<PAGE>
As filed with the Securities and Exchange Commission on October 8, 1998
Registration Statement No. 333-
--------
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
LEVEL ONE COMMUNICATIONS, INCORPORATED
(Exact name of Registrant as specified in its charter)
CALIFORNIA 33-0128224
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9750 Goethe Road
SACRAMENTO, CALIFORNIA 95827
(Address of Principal Executive Offices)
JOHN KEHOE
SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER
LEVEL ONE COMMUNICATIONS, INCORPORATED
9750 GOETHE ROAD
SACRAMENTO, CA 95827
(916) 855-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
______________________
COPIES TO:
GILLES S. ATTIA, ESQ.
GRAHAM & JAMES LLP
400 CAPITOL MALL, SUITE 2400
SACRAMENTO, CALIFORNIA 95814
(916) 558-6700
______________________
Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are to be 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 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment 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 statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED OFFERING PRICE PER OFFFERING PRICE (1) REGISTRATION FEE
REGISTERED SHARE (1)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par
value per share..... 4,217,855(2) $ 18.87 $ 79,590,923.85 $ 23,479.33
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee required
by Section 6(b) of the Securities Act and computed pursuant to Rule 457(c)
under the Securities Act based upon the average of the high and low prices
of the Common Stock of the Registrant on October 2, 1998, as reported on
the Nasdaq National Market.
(2) Includes 256,493 shares of Common Stock of the Registrant reserved for
issuance upon exercise of warrants.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to such Section 8(a), may determine.
<PAGE>
PROSPECTUS
(SUBJECT TO COMPLETION)
OCTOBER , 1998
--
4,217,855 SHARES
LEVEL ONE COMMUNICATIONS, INCORPORATED
COMMON STOCK
This Prospectus relates to the public offering, which is not being
underwritten, of up to 4,217,855 shares of Common Stock, no par value per share
(the "Shares"), of Level One Communications, Incorporated, a California
corporation ("Level One" or the "Company"), which may be offered from time to
time by certain stockholders of the Company or by pledgees, donees,
distributees, transferees or other successors in interest that receive such
shares as a gift, partnership distribution or other non-sale related transfer
(the "Selling Stockholders"). The Company will receive no part of the proceeds
of such sales. All of the Shares were originally issued by the Company in
connection with the Company's acquisition of Acclaim Communications, Inc.
("Acclaim"), a Delaware corporation, by and through a merger of a wholly-owned
subsidiary of Level One, Aardvark Acquisition Corp. ("Aardvark"), with and into
Acclaim (the "Merger"). The Shares were issued pursuant to an exemption from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), provided by Rule 506 of Regulation D thereunder. The Shares
are being registered by the Company pursuant to the Agreement and Plan of
Reorganization dated as of June 25, 1998 (the "Merger Agreement") by and between
Level One, Aardvark and Acclaim.
The Shares may be offered by the Selling Stockholders from time to time in
one or more transactions as described under "Plan of Distribution." To the
extent required, the number of shares to be sold, the name of the Selling
Stockholder(s), the purchase price, the name of any agent or broker-dealer, and
any applicable commissions, discounts or other items constituting compensation
to such agent or broker-dealer with respect to a particular offering will be set
forth in a supplement or supplements to this Prospectus (each, a "Prospectus
Supplement") to the extent not otherwise disclosed herein. The aggregate
proceeds to the Selling Stockholder(s) from the sale of the Shares offered from
time to time hereby will be the purchase price of the Shares sold less
commissions, discounts and other compensation, if any, paid by the Selling
Stockholder(s) to any agent or broker-dealer. The price at which any of the
Shares may be sold, and the commissions, if any paid in connection with any such
sale, are unknown and may vary from transaction to transaction. The Company will
pay all expenses incident to the offering and sale of the Shares to the public
other than any commissions and discounts of underwriters. See "Selling
Stockholders" and "Plan of Distribution."
The Company's Common Stock is listed on the Nasdaq National Market under
the symbol "LEVL." On October , 1998, the last sale price of the Company's
---
Common Stock was $[ ] per share.
------
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 7 HEREOF.
The Securities and Exchange Commission (the "Commission") may take the view
that, under certain circumstances, the Selling Stockholders and any broker-
dealers or agents that participate with the Selling Stockholders in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act. Commissions, discounts or concessions received by any
such broker-dealer or agent may be deemed to be underwriting commissions under
the Securities Act. The Company and the Selling Stockholders have agreed to
certain indemnification arrangements. See "Plan of Distribution."
