<PAGE>
As filed with the Securities and Exchange Commission on December 8, 1999
Registration No. 333-
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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
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MICROCHIP TECHNOLOGY INCORPORATED
(Exact name of Registrant as specified in its charter)
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Delaware 86-0629024
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2355 W. Chandler Blvd.
Chandler, Arizona 85224-6199
(480) 786-7200
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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STEVE SANGHI
Chairman of the Board, President
and Chief Executive Officer
Microchip Technology Incorporated
2355 W. Chandler Blvd.
Chandler, Arizona 85224-6199
(480) 786-7200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
Barry E. Taylor Gregory M. Gallo
Craig D. Norris David A. Hubb
Charles J. Prober Nicole D. Alston
Wilson Sonsini Goodrich & Rosati Gray Cary Ware & Freidenrich LLP
Professional Corporation 400 Hamilton Avenue
650 Page Mill Road Palo Alto, California 94301
Palo Alto, California 94304 (650) 833-2000
(650) 493-9300
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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 426(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(d)
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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<TABLE>
<CAPTION>
Proposed
Proposed Maximum
Title of Each Class of Amount Maximum Aggregate Amount of
Securities to be to be Offering Price Offering Registration
Registered Registered(1) Per Share(2) Price(2) Fee(3)
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<S> <C> <C> <C> <C>
Common Stock $0.001 par 1,265,000
value................. Shares $74.375 $94,084,375 $24,839
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</TABLE>
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(1) Includes 165,000 shares which the Underwriters have the option to purchase
solely to cover over-allotments, if any.
(2) The proposed maximum offering price per share is estimated solely for the
purpose of calculating the registration fee.
(3) The registration fee is being calculated in accordance with Rule 457(c)
based on the average high and low prices for the Registrant's common stock
on December 6, 1999, as quoted on the Nasdaq National Market.
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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, as amended, or until the
Registration Statement shall become effective on such date as the Securities
Exchange Commission, acting pursuant to said Section 8(a), may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. The prospectus is not an +
+offer to sell these securities and it is not soliciting offers to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED DECEMBER 8, 1999
1,100,000 Shares
[MICROCHIP LOGO]
Common Stock
--------
Our common stock is traded on The Nasdaq Stock Market's National Market under
the symbol "MCHP." On December 6, 1999, the last reported sale price for our
common stock on The Nasdaq National Market was $73.0625 per share.
The underwriters have an option to purchase a maximum of 165,000 additional
shares to cover over-allotments of shares.
Investing in our common stock involves risks. See "Risk Factors" on page 4.
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions Microchip
------------- ------------- -------------
<S> <C> <C> <C>
Per Share................................... $ $ $
Total....................................... $ $ $
</TABLE>
Delivery of the shares of common stock will be made on or about , 1999.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
Credit Suisse First
Boston
Merrill Lynch &
Co.
Prudential
Securities
Robertson
Stephens
The date of this prospectus is , 1999.
<PAGE>
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary............... 1
Risk Factors..................... 4
Dividend Policy.................. 8
Use of Proceeds.................. 8
Capitalization................... 9
Selected Consolidated Financial
Data............................ 10
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Underwriting.................. 11
Notice to Canadian Residents.. 13
Where You Can Find More
Information.................. 14
Legal Matters................. 15
Experts....................... 15
</TABLE>
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You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus constitute forward-looking
statements. In some cases, you can identify forward-looking statements by terms
such as may, will, should, expect, plan, intend, forecast, anticipate, believe,
estimate, predict, potential, continue or the negative of these terms or other
comparable terminology. The forward-looking statements contained in this
prospectus involve known and unknown risks, uncertainties and situations that
may cause our or our industry's actual results, level of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these statements.
These factors include those listed under "Risk Factors" and elsewhere in this
prospectus.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. You should not place undue reliance on
these forward-looking statements.
<PAGE>
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information regarding our company and the common stock being sold in this
offering and our consolidated financial statements and related notes appearing
elsewhere in this prospectus or incorporated by reference into this prospectus.
In this prospectus, "we," "us" and "our" each refers to Microchip Technology
Incorporated and not to the underwriters.
Microchip Technology Incorporated
Overview of Our Business
Our Products
We develop and manufacture microcontrollers, application-specific standard
products, referred to as ASSPs, and related memory products for high-volume
embedded control applications. We market our products to the consumer,
automotive, office automation, communications and industrial markets.
We provide highly cost-effective embedded control products for a wide
variety of applications and believe that our PIC(R) product family is a
price/performance leader in the worldwide microcontroller market. Our embedded
control products also offer the advantages of small size, low voltage operation
and ease of development, enabling timely and cost-effective product integration
by our customers.
Our ASSP products include a variety of specialized integrated circuits,
including our family of KEELOQ(R) security products for wireless
communications.
Our memory products are primarily comprised of serial electrically erasable
programmable read-only memory, referred to as EEPROMs. Serial EEPROMs are used
primarily to provide non-volatile memory storage in embedded control systems.
Embedded control systems typically incorporate a microcontroller as the
principal active, and sometimes sole, component. A microcontroller is a self-
contained computer-on-a-chip consisting of a central processing unit, non-
volatile program memory, random access memory for data storage and various
input/output capabilities. In addition to the microcontroller, a complete
embedded control system incorporates application-specific software and may
include specialized peripheral device controllers and external non-volatile
memory components, such as EEPROMs to store additional program software.
Embedded control systems enable our customers to:
. differentiate their products
. replace less efficient electromechanical control devices
. add product functionality, and
. significantly reduce product cost.
Embedded control solutions have been incorporated into thousands of products
and subassemblies in a wide variety of markets worldwide, including:
. automotive air bag systems
. remote control devices
. handheld tools
. appliances
. portable computers
. cordless and cellular telephones
. motor controls, and
. security systems.
1
<PAGE>
Our Strategy
Our strategy is to provide embedded control solutions that combine time-to-
market advantages with high performance and increased functionality. With our
field programmable microcontrollers and easy-to-use development systems,
customers can typically design and produce new products or new product features
in a few days. In addition, our reduced instruction set computing, referred to
as RISC, architecture provides faster performance than competing
microcontrollers. Using advanced design and manufacturing technology, we can
provide products that have some of the smallest package sizes and that operate
at voltage levels and power requirements that are among the lowest in the
embedded control industry.
Our Customers
We sell our products to a geographically diverse base of customers across a
broad and growing range of market applications, reducing our dependence on any
single industry, market or customer. We sell to more than 600 original
equipment manufacturer, referred to as OEM, customers directly. We also sell to
more than 20,000 other customers worldwide through our distributors. To date,
we have sold more than 160,000 application development systems, providing a
broad foundation for future microcontroller sales.
Our Manufacturing Capabilities
We design and fabricate wafers at our facilities in Chandler and Tempe,
Arizona. We continue to transition products to smaller geometries and to larger
wafer sizes to reduce future manufacturing costs. Our current manufacturing
geometries range from 0.7 to 1.2 microns, with all new products produced on the
smallest 0.7 micron process. We currently produce our products on 6-inch and 8-
inch wafers, with all incremental production on the larger 8-inch wafers.
The ownership of our manufacturing resources is an important component of
our business strategy, enabling us to maintain a high level of manufacturing
control and to be one of the lowest cost producers in the embedded control
industry. Direct control over wafer fabrication also enables us to shorten our
design and production cycles. We perform product packaging and testing at our
facilities located near Bangkok, Thailand. We also use third-party assembly and
test contractors in several Asian countries.
Our executive offices are located at 2355 West Chandler Boulevard, Chandler,
Arizona 85224-6199, and our telephone number is (480) 786-7200. Our web site
address is www.microchip.com. Information contained on our web site should not
be considered a part of this prospectus.
The Offering
The following information is based on the number of shares outstanding at
September 30, 1999, excluding outstanding options to purchase 6,965,772 shares
of common stock under our stock option plans and a warrant to purchase 300,000
shares of common stock.
<TABLE>
<S> <C>
Common stock offered.............. 1,100,000 shares
Common stock to be outstanding 51,936,187 shares
after this offering..............
