As filed with the Securities and Exchange Commission on January 8, 1996
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
FORM S-3
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 principal executive offices)
ROBERT O. HERSH
Vice President, Finance and Administration
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 LLP
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 or interest 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 /
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of
1933, check the following box and list the Securities Act of 1933
registration statement number of earlier effective registration
statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box
and list the Securities Act of 1933 registration statement number
of the earlier effective registration statement for the same
offering. / /
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED SECURITY(1) AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 100,000 $4.3125 $431,250 $148.71
- ----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices
for the Common Stock as reported on the Nasdaq National Market on January 4, 1996, in accordance with Rule 457(c)
of the Securities Act of 1933.
</FN>
</TABLE>
-------------------------------
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.
<PAGE>
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 JANUARY 8, 1995
100,000 SHARES
SEEQ TECHNOLOGY INCORPORATED
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
-----------------
This Prospectus relates to the public offering, which
is not being underwritten, of 100,000 shares (the "Shares") of
Common Stock of SEEQ Technology Incorporated ("SEEQ" or the
"Company"). The Shares are being offered hereby by Hualon
Microelectronics Corporation, a stockholder of the Company
("Hualon" or 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" BEGINNING ON PAGE 6.
-------------------------------
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 January 4, 1995 was $4-3/16 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 SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------------
THE DATE OF THIS PROSPECTUS IS ____________, 1996
<PAGE>
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-3 (herein, together with all
amendments and exhibits, referred to as the "Registration
Statement") under 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/A for the
fiscal year ended September 30, 1995, filed pursuant to Section
13 of the Exchange Act; (2) 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; (3) the description of
the Company's Common Stock contained in its Registration
Statement on Form 8-A filed on May 2, 1995; and (4) 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 made hereby, 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 statement. Any
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
Prospectus.
2
<PAGE>
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.
3
<PAGE>
THE COMPANY
SEEQ Technology Incorporated (herein "SEEQ"
or the "Company") is a leading supplier of Ethernet data
communications products for networking applications. As an
Ethernet silicon pioneer, SEEQ introduced the industry's first
Ethernet chip set in 1982. Ethernet is the dominant local area
network ("LAN") technology today and was originally developed by
Xerox and Digital Equipment Corporation in the late 1970s. SEEQ
combines its strengths in digital circuit and analog design with
its communications systems expertise to produce mixed-signal data
communications solutions that provide increased functionality and
greater reliability that result in lower total system cost. In
1983, the Company successfully developed the industry's first
integrated Ethernet data communications controller. In 1994, the
Company introduced the industry's first Fast Ethernet (100
megabits per second ("Mbps")) four-port controller.
SEEQ's product development and marketing
strategy is to sell its products to systems manufacturers who are
performance and volume leaders in the information networking,
telecommunications, personal computer, workstation and printer
markets. The Company's more than 150 customers worldwide include
such industry leaders as Apple Computer, Bay Networks, Cabletron,
Cisco Systems, Compaq, HewlettPackard, Intel, and 3COM. SEEQ's
Ethernet data communications products are sold in numerous market
applications of Ethernet adapter cards, workstations, media
attachment units, print servers, file servers, multiport
repeaters, standard hubs, switching hubs, bridges and routers.
SEEQ's complete product line includes
Ethernet data communications 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. In order to meet customers' needs for
higher-speed LAN solutions, the Company has developed a new
generation of products for Fast Ethernet, a new high-speed LAN
technology. Fast Ethernet is a 100Mbps version of traditional
10Base-T Ethernet (10Mbps). The Company also sells medial
signaling integrated circuits for another emerging high speed LAN
market, Asynchronous Transfer Mode ("ATM").
The Company was founded in 1981 to develop,
manufacture and market products incorporated metal-oxide-silicon
("MOS") reprogrammable, nonvolatile memory integrated circuit
technology. In February 1994, the Company sold its nonvolatile
memory technology and related assets to focus on the data
communications market.
