<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 6, 2000
REGISTRATION NO. 333-
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--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ATMEL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 77-0051991
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
2325 ORCHARD PARKWAY
SAN JOSE, CALIFORNIA 95131
(408) 441-0311
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
DONALD COLVIN
VICE PRESIDENT, FINANCE
AND CHIEF FINANCIAL OFFICER
ATMEL CORPORATION
2325 ORCHARD PARKWAY
SAN JOSE, CALIFORNIA 95131
(408) 441-0311
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
MARK A. BERTELSEN, ESQ. DAVID HUBB, ESQ.
JOSEPH F. DANIELS, ESQ. MARK CAWLEY, ESQ.
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
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ____________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) REGISTRATION FEE
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Common Stock $0.001 par value... 4,600,000 shares $18.63 $85,698,000 $22,624
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</TABLE>
(1) Includes 600,000 shares which the underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for the purpose of computing the amount of the registration
fee based on the last sale price for the Common Stock as reported on the
Nasdaq National Market on August 30, 2000 pursuant to Rule 457(c) under the
Securities Act of 1933.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
PROSPECTUS (Subject to Completion)
Issued September , 2000
4,000,000 Shares
LOGO
COMMON STOCK
------------------------
ATMEL CORPORATION IS OFFERING 4,000,000 SHARES OF ITS COMMON STOCK IN A GLOBAL
OFFERING. THE GLOBAL OFFERING CONSISTS OF A PUBLIC OFFERING IN THE UNITED
STATES, A PUBLIC OFFERING IN FRANCE, AND AN OFFERING TO INSTITUTIONAL INVESTORS
IN THE REST OF THE WORLD. CONCURRENT WITH THE OFFERING, WE ARE APPLYING FOR A
LISTING OF THESE SHARES ON THE PREMIER MARCHE OF THE PARIS STOCK EXCHANGE.
------------------------
OUR COMMON STOCK IS QUOTED ON THE NASDAQ NATIONAL MARKET UNDER THE SYMBOL
"ATML." ON, SEPTEMBER 5, THE REPORTED LAST SALE PRICE OF OUR COMMON STOCK ON THE
NASDAQ NATIONAL MARKET WAS $19 3/8 PER SHARE.
------------------------
INVESTING IN THE COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 6.
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PRICE $ A SHARE AND E A SHARE
------------------------
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND ATMEL
PUBLIC COMMISSIONS CORPORATION
-------- --------------- -----------
<S> <C> <C> <C>
Per Share.............................................. $ $ $
Total.................................................. $ $ $
</TABLE>
Atmel Corporation has granted the underwriters the right to purchase up to an
additional 600,000 shares to cover over-allotments.
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on
, 2000.
------------------------
MORGAN STANLEY DEAN WITTER ODDO PINATTON
, 2000
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Prospectus Summary.................... 1
The Offering.......................... 4
Summary Consolidated Financial
Information......................... 5
Risk Factors.......................... 6
Special Note Regarding Forward-Looking
Statements.......................... 14
Use of Proceeds....................... 15
Dividend Policy....................... 15
Price Range of Common Stock........... 15
</TABLE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Capitalization........................ 16
Selected Consolidated Financial
Data................................ 17
Quarterly Consolidated Financial
Data................................ 18
Market Information.................... 19
Share Certificates and Transfer....... 20
Taxation.............................. 21
Underwriters.......................... 24
Legal Matters......................... 25
Experts............................... 25
Where You Can Find More Information... 25
</TABLE>
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
information different from that contained herein. We are offering to sell, and
seeking offers to buy, shares of common stock only in jurisdictions where offers
and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of the common stock.
This prospectus has not been and will not be submitted to the clearance
procedures of the French Commission des Operations de Bourse and accordingly may
not be used in connection with any offer or sale of our common stock in France.
For the purposes of the French public offering and the listing of our common
stock on the Paris Stock Exchange, we prepared a preliminary prospectus in
French that has received the visa (no. ) of the Commission des
Operations de Bourse dated September , 2000.
In this prospectus "Atmel," "we," "us" and "our" refer to Atmel Corporation
and its subsidiaries. ALL OF THE INFORMATION IN THIS PROSPECTUS GIVES EFFECT TO
TWO-FOR-ONE STOCK SPLITS EFFECTED IN THE FORM OF A 100% STOCK DIVIDEND TO
STOCKHOLDERS OF RECORD AS OF DECEMBER 3, 1999 AND AUGUST 11, 2000.
------------------------
PRESENTATION OF FINANCIAL INFORMATION
We publish our consolidated financial statements in U.S. dollars. As used
in this prospectus, "dollar" or "$" means the currency of the United States of
America, and "Euro" or "E" means the Euro, the common currency of the eleven
member states of the European Union.
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<PAGE> 4
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information concerning our company and the common stock being sold in this
offering and our financial statements and related material appearing in this
prospectus and in the documents incorporated by reference in this prospectus.
Because this is only a summary, you should read the rest of this prospectus,
including the documents incorporated by reference in this prospectus, before you
invest in our common stock. Read this entire prospectus carefully, especially
the risks described under "Risk Factors."
We are a global semiconductor company that designs, develops, manufactures
and sells a wide range of highly-integrated semiconductor integrated circuit
products. We have been instrumental in developing and commercializing
non-volatile memory, or memory that continues to store information after power
is turned off. We have leveraged our expertise in non-volatile memories and
incorporated it with new technologies to meet the evolving and growing needs of
our customers. We offer complex system-on-a-chip solutions for a broad array of
markets by combining our leading-edge complementary metal-oxide semiconductor,
or CMOS, bipolar CMOS, or BiCMOS, and silicon geranium, or SiGe, process
technologies with system-level building blocks such as microcontrollers, digital
signal processors, or DSPs, analog cells and non-volatile memory. We believe our
capabilities in these areas enable our customers to rapidly introduce
leading-edge electronic products that are differentiated by higher performance,
advanced features, lower cost, smaller form factor, longer battery life and/or
more memory. Our products are used primarily in the following markets:
Communications. Communications, including wireless and wireline
telecommunications and data networking, is currently our largest end-user
market, representing nearly half of our revenues for the year ended December 31,
1999. The rapid global acceptance of the wireless phone has resulted in an
increased demand for our products. For the wireless market, we provide
non-volatile memory, microcontrollers and ASICs that are used in GSM and CDMA
mobile phones and their base stations, as well as two-way pagers, mobile radios
and 900 MHz cordless phones, and their respective base stations. We also have a
complete range of products based on Bluetooth, a new short-range wireless
protocol that enables instant connectivity between electronic devices. High
production volumes in the wireless communications market have also made it more
cost-effective for our customers to incorporate certain advanced technologies
into their lower-cost or lower-volume products, such as those in the consumer
electronics segment. Our principal customers in the wireless market include
Ericsson, Kenwood, Lucent, Motorola, Nokia, Panasonic, Philips, Qualcomm,
Samsung and Sony.
The data networking and wireline telecommunications markets are
experiencing significant growth based on the rapid adoption of the Internet. For
these markets, we provide ASIC, non-volatile memory and programmable logic
products that are used in the switches, routers, cable modem termination systems
and DSL access multiplexers that are currently being used to build Internet
infrastructure. Our principal data networking and wireline telecommunications
customers include Alcatel, Cisco, Lucent, Nortel, Siemens, 3Com and Xircom.
Consumer Electronics. Our products are also used in a broad variety of
consumer electronics products. We provide multimode audio processors and
MPEG2-based decoders with programmable transport for complex digital audio
streams used in digital TVs, set-top boxes and DVD players. For digital cameras,
we provide a single-chip digital camera solution. We provide demodulators and
decoders for cable modems. We also offer medium-access controllers for wireless
LANs and baseband controllers and network protocol stacks for voice-over
Internet protocol, or VoIP, telephone terminals. In addition, we provide secure,
encryption-enabled, integrated, tamper-resistant circuits for smart cards. Our
principal consumer electronics customers include GemPlus, LG Electronics,
Matsushita, Mitsubishi, Philips, Samsung, Schlumberger, Sony and Toppan.
Computing, Storage and Imaging. The computing and computing peripherals
markets are also growing because of the rapid adoption of the Internet. For
computing applications, we provide Flash, universal serial bus, or USB, hubs and
ASICs for personal computers and servers. For storage applications, we provide
servo controllers, read channels and data interfaces for data storage
subsystems, hard drives and DVD players. We provide ASICs, non-volatile memory
and microcontrollers for laser printers, inkjet printers, copy machines
1
<PAGE> 5
and scanners. Our principal customers in these markets include ACER, Compaq,
FujiFilm, Hewlett-Packard, IBM, Lexmark, Maxtor, Microsoft, Polaroid, Seagate,
Toshiba and Western Digital.
We manufacture more than 90% of our products in our own wafer fabrication
facilities, or fabs. We believe that our ability to manufacture a broad range of
leading-edge products allows us to offer higher performance, better service and
shorter production cycles at a more competitive cost. We strive to continuously
expand and upgrade our facilities to meet customer demand. We have developed a
broad portfolio of manufacturing capabilities across multiple process
technologies, including our proprietary CMOS, Logic, CMOS Logic, bipolar,
BiCMOS, SiGe, SiGe BiCMOS, Analog, BCDMOS and radiation tolerant process
technologies. We have strategic relationships with industry leaders like
Anadigics and M/A-COM to develop products using the SiGe process technology, and
today have many foundry customers for SiGe products. We consider SiGe a key
technology for our success in providing products to serve the telecommunication
and data networking markets.
Our wafer fabrication facilities are as follows:
- Colorado Springs, Colorado: two 6-inch wafer fabs;
- Rousset, France: 8-inch wafer fab;
- Heilbronn, Germany: 6-inch wafer fab;
- Nantes, France: 6-inch wafer fab; and
- Irving, Texas: 8-inch wafer fab (equipment not yet installed).
Our business has four segments, each of which requires different design,
development and marketing resources to produce and sell semiconductor integrated
circuits.
- ASIC -- The products in our ASIC segment include full custom
application-specific integrated circuits, custom gate arrays and
semi-custom cell-based integrated circuits designed to meet specialized
customer requirements for their high-performance devices in a broad
variety of applications.