Use of proceeds................... We will use the proceeds from this offering
to fund capital expansion activities.
Nasdaq National Market symbol..... MCHP
</TABLE>
Unless we indicate otherwise, the information in this prospectus assumes the
underwriters will not exercise their over-allotment option.
2
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(in thousands, except per share data)
The information in the as adjusted column included below is calculated to
reflect the issuance of 1,100,000 shares of common stock offered under this
prospectus based on an assumed offering price of $73.0625 per share, after
deducting the estimated underwriter discounts and commissions and estimated
expenses payable by us in connection with the offering.
<TABLE>
<CAPTION>
Six Months Ended
Year Ended March 31, September 30,
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1997 1998 1999 1998 1999
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<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net sales....................... $334,252 $396,894 $406,460 $203,269 $225,731
Operating income................ 71,057 86,445 70,156 42,152 58,631
Income before income taxes...... 69,493 88,167 68,611 41,558 59,295
Net income...................... 51,132 64,368 50,088 30,337 43,287
Basic net income per share...... $ 0.99 $ 1.21 $ 0.98 $ 0.59 $ 0.85
Diluted net income per share.... $ 0.94 $ 1.14 $ 0.94 $ 0.56 $ 0.80
Basic common shares
outstanding.................... 51,569 53,576 51,136 51,546 50,879
Diluted common shares
outstanding.................... 54,683 56,313 53,528 53,940 53,842
</TABLE>
<TABLE>
<CAPTION>
Quarter Ended
----------------------------------------------------
June Sept. Sept.
30, 30, Dec. 31, Mar. 31, June 30, 30,
1998 1998 1998 1999 1999 1999
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $99,489 $103,780 $100,167 $103,024 $107,710 $118,021
Operating income........ 17,488 24,664 25,120 2,884 27,582 31,049
Income before income
taxes.................. 17,499 24,059 24,456 2,597 27,669 31,626
Net income.............. 12,774 17,563 17,854 1,897 20,199 23,088
Basic net income per
share.................. $ 0.24 $ 0.34 $ 0.35 $ 0.04 $ 0.40 $ 0.45
Diluted net income per
share.................. $ 0.23 $ 0.33 $ 0.34 $ 0.04 $ 0.38 $ 0.43
Basic common shares
outstanding............ 52,151 50,963 50,647 50,921 50,714 50,787
Diluted common shares
outstanding............ 54,486 53,358 53,192 53,365 53,787 53,916
</TABLE>
<TABLE>
<CAPTION>
September 30,
1999
-----------------
As
Actual adjusted
-------- --------
<S> <C> <C>
Balance Sheet Data:
Working capital............................................ $ 84,474 $160,425
Total assets............................................... 563,647 639,598
Current portion of long-term obligations................... 108 108
Long-term obligations, less current portion................ -- --
Stockholders' equity....................................... 417,241 493,192
</TABLE>
3
<PAGE>
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the following factors before deciding to purchase shares of
our common stock. The trading price of our common stock could decline due to
any of these risks, in which case you could lose all or part of your
investment. In assessing these risks, you should also refer to the other
information in this prospectus, including our financial statements and the
related notes.
This prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as "anticipate," "believe," "plan," "expect,"
"future," "intend" and similar expressions to identify forward-looking
statements. Our actual results could differ materially from those anticipated
in the forward-looking statements as a result of certain factors, including the
risks described below and elsewhere in this prospectus. We disclaim any
obligation to update information contained in any forward-looking statement.
Our quarterly operating results may fluctuate due to factors that could reduce
our net sales and profitability.
Our quarterly operating results are affected by a wide variety of factors
that could reduce our net sales and profitability, many of which are beyond our
control. Some of the factors that may affect our operating results include:
. the level of orders that are received and can be shipped in a quarter
. market acceptance of both our products and our customers' products
. customer order patterns and seasonality
. availability of manufacturing capacity and fluctuations in manufacturing
yield
. the availability and cost of raw materials, equipment and other supplies,
and
. economic, political and other conditions in the worldwide markets served
by us.
We believe that period-to-period comparisons of our operating results are
not necessarily meaningful and that you should not rely upon any comparisons as
indications of future performance. In future periods our operating results may
fall below the expectations of public market analysts and investors, which
would likely have a negative effect on the price of our common stock.
If we fail to maintain manufacturing yields as we increase our capacity, we may
not be able to produce sufficient quantities of integrated circuits to meet
customer demand, which would harm our business.
The manufacture and assembly of integrated circuits, particularly non-
volatile, erasable memory and logic devices such as those that we produce, are
complex processes. These processes are sensitive to a wide variety of factors,
including the level of contaminants in the manufacturing environment,
impurities in the materials used and the performance of our fabrication
personnel and equipment. As is typical in the semiconductor industry, we have
from time to time experienced lower than anticipated manufacturing yields. Our
operating results will suffer if we are unable to maintain yields at
approximately current levels.
We believe that expansion of our manufacturing capacity is important to
enable us to respond to increased sales opportunities and maintain satisfactory
delivery schedules. Our business could suffer if the expansion of manufacturing
capacity is delayed or inefficiently implemented. Other companies in the
industry have experienced difficulty in expanding manufacturing capacity,
resulting in reduced yields or delays in product deliveries. We may experience
manufacturing yield or delivery problems in the future, which could harm our
operating results.
4
<PAGE>
We depend on orders that are received and shipped in the same quarter and
therefore have limited visibility of future product shipments.
Our net sales in any given quarter depend upon a combination of orders
received in that quarter for shipment in that quarter, which we refer to as
turns orders, and shipments from backlog. If we do not achieve a sufficient
level of turns orders in a particular quarter, our net sales and operating
results will suffer. We have emphasized our ability to respond quickly to
customer orders as part of our competitive strategy. From fiscal 1994 through
fiscal 1999, this strategy resulted in customers placing orders with
increasingly shorter delivery schedules. This had the effect of increasing
turns orders as a portion of our business in any given quarter and reducing our
visibility on future product shipments. The percentage of turns orders has
decreased substantially for the first three quarters of fiscal 2000, but may
return to higher levels in the future. Because turns orders are difficult to
predict, increased levels of turns orders make our net sales more difficult to
predict.
Intense competition in our markets may lead to reduced sales of our products
and reduced market share.
The semiconductor industry is intensely competitive and has been
characterized by price erosion and rapid technological change. We compete with
major domestic and international semiconductor companies, many of which have
greater market recognition and substantially greater financial, technical,
marketing, distribution and other resources than we with which to pursue
engineering, manufacturing, marketing and distribution of their products.
Emerging companies are also increasing their participation in the market for
embedded control applications. In addition, our ability to compete successfully
depends on a number of factors both within and outside our control, including:
. the quality, performance, reliability, features, ease of use, pricing and
diversity of our products
. the quality of our customer services and our ability to address the needs
of our customers
. our success in designing and manufacturing new products including those
implementing new technologies
. efficiency of production
. the rate at which customers incorporate our products into their own
products
. product introductions by our competitors, and
. protection of our products and processes by effective utilization of
intellectual property laws.
Historically, average selling prices in the semiconductor industry decrease
over the life of any particular product. The overall average selling prices of
our microcontroller products have remained relatively constant, while average
selling prices of our memory products have declined over time. We have
experienced, and expect to continue to experience, pricing pressure in certain
microcontroller product lines, due primarily to competitive conditions. We may
be unable to maintain average selling prices for our microcontroller or other
products as a result of increased pricing pressure in the future. An increase
in pricing pressure could force us to reduce our average selling prices, which
would reduce our operating results.
We may be unable to compete successfully in the future, which could harm our
business.
We may lose sales if our suppliers of raw materials and equipment fail to meet
our needs.
Our semiconductor manufacturing operations require raw materials and
equipment that must meet exacting standards. We generally have more than one
source for these supplies, but there are only a limited number of suppliers
capable of delivering various raw materials and equipment that meet our
standards. In addition, the raw materials and equipment necessary for our
business could become more difficult to obtain as worldwide use of
semiconductors increases. An interruption of any raw materials or equipment
sources could harm our business. We have faced supply shortages from time to
time in the past, and on occasion our suppliers have told us they need more
time than expected to fill our orders.
