<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 4, 1997
REGISTRATION NO. 333-______
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
CASCADE COMMUNICATIONS CORP.
(Exact name of Registrant as specified in its charter)
DELAWARE 04-3099677
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
5 CARLISLE ROAD
WESTFORD, MASSACHUSETTS 01886-3601
(508) 692-2600
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
--------------------
DANIEL E. SMITH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
5 CARLISLE ROAD
WESTFORD, MASSACHUSETTS 01886-3601
(508) 692-2600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
COPIES TO:
JOHN A. MELTAUS, ESQ.
Testa, Hurwitz & Thibeault, LLP
High Street Tower, 125 High Street
Boston, Massachusetts 02110
(617) 248-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
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, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration 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
under the Securities Act of 1933, check the following box. [ ]
--------------------
<TABLE>
<CAPTION>
=================================================================================================================
TITLE OF SHARES AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE(1) AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(2)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001
par value......... 3,409,196 shares $38.50 $131,254,046.00 $39,773.96
=================================================================================================================
<FN>
- ----------
(1) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457 under the Securities Act of 1933.
(2) Pursuant to Rule 457(c) of the Securities Act of 1933, the registration fee has been calculated based upon the average
of the high and low prices per share of Common Stock reported on the Nasdaq National Market on January 28, 1997.
</TABLE>
--------------------
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 SAID SECTION 8(a),
MAY DETERMINE.
===============================================================================
<PAGE> 2
--------------------
PROSPECTUS
3,409,196 SHARES
[CASCADE LOGO]
CASCADE COMMUNICATIONS CORP.
COMMON STOCK
--------------------
This Prospectus relates to the sale of up to an aggregate of 3,409,196
shares (the "Shares") of the common stock, par value $.001 per share (the
"Common Stock"), of Cascade Communications Corp., a Delaware corporation
("Cascade" or the "Company"), by certain stockholders of the Company
(collectively, the "Selling Stockholders"). The Selling Stockholders may sell
the Shares from time to time at market prices prevailing at the time of sale or
at prices otherwise negotiated. The Selling Stockholders and certain persons who
purchase shares from them including broker-dealers acting as principals who may
resell the Shares, may be deemed "underwriters," as such term is defined in the
Securities Act of 1933, as amended (the "Securities Act"). See "Plan of
Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares. The Company is responsible for the expenses incurred in connection with
the registration of the Shares. The Selling Stockholders will pay or assume
brokerage commissions or other similar charges incurred in the sale of the
Shares.
The Company's Common Stock is listed on the Nasdaq National Market under
the symbol "CSCC." The last reported sale price for the Common Stock on February
3, 1997 was $39.125 per share, as reported by the Nasdaq National Market.
--------------------
AN INVESTMENT IN THESE SECURITIES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 6.
--------------------
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 , 1997.
<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"). Reports, proxy statements
and other information filed by the Company may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Commission's regional offices located at
Seven World Trade Center, 13th Floor, New York, New York 10048, and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies may
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
also maintains a World Wide Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission at the address "http://www.sec.gov." The
Common Stock of the Company is listed on the Nasdaq National Market. Reports,
proxy statements and other information concerning the Company may also be
inspected at the offices of the National Association of Securities Dealers, Inc.
located at 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement") under the
Securities Act, with respect to the Common Stock offered hereby. This Prospectus
does not contain all 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 regarding the Company and the Common
Stock offered hereby, reference is hereby made to the Registration Statement and
to the exhibits and schedules filed therewith. Statements contained in this
Prospectus regarding the contents of any agreement or other document filed as an
exhibit to the Registration Statement are not necessarily complete, and in each
instance reference is made to the copy of such document filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. The Registration Statement, including the exhibits and
schedules thereto, may be inspected at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and copies of all or any part thereof may be obtained from such office upon
payment of the prescribed fees.
The Company will provide without charge to each person to whom a
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference herein (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into such documents). Requests for such copies should be directed to
Paul E. Blondin, Chief Financial Officer, Cascade Communications Corp., 5
Carlisle Road, Westford, Massachusetts 01886, telephone number (508) 692-2600.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated in this Prospectus by reference (File No.
0-24578):
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995.
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 30, 1996.
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<PAGE> 4
3. The Company's Quarterly Report on Form 10-Q for the quarter
ended June 29, 1996.
4. The Company's Quarterly Report on Form 10-Q for the quarter
ended September 28, 1996.
5. The Company's Current Reports on Form 8-K dated February 27,
1996, May 3, 1996, May 30, 1996, July 11, 1996, January 16, 1997
and February 4, 1997.
6. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed pursuant to
Section 12(g) of the Exchange Act on July 26, 1994.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
of the Shares, shall be deemed to be incorporated by reference in this
Prospectus and made a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference in this Prospectus 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 is also deemed to be incorporated
by reference herein or in any prospectus supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
3
<PAGE> 5
THE COMPANY
Cascade develops, manufactures, markets and supports a family of high
performance, multi-service wide area network switches that enable public service
providers and private network managers to provide cost-effective, high-speed
data, video and voice communications services to end users. Wide area networks
("WAN") built on Cascade's switches are designed to support one or more of the
major broadband packet communications protocols and services, including Frame
Relay, Internet Protocol ("IP"), Switched Multi-Megabit Data Service ("SMDS")
and Asynchronous Transfer Mode ("ATM"). Users or other networking devices access
the Company's products over a variety of media, including twisted pair, coaxial
and fiber optic leased line facilities; analog modem and Integrated Services
Digital Network ("ISDN") dial facilities; and wireless facilities.
The rapid growth in the number of personal computers, workstations and
end-user applications has led to the extensive deployment of local area networks
("LANs") in corporate environments. As these LAN-based users needed to
communicate with users at other sites, corporations installed bridges and
multiprotocol routers to interconnect them across WANs.
Traditional WAN architectures to connect these LANs across wide area
networks were based on time division multiplexing ("TDM") technology. TDM
products were optimized for fixed path, fixed bandwidth applications, such as
voice and low volume transaction processing data. However, they were not well
suited for the dynamic, high bandwidth communications of LAN-based data coming
from PCs and workstations. Although vendors of TDM products have provided
upgrade modules to support the newer data and video traffic, these older
architectures are unable to scale to accommodate the tremendous growth in the
data traffic as well as support the dynamic nature of this communication. As
such, a new generation of wide area network technologies has been developed to
address these needs, including Frame Relay, SMDS and ATM.
Cascade pioneered the concept of utilizing a single, powerful switching
platform to simultaneously support the major broadband packet communications
services, including Frame Relay, SMDS and ATM. Cascade's multi-service,
standards-based products enable public service providers and private network
managers to select the transmission services with the cost and performance
attributes that best fit the end user's requirements, without requiring them to
build multiple separate specialized networks. In addition to addressing the
requirements of providing services for internal communications needs, Cascade's
Frame Relay and ATM product offerings are deployed in numerous Internet access
provider networks.
With the acquisition of Arris Networks, Inc. in May 1996, Cascade now
offers a wide range of options to access its broadband network switches,
including twisted pair, coaxial and fiber optic leased line facilities; analog
modem and ISDN dial facilities; and wireless facilities
The Company offers four product families of wide area network switches:
the STDX 6000, the B-STDX(TM) 8000 and 9000, the CBX 500, and the AX 800 and
1600. The Company also offers CascadeView/DOS and CascadeView UX software for
the management and control of all of its WAN products. In addition to the
integrated management application, CascadeView, the Company began shipping in
1996 a series of management servers which allow network service providers to
continue to scale the management of their networks just as they scale the
connectivity to these networks.
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<PAGE> 6
The Company markets its products and services directly to public service
providers, including Interexchange Carriers, Local Exchange Carriers, and
Regional Bell Operating Companies ("RBOCs")and Competitive Access Providers in
the United States, Postal Telephone and Telegraph and Other Licensed Operators
internationally, and Internet Service Providers ("ISPs") and Value Added Network
providers worldwide. The Company's products and services are also sold to
private network managers on a worldwide basis either directly or via partners of
the Company, including original equipment manufacturers, system integrators and
international distributors.
The Company was incorporated in Delaware in 1990 under the name Nexgencom
Corporation and changed its name to Cascade Communications Corp. in August 1991.
The Company's principal executive offices are located at 5 Carlisle Road,
Westford, Massachusetts 01886, and its telephone number at that location is
(508) 692-2600.
RECENT DEVELOPMENTS
Sahara Networks, Inc. Acquisition. On January 28, 1997, the Company
acquired all of the outstanding shares of capital stock of Sahara Networks, Inc.
("SAHARA"), a Delaware corporation (the "MERGER"), pursuant to an Agreement and
Plan of Merger and Reorganization dated as of January 2, 1997 (the "MERGER
AGREEMENT") among the Company, Camel Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of the Company, and Sahara. The Merger
was accomplished through an exchange of up to 3,800,000 shares of the Company's
Common Stock for all outstanding shares of capital stock of Sahara and the
assumption of all outstanding options to acquire shares of capital stock of
Sahara. The Merger has been accounted for as a purchase. The purchase price and
terms for the transaction were determined in arms-length negotiations. Sahara is
a developer of scalable high-speed broadband access products. Cascade and Sahara
will integrate Cascade's carrier-class network management, Quality of Service
and IP capabilities across the companies' combined product lines, enabling
Cascade's service provider customers to extend their high-speed network
infrastructure to the customer premise.
