<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 1997
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
________________
FORE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 25-1628117
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 FORE DRIVE
WARRENDALE, PENNSYLVANIA 15086-7502
(412) 742-4444
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
________________
ERIC C. COOPER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
FORE SYSTEMS, INC.
1000 FORE DRIVE
WARRENDALE, PENNSYLVANIA 15086-7502
(412) 742-4444
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
CHRISTOPHER H. GEBHARDT
CORPORATE COUNSEL
FORE SYSTEMS, INC.
1000 FORE DRIVE
WARRENDALE, PENNSYLVANIA 15086-7502
(412) 742-7658
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time 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, 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. [ ]
________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1) PER SHARE (1) PRICE (1) REGISTRATION FEE
==============================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share 3,940,728 shares $13.94 $54,933,749 $16,647
==============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee;
computed in accordance with Rule 457(c) on the basis of the average of
the high and low sales prices for the Common Stock on April 18, 1997 as
reported on the Nasdaq National Market
________________
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
SUBJECT TO COMPLETION, DATED APRIL 21, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
FORE SYSTEMS, INC.
3,940,728 SHARES
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
_______________________
The common stock, par value $.01 per share ("Common Stock"), of FORE
Systems, Inc. (the "Company") is quoted on the Nasdaq National Market. The last
reported sale price of the Common Stock on the Nasdaq National Market on April
18, 1997 was $13 5/8 per share.
_______________________
SEE "RISK FACTORS" FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE COMMON STOCK.
_______________________
This Prospectus relates to the offering of an aggregate of 3,940,728
shares of Common Stock (the "Shares"), of which 253,136 shares are held of
record by Bing Yang, 395,628 shares are held of record by Gregor N. Ferguson,
203,560 shares are held of record by Peter J. Nesbeda, 41,827 shares are held of
record by Jeffrey P. McCarthy, 33,462 shares are held of record by Raymond W.
DeZenzo, Jr., 30,673 shares are held of record by Caralyn A. Brown, 101,780
shares are held of record by David E. Schantz, 1,249,155 shares are held of
record by Matrix Partners IV, L.P. ("Matrix Partners IV"), 1,022,700 shares are
held of record by North Bridge Venture Partners, L.P. ("North Bridge"), 65,745
shares are held of record by Matrix IV Entrepreneurs Fund, L.P. ("Matrix IV
Entrepreneurs"), 29,220 shares are held of record by Anthony J. Medaglia, Jr.,
29,220 shares are held of record by Gary Bowen and an aggregate of 484,622
shares are held of record by Christopher M. Aldrich, Salvatore I. Anfuso, Derek
Sen-Wen Chen, Ann M. Correa, Gregory A. Heidelberger, Dave A. Kopp, Diana S. Ng,
Catherine A. Presti, Ronald F. Presti, Britt A. Ritzinger, Christopher Roche,
Cheryl B. Scattaglia, Steve H. Sherry, Brian M. Sullivan, San Qi Li, Rock
Ventures, LLC, Steve Tabaska, Alan Taffel, Telechoice, Inc., Eric MacDonald,
David Sung and Marden Marshall. Bing Yang, Gregor N. Ferguson, Peter J. Nesbeda,
Jeffrey P. McCarthy, Raymond W. DeZenzo, Jr., Caralyn A. Brown, David E.
Schantz, Matrix Partners IV, North Bridge, Matrix IV Entrepreneurs, Anthony J.
Medaglia, Jr., Gary Bowen, Christopher M. Aldrich, Salvatore I. Anfuso, Derek
Sen-Wen Chen, Ann M. Correa, Gregory A. Heidelberger, Dave A. Kopp, Diana S. Ng,
Catherine A. Presti, Ronald F. Presti, Britt A. Ritzinger, Christopher Roche,
Cheryl B. Scattaglia, Steve H. Sherry, Brian M. Sullivan, San Qi Li, Rock
Ventures, LLC, Steve Tabaska, Alan Taffel, Telechoice, Inc., Eric MacDonald,
David Sung and Marden Marshall are referred to herein collectively as the
"Selling Stockholders."