------------------------
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 OCTOBER , 1998
--
<PAGE>
QUESTIONS AND ANSWERS
ABOUT THIS OFFERING
Q. WHAT IS THE PURPOSE OF THIS OFFERING?
A. In July 1998, the Company completed the acquisition of Acclaim through a
merger of a subsidiary of the Company with and into Acclaim (referred to
herein as the "Merger"). As part of the Merger, the former stockholders of
Acclaim (the "Selling Stockholders") received shares of Company common
stock in exchange for their shares of Acclaim capital stock and the
assumption by the Company of options and warrants to purchase Acclaim
capital stock. The Company issued the shares of its common stock to the
Acclaim stockholders in reliance on a private placement exemption under the
federal securities laws. Because the shares of common stock were issued in
a private placement transaction such shares are deemed to be "restricted
securities" for the purpose of the federal securities laws and, as a
result, the shares are subject to substantial restrictions on resale under
such laws. The Company has filed this Prospectus (and the related
registration statement) as part of its obligation under a registration
rights agreement with the Selling Stockholders. This Prospectus (and the
related registration statement) makes it possible for the Selling
Stockholders to sell the shares of Company common stock received by them in
the Merger. A Selling Stockholder is required to deliver a copy of this
Prospectus in connection with any sale of shares by them.
Q. WILL THE COMPANY RECEIVE ANY PROCEEDS FROM THIS OFFERING?
A. No. This Prospectus (and the related registration statement) has been
filed to permit the Selling Stockholders to sell the shares of Company
common stock received by them in the Merger. All proceeds from the sales
of Company common stock by the Selling Stockholders will be kept by the
Selling Stockholders and the Company will receive no portion of the
proceeds. The Selling Stockholders are required to pay all commissions,
discounts, concessions and any other compensation paid to broker-dealers or
other agents of the Selling Stockholders as well as any other expenses
incurred by the Selling Stockholders in connection with such sales.
Q. ARE THE SELLING STOCKHOLDERS REQUIRED TO SELL THEIR SHARES OF COMPANY
COMMON STOCK?
A. No. The Selling Stockholders are not required to sell their shares of
Company common stock. The Selling Stockholders will make the decision
whether or not to sell their shares of Company common stock, and the
timing, manner and size of any such sale. See the section of this
Prospectus entitled "Plan of Distribution" beginning on page 14 for
further details regarding the different
<PAGE>
types of transactions the Selling Stockholders may engage in with respect
to their shares of Company common stock.
Q. MAY THE SELLING STOCKHOLDERS SELL THEIR SHARES OF COMPANY COMMON STOCK
RECEIVED IN THE MERGER AT ANY TIME?
A. No. As part of their obligations under the registration rights agreement
with the Company, the Selling Stockholders have agreed not to sell their
shares of Company common stock using this Prospectus during the period
beginning twenty-eight calendar days prior to the end of each of the
Company's fiscal quarters and ending on the second trading day following
the date of the Company's public announcement of its earnings for such
fiscal quarter.
Q. HOW LONG WILL THE SELLING STOCKHOLDERS BE ABLE TO USE THIS PROSPECTUS?
A. Under the terms of the registration rights agreement, the Company has
agreed to keep this Prospectus (and the related registration statement)
effective until July 6, 1999. After July 6, 1999, the Selling Stockholders
will no longer be able to use the Prospectus to sell their shares of
Company common stock and the Selling Stockholders will again have to comply
with the resale restrictions of the federal securities laws applicable to
"restricted securities."
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Commission. Such reports, proxy and information statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
NW, Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, Suite 1300, New
York, New York 10048 and Chicago Regional Office, Northwest Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may be obtained by mail at prescribed rates from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, NW, Washington,
D.C. 20549. The Commission maintains a web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The address of the site is
http://www.sec.gov. The Common Stock of the Company is listed on the Nasdaq
National Market, and such reports, proxy and information statements and other
information concerning the Company may be inspected at the offices of Nasdaq
Operations, 1735 K Street, NW, Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Shares offered hereby, reference
is hereby made to the Registration Statement. The Registration Statement may be
inspected at the public reference facilities maintained by the Commission at the
addresses set forth in the preceding paragraph. The Company has filed the
Registration Statement electronically with the Commission via the Commission's
Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. Statements
contained herein concerning any document filed as an exhibit are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such reference. The Company intends to distribute
to its stockholders annual reports containing audited financial statements and
will make available copies of quarterly reports for the first three quarters of
each fiscal year containing unaudited interim financial information.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File No.
