SC TO-I/A

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE TO-I/A
(Rule 13e-4)
TENDER OFFER STATEMENT UNDER
SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 1)

NetScout Systems, Inc.
(Name of Subject Company (Issuer) and Filing Person (Offeror))

Options to Purchase Common Stock
(Title of Class of Securities)

64115 T 10 4
(CUSIP Number of Class of Securities)
(Common Stock Underlying Options)

Anil K. Singhal
President and Chief Executive Officer
NetScout Systems, Inc.
310 Littleton Road
Westford, MA 01886
(978) 614-4000 With A Copy To:
Miguel J. Vega, Esq.
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
(617) 248-7000

(Name, Address and Telephone Number of Person Authorized to
Receive Notice and Communications on Behalf of Filing Person)

CALCULATION OF FILING FEE

Transaction Valuation*	Amount of Filing Fee
$9,040,230	$832

*

For purposes of calculating the amount of filing fee only. The amount assumes options to purchase 2,489,666 shares of NetScout Systems, Inc. common stock, par value $.001 per share, having an aggregate value of $9,040,230 as of November 5, 2002 will be exchanged pursuant to this offer. The aggregate value of such options was calculated based on the Black-Scholes option-pricing model. The amount of the filing fee, calculated in accordance with Section 13(e) and Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals the value of this transaction multiplied by $0.000092.

ý

Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

         Amount Previously Paid: $832
        Form or Registration No.: Schedule TO-I Filing Party: NetScout Systems, Inc.
Date Filed: November 8, 2002

o

Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

o

third-party tender offer subject to Rule 14d-1.


ý

issuer tender offer subject to Rule 13e-4.


o

going-private transaction subject to Rule 13e-3.


o

amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer:     o

INTRODUCTORY STATEMENT

        This Amendment No. 1 amends and supplements the Tender Offer Statement on Schedule TO relating to our offer to exchange outstanding option grants with an exercise price of at least $10.00 per share granted under our 1999 Stock Option and Incentive Plan, as amended, or the NextPoint Networks, Inc. 2000 Stock Incentive Plan assumed by us in connection with the acquisition of NextPoint for new options we will grant upon the terms and subject to the conditions in the Offer to Exchange dated November 8, 2002.

Item 12. Exhibits.

        Item 12 is hereby amended and restated as follows:

(a)(1)(A)	Offer to Exchange dated November 8, 2002.*
(a)(1)(B)	Form of Election Form and Transmittal Letter.*
(a)(1)(C)	Form of Letter to Eligible Option Holders Regarding Offer.*
(a)(1)(D)	Form of Letter to Tendering Option Holders Regarding Acceptance of Tendered Option Grants.*
(a)(5)(A)	NetScout's Annual Report on Form 10-K for the year ended March 31, 2002, filed with the SEC on June 28, 2002 and incorporated herein by reference.
(a)(5)(B)	NetScout's Quarterly Report on Form 10-Q for the three months ended September 30, 2002, filed with the SEC on November 8, 2002 and incorporated herein by reference.
(a)(5)(C)	NetScout's Definitive Proxy Statement on Schedule 14A filed with the SEC on August 23, 2002 and incorporated herein by reference.
(a)(5)(D)	Stock Purchase and Redemption Agreement dated December 31, 1998 by and among NetScout, Greylock Equity Limited Partnership, certain affiliates of TA Associates, Inc. and Egan-Managed Capital, L.P. (filed with the SEC as Exhibit 10.4 to NetScout's Registration Statement on Form S-1 (No. 333-76843)) and incorporated herein by reference.
(a)(5)(E)	Amended and Restated Rights Agreement entered into as of January 15, 1999 by and among NetScout, Greylock Equity Limited Partnership, certain affiliates of TA Associates, Inc. and Egan-Managed Capital, L.P. (filed with the SEC as Exhibit 10.5 to NetScout's Registration Statement on Form S-1 (No. 333-76843)) and incorporated herein by reference.
(a)(5)(F)	Form of Email Reminder to Option Holders.*
(a)(5)(G)	PowerPoint Presentation to Employees.**
(b)	Not applicable.
(d)(1)	NetScout's 1999 Stock Option and Incentive Plan, as amended (filed as Exhibit 10.1 to NetScout's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001 and incorporated herein by reference).
(d)(2)	NextPoint Networks, Inc. 2000 Stock Option Plan (filed as Exhibit 4.4 to NetScout's Registration Statement on Form S-8 (No. 333-41880) and incorporated by herein by reference).
(d)(3)	Form of Incentive Stock Option Agreement pursuant to NetScout's 1999 Stock Option and Incentive Plan, as amended (filed as Schedule B to Exhibit (a)(1)(A) filed with NetScout's Schedule TO-I filed with the SEC on November 8, 2002 and incorporated herein by reference).*

