SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(AMENDMENT NO. __)
NETFLIX, INC.
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(Name of Issuer)
Common Stock, par value $0.001 per share
(Title of Class of Securities)
64110L106
(CUSIP Number)
Carla S. Newell
c/o Technology Crossover Ventures
528 Ramona Street
Palo Alto, California 94301
(650) 614-8200
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
COPY TO:
Eleanor Cornish, Esq.
C/o Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
610 Lincoln Street Waltham, MA 02451
(781) 795-3554
May 23, 2002
(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
statement because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [ ].
(Continued on following pages)
(1) Name of Reporting Person
TCV IV, L.P.
See item 2 for identification of the General Partner
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
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(4) Source of Funds
AF, OO
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(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
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(6) Citizenship or Place of Organization
DELAWARE
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(7) Sole Voting Power
Number of -6,501,008- SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With -6,501,008- SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
-6,501,008- SHARES OF COMMON STOCK (A)
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(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [X]
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(13) Percent of Class Represented by Amount in Row (11)
31.48%
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(14) Type of Reporting Person
PN
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---------------
(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 3,471,289 shares of Common Stock.
(1) Name of Reporting Person
TCV IV Strategic Partners, L.P.
See item 2 for identification of the General Partner
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
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(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 242,413 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 242,413 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
242,413 SHARES OF COMMON STOCK (A)
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(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [X]
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(13) Percent of Class Represented by Amount in Row (11)
1.17%
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(14) Type of Reporting Person
PN
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---------------
(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 129,439 shares of Common Stock.
(1) Name of Reporting Person
Technology Crossover Management IV, L.L.C.
See item 2 for identification of the Managing Members
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
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(4) Source of Funds
AF, OO
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(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 6,743,421 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 6,743,421 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,743,421 SHARES OF COMMON STOCK (A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
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(13) Percent of Class Represented by Amount in Row (11)
32.66%
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(14) Type of Reporting Person
OO
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---------------
(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 3,600,728 shares of Common Stock.
(1) Name of Reporting Person
Technology Crossover Ventures II, L.P.
See item 2 for identification of the General Partner
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
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(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 951,845 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 951,845 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
951,845 SHARES OF COMMON STOCK (A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [X]
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(13) Percent of Class Represented by Amount in Row (11)
4.61%
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(14) Type of Reporting Person
PN
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---------------
(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 435,790 shares of Common Stock.
(1) Name of Reporting Person
TCV II (Q) L.P.
See item 2 for identification of the General Partner
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
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(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
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(7) Sole Voting Power
Number of 731,792 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 731,792 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
731,792 SHARES OF COMMON STOCK (A)
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(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [X]
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(13) Percent of Class Represented by Amount in Row (11)
3.54%
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(14) Type of Reporting Person
PN
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---------------
(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 335,041 shares of Common Stock.
(1) Name of Reporting Person
TCV II, V.O.F.
See item 2 for identification of the Investment General Partner
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
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(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
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(6) Citizenship or Place of Organization
NETHERLANDS ANTILLES
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(7) Sole Voting Power
Number of 30,920 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 30,920 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
30,920 SHARES OF COMMON STOCK (A)
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(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [X]
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(13) Percent of Class Represented by Amount in Row (11)
LESS THAN 1%
---------------------------------------------------------------------
(14) Type of Reporting Person
PN
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(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 14,156 shares of Common Stock.
(1) Name of Reporting Person
TCV II STRATEGIC PARTNERS, L.P.
See item 2 for identification of the General Partner
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
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(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
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(7) Sole Voting Power
Number of 129,867 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 129,867 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
129,867 SHARES OF COMMON STOCK (A)
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(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [X]
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(13) Percent of Class Represented by Amount in Row (11)
LESS THAN 1%
---------------------------------------------------------------------
(14) Type of Reporting Person
PN
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---------------
(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 59,458 shares of Common Stock.
(1) Name of Reporting Person
Technology Crossover Ventures II, C.V.
See item 2 for identification of the Investment General Partner
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
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(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
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(6) Citizenship or Place of Organization
NETHERLANDS ANTILLES
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(7) Sole Voting Power
Number of 145,327 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 145,327 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
145,327 SHARES OF COMMON STOCK (A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [X]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
LESS THAN 1%
---------------------------------------------------------------------
(14) Type of Reporting Person
PN
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---------------
(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 66,536 shares of Common Stock.
(1) Name of Reporting Person
Technology Crossover Management II, L.L.C.
