As filed with the Securities and Exchange Commission on May 4, 1999
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VTEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 74-2415696
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number
108 Wild Basin Road, Austin, Texas 78746
(512) 437-2700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive officers)
RODNEY S. BOND
Chief Financial Officer
VTEL Corporation
108 Wild Basin Road
Austin, Texas 78746
(512) 437-2700
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copy to:
L. STEVEN LESHIN
Jenkens & Gilchrist, a Professional Corporation
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202-2799
(214) 855-4500
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Approximate date of commencement of proposed sale to the public: At
such time or times after the effective date of this Registration Statement as
the selling stockholder may determine.
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 reimbursement plans, check the following box. |X|
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 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 number of the earlier effective registration statement for the
same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
Proposed
Amount Proposed maximum maximum Amount of
Title of each class of to be offering price per aggregate offering registration fee*
securities to be registered registered unit * price*
Common stock, par value $.01 per share... 1,149,000 $5.34 $6,135,660 $1,706
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* The proposed maximum aggregate offering price has been estimated solely to
calculate the registration fee under Rule 457(c) of the Securities Act,
based upon the average of the highest and lowest price per share of common
stock on the Nasdaq Stock Market reported on April 30, 1999. The Registrant
hereby amends this Registration Statement on such date or dates as may be
necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section said 8(a), may determine.
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PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, dated May 4, 1999
VTEL CORPORATION
1,149,000 Common Shares
par value $.01 Per Share
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YOU SHOULD READ THIS PROSPECTUS AND ANY SUPPLEMENT TO THIS PROSPECTUS
CAREFULLY BEFORE YOU INVEST, INCLUDING THE RISK FACTORS WHICH BEGIN ON PAGE 2 OF
THIS PROSPECTUS.
o This prospectus is part of a registration statement that we filed
with the Securities and Exchange Commission. Any statement that we make in this
prospectus will be modified or superseded by any inconsistent statement made by
us in a prospectus supplement. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information."
o Our common stock is traded on the Nasdaq National Market under the
symbol "VTEL." On April 30, 1999, the average of the high and low price for the
common stock was $5.34.
o We issued the common stock covered by this prospectus to Vosaic
Company, LLC, the selling stockholder, as consideration for our acquisition of
substantially all of Vosaic's assets.
o The shares of common stock offered by this prospectus are being sold
by the selling stockholder. The selling stockholder may sell its common stock on
the Nasdaq National Market or in privately negotiated transactions, whenever it
decides and at the price it sets. The common stock may be sold at market price,
but the selling stockholder has the right to sell its common stock at a premium
or discount to market price.
o We will not receive any proceeds from the sale of these shares. We
will pay all expenses of registration incurred in connection with this offering.
The selling stockholder will pay all selling and other expenses that it incurs.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this prospectus is May 4, 1999.
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TABLE OF CONTENTS
<S> <C>
WHERE YOU CAN FIND MORE INFORMATION...............................................................................1
FORWARD - LOOKING STATEMENTS......................................................................................1
RISK FACTORS......................................................................................................2
ABOUT VTEL........................................................................................................5
SELECTED FINANCIAL DATA...........................................................................................6
USE OF PROCEEDS...................................................................................................7
PLAN OF DISTRIBUTION; SELLING STOCKHOLDER.........................................................................7
LEGAL MATTERS.....................................................................................................8
EXPERTS .........................................................................................................8
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WHERE YOU CAN FIND MORE INFORMATION
o Government Filings. We file annual, quarterly and special reports,
proxy statements and other information with the SEC. Our SEC filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the SEC's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the SEC located at 7 World Trade Center, Suite 1300, New
York, New York 10048 and at Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. You may obtain information on the operation
of the SEC's public reference room in Washington, D.C. by calling the SEC at
1-800-SEC-0330.
o Stock Market. Shares of our common stock are traded as "National
Market Securities" on the Nasdaq National Market. Material filed by us can be
inspected at the offices of the National Association of Securities Dealers,
Inc., Reports Section, 1735 K Street, N.W., Washington, D.C. 20006.
o Information Incorporated by Reference. The SEC allows us to
"incorporate by reference" the information we file with them, which means that
we can disclose important information to you by referring you to those
documents. The information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any further filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
this offering has been completed:
o Our Annual Reports on Form 10-K and Form 10-K/A for the year ended
July 31, 1998;
o Our Quarterly Reports on Form 10-Q for the quarters ended October 31,
1998 and January 31, 1999; and
o The description of our common stock contained in our Form 8-A, dated
March 31, 1992, including any amendment or report filed for the purpose of
updating such description.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Rodney S. Bond
Chief Financial Officer
VTEL Corporation
108 Wild Basin Road
Austin, Texas 78746
(512) 437-2700
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
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FORWARD - LOOKING STATEMENTS
This prospectus contains certain forward-looking statements which
involve substantial risks and uncertainties. These forward-looking statements
can generally be identified because the context of the statement includes words
such as may, will, except, anticipate, intend, estimate, continue, believe, or
other similar words. Similarly, statements that describe our future
expectations, objectives and goals or contain projections of our future results
of operations or financial condition are also forward-looking statements. Our
future results, performance or achievements could differ materially from those
expressed or implied in these forward-looking statements as a result of certain
factors, including those listed under the heading "Risk Factors" and other
cautionary statements in this prospectus.
RISK FACTORS
An investment in the common stock involves a high degree of risk. You
should carefully consider and evaluate all of the information in this
prospectus, including the risk factors set forth below, before investing.
We May Experience Fluctuations in Quarterly Results.