- Logic -- The products in our Logic segment include microcontrollers,
eraseable programmable logic devices, or EPLDs, and field programmable
gate arrays, or FPGAs, for sale to customers who use them in a broad
variety of applications.
- Non-volatile Memories -- The products in our Non-volatile Memories
segment include Flash, electrically eraseable programmable read-only
memories, or EEPROMs, and eraseable programmable read only memories, or
EPROMs, for use in a broad variety of customer applications.
- Temic -- The Temic segment is a wholly-owned European subsidiary
producing analog, microcontroller and specialty products to service the
automotive, telecommunications, consumer and industrial markets. Although
some of its products overlap with one or more of the other segments, the
Temic segment is managed as a discrete business.
During the first six months of 2000, 34% of our sales were made to
customers in North America, 30% to customers in Europe, 33% to customers in Asia
and 3% to customers in other regions. We distribute our products directly
through 17 U.S. sales offices and 24 international sales offices. In addition,
we use distributors for indirect distribution, including All American, Arrow
Electronics, Avnet, Insight and Pioneer.
We were originally incorporated in California in December 1984. In October
1999 we were reincorporated in Delaware. Our principal offices are located at
2325 Orchard Parkway, San Jose, California 95131 and our telephone number is
(408) 441-0311.
RECENT DEVELOPMENTS
TCS Acquisition. In May 2000, we acquired Thomson-CSF Semiconducteurs
Specifique, or TCS, which had been a wholly-owned subsidiary of Thomson-CSF.
TCS, which has been renamed Atmel Grenoble, specializes in the development and
manufacture of ASICs, including image sensors, as well as analog, digital
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<PAGE> 6
and radio frequency ASICs, and products manufactured using SiGe processes. TCS
products are used in such applications as digital cameras, fingerprint sensors,
and GPS and RF chips, which we believe will provide us with an enhanced ability
to provide integrated solutions for the wireless and consumer end markets.
Redemption of Outstanding Convertible Notes. On June 2, 2000, we redeemed
our 3.25% Convertible Subordinated Guaranteed Step-Up Notes due in 2002. The
aggregate principal amount outstanding was $150 million. Note holders had the
option to convert their notes into shares of our common stock or redeem them for
cash. We redeemed notes with a principal amount of $2,000 for $2,161, and the
holders of notes in the remaining principal amount elected to convert their
notes into 8,450,578 shares of our common stock.
Stock Split. On July 14, 2000, our board of directors approved a
two-for-one stock split, to be effected in the form of a 100% stock dividend.
Stockholders of record at the close of business on August 11, 2000 were issued a
certificate representing one additional share for each share already held. These
certificates were distributed on August 25, 2000.
3
<PAGE> 7
THE OFFERING
Common stock offered....... We are offering a total of 4,000,000 shares in a
public offering made by this prospectus in the
United States, an open price offering (offre a prix
ouvert) and a global placement (placement global)
in France under a separate French prospectus, and
an offering to institutional investors outside the
United States and France.
Over-allotment option...... 600,000 shares
Public offering price...... $ and E a share
The public offering price in dollars has been
determined by the underwriters in consultation with
us. The public offering price in Euros has been
determined by converting the public offering price
in dollars using the Key Currency Cross Rate as of
September , 2000 as quoted in Bloomberg.
Common stock outstanding
after the offering......... 464,945,184 shares(1) will be outstanding
immediately following this offering.
Use of proceeds............ We will use the proceeds of this offering for
working capital and other general corporate
purposes. See "Use of Proceeds."
Lock-up.................... We have agreed to restrictions on the offering and
sale of our shares for a period of 90 days
following this offering. For more details, see
"Underwriters."
Nasdaq National Market
symbol................... ATML
Paris Stock Exchange
Listing.................... We are applying for a listing of the 4,000,000
shares of our common stock offered hereby on the
Premier Marche of the Paris Stock Exchange. We
expect the shares to trade on the Paris Stock
Exchange under the following codes:
- Sicovam:
- ISIN:
- Common Code:
Risk Factors............... See "Risk Factors" starting on page 6 to read about
factors you should consider before buying the
shares.
---------------
(1) Based upon shares outstanding as of June 30, 2000, and assuming no exercise
of options after June 30, 2000. Excludes 17,730,600 shares of common stock
available for grant pursuant to Atmel Corporation's employee stock plans. As
of June 30, 2000, options to purchase 21,493,374 shares of common stock were
outstanding under these plans.
4
<PAGE> 8
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
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1997 1998 1999 1999 2000
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<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net revenues..................... $958,282 $1,111,092 $1,330,161 $601,179 $907,944
Total expenses................... 933,233 1,130,749 1,187,183 551,053 745,501
Operating income (loss).......... 25,049 (19,657) 142,978 50,126 162,443
Income (loss) before taxes....... 6,001 (50,931) 128,821 50,158 161,213
Net income (loss)................ $ 1,801 $ (50,038) $ 53,379 $ 3,034 $103,177
Net income (loss) per share:
Basic.......................... $ .00 $ (.13) $ .13 $ .01 $ .23
======== ========== ========== ======== ========
Diluted........................ $ .00 $ (.13) $ .13 $ .01 $ .22
======== ========== ========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
AS OF JUNE 30, 2000
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ACTUAL AS ADJUSTED(1)
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<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments........... $1,094,441 $1,168,154
Working capital............................................. 1,215,934 1,289,647
Total assets................................................ 3,026,093 3,099,806
Long-term obligations, net of current portion............... 627,151 627,151
Stockholders' equity........................................ 1,671,337 1,745,050
</TABLE>
------------
(1) Adjusted to give effect to the sale of the 4,000,000 shares of common stock
in this offering and an assumed public offering price of $19.38 per share
after deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us.
5
<PAGE> 9
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks described below are not the only ones facing our
company. Additional risks not presently known to us or that we currently believe
are immaterial may also impair our business operations. Our business could be
harmed by any of these risks. The trading price of our common stock could
decline due to any of these risks, and you may lose all or part of your
investment. In assessing these risks, you should also refer to the other
information contained or incorporated by reference in this prospectus, including
our financial statements and related notes.
OUR REVENUE AND OPERATING RESULTS FLUCTUATE SIGNIFICANTLY DUE TO A VARIETY OF
FACTORS, WHICH MAY RESULT IN VOLATILITY OR A DECLINE IN OUR STOCK PRICE
Our future operating results will be subject to quarterly variations based
upon a wide variety of factors, many of which are not within our control. These
factors include:
- the cyclical nature of both the semiconductor industry and the markets
addressed by our products;
- fluctuations in manufacturing yields;
- the timing of introduction of new products;
- the timing of customer orders;
- price erosion;
- changes in mix of products sold;
- the extent of utilization of manufacturing capacity;
- product obsolescence;
- availability of supplies and raw materials;
- price competition and other competitive factors; and
- fluctuations in currency exchange rates.
Any unfavorable changes in any of these factors could harm our operating
results.
In particular, we believe that our future sales growth will depend
substantially on the success of our new products. Our new products are generally
incorporated into our customers' products or systems at the design stage.
However, design wins may precede volume sales by a year or more. We may not be
successful in achieving design wins or any design win may not result in future
revenues, which depend in large part on the success of the customer's end
product or system. We expect the average selling price of each of our products
to decline as individual products mature and competitors enter the market. To
offset average selling price decreases, we rely primarily on reducing costs in
the manufacturing of those products, increasing unit sales to absorb fixed costs
and introducing new, higher priced products which incorporate advanced features
or integrated technologies to address new or emerging markets. To the extent
that such cost reductions and new product introductions do not occur in a timely
manner, our operating results could be harmed. From time to time, our quarterly
revenues and operating results can become more dependent upon orders booked and
shipped within a given quarter and, accordingly, our quarterly results can
become less predictable and subject to greater variability.
In addition, our continued success will depend in large part on the
continued growth of various electronics industries that use semiconductors,
including manufacturers of computers, telecommunications equipment, automotive
electronics, industrial controls, consumer electronics, data networking
equipment and military equipment, and economic growth generally. Our success
will also depend upon a better supply and demand balance within the
semiconductor industry.
In 1997, 1998 and early 1999, the semiconductor industry experienced a
significant downturn, characterized by, among other things, diminished product
demand, production overcapacity and decline of average
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selling prices of products. While our revenues in 1998 increased as compared to
1997, the increase was primarily attributable to the inclusion of revenues from
Temic's business, which we acquired in March 1998. Excluding the results of
Temic, our revenues decreased in 1998 as compared with 1997, reflecting the
cyclical downturn in the worldwide semiconductor industry throughout 1997 and
1998. While sales of our ASIC and logic-related products increased during this
period, continued price reduction of our commodity non-volatile memory products
(caused by continued weakened business conditions and excess manufacturing
capacity in the semiconductor industry) more than offset the impact of higher
sales of ASIC and logic-related products in 1998. These non-volatile memory
products included our commodity EPROMs and Flash memories. These business
conditions in the worldwide semiconductor industry also contributed to our
decision to implement a restructuring plan, which we announced in the second
quarter of fiscal 1998. The restructuring plan, which resulted in a nonrecurring
charge of approximately $66.3 million, included a ten percent work force
reduction and an impairment charge to write down the value of certain
manufacturing equipment and machinery with older process technology. We also
recognized an in-process research and development charge of $23.4 million
relating to the Temic acquisition during the second quarter of fiscal 1998.
IF WE DO NOT SUCCESSFULLY INCREASE OUR MANUFACTURING CAPACITY, WE MAY FACE
CAPACITY CONSTRAINTS THAT COULD HARM OUR BUSINESS
We currently manufacture our products at our wafer fabrication facilities
located in Colorado Springs, Colorado, Heilbronn, Germany, Nantes, France, and
Rousset, France. In addition, we currently expect our new facility in Irving,
Texas, to be operational and producing wafers by the first quarter of 2001. We
believe that we will be able to substantially meet our production needs from
these facilities through the end of the fourth quarter of 2002, although this
date may vary depending on, among other things, our rate of growth. We will be
required to hire, train and manage additional production personnel in order to
increase production capacity as planned. We will also be required to
successfully implement new manufacturing technologies, such as 0.25-micron,
0.18-micron and chemical and mechanical planarization in our wafer manufacturing
facilities to increase our manufacturing capacity and yields. If we cannot
expand our capacity on a timely basis, we could experience significant capacity
constraints that would prevent us from meeting customer demand. In addition, the
depreciation and other expenses that we will incur in connection with the
expansion of our manufacturing capacity may reduce our gross margins in future
periods.