See item 2 for identification of the Managing Members
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
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(7) Sole Voting Power
Number of 1,989,751 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 1,989,751 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,989,751 SHARES OF COMMON STOCK (A)
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(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
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(13) Percent of Class Represented by Amount in Row (11)
9.64%
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(14) Type of Reporting Person
OO
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(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 910,981 shares of Common Stock.
(1) Name of Reporting Person
TCV Franchise Fund, L.P.
See item 2 for identification of the General Partner
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 174,965 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 174,965 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
174,965 SHARES OF COMMON STOCK (A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [X]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
LESS THAN 1%
---------------------------------------------------------------------
(14) Type of Reporting Person
PN
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---------------
(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 93,425 shares of Common Stock.
(1) Name of Reporting Person
TCVF Management, L.L.C.
See item 2 for identification of the Mananging Members
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 174,965 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 174,965 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
174,965 SHARES OF COMMON STOCK (A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
LESS THAN 1%
---------------------------------------------------------------------
(14) Type of Reporting Person
OO
---------------------------------------------------------------------
---------------
(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 93,425 shares of Common Stock.
(1) Name of Reporting Person
JAY C. HOAG
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
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(3) SEC Use Only
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(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
UNITED STATES CITIZEN
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(7) Sole Voting Power
Number of -0- SHARES OF COMMON STOCK
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by 8,908,137 SHARES OF COMMON STOCK (A)
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 8,908,137 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
8,908,137 SHARES OF COMMON STOCK (A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
43.14%
---------------------------------------------------------------------
(14) Type of Reporting Person
IN
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---------------
(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 4,605,134 shares of Common Stock.
(1) Name of Reporting Person
RICHARD H. KIMBALL
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
UNITED STATES CITIZEN
---------------------------------------------------------------------
(7) Sole Voting Power
Number of -0- SHARES OF COMMON STOCK
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by 8,908,137 SHARES OF COMMON STOCK (A)
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 8,908,137 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
8,908,137 SHARES OF COMMON STOCK (A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
43.14%
---------------------------------------------------------------------
(14) Type of Reporting Person
IN
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(A) Please see Item 5. Includes warrants which can be immediately exercised for
a total of 4,605,134 shares of Common Stock.
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of common stock, par value $0.001 per share
(the "Common Stock"), of Netflix, Inc., a Delaware corporation ("Netflix" or the
"Company"). The Company's principal executive offices are located at 970
University Ave., Los Gatos, CA 95032.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c), (f). This statement is being filed by (1) TCV IV, L.P., a Delaware
limited partnership ("TCV IV"), (2) TCV IV Strategic Partners, L.P., a Delaware
limited partnership ("Strategic Partners IV"), (3) Technology Crossover
Management IV, L.L.C., a Delaware limited liability company ("Management IV"),
(4) TCV II, V.O.F., a Netherlands Antilles general partnership ("TCV II,
V.O.F."), (5) Technology Crossover Ventures II, L.P., a Delaware limited
partnership ("TCV II, L.P."), (6) TCV II (Q), L.P., a Delaware limited
partnership ("TCV II (Q)"), (7) TCV II Strategic Partners, L.P., a Delaware
limited partnership ("Strategic Partners II"), (8) Technology Crossover Ventures
II, C.V., a Netherlands Antilles general partnership ("TCV II, C.V."), (9)
Technology Crossover Management II, L.L.C., a Delaware limited liability company
("Management II"), (10) TCV Franchise Fund, L.P., a Delaware limited Partnership
("TCVF"), (11) TCVF Management, L.L.C., a Delaware limited liability company
("Management F"), (12) Jay C. Hoag ("Mr. Hoag") and (13) Richard H. Kimball
("Mr. Kimball"). TCV IV, Strategic Partners IV, Management IV, TCV II, V.O.F.,
TCV II, L.P., TCV II (Q), Strategic Partners II, TCV II, C.V., Management II,
TCVF, Management F, Mr. Hoag and Mr. Kimball are sometimes collectively referred
to herein as the "Reporting Persons." The agreement among the Reporting Persons
relating to the joint filing of this statement is attached as Exhibit 1 hereto.
