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As filed with the Securities and Exchange Commission on November 7, 2000
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8 REGISTRATION STATEMENT
(INCLUDING REGISTRATION OF SHARES FOR RESALE
UNDER A FORM S-3 PROSPECTUS)
UNDER THE SECURITIES ACT OF 1933
TRANSMETA CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
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<S> <C>
DELAWARE 77-0402448
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
</TABLE>
3940 FREEDOM CIRCLE
SANTA CLARA, CALIFORNIA 95054
(Address of Principal Executive Offices, including Zip Code)
STOCK OPTION AGREEMENTS
1995 EQUITY INCENTIVE PLAN
1997 EQUITY INCENTIVE PLAN
2000 EQUITY INCENTIVE PLAN
2000 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plans)
DAVID R. DITZEL
CHIEF EXECUTIVE OFFICER
TRANSMETA CORPORATION
3940 FREEDOM CIRCLE
SANTA CLARA, CA 95054
(408) 919-3000
(Name, Address and Telephone Number of Agent For Service)
COPIES TO:
Mark A. Leahy, Esq.
Craig A. Hart, Esq.
Fenwick & West LLP
Two Palo Alto Square, Palo Alto, California 94306
CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED
AMOUNT MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
---------- ---------- --------- -------------- ---
<S> <C> <C> <C> <C>
Common Stock, $0.00001 par value 15,569,894(1) $ 21.00(2) $326,967,774(2) $ 86,320
Common Stock, $0.00001 par value 15,463,406(3) $ 4.19(4) $ 64,791,672(5) $ 17,105(5)
TOTAL 31,033,300 $ $103,425
</TABLE>
(1) Represents 7,000,000 shares reserved for issuance upon the exercise of
stock options that may be granted under the 2000 Equity Incentive Plan,
2,000,000 shares reserved for issuance under the 2000 Employee Stock
Purchase Plan, 87,814 shares reserved for issuance upon the exercise of
stock options that may be granted under the 1997 Equity Incentive Plan
and 6,482,080 shares issued by the Registrant pursuant to the exercise
of options granted under Stock Option Agreements.
(2) Estimated as of November 6, 2000 pursuant to Rule 457(c) solely for the
purpose of calculating the registration fee.
(3) Represents the aggregate of 465,512 shares subject to options
outstanding under the 1995 Equity Incentive Plan, 13,977,894 shares
subject to options outstanding under the 1997 Equity Incentive Plan and
1,020,000 shares subject to options outstanding under Stock Option
Agreements.
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(4) Weighted average per share exercise price for such outstanding options.
(5) Calculated based on the weighted average per share exercise price,
pursuant to Rule 457(h)(1) of the Securities Act.
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PROSPECTUS
TRANSMETA CORPORATION
Up to 6,482,080 Shares of Common Stock
--------------------
The 6,482,080 shares of common stock covered by this prospectus were
previously issued by Transmeta pursuant to Stock Option Agreements entered into
in connection with the employment of each of the selling stockholders or their
families. These shares may be offered and sold over time by the stockholders
named in this prospectus under the heading "Selling Stockholders," by their
pledgees or donees, or by other transferees that receive the shares of common
stock in transfers other than public sales.
The selling stockholders may sell the shares of Transmeta common stock
offered under this prospectus in the open market at prevailing market prices, or
in private transactions at negotiated prices. They may sell the shares directly,
or may sell them through underwriters, brokers or dealers. Underwriters,
brokers, or dealers may receive discounts, concessions or commissions from the
selling stockholders or from the purchaser, and this compensation might be in
excess of the compensation customary in the type of transaction involved. See
"Plan of Distribution."
We will not receive any of the proceeds from the sale of these shares.
Our common stock is quoted on the Nasdaq National Market under the
symbol "TMTA."
--------------------
INVESTING IN TRANSMETA COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
PLEASE CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS
PROSPECTUS.
--------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is November 7, 2000
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TABLE OF CONTENTS
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Summary .......................................... 4
Risk Factors ..................................... 4
Use of Proceeds .................................. 15
Dilution ......................................... 15
Selling Stockholders ............................. 16
Plan of Distribution ............................. 18
Legal Matters .................................... 19
Experts .......................................... 19
Where You Can Find More Information .............. 19
</TABLE>
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This prospectus contains forward-looking statements. In some cases, you
can identify these statements by forward-looking words such as "may," "might,"
"will," "should," "expect," "plan," "anticipated," "believe," "estimate,"
"predict," "potential" or "continue," the negative or plural of these words and
other comparable terminology. These forward-looking statements, which are
subject to risks, uncertainties and assumptions about us, may include, among
other things, projections of our future financial performance, our anticipated
growth strategies and anticipated trends in our business and the markets in
which we operate. These statements are only predictions, based on our current
expectations and projections about future events. Although we believe the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause our actual results,
levels of activity, performance or achievements to differ materially from the
results, levels of activity, performance or achievements expressed or implied by
the forward-looking statements, including those factors discussed under the
caption entitled "Risk Factors." You should specifically consider the numerous
risks outlined under "Risk Factors."
Unless the context otherwise requires, the terms "we," "our," "us," "the
company" and "Transmeta" refer to Transmeta Corporation, a Delaware corporation.
--------------------
In connection with this offering, no person is authorized to give any
information or to make any representations not contained in this prospectus. If
information is given or representations are made, you may not rely on that
information or representations as having been authorized by us. This prospectus
is neither an offer to sell nor a solicitation of an offer to buy any securities
other than those registered by this prospectus, nor is it an offer to sell or a
solicitation of an offer to buy securities where an offer or solicitation would
be unlawful. You may not imply from the delivery of this prospectus, nor from
any sale made under this prospectus, that our affairs are unchanged since the
date of this prospectus or that the information contained in this prospectus is
correct as of any time after the date of this prospectus.
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TRANSMETA CORPORATION
Transmeta develops and sells software-based microprocessors and develops
additional hardware and software technologies for Mobile Internet Computers,
which are portable computing and communication devices designed to provide an
Internet experience comparable to that traditionally provided by a desktop
personal computer. Our Crusoe family of microprocessors is targeted at the
notebook and Internet appliance segments of the Mobile Internet Computer market.
We provide Crusoe microprocessors to suit both existing and emerging products
within these market segments.
We were incorporated in California in March 1995. We reincorporated in
Delaware in October 2000. Our principal executive offices are located at 3940
Freedom Circle, Santa Clara, California 95054, and our telephone number is (408)
919-3000. Transmeta(TM), the Transmeta logo, Crusoe(TM), the Crusoe logo, Code
Morphing(TM) and LongRun(TM) are trademarks of Transmeta Corporation in the
United States and other countries. All other trademarks or trade names appearing
in this prospectus are the property of their respective owners.
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should
carefully consider the following risk factors, as well as other information
contained in this prospectus, before deciding to invest in shares of our common
stock. If any of the following risks actually occurs, our business, financial
condition and results of operations would suffer. In this case, the trading
price of our common stock could decline and you might lose all or part of your
investment in our common stock.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
WE HAVE A HISTORY OF LOSSES, EXPECT TO INCUR FURTHER SIGNIFICANT LOSSES
AND MAY NEVER ACHIEVE OR MAINTAIN PROFITABILITY.
We have a history of substantial losses, expect to incur further
significant losses, and do not expect to achieve profitability in the near
future. We incurred net losses of $10.1 million in 1998, $41.1 million in 1999
and $71.5 million in the first nine months of 2000. As of September 30, 2000, we
had an accumulated deficit of approximately $147.5 million. We intend to
significantly increase our product development, sales and marketing, and
administrative expenses. We also expect to incur substantial non-cash charges
relating to the amortization of deferred stock compensation, which will serve to
increase our net losses further. We cannot assure you that our revenue will
increase, and we may never achieve profitability. Even if we achieve
profitability, we may not be able to sustain or increase profitability on a
quarterly or an annual basis.
OUR BUSINESS IS DIFFICULT TO EVALUATE BECAUSE WE RECOGNIZED OUR FIRST
PRODUCT REVENUE IN THE FIRST HALF OF 2000.
We introduced our first Crusoe microprocessors in January 2000 and
recognized our first product revenue from these products in the first half of
2000. Through June 30, 2000, we had manufactured only limited quantities of our
products. In September 2000, we began volume shipments. Thus, we have only a
very limited operating history with all of our products. This limited history
makes it difficult to evaluate our business. We derived substantially all of our
revenue for 1997, 1998 and 1999 from license fees, but do not expect any license
fee revenue in the foreseeable future. As a result, we need to generate
substantial future revenue from product sales, but our ability to manufacture
our products in production quantities and the revenue and income potential of
our products and business are unproven. You should consider our chances of
financial and operational success in light of the risks, uncertainties,
expenses, delays and difficulties associated with new businesses in highly
competitive technology fields, many of which may be beyond our control. If we
fail to address these risks, uncertainties, expenses, delays and difficulties,
the value of your investment would decline.