The purpose of this Prospectus is to permit the Selling Stockholders
and any persons to whom such Selling Stockholders may assign their registration
rights pursuant to the Registration Rights Agreement discussed below, if they
desire, to dispose of some or all of the Shares at such times as they choose.
Whether such sales will be made and the timing and amount of any sale is within
the sole discretion of each Selling Stockholder. The Shares offered hereby may
be sold by the Selling Stockholders in open market transactions, privately
negotiated transactions or a combination of such methods of sale. Such sales may
be made in the open market, or otherwise at prices and at terms then prevailing
or at prices related to the then-current market price or in negotiated
transactions. See "Plan of Distribution."
<PAGE> 3
The 3,940,728 Shares offered hereby were acquired by the Selling
Stockholders in connection with the merger, effective December 23, 1996, of
Alpha Acquisition Corporation ("Alpha"), a wholly-owned subsidiary of the
Company, with and into Cadia Networks, Inc. ("Cadia").
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 April ___, 1997.
<PAGE> 4
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 can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at 7 World Trade Center, Suite 1300, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition,
reports, proxy statements, registration statements and certain other filings
made with the Commission through its Electronic Data Gathering, Analysis and
Retrieval ("EDGAR") system are publicly available through the Commission's site
on the Internet's World Wide Web, located at http://www.sec.gov. The
registration statement of which this Prospectus forms a part, including all
exhibits thereto and amendments thereof, has been filed with the Commission
through EDGAR.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the offering made hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain portions of which are omitted in accordance with the rules and
regulations of the Commission. Statements contained in this Prospectus as to the
contents of any agreement or other document are summaries which are not
necessarily complete and in each instance reference is made to the copy of such
agreement or other document filed as an exhibit to the Registration Statement,
each such statement herein being qualified in all respects by such reference.
Such additional information may be obtained from the Commission's principal
office in Washington, D.C. as set forth above. For further information,
reference is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1996, the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1996, the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1996, the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended December 31, 1996, the Company's Current
Report on Form 8-K, filed with the Commission on April 21, 1997, the Company's
Current Report on Form 8-K, filed with the Commission on January 7, 1997, the
Company's Report on Form 10-C dated June 13, 1996 and the description of the
Common Stock contained in the Company's Registration Statement on Form 8-A,
dated May 13, 1994, under the Exchange Act are hereby incorporated by reference
into this Prospectus. All reports and other documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date hereof and prior to the termination of the offering described herein
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of the filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in any 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 of such person,
a copy (without certain exhibits) of any or all documents incorporated by
reference into this Prospectus. Requests for such copies should be directed to
Investor Relations, FORE Systems, Inc., 1000 FORE Drive, Warrendale,
Pennsylvania 15086-7502, telephone (412) 742-4444.
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RISK FACTORS
Prospective investors should consider carefully the following factors,
in addition to the other information contained in this Prospectus or
incorporated herein by reference, in evaluating an investment in the shares of
Common Stock offered hereby.
The following risk factors, in addition to the risks described
elsewhere in the reports and other filings incorporated herein by reference, may
cause actual results to differ materially from those in any forward-looking
statements contained herein, under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1996,
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1996,
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1996 and
Annual Report on Form 10-K for the fiscal year ended March 31, 1996, as well as
under the caption "Business - Strategy" in such Form 10-K and other such
statements contained in the reports and other filings incorporated herein by
reference or which have otherwise been made or may be made in the future by the
Company or its representatives:
SUBSTANTIAL DEPENDENCE ON ATM; EARLY STAGE OF MARKET DEVELOPMENT. Asynchronous
Transfer Mode ("ATM") is an industry standard for high-speed local-area and
wide-area networking. Although many network equipment suppliers have introduced
or announced plans to introduce ATM-based products and several public carriers
have implemented or announced plans to implement ATM services, the ATM market is
still emerging and only a limited number of users have installed ATM networks.