THE OFFERING
The Selling Stockholder is offering for sale
all of the 100,000 Shares of Common Stock covered by this
Prospectus. The Selling Stockholder acquired such Shares from the
Company on August 16, 1995 pursuant to the terms and conditions
of a Settlement Agreement, Release and Tolling Agreement by and
between the Company and the Selling Stockholder. See "Recent
Developments" and "Risk Factors-Litigation."
4
<PAGE>
RECENT DEVELOPMENTS
Pursuant to the Asset Purchase Agreement
dated February 7, 1994 (the "Asset Purchase Agreement") by and
between SEEQ and Atmel Corporation ("Atmel"), Atmel purchased the
assets of SEEQ related to its electrically erasable programmable
read only memory ("EEPROM") products (the "EEPROM Asset Sale"). A
substantial portion of the consideration received by the Company
in connection with the EEPROM Asset Sale was placed in escrow
subject to certain claims of indemnity by Atmel under the Asset
Purchase Agreement. As of September 30, 1995, $4,029,000] was on
deposit in escrow (excluding interest earned thereon to such
date). Such amount 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 under the terms of the Asset Purchase
Agreement. Atmel has notified SEEQ that, based on certain claims
asserted by Hualon Microelectronics Corporation ("Hualon"), one
of SEEQ's foundries and joint development partners, that SEEQ
previously granted Hualon certain license rights to the EEPROM
technology pursuant to an alleged license agreement, 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 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 such date under such escrow, then until such claim is
resolved by a court. The Company will be entitled to receive such
funds in the following events: (i) if it is determined that the
alleged license agreement is invalid, (ii) if no such
determination is made, to the extent that any claims made by
Atmel that Atmel has suffered damages as a result of the alleged
license agreement are unsuccessful, (iii) if Atmel fails to make
a claim to such funds by February 1999, or (iv) as otherwise
agreed by the Company and Atmel.
On March 30, 1994 the Company filed a lawsuit
in the United States District Court for the Northern District of
California against Hualon, which had previously been 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 previously sold by the Company to Atmel
Corporation, to which Hualon had 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 was valid and seeking specific performance of the
alleged license agreement and other agreements previously entered
into by the two parties. Hualon 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 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.
On August 16, 1995, the Company and Hualon
entered into a Settlement Agreement, Release and Tolling
Agreement. The terms of such Agreement provided, among other
things, for the payment by the Company to Hualon of $500,000 in
cash and the issuance by the Company to Hualon of 100,000 shares
of the Company's Common Stock. The 100,000 shares issued to
Hualon in connection with the settlement are the Shares being
registered hereby by the Company on behalf of the Selling
Stockholder. See "Risk Factors-Litigation." In addition, under
the terms of such Agreement, the Company agreed that the claims
asserted against Hualon in respect of the alleged license
agreement would be tolled for such time and on such terms as
provided therein. As a result, the Company is not currently
pursuing such claims. The Company is entitled to pursue such
claims in the future, however, subject to the terms of the
Settlement Agreement, Release and Tolling Agreement. In the event
that the Company does not cause the alleged license agreement to
be invalidated, Atmel may assert a claim against the Company
under the Asset Purchase Agreement, including a claim for
damages, if 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
5
<PAGE>
Company's cash flow, financial position or results of operations.
However, there can be no assurance as to such
matters.
On November 28, 1995, Level One Communications
Incorporated ("Level One") filed a complaint against the
Company, in the United States District Court of Northern
California, alleging patent infringement. In the complaint,
Level One claims that the Company has used and sold products in
violation of two of Level One's patents. Level One seeks
immediate and permanent injunctive relief preventing the Company
from making, using, or selling any devices that infringe such
patents and unspecified damages. The Company intends to
vigorously contest all of Level One's claims. Based on the
Company's limited review to date, management believes that the
claims asserted by Level One are without merit and that the
outcome of these legal proceedings will not have a material
adverse effect on the Company's financial position or results of
operations, although there can be no assurance as to such
matters. Patent litigation is often highly complex, can extend
for a protracted period of time, can involve substantial cost to
the Company and may divert the attention of the Company's
management and technical personnel, which can substantially
increase the cost of such litigation. There can be no assurance
that such costs and diversion of resources would not have a
material adverse effect on the Company's business, financial
condition and results of operations. See "Risk
Factors-Litigation."
