UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
ILLUMINET HOLDINGS, INC.
------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01
-------------------------------------------------------
(Title of Class of Securities)
452334105
-------------------------------------------------------
(CUSIP Number)
JAMES M. ULAM, SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
VERISIGN, INC.
487 EAST MIDDLEFIELD ROAD
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 961-7500
-------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
with a copy to:
JEFFREY R. VETTER, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
(650) 494-0600
SEPTEMBER 23, 2001
--------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_]
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
------------------------------------------------
CUSIP No. 452334105
------------------------------------------------
--------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
VeriSign, Inc. I.R.S. ID No.: 94-3221585
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
Not Applicable (b) |_|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
00
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
Not Applicable
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER
OF 6,499,649 (1)
---------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED 846,856 (2)
---------------------------------------------------
BY 9 SOLE DISPOSITIVE POWER
EACH
REPORTING 6,499,649 (1)
---------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH
Not Applicable
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,346,505 (1)(2)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.7% (3)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
2
(1) In the event the Option (discussed in Item 3 and 4 below) becomes
exercisable and is exercised in full, VeriSign will have sole voting power
with respect to that number of shares equal to 19.9% of the number of
shares of the then outstanding shares of common stock of Illuminet, which
based upon the 32,661,554 shares of Illuminet common stock outstanding as
of September 20, 2001, as represented by Illuminet in the Merger Agreement
(defined in Item 4, below), currently equals 6,499,649 shares of Illuminet
common stock. Prior to the exercise of the Option, VeriSign is not entitled
to any rights as a stockholder of Illuminet as to the shares of Illuminet
common stock covered by the Option. The Option may only be exercised upon
the happening of certain events referred to in Item 4, none of which has
occurred as of the date hereof. VeriSign expressly disclaims beneficial
ownership of any of the shares of Illuminet common stock which are
purchasable by VeriSign upon exercise of the Option until such time as
VeriSign purchases any such shares of Illuminet common stock upon any such
exercise.
(2) Represents shares of Illuminet common stock subject to Voting Agreements
(defined in Item 4, below) between VeriSign and certain officers and
directors of Illuminet who are stockholders of Illuminet. Includes shares
issuable upon exercise of options exercisable within 60 days of September
23, 2001. VeriSign express disclaims beneficial ownership of any of the
shares of Illuminet common stock covered by the Voting Agreements. Based on
32,661,554 shares of Illuminet common stock outstanding as of September 20,
2001, as represented by Illuminet in the Merger Agreement, the shares
governed by the Voting Agreements would represent approximately 2.6% of the
shares of outstanding Illuminet common stock.
(3) Calculated assuming the issuance by the Issuer of 6,499,649 shares of
common stock of the Issuer upon exercise of the Option as described herein.
Item 1. Security and Issuer.
This statement on Schedule 13D (this "Statement") relates to the common
stock of Illuminet Holdings, Inc., a Delaware corporation (sometimes referred to
herein as "Issuer" or "Illuminet"). The principal executive offices of Illuminet
are located at 4501 Intelco Loop, Lacey, Washington, 98503.
Item 2. Identity and Background.
(a) The name of the corporation filing this statement is VeriSign, Inc., a
Delaware corporation ("VeriSign").
(b) The address of VeriSign's principal business is 487 East Middlefield
Road, Mountain View, California 94043.
(c) VeriSign provides Internet trust services and digital certificate
solutions for websites, enterprises and individuals to conduct trusted and
secure electronic commerce and communications over Internet protocol-based
networks. The address of VeriSign's principal business is 487 East Middlefield
Road, Mountain View, California 94043.
(d) Neither VeriSign, nor to VeriSign's knowledge, any person named on
Schedule A attached hereto is required to disclose legal proceedings pursuant to
Item 2(d).
(e) Neither VeriSign, nor to VeriSign's knowledge, any person named on
Schedule A attached hereto is required to disclose legal proceedings pursuant to
Item 2(e).
(f) To VeriSign's knowledge each of the individuals identified on Schedule
A attached hereto is a citizen of the United States.
Set forth on Schedule A is the name, and present principal occupation or
employment, and the name, principal business and address of any corporation or
other organization in which such employment is conducted, of each of the
directors and executive officers of VeriSign as of the date hereof.
Item 3. Source and Amount of Funds or Other Consideration.
