UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A-2
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
The Dii Group, Inc.
(Name of Issuer)
Common Stock
(Title of class of securities)
232949107
(CUSIP Number)
Michael E. Marks Tram T. Phi, Esq.
Flextronics International Ltd. Fenwick & West LLP
2090 Fortune Drive Two Palo Alto Square
San Jose, California 95131 Palo Alto, California 94306
(408) 428-1300 (650) 494-0600
(Name, address and telephone number of persons authorized
to receive notices and communications)
November 22, 1999
(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/A, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
|_|.
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 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act.
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SCHEDULE 13D
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CUSIP NO. 232949107
=====================
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No.
of Above Person
Flextronics International Ltd.
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2 Check the Appropriate Box If a Member (a) [_]
of a Group (b) [_]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
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
Singapore
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7 Sole Voting Power
Number of Shares 7,615,077(1)
Beneficially ------------------------------------------------------------------
Owned 8 Shared Voting Power
by Each
Reporting 8,320,313(2)
Person With ------------------------------------------------------------------
9 Sole Dispositive Power
7,615,077(1)
------------------------------------------------------------------
10 Shared Dispositive Power
Not Applicable
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11 Aggregate Amount Beneficially
Owned by Each Reporting Person
8,320,313(1)(2)
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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)
18.1%(3)
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
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(1) If the Option (defined in Item 4 below) becomes exercisable and is
exercised in full, Flextronics will have sole voting power with respect to
that number of shares equal to 19.9% of the outstanding shares of Dii
Common Stock at the time of exercise. Based upon the 38,266,719 shares of
Dii Common Stock outstanding as of November 19, 1999 (as represented by Dii
in the Merger Agreement, which is defined in Item 4), the Option would be
exercisable for 7,615,077 shares of Dii Common Stock. Unless and until the
Option is exercised, Flextronics is not entitled to any rights as a
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stockholder of Dii as to the shares of Dii Common Stock covered by the
Option. The Option may only be exercised upon if certain conditions are
triggered (see Item 4). As of the date of this Statement, none of these
conditions had been triggered. Flextronics disclaims beneficial ownership
of the shares of Dii Common Stock subject to the Option unless and until
Flextronics acquires the shares by exercising the Option.
(2) 705,236 shares of Dii Common Stock (as of November 22, 1999, as represented
to us by Dii) are subject to the Voting Agreements entered into between
Flextronics and certain officers and directors of Dii (see Item 4 and
Schedule B). Under the Voting Agreements, these stockholders agree to vote
in favor of the Merger and certain related matters, but retain voting
rights with respect to all other matters. Flextronics expressly disclaims
beneficial ownership of any of the shares of Dii Common Stock covered by
the Voting Agreements. Based on the number of shares of Dii Common Stock
outstanding as of November 19, 1999 (as represented by Dii in the Merger
Agreement), the number of shares of Dii Common Stock subject to these
Voting Agreements represents approximately 18.1% of the outstanding shares
of Dii Common Stock.
(3) After giving effect to the 7,615,077 that would be issued upon the exercise
of the Option.
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ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D (this "Statement") relates to the Common
Stock of The Dii Group, Inc., a Delaware corporation ("Dii" or the
"Issuer"). The principal executive offices of Dii are located at 6273
Monarch Park Place, Suite 200, Niwot, Colorado 80503.
ITEM 2. IDENTITY AND BACKGROUND
This Statement is filed on behalf of Flextronics International Ltd., a
Singapore company ("Flextronics"). Flextronics is a leading provider of
advanced electronics manufacturing services to original equipment
manufacturers primarily in the telecommunications and networking,
consumer electronics and computer industries. The address of
Flextronics' principal business is 2090 Fortune Drive, San Jose,
California 95131. The address of Flextronics' principal office is 514
Chai Chee Lane #04-13, 1 Bedok Industrial Estate, Singapore 469029.
Please refer to Schedule A to this Statement for information pursuant to
Item 2 (a), (b) and (c) with respect to each director and executive
officer of Flextronics.
During the last five years, neither Flextronics nor, to Flextronics'
knowledge, any person named in Schedule A to this Statement has been:
(a) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors); or (b) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of
which, he 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.