WE DEPEND ON INCREASING DEMAND FOR OUR CRUSOE MICROPROCESSORS.
We expect to derive virtually all of our revenue for the foreseeable
future from the sale of our Crusoe microprocessors, which we only began to ship
in volume in September 2000. Therefore, our future operating results will depend
on the demand for Crusoe by future customers. If Crusoe is not widely accepted
by the market due to performance, price, compatibility or any other reason, or
if, following acceptance, we fail to enhance Crusoe in a timely manner, demand
for our products may fail to increase. If demand for our Crusoe products does
not increase, our revenue will not increase.
OUR FUTURE REVENUE DEPENDS UPON OUR ABILITY TO PENETRATE THE NOTEBOOK
COMPUTER MARKET.
Our success depends upon our ability to sell our Crusoe microprocessors
in volume to makers of notebook computers, which consist of a small number of
OEMs. Due to our software-based approach to microprocessor design, we have been
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required, and expect to continue to be required, to devote substantial resources
to educate prospective customers in the notebook computer market about the
benefits of our Crusoe products and to assist potential customers with their
designs. In addition, since computer products generally are designed to
incorporate a specific microprocessor, OEMs must design new products to utilize
different microprocessors such as our Crusoe products. Given the complexity of
these computer products and their many components, designing new products
requires significant investments. For instance, OEMs may need to design new
computer casings, basic input/output system software and motherboards. Our
target customers may not choose our products for technical, performance,
packaging, novelty, design cost or other reasons. For example, IBM showed a
technology demonstration at a trade show in June 2000 using the Crusoe
microprocessor in an existing ThinkPad model 240 notebook computer but has since
decided not to proceed with the project. If our Crusoe products fail to achieve
widespread acceptance in the notebook computer market, we may never achieve
revenue sufficient to sustain our business and the value of your investment
would decline significantly.
THE GROWTH OF OUR BUSINESS DEPENDS IN PART ON THE GROWTH OF THE INTERNET
APPLIANCE MARKET AND OUR ABILITY TO MEET THE NEEDS OF THIS MARKET.
The growth of our business depends in part on increased acceptance and
use of Internet appliances. We depend on the ability of our target customers to
develop new products and enhance existing products for the Internet appliance
market that incorporate our products and to introduce and promote their products
successfully. The market for Internet appliances depends in part upon the
deployment of wireless technologies that enable the delivery of Internet content
at a speed comparable to that of a desktop computer. The wireless technologies
currently under development might not fully address the needs of mobile Internet
users. If the use of Internet appliances does not grow as we anticipate, or our
target customers do not incorporate our products into theirs, our growth would
be impeded. In addition, the market for Internet appliances is new and evolving.
Internet appliance manufacturers are likely to have varying requirements. To
meet the requirements of different Internet appliance manufacturers, we may be
required to change our product design or features, sales methods or pricing
policies. The costs of addressing these requirements could be substantial and
could delay or prevent any improvement in our operating results.
OUR OPERATING RESULTS ARE DIFFICULT TO PREDICT IN ADVANCE AND MAY
FLUCTUATE SIGNIFICANTLY, AND A FAILURE TO MEET THE EXPECTATIONS OF
SECURITIES ANALYSTS OR INVESTORS WOULD LIKELY RESULT IN A SUBSTANTIAL
DECLINE IN OUR STOCK PRICE.
There is little historical financial information that is useful in
evaluating our business, prospects and future operating results. You should not
rely on quarter-to-quarter comparisons of our results of operations as an
indication of our future performance. We expect our future operating results to
fluctuate significantly from quarter to quarter. Our results could fluctuate
because of the amount of revenue we recognize or the amount of cash we spend in
a particular period. For example, our results could fluctuate due to the
following factors:
- the gain or loss of significant customers or significant changes
in purchasing volume;
- the amount and timing of our operating expenses and capital
expenditures;
- pricing concessions on volume sales;
- the effectiveness of our product cost reduction efforts and
those of our suppliers;
- changes in the average selling prices of our microprocessors or
the products that incorporate them;
- our ability to specify, develop, complete, introduce and market
new products and technologies and bring them to volume
production in a timely manner; and
- changes in the mix of products we sell.
Our reliance on third parties for wafer fabrication, assembly and test
services also could contribute to fluctuations in our quarterly results, based
on factors such as the following:
- fluctuations in manufacturing yields;
- cancellations, changes or delays of deliveries to us by our
manufacturer;
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- the cost and availability of manufacturing, assembly and test
capacity; and
- problems or delays due to shifting our products to smaller
geometry process technologies and designing our products to
achieve higher levels of design integration.
In addition, our results could fluctuate from quarter to quarter due to
factors in our industry that are outside of our control, including the following
factors:
- the timing, rescheduling or cancellation of customer orders;
- the varying length of our sales cycles;
- the availability and pricing of competing products and
technologies and the resulting effect on sales and pricing of
our products;
- fluctuations in the cost and availability of components, such as
dynamic random access memory, or DRAM, that our customers
require to build systems that incorporate our products;
- fluctuations in the cost and availability of raw materials, such
as wafers, chip packages and chip capacitors;
- the rate of adoption and acceptance of new industry standards in
our target markets;
- seasonality in some of our target markets;
- changes in demand by the end users of our customers' products;
and
- variability of our customers' product life cycles.
Because a large portion of our expenses, including rent, salaries and
capital leases, is fixed and difficult to reduce, if our revenue does not meet
our expectations, the adverse effect of the revenue shortfall will be magnified
by the fixed nature of our expenses. If our operating results fail to meet or
exceed the expectations of securities analysts or investors, our stock price
would likely decline substantially.
COMPETITION IN THE SEMICONDUCTOR MARKET IS INTENSE; MANY OF OUR
COMPETITORS AND POTENTIAL COMPETITORS ARE MUCH LARGER THAN WE ARE AND
HAVE SIGNIFICANTLY GREATER RESOURCES; WE MAY NOT BE ABLE TO COMPETE
EFFECTIVELY.
The market for microprocessors is intensely competitive, rapidly
evolving and subject to rapid technological change. We believe that competition
will become more intense in the future and may cause price reductions, reduced
gross margins and loss of market share, any one of which could significantly
reduce our future revenue and increase our losses. Significant competitors that
offer microprocessors for the notebook computer market include Advanced Micro
Devices and Intel. Significant competitors that offer microprocessors for the
Internet appliance market include manufacturers of reduced instruction set
computer, or RISC, microprocessors such as licensees of technology from ARM
Holdings plc and from MIPS Technologies, Inc. In addition, Intel recently
announced that it is developing a RISC microprocessor for release by the end of
2000. We also face competition from providers of x86 compatible microprocessors
for the Internet appliance market, including National Semiconductor.
Many of our current and potential competitors have longer operating
histories, significantly greater financial, technical, product development and
marketing resources, greater name recognition and significantly larger customer
bases than we do. Our competitors may be able to develop products comparable or
superior to those we offer, adapt more quickly than we do to new technologies,
evolving industry trends and customer requirements, and devote greater resources
to the development, promotion and sale of their products than we can. Many of
our competitors also have well-established relationships with our existing and
prospective customers and suppliers. As a result of these factors, many of our
competitors, either alone or with other companies, have significant influence in
our target markets that could outweigh any advantage that we may possess. For
example, negotiating and maintaining favorable customer and strategic
relationships are and will continue to be critical to our business. If our
competitors use their influence to negotiate strategic relationships on more
favorable terms than we are able to negotiate, or if they structure
relationships that impair our ability to form strategic relationships, our
competitive position and our business would be substantially damaged.
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Furthermore, a number of these competitors may merge or form strategic
relationships that would enable them to offer, or bring to market earlier,
products that are superior to ours in terms of features, quality, pricing or
other factors. We expect additional competition from other established and
emerging companies and technologies. We may not be able to compete effectively
against current and potential competitors, especially those with significantly
greater resources and market leverage.
OUR PRODUCTS MAY HAVE DEFECTS, WHICH COULD DAMAGE OUR REPUTATION,
DECREASE MARKET ACCEPTANCE OF OUR PRODUCTS, CAUSE US TO LOSE CUSTOMERS
AND REVENUE, AND RESULT IN LIABILITY TO US.