As of January 31, 1999, our accumulated deficit was $190,537,000. For
the fiscal year ended July 31, 1998, we had net income of $2,779,000. For the
fiscal year ended July 31, 1997, we had a net loss of $52,054,000. During the
first six months of fiscal 1999, we had a net loss of $14,607,000. While we have
initiated programs that we believe will return us to profitability, we cannot
assure you that we will be able to do so. Historically, a significant percentage
of our sales have occurred in the last few weeks of the quarter. By compressing
most of our shipments into a short period of time at the end of each quarter, we
incur overtime costs, sharply increase our inventory levels in anticipation of
this demand and deplete or exhaust our backlog of customer orders. Our sales
cycle is difficult to predict and manage. It is possible that management's
estimates of product demand will be inaccurate and as a result we could
experience a rise in inventory levels and a decline in expected revenue levels
in any given quarter.
Our management estimates future product revenue based on its analysis
of market conditions and reports from its sales force of customer leads and
prospective interest. We cannot rely upon backlog of customer product orders to
forecast future revenue levels. Because of the short cycle time between customer
orders and shipments, unanticipated delays from our vendors could disrupt
shipments and adversely affect the results in a given quarter. This is primarily
due to our reliance on a limited number of highly specialized suppliers. The
above factors represent uncertainties which can have a material adverse effect
on our financial position and results of operations if not managed properly.
We base our expense levels in part, on our expectations as to future
revenue levels. It is difficult to predict future revenue levels due in part to
our strategy of distributing our products primarily through resellers. Our
recent experience has been that revenue levels have fallen below our
expectations. Because our expense levels are relatively fixed from quarter to
quarter, our operating results have been materially and adversely affected in
recent periods. While we have reduced operating expenses to attempt to align
these expenses better with our recent revenue levels, we cannot assure you that
we have reduced expenses sufficiently to enable us to return a profit on our
sales. In addition, future quarterly operating results may fluctuate as a result
of the following factors:
o price reductions;
o delays in the introduction of new products;
o delays in purchase decisions due to new product announcements by
us or our competitors;
o increased competition;
o failure to reduce product costs or maintain product quality;
o cancellations or delays of orders;
o interruptions or delays in supplies of key components;
o changes in reseller base, customer base, business or product mix;
and o seasonal patterns of capital spending by customers.
We May be Unable to Adequately Respond to Rapid Changes in Technology
and Customer Preferences For Videoconferencing Products.
The market for our products is characterized by rapidly changing
technology, evolving industry standards and frequent product introductions.
Increased functionality and better picture and audio quality at lower bandwidths
and at reduced prices are characterizations of new products. The introduction of
products embodying new technology and the emergence of new industry standards
may render existing products obsolete and unmarketable. A significant factor in
our ability to grow and to remain competitive is our ability to successfully
develop and introduce on a timely basis new and enhanced products that embody
new technology, anticipate and incorporate evolving industry standards and
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achieve levels of functionality and price acceptable to the market. In the past,
we have experienced delays in introducing some of our products, primarily due to
our failure to adequately anticipate the resources necessary for our development
efforts and, in some cases, our decision to devote development resources to
other activities. While we believe we have made improvements in each of these
areas, we may encounter technical or other difficulties that could delay
introduction of new products in the future. If we are unable, for technological
or other reasons, to develop competitive products in a timely manner in response
to changes in the industry, our business and operating results will be
materially and adversely affected.
Our Videoconferencing Business is Highly Competitive.
Our business is highly competitive. Our competitors include the
following manufacturers:
o PictureTel Corporation;
o Polycom Corporation;
o Sony Corporation;
o Nippon Electric Corporation;
o Mitsubishi, Ltd.;
o Fujitsu, Ltd.;
o Panasonic, Ltd.;
o British Telecommunications plc.; and
o Tandberg
Our existing competitors and many of our potential competitors are more
established, benefit from greater market recognition and have greater financial,
technological, production and marketing resources than we do. These factors may
materially and adversely affect our competitive position and accordingly, we
cannot assure you that we will be able to compete successfully in the future. We
cannot assure you that we will have sufficient resources to make continued new
investments in product development and sales and marketing or that we will be
able to make technological advances necessary to remain competitive.
Some of our competitors have devoted significant resources to the
development and marketing of person-toperson visual communications products,
such as desktop videoconferencing systems and videophones, which may result in
increased competition. As additional forms of conferencing systems, such as
desktop videoconferencing systems, emerge, manufacturers and suppliers of
desktop computer systems and software may elect to offer videoconferencing
products, thereby increasing competition.
While our Business Plan now calls for Extending Videoconferencing for
the Internet, This Strategy is New and May Not Succeed.
Through our acquisition of the assets of Vosaic in March 1999, we
acquired software technology that permits streaming of video through a web
browser on the world wide web. We intend to incorporate this technology into our
PC-based videoconferencing systems. Once incorporated into our systems, this
technology will permit an individual with nothing more than a PC with Internet
access to participate in Internet-based videoconferencing sessions. This is a
new strategy for us, and we cannot assure you that this feature will be welcomed
by our customers. Because we have made a substantial investment in this
technology, we could fail to realize on this investment if this business
strategy and new product functionality is not embraced by our customers.
Competition For Personnel in the Videoconferencing Industry is Intense,
and We May be Unable to Attract and Retain Key Personnel for Our Business.
Our development and management of our growth and other activities
depend on the efforts of key management and technical employees. Competition for
such personnel is intense. We use incentives, including competitive compensation
and stock option plans, to attract and retain well-qualified employees. We
cannot assure you, however, that we will continue to attract and retain
personnel with the requisite capabilities and experience. The loss of one or
more of our key management or technical personnel also could materially and
adversely affect us. We generally do not have employment agreements with our key
management personnel or technical employees. Our future success also depends
upon our ability to effectively attract, retain, train, motivate and manage our
employees. Failure to do so could materially and adversely affect our business
and operating results.