3
As an inducement for VeriSign to enter into the Merger Agreement
described in Item 4 and in consideration thereof, certain stockholders of
Illuminet, entered into Voting Agreements (See Item 4). VeriSign did not pay
additional consideration to the Stockholders in connection with the execution
and delivery of the Voting Agreements. In addition, the Stockholders granted
VeriSign an irrevocable proxy.
As an inducement for VeriSign to enter into the Merger Agreement,
VeriSign and Illuminet entered into the Stock Option Agreement (the "Stock
Option Agreement"), under which Illuminet granted VeriSign an irrevocable option
to acquire, under specified conditions, up to the number of shares of Illuminet
common stock equal to 19.9% of the number of shares (the "Option Shares") of
Illuminet common stock issued and outstanding as of the date of exercise (the
"Option"), at an exercise price of $35.62 per share, subject to adjustment in
the event of changes in the capitalization of Illuminet. The amount of profit
that VeriSign may realize under the option is subject to a profit cap of
$65,000,000. The Option will become exercisable by VeriSign, in whole or in
part, at any time and from time to time, upon the occurrence of an "Exercise
Event" as specified in Section 2 of the Stock Option Agreement.
References to, and descriptions of, the Merger, the Merger
Agreement, the Voting Agreements and the Option Agreement as set forth herein
are qualified in their entirety by reference to the copies of the Merger
Agreement, the Voting Agreements and the Option Agreement respectively, included
as Exhibits 1, 2 and 3 respectively, to this Schedule 13D, and are incorporated
herein in their entirety where such references and descriptions appear.
Item 4. Purpose of Transaction.
(a) - (b) Pursuant to an Agreement and Plan of Merger dated as of
September 23, 2001 (the "Merger Agreement"), among VeriSign, Illinois
Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of
VeriSign ("Merger Sub"), and Illuminet, and subject to the conditions set forth
therein (including approval by stockholders of VeriSign and Illuminet), Merger
Sub will merge with and into Illuminet and Illuminet will become a wholly-owned
subsidiary of VeriSign (such events constituting the "Merger"). Once the Merger
is consummated, Merger Sub will cease to exist as a corporation and all of the
business, assets, liabilities and obligations of Merger Sub will be merged into
Illuminet with Illuminet remaining as the surviving corporation (the "Surviving
Corporation").
As a result of the Merger, each outstanding share of Illuminet
common stock, other than shares owned by Merger Sub, VeriSign or any
wholly-owned subsidiary of VeriSign, will be converted into the right to receive
0.93 shares (the "Exchange Ratio") of VeriSign common stock, and each
outstanding option to purchase Illuminet common stock will be exchanged for an
option to purchase shares of VeriSign common stock according to the Exchange
Ratio.
The Stockholders have, by executing Voting Agreements (the "Voting
Agreements"), agreed to vote such portion of the 846,856 shares of Illuminet
common stock (the "Shares") beneficially owned by them as described below.
Pursuant to the Voting Agreements, the Stockholders have agreed, at
every Illuminet stockholders meeting and on every action or approval by written
consent in lieu of such meeting, to cause the Shares to be voted (i) in favor of
the approval and adoption of the Merger Agreement and approval of the Merger and
(ii) against approval of any proposal made in opposition to or in competition
with consummation of the Merger, including, without limitation, any Acquisition
Proposal or Superior Offer (each as defined in the Merger Agreement) or any
action or agreement that would result in a breach in any respect of any
covenant, representation or warranty or any other obligation or agreement of
Illuminet under the Merger Agreement or of the Stockholders under the Voting
Agreements. The Stockholders may vote the Shares on all other matters. The
Voting Agreements terminate upon the earlier to occur of (i) such date and time
as the Merger shall become effective in accordance with the terms and provisions
of the Merger Agreement and (ii) such date and time as the Merger Agreement
shall have been terminated pursuant to Article VII thereof. Together with the
Voting Agreements, the Stockholders delivered irrevocable proxies to VeriSign
granting it the right to vote its shares of Illuminet common stock in the manner
similar to the obligations of the Stockholders under the Voting Agreements
described above.
4
The purpose of the transactions under the Voting Agreements is to
enable VeriSign and Illuminet to consummate the transactions contemplated under
the Merger Agreement.
As stated above, the Option was granted to VeriSign in connection
with the execution of the Merger Agreement. VeriSign entered into the Stock
Option Agreement in order to help ensure the closing of the Merger Agreement.
