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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 27, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
LSI LOGIC CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 1551 MCCARTHY BOULEVARD 94-2712976
(STATE OR OTHER JURISDICTION OF MILPITAS, CALIFORNIA 95035 (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) (408) 433-8000 IDENTIFICATION NO.)
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(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DAVID E. SANDERS
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
LSI LOGIC CORPORATION
1551 MCCARTHY BOULEVARD
MILPITAS, CALIFORNIA 95035
(408) 433-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
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LARRY W. SONSINI EDWARD M. LEONARD
JUDITH M. O'BRIEN GARI L. CHEEVER
WILSON, SONSINI, GOODRICH & ROSATI BROBECK, PHLEGER & HARRISON
PROFESSIONAL CORPORATION TWO EMBARCADERO PLACE
650 PAGE MILL ROAD 2200 GENG ROAD
PALO ALTO, CA 94304-1050 PALO ALTO, CA 94303-0913
(415) 493-9300 (415) 424-0160
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE 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. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the 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, check the following box and list the Securities Act
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. / /
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CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT MAXIMUM AGGREGATE AMOUNT OF
OF SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
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Common Stock, $.01 par
value....................... 5,750,000 shares $41.125 $236,468,750 $81,542
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(1) Includes 750,000 shares which the Underwriters have the option to purchase
to cover over-allotments, if any. Also includes Preferred Share Purchase
Rights associated with the Common Stock.
(2) Estimated solely for the purpose of computing the amount of the registration
fee, based on the average of the high and low prices for the Common Stock as
reported on the New York Stock Exchange on June 26, 1995, in accordance with
Rule 457(c) promulgated under the Securities Act of 1933.
------------------------
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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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 JUNE 27, 1995
PROSPECTUS
5,000,000 SHARES
LSI LOGIC CORPORATION
COMMON STOCK
------------------------
All of the 5,000,000 shares of Common Stock offered hereby are being sold
by LSI Logic Corporation
(the "Company").
The Company's Common Stock is traded on the New York Stock Exchange
("NYSE") under the symbol "LSI." On June 26, 1995, the last reported sale price
of the Company's Common Stock on the NYSE was $40.375 per share. See "Price
Range of Common Stock."
------------------------
SEE "RISK FACTORS" AT PAGE 4 FOR CERTAIN FACTORS RELEVENT TO AN
INVESTMENT IN THE COMMON STOCK OFFERED HEREBY.
------------------------
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.
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Price to Underwriting Discounts Proceeds to
Public and Commissions(1) Company(2)
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Per Share....................... $ $ $
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Total(3)........................ $ $ $
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(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting estimated expenses of $300,000 payable by the Company.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
750,000 additional shares of Common Stock on the same terms and conditions
as set forth above, solely to cover over-allotments, if any. If such option
is exercised in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."
------------------------
The shares of Common Stock offered by this Prospectus are offered by the
Underwriters subject to prior sale, to withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain other conditions. It is expected that delivery of the
certificates for the shares of Common Stock will be made at the offices of
Lehman Brothers Inc., New York, New York, on or about July , 1995.
------------------------
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MONTGOMERY SECURITIES
PRUDENTIAL SECURITIES INCORPORATED
July , 1995
<PAGE> 3
AVAILABLE INFORMATION
LSI Logic Corporation 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").
Reports, proxy statements and other information filed by the Company with the
Commission pursuant to the Exchange Act 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, 13th Floor, New York, New York 10048 and at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material also can be obtained from the Public Reference Branch of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Such reports, proxy statements and other information can also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). 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, reference is hereby made to the Registration Statement.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission (File No. 0-11674)
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
January 1, 1995 filed pursuant to Section 13 of the Exchange Act.
2. The Company's Definitive Proxy Statement dated March 27, 1995 in
connection with the Annual Meeting of Stockholders held May 12, 1995
filed pursuant to Section 14 of the Exchange Act.
3. The Company's Quarterly Report on Form 10-Q for the quarter ended April
2, 1995 filed pursuant to Section 13 of the Exchange Act.
4. The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed with the Commission on August
29, 1989 pursuant to Section 12(b) of the Exchange Act.
5. The description of the Company's Preferred Shares Purchase Rights
contained in its Registration Statement on Form 8-A filed with the
Commission on November 21, 1988 pursuant to Section 12(a) of the
Exchange Act.
6. All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of this
offering. Any statement incorporated herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein, in a Prospectus Supplement or in any
other subsequently filed document which also is or is deemed to be
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 the Registration
Statement or this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any and all of the documents which are
incorporated herein by reference (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into such document).
Requests for such documents should be directed to LSI Logic Corporation,
Investor Relations, 1551 McCarthy Boulevard, Mail Stop D-105, Milpitas,
California 95035, or by calling (408) 433-8585.
------------------------
The LSI Logic logo and CoreWare are registered trademarks of the Company.
All other brand names or trademarks appearing in this Prospectus are the
property of their respective holders.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements, including notes thereto,
appearing elsewhere in, or incorporated by reference into, this Prospectus.
Unless otherwise indicated, the information contained in this Prospectus (i)
assumes no exercise of the Underwriters' over-allotment option, (ii) gives
effect to a 2-for-1 stock split in the form of a dividend paid on June 21, 1995
and (iii) reflects the amendment to the Company's Certificate of Incorporation
to increase the Company's authorized Common Stock effected in May 1995.
THE COMPANY
LSI Logic Corporation (the "Company") is a leader in the design,
development, manufacture and marketing of high performance application-specific
integrated circuits ("ASICs"). The Company uses advanced process technology and
computer-aided design methodology to design and develop highly complex ASICs and
other integrated circuits. The Company's sub-micron process technologies
combined with its product libraries, including CoreWare libraries, provide the
Company with the ability to integrate system level solutions on a single chip.
The Company focuses its product marketing strategy primarily on original
equipment manufacturers in the electronic data processing, telecommunications
and certain office automation industries and, within these industries,
emphasizes digital video, networking, desktop and personal computing and
wireless communication applications. The Company increasingly directs its
marketing and selling efforts towards a limited number of customers that are
acknowledged industry leaders in these markets. The Company's customers include
Alcatel NV, AT&T, Cisco Systems, Inc., Compaq Computer Corporation, Digital
Equipment Corporation, Hewlett-Packard Company, International Business Machines
Corporation, Intel Corporation, Matsushita Electric Industrial Co., Ltd.,
Newbridge Networks Corporation, Siemens AG, Silicon Graphics, Inc., Sony
Corporation ("Sony") and Sun Microsystems, Inc.
THE OFFERING
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Common Stock offered by the Company.......... 5,000,000 shares
Common Stock to be outstanding after the
offering................................... 126,406,212 shares(1)
NYSE Symbol.................................. LSI
Use of Proceeds.............................. Capital expenditures and general corporate purposes.
See "Use of Proceeds."
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(1) Based on shares outstanding at March 31, 1995. Excludes 9,514,341 shares
issuable as of March 31, 1995 upon exercise of options granted under the
Company's 1991 Equity Incentive Plan, 1982 Incentive Stock Option Plan and
1986 Directors' Stock Option Plan. Also excludes 11,734,700 shares reserved
for issuance upon conversion of the Company's 5 1/2% Convertible
Subordinated Notes due 2001.
3
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RISK FACTORS
In addition to the other information in this Prospectus and incorporated
herein by reference, the following factors should be carefully considered in
evaluating the Company and its business before purchasing shares of Common Stock
offered hereby.
DEPENDENCE ON NEW PROCESS TECHNOLOGIES AND PRODUCTS. The Company believes
that its future success depends, in part, on its ability to improve its existing
technologies and to develop and implement new process technologies in order to
continue to reduce semiconductor die size, improve device performance and
manufacturing yields, adapt products and processes to technological changes and
adopt emerging industry standards. If the Company is not able to implement new
process technologies successfully and achieve volume production of new products
at acceptable yields using new manufacturing processes, the Company's operating
results will be adversely affected. In addition, the Company must continue to
develop and introduce new products that compete effectively on the basis of
price and performance and that satisfy customer requirements. New product
development often requires long-term forecasting of market trends, development
and implementation of new processes and technologies and a substantial capital
commitment. The Company intends the CoreWare library elements it offers to be
based upon industry standard functions, protocols and interfaces, thereby
positioning them to be useful in a wide variety of systems applications. The
Company is increasingly emphasizing engineering development and acquisition of
CoreWare building blocks and integration of CoreWare libraries into its design
capabilities. There can be no assurance, however, that the cores selected for
investment of the Company's financial and engineering resources will be
developed or acquired in a timely manner or will enjoy market acceptance.
MANUFACTURING RISKS. Disruption of operations at any of the Company's
primary manufacturing facilities, particularly the Company's Japanese
facilities, or any of its subcontractors for any reason, including work
stoppages, fire, earthquake or other natural disasters, would cause delays in
shipments of the Company's products. There can be no assurance that alternate
capacity, particularly wafer production capacity, would be available on a timely
basis or at all, or that if available, it could be obtained on favorable terms.