0-22068) pursuant to the Exchange Act are hereby incorporated by reference in
this Prospectus:
(1) The Company's Annual Report on Form 10-K for the year ended
December 29, 1997;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 29, 1998 and June 28, 1998;
(3) The Company's Current Reports on Form 8-K, Form 8-K/A (Amend. No. 1)
and 8-K/A (Amend. No. 2), filed with the Commission on July 17,
September 21, 1998 and October 7, 1998;
(4) All other documents filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by
the annual report referred to in (1) above; and
5
<PAGE>
(5) The description of the Registrant's Common Stock contained in Items 1
and 2 of the Registrant's Registration Statement on Form 8-A filed
pursuant to Section 12 of the Exchange Act, filed with the Commission
on July 9, 1993.
All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference into this Prospectus, to the extent required, and to
be a part of this Prospectus from the date of filing of such reports and
documents.
Any statement contained in a document incorporated by reference into this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon written or oral request of such person, a copy of any or all of
the information that is incorporated by reference into this Prospectus (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Requests for such documents
should be made to Level One Communications, Incorporated, 9750 Goethe Road,
Sacramento, California 95827, (916) 855-5000.
THE COMPANY
Level One designs, develops and markets mixed-signal application specific
standard integrated circuit products ("ASSPs") for high-speed digital signal
transmission and networking connectivity to systems that transport information,
within an office or around the world. Such systems connect to local area
networks ("LANs"), wide area networks ("WANs") and public telephone transmission
networks. LANs, WANs, and telephone transmission networks make possible such
activities as the use of intra-enterprise networking ("intranets") and the use
of the Internet and World Wide Web.
Level One ASSPs transmit, regenerate and receive digitized voice, data, and
video signals using a wide variety of protocols. Because these products both
transmit and receive signals, they are called "transceivers". All networks,
LAN, WAN, and transmission, require transceivers. Level One combines its
strengths in analog and digital circuit design with its communications systems
expertise to produce mixed-signal solutions with increased functionality and
greater reliability, resulting in lower total system cost.
As the volume of transmitted digital information continues to grow,
communications original equipment manufacturers ("OEMs") that supply products
and systems to the transmission and networking markets face a fundamental
challenge of providing greater data on a cost-effective basis. Level One
addresses the needs of leading communications OEMs by providing high performance
mixed-signal ASSPs that optimize the allocation of analog and digital signal
processing functions. The Company's proprietary simulation software and
sophisticated design and testing methodology accelerate the product design cycle
to improve time to market.
A key challenge for Level One's OEM customers and their end users is the
creation of access technologies that maximize the use of the large installed
base of twisted-pair copper telephone lines to transport information. With more
than 1.3 billion miles in place in the United States, copper telephone wire is
expected to remain the primary medium for local connectivity to the "electronic
superhighway" transport media that handle long-distance data transmissions.
Such long-distance transport media include copper telephone lines, coaxial
cable, fiber optic cable, wireless and satellite transmission. Copper telephone
wire, which was originally designed to transmit relatively slow analog voice
signals, requires special signal conditioning circuits to enable transmission of
high-speed digital signals.
6
<PAGE>
The Company was incorporated in California in November 1985. The Company's
executive offices are located at 9750 Goethe Road, Sacramento, California 95827
and its telephone number is (916) 855-5000. At the 1998 Annual Meeting of
Shareholders of the Company, the shareholders approved a proposal to
reincorporate the Company in the State of Delaware. The Company currently
expects the reincorporation to be completed in the fourth quarter of fiscal
1998.
RISK FACTORS
THIS PROSPECTUS AND CERTAIN INFORMATION INCORPORATED BY REFERENCE HEREIN
CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. THE COMPANY'S ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH UNDER "RISK
FACTORS" AND ELSEWHERE IN, OR INCORPORATED BY REFERENCE INTO, THIS PROSPECTUS.
Manufacturing Risks
The Company does not manufacture the wafers used for its products. The
Company's wafers are manufactured by foundries located in the United States,
Europe and Asia. The Company depends upon these suppliers to produce wafers at
acceptable yields and to deliver them in a timely manner at competitive prices.
