SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
Alteon WebSystems, Inc.
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(Name of Corporation)
Common Stock, par value $0.001 per share
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(Title of Class of Securities)
02145A 10 9
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(CUSIP Number)
Deborah J. Noble
Vice President, Corporate Secretary and Associate General Counsel
Nortel Networks Corporation
8200 Dixie Road, Suite 100
Brampton, Ontario L6T 5P6
Canada
(905) 863-1103
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 28, 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 ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), 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 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 ("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>
SCHEDULE 13D
CUSIP No. 02145A 10 9
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Nortel Networks Corporation
62-12-62580
2 =====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
3
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) |_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
7 SOLE VOTING POWER
NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED BY
EACH REPORTING 8,952,759*** (See Items 4 and 5.)
PERSON
WITH 9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
8,952,759*** (See Items 4 and 5.)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,952,759 (See Items 4 and 5.)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.8%**** (See Items 4 and 5.)
14 TYPE OF REPORTING PERSON*
CO
<PAGE>
SCHEDULE 13D
** Pursuant to certain stockholder agreements (the "Stockholder Agreements"),
dated as of July 28, 2000, among certain holders of Common Stock and options of
Alteon WebSystems, Inc. ("Alteon") (the "Stockholder Parties") and Nortel
Networks Corporation, the Stockholder Parties have agreed to vote in favor of
the adoption of the Merger Agreement (each as defined in the response to Item 4)
(i) the 6,805,858 shares of Alteon Common Stock over which they currently have
voting power and (ii) any of the 2,146,901 shares of Alteon Common Stock they
acquire through the exercise of stock options that are currently exerciseable or
that will become exerciseable in the next 60 days, which the Stockholder Parties
are deemed to beneficially own pursuant to Exchange Act Rule 13d-3(d)(1)(i). The
Stockholder Parties have granted Nortel Networks Corporation an irrevocable
proxy with respect to such shares.
*** Pursuant to the Stockholder Agreements (but subject to certain exceptions),
the Stockholder Parties may not dispose of either (i) the 6,805,858 shares of
Alteon Common Stock that are currently held by them or (ii) any of the 2,146,901
shares of Alteon Common Stock they acquire through the exercise of stock options
that are currently exerciseable or that will become exerciseable in the next 60
days, which the Stockholder Parties are deemed to beneficially own pursuant to
Exchange Act Rule 13d-3(d)(1)(i).
**** Calculated, pursuant to Exchange Act Rule 13d-3(d)(1)(i), by including
2,146,901 shares of Alteon Common Stock that are subject to stock options that
are currently exerciseable or that will become exerciseable in the next 60 days,
which the Stockholder Parties are deemed to beneficially own pursuant to
Exchange Act Rule 13d-3(d)(1)(i), in both the number of shares of Alteon Common
Stock beneficially owned by Nortel Networks and the total number of shares of
Alteon Common Stock outstanding.
<PAGE>
SCHEDULE 13D
RELATING TO THE COMMON STOCK OF
ALTEON WEBSYSTEMS, INC.
Item 1. Security and Issuer.
-------------------
This Statement on Schedule 13D (this "Statement") relates to the common
stock, par value $.001 per share ("Alteon Common Stock"), of Alteon WebSystems,
Inc., a Delaware corporation ("Alteon"). The principal executive offices of
Alteon are located at 50 Great Oaks Boulevard, San Jose, California 95119.
Item 2. Identity and Background.
-----------------------
This Statement is being filed by Nortel Networks Corporation, a Canadian
corporation ("Nortel Networks"). The principal business and principal office of
Nortel Networks are located at 8200 Dixie Road, Suite 100, Brampton, Ontario L6T
5P6, Canada. Nortel Networks is a leading global supplier of data and telephony
network solutions and services. Its business consists of the design,
development, manufacture, marketing, sale, financing, installation, servicing
and support of data and telephony networks for: public and private institutions;
local, long-distance, personal communications services and cellular mobile
communications companies; cable television companies; Internet service
providers; and utilities.
