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As filed with the Securities and Exchange Commission on March 27, 1995
Registration No. 33-84018
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
SEEQ TECHNOLOGY INCORPORATED
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 94-2711298
(State of Incorporation) (I.R.S. Employer Identification No.)
</TABLE>
47200 Bayside Parkway
Fremont, California 94538
(510) 226-7400
(Address and telephone number of principal executive offices)
_____________________
PHILLIP J. SALSBURY
President and Chief Executive Officer
SEEQ Technology Incorporated
47200 Bayside Parkway
Fremont, California 94538
(510) 226-7400
(Name, address and telephone number of agent for service)
Copies to:
SCOTT D. LESTER, ESQ.
Brobeck, Phleger & Harrison
One Market
Spear Street Tower
San Francisco, California 94105
(415) 442-0900
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend orinterest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
_____________________
This Registration Statement shall thereafter shall hereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933.
===============================================================================
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject To Completion, Dated March 27, 1995
3,614,701 Shares
SEEQ Technology Incorporated
Common Stock
(par value $.01 per share)
This Prospectus relates to the public offering, which is not being
underwritten, of 3,614,701 shares (the "Shares") of Common Stock of SEEQ
Technology Incorporated ("SEEQ" or the "Company"). The Shares are being
offered hereby by Atmel Corporation, a stockholder of the Company (the "Selling
Stockholder"), from time to time in transactions in the over-the-counter
market, in negotiated transactions, or a combination of such methods of sale,
at fixed prices which may be changed, at market prices prevailing at the time
of sale, at prices related to prevailing market prices or at negotiated prices.
The Selling Stockholder may effect such transactions by selling the Shares to
or through broker-dealers, and such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the Selling Stockholder
and/or the purchasers of the Shares for whom such broker-dealers may act as
agents or to whom they sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). To the
extent required, the specific Shares to be sold, the name of the Selling
Stockholder, the public offering price, the names of any such agent, dealer or
underwriter, and any applicable commission or discount with respect to any
particular offer is set forth herein or will be set forth in an accompanying
Prospectus Supplement. See "Selling Stockholder" and "Plan of Distribution."
None of the proceeds from the sale of the Shares by the Selling
Stockholder will be received by the Company. The Company has agreed to bear
certain expenses (other than underwriting discounts and commissions and
brokerage commissions and fees) in connection with the registration and sale of
the Shares being offered by the Selling Stockholder.
________________________________
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS."
________________________________
The Company's Common Stock is traded on the Nasdaq National Market
under the symbol "SEEQ". The last sale price of the Company's Common Stock as
reported on the Nasdaq National Market on March 23, 1995 was $2 7/16 per share.
________________________________
The Selling Stockholder and any broker-dealers, agents or underwriters
that participate with the Selling Stockholder in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933 (the "Securities Act"), and any commissions received by
them and any profit on the resale of the Shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act. See
"Plan of Distribution" herein for a description of indemnification
arrangements.
_______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ______________, 1995
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR BY ANY OTHER PERSON.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES TO
ANY PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
MAY NOT LAWFULLY BE MADE.
AVAILABLE INFORMATION
SEEQ Technology Incorporated ("SEEQ" or the "Company") is
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy and
information statements and other information filed by the Company may 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, and at
the Commission's Regional Offices located at Seven World Trade Center, Suite
1300, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material can also be obtained
from the Public Reference Branch of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.
The Company has filed with the Commission a registration
statement on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Common Stock offered
hereby. This Prospectus does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the Shares offered hereby, reference is hereby made
to the Registration Statement. Statements contained in this Prospectus
concerning the provisions of any documents referred to are not necessarily
complete, and each such statement is qualified in its entirety by reference to
the copy of such document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated in this Prospectus by reference: (1) the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1994, filed
pursuant to Section 13 of the Exchange Act; (2) the Company's Quarterly Report
on Form 10-Q, as amended, for the fiscal quarter ended December 31, 1994, filed
pursuant to Section 13 of the Exchange Act; (3) the Company's Proxy Statement
dated February 15, 1995 for the 1995 Annual Meeting of Stockholders of the
Company, filed pursuant to Section 14 of the Exchange Act; (4) the description
of the Company's Common Stock contained in its Registration Statement on Form
8-B filed with the Commission on June 2, 1987; and (5) all other reports
filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act.
All documents subsequently filed by the Company with the
Commission pursuant to Sections 12, 13(a), 13(c), 14 and 15(d) of the Exchange
Act after the effective date of the Registration Statement, but prior to the
termination of the Offering, shall be deemed to be incorporated by reference
into this Prospectus. Each document incorporated into this Prospectus by
reference shall be deemed to be a part of this Prospectus from the date of the
filing of such document with the Commission. Any statement contained in a
document incorporated by reference, or deemed to be incorporated by reference,
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein, or in any
subsequently filed document which is also incorporated by reference herein,
modifies or supersedes such
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statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom
a copy of this Prospectus is delivered, upon the request of any such person, a
copy of any or all of the documents which are incorporated herein by reference
(other than exhibits to such documents that are not specifically incorporated
by reference herein). Requests should be directed to SEEQ Technology
Incorporated, 47200 Bayside Parkway, Fremont, California 94538,
Attention: Secretary, telephone (510) 226-7400.
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THE COMPANY
SEEQ Technology Incorporated (herein "SEEQ" or the
"Company") is a leading supplier of Ethernet data communications products for
networking applications. The Company was founded in 1981 to develop,
manufacture and market products incorporating metal-oxide-silicon ("MOS")
reprogrammable, nonvolatile memory integrated circuit technology. In 1983, the
Company successfully developed the industry's first integrated Ethernet data
communications controller in cooperation with 3COM Corporation. The Company
combines its strengths in digital circuit and analog design with its
communications systems expertise to produce mixed-signal data communication
solutions that provide increased functionality and greater reliability and that
result in lower total system cost. In February 1994, the Company sold its
nonvolatile memory technology and related assets to focus on the data
communications market.
