<PAGE>
As filed with the Securities and Exchange Commission on July 22, 1999
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8/S-3
REGISTRATION STATEMENT
(Including registration of shares for resale by means of a Form S-3 Prospectus)
Under
THE SECURITIES ACT OF 1933
TUT SYSTEMS, INC.
(Exact name of issuer as specified in its charter)
DELAWARE 94-2958543
(State of Incorporation) (IRS Employer Identification No.)
2495 Estand Way
Pleasant Hill, California 94523
(Address of principal executive offices)
1992 STOCK PLAN
1998 STOCK PLAN
1998 EMPLOYEE STOCK PURCHASE PLAN
SHARES ISSUED OUTSIDE OF PLAN
Salvatore D'Auria
President Chief Executive Officer
TUT SYSTEMS, INC.
2495 Estand Way
Pleasant Hill, California 94523
(Name and address of agent for service)
(925) 682-6510
(Telephone number, including area code, of agent for service)
Copy to:
Steven E. Bochner, Esq.
Jeffrey A. Herbst, Esq.
WILSON SONSINI GOODRICH & ROSATI
650 Page Mill Road
Palo Alto, California 94304-1050
(650) 493-9300
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================================================
PROPOSED PROPOSED
TITLE OF SECURITIES TO BE REGISTERED AMOUNT TO BE MAXIMUM MAXIMUM AMOUNT OF
REGISTERED OFFERING PRICE AGGREGATE REGISTRATION FEE
PER SHARE OFFERING PRICE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value:
X subject to outstanding options
under 1992 Stock Plan 930,820 $ 4.51 (1) $ 4,197,998 (1) $ 1,167.04
X reserved or subject to outstanding
options under the 1998 Stock Plan 1,000,000 $ 47.25 (2) $ 46,830,702 (2) $ 13,018.94
X reserved under 1998 Employee Stock
Purchase Plan 250,000 $ 40.16 (3) $ 10,040,000 (3) $ 2,791.12
X issued to service providers outside of plans 40,000 $ 47.25 (4) $ 1,890,000 (4) $ 525.42
==================================================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of the weighted average
exercise price of $4.51 per share for outstanding options to purchase a
total of 930,820 shares of Common Stock.
(2) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of (i) the weighted average
exercise price of $43.12 per share for outstanding options to purchase a
total of 101,525 shares of Common Stock and (ii) $47.25 per share (which
is the average of the high and low prices of Registrant's Common Stock as
reported on the Nasdaq National Market on July 19, 1999), for 898,475
shares of Common Stock reserved for issuance thereunder.
(3) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of $40.16 per share (85% of
$47.25 which is the average of the high and low prices of Registrant's
Common Stock as reported on the Nasdaq National Market on July 19, 1999).
(4) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of $47.25 per share, which
is the average of the high and low prices of Registrant's Common Stock as
reported on the Nasdaq National Market on July 19, 1999.
===============================================================================
<PAGE>
RESALE PROSPECTUS
TUT SYSTEMS, INC.
UP TO 40,000 SHARES OF COMMON STOCK
WHICH THE SELLING STOCKHOLDERS MAY RESELL UNDER THIS PROSPECTUS
-----------
The stockholders of Tut Systems listed below may offer and resell up to
40,000 shares of our common stock under this prospectus for their own accounts.
We will not receive any proceeds from the sale of these shares.
These shares were acquired by the selling stockholders pursuant to the
exercise of options to purchase shares of our Common Stock. Each of these
options were granted to the selling stockholders by such founder for
compensatory purposes prior to the adoption by our 1992 Stock Plan.
The selling stockholders may offer their common stock through public or
private transactions, at prevailing market prices or at privately negotiated
prices. Such future prices are not currently known.
Our common stock is quoted on the Nasdaq National Market under the symbol
"TUTS." The last reported sale price of our common stock on the Nasdaq National
Market on July 21, 1999 was $43.125.
-----------
CONSIDER CAREFULLY THE RISK FACTORS
BEGINNING ON PAGE 3 IN THIS PROSPECTUS.
-----------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------
The date of this prospectus is July 22, 1999.
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TABLE OF CONTENTS
Page
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Tut Systems......................................................... 2
Risk Factors........................................................ 3
Selling Stockholders................................................ 12
Plan of Distribution................................................ 12
Information Incorporated by Reference............................... 13
Where to Find More Information About Tut Systems.................... 13
Indemnification and the SEC's Position on Enforceability............ 14
Information Required in Registration Statement...................... II-1
TUT SYSTEMS
Our principal executive offices are located at 2495 Estand Way, Pleasant
Hill, California 94523. The telephone number at that location is (925) 682-6510.
Tut Systems designs, develops and markets advanced communications products
which enables data to be transmitted at high speeds over the copper wires used
by telephone companies, as well as the copper telephone wires found in homes,
businesses and other buildings. These products incorporate our proprietary
FastCopper technology which allows these products to exploit the underutilized
bandwidth, or capacity, of copper telephone wires. Our products are cost-
effective, scalable and easy to deploy and include the following:
X Expresso high bandwidth multiplexers, which multiplex or aggregate
multiple low speed data channels onto a single high speed channel,
associated modems and routers, and integrated management software;
X XL local area network, or LAN, extension products which extend the
distance of conventional Ethernet-based LANs.
X HomeRun-enabled line cards, adapters and network interface cards.
We have also made our HomeRun technology available to third party vendors
for integration into their own products, including integrated circuits, PCs,
peripherals, modems, Internet telephones and television-based web browsers.
HomeRun is either licensed directly to these vendors or is available integrated
within chip sets from our semiconductor licensees. Since HomeRun is compatible
with standard Ethernet protocols, our licensees can readily incorporate HomeRun
into multiple consumer device designs at a low incremental cost.
Our HomeRun technology, an in-home application of FastCopper, has been
selected as the initial specification for a home networking standard by the Home
Phoneline Network Alliance, or the Home PNA, a non-profit corporation formed to
provide a forum for the creation of an open standard and specification for home
networking products and services. The founding members of the Home PNA were
3Com, Advanced Micro Devices, AT&T Wireless, Compaq, Epigram, Intel, IBM,
Hewlett-Packard, Lucent, Conexant Systems and Tut Systems.
In this prospectus, unless indicated otherwise, "Tut Systems," the
"Company," "we," "us" and "our" refer to Tut Systems, Inc. and its subsidiary.
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RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing us. Additional risks and uncertainties not presently known to
us or that we currently deem immaterial may also impair our business operations.