Sales of ATM networking products and related services are expected to continue
to account for a substantial portion of the Company's revenue for the
foreseeable future. The Company's business strategy is based on the belief that
ATM will be the technology underlying switched enterprise-wide networks as well
as the interactive broadband architecture of future network environments.
Accordingly, the Company's business opportunities and results of operations will
be dependent on continued growth and market acceptance of ATM technology and in
the ability of the Company to offer products that provide a smooth and seamless
migration path from existing networking technologies to ATM. In the event that
networking products based on ATM fail to achieve broad commercial acceptance,
the Company would be materially adversely affected.
DECLINE IN GROWTH RATE. Although the Company and the networking industry in
which the Company competes have historically experienced increasing sales on an
annual basis, the rate of growth in revenue of the networking industry and the
Company appears to have slowed. On April 1, 1997, the Company announced that,
based on a preliminary analysis, revenue for the fourth quarter of fiscal 1997
will be between $100 million and $103 million or an increase of approximately
35% over the previous year's fourth quarter revenue of $75.3 million. In the
fourth quarter of fiscal 1996, revenue had increased by approximately 100% to
$75.3 million, as compared with $37.7 million in the fourth quarter of the
previous year. The Company's rate of growth in revenue in the fourth quarter of
its 1997 fiscal year was adversely affected by several factors, including
increased competition in the switched networking segment of the networking
industry, longer sales cycles for the larger deals for which the Company
competes and slower sales growth in international markets. Due to these and
other factors, the Company expects that, in the future, its revenue may grow at
a slower rate than was experienced in previous periods.
COMPETITION. The networking industry is intensely competitive. Many networking
companies, including 3Com Corporation, Bay Networks, Inc., Cabletron Systems,
Inc., Cisco Systems, Inc. and Newbridge Networks Corporation, and certain
computer companies, including Digital Equipment Corporation, International
Business Machines Corporation and Sun Microsystems, Inc., sell, or have
announced their intention to develop, networking products that are, or will be,
competitive with the Company's products. In addition, other companies, such as
central-office equipment vendors, long-distance carriers and cable television
operators, may seek to apply their communications expertise to the markets
served by the Company. Many of these current and prospective competitors have
greater name recognition, a larger installed base of networking products, more
extensive engineering, manufacturing, marketing and distribution capabilities
and greater financial, technological and personnel resources than does the
Company.
3
<PAGE> 6
The Company expects price competition to persist in the networking industry. The
Company has lowered prices on a regular basis and added new products and
features without increasing prices. There can be no assurance that the Company
will be able to compete in such a price environment. If such pricing pressures
are not mitigated by cost reduction or changes in product mix, the Company's
business, results of operations and financial condition could be materially
adversely affected.
INDUSTRY CONSOLIDATION. The networking industry is currently undergoing a period
of consolidation in which companies, including some of the Company's major
competitors, are participating in business combinations and acquisitions thereby
creating companies with larger market shares, customer bases, sales forces,
product offerings and technology and marketing expertise. There can be no
assurance that the Company will be able to compete successfully in such an
environment.
MANAGEMENT OF GROWTH. The Company's growth, both in sales and in the number of
its employees, has placed and could continue to place a significant strain on
its resources. Certain of the Company's senior management and other key
employees have not had previous experience in managing a large company. The
integration of ALANTEC Corporation, which was acquired by the Company in
February 1996, in addition to the integration of three smaller companies,
acquired during the 1997 fiscal year, has required, and will continue for the
foreseeable future to require, substantial attention from senior management and
key employees of the Company. In addition, the Company may in the future acquire
additional businesses, products or technologies. There can be no assurance that
the Company will be able to manage its expansion or integrate the operations of
any businesses, products or technologies it has acquired or may in the future
acquire; the failure to do so could materially adversely affect the Company.