The Company has been operating most of its manufacturing facilities at or close
to capacity during the last year. Although the Company currently has plans to
increase its production capacity through the installation of new production
equipment at its manufacturing facilities, planned construction of a new
fabrication facility in the United States and technology improvements, there is
no assurance that the Company will be able to expand its manufacturing capacity
to meet expected future demand, which could result in a loss of customers and
could materially and adversely affect the Company's operating results. In
addition, if demand for the Company's products does not absorb the additional
capacity, the increase in fixed costs and operating expenses related to
increases in production capacity may materially and adversely affect the
Company's operations.
FLUCTUATIONS IN OPERATING RESULTS. The Company believes that its future
operating results will continue to be subject to quarterly variations based upon
a wide variety of factors, including the cyclical nature of both the
semiconductor industry and the markets addressed by the Company's products, the
ability to develop and implement new technologies, the availability and extent
of utilization of manufacturing capacity, changes in product mix, fluctuations
in manufacturing yields, the timing of new product introductions, price erosion,
exchange rate fluctuations and other factors. As a participant in the
semiconductor industry, the Company operates in a technologically advanced,
rapidly changing and highly competitive environment. The Company predominantly
sells custom products to customers operating in a similar environment.
Accordingly, changes in the conditions of any of the Company's customers may
have a greater impact on the Company than if the Company offered standard
products that could be sold to many purchasers. While the Company cannot predict
what effect these factors may have on its financial results, the aggregate
effect of these and other factors could result in significant volatility in the
Company's future performance and stock price. To the extent the Company's
performance may not meet expectations published by external sources, public
reaction could result in a sudden and significantly adverse impact on the market
price of the Company's securities, particularly on a short-term basis.
COMPETITION. The semiconductor industry in general and the markets in which
the Company competes in particular are intensely competitive, exhibiting both
rapid technological changes and continued price erosion. The Company's
competitors include many large domestic and foreign companies which have
substantially greater financial, technical and management resources than the
Company, as well as emerging companies attempting to sell products to
specialized markets such as those addressed by the Company.
4
<PAGE> 6
Several major diversified electronics companies, including Fujitsu, Ltd.,
Toshiba Corporation and NEC Corporation, and a number of United States
semiconductor manufacturers, including AT&T, Motorola Inc. and Texas Instruments
Incorporated, offer ASIC products or other products which are competitive with
the product lines of the Company. In addition, there is no assurance that
certain large customers, some of whom have licensed elements of the Company's
process and product technologies, will not develop internal design and
production operations to produce their own ASICs.
CAPITAL NEEDS. The semiconductor industry is extremely capital intensive
requiring continuing investments in new facilities and equipment. To remain
competitive, the Company must continue to expand its facilities and to invest in
advanced manufacturing and test equipment. During 1995, the Company expects to
make net capital expenditures of approximately $200 to $250 million. The Company
currently estimates that the cost to construct and fully equip its proposed new
facility as well as to acquire new equipment for existing facilities will
require annual capital expenditures in excess of these amounts in each of the
next several years. While the Company believes that the proceeds from this
offering, together with existing cash balances, cash flow from operations, and
available equipment lease financing will be sufficient to meet the Company's
liquidity and capital requirements for the next 12 months, there can be no
assurance that the Company will not be required to seek other financing sooner
or that such financing, if required, would be available on terms satisfactory to
the Company. In this regard, any significant adverse effect upon the Company's
cash flow from operations could accelerate the Company's need to seek additional
outside capital.
CURRENCY RISKS. In countries in which the Company is conducting business in
a local currency, currency exchange fluctuations could adversely affect the
Company's revenues and costs. A substantial portion of the costs of the
Company's manufacturing operations are denominated in Japanese yen. In addition,
the Company purchases a substantial portion of its raw materials and equipment
from foreign suppliers and incurs labor costs in foreign locations. A portion of
these transactions are denominated in currencies other than in U.S. dollars,
principally in Japanese yen. International sales are generally denominated in
local currencies. The Company also has borrowings denominated in yen, which
totaled approximately 15 billion yen (approximately $172 million at March 31,
1995) and in June 1995 entered into a 15 billion yen lease line under which
approximately 6.2 billion yen (approximately $74 million) will have been drawn
down by June 30, 1995. Such transactions and borrowings expose the Company to
exchange rate fluctuations for the period of time from inception of the
transaction until it is settled. In recent years, the yen has fluctuated
substantially against the U.S. dollar. However, the Company has entered and will
from time to time enter into hedging transactions in order to minimize exposure
to currency rate fluctuations. There can be no assurance that such hedging
transactions will minimize exposure to currency rate fluctuations or that
fluctuations in currency exchange rates in the future will not have an adverse
impact on the Company's results of operations.
CUSTOMER CONCENTRATION. As a result of the Company's strategy to direct its
marketing and selling efforts toward selected customers, the Company expects
that it will become increasingly dependent on a limited number of customers for
a substantial portion of its revenues. During 1994 and the quarter ended March
31, 1995, approximately 58% and 62%, respectively, of the Company's net revenues
were derived from sales to its top ten customers. Sales to Sony for its
Playstation game console are expected to account for slightly in excess of 10%
of the Company's revenues during the first half of 1995. Loss of new product
design wins or cancellation of business from any of these major customers,
significant changes in scheduled deliveries to any of these customers or
decreases in the prices of products sold to any of these customers could
materially adversely affect the Company's results of operations.
INTELLECTUAL PROPERTY AND TEXAS INSTRUMENTS LITIGATION. Although the
Company believes that the protection afforded by its patents, patent
applications and trademarks has value, the rapidly changing technology in the
semiconductor industry makes the Company's future success dependent primarily
upon the technical competence and creative skills of its personnel rather than
on patent and trademark protection. As is typical in the semiconductor industry,
the Company has from time to time received, and may in the future receive,
communications from other parties asserting patent rights, mask work rights,
copyrights or trademark rights that such other parties allege cover certain of
the Company's products, processes, technologies or information. Several such
assertions relating to patents are in various stages of evaluation. The Company
is considering whether to seek licenses with respect to certain of these claims.
As described below, litigation has
5
<PAGE> 7
arisen with respect to one of these assertions. Based on industry practice, the
Company believes that licenses or other rights, if necessary, could be obtained
on commercially reasonable terms for such existing or future claims.
Nevertheless, no assurance can be given that licenses can be obtained, or if
obtained will be on acceptable terms or that litigation or other administrative
proceedings will not occur. The inability to obtain certain licenses or other
rights or to obtain such licenses or rights on favorable terms, or litigation
arising out of such other parties assertions, both existing and future, could
have a material adverse effect on the Company's future operating results.
The Company is one of three defendants in a patent infringement suit
brought by Texas Instruments ("TI"). This suit resulted in a May 1995 jury
verdict against the Company holding the patents valid and finding wilful
infringement. Damages against the Company were set by the jury at $14.6 million,
for which the Company has adequate reserves. Because both of the patents
involved in the litigation have expired, the verdict will have no effect upon
the manufacture or sale of the Company's present or future products. The Company
has filed various post-trial motions which, if granted, could reduce the jury
award or set aside the jury verdict entirely. TI has requested treble damages,
pre-judgment interest in the amount of $7.5 million from the Company and
attorneys' fees that total $3.8 million from all parties. The Company believes
that the jury verdict was in error and intends to appeal. The Company continues
to believe that the final outcome of this matter will not have a material
adverse effect on the Company's consolidated financial position or results of
operations. No assurance can be given, however, that this matter will be
resolved without the payment of damages and other costs or that damages will not
be increased to an amount in excess of the Company's reserves, thereby having an
adverse effect on the Company.
CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY. The semiconductor industry
is characterized by rapid technological change, rapid product obsolescence and
price erosion. The semiconductor industry historically has been characterized by
wide fluctuations in product supply and demand. From time to time the industry
also has experienced significant downturns, often in connection with, or in
anticipation of, maturing product cycles (of both the semiconductor companies
and their customers) and declines in general economic conditions. These
downturns have been characterized by diminished product demand, production
overcapacity and subsequent accelerated erosion of average selling prices, and
in some cases, have lasted for more than a year. For example, the Company
believes that its operating results were adversely affected by an industry-wide
downturn in the demand for semiconductors beginning in 1990, culminating in the
Company's 1992 restructuring charge and reorganization of its operations.
Currently, the semiconductor industry in general, including the Company, is
experiencing a period of increased demand. There is no assurance that these
conditions will continue. The Company may experience substantial
period-to-period fluctuations in future operating results due to general
industry conditions, events occurring in the worldwide economy or a significant
industry-wide downturn.
6
<PAGE> 8
THE COMPANY
LSI Logic Corporation (the "Company") is a leader in the design,
development, manufacture and marketing of high performance application-specific
integrated circuits ("ASICs"). The Company uses advanced process technology and
computer-aided design methodology to design and develop highly complex ASICs and
other integrated circuits. The Company's sub-micron process technologies
combined with its product libraries, including CoreWare libraries, provide the
Company with the ability to integrate system level solutions on a single chip.
The Company has increasingly directed its marketing and selling efforts
toward selected customers in high growth end markets that are characterized by
increasingly shortened product cycles and ongoing changes in technological
standards and performance requirements. As a result, customers in these markets
tend to benefit from the flexibility of customized ASIC design methodology to
help differentiate their products while still complying with existing and
emerging global industry standards such as Ethernet and ATM (Asynchronous
Transfer Mode) in the networking market, PCI bus interface in the personal
computer market and MPEG2 (Motion Picture Experts Group) for video compression
applications in the digital video market.