This prospectus also contains "forward-looking" statements which involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth below and elsewhere in this prospectus.
We have a history of losses.
We have incurred substantial and increasing net losses and experienced
negative cash flow each fiscal quarter since our inception. We incurred net
losses attributable to common stockholders of $3.5 million for the three months
ended March 31, 1999 and $3.6 million for the three months ended March 31, 1998.
As of March 31, 1999, we had an accumulated deficit of $48.0 million. We expect
that we will continue to incur losses through 1999.
We cannot predict our future profitability.
We may never achieve or sustain profitability. We have spent substantial
amounts of money on the development of our Expresso products and our HomeRun
technology. We intend to continue increasing certain of our operating
expenditures, including our sales and marketing, research and development and
general and administrative expenditures. We cannot assure you that we will
generate a sufficient level of revenue to offset these expenditures, or that we
will be able to adjust spending in a timely manner to respond to any
unanticipated decline in revenue due to the fact that our expenditures for sales
and marketing, research and development, and general administrative functions
are, in the short term, relatively fixed. We derive approximately two-thirds of
our revenue from sales of our Expresso products and approximately one-third of
our revenue from sales of our XL products. Our ability to increase revenues or
achieve profitability in the future will primarily depend on our ability to
increase sales of our Expresso GS and Expresso MDU products, reduce
manufacturing costs, and successfully introduce and sell enhanced versions of
our existing products and new products. In particular, the success of our
Expresso MDU products depends, in part, on the widespread adoption of our
HomeRun technology as an embedded technology in integrated circuits and consumer
products.
Our operating results are likely to fluctuate in future periods and may fail to
meet the expectations of securities analysts or investors.
Our annual and quarterly operating results have fluctuated in the past and
may fluctuate significantly in the future as a result of numerous factors, some
of which are outside of our control. These factors include:
X market acceptance of our products;
X competitive pressures, including pricing pressures from our
partners and competitors;
X the timing or cancellation of orders from, or shipments to,
existing and new customers;
X the timing of new product and service introductions by us, our
customers, our partners or our competitors;
X variations in our sales or distribution channels;
X variations in the mix of products offered by us;
X changes in the pricing policies of our suppliers;
X the availability and cost of key components; and
X the timing of personnel hiring.
We may also experience substantial period to period fluctuations in future
operating results and declines in gross margin as a result of the erosion of
average selling prices for high-speed data access products and services due to a
number of factors, including competition and rapid technological change. We
anticipate that average selling prices for our products will decrease over time
due to competitive pressures and volume pricing agreements. Decreasing average
selling prices could cause us to experience decreased revenues despite an
increase in the number of units sold. We cannot assure you that we will be able
to sustain or improve our gross margins in the future, or that we will be able
to offset future price declines with cost reductions.
As a result of these and other factors, it is possible that in some future
period our operating results will be below the expectations of securities
analysts and investors. In that event, the trading price of our common stock
would likely decline.
Difficulties in forecasting product sales could negatively impact our business.
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We base our expense levels in part upon our expectations concerning future
revenue and these expense levels are relatively fixed in the short-term.
However, orders for our products may vary from quarter to quarter. In some
circumstances, customers may delay purchasing our current products in favor of
next-generation products. In addition, our new products are generally subject to
technical evaluations which typically last 60 to 90 days. If orders forecasted
for a specific customer for a particular quarter do not occur in that quarter,
our revenues for that quarter would be reduced. If we have lower revenue in a
quarter than expected, we may not be able to reduce our spending in the short-
term in response to this shortfall and reduced revenues would have a direct
impact on our results of operations for that quarter. Further, we purchase
components and contract manufacture our products based on forecasts of sales.
If orders for products exceed our forecasts, we may have difficulty meeting
customers orders in a timely manner which could damage our reputation or result
in lost sales.
Our market is subject to rapid technological change.
The markets for high-speed data access products are characterized by rapid
technological developments, frequent enhancements to existing products and new
product introductions, changes in end user requirements and evolving industry
standards. In addition, the market for high-speed data access products is
dependent in large part on the increased use of the Internet. Issues concerning
the use of the Internet, including security, lost or delayed packets, and
quality of service, remain unresolved and may negatively affect the development
of the market for our products. If we do not address these technological
changes and challenges by regularly introducing new products, our product line
will become obsolete which would have a material adverse effect on our business,
financial condition and results of operations. We cannot assure you that we will
be able to respond quickly and effectively to technological change.
Our success depends on our ability to continually introduce new products that
achieve broad market acceptance.
We must also continually improve the performance, features and reliability
of our products, particularly in response to competitive product offerings. To
remain competitive we need to introduce products in a timely manner that
incorporate or are compatible with these new technologies as they emerge. We may
have only a limited amount of time to penetrate certain markets, and we cannot
assure you that we will be successful in achieving widespread acceptance of our
products before competitors offer products and services similar or superior to
our products. Any delay in product introduction could adversely affect our
ability to compete and cause our operating results to be below our expectations
or the expectations of public market analysts or investors. In addition, when we
announce new products or product enhancements that have the potential to replace
or shorten the life cycle of our existing products, customers may defer
purchasing our existing products. These actions could materially adversely
affect our operating results by unexpectedly decreasing sales, increasing our
inventory levels of older products and exposing us to greater risk of product
obsolescence.
Our success depends on continued market acceptance of our Expresso products.
We must devote a substantial amount of human and capital resources in order
to maintain commercial acceptance of our Expresso GS and Expresso MDU products
in the service provider and MDU markets and to further penetrate these markets.
Our success depends on our ability to educate existing and potential customers
and end users about the benefits of our FastCopper technology, including
HomeRun, and the development of new products to meet changing demands of service
providers, MDUs and corporate customers. The continued success of our Expresso
products will also depend on the ability of our customers to market and sell
high-speed data services to end users. We cannot assure you that our Expresso
products will achieve or maintain broad commercial acceptance by service
providers, MDUs and corporate customers or in any other market we enter.
Copper-wire based solutions face severe competition from other technologies.