SEEQ has applied its advanced proprietary complementary
metal-oxide-silicon ("CMOS") process technology to build media signaling
integrated circuits for data communication applications. SEEQ's product
development and marketing strategy is to target its products for sale to
rapidly growing systems manufacturers in the high growth personal computer,
workstation, printer, networking and telecommunication markets. SEEQ intends
to target new and existing systems manufacturers who are performance and volume
leaders in these markets. SEEQ's complete product line includes Ethernet data
communication controllers, AutoDUPLEX(TM) Ethernet chip sets for automatic full
duplex switched Ethernet applications, encoders/decoders, coaxial cable CMOS
transceivers and unshielded twisted pair cable CMOS transceivers, and
networking modules. The Company also designs media signaling integrated
circuits for the emerging high speed local area network ("LAN") markets,
including Fast Ethernet and Asynchronous Transfer Mode ("ATM").
The Company's more than 125 customers worldwide include such
personal computer, workstation and data communication industry leaders as Apple
Computer, Cisco Systems, Hewlett Packard, 3COM, Cabletron, Compaq, and Silicon
Graphics. SEEQ's Ethernet data communications products are sold in all market
applications of Ethernet adapter cards, workstations, media attachment units,
print servers, file servers, multiport repeaters, standard hubs, switching
hubs, bridges and routers.
The Company was originally incorporated in California in 1981
and was reincorporated in Delaware in February 1987. Its principal executive
offices are located at 47200 Bayside Parkway, Fremont, California 94538,
and its telephone number is (510) 226-7400.
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RECENT DEVELOPMENTS
Pursuant to an Asset Purchase Agreement dated February 7, 1994 (the
"Asset Purchase Agreement"), by and between the Company and Atmel Corporation
("Atmel"), Atmel purchased assets of the Company related to its electrically
erasable programmable read only memory ("EEPROM") products (the "EEPROM Asset
Sale".) Under the terms of the Asset Purchase Agreement, Atmel acquired all of
SEEQ's rights in assets related to the Company's nonvolatile memory products,
including intellectual property, equipment, inventory and accounts receivable.
The purchase price for such assets consisted of 135,593 shares of Atmel's Common
Stock and $481,632 in cash. In addition, Atmel assumed certain liabilities
under equipment leases for equipment used in producing nonvolatile memory
products.
During the third quarter of fiscal 1994, SEEQ sold the 135,593 shares of
Atmel common stock it received in the EEPROM Asset Sale for total proceeds of
$6,693,000, reflecting a gain on the sale of $1,693,000. A significant portion
of the proceeds of such sale were deposited in two escrow accounts subject to
claims of indemnity by Atmel under the Asset Purchase Agreement. One escrow
account, which contained $600,000 (recorded as other current assets), was
subject to claims by Atmel with respect to the equipment, inventory and accounts
receivable sold to Atmel in the EEPROM Asset Sale. Atmel asserted a claim for
the full amount deposited in this escrow account. SEEQ notified Atmel that it
disagreed with the claim. On January 30, 1995, the Company entered into an
agreement with Atmel to settle Atmel's claim. Under this agreement, out of the
$600,000 in the escrow account, $250,000 has been distributed to Atmel and the
remaining $350,000 has been distributed to SEEQ. All interest earned on the
funds in such escrow account has been distributed proportionately between SEEQ
and Atmel. The second escrow account, which originally contained $4,329,000
(recorded as other assets), is subject to any future claims that may be made by
Atmel with respect to the EEPROM technology sold to Atmel in the EEPROM Asset
Sale. During the first quarter of fiscal 1995, $300,000 was distributed to SEEQ
from the second escrow account, leaving $4,105,859 on deposit therein, including
interest earned to date. Atmel has notified SEEQ that, based on certain claims
asserted by Hualon Microelectronics Corporation ("Hualon"), one of SEEQ's former
foundries and joint development partners, that SEEQ previously granted Hualon
certain license rights to the EEPROM technology, Atmel believes it may be
entitled to assert a claim against this escrow account, although Atmel has not
done so to date. The funds in this escrow account will remain in escrow until
February 1999, or until a determination is made that SEEQ is entitled to such
funds under any release condition in the escrow agreement, or, if Atmel makes a
claim prior to February 1999 under such escrow, then until such claim is
resolved by a court.
In connection with the EEPROM Asset Sale, Atmel acquired 3,614,701
shares of the Company's Common Stock pursuant to a Stock Purchase Agreement
dated February 7, 1994 (the "Stock Purchase Agreement"), by and between the
Company and Atmel, representing 14% of the Company's outstanding shares of
Common Stock as of such date. Such shares were purchased at a price of $1.25
per share, for a total purchase price of $4,518,376.
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On March 30, 1994, the Company filed a lawsuit in the United
States District Court for the Northern District of California against Hualon,
one of the Company's former foundries and joint development partners. In the
lawsuit, the Company originally sought injunctive relief from the court to
prevent Hualon from using certain of the nonvolatile memory technology sold by
the Company to Atmel pursuant to the Asset Purchase Agreement, to which Hualon
has asserted certain license rights under an alleged license agreement. In
response to the Company's claims, Hualon asserted affirmative defenses and
counterclaims seeking a declaration by the court that the alleged license
agreement is valid and seeking specific performance of the alleged license
agreement and other agreements previously entered into by the two parties.
Hualon filed a motion for summary judgment and the Company's initial claim was
subsequently dismissed by the court. Hualon has subsequently amended its
counterclaims to include additional claims in the proceeding, including claims
for damages for breach of, and for money owed pursuant to, other agreements
between the Company and Hualon. The Company has subsequently amended its
original complaint to include a number of additional claims against Hualon,
including claims for damages for breach of, and for money owed pursuant to,
such other agreements. The Company will be entitled to receive the $4,105,859
of funds currently on deposit in the second escrow account, as described above,
if, among other things, it is determined by the court that the alleged license
agreement is invalid. The Company intends to vigorously prosecute its claims
in this lawsuit and to defend the claims made by Hualon. The Company believes
that its claims and defenses in this lawsuit are meritorious. However, there
can be no assurance as to the possible outcome of this proceeding. In the
event that the Company is not successful in invalidating the alleged license
agreement, Atmel may assert a claim against the Company under the Asset
Purchase Agreement, including a claim for damages suffered by Atmel
as a result of Hualon's use of any of such technology, and, in the event any
such claim by Atmel is determined to be valid, Atmel may recover any such
damages from the escrow described above. The Company believes that, in the
event of any claim by Atmel, the amount of damages that may be payable by the
Company upon a resolution thereof will not have a material adverse effect on
the Company's cash flow, financial position or results of operations. However,
there can be no assurance as to such matters.
