UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
EXCELON CORPORATION
(Name of Issuer)
Common Stock, Par Value $0.001 Per Share
(Title of Class of Securities)
300691102
(CUSIP Number)
James Romeo, Esq.
Progress Software Corporation
14 Oak Park, Bedford, MA 01730
Telephone: (781) 280-4000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 18, 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 that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
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).
Page 1 of 10 pages
SCHEDULE 13D
13D
CUSIP NO.
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Progress Software Corporation, I.R.S. I.D.# 04-2746201
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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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
Massachusetts
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7 SOLE VOTING POWER
1,569,425
NUMBER OF
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
658,442
OWNED BY
-----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
1,569,425
REPORTING
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
225,819
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,227,867
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[-]
(See Instructions)
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
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Page 2 of 10 pages
Item 1. Security and Issuer
This statement on Schedule 13D relates to the common stock,
par value $0.001 per share (the "Issuer Common Stock"), of eXcelon
Corporation, a Delaware corporation (the "Issuer"). The principal
executive offices of the Issuer are located at 25 Mall Road,
Burlington, MA 01803.
Item 2. Identity and Background
(a) The name of the person filing this statement is Progress Software
Corporation, a Massachusetts corporation ("PSC").
(b) The address of the principal office and principal business of PSC
is 14 Oak Park, Bedford, MA 01730
(c) PSC provides industry-leading technologies for all aspects of
e-business development, deployment, integration and management. Set
forth in Schedule A hereto, which is incorporated herein by reference,
is the name, business address, present principal occupation or
employment and the name, principal business and address of any
corporation or other organization in which such employment is conducted
and citizenship, of each of PSC's directors and executive officers, as
of the date hereof. Other than such directors and executive officers,
there are no persons controlling PSC.
(d) During the past five years, neither PSC nor, to PSC's knowledge,
any person named in Schedule A hereto has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither PSC nor, to PSC's knowledge,
any person named in Schedule A hereto was a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction as a
result of which such person was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activity subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Not applicable.
Item 3. Source and Amount of Funds or Other Consideration
As of the date hereof, PSC beneficially owns 94,425 shares of
Issuer Common Stock, which were purchased with working capital in open
market purchases between July 17, 2002 and August 6, 2002 for an
aggregate purchase price of approximately $316,756. In addition,
pursuant to the stockholder agreements, dated as of October 18, 2002
(the "Stockholder Agreements"), among PSC and all of the directors of
the Issuer
Page 3 of 10 pages
and between PSC and certain other stockholders of the Issuer
(collectively, the "Stockholders") and an Option Agreement dated
October 18, 2002 (the "Option Agreement") by and between PSC and the
Issuer, PSC may be deemed to be the beneficial owner of 2,133,442
shares of Issuer Common Stock. Accordingly, PSC May be deemed to be the
beneficial owner an aggregate of 2,227,867 shares of Issuer Common
Stock, which would constitute approximately 25.1% of the outstanding
Issuer Common Stock after giving effect to the exercise of the Option
(as defined in Item 4 below) under the Option Agreement. The
Stockholder Agreements and the Option Agreement were entered into in
order to induce PSC to enter in to the Agreement and Plan of Merger,
dated as of October 18, 2002 (the "Merger Agreement"), among PSC,
Chopin Merger Sub, Inc. a Delaware corporation and a wholly owned
subsidiary of PSC ("Merger Sub"), and the Issuer. Pursuant to the
Merger Agreement, Merger Sub will merge with and into the Issuer (the
"Merger"), with the Issuer continuing as the surviving corporation in
the Merger (the "Surviving Corporation"), as a wholly owned subsidiary
of PSC. In the Merger, each share of Issuer Common Stock will be
converted into the right to receive $3.19 in cash, without interest.
The Merger is subject to certain conditions. The descriptions of the
Merger Agreement, the Stockholders Agreements and the Option Agreement
contained within this statement on Schedule 13D are qualified in their
entirety by reference to such agreements, which are attached hereto as
Exhibits 1, 2, 3 and 4, respectively.