Highly complex products such as our microprocessors may contain hardware
or software defects or bugs. Often, these defects and bugs are not detected
until after the products have been shipped. If any of our products contains
defects, or has reliability, quality or compatibility problems, our reputation
might be damaged significantly and customers might be reluctant to buy our
products, which could result in the loss of or failure to attract customers. In
addition, these defects could interrupt or delay sales. We may have to invest
significant capital and other resources to correct these problems. If any of
these problems are not found until after we have commenced commercial production
of a new product, we might incur substantial additional development costs. If we
fail to provide solutions to the problems, such as software upgrades or patches,
we could also incur product recall, repair or replacement costs. These problems
might also result in claims against us by our customers or others. In addition,
these problems might divert our technical and other resources from other
development efforts. Moreover, we would likely lose, or experience a delay in,
market acceptance of the affected product or products, and we could lose
credibility with our current and prospective customers. This is particularly
significant as we are a new entrant to a market dominated by large
well-established companies.
WE EXPECT TO DERIVE A SUBSTANTIAL PORTION OF OUR REVENUE FROM A SMALL
NUMBER OF CUSTOMERS, AND OUR REVENUE WOULD DECLINE SIGNIFICANTLY IF ANY
MAJOR CUSTOMER CANCELS, REDUCES OR DELAYS A PURCHASE OF OUR PRODUCTS.
We expect that a small number of OEM customers and distributors will
account for a significant portion of our revenue. For the nine months ended
September 30, 2000, sales to Sony Electronics accounted for 50.2% of our product
revenue and sales to Fujitsu Ltd. accounted for 20.3% of our product revenue.
Our future success will depend upon the timing and size of future purchase
orders, if any, from these customers and new customers and, in particular:
- the success of our customers in marketing products that
incorporate our products;
- the product requirements of our customers; and
- the financial and operational success of our customers.
We have entered into two distributor agreements, both of which are
exclusive in large territories, one in Taiwan, Hong Kong and China and the other
in North America. These agreements do not contain minimum purchase commitments.
Any distributor that fails to emphasize sales of our products, chooses to
emphasize alternative products or promotes products of our competitors might not
sell a significant or any amount of our products. We expect that our sales to
OEM customers will be made on the basis of purchase orders rather than long-term
commitments. In addition, customers can delay, modify or cancel orders without
penalty. Many of our customers and potential customers are significantly larger
than we are and have sufficient bargaining power to demand reduced prices and
favorable nonstandard terms. The loss of any major customer, or the delay of
significant orders from these customers, could reduce or delay our recognition
of product revenue.
IF WE FAIL TO ESTABLISH AND MAINTAIN RELATIONSHIPS WITH KEY PARTICIPANTS
IN OUR TARGET MARKETS, WE MAY HAVE DIFFICULTY SELLING OUR PRODUCTS.
In addition to our customers, we will need to establish and maintain
relationships with companies that develop technologies that work in conjunction
with our microprocessors. These technologies include operating systems, basic
input/output systems, graphics chips, dynamic random access memory, or DRAM, and
other hardware components and software that are used in computers. If we fail to
establish and maintain these relationships, it would be more difficult for us to
develop and market products with features that address emerging market trends.
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IF OUR PRODUCTS ARE NOT COMPATIBLE WITH THE OTHER COMPONENTS THAT OUR
CUSTOMERS DESIGN INTO THEIR SYSTEMS, SALES OF OUR PRODUCTS COULD BE
DELAYED OR CANCELLED AND A SUBSTANTIAL PORTION OF OUR PRODUCTS COULD BE
RETURNED.
Our products are designed to function as components of a system. We
anticipate that our customers will use our products in systems that have
differing specifications and that require various other components, such as
dynamic random access memory, or DRAM, and other semiconductor devices. If our
customers' systems are to function properly, all of the components must be
compatible with each other. If our customers experience system-level
incompatibilities between our products and the other components in their
systems, we could be required to modify our products to overcome the
incompatibilities or delay shipment of our products until the manufacturers of
other components modify their products or until our customers select other
components. These events would delay purchases of our products, cause orders for
our products to be cancelled or result in product returns. System level
incompatibilities that are significant, or are perceived to be significant,
could also result in negative publicity and could significantly damage our
business.
IF OUR CUSTOMERS ARE NOT ABLE TO OBTAIN THE OTHER COMPONENTS NECESSARY
TO BUILD THEIR SYSTEMS, SALES OF OUR PRODUCTS COULD BE DELAYED OR
CANCELLED.
Suppliers of other components incorporated into our customers' systems
may experience shortages, which could reduce the demand for our products. For
example, from time to time, the semiconductor industry has experienced shortages
of some materials and devices, including dynamic random access memory, or DRAM.
Our customers could defer or cancel purchases of our products if they are not
able to obtain the other components necessary to build their systems.
THERE MAY BE SOFTWARE APPLICATIONS OR OPERATING SYSTEMS THAT ARE NOT
COMPATIBLE WITH OUR PRODUCTS, WHICH MAY PREVENT OUR PRODUCTS FROM
ACHIEVING MARKET ACCEPTANCE AND PREVENT US FROM RECEIVING SIGNIFICANT
PRODUCT REVENUE.
Software applications, games or operating systems with machine-specific
routines programmed into them can result in specific incompatibilities. If a
particular software application, game or operating system is programmed in a
manner that makes it unable to respond correctly to our microprocessor, it will
appear to users of that software that our microprocessor is not compatible with
PC software. We might encounter incompatibilities in the future. If any
incompatibilities are significant or perceived to be significant, our products
may never achieve market acceptance and we may not receive significant revenue
from product sales.
OUR RECENT GROWTH COULD PLACE A SIGNIFICANT STRAIN ON OUR MANAGEMENT
SYSTEMS, INFRASTRUCTURE AND OTHER RESOURCES, AND OUR BUSINESS MAY NOT
SUCCEED IF WE FAIL TO MANAGE OUR GROWTH EFFECTIVELY.
Our ability to implement our business plan in a rapidly evolving market
requires an effective planning and management process. Until this year, we
focused primarily on the development of our products. We have recently increased
our number of employees substantially and plan to increase the scope of our
operations and the size of our direct sales force domestically and
internationally. The number of employees that we and our subsidiaries employ
increased from 193 at January 1, 2000 to 364 at September 30, 2000. We expect to
expand our facilities in proportion to any expansion in the number of our
employees. This growth could place a significant strain on our management
systems, infrastructure and other resources. In addition, we expect that we will
need to continue to improve our financial and managerial controls and
procedures. We will also need to expand, train and manage our workforce
worldwide. Furthermore, we expect that we will be required to manage an
increasing number of relationships with suppliers, manufacturers, customers and
other third parties. If we fail to manage our growth effectively, our
employee-related costs and employee turnover could increase, which would
jeopardize our ability to execute on our business plan.
OUR LENGTHY AND VARIABLE SALES CYCLES MAKE IT DIFFICULT FOR US TO
PREDICT WHEN AND IF A DESIGN WIN WILL RESULT IN VOLUME SHIPMENTS.
We depend upon companies designing our microprocessors into their
products, which we refer to as design wins. Many of our targeted customers
consider the choice of a microprocessor to be a strategic decision. Our targeted
customers may take a long time to evaluate our products, and many individuals
may be involved in the evaluation process. We anticipate that the length of time
between our initial contact with a customer and the time when we recognize
revenue from that customer will vary. We expect our sales cycles to range from
six to twelve months from the time we achieve a design win to the time the
customer begins volume production of products that incorporate our
microprocessors. We do not have historical experience selling our products that
is sufficient for us to determine how our sales cycles will affect the timing of
our revenue. Variations in the length of our sales cycles could cause our
revenue to fluctuate widely from period to period. While potential customers are
evaluating our products and before they place an order with us, we may incur
sales and marketing expenses and expend
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<PAGE> 10
significant management and engineering resources without any assurance of
success. The value of any design win depends upon the commercial success of our
customers' products. Therefore, we take risks related to project cancellations
or changed product plans, which could result in the loss of anticipated sales.
We can offer no assurance that we will achieve further design wins or that the
products for which we achieve design wins will be commercially successful.
IF WE DO NOT KEEP PACE WITH TECHNOLOGICAL CHANGE, OUR PRODUCTS MAY NOT
BE COMPETITIVE AND OUR REVENUE AND OPERATING RESULTS MAY SUFFER.
The semiconductor industry is characterized by rapid technological
change, frequent new product introductions and enhancements, and ongoing
customer demands for greater performance. In addition, the average selling price
of any particular microprocessor product has historically decreased over its
life, and we expect that trend to continue. As a result, our products may not be
competitive if we fail to introduce new products or product enhancements that
meet evolving customer demands. The development of new products is complex, and
we may not be able to complete development in a timely manner, or at all. To
introduce products on a timely basis, we must:
- accurately define and design new products to meet market needs;
- design features that continue to differentiate our products from
those of our competitors;
- transition our products to new manufacturing process
technologies;
- identify emerging technological trends in our target markets;
- anticipate changes in end-user preferences with respect to our
customers' products;
- bring products to market on a timely basis at competitive
prices; and
- respond effectively to technological changes or product
announcements by others.