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RISK FACTORS
In addition to the other information contained or incorporated by
reference in this Prospectus, the following factors should be considered
carefully in evaluating an investment in the Common Stock offered hereby.
HISTORY OF OPERATING LOSSES; UNCERTAINTY OF FUTURE FINANCIAL RESULTS
The Company has incurred substantial operating losses during each of
the last five fiscal years. As of December 31, 1994, the Company had an
accumulated deficit of approximately $113,000,000. The Company's revenues have
also decreased substantially over the last five fiscal years. In addition, as
a result of the EEPROM Asset Sale on February 7, 1994, the Company expects that
its revenues will be substantially lower in future fiscal periods as compared
to comparable periods in prior fiscal years . There can be no assurance that
the Company will be able to achieve and maintain profitability or revenue
growth in the future. The Company's ability to achieve and maintain
profitability will depend on its ability to successfully manufacture and sell
its products, to develop new products and to control its costs and expenses.
Failure by the Company to achieve revenue growth or profitability would impair
the Company's ability to sustain its operations.
LIQUIDITY; FUTURE CAPITAL REQUIREMENTS
At December 31, 1994, the Company's unused sources of liquidity consisted of
approximately $1,713,000 in cash and cash equivalents. As a result of the sale
of assets and stock by the Company to Atmel on February 7, 1994, the Company
received cash proceeds of approximately $5,000,000 and 135,593 shares of Atmel
Common Stock. As described under "Recent Developments," a significant portion
of the shares of Atmel Common Stock received by the Company in the EEPROM Asset
Sale were placed in escrow pending any claims of indemnity by Atmel with
respect to the nonvolatile memory technology, equipment, inventory and accounts
receivable acquired. During April 1994, the Company sold the Atmel Common
Stock received in the EEPROM Asset Sale for total proceeds of $6,693,000, of
which $4,329,000 was placed in escrow to be held pending any claims by Atmel on
the release of such funds to the Company under the terms and conditions of the
applicable escrow agreements. During the first quarter of fiscal 1995, $300,000
was distributed to the Company from this escrow account, leaving $4,105,859 on
deposit therein, including interest earned to date. This amount has been
classified by the Company as long-term assets on the Company's balance sheet as
of December 31, 1994. In addition, the Company filed a lawsuit against Hualon
concerning claims by Hualon to certain license rights to the nonvolatile memory
technology acquired by Hualon from the Company, which could potentially lead to
a claim by Atmel against the funds held in such escrow. See "Recent
Developments." In November 1993, the Company entered into a two-year line of
credit agreement with the CIT Group Incorporated ("CIT") which provides for
borrowings of up to 80% of eligible accounts receivable not to exceed
$5,000,000. Interest on borrowings is charged at CIT's prime lending rate plus
2-1/4% and is payable monthly. This credit facility is secured by all of the
Company's assets. There can be no assurance that the Company will have
adequate resources to satisfy its operating and working capital requirements.
In addition, it may become necessary for the Company to raise additional funds
from debt and/or equity financing. There can be no assurance that such funds
will be available on terms acceptable to the Company, if at all.
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FACTORS AFFECTING OPERATING RESULTS
The Company believes that its future annual and quarterly
operating results will be subject to quarterly variations based upon a wide
variety of factors that could have a material adverse effect on the Company's
revenues and profitability, many of which are outside the control of the
Company. These factors include fluctuations in manufacturing yields, the
timing of introduction of new products by the Company and its competitors,
changes in the markets addressed by the Company's products, market acceptance
of the Company's and its customers' products, the volume and timing of orders
received, changes in the Company's product mix and customer base, the timing
and extent of research and development expenditures, the availability and cost
of semiconductor wafers from outside foundries, product obsolescence, price
erosion, competitive factors, cyclical semiconductor industry conditions and
general economic conditions. The Company's net revenue and cost of sales vary
depending upon the mix of products sold. Any unfavorable changes in
manufacturing yields or product mix, delays in new product introductions,
underutilization of manufacturing capacity, increased price competition or
other factors could have a material adverse effect on the Company's operating
results and financial condition. Historically, average selling prices in the
semiconductor industry have decreased over the life of any particular product.
There can be no assurance that the average selling prices of the Company's
current or future products will not be subject to significant pricing pressures
in the future. In addition, the Company's business is characterized by
short-term orders and shipment schedules, and customer orders typically can be
canceled or rescheduled without significant penalty to the customer. Due to
the absence of substantial noncancellable backlog, the Company typically plans
its production and inventory levels based on internal forecasts of customer
demand, which are highly unpredictable and can fluctuate substantially. In
addition, the Company is limited in its ability to reduce costs quickly in
response to any revenue shortfalls, which could have a material adverse effect
on the Company's business, operating results and financial condition.
DEPENDENCE ON NEW PRODUCT DEVELOPMENT AND TECHNOLOGICAL CHANGE
The average selling prices of the Company's products
historically have decreased over the products' lives and are expected to
continue to do so. To offset average selling price decreases typically
experienced over the life of any particular product, the Company relies
primarily on obtaining cost reductions in the manufacture of those products and
on introducing new, higher priced products which incorporate advanced features
or address new or emerging markets. To the extent that such cost reductions
and new product introductions do not occur in a timely manner, the Company's
operating results will be adversely affected. As a result, the Company's
operating results will depend to a substantial extent on its ability to
continue to successfully introduce new products on a timely basis that compete
effectively on the basis of price and performance and that address customer
requirements. The success of new product introductions is dependent upon
several factors, including proper new product definition, timely completion and
introduction of new product designs, availability of production capacity,
achievement of acceptable manufacturing yields and market acceptance of such
new products. The development cycle for new products is generally one to two
years, depending upon the complexity of the product. In addition, because of
the complexity of its products, the Company has experienced delays from time to
time in completing the development and introduction of new products.