Item 4. Purpose of Transaction
(a) - (b) The Stockholder Agreements were entered into as a condition
to the willingness of PSC to enter into the Merger Agreement and to
increase the likelihood that the approval of the Issuer's stockholders
required in connection with the Merger will be obtained. In addition,
as a condition to PSC entering into the Merger Agreement, the Issuer
has entered into the Option Agreement with PSC, whereby the Issuer has
granted PSC an irrevocable option (the "Option") to purchase, in whole
or in part, up to 1,475,000 shares of Issuer Common Stock. See the
response to Item 3 for a more complete description of the Merger.
(c) Not applicable.
(d) Upon consummation of the Merger, the directors of Merger Sub will
be the directors of the Surviving Corporation, to hold office in
accordance with the Certificate of Incorporation and Bylaws of the
Surviving Corporation. The current director of Merger Sub is Joseph W.
Alsop, the Chief executive Officer and a director of PSC. The officers
of the Surviving Corporation shall be the officers of the Issuer
immediately prior to the consummation of the Merger, until their
resignation or removal or until their respective successors are duly
elected and qualified.
(e) Other than as a result of the Merger described in Item 3 above, not
applicable.
(f) Not applicable.
Page 4 of 10 pages
(g) Upon consummation of the Merger, the Certificate of Incorporation
and Bylaws of the Merger Sub, as in effect immediately prior to the
Merger, shall be the Certificate of Incorporation of the Surviving
Corporation.
(h) - (i) Upon consummation of the Merger, the Issuer Common Stock will
be delisted from The Nasdaq Stock Market Inc. and will become eligible
for termination of registration pursuant to Section 12(g)(4) of the
Exchange Act.
(j) Other than as described above, PSC currently has no plan or
proposals that relate to, or may result in, any of the matters listed
in Items 4(a) - (i) of Schedule 13D (although PSC reserves the right to
develop such plans).
Item 5. Interest in Securities of the Issuer
(a) - (b) As a result of PSC's ownership 94,425 shares of Issuer Common
Stock, the Stockholder Agreements and the Option Agreement, PSC may be
deemed to be the beneficial owner of 2,227,867 shares of Issuer Common
Stock, which constitutes approximately 25.1% of the issued and
outstanding shares of Issuer Common Stock, after giving effect to the
exercise of the Option, and based on the Issuer's representation in the
Merger Agreement that there were 7,412,572 shares of Issuer Common
Stock issued and outstanding at the close of business on October 18,
2002.
Pursuant to the Stockholder Agreement, each Stockholder has
agreed, among other things, to (a) vote the shares of Issuer Common
Stock owned by such Stockholder (i) in favor of the adoption of the
Merger Agreement, (ii) against any Acquisition Proposal (as defined in
the Merger Agreement) and against any proposal for action or agreement
that would result in a breach of any covenant, representation or
warranty, or any other obligation or agreement of the Issuer under the
Merger Agreement or which is reasonably likely to result in any of the
Issuer's obligations under the Merger Agreement not being fulfilled,
any change in the directors of the Issuer, any change in the present
capitalization of the Company or any amendment to the Company's Amended
and Restated Certificate of Incorporation or Amended and Restated
Bylaws, any other material change in the Issuer's corporate structure
or business or any other action which in the case of each of the
matters referred to in this clause (ii) could reasonably be expected to
impede, interfere with, delay, postpone or materially adversely affect
the transactions contemplated by the Merger Agreement or the likelihood
of such transactions being consummated and (iii) in favor of any other
matter necessary for consummation of the transactions contemplated by
the Merger Agreement that is considered at any such meeting of
stockholders or in such consent, and in connection therewith to execute
any documents which are necessary or appropriate in order to effectuate
the foregoing, including the ability for Merger Sub or its nominees to
vote such Subject Shares directly; provided, however, that the
Stockholder shall not be required to vote for any action that would
decrease the consideration to be received by the stockholders of the
Issuer in respect of their shares in the Merger; and (b) during the
term
Page 5 of 10 pages
of the agreement not to (i) transfer (which term shall include, without
limitation, any sale, assignment, gift, pledge, hypothecation or other
disposition), or consent to any transfer of, any or all of the
Stockholder's shares or any interest therein, or create or permit to
exist any Encumbrance (as defined below) on such shares, (ii) enter
into any contract, option or other agreement or understanding with
respect to any transfer of any or all of such shares or any interest
therein, (iii) grant any proxy, power-of-attorney or other
authorization in or with respect to such shares, (iv) deposit such
shares into a voting trust or enter into a voting agreement or
arrangement with respect to such shares or (v) take any other action
that would in any way restrict, limit or interfere with the performance
of the Stockholder's obligations hereunder or the transactions
contemplated hereby or by the Merger Agreement.