(a)-(c); (f) The name, business address, present principal occupation or
employment, and the name and principal business of any corporation or other
organization in which such employment is conducted, of each of the directors and
executive officers of Nortel Networks is set forth in Schedule I hereto, which
is incorporated herein by reference. The citizenship of each person listed in
Schedule I is indicated thereon.
(d)-(e) During the last five years, neither Nortel Networks nor, to the
knowledge of Nortel Networks, any of the persons listed on Schedule I hereto (i)
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) has been 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 laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
As described in the response to Item 4, the Stockholder Parties (as defined
in the response to Item 4) each have entered into Stockholder Agreements with
Nortel Networks pursuant to which the Stockholder Parties have agreed to vote
the 8,952,759 shares of Alteon Common Stock over which they have voting power in
the aggregate in favor of adoption of the Merger Agreement, and have granted to
Nortel Networks an irrevocable proxy with respect to such shares for such
purpose. In addition, subject to certain exceptions, the Stockholder Agreements
prohibit the Stockholder Parties from disposing of the shares of Alteon Common
Stock held by them. Any shares acquired by any Stockholder Party subsequent to
the date of the Stockholder Agreements, including by exercise of any of the
Stockholder Parties' 2,146,901 stock options that are currently exerciseable or
that will become exerciseable in the next 60 days, would be subject to the same
restrictions on voting and disposition. Following the execution of the
Stockholder Agreements, Nortel Networks agreed to permit each Stockholder Party
to dispose of up to 5% of the shares of Alteon Common Stock beneficially owned
(within the meaning of Rule 13d-3 of the Securities and Exchange Act of 1934
(the "Exchange Act")) by such Stockholder Party.
Item 4. Purpose of Transaction.
----------------------
Merger and Merger Agreement
On July 28, 2000, Nortel Networks, Alteon and Darius Corp., a Delaware
corporation and a wholly-owned subsidiary of Nortel Networks ("Merger Sub"),
entered into an Agreement and Plan of Merger, dated as of July 28, 2000 (the
"Merger Agreement"), a copy of which is incorporated herein by reference as
Exhibit 1. The Merger Agreement provides, among other things, for the Merger
(the "Merger") of Merger Sub with and into Alteon with Alteon being the
corporation surviving the merger (the "Surviving Corporation").
Pursuant to the Merger Agreement, at the Effective Time (as defined in the
Merger Agreement), each share of Alteon Common Stock issued and outstanding
immediately prior to the Effective Time (excluding those held in the treasury of
Alteon, by any subsidiary of Alteon or by Nortel Networks or any subsidiaries of
Nortel Networks (collectively, the "Excluded Shares")) will cease to exist and
be converted into 1.83148 common shares, without par value, of Nortel Networks
(the "Nortel Networks Common Shares"). The Merger Agreement defines the number
of Nortel Networks Common Shares to be exchanged for each share of Alteon Common
Stock as the "Exchange Ratio," and provides that the Exchange Ratio shall be
subject to adjustment in the event of a stock split, stock dividend,
recapitalization, subdivision, reclassification, combination, exchange of shares
or similar transaction with respect to the Nortel Networks Common Shares. The
Merger Agreement also provides that each Excluded Share will be canceled and
retired without the payment of any consideration therefor.
At the Effective Time, Alteon will become a wholly-owned subsidiary of
Nortel Networks. As a consequence of the Merger, Nortel Networks will own 100%
of the capital stock of Alteon. The Alteon Common Stock will be delisted from
trading on the Nasdaq National Market of The Nasdaq Stock Market, Inc. and
Alteon will no longer be required to file periodic reports under Section 12(a)
of the Exchange Act.