Certain Selling Stockholders represented to the Company, in connection
with the completion of the Merger, that such Selling Stockholder was acquiring
the Shares from the Company without any present intention of effecting a
distribution of those Shares. In recognition of the fact, however, that
investors may want to be able to sell their shares when they consider
appropriate, the Company agreed to file with the Commission a registration
statement on Form S-3 (of which this Prospectus is a part) to permit the public
sale of the Shares by the Selling Stockholders from time to time and to use its
best efforts to keep the registration statement effective until the earlier of
the sale of the Shares pursuant to the Registration Statement or the second
anniversary of the effective date of this Registration Statement. The Company
will prepare and file such amendments and supplements to the registration
statement as may be necessary to keep it effective until the earlier of the sale
of all Shares pursuant to the registration statement or until the second
anniversary of the effective date of this Registration Statement.
Stock Split. All share and per share information in this Prospectus has
been adjusted as of each date given to reflect (i) a two-for-one stock split in
the form of a stock dividend in June 1995, (ii) a three-for-two stock split in
the form of a stock dividend in February 1996, and (iii) the two-for-one stock
split in the form of a stock dividend in May 1996.
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<PAGE> 7
RISK FACTORS
In addition to the other information presented in this Prospectus and the
information incorporated in this Prospectus by reference, the following risk
factors should be considered carefully in evaluating the Company and its
business before purchasing the Common Stock offered hereby.
DIFFICULTY OF INTEGRATING ACQUIRED BUSINESSES. In addition to the
Company's acquisition of Sahara, the Company consummated an acquisition in May
1996. There can be no assurance that products, technologies, distribution
channels, key personnel and businesses of acquired companies will be
successfully integrated into the Company's business or product offerings, or
that such integration will not adversely affect the Company's business,
financial condition or results of operations. There can be no assurance that any
acquired products, technologies or businesses will contribute significantly to
the Company's sales or earnings, that the sales and earnings from acquired
businesses will not be adversely affected by the integration process or other
factors. If the Company is not successful in the integration of such acquired
businesses, there could be an adverse impact on the financial results of the
Company. The historical growth of the computer networking industry, coupled with
critical time-to-market factors, has caused increased competition and
consolidation. As a result, there has been a significant increase in the
acquisition value of computer networking companies. Therefore, acquisitions are
more likely to result in values that are material to the Company's operations.
There can be no assurance that the Company will continue to be able to identify
and consummate suitable acquisition transactions in the future.
FLUCTUATIONS IN REVENUE AND OPERATING RESULTS. The growth rates recently
experienced by the Company are not necessarily indicative of the operating
results for any future periods. The Company's operating results may fluctuate as
a result of a number of factors, including the timing of orders from, and
shipments to, customers; the timing of new product introductions and the market
acceptance of those products; increased competition; changes in manufacturing
costs; changes in the mix of product sales; the rate of end user adoption and
carrier and private network development of WAN data communications services;
factors associated with international operations; and changes in world economic
conditions.
EVOLVING MARKET. The Company's success will depend in part on the growth
in the broadband packet equipment market. The market for these services
continues to evolve, and there are a number of competing technologies providing
these services. Regulatory policies affecting the telecommunications industry in
the United States and internationally are likely to continue to have a
significant impact on pricing and demand for both voice and data communications
products and services. There can be no assurance whether, and at what rate, end
user demand will develop for these services or that public carriers or private
networks will continue to adopt the Company's products and technology to
implement these services.
MANAGEMENT OF GROWTH. The Company is currently experiencing a period of
rapid growth which has placed, and could continue to place, a significant strain
on the resources. In order to support the growth of its business, the Company
plans to significantly expand its level of operations during 1997. If the
Company's management is unable to manage growth effectively, the Company's
operating results could be adversely affected.
DEPENDENCE ON KEY EMPLOYEES. The Company's success depends to a
significant degree upon the continuing contributions of its key management,
sales, marketing, research and development and manufacturing personnel, many of
whom would be difficult to replace. The Company does not have employment
contracts with its key personnel. The Company believes that its future success
will depend in large part upon its ability to attract and retain highly-skilled
hardware and software engineers, and
6
<PAGE> 8
management, sales and marketing personnel. Competition for such personnel is
intense, and there can be no assurance that the Company will be successful in
attracting and retaining such personnel. Failure to attract and retain key
personnel could have a material adverse effect on the Company's business,
operating results and financial condition.
COMPETITION. The market for wide area network and remote access
communications products is intensely competitive and is subject to rapid
technological change. The Company expects competition to increase significantly
in the future from existing competitors and a number of companies which may
enter the Company's existing or future markets. In addition to competition from
other switch and remote access providers, the Company expects to face
competition from other vendors in the networking market such as network router
vendors, who may incorporate switching functionality into their products or
provide alternative network solutions. Increased competition could adversely
affect the Company's revenue and profitability through price reductions and loss
of market share. The principal competitive factors in the market for switching
products are breadth of network services supported, conformance to industry
standards, price per port, performance, product features, network management
capabilities, reliability and customer support. Many of the Company's current
and potential competitors have longer operating histories and substantially
greater financial, technical, sales and marketing resources than the Company.