We May be Unable to Successfully Implement Our Expansion and Growth
Strategy.
We acquired Compression Labs, Incorporated in 1997. We also acquired
two distributors in Germany and France in 1998, and Vosaic Company in March
1999. These acquisitions have placed and may continue to place a significant
strain on our management, operational and financial resources. The integration
of the personnel and assets which were acquired in these acquisitions and in
other possible future acquisitions could place additional strains on these
management, operational and financial
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resources. These strains may adversely affect our future performance. Our future
performance will depend on our ability to broaden and develop our senior
management and to attract and retain skilled employees, as well as on our
ability to manage our growth successfully.
The Strategy We Use To Distribute Our Products and Our Reliance on Cer-
tain Types of Customers May Adversely Affect Our Business.
We rely substantially on third parties to distribute our products. In
contrast, many of our competitors sell their products primarily to end-users. A
reduction in the sales efforts by some of our current resellers or a termination
of their relationships with us could have a material and adverse effect on our
business and operating results. Some of these resellers also represent or may in
the future represent other lines of products, some of which compete with our
products. We attempt to encourage these resellers to focus on selling our
products through marketing and support programs. However, there is a risk that
these resellers may give higher priority to products of other suppliers,
reducing their efforts devoted to selling our products. Ten of our resellers
accounted for 57% and 53% of our revenues for the fiscal years ended July 31,
1998 and 1997. Typically, our agreements with our resellers involve
non-exclusive arrangements which may be canceled by either party at will and do
not require the reseller to sell minimum amounts of our products. We cannot
assure you that our distribution strategy will be successful or that we will be
able to retain our current resellers or identify new resellers in the future
that are acceptable to us.
We focus a substantial portion of our sales and marketing efforts on
generating sales to customers in education, government, health care and general
business. Since 1993, we have devoted significant resources to generate sales of
our products to these types of customers. A reduction or adverse change in
patterns of capital spending by these types of customers due to general economic
conditions, fiscal policies of government, possible reforms in health care laws
and other factors beyond our control may substantially and adversely affect our
revenues and operating results.
Year 2000 Computer Problems Could Adversely Impact Future Operations and
Results.
The widespread use of computer programs that rely on two-digit date
programs to perform computations and decision-making functions may cause
videoconferencing systems to malfunction in the year 2000 and may lead to
significant business delays in the U.S. and internationally. The year 2000
problem has the potential to significantly impact the videoconferencing industry
since it involves the use of computers and is dependent on third-party suppliers
for electronic components. In addition to potential problems from computer
systems, potential problems could arise from equipment with embedded chips, such
as vaults, elevators and other non-videoconferencing systems. Not all of our
systems are fully year 2000 compliant due to the incorporation of third party
software products that are not fully compliant at this time. If we fail to
properly recognize and address the year 2000 problem in our systems, our
business, financial condition, and results of operations could be materially and
adversely affected.
The year 2000 problem also affects some of our major suppliers of
computers, software, and other equipment. We have discussed the year 2000
problem with some of these suppliers, but we cannot assure you that these
suppliers will resolve any or all year 2000 problems. If our suppliers fail to
resolve year 2000 problems, our business could be materially disrupted.
We expect to identify and resolve all year 2000 problems that could
materially adversely affect our business operations. However, it is impossible
to determine with complete certainty that all year 2000 problems affecting us,
our suppliers or our customers have been identified or corrected. The number of
devices that could be affected and the interactions among these devices are
simply too numerous. In addition, no one can accurately predict how many year
2000 problem-related failures will occur or the severity, duration, or financial
consequences of these perhaps inevitable failures. Moreover, our failure to
adequately address year 2000 issues in our multi-media conferencing systems and
PC software applications could result in litigation, which could be costly and
time-consuming to defend.
We are a Defendant in Some Legal Proceedings.
We acquired Compression Labs, Incorporated in a merger that was
completed May 23, 1997. At the time of the merger, Compression Labs was engaged
in several legal proceedings and disputes relating to matters arising prior to
the merger. We cannot assure you that Compression Labs' legal proceedings can be
resolved favorably to Compression Labs or to us. If these legal proceedings
continue for an extended period of time, they could have an adverse effect upon
our working capital and management's ability to concentrate on its business. An
unfavorable outcome in any one or several such legal proceedings could affect us
in a materially adverse way.
In June 1997, Keytech, S.A. filed suit against Compression Labs in the
United States District Court in Tampa, Florida. Keytech was a distributor of
satellite encoder and decoder products manufactured by a division of Compression
Labs which Compression Labs sold in June 1996. Keytech has asserted that the
equipment sold was defective and did not conform to contract specifications and
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express and implied warranties. Keytech has asserted damages of in excess of $20
million based on its allegations of breach of contract, breach of warranties and
fraud. Compression Labs has filed an answer denying liability and has asserted
cross-claims against Keytech for amounts due and unpaid for equipment sold by
Compression Labs to Keytech.
In November 1998, Philips Electronics North America Corporation filed
suit against Compression Labs in the Superior Court in Santa Clara County,
California. Philips and Compression Labs had purportedly entered into a series
of agreements for the purpose of jointly developing, manufacturing and marketing
consumer premises equipment. Philips has alleged that Compression Labs breached
its obligations to Philips under these purported agreements and refused to pay
Philips more than $4.4 million in development costs and other amounts alleged to
be owed by Compression Labs under the parties' agreements. Philips seeks an
award of damages based on its allegations of breach of contract, breach of a
covenant of good faith and fair dealing and a claim of unfair trade practices
under the California Unfair Competition Act. Pursuant to an exchange of letters
in February 1999, the parties agreed to non-binding mediation of the dispute,
although as of the date of this prospectus, this mediation had not occurred. If
the matter is not resolved through mediation, Compression Labs intends to file
an answer denying liability and will assert various cross-claims against
Philips.