5
<PAGE>
Our business is highly dependent on selling through distributors.
Distributors accounted for 59% of our net sales to customers for the six
months ended September 30, 1999. Our largest distributor accounted for 13% of
our total net sales for the six months ended September 30, 1999. Generally, we
do not have long-term agreements with our distributors and our distributors may
terminate their relationship with us with little or no advanced notice.
The loss of, or a disruption in the operations of, one or more of our
distributors could reduce our net sales in a given quarter and could result in
an increase in inventory returns.
Our operating results may be impacted by the wide fluctuations of supply and
demand in the semiconductor industry.
The semiconductor industry has been characterized by wide fluctuations of
supply and demand. The industry has experienced significant economic downturns
at various times, characterized by diminished product demand, accelerated
erosion of average selling prices and production over-capacity. We have sought
to reduce our exposure to industry cyclicality by selling products to a
geographically diverse base of customers across a broad range of market
applications. However, we may experience substantial period-to-period
fluctuations in future operating results due to general industry or economic
conditions.
If we are unable to adequately protect or enforce our intellectual property
rights, we could lose market share, incur costly litigation expenses or lose
valuable assets.
Our success depends in part on our ability to obtain patents, licenses and
other intellectual property rights covering our products and manufacturing
processes. To that end, we have acquired certain patents and patent licenses
and intend to continue to seek patents on our inventions and manufacturing
processes. The process of seeking patent protection can be long and expensive,
and patents may not be issued from currently pending or future applications. In
addition, our existing patents and any new patents that are issued may not be
of sufficient scope or strength to provide meaningful protection or any
commercial advantage to us. We may be subject to or may initiate interference
proceedings in the U.S. Patent and Trademark Office, which can require
significant financial and management resources. In addition, the laws of
certain foreign countries do not protect our intellectual property rights to
the same extent as the laws of the United States.
As is typical in the semiconductor industry, we have from time to time
received, and may in the future receive, communications alleging possible
infringement of patents or other intellectual property rights of others. We
investigate all infringement notices and respond as we believe is appropriate.
Based on industry practice, we believe that in most cases we can obtain any
necessary licenses or other rights on commercially reasonable terms, but we
cannot assure that licenses would be available on acceptable terms, that
litigation would not ensue or that damages for any past infringement would not
be assessed. Litigation, which could result in substantial cost to us and
diversion of management effort, may be necessary to enforce our patents or
other intellectual property rights or to defend us against claimed infringement
of the rights of others. The failure to obtain necessary licenses or other
rights or litigation arising out of infringement claims could harm our
business.
We are highly dependent on foreign sales and operations, which exposes us to
foreign political and economic risks.
Sales to foreign customers account for a substantial portion of our net
sales. During the six months ended September 30, 1999, 68% of our net sales
were made to foreign customers. We purchase a substantial portion of our raw
materials and equipment from foreign suppliers. In addition, we own product
packaging and testing facilities located near Bangkok, Thailand. We also use
various third-party contractors located throughout Asia for a portion of our
packaging and testing requirements.
6
<PAGE>
Our reliance on foreign sales and operations exposes us to foreign
political and economic risks, including:
. political, social and economic instability
. trade restrictions and changes in tariffs
. import and export license requirements and restrictions
. difficulties in staffing and managing international operations
. disruptions in international transport or delivery
. fluctuations in currency exchange rates
. difficulties in collecting receivables, and
. potentially adverse tax consequences.
If any of these risks materialize, our foreign sales could decrease and our
foreign operations could suffer.
Various Asian countries recently experienced significant economic
difficulties. These difficulties included business failures and a generally
depressed business climate, particularly in the semiconductor industry.
Because of our reliance on Asian facilities, any further economic crisis in
Asia may harm our business.
We are subject to stringent environmental regulation, which may force us to
incur significant expenses.
We must comply with many different federal, state and local governmental
regulations related to the use, storage, discharge and disposal of toxic,
volatile or otherwise hazardous chemicals used in our manufacturing process.
Although we believe that our activities conform to presently applicable
environmental regulations, our failure to comply with present or future
regulations could result in the imposition of fines, suspension of production
or a cessation of operation. Any regulation could require us to acquire costly
equipment or to incur other significant expenses to comply with environmental
regulations. Any failure by us to control the use of or adequately restrict
the discharge of hazardous substances could subject us to future liabilities.
Environmental problems may occur that could subject us to future costs or
liabilities.
We must attract and retain qualified personnel to be successful, and
competition for qualified personnel is intense in our market.
Our success depends to a significant extent upon the efforts and abilities
of our senior management, engineering and other personnel. The competition for
qualified engineering and management personnel is intense. We may be
unsuccessful in retaining our existing key personnel or in attracting and
retaining additional key personnel that we require. The loss of the services
of one or more of our key personnel or the inability to add key personnel
could harm our business. We have no employment agreements with any member of
our senior management team.
The year 2000 problem may adversely affect us by causing failures in our
internal systems or in systems used by our suppliers, distributors or
customers.
The year 2000 problem is the potential for system and processing failure of
date-related data as a result of computer-controlled systems that use two
digits rather than four to define a year in the date field. Many computer
hardware systems and software applications could fail or create erroneous
results unless corrected so that they can correctly process data related to
the year 2000 and beyond. Failures by our internal systems, or by systems used
by our suppliers, distributors or customers, could seriously harm our
business. In particular, the infrastructure of foreign countries where our
products are manufactured or our customers are located may be subject to
disruption or failure as a result of the year 2000 problem.
7
<PAGE>
The future trading price of our common stock could be subject to wide
fluctuations in response to a variety of factors.
The market price of our common stock has fluctuated significantly in the
past and is likely to fluctuate in the future. The future trading price of our
common stock could be subject to wide fluctuations in response to a variety of
factors, many of which are beyond our control, including:
. quarterly variations in our operating results and the operating results
of other semiconductor companies
. actual or anticipated announcements of technical innovations or new
products by us or our competitors
. changes in analysts' estimates of our financial performance or buy/sell
recommendations
. general conditions in the semiconductor industry, and
. worldwide economic and financial conditions.
In addition, the stock market has experienced significant price and volume
fluctuations that have particularly affected the market prices for many high
technology companies and that often have been unrelated to the operating
performance of such companies. These broad market fluctuations and other
factors may harm the market price of our common stock.
Provisions in our charter may have anti-takeover effects.
Provisions in our certificate of incorporation allow us to issue preferred
stock with voting, liquidation and dividend rights senior to those of our
common stock without the approval of our stockholders. The issuance of
preferred stock, while providing desirable flexibility in connection with
possible acquisitions or other corporate purposes, could have the effect of
making it more difficult for a third party to acquire a majority of our
outstanding stock. We have no present plans to issue shares of preferred stock.
DIVIDEND POLICY
We have not paid any cash dividends since our inception. We currently
anticipate that we will retain all of our future earnings for use in the
expansion and operation of our business. Thus, we do not anticipate paying any
cash dividends on our capital stock in the foreseeable future.
USE OF PROCEEDS
The net proceeds to us from the sale of the 1,100,000 shares being offered
under this prospectus are estimated to be approximately $75,950,000, or
$87,403,000 if the underwriters' over-allotment option is exercised in full,
based on an assumed offering price of $73.0625 per share and after deducting
the estimated underwriter discounts and commissions and estimated expenses
payable by us in connection with the offering. We intend to use the net
proceeds to purchase additional wafer fabrication and final test equipment and
to fund the construction of additional office building space. Pending these
uses, we intend to invest the net proceeds in investment grade, interest
bearing securities.
8
<PAGE>
CAPITALIZATION
The following table sets forth our capitalization as of September 30, 1999
and is based on the number of shares outstanding at that date, excluding
outstanding options to purchase 6,965,772 shares of common stock under our
stock option plans and a warrant to purchase 300,000 shares of common stock.
