SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 5,
1995
Xylogics, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-15487 04-2669596
(Commission File Number) (IRS Employer Identification No.)
53 Third Avenue, Burlington, Massachusetts 01803
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (617) 272-8140
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
On September 5, 1995, Xylogics, Inc. (the "Registrant") signed
a binding agreement with Bay Networks, Inc., a Delaware corporation
("Bay"), for the acquisition of the Registrant by Bay. The
Registrant also amended the Rights Agreement by and between the
Registrant and The First National Bank of Boston, N.A., as Rights
Agent, in connection with the signing of the binding agreement with
Bay. A copy of the amendment is attached as Exhibit 10.
For additional information regarding this event, see the Press
Release attached as Exhibit 99.
Item 7. Financial Statements and Exhibits.
(c) Exhibits. See Exhibit Index.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
XYLOGICS, INC.
(Registrant)
/s/ Maurice L. Castonguay
Maurice L. Castonguay
Vice President, Finance
September 8, 1995
Date
Exhibit Index
Exhibit Page No.
10 Amendment No. 1 to Rights Agreement dated
September 5, 1995 between Xylogics, Inc.
and The First National Bank of Boston
99 Press Release dated September 5, 1995
Announcing Acquisition by Bay Networks,
Inc.
Exhibit 10
AMENDMENT NO. 1
TO
RIGHTS AGREEMENT
This AMENDMENT NO. 1 TO RIGHTS AGREEMENT (the "Amendment") is
entered into as of the 5th day of September, 1995 between Xylogics,
Inc., a Delaware corporation (the "Company"), and The First
National Bank of Boston, a national banking association (the
"Rights Agent"). Capitalized terms not otherwise defined herein
shall have the meanings given them in the Rights Agreement (as
defined below).
RECITALS
WHEREAS, the Board of Directors has determined that it is in
the best interests of the Company to amend the Rights Agreement as
set forth herein immediately prior to and in connection with the
execution of (i) that certain Agreement and Plan of Merger dated as
of September 5, 1995, as the same may be amended from time to time
(the "Merger Agreement") among Bay Networks, Inc., a Delaware
corporation ("Bay Networks"), Branch Merger Co., Inc., a Delaware
corporation and a wholly-owned subsidiary of Bay Networks
("Branch"), and the Company (pursuant to which Merger Agreement,
among other things, Branch shall merge with and into the Company
(the "Merger")), and (ii) that certain Stock Option Agreement dated
as of September 5, 1995, as the same may be amended from time to
time (the "Option Agreement"), between Bay Networks and the Company
(pursuant to which Option Agreement, among other things, the
Company shall grant to Bay Networks an option (the "Option") to
purchase up to 345,000 shares of Common Stock of the Company).
WHEREAS, the Company has requested that the Rights Agreement
be amended in accordance with Section 27 of the Rights Agreement,
as set forth herein, and the Rights Agent is willing to amend the
Rights Agreement as set forth herein.
AGREEMENT
NOW, THEREFORE, the parties, intending to be legally bound,
hereby agree as follows:
1. Section 1 of the Rights Agreement is hereby amended to
add thereto a new Section 1(al), which shall read in its entirety
as follows:
"(al) "Permitted Offer" shall mean a tender or exchange
offer for all outstanding shares of Common Stock of the
Company, provided that (x) such offer constitutes a Superior
Proposal (as such term is defined in the Agreement and Plan of
Merger dated as of September 5, 1995, as the same may be
amended from time to time, among Bay Networks, Inc., a
Delaware corporation ("Bay Networks"), Branch Merger Co.,
Inc., a Delaware corporation and a wholly-owned subsidiary of
Bay Networks ("Branch"), and the Company (the "Merger
Agreement"), pursuant to which Merger Agreement, among other
things, Branch shall merge with and into the Company (the
"Merger")), (y) the Board of Directors of the Company
affirmatively recommends that the holders of Common Stock of
the Company accept such offer and (z) such offer is
consummated after the earlier of the Xylogics Stockholders'
Meeting (as defined in the Merger Agreement) or March 4,
1996."
2. Section 7(a) of the Rights Agreement is hereby amended to
read in its entirety as follows:
"(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii)
and Section 23(a) hereof) in whole or in part at any time
after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase
Price with respect to the total number of Units (or other
securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or
prior to the earlier of (i) the Final Expiration Date,
(ii) the time at which the Rights are redeemed as provided in
Section 23 hereof, (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof or (iv) immediately
prior to the Effective Time (as defined in the Merger
Agreement) (the earlier of (i), (ii), (iii) and (iv) being
herein referred to as the "Expiration Date")."
