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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
TELCOM SEMICONDUCTOR, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.001 PER SHARE
(Title of Class of Securities)
87921P107
(CUSIP Number)
Mary K. Simmons
Microchip Technology Incorporated
2355 W. Chandler Boulevard
Chandler, Arizona 85224-6199
(480) 792-7200
Copies to:
Michael J. Kennedy
Wilson Sonsini Goodrich & Rosati
Professional Corporation
One Market, Spear Tower
San Francisco, CA 94105
(415) 947-2000
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
October 26, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Section 240.13d-7(b)
for other parties to whom copies are to be sent.
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*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
CUSIP No. 87921P107
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Microchip Technology I.R.S. Identification No. 86-0629024
Incorporated
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
(b)
N/A
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e).
N/A
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
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7 SOLE VOTING POWER
NUMBER OF SHARES 3,644,587 shares of Common Stock (1)
BENEFICIALLY ---------------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING PERSON 2,269,947 shares of Common Stock (2)
WITH ---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
3,644,587 (1)
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10 SHARED DISPOSITIVE POWER
N/A
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,914,534 shares of Common Stock (1)(2)
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.2% (3)
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14 TYPE OF REPORTING PERSON*
CO
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* See Instructions.
(1) 3,644,587 shares of TelCom Semiconductor, Inc. ("TelCom") common stock
("TelCom Common Stock") are subject to a stock option agreement
between Microchip Technology Incorporated ("Microchip") and TelCom.
This option is exercisable under certain circumstances in connection
with a termination of the Merger Agreement discussed in Items 3 and 4
below. Were it to be exercised, based on the number of shares of
TelCom Common Stock outstanding as of October 26, 2000, the Option
shares would represent approximately 19.9% of the outstanding TelCom
Common Stock subsequent to the exercise of the Option.
(2) 2,269,947 shares of TelCom Common Stock are subject to voting
agreements entered into by Microchip and certain stockholders of
TelCom (discussed in Items 3 and 4 below). Microchip expressly
disclaims beneficial ownership of any of the shares of TelCom Common
Stock covered by the Voting Agreements. Based on the number of shares
of TelCom Common Stock outstanding as of October 26, 2000, the number
of shares of TelCom Common Stock covered by the Voting Agreements
represents approximately 12.5% of the outstanding TelCom Common Stock.
(3) Assuming the exercise of all shares subject to the stock option
described above.
ITEM 1. SECURITY AND ISSUER.
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This statement relates to the common stock, par value $0.001 per share
(the "TelCom Common Stock"), of TelCom Semiconductor, Inc., a Delaware
corporation ("TelCom"). The principal executive offices of TelCom are located
at 1300 Terra Bella Avenue, Mountain View, California 94043.
ITEM 2. IDENTITY AND BACKGROUND.
The name of the corporation filing this statement is Microchip Technology
Incorporated, a Delaware corporation ("Microchip"). Microchip is a developer and
manufacturer of semiconductor products. Microchip's principal business address
is 2355 W. Chandler Boulevard, Chandler, Arizona 85224-6199. The address of
Microchip's executive offices is the same as the address of its principal
business.
Set forth on Schedule A is the name of each of the directors and
executive officers of Microchip along with the present principal occupation or
employment of such directors and executive officers and the name, principal
business and address if any corporation or other organization in which such
employment is conducted, as of the date hereof to Microchip's knowledge. To
Microchip's knowledge, each of the individuals identified on Schedule A is a
citizen of the United States.
During the last five years neither Microchip nor, to the best of
Microchip's knowledge, any of the other entities or individuals referred to in
Schedule A has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
During the last five years neither Microchip nor, to the best of
Microchip's knowledge, any of the other entities or individuals referred to in
Schedule A was a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to an Agreement and Plan of Merger dated as of October 26, 2000
(the "Merger Agreement"), among Microchip, Matchbox Acquisition Corp., a
Delaware corporation and a wholly-owned subsidiary of Microchip ("Merger Sub")
and TelCom Semiconductor, Inc. ("TelCom"), and subject to the conditions set
forth therein (including approval by stockholders of TelCom), Merger Sub will
merge with and into TelCom and TelCom will become a wholly-owned subsidiary of
Microchip (such events constituting the "Merger"). Once the Merger is
consummated, Merger Sub will cease to exist as a corporation and all of the
business, assets, liabilities and obligations of Merger Sub will be merged into
TelCom with TelCom remaining as the surviving corporation (the "Surviving
Corporation").