6
<PAGE>
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 incurred substantial operating
losses during each of the five fiscal years ended September 30,
1994. The Company achieved a profit of approximately $1.3
million, or $0.05 per share, for the fiscal year ended September
30, 1995. As of September 30, 1995, the Company had an
accumulated deficit of approximately $112.4 million. There can be
no assurance that the Company will be able to maintain
profitability or revenue growth in the future. The Company's
ability to maintain profitability in the future will depend,
among other things, 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 maintain revenue
growth or profitability would impair the Company's ability to
sustain its operations.
LIQUIDITY; FUTURE CAPITAL REQUIREMENTS
At September 30, 1995, the Company's unused
sources of liquidity consisted of approximately $3.7 million 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. Approximately $4.3 million
(including interest earned thereon) of the proceeds on the sale
of the shares of Atmel Common Stock received by the Company in
the EEPROM Asset Sale are currently held in escrow pending any
claims of indemnity by Atmel with respect to the nonvolatile
memory technology. This $4.3 million (including interest earned
thereon) has been classified by the Company as long-term assets
on the Company's balance sheet as of September 30, 1995. In
November 1993, the Company entered into a two-year line of credit
agreement with the CIT Group Incorporated ("CIT"). Effective
November 22, 1995, the Company renewed the credit agreement with
CIT for a two-year term, subject to renewal thereafter. The
credit agreement 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% 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 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
7
<PAGE>
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 into the marketplace 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. 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. The Company has recently experienced
certain delays in the development of certain of its new products,
which the Company believes may have a material adverse effect on
the Company's results of operations in future periods. Although
the Company has increased its development efforts over the past
year, there can be no assurance that such delays will not
continue to 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.
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. Sales to Solectron
(an agent for Apple Computer, Cisco Systems and 3COM) and Serial
Systems (an agent for Hewlett-Packard and Compaq) accounted for
8
<PAGE>
approximately 19% and 15% of the Company's revenues for the three
months ended June 30, 1995. Sales to Apple Computer and Serial
Systems accounted for approximately 17% and 16% of the Company's
revenues in fiscal 1995, respectively. Sales to Apple Computer
and Hewlett-Packard accounted for approximately 24% and 19% of
the Company's revenues for the three months ended September 30,
1994, respectively. Sales to Apple Computer and Cisco Systems
accounted for approximately 16% and 11% of the Company's revenues
in fiscal 1994, respectively. 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 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, in the second quarter of fiscal 1995,
the Company was notified by Apple Computer that the Company would
receive no additional orders for the media attachment unit
("MAU") that the Company had been manufacturing for Apple, which
had a material adverse effect on the Company's results of
operations.
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, Taiwan 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.
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.
The Company generally 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
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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. In this regard, in the fourth quarter of fiscal 1995,
the Company was notified by one of its foundry suppliers that it
would no longer supply wafers to the Company. Although the
Company recently added an additional independent wafer supplier,
there can be no assurance that such events will not have a
material adverse effect on the Company's results of operations
and financial condition. 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 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
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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 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.
