<PAGE> 1
As filed with the Securities and Exchange Commission on February 22, 1995
Registration No. 33-86646
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 2
TO
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
SEEQ TECHNOLOGY INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 94-2711298
(State of Incorporation) (I.R.S. Employer
Identification No.)
47200 Bayside Parkway
Fremont, California 94538
(510) 226-7400
(Address and telephone number of registrant's 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
Spear Street Tower
One Market
San Francisco, California 94105
(415) 442-0900
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
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, check the following box. / /
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile
thereof, pursuant to Item 11(a)(1) of this Form, check the following box. /x/
-------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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SEEQ TECHNOLOGY INCORPORATED
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
SHOWING LOCATION IN PROSPECTUS OF INFORMATION
REQUIRED BY ITEMS OF FORM S-2
<TABLE>
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ITEM NUMBER AND HEADING IN
FORM S-2 REGISTRATION STATEMENT LOCATION IN PROSPECTUS
------------------------------- ----------------------
<S> <C> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus . . Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus . . . . . . . . . . . . . . Inside Front and Outside Back Cover Pages of
Prospectus
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges . . . . . . . Prospectus Summary; Risk Factors
4. Use of Proceeds . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . Outside Front Cover Page of Prospectus; Risk
Factors; Price Range of Common Stock and Dividend
Policy; Sale of the Shares
6. Dilution . . . . . . . . . . . . . . . . . Not Applicable
7. Selling Security Holders . . . . . . . . . Not Applicable
8. Plan of Distribution . . . . . . . . . . . Outside Front and Inside Front Cover Pages of
Prospectus; Sale of the Shares
9. Description of Securities to be Registered Outside Front Cover Page of Prospectus; Prospectus
Summary; Capitalization; Price Range of Common Stock
and Dividend Policy; Description of Capital Stock
10. Interests of Named Experts and Counsel . . Not Applicable
11. Information with Respect to the Registrant Outside Front and Inside Front Cover Pages;
Available Information; Incorporation of Certain
Documents By Reference; Additional Information;
Prospectus Summary; Risk Factors; Use of Proceeds;
Price Range of Common Stock and Dividend Policy;
Capitalization; Sale of the Shares; Description of
Capital Stock; Legal Matters; Experts
12. Incorporation of Certain Information By
Reference . . . . . . . . . . . . . . . . Incorporation of Certain Documents By Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . Not Applicable
</TABLE>
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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.
<PAGE> 4
PRELIMINARY PROSPECTUS DATED FEBRUARY 22, 1995
375,000 SHARES
SEEQ TECHNOLOGY INCORPORATED
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
_______________________________
This Prospectus relates to the public offering, which is not being
underwritten, of 375,000 shares (the "Shares") of Common Stock of SEEQ
Technology Incorporated ("SEEQ" or the "Company"). The Shares are being
offered hereby by the Company as partial consideration in the settlement of
certain litigation pending against the Company. See "Sale of the Shares" for
information relating to the disposition of the Shares offered hereby.
_______________________________
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 February 17, 1995 was $1-15/32 per
share.
_______________________________
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 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-2 (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 Shares 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.
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . 3
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
RECENT DEVELOPMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . 16
CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SALE OF THE SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
DESCRIPTION OF CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
2
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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
for the fiscal quarter ended December 31, 1994, filed pursuant to Section 13 of
the Exchange Act, as amended (3) 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 (4) all other reports filed by the Company pursuant to
Section 13(a) or 15(d) of the Exchange Act.
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 modifies or supersedes such
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.
ADDITIONAL INFORMATION
This Prospectus is accompanied by the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1994 and the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended December 31, 1994, as amended.
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SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial data appearing elsewhere or incorporated by
reference in this Prospectus, including the information under "Risk Factors."
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.
THE OFFERING
The Shares are being offered by the Company to Brazos Partners, L.P.
("Brazos") in settlement of certain litigation pending against the Company.