Accordingly, new product development requires a long-term forecast of market
trends and customers' needs and may be adversely affected by competing
technologies serving markets addressed by the Company's products. Although the
Company has successfully developed new products in the past, there can be no
assurance that it will continue to be able to do so in the future. In this
regard, as a result of the Company's financial results in the past several
years and other factors, the Company has been unable to introduce new products
as fast as existing products become obsolete or as such product sales decline,
as reflected by the reductions in sales over such period. There can be no
assurance this will not occur in future periods. The markets for the original
equipment manufacturers who purchase the Company's products are characterized
by rapidly changing technology, evolving industry standards and improvements in
products and services. If technologies or standards supported by the Company's
products become obsolete or fail to gain widespread commercial acceptance, the
Company's business may be materially adversely affected. As a result, the
Company believes that continued significant expenditures for research and
development will be required in the future. If the Company were
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unable to design, develop and introduce competitive products on a timely basis,
its future operating results would be materially adversely affected.
New products are generally incorporated into a customer's
products or systems at the design stage. However, design wins, which can often
require significant expenditures by the Company, may precede the generation of
volume sales, if any, by a year or more. Moreover, the value of any design win
will depend in large part on the ultimate success of the customer's product and
on the extent to which the system's design accommodates components manufactured
by the Company's competitors. No assurance can be given that the Company will
achieve design wins or that any design win will result in significant future
revenue.
DEPENDENCE UPON INDEPENDENT MANUFACTURERS AND ASSEMBLY SUPPLIERS
All of the Company's products are currently manufactured to
the Company's specifications by independent subcontractors, and the Company
maintains no wafer manufacturing or assembly operations of its own. The
Company currently utilizes semiconductor wafer manufacturing subcontractors
located in South Korea, Japan and the United States. The Company also
contracts with independent assembly suppliers located in Asia for the assembly
of all of its products, and relies principally on one assembly contractor
located in South Korea. As a result, all of the Company's products are
manufactured by independent foundries and assembled by foreign assembly
contractors. Consequently, the Company currently relies exclusively on the
manufacturing, assembly and other resources of these independent manufacturers
and assembly suppliers. Currently, certain of these independent manufacturers
serve as the sole source for several of the Company's products. The Company's
reliance on subcontractors to manufacture and assemble its products involves
significant risks, including reduced control over delivery schedules, the
potential lack of adequate capacity, reduced control over fluctuations in
manufacturing yields, discontinuation or phase-out of such subcontractors'
production processes, and potential misappropriation of proprietary
intellectual property. To date, the process of transferring the Company's
manufacturing operations to these independent manufacturers has been
acceptable; however, there can be no assurance that problems will not occur in
the future, or that such manufacturers will be able to produce wafers at
acceptable yields and to deliver wafers to the Company in a timely manner.
There can be no assurance that the Company will not experience problems in
timeliness, yields and quality of wafer deliveries from its wafer manufacturing
subcontractors, each of which could have a material adverse effect on the
Company's operations and operating results. In addition, although the Company
has entered into manufacturing agreements with each of these independent
manufacturers, there can be no assurance that such manufacturers will continue
to manufacture products for the Company. In this regard, at various times
during fiscal 1992, 1993 and 1994, the Company experienced significant delays
in the delivery of wafer products having acceptable yields and quality from
Hualon, which, during fiscal 1992, 1993 and for the first five months of fiscal
1994, was the Company's most significant foundry partner, which had a material
adverse effect on the Company's results of operations and financial condition.
Since the second quarter of fiscal 1994, Hualon has not served as a foundry for
the Company.
The Company does not have long-term, non-cancelable contracts
with its wafer suppliers. Therefore, the Company's wafer suppliers could
choose to prioritize capacity for other uses or reduce or eliminate deliveries
to the Company on short notice. Accordingly, there can be no assurance that
the Company's foundries will allocate sufficient wafer manufacturing capacity
to the Company to satisfy the Company's product requirements. In addition, the
Company has been, and expects to continue to be in the future, particularly
dependent on one or more foundries for its wafer manufacturing requirements.
Any sudden demand for an increased amount of wafers or sudden reduction or
elimination of any existing source or sources of wafers could result in a
material delay in the shipment of the Company's products. There can be no
assurance that material disruptions in supply, which have occurred periodically
in the past, will not occur in the future. Any such disruption could have a
material adverse effect on the Company's operating results and financial
condition. In the event the Company were unable to qualify alternative
manufacturing sources for existing or new products in a timely manner or such
sources were unable to produce wafers with acceptable manufacturing yields, the
Company's business, operating results and financial condition would be
materially and adversely affected.
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DEPENDENCE ON FOUNDRY MANUFACTURING
The manufacture of semiconductor wafers for the Company's
products is a highly complex process that requires a high degree of technical
skill, state-of-the-art equipment and effective cooperation between the wafer
foundry and the Company's engineering staff to produce acceptable yields.
Worldwide manufacturing capacity for these products is limited. Therefore,
significant interruptions in supply from any of the Company's independent
foundries could adversely affect the Company and its results of operations.
Other unanticipated changes in the Company's wafer supply or assembly
arrangements could reduce product availability, increase cost, impair quality
and reliability or decrease yield. Many of the factors that could result in
such changes are beyond the Company's control. To a considerable extent, the
Company's ability to succeed in the future will depend on its ability to
maintain access to advanced wafer fabrication technologies. Since the Company
does not own or operate its own wafer fabrication or process development
facility, the Company depends upon independent companies to provide access to
such technologies. In light of this dependency, and the intensely competitive
nature of the semiconductor industry, there is no assurance that either
technology advantages or timely product introduction can be maintained in the
future. In connection with its arrangements with foreign independent wafer
suppliers, it is necessary for the Company to provide such suppliers with
proprietary information regarding its process and product technologies.
Although the Company has entered into confidentiality and nondisclosure
agreements with its foreign suppliers, there can be no assurance that the
Company will be able to protect its rights under its patents, copyrights,
maskwork rights or such confidentiality and nondisclosure agreements in foreign
countries.