EVOLVING INDUSTRY STANDARDS AND RAPID TECHNOLOGICAL DEVELOPMENT. The markets for
the Company's products are characterized by evolving industry standards and
rapid technological development. The Company's success will depend, in part,
upon its ability to influence the development of industry standards, to maintain
its technological leadership, to enhance and expand its existing product
offerings and to develop in a timely manner new products which achieve market
acceptance. The Company believes that its ability to compete successfully is
also dependent upon the continued compatibility and interoperability of its
products with products and architectures offered by various vendors and on the
timely development of industry standards. There can be no assurance that the
Company will be able effectively to address the compatibility and
interoperability issues raised by technological changes or that new industry
standards will be developed in a timely manner. The Company would be materially
adversely affected if it were to incur significant delays or be unsuccessful in
developing new products or enhancements, if any such products or enhancements
did not gain market acceptance or if a delay in the creation of industry
standards resulted in customers deciding not to deploy ATM in their networks or
to delay such deployment. In addition, there can be no assurance that products
or technologies developed by others will not render the Company's products
noncompetitive or obsolete.
INTELLECTUAL PROPERTY. While the Company believes that its success is ultimately
dependent upon its ability to innovate and to enhance its presence in the
networking industry, its capacity to compete successfully in that industry
depends, in part, upon its ability to protect proprietary technology contained
in its products. The Company currently relies upon a combination of patent,
trade secret, copyright and trademark laws and contractual restrictions to
establish and protect proprietary rights in its products. The Company also
enters into confidentiality and invention assignment agreements with its
employees and enters into non-disclosure agreements with its suppliers,
distributors and appropriate customers so as to limit access to and disclosure
of its proprietary information. There can be no assurance that these statutory
and contractual arrangements will be sufficient to deter misappropriation of the
Company's proprietary technologies or independent third-party development of
similar technologies. The development of alternative technologies by third
parties could adversely affect the competitiveness of the Company's products.
Further, the laws of some countries do not provide the same degree of protection
of the Company's proprietary information as do the laws of the United States.
Finally, the Company's adherence to industry-wide technical standards and
specifications may limit the Company's opportunities to provide proprietary
product features capable of protection.
4
<PAGE> 7
The Company, like other companies in the networking industry, is also subject to
the risk of litigation alleging infringement of third party intellectual
property rights. There can be no assurance that third parties will not assert
infringement claims against the Company in the future with respect to current or
future products. Any such claims could require the Company to expend significant
sums in litigation, pay damages, develop non-infringing technology or acquire
licenses to the technology which is the subject of asserted infringement.
DEPENDENCE ON KEY PERSONNEL. The Company's success to date has been
significantly dependent on the contributions of its founders, Eric C. Cooper,
Onat Menzilcioglu, Francois J. Bitz and Robert D. Sansom, and the loss of the
services of one or more of them could have a material adverse effect on the
Company. The Company's success also depends, to a significant extent, upon a
number of other key employees. The loss of the services of one or more of these
key employees also could have a material adverse effect on the Company. The
Company believes that its future success will depend not merely on retaining its
key personnel, but also upon its ability to attract and retain additional
highly-skilled technical, managerial, manufacturing, sales and marketing
personnel. Competition for such personnel is intense. There can be no assurance
that the Company will be able to anticipate accurately, or to obtain, the
personnel that it may require in the future. The failure to obtain needed
personnel, when and as needed, could have a material adverse effect on the
Company.
DEPENDENCE ON SUPPLIERS. All of the materials used in the Company's products are
purchased under contracts and purchase orders with third parties. While the
Company believes that many of the materials used in the production of its
products are generally readily available from a variety of sources, certain
components are available from one or a limited number of suppliers.
The lead times for delivery of certain of these components can be at least
twelve weeks. If the Company fails to forecast its requirements accurately for
such long lead-time components, then it may experience shortages which could
result in product shipment delays which would adversely affect the Company.
DEPENDENCE ON CUSTOMERS. Revenue from United States government agencies
represented approximately 7%, 7% and 10% of the Company's revenue on a
consolidated basis for the years ended March 31, 1996, 1995 and 1994,
respectively. These United States government customers include more than twenty
different agencies, each of which makes its own procurement decisions. These
government customers may from time to time reduce their budgets and expenditures
or cancel orders. In addition, current Congressional initiatives to balance the
federal budget could curtail spending of government agencies in a manner which
may lead such customers to reduce their expenditures for the Company's products.