TCV IV, Strategic Partners IV, Management IV, TCV II, V.O.F., TCV II, L.P., TCV
II (Q), Strategic Partners II, TCV II, C.V., Management II, TCVF and Management
F are each principally engaged in the business of investing in securities of
privately and publicly held companies. Management IV is the sole general partner
of TCV IV and Strategic Partners IV. Management II is the sole general partner
of TCV II, L.P., TCV II (Q) and Strategic Partners II and the sole investment
general partner of TCV II, V.O.F. and TCV II, C.V. Management F is the sole
general partner of TCVF. The address of the principal business and office of
each of TCV IV, Strategic Partners IV, Management IV, TCV II, V.O.F., TCV II,
L.P., TCV II (Q), Strategic Partners II, TCV II, C.V., Management II, TCVF and
Management F is 528 Ramona Street, Palo Alto, California 94301.
Mr. Hoag and Mr. Kimball are the managing members of Management IV, Management
II and Management F. Mr. Hoag and Mr. Kimball are each United States citizens,
and the present principal occupation of each is as a venture capital investor.
The business address of each of Mr. Hoag and Mr. Kimball is 528 Ramona Street,
Palo Alto, California 94301.
(d), (e). During the last five years, none of TCV IV, Strategic Partners IV,
Management IV, TCV II, V.O.F., TCV II, L.P., TCV II (Q), Strategic Partners II,
TCV II, C.V., Management II, TCVF and Management F, Mr. Hoag or Mr. Kimball has
(1) been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (2) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On May 23, 2002 TCV IV, Strategic Partners IV and TCVF purchased the following
shares from the underwriters of Company's initial public offering (the
"Offering") at $15.00 per share (the "IPO Shares"):
Name of Investor Shares Acquired
---------------------- ---------------
TCV IV 331,704
Strategic Partners IV 12,369
TCVF 8,927
The source of funds for the acquisition of the IPO Shares by TCV IV, Strategic
Partners IV and TCVF was capital contributions from their respective partners.
Pursuant to the terms of a Series E Non-Voting Preferred Stock and Warrant
Purchase Agreement dated April 13, 2000 (the "E Purchase Agreement") by and
among the Company on the one hand, and TCV IV, Strategic Partners IV, TCV II,
V.O.F., TCV II, L.P., TCV II (Q), Strategic Partners II, TCV II, C.V., TCVF (the
"TCV Investors") and other investors, on the other hand, the Company agreed to
sell and the TCV Investors agreed to purchase 4,359,876 shares of Series E
Preferred Stock, at a purchase price of $9.38 per share. In consideration of the
E Shares the TCV Investors paid the Company an aggregate of $40,895,637. Each
share of Series E Preferred Stock converted into approximately .68 shares of
Common Stock upon closing of the Offering, such that the TCV Investors hold an
aggregate of 2,969,906 shares of Common Stock as a result of such conversion
(the "E Shares").
The source of the funds for the acquisition of the E Shares by the TCV Investors
was capital contributions from their respective partners.
A copy of the E Purchase Agreement is attached hereto as Exhibit 2.
Pursuant to the terms of a Note and Warrant Purchase Agreement dated July 10,
2001 (the "Warrant Purchase Agreement") by and among the Company on the one
hand, and the TCV Investors and other investors, on the other hand, the Company
agreed to sell and the TCV Investors agreed to purchase 4,605,134 warrants to
acquire Common Stock (the "Warrants") at a purchase price of $.003 per share per
underlying share of Common Stock (the "Warrant Shares") and at an exercise price
of $3.00 per share. In consideration of the Warrants the TCV Investors paid the
Company an aggregate of $13,815.
The source of funds for the acquisition of Warrants by the TCV Investors was
capital contributions from their respective partners.
A copy of the Warrant Purchase Agreement is attached hereto as Exhibit 3.
Pursuant to the terms of a Series D Preferred Stock Purchase Agreement dated
June 22, 1999 (the "D Purchase Agreement") by and among the Company on the one
hand, and TCV II, V.O.F., TCV II, L.P., TCV II (Q), Strategic Partners II, TCV
II, C.V. (the "TCV II Investors") and other investors, on the other hand, the
Company agreed to sell and the TCV II Investors agreed to purchase 366,735
shares of Series D Preferred Stock, at a purchase price of $6.52 per share. In
consideration of the D Shares the TCV II Investors paid the Company an aggregate
of $2,391,112. Each share of Series D Preferred Stock converted into
approximately .47 shares of Common Stock upon closing of the Offering, such that
the TCV II Investors hold an aggregate of 173,646 shares of Common Stock as a
result of such conversion (the "D Shares").
The source of the funds for the acquisition of the D Shares by the TCV II
Investors was capital contributions from their respective partners.