2

(d)(4)	Form of Non-Statutory Stock Option Agreement pursuant to NetScout's 1999 Stock Option and Incentive Plan, as amended (filed as Schedule C to Exhibit (a)(1)(A) filed with NetScout's Schedule TO-I filed with the SEC on November 8, 2002 and incorporated herein by reference).*
(g)	Not applicable.
(h)	Not applicable.

*

Previously filed.

**

Filed herewith.

3

SIGNATURE

        After due 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.

NETSCOUT SYSTEMS, INC.
By:	/s/  ANIL K. SINGHAL Anil K. Singhal President and Chief Executive Officer
Date: November 8, 2002

4

EXHIBIT INDEX

(a)(1)(A)	Offer to Exchange dated November 8, 2002.*
(a)(1)(B)	Form of Election Form and Transmittal Letter.*
(a)(1)(C)	Form of Letter to Eligible Option Holders Regarding Offer.*
(a)(1)(D)	Form of Letter to Tendering Option Holders Regarding Acceptance of Tendered Option Grants.*
(a)(5)(A)	NetScout's Annual Report on Form 10-K for the year ended March 31, 2002, filed with the SEC on June 28, 2002 and incorporated herein by reference.
(a)(5)(B)	NetScout's Quarterly Report on Form 10-Q for the three months ended September 30, 2002, filed with the SEC on November 8, 2002 and incorporated herein by reference.
(a)(5)(C)	NetScout's Definitive Proxy Statement on Schedule 14A filed with the SEC on August 23, 2002 and incorporated herein by reference.
(a)(5)(D)	Stock Purchase and Redemption Agreement dated December 31, 1998 by and among NetScout, Greylock Equity Limited Partnership, certain affiliates of TA Associates, Inc. and Egan-Managed Capital, L.P. (filed with the SEC as Exhibit 10.4 to NetScout's Registration Statement on Form S-1 (No. 333-76843)) and incorporated herein by reference.
(a)(5)(E)	Amended and Restated Rights Agreement entered into as of January 15, 1999 by and among NetScout, Greylock Equity Limited Partnership, certain affiliates of TA Associates, Inc. and Egan-Managed Capital, L.P. (filed with the SEC as Exhibit 10.5 to NetScout's Registration Statement on Form S-1 (No. 333-76843)) and incorporated herein by reference.
(a)(5)(F)	Form of Email Reminder to Option Holders.*
(a)(5)(G)	PowerPoint Presentation to Employees.**
(b)	Not applicable.
(d)(1)	NetScout's 1999 Stock Option and Incentive Plan, as amended (filed as Exhibit 10.1 to NetScout's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001 and incorporated herein by reference).
(d)(2)	NextPoint Networks, Inc. 2000 Stock Option Plan (filed as Exhibit 4.4 to NetScout's Registration Statement on Form S-8 (No. 333-41880) and incorporated by herein by reference).
(d)(3)	Form of Incentive Stock Option Agreement pursuant to NetScout's 1999 Stock Option and Incentive Plan, as amended (filed as Schedule B to Exhibit (a)(1)(A) filed with NetScout's Schedule TO-I filed with the SEC on November 8, 2002 and incorporated herein by reference).*
(d)(4)	Form of Non-Statutory Stock Option Agreement pursuant to NetScout's 1999 Stock Option and Incentive Plan, as amended (filed as Schedule C to Exhibit (a)(1)(A) filed with NetScout's Schedule TO-I filed with the SEC on November 8, 2002 and incorporated herein by reference).*
(g)	Not applicable.
(h)	Not applicable.