The market for high-speed data access products and services is
characterized by several competing technologies, including fiber optic cables,
coaxial cables, satellites and other wireless facilities, that offer competing
solutions which provide fast access, high reliability and are cost-effective for
some users. Since all of our products are based on the use of copper telephone
wire, and since there are physical limits to the speed and distance over which
data can be transmitted over this wire, our products may not be a viable
solution for customers requiring service at performance levels beyond the
current limits of copper telephone wire. To the extent that telecommunications
service providers choose to install fiber optic cable or other transmission
media in the last mile, or to the extent that homes and businesses install other
transmission media within buildings, we expect that demand for our products
which are based on copper telephone wires will decline. Commercial acceptance of
any one of these competing solutions or any technological advancement or product
introduction that provides faster access, greater reliability, increased cost-
effectiveness or other advantages over technologies that utilize existing
telephone copper wires could decrease the demand for our products and reduce
average selling prices and gross margins associated with our products. The
occurrence of any one or more of these events could materially adversely affect
our business, financial condition and results of operations.
4
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Manufacturing or design defects in our products could cause harm to our
reputation and business.
Any defect or deficiency in our products could reduce the functionality,
effectiveness or marketability of our products. These defects or deficiencies
could cause orders for our products to be canceled or delayed, reduce revenues,
or render our product designs obsolete. In that event, we would be required to
devote substantial financial and other resources for a significant period of
time in order to develop new product designs. We cannot assure you that we would
be successful in addressing any manufacturing or design defects in our products
or in developing new product designs in a timely manner, if at all. Any of these
events, individually or in the aggregate, could have a material adverse effect
on our business, financial condition and results of operations.
The markets in which we operate are highly competitive, and we may not be able
to compete effectively.
The markets for high-speed Internet and network access products are
intensely competitive, and expect that these markets will become increasingly
competitive in the future. Our most immediate competitors are: PairGain,
Paradyne, Cisco, Ascend Communications (recently acquired by Lucent
Technologies), Copper Mountain, and a number of other public and private
companies. Many of these competitors are offering, or may offer, technologies
and services that directly compete with some or all of our high-speed access
products. For a discussion of the factors which impact our ability to compete,
see "Business-Competition."
Many of our competitors and potential competitors have substantially
greater name recognition and technical, financial and marketing resources than
we do, and we can give you no assurance that we will be able to compete
effectively in our target markets. As a result, they may be able to undertake
more extensive marketing campaigns, adopt more aggressive pricing policies and
devote substantially more resources to developing new products than we can. In
addition, our licensees may sell products based on our technology to our
competitors or potential competitors. This licensing may cause an erosion in the
potential market for our products. We cannot assure you that we will have the
financial resources, technical expertise or marketing, manufacturing,
distribution and support capabilities to compete successfully. This competition
could result in price reductions, reduced profit margins and loss of market
share, which could materially and adversely affect our business, financial
condition and results of operations.
We depend on third parties for increased market penetration of HomeRun.
We have established relationships with several strategic partners,
including our collaborative arrangement through the Home Phoneline Network
Alliance, or the Home PNA, with leading semiconductor, computer hardware and
consumer electronics manufacturers. We have also licensed our HomeRun technology
to members of the Home PNA and others. In this regard, the widespread market
acceptance of our HomeRun technology for home networking applications is
dependent on the development and marketing of HomeRun-enabled integrated
circuits and consumer products by our licensees and their customers. We cannot
assure you that our HomeRun technology will continue to be successfully deployed
on a widespread basis and future sales of products containing our HomeRun
technology cannot be predicted. The amount and timing of resources which our
licensees devote to developing and marketing HomeRun-enabled products is not
within our control. We cannot assure you that these licensees will develop and
market products as expected or that significant license and royalty revenues
will be forthcoming in the future. If any of our licensees fails to develop,
commercialize or market products incorporating HomeRun technology, our revenues
would not grow as expected and we may be required to undertake unforeseen
additional responsibilities or to devote additional resources to development,
commercialization or marketing of HomeRun, all of which could have a material
adverse effect on our business, financial condition and results of operations.
Changing industry standards may adversely affect demand for our products and our
stock price.
We will not be competitive unless we continually introduce new products and
product enhancements that changing industry standards. The emergence of new
industry standards, whether through adoption by official standards committees or
widespread use by telephone companies or other service providers, could require
redesign of our products. If these standards become widespread and our products
are not in compliance, our customers and potential customers may not purchase
our products, which would materially adversely affect our business, financial
condition and results of operations. The rapid development of new standards
increases the risk that competitors could develop products that make our
products obsolete. Any failure by us to develop and introduce new products or
enhancements directed at new industry standards could have a material adverse
effect on our business, financial condition and results of operations. In
addition, selection of competing technologies as standards by standards setting
bodies such as the Home PNA could negatively affect our reputation in the market
regardless of whether our products are standard compliant or demand for our
products does not decline. This selection could be interpreted by the press and
others as having a negative impact on our business which could negatively impact
the market price of our stock.
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If a key distributor discontinues purchasing our product, our revenues may
decline and the price of our stock may fall.
In the first three months of 1999, we derived approximately 15.3% of our
revenues from combined sales to Tech Data and Ingram Micro, two independent
distributors of our products. These independent distributors are not
contractually bound to purchase our products and therefore could discontinue
carrying our products at any time in favor of competitive products or for any
other reason. In addition, we remain subject to the risk of product returns from
these distributors and other customers. We expect that the sale of our products
to a limited number of distributors and value-added resellers, including Tech
Data and Ingram Micro, may continue to account for a substantial percentage of
revenues for the foreseeable future. Any reduction, delay or loss of orders from
Tech Data or Ingram Micro could have a material adverse effect on our revenues
and on our business, financial condition and results of operations.
We depend on contract manufacturers to manufacture all of our products.
We do not manufacture any of our products, but instead rely on contract
manufacturers to assemble, test and package our products. We cannot assure you
that these contract manufacturers and suppliers will be able to meet our future
requirements for manufactured products, components and subassemblies. Any
interruption in the operations of one or more of these contract manufacturers
would adversely affect our ability to meet our scheduled product deliveries to
customers. We also intend to regularly introduce new products and product
enhancements, which will require that we rapidly achieve volume production by
coordinating our efforts with those of our suppliers and contract manufacturers.
The inability of our contract manufacturers to provide us with adequate supplies
of high-quality products or the loss of a current contract manufacturer would
cause a delay in our ability to fulfill customer orders while we obtain a
replacement manufacturer and would have a material adverse effect on our
business, operating results and financial condition. In addition, our inability
to accurately forecast the actual demand for our products could result in
supply, manufacturing or testing capacity constraints. These constraints could
result in delays in the delivery of our products or the loss of existing or
potential customers, either of which could have a material adverse effect on our
business, operating results or financial condition.