A copy of the D Purchase Agreement is attached hereto as Exhibit 4.
Pursuant to the terms of a Series C Preferred Stock Purchase Agreement dated
February 17, 1999 (the "C Purchase Agreement") by and among the Company on the
one hand, and the TCV II Investors and other investors, on the other hand, the
Company agreed to sell and the TCV II Investors agreed to purchase 1,834,862
shares of Series C Preferred Stock, at a purchase price of $3.27 per share. In
consideration of the C Shares the TCV II Investors paid the Company an aggregate
of $5,999,999. Each share of Series C Preferred Stock converted into
approximately .44 shares of Common Stock upon closing of the Offering, such that
the TCV II Investors hold an aggregate of 806,451 shares of Common Stock as a
result of such conversion (the "C Shares").
The source of the funds for the acquisition of the C Shares by the TCV II
Investors was capital contributions from their respective partners.
A copy of the C Purchase Agreement is attached hereto as Exhibit 5.
ITEM 4. PURPOSE OF TRANSACTION.
REGISTRATION RIGHTS AGREEMENT
Pursuant to the Amended and Restated Stockholders' Rights Agreement dated July
10, 2001 (the "Rights Agreement") by and among the Company on the one hand, and
TCV Investors and other investors on the other hand, the Company agreed to
register the E Shares, D Shares, C Shares and the Warrant Shares, subject to
certain exceptions. The Company is obligated to pay all expenses incurred in
connection with such registrations. The Company has agreed to indemnify the
Investors and related persons against certain liabilities under the securities
laws in connection with the sale of securities under such registrations.
A copy of the Rights Agreement is attached hereto as Exhibit 6.
WARRANTS
Pursuant to Warrants dated July 10, 2001, TCV Investors have the right to
purchase shares of the Company's Common Stock at an exercise price of $3.00 per
share. Payment of the exercise price may be made in cash, or through the
surrender of Common Stock underlying the Warrants with a fair market value equal
to the exercise price of the Warrants being exercised (otherwise known as net
exercise). The exercise price and the number of shares issuable upon exercise of
the Warrants are subject to certain adjustments under certain circumstances
as set forth in the Warrants.
A copy of the form of Warrant issued to the TCV Investors, along with a schedule
of the number of shares of Common Stock underlying the Warrants issued to the
TCV Investors, is attached hereto as Exhibit 7.
The Reporting Persons acquired the IPO Shares, E Shares, Warrants, D Shares and
C Shares for investment purposes. Depending on the factors discussed herein, the
Reporting Persons may, from time to time, exercise all or a portion of the
Warrants and may acquire additional shares of Common Stock and/or retain and/or
sell all or a portion of the IPO Shares, E Shares, D Shares, C Shares and/or
Common Stock issued upon exercise of the Warrants in the open market or in
privately negotiated transactions. Any actions the Reporting Persons might
undertake will be dependent upon the Reporting Persons' review of numerous
factors, including, among other things, the price levels of the Common Stock;
general market and economic conditions; ongoing evaluation of the Company's
business, financial condition, operations and prospects; the relative
attractiveness of alternative business and investment opportunities; and other
future developments.
Except as set forth above, the Reporting Persons have no present plans or
intentions which would result in or relate to any of the transactions described
in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a), (b). As of the close of business on May 23, 2002, TCV IV, Strategic
Partners IV, TCV II, V.O.F., TCV II, L.P., TCV II (Q), Strategic Partners II,
TCV II, C.V. and TCVF owned directly 8,908,137 shares of Common Stock as
follows:
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Name of Investor Number of Total Shares Percentage of Outstanding Shares (a)
-------------------------------------------------------------------------------------------------
TCV IV 6,501,008 31.48%
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Strategic Partners IV 242,413 1.17%
-------------------------------------------------------------------------------------------------
TCV II, V.O.F. 30,920 Less than 1%
-------------------------------------------------------------------------------------------------
TCV II, L.P. 951,845 4.61%
-------------------------------------------------------------------------------------------------
TCV II (Q) 731,792 3.54%
-------------------------------------------------------------------------------------------------
Strategic Partners II 129,867 Less than 1%
-------------------------------------------------------------------------------------------------
TCV II, C.V. 145,327 Less than 1%
-------------------------------------------------------------------------------------------------
TCVF 174,965 Less than 1%
-------------------------------------------------------------------------------------------------
Mr. Hoag 8,908,137 43.14%
-------------------------------------------------------------------------------------------------
Mr. Kimball 8,908,137 43.14%
(a) all percentages in this table are based on the 20,648,074 shares of Common
Stock of the Company outstanding, as reported on the Company's 424(b)(4) filed
with the Securities and Exchange Commission on May 23, 2002.