We believe that we will need to continue to enhance our products and
develop new products to keep pace with competitive and technological
developments and to achieve market acceptance for our products.
OUR DEPENDENCE ON THIRD PARTIES TO FABRICATE WAFERS LIMITS OUR CONTROL
OVER THE PRODUCTION, SUPPLY AND DELIVERY OF OUR PRODUCTS.
The cost, quality and availability of third-party manufacturing
operations are essential to the successful production of our products. We
currently rely exclusively on IBM to fabricate our wafers. Our contract with IBM
does not obligate IBM to provide us with any specified number of wafers at any
specified price until IBM has accepted a purchase order. The absence of
dedicated capacity under our agreement means that, with little or no notice, IBM
could refuse to continue to fabricate all or some of the wafers that we require
or change the terms under which it fabricates wafers. If IBM were to stop
manufacturing for us, we would likely be unable to replace the lost capacity on
a timely basis. Transferring to another manufacturer would require a significant
amount of time, and a smooth and timely transition would be unlikely. As a
result, we could lose potential sales and fail to meet existing obligations to
our customers. In addition, if IBM were to change the terms under which it
manufactures for us, our manufacturing costs could increase.
We recently qualified Taiwan Semiconductor Manufacturing Co., or TSMC,
to fabricate wafers for Crusoe microprocessors. We do not have a manufacturing
agreement with TSMC or a guaranteed level of production capacity or any
particular price from TSMC. We place orders on a purchase order basis and TSMC
may allocate capacity to other companies' products while reducing deliveries to
us on short notice. Any inability of TSMC to fabricate our wafers could result
in significant delays and increase production costs of our microprocessors.
Our reliance on third-party manufacturers exposes us to the following
risks outside our control:
- unpredictability of manufacturing yields and production costs;
- interruptions in shipments;
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<PAGE> 11
- potential lack of adequate capacity to fill all or part of the
services we require;
- inability to control quality of finished products;
- inability to control product delivery schedules; and
- potential lack of access to key fabrication process
technologies.
OUR DEPENDENCE ON THIRD PARTIES TO PROVIDE ASSEMBLY AND TEST SERVICES
LIMITS OUR CONTROL OVER PRODUCTION COSTS AND PRODUCT SUPPLY.
We rely on IBM for substantially all of our assembly and test services.
As a result, we do not directly control our product delivery schedules. This
lack of control could result in product shortages as IBM manufactures our
current products in volume and, in the future, as we introduce new products.
Product shortages could increase our costs or delay delivery of our products. We
do not have a contract with IBM for test and assembly services, and we typically
procure these services from IBM on a per order basis. Therefore, we may not be
able to obtain assembly and testing services for our products on acceptable
terms, or at all. If we are required to find and qualify alternative assembly or
testing services, we could experience delays in product shipments or a decline
in product quality.
WE MAY NOT ACHIEVE ACCEPTABLE MANUFACTURING YIELDS, WHICH COULD INCREASE
THE COST AND REDUCE THE SUPPLY OF OUR PRODUCTS.
The fabrication of wafers for our microprocessors is a highly complex
and precise process that requires production in a tightly controlled, clean room
environment. Minute impurities, difficulties in the fabrication process, defects
in the masks used to print circuits on a wafer or other factors can cause
numerous die on each wafer to be nonfunctional. The proportion of functional die
expressed as a percentage of total die on a wafer is referred to as product
"yield." Semiconductor companies frequently encounter difficulties in achieving
expected product yields. If we do not achieve expected yields, our product costs
would increase. Even with functional die, normal variations in wafer fabrication
can cause some die to run faster than others. Variations in speed yield could
lead to excess inventory of slower products and insufficient inventory of faster
products, depending upon customer demand. Further, we may experience yield
problems as we migrate our manufacturing processes to smaller geometries. Yield
problems may not be identified and resolved until a product has been
manufactured and can be analyzed and tested, if ever. As a result, yield
problems are often difficult, time consuming and expensive to correct. Yield
problems could hamper our ability to deliver our products to our customers in a
timely manner.
IF WE FAIL TO FORECAST DEMAND FOR OUR PRODUCTS ACCURATELY, WE COULD LOSE
SALES AND INCUR INVENTORY LOSSES.
Because we only introduced our products in January 2000, we have little
historical information about demand for our products. We expect that the demand
for our products will depend upon many factors and be difficult to forecast. We
expect that it will become more difficult to forecast demand as we introduce a
larger number of products and as competition in the markets for our products
intensifies. Significant unanticipated fluctuations in demand could cause
problems in our operations.
The lead time required to fabricate large volumes of wafers is often
longer than the lead time our customers provide to us for delivery of their
product requirements. Therefore, we often must place our orders in advance of
expected purchase orders from our customers. As a result, we have only a limited
ability to react to fluctuations in demand for our products, which could cause
us to have either too much or too little inventory of a particular product. If
demand does not develop as we expect, we could have excess production. Excess
production would result in excess inventories of finished products, which would
use cash and could result in inventory write-offs. We have limited capability to
reduce ongoing production once wafer fabrication has commenced. Excess materials
would likely result in excess or obsolete inventory. If demand exceeds our
expectations, IBM may not be able to fabricate wafers as quickly as we need
them. In that event, we would need to increase production rapidly at IBM or
find, qualify and begin production at additional manufacturers, which may not be
possible within a time frame acceptable to our customers. The inability of IBM
to increase production rapidly enough could cause us to fail to meet customer
demand. In addition, rapid increases in production levels to meet unanticipated
demand could result in higher costs for manufacturing and other expenses. These
higher costs could lower our gross margins.
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<PAGE> 12
OUR PRODUCTS MAY INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS,
WHICH MAY CAUSE US TO BECOME SUBJECT TO EXPENSIVE LITIGATION, CAUSE US
TO INCUR SUBSTANTIAL DAMAGES, REQUIRE US TO PAY SIGNIFICANT LICENSE FEES
OR PREVENT US FROM SELLING OUR PRODUCTS.
Our industry is characterized by the existence of a large number of
patents and frequent claims and related litigation regarding patent and other
intellectual property rights. We cannot be certain that our products do not and
will not infringe issued patents, patents to be issued in the future, or other
intellectual property rights of others. In addition, leading companies in the
semiconductor industry have extensive portfolios with respect to semiconductor
technology. From time to time, third parties, including these leading companies,
may assert exclusive patent, copyright, trademark and other intellectual
property rights to technologies and related methods that are important to us. We
expect that we may become subject to infringement claims as the number of
products and competitors in our target markets grows and the functionality of
products overlaps. We have received, and may in the future receive,
communications from third parties asserting patent or other intellectual
property rights covering our products. Litigation may be necessary in the future
to defend against claims of infringement or invalidity, to determine the
validity and scope of the proprietary rights of others, to enforce our
intellectual property rights, or to protect our trade secrets. We may also be
subject to claims from customers for indemnification. Any resulting litigation,
regardless of its resolution, could result in substantial costs and diversion of
resources.
If it were determined that our products infringe the intellectual
property rights of others, we would need to obtain licenses from these parties
or substantially reengineer our products in order to avoid infringement. We
might not be able to obtain the necessary licenses on acceptable terms or at
all, or to reengineer our products successfully. Moreover, if we are sued for
infringement and lose the suit, we could be required to pay substantial damages
or be enjoined from licensing or using the infringing products or technology.
Any of the foregoing could cause us to incur significant costs and prevent us
from selling our products.
IF WE ARE UNABLE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS, OUR
COMPETITORS MAY GAIN ACCESS TO OUR TECHNOLOGY AND WE MIGHT NOT COMPETE
SUCCESSFULLY IN OUR MARKET.
We believe that our success will depend in part upon our proprietary
technology. We rely on a combination of patents, copyrights, trademarks, trade
secret laws and contractual obligations with employees and third parties to
protect our proprietary rights. These legal protections provide only limited
protection and may be time consuming and expensive to obtain and enforce. If we
fail to adequately protect our proprietary rights, our competitors may gain
access to our technology. As a result, our competitors might offer similar
products and we might not be able to compete successfully in our market.
Moreover, despite our efforts to protect our proprietary rights, unauthorized
parties may copy aspects of our products and obtain and use information that we
regard as proprietary. Also, our competitors may independently develop similar,
but not infringing, technology, duplicate our products, or design around our
patents or our other intellectual property. In addition, other parties may
breach confidentiality agreements or other protective contracts with us, and we
may not be able to enforce our rights in the event of these breaches.
Furthermore, we expect that we will increase our international operations in the
future, and the laws of many foreign countries do not protect our intellectual
property rights to the same extent as the laws of the United States. We may be
required to spend significant resources to monitor and protect our intellectual
property rights.