The litigation involves an action originally instituted against the Company by
a previous landlord for rent and damages under a lease of certain premises
previously occupied by the Company. Promptly following the date of this
Prospectus, the Company plans to enter into a final settlement of the
litigation with Brazos. The terms of the settlement would provide for the
payment by the Company of $37,500, the issuance by the Company to Brazos of the
Shares offered hereby, and the assignment by the Company to Brazos of a
$360,000 promissory note and a $75,000 security deposit on such premises, which
are both currently due to the Company. Upon the execution of a settlement
agreement in respect thereof andthe fulfillment of the terms thereof, including
the issuance of the Shares offered hereby to Brazos, all such actions and
related claims against the Company will be dismissed.
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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.
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
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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.
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
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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 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.
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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.
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
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<PAGE> 13
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.
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
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<PAGE> 14
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 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 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
11
<PAGE> 15
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.
On September 4, 1992, an action was filed against the Company by GOCO
Realty Fund I, a previous landlord, for rent and damages under a lease of the
premises previously occupied by the Company. The Company vacated the premises
in July 1992. The claims asserted in this action were subsequently assigned to
Brazos. In the action, plaintiff is seeking rent through the original
expiration date of the lease, which was September 9, 1994. The lease provided
for monthly rental payments of $106,142 from July 1992 through September 1992,
$111,449 from October 1992 through September 1993 and $117,021 from October
1993 through September 1994. In addition, plaintiff is seeking certain
additional rent and specified damages and costs, including attorneys' fees and
courts costs incurred in the litigation. In April 1994, the Company proposed a
settlement of this action, and Brazos indicated such a settlement would be
acceptable to Brazos. The terms of the settlement would provide for the
payment by the Company of $37,500, the issuance by the Company to Brazos of the
Shares offered hereby, and the assignment by the Company to plaintiff of a
$360,000 promissory note and a $75,000 security deposit on such premises, which
are both currently due to the Company. Since April 1994, the Company has been
in the process of preparing the final settlement agreement and registering the
Shares under the Securities Act. In November 1994, Brazos filed an additional
lawsuit against the Company alleging that Brazos has incurred certain damages
because the Company and Brazos have not yet entered into a final settlement
agreement. The Company believes that this additional lawsuit is without merit.
Promptly following the date of this Prospectus, the Company plans to enter into
a final settlement of the litigation with Brazos. Upon the execution of a
settlement agreement in respect thereof and the fulfillment of the terms
thereof, including the issuance of the Shares offered hereby to Brazos, all
such actions and related claims against the Company will be dismissed. The
Company believes that a settlement agreement containing such terms will be
executed and that the terms of such settlement agreement will be fulfilled by
the Company. In the event that such a settlement agreement were not executed
or the terms of such settlement agreement were not fulfilled by the Company,
these actions would proceed and, in the event the Company were not successful
in these actions and it were determined that the plaintiff is entitled to
recover damages from the Company, the Company's results of operations and
financial conditions could be materially and adversely affected.
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<PAGE> 16
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 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
13
<PAGE> 17
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. See "Price Range of
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 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
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<PAGE> 18
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."
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<PAGE> 19
USE OF PROCEEDS
The Shares offered pursuant hereto are being issued to Brazos as
partial consideration for the settlement of certain litigation between the
Company and Brazos. See "Sale of the Shares." As a result, the Company will
not receive any cash proceeds from the issuance of these Shares.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
SEEQ's Common Stock is traded in the over-the-counter market and
prices are quoted on the Nasdaq National Market under the symbol "SEEQ". The
following table sets forth the range of closing high and low closing sale
prices for the Common Stock as reported by the Nasdaq National Market for each
fiscal quarter during the periods indicated. See the cover page of this
Prospectus for a recent price for the Company's Common Stock.
