<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1998.
REGISTRATION NO. 333-____________________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------
BAY NETWORKS, INC.
(Exact name of Registrant as specified in its charter)
------------------
<TABLE>
<S> <C>
DELAWARE 04-2916246
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
4401 GREAT AMERICA PARKWAY
SANTA CLARA, CA 95054
(408) 988-2400
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
------------------
JOHN J. POGGI, JR.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
BAY NETWORKS, INC.
4401 GREAT AMERICA PARKWAY, SANTA CLARA, CA 95054
(408) 988-2400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
<TABLE>
<S> <C>
ROB G. SEIM BRUCE E. SCHAEFFER, ESQ.
Vice President and Gray Cary Ware & Freidenrich LLP
Corporate Controller 400 Hamilton Avenue
Bay Networks, Inc. Palo Alto, CA 94301
4401 Great America Parkway
Santa Clara, CA 95054
</TABLE>
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE REGISTERED MAXIMUM MAXIMUM REGISTRATION FEE
REGISTERED OFFERING PRICE AGGREGATE
PER SHARE (1) OFFERING
PRICE (1)
- ------------------------------ ------------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Common Stock ($0.01 par value) 5,093,551 shares $26.69 $135,946,876.19 $40,104.33
- ------------------------------ ------------------- --------------- --------------- ----------------
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee and
based on the average of the high and low prices of the Common Stock of
Bay Networks, Inc. as reported on the New York Stock Exchange on January
21, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
PROSPECTUS
5,093,551 SHARES
BAY NETWORKS, INC.
COMMON STOCK
The 5,093,551 shares of the common stock, $0.01 par value per share
("Common Stock"), of Bay Networks, Inc. (the "Company") offered by this
Prospectus (the "Shares") are outstanding shares that may be sold from time to
time by or on behalf of certain stockholders (the "Selling Stockholders") of the
Company described in this Prospectus under "Selling Stockholders." The Selling
Stockholders acquired the Shares from the Company in a private transaction
related to the Company's acquisition of all of the outstanding stock of New Oak
Communications, Inc. ("New Oak") pursuant to a merger of a newly formed,
wholly-owned subsidiary of the Company with and into New Oak (the
"Acquisition"). The Company has agreed to register the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and to use its best
efforts to cause the registration statement covering the Shares to be declared
effective and to remain effective until the earlier of (i) such time as each of
the Selling Stockholders may sell all of the Shares held by him, her or it
without registration pursuant to Rule 144 under the Securities Act within a
three-month period after the availability of Rule 144; or (ii) such time as all
of the Shares have been sold by the Selling Stockholders. The Company will not
receive any of the proceeds from the sale of the Shares by the Selling
Stockholders.
The Company has been advised by the Selling Stockholders that they
intend to sell all or a portion of the Shares from time to time on the New York
Stock Exchange ("NYSE"), in negotiated transactions or otherwise, and on terms
and at prices then obtainable. The Selling Stockholders and any broker-dealers,
agents or underwriters that participate with the Selling Stockholders in the
distribution of any of the Shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commission received by them and any
profit on the resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. The Company and
the Selling Stockholders have agreed to certain indemnification arrangements.
See "Plan of Distribution."
The Company will bear all costs and expenses incident to the offering
and sale of the Shares to the public, including without limitation, printing
expenses, legal fees and disbursements of counsel for the Company, "blue sky"
expenses, accounting fees and filing fees, but excluding any underwriting
commissions or similar charges and legal fees and disbursements of counsel for
the Selling Stockholders.
THE SHARES HAVE NOT BEEN REGISTERED FOR SALE UNDER THE SECURITIES LAWS
OF ANY STATE OR JURISDICTION AS OF THE DATE OF THIS PROSPECTUS. BROKERS OR
DEALERS EFFECTING TRANSACTIONS IN THE SHARES SHOULD CONFIRM THE REGISTRATION OF
THE SHARES UNDER THE SECURITIES LAWS OF THE STATES IN WHICH SUCH TRANSACTIONS
OCCUR, OR THE EXISTENCE OF ANY EXEMPTIONS FROM SUCH REGISTRATION.