We are exploring alternatives for the further expansion of our
manufacturing capacity, which could likely occur during or after 2000,
including:
- expanding our current wafer fabrication facilities;
- purchasing or building one or more additional wafer fabrication
facilities; and
- entering into strategic relationships to obtain additional capacity.
Any of these alternatives could require a significant investment by us, and
none of the alternatives for expanding our manufacturing capacity may be
available on a timely basis.
The cost of expanding our manufacturing capacity at the Irving, Texas
facility or elsewhere is expected to be funded through a combination of
available cash resources, cash from operations and additional lease, debt or
equity financing. We may not be able to obtain the additional financing
necessary to fund the expansion of our manufacturing facilities.
Expanding our wafer fabrication capacity involves significant risks,
including:
- shortages of materials and skilled labor;
- unavailability of semiconductor manufacturing and testing equipment;
- unforeseen environmental or engineering problems;
- work stoppages;
- approvals and requirements of governmental and regulatory agencies; and
- unanticipated cost increases.
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Any one of these risks could delay the building, equipping and production
start-up of a new facility or the expansion of an existing facility, and could
involve significant additional costs or reduce our anticipated revenues. In
addition, the timing of commencement of operation of our Irving, Texas facility
will depend upon the availability, timely delivery, successful installation and
testing of complex process equipment.
As a result of these and other factors, any expanded or new facility may
not be completed and in volume production on time or within budget. Furthermore,
we may be unable to achieve adequate manufacturing yields in any expanded or new
facility in a timely manner, and our revenues may not increase in proportion to
the anticipated increase in manufacturing capacity associated with any expanded
or new facility.
IF WE ARE UNABLE TO EFFECTIVELY UTILIZE OUR WAFER MANUFACTURING CAPACITY AND
FAIL TO ACHIEVE ACCEPTABLE MANUFACTURING YIELDS, OUR BUSINESS WOULD BE HARMED
The fabrication of our integrated circuits is a highly complex and precise
process, requiring production in a tightly controlled, clean environment. Minute
impurities, difficulties in the fabrication process, defects in the masks used
to print circuits on a wafer or other factors can cause a substantial percentage
of wafers to be rejected or numerous die on each wafer to be nonfunctional. We
may experience problems in achieving acceptable yields in the manufacture of
wafers, particularly in connection with the expansion of our manufacturing
capacity and related transitions. The interruption of wafer fabrication or the
failure to achieve acceptable manufacturing yields at any of our wafer
fabrication facilities would harm our business.
In 1997 and 1998, we made substantial capital expenditures to increase our
wafer fabrication capacity at our facilities in Colorado Springs, Colorado and
Rousset, France, and acquired two wafer fabrication facilities in connection
with our acquisition of Temic. In 1998, our gross margin declined significantly
as a result of the increase in fixed costs and operating expenses related to
this expansion of capacity, and lower product margins in many of our
non-volatile memory products due to severe price decline. In 1999, the declining
gross margin trend reversed, primarily due to a higher unit sales volume over
which to spread fixed costs and operating expenses, the inclusion of Temic's
positive gross margin for all of 1999 compared to only ten months in 1998, and
average selling prices that stabilized in 1999.
The improved market conditions that we experienced in 1999 and the first
six months of 2000 may not continue or may not permit us to fully utilize our
wafer fabrication capacity, and our increases in fixed costs and operating
expenses related to manufacturing overcapacity may harm our operating results.
If net revenues do not continue to increase sufficiently in future periods, our
business could be harmed. We experienced production delays and yield
difficulties in connection with earlier expansions of our wafer fabrication
capacity. Production delays, difficulties in achieving acceptable yields at any
of our fabrication facilities or overcapacity could materially and adversely
affect our operating results.
THE CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY COULD CREATE FLUCTUATIONS IN
OUR OPERATING RESULTS, AS WE EXPERIENCED IN 1997 AND 1998
The semiconductor industry has historically been cyclical, characterized by
wide fluctuations in product supply and demand. From time to time, the industry
has also experienced significant downturns, often in connection with, or in
anticipation of, maturing product cycles and declines in general economic
conditions. Downturns of this type occurred in 1997 and 1998. These downturns
have been characterized by diminished product demand, production overcapacity
and accelerated decline of average selling prices, and in some cases have lasted
for more than a year. Our business could be harmed by industry-wide fluctuations
in the future. The commodity memory portion of the semiconductor industry, from
which we derived approximately half of our revenues through 1998, approximately
46% of our revenues in 1999, and 53% of our revenues in the first six months of
2000, continued to suffer from excess capacity in 1998, which led to substantial
price reduction during this period. While these conditions improved in 1999 and
to date in 2000, if they were to resume our growth and operating results would
be harmed. In addition, in the past, our operating results were harmed by
industry-wide fluctuations in the demand for semiconductors, which resulted in
under-utilization of our manufacturing capacity. Our business could be harmed in
the future by cyclical conditions in the semiconductor industry or by slower
growth in any of the markets served by our customer products.
8
<PAGE> 12
OUR MARKETS ARE HIGHLY COMPETITIVE, AND IF WE DO NOT COMPETE EFFECTIVELY, WE MAY
SUFFER PRICE REDUCTIONS, REDUCED REVENUES, REDUCED GROSS MARGINS AND LOSS OF
MARKET SHARE
We compete in markets that are intensely competitive and characterized by
rapid technological change, product obsolescence and price decline. Throughout
our product line, we compete with a number of large semiconductor manufacturers,
such as AMD, Fujitsu, Intel, Sharp and ST Microelectronics. These competitors
have substantially greater financial, technical, marketing and management
resources than we do. As we have introduced our new Flash products, we are
increasingly competing directly with these competitors, and we may not be able
to compete effectively. We also compete with emerging companies that are
attempting to sell their products in specialized markets that our products
address. We compete principally on the basis of the technical innovation and
performance of our products, including their speed, density, power usage,
reliability and specialty packaging alternatives, as well as on price and
product availability. During recent periods, we have experienced significant
price competition in our non-volatile memory business and especially for EPROM
and Flash products. We expect continuing competitive pressures in our markets
from existing competitors and new entrants, which, among other things, could
further accelerate the trend of decreasing average selling prices for our
products.
In addition to the factors described above, our ability to compete
successfully depends on a number of factors, including the following:
- our success in designing and manufacturing new products that implement
new technologies and processes;
- our ability to offer integrated solutions using our advanced non-volatile
memory process with other technologies;
- the rate at which customers incorporate our products into their systems;
- product introductions by our competitors;
- the number and nature of our competitors in a given market; and
- general market and economic conditions.
Many of these factors are outside of our control, and we may not be able to
compete successfully in the future.
WE MUST KEEP PACE WITH TECHNOLOGICAL CHANGE TO REMAIN COMPETITIVE
The average selling prices of our products historically have decreased over
the products' lives and are expected to continue to do so. As a result, our
future success depends on our ability to develop and introduce new products
which compete effectively on the basis of price and performance and which
address customer requirements. We are continually in the process of designing
and commercializing new and improved products to maintain our competitive
position. The success of new product introductions is dependent upon several
factors, including timely completion and introduction of new product designs,
achievement of acceptable fabrication yields and market acceptance. Our
development of new products and our customers' decision to design them into
their systems can take as long as three years, depending upon the complexity of
the device and the application. Accordingly, new product development requires a
long-term forecast of market trends and customer needs, and the successful
introduction of our products may be adversely affected by competing products or
technologies serving markets addressed by our products. Our qualification
process involves multiple cycles of testing and improving a product's
functionality to ensure that our products operate in accordance with design
specifications. If we experience delays in the introduction of new products, our
future operating results could be harmed.
In addition, new product introductions frequently depend on our development
and implementation of new process technologies, and our future growth will
depend in part upon the successful development and market acceptance of these
process technologies. Our integrated solution products will require more
technically sophisticated sales and marketing personnel to market these products
successfully to customers. We are developing new products with smaller feature
sizes, the fabrication of which will be substantially more
9
<PAGE> 13
complex than fabrication of our current products. If we are unable to design,
develop, manufacture, market and sell new products successfully, our operating
results will be harmed. Our new product development, process development, or
marketing and sales efforts may not be successful, our new products may not
achieve market acceptance, and price expectations for our new products may not
be achieved, any of which could harm our business.
OUR OPERATING RESULTS ARE HIGHLY DEPENDENT ON OUR INTERNATIONAL SALES AND
OPERATIONS, WHICH EXPOSES US TO VARIOUS POLITICAL AND ECONOMIC RISKS
Foreign product sales to customers accounted for approximately 65%, 65% and
66% of net revenues in 1998, 1999 and the first six months of 2000,
respectively. We expect that revenues derived from international sales will
continue to represent a significant portion of net revenues. In addition, in
recent years, we have significantly expanded our international operations, most
recently through our acquisitions of Temic in 1998 and a subsidiary of
Thomson-CSF in May 2000. International sales and operations are subject to a
variety of risks, including:
- greater difficulty in protecting intellectual property;
- greater difficulty in staffing and managing foreign operations;
- greater risk of uncollectible accounts;
- longer collection cycles;
- potential unexpected changes in regulatory practices, including export
license requirements, trade barriers, tariffs and tax laws;
- sales seasonality; and
- general economic and political conditions in these foreign markets.
Further, we purchase a significant portion of our raw materials and
equipment from foreign suppliers, and we incur labor and other operating costs
in foreign currencies, particularly at our French and German manufacturing
facilities. As a result, our costs will fluctuate along with the currencies and
general economic conditions in the countries in which we do business, which
could harm our operating results.