To Flextronics' knowledge, except for Robert R.B. Dykes, who is a
citizen of New Zealand, Tsui Sung Lam, who is a citizen of Singapore,
Chuen Fah Alain Ahkong, who is a citizen of Singapore, Hui Shing Leong,
who is a citizen of Maylasia, Humphrey Porter, who is a citizen of the
United Kingdom, and Ronny Nilsson, who is a citizen of Sweden, each of
the individuals identified on Schedule A to this Statement is a citizen
of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
As an inducement for Flextronics to enter into the Merger Agreement, Dii
and Flextronics entered into the Option Agreement under which Dii
granted the Option to Flextronics (see Item 4). The Option was
negotiated as a material term of the overall transaction, and
Flextronics did not pay additional consideration to Dii for the Option.
The Option is only exercisable if certain conditions are triggered (see
Item 4). If the Option becomes exercisable and Flextronics elects to
exercise this option, Flextronics anticipates that it would use working
capital to pay the exercise price of $65.406 per share. Please refer to
Item 4(a)-(b).
As a further inducement for Flextronics to enter into the Merger
Agreement, certain officers and directors of Dii entered into the Voting
Agreements with Flextronics (see Item 4). Flextronics did not pay
additional consideration to any of these stockholders in connection with
the execution and delivery of the Voting Agreements.
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ITEM 4. PURPOSE OF TRANSACTION
(a)-(b) Pursuant to an Agreement and Plan of Merger dated November 22, 1999
among Flextronics, Slalom Acquisition Corp., a Delaware corporation and
wholly owned subsidiary of Flextronics ("Merger Sub") and Dii, Merger
Sub will merge with and into Dii, with Dii to survive the Merger and to
become a wholly owned subsidiary of Flextronics (the "Merger"). The
closing of the Merger is subject to several conditions, including
clearance under the Hart-Scott-Rodino Antitrust Improvements Act and
approval by the Flextronics stockholders and Dii stockholders. Upon the
closing of the Merger, Flextronics will issue .805 Ordinary Shares in
exchange for each outstanding share of Dii Common Stock (the "Exchange
Ratio"), and each outstanding option to purchase Dii Common Stock issued
under Dii's stock option plans will be assumed by Flextronics and
converted into an option to purchase Flextronics Common Stock according
to the Exchange Ratio.
As an inducement for Flextronics to enter into the Merger Agreement, Dii
and Flextronics entered into the Company Stock Option Agreement dated
November 22, 1999 (the "Stock Option Agreement"), under which Dii
granted Flextronics an option to acquire up to the number of shares of
Dii Common Stock equal to 19.9% of Dii's outstanding common stock as of
the date of exercise (the "Option"). The Option is exercisable upon the
occurrence of one or more of the following:
o Dii's Board of Directors withdraws, amends or modifies
its unanimous recommendation in favor of the Merger and
the approval of the Merger Agreement;
o Dii fails to include in the proxy statement/prospectus
concerning the Merger the unanimous recommendation of
Dii's Board of Directors in favor of the Merger and the
approval of the Merger Agreement;
o the Dii Board of Directors fails to reaffirm this
unanimous recommendation within 10 business days of a
written request from Flextronics following the public
announcement of a "Company Acquisition Proposal"
(defined in full in the Merger Agreement, but generally
defined as an offer or proposal: (i) to acquire a 15% or
greater interest in the voting securities of Dii, (ii)
to enter into any transaction resulting in a change in
ownership of Dii voting securities such that Dii
stockholders prior to the transaction would own less
than 85% of the Dii voting securities following the
transaction, or (iii) to dissolve Dii);
o the Dii Board of Directors approves or publicly
recommends any Company Acquisition Proposal;
o Dii enters into any agreement or commitment accepting
any Company Acquisition Proposal;
o any party unaffiliated with Flextronics commences a
tender or exchange offer relating to Dii securities and
Dii does not send a notice to its stockholders in
accordance with Rule 14e-2 under the Exchange Act
stating that it recommends rejection of the tender or
exchange offer;
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o public announcement of an "Option Acquisition Proposal"
(defined in full in the Option Agreement, but generally
defined as an offer or proposal to acquire a 10% or
greater interest in Dii voting securities or assets,
disposition by Dii of 10% or more of its assets or
dissolution of Dii), and one of the following events
together with or following such Option Acquisition
Proposal: (A) failure to get Dii stockholder approval of
the Merger Agreement and the Merger, (B) tender or
exchange offer for 15% or more of the outstanding shares
of Dii common stock is commenced, (C) Dii fails to call
and hold the Dii stockholders' meeting to vote on the
Merger by May 22, 2000; or (D) Dii fails to take all
actions necessary to hold the Dii stockholders' meeting
as promptly as practicable, and in any event within 45
days after the dclaration of the effectiveness of the
Registration Statement (as defined in the Merger
Agreement);
o the acquisition by any person (other than Flextronics)
or "group" (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder)
of beneficial ownership of 25% or more of the total
outstanding voting security of Dii or any of its
subsidiaries; or
o commencement of a solicitation seeking to alter the
composition of Dii's Board of Directors.