Each of TCV IV and Strategic Partners IV (together the "TCV IV Funds") has the
sole power to dispose or direct the disposition of the IPO Shares, E Shares, and
Warrants which it holds directly and the Warrant Shares acquirable upon exercise
of its Warrants. Each of the TCV IV Funds has the sole power to direct the vote
of its respective IPO Shares and E Shares and will have the power to vote or
direct the vote of its respective Warrant Shares upon exercise of its Warrants.
Management IV as the sole general partner of TCV IV and Strategic Partners IV
may also be deemed to have the sole power to dispose or direct the disposition
of the IPO Shares, E Shares, and Warrants which it holds directly and the
Warrant Shares acquirable upon exercise of its Warrants and direct the vote of
the IPO Shares, E Shares, and Warrant Shares acquirable upon exercise of its
Warrants. Management IV disclaims beneficial ownership of such securities except
to the extent of its pecuniary interest therein.
Each of TCV II, V.O.F., TCV II, L.P., TCV II (Q), Strategic Partners II and TCV
II, C.V. (together the "TCV II Funds") has the sole power to dispose or direct
the disposition of the E Shares, D Shares, C Shares, and Warrants which it holds
directly and the Warrant Shares acquirable
upon exercise of its Warrants. Each of the TCV II Funds has the sole power to
direct the vote of its respective E Shares, D Shares and C Shares and will have
the power to vote or direct the vote of its respective Warrant Shares upon
exercise of its Warrants. Management II as the sole general partner of TCV II,
L.P., TCV II (Q) and Strategic Partners II and as the sole investment general
partner of TCV II, V.O.F. and TCV II, C.V. may also be deemed to have the sole
power to dispose or direct the disposition of the E Shares, D Shares, C Shares,
and Warrants which it holds directly and the Warrant Shares acquirable upon
exercise of its Warrants and direct the vote of the E Shares, D Shares, C Shares
and Warrant Shares upon exercise of its Warrants. Management II disclaims
beneficial ownership of such securities except to the extent of its pecuniary
interest therein.
TCVF has the sole power to dispose or direct the disposition of the IPO Shares,
E Shares, and Warrants which it holds directly and the Warrant Shares acquirable
upon exercise of its Warrants. TCVF has the sole power to direct the vote of its
respective IPO Shares and E Shares and will have the power to vote or direct the
vote of its respective Warrant Shares upon exercise of its Warrants. Management
F as the sole general partner of TCVF may also be deemed to have the sole power
to dispose or direct the disposition of the IPO Shares, E Shares, and Warrants
which it holds directly and the Warrant Shares acquirable upon exercise of its
Warrants and direct the vote of the IPO Shares, E Shares, and Warrant Shares
acquirable upon exercise of its Warrants. Management F disclaims beneficial
ownership of such securities except to the extent of its pecuniary interest
therein.
Messrs. Hoag and Kimball are the managing members of Management IV, Management
II and Management F. Under the operating agreements of Management IV, Management
II and Management F, each of Messrs. Hoag and Kimball have the independent power
to cause the funds managed by Management IV, Management II and Management F to
buy and sell securities of publicly traded portfolio companies; however, in
general, they must act by unanimous consent with respect to all other matters,
including directing the voting of such securities. As a result, each of Messrs.
Hoag and Kimball may be deemed to each have the sole power to dispose or direct
the disposition of the IPO Shares, E Shares, D Shares, C Shares and Warrants
which it holds directly and the Warrant Shares acquirable upon exercise of the
Warrants held by TCV IV Funds, TCV II Funds and TCVF and the shared power to
direct the vote of the IPO Shares, E Shares, D Shares, C Shares and Warrant
Shares acquirable upon exercise of the Warrants held by TCV IV Funds, TCV II
Funds and TCVF. Messrs. Hoag and Kimball disclaim beneficial ownership of the
securities owned by TCV IV Funds, TCV II Funds and TCVF except to the extent of
their pecuniary interest therein.
The Reporting Persons may be deemed to be acting as a group in relation to their
respective holdings in the Company but do not affirm the existence of any such
group.
Except as set forth in this Item 5(a) - (b), each of the Reporting Persons
disclaims beneficial ownership of any Common Stock owned beneficially or of
record by any other Reporting Person.