The Company's Common Stock is listed on the NYSE. On January 21, 1998,
the last sales price of the Company's Common Stock as reported on the NYSE was
$27.00.
--------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR INFORMATION THAT SHOULD
BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
The date of this Prospectus is January ___, 1998
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the Commission's public reference room at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, as well as at the Regional Offices of the
Commission located at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of such material can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the fees prescribed by the Commission. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The Commission's web site can be accessed at http://www.sec.gov. The
Company's Common Stock is traded on the NYSE. Reports and other information
concerning the Company can also be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
The Company has also filed with the Commission a Registration Statement
on Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is made to the Registration
Statement, copies of which may be obtained from the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of
the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference: (1) Annual
Report on Form 10-K for the year ended June 30, 1997; (2) Quarterly Report on
Form 10-Q for the quarter ended September 27, 1997; (3) the description of the
Company's capital stock contained in the Company's Registration Statement on
Form 8-A filed on February 21, 1996; (4) the description of the Company's
Preferred Stock Purchase Rights attached to each share of the Company's Common
Stock contained in the Company's Registration Statement on Form 8-A filed on
February 21, 1996; and (5) Current Report on Form 8-K filed on July 8, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents. Any
statement incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any or all of
the foregoing documents incorporated by reference in this Prospectus (other than
any exhibits thereto). Requests for such documents should be directed to Bay
Networks, Inc. at 4401 Great America Parkway, Santa Clara, CA 95052-8185
(telephone number (408) 988-2400), Attn: Secretary.
Trademarks of Bay Networks, Inc. appear in this document. Other
trademarks, brand, product or company names may be the property of others.
2
<PAGE> 4
THE COMPANY
The Company, together with its worldwide subsidiaries, develops,
manufactures, markets, sells and supports a comprehensive line of data
networking products and services. The Company provides products that meet the
connectivity requirements of corporate enterprises, network service providers
and telecommunications carriers. The Company offers switches, routers, shared
media hubs, remote and Internet access solutions, Internet Protocol (IP)
services and network management applications, all marketed under the Company's
Adaptive Networking strategy. The Company's products and technologies enable
customers to transition from today's complex multi-protocol networks to the
IP-optimized networks of tomorrow. These solutions link people to critical
information resources at the desktop, across corporate enterprise networks or
over the public Internet.
The Company is a Delaware corporation incorporated on May 2, 1986. The
Company's principal executive offices are located at 4401 Great America Parkway,
Santa Clara, California 95054, telephone number (408) 988-2400. As used in this
Prospectus, references to the "Company" or the "Registrant" include Bay
Networks, Inc. and its subsidiaries.
RISK FACTORS
The following risk factors should be considered in conjunction with the
other information included and incorporated by reference in this Prospectus
before purchasing the Common Stock offered hereby. The discussions in this
Prospectus may include forward-looking statements that involve risks and
uncertainties. In addition to those risk factors discussed elsewhere in this
Prospectus, the Company identifies the following risk factors which could affect
the Company's actual results and cause actual results to differ materially from
those in the forward-looking statements.
Risks Related to New Markets. The markets for data networking products
are rapidly changing and highly competitive. If these markets do not continue to
grow, or if the Company's strategies for the data networking markets are
unsuccessful, the Company's consolidated financial position, results of
operations, or cash flows, may be adversely affected.
Risks Related to New Products. The Company's future revenue is dependent
on its ability to successfully develop, acquire, manufacture and market products
for customers in rapidly evolving markets worldwide. To successfully distribute
new products, the Company must establish and maintain new distribution channels.
There can be no assurance that the Company's product development and acquisition
efforts will result in timely and commercially successful new product offerings
in the future.
Risks Related to Gross Profit. The Company's gross profit percentage is
a function of the product mix sold in any period. Therefore, gross profit
percentage may fluctuate, affecting the Company's operating results. Factors
such as unit volumes, obsolescence/surplus of inventory, heightened price
competition, changes in channels of distribution, shortages and cost increases
in supplies of parts from vendors, and the availability of skilled labor, also
may cause fluctuations in gross profit percentages.
