UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
VOCALTEC COMMUNICATIONS LTD.
(Name of Issuer)
Ordinary Shares, par value NIS 0.13 per share
(Title of Class of Securities)
M97601-10-4
(CUSIP Number)
David J. Schwartz, Esq. Martha D. Vorlicek
Debevoise & Plimpton LLP HarbourVest Partners, LLC
919 Third Avenue One Financial Center
New York, NY 10022 Boston, MA 02111
(212) 909-6000 (617) 348-3707
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications)
November 24, 2005
(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 Rule 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 purposes 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 11
(1) Names of Reporting Persons HarbourVest Partners, LLC
I.R.S. Identification 04-3335829
Nos. of Above Persons (entities only)
(2) Check the Appropriate Box (a) ________
if a Member of a Group (b) ________
(3) SEC Use Only
(4) Source of Funds 00
(5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of
Organization Delaware
Number of Shares (7) Sole Voting Power
Beneficially Owned 910,444
by Each Reporting
Person With (8) Shared Voting Power
-0-
(9) Sole Dispositive Power
910,444
(10) Shared Dispositive Power
-0-
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person 910,444
(12) Check if the Aggregate Amount
in Row (11) Excludes Certain Shares
(13) Percent of Class Represented
by Amount in Row 11 19.61%
(14) Type of Reporting Person IA
Page 2 of 11
(1) Names of Reporting Persons D. Brooks Zug
I.R.S. Identification
Nos. of Above Persons (entities only)
(2) Check the Appropriate Box (a) ________
if a Member of a Group (b) ________
(3) SEC Use Only
(4) Source of Funds 00
(5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of
Organization USA
Number of Shares (7) Sole Voting Power
Beneficially Owned -0-
by Each Reporting
Person With (8) Shared Voting Power
910,444
(9) Sole Dispositive Power
-0-
(10) Shared Dispositive Power
910,444
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person 910,444
(12) Check if the Aggregate Amount
in Row (11) Excludes Certain Shares
(13) Percent of Class Represented
by Amount in Row 11 19.61%
(14) Type of Reporting Person IN
Page 3 of 11
(1) Names of Reporting Persons Edward W. Kane
I.R.S. Identification
Nos. of Above Persons (entities only)
(2) Check the Appropriate Box (a) ________
if a Member of a Group (b) ________
(3) SEC Use Only
(4) Source of Funds 00
(5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of
Organization U.S.A.
Number of Shares (7) Sole Voting Power
Beneficially Owned -0-
by Each Reporting
Person With (8) Shared Voting Power
910,444
(9) Sole Dispositive Power
-0-
(10) Shared Dispositive Power
910,444
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person 910,444
(12) Check if the Aggregate Amount
in Row (11) Excludes Certain Shares
(13) Percent of Class Represented
by Amount in Row 11 19.61%
(14) Type of Reporting Person IN
Page 4 of 11
(1) Names of Reporting Persons HIPEP III-Direct
I.R.S. Identification Associates LLC
Nos. of Above Persons (entities only) 04-3402912
(2) Check the Appropriate Box (a) ________
if a Member of a Group (b) ________
(3) SEC Use Only
(4) Source of Funds 00
(5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of
Organization Delaware
Number of Shares (7) Sole Voting Power
Beneficially Owned -0-
by Each Reporting
Person With (8) Shared Voting Power
910,444
(9) Sole Dispositive Power
-0-
(10) Shared Dispositive Power
910,444
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person 910,444
(12) Check if the Aggregate Amount
in Row (11) Excludes Certain Shares
(13) Percent of Class Represented
by Amount in Row 11 19.61%
(14) Type of Reporting Person 00
Page 5 of 11
(1) Names of Reporting Persons HarbourVest International
I.R.S. Identification Private Equity Partners
Nos. of Above Persons (entities only) III-Direct Fund L.P.
04-3402925
(2) Check the Appropriate Box (a) ________
if a Member of a Group (b) ________
(3) SEC Use Only
(4) Source of Funds 00
(5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of
Organization Delaware
Number of Shares (7) Sole Voting Power
Beneficially Owned -0-
by Each Reporting
Person With (8) Shared Voting Power
910,444
(9) Sole Dispositive Power
-0-
(10) Shared Dispositive Power
910,444
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person 910,444
(12) Check if the Aggregate Amount
in Row (11) Excludes Certain Shares
(13) Percent of Class Represented
by Amount in Row 11 19.61%
(14) Type of Reporting Person PN
Page 6 of 11
CONTINUATION PAGES TO SCHEDULE 13D
In order to avoid any question as to whether the Reporting Persons'
beneficial ownership is being reported on the proper form and in order to
provide greater investment flexibility, the Reporting Persons have decided to
file their beneficial ownership reports on the more detailed Schedule 13D rather
than on the short-form Schedule 13G and thereby to provide more expansive
disclosure than may be necessary. This Schedule 13D shall not be deemed an
admission that the Reporting Persons are required to file their beneficial
ownership reports on Schedule 13D rather than on Schedule 13G.