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As a condition and inducement for Microchip to enter into the Merger
Agreement and in consideration thereof, TelCom granted to Microchip an option
(the "Option") to acquire up to 3,644,587 shares of TelCom Common Stock at a
purchase price of $15.00 per share pursuant to a stock option agreement (the
"Stock Option Agreement"). The Stock Option Agreement was entered into between
Microchip and TelCom on October 26, 2000, and the Option becomes exercisable if
the Merger Agreement is terminated under certain circumstances. Microchip did
not pay any additional consideration to TelCom in connection with the Stock
Option Agreement.
As a condition and inducement for Microchip to enter into the Merger
Agreement and in consideration thereof, certain stockholders of TelCom entered
into individual voting agreements with Microchip (collectively the "Voting
Agreements") whereby each such stockholder (collectively, the "TelCom Voting
Agreement Stockholders") agreed, severally and not jointly, to vote all of the
shares of TelCom Common Stock (plus any additional shares of TelCom Common Stock
acquired upon the exercise of options, warrants and other rights to acquire
shares of TelCom Common Stock) beneficially owned by him at every TelCom
stockholders meeting and every written consent in lieu of such a meeting in
favor of the adoption of the Merger Agreement. Microchip did not pay additional
consideration to any Voting Agreement Stockholder in connection with the
execution and delivery of the Voting Agreements.
References to, and descriptions of, the Merger and the Merger Agreement
as set forth in this Schedule 13D are qualified in their entirety by reference
to the copy of the Merger Agreement included as Exhibit 2.1 to the Form 8-K
filed by Microchip on October 30, 2000.
References to, and descriptions of, the Stock Option Agreement and the
Voting Agreements as set forth in this Schedule 13D are qualified in their
entirety by reference to copies of the forms of the Stock Option Agreement and
Voting Agreement included as Exhibits 2 and 3 to this Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
(a) Not applicable.
(b) The information set forth in Item 3 is incorporated by reference
herein.
As described in Item 3 above, this statement relates to the Merger of
Merger Sub, a wholly-owned subsidiary of Microchip, with and into TelCom in a
statutory merger pursuant to the applicable provisions of Delaware Law. At the
effective time of the Merger (the "Effective Time"), the separate existence of
Merger Sub will cease and TelCom will continue as the Surviving Corporation and
as a wholly-owned subsidiary of Microchip. Each holder of outstanding TelCom
Common Stock will receive, in exchange for each share of TelCom Common Stock
held by such holder, a number of shares of Microchip Common Stock equal in
value to $15.00 divided by the average closing price
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of Microchip common stock for the ten trading days preceding the closing of
the Merger (the "Exchange Ratio"); provided that if such average closing price
is less than $28.30 per share, the holders of TelCom common stock will receive
.53 shares of Microchip common stock for each share of TelCom common stock,
and, provided further, that if such average closing price is greater than
$32.61 per share, the holders of TelCom common stock will receive .46 shares
of Microchip common stock for each share of TelCom common stock. Microchip
will assume each outstanding option to purchase TelCom Common Stock under
TelCom's stock option plans. Furthermore, all rights to purchase shares of
TelCom Common Stock under TelCom's Employee Stock Purchase Plan shall be
converted into rights to purchase shares of Microchip Common Stock and shall
be assumed by Microchip.
Pursuant to the Stock Option Agreement, TelCom agreed to grant Microchip
an option to acquire up to 3,644,587 shares of TelCom Common Stock at a purchase
price of $15.00 per share. The Stock Option Agreement becomes exercisable if the
Merger Agreement is terminated under certain circumstances. The Stock Option
Agreement expires upon the earliest of (i) the Effective Time, (ii) twelve (12)
months following the date on which the Merger Agreement is terminated pursuant
to Section 7.01(b) (by either Microchip or TelCom as a result of the Merger not
being consummated by April 30, 2001) or 7.01(d)(i) (by either Microchip or
TelCom as a result of the stockholders of TelCom not approving the Merger), if
no event causing the "Termination Fee" (as that term is defined in the Merger
Agreement) to become payable pursuant to Section 7.03(b)(ii) of the Merger
Agreement has occurred, (iii) twelve (12) months following the date on which the
Merger Agreement is terminated by Microchip as a result of a "Triggering Event"
(as that term is defined in the Merger Agreement), (iv) in the event the Merger
Agreement has been terminated pursuant to Section 7.01(b) or 7.01(d)(i) thereof
and the Termination Fee became payable pursuant to Section 7.03(b)(ii) thereof,
twelve (12) months after payment of the Termination Fee; and (v) the date on
which the Reorganization Agreement is terminated other than pursuant to Sections
7.01(b), 7.01(d)(i) or as a result of a Triggering Event.
