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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _______)*
E-NET, INC.
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(Name of Issuer)
Common Stock, $.01 par value per share
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(Title of Class of Securities)
268 745 205
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(CUSIP Number)
Thomas E. Taylor with a copy to:
General Counsel and Secretary Karen C. Goodin, Esq.
Cincinnati Bell Inc. Riordan & McKinzie
201 East Fourth Street 600 Anton Boulevard, 18th Floor
Cincinnati, Ohio 45201-2301 Costa Mesa, California 92626
(513) 397-1504 (714) 433-2655
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 7, 1999
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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 9.
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 copes 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 ("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).
Page 1 of 6
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SCHEDULE 13D
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CUSIP No. 268 745 205 PAGE 2 OF 6 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR IRS. IDENTIFICATION NO. OF ABOVE PERSON
Cincinnati Bell Inc.
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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*
WC
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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
Ohio
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7 SOLE VOTING POWER
-0-
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,888,653 (See Item 5)
EACH --------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,888,653 (See Item 5)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,888,653 (See Item 5)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.3%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
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CUSIP No. 268 745 205 PAGE 3 OF 6 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR IRS. IDENTIFICATION NO. OF ABOVE PERSON
Broadwing Holdings Inc.
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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*
WC
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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
Delaware
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7 SOLE VOTING POWER
-0-
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,888,653 (See Item 5)
EACH --------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,888,653 (See Item 5)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,888,653 (See Item 5)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.3%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 4
Item 1. SECURITY AND ISSUER.
This Schedule 13D relates to the common stock, par value $.01, CUSIP No.
268 745 205 (the "Common Stock"), of e-Net, Inc., a Delaware corporation (the
"Issuer"), having its principal executive offices at 12800 Middlebrook Road,
Suite 400, Germantown, Maryland 20874-5204.
Item 2. IDENTITY AND BACKGROUND.
This Schedule 13D is filed by and on behalf of Cincinnati Bell Inc., an
Ohio corporation doing business as Broadwing Inc. ("CBI"), having its principal
address and principal office at 201 East Fourth Street, Cincinnati, Ohio
45201-2301 and Broadwing Holdings Inc., a Delaware corporation ("Holdings"),
having its principal address and principal office at 300 Delaware Avenue, 9th
floor, DE-540, Wilmington, Delaware 19801 (collectively, the "Filing Persons").
During the last five years, none of the Filing Persons has been
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors) or were a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
were or are subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
All executive officers and directors of each of the Filing Persons are
citizens of the United States. The name, business address and present principal
occupation (including the name and address of the corporation or organization in
which such employment is conducted) of each executive officer and director is
set forth in Schedule A to this Schedule 13D.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to a letter agreement dated December 7, 1999 (the "Letter
Agreement") between CBI and the Issuer, CBI exercised an option (the "Option")
assigned by IXC Internet Services, Inc., a Delaware corporation and a
wholly-owned subsidiary of CBI ("Internet") to acquire 1,888,653 shares of the
Common Stock at a purchase price of approximately $5.742 per share contingent
upon CBI Board approval. On December 8, 1999, such contingency was satisfied.
The Option was initially granted to Internet pursuant to a Revenue Sharing,
Service Development and Joint Marketing Alliance Agreement entered into as of
September 14, 1999 between the Issuer and Broadwing Communications Services
Inc., formerly IXC Communications Services, Inc., a wholly owned subsidiary of
CBI (the "Alliance Agreement"). The aggregate purchase price of $10,845,000.00
will be paid out of funds from working capital on or prior to December 20, 1999.
The 1,888,653 shares of the Common Stock will be issued to Holdings, a wholly
owned subsidiary of CBI.
Item 4. PURPOSE OF TRANSACTION.
The Issuer's Common Stock has been acquired solely for investment.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) In connection with the Letter Agreement, the Filing Persons have
requested that the Issuer grant the Filing Persons two seats on the
Issuer's board of directors, with the intent that one such seat be
filled by a business person and the other such seat be filled by a
technology expert.
(e) Not applicable.
Page 4 of 6 pages
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(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
(i) Not applicable.
(j) Not applicable.
Item 5. Interest in Securities of The Issuer.
(a) Each of the Filing Persons may be deemed to beneficially own
1,888,653 shares, or approximately 18.3% of the Issuer's outstanding Common
Stock.
(b) Each of the Filing Persons may be deemed to have shared dispositive
power with respect to 1,888,653 shares of the Issuer's Common Stock and shared
voting power with respect to 1,888,653 shares of the Issuer's Common Stock.
(c) Other than as set forth in this Schedule 13D, no other transactions
by the Filing Persons with respect to the Common Stock of the Issuer were
effected during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
As confirmed in the Letter Agreement, the Issuer has granted to Holdings
each of the registration rights set forth in Section IX, Paragraph B of the
Alliance Agreement with respect to the shares acquired through the Option.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
The Filing Persons file as exhibits the following:
EXHIBIT 1: Revenue Sharing, Service Development and Joint Marketing
Alliance Agreement dated as of September 14, 1999 by and
between the Issuer and Broadwing Communications Services
Inc., formerly IXC Communications Services, Inc.,
(incorporated by reference to Exhibit 10.1 to the Issuer's
Form 10-QSB filed with the Commission on November 15, 1999).