(c). Except as set forth herein, none of the Reporting Persons has effected any
transaction in the Common Stock during the past 60 days.
(d). Not applicable.
(e). Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Item 4 above summarizes certain provisions of the E Purchase Agreement, the
Warrant Purchase Agreement, the D Purchase Agreement, the C Purchase Agreement,
the Rights Agreement and the form of Warrant. A copy of the E Purchase Agreement
is attached hereto as Exhibit 2 and is incorporated by reference herein. A copy
of the Warrant Purchase Agreement is attached hereto as Exhibit 3 and is
incorporated by reference herein. A copy of the D Purchase Agreement is attached
hereto as Exhibit 4 and is incorporated by reference herein. A copy of the C
Purchase Agreement is attached hereto as Exhibit 5 and is incorporated by
reference herein. A copy of the Rights Agreement is attached hereto as Exhibit 6
and is incorporated by reference herein. A copy of the form of Warrant is
attached hereto as Exhibit 7 and is incorporated by reference herein.
Except as set forth herein, none of the Reporting Persons has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to any securities of Company, including but not limited to
any contracts, arrangements, understandings or relationships concerning the
transfer or voting of such securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or losses, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Joint Filing Agreement
Exhibit 2 Series E Non-Voting Preferred Stock and Warrant Purchase Agreement
dated April 13, 2000
Exhibit 3 Note and Warrant Purchase Agreement dated July 10, 2002
Exhibit 4 Series D Preferred Stock Purchase Agreement dated June 22, 1999
Exhibit 5 Series C Preferred Stock Purchase Agreement dated February 17,
1999
Exhibit 6 Amended and Restated Stockholders' Rights Agreement dated July 10,
2001 (incorporated by reference from Exhibit 10.5 of the
Company's Form S-1 dated March 6, 2002)
Exhibit 7 Form of Warrant dated July 10, 2001 (including a schedule of the
number of shares of Common Stock underlying the Warrants issued to
the Reporting Persons)
Exhibit 8 Statement Appointing Designated Filer and Authorized Signatories
dated November 5, 2001 (incorporated by reference from Exhibit A
to the Schedule 13D/A relating to the common stock of Digital
Generation Systems, Inc. filed on March 21, 2002).
SIGNATURE
After reasonable inquiry and to the best of each of the undersigned's knowledge
and belief, each of the undersigned certifies that the information set forth in
this statement is true, complete and correct.
Dated: May 23, 2002
TCV IV, L.P.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TCV IV STRATEGIC PARTNERS, L.P.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TECHNOLOGY CROSSOVER MANAGEMENT IV, L.L.C.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TCV II, V.O.F.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TECHNOLOGY CROSSOVER VENTURES II, L.P.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TCV II (Q), L.P.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TCV II STRATEGIC PARTNERS, L.P.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TECHNOLOGY CROSSOVER VENTURES II, C.V.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TECHNOLOGY CROSSOVER MANAGEMENT II, L.L.C.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TCV FRANCHISE FUND, L.P.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TCVF MANAGEMENT, L.L.C.
By: /s/ Carla S. Newell
----------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
JAY C. HOAG
/s/ Carla S. Newell
------------------------------------------
By: Carla S. Newell, Authorized Signatory
RICHARD H. KIMBALL
/s/ Carla S. Newell
-------------------------------------------
By: Carla S. Newell, Authorized Signatory
EXHIBIT INDEX
Exhibit 1 Joint Filing Agreement
Exhibit 2 Series E Non-Voting Preferred Stock and Warrant Purchase Agreement
dated April 13, 2000
Exhibit 3 Note and Warrant Purchase Agreement dated July 10, 2002
Exhibit 4 Series D Preferred Stock Purchase Agreement dated June 22, 1999
Exhibit 5 Series C Preferred Stock Purchase Agreement dated February 17, 1999
Exhibit 6 Amended and Restated Stockholders' Rights Agreement dated July 10,
2001 (incorporated by reference from Exhibit 10.5 of the Company's
Form S-1 dated March 6, 2002)
Exhibit 7 Form of Warrant dated July 10, 2001 (including a schedule of the
number of shares of Common Stock underlying the Warrants issued to
the Reporting Persons)
Exhibit 8 Statement Appointing Designated Filer and Authorized Signatories
dated November 5, 2001 (incorporated by reference from Exhibit A
to the Schedule 13D/A relating to the common stock of Digital
Generation Systems, Inc. filed on March 21, 2002).