By their execution of the Stockholder Agreements, each
Stockholder has appointed PSC and Merger Sub, or any nominee of PSC and
Merger Sub, with full power of substitution and resubstitution, at any
time during the term of the agreement, as the Stockholder's true and
lawful attorney and proxy (the "Attorney"). The name of each
Stockholder and the number of Subject Shares owned of record or
beneficially by each Stockholder are set forth in Schedule I to the
Stockholder Agreements, copies of which are filed herewith as Exhibit 2
and 3 hereto. In exercising its right to vote the Subject Shares as
proxy and attorney-in-fact of the Stockholders, the Attorney's rights
are limited to voting the Subject Shares at every annual, special,
adjourned or postponed meeting of the stockholders of the Issuer, at
which any proposal described above is considered and includes the right
to sign the Stockholder's name (as stockholder) to any consent,
certificate or other document in lieu of any such meeting that Delaware
law may permit or require.
In addition to the voting agreements and arrangements
described above, each of the Stockholder Agreements entered into by the
six members of Issuer's board of directors also provides for the grant
to PSC of an option to purchase any and all of the shares of Issuer
Common Stock owned by such director at a purchase price of $3.19 per
share. The options become exercisable if the Merger Agreement is
terminated: (A) by PSC (i) after Issuer's stockholders do not approve
the merger, (ii) after Issuer's board of directors fails to recommend,
or withdraws or modifies its recommendation, that Issuer's stockholders
approve the merger, (iii) after Issuer materially breaches the Merger
Agreement or (iv) after PSC exercises its option to commence a tender
offer for Issuer Common Stock and Issuer's board of directors fails to
recommend, or withdraws or modifies its recommendation, that Issuer's
stockholders tender their shares; or (B) by Issuer after January 31,
2003 following Issuer's receipt of another acquisition proposal.
The Stockholder Agreements terminate upon the earlier of (a)
the consummation of the purchase of all of the Subject Shares pursuant
to the Offer (as defined in the Merger Agreement), (b) the termination
of the Merger Agreement, (c) the written mutual consent of PSC and the
Stockholder, and (d) such date and time as the Merger shall become
effective in accordance with the terms of the Merger Agreement.
Page 6 of 10 pages
Pursuant to the Option Agreement, the Issuer has granted PSC
the Option to purchase, in whole or in part, an aggregate of up to
1,475,000 shares of Issuer Common Stock (representing approximately
19.9% of the outstanding shares of Issuer Common Stock as of the date
of the Option Agreement) at an exercise price of $3.19 per share prior
to the Expiration Date (as defined below). The Option becomes
exercisable if the Merger Agreement is terminated by PSC (i) after
Issuer's board of directors fails to recommend, or withdraws or
modifies its recommendation, that Issuer's stockholders approve the
merger, (ii) after PSC exercises its option to commence a tender offer
for Issuer Common Stock and Issuer's board of directors fails to
recommend, or withdraws or modifies its recommendation, that Issuer's
stockholders tender their shares, (iii) after Issuer's stockholders do
not approve the merger following the receipt by Issuer of another
acquisition proposal that is consummated within one year of termination
and (iv) after Issuer intentionally and materially breaches the Merger
Agreement. The Expiration Date means the first to occur prior to PSC's
exercise of the Option of (a) the closing of the merger, (b) written
notice of termination of the Option Agreement by PSC, (c) termination
of the Merger Agreement under circumstances where PSC would not be
entitled to payment of a termination fee, or (d) the date that is 12
months from the date of termination of the Merger Agreement.