The Company focuses its product marketing strategy primarily on original
equipment manufacturers in the electronic data processing, telecommunications
and certain office automation industries and, within these industries,
emphasizes digital video, networking, desktop and personal computing and
wireless communication applications. The Company increasingly directs its
marketing and selling efforts towards a limited number of customers that are
acknowledged industry leaders in these markets. The Company's customers include
Alcatel NV, AT&T, Cisco Systems, Inc., Compaq Computer Corporation, Digital
Equipment Corporation, Hewlett-Packard Company, International Business Machines
Corporation, Intel Corporation, Matsushita Electric Industrial Co., Ltd.,
Newbridge Networks Corporation, Siemens AG, Silicon Graphics, Inc., Sony
Corporation and Sun Microsystems, Inc.
The Company's CoreWare product library approach and its sub-micron process
technologies permit system-level integration of functional cores or elements
including microprocessor "engines," logic blocks (including industry-standard
functions, protocols and interfaces), memory and customer-specific proprietary
logic functions on a single piece of silicon. Examples of these elements include
the MIPS microprocessor core family and cores implementing Ethernet, MPEG, JPEG
and ATM standards. This methodology enables customers to improve the
performance, reliability and further differentiate their products while
shortening product development cycles, lowering development costs and optimizing
the customer's application.
The Company's proprietary computer-aided design tools are highly integrated
with the Company's manufacturing process requirements, thereby providing high
predictability that a product's physical performance will mirror the computer
simulation of the chip and affording high predictability of performance of
products developed using the Company's design methodology. The Company's
sophisticated design tools, advanced process technology and sub-micron
manufacturing capability are intended to provide customers with highly
integrated solutions that work right the first time.
The Company provides customers with a comprehensive approach and a
continuum of solutions for the design and manufacture of leading-edge ASICs.
This allows customers substantial flexibility in how they proceed with an ASIC
design project. A customer may establish product specifications for
implementation into a particular chip design by the customer's engineers, by the
Company's engineers on a "turn-key" basis or through a collaborative effort. The
Company's design environment includes expanded interface capabilities to certain
third-party EDA software design tools from companies such as Cadence Design
Systems, Inc., Mentor Graphics Corporation and Synopsys, Inc.
The Company has developed and uses advanced manufacturing process
technologies, including 0.6-micron and 0.5-micron CMOS processes, for its
advanced product offerings. As process technology becomes more sophisticated,
allowing greater density and increased functionality on a single chip, the
system-on-a-chip is becoming the foundation of the Company's approach to the
marketplace.
The Company believes that owning its wafer manufacturing facilities not
only provides better access to capacity but also improves quality,
cost-effectiveness, responsiveness to customers, ability to implement
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leading-edge process technology and time-to-market as compared to companies that
do not own their own wafer fabrication facilities. The Company's manufacturing
operations are located in the United States, Japan and Hong Kong. The Company
performs substantially all of its packaging, assembly and final test operations
through third-party subcontractors in various locations. During 1994, the
Company's United States production operations received ISO-9002 certification,
an important international measure for quality.
The Company markets its products and services on a worldwide basis through
its direct sales, marketing and field technical staff of approximately 750
employees (including its majority-owned subsidiaries in Europe, Canada and
Japan) and through independent sales representatives and distributors. The
Company operates over 25 design centers around the world to assist customers in
product design activities. The Company's network of design centers allows the
Company to provide its customers with highly experienced engineers to interact
with its customers' engineering management and system architects to develop
designs for new products and to provide continuing after-sale customer support.
The Company was incorporated in California on November 6, 1980 and
reincorporated in Delaware on June 11, 1987. Its principal offices are located
at 1551 McCarthy Boulevard, Milpitas, California 95035, and its telephone number
at that location is (408) 433-8000. Except where otherwise indicated, references
to the "Company" means LSI Logic Corporation and its subsidiaries.
8
<PAGE> 10
USE OF PROCEEDS
The net proceeds from the sale of Common Stock offered hereby are estimated
to be $193,500,000 ($222,570,000 if the Underwriters' over-allotment option is
exercised in full) assuming a public offering price of $40.375 per share and
after deducting the estimated underwriters' discounts and commissions and
expenses payable by the Company in connection with the offering. The Company
intends to use such net proceeds primarily for capital expenditures, principally
to purchase equipment for its existing manufacturing facilities and to commence
construction of a new 8-inch wafer fabrication facility in the United States,
and for general corporate purposes. During 1995, the Company expects to make net
capital expenditures of approximately $200 to $250 million, approximately
one-half of which has been spent to date. In addition, the Company, from time to
time, may consider acquisitions of, or investments in, complementary businesses,
assets or technologies. At the present time, however, the Company has no
agreements or understandings, nor are there any negotiations pending, with
respect to any material acquisitions. The Company believes that the net proceeds
from the sale of the Common Stock in this offering, together with existing cash
balances, cash flow from operations and available equipment lease financing,
will be sufficient to meet the Company's liquidity and capital requirements for
the next 12 months. The Company believes that success in its industry requires
substantial financial strength and flexibility. Accordingly, the Company may
seek additional equity or debt financing to fund the completion of its planned
8-inch wafer fabrication facility, further expansion of its existing fabrication
capacity or for other purposes. Pending such uses, the Company will invest the
net proceeds in short- or medium-term income producing investments.
DIVIDEND POLICY
The Company has paid no cash dividends on its Common Stock since its
incorporation and anticipates that for the foreseeable future it will continue
to retain any earnings for use in its business.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the NYSE under the symbol LSI. The
following table sets forth, for the periods indicated, high and low sale prices
for the Common Stock on the NYSE.
<TABLE>
<CAPTION>
HIGH LOW
--- ---
<S> <C> <C>
FISCAL 1993
First Quarter............................................. $ 7 1/16 $ 5 1/8
Second Quarter............................................ 7 3/4 5 1/4
Third Quarter............................................. 9 5/8 7 1/8
Fourth Quarter............................................ 8 9/16 6 1/2
FISCAL 1994
First Quarter............................................. 11 1/2 7 3/4
Second Quarter............................................ 13 3/16 8 3/8
Third Quarter............................................. 17 7/8 1 1/16
Fourth Quarter............................................ 22 11/16 1 7/16
FISCAL 1995
First Quarter............................................. 29 3/16 18 1/4
Second Quarter (through June 26, 1995).................... 42 5/8 25 1/2
</TABLE>
On June 26, 1995, the last reported sale price of the Common Stock on the
NYSE was $40.375 per share.
9
<PAGE> 11
CAPITALIZATION
The following table sets forth the consolidated short-term debt and
capitalization of the Company at March 31, 1995 and as adjusted to give effect
to the issuance and sale by the Company of the 5,000,000 shares of Common Stock
offered hereby assuming a public offering price of $40.375 per share, and the
application of the estimated net proceeds therefrom. The financial data in the
following table should be read in conjunction with the Company's audited
consolidated financial statements (and notes thereto) at December 31, 1994 and
the Company's unaudited consolidated condensed quarterly financial statements
(and notes thereto) at March 31, 1995, incorporated herein by reference.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1995
--------------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS, EXCEPT SHARE
AMOUNTS)
<S> <C> <C>
Current portion of long-term debt, capital lease obligations
and short-term borrowings(1)................................ $ 44,013 $ 44,013
========= =========
Long-term debt, capital lease obligations and other
long-term liabilities, less current portion(1).............. $ 295,806 $ 295,806
---------- -----------
Minority interest in subsidiaries............................. 29,009 29,009
---------- -----------
Stockholders' equity(2):
Preferred Stock, $.01 par value, 2,000,000 shares
authorized, none outstanding............................. -- --
Common Stock, $.01 par value, 250,000,000 shares authorized,
121,406,212 shares issued and outstanding, 126,406,212
shares
issued and outstanding as adjusted....................... 607 657
Additional paid-in capital.................................. 565,437 758,887
Retained earnings........................................... 112,329 112,329
Cumulative translation adjustment........................... 112,487 112,487
---------- -----------
Total stockholders' equity............................... 790,860 984,360
---------- -----------
Total capitalization................................ $1,115,675 $ 1,309,175
========= =========
</TABLE>
- ---------------
(1) For additional information regarding short-term debt, long-term debt and
stockholders' equity, see Notes 6 and 7 of Notes to Consolidated Financial
Statements included in the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1995. See "Incorporation of Certain Documents
by Reference."
(2) Excludes, as of March 31, 1995, (i) 7,841,692 shares reserved for issuance
upon exercise of outstanding options granted under the Company's 1991 Equity
Incentive Plan and 174,536 shares which remain available for future grant
under such plan, (ii) 1,492,649 shares reserved for issuance upon exercise
of outstanding options under the Company's 1982 Incentive Stock Option Plan,
(iii) approximately 997,878 shares reserved for issuance under the Company's
Employee Stock Purchase Plan and (iv) 180,000 shares reserved for issuance
upon exercise of outstanding options granted under the 1986 Directors' Stock
Option Plan and 67,500 shares which remain available for future grant under
such plan. Also excludes 11,734,700 shares of Common Stock reserved for
issuance upon conversion of the Company's 5 1/2% Convertible Subordinated
Notes due 2001, which Notes are convertible at any time at a rate of one
share of Common Stock per $12.25 principal amount of Notes converted,
subject to adjustment in certain circumstances. Excludes 100,000 shares of
Preferred Stock reserved for issuance in certain circumstances in connection
with the Company's Preferred Shares Rights Agreement dated as of November
16, 1988.