The Company may sustain an adverse impact on operating results from problems
with the cost, timeliness, yield and quality of wafer deliveries from suppliers.
From time to time, the available industry-wide foundry capacity can fluctuate
significantly. During periods of constrained supply, the Company may experience
difficulty in securing an adequate supply of wafers, and/or its suppliers may
increase wafer prices. The Company's operating results depend in substantial
part on its ability to maintain or increase the capacity available from its
existing or new foundries. In prior years, the Company has experienced
increased costs and delays in customer shipments as a result of a foundry
reducing shipments to the Company without prior notice, requiring the Company to
transfer products to a new foundry. Although the Company believes that it has
planned to meet customer demand, there can be no assurances that unforeseen
demand, current supplier interruptions or other changes will not have a material
impact on the Company's business.
Manufacturing process technologies are subject to rapid change. Other
companies in the industry have experienced difficulty in migrating to new
manufacturing processes, and, consequently, have suffered reduced yields, delays
in product deliveries and increased expense levels. The Company's business,
financial condition and results of operations could be materially adversely
affected if any such transition is substantially delayed or inefficiently
implemented.
The Company is also dependent upon third-party assembly companies that
package or test the Company's devices. The Company depends upon these suppliers
to produce products in a timely manner and at competitive prices. The Company
may sustain an adverse financial impact from problems with the cost, timeliness,
yield and quality of product deliveries from these suppliers.
Factors Affecting Annual and Quarterly Operating Results
The semiconductor industry is characterized by rapid technological change,
intense competitive pressure and cyclical market patterns. The Company's
results of operations are affected by a wide variety of factors, including
general economic conditions, semiconductor industry environment, changes in
average selling prices, the timing of new product introductions (by the Company
and its customers), use of new technologies, the ability to safeguard patents
and intellectual property, and rapid change of demand for products. The level
of net revenues in any specific quarter can also be affected by the level of
orders placed during that quarter. The Company attempts to respond to changes
in market conditions as soon as possible; however, the rapidity of their onset
may make prediction of and reaction to such events difficult. Due to the
foregoing and other factors, past results, such as those described in this
report, may not be predictive of future performance.
7
<PAGE>
Dependence on New Products
The Company's future success depends on its ability to timely develop and
introduce new products which compete effectively. Because of the complexity of
its products, the Company may experience delays in completing development and
introduction of new products, and, as a result, not achieve the market share
anticipated for such products. The Company's strategy is to develop products
for the fastest growing segments of the communications market. The Company
conducts its own analysis of market trends and reviews forecasts and information
provided by industry analysts. Market conditions may change rapidly as
technology, economic, or user-preference conditions cause different
communications technologies to experience growth other than that forecast by the
Company or others. There can be no assurance that the Company will successfully
identify new product opportunities and bring new products to market in a timely
manner, that products or technologies developed by others will not render the
Company's products or technologies obsolete or noncompetitive, or that the
Company's products will be selected for design into the products of its targeted
customers. In addition, the average selling price for any particular product
tends to decrease over the product's life. To offset such price decreases, the
Company relies primarily on obtaining yield improvements and corresponding cost
reductions in the manufacture of existing products and on introducing new
products which incorporate advanced features and other price/performance factors
such that higher average selling prices and higher margins are achievable
relative to existing product lines. To the extent that cost reductions and new
product introductions with higher margins do not occur in a timely manner, or
the Company's products do not achieve market acceptance, the Company's operating
results could be adversely affected.
Management of Growth; Dependence on Key Personnel
The Company is currently experiencing a period of significant growth which
has placed, and could continue to place, a significant strain on the Company's
personnel and other resources. The Company's ability to manage its growth
effectively will require continued expansion and refinement of the Company's
operational, financial, management and control systems, as well as a significant
increase in the Company's development, testing, quality control, marketing,
logistics and service capabilities, any of which could place a significant
strain on the Company's resources. The Company's success also depends to a
significant extent upon its ability to retain and attract key personnel.
Competition for such personnel is intense and there can be no assurance that the
Company will be able to retain and attract key personnel. If the Company's
management is unable to manage growth effectively, maintain the quality and
marketability of the Company's products and retain, hire and integrate key
personnel, the Company's business, financial condition and results of operations
could be materially adversely affected.