The Option will terminate on the earliest to occur of: (i) the effective
time of the Merger; (ii) termination of the Merger Agreement under
Section 7.1(b), (d), (f) or (h) thereof; (iii) 14 months following the
termination of the Merger Agreement under Section 7.1(b), (d), (f) or
(h); or (iv) 14 months following the first occurrence of an Exercise
Event (as defined in the Option Agreement), provided that such time
shall be later in limited circumstances related to governmental
clearance. Under the terms of the Option Agreement, Flextronics must
return any proceeds in connection with the sale or disposition of the
Option or underlying securities in excess of 3.5% of the "Company Equity
Value" (as defined in the Merger Agreement).
As a further inducement for Flextronics to enter into the Merger
Agreement, certain officers and directors of Dii (the "Stockholders")
each entered into a Company Voting Agreement dated November 22, 1999
with Flextronics (the "Voting Agreements"). Schedule B to this Statement
sets forth the Stockholders and the number of outstanding shares of Dii
Common Stock that each of them beneficially owns. Under the Voting
Agreements, each of the Stockholders agreed to vote all of their shares
of Dii Common Stock, until the earlier of the effective time of the
Merger or the valid termination of the Merger Agreement under Article
VII of the Merger Agreement: (i) in favor of the Merger, the adoption
and execution of the Merger Agreement and other transactions
contemplated by the Merger Agreement; and (ii) in favor of the waiver of
any registration rights, rights of first refusal, first offer, co-sale
or other similar rights of the stockholder under any agreement
applicable to their Dii shares. The Stockholders also waived all
appraisal and dissenters' rights that they may acquire in connection
with the Merger. Together with the Voting Agreements, each Stockholder
delivered an irrevocable proxy to Flextronics and certain of its
officers granting them the right to vote their shares of Dii Common
Stock in favor of the matters referenced above. The Stockholders retain
other rights with respect to their shares, including voting rights on
other matters.
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The purpose of the transactions under the Merger Agreement, Stock Option
Agreement and Voting Agreements are to enable Flextronics and Dii to
consummate the Merger and other related transactions contemplated by
these agreements.
(c) Not applicable.
(d) Upon the closing of the Merger, the directors and officers of Merger Sub
will become the directors and officers of Dii (which will survive the
Merger as a wholly owned subsidiary of Flextronics) until their
respective successors are duly elected or appointed and qualified, as
applicable.
(e) Other than as described in the Merger Agreement, the Option Agreement
and the Voting Agreements, Flextronics does not have any plans or
proposals to materially change the present capitalization or dividend
policy of Dii.
(f) Not applicable.
(g) The Certificate of Incorporation and Bylaws of Merger Sub, as in effect
immediately prior to the Merger, will be the Certificate of
Incorporation and Bylaws of Dii upon the closing of the Merger.
(h)-(i) Upon the closing of the Merger, Dii Common Stock will be deregistered
under the Act and delisted from the Nasdaq National Market. However,
Flextronics' Ordinary Shares will trade under the ticker symbol FLEX.
(j) Not applicable.
References to, and descriptions of, the Merger Agreement, the Stock
Option Agreement and the Voting Agreements are qualified in their
entirety be reference to the copies of these documents filed as exhibits
to this Statement. These agreements are incorporated by reference into
this Item 4 where these references and descriptions appear.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As a result of the Voting Agreements, Flextronics may be deemed to be
the beneficial owner of at least 705,236 shares of Dii Common Stock,
representing approximately 1.8% of the issued and outstanding shares of
Dii Common Stock outstanding as of November 19, 1999 (as represented by
Dii in the Merger Agreement). Other than the voting rights conferred by
the Voting Agreements, Flextronics is not entitled to any rights as a
stockholder of Dii as to these shares and disclaims beneficial ownership
of these shares.
In the event the Option becomes exercisable and is exercised in full,
Flextronics will become the beneficial owner of that number of shares of
Dii Common Stock equal to 19.9% of the outstanding shares of Dii Common
Stock at the time of exercise, which, based on the shares of Dii Common
Stock outstanding as of November 19, 1999 (as represented by Dii in the
Merger Agreement), currently equals 7,615,077 shares of Dii Common
Stock. Flextronics disclaims beneficial ownership of the shares of Dii
Common Stock subject to the Option unless and until Flextronics acquires
such shares by exercising the Option.