-----------------------------
During the second quarter of 1995, the Company, through its Japanese
subsidiary, entered into a 15 billion yen (approximately $179 million) operating
lease line, approximately 6.2 billion yen (approximately $74 million) of which
will have been drawn down by June 30, 1995. This lease line will be used to
lease equipment for the Company's Japanese manufacturing facility.
10
<PAGE> 12
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below for, and as of the
end of, each of the years in the five-year period ended December 31, 1994 have
been derived from the consolidated financial statements of the Company, which
have been audited by Price Waterhouse LLP, independent accountants. The selected
consolidated financial data presented below at March 31, 1995 and for the
quarter then ended and for each of the four fiscal quarters of 1993 and of 1994
have been derived from unaudited consolidated financial statements of the
Company. In the opinion of the Company's management, the unaudited consolidated
financial statements include all adjustments, consisting of only normal
recurring adjustments, necessary to fairly state the information set forth
therein. Such data should be read in conjunction with the consolidated financial
statements, related notes and other financial information incorporated by
reference herein. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------------------------- -----------------------
1990 1991 1992 1993 1994 1994 1995
-------- -------- --------- -------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA(1):
Revenues...................................... $655,491 $697,838 $ 617,468 $718,812 $ 901,830 $ 193,812 $ 280,158
-------- -------- --------- -------- ---------- ---------- ----------
Costs and expenses:
Cost of revenues............................ 443,759 457,692 408,318 438,523 520,150 115,387 153,399
Research and development.................... 60,196 80,802 78,825 78,995 98,978 23,141 24,378
Selling, general and administrative......... 117,318 136,811 129,254 117,452 124,936 29,457 39,335
Restructuring of operations................. 44,000 5,626 101,785 -- -- -- --
-------- -------- --------- -------- ---------- ---------- ----------
Total costs and expenses.................. 665,273 680,931 718,182 634,970 744,064 167,985 217,112
-------- -------- --------- -------- ---------- ---------- ----------
Income (loss) from operations................. (9,782) 16,907 (100,714) 83,842 157,766 25,827 63,046
Interest expense.............................. (21,256) (19,371) (11,567) (9,621) (18,455) (3,788) (4,183)
Interest income and other..................... 12,517 14,722 12,413 6,500 16,858 4,798 5,481
-------- -------- --------- -------- ---------- ---------- ----------
Income (loss) before income taxes, minority
interest and extraordinary credit........... (18,521) 12,258 (99,868) 80,721 156,169 26,837 64,344
Provision for income taxes.................... 11,685 6,129 8,521 24,221 43,679 7,514 18,016
-------- -------- --------- -------- ---------- ---------- ----------
Income (loss) before minority interest and
extraordinary credit........................ (30,206) 6,129 (108,389) 56,500 112,490 19,323 46,328
Minority interest in net income (loss) of
subsidiaries................................ 1,065 (2,212) 1,819 2,750 3,747 (32) 1,068
-------- -------- --------- -------- ---------- ---------- ----------
Income (loss) before extraordinary credit..... (31,271) 8,341 (110,208) 53,750 108,743 19,355 45,260
Extraordinary credit resulting from the
retirement of debt.......................... 955 -- -- -- -- -- --
-------- -------- --------- -------- ---------- ---------- ----------
Net income (loss)............................. $(30,316) $ 8,341 $(110,208) $ 53,750 $ 108,743 $ 19,355 $ 45,260
======== ======== ========= ======== ========= ========= =========
Primary income (loss) per share:
Net income (loss) before extraordinary
credit.................................... $ (0.37) $ 0.10 $ (1.24) $ 0.55 $ 0.99 $ 0.19 $ 0.37
Extraordinary credit........................ 0.01 -- -- -- -- -- --
-------- -------- --------- -------- ---------- ---------- ----------
Net income (loss) per share................. $ (0.36) $ 0.10 $ (1.24) $ 0.55 $ 0.99 $ 0.19 $ 0.37
======== ======== ========= ======== ========= ========= =========
Fully diluted net income per share.......... * * * $ 0.52 $ 0.93 $ 0.18 $ 0.35
======== ========= ========= =========
Common shares and common share equivalents
used in computing per share amounts:
Primary..................................... 84,126 86,752 88,956 99,062 109,906 103,262 120,770
======== ======== ========= ======== ========= ========= =========
Fully diluted............................... * * * 109,626 125,428 115,164 132,640
======== ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------------------------- MARCH 31,
1990 1991 1992 1993 1994 1995
-------- --------- -------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA(2):
Working capital............................... $231,248 $ 225,193 $133,640 $ 230,513 $ 422,916 $ 430,615
Total assets.................................. 771,682 748,456 747,438 859,010 1,270,374 1,505,145
Long-term debt, capital lease obligations and
other long-term liabilities................. 189,795 166,107 218,837 246,314 288,496 295,806
Stockholders' equity.......................... 267,729 293,075 197,728 292,434 544,906 790,860
</TABLE>
11
<PAGE> 13
QUARTERLY FINANCIAL DATA(2):
<TABLE>
<CAPTION>
1993 1994 1995
----------------------------------------- ----------------------------------------- --------
FIRST SECOND THIRD FOURTH FIRST SECOND THIRD FOURTH FIRST
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues....................... $168,928 $177,080 $183,761 $189,043 $193,812 $212,106 $240,218 $255,694 $280,158
-------- -------- -------- -------- -------- -------- -------- -------- --------
Costs and expenses:
Cost of revenues............. 103,921 108,246 112,001 114,355 115,387 123,337 138,219 143,207 153,399
Research and development..... 18,998 19,408 19,134 21,455 23,141 22,467 26,834 26,536 24,378
Selling, general and
administrative............. 29,205 29,007 29,910 29,330 29,457 31,102 30,645 33,732 39,335
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total costs and expenses... 152,124 156,661 161,045 165,140 167,985 176,906 195,698 203,475 217,112
-------- -------- -------- -------- -------- -------- -------- -------- --------
Income from operations......... 16,804 20,419 22,716 23,903 25,827 35,200 44,520 52,219 63,046
Interest expense............... (2,175) (2,384) (2,538) (2,524) (3,788) (5,665) (4,822) (4,180) (4,183)
Interest income and other...... 1,697 2,512 1,818 473 4,798 4,127 3,263 4,670 5,481
-------- -------- -------- -------- -------- -------- -------- -------- --------
Income before income taxes and
minority interest............ 16,326 20,547 21,996 21,852 26,837 33,662 42,961 52,709 64,344
Provision for income taxes..... 4,901 6,164 6,599 6,557 7,514 9,425 12,028 14,712 18,016
Minority interest in net income
(loss) of subsidiaries....... 814 1,313 1,022 (399) (32) 799 1,465 1,515 1,068
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net income..................... $ 10,611 $ 13,070 $ 14,375 $ 15,694 $ 19,355 $ 23,438 $ 29,468 $ 36,482 $ 45,260
======== ======== ======== ======== ======== ======== ======== ======== ========
Primary net income per share... $ 0.11 $ 0.14 $ 0.15 $ 0.16 $ 0.19 $ 0.22 $ 0.26 $ 0.31 $ 0.37
======== ======== ======== ======== ======== ======== ======== ======== ========
Fully diluted net income per
share........................ * * * $ 0.15 $ 0.18 $ 0.21 $ 0.25 $ 0.30 $ 0.35
======== ======== ======== ======== ======== ========
Common shares and common share
equivalents used in computing
per share amounts
Primary...................... 94,904 97,748 100,498 101,872 103,262 106,224 112,788 117,702 120,770
======== ======== ======== ======== ======== ======== ======== ======== ========
Fully diluted................ * * * 112,084 115,164 128,102 127,876 129,436 132,640
======== ======== ======== ======== ======== ========
</TABLE>
- ---------------
* Fully diluted amount disclosures are not required because they are
substantially the same as primary amounts disclosed for these periods.
(1) The Company's fiscal year ends on the Sunday closest to December 31. For
presentation purposes, the consolidated financial statements refer to
December 31 as year end. Fiscal 1993 was a 53-week year, whereas, 1994, 1992
and 1990 were 52-week years. The fourth quarter of 1993 was a 14-week
quarter, whereas the first, second and third quarters were 13-week quarters.
The additional week in the fourth quarter of 1993 did not have a material
impact on the Company's results of operations.
(2) Certain reclassifications have been made to the 1992 and 1993 consolidated
financial statements to conform to the 1994 presentation. Such
reclassifications had no effect on results of operations or stockholders'
equity.
------------------------
As of March 31, 1995, the Company had remaining restructuring reserves of
approximately $14.6 million relating to the phase down of its Fremont
development facility and the phase out of its Milpitas manufacturing facility.