Reductions in sales to current customers, if not offset by sales to new or
existing customers, could have a material adverse effect on the Company.
INTERNATIONAL SALES, REGULATORY STANDARDS AND CURRENCY EXCHANGE. International
sales accounted for approximately 39% of the Company's revenue on a consolidated
basis for the year ended March 31, 1996 and approximately 46% of the Company's
revenue on a consolidated basis for the quarter ended December 31, 1996. The
Company expects that international sales will continue to be a significant
portion of its business as it seeks to expand its international presence.
However, in the fourth quarter of fiscal 1997, the Company experienced slower
sales in international markets and there can be no assurance that the Company's
revenue from international sales will continue to constitute a significant
portion of its business; a decline in international sales could have a material
adverse effect on the Company. In addition, while the Company's current products
are designed to meet relevant regulatory requirements of foreign markets in
which they are sold, any inability to obtain any required foreign regulatory
approvals on a timely basis could have a material adverse effect on the Company.
Additionally, the Company's international business may be adversely affected by
changes in demand resulting from fluctuations in currency exchange rates and
local purchasing practices, including seasonal fluctuations in demand and slower
payment of invoices, as well as by risks such as increases in duty rates,
difficulties in distribution and constraints upon international trade.
5
<PAGE> 8
EFFECT OF ECONOMIC AND MARKET CONDITIONS. Sales of networking products
fluctuate, from time to time, based on numerous factors, including customers'
capital spending levels and general economic conditions. Future declines in
networking product sales, as a result of general economic conditions or for any
other reason, could have a material adverse effect on the Company.
LIMITED OPERATING HISTORY; POTENTIAL FLUCTUATIONS IN OPERATING RESULTS. The
Company was founded in April 1990 and first shipped products in November 1991.
Although the Company has historically experienced increasing sales, the Company
may experience fluctuations in operating results in the future, both on an
annual and a quarterly basis, caused by various factors, including general
economic conditions, specific economic conditions in the computer networking
industry, the size and timing of customer orders, the pattern and seasonality of
customer purchasing cycles, the introduction of new technologies and products by
the Company or its competitors, the mix of products sold and the mix of product
channels through which products are sold. In addition, as a strategic response
to a changing competitive environment, the Company may elect, from time to time,
to make certain pricing, product or marketing decisions, and any such decisions
could have a material adverse effect on its periodic results of operations.
POTENTIAL VOLATILITY OF STOCK PRICE. The market price of the Company's Common
Stock has been and may continue to be volatile. Factors such as fluctuations in
the Company's operating results, announcements of technological innovations or
new products by the Company or its competitors, developments with respect to
patents or proprietary rights, changes in financial estimates by, or
expectations or recommendations of, securities analysts, general market
conditions and sales of substantial amounts of the Company's Common Stock in the
public market, or the prospect of such sales, may have a significant effect on
the market price of its Common Stock. Stock price fluctuations could affect the
Company's operations by making it more difficult to attract and retain qualified
personnel or complete business acquisitions in the future.
ANTITAKEOVER EFFECT OF CERTAIN CHARTER, BY-LAW AND OTHER PROVISIONS. Certain
provisions of the Company's Amended and Restated Certificate of Incorporation,
as amended, and Second Amended and Restated By-laws and Delaware law 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.
USE OF PROCEEDS
The Company will not derive any proceeds from the sale of any of the
Shares offered hereby.
THE SELLING STOCKHOLDERS
The 3,940,728 Shares offered hereby were acquired by the Selling
Stockholders in connection with the merger, effective December 23, 1996, of
Alpha, a wholly-owned subsidiary of the Company, with and into Cadia (the "Cadia
Transaction") pursuant to an Agreement and Plan of Merger, dated December 20,
1996, by and among the Company, Alpha, Cadia, Bing Yang, Gregor N. Ferguson,
Peter J. Nesbeda, Jeffrey P. McCarthy, Raymond W. DeZenzo, Jr., Caralyn A. Brown
and David E. Schantz (the "Cadia Agreement"). Prior to the Cadia Transaction,
Gregor N. Ferguson served as Cadia's President and as a director of Cadia, Bing
Yang served as Cadia's Treasurer and as a director of Cadia, Anthony J.