Intellectual Property
The Company relies upon patent, trademark, trade secret and copyright law
to protect its intellectual property. There can be no assurance that such
intellectual property rights can be successfully asserted or will not be
invalidated, circumvented or challenged. Litigation, regardless of its outcome,
could result in substantial cost and diversion of resources for the Company.
Any infringement claim or other litigation against or by the Company could have
a material effect on the Company's financial condition and results of
operations. In November 1995 the Company commenced infringement litigation
against a competitor.
Semiconductor Industry
The semiconductor industry has historically been cyclical and subject to
significant economic downturns at various times. The Company may experience
substantial period-to-period fluctuations in operating results due to general
semiconductor industry conditions, overall economic conditions or other factors.
In addition, the securities of many high technology companies have
historically been subject to extreme price and volume fluctuations, factors
which may affect the market price of the Company's common stock. As is common
in the semiconductor industry, the Company frequently ships more product
8
<PAGE>
in the third month of a quarter than in the other months. If a disruption in the
Company's production or shipping occurs near the end of a quarter, the Company's
revenues for that quarter could be adversely affected.
The Company must order wafers and build inventory in advance of product
shipments. There is risk that the Company could produce excess or insufficient
inventories of particular products because the Company's markets are volatile
and subject to rapid technology and price changes. This inventory risk is
heightened because certain of the Company's customers place orders with long
lead times which may be subject to cancellation or rescheduling by that
customer. To the extent the Company's produces excess or insufficient
inventories of particular products, the Company's revenues and earnings could be
adversely affected.
Increased demand for semiconductor products may result in a reduction in
the availability of wafers from foundries. Such capacity limitations may
adversely affect the Company's ability to deliver products on a timely basis and
affect the Company's margins. Additionally, the Company believes that during
periods of strong demand and/or restricted semiconductor capacity, customers
will over-order to assure an adequate supply. Certain of the Company's
customers may cancel or postpone orders without notice if product becomes
available elsewhere.
Shortages of components from other suppliers could cause the Company's
customers to cancel or delay programs incorporating the Company's products,
resulting in the cancellation or delay of orders for the Company's products.
Intense Competition
The semiconductor industry is intensely competitive. The Company's
competition consists of semiconductor companies and semiconductor divisions of
vertically integrated companies. In the telecom market, the Company's principal
competitors are Brooktree Corporation (a subsidiary of Rockwell International,
Inc.), Crystal Semiconductor, Inc. (a subsidiary of Cirrus Logic, Inc.)
("Crystal"), Dallas Semiconductor, Inc., Lucent Technologies Inc. ("Lucent"),
PMC-Sierra Inc. and Siemens A.G. In the networking market, the Company's
principal competitors are Advanced Micro Devices, Inc., Broadcom Corporation,
Crystal, Integrated Circuit Systems, Inc., Lucent, Micro Linear Corp., National
Semiconductor Corporation, Quality Semiconductor, Inc., Seeq Technologies, Inc.
and Texas Instruments, Incorporated. Many of these competitors have longer
operating histories, greater name recognition, access to larger customer bases
and significantly greater financial and other resources than the Company with
which to pursue engineering, manufacturing, marketing and distribution of
products.
The ability of the Company to compete successfully in the rapidly evolving
area of high performance integrated circuit technology depends on factors both
within and outside of the Company's control. Such factors include, without
limitation, success in designing and manufacturing new products, implementing
new technologies, intellectual property programs, product quality, reliability,
price, efficiency of production, and general economic conditions. There is no
assurance that the Company will be able to compete successfully against current
and future competitors. Increased competition may result in price reductions,
reduced gross margins and loss of market share, any of which may have a material
adverse effect on the Company's business, financial condition and results of
operations.
International Operations
Due to its reliance on international sales and foreign third-party
manufacturing and assembly operations, the Company is subject to the risks of
conducting business outside of the United States including government regulatory
risks, political, social and economic instability, potential hostilities and
changes in diplomatic and trade relationships. There can be no assurance that
one or more of the foregoing factors will not have a material adverse effect on
the Company's business, financial condition or operating results. The recent
economic downturn in several Asian countries has not affected the Company in a
material way, but there can be no assurances that continued economic problems in
Asia or any other region of the world will not affect the Company.