The information in the as adjusted column included below is calculated to
reflect the issuance of 1,100,000 shares of common stock offered under this
prospectus based on an assumed offering price of $73.0625 per share, after
deducting the estimated underwriter discounts and commissions and estimated
expenses payable by us in connection with this offering.
<TABLE>
<CAPTION>
September 30, 1999
---------------------
Actual As Adjusted
-------- -----------
(in thousands)
<S> <C> <C>
Long-term obligations, less current portion.............. $ -- $ --
-------- --------
Stockholders' equity:
Preferred Stock, $0.001 par value; 5,000,000 shares
authorized, no shares issued and outstanding.......... -- --
Common Stock, $0.001 par value, 100,000,000 shares
authorized, 53,881,342 shares issued and 50,836,187
shares outstanding; 53,881,342 shares issued and
51,936,187 shares outstanding as adjusted............. 54 54
Additional paid-in capital............................. 209,227 257,922
Retained earnings...................................... 307,568 307,568
Less shares of common stock held in treasury........... (99,608) (72,352)
Net stockholders' equity............................... 417,241 493,192
-------- --------
Total capitalization................................. $417,241 $493,192
======== ========
</TABLE>
9
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with our consolidated financial statements and notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in the documents incorporated herein by reference. Our
consolidated statement of operations data for each of the years in the five-
year period ended March 31, 1999, and the balance sheet data as of March 31,
1999, 1998, 1997, 1996 and 1995 are derived from and are qualified by reference
to our audited consolidated financial statements. The selected consolidated
statement of operations data for the six months ended September 30, 1998 and
1999 and the balance sheet data as of September 30, 1999 have been derived from
unaudited consolidated financial statements which include, in the opinion of
management, all adjustments, consisting only of normal recurring adjustments
necessary for a fair presentation of the financial data for such periods. The
results of operations for the six months ended September 30, 1999, are not
necessarily indicative of the results to be expected for any future interim or
annual period.
<TABLE>
<CAPTION>
Six Months Ended
Year Ended March 31, September 30,
----------------------------------------------- ------------------
1995 1996 1997 1998 1999 1998 1999
-------- -------- -------- -------- -------- -------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net sales............... $207,961 $285,888 $334,252 $396,894 $406,460 $203,269 $225,731
Cost of sales........... 101,039 137,708 167,330 199,538 203,574 102,538 110,199
-------- -------- -------- -------- -------- -------- --------
Gross profit............ 106,922 148,180 166,922 197,356 202,886 100,731 115,532
Research and
development............ 20,746 27,517 32,073 38,362 40,787 20,788 20,959
Selling, general and
administrative......... 36,975 48,903 56,248 67,549 63,006 32,291 35,942
Special charges......... -- 11,448 7,544 5,000 28,937 5,500 --
-------- -------- -------- -------- -------- -------- --------
Operating income........ 49,201 60,312 71,057 86,445 70,156 42,152 58,631
Interest income
(expense), net......... (881) (947) (1,852) 1,505 (2,210) (1,142) 192
Other, net.............. 808 569 288 217 665 548 472
-------- -------- -------- -------- -------- -------- --------
Income before income
taxes.................. 49,128 59,934 69,493 88,167 68,611 41,558 59,295
Provision for income
taxes.................. 12,829 16,182 18,361 23,799 18,523 11,221 16,008
-------- -------- -------- -------- -------- -------- --------
Net income.............. 36,299 43,752 51,132 64,368 50,088 30,337 43,287
======== ======== ======== ======== ======== ======== ========
Basic net income per
share.................. $ 0.76 $ 0.86 $ 0.99 $ 1.21 $ 0.98 $ 0.59 $ 0.85
======== ======== ======== ======== ======== ======== ========
Diluted net income per
share.................. $ 0.70 $ 0.80 $ 0.94 $ 1.14 $ 0.94 $ 0.56 $ 0.80
======== ======== ======== ======== ======== ======== ========
Basic common shares
outstanding............ 47,525 50,750 51,569 53,376 51,136 51,546 50,879
======== ======== ======== ======== ======== ======== ========
Diluted common shares
outstanding............ 51,641 54,533 54,683 56,313 53,528 53,940 53,842
======== ======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
As of March 31,
-------------------------------------------- September 30,
1995 1996 1997 1998 1999 1999
-------- -------- -------- -------- -------- -------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Working capital........ $ 71,307 $ 55,855 $ 91,176 $ 55,171 $ 93,295 $ 84,474
Total assets........... 249,480 358,187 428,092 524,743 505,230 563,647
Long-term obligations,
less current portion.. 15,340 33,250 5,999 8,768 25,000 --
Stockholders' equity... 161,825 219,632 316,584 367,308 358,797 417,241
</TABLE>
10
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated December , 1999, we have agreed to sell to the underwriters
named below, for whom Credit Suisse First Boston Corporation, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Prudential Securities Incorporated and
BancBoston Robertson Stephens Inc. are acting as representatives, the following
respective numbers of shares of common stock:
<TABLE>
<CAPTION>
Number of
Underwriters Shares
------------ ----------
<S> <C>
Credit Suisse First Boston Corporation...........................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................
Prudential Securities Incorporated...............................
BancBoston Robertson Stephens Inc................................
----------
Total........................................................
==========
</TABLE>
The underwriting agreement provides that the underwriters are obligated to
purchase all of the shares of common stock in the offering if any are
purchased, other than those shares covered by the over-allotment option
described below. The underwriting agreement also provides that if an
underwriter defaults, the purchase commitments of the non-defaulting
underwriters may be increased or the offering of common stock may be
terminated.
We have granted to the underwriters a 30-day option to purchase on a pro-
rata basis up to 165,000 additional shares at the public offering price less
the underwriting discounts and commissions. The option may be exercised only to
cover any over-allotments of common stock.
The underwriters propose to offer the shares of common stock initially at
the public offering price on the cover page of this prospectus and to selling
group members at that price less a concession of $ per share. The underwriters
and selling group members may allow a discount of $ per share on sales to other
broker/dealers. After the public offering of the common stock, the public
offering price and concession and discount to broker/dealers may be changed by
the underwriters.
The following table summarizes the compensation and estimated expenses we
will pay:
<TABLE>
<CAPTION>
Per Share Total
--------------------- ---------------------
Without Without
Over- With Over- Over- With Over-
allotment allotment allotment allotment
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Underwriting Discounts and
Commissions paid by us.......
Expenses payable by us........
</TABLE>
We and our directors and executive officers have agreed that we and they
will not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any shares of our common stock or securities
convertible into or exchangeable or exercisable for any shares of our common
stock, or enter into a transaction which would have the same effect or publicly
disclose the intention to make any such offer, sale, pledge or disposal without
the prior written consent of Credit Suisse First Boston Corporation for a
period of 90 days after the date of this prospectus, except that our executive
officers and directors may collectively sell up to 250,000 shares of our common
stock in the open market without regard to the restrictions described in this
paragraph. In addition, the holder of a warrant to purchase 300,000 shares of
our common stock has entered into a lock-up agreement for a period of 30 days
after the date of this prospectus.
We have agreed to indemnify the underwriters against liabilities under the
Securities Act or contribute to payments which the underwriters may be required
to make in that respect.
11
<PAGE>
Our common stock is listed on The Nasdaq National Market under the symbol
MCHP.
The representatives may engage in over-allotment, stabilizing transactions,
syndicate covering transactions, penalty bids and "passive" market making in
accordance with Regulation M under the Securities Exchange Act of 1934.
. Over-allotment involves syndicate sales in excess of the offering size,
which creates a syndicate short position.
. Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
. Syndicate covering transactions involve purchases of the shares of the
common stock in the open market after the distribution has been completed
in order to cover syndicate short positions.
. Penalty bids permit the underwriters to reclaim a selling concession from
a syndicate member when the shares of common stock originally sold by
that syndicate member is purchased in a syndicate covering transaction to
cover syndicate short positions.