To Flextronics' knowledge, no directors or officers of Flextronics named
in Item 2 beneficially own any shares of Dii Common Stock.
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(b) Flextronics may be deemed to have shared voting power over the 705,236
shares of Dii Common Stock covered by the Voting Agreements. Flextronics
does not have the power to dispose of these shares. If Flextronics
acquires shares of Dii Common Stock by exercising the Option,
Flextronics will acquire sole power to vote and dispose of these shares.
(c) Flextronics entered into the Merger Agreement, Option Agreement and
Voting Agreements with Dii and Dii stockholders on November 22, 1999. To
the knowledge of Flextronics, no other transactions in Dii Common Stock
were effected during the past 60 days by the persons named in Item 5(a).
(d) Flextronics is not aware of the right of any other person to receive or
the power to direct the receipt of dividends from, or the proceeds from
the sale of, shares of Dii Common Stock.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
Flextronics is a party to the Merger Agreement and the exhibits thereto,
including the Stock Option Agreement, the Voting Agreements (and
accompanying Irrevocable Proxies) and a stock option agreement for the
benefit of Dii. Flextronics' directors and officers have entered into
voting agreements with Dii. Other than the foregoing, neither
Flextronics nor, to Flextronics' knowledge, the other persons named in
Item 2 to this Statement are a party to any contract, arrangement,
understanding or relationship of the type specified by this Item 6 with
respect to any Dii securities.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following documents are filed as exhibits hereto:
1. Agreement and Plan of Merger, dated November 22, 1999, among
Flextronics, Merger Sub and Dii.*
2. Stock Option Agreement dated November 22, 1999 between Dii and
Flextronics.*
3. Form of Company Voting Agreement entered into between
Flextronics and certain stockholders of Dii on November 22,
1999, together with the form of Irrevocable Proxy delivered
therewith.*
*Previously filed.
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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 9, 1999 FLEXTRONICS INTERNATIONAL LTD.
By: /s/ Michael E. Marks
------------------------
Michael E. Marks
Chief Executive Officer
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Schedule A
The following table sets forth the name, business address and present
principal occupation or employment of each director and executive officer of
Flextronics. Unless otherwise indicated below, the business address of each such
person is 2090 Fortune Drive, San Jose, California 95131.
Board of Directors
Name and Business Address Present Principal Occupation
- ------------------------- ----------------------------
Michael E. Marks Chief Executive Officer, Flextronics
Tsui Sung Lam Consultant, Flextronics
514 Chai Chee Land #04-13
Singapore 1646
Chuen Fah Alain Ahkong Managing Director, Pioneer
51 Goldhill Plaza Management Services Pte Ltd.
#18-11 Goldhill Plaza
Singapore 308900
Michael J. Moritz General Partner, Sequoia Capital
3000 Sand Hill Road, Suite 280
Building 4
Menlo Park, CA 94025
Richard L. Sharp President and Chief Executive Officer,
9950 Mayland Drive Circuit City
Richmond, VA 23233
Patrick Foley Chief Executive Officer,
333 Twin Dolphine Drive DHL Airways, Inc.
Redwood City, CA 94062
Hui Shing Leong Managing Director, CS Hui Holdings
Plot 540, Lorong Perusahaan 6A
Prai Industrial Estate
13600 Prai
Malaysia
Executive Officers
Name and Business Address Present Principal Occupation
- ------------------------- ----------------------------
Michael E. Marks President and Chief Executive Officer,
Flextronics
Robert R.B. Dykes President, Systems Group and Chief
Financial Officer, Flextronics
Humphrey Porter President, Central/Eastern European
Operations, Flextronics
Ash Bhardwaj President, Asian-Pacific Operations,
Flextronics
Michael McNamara President, Americas Operations,
Flextronics
Ronny Nilsson President, Western European Operations,
Flextronics
<PAGE>
Schedule B
Stockholders Subject to Voting Agreements
(as of November 22, 1999, as represented to us by Dii)
Stockholder Shares Beneficially Owned
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Ronald R. Budacz 329,194
Carl R. Vertuca, Jr. 64,546
Thomas J. Smach 27,938
Constantine S. Macricostas 39,490
Alexander W. Wong 10,500
Dermott O'Flanagan 53,729
Ronald R. Snyder 84,987
Steven C. Schlepp 54,984
Carl Plichta 39,868