We currently purchase all of our raw materials and components used in our
products through our contract manufacturers. Components are purchased pursuant
to purchase orders based on forecasts, but we or our contract manufacturers have
no guaranteed supply arrangements with these suppliers. The availability of many
of these components is dependent in part on our ability to provide our contract
manufacturers and their suppliers with accurate forecasts of our future needs.
If we or our manufacturers were unable to obtain a sufficient supply of
components from current sources, we could experience difficulties in obtaining
alternative sources or in altering product designs to use alternative
components. Resulting delays or reductions in product shipments could damage
customer relationships and could adversely affect our business, financial
condition or results of operations. In addition, any increases in component
costs could increase the costs of our products and reduce demand for our
products.
We rely on third parties to test all of our products.
Substantially all of our products are assembled and tested by our contract
manufacturers. Although we perform random spot testing on manufactured products,
we rely on our contract manufacturers for assembly and primary testing of our
products. Any quality assurance problems could increase the costs of
manufacturing, assembling or testing of our products and could have a material
adverse effect on our business, financial condition and results of operation.
Moreover, defects in products which are not discovered in the quality assurance
process could damage customer relationships and result in product returns or
liability claims, each of which could have a materially adversely affect our
business, financial condition and results of operations.
We purchase several key components from single or limited sources and could lose
sales if these sources fail to fill our needs.
We currently purchase all of our raw materials and components used in our
products through our contract manufacturers. In procuring components, our
contract manufacturers rely on some suppliers that are the sole source of those
components, and we are dependent upon supply from these sources to meet our
needs. For example, all of the field programmable gate array supplies used in
our products are purchased from Xilinx. Our Expresso products are also
dependent on various sole source offerings from Metalink US, Motorola, Osicom
Technologies, RELTEC, SaRonix, and Wind River Systems. Certain of our XL
products are dependent on offerings from Globespan Semiconductor and Level One
Communications. If there is any interruption in the supply of any of the key
components currently obtained from a single or limited source, obtaining these
components from other sources could take a substantial period of time, could
cause us to redesign our products and could disrupt our operations and have a
material adverse effect on our business in any given period.
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We may not be able to manage our growth effectively.
Our growth has placed, and in the future may continue to place, a
significant strain on our engineering, managerial, administrative, operational,
financial and marketing resources, and increased demands on our systems and
controls. To exploit the market for our products, we must develop new and
enhanced products while managing anticipated growth in sales by implementing
effective planning and operating processes. To manage our anticipated growth, we
must, among other things, continue to implement and improve our operational,
financial and management information systems, hire and train additional
qualified personnel, continue to expand and upgrade core technologies and
effectively manage multiple relationships with various customers, suppliers and
other third parties. We cannot assure you that our systems, procedures or
controls will be adequate to support our operations or that our management will
be able to achieve the rapid execution necessary to exploit fully the market for
our products or systems. If we are unable to manage our growth effectively could
have a material adverse effect on our business, financial condition and results
of operations.
We depend on international sales for a significant portion of our revenues.
Sales to customers outside of the United States accounted for approximately
18.5% of revenues in 1998 and 21.4% of revenues in the first quarter of 1999.
There are a number of risks arising from our international business, including:
X longer receivables collection periods;
X increased exposure to bad debt write-offs;
X risk of political and economic instability;
X difficulties in enforcing agreements through foreign legal systems;
X unexpected changes in regulatory requirements;
X import or export licensing requirements;
X reduced protection for intellectual property rights in some
countries; and
X currency fluctuations.
We expect sales to customers outside of the United States to increase in
the future and our success is dependent on increased international sales. We can
give you no assurance that foreign markets for our products will not develop
more slowly than currently anticipated. Any failure to increase sales to
customers outside the United States could materially adversely affect our
business, financial condition and results of operations.
We also expend product development and other resources in order to meet
regulatory and technical requirements of foreign countries. We are depending on
sales of our products in these foreign markets in order to recoup the costs
associated with developing products for these markets.
We are subject to fluctuations in currency exchange rates.
All of our foreign sales are invoiced in U.S. dollars. As a result,
fluctuations in currency exchange rates could cause our products to become
relatively more expensive for international customers and reduce demand for our
products. We anticipate that foreign sales will generally continue to be
invoiced in U.S. dollars. Accordingly, we do not plan to engage in foreign
currency hedging transactions. However, as we expand our current international
operations, we may allow payment in foreign currencies and exposure to losses in
foreign currency transactions may increase. We may choose to limit our exposure
through the purchase of forward foreign exchange contracts or other hedging
strategies. We cannot assure you that any currency hedging strategy would be
successful in avoiding exchange related losses.
Our limited ability to protect our intellectual property may adversely affect
our ability to compete.
Our future success and ability to compete is dependent in part upon our
proprietary technology. We rely on a combination of copyright, patent, trademark
and trade secrets laws and nondisclosure agreements to establish and protect our
proprietary technology. We currently hold 12 United States patents and have 14
United States patent applications pending. However, we cannot assure you that
patents will be issued with respect to pending or future patent applications or
that our patents will be upheld as valid or will prevent the development of
competitive products or that any actions we have taken will adequately protect
our intellectual property rights.
We generally enter into confidentiality agreements with our employees,
consultants, resellers, customers and potential customers, strictly limit access
to and distribution of our software, and further limit the disclosure and use of
other proprietary information. Despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to copy or otherwise obtain or use our
products or technology. We also cannot assure you that our competitors will not
independently develop technologies that are substantially equivalent
7
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or superior to our technology. In addition, the laws of some foreign countries
do not protect our proprietary rights to the same extent as do the laws of the
United States.
We are also subject to the risk of adverse claims and litigation alleging
infringement of the intellectual property rights of others. We cannot assure you
that third parties will not assert infringement claims in the future with
respect to our current or future products. Any such assertion, regardless of its
merit, could require us to pay damages or settlement amounts and could require
us to develop non-infringing technology or acquire licenses to the technology
that is the subject of asserted infringement. This litigation or potential
litigation could result in product delays, increased costs or both. In addition,
the cost of any litigation and the resulting distraction of our management
resources could have a material adverse effect on our business, results of
operations or financial condition. We also cannot assure you that any licenses
of technology necessary for our business will be available or that, if
available, these licenses can be obtained on commercially reasonable terms. Our
failure to obtain these licenses could have a material adverse effect on our
business, results of operations and financial condition.
Our products must comply with complex government regulations or our products may
not be sold.
