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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
Echelon Corporation
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(Name of Issuer)
Common Stock, $.01 Par Value
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(Title of Class of Securities)
27874N105
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(CUSIP Number)
Salvatore Cardillo
Viale Regina Margherita 137
00198 Rome, Italy
(39) 06-8509-2727
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 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: Schedules filed in paper format shall include a signed original and five
copies of the Schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
____________________
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to 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 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).
(Continued on following pages)
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CUSIP NO. 27874N105 13D
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NAME OF REPORTING PERSONS
1 S.S OR I.R.S IDENTIFICATION NOS. OF ABOVE PERSONS
ENEL S.p.A ("ENEL")
I.R.S. I.D.#
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4 WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [_]
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6 Italy
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SOLE VOTING POWER
7 3,000,000
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
Not applicable
OWNED BY
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EACH SOLE DISPOSITIVE POWER
9 3,000,000
REPORTING
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10 Not applicable
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 3,000,000 shares of the common stock, par value $0.01 (the "Common
Stock"), of Echelon Corporation (the "Issuer")
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
12 [_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
13 7.93% (calculated on the basis of 37,809,187 shares of Common Stock, of
which 34,809,187 shares were stated to be outstanding as of July 31,
2000 in the Form 10-Q for the Fiscal Quarter ended June 30, 2000 filed
by the Issuer with the Securities and Exchange Commission, and 3,000,000
new shares were issued to ENEL on September 11, 2000)
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TYPE OF REPORTING PERSON*
14
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT
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ITEM 1. Security and Issuer.
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This statement on Schedule 13D relates to the common stock, par value $.01
per share (the "Common Stock"), of Echelon Corporation, a Delaware corporation
(the "Issuer"). The principal executive offices of the Issuer are located at
415 Oakmead Parkway, Sunnyvale, California 94086.
ITEM 2. Identity and Background.
-----------------------
(a)-(c) The name of the person filing this statement is ENEL S.p.A, a
Societa per Azioni incorporated under the laws of Italy ("ENEL"). The business
address of ENEL is Viale Regina Margherita 137, 00198 Rome, Italy. ENEL,
together with its consolidated subsidiaries, is the principal electricity
company in Italy, with the leading position in the generation, transmission,
distribution and supply of electricity in Italy.
Schedule A to this Schedule 13D sets forth identifies ENEL's
directors and executive officers as of the date hereof, together with details
regarding their present principal occupation or employment where different from
ENEL. The business address of each of the persons listed in Schedule A is the
same as ENEL's business address provided above.
ENEL is a state-controlled company, with the Republic of Italy
(acting through the Ministry of the Treasury, Budget and Economic Planning)
owning approximately 68% of the outstanding share capital of ENEL and possessing
certain special powers pursuant to Italian privatization law and ENEL's By-laws.
(d) During the past five years, neither ENEL nor, to ENEL's knowledge, any
person named in Schedule A to this Schedule 13D, has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither ENEL nor, to ENEL's knowledge, any
person named in Schedule A to this Schedule 13D has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which ENEL or such person was or is subject to a judgment, decree or
final order enjoining future violations of or prohibiting or mandating activity
subject to United States Federal or State securities laws or finding any
violation with respect to such laws.
(f) Not applicable to ENEL. Each of the persons identified in Schedule A to
this Schedule 13D is an Italian citizen.
ITEM 3. Source and Amount of Funds or Other Consideration.
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ENEL purchased 3,000,000 newly-issued shares (the "Shares") of the Common
Stock for a purchase price of $130,927,500. ENEL funded its investment in the
Issuer from working capital. None of the funds used to purchase the Shares
consisted of funds or other consideration borrowed or otherwise obtained for the
purpose of acquiring, holding, trading or voting the Shares.
1
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To ENEL's knowledge, this Item 3 is not applicable to the persons named in
Schedule A to this Schedule 13D.
ITEM 4. Purpose of Transaction.
----------------------
ENEL effected the transaction reported in this statement for investment
purposes.
(a)-(c) ENEL has no present plan to (i) acquire additional securities of
the Issuer, or to dispose of securities of the Issuer, (ii) effect an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries or (iii)
participate in or effect a sale or transfer of a material amount of assets of
the Issuer or any of its subsidiaries.