MANUFACTURING; VARIATION IN PRODUCTION YIELDS
The manufacture of semiconductor products is highly complex,
involving many precise and critical steps, and is sensitive to a wide variety
of factors, including the level of contaminants in the manufacturing
environment, impurities in the materials used and the performance of
sophisticated electronic equipment. Technical problems which may arise in the
manufacturing process at the manufacturing facilities of any of the Company's
independent foundries can adversely affect manufacturing yields and the overall
profitability of the Company. Such technical problems may occur or new
problems may arise as the Company begins using new manufacturing processes in
connection with the introduction of new products. While the Company is
attempting to minimize the impact of such factors and potential problems by
developing several sources of wafer supply, certain of the foundries utilized
by the Company have experienced lower than anticipated yields. No assurance
can be given that the Company or its suppliers will not experience yield
problems in the future, which could have a material adverse effect on the
Company's results of operations.
RISKS ASSOCIATED WITH FOREIGN SUPPLIERS
A substantial number of the Company's products are
manufactured, and all of the Company's products are assembled, by independent
foundries and assembly suppliers located in foreign countries, including Japan
and South Korea. The Company is, therefore, subject to certain risks generally
associated with contracting with foreign suppliers, including currency exchange
fluctuations, political instability, trade restrictions and changes in tariff
and freight rates.
THE SEMICONDUCTOR INDUSTRY
The semiconductor industry is subject to rapid technological
change, price erosion, occasional shortages of materials, variations in
manufacturing efficiencies, significant expenditures for capital equipment and
product development, and cyclical market patterns. In recent years, the
industry has experienced intermittent significant economic downturns
characterized by diminished product demand, accelerated erosion of selling
prices and production overcapacity. Similar fluctuations may occur in the
future, and there can be no assurance that the Company will not be materially
and adversely affected in the future by such fluctuations or by cyclical
conditions in the semiconductor industry or slower growth in any of the markets
for the Company's products.
10
<PAGE> 12
DEPENDENCE ON DATA COMMUNICATION MARKET
The Company anticipates that substantially all of the
Company's future revenues will be attributable to sales of data communication
products. The market for data communications products is characterized by
intense competition, relatively short product life cycles and rapid
technological change. In addition, the market for data communications products
has undergone a period of extremely rapid growth and has experienced
consolidation among the competitors in the marketplace. The Company expects
that substantially all of its revenues for the foreseeable future will continue
to consist of sales of data communications products. The Company's results of
operations and financial condition would be materially adversely affected in
the event of any future slowdown or adverse events in the market for data
communications products.
CUSTOMER CONCENTRATION
During certain periods, a relatively small number of the
Company's customers have accounted for a significant portion of the Company's
revenues. In In the quarter ended December 31, 1994, sales to Apple Computer,
Cisco Systems and Hewlett-Packard accounted for approximately 34%, 11% and 11%,
respectively, of the Company's revenues. In the quarter ended December 31,
1993, Cisco Systems accounted for approximately 10% of the Company's revenues.
The reduction, delay or cancellation of orders from one or more of the
Company's significant customers for any reason, including a reduction in the
demand for data communications products that include the Company's products,
could have a material adverse effect on the Company's results of operations and
financial condition. The Company's sales to its customers, including Apple
Computer, are made under purchase orders and not pursuant to any long-term
agreements. In addition, the Company's products are often sole-sourced to its
customers, and the Company's operating results and financial condition could be
materially and adversely affected if one or more of the Company's major
customers were to develop other sources of supply. Furthermore, in view of the
short product life cycles, in the market for data communications products, the
Company's operating results would be materially and adversely affected if one
or more of the Company's significant customers were to purchase integrated
circuits manufactured by one of the Company's competitors for inclusion in new
generations of products developed by its customers. The Company is also
dependent upon sales representatives and distributors for the sales of its
products to systems manufacturers. There can be no assurance that the
Company's current customers will continue to place orders with the Company,
that orders by existing customers will continue at the levels of previous
periods, or that the Company will be able to obtain orders from new customers.
The loss of one or more of the Company's current customers could have a
material adverse effect on the Company's business, operating results and
financial condition. In this regard, the Company has been notified by Apple
Computer that orders for the Company's proprietary transceiver products will
cease in the second quarter of fiscal 1995 as Apple Computer begins
manufacturing its internally developed product. The Company is actively
marketing its LAN integrated circuits to Apple Computer for the transceiver
products and other data communication applications. Although the Company
believes that it will be able to substantially replace such sales with sales of
LAN integrated circuits to Apple Computer, additional sales of the Company's
existing product line to other customers, and sales of new products, there can
be no assurance that the Company will be successful in doing so.
PRIOR RELIANCE UPON MILITARY SALES
Historically, a substantial proportion of the Company's
revenues and net income were attributable to products sold by the Company for
use in military applications. During fiscal 1991, 1992, 1993 and 1994,
approximately 30%, 16%, 23% and 7%, respectively, of the Company's revenues
were attributable to products sold for use in military applications. On
average, these products contributed higher profit margins than the Company's
other products. Commencing in fiscal 1992 and accelerating in fiscal 1993 and
fiscal 1994, the Company experienced a significant reduction in the demand for
products sold for use in military applications as compared with prior periods.
This reduction in such products had a material adverse effect on the Company's
results of operations and financial condition. As a result of the Company's
sale of assets related to its nonvolatile
11
<PAGE> 13
memory products as part of the EEPROM Asset Sale in February 1994, the Company
anticipates that it will have no military sales for the foreseeable future.