. In "passive" market making, market makers in the common stock who are
underwriters or prospective underwriters may, subject to specific
limitations, make bids for or purchases of the common stock until the
time, if any, at which a stabilizing bid is made.
These stabilizing transactions, syndicate covering transactions and penalty
bids may cause the price of the common stock to be higher than it would
otherwise be in the absence of these transactions. These transactions may be
effected on The Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.
12
<PAGE>
NOTICE TO CANADIAN RESIDENTS
Resale Restrictions
The distribution of the common stock in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of common stock are effected. Accordingly, any resale of the common
stock in Canada must be made in accordance with applicable securities laws
which will vary depending on the relevant jurisdiction, and which may require
resales to be made in accordance with available statutory exemptions or
pursuant to a discretionary exemption granted by the applicable Canadian
securities regulatory authority. Purchasers are advised to seek legal advice
prior to any resale of the common stock.
Representations of Purchasers
Each purchaser of common stock in Canada who receives a purchase
confirmation will be deemed to represent to us and the dealer from whom such
purchase confirmation is received that (i) such purchaser is entitled under
applicable provincial securities laws to purchase such common stock without the
benefit of a prospectus qualified under such securities laws, (ii) where
required by law, that such purchaser is purchasing as principal and not as
agent, and (iii) such purchaser has reviewed the text above under "Resale
Restrictions".
Rights of Actions (Ontario Purchasers)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
Enforcement of Legal Rights
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process within Canada
upon the issuer or such persons. All or a substantial portion of the assets of
the issuer and such persons may be located outside of Canada and, as a result,
it may not be possible to satisfy a judgment against the issuer or such persons
in Canada or to enforce a judgment obtained in Canadian courts against such
issuer or persons outside of Canada.
Notice to British Columbia Residents
A purchaser of common stock to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
common stock acquired by such purchaser pursuant to this offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one such report
must be filed in respect of common stock acquired on the same date and under
the same prospectus exemption.
Taxation and Eligibility for Investment
Canadian purchasers of common stock should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the common
stock in their particular circumstances and with respect to the eligibility of
the common stock for investment by the purchaser under relevant Canadian
legislation.
13
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-3, of which this prospectus is a part, under the Securities
Act with respect to the shares of common stock offered hereby. This prospectus
does not contain all of the information included in the registration statement.
Statements contained in this prospectus concerning the provisions of any
document are not necessarily complete. You should refer to the copy of these
documents filed as an exhibit to the registration statement or otherwise filed
by us with the SEC for a more complete understanding of the matter involved.
Each statement concerning these documents is qualified in its entirety by such
reference.
We are also subject to the informational requirements of the Securities
Exchange Act of 1934. Under the Exchange Act, we file reports, proxy statements
and other information with the SEC. The registration statement, including the
attached exhibits and schedules, may be inspected and copied at the following
public reference facilities maintained by the SEC:
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison
Room 1024, Judiciary Plaza Suite 1300 Street
Washington, D.C. 20549 New York, NY 10048 Suite 1400
Chicago, IL 60661-
2511
Please call the SEC at 1-800-SEC-0330 for further information about the
public reference rooms. The SEC maintains a web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. Copies of the registration statement and
the reports, proxy and information statements and other information that we
file with the SEC may be obtained from the SEC's Internet address at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" into the prospectus the
information we have filed with them. The information incorporated by reference
is an important part of this prospectus and the information that we file
subsequently with the SEC will automatically update this prospectus. The
information incorporated by reference is considered to be part of this
prospectus. We incorporate by reference the documents listed below and any
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, after the initial filing of this
registration statement that contains this prospectus and prior to the time that
we sell all the securities offered by this prospectus:
. our annual report on Form 10-K for the fiscal year ended March 31, 1999
. our quarterly report on Form 10-Q for the quarter ended June 30, 1999
. our quarterly report on Form 10-Q for the quarter ended September 30,
1999
. our current report on Form 8-K dated October 11, 1999
. the description of our common stock contained in our Registration
Statement on Form 8-A filed on February 5, 1993 under Section 12 of the
Exchange Act, including any amendment or report updating such
description, and
. the description of our preferred share purchase rights contained in our
Registration Statement on Form 8-A filed on February 14, 1995 under
Section 12 of the Exchange Act, including any amendment or report
updating such description.
You may request a copy of these documents, at no cost, by writing or
telephoning us at the following address:
Microchip Technology Incorporated
Attention: Investor Relations
2355 W. Chandler Blvd.
Chandler, Arizona 85224-6199
(480) 786-7200
14
<PAGE>
LEGAL MATTERS
The validity of the shares of common stock offered under this prospectus
will be passed upon for us by Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto, California. Various legal matters in connection with
this offering will be passed upon for the underwriters by Gray Cary Ware &
Freidenrich LLP, Palo Alto, California.
EXPERTS
Our consolidated financial statements as of March 31, 1998 and 1999, and for
each of the years in the three-year period ended March 31, 1999, have been
incorporated herein by reference and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated herein by reference and upon the authority of such firm as experts
in accounting and auditing.
15
<PAGE>
[MICROCHIP LOGO]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses other than
underwriting discounts and commissions, payable by the Company in connection
with the sale of Common Stock being registered. All amounts are estimates
except the SEC Registration Fee and the NASD Filing Fee.
<TABLE>
<CAPTION>
Amount To Be
Paid By the
Company
------------
<S> <C>
SEC Registration Fee......................................... $ 24,839
NASD Filing Fee.............................................. 9,909
Printing..................................................... 100,000
Legal Fees and Expenses...................................... 150,000
Accounting Fees and Expenses................................. 50,000
Blue Sky Fees and Expenses................................... 3,500
Transfer Agent and Registrar Fees............................ 2,500
Miscellaneous................................................ 59,252
--------
Total.................................................... $400,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("Delaware Law")
authorizes a court to award or a corporation's Board of Directors to grant
indemnification to directors and officers in terms sufficiently broad to permit
such indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Act"). Article VII of the Registrant's Bylaws provides for
mandatory indemnification of its directors, officers, employees and other
agents to the maximum extent permitted by Delaware Law. The Registrant has
entered into indemnification agreements with its directors and certain of its
officers, a form of which was filed as Exhibit 10.1 to Registration Statement
No. 33-57960. The indemnification agreements provide the Registrant's directors
and selected officers with further indemnification to the maximum extent
permitted by Delaware Law. 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.
Reference is made to the form of Underwriting Agreement filed as Exhibit 1.1
to this Registration Statement for certain provisions regarding indemnification
of officers and directors of the Company by the several Underwriters.
Item 16. Exhibits and Financial Statement Schedules
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
1.1 Form of Underwriting Agreement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
23.1 Consent of KPMG LLP.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(Included in Exhibit 5.1).
24.1 Power of Attorney (Included on Page II-3).
</TABLE>
II-1
<PAGE>
(b) Financial Statement Schedules
None.
Item 17. Undertakings
The undersigned Registrant hereby undertakes that:
(1) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(2) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report, to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to
be presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
in Item 15 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 of 1933 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 of
the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(4) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed be part of this
registration statement as of the time it was declared effective.
(5) For the purpose of determining any liability under the Securities
Act of 1933, 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>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chandler, State of Arizona, on the 8th day of
December 1999.
Microchip Technology Incorporated
/s/ C. Philip Chapman
By: _________________________________
C. Philip Chapman
Vice President, Chief Financial
Officer and Secretary
(Principal Financial and
Accounting Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints C. Philip Chapman and Mary K. Simmons, and each
of them, his attorneys-in-fact, each with the power of substitution, for him
and in his name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this Registration
Statement, and to sign any registration statement for the same offering covered
by this Registration Statement that is to be effective upon filing pursuant to
Rule 462(b) promulgated under the Securities Act, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto in all
documents in connection therewith, with the SEC, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that such attorneys-in-fact
and agents or any of them, or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on December 8,
1999 in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Steve Sanghi Chairman, President, Chief
____________________________________ Executive Officer
(Steve Sanghi) (Principal Executive
Officer) and Director
/s/ C. Philip Chapman Vice President, Chief
____________________________________ Financial Officer and
(C. Philip Chapman) Secretary (Principal
Financial and Accounting
Officer)
/s/ Matthew W. Chapman Director
____________________________________
(Matthew W. Chapman)
/s/ Albert J. Hugo-Martinez Director
____________________________________
(Albert J. Hugo-Martinez)
/s/ L.B. Day Director
____________________________________
L.B. Day
/s/ Wade F. Meyercord Director
____________________________________
(Wade F. Meyercord)
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S> <C>
1.1 Form of Underwriting Agreement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
23.1 Consent of KPMG LLP.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (Included in Exhibit 5.1).
24.1 Power of Attorney (Included on Page II-3).
</TABLE>
<PAGE>
EXHIBIT 1.1
1,100,000 Shares
Microchip Technology Incorporated
Common Stock
($0.001 par value per share)
UNDERWRITING AGREEMENT
----------------------
December __, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH & CO.