Our pending patent and trademark applications may not be approved. Even
if our pending patent applications are approved, the resulting patents may not
provide us with any competitive advantage or may be challenged by third parties.
If challenged, our patents might not be upheld or their claims could be
narrowed. Any litigation surrounding our rights could force us to divert
important financial and other resources away from our business operations.
WE MIGHT NOT BE ABLE TO EXECUTE ON OUR BUSINESS PLAN IF WE LOSE KEY
MANAGEMENT AND TECHNICAL PERSONNEL, ON WHOSE KNOWLEDGE, LEADERSHIP AND
TECHNICAL EXPERTISE WE RELY.
Our success depends heavily upon the continued contributions of our key
management and technical personnel, whose knowledge, leadership and technical
expertise would be difficult to replace. Several of these personnel have been
with us for a number of years. All of our executive officers and key personnel
are employees at-will. We have no employment contracts and maintain no key
person insurance on any of our personnel. We might not be able to execute on our
business plan if we were to lose the services of any of our key personnel.
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<PAGE> 13
WE WILL NOT BE ABLE TO GROW OUR BUSINESS IF WE ARE UNABLE TO HIRE, TRAIN
AND RETAIN ADDITIONAL SALES, MARKETING, OPERATIONS, ENGINEERING AND
FINANCE PERSONNEL.
To grow our business successfully and maintain a high level of quality,
we will need to recruit, train, retain and motivate additional highly-skilled
sales, marketing, engineering and finance personnel. In particular, we will need
to expand our sales and marketing organizations in order to increase market
awareness of our products and to increase revenue. In addition, as a company
focused on the development of complex products, we will need to hire additional
engineering staff of various experience levels in order to meet our product
roadmap. Competition for skilled employees, particularly in the San Francisco
Bay Area, is intense. We may have even greater difficulty recruiting potential
employees as a public company if prospective employees perceive the equity
component of our compensation package to be less valuable than it was before our
initial public offering.
SEVERAL OF OUR EXECUTIVES AND OTHER EMPLOYEES HAVE JOINED US ONLY
RECENTLY, AND IF THEY ARE UNABLE TO WORK TOGETHER EFFECTIVELY, WE MAY
NOT BE ABLE TO MANAGE OUR GROWTH AND OPERATIONS.
Several of our executives and other employees joined us only recently
and have had only a limited time to work together. Mark K. Allen, our President
and Chief Operating Officer, joined us in January 2000; David P. Jensen, our
Vice President of Operations, joined us in February 2000; Merle A. McClendon,
our Chief Financial Officer, joined us in March 2000; John O. Horsley, our
General Counsel, joined us in July 2000; and Barry L. Rubinson, our Vice
President of Software, joined us in August 2000. Our management team might not
be able to work effectively together or with the rest of our employees to
develop our technology and manage our growth and continuing operations.
WE MAY MAKE ACQUISITIONS, WHICH COULD PUT A STRAIN ON OUR RESOURCES,
CAUSE DILUTION TO OUR STOCKHOLDERS AND ADVERSELY AFFECT OUR FINANCIAL
RESULTS.
We may acquire companies to expand our business. Integrating newly
acquired organizations and technologies into our company could put a strain on
our resources and be expensive and time consuming. We may not be successful in
integrating acquired businesses or technologies and may not achieve anticipated
revenue and cost benefits. In addition, future acquisitions could result in
potentially dilutive issuances of equity securities or the incurrence of debt,
contingent liabilities or amortization expenses related to goodwill and other
intangible assets, any of which could adversely affect our balance sheet and
operating results. Moreover, we may not be able to identify future suitable
acquisition candidates or, if we are able to identify suitable candidates, we
may not be able to make these acquisitions on commercially reasonable terms or
at all.
THE CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY COULD CREATE
FLUCTUATIONS IN OUR OPERATING RESULTS.
The semiconductor industry has historically been cyclical, and
characterized by wide fluctuations in product supply and demand. From time to
time, the industry has also experienced significant downturns, often in
connection with, or in anticipation of, maturing product cycles and declines in
general economic conditions. Industry downturns have been characterized by
diminished product demand, production overcapacity and accelerated decline of
average selling prices, and in some cases have lasted for more than a year. A
downturn of this type occurred in 1997 and 1998. Our operating results could
fluctuate if industry-wide fluctuations occur in the future.
WE PLAN TO EXPAND OUR INTERNATIONAL OPERATIONS, AND THE SUCCESS OF OUR
INTERNATIONAL EXPANSION IS SUBJECT TO SIGNIFICANT UNCERTAINTIES.
We believe that we must expand our international sales and distribution
operations to be successful. We expect to sell a significant portion of our
products to customers overseas. As part of our international expansion, we have
opened an office in Taiwan to provide sales and customer support, and expect to
do the same in Japan during 2001. In addition, we have appointed a distributor
to sell products in Taiwan, Hong Kong and China. In attempting to conduct and
expand business internationally, we are exposed to various risks that could
adversely affect our international operations and, consequently, our operating
results, including:
- difficulties and costs of staffing and managing international
operations;
- fluctuations in currency exchange rates;
- unexpected changes in regulatory requirements, including
imposition of currency exchange controls;
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<PAGE> 14
- longer accounts receivable collection cycles;
- import or export licensing requirements;
- potentially adverse tax consequences;
- political and economic instability; and
- potentially reduced protection for intellectual property rights.
In addition, because we have suppliers that are located outside of the
United States, we are subject to risks generally associated with contracting
with foreign suppliers and may experience problems in the timeliness and the
adequacy or quality of product deliveries.
RISKS RELATED TO THIS OFFERING
THE STOCKS OF TECHNOLOGY COMPANIES HAVE EXPERIENCED EXTREME PRICE AND
VOLUME FLUCTUATIONS; AND OUR STOCK PRICE MAY BE VOLATILE.
The market price of our common stock may be volatile. Many factors could
cause the market price of our common stock to rise and fall, including:
- variations in our quarterly results;
- announcements of technological innovations by us or by our
competitors;
- introductions of new products or new pricing policies by us or
by our competitors;
- acquisitions or strategic alliances by us or by our competitors;
- recruitment or departure of key personnel;
- the gain or loss of significant orders;
- the gain or loss of significant customers;
- changes in the estimates of our operating performance or changes
in recommendations by any securities analysts that elect to
follow our stock; and
- market conditions in our industry, the industries of our
customers and the economy as a whole.
In addition, stocks of technology companies have experienced extreme
price and volume fluctuations that often have been unrelated or disproportionate
to these companies' operating performance. Public announcements by companies in
our industry concerning, among other things, their performance, accounting
practices or legal problems could cause the market price of our common stock to
decline regardless of our actual operating performance.
In the past, securities class action litigation has often been brought
against a company following a period of volatility in the market price of its
securities. We may in the future be the target of similar litigation. Securities
litigation could result in substantial costs and divert management's attention
and resources.
OUR OFFICERS, DIRECTORS AND AFFILIATED ENTITIES OWN A LARGE PERCENTAGE
OF OUR COMPANY AND COULD SIGNIFICANTLY INFLUENCE THE OUTCOME OF ACTIONS
IN WAYS THAT COULD CAUSE OUR STOCK PRICE TO DECLINE.
Our executive officers, directors, entities affiliated with them and
other 5% or greater stockholders, in total, beneficially own approximately 36%
of our outstanding common stock. These stockholders, acting together, would be
able to significantly influence all matters requiring approval by our
stockholders, including the election of directors. Thus, actions might be taken
even if other stockholders, including those who purchase shares in this
offering, oppose them. This concentration of
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<PAGE> 15
ownership might also have the effect of delaying or preventing a change of
control of our company, which could cause our stock price to decline.
SUBSTANTIAL FUTURE SALES OF OUR COMMON STOCK COULD CAUSE OUR STOCK PRICE
TO DECLINE.
The market price of our common stock could decline as a result of sales
of a large number of shares of our common stock in the market or the perception
that these sales could occur. The shares of common stock sold in our initial
public offering are freely tradable except for any shares purchased by our
"affiliates" as defined in Rule 144 under the Securities Act of 1933 and shares
purchased in our directed share program. All of the remaining shares of common
stock, and the shares purchased in our directed share program, are subject to
180-day lock-up agreements with the underwriters or with us. Morgan Stanley &
Co. Incorporated, in its sole discretion, may release any portion of the
securities subject to these lock-up agreements. After the 180-day lock-up
period, these shares may be sold in the public market, subject to prior
registration or qualification for an exemption from registration, including, in
the case of shares held by affiliates, compliance with volume restrictions.
After the lock-up period, approximately 110 million additional shares will be
immediately available for sale in the public market without registration under
Rule 144. The remaining shares will become available for sale under Rule 144 at
varying times following the end of the 180-day lock-up period. In addition, up
to 749,648 shares of our common stock subject to warrants are available for
public sale, assuming the net exercise of the warrants. Stockholders owning
75,595,126 shares are entitled, pursuant to contracts providing for registration
rights, to require us to register our securities owned by them for public sale.