We and our customers are subject to varying degrees of federal, state and
local regulation. Our products must comply with various regulations and
standards defined by the Federal Communications Commission.. The FCC has issued
regulations that set installation and equipment standards for communications
systems. Our products are also required to meet certain safety requirements. For
example, certain of our products must be certified by Underwriters Laboratories
in order to meet federal safety requirements relating to electrical appliances
to be used inside the home. In addition, certain products must be Network
Equipment Building Standard certified before they may be deployed by certain of
our customers. Any delay in or failure to obtain these approvals could have a
material adverse effect on our business, financial condition or results of
operations. Outside of the United States, our products are subject to the
regulatory requirements of each country in which our products are manufactured
or sold. These requirements are likely to vary widely. If we do not obtain
timely domestic or foreign regulatory approvals or certificates we would not be
able to sell our products where these regulations apply, which may prevent us
from sustaining our revenues or achieving profitability.
In addition, regulation of our customers may adversely impact our business,
operating results and financial condition. For example, FCC regulatory policies
affecting the availability of data and Internet services and other terms on
which telecommunications companies conduct their business, may impede our
penetration of certain markets. In addition, the increasing demand for
communications systems has exerted pressure on regulatory bodies worldwide to
adopt new standards, generally following extensive investigation of competing
technologies. The delays inherent in this governmental approval process may
cause the cancellation, postponement or rescheduling of the installation of
communications systems by our customers, which in turn may have a material
adverse effect on the sale of products by us to these customers.
Our success is dependent on our ability to provide adequate customer support.
Our ability to achieve our planned sales growth and retain current and
future customers will depend in part upon the quality of our customer support
operations. Our customers generally require significant support and training
with respect to our products, particularly in the initial deployment and
implementation stage. We have limited experience with widespread deployment of
our products to a diverse customer base, and we cannot assure you that we will
have adequate personnel to provide the levels of support that our customers may
require during initial product deployment or on an ongoing basis. In addition,
we rely on a third party for a substantial portion of our customer support
functions. Our failure to provide sufficient support to our customers could
delay or prevent the successful deployment of our products. Failure to provide
adequate support could also have an adverse impact on our reputation and
relationship with our customers, could prevent us from gaining new customers and
could have a material adverse effect on our business, financial condition or
results of operations.
Our success depends on our retention of certain key personnel and our ability to
hire additional key personnel.
We depend on the performance of Matthew Taylor, our Chairman of the Board
and Chief Technical Officer, and Salvatore D'Auria, our President and Chief
Executive Officer, and on other senior management and technical personnel with
experience in the data communications, telecommunications and high-speed data
access industries, and the loss of any one of them could have a material adverse
effect on our ability to execute our business strategy. Additionally, we do
not have employment contracts with any of our executive officers and we only
maintain a "key person" life insurance policy on Matthew Taylor. We believe
that our future success will depend in large part upon our continued ability to
identify, hire, retain and motivate highly skilled employees, who are in great
demand. We cannot assure you that we will be able to do so.
8
<PAGE>
Our failure or the failure of our key suppliers and customers to be year 2000
compliant could negatively impact our business.
Software that records only the last two digits of the calendar year may not
be able to distinguish whether "00" means 1900 or 2000. This may result in
software failures or the creation of erroneous results, which could adversely
impact our operations. The following are risks of the year 2000 issue:
X potential warranty or other claims from our customers or payment of
compensatory or other damages;
X loss or delay in market acceptance of our products or services;
X disruptions in systems we use to run our business;
X disruptions in systems used by our suppliers; and
X potential reduced spending by other companies on networking
solutions as a result of significant information systems spending
on year 2000 remediation
We generally warrant and represent to our customers that our products are
free from year 2000 defects. Since all customer situations cannot be
anticipated, we may see an increase in warranty and other claims as a result of
the year 2000 transition. In addition, litigation regarding year 2000 compliance
issues is expected to escalate. For these reasons, the impact of customer claims
could have a material adverse impact on our operating results or financial
condition.
Within the past twelve months, we have been upgrading components of our own
internal computer and related information and operational systems and continue
to assess the need for further system redesign. We believe we are taking the
appropriate steps to ensure year 2000 compliance. Based on information
currently available, we believe that the costs associated with year 2000
compliance, and the consequences of incomplete or untimely resolution of the
year 2000 problem, will not have a material adverse effect on our business,
financial condition and results of operations in any given year. However, even
if our internal systems are not materially affected by the year 2000 problem,
our business, financial condition and results of operations could be materially
adversely affected through disruption in the operation of the enterprises with
which we interact. We cannot assure you that third party computer products used
by us are year 2000 compliant. Further, even though we believe that our current
products are year 2000 compliant, we cannot assure you that under actual
conditions these products will perform as expected or that future products will
be year 2000 compliant. Any failure of our products to be year 2000 compliant
could result in the loss of or delay in market acceptance of our products and
services, increased service and warranty costs to us or payment by us of
compensatory or other damages which could have a material adverse effect on our
business, financial condition and results of operations.
We may engage in future acquisitions of companies, technologies or products.
As a part of our business strategy, we expect to make acquisitions of, or
significant investments in, complementary companies, products or technologies,
although no acquisitions or investments are currently pending. For example, in
June 1999, we acquired Public Port, Inc. Any future acquisitions would be
accompanied by the risks commonly encountered in acquisitions of companies.
These risks include:
X difficulties in assimilating the operations and personnel of the
acquired companies;
X diversion of management's attention from ongoing business concerns;
X our potential inability to maximize our financial and strategic
position through the successful incorporation of acquired
technology and rights into our products and services;
X additional expense associated with amortization of acquired
intangible assets;
X maintenance of uniform standards, controls, procedures and
policies; and
X impairment of existing relationships with employees, suppliers and
customers as a result of the integration of new management
personnel.
We cannot assure you that we will be able to successfully integrate any
business, products, technologies or personnel that we might acquire in the
future, and our failure to do so could materially adversely affect our business,
operating results and financial condition.
Our stock price has been and is likely to continue to be volatile.
The trading price of our common stock has been and is likely to continue to
be highly volatile. Our stock price could fluctuate widely in response to
factors such as the following:
X actual or anticipated variations in operating results;
9
<PAGE>
X announcements of technological innovations, new products or new
services by us or by our partners, competitors or customers;
X changes in financial estimates or recommendations by stock market
analysts regarding us or our competitors;
X conditions or trends in the telecommunications industry, including
regulatory developments;
X growth of the Internet;
X announcements by us of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;
X additions or departures of key personnel;
X future equity or debt offerings or our announcements of these
offerings; and
X general market and general economic conditions.