PRUDENTIAL SECURITIES INCORPORATED
BANCBOSTON ROBERTSON STEPHENS INC.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Ladies and Gentlemen:
1. Introductory. Microchip Technology Incorporated, a Delaware
corporation ("Company"), proposes to issue and sell 1,100,000 shares ("Firm
Securities") of its Common Stock, par value $0.001 per share ("Securities"), and
also proposes to issue and sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than 165,000 additional shares ("Optional
Securities") of its Securities as set forth below. The Firm Securities and the
Optional Securities are herein collectively called the "Offered Securities". The
Company hereby agrees with the several Underwriters named in Schedule A hereto
("Underwriters") as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-_____) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (i) has been
declared effective under the Securities Act of 1933, as amended ("Act"),
and is not proposed to be amended or (ii) is proposed to be amended by
amendment or post-effective amendment. If such registration statement
("initial registration statement") has been declared effective, either (i)
an additional registration statement ("additional registration statement")
relating to the Offered Securities may have been filed with the Commission
pursuant to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has
become effective upon filing pursuant to such Rule and the Offered
Securities all have been duly registered under the Act pursuant to the
initial registration statement and, if applicable, the additional
registration statement or (ii) such an additional registration statement is
proposed to be filed with the Commission pursuant to Rule 462(b) and will
become effective upon filing pursuant to such Rule and upon such filing the
Offered Securities will all have been duly registered under the Act
pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the
initial registration statement or if an additional registration statement
has been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent
1
<PAGE>
amendment (if any) to each such registration statement has been declared
effective by the Commission or has become effective upon filing pursuant to
Rule 462(c) ("Rule 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"Effective Time" with respect to the initial registration statement or, if
filed prior to the execution and delivery of this Agreement, the additional
registration statement means (i) if the Company has advised the
Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or
the most recent post-effective amendment thereto (if any) filed prior to
the execution and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c), or
(ii) if the Company has advised the Representatives that it proposes to
file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement, as
amended by such amendment or post-effective amendment, as the case may be,
is declared effective by the Commission. If an additional registration
statement has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that it proposes
to file one, "Effective Time" with respect to such additional registration
statement means the date and time as of which such registration statement
is filed and becomes effective pursuant to Rule 462(b). "Effective Date"
with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its Effective
Time, including all material incorporated by reference therein, including
all information contained in the additional registration statement (if any)
and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the
General Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("Rule
430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as amended
at its Effective Time, including the contents of the initial registration
statement incorporated by reference therein and including all information
(if any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to as
the "Additional Registration Statement". The Initial Registration Statement
and the Additional Registration Statement are herein referred to
collectively as the "Registration Statements" and individually as a
"Registration Statement". The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no such
filing is required) as included in a Registration Statement, including all
material incorporated by reference in such prospectus, is hereinafter
referred to as the "Prospectus". No document has been or will be prepared
or distributed in reliance on Rule 434 under the Act. All references in
this Agreement to financial statements and schedules and other information
which is "contained," "included" or "stated" in the Registration
Statements, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is
incorporated by reference in the Registration Statements, any preliminary
prospectus or the Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Registration Statements,
any preliminary prospectus or the Prospectus shall be deemed to mean and
include the filing of any document under the Securities Exchange Act of
1934 (the "Exchange Act") which is incorporated by reference in the
Registration Statements, such preliminary prospectus or the Prospectus, as
the case may be.
(b) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (i) on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all respects to the requirements of the Act and the
rules and regulations of the Commission ("Rules and Regulations") and did
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all material respects to the requirements of
the Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or will
not omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) on the
date of this Agreement, the Initial Registration Statement and, if the
Effective Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the Effective
Date of the Additional Registration Statement in which the Prospectus is
included, each Registration Statement and the Prospectus
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will conform, in all material respects to the requirements of the Act and
the Rules and Regulations, and neither of such documents includes, or will
include, any untrue statement of a material fact or omits, or will omit, to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading (with respect to the Prospectus only,
in the light of the circumstances under which they were made). If the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement: on the Effective Date of the
Initial Registration Statement, the Initial Registration Statement and the
Prospectus will conform in all material respects to the requirements of the
Act and the Rules and Regulations, neither of such documents will include
any untrue statement of a material fact or will omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading (with respect to the Prospectus only, in the light
of the circumstances under which they were made), and no Additional
Registration Statement has been or will be filed. The two preceding
sentences do not apply to statements in or omissions from a Registration
Statement or the Prospectus based upon written information furnished to the
Company by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information is
that described as such in Section 7(b) hereof.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified would individually or in the aggregate not have
a material adverse effect on the condition (financial or otherwise),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole ("Material Adverse Effect").
(d) Each subsidiary of the Company has been duly incorporated and is
an existing corporation in good standing under the laws of the jurisdiction
of its incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus; and
each subsidiary of the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified would
individually or in the aggregate not have a Material Adverse Effect; all of
the issued and outstanding capital stock of each subsidiary of the Company
has been duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each subsidiary owned by the
Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(e) The Offered Securities and all other outstanding shares of capital
stock of the Company have been duly authorized; all outstanding shares of
capital stock of the Company are, and, when the Offered Securities have
been delivered and paid for in accordance with this Agreement on each
Closing Date (as defined below), such Offered Securities will have been,
validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus; and the stockholders of
the Company have no preemptive rights with respect to the Securities except
as have been validly waived.
(f) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with
this offering.
(g) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the 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 a Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Act which have not been validly waived with respect to this offering of the
Offered Securities.
(h) The Offered Securities have been approved for listing on The
Nasdaq Stock Market's National Market subject to notice of issuance.
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(i) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Offered Securities by the
Company, except such as have been obtained and made under the Act and such
as may be required under state securities laws.
(j) The execution, delivery and performance of this Agreement, and the
issuance and sale of the Offered Securities will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over
the Company or any subsidiary of the Company or any of their properties, or
any agreement or instrument to which the Company or any such subsidiary is
a party or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is subject, or
the charter or by-laws of the Company or any such subsidiary, and the
Company has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by this Agreement.
(k) This Agreement has been duly authorized, executed and delivered by
the Company.
(l) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Prospectus, the Company and its subsidiaries
hold any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the use made
or to be made thereof by them.
(m) The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(n) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(o) Except as disclosed in the Prospectus, the Company and its
subsidiaries own, possess or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct the
business now operated by them, or presently employed by them, and have not
received any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a Material Adverse Effect.
(p) Except as disclosed in the Prospectus, neither the Company nor any
of its subsidiaries is in violation of any statute, any rule, regulation,
decision or order of any governmental agency or body or any court, domestic
or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively,
"environmental laws"), owns or operates any real property contaminated with
any substance that is subject to any environmental laws, is liable for any
off-site disposal or contamination pursuant to any environmental laws, or
is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware of
any pending investigation which might lead to such a claim.
(q) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a Material Adverse Effect, or would materially and
adversely affect the ability of the Company to perform its
4
<PAGE>
obligations under this Agreement, or which are otherwise material in the
context of the sale of the Offered Securities; and no such actions, suits
or proceedings are threatened or, to the Company's knowledge, contemplated.