Approximately 76%, 77% and 73% of our sales in 1998, 1999 and the first six
months of 2000, respectively, were denominated in U.S. dollars. During these
periods our products became less price competitive in countries with currencies
declining in value against the dollar. In 1998, our revenues declined by
approximately $7.0 million due to the strengthening of the U.S. dollar against
foreign currencies in the markets in which we sell products. In addition, in
1998 business conditions in Asia were severely affected by banking and currency
issues which adversely affected our operating results. Furthermore, accounts
receivable increased $42.5 million in 1997 due to our extending longer payment
terms to customers and a more difficult collection environment because of the
financial turmoil in Asia. While these conditions stabilized in 1999 and to date
in 2000, the continuance or worsening of adverse business and financial
conditions in Asia, where 34% of our revenues were generated during 1999 and 33%
were generated in the first six months of 2000, would likely harm our operating
results.
WHEN WE TAKE FOREIGN ORDERS DENOMINATED IN LOCAL CURRENCIES, WE RISK RECEIVING
LESS DOLLARS WHEN THESE CURRENCIES WEAKEN AGAINST THE DOLLAR, AND MAY NOT BE
ABLE TO ADEQUATELY HEDGE AGAINST THIS RISK
When we take a foreign order denominated in a local currency we will
receive fewer dollars than we initially anticipated if that local currency
weakens against the dollar before we collect our funds. In addition to reducing
revenue, this risk will negatively affect our operating results. In Europe,
where our significant operations have costs denominated in European currencies,
these negative impacts on revenue can be partially offset by positive impacts on
costs. However, in Japan, while our yen denominated sales are also subject to
exchange rate risk, we do not have significant operations there with which to
counterbalance our exposure.
10
<PAGE> 14
Sales denominated in yen were 8% of our revenue in the first half of 2000. Sales
denominated in foreign currencies were 22% in the first half of 2000, compared
to 23% in the comparable period of 1999. We also face the risk that our accounts
receivables denominated in foreign currencies will be devalued if such foreign
currencies weaken quickly and significantly against the dollar. Though we hedge
our accounts receivables in yen using a loan denominated in yen of approximately
equal amount, this strategy may not be successful, which would harm our
operating results.
IF WE FAIL TO MAINTAIN SATISFACTORY RELATIONSHIPS WITH MOTOROLA AND OTHER KEY
CUSTOMERS, OUR BUSINESS MAY BE HARMED
In 1997, 1998, 1999 and the first six months of 2000, 13%, 14%, 12% and
10%, respectively, of our net revenues were derived from sales to Motorola. Our
ability to maintain close, satisfactory relationships with Motorola and other
large customers is important to our business. A reduction, delay, or
cancellation of orders from Motorola or our other large customers would harm our
business. Moreover, our customers may vary order levels significantly from
period to period, and customers may not continue to place orders with us in the
future at the same levels as in prior periods. The loss of one or more of our
key customers, or reduced orders by any of our key customers, could harm our
business and results of operations.
OUR FAILURE TO SUCCESSFULLY INTEGRATE BUSINESSES OR PRODUCTS WE HAVE ACQUIRED
COULD DISRUPT OR HARM OUR ONGOING BUSINESS
We have from time to time acquired complementary businesses, products and
technologies. Achieving the anticipated benefits of an acquisition depends, in
part, upon whether the integration of the acquired business, products or
technology is accomplished in an efficient and effective manner. Moreover,
successful acquisitions in the semiconductor industry may be more difficult to
accomplish than in other industries because such acquisitions require, among
other things, integration of product offerings, manufacturing operations and
coordination of sales and marketing and research and development efforts. The
difficulties of such integration may be increased by the need to coordinate
geographically separated organizations, the complexity of the technologies being
integrated, and the necessity of integrating personnel with disparate business
backgrounds and combining two different corporate cultures. The integration of
operations following an acquisition requires the dedication of management
resources that may distract attention from the day-to-day business, and may
disrupt key research and development, marketing or sales efforts. The inability
of management to successfully integrate any future acquisition could harm our
business. Furthermore, products acquired in connection with acquisitions may not
gain acceptance in our markets, and we may not achieve the anticipated or
desired benefits of such transactions.
WE CURRENTLY ARE AND MAY BE SUBJECT TO FURTHER THIRD PARTY INTELLECTUAL PROPERTY
INFRINGEMENT CLAIMS THAT COULD BE COSTLY TO DEFEND AND RESULT IN LOSS OF
SIGNIFICANT RIGHTS
The semiconductor industry is characterized by vigorous protection and
pursuit of intellectual property rights or positions, which have on occasion
resulted in significant and often protracted and expensive litigation. We have
from time to time received, and may in the future receive, communications from
third parties asserting patent or other intellectual property rights covering
our products or processes. In the past, we have received specific allegations
from major companies alleging that certain of our products infringe patents
owned by such companies, and we have been involved in such litigation which
harmed our operating results. Further, in order to avoid the significant costs
associated with litigation involving such claims, we may obtain licenses for the
use of the technologies that are the subject of these claims and be required to
make corresponding royalty payments, which may harm our operating results.
In July 2000 we were named as a defendant in a lawsuit brought by
STMicroelectronics alleging that we were infringing nine of its patents covering
manufacturing processes as well as various products, including memory products,
microcontroller products, and smart card products. Although we intend to
vigorously defend against these claims, we may not prevail given the complex
technical issues and inherent uncertainties in patent and intellectual property
litigation. Moreover, the cost of defending against such litigation, both in
terms of management time and attention, legal fees and product delays, could be
substantial, whatever the
11
<PAGE> 15
outcome. If this or any other patent or other intellectual property claim
against us was successful, we may be prohibited from using the technologies
subject to these claims, and if we are unable to obtain a license on acceptable
terms, license a substitute technology, or design new technology to avoid
infringement, our business and operating results may be significantly harmed.
OUR LONG-TERM DEBT COULD HARM OUR ABILITY TO OBTAIN ADDITIONAL FINANCING, AND
OUR ABILITY TO MEET OUR DEBT OBLIGATIONS WILL BE DEPENDENT UPON OUR FUTURE
PERFORMANCE
We financed our 1997 capital expenditures with long-term debt. Long-term
debt less current portion more than doubled during that year, increasing from
$278.6 million at December 31, 1996 to $571.4 million at December 31, 1997.
Long-term debt less current portion increased again in 1998 to $771.1 million at
December 31, 1998, due primarily to the issuance of $115.0 million of debt
securities and $142.2 million of lease financing related to asset acquisitions.
At December 31, 1999, our long-term debt less current portion was approximately
$654.0 million as we reduced our capital expenditures from prior years. As of
June 30, 2000, our long term debt less current portion increased to $756.5
million, the result of increased building and equipment purchases. The increase
in our debt-to-equity ratio could materially and adversely affect our ability to
obtain additional financing for working capital, acquisitions or other purposes
and could make us more vulnerable to industry downturns and competitive
pressures. Our ability to meet our debt obligations will depend upon our future
performance, which will be subject to the financial, business and other factors
affecting our operations, many of which are beyond our control.
Since a substantial portion of our operations are conducted through our
subsidiaries, the cash flow and the consequent ability to service debt are
partially dependent upon the earnings of our subsidiaries and the distribution
of those earnings, or upon loans or other payments of funds by those
subsidiaries, to us. These subsidiaries are separate and distinct legal entities
and have no obligation, contingent or otherwise, to pay any amounts due pursuant
to our long-term debt or to make any funds available therefor, whether by
dividends, distributions, loans or other payments. In addition, the payment of
dividends or distributions and the making of loans and advances to us by any of
our subsidiaries could in the future be subject to statutory or contractual
restrictions and other various business considerations and contingent upon the
earnings of those subsidiaries. Any right held by us to receive any assets of
any of our subsidiaries upon its liquidation or reorganization will be
effectively subordinated to the claims of that subsidiary's creditors, including
trade creditors, except to the extent that we are recognized as a creditor of
such subsidiary, in which case our claims would still be subordinate to any
security interest in the assets of such subsidiary and any indebtedness of such
subsidiary senior to that held by us.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL THAT MAY NOT BE AVAILABLE
Semiconductor companies that maintain their own fabrication facilities have
substantial capital requirements. We made capital expenditures of $312.1 million
in 1997, $187.7 million in 1998, $171.8 million in 1999, and approximately
$399.1 million through June 30, 2000, and intend to continue to make capital
investments to support business growth and achieve manufacturing cost reductions
and improved yields. Our capital expenditure plan for 2000, which was originally
set at approximately $550.0 million, has recently been increased to
approximately $1.0 billion, a portion of which we intend to fund from the
proceeds of this offering. We may seek additional equity or debt financing to
fund further expansion of our wafer fabrication capacity or to fund other
projects. The timing and amount of such capital requirements cannot be precisely
determined at this time and will depend on a number of factors, including demand
for products, product mix, changes in semiconductor industry conditions and
competitive factors. Additional debt or equity financing may not be available
when needed or, if available, may not be available on satisfactory terms.
WE DEPEND ON INDEPENDENT ASSEMBLY CONTRACTORS WHICH MAY NOT HAVE ADEQUATE
CAPACITY TO FULFILL OUR NEEDS AND WHICH MAY NOT MEET OUR QUALITY AND DELIVERY
OBJECTIVES
We manufacture wafers for our products at our fabrication facilities, and
the wafers are then sorted and tested at our facilities. After wafer testing, we
ship the wafers to one of our independent assembly contractors located in China,
Malaysia, the Philippines, South Korea, Taiwan and Thailand where the wafers are
12
<PAGE> 16
separated into die, packaged and, in some cases, tested. Our reliance on
independent contractors to assemble, package and test our products involves
significant risks, including reduced control over quality and delivery
schedules, the potential lack of adequate capacity and discontinuance or
phase-out of the contractors' assembly processes. These independent contractors
may not continue to assemble, package and test our products for a variety of
reasons. Moreover, because our assembly contractors are located in foreign
countries, we are subject to certain risks generally associated with contracting
with foreign suppliers, including currency exchange fluctuations, political and
economic instability, trade restrictions and changes in tariff and freight
rates. Accordingly, we may experience problems in timelines and the adequacy or
quality of product deliveries, any of which could have a material adverse effect
on our results of operations.