There can be no assurance that the Company will be able to continue to compete
successfully with its existing competitors or will be able to compete
successfully with new competitors.
THIRD PARTY MANUFACTURING. The Company relies on a variety of independent
third party assembly companies to perform printed circuit board assembly, in
circuit test and product repair. There can be no assurance that in the future
the Company's independent contractors will be able to meet the Company's demand
for manufacturing capacity in a cost-effective manner. In the event that the
Company's subcontractors were to experience financial, operational, production
or quality assurance difficulties that resulted in a reduction or interruption
in supply to the Company, the Company's operating results would be adversely
affected until the Company established sufficient manufacturing supply from
alternative sources.
DEPENDENCE ON SOLE SOURCE SUPPLIERS. Some key components of the Company's
products are currently available only from single sources. There can be no
assurance that in the future the Company's suppliers will be able to meet the
Company's demand for components in a timely and cost-effective manner. The
Company generally purchases these single or limited source components pursuant
to purchase orders and has no guaranteed supply arrangements with the suppliers.
In addition, the availability of many of these components to the Company is
dependent in part on the ability of the Company or its subcontractors to provide
the suppliers with accurate forecasts of future requirements. The Company has
generally been able to obtain adequate supplies of parts and components in a
timely manner from existing sources. The Company's operating results and
customer relationships could be adversely affected by either an increase in
prices for, or an interruption or reduction in supply of, any key components.
TECHNOLOGICAL CHANGE. The market for the Company's products is
characterized by rapidly changing technology, evolving industry standards,
emerging network architectures, and frequent new product introductions. Current
competitors or new market entrants may develop new products with features that
could adversely affect the competitive position of the Company's products. There
can be no assurance that the Company will be successful in selecting,
developing, manufacturing and marketing new products or enhancing its existing
products or that the Company will be able to respond effectively to
technological changes, new standards or product announcements by competitors.
The timely availability of new products and enhancements, and their acceptance
by customers are important to the
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<PAGE> 9
future success of the Company. Delays in such availability or a lack of market
acceptance could have an adverse affect on the Company.
CUSTOMER CONCENTRATION. The Company's customer base is highly concentrated
among a limited number of large customers, many of whom generally require
product vendors to comply with rigorous industry standards. Any failure to
comply with such standards may result in a significant loss or reduction of
sales. The Company has diversified its customer base over time; however, in
recent periods, certain customers have accounted for over 10% of the Company's
revenue. In 1995, sales to the Company's two largest customers in that year
accounted for approximately 17% and 12% of revenue. In 1994, sales to the
Company's two largest customers in that year accounted for approximately 12% and
11% of revenue. No other customer accounted for 10% or more of revenue in 1995
or 1994. There can be no assurance that these customers will place additional
orders, or that the Company will obtain orders of similar magnitude from other
customers. A decline in demand from public network carriers would have an
adverse effect on the Company's operating results.
INTERNATIONAL OPERATIONS. International sales (sales to customers outside
the United States, both direct and indirect) accounted for approximately 16% and
20% of the Company's revenue in 1995 and 1994, respectively, and approximately
21% of the Company's revenue in the first nine months of 1996. The Company
anticipates that international sales will continue to account for a significant
portion of revenue. The Company's international sales are subject to risks
inherent in foreign operations including unexpected changes in regulatory
requirements, tariffs or other barriers and potentially negative tax
consequences. In addition, sales of the Company's products in international
markets are heavily dependent on third-party distribution channels. To date, the
Company's international sales have been denominated in U.S. currency; however,
if this were to change, the Company would be subject to exchange rate
fluctuations.
UNCERTAINTIES REGARDING PATENTS AND PROTECTION OF PROPRIETARY TECHNOLOGY.
The Company's success will depend, to a large extent, on its ability to protect
its proprietary technology. The Company has a number of patent applications that
are currently pending for certain of its existing products and currently relies
on a combination of contractual rights, trade secrets and copyrights to protect
its proprietary rights. Although the Company intends to apply for additional
patents in the future, there can be no assurance that the Company's intellectual
property protection will be sufficient to prevent competitors from developing
similar technology. Moreover, in the absence of patent protection, the Company's
business may be adversely affected by competitors that independently develop
functionally equivalent technology. The Company currently licenses certain
hardware and software technology from third parties and plans to continue to do
so in the future. The Company attempts to ensure that its products and processes
do not infringe patents and other proprietary rights, but there can be no
assurance that such infringement may not be alleged by third parties in the
future. If infringement is alleged, there can be no assurance that the necessary
licenses would be available on acceptable terms, if at all, or that the Company
would prevail in any such challenge.