Pursuant to the Voting Agreements, the TelCom Voting Agreement
Stockholders have agreed to vote the shares of TelCom Common Stock (plus any
additional shares of TelCom Common Stock acquired upon the exercise of options,
warrants and other rights to acquire shares of TelCom Common Stock) beneficially
owned by them at every TelCom stockholders meeting and every written consent in
lieu of such a meeting in favor of the adoption of the Merger Agreement. A
Voting Agreement terminates upon the earlier to occur of (i) such date and time
as the Merger Agreement shall have been terminated pursuant to its terms, or
(ii) the Effective Time.
In connection with the Merger Agreement, certain stockholders of TelCom
(each a "TelCom Affiliate") have each entered into an affiliate agreement with
Microchip (collectively, the "TelCom Affiliate Agreements") pursuant to which
each TelCom Affiliate has agreed not to sell, transfer, or otherwise dispose
of or reduce such TelCom Affiliate's risk with respect to any shares of TelCom
stock or shares of Microchip stock
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during the period commencing thirty days prior to the Effective Time and
ending at such time as financial results covering at least 30 days of combined
operations of TelCom and Microchip have been published by Microchip. Pursuant
to the TelCom Affiliate Agreements, each TelCom Affiliate has also agreed that
any sale, transfer or other disposition of TelCom Common Stock by such
Affiliate will be made in accordance with Rule 145 promulgated by the
Commission under the Securities Act of 1933, as amended.
The foregoing summary of the Affiliate Agreements is qualified in its
entirety by reference to the copy of a form of the TelCom Affiliate Agreement
included as Exhibit 4 to this Schedule 13D and incorporated herein in its
entirety by reference.
The purpose of the transactions under the Stock Option Agreement, the
Voting Agreements and the Affiliate Agreements is to enable TelCom and Microchip
to consummate the transactions contemplated under the Merger Agreement.
(c) Not applicable.
(d) Not applicable.
(e) Other than as a result of the Merger described in Item 3 above, not
applicable.
(f) Not applicable.
(g) In connection with the Merger, TelCom has amended the TelCom Rights
Plan (as defined in the Merger Agreement) so that the Merger Agreement, the
Stock Option Agreement and the Voting Agreement, and any transactions
contemplated thereby (including the acquisition of shares pursuant to exercise
of the Option) will not result in the grant of rights to any person under the
TelCom Rights Plan.
(h) - (i) Not applicable.
(j) Not applicable.
References to, and descriptions of, the Merger and the Merger Agreement
as set forth in this Schedule 13D are qualified in their entirety by reference
to the copy of the
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Merger Agreement included as Exhibit 2.1 to the Form 8-K filed by Microchip on
October 30, 2000.
References to, and descriptions of, the Stock Option Agreement, the
Voting Agreements and the Affiliate Agreements as set forth in this Schedule 13D
are qualified in their entirety by reference to the copies of the forms of the
Stock Option Agreement, the Voting Agreements and the Affiliate Agreements
included as Exhibits 2-5 to this Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) - (b) The information set forth and incorporated by reference in
Items 3 and 4 is incorporated by reference herein.
If pursuant to the Stock Option Agreement the Option becomes exercisable,
Microchip would have the right to acquire up to 3,644,587 shares of TelCom
Common Stock, which constitutes approximately 19.9% of the issued and
outstanding shares of TelCom Common Stock based on the number of shares of
TelCom Common Stock outstanding as of October 26, 2000. In the event that
Microchip exercises the Option, it would have the sole power to vote the shares
acquired under the Option and would then be entitled to all rights as a
stockholder of TelCom as to the shares. Microchip disclaims any beneficial
ownership of the shares of TelCom Common Stock which are covered by the Stock
Option Agreement.
As a result of the Voting Agreements, Microchip may be deemed to be the
beneficial owner of at least 2,269,947 shares of TelCom Common Stock. Such
TelCom Common Stock constitutes approximately 12.5% of the issued and
outstanding shares of TelCom Common Stock based on the number of shares of
TelCom Common Stock outstanding as of October 26, 2000. Microchip may be deemed
to have the shared power to vote such shares with respect to those matters
described above. However, Microchip (i) is not entitled to any rights as a
stockholder of TelCom as to the shares and (ii) disclaims any beneficial
ownership of the shares of TelCom Common Stock which are covered by the Voting
Agreements.
To Microchip's knowledge, no person listed in Schedule A has an ownership
interest in TelCom.
Set forth on Schedule B are the names of the stockholders of TelCom that
have entered into a Voting Agreement with Microchip, and their present principal
occupation or employment, including the name, principal business and address of
any corporation or other organization in which such employment is conducted, to
Microchip's knowledge.
(c) To the knowledge of Microchip, no transactions in the class of
securities reported have been effected during the past sixty days by any person
named pursuant to Item 2.
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(d) To the knowledge of Microchip, no other person has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of shares of TelCom Common Stock obtainable by Microchip upon
exercise of the Option.
(e) Not applicable.