Risks Related to Manufacturing Operations. The Company operates
manufacturing facilities and relies upon a number of manufacturing arrangements
worldwide. The Company's manufacturing capability may be affected by factors
impacting the operations of its suppliers. In addition, the Company's ability to
meet customer demand may also be dependent on its ability to adjust
manufacturing levels on short notice based on anticipated orders.
Risks Related to Intellectual Property Rights. The Company relies upon a
combination of patents, copyrights, trademarks and trade secrets to establish
and protect intellectual property rights in its products and technology. There
can be no assurance that the steps taken by the Company will be adequate to
prevent misappropriation of its technology, or that the Company's competitors
will not develop superior technologies. From time to time it may be necessary or
desirable for the Company to enter into technology licenses, strategic alliances
and cooperative marketing efforts with others. There can be no assurance that
the Company consistently will be able to secure third-party rights necessary to
offer competitive products.
3
<PAGE> 5
Risks Related to Competition. The data networking industry is highly
competitive. There can be no assurance that the Company will be able to compete
successfully in the future with existing or new competitors. Among the
competitive factors that may adversely affect the Company's future results are
conformity to existing and emerging industry standards; interoperability with
other networking products; network management capabilities; price; performance;
product features; technical support; and distribution.
Risks Related to Acquisitions. To implement its business plans, the
Company may make further acquisitions in the future. Acquisitions require
significant financial and management resources both at the time of the
transaction and during the process of integrating the newly acquired business
into the Company's operations. The Company's results of operations, consolidated
financial position, or cash flows, may be adversely affected if it is unable to
successfully acquire and integrate such new companies into its operations.
Risks of Stock Volatility and Absence of Dividends. In recent years, the
stock market in general and the market for technology stocks in particular,
including the Company's Common Stock, have experienced extreme price
fluctuations. There is a risk that stock price fluctuation could impact the
Company's operations. Changes in the price of the Company's Common Stock could
affect the Company's ability to successfully attract and retain qualified
personnel or complete necessary business combinations or other transactions in
the future. The Company has never paid any cash dividends on its capital stock,
and has no present intention to do so.
SELLING STOCKHOLDERS
The Selling Stockholders acquired the Shares from the Company in
connection with the Company's acquisition of all of the outstanding stock of
New Oak pursuant to the Acquisition. The Acquisition was consummated on January
20, 1998. The Selling Stockholders received the Shares and cash in the
aggregate amount of approximately $22,957,000 directly from the Company in
exchange for all of the outstanding shares of New Oak.
The following table lists the Selling Stockholders, the number of shares
of the Company's Common Stock which each owned as of January 21, 1998, the
number of shares of the Company's Common Stock expected to be sold by each, and
the number and the percentage of the shares of the Company's Common Stock which
each will own after the offering pursuant to the Registration Statement,
assuming the sale of all the shares expected to be sold. In addition, certain of
the Selling Stockholders are venture capital funds, corporations or trusts which
may, in the future, distribute their shares to their partners, shareholders or
trust beneficiaries, respectively, which distributees may likewise distribute
such shares to their partners, shareholders or trust beneficiaries. Those shares
may later be sold by those partners, shareholders or trust beneficiaries, or any
of their respective distributees.