During the second quarter, the Company determined to continue to operate its
Milpitas facility and completed the phase down of the Fremont facility and, as a
result, expects to significantly reduce such reserves during the quarter ending
June 30, 1995. The Company also expects, however, that such reduction in
reserves will be substantially offset by increases in its restructuring reserves
for other corporate matters, including the $14.6 million jury verdict against
the Company during the quarter ending June 30, 1995 in the Texas Instruments
litigation. See "Risk Factors -- Intellectual Property and Texas Instruments
Litigation." Accordingly, the Company does not expect that these events will
have a material effect on its net income for the quarter ending June 30, 1995.
12
<PAGE> 14
UNDERWRITING
The Underwriters named below (the "Underwriters") have severally agreed,
subject to the terms and conditions of the Underwriting Agreement (the form of
which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part), to purchase from the Company, and the Company has agreed
to sell to each Underwriter, the aggregate number of shares of Common Stock set
forth opposite their respective names below:
<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
------------------------------------------------------------------ ---------
<S> <C>
Lehman Brothers Inc. .............................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................
Montgomery Securities.............................................
Prudential Securities Incorporated................................
---------
Total................................................... 5,000,000
========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters to purchase shares of Common Stock are subject to certain
conditions, and that if any of the foregoing shares of Common Stock are
purchased by the Underwriters pursuant to the Underwriting Agreement, all shares
of Common Stock agreed to be purchased by the Underwriters pursuant to the
Underwriting Agreement must be so purchased.
The Company has been advised that the Underwriters propose to offer the
shares of Common Stock directly to the public initially at the public offering
price set forth on the cover page of this Prospectus, and to certain selected
dealers (who may include the Underwriters) at such public offering price less a
concession not in excess of $ per share. The Underwriters may allow and the
selected dealers may reallow a concession not in excess of $ per share to
certain other brokers and dealers. After the public offering, the public
offering price, the concession to selected dealers and the reallowance to other
dealers may be changed by the Underwriters.
The Company has granted to the Underwriters an option to purchase up to an
additional 750,000 shares of Common Stock at the public offering price, less the
aggregate underwriting discounts and commissions, shown on the cover page of
this Prospectus, solely to cover over-allotments, if any. The option may be
exercised at any time up to 30 days after the date of this Prospectus. To the
extent that the Underwriters exercise such option, each of the Underwriters will
be committed, subject to certain conditions, to purchase a number of option
shares proportionate to such Underwriter's initial commitment.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriters may be required to make in respect thereof.
The Company has agreed that without the written consent of the
Underwriters, it will not offer, sell, contract to sell or otherwise dispose of
any shares of Common Stock or any securities, convertible or exchangeable
therefor, for a period of 90 days from the date of this Prospectus, subject to
limited exceptions.
The Company's directors and executive officers, who collectively held as of
March 14, 1995 an aggregate of 7,867,360 shares of Common Stock and options to
purchase Common Stock, have agreed that without the consent of the Underwriters
they will not offer, sell, contract to sell or otherwise dispose of any shares
of Common Stock or any securities convertible into or exchangeable therefor for
a period of 30 days from the date of this Prospectus.
From time to time, certain of the Underwriters or their affiliates have
provided, and may continue to provide, investment banking services to the
Company.
13
<PAGE> 15
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by Wilson, Sonsini, Goodrich & Rosati, Professional Corporation
("WSGR"), Palo Alto, California, and for the Underwriters by Brobeck, Phleger &
Harrison, Palo Alto, California. Larry W. Sonsini, a member of WSGR, is an
Assistant Secretary of the Company.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1994, 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.
14
<PAGE> 16
- ------------------------------------------------------
- ------------------------------------------------------
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or a solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to its date.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information................... 2
Information Incorporated by Reference... 2
Prospectus Summary...................... 3
Risk Factors............................ 4
The Company............................. 7
Use of Proceeds......................... 9
Dividend Policy......................... 9
Price Range of Common Stock............. 9
Capitalization.......................... 10
Selected Consolidated Financial Data.... 11
Underwriting............................ 13
Legal Matters........................... 14
Experts................................. 14
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
5,000,000 SHARES
COMMON STOCK
---------------------------
PROSPECTUS
July , 1995
---------------------------
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MONTGOMERY SECURITIES
PRUDENTIAL SECURITIES INCORPORATED
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various costs and expenses payable by
the Company, other than underwriting discounts and commissions, of the sale and
distribution of the securities being registered. All of the amounts shown are
estimates except the Securities and Exchange Commission registration fee, the
NYSE listing fee and the NASD filing fee.
<TABLE>
<S> <C>
SEC Registration Fee.............................................. $ 81,542
NASD Filing Fee................................................... 24,147
NYSE Listing Fee.................................................. 1,500
Blue Sky Fees and Expenses........................................ 10,000
Legal Fees and Expenses........................................... 80,000
Accounting Fees and Expenses...................................... 45,000
Printing.......................................................... 45,000
Transfer Agent and Registrar Fees................................. 5,000
Miscellaneous..................................................... 7,811
--------
Total........................................................... $300,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has the power, pursuant to Section 145 of the Delaware General
Corporation Law, to limit the liability of directors to the Company for certain
breaches of fiduciary duty and to indemnify its directors, officers and other
persons for certain acts. Article 11 of the Company's Restated Certificate of
Incorporation includes the following provision:
"To the fullest extent permitted by the Delaware General Corporation
Law, a director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. Neither any amendment nor repeal of this
Article 11, nor the adoption of any provision of this Certificate of
Incorporation inconsistent with this Article 11, shall eliminate or reduce
the effect of this Article 11 in respect of any matter occurring, or any
cause of action, suit or claim that, but for this Article 11, would accrue
or arise, prior to such amendment, repeal or adoption of an inconsistent
provision."
Article VI of the Bylaws of the Company provides that the Company shall
indemnify certain agents of the Company against judgments, fines, settlements
and other expenses arising from such person's agency relationship with the
Company provided that the standard of conduct set forth therein is met. The
effect of Article VI is to require that the Company provide indemnification to
such agents to the maximum extent permitted by the Delaware General Corporation
Law. Agents covered by this indemnification provision include current and former
directors and officers of the Company, as well as persons who serve at the
request of the Company as directors, officers, employees or agents of another
enterprise.
In addition, the Company has entered into indemnification agreements with
each of its directors and certain of its officers. The indemnification
agreements are based on the provisions of Section 145 of the Delaware General
Corporation Law and attempt to provide the directors and officers of the Company
with the maximum indemnification allowed under Delaware law. In certain
instances, they may result in an expansion of the substantive protection
available to such individuals under the Restated Certificate of Incorporation
and the Bylaws.
The Company currently maintains directors' and officers' liability
insurance.
Reference is also made to Section 8 of the Underwriting Agreement contained
in Exhibit 1.1 hereto, indemnifying officers and directors of the Registrant
against certain liabilities.
II-1
<PAGE> 18
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ --------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement between Registrant and Lehman Brothers,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Montgomery Securities
and Prudential Securities Incorporated.
4.1 Preferred Shares Rights Agreement dated November 16, 1988.(1)
5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation,
regarding legality of securities being registered.
23.1 Consent of Price Waterhouse LLP (see page II-4).
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (see page II-3)
27.1 Financial Data Schedule
</TABLE>
- ---------------
(1) Incorporated by reference to exhibits filed with the Registrant's Form 8-A
filed on November 21, 1988.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act 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
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to provisions of the Company's Certificate of Incorporation
and Bylaws, Delaware Corporation Law, the Underwriting Agreement 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 Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the question has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus 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-2
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant, LSI Logic Corporation, a corporation organized and existing under
the law of the State of Delaware, 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 the City of Milpitas, State of
California, on the 26th day of June, 1995.
LSI Logic Corporation
By: WILFRED J. CORRIGAN
------------------------------------
Wilfred J. Corrigan,
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Wilfred J. Corrigan and David E. Sanders,
jointly and severally, his attorneys-in-fact, each with power of substitution,
for him in any and all capacities, to sign any amendments to this Registration
Statement (including post-effective amendments), and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- --------------------------------------- ---------------
<S> <C> <C>
WILFRED J. CORRIGAN Chairman and Chief Executive Officer June 26, 1995
- ------------------------------------- (Principal Executive Officer)
Wilfred J. Corrigan
ALBERT A. PIMENTEL Senior Vice President, Finance and June 26, 1995
- ------------------------------------- Chief Financial Officer (Principal
Albert A. Pimentel Financial Officer and Principal
Accounting Officer)
T.Z. CHU Director June 26, 1995
- -------------------------------------
T.Z. Chu
MALCOLM R. CURRIE Director June 26, 1995
- -------------------------------------
Malcolm R. Currie
JAMES H. KEYES Director June 26, 1995
- -------------------------------------
James H. Keyes
R. DOUGLAS NORBY Director June 26, 1995
- -------------------------------------
R. Douglas Norby
</TABLE>
II-3
<PAGE> 20
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
January 26, 1995 appearing on page 21 of LSI Logic Corporation's Annual Report
on Form 10-K for the year ended December 31, 1994. We also consent to the
references to us under the headings "Experts" and "Selected Financial Data" in
such Prospectus. However, it should be noted that Price Waterhouse LLP has not
prepared or certified such "Selected Financial Data."