(d) The Echelon Corporation Common Stock Purchase Agreement, dated as of
June 30, 2000 (the "Purchase Agreement"), by and between ENEL and the Issuer,
granted ENEL the right to nominate one director to sit on the Issuer's Board of
Directors and all successors of such director, provided that ENEL and all the
companies controlled by ENEL (together, the "ENEL Group") own at least 2,000,000
Shares. By resolution dated August 17, 2000, the Issuer's Board of Directors
amended the Issuer's by-laws to change the maximum number of directors from
seven (7) to eight (8), and appointed the initial ENEL nominee to the Board of
Directors, effective as of the closing date under the Purchase Agreement (being
September 11, 2000).
(e)-(f) ENEL has no present plan to effect (i) any material change in the
Issuer's present capitalization or dividend policy or (ii) any other material
change in the Issuer's business or corporate structure.
(g) ENEL has no present plan to change the Issuer's charter or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person. In connection with the appointment of the
ENEL nominee as described above by resolution dated August 17, 2000, the
Issuer's Board of Directors amended the Issuer's by-laws to change the maximum
number of directors from seven to eight.
(h)-(j) ENEL has no present plan to (i) 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 an inter-dealer quotation system of a registered
national securities association, (ii) 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, or (iii) cause or take any
action similar to those enumerated in (a)-(f) above, or (i)-(iii) of this
paragraph.
To ENEL's knowledge, this Item 4 is not applicable to the persons named in
Schedule A to this Schedule 13D.
ITEM 5. Interest in Securities of the Issuer.
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(a)-(b) ENEL owns of record and beneficially, 3,000,000 shares of Common
Stock, representing approximately 7.93% of the total outstanding Common Stock of
the Issuer. This percentage amount is calculated on the basis of 37,809,187
shares of Common Stock, of which 34,809,187 shares were stated to be outstanding
2
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as of July 31, 2000 in the Form 10-Q for the Fiscal Quarter ended June 30, 2000
filed by the Issuer with the Securities and Exchange Commission and, 3,000,000
new shares were issued to ENEL on September 11, 2000. ENEL has the sole power
(i) to vote or to direct the vote, and (ii) to dispose or to direct the
disposition of the 3,000,000 shares of Common Stock, subject to the terms of the
Purchase Agreement.
Mr. Francesco Tato, Director and Chief Executive Officer of ENEL, holds an
option to purchase 25,000 shares of Common Stock (the "Option"), pursuant to the
terms of the Echelon Corporation Director Option Agreement executed by the
Issuer on September 11, 2000, and accepted by Mr. Tato on that same date (the
"Option Agreement"). The Option is fully vested and exercisable as of its date
of grant. Mr. Tato is deemed to own beneficially 25,000 shares of Common Stock
as a result of holding the Option. Upon exercise of the Option, Mr. Tato will
have the sole power (i) to vote or to direct the vote, and (ii) to dispose or to
direct the disposition of the 25,000 shares of Common Stock issued to him. ENEL
disclaims beneficial ownership of the Common Stock deemed to be beneficially
owned by Mr. Tato.
To the knowledge of ENEL, none of the other persons named in Schedule A to
this Schedule 13D own of record or beneficially any Common Stock.
(c) Except as described herein, neither ENEL nor, to the knowledge of
ENEL, any person named in Schedule A to this statement on Schedule 13D, has
effected any transaction in the Issuer Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect
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to Securities of the Issuer.
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The following is a summary of certain provisions of the (a) Purchase
Agreement, (b) Echelon Corporation Voting Agreement, dated as of September 11,
2000 (the "Voting Agreement"), by and among ENEL, the Issuer and the Key Holders
(as defined therein), (c) Echelon Corporation Registration Rights Agreement,
dated as of September 11, 2000 (the "Registration Rights Agreement"), by and
between ENEL and the Issuer, and (d) Option Agreement. This summary is
qualified in its entirety by the actual provisions of the foregoing documents,
each of which is filed as an Exhibit to this Schedule 13D and is incorporated
herein by reference.
Other than the foregoing, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) between ENEL and the
Issuer or, to ENEL's knowledge, between either of them and any of the persons
named in Schedule A to this Schedule 13D, with respect to any securities of the
Issuer, including but not limited to transfer or voting of any of the
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
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(a) Purchase Agreement:
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(i) ENEL shall be entitled to nominate one director to sit on the
Issuer's Board of Directors and all successors of such director (collectively
the "ENEL Nominee" and upon appointment or election to the Issuer's Board of
Directors, the "ENEL Director"), provided that the ENEL Group owns at least
2,000,000 Shares (or such other number of Shares as may be agreed in writing by
the Issuer and ENEL).