In addition, in recent years, the stock market in general, and the Nasdaq
National Market and the securities of Internet and technology companies in
particular, have experienced extreme price and volume fluctuations. These
fluctuations have often been unrelated or disproportionate to the operating
performance of these companies. These market and industry factors may materially
and adversely affect our stock price, regardless of our operating results. In
addition, trading prices of the stocks of many technology companies are at or
near historic highs and reflect price-earnings ratios substantially above
historic levels. These trading prices and price-earnings rations may not be
sustained.
Our charter and bylaws and Delaware law contain provisions with certain anti-
takeover effects.
Certain provisions of our charter and bylaws may have the effect of making
it more difficult for a third party to acquire, or of discouraging a third party
from attempting to acquire, control of us. These provisions could limit the
price that certain investors might be willing to pay in the future for shares of
our common stock. Our charter and bylaws provide for a classified board of
directors, eliminate cumulative voting in the election of directors, restrict
our stockholders from acting by written consent and calling special meetings,
and provide for procedures for advance notification of stockholder nominations
and proposals. In addition, our board of directors has the authority to issue
up to 5,000,000 shares of preferred stock and to determine the price, rights,
preferences, privileges and restrictions, including voting rights, of those
shares without any further vote or action by the shareholders. The issuance of
preferred stock, while providing flexibility in connection with possible
financings or acquisitions or other corporate purposes, could have the effect of
making it more difficult for a third party to acquire a majority of our
outstanding voting stock. These provisions, as well as Section 203 of the
Delaware General Corporation Law to which we are subject, could discourage
potential acquisition proposals, delay or prevent a change of control and
prevent changes in our management.
Future sales of our common stock may depress our stock price.
Sales of a substantial number of shares of our common stock in the public
market, or the appearance that these shares are available for sale, could
materially and adversely affect the market price of our common stock. These
sales also might make it more difficult for us to sell equity securities or
equity-related securities in the future at a time and price that we deem
appropriate. As of July 15, 1999, we had 11,635,854 shares outstanding. Of
these shares, the 2,875,000 shares sold in our initial public offering plus an
additional 36,455 shares released by lockup agreements are freely tradable in
the public market without restriction unless held by our affiliates. The
remaining 8,555,720 shares of common stock available for sale in the public
market are limited by restrictions under the securities laws and lock-up
agreements applicable to these shares and will be generally available for sale
in the public market as follows:
Date of Availability For Sale Number
----------------------------- ------
July 27, 1999 7,883,829 shares
February 3, 1999 666,836 shares
June 8, 2000 168,679 shares
We have agreed, subject to certain conditions, to register on or prior to
October 31, 1999 the 168,679 shares which will otherwise become available for
sale on June 8, 2000. In addition, we have 55,000 shares underlying an
outstanding warrant that, will be eligible for resale in the public market upon
expiration of the warrant holder's one-year holding period under Rule 144, which
will begin upon the date of exercise. However, to the extent that the warrant
holder effects a "cashless" exercise of our warrant, the underlying shares will
be eligible for sale in the public market beginning on December 21, 1999.
We also have 1,148,475 shares of our common stock available for future
grants pursuant to our 1998 Employee Stock Purchase Plan and 1998 Stock Plan as
of July 15, 1999, and we have 1,032,345 shares of our common stock which are
subject to outstanding options at July 15, 1999. All of these outstanding
options are also subject to the 180-day lockup. Accordingly, shares underlying
vested options will be eligible for resale in the public market beginning on
July 27, 1999.
Lehman Brothers Inc. may, in its sole discretion and at any time without
notice, release all or any portion of the securities subject to lock-up
agreements.
10
<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking statements" including statements
containing the words "believes," "anticipates," "expects" and words of similar
import. All statements other than statements of historical fact included in this
prospectus, including without limitation, statements under "Prospectus Summary,"
"Risk Factors," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business" in documents incorporated by reference
herein and located elsewhere herein, regarding Tut Systems or any of the
transactions described herein, including the timing, financing, strategies and
effects of these transactions, are forward-looking statements. Although we
believe that the expectations reflected in these forward-looking statements are
reasonable, we can give no assurance that these expectations will prove to have
been correct. Important factors that could cause actual results to differ
materially from expectations are disclosed in this prospectus, including,
without limitation, in conjunction with the forward-looking statements in this
prospectus and/or under "Risk Factors." We do not intend to update these
forward-looking statements.
11
<PAGE>
SELLING STOCKHOLDERS
The selling stockholders acquired beneficial ownership of all the shares
listed below through the purchase of restricted securities. The following table
shows, in each case as of May 31, 1999:
X the name of each selling stockholder;
X how many shares the selling stockholder beneficially owns;
X how many shares the selling stockholder can resell under this
prospectus; and
X assuming a selling stockholder sells all shares listed next to his or
her name, how many shares the selling stockholder will beneficially
own after completion of the offering.
Tut Systems may amend or supplement this prospectus from time to time in
the future to update or change this list of selling stockholders and shares
which may be resold.
We have calculated the number of shares each selling stockholder
"beneficially owns" in accordance with Rule 13d-3 under the Exchange Act.
Beneficial ownership as defined in Rule 13d-3 does not necessarily indicate
beneficial ownership for any other purpose. Under Rule 13d-3, a person
beneficially owns all shares as to which they have either sole or shared voting
power or sole or shared investment power, as well as all shares which they have
the right to acquire within 60 days of the calculation date by exercising any
stock option or other right. Since the list above speaks as of May 31, 1999,
beneficial ownership therefore includes all shares which the selling stockholder
has the right to acquire within 60 days of May 31, 1999 (i.e. on or before July
30, 1999). Shares beneficially owned by each selling stockholder represent less
than 1% of our outstanding common stock.