LITIGATION
On March 30, 1994, the Company filed a lawsuit in the United
States District Court for the Northern District of California against Hualon,
one of the Company's foundries and joint development partners. In the lawsuit,
the Company originally sought injunctive relief from the court to prevent Hualon
from using certain of the nonvolatile memory technology sold by the Company to
Atmel pursuant to the Asset Purchase Agreement, to which Hualon has asserted
certain license rights under an alleged license agreement. In response to the
Company's claims, Hualon asserted affirmative defenses and counterclaims seeking
a declaration by the court that the alleged license agreement is valid and
seeking specific performance of the alleged license agreement and other
agreements previously entered into by the two parties. Hualon filed a motion for
summary judgment and the Company's initial claim was subsequently dismissed by
the court. Hualon has subsequently amended its counterclaims to include
additional claims, including claims for damages for breach of, and for money
owed pursuant to, other agreements between the Company and Hualon. The Company
has subsequently amended its original complaint to include a number of
additional claims against Hualon, including claims for damages for breach of,
and for money owed pursuant to, such other agreements. Under the terms of one of
the escrow agreements entered into with Atmel in connection with the EEPROM
Asset Sale, under which $4,105,859 is currently on deposit in escrow, the
Company will be entitled to receive such funds if, among other things, it is
determined by the court that the alleged license agreement is invalid See
"Recent Developments." The Company intends to vigorously prosecute its claims
in this lawsuit and to defend the claims made by Hualon. The Company believes
that its claims and defenses in this lawsuit are meritorious. However, there
can be no assurance as to the possible outcome of this proceeding. In the event
that the Company is not successful in invalidating the alleged license
agreement, Atmel may assert a claim against the Company under the Asset Purchase
Agreement, including a claim for damages, if any, suffered by Atmel as a result
of Hualon's use of any of such technology, and, in the event any such claim by
Atmel is determined to be valid, Atmel may recover any such damages. The
Company believes that, in the event of any claim by Atmel, the amount of damages
that may be payable by the Company upon a resolution thereof will not have a
material adverse effect on the Company's cash flow, financial position or
results of operations. However, there can be no assurance as to such matters.
12
<PAGE> 14
COMPETITION
The semiconductor industry is intensely competitive and is
characterized by price erosion, rapid technological change, short product life
cycles, cyclical market patterns and heightened domestic and international
competition in many markets. The Company competes with major domestic and
international semiconductor companies, most of which have substantially greater
financial, technical, manufacturing and marketing resources than the Company,
as well as other substantial resources with which to more effectively pursue
engineering, manufacturing, marketing and distribution of their products. In
addition, many of the Company's competitors maintain their own wafer
fabrication and manufacturing facilities, which the Company considers to be a
competitive advantage. Accordingly, the Company believes that it is at a
substantial competitive disadvantage in comparison to larger companies with
wafer fabrication and manufacturing facilities, broader product lines, greater
technical, financial and other resources and a higher level of customer service
and support. New entrants may also increase their participation in the
semiconductor market. The ability of the Company to compete successfully in
the rapidly evolving area of high performance integrated circuit technology
depends on factors both within and outside of its control, including success in
designing and subcontracting the manufacture of new products that implement new
technologies, adequate sources of raw materials, protection of Company products
by effective utilization of intellectual property laws, product quality,
reliability, price, efficiency of production, the pace at which customers
incorporate the Company's integrated circuits into their products, success of
competitors' products and general economic conditions. Because the Company
does not currently manufacture its own semiconductor wafers, the Company is
vulnerable to process technology advances utilized by competitors to
manufacture higher performance or lower cost products. There is no assurance
that the Company will be able to compete successfully in the future.
PATENTS, LICENSES AND INTELLECTUAL PROPERTY CLAIMS
The Company's success depends in part on its ability to obtain
patents, licenses and other intellectual property rights covering its products
and manufacturing processes. To that end, the Company has in the past acquired
certain patents and patent licenses and intends to continue to seek patents on
its inventions and manufacturing processes in appropriate circumstances. The
process of seeking patent protection can be long and expensive and there can be
no assurance that patents will issue from currently pending or future
applications or that existing patents or any new patents that may be issued
will be of sufficient scope or strength to provide meaningful protection or any
commercial advantage to the Company. The Company may be subject to or may
initiate interference proceedings in the patent office, which can demand
significant financial and management resources. As is typical in the
semiconductor industry, the Company has from time to time received, and may in
the future receive, communications alleging possible infringement of patents or
other intellectual property rights of others. Based on industry practice, the
Company believes that any necessary licenses or other rights are often
obtainable on commercially reasonable terms, but no assurance can be given that
licenses would be available or that litigation would not ensue. Litigation,
which could result in substantial cost to and diversion of effort by the
Company, may be necessary to enforce patents or other intellectual property
rights of the Company or to defend the Company against claimed infringement of
the rights of others. The failure to obtain necessary licenses or other rights
or litigation could have a material adverse effect on the Company's operations.
ENVIRONMENTAL AND OTHER GOVERNMENTAL REGULATIONS
Certain of the Company's foundry and assembly subcontractors
are subject to a variety of government regulations related to the discharge or
disposal of toxic, volatile or otherwise hazardous chemicals
13
<PAGE> 15
used in their manufacturing process. The failure by the Company's
subcontractors to comply with present or future environmental regulations could
result in fines, suspension of production or cessation of operations. Such
regulations could also require the subcontractors to acquire equipment or to
incur substantial other expenses to comply with environmental regulations. If
substantial additional expenses were incurred by the Company's subcontractors,
product costs could significantly increase, thus materially adversely affecting
the Company's results of operations. Additionally, the Company is subject to a
variety of government regulations relating to its operations, such as
environmental, labor and export control regulations. While the Company
believes it has all permits necessary to conduct its business, the failure to
comply with present or future regulations could result in fines being imposed
on the Company or suspension or cessation of operations. Any failure by the
Company or its subcontractors to control the use of, or adequately restrict the
discharge of hazardous substances could subject it to future liabilities, and
could have a material adverse effect on the Company.
ATTRACTION AND RETENTION OF KEY PERSONNEL
The Company's future success is dependent upon its ability to
hire and retain qualified technical and management personnel, particularly
highly skilled design engineers involved in new product development. The
competition for such personnel is intense and there can be no assurance that
the Company will be able to attract and retain skilled and experienced
personnel in the future. Any failure to attract or retain such personnel could
adversely affect the Company's future prospects and profitability.