From time to time, we have received, and continue to receive, letters
and demands from other companies claiming that aspects of our technology
products may infringe their patent rights. When we received these kinds of
letters, we typically investigate the validity of the claim and, where
appropriate, may enter into licensing agreements for the disputed patented
technology or we may dispute the claim. We believe this is typical of what is
experienced in other technology corporations. However, it is possible that we
could be sued. It is expensive to defend patent litigation. It is also possible
we could have a patent lawsuit. These factors could adversely affect our
business, financial condition and results of operations.
Our Business Would be Disrupted if We Experienced a Disruption in
Supply.
Substantially all of our electronic components, subsystems and
assemblies are made by outside vendors. Some of our components are currently
available only from sole sources and embody such parties' proprietary
technology. If our supplies are interrupted or if we experience a significant
increase in price of one or more of these components or if a third-party
supplier fails to remain competitive in functionality or price, these factors
could have a materially adverse effect on our business and results of
operations. We cannot assure you that we will not experience such problems in
the future. Similarly, if we are required to incur excessive rework costs
associated with defective components or process errors, this also could
adversely affect our business and operating results. We do not have contracts
with many of our suppliers ensuring continued availability of key electronic
components.
In addition, from time to time we enter into development arrangements
with other third parties to develop and incorporate new features and functions
into our products. As such, we depend upon these third parties to fulfill their
respective obligations under these development arrangements. If these third
parties failed to fulfil their obligation, this also could affect our results of
operations in a materially adverse way.
Our Stock Price has been Subject to Significant Volatility
The market price of our common stock has been, and in the future will
likely be, very volatile. The stock price has been affected by the following
factors, among others:
o the announcement of new products or technological innovations by
us and by our competitors;
o quarter-to-quarter variations in our anticipated or actual
results of operations; and
o general conditions in high technology industries.
The stock market occasionally experiences extreme price and volume
fluctuations, which affects the market prices particularly for many high
technology companies like us, and which are often unrelated to the operating
performance of the specific companies.
ABOUT VTEL
We design, manufacture and market multi-media conferencing systems. Our
systems integrate traditional video and audio conferencing with additional
functions, including the sharing of PC software applications and the
transmission of high-resolution images and facsimiles. Through the use of our
multi-media conferencing systems, users are able to replicate more closely the
impact and effectiveness of face-to-face meetings. Our Pen Pal GraphicsTM and
AppsViewTM user interfaces make our multi-media conferencing systems simpler to
use. Our systems are built upon a system platform which is based on
industry-standard, PC-compatible open hardware and software architecture. By
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leveraging this open architecture design, we are able to integrate into the
videoconference PC-compatible hardware and software applications which allow
users to customize the systems to meet their unique needs. The PC-architecture
also provides a natural pathway to connect our videoconferencing systems onto
local area networks (LANs) and wide area networks (WANs) thereby leveraging the
rapidly expanding network infrastructures being deployed in organizations
throughout the world. Also complementing this open architecture is our
compliance with emerging industry video standards. Our open architecture and
compliance with data and telecommunications standards permit the incorporation
of new functions through software upgrades, thereby extending the useful life of
the user's investment.
The cornerstone of our business strategy is to identify customers that
can most benefit from the advanced functionality of multi-media conferencing
systems and to focus a substantial portion of our sales and marketing efforts on
these customers, including end-users in the areas of education, government,
health care and general business. We distribute our systems almost exclusively
through third-party resellers which include major telecommunications providers
such as Ameritech Corporation, GTE Corporation, SBC Communications, Inc., Sprint
Corporation, U.S. West, Inc., MCI WorldCom, Inc. Corporation and other
value-added resellers. We have built an extensive marketing and sales
organization to support our third-party resellers. This organization provides
marketing programs; field support personnel including sales managers, system
engineers, and business development managers; and personnel with industry
expertise to implement our targeted marketing strategy. Since our inception, we
have sold over 30,000 conferencing systems and multipoint control units.
In November 1995, we completed the acquisition of certain assets and a
specified work force of the Integrated Communications Systems Group of
Peirce-Phelps, Inc. As part of Peirce-Phelps, ICS was a value-added reseller of
videoconferencing systems, and also provided integration, installation and
maintenance services to certain end-users. The completion of the acquisition
allows us to significantly enhance our ability to support our resellers'
abilities to offer systems integration, installation and end-user support to the
ultimate purchaser of our products, thereby allowing the resellers to more
effectively provide an essential part of the services that are integral to the
purchase of our products.
On May 23, 1997, we completed the acquisition of Compression Labs,
Incorporated in exchange for approximately 8.4 million shares of our common
stock. At the time of the acquisition, Compression Labs was a leader in the
development, manufacture and marketing of digital visual communication systems.
On March 9, 1999, we completed our acquisition of the assets of Vosaic
Company, LLC, an Internet video software and technology company. In this
transaction, we paid $230,000 in cash to Vosaic, paid costs associated with
relocating certain of Vosaic's employees to our development site in Sunnyvale,
California, extinguished $150,000 of debt due to us by Vosaic, agreed to issue
1,149,000 shares of our common stock to Vosaic (a portion of which are held in
escrow pending achievement of some specified milestones) and issued warrants to
purchase 125,000 shares of our common stock to former Vosaic employees. We also
agreed to issue warrants to purchase 225,000 shares of our common stock to
Vosaic following the timely issuance of certain U.S. patents. The technology
that we acquired from Vosaic permits streaming of video through a web browser on
the world wide web. We intend to incorporate this technology into our PC-based
videoconferencing systems as well as offer it on a stand alone basis. Once
incorporated into our systems, this technology will permit an individual with
nothing more than a PC with Internet access to participate in Internet-based
videoconferencing sessions.