WE ARE SUBJECT TO ENVIRONMENTAL REGULATIONS WHICH COULD IMPOSE UNANTICIPATED
REQUIREMENTS ON OUR BUSINESS IN THE FUTURE. ANY FAILURE TO COMPLY WITH CURRENT
OR FUTURE ENVIRONMENTAL REGULATIONS MAY SUBJECT US TO LIABILITY OR SUSPENSION OF
OUR MANUFACTURING OPERATIONS
We are subject to a variety of federal, state and local governmental
regulations related to the discharge or disposal of toxic, volatile or otherwise
hazardous chemicals used in our manufacturing processes. While we believe that
we have all environmental permits necessary to conduct our business and that our
activities conform to present environmental regulations, increasing public
attention has been focused on the environmental impact of semiconductor
operations. Although we have not experienced any material adverse effect on our
operations from environmental regulations, any changes in such regulations may
impose the need for additional capital equipment or other requirements. If for
any reason we fail to control the use of, or to restrict adequately the
discharge of, hazardous substances under present or future regulations, we could
be subject to substantial liability or our manufacturing operations could be
suspended.
WE DEPEND ON CERTAIN KEY PERSONNEL, AND THE LOSS OF ANY KEY PERSONNEL MAY
SERIOUSLY HARM OUR BUSINESS
Our future success depends in large part on the continued service of our
key technical and management personnel and on our ability to continue to attract
and retain qualified employees, particularly those highly skilled design,
process and test engineers involved in the manufacture of existing products and
the development of new products and processes. The competition for such
personnel is intense, and the loss of key employees, none of whom is subject to
an employment agreement for a specified term or a post-employment
non-competition agreement, could harm our business.
WE ARE NOT PROTECTED BY LONG-TERM CONTRACTS WITH OUR CUSTOMERS
We do not typically enter into long-term contracts with our customers, and
we cannot be certain as to future order levels from our customers. When we do
enter into a long-term contract, the contract is generally terminable at the
convenience of the customer. In the event of an early termination by one of our
major customers, it is unlikely that we will be able to rapidly replace that
revenue source, which would harm our financial results.
FAILURE TO MANAGE OUR GROWTH MAY SERIOUSLY HARM OUR BUSINESS
Our business has grown in recent years through both internal expansion and
acquisitions, and continued growth may cause a significant strain on our
infrastructure and internal systems. To manage our growth effectively, we must
continue to improve and expand our management information systems, and we have
commenced an implementation of a new SAP enterprise resource planning and
management system for our worldwide operations in 2000. Our success depends to a
significant extent on the management skills of our executive officers. If we are
unable to manage growth effectively, our results of operations will be harmed.
OUR STOCK PRICE HAS FLUCTUATED IN THE PAST AND MAY CONTINUE TO FLUCTUATE IN THE
FUTURE
The market price of our common stock has experienced significant
fluctuations and may continue to fluctuate significantly. The market price of
our common stock may be significantly affected by factors such as
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<PAGE> 17
the announcement of new products or product enhancements by us or our
competitors, technological innovations by us or our competitors, quarterly
variations in our results of operations, changes in earnings estimates by market
analysts and general market conditions or market conditions specific to
particular industries. Statements or changes in opinions, ratings, or earnings
estimates made by brokerage firms or industry analysts relating to the market in
which we do business or relating to us specifically could result in an immediate
and adverse effect on the market price of our stock. In addition, in recent
years the stock market has experienced extreme price and volume fluctuations.
These fluctuations have had a substantial effect on the market prices for many
high technology companies, often unrelated to the operating performance of the
specific companies.
PROVISIONS IN OUR CERTIFICATE OF INCORPORATION MAY HAVE ANTI-TAKEOVER EFFECTS
Our board of directors has the authority to issue up to 5,000,000 shares of
preferred stock and to determine the price, voting rights, preferences and
privileges and restrictions of those shares without the approval of our
stockholders. The rights of the holders of common stock will be subject to, and
may be harmed by, the rights of the holders of any shares of preferred stock
that may be issued in the future. The issuance of preferred stock may delay,
defer or prevent a change in control, by making it more difficult for a third
party to acquire a majority of our stock. In addition, the issuance of preferred
stock could have a dilutive effect on our stockholders. We have no present plans
to issue shares of preferred stock.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus and in the documents incorporated
by reference 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.
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<PAGE> 18
USE OF PROCEEDS
The net proceeds we will receive from the sale of 4,000,000 shares of
common stock being offered by us are estimated to be approximately $
and E , or $ and E if the underwriters'
over-allotment option is exercised in full, assuming a public offering price of
$ and E
per share and after deducting the estimated underwriting discounts and
commissions and estimated expenses payable by us. We intend to use the net
proceeds of this offering for working capital and general corporate purposes.
Pending these uses, we intend to invest the net proceeds in investment grade,
interest bearing securities.
DIVIDEND POLICY
We have never declared or paid any cash dividend on our capital stock and
do not anticipate paying any cash dividends on capital stock in the foreseeable
future. We currently intend to retain future earnings, if any, for use in our
business.
PRICE RANGE OF COMMON STOCK
The following table presents the high and low closing sale price per share
for our common stock as quoted on the Nasdaq National Market for the periods
indicated.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
FISCAL YEAR ENDED DECEMBER 31, 1998:
First Quarter............................................... $ 5 1/8 $ 3 1/2
Second Quarter.............................................. 5 1/16 3 3/16
Third Quarter............................................... 3 21/32 1 65/128
Fourth Quarter.............................................. 4 3/32 1 51/64
FISCAL YEAR ENDED DECEMBER 31, 1999:
First Quarter............................................... 4 29/32 3 33/64
Second Quarter.............................................. 6 19/32 4 9/32
Third Quarter............................................... 10 15/32 6 19/32
Fourth Quarter.............................................. 15 3/16 7 11/16
FISCAL YEAR ENDING DECEMBER 31, 2000:
First Quarter............................................... 29 3/4 12 17/32
Second Quarter.............................................. 28 15/16 14 31/32
Third Quarter (through September 5, 2000)................... 20 13/16 13 13/32
</TABLE>
A recent reported last sale price per share for our common stock on the
Nasdaq National Market is set forth on the cover page of this prospectus. At
June 30, 2000, there were approximately 1,693 holders of record of our common
stock.
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<PAGE> 19
CAPITALIZATION
The following table sets forth our capitalization as of June 30, 2000:
- On an actual basis, after giving retroactive effect to the two-for-one
split of our outstanding common stock effected in August 2000; and
- As adjusted to give effect to the sale of the 4,000,000 shares of common
stock we are offering hereby at an assumed public offering price of
$ per share and E per share after deducting estimated
underwriting discounts and commissions and estimated offering expenses
payable by us.
<TABLE>
<CAPTION>
JUNE 30, 2000
---------------------------
ACTUAL AS ADJUSTED
----------- ------------
(IN THOUSANDS, EXCEPT SHARE
DATA)
<S> <C> <C>
Long-term debt less current portion......................... $ 627,151 $ 627,151
---------- ----------
Stockholders' equity:
Preferred stock, $.001 par value, 5,000,000 shares
authorized; 500,000 designated series A preferred
stock, none issued..................................... -- --
Common stock, $.001 par value, 500,000,000 shares
authorized; 460,945,184 shares outstanding at June 30,
2000, 464,945,184 shares outstanding as adjusted(1).... 1,178,004 1,251,717
Accumulated other comprehensive income.................... (65,316) (65,316)
Retained earnings......................................... 558,649 558,649
---------- ----------
Total stockholders' equity............................. 1,671,337 1,745,050
---------- ----------
Total capitalization................................... $2,298,488 $2,372,201
========== ==========
</TABLE>
------------
(1) Excludes 21,493,374 shares issuable upon exercise of outstanding stock
options as of June 30, 2000.
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<PAGE> 20
SELECTED CONSOLIDATED FINANCIAL DATA
The following table presents selected balance sheet and statement of
operations data as of and for the fiscal years ended December 31, 1995 through
1999 and for the six month periods ended June 30, 1999 and 2000. The information
for the six month periods is unaudited and has been prepared on the same basis
as our annual consolidated financial statements. In our opinion, the quarterly
information reflects all adjustments, consisting only of normal recurring
adjustments necessary for a fair presentation of the information for the periods
presented. This data gives retroactive effect to two-for-one splits of our
outstanding common stock effected as a 100% stock dividend to stockholders of
record as of the close of business on December 3, 1999 and August 11, 2000.