LITIGATION
As described under "Recent Developments," a
substantial portion of the consideration received by the Company
in connection with the EEPROM Asset Sale was placed in escrow
subject to certain claims of indemnity by Atmel under the Asset
Purchase Agreement. As of September 30, 1995, $[4,029,000] was on
deposit in escrow (excluding interest earned thereon to such
date). Such amount 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 under the terms of the Asset Purchase
Agreement. Atmel has notified SEEQ that, based on certain claims
asserted by Hualon, that SEEQ previously granted Hualon certain
license rights to the EEPROM technology pursuant to an alleged
license agreement, 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 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 such date under such escrow, then until
such claim is resolved by a court. The Company will be entitled
to receive such funds in the following events: (i) if it is
determined that the alleged license agreement is invalid, (ii) if
no such determination is made, to the extent that any claims made
by Atmel that Atmel has suffered damages as a result of the
alleged license agreement are unsuccessful, (iii) if Atmel fails
to make a claim to such funds by February 1999, or (iv) as
otherwise agreed by the Company and Atmel.
On March 30, 1994 the Company filed a lawsuit
in the United States District Court for the Northern District of
California against Hualon, which had previously been 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 previously sold by the Company to Atmel
Corporation, to which Hualon had 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 was valid and seeking specific performance of the
alleged license agreement and other agreements previously entered
into by the two parties. Hualon subsequently amended its
counterclaims to include additional claims in the proceeding,
including claims for
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damages for breach of, and for money owed pursuant to, other
agreements between the Company and Hualon. The Company
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.
On August 16, 1995, the Company and Hualon
entered into a Settlement Agreement, Release and Tolling
Agreement. The terms of such Agreement provided, among other
things, for the payment by the Company to Hualon of $500,000 in
cash and the issuance by the Company to Hualon of 100,000 shares
of the Company's Common Stock. The 100,000 shares issued to
Hualon in connection with the settlement are the Shares being
registered hereby by the Company on behalf of the Selling
Stockholder. See "Risk Factors-Litigation." In addition, under
the terms of such Agreement, the Company agreed that the claims
asserted against Hualon in respect of the alleged license
agreement would be tolled for such time and on such terms as
provided therein. As a result, the Company is not currently
pursuing such claims. The Company is entitled to pursue such
claims in the future, however, subject to the terms of the
Settlement Agreement, Release and Tolling Agreement. In the event
that the Company does not cause the alleged license agreement to
be invalidated, Atmel may assert a claim against the Company
under the Asset Purchase Agreement, including a claim for
damages, if 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. See "Recent Developments."
On November 28, 1995, Level One Communications
Incorporated ("Level One") filed a complaint against the
Company, in the United States District Court of Northern
California, alleging patent infringement. In the complaint,
Level One claims that the Company has used and sold products in
violation of two of Level One's patents. Level One seeks
immediate and permanent injunctive relief preventing the Company
from making, using, or selling any devices that infringe such
patents and unspecified damages. The Company intends to
vigorously contest all of Level One's claims. Based on the
Company's limited review to date, management believes that the
claims asserted by Level One are without merit and that the
outcome of these legal proceedings will not have a material
adverse effect on the Company's financial position or results of
operations, although there can be no assurance as to such
matters. Patent litigation is often highly complex, can extend
for a protracted period of time, can involve substantial cost to
the Company and may divert the attention of the Company's
management and technical personnel, which can substantially
increase the cost of such litigation. There can be no assurance
that such costs and diversion of resources would not have a
material adverse effect on the Company's business, financial
condition and results of operations. See "Recent
Developments."
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
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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. See "Risk Factors-Litigation."
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
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.
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TAX LOSS CARRYFORWARDS
At September 30, 1995, the Company had net
operating loss carryforwards of approximately $107.0 million for
federal tax purposes, which expire in 1998 through 2010. 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
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
provisions 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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SELLING STOCKHOLDER
The Selling Stockholder is offering for sale
all of the 100,000 shares of Common Stock covered by this
Prospectus. The Selling Stockholder acquired such shares from the
Company on August 16, 1995 pursuant to the terms and conditions
of a Settlement Agreement, Release and Tolling Agreement by and
between the Company and the Selling Stockholder. In addition to
the Shares offered hereby (which represent less than 1% of the
outstanding Common Stock of the Company), the Selling Stockholder
owns 1,625,000 shares of the Company's Common Stock. 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.
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,
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<PAGE>
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 hereby.