PRICE WATERHOUSE LLP
San Jose, California
June 26, 1995
II-4
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- -------
<C> <S> <C>
1.1 Form of Underwriting Agreement between Registrant and Lehman Brothers,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Montgomery
Securities and Prudential Securities Incorporated
4.1 Preferred Shares Rights Agreement dated November 16, 1988.(1)
5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation, regarding legality of securities being registered
23.1 Consent of Price Waterhouse LLP (see page II-4)
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
</TABLE>
- ---------------
(1) Incorporated by reference to exhibits filed with the Registrant's Form 8-A
filed on November 21, 1988.
<PAGE> 1
Draft 6/26/95
5,000,000 SHARES
LSI LOGIC CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
July , 1995
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MONTGOMERY SECURITIES
PRUDENTIAL SECURITIES INCORPORATED
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
LSI Logic Corporation, a Delaware corporation (the "Company"), proposes to
sell 5,000,000 shares (the "Firm Stock") of the Company's common stock, par
value $0.01 per share (the "Common Stock"). In addition, the Company proposes to
grant to the Underwriters named in Schedule 1 hereto (the "Underwriters") an
option to purchase up to an additional 750,000 shares of the Common Stock on the
terms and for the purposes set forth in Section 2 (the "Option Stock"). The Firm
Stock and the Option Stock, if purchased, are hereinafter collectively called
the "Stock." This is to confirm the agreement concerning the purchase of the
Stock from the Company by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The Company
represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect to the Stock has
(i) been prepared by the Company in conformity with the requirements of the
United States Securities Act of 1933, as amended, (the "Securities Act")
and the rules and regulations (the "Rules and Regulations") promulgated by
the United States Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the Securities Act
and (iii) become effective under the Securities Act. Copies of such
registration statement and all amendments thereto have been delivered by
the Company to you. As used in this Agreement, "Effective Time" means the
date and the time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared effective by
the Commission; "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became effective
under the Securities Act and any prospectus filed with the Commission by
the Company with the consent of the Representatives pursuant to Rule 424(a)
of the Rules and Regulations; "Registration Statement" means such
registration statement, as amended at the Effective Time, including any
documents incorporated by reference therein at such time and all
information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in accordance with
Section 5(a) hereof and deemed to be a part of the registration statement
as of the Effective Time pursuant to paragraph (b) of Rule 430A of the
Rules and Regulations; and "Prospectus" means such final prospectus, as
first filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the
<PAGE> 2
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any document filed under the United States
Securities Exchange Act of 1934 (the "Exchange Act") after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the Prospectus,
as the case may be. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do not
and will not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date
(as to the Prospectus and any amendment or supplement thereto) contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided that no representation or warranty is made as to information
contained in or omitted from the Registration Statement or the Prospectus
in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter specifically for inclusion
therein.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made.
(d) The Company and each of its Significant Subsidiaries (as defined
in Section 15) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and are
in good standing as foreign corporations in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole, and have all corporate power and authority necessary to own or hold
their respective properties and to conduct the businesses in which they are
engaged.
(e) The Company has an authorized capitalization as set forth in
documents incorporated by reference in the Prospectus, and all of the
issued shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus; and all of the issued and
outstanding shares of capital stock of each Significant Subsidiary of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable and are owned directly or indirectly by the Company in
the percentages set forth on Schedule 1(e) hereof, free and clear of all
liens, encumbrances, equities or claims.
(f) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and non-assessable; and the
Stock will conform to the description thereof contained in documents
incorporated by reference into the Prospectus.
2
<PAGE> 3
(g) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as (i)
the enforceability thereof may be limited by the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, and (ii)
the availability of equitable remedies may be limited by equitable
principles of general applicability.
(h) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its Significant Subsidiaries is a party or by
which the Company or any of its Significant Subsidiaries is bound or to
which any of the properties or assets of the Company or any of its
Significant Subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or bylaws of the Company or any
of its Significant Subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its Significant Subsidiaries or any of their
properties or assets; and, except for the registration of the Stock under
the Securities Act, and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act
and applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(i) There are no contracts, agreements or understandings, which have
not been waived in connection with this transaction, between the Company
and any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(j) Except as described in the Prospectus or documents incorporated
therein by reference, the Company has not sold or issued any shares of
Common Stock during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under, or Regulations
D or S of, the Securities Act, other than shares issued pursuant to
employee benefit plans, stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
(k) Neither the Company nor any of its Significant Subsidiaries has
sustained, since the date of the latest audited consolidated financial
statements included or incorporated by reference in the Prospectus, any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus; and, since such date, there
has not been any change in the capital stock, other than the reservation of
the Stock and issuance of options and stock under employee benefit plans,
or in long-term debt of the Company or any of its Significant Subsidiaries
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated
in the Prospectus or the documents incorporated by reference therein.
(l) The consolidated financial statements (including the related notes
and supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly the
financial condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
3
<PAGE> 4
(m) Except as described in the Prospectus or the documents
incorporated by reference therein, and except as would not result in any
material adverse effect upon the business of the Company and its
subsidiaries taken as a whole, the Company and each of its Significant
Subsidiaries own or possess adequate rights to use all material patents,
patent applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights and licenses
necessary for the conduct of their respective businesses as now conducted
or as proposed to be conducted as described in the Prospectus or the
documents incorporated by reference therein, and have no reason to believe
that the conduct of their respective businesses as now conducted or as
proposed to be conducted as described in the Prospectus or the documents
incorporated by reference therein, will conflict with, and have not
received any notice of any claim of conflict with, any such rights of
others, except as the outcome of such claim of conflict would not result in
any material adverse effect upon the Company and its subsidiaries taken as
a whole.
(n) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(o) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(p) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes shown thereon, as due and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries which has
had (nor does the Company have any knowledge of any tax deficiency which,
if determined adversely to the Company or any of its subsidiaries, will
have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries, taken as a whole.
(q) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus or documents incorporated by reference herein, the Company has
not (i) issued or granted any securities except options and shares of
common stock issued on exercise of options and stock purchase rights
granted under the Company's stock option and benefit plans, (ii) incurred
any liability or obligation, direct or contingent, other than liabilities
and obligations which were incurred in the ordinary course of business,
(iii) entered into any transaction not in the ordinary course of business
or (iv) declared or paid any dividend on its capital stock.
(s) The Company's directors and executive officers, who collectively
held as of December 31, 1994 an aggregate of 3,882,030 shares of Common
Stock and options to purchase Common Stock, have agreed that without the
consent of the Underwriters they will not offer, sell, contract to sell or
otherwise dispose of any shares of Common Stock or any securities
convertible into or exchangeable therefor for a period of 30 days from the
date of the Prospectus.
2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 5,000,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto.
In addition, the Company grants to the Underwriters an option to purchase
up to 750,000 shares of Option Stock. Such option is granted solely for the
purpose of covering overallotments in the sale of Firm Stock and is exercisable
as provided in Section 4 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Stock shall be adjusted by the Underwriters so that no Underwriter
shall be obligated to
4
<PAGE> 5
purchase Option Stock other than in 100 share amounts. The price of both the
Firm Stock and any Option Stock shall be $ per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
3. Offering of Stock by the Underwriters. The several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
4. Delivery of and Payment for the Stock. Delivery of and payment for the
Firm Stock shall be made at the office of Wilson, Sonsini, Goodrich & Rosati,
650 Page Mill Road, Palo Alto, California 94304, at 10:00 A.M., New York City
time, on the third full business day following the date of this Agreement, or
the fourth full business day if permitted under Rule 15c6-1(c) of the Exchange
Act, or at such other date or place as shall be determined by agreement between
the Underwriters and the Company. This date and time are sometimes referred to
as the First Delivery Date." On the First Delivery Date, the Company shall
deliver or cause to be delivered certificates representing the Firm Stock to the
Underwriters against payment to or upon the order of the Company of the purchase
price by certified or official bank check or checks payable in New York Clearing
House (next-day) funds. Time shall be of the essence, and delivery at the time
and place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be
registered in such names and in such denominations as the Underwriters shall
request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company shall make the certificates
representing the Firm Stock available for inspection by the Underwriters in New
York, New York, not later than 2:00 P.M., New York City time, on the business
day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this Agreement
the option granted in Section 2 may be exercised by written notice being given
to the Company by the Underwriters. Such notice shall set forth the aggregate
number of shares of Option Stock as to which the option is being exercised, the
names in which the shares of Option Stock are to be registered, the
denominations in which the shares of Option Stock are to be issued and the date
and time, as determined by the Underwriters, when the shares of Option Stock are
to be delivered; provided, however, that this date and time shall not be earlier
than the First Delivery Date nor earlier than the second business day after the
date on which the option shall have been exercised nor later than the third
business day after the date on which the option shall have been exercised (the
fourth full business day if permitted under Rule 15c6-1(c) of the Exchange Act).
The date and time the shares of Option Stock are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date").
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on the Second Delivery Date.