3. Section 11(a)(ii)(B) of the Rights Agreement is hereby
amended to read in its entirety as follows:
"(B) any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or
pursuant to the terms of any such plan), alone or together
with its Affiliates and Associates, shall, at any time after
the Rights Dividend Declaration Date, become the Beneficial
Owner of 25% or more of the shares of Common Stock then
outstanding, unless the event causing the 25% threshold to be
crossed (x) is a transaction set forth in Section 13(a)
hereof, (y) is a Permitted Offer, or (z) following the
termination of the Merger Agreement, is an acquisition of
shares of Common Stock pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock at
a price and on terms determined by at least a majority of the
Continuing Directors and a majority of the Independent
Directors, after receiving advice from one or more investment
banking firms, to be (a) at a price that is fair to
stockholders (taking into account all factors which the
Continuing Directors and Independent Directors deem relevant
including, without limitation, prices which could reasonably
be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and
(b) otherwise in the best interests of the Company and its
stockholders, or"
4. Section 35 of the Rights Agreement is hereby added as
follows:
"35. Bay Networks Transactions. Notwithstanding any
provision of this Rights Agreement to the contrary, no
Distribution Date, Stock Acquisition Date or Triggering Event
shall be deemed to have occurred, neither Bay Networks nor any
Affiliate or Associate of Bay Networks shall be deemed to have
become an Acquiring Person and no holder of Rights shall be
entitled to exercise such Rights under or be entitled to any
rights pursuant to Section 7(a), 11(a) or 13(a) of this Rights
Agreement by reason of (x) the approval, execution, delivery
or effectiveness of the Merger Agreement, (y) the approval,
execution, delivery or effectiveness of the Stock Option
Agreement (the "Option Agreement") between Bay Networks and
the Company dated as of September 5, 1995, as the same may be
amended from time to time (pursuant to which Option Agreement,
among other things, the Company shall grant to Bay Networks an
option (the "Option") to purchase up to 345,000 shares of
Common Stock of the Company) or (z) the consummation of the
transactions contemplated under the Merger Agreement or the
Option Agreement in accordance with the terms thereof
(including, without limitation, the consummation of the Merger
and the exercise of the Option), provided that if, after
September 5, 1995, Bay Networks or any of its Subsidiaries or
any of their respective directors becomes the Beneficial Owner
of any shares of Common Stock of the Company (other than by
reason of the approval, execution, delivery or effectiveness
of the Merger Agreement or the Option Agreement or the
consummation of any of the transactions contemplated thereby),
or if Bay Networks finances the purchase of Common Stock of
the Company by any Affiliate or Associate of Bay Networks, the
provisions of this Section 35 (other than this proviso) shall
not be applicable."
5. This Amendment shall be deemed effective as of
September 5, 1995 as if executed by both parties on such date.
Except as amended hereby, the Rights Agreement shall remain
unchanged and shall remain in full force and effect.
6. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed by their respective duly authorized representatives as
of the date first above written.
XYLOGICS
By: /s/ Bruce I. Sachs
Name: Bruce I. Sachs
Title: President and Chief
Executive Officer
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Katherine S. Anderson
Name: Katherine S. Anderson
Title: Administration Manager
Exhibit 99
FOR IMMEDIATE RELEASE Contact: Chris Carleton
Bay Networks, Inc.
508-436-3706
ccarleto@baynetworks.com
BAY NETWORKS TO ACQUIRE XYLOGICS
A LEADER IN ENTERPRISE REMOTE ACCESS
- Strategic Acquisition Addresses Expanding Market Requirements -
SANTA CLARA, Calif., September 6, 1995 -- Bay Networks
(Nasdaq: BNET) today announced that it has signed a binding
agreement to acquire Xylogics, Inc. (Nasdaq: XLGX), a publicly held
company headquartered in Burlington, Massachusetts. Xylogics is a
technology and market leader in enterprise remote access, offering
remote users and offices transparent corporate-wide access to
networking resources.
Under the terms of the agreement, Bay Networks will exchange
1.05 shares of its common stock for each outstanding share of
Xylogics' common stock. Based on the closing price of Bay
Networks' stock of $50.25 on September 5, 1995, the transaction is
valued at approximately $330 million.
Xylogics will become an independent operating unit of Bay
Networks and will continue to focus on the remote access market.