VeriSign currently anticipates that it will acquire all of the outstanding
common stock of the Issuer upon consummation of the Merger.
The Option shall become exercisable upon the occurrence of certain
events set forth in Section 2 of the Stock Option Agreement, none of which has
occurred as of the date hereof.
VeriSign has the right to cause the Issuer to prepare and file a
shelf registration statement under the Securities Act of 1933, as amended, in
order to permit the sale by VeriSign of Option Shares purchased under the
Option.
(c) Not applicable.
(d) It is anticipated that upon consummation of the Merger, the
directors of the Surviving Corporation shall be the current directors of Merger
Sub. It is anticipated that the initial officers of the Surviving Corporation
shall be the officers of Merger Sub, until their respective successors are duly
elected or appointed and qualified.
(e) Other than as a result of the Merger described in Item 3 above,
not applicable.
(f) Not applicable.
(g) Upon consummation of the Merger, the Certificate of
Incorporation of Illuminet shall be amended and restated in its entirety to be
identical to the Certificate of Incorporation of the Merger Sub except Article I
of the Certificate of Incorporation shall read: "The name of the corporation is
"Illuminet Holdings, Inc.", until thereafter amended. Upon consummation of the
Merger, the Bylaws of Illuminet shall be amended and restated in their entirety
to be identical to the Bylaws of Merger Sub until thereafter amended.
(h) - (i) If the Merger is consummated as planned, the Illuminet
common stock will be deregistered under the Act and delisted from The Nasdaq
National Market.
(j) Other than described above, VeriSign currently has no plan or
proposals which relate to, or may result in, any of the matters listed in Items
4(a) - (j) of Schedule 13D (although VeriSign reserves the right to develop such
plans).
References to, and descriptions of, the Merger Agreement , the Stock
Option Agreement and the Voting Agreements as set forth above in this Item 4 are
qualified in their entirety by reference to the copies of the Merger Agreement,
the Stock Option Agreement and the Voting Agreements, respectively, included as
Exhibits 1 and 2, respectively, to this Schedule 13D, and are incorporated in
this Item 4 in their entirety where such references and descriptions appear.
Item 5. Interest in Securities of the Issuer.
(a) - (b) As a result of the Voting Agreements and the issuance of
the Option, VeriSign may be deemed to be the beneficial owner of 7,346,505
shares of Illuminet common stock. Such Illuminet common stock constitutes
approximately 21.7% of the issued and outstanding shares of Illuminet common
stock based on the number of shares of Illuminet common stock outstanding as of
September 20, 2001 (as represented by Illuminet in the Merger Agreement
discussed in Items 3 and 4). If the Option becomes exercisable and if all of the
Option Shares were acquired, VeriSign would have sole voting and dispositive
power with respect to the Option Shares. Schedule B to this Statement sets forth
the name and number of
5
shares of Illuminet common stock beneficially owned by each Illuminet
stockholder who is subject to a Voting Agreement. VeriSign may be deemed to have
the shared power to vote the Shares under the Voting Agreements as described
above.
VeriSign (i) is not entitled to any rights as a stockholder of
Illuminet as to the Shares and (ii) disclaims any beneficial ownership of the
shares of Illuminet common stock which are covered by the Voting Agreements.
Nothing herein shall be deemed to be an admission by VeriSign as to
the beneficial ownership of any Shares, and, prior to exercise of the Option,
VeriSign disclaims beneficial ownership of all Option Shares.
To VeriSign's knowledge, no shares of Illuminet common stock are
beneficially owned by any of the persons named in Schedule A to this Statement.
(c) To the knowledge of VeriSign, no transactions in the class of
securities reported have been effected during the past sixty days by any person
named pursuant to Item 2.
(d) To the knowledge of VeriSign, no other person has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the securities of Illuminet.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understanding or Relationships With Respect
to Securities of the Issuer.
Other than the Merger Agreement and the exhibits thereto, including
the Voting Agreements, and the Stock Option Agreement, to the knowledge of
VeriSign, there are no contracts, arrangements, understandings or relationships
among the persons named in Item 2 and between such persons and any person with
respect to any securities of Illuminet, including but not limited to transfer or
voting of any of the securities, finder's fees, joint ventures, loan or option
arrangement, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
Item 7. Materials to be Filed as Exhibits.