Medaglia, Jr. served as Cadia's Secretary, Peter J. Nesbeda served as Cadia's
Vice President of Operations, Raymond W. DeZenzo, Jr. served as Cadia's Vice
President and Chief Financial Officer and Jeffrey P. McCarthy served as Cadia's
Vice President of Business Development. The Selling Stockholders were the
holders of all the outstanding capital stock of Cadia and received in exchange
therefor an aggregate of 3,940,728 shares of Common Stock. As of April 21, 1997,
the number of shares of Common Stock held by each of Bing Yang, Gregor N.
Ferguson, Peter J. Nesbeda, Jeffrey P. McCarthy, Raymond W. DeZenzo, Jr.,
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<PAGE> 9
Caralyn A. Brown, David E. Schantz, Matrix Partners IV, North Bridge, Matrix IV
Entrepreneurs, Anthony J. Medaglia, Jr. and Gary Bowen was 253,136, 395,628,
203,560, 41,827, 33,462, 30,673, 101,780, 1,249,155, 1,022,700, 65,745, 29,220
and 29,220, respectively. As of April 21, 1997, Christopher M. Aldrich,
Salvatore I. Anfuso, Derek Sen-Wen Chen, Ann M. Correa, Gregory A. Heidelberger,
Dave A. Kopp, Diana S. Ng, Catherine A. Presti, Ronald F. Presti, Britt A.
Ritzinger, Christopher Roche, Cheryl B. Scattaglia, Steve H. Sherry, Brian M.
Sullivan, San Qi Li, Rock Ventures, LLC, Steve Tabaska, Alan Taffel, Telechoice,
Inc., Eric MacDonald, David Sung and Marden Marshall held, in the aggregate,
484,622 shares of Common Stock. Assuming that all shares offered by them hereby
are sold, the number of shares owned by each of the Selling Stockholders will be
zero.
Certain of the Shares owned by the Selling Stockholders are being held
in escrow for a one-year period following the closing of the Cadia Transaction
to secure indemnification obligations which may arise in connection therewith.
In addition, certain of the Shares owned by Selling Stockholders who are
employees of the Company are subject to repurchase by the Company under certain
circumstances. Accordingly, such Shares are not available for sale at this time.
Pursuant to the terms of a certain Registration Rights Agreement
entered into concurrently with the Cadia Agreement, the Company is obligated to
file at its expense a registration statement under the Securities Act and to use
best efforts, among other things, to maintain the effectiveness of such
registration statement for a period ending on December 20, 1998 (the second
anniversary of the closing of the Cadia Transaction) or such earlier date as the
Selling Stockholders are permitted by law to sell the Shares pursuant to Rule
144 under the Securities Act. The Registration Statement, of which this
Prospectus forms a part, constitutes such registration statement. In addition,
the Registration Rights Agreement grants each Selling Stockholder the right,
subject to certain conditions, to assign his, her or its registration rights
thereunder to certain permitted transferees including, in the case of Selling
Stockholders who are individuals, to members of their families and, in the case
of any Selling Stockholder which is a partnership, to any general or limited
partner of such partnership. In the event that any Selling Stockholder exercises
his, her or its rights to assign such stockholder's registration rights with
respect to any shares received by such stockholder in the Cadia Transaction to a
permitted transferee, such transferee will be deemed, with respect to such
shares, to be a Selling Stockholder for purposes of this Prospectus.
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities in connection with the offering made hereby, including
liabilities under the Securities Act.
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be sold by the Selling
Stockholders or their permitted transferees described above. 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. The Shares may be sold by one or more of the following
methods: (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; and (d) in privately negotiated transactions. 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.
7
<PAGE> 10
The Selling Stockholders and any other person participating in the sale
or distribution of the Shares will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including, without
limitation, Regulation M, in connection with transactions in the Shares.