We were organized as a Delaware corporation and our common stock is
traded on the Nasdaq Stock Market under the symbol "VTEL." Our principal
executive offices are located at 108 Wild Basin Road, Austin, Texas 78746 and
our telephone number is 512-437-2700.
SELECTED FINANCIAL DATA
The following table sets forth consolidated financial data as of the
dates and for the periods indicated and reflects the merger with Compression
Labs on May 23, 1997 which was accounted for as a pooling of interests. The
selected consolidated financial data for the years ended and as of December 31,
1993, 1994 and 1995 and July 31, 1997 and 1998 has been derived from our audited
consolidated financial statements. The consolidated financial data as of July
31, 1995 and 1996 and for the seven months ended July 31, 1995 and 1996 as of
January 31, 1998 and 1999 and for the six months ended January 31, 1998 and 1999
has been derived from our unaudited supplemental consolidated financial
statements. The unaudited consolidated financial statements include all
adjustments, consisting of normal recurring adjustments, which we consider
necessary for a fair presentation of our financial position as of such dates and
the results of operations and cash flows for such periods. Operating results for
six months ended January 31, 1999 are not necessarily indicative of the results
that may be expected for the entire year ended July 31, 1999.
This consolidated financial information gives retroactive effect to our
merger with Compression Labs that was consummated in May 1997, as if the two
companies had operated as a single company for all periods presented. However,
the two companies operated independently prior to the merger and the historical
changes and trends in the financial condition and results of operations of these
two companies resulted from independent activities.
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For the Years For the Seven Months For the Years For the Six Months
Ended December 31, Ended July 31, Ended July 31, Ended January 31
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1993 1994 1995 1995 1996 1997(1) 1998 1998 1999
----------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues $126,547 $169,189 $191,074 $ 98,079 $ 96,962 $191,023 $179,684 $ 86,981 $ 74,570
Gross margin 39,089 66,380 66,843 39,971 35,980 74,702 84,957 40,402 32,400
Net income (loss) from continuing
operations (21,518) (4,816) (17,301) (4,335) (18,507) (44,271) 2,779 388 (14,607)
Net income (loss) (12,817) 169 (53,843) (3,811) (18,507) (52,054) 2,779 388 (14,607)
Net income (loss) per share
from continuing opera-
tions, basic and diluted $ (1.51) $ (0.27) $ (0.90) $ (0.24) $ (0.87) (2.10) 0.12 0.02 (0.63)
Net income (loss) per share,
basic and diluted $ (0.90) $ 0.01 $ (2.81) $ (0.21) $ (0.87) (2.45) 0.12 0.02 (0.63)
Balance Sheet Data:
Working capital $ 85,335 $ 85,088 $ 93,330 $ 76,023 $ 77,091 $ 39,528 $ 41,503 $ 38,770 $ 34,055
Total assets 170,469 178,086 223,061 182,082 175,092 131,135 129,289 118,374 130,254
Long-term liability 1,020 494 985 1,278 -- -- 3,848 -- 20,530
Stockholders' equity 117,595 124,185 139,512 126,739 122,238 76,765 81,258 78,155 65,790
<FN>
- -------------------------
(1) In connection with the merger with Compression Labs, we recorded merger, restructuring and other expenses of $29,397
during the year ended July 31, 1997.
</FN>
</TABLE>
USE OF PROCEEDS
The selling stockholder is selling all of the common stock covered by
this prospectus for its own account. Accordingly, we will not receive any
proceeds from the resale of such common stock. We will bear all expenses
relating to this registration except for brokerage or underwriting commissions
and expenses, if any, which will be paid by the selling stockholder.
PLAN OF DISTRIBUTION; SELLING STOCKHOLDER
This prospectus relates to 1,149,000 shares of common stock that may be
offered and sold from time to time by the selling stockholder. Set forth below
is information, as of the date hereof, regarding the beneficial ownership of the
shares by the selling stockholder.
<TABLE>
<CAPTION>
Number of Shares
of Common Stock Number of
Beneficially Shares of Common Stock
Owned Common Beneficially Owned
Prior to Stock After
Offering (1) Offered Offering (2)
----------------------- ----------------- --------------------------
Selling Stockholder Number Percent
- ------------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Vosaic Company, LLC (3)................ 1,149,000 1,149,000 --- ---
<FN>
- --------------------
* Indicates less than 1%.
(1) Unless otherwise indicated, to our knowledge, Vosaic has sole voting
and sole investment power with respect to all shares of common stock
beneficially owned, subject to community property laws where
applicable. This number represents those shares of common stock held by
the selling stockholder, if any.
(2) Assumes that all shares of common stock offered hereby by the selling
stockholder are actually sold. Such presentation is based on 24,264,537
shares of VTEL common stock outstanding as of March 9, 1999.
(3) The address of Vosaic Company, LLC is 2320 Grand Canal Venice, CA 90291.
</FN>
</TABLE>
The shares of common stock beneficially owned by Vosaic were acquired
in the transaction pursuant to which we acquired substantially all of the assets
of Vosaic effective March 9, 1999. In connection with the acquisition, we agreed
to file the Registration Statement of which this prospectus forms a part.
The selling stockholder has not, nor within the past three years has
the selling stockholder had, any position, office or other material relationship
with us or any of our predecessors or affiliates.