Effective January 1, 1999 we changed our fiscal year from a 52 or 53-week year
ending on the Monday nearest the last day in December of each year to a calendar
year ending December 31. Our fiscal quarters also changed from 13-week quarters
to calendar quarters. For presentation purposes, we have indicated that our
prior fiscal years ended on December 31. The results of operations for the six
months ended June 30, 2000 are not necessarily indicative of the results that
may be expected for the full year ending December 31, 2000, or any other future
period.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------------------------ -----------------------
1995 1996 1997 1998 1999 1999 2000
-------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS
DATA:
Net revenues........................... $634,241 $1,070,288 $ 958,282 $1,111,092 $1,330,161 $ 601,179 $ 907,944
Expenses:
Cost of sales........................ 323,530 539,215 602,239 717,147 826,301 380,375 523,429
Research and development............. 69,795 110,239 137,896 174,808 193,750 90,353 124,529
Selling, general and
administrative..................... 73,474 115,362 150,098 149,069 167,132 80,325 97,543
Restructuring and in-process research
and development charges............ -- -- 43,000 89,725 -- -- --
-------- ---------- ---------- ---------- ---------- ---------- ----------
Total expenses......................... 466,799 764,816 933,233 1,130,749 1,187,183 551,053 745,501
-------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income (loss)................ 167,442 305,472 25,049 (19,657) 142,978 50,126 162,443
Other income (expenses), net........... 4,820 3,681 (19,048) (31,274) (14,157) 32 (1,230)
-------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before taxes............. 172,262 309,153 6,001 (50,931) 128,821 50,158 161,213
Benefit from (provision for) income
taxes................................ (58,569) (107,431) (4,200) 893 (46,374) (18,056) (58,036)
-------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before cumulative effect
of accounting change................. 113,693 201,722 1,801 (50,038) 82,447 32,102 103,177
Cumulative effect of accounting change,
net of tax effect.................... -- -- -- -- (29,068) (29,068) --
-------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)...................... $113,693 $ 201,722 $ 1,801 $ (50,038) $ 53,379 $ 3,034 $ 103,177
======== ========== ========== ========== ========== ========== ==========
Net income (loss) per share:
Basic................................ $ .30 $ .51 $ .00 $ (.13) $ .13 $ .01 $ .23
======== ========== ========== ========== ========== ========== ==========
Diluted.............................. $ .29 $ .50 $ .00 $ (.13) $ .13 $ .01 $ .22
======== ========== ========== ========== ========== ========== ==========
BALANCE SHEET DATA:
Working capital........................ $132,597 $ 123,621 $ 410,085 $ 492,172 $ 487,496 $ 529,661 $1,215,934
Total assets........................... 919,621 1,455,914 1,822,040 1,962,737 2,014,910 1,858,976 3,026,093
Long-term obligations, net of current
portion.............................. 88,455 278,576 571,389 771,069 654,033 714,722 627,151
Stockholders' equity................... 588,768 789,751 786,434 732,195 801,479 769,624 1,671,337
</TABLE>
17
<PAGE> 21
QUARTERLY CONSOLIDATED FINANCIAL DATA
The following tables set forth our unaudited quarterly statements of
operations data for each of the six quarters ended June 30, 2000, such data
expressed as a percentage of our net revenues, and our unaudited consolidated
net revenues by segment, for each of these six quarters. This quarterly
information is unaudited and has been prepared on the same basis as our annual
consolidated financial statements. This data gives retroactive effect to
two-for-one splits of our outstanding common stock effected as a 100% stock
dividend to stockholders of record as of the close of business on December 3,
1999 and August 11, 2000. In our opinion, this quarterly information reflects
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the information for the periods presented. The operating
results for any quarter are not necessarily indicative of results for any future
period.
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30,
1999 1999 1999 1999 2000 2000
--------- -------- --------- -------- --------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net revenues........................................... $290,037 $311,142 $340,244 $388,738 $429,186 $478,758
Expenses:
Cost of sales........................................ 186,165 194,210 211,767 234,159 252,722 270,707
Research and development............................. 47,229 43,124 46,296 57,101 61,913 62,616
Selling, general and administrative.................. 35,920 44,405 46,321 40,486 45,110 52,433
-------- -------- -------- -------- -------- --------
Total expenses......................................... 269,314 281,739 304,384 331,746 359,745 385,756
-------- -------- -------- -------- -------- --------
Operating income (loss)................................ 20,723 29,403 35,860 56,992 69,441 93,002
Other income (expense), net............................ 5,367 (5,335) (8,820) (5,369) (4,048) 2,818
-------- -------- -------- -------- -------- --------
Income (loss) before taxes............................. 26,090 24,068 27,040 51,623 65,393 95,820
Benefit from (provision for) income taxes.............. (9,392) (8,664) (9,734) (18,584) (23,541) (34,495)
-------- -------- -------- -------- -------- --------
Income (loss).......................................... 16,698 15,404 17,306 33,039 41,852 61,325
Cumulative effect of accounting change, net of tax
effect............................................... (29,068) -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net income (loss)...................................... $(12,370) $ 15,404 $ 17,306 $ 33,039 $ 41,852 $ 61,325
======== ======== ======== ======== ======== ========
Net income (loss) per share:
Basic................................................ $ (.03) $ .04 $ .04 $ .08 $ .10 $ .14
======== ======== ======== ======== ======== ========
Diluted.............................................. $ (.03) $ .04 $ .04 $ .08 $ .09 $ .13
======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
AS A PERCENTAGE OF NET REVENUES
------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30,
1999 1999 1999 1999 2000 2000
--------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Net revenues............................................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Expenses:
Cost of sales......................................... 64.2 62.4 62.2 60.2 58.9 56.5
Research and development.............................. 16.3 13.8 13.6 14.7 14.4 13.1
Selling, general and administrative................... 12.4 14.3 13.6 10.4 10.5 11.0
----- ----- ----- ----- ----- -----
Total expenses.......................................... 92.9 90.5 89.4 85.3 83.8 80.6
Operating income (loss)................................. 7.1 9.5 10.6 14.7 16.2 19.4
Other income (expense), net............................. 1.8 (1.7) (2.6) (1.4) (0.9) 0.6
----- ----- ----- ----- ----- -----
Income (loss) before taxes.............................. 8.9 7.8 8.0 13.3 15.3 20.0
Benefit from (provision for) income taxes............... (3.2) (2.8) (2.9) (4.8) (5.5) (7.2)
----- ----- ----- ----- ----- -----
Income (loss)........................................... 5.7 5.0 5.1 8.5 9.8 12.8
Cumulative effect of accounting change, net of tax
effect................................................ (10.0) -- -- -- -- --
----- ----- ----- ----- ----- -----
Net income (loss)....................................... (4.3)% 5.0% 5.1% 8.5% 9.8% 12.8%
===== ===== ===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30,
1999 1999 1999 1999 2000 2000
--------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Non-volatile Memories.................................. $124,083 $136,852 $163,933 $192,260 $227,684 $252,188
Temic.................................................. 66,070 68,111 66,842 74,267 69,942 74,230
ASIC................................................... 79,624 79,373 83,754 92,310 101,516 117,180
Logic.................................................. 20,260 26,806 25,715 29,901 30,044 35,160
-------- -------- -------- -------- -------- --------
Total net revenues................................... $290,037 $311,142 $340,244 $388,738 $429,186 $478,758
======== ======== ======== ======== ======== ========
</TABLE>
18
<PAGE> 22
MARKET INFORMATION
Our common stock is listed on The Nasdaq Stock Market's National Market
under the symbol ATML. Concurrent with this offering, we are applying for a
listing of the 4,000,000 shares of common stock offered by this prospectus on
the Premier Marche of the Paris Stock Exchange.
THE PARIS STOCK EXCHANGE
Securities listed on the Premier Marche or the Second Marche of the Paris
Stock Exchange are officially traded through authorized financial institutions
that are members of the Paris Stock Exchange. Since April 3, 2000, securities
have been traded continuously on each business day from 9:00 a.m. to 5:30 p.m.
(Paris time), with a pre-opening session from 7:45 a.m. to 9:00 a.m. There is a
determination of the closing price at 5:35 p.m. (Paris time). Any trade of a
security that occurs after a stock exchange session closes is recorded on the
next business day at the previous session's closing price for that security. The
Paris Stock Exchange has introduced continuous electronic trading during trading
hours for most listed securities. The Paris Stock Exchange is managed and
operated by ParisBourse(SBF) S.A., a market enterprise. ParisBourse(SBF) S.A.
publishes a daily official price list that includes price information on listed
securities.
In France, most large public companies list their securities on the Premier
Marche and most small and medium sized companies list their securities on the
Second Marche. Securities also may be traded on the Nouveau Marche, a regulated
electronic market that was established to allow small capitalization and
start-up companies to access the stock market. ParisBourse(SBF) S.A. manages and
operates each of the Premier Marche, the Second Marche and the Nouveau Marche.
ParisBourse(SBF) S.A. places securities listed on the Premier Marche or the
Second Marche in one of the three categories, depending on their trading volume.
We expect that our shares will be placed in the category known as Continu A,
which includes the most actively traded securities. The minimum daily trading
volume required for a security to be in Continu A is twenty trades or FF
250,000, equal to Euro 38,112.
ParisBourse(SBF) S.A. may suspend trading in a security listed on the
Premier Marche if the quoted price of the security exceeds specific price limits
defined by its regulations. In particular, if the quoted price of a Continu A
security varies by more than 10% from the previous day's closing price,
ParisBourse(SBF) S.A. may suspend trading in that security for up to 15 minutes.
It may suspend trading further for up to 15 minutes if the price again varies by
more than 5%. ParisBourse(SBF) S.A. also may suspend trading of a security
listed on the Premier Marche in other limited circumstances, including, for
example, where there is unusual trading activity in the security. In addition,
in exceptional cases, the Conseil des Marches Financiers may also suspend
trading.
Trades of securities listed on the Premier Marche may be settled either in
the cash settlement market (marche au comptant) or, beginning September 25,
2000, through a deferred settlement service (service de reglement differe) if
the security traded has a total market capitalization of at least E
1,000,000,000 and the daily average of the aggregate value of trades in the
security exceeds E 1,000,000. Deferred settlement orders will involve additional
fees which are determined by the deferred settlement services. Cash settlements
take place on the third trading day following the trade. Deferred settlements
will take place on the last trading day of the month in which the trade is made,
unless you elect on or before the fifth trading day before the end of the month,
or the determination date (date de liquidation), to pay additional fees to
postpone the settlement until the determination date of the following month.
Equity securities traded through a deferred settlement service will be
considered to have been transferred only upon the date they have been registered
in the purchaser's account, which is the date of the last trading day of the
month in which the trade is settled. Under French securities regulations, any
sale of a security traded through a deferred service during the month of a
dividend payment date will be deemed to occur after the dividend has been paid.
If the sale takes place before, but during the month of, a dividend payment
date, the purchaser's account will be credited with an amount equal to the
dividend paid and the seller's account will be debited by the same amount.
19
<PAGE> 23
SHARE CERTIFICATES AND TRANSFER
Our common stock will be issued in registered form only in the United
States of America. The stock register is maintained in Boston, Massachusetts by
Equiserve, L.P., or the Boston Registry. Holders of our common stock of Boston
Registry may hold their shares through DTC, in which case their shares are
registered with Equiserve, L.P. in the name of Cede & Co., the nominee of DTC.
Holders of our common stock may elect to hold their shares directly through
SICOVAM, or indirectly through SICOVAM via Euroclear or Clearstream Banking
(formerly known as Cedel). Shares held directly or indirectly through SICOVAM
will be recorded in the books of BNP, New York Branch, in the name of SICOVAM.
BNP PARIBAS, New York Branch, will itself hold such shares through DTC. The
centralizing agent for the shares in France will be .