The Company has agreed to supply the Selling Stockholders with such
number of copies of this Prospectus as they may reasonably request. The Selling
Stockholders will in all cases be responsible for complying with the prospectus
delivery requirements of Section 5(b)(2) of the Securities Act in connection
with the offering and sale of the Shares.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference to the Company's Annual Report on Form 10-K for the year ended
March 31, 1996 have been so incorporated in reliance upon the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
VALIDITY OF COMMON STOCK
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Morgan, Lewis & Bockius LLP, Pittsburgh,
Pennsylvania. As of April 16, 1997, Marlee S. Myers, a partner of Morgan, Lewis
& Bockius LLP, beneficially owned 4,000 shares of Common Stock and held options
to acquire up to 40,000 shares of Common Stock.
8
<PAGE> 11
===============================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY 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 ITS DATE.
3,940,728 SHARES
FORE SYSTEMS, INC.
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
_______________________
TABLE OF CONTENTS
Available Information.........................................................2
Incorporation of Certain Information
by Reference................................................................2
Risk Factors..................................................................3
Use of Proceeds...............................................................6
The Selling Stockholders......................................................6
Plan of Distribution..........................................................7
Experts.......................................................................8
Validity of Common Stock......................................................8
===============================================================================
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Following is an estimate of the expenses to be incurred in connection
with the offering and sale of the securities being registered, other than
selling commissions:
<TABLE>
<S> <C>
SEC registration fee.................................. $16,647.00
Legal fees and expenses............................... $ 1,900.00
Miscellaneous......................................... $ 500.00
----------
Total................................................. $19,047.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL")
permits a corporation, in its certificate of incorporation, to limit or
eliminate, subject to certain statutory limitations, the liability of directors
to the corporation or its stockholders for monetary damages for breaches of
fiduciary duty, except for liability (a) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (c) under Section 174 of the DGCL, or (d) for any transaction from which
the director derived an improper personal benefit. Article Eighth of the
Company's Amended and Restated Certificate of Incorporation provides that the
personal liability of directors of the Company is eliminated to the fullest
extent permitted by Section 102(b)(7) of the DGCL.
Under Section 145 of the DGCL, a corporation has the power to indemnify
directors and officers under certain prescribed circumstances and subject to
certain limitations against certain costs and expenses, including attorneys'
fees actually and reasonably incurred in connection with any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
any of them is a party by reason of his being a director or officer of the
corporation if it is determined that he acted in accordance with the applicable
standard of conduct set forth in such statutory provision. Article V of the
Company's Second Amended and Restated By-Laws provides that the Company will
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding by reason of
the fact that he is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another entity, against certain liabilities, costs
and expenses. Article V further permits the Company to maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another entity against any liability asserted
against such person and incurred by such person in any such capacity or arising
out of his status as such, whether or not the Company would have the power to
indemnify such person against such liability under the DGCL. The Company
maintains directors' and officers' liability insurance.
II-1
<PAGE> 13
ITEM 16. EXHIBITS.
The following exhibits are filed as part of this registration
statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ------------------------------------------------------------------------------------
<S> <C>
2.1 Agreement and Plan of Merger, dated as of December 20, 1996, by and among FORE
Systems, Inc., Alpha Acquisition Corporation, Cadia Networks, Inc., Bing Yang,
Gregor N. Ferguson, Peter J. Nesbeda, Jeffrey P. McCarthy, Raymond W. DeZenzo, Jr.,
Caralyn Brown and David E. Schantz (incorporated by reference to Exhibit 2.1 to the
Company's Form 8-K dated December 23, 1996).
5.1 Opinion of Morgan, Lewis & Bockius LLP as to the legality of the securities being
registered (filed herewith).
23.1 Consent of Morgan, Lewis & Bockius LLP (included in opinion filed as Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP (filed herewith).
24.1 Power of Attorney (included on signature page of this Registration Statement).
</TABLE>
ITEM 17. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes: (i) to file, during
any period in which offers or sales are being made, a post-effective amendment
to this Registration Statement 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; (ii) 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; and (iii) 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.
(2) 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
Exchange Act 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.
(3) 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 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 liability (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.