The following documents are filed as exhibits:
1. Agreement and Plan of Merger, dated September 23, 2001 by and
among VeriSign, Merger Sub and Illuminet.
2. Form of Voting Agreement, dated September 23, 2001, between
VeriSign and certain stockholders of Illuminet.
3. Stock Option Agreement, dated September 23, 2001, between
VeriSign and Illuminet.
6
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: October 3, 2001
VERISIGN, INC.
By: /s/ James M. Ulam
-----------------------------------------
James M. Ulam
Senior Vice President,
General Counsel and Secretary
Schedule A
DIRECTORS AND EXECUTIVE OFFICERS OF VERISIGN, INC.
-------------------------------------------------
The following table sets forth the name, business address and
present principal occupation or employment of each director and executive
officer of VeriSign. Except as indicated below, the business address of each
such person is 487 East Middlefield Road, Mountain View, CA 94043.
BOARD OF DIRECTORS
------------------
Name and Business Address Present Principal Occupation
D. James Bidzos Vice Chairman of the Board of
c/o RSA Security Inc. Directors, RSA Security, Inc.
36 Crosby Drive
Bedford, MA 01730
Stratton D. Sclavos President and Chief Executive Officer
and Director, VeriSign, Inc.
William Chenevich, Vice Chairman of the Board,
First Star First Star Corporation
777 E. Wisconsin
Milwaukee, WI 53202
Kevin R. Compton General Partner,
Kleiner Perkins Caufield & Byers Kleiner Perkins Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
David J. Cowan General Partner,
Bessemer Venture Partners Bessemer Venture Partners
535 Middlefield Road
Menlo Park, CA 94025
Scott G. Kriens Chairman, President and Chief
Juniper Networks, Inc. Executive Officer Juniper Networks, Inc.
1194 N. Mathilda Avenue
Sunnyvale, CA 94089
Greg L. Reyes Chairman and Chief Executive Officer
Brocade Communications, Inc. Brocade Communications, Inc.
1745 Technology Drive
San Jose, CA 95110
Timothy Tomlinson Partner,
Tomlinson Zisko Morosoli & Maser LLP Tomlinson Zisko Morosoli & Maser LLP
200 Page Mill Road, 2nd Floor
Palo Alto, CA 94306
EXECUTIVE OFFICERS OF VERISIGN
------------------------------
Name Title
---- -----
Stratton D. Sclavos President and Chief Executive Officer
and Director
Dana L. Evan Executive Vice President of Finance
And Administration and Chief Financial
Officer
William P. Fasig Senior Vice President of Corporate
Marketing Services
Quentin P. Gallivan Executive Vice President of Worldwide
Sales And Services
Herbert R. Hribar Executive Vice President, General
Manager of VeriSign Global Registry
Services
Robert J. Korzeniewski Executive Vice President of Corporate
And Business Development
W.G. Champion Mitchell Executive Vice President and General
Manager, Mass Markets Division
Anil H. P. Pereira Senior Vice President and Group General
Manger, Enterprise and Service Provider
Division
James M. Ulam Senior Vice President, General Counsel
And Secretary
SCHEDULE B
Illuminet Stockholders Subject to Company Voting Agreements and Irrevocable
Proxies
Stockholder Shares Beneficially Owned
----------- -------------------------
Theodore Berns (1) 62,484
Jack Blumenstein (2) 2,175
Terry Kremian (3) 130,380
Richard Lumpkin (4) 450,117
David Nicol (5) 111,014
James Strand (6) 37,523
Greg Wilkinson (7) 53,163
(1) Includes 51,016 shares issuable under options exercisable within 60 days
after September 23, 2001.
(2) Includes 2,175 shares issuable under options exercisable within 60 days
after September 23, 2001.
(3) Includes 127,250 shares issuable under options exercisable within 60 days
after September 23, 2001.
(4) As a voting member of SKL Investment Group, LLC, Mr. Lumpkin may be deemed
the beneficial owner of 437,584 shares of Common Stock owned by SKL. The
figures in the table for Mr. Lumpkin also include 12,533 shares issuable
under options exercisable within 60 days after September 23, 2001.
(5) Includes 104,000 shares issuable under options exercisable within 60 days
after September 23, 2001.
(6) Includes 30,819 shares issuable under options exercisable within 60 days
after September 23, 2001.
(7) Includes 52,963 shares issuable under options exercisable within 60 days
after September 23, 2001.