Our common stock is traded on the Nasdaq National Market under the symbol
"ATML". We have also applied for the listing of our common stock on the Premier
Marche of Paris Stock Exchange. Only those shares of our common stock held
through SICOVAM may be traded on the Premier Marche of Paris Stock Exchange. Our
common stock will be traded in bearer form only on the Premier Marche of Paris
Stock Exchange.
Transfer of shares of Boston Registry may be registered on the books of the
Company at the office of Equiserve, L.P. and certificates for shares of Boston
Registry may be exchanged at such office for certificates for shares of Boston
Registry of other authorized denominations.
Transfer of shares within any of DTC, SICOVAM, Euroclear or Clearstream
Banking, or between any of DTC, SICOVAM, Euroclear or Clearstream Banking will
be made by book-entry transfer in accordance with the applicable clearing
systems' rules and procedures. Transfers of shares between registered holders of
common stock and any of SICOVAM, Euroclear or Clearstream Banking will be made
by the relevant clearing systems and by Equiserve, L.P. and BNP, New York
Branch, in accordance with the procedures described below.
Upon a request to transfer shares of Boston Registry to SICOVAM or
Euroclear or Clearstream Banking, the transferor will instruct Equiserve, L.P.
to cancel the certificates representing the appropriate number of shares and
appropriately adjust its register. Equiserve, L.P. will register the shares in
the name of Cede & Co., the nominee of DTC. DTC will credit the account of BNP,
New York Branch, with such shares, which itself will credit the account of
SICOVAM. SICOVAM will itself credit the shares to the account of its relevant
member, including, as the case may be, Euroclear or Clearstream Banking.
Upon a request to transfer shares held directly or indirectly through
SICOVAM to the Boston Registry, the account of SICOVAM with BNP, New York
Branch, would be debited by the number of such shares as well as the account of
BNP, New York Branch, with DTC. Cede & Co. will request Equiserve, L.P. to
appropriately adjust its register. Equiserve, L.P. will countersign and deliver
a certificate for shares of Boston Registry to the appropriate new registered
owner and appropriately adjust its register. Holders through Euroclear or
Clearstream Banking should submit instructions in accordance with, respectively,
Euroclear's or Clearstream Banking's rules and procedures.
Shareholders will be charged a fee by Equiserve, L.P. for the issuance or
cancellation of certificates of shares of Boston Registry in connection with
transfers of shares from the Boston Registry to SICOVAM, Euroclear or
Clearstream Banking or vice-versa.
Our common stock has been accepted for clearance through Cedel and
Euroclear under common code number . The International Securities
Identification Number for our common stock is US7842131002. The CUSIP number for
the existing shares of Boston Registry is 049513104. The SICOVAM number is
.
20
<PAGE> 24
TAXATION
GENERAL
The following is a general discussion of the material United States federal
income and estate tax consequences of the ownership and disposition of our
common stock that may be relevant to you if you are a non-United States Holder.
In general, a "non-United States Holder" is any person or entity that is, for
United States federal income tax purposes, a foreign corporation, a nonresident
alien individual, a foreign partnership or a foreign estate or trust. This
discussion is based on current law, which is subject to change, possibly with
retroactive effect, or different interpretations. This discussion is limited to
non-United States Holders who hold shares of common stock as capital assets.
Moreover, this discussion is for general information only and does not address
all of the tax consequences that may be relevant to you in light of your
personal circumstances, nor does it discuss special tax provisions which may
apply to you if you relinquished United States citizenship or residence.
If you are an individual, you may, in many cases, be deemed to be a
resident alien, as opposed to a nonresident alien, by virtue of being present in
the United States for at least 31 days in the calendar year and for an aggregate
of at least 183 days during a three-year period ending in the current calendar
year (counting for such purposes all of the days present in the current year,
one-third of the days present in the immediately preceding year, and one-sixth
of the days present in the second preceding year). Individuals who are lawful
permanent residents of the United States ("green card holders") are also
considered to be resident aliens, without regard to the number of days present
in the United States during the calendar year. Resident aliens are subject to
United States federal income tax as if they were United States citizens.
Each prospective purchaser of our common stock is advised to consult a tax
advisor with respect to current and possible future tax consequences of
purchasing, owning and disposing of our common stock as well as any tax
consequences that may arise under the laws of any United States state,
municipality or other taxing jurisdiction.
DIVIDENDS
If dividends are paid, as a non-United States Holder, you will be subject
to withholding of United States federal income tax at a 30% rate on the gross
amount of the dividend or a lower rate as may be specified by an applicable
income tax treaty. To claim the benefit of a lower rate under an income tax
treaty, you must comply with certain certification and disclosure requirements.
If dividends are considered effectively connected with the conduct of a
trade or business by you within the United States and, where a tax treaty
applies, are attributable to a United States permanent establishment of yours,
those dividends will not be subject to withholding tax, but instead will be
subject to United States federal income tax on a net basis at applicable
graduated individual or corporate rates, provided that you comply with certain
certification and disclosure requirements. If you are a foreign corporation, any
effectively connected dividends may, under certain circumstances, be subject to
an additional "branch profits tax" at a rate of 30% or a lower rate as may be
specified by an applicable income tax treaty.
Unless the payor has knowledge to the contrary, dividends paid prior to
January 1, 2001 to an address outside the United States are presumed to be paid
to a resident of such country for purposes of the withholding discussed above
and for purposes of determining the applicability of a tax treaty rate. However,
recently finalized Treasury Regulations pertaining to United States federal
withholding tax provide that you must comply with certification procedures, or,
in the case of payments made outside the United States with respect to an
offshore account, certain documentary evidence procedures, directly or under
certain circumstances through an intermediary, to obtain the benefits of a
reduced rate under an income tax treaty with respect to dividends paid after
December 31, 2000. In the case of common stock held by a foreign partnership,
the certification requirements would generally be applied to the partners and
the partnership may be required to provide certain information, including a
United States taxpayer identification number.
21
<PAGE> 25
If you are eligible for a reduced rate of United States withholding tax
pursuant to an income tax treaty, you may obtain a refund of any excess amounts
withheld by filing an appropriate claim for refund with the IRS.
GAIN ON DISPOSITION OF COMMON STOCK
As a non-United States Holder, you generally will not be subject to United
States federal income tax on any gain recognized on the sale or other
disposition of common stock unless:
- the gain is considered effectively connected with the conduct of a trade
or business by you within the United States and, where a tax treaty
applies, is attributable to a United States permanent establishment of
yours (and, in which case, if you are a foreign corporation, you may be
subject to an additional branch profits tax equal to 30% or a lower rate
as may be specified by an applicable income tax treaty);
- you are an individual who holds the common stock as a capital asset and
are present in the United States for 183 or more days in the taxable year
of the sale or other disposition and other conditions are met; or
- we are or have been a "United States real property holding corporation",
or a USRPHC, for United States federal income tax purposes. We believe
that we are not currently, and are likely not to become, a USRPHC. If we
were to become a USRPHC, then gain on the sale or other disposition of
common stock by you generally would not be subject to United States
federal income tax provided:
- the common stock was "regularly traded" on an established securities
market; and
- you do not actually or constructively own more than 5% of our common
stock during the shorter of the five-year period preceding the
disposition or your holding period.
FEDERAL ESTATE TAX
If you are an individual, common stock held at the time of your death will
be included in your gross estate for United States federal estate tax purposes,
and may be subject to United States federal estate tax, unless an applicable
estate tax treaty provides otherwise.
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
We must report annually to the IRS and to each of you the amount of
dividends paid to you and the tax withheld with respect to those dividends,
regardless of whether withholding was required. Copies of the information
returns reporting those dividends and withholding may also be made available to
the tax authorities in the country in which you reside under the provisions of
an applicable income tax treaty or other applicable agreements.
Backup withholding is generally imposed at the rate of 31% on certain
payments to persons that fail to furnish the necessary identifying information
to the payer. Backup withholding generally will not apply to dividends paid
prior to January 1, 2001 to a Non-United States Holder at an address outside the
United States. unless the payor has knowledge that the payee is a United States
person. In the case of dividends paid after December 31, 2000, the recently
finalized Treasury Regulations provide that you generally will be subject to
withholding tax at a 31% rate unless you certify your non-United States status.
The payment of proceeds of a sale of common stock effected by or through a
United States office of a broker is subject to both backup withholding and
information reporting unless you provide the payor with your name and address
and you certify your non-United States status or you otherwise establish an
exemption. In general, backup withholding and information reporting will not
apply to the payment of the proceeds of a sale of common stock by or through a
foreign office of a broker. If, however, such broker is, for United States
federal income tax purposes, a United States person, a controlled foreign
corporation, or a foreign person that derives 50% or more of its gross income
for certain periods from the conduct of a trade or business in the United
States, or, in addition, for periods after December 31, 2000, a foreign
partnership that at any time
22
<PAGE> 26
during its tax year either is engaged in the conduct of a trade or business in
the United States or has as partners one or more United States persons that, in
the aggregate, hold more than 50% of the income or capital interest in the
partnership, such payments will be subject to information reporting, but not
backup withholding, unless such broker has documentary evidence in its records
that you are a non-United States Holder and certain other conditions are met or
you otherwise establish an exemption.
Any amounts withheld under the backup withholding rules generally will be
allowed as a refund or a credit against your United States federal income tax
liability provided the required information is furnished in a timely manner to
the IRS.
23
<PAGE> 27
UNDERWRITERS
Under the terms and subject to the conditions contained in an underwriting
agreement dated the date of this prospectus, the international underwriters
named below have severally agreed to purchase, and Atmel has agreed to sell to
them, the number of shares indicated below.
<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
---- ---------
<S> <C>
Morgan Stanley & Co. Incorporated...........................
Oddo-Pinatton...............................................
Total.............................................
</TABLE>
The underwriters are offering the shares subject to their acceptance of the
shares from Atmel and subject to prior sale. The underwriting agreement provides
that the obligations of the several underwriters to pay for and accept delivery
of the common shares offered hereby are subject to the approval of certain legal
matters by their counsel and to certain other conditions. The underwriters are
obligated to make and pay for all of the shares offered by this prospectus,
other than those covered by the over-allotment option described below, if any
such shares are taken.
