UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(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.
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(Name of Issuer)
Common Stock
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(Title of class of securities)
232949107
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(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
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(Name, address and telephone number of person authorized to receive notice and
communications)
November 22, 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(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 ("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
=====================
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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) [_]
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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
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 8,354,313(2)
Person With ------------------------------------------------------------------
9 Sole Dispositive Power
7,615,077(1)
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10 Shared Dispositive Power
Not Applicable
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11 Aggregate Amount Beneficially
Owned by Each Reporting Person
8,354,313(1)(2)
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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)
21.8%(3)
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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) 739,236 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 21.8% 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 Malaysia, 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 739,236 shares of Dii Common
Stock, representing approximately 2.0% 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
739,236 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 2, 1999 FLEXTRONICS INTERNATIONAL LTD.
By: /s/ MICHAEL E. MARKS
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Michael E. Marks
Chief Executive Officer
<PAGE>
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
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation
- ------------------------- ----------------------------
<S> <C>
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 Management Services Pte Ltd.
51 Goldhill Plaza
#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, Circuit City
9950 Mayland Drive
Richmond, VA 23233
Patrick Foley Chief Executive Officer, DHL Airways, Inc.
333 Twin Dolphine Drive
Redwood City, CA 94062
Hui Shing Leong Managing Director, CS Hui Holdings
Plot 540, Lorong Perusahaan 6A
Prai Industrial Estate
13600 Prai
Malaysia
</TABLE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS
Name and Business Address Present Principal Occupation
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<S> <C>
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
</TABLE>
<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