9
<PAGE>
Increased Leverage
As a result of the Company's sale in August and September 1997 of its 4%
Convertible Subordinated Notes due 2004 (the "Notes"), the Company has incurred
approximately $115.0 million in additional indebtedness which increases the
ratio of its long-term debt to its total capitalization from 3.0%, at June 29,
1997, to 48.8%, at December 28, 1997. As a result of this increased leverage,
the Company's interest obligations have increased substantially. The degree to
which the Company will be leveraged could adversely affect the Company's ability
to obtain additional financing for working capital, acquisitions or other
purposes and could make it more vulnerable to economic downturns and competitive
pressures. The Company's increased leverage could also adversely affect its
liquidity, as a substantial portion of available cash from operations may have
to be applied to meet debt service requirements and, in the event of a cash
shortfall, the Company could be forced to reduce other expenditures and forego
potential acquisitions to be able to meet such requirements.
Volatility of Stock Price
Economic and other external factors, many of which are beyond the control
of the Company, may have a significant impact on the Company's business and on
the market price of its Common Stock. Such factors include, without limitation,
fluctuations in product revenue and net income of the Company or its
competitors, shortfalls in the Company's operating results from levels forecast
by securities analysts, announcements concerning the Company, its competitors or
customers, announcements of technological innovations by the Company, its
competitors or its customers, the introduction of new products or changes in
product pricing policies by the Company, its competitors or its customers,
market conditions in the industry and the general state of the securities
market. In addition, the stock prices of many technology companies fluctuate
significantly for reasons that may be unrelated or disproportionate to operating
results. These fluctuations, as well as general economic, political and market
conditions such as recession or international instability, may adversely affect
the market price of the Company's Common Stock.
Year 2000 Compliance
The Company has reviewed its exposure to risks that could be caused if
internal computer systems do not correctly recognize date information when the
year changes to 2000. Management believes that the likelihood of a material
adverse impact due to problems with internal systems or products sold to
customers is remote and expects that the cost of remedying internal systems that
currently cannot process the date change will not have a material effect on the
Company's financial position or overall trends in results of operations. The
Company is also contacting critical suppliers of products and services to
determine that the supplier's operations and the products and services they
provide are year 2000 compliant. There can be no assurance that another
company's failure to ensure year 2000 capability would not have an adverse
effect on the Company.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All proceeds from the sale of the Shares will be for the account of the
Selling Stockholders, as described below. See "Selling Stockholders" and "Plan
of Distribution" described below.
10
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth, as of the date of this Prospectus, the name
of each of the Selling Stockholders, the number of Shares that each such Selling
Stockholder owns as of such date, the number of Shares owned by each Selling
Stockholder that may be offered for sale from time to time by means of this
Prospectus, and the number of Shares to be held by each such Selling Stockholder
assuming the sale of all of the Shares offered hereby. Except as indicated, none
of the Selling Stockholders has held any position or office or had a material
relationship with the Company or any of its affiliates within the past three
years other than as a result of the ownership of the Company's Common Stock. The
Company may amend or supplement this Prospectus from time to time to update the
disclosure set forth herein.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AFTER
OFFERING
SHARES SHARES WHICH MAY BE
BENEFICIALLY SOLD PURSUANT TO THIS
SELLING STOCKHOLDER OWNED(1) PROSPECTUS(2) NUMBER PERCENT
<S> <C> <C> <C> <C>
Visveswar Akella(3).............................. 1,302,460 1,302,460 -- --
Tom Hsien-Chin Hsieh and Ling Ling T.
Hsieh............................................ 1,360 1,360 -- --
Eugene Fleisher.................................. 3,429 3,429 -- --
Swaminathan Ganesan.............................. 1,360 1,360 -- --
Steve Gulesserian................................ 1,209 1,209 -- --
Joseph Toste..................................... 3,930 3,930 -- --
Douglas Denny.................................... 2,116 2,116 -- --
Anindya Chakraborty.............................. 2,947 2,947 -- --
Frances Hsin-Pei Wang............................ 2,154 2,154 -- --
Durvasula Sastry................................. 9,071 9,071 -- --
Jagannadham Akella............................... 7,257 7,257 -- --
Seshagiri Rao Mandalika.......................... 3,628 3,628 -- --
Ethindrababu A. Baktha........................... 3,628 3,628 -- --
David E. Dukinfield.............................. 3,401 3,401 -- --
Diosdado P. Banatao(4)........................... 1,307,848 1,307,848 -- --
Angel Ventures, L.P.(5).......................... 583,672 583,672 -- --
Jones M. Castro, Jr. and/or
Marina E. Castro, JTWROS......................... 9,750 9,750 -- --
Phurpa G. LadenLa and Sophie C.