POSSIBLE VOLATILITY OF STOCK PRICE. The market price of the Company's
Common Stock has increased significantly since the Company's initial public
offering in July 1994, and has experienced fluctuations during this period. The
market price of the Company's Common Stock has been, and may continue to be,
extremely volatile. The trading price of the Company's Common Stock could be
subject to wide fluctuations in response to quarter-to-quarter variations in
operating results, changes in earnings estimates by analysts, announcements of
technological innovations or new products by the Company or its competitors,
challenges associated with integration of businesses and other events or
factors. In addition, the stock market has from time to time experienced extreme
price and volume fluctuations
8
<PAGE> 10
which have particularly affected the market price for many high technology
companies and which often have been unrelated to the operating performance of
these companies. These broad market fluctuations may adversely affect the market
price of the Company's Common Stock.
EFFECT OF ANTI-TAKEOVER PROVISIONS. Certain provisions of the Company's
Amended and Restated Certificate of Incorporation, as amended, and Amended and
Restated By-laws could have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from attempting to acquire,
control of the Company. Such provisions could limit the price that certain
investors might be willing to pay in the future for shares of the Company's
Common Stock. Certain of such provisions allow the Company to issue Preferred
Stock with rights senior to those of the Common Stock and impose various
procedural and other requirements which could make it more difficult for
stockholders to effect certain corporate actions. The Company's Board of
Directors is divided into three classes, each of which serves for a staggered
three-year term. Such staggered Board may make it more difficult for a third
party to gain control of the Company's Board of Directors.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders.
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<PAGE> 11
SELLING STOCKHOLDERS
<TABLE>
The following table sets forth certain information regarding ownership of
Common Stock of Cascade as of January 28, 1997 and the number of Shares that may
be offered for the account of the Selling Stockholders or their transferees,
distributees, pledgees, donees or other successors in interest from time to
time. All of the shares offered hereby were acquired in connection with the
Cascade acquisition of Sahara. See "Plan of Distribution."
<CAPTION>
Common Stock Shares Common Stock
Owned to be Sold Owned
Prior to the in the After the
Selling Stockholder Offering Offering(1) Offering(2)
------------------- -------- ----------- -----------
==========================================================================
<S> <C> <C> <C>
Bessemer Venture Partners III L.P. 1,050,938 1,050,938 *
Greylock Equity Limited Partnership 955,209 955,209 *
Jonathan M. Reeves 389,184 389,184 *
Timothy J. Kraskey 234,510 234,510 *
William Thomas Shea 232,603 232,603 *
Ardent Research Partners L.P. 56,321 56,321 *
Dennis A. Kirshy 44,076 44,076 *
G. Felda Hardyman 42,468 42,468 *
BVP III Special Situations L.P. 37,304 37,304 *
Christopher Gabrieli 172,922 36,694 136,228*
Francis J. Saldutti 26,779 26,779 *
WA&H Investment, L.L.C. 23,818 23,818 *
Farrokh Billimoria 22,228 21,928 300*
Brimstone Island Company LP 56,234 21,234 35,000*
William T. Burgin 121,234 21,234 100,000*
Michael I. Barach 19,846 18,846 1,000*
Bradford Mills 16,205 16,205 *
Comdisco, Inc. 14,703 14,703 *
Neill H. Brownstein 82,564 12,564 70,000*
Baldwin Venture Partnership 59,487 11,487 48,000*
</TABLE>
10
<PAGE> 12
<TABLE>
<CAPTION>
Common Stock Shares Common Stock
Owned to be Sold Owned
Prior to the in the After the
Selling Stockholder Offering Offering(1) Offering(2)
------------------- -------- ----------- -----------
==========================================================================
<S> <C> <C> <C>
Charles Robbins 11,487 11,487 *
Robi L. Soni 10,255 10,255 *
Jonathan Art 10,166 10,166 *
Columbia Ventures Trust 9,988 9,988 *
Quentin Corporation 9,723 9,723 *
Belisarius Corporation 9,023 9,023 *
Barbara M. Henagan 16,313 7,182 9,131*
Richard R. Davis 6,577 6,577 *
Robert H. Buescher 25,892 6,282 19,610*
David J. Cowan 6,282 6,282 *
Rubin Gruber 6,273 6,273 *
Gabrieli Family Foundation 17,773 5,773 12,000*
Stephen T. Watts 4,594 4,594 *
William N. Giudice 3,451 3,451 *
Gautam A. Prakash 3,240 3,140 100*
Mark Hughes 2,756 2,756 *
Lawrence Sage 2,756 2,756 *
John M. McQuillan 3,287 2,687 600*
Shipman & Goodwin Profit 2,384 2,384 *
Sharing Retirement Plan
f/b/o Frank J. Marco
Howard Anderson 2,149 2,149 *
Todd Dagres 2,149 2,149 *
C. Samantha Chen 1,669 1,669 *
Thomas F. Ruhm 1,620 1,620 *
Adam P. Godfrey 1,458 1,458 *
Rodney A. Cohen 1,352 1,352 *
Robert S. Smith 1,074 1,074 *
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
Common Stock Shares Common Stock
Owned to be Sold Owned
Prior to the in the After the
Selling Stockholder Offering Offering(1) Offering(2)
------------------- -------- ----------- -----------