Consummation of the Merger is subject to the satisfaction or waiver at or
prior to the Effective Time of certain conditions, including, but not limited
to, adoption of the Merger Agreement by the holders of shares of Alteon Common
Stock, expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), approval of listing of the Nortel Networks Common Shares on the New York
Stock Exchange and The Toronto Stock Exchange and other customary conditions.
Pursuant to the Merger Agreement, (i) the certificate of incorporation and
the by-laws of Merger Sub as in effect immediately prior to the Effective Time
will be the certificate of incorporation and by-laws of the Surviving
Corporation, (ii) the directors of Merger Sub immediately prior to the Effective
Time shall be the directors of the Surviving Corporation until their successors
have been duly elected and qualified or until their resignation or removal and
(iii) the officers of Alteon immediately prior to the Effective Time shall
continue to serve as the officers of the Surviving Corporation until their
successors have been duly elected and qualified or appointed or until their
resignation or removal.
The Merger Agreement contains certain customary restrictions on the conduct
of the business of Alteon pending the Merger, including, without limitation, not
declaring, setting aside or paying any dividend or distribution on any capital
stock.
Stockholder Agreements
As a further condition and inducement to Nortel Networks' entering into the
Merger Agreement, concurrently with the execution of the Merger Agreement,
Nortel Networks entered into Stockholder Agreements with the stockholders listed
on Schedule A thereto (the "Stockholder Parties"), a form of which is
incorporated herein by reference as Exhibit 2 and a Stockholder Agreement
between Nortel Networks and Matrix Partners, a copy of which is incorporated
herein by reference as Exhibit 3. Pursuant to the Stockholder Agreements, the
Stockholder Parties have agreed to vote in favor of the Merger Agreement and the
Merger, or if applicable, give consents with respect to, (i) the 6,805,858
shares of Alteon Common Stock currently held by them as of July 28, 2000 and
(ii) any shares of Alteon Common Stock subsequently acquired by them, including
through the exercise of stock options. The Stockholder Parties have granted to
Nortel Networks an irrevocable proxy with respect to such shares. In addition,
the Stockholder Parties have agreed not to dispose of any shares of Alteon
Common Stock (subject to certain exceptions). The Stockholder Agreements will
terminate on the earliest of: (a) the Effective Time (as defined in the Merger
Agreement); (b) termination of the Merger Agreement (unless Nortel Networks is
or may be entitled to receive a Termination Fee (as defined in the Merger
Agreement) under the Merger Agreement following such termination), or (c) 30
days following the termination of the Merger Agreement in the event that Nortel
Networks is or may be entitled to receive a Termination Fee under the Merger
Agreement following such termination; provided that, during such 30 day period,
the Stockholder Parties will be permitted to make sales of Alteon Common Stock
in broker transactions effected through The Nasdaq Stock Market, Inc.
Following the execution of the Stockholder Agreements, Nortel Networks
agreed to permit each Stockholder Party to dispose of up to 5% of the shares of
Alteon Common Stock beneficially owned (within the meaning of Rule 13d-3 of the
Securities Act) by such Stockholder Party.
The foregoing summaries of the Merger Agreement and the Stockholder
Agreements do not purport to be complete and are qualified in their entirety by
reference to the text of such agreements incorporated by reference as Exhibits
1, 2 and 3 hereto, respectively.