<TABLE>
<CAPTION>
SHARES WHICH MAY
SHARES BE SOLD UNDER
BENEFICIALLY THIS SHARES BENEFICIALLY OWNED
SELLING STOCKHOLDER OWNED (1) PROSPECTUS AFTER OFFERING
- --------------------------- --------------- ------------------- --------------------------
<S> <C> <C> <C>
Mark Miller 61,000 25,000 36,000
Billie Mowers 11,812 7,500 4,312
Bernard Peuto TTEE of the Peuto
Family Trust UAD 7/9/91 40,000 7,500 32,500
</TABLE>
PLAN OF DISTRIBUTION
We have been advised by the selling stockholders that they intend to sell
all or a portion of the shares offered hereby from time to time in the Nasdaq
National Market and that sales will be made at prices prevailing in the Nasdaq
National Market at the times of such sales. The selling stockholders may also
make private sales directly or through a broker or brokers, who may act as agent
or as principal. Further, the selling stockholders may choose to dispose of the
shares offered hereby by gift to a third party or as a donation to a charitable
or other non-profit entity. In connection with any sales, the selling
stockholders and any brokers participating in such sales may be deemed to be
underwriters within the meaning of the Securities Act.
Any broker-dealer participating in such transactions as agent may receive
commissions from the selling stockholders (and, if such broker acts as agent for
the purchaser of such shares, from such purchaser). Broker-dealers may agree
with the selling stockholders to sell a specified number of shares at a
stipulated price per share, and, to the extent such a broker-dealer is unable to
do so acting as agent for the selling stockholders, to purchase as principal any
unsold shares at the price required to fulfill the broker-dealer commitment to
the selling stockholders. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
shares commissions computed as described above.
12
<PAGE>
We have advised the selling stockholders that Regulation M promulgated
under the Exchange Act may apply to sales in the market and has informed them of
the possible need for delivery of copies of this prospectus. The selling
stockholders may indemnify any broker-dealer that participates in transactions
involving the sale of the shares against certain liabilities, including
liabilities arising under the Securities Act. Any commissions paid or any
discounts or concessions allowed to any such broker-dealers, and, if any such
broker-dealers purchase shares as principal, any profits received on the resale
of such shares, may be deemed to be underwriting discounts and commissions under
the Securities Act.
Upon our being notified by the selling stockholders that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a cross or block trade, a supplemental prospectus will be filed under
Rule 424(c) under the Securities Act, setting forth the name of the
participating broker-dealer(s), the number of shares involved, the price at
which such shares were sold by the selling stockholders, the commissions paid or
discounts or concessions allowed by the selling stockholders to such broker-
dealer(s), and where applicable, that such broker-dealer(s) did not conduct any
investigation to verify the information set forth in this prospectus.
Any securities covered by this prospectus which qualify for sale pursuant
to Rules 144 and 701 under the Securities Act may be sold under Rule 144 rather
than pursuant to this prospectus. In general, under Rule 144 as currently in
effect, a person (or persons whose shares are aggregated), including any person
who may be deemed to be our "affiliate", is entitled to sell within any three
month period "restricted shares" beneficially owned by him or her in an amount
that does not exceed the greater of (i) 1% of the then outstanding shares of
common stock or (ii) the average weekly trading volume in shares of common stock
during the four calendar weeks preceding such sale, provided that at least one
year has elapsed since such shares were acquired from us or our affiliate. Sales
are also subject to certain requirements as to the manner of sale, notice and
availability of current public information regarding us. However, a person who
has not been our "affiliate" at any time within three months prior to the sale
is entitled to sell his or her shares without regard to the volume limitations
or other requirements of Rule 144, provided that at least one year has elapsed
since such shares were acquired from us or our affiliate. In general, under Rule
701 as currently in effect, any employee, consultant or advisor of us who
purchases shares from us in connection with a compensatory stock or option plan
or other written agreement related to compensation is eligible to resell such
shares in reliance on Rule 144, but without compliance with certain restrictions
contained in Rule 144.
There can be no assurance that the selling stockholders will sell any or
all of the shares of common stock offered hereunder.
INFORMATION INCORPORATED BY REFERENCE
This prospectus incorporates by reference the following documents and
information, all of which we have filed in the past with the SEC:
X Our Registration Statement on Form S-1 (File No. 333-60419), declared
effective on January 28, 1999.
X Our Quarterly Report on Form 10-Q filed on May 14, 1999.
Unless we have filed a post-effective amendment to the registration
statement under the Securities Act which contains this prospectus indicating
that all of the shares have been sold or which deregisters all shares then
remaining unsold, all documents which we subsequently file under Section 13(a),
13(c), 14 or 15(d) of the Exchange Act shall be deemed to be incorporated by
reference in this prospectus and to be part of this prospectus from the date of
filing of such documents.
We will provide without charge to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of the information
that has been or may be incorporated by reference in this prospectus. Direct any
request for such copies by writing or telephoning us at the following address:
Tut Systems, Inc., 2495 Estand Way, Pleasant Hill, California 94523, attention:
Investor Relations. Our telephone number is (925) 682-6510.
WHERE TO FIND MORE INFORMATION ABOUT TUT SYSTEMS
We are required to file special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, NW, Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the public reference room. Our SEC filings are also available to the public
from the SEC's Web site at http://www.sec.gov.
This prospectus contains information concerning us and the sale of our
common stock by the selling stockholders, but does not contain all the
information set forth in the Registration Statement on Form S-8/S-3 which we
have filed with the SEC under the Securities Act. Statements made in this
prospectus as to the contents of any referenced contract, agreement or other
document are not
13
<PAGE>
necessarily complete, and such statement shall be deemed qualified in its
entirety by reference thereto. The registration statement, including various
exhibits, may be obtained upon payment of the fee prescribed by the SEC, or may
be examined without charge at the SEC's office in Washington, D.C.
INDEMNIFICATION AND THE SEC'S POSITION ON ENFORCEABILITY
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers. This may under certain circumstances include indemnification for
liabilities arising under the Securities Act as well as for expenses incurred in
that regard. Our certificate of incorporation and bylaws provide for the
indemnification of present and former directors, officers, employees and agents
of Tut Systems to the maximum extent permitted by the Delaware General
Corporation Law. We have also entered into, or will enter into, indemnification
agreements with our officers and directors.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling us pursuant to
the foregoing provisions, we have been informed that, in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
14
<PAGE>
TUT SYSTEMS, INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
All documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities registered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
The following documents and information previously filed with the Securities and
Exchange Commission by the Registrant are hereby incorporated by reference in
this Registration Statement:
(a) The Registrant's Registration Statement on Form S-1 (File No. 333-60419),
declared effective on January 28, 1999.
(b) The Registrant's Quarterly Report on Form 10-Q filed on May 14, 1999.