==========================================================================
<S> <C> <C> <C>
Jeffrey Mammen 918 918 *
Michael Martinich 918 918 *
Nick Lippis 806 806 *
John K. Rodakis 715 715 *
Ravi B. Mhatre 700 700 *
Paul V. Bergantino 537 537 *
Craig T. Hoekenga 537 537 *
Kenneth Lee 537 537 *
Edward H. Pikaart, Jr. 537 537 *
Money Purchase Plan DTD
12/12/88 E.H. Pikaart,
Jr., Trustee
Sheryl Schultz 537 537 *
Russell E. Stingel 537 537 *
Diane N. McPartlin 448 448 *
Robert J.S. Roriston 374 374 *
Richard M. Borden 268 268 *
Frank J. Marco 268 268 *
Joanna Aptekar Strober 204 204 *
TOTAL 3,841,165 3,409,196 431,969
<FN>
---------------------
*See Footnote 2 below
(1) Assumes that all of the Shares owned by each Selling Stockholder
and offered under this Prospectus are sold during the distribution
period.
(2) Because the Selling Stockholders or their transferees,
distributees, pledges, donees or other successors in interest may sell
all or any part of their Shares pursuant to this Prospectus, no
estimate can be given as to the number of Shares that will be held by
each Selling Stockholder upon termination of this offering. However,
prior to the offering each Selling Stockholder held less than one
percent (1%) of Cascade's outstanding shares of Common Stock, based on
shares of Common Stock outstanding as of January 28, 1997.
</TABLE>
12
<PAGE> 14
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by the Selling
Stockholders acting as principals for their own account. The Company is
responsible for the expenses incurred in connection with the registration of the
Shares. The Company will receive none of the proceeds from this offering. The
Selling Stockholders will pay or assume brokerage commissions or other charges
and expenses incurred in the sale of the Shares. In addition, Cascade has agreed
to indemnify the Selling Stockholders against certain liabilities, including
liabilities under the Securities Act, and, in the event that any offering is
made by the Selling Stockholders through underwriters, to agree to indemnify
such underwriters for such liabilities.
The distribution of the Shares by the Selling Stockholders is not
currently subject to any underwriting agreement. The Shares covered by this
Prospectus may be sold by the Selling Stockholders or their transferees,
distributees, pledgees, donees, or other successors in interest from time to
time. Such sales may be made at fixed prices that may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, or at negotiated prices. Such sales may be effected in the
over-the-counter market, on the National Association of Securities Dealers
Automated Quotation System, on the Nasdaq National Market, or on any exchange on
which the Shares may then be listed. The Shares may be sold by one or more of
the following: (a) one or more block trades in which a broker or dealer so
engaged will attempt to sell all or a portion of the Shares held by the Selling
Stockholders 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 account pursuant to this
Prospectus; (c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; (d) in negotiated transactions; and (e) through
other means. The Selling Stockholders may effect such transactions by selling
Shares to or through broker-dealers, and such broker-dealers will receive
compensation in negotiated amounts in the form of discounts, concessions,
commissions or fees from the Selling Stockholders and/or the purchasers of the
Shares for whom such broker-dealers may act as agent or to whom they sell as
principal, or both (which compensation to a particular broker-dealer might be in
excess of customary commissions). Such brokers or dealers or the participating
brokers or dealers and the Selling Stockholders may be deemed to be
"underwriters" within the meaning of the Securities Act, in connection with such
sales, and any commissions received by such broker-dealers may be deemed to be
underwriting compensation.
Any shares covered by the Prospectus that qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Selling Stockholders are not restricted as to the price or prices at
which they may sell their Shares. Sales of such Shares at less than the market
prices may depress the market price of the Company's Common Stock. During the
effective time of this Prospectus, the Selling Stockholders have agreed to
potential restrictions on resale during (i) the period commencing on the close
of business seven (7) days before the end of each fiscal quarter and ending at
the close of business two (2) business days after the public announcement by
Cascade of its earnings for such fiscal quarter and (ii) if notified by the
Company of a potential material event that could have a material effect on the
Company's business and financial condition, a period commencing upon such notice
and ending upon notice by the Company that either has been disclosed to the
public or no longer constitutes a potential material event. The Selling
Stockholders are not restricted as to the number of Shares which may be sold at
any one time, and it is possible that a significant number of Shares could be
sold at the same time.