The shares sold by the underwriters to the public outside of the U.S. will
initially be offered at the public offering price of Euros. Any
shares sold by the underwriters to the public in the U.S. will initially be
offered at the public offering price of $ . Any shares sold by the
underwriters to international securities dealers will be sold at a price that
represents a concession not in excess of Euros per share from the
public offering price in France, and to U.S. securities dealers at a price that
represents a concession not in excess of $ a share from the public
offering price in the U.S.
We have applied to list the shares on the Premier Marche of the Paris Stock
Exchange. See "Market Information."
We have agreed that, without the prior written consent of Morgan Stanley &
Co. Incorporated on behalf of the underwriters, during the period ending 90 days
after the date of this prospectus, we will not, directly or indirectly:
- Offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock or any securities
convertible into or exercisable or exchangeable for common stock; or
- Enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of common
stock,
whether any such transaction described above is to be settled by delivery of
common stock or such other securities, in case or otherwise.
The restrictions described in the previous paragraph do not apply to:
- The sale to the underwriters of the shares under the underwriting
agreement;
- The issuance by us of shares of common stock in the French public
offering;
- The issuance by us of shares of common stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date
of this prospectus which is described in the prospectus; or
- The issuance of shares of common stock or options to purchase shares of
common stock pursuant to our employee benefit plans that are in existence
on the date of the prospectus and consistent with past practices.
In order to facilitate the offering, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
shares. Specifically, the underwriters may over-allot in connection with the
24
<PAGE> 28
offering, creating a short position in the common stock for their own account.
In addition, to cover over-allotments or to stabilize the price of the shares,
the underwriters may bid for, and purchase, shares in the open market. Finally,
the underwriting syndicate may reclaim selling concessions allowed to an
underwriter or a dealer for distributing shares in the offering if the syndicate
repurchases previously distributed shares in transactions to cover syndicate
short positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of the stock above
independent market levels. The underwriters are not required to engage in these
activities and may end any of these activities at any time. These transactions
may be effected on the Paris Stock Exchange, the Nasdaq National Market, the
over-the-counter market outside the U.S. or otherwise.
The underwriting agreement provides that we and the underwriters will
indemnify each other against certain liabilities, including liabilities under
the Securities Act.
This prospectus may be used by the underwriters and other dealers in
connection with offers and sales of shares in the U.S. and with offers and sales
of shares initially sold by the international underwriters outside the U.S. in
the offering insofar as such shares are resold from time to time in the U.S. in
transactions that require registration under the Securities Act.
This prospectus has not been submitted to the clearance procedures of the
Commission des Operations de Bourse and accordingly may not be used in
connection with any offer to purchase, subscribe or sell any shares in France.
For the purpose of the offering of shares in France, we have prepared a
prospectus in French which has received the approval ("visa") of the Commission
des Operations de Bourse.
Morgan Stanley & Co. Incorporated was the initial purchaser of $296,000,000
aggregate principal amount of our Zero Coupon Convertible Subordinated
Debentures due 2018. These debentures were purchased in April 1998 and resold to
"qualified institutional buyers" pursuant to Rule 144A under the Securities Act.
Morgan Stanley & Co. Incorporated received a customary fee in connection with
this transaction.
LEGAL MATTERS
The validity of the issuance of the shares of common stock we are offering
by this prospectus will be passed upon for us by Wilson Sonsini Goodrich &
Rosati, Professional Corporation, Palo Alto, California. Certain legal matters
specified by the underwriters in connection with this offering will be passed
upon for the underwriters by Gray Cary Ware & Freidenrich LLP, Palo Alto,
California and Stibbe Simont Monahan Duhot & Giroux, Paris, France.
EXPERTS
Our consolidated financial statements as of December 31, 1999 and 1998 and
for each of the years in the three-year period ended December 31, 1999,
incorporated by reference to the Annual Report on Form 10-K for the year ended
December 31, 1999 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the
Commission, in accordance with the Securities Exchange Act of 1934. You may read
and copy our reports, proxy statements and other information filed by us at the
public reference facilities of the Commission in Washington, D.C., New York, New
York and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for
further information about the public reference rooms. Our reports, proxy
statements and other information filed with the Commission are available to the
public over the Internet at the Commission's World Wide Web site at
http://www.sec.gov. Our web address is http://www.atmel.com.
25
<PAGE> 29
The Commission allows us to "incorporate by reference" the information we
filed with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be a part of this prospectus, and information that we file
later with the Commission will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made by us with the Commission under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act until our offering is complete.
- The description of the common stock in our Registration Statement on Form
8-A filed on February 20, 1991 (as amended on March 14, 1991), under
Section 12(g) of the Exchange Act;
- The description of our Preferred Shares Rights Agreement, in our
Registration Statement on Form 8-A/12G filed on September 15, 1998, as
amended on Form 8-A/12G/A filed on December 6, 1999, under Section 12(g)
of the Exchange Act;
- Our Current Report on Form 8-K, dated January 20, 2000;
- Our Annual Report on Form 10-K filed on March 15, 2000 for the fiscal
year ended December 31, 1999;
- Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000
and June 30, 2000; and
- Our definitive Proxy Statement on Form 14A filed on March 17, 2000.
Any statement contained in a document that is incorporated by reference
will be modified or superseded for all purposes to the extent that a statement
contained in this prospectus (or in any other document that is subsequently
filed with the Commission and incorporated by reference) modifies or is contrary
to that previous statement. Any statement so modified or superseded will not be
deemed a part of this prospectus except as so modified or superseded.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address: Investor Relations, Atmel Corporation,
2325 Orchard Parkway, San Jose, California 95131, (408) 441-0311.
26
<PAGE> 30
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The aggregate estimated (other than the registration fee) expenses to be
paid by the Registrant in connection with this offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 22,624
NASD filing fee............................................. 9,070
Nasdaq additional listing fee............................... 17,500
Accounting fees and expenses................................ 50,000
Legal fees and expenses..................................... 120,000
Printing and engraving...................................... 70,000
Blue sky fees and expenses.................................. 10,000
Transfer agent fees and expenses............................ 250
--------
Total..................................................... $299,444
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF ATMEL CORPORATION
CERTIFICATE OF INCORPORATION
Article XI of our Certificate of Incorporation provides that, to the
fullest extent permitted by Delaware law, as the same now exists or may
hereafter be amended, a director shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director. Delaware law provides that directors of a corporation will
not be personally liable for monetary damages for breach of their fiduciary
duties as directors, except for liability:
- for any breach of their duty of loyalty to the corporation or its
stockholders,
- for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law,
- for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law, or
- for any transaction from which the director derived an improper personal
benefit.
BYLAWS
Our bylaws provide that our directors, officers and agents shall be
indemnified against expenses including attorneys' fees, judgments, fines,
settlements actually and reasonably incurred in connection with any proceeding
arising out of their status as such, if such director, officer or agent acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of Atmel Corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such conduct was
unlawful.
We have entered into agreements to indemnify our directors and officers, in
addition to the indemnification provided for in our Certificate of Incorporation
and Bylaws. These agreements, among other things, indemnify our directors and
officers for certain expenses, including attorney's fees, judgments, fines and
settlement amounts incurred by any such person in any action or proceeding,
including any action by or in the right of Atmel, arising out of such person's
services as a director or officer of Atmel, any subsidiary of Atmel or any other
company or enterprise to which the person provides services at the request of
Atmel.
The form(s) of proposed Underwriting Agreement(s) to be filed as (an)
Exhibit(s) hereto or incorporated by reference herein may include provisions
regarding the indemnification of our officers and directors by the several
Underwriters.
II-1
<PAGE> 31
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
1.1 Form of Underwriting Agreement.*
3.1 Certificate of Incorporation.(1)
3.2 Bylaws.(1)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
23.1 Consent of PricewaterhouseCoopers, independent auditors.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
24.1 Power of Attorney (see page II-3).
</TABLE>
------------
* To be filed by amendment or by a report on Form 8-K pursuant to Section 601
of Regulation S-K.
(1) Incorporated by reference to the Registration Statement on Form 8-A/12G/A
filed on December 6, 1999, under Section 12(g) of the Exchange Act.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities, other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding, is asserted by such director, officer or controlling person
in connection with the securities being registered, 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 and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 32
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Jose, State of California, on September 6,
2000.
ATMEL CORPORATION
By: /s/ GEORGE PERLEGOS
------------------------------------
Name: George Perlegos
Title: President and Chief
Executive Officer and Chairman
of the
Board of Directors
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints George Perlegos and Donald Colvin,
and each of them, as his true and lawful attorneys-in-fact and agents, each with
power of substitution, for him in his name, place and stead, in any and all
capacities, to sign the Registration Statement filed herewith and 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 of 1933 and all post-effective
amendments thereto and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, each of them with full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the foregoing, as full to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, 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, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ GEORGE PERLEGOS President, Chief Executive Officer September 6, 2000
------------------------------------ and Chairman of the Board of
George Perlegos Directors (Principal Executive
Officer)
/s/ DONALD COLVIN Vice President, Finance, and Chief September 6, 2000
------------------------------------ Financial Officer (Principal
Donald Colvin Financial Officer and Accounting
Officer)
/s/ GUST PERLEGOS Director September 6, 2000
------------------------------------
Gust Perlegos
/s/ TSUNG-CHING WU Director September 6, 2000
------------------------------------
Tsung-Ching Wu
/s/ NORM HALL Director September 6, 2000
------------------------------------
Norm Hall
/s/ T. PETER THOMAS Director September 6, 2000
------------------------------------
T. Peter Thomas
</TABLE>
II-3
<PAGE> 33
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
1.1 Form of Underwriting Agreement.*
3.1 Certificate of Incorporation.(1)
3.2 Bylaws.(1)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
23.1 Consent of PricewaterhouseCoopers, independent auditors.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
24.1 Power of Attorney (see page II-3).
</TABLE>
------------
* To be filed by amendment or by a report on Form 8-K pursuant to Section 601
of Regulation S-K.
(1) Incorporated by reference to the Registration Statement on Form 8-A/12G/A
filed on December 6, 1999, under Section 12(g) of the Exchange Act.