(r) The financial statements included in each Registration Statement
and the Prospectus present fairly the financial position of the Company and
its consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent basis
and the schedules included in each Registration Statement present fairly
the information required to be stated therein.
(s) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole, and, except as disclosed in or contemplated
by the Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(t) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940.
(u) KPMG Peat Marwick LLP, who have certified the financial statements
of the Company and its subsidiaries, are independent public accountants as
required by the Act and the Rules and Regulations.
(v) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or any of its
subsidiaries has a material relationship to evaluate the extent to which
the business or operations of the Company or any of its subsidiaries will
be effected by the Year 2000 Problem. As a result of such review, the
Company has no reason to believe, and does not believe, that the Year 2000
Problem will have a Material Adverse Effect or result in any material loss
or interference with the Company's business or operations. The "Year 2000
Problem" as used herein means any significant risk that computer hardware
or software used in the receipt, transmission, processing, manipulation,
storage, retrieval, retransmission or other utilization of date or in the
operation of mechanical or electrical systems of any kind will not, in the
case of dates or time periods occurring after December 31, 1999, function
at least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
(w) The documents incorporated or deemed to be incorporated by
reference in the Registration Statements and the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the Exchange Act
and the Rules and Regulations, and, when read together with the other
information in the Prospectus, at the time the Registration Statements
became effective, at the time the Prospectus was issued and at the First
Closing Date (and if any Option Securities are purchased, at the Optional
Closing Date), did not 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 (with
respect to the Prospectus only, in the light of the circumstances under
which they were made).
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $ per share, the respective
numbers of shares of Firm Securities set forth opposite the names of the
Underwriters in Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives for the
accounts of the Underwriters, against payment of the purchase price in Federal
(same day) funds by official bank check or checks or wire transfer to an account
at a bank acceptable to Credit Suisse First Boston Corporation ("CSFBC") drawn
to the order of at the office of , at 9:00 A.M.,
New York time, on , or at
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<PAGE>
such other time not later than seven full business days thereafter as CSFBC and
the Company determine, such time being herein referred to as the "First Closing
Date". For purposes of Rule 15c6-1 under the Exchange Act, the First Closing
Date (if later than the otherwise applicable settlement date) shall be the
settlement date for payment of funds and delivery of securities for all the
Offered Securities sold pursuant to the offering. The certificates for the Firm
Securities so to be delivered will be in definitive form, in such denominations
and registered in such names as CSFBC requests and will be made available for
checking and packaging at the office of at least 24 hours prior to
the First Closing Date.
In addition, upon written notice from CSFBC given to the Company from time
to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of shares of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Securities set forth opposite such Underwriter's name
bears to the total number of shares of Firm Securities (subject to adjustment by
CSFBC to eliminate fractions) and may be purchased by the Underwriters only for
the purpose of covering over-allotments made in connection with the sale of the
Firm Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to
the order of , at the office of . The certificates for
the Optional Securities being purchased on each Optional Closing Date will be in
definitive form, in such denominations and registered in such names as CSFBC
requests upon reasonable notice prior to such Optional Closing Date and will be
made available for checking and packaging at the office of at
a reasonable time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifteenth business day after the Effective Date of the Initial
Registration Statement. The Company will advise CSFBC promptly of any such
filing pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to register
a portion of the Offered Securities under the Act but the Effective Time
thereof has not occurred as of such execution and delivery, the Company
will file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on
the date of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to any Underwriter, or will make such
filing at such later date as shall have been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to amend or
supplement the initial or any additional registration statement as filed or
the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not
effect such amendment or supplementation without CSFBC's consent; and the
Company will also advise CSFBC promptly of the
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<PAGE>
effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or the Prospectus
and of the institution by the Commission of any stop order proceedings in
respect of a Registration Statement and will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs 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
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, the Company will promptly
notify CSFBC of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Neither CSFBC's consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (four of which will be signed and will include all
exhibits and documents incorporated by reference therein), each related
preliminary prospectus, and, so long as a prospectus relating to the
Offered Securities is required to be delivered under the Act in connection
with sales by any Underwriter or dealer, the Prospectus and all amendments
and supplements to such documents, in each case in such quantities as CSFBC
requests. The Prospectus shall be so furnished on or prior to 3:00 P.M.,
New York time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial
Registration Statement. All other documents shall be so furnished as soon
as available. The Company will pay the expenses of printing and
distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and will continue such qualifications in effect so long as
required for the distribution.
(g) During the period of five years hereafter, the Company will make
available to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Exchange Act or mailed to stockholders, and (ii)
from time to time, such other information concerning the Company as CSFBC
may reasonably request.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, for any filing fees and other
expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Offered Securities for sale and
determination of their eligibility for investment under the laws of such
jurisdictions as CSFBC designates and the printing of memoranda relating
thereto, for the filing fee incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review
by the National Association of Securities Dealers, Inc. of the Offered
Securities, for any travel expenses of the Company's officers and employees
and any other expenses of the Company in connection with attending or
hosting meetings with prospective purchasers of
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the Offered Securities and for expenses incurred in distributing
preliminary prospectuses and the Prospectus (including any amendments and
supplements thereto) to the Underwriters.
(i) For a period of 90 days after the date of the public offering of
the Offered Securities, the Company will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to, any
additional shares of its Securities or securities convertible into or
exchangeable or exercisable for any shares of its Securities, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of CSFBC, except grants of
employee stock options pursuant to the terms of plans in effect on the date
hereof, issuances of Securities pursuant to the exercise of such options or
the exercise of any other employee stock options outstanding on the date
hereof.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing of
the amendment or post-effective amendment to the registration statement to
be filed shortly prior to such Effective Time), of KPMG Peat Marwick LLP
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder
and stating to the effect that:
(i) in their opinion the financial statements and schedules
examined by them and included or incorporated by reference in the
Registration Statements comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements included or incorporated by reference in the
Registration Statements;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that:
(A) the unaudited financial statements included in the
Registration Statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act
and the related published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements for them to be in conformity with generally accepted
accounting principles;
(B) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of such letter, there
was any change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
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<PAGE>
(C) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year, in consolidated net sales--,--or--
net operating income--,--or in the total or per share amounts of
consolidated income before extraordinary items or net income,
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii) if the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement but the Effective Time of the
Additional Registration is subsequent to such execution and delivery,
"Registration Statements" shall mean the Initial Registration Statement and
the additional registration statement as proposed to be filed or as proposed
to be amended by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "Prospectus" shall mean the prospectus
included in the Registration Statements. All financial statements and
schedules included in material incorporated by reference into the Prospectus
shall be deemed included in the Registration Statements for purposes of this
subsection.
(b) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such Effective
Time shall have occurred not later than 10:00 P.M., New York time, on the
date of this Agreement or such later date as shall have been consented to
by CSFBC. If the Effective Time of the Additional Registration Statement
(if any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, the time the Prospectus
is printed and distributed to any Underwriter, or shall have occurred at
such later date as shall have been consented to by CSFBC. If the Effective
Time of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) of
this Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Representatives, shall be contemplated by
the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as one enterprise which, in the judgment of a majority
in interest of the Underwriters including the Representatives, is material
and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities; (ii) any downgrading in the rating of any debt
securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance
or review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any material
suspension or material limitation of trading in securities
9
<PAGE>
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities.