7
<PAGE>
We have been advised by the selling stockholder that it (or, subject to
applicable law, its pledgees, donees, distributees, transferees or other
successors in interest) intends to sell all or a portion of the shares offered
by this prospectus from time to time on the Nasdaq National Market, in
negotiated transactions at fixed prices which may be changed, at market prices
prevailing at the time of sale or at prices reasonably related thereto or at
negotiated prices, or by a combination of the foregoing methods of sale through:
o ordinary brokerage transactions in which the broker solicits
purchases;
o sales to one or more brokers or dealers as principal, and the
resale by such brokers or dealers for their account pursuant to
this prospectus, including resales to other brokers and dealers;
o block trades in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a
portion of the block as principal in order to facilitate the
transaction; or
o negotiated transactions with purchasers with a broker or dealer.
We are not aware as of the date of this prospectus of any agreements between the
selling stockholder and any broker-dealers with respect to the sale of the
shares offered by this prospectus. In connection with distributions of the
shares or otherwise, the selling stockholder may enter into hedging transactions
with broker-dealers. In connection with such transactions:
o broker-dealers may engage in short sales of the shares registered
hereunder in the course of hedging the positions they assume with
selling stockholder;
o the selling stockholder may sell shares of our common stock short
and deliver the shares to close out such short positions;
o the selling stockholder may enter into option or other
transactions with broker-dealers which require the delivery to
the broker-dealer of the shares registered hereunder, which the
broker-dealer may resell pursuant to this prospectus; and
o the selling stockholder may pledge the shares registered
hereunder to a broker or dealer and upon a default, the broker or
dealer may effect sales of the pledged shares pursuant to this
prospectus.
The selling stockholder and any broker, dealer or other agent executing
sell orders on behalf of the selling stockholder may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended, in
which event commissions received by any such broker, dealer or agent and profit
on any resale of the shares of principal may be deemed to be underwriting
commissions under the Securities Act. Such commissions received by a broker,
dealer or agent may be in excess of customary compensation. The shares may also
be sold in accordance with Section 4(1) of the Securities Act or Rule 144 and
Rule 145 under the Securities Act.
Information as to whether underwriters who may be selected by the
selling stockholder, or any other broker-dealer, is acting as principal or agent
for the selling stockholder, the compensation to be received by underwriters who
may be selected by the selling stockholder, or any broker-dealer, acting as
principal or agent for the selling stockholder and the compensation to be
received by other broker-dealers, will, to the extent required, be set forth in
a supplement to this prospectus. Any dealer or broker participating in any
distribution of the shares may be required to deliver a copy of this prospectus,
including the prospectus supplement, if any, to any person who purchases any of
the shares from or through such dealer or broker.
All expenses of registration incurred in connection with the offering
will be borne by us. All selling and other expenses incurred by the selling
stockholder will be borne by the selling stockholder.
The selling stockholder will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation, Rule 102 under Regulation M, which provisions may limit the timing
of purchases and sales of any of the common stock by the selling stockholder.
Rule 102 under Regulation M provides, with certain exceptions, that it is
unlawful for a selling shareholder or its affiliated purchaser to, directly or
indirectly, bid for or purchase or attempt to induce any person to bid for or
purchase, for an account in which the selling shareholder or affiliated
purchaser has a beneficial interest in any securities that are the subject of
the distribution during the applicable restricted period under Regulation M. All
of the foregoing may affect the marketability of the common stock. We will
require the selling stockholder, and its broker if applicable, to provide a
letter that acknowledges his compliance with Regulation M under the Exchange Act
before authorizing the transfer of the selling stockholder's shares.
8
<PAGE>
The selling stockholder may offer all of the shares for sale. Further,
because it is possible that a significant number of shares could be sold at the
same time hereunder, such sales, or the possibility thereof, may have a
depressive effect on the market price of our common stock.
LEGAL MATTERS
The validity of the shares being offered hereby will be passed upon by
Jenkens & Gilchrist, a Professional Corporation, Dallas, Texas.
EXPERTS
The financial statements of VTEL Corporation incorporated in this pros-
pectus by reference to the annual reports on Form 10-K and Form 10-K/A for the
year ended July 31, 1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, on the authority of said
firm as experts in auditing and accounting.
The consolidated statement of operations, stockholders' equity and cash
flows of Compression Labs, Incorporated for the year ended December 31, 1995,
incorporated in this prospectus by reference to the annual reports on Form 10-K
and Form 10-K/A for the year ended July 31, 1998, have been so incorporated in
reliance on the report of KPMG LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection
with the distribution of the securities covered by this Registration Statement.
All of the expenses will be borne by the Company except as otherwise indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
SEC Registration Fee...........................................................................$1,706
Printing and Engraving Fees and Expenses.......................................................*
Legal Fees and Expenses .......................................................................*
Accounting Fees and Expenses...................................................................*
Transfer Agent and Registrar Fees..............................................................*
Miscellaneous..................................................................................*
Total..........................................................................................$1,706 *
<FN>
* To be provided by amendment.
</FN>
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("Section 145")
permits indemnification of directors, officers, agents and controlling persons
of a corporation under certain conditions and subject to certain limitations.