Item 1. Security and Company.
This statement relates to the Ordinary Shares, par value New Israeli Shekel
$0.13 per share (adjusted to reflect a 1-for-13 reverse stock split effective
November 28, 2005) (the "Stock"), of VocalTec Communications Ltd., a public
company organized under the laws of the State of Israel (the "Company"). The
principal executive offices of the Company are located at 1 Maskit Street,
Herzliya, 46733, Israel.
Item 2. Identify and Background.
(a) This Statement on Schedule 13D is filed by HarbourVest Partners, LLC
("HarbourVest"), D. Brooks Zug ("Zug"), Edward W. Kane ("Kane"), HIPEP
III-Direct Associates LLC ("HIPEP III Associates"), who may be deemed to be
beneficial owners of the Company's Stock, and HarbourVest International Private
Equity Partners III-Direct Fund L.P. ("HIPEP III Fund"), the record owner of
the Company's Stock, (together the "Reporting Persons").
The following individuals are managing directors of HarbourVest:
Edward W. Kane
D. Brooks Zug
John M. Begg
Theodore A. Clark
Kevin S. Delbridge
William A. Johnston
Frederick C. Maynard
John G. Morris
Ofer Nemirovsky
Gregory V. Stento
Martha DiMatteo Vorlicek
Robert M. Wadsworth
Generally, investment decisions by HarbourVest require the affirmative
consent of both Messrs. Kane and Zug.
Mr. Robert M. Wadsworth serves on the Company's Board of Directors.
Page 7 of 11
In addition, Ilan Rosen, a consultant to HarbourVest, serves as the
Chairman of the Board of Directors of the Company.
HarbourVest is the sole managing member of HIPEP III Associates.
HIPEP III Associates is the sole general partner of HIPEP III Fund.
(b) The business address for each of the individuals and entities
identified in Item 2(a) above is One Financial Center, 44th Floor, Boston,
MA 02111 USA.
(c) HarbourVest is a global private equity investment management firm and
is the sole managing member of HIPEP III Associates. HIPEP III Associates is the
sole general partner of HIPEP III Fund. HIPEP III Fund is a private investment
fund. The principal occupation of each of the individuals named in Item 2(a)
above is that of a managing director of HarbourVest. The business addresses for
each of these individuals and entities is stated in Item 2(b) above.
(d) and (e) None of the individuals or entities with respect to whom
information is required by this Item 2 has been, during the last five years,
either (i) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) 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 activities subject to, federal or state securities
laws or finding any violation of such laws.
(f) HarbourVest and HIPEP III Associates are Delaware limited liability
companies. HIPEP III Fund is a Delaware limited partnership. With the exception
of William A. Johnston, all of the named individuals are citizens of the
United States. Mr. Johnston is a Canadian citizen.
Item 3. Source and Amount of Funds or Other Consideration.
HIPEP III Fund owned a 26.1% interest in Tdsoft Ltd., a private
company organized under the laws of the State of Israel ("Tdsoft"). On October
27, 2005, the Company entered into a Share Sale and Purchase Agreement (the
"Share Sale and Purchase Agreement") with Tdsoft and certain of Tdsoft's
shareholders, including HIPEP III Fund. Pursuant to the Share Sale and Purchase
Agreement, Tdsoft's shareholders agreed to sell and the Company agreed to
purchase all of the issued and outstanding share capital of Tdsoft by issuing to
Tdsoft's shareholders ordinary shares of the Company in
Page 8 of 11
an aggregate amount equal to 75% of the issued and outstanding share capital of
the Company immediately following the transaction. As a result of the
transactions contemplated by the Share Sale and Purchase Agreement
(collectively, the "Transaction"), Tdsoft would become a wholly-owned subsidiary
of the Company.
The Transaction closed on November 24, 2005. At that time, HIPEP III
Fund received 11,835,777 Ordinary Shares, par value New Israeli Shekel 0.01, of
the Company, in exchange for its entire interest in Tdsoft.
Descriptions of the Share Sale and Purchase Agreement contained in
this Schedule 13D are qualified in their entirety by reference to the form of
such agreement, the full text of which is filed as Exhibit 1 hereto and
incorporated herein by reference.