(ii) Among other conditions to closing, (A) ENEL and the Issuer shall have
entered into an agreement providing for registration rights in respect of the
Shares owned by the ENEL Group from time to time and (B) the current directors
and chief financial officer of the Issuer shall have entered into a voting
agreement providing that all of the voting securities of the Issuer owned and
beneficially owned by such persons and certain related persons will be voted to
elect each ENEL Nominee and to maintain each ENEL Director continuously in
office for so long as ENEL is entitled to nominate a nominee.
(iii) ENEL shall take such action as may be required so that all shares of
voting stock of the Issuer owned by the ENEL Group are voted for the slate of
nominees recommended by Issuer's Board of Directors to stockholders for election
as directors (which slate shall include the ENEL Nominee), including without
limitation to be present, in person or by proxy, at all meetings of stockholders
of the Issuer voting for the election of directors. In addition, in connection
with certain limited matters set forth in the Purchase Agreement, ENEL shall
vote, and shall use its best efforts to cause the other companies in the ENEL
Group to vote, at least the same percentage of the voting stock of the Issuer
owned by them for or against such matter (as recommended by a designated
majority of the Issuer's Board of Directors on such matter) as the percentage of
voting stock of the Issuer held by all other stockholders of the Issuer which is
voted for or against such matter (as so recommended).
(iv) Without the prior written consent of the Issuer, ENEL shall not (and
ENEL shall not permit any company in the ENEL Group to) acquire, directly or
indirectly, beneficial ownership of any voting stock of the Issuer, any
securities convertible into or exchangeable for voting stock of the Issuer or
any other right to acquire voting stock of the Issuer or authorize or make a
tender, exchange or other offer for, or enter into any agreement to effect any
of the foregoing, if the effect of such acquisition or offer would be to
increase the voting power of all voting stock of the Issuer then beneficially
owned by the ENEL Group, or which it has a right to acquire, to more than 10.0%
of the total voting power of the Issuer.
(v) Until the earlier of (i) September 11, 2003 and (ii) 30 days
following the date on which it is publicly announced that ENEL has terminated
the Research and Development and Technological Cooperation Agreement between the
Issuer and one of ENEL's subsidiaries, dated June 28, 2000, for certain material
breaches by Issuer, ENEL shall not, and shall not permit any other company in
the ENEL Group, to directly or indirectly, sell or transfer any of the Common
Stock, with such exceptions as are set forth in the Purchase Agreement.
4
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(b) Voting Agreement:
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(i) The Issuer and the Key Holders (being the current directors and chief
financial officer of the Issuer) shall ensure that the ENEL Nominee is included
in the slate of nominees recommended by the Issuer's Board of Directors to
stockholders for election as directors.
(ii) Each Key Holder shall, and shall cause certain related persons to,
(A) attend in person or by proxy every meeting of stockholders of the Issuer at
which a vote to elect an ENEL Nominee, or any other vote regarding or affecting
the ENEL Director or an ENEL Nominee, is to be held and (B) vote or cause to be
voted all of the voting stock of the Issuer owned and beneficially owned by such
Key Holder and his related persons in favor of the election of the ENEL Nominee
to the Issuer's Board of Directors or otherwise as ENEL shall recommend.
(iii) The Voting Agreement shall terminate on the date on which the ENEL
Group owns in the aggregate less than 2,000,000 shares of Common Stock, unless
terminated earlier by the parties in accordance with the terms thereof.
(c) Registration Rights Agreement:
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(i) The Issuer granted the Holders (being ENEL and any other persons to
whom the rights under the Registration Rights Agreement have been transferred in
accordance with the terms thereof) registration rights in respect of the Common
Stock issued or issuable to ENEL or other companies in the ENEL Group pursuant
to the Purchase Agreement ("Registerable Securities").
(ii) Subject to the terms and conditions set forth in the Registration
Rights Agreement, the Holders are entitled to (A) request up to three times
that the Issuer effect the registration of not less than 1,000,000 shares of
Registrable Securities, (B) participate in any registrations undertaken by the
Issuer, subject to pro rata limitation in the event of an underwritten offering,
and (C) request registration on Form S-3 under the Securities Act of 1933, as
amended provided that the Holders hold in the aggregate not less than 5% of the
then-outstanding Registrable Securities and the anticipated price to the public
would exceed $1,000,000.