On the Second Delivery Date, the Company shall deliver or cause to be delivered
the certificates representing the Option Stock to the Underwriters against
payment to or upon the order of the Company of the purchase price by certified
or official bank check or checks payable in New York Clearing House (next-day)
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Option Stock shall be registered
in such names and in such denominations as the Underwriters shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
Underwriters in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the Second Delivery Date.
5
<PAGE> 6
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Underwriters
and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than Commission's close of business on the second business
day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the last Delivery Date
except as permitted herein; to advise the Underwriters, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Underwriters with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Stock; to advise the Underwriters, promptly after
it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of the
Stock for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) To furnish promptly to the Underwriters and to counsel for the
Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings), (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus and (iii) any document incorporated by reference in the
Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Stock or any other securities relating
thereto and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend
or supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Underwriters and to file
such document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Underwriters may from
time to time reasonably request of an amended or supplemented Prospectus
which will correct such statement or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Underwriters, be
required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any Prospectus pursuant to
Rule 424 of the Rules and Regulations, to furnish a copy thereof to the
Underwriters and counsel for the Underwriters and obtain the consent of the
Underwriters to the filing;
(f) As soon as practicable after the Effective Date to make generally
available to the Company's security holders and to deliver to the
Underwriters an earnings statement of the Company and its
6
<PAGE> 7
subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the option
of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to
furnish to the Underwriters copies of all materials furnished by the
Company to its stockholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder;
(h) Promptly from time to time to take such action as the Underwriters
may reasonably request to qualify the Stock for offering and sale under the
securities laws of such jurisdictions as the Underwriters may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock except where such qualification
would require the Company to execute a general consent to service of
process;
(i) For a period of 90 days from the date of the Prospectus, not to
offer for sale, sell or otherwise dispose of (or enter into any transaction
which is designed to, or could be expected to, result in the disposition by
any person of), directly or indirectly, any shares of common stock or
preferred stock or any securities convertible into or exercisable or
exchangeable for its common stock or preferred stock (including, but not
limited to rights, options, and warrants) other than the Stock, shares and
options issued pursuant to employee benefit plans, stock option plans or
other employee compensation plans existing on the date hereof, and shares
of Preferred Stock issued pursuant to the Rights (as defined in the
Prospectus) without the prior written consent of the Underwriters;
(j) Prior to the Effective Date, to apply for the listing of the Stock
on the New York Stock Exchange, Inc. and to use its best efforts to
complete that listing, subject only to official notice of issuance prior to
the First Delivery Date; and
(k) To apply the net proceeds from the sale of the Stock being sold by
the Company as set forth in the Prospectus.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus or any document
incorporated by reference therein, all as provided in this Agreement; (d) the
costs of producing and distributing this Agreement and any other related
documents in connection with the offering, purchase, sale and delivery of the
stock; (e) the filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. of the terms of sale of the
Stock; (f) any applicable listing or other fees; (g) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 5(h) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters);
and (h) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement; provided that, except as
provided in this Section 6 and in Section 11 the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective obligations of
the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by
the
7
<PAGE> 8
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise
shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of the Underwriters is material
or omits to state a fact which is material and is required to be stated
therein or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be satisfactory in all respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(d) Wilson, Sonsini, Goodrich & Rosati shall have furnished to the
Underwriters its written opinion, as counsel to the Company, addressed to
the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is a validly
existing corporation in good standing under the laws of its jurisdiction
of incorporation and has all power and authority necessary to own or
hold its properties and to conduct the business in which it is engaged;
(ii) The Company has an authorized capitalization as set forth in
the documents incorporated by reference into the Prospectus, and during
the course of the due diligence investigation conducted by such counsel,
nothing came to such counsel's attention which caused such counsel to
believe that the issued shares of capital stock of the Company had not
been duly and validly authorized and issued, or were not fully paid and
nonassessable;
(iii) There are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument listed as an exhibit to the Registration
Statement or as an exhibit to any document incorporated by reference in
the Prospectus;
(iv) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph of
Rule 424(b) of the Rules and Regulations specified in such opinion on
the date specified therein and no stop order suspending the
effectiveness of the Registration Statement has been issued and, to the
knowledge of such counsel, no proceeding for that purpose is pending or
threatened by the Commission;
(v) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to such
Delivery Date (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Securities
Act and the Rules and Regulations; and the documents incorporated by
reference in the Prospectus and any further amendment or supplement to
any such incorporated document made by the Company prior to such
Delivery Date (other than the financial statements, schedules and other
financial statistical data, as to which such counsel need express no
opinion), when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material respects with
the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder;
(vi) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described or filed as exhibits
8
<PAGE> 9
to the Registration Statement or incorporated therein by reference as
permitted by the Rules and Regulations;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company; and
(viii) The issue and sale of the shares of Stock being delivered on
such Delivery Date by the Company and the compliance by the Company with
all of the provisions of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of the charter or
by-laws of the Company or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of their properties or assets; and,
except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of
America and the laws of the State of California and the General Corporation
Law of Delaware. Such counsel shall also have furnished to the Underwriters
a written statement, addressed to the Underwriters and dated such Delivery
Date, in form and substance satisfactory to the Underwriters, to the effect
that (x) such counsel has participated in conferences with the Underwriters
and representatives of the Company and its auditors in connection with the
preparation of the Registration Statement, and (y) based on the foregoing,
no facts have come to the attention of such counsel which lead it to
believe that (except for financial statements, schedules, and other
statistical data as to which counsel need not express any opinion) (I) the
Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein
not misleading in light of the circumstances under which they were made, or
that the Prospectus contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (II) any document incorporated
by reference in the Prospectus or any further amendment or supplement to
any such incorporated document made by the Company prior to such Delivery
Date, when they became effective or were filed with the Commission as the
case may be, contained, in the case of a registration statement which
became effective under the Securities Act, any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein in light of
the circumstances under which they were made not misleading, or, in the
case of other documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
foregoing opinion and statement may be qualified by a statement to the
effect that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus.
(e) Counsel to each of LSI Logic Europe plc, LSI Logic K.K., Nihon
Semiconductor, Inc., LSI Logic Corporation of Canada, Inc., LSI Logic GmbH
and LSI Logic S.A., shall have furnished to the Underwriters an opinion as
counsel to such subsidiary, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the
Underwriters, to the effect that, with respect to each such subsidiary:
(i) Such subsidiary is duly incorporated (as applicable) and
validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized with full corporate
power and authority to own its properties and conduct its business as
presently conducted, and is duly qualified to do business and is in good
standing in each jurisdiction in which the character
9
<PAGE> 10
of the business conducted by it or the location of the properties owned
or leased by it makes such qualification necessary, except where the
failure to be so qualified would not have a material adverse effect on
the Company and its subsidiaries taken as a whole;
(ii) All outstanding shares of capital stock of such subsidiary
have been duly authorized and issued and are fully paid and
nonassessable. As of this date, shares of capital stock of such
subsidiary were issued and outstanding, of which were issued
to and owned by the Company. To the knowledge of such counsel, the
shares of capital stock issued to the Company are owned free and clear
of any security interest, claim, lien or encumbrance created by any
statute, law or governmental regulation or authority;
It is recognized and understood that the foregoing local opinion
requirements will be modified as necessary or appropriate to adapt the
legal concepts set forth therein to the comparable concepts as existing
under the jurisprudence of the applicable jurisdiction and to conform to
generally accepted local legal practices.
(f) David E. Sanders shall have furnished to the Underwriters a
written opinion, as general counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Underwriters, to the effect that:
(i) To such counsel's knowledge, the shares of capital stock of
each of LSI Logic Europe plc, LSI Logic K.K., Nihon Semiconductor, Inc.,
LSI Logic Corporation of Canada, Inc., LSI Logic GmbH and LSI Logic S.A.
issued to the Company are owned free and clear of any security interest,
claim, lien or encumbrance created by the Company;
(ii) To such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject which would require disclosure in the Prospectus; and, to such
counsel's knowledge, no such proceedings are overtly threatened in
writing by governmental authorities or by others;
(iii) The Company is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its business requires
such qualification (other than those jurisdictions in which the failure
to so qualify would not have a material adverse effect on the Company
and its subsidiaries taken as a whole);
(iv) To such counsel's knowledge, there are no contracts or other
documents which are described in the Prospectus or required to be filed
as exhibits to the Registration Statement or any filing by the Company
under the Exchange Act or by the Exchange Act or the Rules and
Regulations which have not been so described or filed or incorporated
therein by reference as permitted by the Exchange Act or the Rules and
Regulations;
(v) The issue and sale of the shares of Stock being delivered on
such Delivery Date by the Company and the compliance by the Company with
all of the provisions of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under any document listed as an exhibit to the Registration
Statement or incorporated by reference into the Prospectus; and
(vi) All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, and are fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the State of California and the General Corporation
Law of Delaware.