(c) The description of the Registrant's Common Stock to be offered hereby is
contained in the Registrant's Registration Statement on Form 8-A filed with
the Securities and Exchange Commission on January 22, 1999 pursuant to
Section 12(g) of the Exchange Act, including any amendment or report filed
for the purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-
effective amendment which indicates that all securities offered have been sold
or which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be part hereof
from the date of filing such documents.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
The Registrant's Certificate of Incorporation limits, to the maximum extent
permitted by Delaware law, the personal liability of directors for monetary
damages for breach of their fiduciary duties as a director. The Registrant's
Bylaws provide that the Company shall indemnify its officers and directors and
may indemnify its employees and other agents to the fullest extent permitted by
Delaware law. The Registrant has entered into indemnification agreements with
its officers and directors containing provisions which are in some respects
broader than the specific indemnification provisions contained in the Delaware
General Corporation Law. The indemnification agreements require the Registrant,
among other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers (other than liabilities arising from willful misconduct of a culpable
nature), to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified, and to obtain directors' and
officers' insurance, if available on reasonable terms. The Registrant believes
that these agreements are necessary to attract and retain qualified persons as
directors and officers.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify a director, officer, employee or agent made a party to
an action by reason of that fact that he or she was a director, officer,
employee or agent of the corporation or was serving at the request of the
corporation, against expenses actually and reasonable incurred by him or her in
connection with such action
II-1
<PAGE>
if he or she acted in good faith and in a manner he or she reasonably believed
to be in, or not opposed to, the best interests of the corporation and with
respect to any criminal action, had no reasonable cause to believe his or her
conduct was unlawful.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
--------
Exhibit Number
--------------
4.1 1992 Stock Plan, as amended, and form of Stock Option
Agreement thereunder.*
4.2 1998 Stock Plan and forms of Stock Option Agreement and Stock
Purchase Agreement thereunder.*
4.3 1998 Employee Stock Purchase Plan, as amended.**
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to legality of securities being registered.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see Page II-4).
*Incorporated by reference to the Registrant's Registration Statement on S-1
declared effective on January 28, 1999.
**Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
filed on May 14, 1999.
Item 9. Undertakings.
------------
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) 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 foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
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.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Tut
Systems, Inc., a corporation organized and existing under the laws of the State
of Delaware, certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8/S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Pleasant Hill, State of California, on this 22nd
day of July, 1999.
Tut Systems, Inc.
By: /s/ Salvatore D'Auria
---------------------
Salvatore D'Auria
President and Chief Executive Officer
II-3
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Salvatore D'Auria and Nelson B. Caldwell, and
each of them, as his or her attorney-in-fact, with full power of substitution in
each, for him or her in any and all capacities to sign any amendments to this
Registration Statement on Form S-8/S-3, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said attorney-in-
fact, or his substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Salvatore D'Auria President and Chief Executive Officer July 22, 1999
- -------------------------------------- (Principal Executive Officer) and Director
Salvatore D'Auria
/s/ Nelson B. Caldwell Vice President of Finance and Chief July 22, 1999
- -------------------------------------- Financial Officer (Principal Financial
Nelson B. Caldwell and Accounting Officer)
/s/ Matt Taylor
- -------------------------------------- Chief Technology Officer and Director July 22, 1999
Matt Taylor and Chairman of the Board
/s/ Clifford H. Higgerson
- -------------------------------------- Director July 22, 1999
Clifford H. Higgerson
/s/ Neal Douglas
- -------------------------------------- Director July 22, 1999
Neal Douglas
- -------------------------------------- Director
Brion Applegate
/s/ Saul Rosenzweig
- -------------------------------------- Director July 22, 1999
Saul Rosenzweig
/s/ David Spreng
- -------------------------------------- Director July 22, 1999
David Spreng
/s/ George Middlemas
- -------------------------------------- Director July 22, 1999
George Middlemas
- -------------------------------------- Director
Roger Moore
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------ ----------- ----
<S> <C> <C>
4.1 1992 Stock Plan, as amended, and form of Stock Option Agreement
thereunder.*
4.2 1998 Stock Plan and forms of Stock Option Agreement and Stock
Purchase Agreement thereunder.*
4.3 1998 Employee Stock Purchase Plan, as amended.**
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to legality of securities being registered.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see Page II-4).
</TABLE>
- -----------------------------------------------------------------------------
* Incorporated by reference to the Company's Registration Statement on Form
S-1 declared effective on January 28, 1999.
** Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q filed on May 14, 1999.
<PAGE>
EXHIBIT 5.1
[WSGR LETTERHEAD]
July 22, 1999
Tut Systems, Inc.
2459 Estand Way
Pleasant Hill, CA
Re: Registration Statement on Form S-8/S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8/S-3 (the
"Registration Statement") to be filed by Tut Systems, Inc., a Delaware
corporation (the "Registrant" or "you"), with the Securities and Exchange
Commission on or about July 22, 1999, in connection with the registration under
the Securities Act of 1933, as amended, of an aggregate of 2,180,820 shares of
your Common Stock, $.001 par value (the "Shares"), outstanding or reserved for
issuance pursuant to the 1992 Stock Plan, 1998 Stock Plan and 1998 Employee
Stock Purchase Plan (the "Plans") plus 40,000 shares (the "Resale Shares") to be
sold by certain stockholders listed in the Registration Statement (the "Selling
Stockholders").
As your legal counsel, we have reviewed the actions proposed to be taken by
you in connection with the proposed sale and issuance of the Shares by the
Registrant under the Plans. We assume that the consideration received by you in
connection with each issuance of Shares will include an amount in the form of
cash, services rendered or property that exceeds the greater of (i) the
aggregate par value of such Shares or (ii) the portion of such consideration
determined by the Company's Board of Directors to be "capital" for purposes of
the Delaware General Corporation Law.
It is our opinion that, upon completion of the proceedings being taken, or
contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares pursuant to the Registration Statement and the Plans and the sale of the
Resale Shares pursuant to the Registration Statement, including the proceedings
being taken in order to permit such transaction to be carried out in accordance
with applicable state securities laws, the Shares and Resale Shares, when issued
and sold in the manner described in the Registration Statement and in accordance
with the resolutions adopted by the Board of Directors of the Company, will be
legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
statement, and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.
Sincerely,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8/S-3 dated July 22, 1999 of our report dated January 13,
1999, relating to the financial statements which appears in the Form S-1
Registration Statement. We also consent to the incorporation by reference of our
report dated January 13, 1999 relating to the financial statement schedules,
which appears in such Form S-1.
PRICEWATERHOUSECOOPERS, LLP
San Jose, California
July 22, 1999