Existing Xylogics management will continue to manage Xylogics as a
Bay Networks' business unit. Xylogics' president and CEO, Bruce
Sachs, will become president and general manager of Xylogics
business unit and report directly to Bay Networks president and
CEO, Andy Ludwick.
This acquisition supports Bay Networks' view of extending the
backbone network beyond the branch office, bringing the enterprise
closer to remote users and customers. Xylogics' technology
leadership includes award-winning analog remote access and ISDN
routing products -- key to on-line access to corporate information
and services such as the Internet. Xylogics' unique focus on
remote access for the enterprise, such as universal client access
and channelized TI technology, is strategically a strong fit with
Bay Networks' leading LAN/WAN backbone solutions. Recognizing
these complementary strategies, Bay Networks and Xylogics started
an OEM relationship in 1993, and Xylogics' remote access server
technology is now shipping in Bay Networks 5000 Network Center
platform.
"Bay Networks is strongly positioned in the enterprise LAN and
WAN backbone market with solutions that reach from the network
center to the branch office," said Paul J. Severino, Bay Networks'
chairman. "Xylogics' award-winning Remote Annex remote access
servers and new Nautica line of ISDN products, combined with the
company's skills and technology in delivering highly scaleable
solutions, and a very complementary fit strategically with our core
enterprise business. This acquisition is fully supportive of our
objective to provide customers with communications way beyond the
enterprise."
Organizations are experiencing a major strategic shift from
departmental-only to enterprise-wide remote access, motivated in
part by the need to better manage and secure access to enterprise
applications. In addition, the business initiative to move
information closer to its customers has driven the need for
applications and network infrastructure that are remote access-
ready.
The rapid growth in the remote access market is a result of:
increased business mobility; the move to telecommuting; reduced
cost of ownership of both product and WAN services; widespread
adoption of remote access standards, such as PPP; and integrated
network operating system support, including Windows 95. According
to industry analyst IDC, the worldwide market for non-PC based
remote access servers is expected to grow from $345 million in 1994
to $1 billion by 1998. Xylogics' 1994 worldwide market share, by
ports shipped, is 21.2 percent, according to analyst In-Stat
Services.
"Our universal remote access strategy has been a key Xylogics
differentiator in addressing the expanding needs of our corporate
customers," said Bruce Sachs, Xylogics' president and CEO. "As a
division of Bay Networks, Xylogics will have the financial and
channel strength to more aggressively broaden our deployment of
network access products, technologies and services. In addition,
Bay Networks' complementary products and technology will further
our strategy of delivering enterprise-wide solutions. We are
excited about providing our shareholders the opportunity to
continue their ownership interest in the combined companies."
Xylogics acquired Scorpion Logic, a UK-based ISDN router
company, in April 1995. Xylogics is shipping the award-winning
Scorpion router family for mid-size corporate networks (both
leased-line and ISDN) today in Europe, and will commence shipment
in the U.S. in September 1995.
The Boards of Directors of both companies have approved the
merger agreement. The stock-for-stock merger is expected to be a
tax-free reorganization and accounted for as a pooling of
interests. The agreement is subject to approval by Xylogics'
stockholders and standard antitrust clearances. A registration
statement/proxy statement for this merger must be filed with the
SEC and consummation of the merger is currently anticipated to
occur in the fourth calendar quarter of 1995. As part of the
transaction, Xylogics has granted Bay Networks an option to
purchase a number of shares equal to approximately 6.3 percent of
Xylogics' outstanding shares, under certain circumstances.
Xylogics, headquartered in Burlington, Mass., with offices in
the UK, France, Germany, and the Far East, offers a complete line
of award-winning analog and ISDN remote access products that
provide remote users and offices transparent access to corporate
networking resources. In addition, Xylogics supplies network
access products to the leading hub vendors including Bay Networks,
as well as a number of other computer networking manufacturers.
Xylogics products are sold by 250+ resellers worldwide.
Bay Networks, Inc. is a leading worldwide supplier of a full
range of highly available, multiprotocol routers, intelligent hubs,
high-speed switches, and sophisticated network management products
for organizations building enterprise-wide information
internetworks. The company was established in October 1994 with a
merger of SynOptics Communications and Wellfleet Communications,
and now has combined revenues in excess of $1.3 billion for its
most recent year. With more than 1,000 resellers and over 1,200
direct sales and service personnel worldwide, Bay Networks markets
and supports its comprehensive product suite in 110 offices,
providing 7x24 global support. Bay Networks' World Wide Web
address is: http://www.baynetworks.com.