Based on the foregoing, PSC may be deemed to have (i) sole
voting and sole dispositive power with respect to the 94,425 shares
beneficially owned and the 1,475,000 shares subject to the Option
Agreement, (ii) shared voting and shared dispositive power with respect
to the 225,819 shares subject to the Stockholder Agreements entered
into by the Issuer's directors and (iii) shared voting power with
respect to the 432,623 shares subject to the Stockholder Agreements
entered into by the Issuer's other Stockholders. The responses of PSC
with respect to Rows 7, 8, 9 and 10 on the cover page to this statement
on Schedule 13D that relate to the aggregate number of shares of
capital stock of the Issuer as to which PSC has sole power to vote or
to direct the vote, shared power to vote or to direct the vote and sole
or shared power to dispose or to direct the disposition are
incorporated herein by reference.
(c) Neither PSC nor, to the knowledge of PSC, any person named in
Schedule A, has effected any transaction in the Issuer 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
Other than as described in Items 3, 4 and 5 and the agreements
incorporated herein by reference and set forth as exhibits hereto, to
the knowledge of PSC, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons
named in Item 2 and between such persons and any person with respect to
any
Page 7 of 10 pages
securities of the Issuer, including but not limited to transfer or
voting of any of the securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies .
Item 7. Material to be Filed as Exhibits
The following documents are filed as exhibits:
EXHIBIT
NUMBER EXHIBIT NAME
------ ------------
1. Agreement and Plan of Merger dated as of October 18,
2002, among Progress Software Corporation, a
Massachusetts corporation, Chopin Merger Sub, Inc. a
Delaware corporation and a wholly owned subsidiary of
Progress Software Corporation, and eXcelon
Corporation, a Delaware corporation.
2. Stockholder Agreement dated as of October 18, 2002,
among Progress Software Corporation, a Massachusetts
corporation, Chopin Merger Sub, Inc. and the
directors of eXcelon Corporation.
3. Stockholder Agreement dated as of October 18, 2002,
among Progress Software Corporation, a Massachusetts
corporation, Chopin Merger Sub, Inc. and certain
stockholders of eXcelon Corporation.
4. Stock Option Agreement dated as of October 18, 2002,
by and between Progress Software Corporation, a
Massachusetts corporation and eXcelon Corporation, a
Delaware corporation.
Page 8 of 10 pages
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.
October 28, 2002
/s/ Norman R. Robertson
--------------------------------------
Norman R. Robertson
Senior VP, Finance and Administration,
Treasurer and Chief Financial Officer
Page 9 of 10 pages
Schedule A
Set forth below are the names, positions with Progress Software Corporation,
business addresses and principal occupations of the directors and executive
officers of PSC. Each individual named below is a United States citizen.
Name, Position(s) Held
and Business Addresses* Present Principal Occupation
----------------------- ----------------------------
Directors
---------
Joseph W. Alsop Chief Executive Officer and Director,
Progress Software Corporation
Larry R. Harris Founder and Chairman of EasyAsk, Inc.
Roger J. Heinen, Jr. Director, various companies
Michael L. Mark Director, various companies
Arthur J. Marks General Partner of Valhalla Partners
Scott A. McGregor President and CEO of Philips Semiconductors
Amram Rasiel Private Investor
Executive Officers
------------------
David G. Ireland President, the Progress Company
Gregory J. O'Conner President, Sonic Software Corporation
Richard D. Reidy Senior Vice President, Products and Business Development, Progress
Software Corporation
Norman R. Robertson Senior Vice President, Finance and Administration and Chief Financial
Officer, Progress Software Corporation
David H. Benton, Jr. Vice President and Corporate Controller, Progress Software Corporation
H. Jeffrey Ray Vice President, Worldwide Field Operation, the
Progress Company
Lorne J. Cooper President, PeerDirect Corporation
* All business addresses are:
c/o Progress Software Corporation
14 Oak Park
Bedford, MA 01730
Page 10 of 10 pages