References to, and descriptions of, the Stock Option Agreement, the
Voting Agreements and the Affiliate Agreements as set forth in this Schedule 13D
are qualified in their entirety by reference to the copies of the forms of the
Stock Option Agreement, the Voting Agreements and the Affiliate Agreements
included as Exhibits 2-5 to this Schedule 13D.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The information set forth and incorporated by reference in Items 3, 4 and
5 is incorporated by reference herein.
Other than the Merger Agreement and the exhibits thereto, including the
Stock Option Agreement, the Voting Agreements and the Affiliate Agreements
described herein, to the knowledge of Microchip, there are no contracts,
arrangements, understandings or relationships among the persons named in Item 2
and between such persons and any person with respect to any securities of
TelCom, including but not limited to transfer or voting of any of the
securities, finder's fees, joint ventures, loan or option arrangement, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
The following documents are filed as exhibits:
1. *Agreement and Plan of Reorganization, dates as of August 8, 2000, by and
among Microchip Technology Incorporated, Matchbox Acquisition Corp. and
TelCom Semiconductor, Inc.
2. Form of Stock Option Agreement, dated as of October 26, 2000, between
Microchip Technology Incorporated and TelCom Semiconductor, Inc.
3. Form of Voting Agreement, dated as of October 26, 2000, between Microchip
Technology Incorporated and certain stockholders of TelCom Semiconductor,
Inc.
4. Form of Affiliate Agreement, dated as of October 26, 2000, between
Microchip Technology Incorporated and certain stockholders of TelCom
Semiconductor, Inc.
* Incorporated by reference to the 8-K filed by Microchip on October 30, 2000.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 3, 2000 MICROCHIP TECHNOLOGY INCORPORATED
By: /s/ Steve Sanghi
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Steve Sanghi
Chief Executive Officer
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Schedule A
DIRECTORS AND EXECUTIVE OFFICERS OF
MICROCHIP TECHNOLOGY INCORPORATED
The following table sets forth the name, business address and present
principal occupation or employment of each director and executive officer of
Microchip. Except as indicated below, the address of each such person is c/o
Microchip Technology Incorporated, 2355 W. Chandler Boulevard, Chandler, Arizona
85224-6199. To Microchip's knowledge, each of the individuals identified below
is a citizen of the United States.
Name and Title in Microchip Present Principal Occupation and
Technology Incorporated Name of Employer
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Director of Microchip:
Steve Sanghi
Chief Executive Officer, President
and Chairman of the Board of Directors
Albert J. Hugo-Martinez Business Advisor/Consultant
Director Hugo-Martinez & Associates
1378 Via Alta
Del Mar, CA 92014
L.B. Day President
Director L.B. Day & Co.
806 S.W. Broadway
Floor 11
Portland, OR 97205
Matthew W. Chapman President, Chief Executive
Director Officer and Chairman
Global Services Networks, Inc.
400 SW 6th Avenue
Portland, OR 97204
Wade F. Meyercord Senior Vice President and
Director Chief Financial Officer
RioPort.com, Inc.
2895 Zanker Road
San Jose, CA 95134
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Executive Officers of Microchip (who do not also serve as
Directors of Microchip):
Gordon W. Parnell
Chief Financial Officer
Timothy B. Billington
Vice President, Manufacturing and Technology Groups
George P. Rigg
Vice President, Advanced Microcontroller and Systems Group
Mitchell R. Little
Vice President, Worldwide Sales
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Schedule B
The following table sets forth the name and present principal occupation or
employment of each TelCom stockholder that entered into a voting agreement
with Microchip. Except as indicated below, the business address of each such
person is c/o TelCom Semiconductor, Inc., 1300 Terra Bella Avenue, Mountain
View, CA 94043.
<TABLE>
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Name and Business Address Present Principal Occupation Shares Beneficially Owned
or Employment
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<S> <C> <C>
Directors of TelCom:
Phillip M. Drayer Chairman of the Board of Directors 865,331
Robert T. Gargus President and Chief Executive 404,465
Officer
Frank Gill 28,000
3000 Sandhill Road
Building 2, Suite 290
Menlo Park, CA 94025
Donald E. Fowler Consultant 70,000
10 Ohlone
Portola Valley, CA 94025
T. Peter Thomas General Partner, Institutional 90,933
Venture Partners
Executive Officers of TelCom
(who do not also serve as
Directors of TelCom):
Edward D. Mitchell Executive Vice President and Chief 250,500
Technical Officer
Mark M. Brown Vice President, Finance and Chief 100,000
Financial Officer
Thomas J. Grune Vice President, Sales 136,520
Edward Browder Vice President, Operations 203,413
Kenneth Rose Chief Accounting Officer and 120,785
Corporate Controller
</TABLE>
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