Except as set forth in this Statement, the Merger Agreement or the
Stockholder Agreements, neither Nortel Networks nor, to the best of Nortel
Networks' knowledge, any of the individuals named in Schedule I hereto has any
plans or proposals which relate to or which would result in or relate to any of
the actions specified in subparagraphs (a) through (j) of Item 4 of Schedule
13D.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) - (b) Nortel Networks may, as a result of the Stockholder Agreements,
be deemed to beneficially own the shares of Alteon Common Stock that are held by
the Stockholder Parties and, pursuant to Exchange Act Rule 13d-3(d)(1)(i), the
shares of Alteon Common Stock that are subject to currently exercisable stock
options held by such parties (together, the "Beneficially Owned Shares"). Based
on the aggregate number of Beneficially Owned Shares (8,952,759), Nortel
Networks may as a result of the Stockholder Agreements be deemed to own
beneficially approximately 19.8% of the outstanding Alteon Common Stock (based
on the 43,169,417 shares of Alteon Common Stock outstanding on July 25, 2000, as
represented to Nortel Networks by Alteon in the Merger Agreement, plus the
2,146,901 shares of Alteon Common Stock subject to stock options that are
currently exerciseable or that will become exerciseable in the next 60 days held
by the Stockholder Parties as represented to Nortel Networks by Alteon). The
Stockholder Parties and Nortel Networks may be deemed to have shared power to
vote or to direct the vote with respect to the Beneficially Owned Shares. The
Stockholder Agreements also provide that, subject to certain exceptions, the
Stockholder Parties may not dispose of the Beneficially Owned Shares and,
because this provision may be waived by Nortel Networks, the Stockholder Parties
and Nortel Networks may be deemed to have shared power to dispose or direct the
disposition of the Beneficially Owned Shares.
Except as set forth in this Item 5, none of Nortel Networks or, to the best
of Nortel Networks' knowledge, any of the individuals named in Schedule I hereto
beneficially owns any shares of Alteon Common Stock.
(c) Except for entering into the agreements described above, neither Nortel
Networks nor, to the best of Nortel Networks' knowledge, any of the individuals
named in Schedule I hereto has effected any transaction in Alteon Common Stock
during the past 60 days.
(d) Prior to the consummation of the Merger, Nortel Networks does not 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 Alteon Common Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understanding or Relationships with Respect to
Securities of Alteon.
----------------------
Except as provided in the Merger Agreement or the Stockholder Agreements or
as set forth in this Statement, neither Nortel Networks nor, to the best of
Nortel Networks' knowledge, any of the individuals named in Schedule I hereto
has any contracts, arrangements, understandings or relationships (legal or
otherwise) with any person with respect to any securities of Alteon, 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.
Item 7. Material To Be Filed as Exhibits.
--------------------------------
Exhibit 1 -- Agreement and Plan of Merger, dated as of July 28, 2000,
among Nortel Networks Corporation,
Darius Corp. and Alteon WebSystems, Inc.
Exhibit 2 -- Form of Stockholder Agreements, dated as of July 28, 2000,
between Nortel Networks Corporation and the stockholders
listed on Schedule A thereto.
Exhibit 3 -- Stockholder Agreement, dated as of July 28, 2000, between
Nortel Networks Corporation and Matrix Partners.
<PAGE>
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: August 7, 2000
NORTEL NETWORKS CORPORATION
By: /s/ Frank A. Dunn
------------------
Name: Frank A. Dunn
Title: Chief Financial Officer
By: /s/ Blair F. Morrison
---------------------
Name: Blair F. Morrison
Title: Assistant Secretary
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
NORTEL NETWORKS CORPORATION
The name, citizenship, present principal occupation or employment, and the
name of any corporation or other organization in which such employment is
conducted, of each of the directors and executive officers of Nortel Networks
Corporation is set forth below. Unless otherwise indicated below, the business
address of each director and executive officer is Nortel Networks Corporation,
8200 Dixie Road, Suite 100, Brampton, Ontario L6T 5P6, Canada.
PRESENT PRINCIPAL OCCUPATION
NAME AND CITIZENSHIP OR EMPLOYMENT
-------------------- ---------------------------
Directors
Blanchard, James J. Verner, Liipfert, Bernhard,
American McPherson and Hand
901-15th Street, N.W., Suite 700
Washington, DC 20005-2301 USA
Brown, Robert E. President and Chief Executive Officer
Canadian/British Bombardier Inc.