13
<PAGE> 15
Boston EquiServe L.P., 150 Royall Street, Canton, Massachusetts 02021, is
the transfer agent for the Company's Common Stock.
LEGAL MATTERS
Certain legal matters with respect to the issuance of the Shares are being
passed upon for the Company by Testa, Hurwitz & Thibeault, LLP, Boston,
Massachusetts. A partner of Testa, Hurwitz & Thibeault, LLP, counsel to the
Company, is an Assistant Secretary of the Company.
EXPERTS
The consolidated balance sheets of Cascade Communications Corp. as of
December 31, 1995 and 1994 and the related consolidated statements of
operations, cash flows and stockholders' equity (deficit) for each of the three
years in the period ended December 31, 1995 included in the Company's Annual
Report on Form 10-K have been incorporated by reference herein in reliance on
the report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
The Financial Statements of Sahara Networks, Inc. for the period from May
25, 1995 (inception) to December 31, 1995 appearing in Cascade Communications
Corp.'s Current Report on Form 8-K dated February 4, 1997 have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report included
therein and incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
14
<PAGE> 16
- --------------------------------------- ---------------------------------
No person has been authorized to give 3,409,196 SHARES
any information or to make any
representation other than those
contained in this Prospectus and, if
given or made, such information or
representation must not be relied
upon as having been authorized by the CASCADE COMMUNICATIONS CORP.
Company, any Selling Stockholder or
any other person. This Prospectus
does not constitute an offer to sell
or a solicitation of an offer in any
jurisdiction in which such offer or
solicitation would be unlawful or to
any person to whom it is unlawful. COMMON STOCK
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 or that
information contained herein is
correct as of any time subsequent to
this date hereof.
----------- ----------
TABLE OF CONTENTS PROSPECTUS
Page ----------
----
Available Information......... 2
Incorporation of Certain
Information by Reference.... 2
The Company................... 4
Recent Developments........... 5
Risk Factors.................. 6
Use of Proceeds............... 9
Selling Stockholders.......... 10
Plan of Distribution.......... 13
Legal Matters................. 14
Experts....................... 14
- --------------------------------------- ---------------------------------
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
Estimated expenses (other than underwriting discounts and commissions)
payable in connection with the sale of the Common Stock offered hereby are as
follows:
<S> <C>
SEC Registration Fee $ 39,773.96
Nasdaq Filing Fee 17,500.00
Legal fees and expenses 20,000.00
Accounting fees and expenses 20,000.00
Blue Sky fees and expenses (including legal 2,000.00
fees)
Printing Fees 5,000.00
-----------
Total $104,273.96
</TABLE>
The Company will bear all expenses shown above.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law and the Company's certificate of
incorporation and by-laws, each as amended, provide for indemnification of the
Company's directors and officers for liabilities and expenses that they may
incur in such capacities. In general, directors and officers are indemnified
with respect to actions taken in good faith in a manner reasonably believed to
be in, or not opposed to, the best interests of the Company, and with respect to
any criminal action or proceeding, actions that the indemnitee had no reasonable
cause to believe were unlawful. Reference is made to the Company's amended and
restated certificate of incorporation filed as Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (No. 33-79330) and the Company's amended and
restated by-laws filed as Exhibit 3.2 to the Company's Registration Statement on
Form S-1 (No. 33-79330).
The Company maintains director and officers liability insurance for the
benefit of its directors and officers.
ITEM 16. EXHIBITS.
2.1 Agreement and Plan of Merger and Reorganization dated as of
January 2, 1997 by and among the Company, Camel Acquisition
Corporation and Sahara Networks, Inc. (filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K dated February 4, 1997 and
incorporated herein by reference)
4.1 Amended and Restated Certificate of Incorporation of the Company
(filed as Exhibit 3.1 to the Company's Registration Statement on
Form S-1 (No. 33-79330) and incorporated herein by reference)
4.2 Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company (filed as Exhibit 4.2 to the
Company's Registration Statement on Form S-8 (File No. 333-06417)
and incorporated herein by reference)
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ernst & Young L.L.P.
II-1
<PAGE> 18
23.3 Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit
5.1)
24.1 Power of Attorney (included as part of the signature page to this
Registration Statement)
ITEM 17. UNDERTAKINGS.
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;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this 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 this 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 and 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 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(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 this Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, 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.
The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where appropriate, each filing of an employee benefit plan's
annual report pursuant to 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such
II-2
<PAGE> 19
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 of 1933 and will be governed by the
final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, 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 this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, 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> 20
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 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 Westford, Massachusetts on February 4, 1997.
CASCADE COMMUNICATIONS CORP.