Article Ninth of VTEL's Fourth Amended and Restated Certificate of
Incorporation, as amended, provides for the indemnification of directors,
officers and other authorized representatives of VTEL to the maximum extent
permitted by the Delaware General Corporation Law. Section 145 empowers a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or complete action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer or agent of the corporation or another
enterprise if serving at the request of the corporation. Depending on the
character of the proceeding, a corporation may indemnify against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with such action, suit or
proceeding if the person indemnified acted in good faith and in a manner he
reasonably believed to be in or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In the case of an action
by or in the right of the corporation, no indemnification may be made with
respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine that despite the court in which such action or suit was brought shall
determine that despite the adjudication of liability such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. Section 145 further provides that to the extent a director or officer of
a corporation has been successful in the defense of any action, suit or
proceeding referred to above or in the defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
Article Ninth of VTEL's Fourth Amended and restated Certificate of
Incorporation, as amended, permits it to purchase insurance on behalf of any
such person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not VTEL
would have the power to indemnify him against such liability under the foregoing
provision of the Certificate of Incorporation.
II-1
<PAGE>
Item 16. Exhibits
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated herein by reference to a prior
filing of the Company under the Securities Act or the Exchange Act as indicated
in parenthesis:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C> <C> <C>
3.1 --- Fourth Amended Restated Certificate of Incorporation (incorporated by reference the Exhibit 3.1
to VTEL's quarterly report Form 10-Q for the period ended June 30, 1993).
3.2 --- Amendment to Fourth Amended and Restated Certificate of Incorporation, as filed on May 27,
1997 with the Secretary of State of Delaware (incorporated by reference to Exhibit 3.1 to VTEL's
Annual Report on Form 10-K for the period ended July 31, 1997.)
3.3 --- Bylaws of VTEL as adopted by the Board of Directors of the Company effective as of June 11,
1989 (incorporated by reference to Exhibit 3.3 to VTEL's Registration Statement on Form S-1,
File No. 33-45876, as amended).
3.4 --- Amendment to Bylaws of VTEL as adopted by the Board of Directors of VTEL effective as of
April 28, 1992 (incorporated by reference to Exhibit 19.1 to VTEL's Quarterly Report on
Form 10-Q for the three months ended March 31, 1992).
3.5 --- Amendment to the Bylaws of VTEL as adopted by the Board of Directors of VTEL effective as of
July 10, 1996 (incorporated by reference to Exhibit 4.5 to VTEL's Current Report on Form 8-K
dated July 10, 1996).
4.1 --- Specimen Certificate for the Common Stock (incorporated by reference to Exhibit 4.1 to VTEL's
Registration Statement on Form S-1, File No. 33-45876, as amended).
4.2 --- Rights Agreement dated as of July 10, 1996 between VTEL Corporation and First National Bank
of Boston, which includes the form of Certificate of Designations for Designating Series A
Preferred Stock, $.01 par value, the form of Rights Certificate, and the Summary of Rights to
Purchase Series A Preferred Stock (incorporated by reference to Exhibit 4.1 to VTEL's Current
Report on Form 8-K dated July 10, 1996).
5.1* --- Opinion of Jenkens & Gilchrist, a Professional Corporation, regarding legality of shares being
registered.
23.1* --- Consent of PricewaterhouseCoopers LLP. 23.2* --- Consent of KPMG LLP.
23.3* --- Consent of Jenkens & Gilchrist, a Professional Corporation (included in Exhibit 5.1 hereof).
24.1 --- Powers of attorney (included in the signature page of this Registration Statement).
<FN>
-------
* Filed herewith.
</FN>
</TABLE>
(b) Financial Statement Schedules:
Not Applicable.
Item 17. Undertakings.
The undersigned 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.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, 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 of 1933, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the provisions set forth in Item 15, or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by a
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 Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all requirements for filing a Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Austin, State of Texas, on May 4, 1999.
VTEL CORPORATION
By: /s/ Jerry Bensen
------------------------------
Jerry Bensen
Chief Executive Officer and President
(Principal Executive Officer)
Each individual whose signature appears below hereby designates and
appoints Jerry S. Bensen, Jr. and Rodney S. Bond, and each of them, any one of
whom may act without the joinder of the other, as such person's true and lawful
attorney-in-fact and agents (the "Attorneys-in-Fact") with full power of
substitution and resubstitution, for such person and in such person's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, which
amendments may make such changes in this Registration Statement as any
Attorney-in-Fact deems appropriate, and any registration statement relating to
the same offering filed pursuant to Rule 462(b) under the Securities Act of 1933
and requests to accelerate the effectiveness of such registration statements,
and to file each such amendment with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting unto
such Attorneys-in-Fact and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as such person might or
could do in person, hereby ratifying and confirming all that such
Attorneys-in-Fact or either of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
their capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jerry S. Benson, Jr. Chief Executive Officer, President and May 4, 1999
- ----------------------------------------- Director
Jerry S. Benson, Jr. (Principal Executive Officer)
/s/ Rodney S. Bond Chief Financial Officer, Vice President- May 4, 1999
- ----------------------------------------- Finance and Secretary
Rodney S. Bond (Principal Financial Officer and Principal
Accounting Officer)
/s/ F.H. Dick Moeller Chairman of the Board of Directors May 4, 1999
- -------------------------------------------
F.H. Dick Moeller
/s/ Gordon H. Mathews Director May 4, 1999
- ----------------------------------------
Gordon H. Mathews
/s/ Max D. Hopper Director May 4, 1999
- -----------------------------------------
Max D. Hopper
/s/ T. Gary Trimm Director May 4, 1999
- -----------------------------------------
T. Gary Trimm
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Richard Snyder Director May 4, 1999
- -----------------------------------------
Richard Snyder
/s/ Eric L. Jones Director May 4, 1999
- -------------------------------------------
Eric L. Jones
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
<S> <C> <C> <C>
3.1 --- Fourth Amended Restated Certificate of Incorporation (incorporated by reference the Exhibit 3.1
to VTEL's quarterly report Form 10-Q for the period ended June 30, 1993).
