UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
Z-TEL TECHNOLOGIES, INC.
(Name of Issuer)
Common Stock
------------
(Title of Class of Securities)
988792107
(CUSIP Number)
LAWRENCE C. TUCKER
Brown Brothers Harriman & Co.
140 Broadway
New York, New York
(212) 483-1818
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
August 24, 2004
(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(b)(3) or (4), check the following box [_].
*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).
2
CUSIP No. 988792107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
THE 1818 FUND III, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY ---------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 28,439,975
PERSON ---------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
---------------------------------------------
10 SHARED DISPOSITIVE POWER
28,439,975
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5.
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.13%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
--------------------------------------------------------------------------------
3
CUSIP No. 988792107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
BROWN BROTHERS HARRIMAN & CO.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
NEW YORK
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY ---------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 65,928,182
PERSON ---------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
---------------------------------------------
10 SHARED DISPOSITIVE POWER
65,928,182
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5.
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.13%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
--------------------------------------------------------------------------------
4
CUSIP No. 988792107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
T. MICHAEL LONG
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
UNITED STATES
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY ---------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 65,928,182
PERSON ---------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
---------------------------------------------
10 SHARED DISPOSITIVE POWER
65,928,182
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5.
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.13%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
5
CUSIP No. 988792107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
LAWRENCE C. TUCKER
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
UNITED STATES
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 74,696
BENEFICIALLY ---------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 28,439,975
PERSON ---------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
74,696
---------------------------------------------
10 SHARED DISPOSITIVE POWER
28,439,975
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5.
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.2%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
6
EXPLANATORY NOTE
This Amendment No. 3 ("Amendment No. 3") to Schedule 13D is
filed by the undersigned to amend and supplement the Schedule 13D filed on
November 13, 2000 (the "Original 13D"), as amended by Amendment No. 1 to
Schedule 13D filed on July 12, 2001 ("Amendment No. 1"), and Amendment No. 2 to
Schedule 13D filed on August 9, 2001 ("Amendment No. 2"), relating to the common
stock (the "Common Stock"), par value $.01 per share, issued by Z-Tel
Technologies, Inc., a Delaware corporation (the "Company"). Unless otherwise
indicated, all capitalized terms shall have the same meaning as provided in the
Original 13D.
ITEM 1. SECURITY AND ISSUER.
No Change.
ITEM 2. IDENTITY AND BACKGROUND.
No Change.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is hereby amended and supplemented by the addition of
the following:
Pursuant to a Standby Credit Facility Agreement, dated August
24, 2004, (the "Standby Credit Facility Agreement"), by and between the Company
and the Fund, the Company issued to the Fund on such date a Senior Unsecured
Promissory Note (the "Note") in principal amount of up to $15 million. The
Company's obligations under the Standby Credit Facility Agreement and the Note
have been guaranteed by the Company's subsidiaries pursuant to the Subsidiaries'
Guarantee, dated August 24, 2004, in favor of the Fund (the "Subsidiaries'
Guarantee"). The Company's and its subsidiaries' respective obligations under
the Standby Credit Facility Agreement, the Note and the
7
Subsidiaries' Guarantee are subordinated pursuant to the Subordination
Agreement, dated August 24, 2004, by and among the Company, its subsidiaries,
the Fund and Textron Financial Corporation. Copies of the Standby Credit
Facility Agreement, the Note, the Subsidiaries' Guarantee and the Subordination
Agreement are attached hereto as Exhibits 1, 2, 3 and 4 to this Amendment No. 3,
respectively, and are hereby incorporated by reference.