II-2
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Borough of Warrendale, Commonwealth of Pennsylvania, on April
21, 1997.
FORE Systems, Inc.
By: /s/ ERIC C. COOPER
------------------------------------
Eric C. Cooper
Chairman and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eric C. Cooper and Thomas J. Gill, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documentation in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ Eric C. Cooper Chairman and Chief Executive Officer April 21, 1997
- ------------------------- (Principal Executive Officer) and a Director
Eric C. Cooper
/s/ Onat Menzilcioglu President and a Director April 21, 1997
- -------------------------
Onat Menzilcioglu
/s/ Thomas J. Gill Chief Operating Officer, Vice President, April 21, 1997
- ------------------------- Finance, Chief Financial Officer and Treasurer
Thomas J. Gill (Principal Financial and Accounting Officer)
/s/ Francios J. Bitz Vice President, Engineering and a Director April 21, 1997
- -------------------------
Francois J. Bitz
/s/ Robert D. Sansom Vice President, Engineering, Secretary and a April 21, 1997
- ------------------------- Director
Robert D. Sansom
/s/ John C. Baker Director April 21, 1997
- -------------------------
John C. Baker
/s/ Daniel W. McGlaughlin Director April 21, 1997
- -------------------------
Daniel W. McGlaughlin
</TABLE>
II-3
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ --------------------------------------------------------------------
<S> <C>
2.1 Agreement and Plan of Merger, dated as of December 20, 1996, by and
among FORE Systems, Inc., Alpha Acquisition Corporation, Cadia
Networks, Inc., Bing Yang, Gregor N. Ferguson, Peter J. Nesbeda,
Jeffrey P. McCarthy, Raymond W. DeZenzo, Jr., Caralyn Brown and
David E. Schantz (incorporated by reference to Exhibit 2.1 to the
Company's Form 8-K dated December 23, 1996).
5.1 Opinion of Morgan, Lewis & Bockius LLP as to the legality of the
securities being registered.
23.1 Consent of Morgan, Lewis & Bockius LLP (included in opinion filed
as Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP.
24.1 Power of Attorney (included on signature page of this Registration
Statement).
</TABLE>
<PAGE> 1
Exhibit 5.1
Morgan, Lewis & Bockius LLP
One Oxford Centre
Thirty-Second Floor
Pittsburgh, PA 15219-6401
April 21, 1997
FORE Systems, Inc.
1000 FORE Drive
Warrendale, PA 15086
Re: Form S-3 Registration Statement
-------------------------------
Gentlemen:
We have acted as counsel to FORE Systems, Inc., a Delaware corporation (the
"Company"), in connection with the Registration Statement on Form S-3 (the
"Registration Statement"), filed by the Company with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended,
relating to the sale by certain selling stockholders identified in the
Registration Statement of an aggregate of up to 3,940,728 shares (the "Shares")
of the Company's Common Stock, par value $.01 per share.
We are familiar with the Registration Statement. We have reviewed the Company's
Amended and Restated Certificate of Incorporation, as amended, and Second
Amended and Restated Bylaws. We have also examined such other public and
corporate documents, certificates, instruments and corporate records, and such
questions of law as we have deemed necessary for purposes of expressing an
opinion on the matters hereinafter set forth. In all examinations of documents,
instruments and other papers, we have assumed the genuiness of all signatures on
original and certified documents and the conformity to original and certified
documents of all copies submitted to us as conformed, photostatic or other
copies.
On the basis of the foregoing, we are of the opinion that the Shares have been
validly issued and are fully paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement and to the use of our name in the Prospectus forming a part thereof
under the caption "Validity of Common Stock." In giving such consent, we do not
thereby admit that we are acting within the category of persons whose consent
is required under Section 7 of the Act or the rules and regulations of the
Securities and Exchange Commission thereunder.
Yours truly,
/s/ MORGAN, LEWIS & BOCKIUS LLP
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated April 25, 1996 appearing on page 25 of Fore Systems, Inc.'s Annual Report
on Form 10-K for the fiscal year ended March 31, 1996. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania
April 21, 1997