<TABLE>
<CAPTION>
HIGH LOW
------ -----
<S> <C> <C>
FISCAL 1993
First Quarter . . . . . . . . . . . . . . . . . . $1-1/2 $3/4
Second Quarter . . . . . . . . . . . . . . . . . . $1-5/8 $1
Third Quarter . . . . . . . . . . . . . . . . . . $1-5/8 $1
Fourth Quarter . . . . . . . . . . . . . . . . . . $1-3/4 $31/32
FISCAL 1994
First Quarter . . . . . . . . . . . . . . . . . . $1-3/4 $1-1/16
Second Quarter . . . . . . . . . . . . . . . . . . $1-1/2 $1-3/32
Third Quarter . . . . . . . . . . . . . . . . . . $1-5/16 $15/16
Fourth Quarter . . . . . . . . . . . . . . . . . . $1-9/32 $15/16
FISCAL 1995
First Quarter . . . . . . . . . . . . . . . . . . $1-1/8 $3/4
Second Quarter (through February 17, 1995) . . . . $1-15/32 $13/16
</TABLE>
The Company has never paid any cash dividends and the Board of
Directors currently does not anticipate paying cash dividends in the
foreseeable future. The Company is restricted under its financing agreements
from paying dividends without the consent of the lender.
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<PAGE> 20
CAPITALIZATION
The following table sets forth the capitalization of the Company at
December 31, 1994, and as adjusted to reflect the effect of the issuance of the
Shares offered hereby.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1994
--------------------------------
ACTUAL AS ADJUSTED
------ -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term obligations, less current portion . . . . . . . . . . . . $ 1,621 $ 1,621
--------- ---------
</TABLE>
<TABLE>
<S> <C> <C>
Stockholders' Equity:
Preferred Stock, $.01 par value; 1,000,000 shares
authorized, no shares outstanding . . . . . . . . . . . . . . . ___ ___
Common Stock, $.01 par value; 40,000,000 shares
authorized, 25,818,152 shares outstanding;
26,193,152 shares outstanding, as adjusted(1) . . . . . . . . . 258 262
Additional paid-in capital . . . . . . . . . . . . . . . . . . . 117,529 117,923
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . (113,219) (113,219)
--------- ---------
Total stockholders' equity . . . . . . . . . . . . . . . . . . $ 4,568 $ 4,966
========= =========
</TABLE>
_______________________________________
(1) Excludes as of December 31, 1994 (i) 3,110,718 shares issuable upon
the exercise of outstanding stock options and 2,008,217 shares
available for future option grants under the Company's Restated 1982
Stock Option Plan and Non-employee Director Stock Option Plan, (ii)
142,273 shares issuable pursuant to the Company's Periodic Stock
Purchase Plan, and (iii) 3,357,385 shares issuable upon exercise of
outstanding warrants to purchase shares of Common Stock.
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<PAGE> 21
SALE OF THE SHARES
The Shares are being offered by the Company to Brazos in settlement of
certain litigation pending against the Company. The litigation involves an
action originally instituted against the Company by a previous landlord for
rent and damages under a lease of certain premises previously occupied by the
Company. The claims asserted in this action were subsequently assigned to
Brazos. Promptly following the date of this Prospectus, the Company plans to
propose a settlement of the litigation to Brazos. The terms of the settlement
would provide for the payment by the Company of $37,500, the issuance by the
Company to Brazos of the 375,000 Shares offered hereby, and the assignment by
the Company to Brazos of a $360,000 promissory note and a $75,000 security
deposit on such premises, which are both currently due to the Company. Upon
the execution of a settlement agreement in respect thereof and the fulfillment
of the terms of such settlement agreement, including the issuance of the Shares
offered hereby to Brazos, all such actions and related claims against the
Company will be dismissed. See "Risk Factors - Litigation."
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<PAGE> 22
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.
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<PAGE> 23
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 as of September 30, 1994 and
1993 and for each of the three years in the period ended September 30, 1994,
incorporated by reference in this Prospectus, have been so included in reliance
on the report of Price Waterhouse LLP, independent accountants, given upon the
authority of said firm as experts in auditing and accounting.
20
<PAGE> 24
375,000 SHARES
SEEQ TECHNOLOGY INCORPORATED
COMMON STOCK
<PAGE> 25
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 130
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
-------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $75,130
=======
</TABLE>
The Company will bear all the 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.
4.1 Certificate of Incorporation (incorporated by reference to the
Company's Form 8-B filed on June 2, 1987).
4.2 Bylaws (Incorporated by reference to the Company's Form 8-B filed
on June 2, 1987).
5.1* Opinion of Brobeck, Phleger & Harrison.