EXHIBIT 2: Letter Agreement dated December 7, 1999 between the Issuer
and CBI.
EXHIBIT 3: Joint Reporting Agreement dated December 17, 1999 between the
Filing Persons.
Page 5 of 6 pages
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SIGNATURE
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: December 17, 1999 CINCINNATI BELL INC.
/s/ THOMAS E. TAYLOR
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By: Thomas E. Taylor
Its: General Counsel and Secretary
BROADWING HOLDINGS INC.
/s/ THOMAS E. TAYLOR
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By: Thomas E. Taylor
Its: Secretary and Treasurer
Page 6 of 6 pages
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SCHEDULE A
1. The name, business address, title, present principal occupation or
employment of each of the directors and executive officers of Cincinnati Bell
Inc. ("CBI") are set forth below. If no business address is given, the
director's or officer's business address is 201 East Fourth Street, Cincinnati,
Ohio 45201-2301.
Directors:
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation
- ------------------------- ----------------------------
<S> <C>
Richard G. Ellenberger President and Chief Executive Officer of CBI, Chief Executive
Officer and Director of Cincinnati Bell Telephone Company
Karen M. Hoguet Chief Financial Officer and Senior Vice President of Federated
Department Stores, Inc.
David B. Sharrock Consultant, Director of Interneuron Pharmaceuticals Inc.,
Intercardia, Inc. and Praecis Pharmaceutical, Inc., Incara
Inc., and The Ohio State University Foundation
Phillip R. Cox President and Chief Executive Officer of Cox Financial Corporation,
Director of Federal Reserve Bank of Cleveland, Cinergy Corp., BDM
International, Touchstone Mutual Funds and PNC Bank, Ohio, N.A.
William A. Friedlander Chairman of Bartlett & Co., Director of The Union Central Life
Insurance Company and Center Bank of Clermont, Ohio
John T. LaMacchia President and Chief Executive Officer of CellNet Data Systems,
Director of The Kroger Co., Burlington Resources Inc. and FORE Systems
James D. Kiggen Chairman of the Board of CBI, Chairman of the Board of Xtek, Inc.,
Director of Fifth Third Bank and United States Playing Card Co.
Daniel J. Meyer Chairman and Chief Executive Officer of Milacron, Inc., Director of
the E.W. Scripps Company and Hubbell Incorporated
Mary D. Nelson Director of The Union Central Life Insurance Company
Richard D. Irwin President of Grumman Hill Company, LLC, Director of PharmChem
Laboratories, Inc.
John M. Zrno Director of Teleglobe, Inc.
J. Taylor Crandall Managing Partner of Oak Hill Capital Management, Inc., Director of
Keystone, U.S. Oncology Inc., Sunterra Corporation and Washington
Mutual, Inc.
</TABLE>
1
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Executive Officers (Who Are Not Directors):
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation
- ------------------------- ----------------------------
<S> <C>
Kevin W. Mooney Executive Vice President and Chief Financial Officer of CBI
and President of Holdings
Thomas E. Taylor General Counsel and Secretary of CBI
</TABLE>
2. The name, business address, title, present principal occupation or
employment of each of the directors and executive officers of Broadwing Holdings
Inc. ("Holdings") are set forth below. If no business address is given, the
director's or officer's business address is 201 East Fourth Street, Cincinnati,
Ohio 45201-2301.
Directors:
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation
- ------------------------- ----------------------------
<S> <C>
Richard G. Ellenberger President and Chief Executive Officer of CBI and Chief
Executive Officer and Director of Cincinnati Bell Telephone
Company
Kevin W. Mooney Executive Vice President and Chief Financial Officer of CBI
and President of Holdings
Linda S. Bubacz Trust Officer, First Union National Bank
</TABLE>
Executive Officers (Who Are Not Directors):
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation
- ------------------------- ----------------------------
<S> <C>
Thomas E. Taylor General Counsel and Secretary of CBI and Secretary and
Treasurer of Holdings
</TABLE>
2
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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1 Revenue Sharing, Service Development and Joint Marketing
Alliance Agreement dated as of September 14, 1999 between the
Issuer and Broadwing Communications Services Inc., formerly
IXC Communications Services, Inc., (incorporated by reference
to Exhibit 10.1 to the Issuer's Form 10-QSB filed with the
Commission on November 15, 1999).
2 Letter Agreement dated December 7, 1999 between the Issuer and
CBI.
3 Joint Reporting Agreement dated December 17, 1999 between the
Filing Persons.
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EXHIBIT 2
VIA FACSIMILE AND FEDERAL EXPRESS (301) 601-3221
- -------------------------------------------------
December 7, 1999
Mr. Robert A. Veschi
President & CEO
e-Net, Inc.