In addition, we have registered 31,033,300 shares issuable upon the exercise of
outstanding stock options and shares reserved for future issuance under our
stock option and stock purchase plans, including the shares offered by this
prospectus.
OUR CERTIFICATE OF INCORPORATION AND BYLAWS AND DELAWARE LAW CONTAIN
PROVISIONS THAT COULD DISCOURAGE OR PREVENT A TAKEOVER, EVEN IF AN
ACQUISITION WOULD BE BENEFICIAL TO OUR STOCKHOLDERS.
Provisions of our certificate of incorporation and bylaws, as well as
provisions of Delaware law, could make it more difficult for a third party to
acquire us, even if doing so would be beneficial to our stockholders. These
provisions include:
- establishing a classified board of directors so that not all
members of our board may be elected at one time;
- providing that directors may only be removed "for cause" and
only with the approval of 66 ?% of our stockholders;
- requiring super-majority voting to amend some provisions in our
certificate of incorporation and bylaws;
- authorizing the issuance of "blank check" preferred stock that
our board could issue to increase the number of outstanding
shares and to discourage a takeover attempt;
- limiting the ability of our stockholders to call special
meetings of stockholders;
- prohibiting stockholder action by written consent, which
requires all stockholder actions to be taken at a meeting of our
stockholders;
- eliminating cumulative voting in the election of directors; and
- establishing advance notice requirements for nominations for
election to our board or for proposing matters that can be acted
upon by stockholders at stockholder meetings.
In addition, Section 203 of the Delaware General Corporation Law may
discourage, delay or prevent a change in control.
IF WE NEED ADDITIONAL FINANCING, WE MAY NOT BE ABLE TO RAISE FURTHER
FINANCING OR IT MAY ONLY BE AVAILABLE ON TERMS UNFAVORABLE TO US OR OUR
STOCKHOLDERS.
We believe that our available cash resources, combined with the net
proceeds from this offering, will be sufficient to meet our anticipated working
capital and capital expenditure requirements for at least twelve months after
the date of this prospectus. We might need to raise additional funds, however,
to respond to business contingencies, which could include the need to:
- fund additional marketing expenditures;
- develop new products or enhance existing products;
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<PAGE> 16
- enhance our operating infrastructure;
- hire additional personnel;
- respond to competitive pressures; or
- acquire complementary businesses or technologies.
If we raise additional funds through the issuance of equity or
convertible debt securities, the percentage ownership of our stockholders would
be reduced, and these newly issued securities might have rights, preferences or
privileges senior to those of our then-existing stockholders, including those
acquiring shares in this offering. Additional financing might not be available
on terms favorable to us, or at all. If adequate funds were not available or
were not available on acceptable terms, our ability to fund our operations, take
advantage of unanticipated opportunities, develop or enhance our products or
otherwise respond to competitive pressures would be significantly limited.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock by
the selling stockholders under this prospectus.
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<PAGE> 17
SELLING STOCKHOLDERS
The following table provides information about the shares beneficially
owned by the selling stockholders named below as of October 27, 2000, the shares
that the selling stockholders may offer and sell from time to time under this
prospectus, assuming each selling stockholder sells all of the shares offered by
this prospectus, and the nature of any position, office or other material
relationship that each selling stockholder has had with Transmeta or any of its
predecessors or affiliates within the past three years. The selling stockholders
include the persons named below, any pledgee or donee of any named stockholders
and any person who may purchase shares offered by this prospectus from any named
stockholders in a private transaction.
The shares that may be offered and sold pursuant to this prospectus were
acquired by the selling stockholders upon the exercise of stock options. Because
the selling stockholders may offer from time to time all or some of their shares
under this prospectus, no assurances can be given as to the actual number of
shares that will be sold by any selling stockholder or that will be held by the
selling stockholder after completion of the sales. Information concerning the
selling stockholders may change from time to time and any changed information
will be provided in supplements to this prospectus if and when necessary.
The percentage of beneficial ownership for the following table is based
on 128,103,444 shares of common stock outstanding. This number represents
13,000,000 shares issued in our initial public offering, assuming no exercise of
the underwriters' over-allotment option, and 115,103,444 shares outstanding as
of October 27, 2000, assuming the conversion of all outstanding shares of our
preferred stock into common stock and the conversion of a convertible promissory
note into shares of common stock, each of which will occur upon the closing of
our initial public offering.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission that consider shares to be beneficially owned
by any person who has voting or investment power with respect to the shares.
Common stock subject to options that are currently exercisable or exercisable
within 60 days after October 27, 2000 are considered to be outstanding and to be
beneficially owned by the person holding the options for the purpose of
computing the percentage ownership of that person but are not treated as
outstanding for the purpose of computing the percentage ownership of any other
person.
To our knowledge, except under community property laws or as otherwise
noted, the persons named in the table have sole voting and sole investment power
with respect to all shares beneficially owned. Unless otherwise indicated, the
address for each selling stockholder is c/o Transmeta Corporation, 3940 Freedom
Circle, Santa Clara, California 95054.
<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING
SHARES OWNED SHARES OWNED SHARES OWNED
NAME BEFORE OFFERING SHARES OFFERED AFTER OFFERING AFTER OFFERING
---- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
David R. Ditzel (1) ......................... 4,420,000 500,000 3,920,000 3.1%
Douglas A. Laird (2) ........................ 2,736,944 500,000 2,236,944 1.7
Mark K. Allen (3) ........................... 2,000,000 2,000,000 0 *
Merle A. McClendon (4) ...................... 1,100,000 1,100,000 0 *
James Chapman (5) ........................... 1,300,000 500,000 800,000 *
Murray A. Goldman (6) ....................... 960,000 800,000 160,000 *
David P. Jensen (7) ......................... 550,000 550,000 0 *
Daniel E. Steimle (8) ....................... 412,080 412,080 0 *
R. Hugh Barnes (9) .......................... 200,000 120,000 80,000 *
</TABLE>
* Less than 1%
(1) Of the total shares offered, at October 27, 2000, 330,000 shares were
subject to repurchase by Transmeta if the holder's employment with
Transmeta terminates. Transmeta's repurchase right lapses at a rate of
10,000 shares per month until April 19, 2001, then 11,666 shares per
month until March 19, 2003 and 11,682 shares on March 19, 2000. Shares
subject to repurchase are not transferable. David R. Ditzel is a
co-founder of Transmeta and has served as Chief Executive Officer and a
director of Transmeta since March 1995, as President from March 1995 to
January 2000, and as Vice President of Engineering from March 1995 to
November 1998.
(2) Represents 2,476,944 shares held of record jointly by Mr. Laird and his
wife, as trustees for the Douglas A. & Joan G. Laird Trust dated August
30, 1989 and 260,000 shares held of record by the D and J Laird Family
Limited Partnership, of which Mr. Laird and
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<PAGE> 18
his wife are each a general partner. Of the total shares offered, at
October 27, 2000, 330,000 shares were subject to repurchase by Transmeta
if the holder's employment with Transmeta terminates. Transmeta's
repurchase right lapses at a rate of 10,000 shares per month until April
19, 2001, then 11,666 shares per month until March 19, 2003 and then
11,682 shares on March 19, 2000. Shares subject to repurchase are not
transferable. Douglas A. Laird is a co-founder of Transmeta and has
served as the Senior Vice President of Product Development since
February 2000, as Vice President of Product Development from November
1998 to January 2000, and as Vice President of VLSI Engineering from
October 1995 to November 1998.
(3) All of the shares offered are subject to repurchase by Transmeta if the
holder's employment with Transmeta terminates. Transmeta's repurchase
right lapses at a rate of 41,666 shares per month until January 2004.
Shares subject to repurchase are not transferable. Mark K. Allen has
served as President, Chief Operating Officer and a director of Transmeta
since January 2000.
(4) All of the shares offered are subject to repurchase by Transmeta if the
holder's employment with Transmeta terminates. Transmeta's repurchase
right lapses at a rate of 22,916 shares per month until March 2004.
Shares subject to repurchase are not transferable. Merle A. McClendon
has served as Chief Financial Officer and Secretary of Transmeta since
March 2000.
(5) Includes 200,000 shares held of record by Chapman Ventures, LLC, of
which Mr. Chapman is the sole owner. Of the total shares offered, at
October 27, 2000, 330,000 shares were subject to repurchase by Transmeta
if the holder's employment with Transmeta terminates. Transmeta's
repurchase right lapses at a rate of 10,000 shares per month until April
19, 2001, then 11,666 shares per month until March 19, 2003 and then
11,682 shares on March 19, 2000. Shares subject to repurchase are not
transferable. James N. Chapman has served as Senior Vice President of
Sales and Marketing of Transmeta since February 2000, as Vice President
of Sales and Marketing from November 1998 to January 2000, and as Vice
President of Sales from August 1997 to November 1998.