*

Previously filed.

**

Filed herewith.

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CALCULATION OF FILING FEE
INTRODUCTORY STATEMENT
SIGNATURE
EXHIBIT INDEX

EX-99.(A)(5)(G)

EXHIBIT (a)(5)(G)

NetScout Employee Option Exchange

•

Exchange old grants priced @ $10 or higher



•

All employees eligible, except Chairman and CEO



•

Tender (return) any/all old option grants by 12/9/02



•

New grant after 6 months and 1 day

•

Between June 12 and June 20, 2003

•

Same number of shares as old grant

•

New exercise price set on date of grant

•

Partial reset of old grant vesting

•

Credit for old vesting through new grant date

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37.5% of old grant total "unvested"

•

Remaining vested balance carried over to new grant

NetScout Employee Option Exchange

•

3 year vesting period for new options

•

In 12 equal installments




•

Some conditions

•

Each tendered grant cannot be split

•

Entire grant or entire unexercised portion

•

Exercised shares not included

•

If any tendered, 6 month look-back applies

•

Grants since May 7, whatever price, must be tendered

•

New grant vest over 3 years

•

If any tendered, no new grants for 6 months

•

You must be an employee through new grant date

NetScout Employee Option Exchange

Process
11/8	Employee announcement meeting Offer distributed
11/8-14	Offer document examination period CONSULT YOUR TAX ADVISOR
11/14	Email questions to Jim Hamilton
11/15	1st Q&A meeting
12/2	Email additional questions to Jim Hamilton
12/3	2nd Q&A meeting
NLT 12/9	Employee election forms received Confirmation form sent
6/12-20	New grants made by Board

NetScout Employee Option Exchange

Example: Typical 3 year old option

Option for 160 Shares	Old Option Dec. 9 2002	Old Option in June 2003	New Option in June 2003	Change between Old and New Options in June 2003
No. of Shares	160 shrs	160 shrs	160 shrs	No change
Grant Date	12/1/99	12/1/99	6/15/03
Exercise Price	$23.88	$23.88	Unknown	Lower or Higher
Vesting Period	4 years	4 years	3 years
Vest Time Left	1 year	6 months	3 years	2 1/2 years longer
Shares Vested	120 shrs	140 shrs	80 shrs	60 shrs less

NetScout Employee Option Exchange

Example: Typical 2 year old option

Option for 160 Shares	Old Option Dec. 9 2002	Old Option in June 2003	New Option in June 2003	Change between Old and New Options in June 2003
No. of Shares	160 shrs	160 shrs	160 shrs	No change0
Grant Date	12/1/00	12/1/00	6/15/03
Exercise Price	$16.75	$16.75	Unknown	Lower or Higher
Vesting Period	4 years	4 years	3 years
Vest Time Left	2 years	1 1/2 years	3 years	1 1/2 years longer
Amount Vested	80 shrs	100 shrs	40 shrs	60 shrs less

NetScout Employee Option Exchange

Example: Typical 1 year old option—INELIGIBLE

Option for 160 Shares	Old Option Dec. 9 2002	Old Option in June 2003	New Option in June 2003	Change between Old and New Options in June 2003
No. of Shares	160 shrs	160 shrs	Ineligible
Grant Date	12/1/01	12/1/01	NA
Exercise Price	$9.00	$9.00	NA
Vesting Period	4 years	4 years	NA
Vest Time Left	3 years	2 1/2 years	NA
Amount Vested	40 shrs	60 shrs	NA

NetScout Employee Option Exchange

QUESTIONS AND ANSWERS