The consideration paid by the Fund for the Note consisted of
$5 million in cash at closing (and, if all advances are made under the Note, an
aggregate of $15 million), which was or will be obtained by the Fund from
capital contributions made by its partners pursuant to pre-existing capital
commitments.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended and supplemented by the addition of
the following:
Pursuant to the terms of the Standby Credit Facility Agreement
and the Note, the Fund agreed to loan the Company up to $15 million. The Note is
payable at maturity in cash.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is hereby amended and supplemented by the addition of
the following:
On May 20, 2004, Lawrence C. Tucker acquired stock options to
purchase 1,100 Shares of Common Stock. The options are exercisable from May 20,
2005 to May 20, 2014.
No additional securities of the Company were acquired by the
Fund. The shares of Preferred Stock and Series G Preferred Stock held by the
Fund are convertible
8
into shares of Common Stock. The number of shares of Common
Stock into which Preferred Stock and Series G Preferred Stock may convert
increases over time, as described in Amendment No. 2, due to the accrual of
dividends on Preferred Stock and Series G Preferred Stock. All accrued dividends
on Series G Preferred Stock that are converted into Common Stock will result in
additional shares of Common Stock being issuable to holders of the Warrant and
Preferred Stock as a result of the anti-dilution provisions in the Warrant and
the Certificate of Designations of the Preferred Stock.
As of the date hereof, based on calculations made in
accordance with Rule 13-d3(d) promulgated under the Exchange Act and there being
37,488,207 shares of Common Stock outstanding (as reported on the Company's Form
10-Q for the quarter ended June 30, 2004), the number of shares of Common Stock
the Fund, BBH, Long and Tucker are deemed to own and the percent of the
outstanding shares of Common Stock are as follows:
Shares Percentage
------ ----------
Fund 28,439,975 43.13%
BBH 28,439,975 43.13%
Long 28,439,975 43.13%
Tucker 28,514,671 43.2%
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE COMMON STOCK OF THE ISSUER.
Item 6 is hereby amended by deleting it in its entirety and
replacing it with the following:
The Company and the Fund are parties to the Registration
Rights Agreement which gives the Fund, among other things, the right, on the
terms and conditions set forth therein, to require the Company to register for
sale to the public any shares of Common Stock held by the Fund, including
without limitation, shares of
9
Common Stock issuable upon the conversion of Preferred Stock and Series G
Preferred Stock held by the Fund and upon exercise of the Warrant and the Series
G Warrant.
Except as described elsewhere in this Statement and as set
forth in the Standby Credit Facility Agreement, the Note, the Subsidiaries'
Guarantee and the Subordination Agreement, copies of which are attached hereto
as Exhibits 1, 2, 3 and 4 to this Amendment No. 3, and incorporated herein by
reference, to the best of the knowledge of the Reporting Persons, there exists
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 securities of the Company, including but not limited to transfer
or voting any securities of the Company, 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.
1. Standby Credit Facility Agreement, dated as of August 24,
2004, by and between Z-Tel Technologies, Inc. and The 1818
Fund III, L.P.
2. Senior Unsecured Promissory Note, dated as of August 24,
2004, of Z-Tel Technologies, Inc. issued to The 1818 Fund
III, L.P.
3. Subsidiaries' Guarantee, dated August 24, 2004, by the
signatories thereto in favor of The 1818 Fund III, L.P.
4. Subordination Agreement, dated August 24 2004, by and
among Z-Tel Technologies, Inc., The 1818 Fund III, L.P.,
Textron Financial Corporation and the other signatories
thereto.
SIGNATURE
---------
After reasonable inquiry and to the best of its knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: August 24, 2004
THE 1818 FUND III, L.P.
By: Brown Brothers Harriman & Co.,
General Partner
By: /s/ Lawrence C. Tucker
---------------------------------------
Name: Lawrence C. Tucker
Title: Partner
BROWN BROTHERS HARRIMAN & CO.
By: /s/ Lawrence C. Tucker
---------------------------------------
Name: Lawrence C. Tucker
Title: Partner
/s/ T. Michael Long
--------------------------------------------
T. Michael Long
/s/ Lawrence C. Tucker
--------------------------------------------
Lawrence C. Tucker