<TABLE>
<CAPTION>
Shares Owned Shares To Shares Owned Percentage Owned
Selling Stockholder Before Offering Be Offered After Offering After Offering
------------------- --------------- ---------- -------------- ----------------
<S> <C> <C> <C> <C>
Rich Baker 3,786 3,786 0 0%
J. Martin Borden (1) 48,711 45,432 3.279 *
Daniel Boudreau 272,754 272,592 162 *
Gary Bowen (2) 154,039 154,039 0 0%
Arlene Ina Bresner 7,771 7,256 515 *
John Burnham (3) 18,930 18,930 0 0%
John Chao 34,074 34,074 0 0%
Denis Cho 7,572 7,572 0 0%
Robert E. Cole 15,144 15,144 0 0%
</TABLE>
4
<PAGE> 6
<TABLE>
<CAPTION>
Shares Owned Shares To Shares Owned Percentage Owned
Selling Stockholder Before Offering Be Offered After Offering After Offering
------------------- --------------- ---------- -------------- ----------------
<S> <C> <C> <C> <C>
Peter Donahue 11,358 11,358 0 0%
Richard J. Dorff 11,358 11,358 0 0%
Raymond Earle 3,312 3,312 0 0%
William P. Fallon 3,786 3,786 0 0%
Bernard Farrell 2,524 2,524 0 0%
Michael Feinstein 75,720 75,720 0 0%
Rubin Gruber 26,462 26,185 277 *
Kerry Hannigan 22,716 22,716 0 0%
Robert Gardner Hendrie (4) 4,919 2,839 2,080 *
Highland Capital Partners III 639,397 639,397 0 0%
Limited Partnership
Highland Entrepreneurs' Fund 26,642 26,642 0 0%
III Limited Partnership
Gary Hoglund 34,074 34,074 0 0%
Richard J. Kennelley 22,716 22,716 0 0%
Jonathon R. Lawrence 13,251 13,251 0 0%
Jeffrey Lindholm (5) 47,652 47,325 327 *
Shawn Mamros 22,716 22,716 0 0%
Jeffrey McCarthy (6) 309,505 309,505 0 0%
James E. Moore 16,090 16,090 0 0%
Robert Harris Myhill 9,465 9,465 0 0%
North Bridge Venture 1,136,095 1,136,095 0 0%
Partners, L.P.
North Bridge Venture Partners 167,029 167,029 0 0%
II, L.P.
John Thomas O'Hara 90,864 90,864 0 0%
Gary A. Ochs 3,312 3,312 0 0%
</TABLE>
5
<PAGE> 7
<TABLE>
<CAPTION>
Shares Owned Shares To Shares Owned Percentage Owned
Selling Stockholder Before Offering Be Offered After Offering After Offering
------------------- --------------- ---------- -------------- ----------------
<S> <C> <C> <C> <C>
Kenneth W. Ouellette 22,716 22,716 0 0%
Nancy L. Petit 157 157 0 0%
Bryan Petty (7) 2,227 (8) 1,893 334 (8) *
James A. Philippou 90,864 90,864 0 0%
Thomas J. Pincince 427,458 427,458 0 0%
Kenneth Ouelette 22,716 22,716 0 0%
John Richardson 1,893 1,893 0 0%
Michael Rugo 9,465 9,465 0 0%
Gregg J. Savage (9) 96,645 94,650 1,995 *
Richard Shea 22,716 22,716 0 0%
Matthias Siebler 11,358 11,358 0 0%
Alden W. Smith (10) 21,699 2,050 19,649 *
Steve Starliper 1,893 1,893 0 0%
Alan B. Taffel 2,839 2,839 0 0%
Pablo E. Tapia(11) 2,839 2,839 0 0%
Rudolph C. Tenes 3,312 3,312 0 0%
Khac T. Thai (12) 14,197 14,197 0 0%
Linda Theriault (13) 1,365 1,104 261 *
William L. Thompson 3,786 3,786 0 0%
Randall B. Uram (14) 47,325 47,325 0 0%
Venrock Associates 431,554 431,554 0 0%
Venrock Associates II, L.P. 627,708 627,708 0 0%
Karen L. Vergura (15) 7,572 7,572 0 0%
Throop L. Wilder 3,786 3,786 0 0%
</TABLE>
6
<PAGE> 8
<TABLE>
<CAPTION>
Shares Owned Shares To Shares Owned Percentage Owned
Selling Stockholder Before Offering Be Offered After Offering After Offering
------------------- --------------- ---------- -------------- ----------------
<S> <C> <C> <C> <C>
John T. Wroclawski 946 946 0 0%
Monica Young 2,366 2,366 0 0%
</TABLE>
(1) Mr. Borden was employed by the Company as a consulting engineer from
February 1992 to November 1996.
(2) Mr. Bowen was employed by the Company as Executive Vice President,
World Wide Field Operations and Marketing from _______ to October 1996.
(3) Mr. Burnham was employed by the Company as Vice President, Corporate
Communications from October 1996 to February 1997.
(4) Mr. Hendrie was employed by the Company as a senior software engineer
from November 1993 to November 1995.
(5) Mr. Lindholm was employed by the Company as Vice President,
Intercontinential Operations from January 1989 to September 1996.