(6) Includes 177,496 shares held of record by Murray A. Goldman, as trustee
for the Murray A. Goldman Irrevocable Deed of Trust February 29, 2000.
Of the total shares offered, at October 27, 2000, 345,812 shares were
subject to repurchase by Transmeta if the holder's employment with
Transmeta terminates. Transmeta's repurchase right lapses, with respect
to two grants totalling 300,000 shares, at a rate of 6,249 shares per
month until December 2002. The remainder of the shares vest at a rate of
16,666 shares per month until April 19, 2001, then 4,166 shares per
month until March 19, 2003 and then 4,190 shares on March 19, 2003.
Shares subject to repurchase are not transferable. Murray A. Goldman has
served as Chairman of the Board of Directors of Transmeta since November
1998, and as a business advisor to Transmeta from March 1997 to November
1998.
(7) All of the shares offered are subject to repurchase by Transmeta if the
holder's employment with Transmeta terminates. Transmeta's repurchase
right lapses at a rate of 137,500 shares on February 14, 2001, and then
11,458 shares per month until February 2004. Shares subject to
repurchase are not transferable. David P. Jensen has served as Vice
President of Operations of Transmeta since February 2000.
(8) Daniel E. Steimle served as Chief Financial Officer and Secretary of
Transmeta from November 1998 to March 2000.
(9) Of the total shares offered, at October 27, 2000, 62,523 shares were
subject to repurchase by Transmeta if the holder's employment with
Transmeta terminates. Transmeta's repurchase right lapses at a rate of
2,499 shares per month until December 2002. Shares subject to repurchase
are not transferable. R. Hugh Barnes has served as a director of
Transmeta since November 1998, and as a business advisor to Transmeta
from March 1997 to November 1998.
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PLAN OF DISTRIBUTION
The selling stockholders and their successors, including their
transferees, pledgees or donees or their successors, may sell the common stock
offered under this prospectus directly to purchasers or through underwriters,
broker-dealers or agents, who may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders or the purchasers.
These discounts, concessions or commissions as to any particular underwriter,
broker-dealer or agent may be in excess of those customary in the types of
transactions involved. Neither Transmeta nor the selling stockholders can
estimate the amount of this compensation.
The common stock offered under this prospectus may be sold from time to
time in one or more transactions at fixed prices, at prevailing market prices at
the time of sale, at prices related to the prevailing market prices, at varying
prices determined at the time of sale, or at negotiated prices. These sales may
be effected in transactions, which may involve crosses or block transactions:
- on any national securities exchange or U.S. inter-dealer system
of a registered national securities association on which the
common stock may be listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions otherwise than on these exchanges or systems or
in the over-the-counter market;
- through the writing of options, whether the options are listed
on an options exchange or otherwise; or
- through the settlement of short sales.
In connection with the sale of the common stock, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. Except as provided in
Section 16(c) of the Securities Act of 1933, the selling stockholders may also
sell the common stock short and deliver these securities to close out their
short positions, or loan or pledge the common stock to broker-dealers that in
turn may sell these securities.
The aggregate proceeds to the selling stockholders from the sale of the
common stock offered by them will be the purchase price of the common stock less
discounts and commissions, if any. Each of the selling stockholders reserves the
right to accept or to reject, in whole or in part, any proposed purchase of
common stock to be made directly or through agents.
The selling stockholders and any underwriters, broker-dealers or agents
that participate in the sale of the common stock may be "underwriters" within
the meaning of Section 2(11) of the Securities Act. Any discounts, commissions,
concessions or profit they earn on any resale of the shares may be underwriting
discounts and commissions under the Securities Act. If the selling stockholders
are "underwriters" within the meaning of Section 2(11) of the Securities Act,
they will be subject to the prospectus delivery requirements of the Securities
Act.
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus. A selling stockholder may not sell any
common stock described in this prospectus and may not transfer, devise or gift
these securities by other means not described in this prospectus.
To the extent required, the specific common stock to be sold, the names
of the selling stockholders, the respective purchase prices and public offering
prices, the names of any agent, dealer or underwriter, and any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement of which this prospectus is a part. This
prospectus also may be used, with Transmeta's consent, by donees or pledgees of
the selling stockholders, or by other persons acquiring shares and who wish to
offer and sell shares under circumstances requiring or making desirable its use.
In order to comply with the securities laws of some states, if
applicable, the common stock may be sold in these jurisdictions only through
registered or licensed brokers or dealers.
The selling stockholders may indemnify brokers, dealers, agents or
underwriters that participate in transactions involving sales of the shares
against specific liabilities, including liabilities arising under the Securities
Act and/or Exchange Act. Transmeta will pay substantially all of the expenses
incident to this offering of the shares by the selling stockholders to the
public other than commissions and discounts of underwriters, brokers, dealers or
agents.
17
<PAGE> 20
We may suspend the use of this prospectus if we learn of any event that
causes this prospectus to include an untrue statement of a material fact or to
omit to state a material fact required to be stated in the prospectus or
necessary to make the statements in the prospectus not misleading in the light
of the circumstances then existing. If this type of event occurs, a prospectus
supplement or post-effective amendment, if required, will be distributed to each
selling stockholder.
LEGAL MATTERS
Fenwick & West LLP, Palo Alto, California, will provide Transmeta with
an opinion as to legal matters in connection with the common stock. An
investment partnership affiliated with Fenwick & West LLP holds a total of
101,764 shares of our common stock.
EXPERTS
The consolidated financial statements of Transmeta Corporation as of
December 31, 1998 and 1999, and for each of the three years in the period ended
December 31, 1999, incorporated by reference in this prospectus from the
prospectus filed on November 7, 2000 pursuant to Rule 424(b) under the
Securities Act, relating to the registration statement on Form S-1 (File No.
333-44030), of Transmeta Corporation, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance on such report given on the
authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
The following documents that we have filed with the Securities and
Exchange Commission (the "Commission") are incorporated into this prospectus by
reference:
- the Registration Statement on Form S-8 of which this prospectus
is a part, and the exhibits filed with this registration
statement and incorporated into this registration statement by
reference;
- our prospectus filed on November 7, 2000 pursuant to Rule 424(b)
under the Securities Act, relating to the registration statement
on Form S-1 (File No. 333-44030), which contains the description
of our capital stock and our audited consolidated balance sheets
as of December 31, 1998 and 1999, and the related consolidated
statements of operations, stockholders' equity (deficit), and
cash flows for each of the years in the three-year period ended
December 31, 1999.
- the description of our common stock contained in our
Registration Statement on Form 8-A filed on October 19, 2000
under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including any amendment or report
filed for the purpose of updating such description; and
- all documents subsequently filed by us pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of
this prospectus and before the termination of this offering.
To the extent that any statement in this prospectus is inconsistent with
any statement that is incorporated by reference, the statement in this
prospectus shall control. The incorporated statement shall not be deemed, except
as modified or superseded, to constitute a part of this prospectus or the
registration statement.
Because we are subject to the informational requirements of the Exchange
Act, we file reports and other information with the Commission. Reports,
registration statements, proxy and information statements and other information
that we have filed can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain copies of this material from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at rates prescribed by the Commission. The public may obtain information
on the operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. The Commission also maintains a World Wide Web site that
contains reports, proxy and information statements and other information that is
filed electronically with the Commission. This web site can be accessed at
http://www.sec.gov.
We have filed with the Commission a registration statement on Form S-8
under the Securities Act with respect to the common stock offered under this
prospectus. This prospectus does not contain all of the information in the
registration
18
<PAGE> 21
statement, parts of which we have omitted, as allowed under the rules and
regulations of the Commission. You should refer to the registration statement
for further information with respect to us and our common stock. Statements
contained in this prospectus as to the contents of any contract or other
document are not necessarily complete and, in each instance, we refer you to the
copy of each contract or document filed as an exhibit to the registration
statement. Copies of the registration statement, including exhibits, may be
inspected without charge at the Commission's principal office in Washington,
D.C., and you may obtain copies from this office upon payment of the fees
prescribed by the Commission.
We will furnish without charge to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of the information
that has been incorporated by reference into this prospectus (except exhibits,
unless they are specifically incorporated by reference into this prospectus).
You should direct any requests for copies to Transmeta Corporation, 3940 Freedom
Circle, Santa Clara, CA 95054, Attention: Dana Rubinstein, telephone: (408)
919-3000.
19
<PAGE> 22
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) The Registrant's prospectus filed on November 7, 2000 (the
"Registration Statement") pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Securities Act"),
relating to the registration statement on Form S-1 (File No.