By: /s/ Daniel E. Smith
-------------------------------
Daniel E. Smith,
President and Chief Executive Officer
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Cascade Communications Corp.,
hereby severally constitute and appoint Daniel E. Smith and Paul E. Blondin, and
each of them singly, our true and lawful attorneys, with full power to them and
each of them singly, to sign for us in our names in the capacities indicated
below, all pre-effective and post-effective amendments to this registration
statement, and generally do all things in our names and on our behalf in such
capacities to enable Cascade Communications Corp. to comply with the provisions
of the Securities Act of 1933 and all requirements of the Securities and
Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature Title(s) Date
- --------- -------- ----
Executive Vice President of
- -------------------------- Business Development and
Gururaj Deshpande Chairperson of the Board
/s/ Daniel E. Smith President, Chief Executive February 4, 1997
- -------------------------- Officer and Director (Principal
Daniel E. Smith Executive Officer)
/s/ Victoria A. Brown Director February 4, 1997
- --------------------------
Victoria A. Brown
/s/ Paul E. Blondin Vice President of Finance and February 4, 1997
- -------------------------- Administration, Chief Financial
Paul E. Blondin Officer, Treasurer and Secretary
(Principal Financial and Accounting
Officer)
II-4
<PAGE> 21
/s/ Richard M. Burnes, Jr. Director February 4, 1997
- --------------------------
Richard M. Burnes, Jr.
/s/ Paul J. Ferri Director February 4, 1997
- --------------------------
Paul J. Ferri
/s/ Bruns H. Grayson Director February 4, 1997
- --------------------------
Bruns H. Grayson
/s/ Steven C. Walske Director February 4, 1997
- --------------------------
Steven C. Walske
II-5
<PAGE> 22
EXHIBIT INDEX
Exhibit No. Description of Exhibit
----------- ----------------------
2.1 Agreement and Plan of Merger and Reorganization dated as of
January 2, 1997 by and among the Company, Camel Acquisition
Corporation and Sahara Networks, Inc. (filed as Exhibit 2.1
to the Company's Current Report on Form 8-K dated February 4,
1997 and incorporated herein by reference)
4.1 Amended and Restated Certificate of Incorporation of the
Company (filed as Exhibit 3.1 to the Company's Registration
Statement on Form S-1 (No. 33-79330) and incorporated
herein by reference)
4.2 Certificate of Amendment to the Amended and Restated
Certificate of Incorporation of the Company (filed as
Exhibit 4.2 to the Company's Registration Statement on Form
S-8 (File No. 333-06417) and incorporated herein by
reference)
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ernst & Young LLP
23.3 Consent of Testa, Hurwitz & Thibeault, LLP (included in
Exhibit 5.1)
24.1 Power of Attorney (included as part of the signature page
to this Registration Statement)
II-6
<PAGE> 1
EXHIBIT 5.1
February 3, 1997
Cascade Communications Corp.
5 Carlisle Road
Westford, Massachusetts 01886-3601
Re: S-3 Registration Statement
--------------------------
Ladies and Gentlemen:
We are counsel to Cascade Communications Corp., a Delaware corporation
(the "Company"), and have represented the Company in connection with the
preparation and filing of the Company's Form S-3 Registration Statement (the
"Registration Statement"), covering the sale to the public of up to 3,409,196
shares of the Company's Common Stock, $.001 par value per share (the "Shares"),
being sold by certain stockholders of the Company.
We have reviewed the corporate proceedings taken by the Board of Directors
of the Company with respect to the authorization and issuance of the Shares. We
have also examined and relied upon originals or copies, certified or otherwise
authenticated to our satisfaction, of all corporate records, documents,
agreements or other instruments of the Company and have made all investigations
of law and have discussed with the Company's officers all questions of fact that
we have deemed necessary or appropriate.
Based upon and subject to the foregoing, we are of the opinion that the
Shares are legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm in the Prospectus
contained in the Registration Statement under the caption "Legal Matters."
Very truly yours,
/s/ Testa, Hurwitz & Thibeault, LLP
-----------------------------------
TESTA, HURWITZ & THIBEAULT, LLP
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement of Cascade Communications Corp. on Form S-3 of our reports dated
February 1, 1996, on our audits of the consolidated financial statements and
financial statement schedule of Cascade Communications Corp. as of December 31,
1995 and 1994, and for the three years ended December 31, 1995, which reports
are included in the Company's 1995 Annual Report on Form 10-K. We also consent
to the reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 4, 1997
<PAGE> 1
Exhibit 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated January 5, 1996, except for Note 8 as to which the date
is October 8, 1996, and Note 9 as to which the date is January 2, 1997, with
respect to the financial statements of Sahara Networks, Inc. incorporated by
reference in the Registration Statement (Form S-3) and related Prospectus of
Cascade Communications Corp. for the registration of 3,409,196 shares of its
common stock.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Hartford, Connecticut
February 3, 1997