3.2 --- Amendment to Fourth Amended and Restated Certificate of Incorporation, as filed on May 27,
1997 with the Secretary of State of Delaware (incorporated by reference to Exhibit 3.1 to VTEL's
Annual Report on Form 10-K for the period ended July 31, 1997.)
3.3 --- Bylaws of VTEL as adopted by the Board of Directors of the Company effective as of June 11,
1989 (incorporated by reference to Exhibit 3.3 to VTEL's Registration Statement on Form S-1,
File No. 33-45876, as amended).
3.4 --- Amendment to Bylaws of VTEL as adopted by the Board of Directors of VTEL effective as of
April 28, 1992 (incorporated by reference to Exhibit 19.1 to VTEL's Quarterly Report on
Form 10-Q for the three months ended March 31, 1992).
3.5 --- Amendment to the Bylaws of VTEL as adopted by the Board of Directors of VTEL effective as of
July 10, 1996 (incorporated by reference to Exhibit 4.5 to VTEL's Current Report on Form 8-K
dated July 10, 1996).
4.1 --- Specimen Certificate for the Common Stock (incorporated by reference to Exhibit 4.1 to VTEL's
Registration Statement on Form S-1, File No. 33-45876, as amended).
4.2 --- Rights Agreement dated as of July 10, 1996 between VTEL Corporation and First National Bank
of Boston, which includes the form of Certificate of Designations for Designating Series A
Preferred Stock, $.01 par value, the form of Rights Certificate, and the Summary of Rights to
Purchase Series A Preferred Stock (incorporated by reference to Exhibit 4.1 to VTEL's Current
Report on Form 8-K dated July 10, 1996).
5.1* --- Opinion of Jenkens & Gilchrist, a Professional Corporation, regarding legality of shares being
registered.
23.1* --- Consent of PricewaterhouseCoopers LLP. 23.2* --- Consent of KPMG LLP.
23.3* --- Consent of Jenkens & Gilchrist, a Professional Corporation (to be included in Exhibit 5.1 hereof).
24.1 --- Powers of attorney (included in the signature page of this Registration Statement).
<FN>
- -------------------
* Filed herewith.
</FN>
</TABLE>
[letterhead of Jenkens & Gilchrist]
May 4, 1999
VTEL Corporation
108 Wild Basin Road
Austin, Texas 78746
Re: VTEL Corporation
Registration Statement on Form S-3
Ladies and Gentlemen:
This firm has acted as counsel to VTEL Corporation, a Delaware
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-3 (the "Registration Statement") to be filed
with the Securities and Exchange Commission on or about May 4, 1999, under
the Securities Act of 1933, as amended (the "Securities Act"), relating to
1,149,000 shares (the "Shares") of the Company's common stock, par value $0.01
per share (the "Common Stock") held by Vosaic Company, LLC.
You have requested the opinion of this firm with respect to certain
legal aspects of the proposed offering. In connection therewith, this firm has
examined and relied upon the original, or copies identified to our satisfaction,
of (1) the Company's Certificate of Incorporation and the bylaws of the Company,
as amended; (2) minutes and records of the corporate proceedings of the Company
with respect to the issuance of the Shares and related matters; (3) the
Registration Statement and exhibits thereto; and (4) such other documents and
instruments as this firm has deemed necessary for the expression of these
opinions. In making the foregoing examinations, this firm has assumed the
genuineness of all signatures and the authenticity of all documents submitted to
this firm as originals, and the conformity to original documents of all
documents submitted to this firm as certified or photostatic copies. As to
various questions of fact material to this opinion letter, and as to the content
and form of the Certificate of Incorporation, the bylaws, minutes, records,
resolutions and other documents or writings of the Company, this firm has
relied, to the extent it deems reasonably appropriate, upon representations or
certificates of officers or directors of the Company and upon documents, records
and instruments furnished to this firm by the Company, without independent check
or verification of their accuracy.
Based upon our examination, consideration of, and reliance on the
documents and other matters described above, this firm is of the opinion that
the Shares are duly authorized, validly issued, fully paid and nonassessable.
<PAGE>
VTEL Corporation
May 4, 1999
Page 2
The opinions expressed in this Opinion Letter assume that the Shares
were duly authorized and validly issued by the Company.
This firm hereby consents to the filing of this opinion letter as an
exhibit to the Registration Statement and to references to our firm included in
or made a part of the Registration Statement. In giving this consent, this firm
does not admit that it comes within the category of person whose consent is
required under Section 7 of the Securities Act or the Rules and Regulations of
the Securities and Exchange Commission thereunder.
Very truly yours,
JENKENS & GILCHRIST,
a Professional Corporation
By: /s/ L. Steven Leshin
----------------------
L. Steven Leshin, Esq.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the prospectus con-
stituting part of this Registration Statement on Form S-3 of our report dated
September 22, 1998, which appears in VTEL Corporation's annual reports on Form
10-K and Form 10-K/A for the year ended July 31, 1998. We also consent to the
reference to us under the heading "Experts" in such prospectus.
PricewaterhouseCoopers LLP
/s/ PricewaterhouseCoopers LLP
- ------------------------------
Austin, Texas
May 3, 1999
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
on Form S-3 of VTEL Corporation of our report dated March 13, 1996 with respect
to the consolidated statements of operations, stockholders' equity and cash
flows of Compression Labs, Incorporated for the year ended December 31, 1995,
which report appears in the annual reports on Form 10-K and Form 10-K/A of VTEL
Corporation for the year ended July 31, 1998. We also consent to the reference
to us under the heading "Experts" in the prospectus.
KPMG LLP
/s/ KPMG, LLP
- --------------------------
Mountain View, California
May 3, 1999