333-44030) which contains the Registrant's audited consolidated
balance sheets as of December 31, 1998 and 1999, and the related
consolidated statements of operations, stockholders' equity
(deficit) and cash flows for each of the years ending as of
December 31, 1997, 1998 and 1999.
(b) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A filed on
October 19, 2000 under Section 12(g) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities registered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed incorporated into this registration statement by reference and to be a
part hereof from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Fenwick & West LLP, Palo Alto, California, will pass on the
validity of the common stock offered by the selling stockholders in this
offering. An investment partnership affiliated with Fenwick & West LLP holds a
total of 101,764 shares of the Registrant's stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS AND LIMITATION OF LIABILITY.
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's board of directors to grant, indemnity to directors
and officers under certain circumstances and subject to certain limitations. The
terms of Section 145 of the Delaware General Corporation Law are sufficiently
broad to permit indemnification under certain circumstances for liabilities,
including reimbursement of expenses incurred, arising under the Securities Act.
As permitted by the Delaware General Corporation Law, the Registrant's
certificate of incorporation includes a provision that eliminates the personal
liability of a director for monetary damages resulting from breach of his
fiduciary duty as a director, except for liability:
- for any breach of the director's duty of loyalty to Registrant
or its stockholders;
- for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law;
- under Section 174 of the Delaware General Corporation Law
regarding unlawful dividends and stock purchases; or
- for any transaction from which the director derived an improper
personal benefit.
II-1
<PAGE> 23
As permitted by the Delaware General Corporation Law, the Registrant's
bylaws provide that:
- the Registrant is required to indemnify its directors and
officers to the fullest extent permitted by the Delaware General
Corporation Law, subject to limited exceptions where
indemnification is not permitted by applicable law;
- the Registrant is required to advance expenses, as incurred, to
its directors and officers in connection with a legal proceeding
to the fullest extent permitted by the Delaware General
Corporation Law, subject to certain very limited exceptions; and
- the rights conferred in the bylaws are not exclusive.
In addition, the Registrant has entered into indemnity agreements with
each of its current directors and officers. These agreements provide for the
indemnification of the Registrant's officers and directors for all expenses and
liabilities incurred in connection with any action or proceeding brought against
them by reason of the fact that they are or were agents of the Registrant.
The Registrant has obtained directors' and officers' insurance to cover
its directors, officers and some of its employees for certain liabilities,
including public securities matters.
See also the undertakings set out in response to Item 9.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The Registrant issued a total of 6,482,080 shares of its common stock to nine
directors, officers and employees pursuant to exercises of options pursuant to
stock option agreements of the Registrant, at exercise prices ranging from $.65
to $6.00 per share. These shares were issued in private transactions that were
exempt from registration under the Securities Act by virtue of Regulation
D/Section 4(2) of the Securities Act.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
NUMBER TITLE
------ -----
<S> <C>
4.01 Registrant's First Amended and Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3.03 to the
Registration Statement).
4.02 Form of Registrant's Second Amended and Restated Certificate of
Incorporation to be effective after completion of the offering
covered by the Registration Statement (incorporated by reference
to Exhibit 3.04 to the Registration Statement).
4.03 Registrant's Restated Bylaws (incorporated by reference to
Exhibit 3.06 to the Registration Statement).
4.04 Form of Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4.01 to the Registration Statement).
4.05 Fifth Restated Investors' Rights Agreement dated March 31, 2000,
between Registrant, certain stockholders and a convertible note
holder (incorporated by reference to Exhibit 4.02 to the
Registration Statement).
4.06 Form of Piggyback Registration Rights Agreement (incorporated by
reference to Exhibit 4.03 to the Registration Statement).
4.07 Registrant's 1995 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.02 to the Registration Statement).
4.08 Registrant's 1997 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.03 to the Registration Statement).
4.09 Registrant's 2000 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.04 to the Registration Statement).
</TABLE>
II-2
<PAGE> 24
<TABLE>
<S> <C>
4.10 Registrant's 2000 Employee Stock Purchase Plan (incorporated
herein by reference to Exhibit 10.05 to the Registration
Statement).
4.11 Form of option granted to Mark K. Allen and related documents
(incorporated herein by reference to Exhibit 10.06 to the
Registration Statement).
4.12 Form of Stock Option Agreement under Registrant's 2000 Equity
Incentive Plan (incorporated by reference to Exhibit 10.17 to
the Registration Statement).
4.13 Form of Stock Option Agreement (for Non-Employee Directors)
under Registrant's 2000 Equity Incentive Plan (incorporated by
reference to Exhibit 10.18 to the Registration Statement).
5.01 Opinion of Fenwick & West LLP
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of Ernst & Young LLP, independent auditors.
24.01 Power of Attorney (see page II-5).
</TABLE>
ITEM 9. UNDERTAKINGS.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3)
of the Securities Act;
(b) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(c) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (1)(a) and (1)(b) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE> 25
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions discussed in Item 6 hereof, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Transmeta Corporation, certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Santa Clara, State of
California, on this 6th day of November, 2000.
TRANSMETA CORPORATION
By: /s/ David R. Ditzel
---------------------------------
David R. Ditzel
Chief Executive Officer
POWER OF ATTORNEY
KNOW BY ALL PERSONS BY THESE PRESENTS that each individual whose
signature appears below constitutes and appoints David R. Ditzel and Merle A.
McClendon, and each of them, his or her true and lawful attorneys-in-fact and
agents with full power of substitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments,
including post-effective amendments, to this registration statement on Form S-8,
and to file the same, with all exhibits thereto and all documents in connection
therewith, making such changes in this registration statement as such person or
persons so acting deems appropriate, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
his, her or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ David R. Ditzel CHIEF EXECUTIVE OFFICER November 6, 2000
----------------------------- AND DIRECTOR
David R. Ditzel [PRINCIPAL EXECUTIVE OFFICER]
/S/ Merle A. McClendon CHIEF FINANCIAL OFFICER AND SECRETARY November 6, 2000
----------------------------- [PRINCIPAL FINANCIAL OFFICER AND
Merle A. McClendon PRINCIPAL ACCOUNTING OFFICER]
/s/ Mark K. Allen PRESIDENT, CHIEF OPERATING OFFICER November 6, 2000
----------------------------- AND DIRECTOR
Mark K. Allen
Director November _, 2000
-----------------------------
R. Hugh Barnes
Director November _, 2000
-----------------------------
Murray A. Goldman
</TABLE>
II-5
<PAGE> 27
<TABLE>
<S> <C> <C>
/s/ Larry R. Carter Director November 6, 2000
-----------------------------
Larry R. Carter
/s/ Paul M. McNulty Director November 6, 2000
-----------------------------
Paul M. McNulty
/s/ William P. Tai Director November 6, 2000
-----------------------------
William P. Tai
/s/ T. Peter Thomas Director November 6, 2000
-----------------------------
T. Peter Thomas
</TABLE>
II-6
<PAGE> 28
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
NUMBER TITLE
------ -----
<S> <C>
4.01 Registrant's First Amended and Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3.03 to the
Registration Statement).
4.02 Form of Registrant's Second Amended and Restated Certificate of
Incorporation to be effective after completion of the offering
covered by the Registration Statement (incorporated by reference
to Exhibit 3.04 to the Registration Statement).
4.03 Registrant's Restated Bylaws (incorporated by reference to
Exhibit 3.06 to the Registration Statement).
4.04 Form of Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4.01 to the Registration Statement).
4.05 Fifth Restated Investors' Rights Agreement dated March 31, 2000,
between Registrant, certain stockholders and a convertible note
holder (incorporated by reference to Exhibit 4.02 to the
Registration Statement).
4.06 Form of Piggyback Registration Rights Agreement (incorporated by
reference to Exhibit 4.03 to the Registration Statement).
4.7 Registrant's 1995 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.02 to the Registration Statement).
4.8 Registrant's 1997 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.03 to the Registration Statement).
4.9 Registrant's 2000 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.04 to the Registration Statement).
4.10 Registrant's 2000 Employee Stock Purchase Plan (incorporated
herein by reference to Exhibit 10.05 to the Registration
Statement).
4.11 Form of option granted to Mark K. Allen and related documents
(incorporated herein by reference to Exhibit 10.06 to the
Registration Statement).
4.12 Form of Stock Option Agreement under Registrant's 2000 Equity
Incentive Plan (incorporated by reference to Exhibit 10.17 to
the Registration Statement).
4.13 Form of Stock Option Agreement (for Non-Employee Directors)
under Registrant's 2000 Equity Incentive Plan (incorporated by
reference to Exhibit 10.18 to the Registration Statement).
5.01 Opinion of Fenwick & West LLP
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of Ernst & Young LLP, independent auditors.
24.01 Power of Attorney (see page II-5).
</TABLE>