TAX LOSS CARRYFORWARDS
At September 30, 1994, the Company had net operating loss
carryforwards of approximately $103,000,000 for federal tax purposes, which
expire in 1998 through 2008. Under Section 382 of the Internal Revenue Code of
1986, as amended, utilization of prior net operating loss carryforwards is
limited after an ownership change, as defined in Section 382, to an annual
amount equal to the value of the loss corporation's outstanding stock
immediately before the date of the ownership change multiplied by the federal
long-term tax-exempt rate. This offering is not expected to limit the
Company's utilization of net operating loss carryforwards under Section 382.
However, there can be no assurance that the Company will not issue additional
shares to obtain necessary additional future financing or that certain of the
Company's major stockholders will not sell all of their shares, in each case in
a transaction that would trigger such Section 382 limitation. In the event the
Company achieves profitable operations and triggers the Section 382 limitation,
any significant limitation on the utilization of net operating loss
carryforwards would have the effect of increasing the Company's tax liability
and reducing net income and available cash resources.
VOLATILITY OF STOCK PRICE
The Company's Common Stock has experienced substantial price
volatility and such volatility may occur in the future, particularly as a
result of quarter to quarter variations in the actual or anticipated financial
results of, or announcements by, the Company, its competitors and other
companies in the semiconductor industry. In addition, the stock market has
experienced extreme price and volume fluctuations which have affected the
market price of many technology companies in particular and which have often
been unrelated to the operating performance of these companies. Broad market
fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the Common Stock.
EFFECT OF ANTITAKEOVER PROVISIONS
The Company's Board of Directors has the authority to issue up
to 1,000,000 shares of Preferred Stock and to determine the price, rights,
preferences, and privileges of those shares without any further vote or action
by the Company's stockholders. The rights of the holders of Common Stock will
be subject to, and may be adversely affected by, the rights of the holders of
any Preferred Stock that may be issued in the future. While the Company has no
present intention to issue shares of Preferred Stock, such issuance, while
providing desirable
14
<PAGE> 16
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of making it more difficult for a third party
to acquire a majority of the outstanding voting stock of the Company. In
addition, such Preferred Stock may have other rights, including economic
rights senior to the Common Stock, and, as a result, the issuance thereof could
have a material adverse effect to the market value of the Common Stock.
Furthermore, the Company is subject to the anti-takeover provisions of Section
203 of the Delaware General Corporation Law, which prohibits the Company from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved
in a prescribed manner. The application of Section 203 also could have the
effect of delaying or preventing a change of control of the Company. Certain
other provision of the Company's Certificate of Incorporation may have the
affect of delaying or preventing changes in control or management of the
Company, which could adversely affect the market price of the Company's Common
Stock. See "Description of Capital Stock."
15
<PAGE> 17
SELLING STOCKHOLDER
The Selling Stockholder is offering for sale all of the
3,614,701 shares of Common Stock covered by this Prospectus. The Selling
Stockholder acquired such shares from the Company on February 7, 1994 pursuant
to the terms and conditions of a Stock Purchase Agreement between the parties
and in connection with the purchase by the Selling Stockholder from the Company
of assets related to the Company's non-volatile memory products. In addition
to the Shares offered hereby (which represent approximately 14% of the
outstanding Common Stock of the Company), the Selling Stockholder owns ten
shares of the Company's Common Stock. Except as otherwise indicated in this
Prospectus, the Selling Stockholder has not had a material relationship with
the Company within the past three years other than as a result of the ownership
of the Shares. The Selling Stockholder may from time to time offer all or some
of the Shares which it owns pursuant to the offering contemplated by this
Prospectus, and, therefore, because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the Shares,
no estimate can be given as to the amount of Shares that will be held by the
Selling Stockholder after completion of this offering.
16
<PAGE> 18
PLAN OF DISTRIBUTION
The Shares offered hereby are being offered directly by the
Selling Stockholder. The Company will receive no proceeds from the sale of any
of the Shares. The sale of the Shares may be effected by the Selling
Stockholder from time to time in transactions in the over-the-counter market,
in negotiated transactions, or a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing at the time of sale,
at prices related to prevailing market prices or at negotiated prices. The
Selling Stockholder may effect such transactions by selling the Shares to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from the Selling Stockholder
and/or the purchasers of the Shares for whom such broker-dealers may act as
agents or to whom they sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
At the time a particular offer of Shares is made, to the
extent required, a supplemental Prospectus will be distributed which will set
forth the number of Shares being offered and the terms of the offering
including the name or names or any underwriters, dealers or agents, the
purchase price paid by any underwriter for the Shares purchased from Selling
Stockholder, any discounts, commissions and other items constituting
compensation from the Selling Stockholder and any discounts, commissions or
concessions allowed or reallowed or paid to dealers.
In order to comply with the securities laws of certain states,
if applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states, the
Shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Selling Stockholder and any broker-dealers, agents or
underwriters that participate with the Selling Stockholder in the distribution
of the Shares may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, and any commissions received by them and any
profit on the resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. The Company
has agreed to indemnify the Selling Stockholder against certain liabilities,
including liabilities under the Securities Act, as underwriters or otherwise.
Under applicable rules and regulations under the Exchange Act,
any person engaged in the distribution of the Shares may not simultaneously
engage in market making activities with respect to the Common Stock of the
Company for a period of two business days prior to the commencement of such
distribution. In addition and without limiting the foregoing, the Selling
Stockholder will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Rules
10b-6 and 10b-7, which provisions may limit the timing of purchases and sales
of shares of the Company's Common Stock by the Selling Stockholder.
There can be no assurance that the Selling Stockholder will
sell all or any of the shares of common stock offered hereunder.
17
<PAGE> 19
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of
40,000,000 shares of Common Stock, par value $0.01 per share, and 1,000,000
shares of Preferred Stock, par value $0.01 per share. As of December
31, 1994, there were 25,818,152 shares of Common Stock outstanding
and no shares of Preferred Stock were outstanding.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of the stockholders.
Subject to preferences that may be applicable to any outstanding Preferred
Stock, holders of Common Stock are entitled to receive ratably such dividends
as may be declared by the Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference of any
outstanding Preferred Stock. Holders of Common Stock have no preemptive rights
and have no rights to convert their Common Stock into any other securities.