800 Rene-Levesque Boulevard West
Montreal, Quebec H3B 1Y8
Canada
Carlucci, Frank C. Chairman
American The Carlyle Group
1001 Pennsylvania Avenue N.W.
Washington, DC 20004 USA
(non-executive Chairman of
Nortel Networks Corporation)
Dunn, Frank A. Chief Financial Officer
Canadian Nortel Networks Corporation
Fortier, L. Yves Chairman & Senior Partner
Canadian Ogilvy Renault
1981 McGill College Avenue
12th Floor
Montreal, Quebec H3A 3C1
Canada
Ingram, Robert A. Chief Executive Officer
American Glaxo Wellcome Inc.
P.O. Box 13398
5 Moore Drive
Research Triangle Park, NC 27709
USA
Pilkington, Sir Antony Retired Chairman
British Pilkington plc
Group Headquarters
Prescot Road, St. Helens
Merseyside, England WA10 3TT
United Kingdom
Roth, John A. President and Chief Executive Officer
Canadian Nortel Networks Corporation
Saucier, Guylaine Chairman of the Board
Canadian Canadian Broadcasting Corporation
1321 Sherbrooke Street West
Suite C-61
Montreal, Quebec H3G 1J4
Canada
Smith, Jr., Sherwood H. Chairman Emeritus of the Board
American Carolina Power & Light Company
One Hanover Square Building
411 Fayetteville Street Mall
Raleigh, North Carolina 27601-1748
USA
Wilson, Lynton R. Chairman of the Board
Canadian CAE Inc.
181 Bay Street, Suite 4700
P.O. Box 794
Toronto, Ontario M5J 2T3
Canada
Officers
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Beatty, Douglas C. Controller
Canadian
Bolouri, Chahram President, Global Operations
Canadian
Buechner, Klaus M. Senior Vice-President, Business Development
Canadian
Burn, David L. Vice-President, Taxation
Canadian
Carlucci, Frank C. Chairman
American Chairman, The Carlyle Group
1001 Pennsylvania Avenue N.W.
Washington, DC 20004 USA
Chandran, Clarence J. Chief Operating Officer
Canadian
Childers, Charles Chief Marketing Officer
American
Conner, William F. President, E-Business Solutions
American
DeBon, Pascal President
Canadian Service Provider Solutions, Europe
DeRoma, Nicholas J. Chief Legal Officer
American
Donahee, Gary R. President,
Canadian Service Provider Solutions, Americas
Doolittle, John M. Assistant Treasurer
Canadian
Dunn, Frank A. Chief Financial Officer
Canadian
Hawe, William R. Chief Technology Officer
American
Huret, Jerome P. Senior Vice-President, Corporate Development
French
Kaye, Robert B. General Auditor
Canadian
Kerr, Margaret G. Senior Vice-President, Human Resources
Canadian
Kerr, William R. Senior Vice-President, Corporate Business
Canadian Development
Khatod, Anil K. President, Internet Business Solutions
American
Mao, Robert Y.L. CEO, Nortel China
American
Meunier, Jules M.J.
Canadian President, Core Networks
Morrison, Blair F. Assistant Secretary
Canadian
Mumford, Donald G. President, Optical Networks
Canadian
Noble, Deborah J. Corporate Secretary
Canadian
Pahapill, Mary Anne E. Assistant Controller
Canadian
Pfeffer, Robert W. Chief Network Solutions Officer
Canadian
Plastina, Frank President, Wireless and Carrier Solutions
Canadian
Ricks, Richard C. Chief Information Officer
American
Ross, Eric J. President, Global Customer Care Services
Canadian
Roth, John A. President and Chief Executive Officer
Canadian
Schilling, Steven L. President, Access Networks
American
Srikanth, Kannankote S. President, Professional Services
American
Stevenson, Katharine B. Treasurer
Canadian/American
Tariq, Masood A. President, Service Provider Solutions, Asia
American
Yohe, Vickie L. President, Global Carrier Solutions ILECS/IOCS
American