(d) Option Agreement:
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(i) Mr. Tato's rights under the Option Agreement are subject to the terms
of the Echelon Corporation 1998 Director Option Plan (as amended through April
22, 1999), which is incorporated therein by reference.
(ii) The term of the Option is five years. The Option is fully vested and
exercisable as of the date of grant.
(iii) Mr. Tato may exercise the Option by written notice which shall state
the election to exercise the Option and the number of shares in respect of which
the Option is being exercised. The exercise price is $41.25 for each share of
Common Stock.
(iv) The Option may not be transferred, other than by will or by the laws
of descent or distribution and may be exercised during the lifetime of Mr. Tato,
only by Mr. Tato.
5
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ITEM 7. Materials to be Filed as Exhibits.
---------------------------------
The following documents are filed as exhibits:
Exhibit No. Exhibit
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99.1 Echelon Corporation Common Stock Purchase
Agreement, dated as of June 30, 2000, by and
between ENEL S.p.A. and Echelon Corporation
99.2 Echelon Corporation Registration Rights Agreement,
dated as of September 11, 2000, by and between
Echelon Corporation and ENEL S.p.A.
99.3 Echelon Corporation Voting Agreement, dated as of
September 11, 2000, by and among ENEL S.p.A.,
Echelon Corporation and the Key Holders (as defined
therein)
99.4 Echelon Corporation Director Option Agreement,
executed by the Issuer on September 11, 2000, and
accepted by Mr. Tato on that same date
6
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SIGNATURE
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 20, 2000
ENEL S.p.A.
By: /s/ Francesco Tato
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Francesco Tato
Director and Chief Executive Officer
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Schedule A
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DIRECTORS AND EXECUTIVE OFFICERS OF ENEL S.p.A.
The following table identifies ENEL's directors as of the date hereof, together
with details regarding their present principal occupation or employment where
different from ENEL.
<TABLE>
<CAPTION>
Name Position at ENEL Principal Occupation or Employment
(if different from ENEL)
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<S> <C> <C>
Enrico Testa Chairman
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Francesco Tato Director and Chief
Executive Officer
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Carlo Angelici Director Dean of the Faculty of Law, University "La
Sapienza" of Rome, Piazzale Aldo Moro 5,
00185 Rome, Italy
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Vittorio Grilli Director General Director - Head of Economic
Analysis and Privatization Department,
Ministry of the Treasury, Budget and
Economic Planning of the Republic of Italy,
Via XX Settembre 97, 00187 Rome, Italy
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Franco Morganti Director Consultant - Director of South European
Affairs at Logica Consulting (a
telecommunications consulting firm), Via
Conservatorio 22, 20122 Milan, Italy
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Claudio Poggi Director
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</TABLE>
The following table identifies ENEL's executive officers as of the date hereof.
None of such persons presently has a principal occupation or employment
different from ENEL.
<TABLE>
<CAPTION>
Name Position at ENEL
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<S> <C>
Mario Barozzi Director of Strategic Affairs Department
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Alessandro Bufacchi Director of E-Business Development Department
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Antonio Cardani Director of Audit Department
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Salvatore Cardillo Director of Department of Legal Affairs
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Giuseppe Carta Director of Regulatory Relations Department
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Fulvio Conti Chief Financial Officer
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Mario Dal Co Director of Information and Communications Department
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Angelo Delfino Director of Personnel Department
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Massimo Romano Director of Department of Institutional and
International Affairs
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Claudio Sartorelli Director of Corporate Affairs Department
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Luciana Tarozzi Director of Accounting Department
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</TABLE>
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EXHIBIT INDEX
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Exhibit No. Exhibit
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99.1 Echelon Corporation Common Stock Purchase
Agreement, dated as of June 30, 2000, by and
between ENEL S.p.A. and Echelon Corporation
99.2 Echelon Corporation Registration Rights Agreement,
dated as of September 11, 2000, by and between
Echelon Corporation and ENEL S.p.A.
99.3 Echelon Corporation Voting Agreement, dated as of
September 11, 2000, by and among ENEL S.p.A.,
Echelon Corporation and the Key Holders (as defined
therein)
99.4 Echelon Corporation Director Option Agreement,
executed by the Issuer on September 11, 2000, and
accepted by Mr. Tato on that same date