The Company has no redemption rights with respect to the Common Stock. All of
the outstanding shares of Common Stock presently outstanding are, and the
Shares offered hereby will be, fully paid and non-assessable. The rights,
preferences and privileges of the Common Stock are subject to any series of
Preferred Stock which the Company may issue in the future.
PREFERRED STOCK
The Board of Directors is authorized to provide for the
issuance of Preferred Stock in one or more series and to fix the number of
shares constituting any such series, the voting powers, designations,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, including the dividend
rights, redemption privileges, conversion rights and liquidation preferences of
the shares constituting any series, without any further vote or action by the
stockholders of the Company. The issuance of shares of Preferred Stock could
decrease the amount of earnings and assets available for distribution to
holders of Common Stock or adversely affect the rights and powers, including
voting rights, of the holders of the Common Stock. The issuance of shares of
Preferred Stock could have the effect of delaying, deferring or preventing a
change in control of the Company without further action by the stockholders.
The Company has no current plans to issue any shares of Preferred Stock.
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company, New York, New York,
is the transfer agent and registrar for the Company's Common Stock.
18
<PAGE> 20
LEGAL MATTERS
The validity of the securities offered hereby will be passed
upon for the Company by Brobeck, Phleger & Harrison, San Francisco, California.
Certain attorneys of Brobeck, Phleger & Harrison beneficially own an aggregate
of approximately 11,000 shares of the Company's Common Stock.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference to the Annual Report on Form 10-K for the fiscal year
ended September 30, 1994 have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given upon the authority of said
firm as experts in auditing and accounting.
19
<PAGE> 21
3,614,701 Shares
SEEQ TECHNOLOGY INCORPORATED
Common Stock
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemized statement of
various expenses in connection with the sale and distribution of the securities
being registered other than underwriting discounts and commissions. All of the
amounts shown are estimates except for the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,403
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,597
-------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21,000
</TABLE>
The Selling Stockholder will bear its own sales commissions and
related sales expenses in connection with this offering. The Company will bear
all other expenses of the Offering listed above.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits a
corporation to grant indemnification to directors, officers and other agents in
terms sufficiently broad to permit indemnification under certain circumstances
for liabilities, including expenses, arising in connection with the Securities
Act of 1933, as amended. Pursuant to the Certificate of Incorporation and the
Bylaws of the Company, directors and officers of the Company are indemnified to
the full extent permitted by law. In addition, the Company has entered into
indemnification agreements with its officers and directors that indemnify such
officers and directors to the full extent permitted by law against all expenses
(including attorneys' fees), judgments, fines or settlement amounts incurred or
paid by them in any action or proceeding, including any action by or on behalf
of the Company, on account of their service as an officer or director of the
Company.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
5.1 Opinion of Brobeck, Phleger & Harrison.
23.1 Consent of Price Waterhouse LLP, independent accountant.
23.2 Consent of Brobeck, Phleger & Harrison (included in the Opinion of Counsel filed as Exhibit 5.1 hereto).
</TABLE>
II-1
<PAGE> 23
ITEM 17. UNDERTAKINGS.
The undersigned 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: (i)
to include any prospectus required by section 10(a)(3) of the Securities Act of
1933; (ii) 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;
and (iii) 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 (i) and (ii) do not apply if the Registration Statement is on
Form S-3 or Form S-8, and the information required to be included in a
post-effective amendment by (i) and (ii) is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15 of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 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.
For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
II-2
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 3 to this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in Fremont, California on this
24th day of March, 1995.
SEEQ TECHNOLOGY INCORPORATED
By /s/ Phillip J. Salsbury
----------------------------------
Phillip J. Salsbury
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Amendment No. 3 to 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/ Phillip J. Salsbury President, Chief Executive March 24, 1995
---------------------------------------------
(Phillip J. Salsbury) Officer and Director
(Principal Executive Officer)
/s/ Ralph J. Harms Vice President, Finance and March 24, 1995
---------------------------------------------
(Ralph J. Harms) Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
/s/ Alan V. Gregory Chairman of the March 24, 1995
----------------------------------------------
(Alan V. Gregory) Board of Directors
/s/ Charles C. Harwood Director March 24, 1995
----------------------------------------------
(Charles C. Harwood)
Director
----------------------------------------------
(Peter C. Chen)
</TABLE>
II-3
<PAGE> 25
SEEQ TECHNOLOGY INCORPORATED
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Exhibit Page
------- ------- ----
<S> <C> <C>
5.1 Opinion of Brobeck, Phleger & Harrison.
23.1 Consent of Price Waterhouse LLP, independent accountant.
23.2 Consent of Brobeck, Phleger & Harrison (included in the
Opinion of Counsel filed as Exhibit 5.1 hereto).
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD]
March 24, 1995
SEEQ Technology Incorporated
47200 Bayside Parkway
Fremont, California 94538
Re: SEEQ Technology Incorporated
Registration Statement on Form S-3 (File No. 33-84018)
Ladies and Gentlemen:
We have acted as counsel for SEEQ Technology Incorporated (the
"Company"), a Delaware corporation, in connection with the authorization,
issuance, and sale of 3,614,701 shares of common stock of the Company, par
value $0.01 (the "Shares"), as described in the above-referenced Registration
Statement (the "Registration Statement"), and the preparation of the
Registration Statement under the Securities Act of 1933, as amended.
In this connection, we are familiar with the corporate proceedings
taken by the Company in connection with the issuance and sale of the Shares. We
have also reviewed the Registration Statement and the exhibits thereto, and we
have made such other examinations of law and fact as we considered necessary in
order to form a basis for the opinion hereafter expressed.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized, and upon effectiveness of the Registration Statement and sale
of the Shares as contemplated by the Registration Statement, the Shares will be
legally issued, fully paid, and nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus which is part of the Registration Statement.
Very truly yours,
/s/ Brobeck, Phleger & Harrison
BROBECK, PHLEGER & HARRISON
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on Form S-3 of our
report dated October 21, 1994, except for Note 12, which is as of November 23,
1994, appearing on page 27 of SEEQ Technology Incorporated's Annual Report on
Form 10-K for the fiscal year ended September 30, 1994. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
San Jose, California
March 24, 1995