10.1 Form of Indemnification Agreement with Directors and Officers
(incorporated herein by reference to Registrant's Form 8-B filed on
June 2, 1987).
10.2 Restated Periodic Purchase Plan, as amended (incorporated herein by
reference to Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1991).
10.3 Notice of Periodic Purchase Plan Offerings (incorporated herein by
reference to Registrant's Form S-8 Registration Statement
(Registration No. 33-27419) filed on March 7, 1989).
10.4 Restated 1982 Stock Option Plan, as amended (incorporated herein by
reference to Registrant's Form S-8 Registration Statement
(Registration No. 33-6544) filed on July 2, 1993).
10.5 1989 Non-Employee Director Stock Option Plan (incorporated herein by
reference to Registrant's Form S-8 Registration Statement
(Registration No. 33-35838) filed on July 11, 1990).
II-1
<PAGE> 26
10.6 Kodiak Technology Incorporated 1989 Stock Option Plan, and related
Stock Option and Stock Purchase Agreements (incorporated herein by
reference to Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1989).
10.7 Build to Suit Lease dated as of October 15, 1982, as amended ("1982
Lease"), between the Company and David W. Mariani Investment
Partnership dba Mariani Financial Co. (incorporated herein by
reference to Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1986).
10.8 Stock Purchase Agreement dated as of July 16, 1990 between the Company
and Hualon Microelectronics Corporation (incorporated herein by
reference to Registrant's Quarterly Report on Form 10-Q for the period
ended June 30, 1990).
10.9 Technology Transfer and Foundry Agreement dated as of July 16, 1990
between the Company and Hualon Microelectronics Corporation (subject
to confidential treatment) (incorporated herein by reference to
Registrant's Quarterly Report on Form 10-Q for the period ended June
30, 1990).
10.10 Business Loan Agreement with Silicon Valley Bank dated as of August 2,
1991 (incorporated herein by reference to Registrant's Annual Report
on Form 10-K for the fiscal year ended September 30, 1991).
10.11 Amendment to Business Loan Agreement with Silicon Valley Bank as of
February 24, 1993 (incorporated herein by reference to Registrant's
Registration Statement on Form S-1 (Registration No. 33-47985)).
10.12 Warrant Purchase Agreement dated as of August 2, 1991 with Silicon
Valley Bank and warrant issued pursuant thereto (incorporated herein
by reference to Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1991).
10.13 Foundry Agreement dated as of November 15, 1991 between the Company
and International Microelectronic Products Inc. (subject to request
for confidential treatment) (incorporated herein by reference to
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1991).
10.14 Loan and Security Agreement with CIT Group/Credit Finance, Inc. dated
November 22, 1993 (incorporated herein by reference to Registrant's
Annual Report on Form 10-K for the fiscal year ended September 30,
1993).
10.15 Warrant Agreement dated January 29, 1992 between the Company and
certain stockholders (incorporated by reference herein to Registrant's
Registration Statement on Form S-1 (Registration No. 33-64822)).
10.16 Warrant Agreement dated April 27, 1993 between the Company and certain
stockholders (incorporated by reference herein to Registrant's
Registration Statement on Form S-1 (Registration No. 33-64822)).
10.17 Form of Warrant issued by the Company to certain stockholders on July
30, 1993 (incorporated by reference herein to Registrant's
Registration Statement on Form S-1 (Registration No. 33-64822)).
10.18 Stock Purchase Agreement and Exhibits thereto dated January 10, 1992
between the Company and certain stockholders (incorporated by
reference herein to Registrant's Registration Statement on Form S-1
(Registration No. 33-64822)).
10.19 Asset Purchase Agreement dated February 7, 1994 between the Company
and Atmel Corporation (incorporated by reference to the Company's Form
8-K dated February 7, 1994).
10.20 Stock Purchase Agreement dated February 7, 1994 between the Company
and Atmel Corporation (incorporated by reference to the Company's Form
8-K dated February 7, 1994).
10.21 Escrow Agreement dated February 7, 1994 between the Company, Atmel
Corporation and Wilson, Sonsini, Goodrich & Rosati, P.C.
(incorporated by reference to the Company's Form 8-K dated February 7,
1994).