(6) Mr. McCarthy was employed by the Company as Vice President, Carrier
Services from January 1989 to July 1996.
(7) Mr. Petty was employed by the Company as a systems engineer from April
1994 to November 1997.
(8) Excludes 2,464 shares of the Company's Common Stock beneficially owned
by Mr. Petty subject to immediately excercisable options. Such options
expire in February 1998.
(9) Mr. Savage was employed by the Company as Vice President and Chief
Information Officer from February 1988 to March 1995.
(10) Mr. Smith was employed by the Company, most recently as a supplier
engineer, from April 1987 to October 1997.
(11) Mr. Tapia is a principal of a software vendor that supplied software to
the Company in 1997.
(12) Mr. Thai was employed by the Company as a senior software engineer from
April 1993 to February 1996.
(13) Ms. Theriault was employed by the Company as an administrative
assistant from July 1993 to December 1996.
(14) Mr. Uram was employed by the Company as an area manager from April 1991
to July 1997.
(15) Ms. Vergura was employed by the Company as Manager of Information
Systems from March 1994 to March 1997.
7
<PAGE> 9
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Stockholders that they
intend to sell all or a portion of the Shares from time to time on the NYSE at
prices and at terms prevailing at the time of sale or at prices related to the
then current market price, or in negotiated transactions. The Shares may be sold
by one or more of the following methods: (a) a block trade in which the broker
or dealer so engaged will attempt to sell the Shares as agent, but may position
and resell a portion of the block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such broker or
dealer for its own account pursuant to this Prospectus; (c) an over-the-counter
distribution in accordance with the rules of the New York Stock Exchange; (d)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; and (e) in privately negotiated transactions. There is no assurance
that any of the Selling Stockholders will sell any or all of the Shares offered
by them. Certain of the Shares owned by the Selling Stockholders are being held
in escrow for a one-year period following the closing of the Acquisition to
secure indemnification obligations in connection with the Acquisition. Further,
certain Shares owned by certain of the Selling Stockholders are subject to
repurchase by the Company. Accordingly, such Shares are not available for sale
at this time. In addition, certain of the Selling Stockholders are venture
capital funds, corporations or trusts which may, in the future, distribute their
shares to their partners, shareholders or trust beneficiaries, respectively,
which distributees may likewise distribute such shares to their partners,
shareholders or trust beneficiaries. Those shares may later be sold by those
partners, shareholders or trust beneficiaries, or any of their respective
distributees.
In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from the Selling Stockholders in
amounts to be negotiated prior to the sale. Such brokers or dealers and any
other participating brokers or dealers may be deemed to be "underwriters" within
the meaning of the Securities Act in connection with such sales. The Company
will bear all costs and expenses incident to the offering and sale of the Shares
to the public, including without limitation, printing expenses, legal fees and
disbursements of counsel for the Company, "blue sky" expenses, accounting fees
and filing fees, but excluding any underwriting commissions or similar charges
and legal fees and disbursements of counsel for the Selling Stockholders.
The Company has agreed to indemnify in certain circumstances the Selling
Stockholders and any underwriter and certain control and other persons related
to the foregoing persons against certain liabilities, including liabilities
under the Securities Act. The Selling Stockholders have agreed to indemnify in
certain circumstances the Company and certain related persons against certain
liabilities, including liabilities under the Securities Act.
The Company has agreed with the Selling Stockholders to keep the
Registration Statement of which this Prospectus constitutes a part effective
until the earlier of (i) such time as each of the Selling Stockholders may sell
all of the Shares held by him, her or it without registration pursuant to Rule
144 under the Securities Act within a three-month period after the availability
of Rule 144; or (ii) such time as all of the Shares have been sold by the
Selling Stockholders. The Company intends to de-register any of the Shares not
sold by the Selling Stockholders at the end of such period; however, at such
time, any unsold shares may be freely tradable subject to compliance with Rule
144 of the Securities Act.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock
by the Selling Stockholders.
LEGAL MATTERS
The legality of the Shares is being passed upon by Gray Cary Ware &
Freidenrich LLP, Palo Alto, California.