On November 25, 2005, the Company announced a 1-for-13 reverse split
of its Ordinary Shares, effective immediately before trading on Monday, November
28, 2005. After giving effect to this reverse stock split, HIPEP III Fund holds
910,444 shares of the Company's Stock.
Item 4. Purpose of Transaction.
The Reporting Persons acquired the Company's Stock for investment
purposes during the ordinary course of business. However, the Company's business
and industry and the ownership of its Stock will be continuously evaluated.
Depending upon ongoing evaluations of prevailing market conditions, other
investment opportunities, liquidity requirements of HIPEP III Fund, or other
investment considerations HIPEP III Fund deems material, HIPEP III Fund may from
time to time acquire or dispose of the Company's Stock in open market or
privately negotiated transactions.
Except as described herein, the Reporting Persons have no present
plans or proposals that relate to or would result in any of the actions
described in Item 4(a) through (j) of Schedule 13D under Rule 13d-1(a).
Item 5. Interest in Securities of the Issuer.
(a) HarbourVest, as the result of its position as the sole managing member
of HIPEP III Associates, Zug and Kane, as the result of their positions as
senior managing directors of HarbourVest, HIPEP III Associates, as the result of
its position as the sole general partner of HIPEP III Fund, and HIPEP III Fund
as record and ultimate owner of the Company's Stock, each may be deemed to
beneficially own 910,444 shares of the Company's Stock, or 19.61% of Company
Stock currently outstanding (based on 4,642,007 shares of Stock outstanding as
of November 28, 2005, as reported by the Company in Form 6-K filed with the
Securities and Exchange Commission on November 28, 2005).
HarbourVest, HIPEP III Associates, Kane and Zug disclaim beneficial
ownership over any of the reported securities which they may be deemed to
beneficially own, except to the extent of their pecuniary interests therein.
Page 9 of 11
(b) HarbourVest, as the result of its position as the sole managing member
of HIPEP III Associates, may be deemed to have the sole power to vote or direct
the vote of and to dispose of or to direct the disposition of 910,444 shares of
the Company's Stock held by HIPEP III Fund.
Kane and Zug, as the result of their positions as senior managing directors
of HarbourVest, may be deemed to share power to vote or direct the vote of and
to dispose of or to direct the disposition of 910,444 shares of the Company's
Stock held by HIPEP III Fund.
HIPEP III Associates, as the sole general partner of HIPEP III Fund, and
HIPEP III Fund, as record and ultimate owner of the Company's Stock, may be
deemed to share power to vote or direct the vote of and to dispose of or to
direct the disposition of 910,444 shares of the Company's Stock held by HIPEP
III Fund.
(c) On November 24, 2005, as the result of the merger of Tdsoft into the
Company, HIPEP III Fund received shares of the Company's Stock. See Item 3
above.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with respect to
Securities of the Issuer.
Except as described in this Schedule 13D, none of the individuals or
entities named in Item 2 has any contracts, arrangements, understandings or
relationships (legal or otherwise) with each other or with any person with
respect to any securities of the Issuer, including but not limited to the
transfer of any shares of Common Stock, finder's fees, joint ventures,
guarantees of profits, division of profits or loss, or the giving or withholding
of proxies.
Item 7. Material to be Filed as Exhibits
Exhibit 1. Form of Share Sale and Purchase Agreement among VocalTec
Communications Ltd., Tdsoft Ltd. and certain Tdsolft Ltd.
Shareholders, incorporated herein by reference to Exhibit 99.2 to
Form 6-K filed with the Securities and Exchange Commission by
VocalTec Communications Ltd. on November 7, 2005.
Exhibit 2. Joint Filing Agreement, dated December 5, 2005.
Page 10 of 11
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.
Date: December 5, 2005
HARBOURVEST PARTNERS, LLC
By: /s/ Martha D. Vorlicek
------------------------------------
Name: Martha D. Vorlicek
Title: Managing Director
/s/ Edward W. Kane
----------------------------------------
Edward W. Kane
/s/ D. Brooks Zug
----------------------------------------
D. Brooks Zug
HIPEP III-DIRECT ASSOCIATES LLC
By: HARBOURVEST PARTNERS, LLC
Its Managing Member
By /s/ Martha D. Vorlicek
-------------------------------------
Name: Martha D. Vorlicek
Title: Managing Director
HARBOURVEST INTERNATIONAL PRIVATE EQUITY
PARTNERS III-DIRECT FUND L.P.
By: HIPEP III-DIRECT ASSOCIATES LLC
Its General Partner
By: HARBOURVEST PARTNERS, LLC
Its Managing Member
By: /s/ Martha D. Vorlicek
------------------------------------
Name: Martha D. Vorlicek
Title: Managing Director
Page 11 of 11