10.22 Escrow Agreement dated April 14, 1994 between the Company, Atmel and
Bank of America NT&SA (incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1994).
II-2
<PAGE> 27
10.23 Separation Agreement dated as of October 1, 1993, between the Company
and J. Daniel McCranie (incorporated by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended September 30,
1994).
10.24 Separation Agreement dated as of March 4, 1994, between the Company
and Michael E. Villott (incorporated by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended September 30,
1994).
13.1 Annual Report on Form 10-K for the fiscal year ended September 30,
1994 (incorporated herein by reference to Registrant's Annual Report
on Form 10-K for the fiscal year ended September 30, 1994).
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).
____________________________________________________
* Filed herewith.
II-3
<PAGE> 28
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security-holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirement of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to 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.
II-4
<PAGE> 29
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-2 and has duly caused this
Amendment No. 2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Fremont, California on this 17th day
of February, 1995.
SEEQ TECHNOLOGY INCORPORATED
By /s/ Ralph J. Harms
---------------------------------
Ralph J. Harms
Vice President, Finance
and Administration,
Chief Financial Officer
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the 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>
* President, Chief Executive February 17, 1995
- ------------------------- Officer and Director
(Phillip J. Salsbury) (Principal Executive Officer)
/s/ Ralph J. Harms Vice President, Finance and February 17, 1995
- ------------------------- Administration, Chief
(Ralph J. Harms) Financial Officer and Secretary
(Principal Financial and
Accounting Officer)
* Chairman of the February 17, 1995
- ------------------------- Board of Directors
(Alan V. Gregory)
* Director
- -------------------------
(J. Daniel McCranie)
* Director February 17, 1995
- -------------------------
(Charles C. Harwood)
* Director February 17, 1995
- -------------------------
(Peter C. Chen)
*By /s/ Ralph J. Harms
----------------------
(Ralph J. Harms)
(Attorney-in-fact)
</TABLE>
II-
<PAGE> 30
SEEQ TECHNOLOGY INCORPORATED
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
- ------- ----------- ------------
<S> <C>
4.1 Certificate of Incorporation (incorporated by reference to the Company's Form 8-B
filed on June 2, 1987.
4.2 Bylaws (Incorporated by reference to the Company's Form 8-B filed on June 2, 1987).
5.1* Opinion of Brobeck, Phleger & Harrison.
10.1 Form of Indemnification Agreement with Directors and Officers (incorporated herein
by reference to Registrant's Form 8-B filed on June 2, 1987).
10.2 Restated Periodic Purchase Plan, as amended (incorporated herein by reference to
Registrant's Annual Report on Form 10-K for the fiscal year ended September 30,
1991).
10.3 Notice of Periodic Purchase Plan Offerings (incorporated herein by reference to
Registrant's Form S-8 Registration Statement (Registration No. 33-27419) filed on
March 7, 1989).
10.4 Restated 1982 Stock Option Plan, as amended (incorporated herein by reference to
Registrant's Form S-8 Registration Statement (Registration No. 33-6544) filed on
July 2, 1993).
10.5 1989 Non-Employee Director Stock Option Plan (incorporated herein by reference to
Registrant's Form S-8 Registration Statement (Registration No. 33-35838) filed on
July 11, 1990).
10.6 Kodiak Technology Incorporated 1989 Stock Option Plan, and related Stock Option and
Stock Purchase Agreements (incorporated herein by reference to Registrant's Annual
Report on Form 10-K for the fiscal year ended September 30, 1989).
10.7 Build to Suit Lease dated as of October 15, 1982, as amended (``1982 Lease''),
between the Company and David W. Mariani Investment Partnership dba Mariani
Financial Co. (incorporated herein by reference to Registrant's Annual Report on
Form 10-K for the fiscal year ended September 30, 1986).
10.8 Stock Purchase Agreement dated as of July 16, 1990 between the Company and Hualon
Microelectronics Corporation (incorporated herein by reference to Registrant's
Quarterly Report on Form 10-Q for the period ended June 30, 1990).
10.9 Technology Transfer and Foundry Agreement dated as of July 16, 1990 between the
Company and Hualon Microelectronics Corporation (subject to confidential treatment)
(incorporated herein by reference to Registrant's Quarterly Report on Form 10-Q for
the period ended June 30, 1990).