EXPERTS
The consolidated financial statements and schedule of Bay Networks,
Inc. appearing in Bay Networks, Inc.'s Annual Report (Form 10-K) for the year
ended June 30, 1997, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
8
<PAGE> 10
================================================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES,
OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, IN ANY JURISDICTION
IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information ..................................................... 2
Incorporation of Certain Documents by Reference ............................ 2
The Company ................................................................ 3
Risk Factors ............................................................... 3
Selling Stockholders ....................................................... 4
Plan of Distribution ....................................................... 8
Use of Proceeds ............................................................ 8
Legal Matters .............................................................. 8
Experts .................................................................... 8
</TABLE>
================================================================================
5,093,551 SHARES
BAY NETWORKS, INC.
COMMON STOCK
------------------------------------
PROSPECTUS
------------------------------------
January ___, 1998
================================================================================
<PAGE> 11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses in connection with
the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimates
except the Securities and Exchange Commission registration fees and New York
Stock Exchange listing fee.
<TABLE>
<CAPTION>
TO BE PAID
BY THE
REGISTRANT
----------
<S> <C>
SEC registration fee........................................ $ 40,104
NYSE listing fee............................................ 15,281
Accounting fees and expenses................................ 27,500
Printing.................................................... 3,000
Transfer agent and registrar fees and expenses.............. 0
Blue Sky fees and expenses (including counsel fees)......... 0
Legal fees and expense...................................... 15,000
Miscellaneous expenses...................................... 0
Total............................................... $ 100,885
=========
</TABLE>
The Company will pay all expenses of registration, issuance and
distribution of the shares being sold by the Selling Stockholders, excluding
underwriting commissions and similar charges and legal fees and disbursements of
counsel for the Selling Stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article EIGHTH of the Company's Certificate of Incorporation provides
that no director of the Company shall be liable for any breach of fiduciary
duty, except to the extent that the Delaware General Corporation Law prohibits
the elimination or limitation of liability of directors for breach of fiduciary
duty.
Article TWELFTH of the Company's Certificate of Incorporation provides
that a director or officer of the Company (a) shall be indemnified by the
Company against all costs, charges, expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement incurred in connection with any
litigation or other legal proceeding (other than an action by or in the right of
the Company) brought against him by virtue of his position as a director or
officer of the Company if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Company, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful and (b) shall be indemnified by the Company
against all costs, charges and expenses (including attorneys' fees) incurred in
connection with any action by or in the right of the Company brought against him
by virtue of his position as a director or officer of the Company if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the Company, except that no indemnification shall be made
with respect to any such matter as to which such person shall have been adjudged
to be liable to the Company, unless a court determines that, despite such
adjudication but in view of all of the circumstances, he is entitled to
indemnification of such expenses. Notwithstanding the foregoing, to the extent
that a director or officer has been successful, on the merits or otherwise,
including, without limitation, the dismissal of an action with prejudice or the
settlement of an action without admission of liability, he is required to be
indemnified by the Company against all costs, charges and expenses (including
attorneys' fees) incurred in connection therewith. Expenses shall be advanced to
a director or officer at his request, provided that he undertakes to repay the
amount advanced if it is ultimately determined that he is not entitled to
indemnification for such expenses.
II-1
<PAGE> 12
Indemnification is required to be made unless the Board of Directors or
independent legal counsel determines that the applicable standard of conduct
required for indemnification has not been met. In the event of a determination
by the Board of Directors or independent legal counsel that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Company fails to make an indemnification payment
within sixty (60) days after such payment is claimed by such person, such person
is permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or officer must give the Company
notice of the action for which indemnity is sought and the Company has the right
to participate in such action or assume the defense thereof.
Article TWELFTH of the Company's Certificate of Incorporation further
provides that the indemnification provided therein is not exclusive, and
provides that in the event that the Delaware General Corporation Law is amended
to expand the indemnification permitted to directors or officers the Company
must indemnify those persons to the fullest extent permitted by such law as so
amended.
In addition, with the approval of its Board of Directors, the Company
has entered into separate indemnification agreements with its directors and
officers which require the Company to, among other things, indemnify them
against certain liabilities which may arise by reason of their status or
service.
The Company has obtained liability insurance for the benefit of its
directors and officers.
ITEM 16. EXHIBITS.
