services companies.
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What exactly is being merged? [_]
The merger combines the DSL networks, product suites, strategic partnerships,
customers and top-flight personnel of NorthPoint and Verizon to create a
preeminent broadband leader dedicated to accelerating broadband service
innovation and choice nationwide.
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What are the combined strengths of the new company? [_]
By the end of the year, the combined DSL operations of NorthPoint and Verizon
are expected to include:
. A nationwide broadband network comprised of more than 3,000 COs, passing
approximately 63 million homes and businesses
. More than 600,000 combined DSL subscribers and wholesale relationships
with companies such as AOL, RadioShack, and Microsoft
. Approximately 3,000 employees dedicated to supporting NorthPoint's
competitive, customer-focused strategy
. Broadband ventures in Europe and in Canada
. A NorthPoint management team that has pioneered the industry's most
aggressive DSL deployment
. Strong and committed financial resources to execute on the company's
aggressive plans
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What percentage of NorthPoint does Verizon now own? [_]
The combination of the two DSL businesses creates a "new" NorthPoint with
Verizon owning a 55 percent stake and existing NorthPoint shareholders assuming
a 45 percent stake.
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What impact will this have on existing customers? [_]
This deal has a positive impact on customers, providing NorthPoint with greater
network and product coverage, as well as the depth of resources necessary to
continue its focus on network build out and product innovation, in addition to
improving customer service and provisioning.
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Why does this agreement put NorthPoint in a better position as a [_]
broadband leader?
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The depth of resources and assets combined with our entrepreneurial spirit puts
us in a stronger position than ever, in what continues to be one of the fastest
growing markets in the industry. The fundamentals of this business have not
changed -- in fact they have only improved with line sharing and other
technology advances. With this agreement, we have the industry's most
expansive network, the largest number of wholesale subscribers and unmatched
partnerships -- along with the necessary funding -- to deliver robust value-
added broadband services to consumers and businesses.
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When do you expect the deal to close? Do you expect it to be approved [_]
quickly?
We expect to complete the merger by mid-2001. The transaction requires approval
by the FCC, Department of Justice, various state utility commissions and
NorthPoint shareholders. Given the substantial benefits to consumers, we are
confident we will gain all necessary approvals.
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As a current NorthPoint partner, what does the Verizon announcement mean [_]
to my current relationship with NorthPoint?
The additional benefits you will receive as a result of this announcement are
significant. NorthPoint's agreement significantly expands our network reach,
service offerings, access to capital and ability to innovate. By the end of the
year, the combined operations of NorthPoint and Verizon are expected to include
more than 3,000 operational central offices in 163 MSAs, more than 600,000
subscribers and a network passing approximately 63 million homes and businesses.
This announcement also provides NorthPoint with additional resources that will
enable NorthPoint to scale, continue network expansion and product development
and continue to improve customer service.
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Is NorthPoint maintaining its wholesale strategy or will it launch a [_]
retail service?
NorthPoint remains focused on a wholesale strategy. We are on the fastest path
to profitability among national DSL service providers, demonstrating the success
with which we have executed to this strategy. NorthPoint has relationships with
more than 200 leading service provider partners -- including ISPs, CLECs,
regional providers, IXCs and ILECs, in addition to retail alliances with
RadioShack and MSN. The new NorthPoint will gain customer relationships with
additional ISPs including AOL, Verizon Online and Genuity.
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Will the addition of Verizon's retail channel and former Verizon [_]
wholesale partners, such as AOL, change my relative importance to
NorthPoint as a channel partner?
This agreement strengthens NorthPoint's ability to serve all of its wholesale
customers through expanded resources to deploy network, develop new products,
and enhance service delivery and support. NorthPoint's plan is based on a
continued
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fast pace of growth. NorthPoint's existing 200+ service provider partners
provided 62,000 installed lines by the end of Q2 2000 and all signs point to
continued subscriber demand for DSL from this channel.
In order to be successful NorthPoint must recognize continued productivity and
growth from all of its channels. This will necessitate that NorthPoint continue
to provide top quality support for all of its partners.
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Will this announcement impact my current NorthPoint account team? Will [_]
my escalation process change?
You can expect business as usual with regard to the people supporting your
account. Your current account team will continue to be focused on supporting you
and escalation procedures will remain in place as they are today. As always,
NorthPoint will continue to look at ways of enhancing our processes and
procedures in order to continually improve the level of service and support we
provide our partners.
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Will the Verizon announcement have any impacts on the operational [_]
processes by which I interface with NorthPoint today (e.g., order
placement, order status, partner support center)?
Again, it's business as usual. This announcement should not cause disruption in
your current daily interactions with NorthPoint. You should feel 100 percent
confident in placing to orders using the same procedures, systems, and staff.
NorthPoint will continue to use its current industry leading back office
systems, including the Partner Resource Center (PRC) and OSS 2000, as well as
the rest of its operational processes. Service delivery will remain based in
Emeryville and staffed by the same teams that are supporting you today.
As we leverage the combined strengths of the "new" NorthPoint after the
completion of the deal, we will keep you posted on service delivery
enhancements.
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