12800 Middlebrook Rd, suite 400
Germantown, MD 20874
Re: Equity Investment by Cincinnati Bell Inc. d/b/a Broadwing Inc.
Dear Robert:
This letter will serve to confirm our agreement of the following:
(1) e-Net, Inc. hereby consents to the assignment by IXC Internet
Services, Inc. to Cincinnati Bell Inc. of the Call Right contained in Section
XI.A, and the Registration Rights contained in Section XI.B, of the Revenue
Sharing, Service Development and Joint Marketing Alliance Agreement dated
September 14, 1999 by and between IXC Communication Services Inc. and e-Net,
Inc. (the "Agreement");
(2) Cincinnati Bell Inc. hereby exercises the Call Right to purchase
1,888,653 shares of e-Net, Inc.'s common stock, i.e., the number of shares of
common stock equal to eighteen and two hundred fifty-nine thousandths percent
(18.259%) of the outstanding common shares of e-Net, Inc. (as calculated
pursuant to the terms of the Agreement), subject only to approval by Cincinnati
Bell Inc.'s Board of Directors;
(3) The price per share shall be $5.7421875, i.e., 1.25 times the
closing price of e-Net, Inc.'s common stock as listed on the Nasdaq SmallCap
Market on December 7, 1999;
(4) The aggregate exercise price for the Call Right shall be
$10,845,000.00;
(5) e-net Inc. hereby consents to an extension of the deadline for
exercise of the Call Right until December 14, 1999, solely for purposes of
allowing Cincinnati Bell Inc. to obtain Board approval at its meeting on
December 13, 1999, provided that if such approval is obtained and Cincinnati
Bell Inc. so notifies e-Net, Inc. in writing on or before December 14, 1999,
this letter agreement shall be automatically effective retroactively to a Call
Right Exercise Date of the date hereof, but if Cincinnati Bell Inc. does not so
notify e-Net, Inc., then this letter agreement will be null and void;
(6) The final exercise of the Call Right after Cincinnati Bell's Board
approval, as and to the extent set forth above, shall be sufficient to invoke
the full exclusivity rights and obligations as set forth in the Agreement,
particularly Section VII.K;
(7) Cincinnati Bell Inc. shall fund the exercise of the Call Right and
deliver the exercise price to e-Net, Inc. as soon as practicable after Board
approval, but no later than December 20, 1999;
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(8) Upon funding and delivery of the exercise price, the shares of
e-Net, Inc. common stock shall be issued to Cincinnati Bell Holdings Inc., a
wholly owned subsidiary of Cincinnati Bell Inc.; and
(9) Cincinnati Bell Inc. requests e-Net, Inc. to give full
consideration to negotiation of the following business points, none of which
shall be conditions to exercise of the Call Right or the closing thereof but are
set forth herein solely as a nonbinding expression of the parties' intent as to
the direction of their future discussions:
(i) granting two (2) seats on e-Net, Inc.'s Board of Directors,
one for a business person, and one for a technology expert;
(ii) allowing BroadWing Communications, Inc. to private label
e-Net, Inc.'s ZeroPlus service for the business to business market; and
(iii) having discussions with Cincinnati Bell Inc. regarding the
possibility of Cincinnati Bell Inc. taking a larger position in e-Net,
Inc. or ZeroPlus Inc. at a future date.
Except as modified by this letter, all terms and conditions of the
Agreement remain in effect.
If the above accurately represents your understanding of our agreement,
I would appreciate you signing and returning a copy of this letter to me. Upon
signature, please work with Mike Callaghan to coordinate the closing and proper
issuance of the shares.
Very Truly Yours,
/s/ RICHARD G. ELLENBERGER
- --------------------------------------
Richard G. Ellenberger
President and Chief Executive Officer
AGREED:
/s/ ROBERT A. VESCHI
- --------------------------------------
Robert A. Veschi
Date: December 8, 1999
2
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EXHIBIT 3
JOINT REPORTING AGREEMENT
In consideration of the mutual covenants herein contained, each of the
parties hereto represents to and agrees with the other party as follows:
1. Such party is eligible to file a statement or statements on Schedule
13D pertaining to the Common Stock, $.01 par value, of e-Net, Inc. to which this
agreement is an exhibit, for filing of the information contained herein.
2. Such party is responsible for timely filing of such statement and any
amendments thereto and for the completeness and accuracy of the information
concerning such party contained therein, provided that no such party is
responsible for the completeness or accuracy of the information concerning any
other party making the filing, unless such party knows or has reason to believe
that such information is inaccurate.
3. Such party agrees that such statement is filed by and on behalf of
each such party and that any amendment thereto will be filed on behalf of each
such party.
This Joint Reporting Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original instrument, but
all of such counterparts together shall constitute but one agreement.
Dated: December 17, 1999 CINCINNATI BELL INC.
/s/ THOMAS E. TAYLOR
----------------------------------
By: Thomas E. Taylor
Its: General Counsel and Secretary
BROADWING HOLDINGS INC.
/s/ THOMAS E. TAYLOR
----------------------------------
By: Thomas E. Taylor
Its: Secretary and Treasurer