10.10 Business Loan Agreement with Silicon Valley Bank dated as of August 2, 1991
(incorporated herein by reference to Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1991).
10.11 Amendment to Business Loan Agreement with Silicon Valley Bank as of February 24,
1993 (incorporated herein by reference to Registrant's Registration Statement on
Form S-1 (Registration No. 33-47985)).
10.12 Warrant Purchase Agreement dated as of August 2, 1991 with Silicon Valley Bank and
warrant issued pursuant thereto (incorporated herein by reference to Registrant's
Annual Report on Form 10-K for the fiscal year ended September 30, 1991).
10.13 Foundry Agreement dated as of November 15, 1991 between the Company and
International Microelectronic Products Inc. (subject to request for confidential
</TABLE>
<PAGE> 31
<TABLE>
<S> <C>
treatment) (incorporated herein by reference to Registrant's Annual Report on
Form 10-K for the fiscal year ended September 30, 1991).
10.14 Loan and Security Agreement with CIT Group/Credit Finance, Inc. dated November 22,
1993 (incorporated herein by reference to Registrant's Annual Report on Form 10-K
for the fiscal year ended September 30, 1993).
10.15 Warrant Agreement dated January 29, 1992 between the Company and certain
stockholders (incorporated by reference herein to Registrant's Registration
Statement on Form S-1 (Registration No. 33-64822)).
10.16 Warrant Agreement dated April 27, 1993 between the Company and certain stockholders
(incorporated by reference herein to Registrant's Registration Statement on Form S-1
(Registration No. 33-64822)).
10.17 Form of Warrant issued by the Company to certain stockholders on July 30, 1993
(incorporated by reference herein to Registrant's Registration Statement on Form S-1
(Registration No. 33-64822)).
10.18 Stock Purchase Agreement and Exhibits thereto dated January 10, 1992 between the
Company and certain stockholders (incorporated by reference herein to Registrant's
Registration Statement on Form S-1 (Registration No. 33-64822)).
10.19 Asset Purchase Agreement dated February 7, 1994 between the Company and Atmel
Corporation (incorporated by reference to the Company's Form 8-K dated February 7,
1994).
10.20 Stock Purchase Agreement dated February 7, 1994 between the Company and Atmel
Corporation (incorporated by reference to the Company's Form 8-K dated February 7,
1994).
10.21 Escrow Agreement dated February 7, 1994 between the Company, Atmel Corporation and
Wilson, Sonsini, Goodrich & Rosati, P.C. (incorporated by reference to the Company's
Form 8-K dated February 7, 1994).
10.22 Escrow Agreement dated April 14, 1994 between the Company, Atmel and Bank of America
NT&SA (incorporated by reference to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1994).
10.23 Separation Agreement dated as of October 1, 1993, between the Company and J. Daniel
McCranie (incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1994).
10.24 Separation Agreement dated as of March 4, 1994, between the Company and Michael E.
Villott (incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1994).
13.1 Annual Report on Form 10-K for the fiscal year ended September 30, 1994
(incorporated herein by reference to Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1994).
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>
________________________
* Filed herewith.
<PAGE> 1
EXHIBIT 5.1
February 21, 1995
SEEQ Technology Incorporated
47131 Bayside Parkway
Fremont, California 94538
Re: SEEQ Technology Incorporated
Registration Statement on Form S-2 (File No. 33-86646)
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 375,000 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-2 of our
report dated October 21, 1994, except for Note 12, which is as of November 23,
1994, appearing on page 21 of SEEQ Technology Incorporated's Annual Report on
Form 10-K for the fiscal year ended September 30, 1994. We also consent to the
application of such report to the Financial Statements for the three years
ended September 30, 1994 listed under Item 8 of SEEQ Technology Incorporated's
Annual Report on Form 10-K for the year ended September 30, 1994 when such
Schedules are read in conjunction with the financial statements referred to in
our report. The audits referred to in such report also included these
Financial Statements Schedules. We also consent to the references to us
under the heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
San Jose, California
February 21, 1995