LEGAL MATTERS
The validity of the securities offered hereby
will be passed upon for the Company by Brobeck, Phleger &
Harrison LLP, San Francisco, California. Certain attorneys of
Brobeck, Phleger & Harrison LLP beneficially own an aggregate of
approximately 11,000 shares of the Company's Common Stock.
EXPERTS
The financial statements incorporated in this
Prospectus by reference to the Annual Report on Form 10-K/A of
SEEQ Technology Incorporated for the year ended September 30,
1995 have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
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100,000 SHARES
SEEQ TECHNOLOGY INCORPORATED
COMMON STOCK
<PAGE>
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.
SEC registration fee........................ $ 148.71
Legal fees and expenses..................... 15,000.00
Accounting fees and expenses................ 5,000.00
Miscellaneous............................... 1,000.00
----------
Total............................. $21,148.71
=========
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.
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.
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.
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 LLP.
II-1
<PAGE>
23.1 Consent of Price Waterhouse LLP, independent accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in the
Opinion of Counsel filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (See page II-3).
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.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
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, Form S-8 or Form F-3,
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(d) 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.
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.
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
II-2
<PAGE>
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.
II-3
<PAGE>
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 Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
Fremont, California on this 31st day of December, 1995.
SEEQ TECHNOLOGY INCORPORATED
By /s/ PHILLIP J. SALSBURY
-----------------------
Phillip J. Salsbury
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of SEEQ
Technology Incorporated, a Delaware corporation, do hereby
constitute and appoint Phillip J. Salsbury the lawful attorney
and agent, with power and authority to do any and all acts and
things and to execute any and all instruments which said attorney
and agent, determine may be necessary or advisable or required to
enable said corporation to comply with the Securities Act of
1933, as amended, and any rules or regulations or requirements of
the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the
foregoing power and authority, the powers granted include the
power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this
Registration Statement, to any and all amendments, both
pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with this
Registration Statement or amendments or supplements thereof, and
each of the undersigned hereby ratifies and confirms all that
said attorney and agent shall do or cause to be done by virtue
hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned
has executed this Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ PHILLIP J. SALSBURY
- --------------------------------- President, Chief Executive December 31, 1995
(Phillip J. Salsbury) Officer and Director
(Principal Executive Officer)
/s/ ALAN V. GREGORY
- --------------------------------- Chairman of the December 31, 1995
(Alan V. Gregory) Board of Directors
/s/ CHARLES C. HARWOOD
- --------------------------------- Director December 31, 1995
(Charles C. Harwood)
- --------------------------------- Director
(Peter C. Chen)
/s/ ROBERT O. HERSH Vice President, Finance and Administration December 31, 1995
- --------------------------------- (Principal Financial and
(Robert O. Hersh) Accounting Officer)
</TABLE>
II-4
<PAGE>
SEEQ TECHNOLOGY INCORPORATED
INDEX TO EXHIBITS
EXHIBIT
NO. EXHIBIT PAGE
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 LLP.
23.1 Consent of Price Waterhouse LLP, independent accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in the Opinion
of Counsel filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (See page II-3).
EXHIBIT 5.1
January 5, 1996
SEEQ Technology Incorporated
47200 Bayside Parkway
Fremont, California 94538
Re: SEEQ Technology Incorporated
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to SEEQ Technology
Incorporated (the "Company"), a Delaware corporation, in
connection with the authorization, issuance, and sale of 100,000
shares of common stock of the Company, par value $0.01 (the
"Shares"), as described in the Registration Statement filed to
register the Shares and which is being filed with the Securities
and Exchange Commission on January 8, 1996 (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 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 LLP
BROBECK, PHLEGER & HARRISON LLP
EXHIBIT 23.1
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 20, 1995, except for Note
12, which is as of December 14, 1995, appearing on page 21 of
SEEQ Technology Incorporated's Annual Report on Form 10-K/A for
the year ended September 30, 1995. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
San Jose, California
January 4, 1996