The following exhibits are filed with this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
<S> <C>
5.1 Opinion of Gray Cary Ware & Freidenrich LLP.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included in the Signature Page contained in Part II of the
Registration Statement).
</TABLE>
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the
II-2
<PAGE> 13
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
D. The undersigned Registrant hereby undertakes that:
(1) For the purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(2) or the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Clara, State of California, on the 22nd day of
January, 1998.
BAY NETWORKS, INC.
By: /s/ John J. Poggi, Jr.
-----------------------------------
John J. Poggi, Jr.
Vice President, General Counsel
and Secretary
POWER OF ATTORNEY
Each of the officers and directors of Bay Networks, Inc. whose signature
appears below hereby constitutes and appoints David J. Rynne and John J. Poggi,
Jr., and each of them, their true and lawful attorneys and agents, with full
power of substitution, each with power to act alone, to sign and execute on
behalf of the undersigned any amendment or amendments to the Registration
Statement on Form S-3 and to perform any acts necessary in order to file such
amendments, and each of the undersigned does hereby ratify and confirm all that
said attorneys and agents, or their or his substitutes, shall do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on January 22, 1998 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
- -------------------------------- ---------------------------------------
<S> <C>
/s/ David L. House
- --------------------------------
David L. House President, Chief Executive Officer and
Chairman of the Board of Directors
/s/ David J. Rynne (Principal Executive Officer)
- --------------------------------
David J. Rynne Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
/s/ Rob G. Seim
- --------------------------------
Rob G. Seim Vice President and Corporate Controller
(Principal Accounting Officer)
/s/ Arthur Carr
- --------------------------------
Arthur Carr Director
/s/ Shelby H. Carter, Jr.
- --------------------------------
Shelby H. Carter, Jr. Director
/s/ Kathleen A. Cote
- --------------------------------
Kathleen A. Cote Director
</TABLE>
II-4
<PAGE> 15
<TABLE>
<S> <C>
/s/ John S. Lewis
- --------------------------------
John S. Lewis Director
/s/ Benjamin F. Robelen
- --------------------------------
Benjamin F. Robelen Director
/s/ Ronald V. Schmidt
- --------------------------------
Ronald V. Schmidt Director
/s/ Paul J. Severino
- --------------------------------
Paul J. Severino Director
</TABLE>
II-5
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Title
------ -------------
<S> <C>
5.1 Opinion of Gray Cary Ware & Freidenrich LLP.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included in the Signature Page contained in Part II of the
Registration Statement).
</TABLE>
II-6
<PAGE> 1
[GRAY CARY WARE & FREIDENRICH LLP]
EXHIBIT 5.1
January 21, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: BAY NETWORKS, INC.
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
As legal counsel for Bay Networks, Inc., a Delaware corporation (the "Company"),
we are rendering this opinion in connection with the preparation and filing of a
registration statement on Form S-3 (the "Registration Statement") relating to
the registration under the Securities Act of 1933, as amended, of 5,093,551
shares of Common Stock, par value $0.01 per share (the "Common Stock"), issued
by the Company pursuant to an Agreement of Merger, dated as of January 13, 1998,
among the Company, TwigCo, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Company, and New Oak Communications, Inc., a Delaware
corporation.
We have examined such instruments, documents and records as we deemed relevant
and necessary for the basis of our opinion hereinafter expressed. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.
Based on such examination, we are of the opinion that the 5,093,551 shares of
Common Stock of the Company being registered pursuant to the Registration
Statement and to be sold by the selling stockholders are duly authorized shares
of Common Stock and are validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and the use of our name wherever it
appears in said Registration Statement.
This opinion is to be used only in connection with the issuance of the Common
Stock while the Registration Statement is in effect.
Very truly yours,
/s/ GRAY CARY WARE & FREIDENRICH
GRAY CARY WARE & FREIDENRICH LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Bay Networks, Inc.
for the registration of 5,093,551 shares of its common stock and to the
incorporation by reference therein of our reports dated July 18, 1997 with
respect to the consolidated financial statements and the financial statement
schedule, of Bay Networks, Inc. included in its Annual Report (Form 10-K) for
the year ended June 30, 1997, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Palo Alto, California
January 16, 1998