(d)(1) The Representatives shall have received an opinion, dated such
Closing Date, of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except where
the failure to be so qualified would individually or in the aggregate
not have a Material Adverse Effect;
(ii) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus; and each subsidiary of the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except where
the failure to be so qualified would individually or in the aggregate
not have a Material Adverse Effect; all of the issued and outstanding
capital stock of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable; and
the capital stock of each subsidiary owned by the Company, directly or
through subsidiaries, is owned free from liens, encumbrances and
defects;
(iii) The Offered Securities delivered on such Closing Date and
all other outstanding shares of the Common Stock of the Company have
been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Securities except as have been validly
waived;
(iv) There are no contracts, agreements or understandings known
to such counsel between the Company and any person granting such
person the right to require the Company to file a registration
statement under the 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
Act, which have not been validly waived with respect to this offering
of the Offered Securities;
(v) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940;
(vi) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Offered Securities by the
Company, except such as have been obtained and made under the Act and
such as may be required under state securities laws;
10
<PAGE>
(vii) The execution, delivery and performance of this Agreement
and the issuance and sale of the Offered Securities will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any governmental agency or body or any court having jurisdiction
over the Company or any subsidiary of the Company or any of their
properties, or any material agreement or instrument to which the
Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or by-laws
of the Company or any such subsidiary, and the Company has full power
and authority to authorize, issue and sell the Offered Securities as
contemplated by this Agreement;
(viii) Except as disclosed in the Prospectus, to such counsel's
knowledge, there are no pending actions, suits or proceedings against
or affecting the Company, any of its subsidiaries or any of their
respective properties that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect, or would materially and adversely affect the
ability of the Company to perform its obligations under this
Agreement, or which are otherwise material in the context of the sale
of the Offered Securities; and no such actions, suits or proceedings
are threatened or, to such counsel's knowledge, contemplated;
(ix) The Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion, the
Additional Registration Statement (if any) was filed and became
effective under the Act as of the date and time (if determinable)
specified in such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in
such opinion on the date specified therein or was included in the
Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the knowledge of such counsel,
no stop order suspending the effectiveness of a Registration Statement
or any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Act, and each Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective effective or
issue dates, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations;
(x) This Agreement has been duly authorized, executed and
delivered by the Company;
(xi) The Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 1999, the Company's Quarterly Report on Form 10-Q
for the quarters ended June 30, 1999 and September 30, 1999, the
Company's Current Report on Form 8-K dated October 12, 1999, the
Company's Proxy Statement dated July 14, 1999 for the Annual Meeting
of Shareholders held on August 20, 1999, and any filing made by the
Company with the Commission under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act from the date of this Agreement until the offering
of the Offered Securities has been completed (other than the financial
statements or other financial data contained therein), when they were
filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act and the Rules and
Regulations; and
(xii) Such counsel shall also state that it has no reason to
believe that any part of a Registration Statement or any amendment
thereto, as of its effective date or as of such Closing Date,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto, as of its issue date or as of such
Closing Date, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; the descriptions in the Registration
Statements and Prospectus of statutes, legal and governmental
proceedings and contracts and other documents are accurate and fairly
present the information required to be shown; and such counsel does
not know of any legal or governmental proceedings required to be
described in a Registration Statement or the Prospectus which are not
described as required or of any contracts or documents of a character
required to be described in a Registration Statement or the Prospectus
or to be filed as exhibits to a
11
<PAGE>
Registration Statement which are not described and filed as required;
it being understood that such counsel need express no opinion as to
the financial statements or other financial data contained or
incorporated by reference in the Registration Statements or the
Prospectus.
In rendering such opinion, Wilson Sonsini Goodrich & Rosati, Professional
Corporation, may rely as to matters governed by the law of states other than
Delaware or Federal laws or local counsel in such jurisdictions, provided that
in each case such counsel shall state that they believe they and the
Underwriters are justified in relying on such local counsel.
(d)(2) The Representatives shall have received an opinion, dated such
Closing Date, of Mary K. Simmons, in-house counsel for the Company, to the
effect that:
(i) The Company and its subsidiaries own, possess or can acquire
on reasonable terms, adequate trademarks, trade names and other rights
to inventions, know-how, patents, copyrights, confidential information
and other intellectual property necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any such intellectual property rights that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and
(ii) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of
its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and no
such actions, suits or proceedings are threatened or, to such
counsel's knowledge, contemplated.
(e) The Representatives shall have received from Gray Cary Ware &
Freidenrich LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the validity of the Offered
Securities delivered on such Closing Date, the Registration Statements, the
Prospectus and other related matters as the Representatives may require,
and the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(f) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that: the representations and warranties of the Company in this Agreement
are true and correct; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to such Closing Date; no stop order suspending the
effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by
the Commission; the Additional Registration Statement (if any) satisfying
the requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing fee in
accordance with Rule 111(a) or (b) under the Act, prior to the time the
Prospectus was printed and distributed to any Underwriter; and, subsequent
to the date of the most recent financial statements in the Prospectus,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(g) The Representatives shall have received a letter, dated such
Closing Date, of KPMG Peat Marwick LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than three days prior to such
Closing Date for the purposes of this subsection.
12
<PAGE>
(h) At the date of this Agreement, the Representatives shall have
received an agreement substantially in the form of Exhibit A hereto signed
by each of the Company's directors and executive officers.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. CSFBC may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder,
whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless each Underwriter, its partners, directors and officers and
each person, if any, who controls such Underwriter within the meaning of Section
15 of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below; and provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus (exclusive of material incorporated by reference) if the Company
had previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any who
controls the Company within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such 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 by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the paragraph
under the caption "Underwriting" and the information contained in the ________
paragraph under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party
13
<PAGE>
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act by or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is 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 Securities
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 in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities 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 shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed a Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of
14
<PAGE>
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company, except as provided in Section 9 (provided that if such default occurs
with respect to Optional Securities after the First Closing Date, this Agreement
will not terminate as to the Firm Securities or any Optional Securities
purchased prior to such termination). As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Offered Securities have been purchased hereunder
the representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. If the purchase of the Offered Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 8 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 6(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, New York 10010-3629, Attention: Investment Banking
Department--Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at Microchip Technology
Incorporated, 2355 West Chandler Boulevard, Chandler, Arizona 85224, Attention:
C. Philip Chapman; provided, however, that any notice to an Underwriter pursuant
to Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CSFBC will be binding
upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company and each Underwriter hereby submit to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
15
<PAGE>
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
MICROCHIP TECHNOLOGY INCORPORATED
By............................
Name..........................
Title.........................
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH & CO.
PRUDENTIAL SECURITIES INCORPORATED
BANCBOSTON ROBERTSON STEPHENS INC.
Acting on behalf of themselves and as the
Representatives of the several Underwriters
By CREDIT SUISSE FIRST BOSTON CORPORATION
By..............................
Name............................
Title..........................
16
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Underwriter Firm Securities
----------- ---------------
<S> <C>
Credit Suisse First Boston Corporation.................
Merrill Lynch & Co.
Prudential Securities Incorporated
BancBoston Robertson Stephens Inc.
---------------
Total...............................
</TABLE>
17
<PAGE>
EXHIBIT A
18
<PAGE>
EXHIBIT 5.1
OPINION OF WILSON SONSINI GOODRICH & ROSATI, PROFESSIONAL CORPORATION
December 6, 1999
Microchip Technology Incorporated
2355 West Chandler Boulevard
Chandler, AZ 85224-6199
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by you
with the Securities and Exchange Commission on or about December 7, 1999 (as
such may thereafter be amended or supplemented, the "Registration Statement")
in connection with the registration under the Securities Act of 1933, as
amended, of 1,265,000 shares of your Common Stock, $.001 par value (the
"Stock"). The Stock includes 1,265,000 shares to be issued by the Company
including an over-allotment option granted to the Underwriters to purchase
165,000 shares. As your legal counsel, we have examined the proceedings being
taken by you relating to the issuance and sale of the Stock.
It is our opinion that the Stock, when issued and sold in the manner
referred to in the Registration Statement and in accordance with the
resolutions adopted by the Board of Directors of the Company, 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 further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich &
Rosati, Professional Corporation
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Microchip Technology, Inc.:
We consent to incorporation by reference in the registration statement on
Form S-3 of Microchip Technology, Inc. of our report dated April 20, 1999,
relating to the consolidated balance sheets of Microchip Technology, Inc. as of
March 31, 1999 and 1998, and the related consolidated statements of operations,
cash flows and stockholders' equity for each of the years in the three-year
period ended March 31, 1999, which report appears in the March 31, 1999 annual
report on Form 10-K of Microchip Technology, Inc., and to the reference to our
firm under the heading "Experts" therein.
/s/ KPMG LLP
Phoenix, Arizona
December 8, 1999