(g) The Underwriters shall have received from Brobeck, Phleger &
Harrison, counsel for the Underwriters, such opinion or opinions, dated
such Delivery Date, with respect to the issuance and sale of
10
<PAGE> 11
the Stock, the Registration Statement, the Prospectus and other related
matters as the Underwriters may reasonably require, and the Company shall
have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the Underwriters shall
have received from Price Waterhouse a letter, in form and substance
satisfactory to the Underwriters, addressed to the Underwriters and dated
the date hereof (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(i) With respect to the letter of Price Waterhouse referred to in the
preceding paragraph and delivered to the Underwriters concurrently with the
execution of this Agreement (the "initial letter"), the Company shall have
furnished to the Underwriters a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning
of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five
days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(j) The Company shall have furnished to the Underwriters a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 are true and correct as of such Delivery Date; the Company
has complied with all its agreements contained herein; and the
conditions set forth in Sections 7(a) and 7(k) have been fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not
misleading, and (B) since the Effective Date no event has occurred which
should have been set forth in a supplement or amendment to the
Registration Statement or the Prospectus.
(k) (i) Neither the Company nor any of its Significant Subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock other than shares issued pursuant
to employee benefit plans, stock option plans or other employee
compensation plans or pursuant to outstanding options, rights or warrants,
or in long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock
11
<PAGE> 12
Exchange or in the over-the-counter market, or trading in any securities of
the Company on any exchange or in the over-the-counter market, shall have
been suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the Stock
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(m) The New York Stock Exchange shall have approved the Stock for
listing subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may become
subject, under the Securities Act, Exchange Act, or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto filed with the
Commission or (ii) the omission or alleged omission to state therein a
material fact or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and shall
reimburse each Underwriter and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter, officer, employee or controlling person in
connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
specifically for inclusion therein and provided further that as to any
Preliminary Prospectus this indemnity agreement shall not inure to the
benefit of any Underwriter, its officer or employee, or any person
controlling that Underwriter on account of any loss, claim, damage,
liability or action arising from the sale of Stock to any person by that
Underwriter if that Underwriter failed to send or give a copy of the
Prospectus (as the same may then be amended or supplemented if the Company
shall have furnished such amendment or supplement), to that person
asserting such loss, claim, damage, liability or action, and the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission to state a
12
<PAGE> 13
material fact in such Preliminary Prospectus was corrected in the
Prospectus, unless such failure resulted from non-compliance by the Company
with Section 5(b) or 5(c). The foregoing indemnity agreement is in addition
to any liability which the Company may otherwise have to any Underwriter or
to any officer, employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act or Exchange Act, from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company or any such director,
officer or controlling person may become subject, under the Securities Act,
Exchange Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto filed with the Commission or (ii) the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements in light of the
circumstances under which they were made therein not misleading, but in
each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through the
Underwriters by or on behalf of that Underwriter specifically for inclusion
therein, and shall reimburse through the Underwriters the Company and any
such director, officer or controlling person for any legal or other
expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement is
in addition to any liability which any Underwriter may otherwise have to
the Company or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent
it has been materially prejudiced by such failure and, provided further,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than
under this Section 8. If any such claim or action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assure the defense thereof with counsel satisfactory
to the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof other than
reasonable costs or investigation; provided, however, that any indemnified
party shall have the right to employ separate counsel in any such action
and to participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying
party in writing, (ii) such indemnified party shall have been advised by
such counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel or (iii)
the indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party, it
being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees
13
<PAGE> 14
and expenses of more than one separate firm of attorneys at any time for
all such indemnified parties, which firm shall be designated in writing by
the Underwriters, if the indemnified parties under this Section 8 consist
of any Underwriter or any of their respective controlling persons, or by
the Company, if the indemnified parties under this Section consist of the
Company or any of the Company's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in this Section 8 shall use its best efforts to cooperate with
the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there
be a final judgment of the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from and
against any loss of liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Stock or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Underwriters on the other with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company on the one hand, and
the total underwriting discounts and commissions received by the
Underwriters with respect to the shares of the Stock purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the
offering of the shares of the Stock under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8 were to be
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above
in this Section 8 shall be deemed to include, for purposes of this Section
8(d), any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 8(d), no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Stock underwritten by it and distributed to
the public was offered to the public exceeds the amount of any damages
which such Underwriter has otherwise paid or become liable to pay by reason
of any untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 8(d)
are several in proportion to their respective underwriting obligations and
not joint. No party shall be liable for contribution with respect to any
action or claim settled without its consent; provided, however, that such
consent shall not be unreasonably withheld.
(e) The Underwriters severally confirm that the statements with
respect to the public offering of the Stock set forth on the cover page of,
and under the caption "Underwriting" in, the Prospectus are correct
14
<PAGE> 15
and constitute the only information furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
9. Defaulting Underwriters. If, on either Delivery Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall be obligated to purchase the Stock
which the defaulting Underwriter agreed but failed to purchase on such Delivery
Date in the respective proportions which the number of shares of the Firm Stock
set opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Underwriters or the Company may postpone the
Delivery Date for up to seven full business days in order to effect any changes
that in the opinion of counsel for the Company or counsel for the Underwriters
may be necessary in the Registration Statement, the Prospectus or in any other
document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock if, prior to that time, any
of the events described in Sections 7(k) or 7(l), shall have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement.
11. Reimbursement of Underwriters' Expenses. If (a) the Company shall
fail to tender the Stock for delivery to the Underwriters for any reason
permitted under this Agreement or (b) the Underwriters shall decline to purchase
the Stock for any reason permitted under this Agreement (including the
termination of this Agreement pursuant to Section 10, the Company shall
reimburse the Underwriters for the reasonable fees and expenses of their counsel
and for such other out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to the Underwriters.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Lehman Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department (Fax:
212-528-8822), with a copy, in the case of any notice pursuant to Section
8(d), to the Director of Litigation, Office of the General Counsel, Lehman
Brothers Inc., 2 World Trade Center, 15th Floor, New York, NY 10048;
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: David E. Sanders, General Counsel (Fax:
408-433-6896),
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the
Underwriters by Lehman Brothers Inc. on behalf of the Underwriters.
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Company, and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriters contained in
Section 8(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
15
<PAGE> 16
14. Survival. The respective indemnities, representations, warranties and
agreements of the Company and the Underwriters contained in this Agreement or
made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Stock and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Significant
Subsidiary". For purposes of this Agreement, (a) "business day" means any day
on which the New York Stock Exchange, Inc. is open for trading and (b)
"Significant Subsidiary" shall mean each of LSI Logic Europe plc, LSI Logic
K.K., Nihon Semiconductor, Inc., LSI Logic Corporation of Canada, Inc., LSI
Logic GmbH and LSI Logic S.A.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the Company and
the Underwriters, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
LSI LOGIC CORPORATION
By
Albert A. Pimentel
Senior Vice President, Finance
and Chief Financial Officer
Accepted:
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MONTGOMERY SECURITIES
PRUDENTIAL SECURITIES INCORPORATED
By LEHMAN BROTHERS INC.
By
Michael S. Wishart
Managing Director
16
<PAGE> 17
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- -------------------------------------------------------------------------------- ---------
<S> <C>
Lehman Brothers Inc. ...........................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................................................
Montgomery Securities...........................................................
Prudential Securities Incorporated..............................................
---------
Total................................................................. 5,000,000
==========
</TABLE>
17
<PAGE> 18
SCHEDULE 1(E)
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
JURISDICTION OF DIRECT/INDIRECT
NAME OF SUBSIDIARY INCORPORATION OWNERSHIP
- ---------------------------------------------------------- --------------- ---------------
<S> <C> <C>
LSI Logic Europe plc...................................... United Kingdom 98%
LSI Logic Corporation of Canada, Inc...................... Canada 56%
LSI Logic K.K............................................. Japan 78%
Nihon Semiconductor, Inc.................................. Japan 100%
LSI Logic GmbH............................................ Germany 98%
LSI Logic S.A............................................. France 98%
</TABLE>
18
<PAGE> 1
EXHIBIT 5.1
Wilson, Sonsini, Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
June 26, 1995
LSI Logic Corporation
1551 McCarthy Boulevard
Milpitas, CA 95035
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by LSI
Logic Corporation (the "Company") with the Securities and Exchange Commission
(the "Commission") on June 27, 1995 (as such may be further amended or
supplemented, the "Registration Statement"), in connection with the registration
under the Securities Act of 1933, as amended, of 5,750,000 shares of the
Company's Common Stock (the "Shares"). The Shares, which include up to 750,000
shares of Common Stock issuable pursuant to an over-allotment option granted to
the underwriters (the "Underwriters"), are to be sold to the Underwriters as
described in such Registration Statement for sale to the public. As counsel to
the Company in connection with this transaction, we have examined the
proceedings taken and are familiar with the proceedings proposed to be taken by
the Company in connection with the issuance and sale of the Shares.
Based on the foregoing, it is our opinion that, upon conclusion of the
proceedings being taken or contemplated by us, as your counsel, to be taken
prior to the issuance of the Shares and upon completion of the proceedings taken
in order to permit such transactions to be carried out in accordance with the
securities laws of various states where required, the Shares, when issued and
sold in the manner described in the Registration Statement, will be legally and
validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and any related short-form Registration Statement filed to register
additional securities ("Short-form Registration Statement"), and further consent
to the use of our name wherever appearing in the Registration Statement and any
Short-form Registration Statement, including the prospectus constituting a part
thereof, and any amendment thereto, which has been approved by us.
Very truly yours,
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