LandenLa, TTEES UTD,
10/14/85, Phurpa G. LadenLa
and Sophie C. LadenLa, Trustors.................. 4,875 4,875 -- --
Stephen R. Dohrmann.............................. 4,062 4,062 -- --
Capquest Ventures, Incorporated.................. 9,750 9,750 -- --
Alfredo Alforque................................. 1,625 1,625 -- --
Reynaldo S. Factoran............................. 1,625 1,625 -- --
Gil Espinosa..................................... 1,625 1,625 -- --
Juan Magdaraog................................... 812 812 -- --
Rogelio Laraya................................... 812 812 -- --
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AFTER
OFFERING
SHARES SHARES WHICH MAY BE
BENEFICIALLY SOLD PURSUANT TO THIS
SELLING STOCKHOLDER OWNED(1) PROSPECTUS(2) NUMBER PERCENT
<S> <C> <C> <C> <C>
Diosdado Rey Banatao............................. 3,250 3,250 -- --
Desi R. Banatao.................................. 3,250 3,250 -- --
Tala M. Banatao.................................. 3,250 3,250 -- --
Thomas Alexander(6).............................. 56,990 56,990 -- --
Adaptive Technologies, LLC(7).................... 33,753 33,753 -- --
Chong-Moon Lee(8)................................ 640,420 640,420 -- --
Ravinder Sajwan(9)............................... 240,445 77,160 -- --
Ramjit Johl(10).................................. 117,991 85,335 -- --
Satish Sathe(11)................................. 75,371 19,323 -- --
LINC Capital, Inc.(12)........................... 6,093 6,093 -- --
Silcon Valley Bank(13)........................... 9,750 9,750 -- --
Brian Creek & Evelyn G. Lopez-Creek,............. 815 815 -- --
In Joint Tenancy
Daniel-Edward G. Lopez & Karen Lopez,............ 815 815 -- --
In Joint Tenancy
Danilo S. Lopez & Evelyn G. Lopez, In............ 3,245 3,245 -- --
Joint Tenancy
</TABLE>
- ------------------------
(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Exchange Act, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
such rule, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also any
shares which the individual has the right to acquire within 60 days of the
date of this Prospectus through the exercise of any stock option or other
right. Unless otherwise indicated in the footnotes, each person has sole
voting and investment power (or shares such powers with his or her spouse)
with respect to the shares shown as beneficially owned.
(2) See "Plan of Distribution".
(3) Includes 36,562 shares issuable upon exercise of warrants assumed by the
Company that are exerciseable within 60 days of the date of this
Prospectus. If the warrants are exercised before the end of the escrow
period, ten percent of the shares issued upon exercise of the warrants will
be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
(4) Includes 70,687 shares issuable upon exercise of warrants assumed by the
Company that are exerciseable within 60 days of the date of this
Prospectus. If the warrants are exercised before the end of the escrow
period, ten percent of the shares issued upon exercise of the warrants will
be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
(5) Includes 12,187 shares issuable upon exercise of warrants assumed by the
Company that are exerciseable within 60 days of the date of this
Prospectus. If the warrants are exercised before the end of the escrow
period, ten percent of the shares issued upon exercise of the warrants will
be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
(6) Includes 7,312 shares issuable upon exercise of warrants assumed by the
Company that are exerciseable within 60 days of the date of this
Prospectus. If the warrants are exercised before the end of the escrow
period, ten percent of the shares issued upon exercise of the warrants will
be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
(7) Includes 4,265 shares issuable upon exercise of warrants assumed by the
Company that are exerciseable within 60 days of the date of this
Prospectus. If the warrants are exercised before the end of the escrow
period, ten percent of the shares issued upon exercise of the warrants will
be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
12
<PAGE>
(8) Includes 80,437 shares issuable upon exercise of warrants assumed by the
Company that are exerciseable within 60 days of the date of this
Prospectus. If the warrants are exercised before the end of the escrow
period, ten percent of the shares issued upon exercise of the warrants will
be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
(9) Includes 9,701 shares issuable upon exercise of warrants assumed by the
Company that are exerciseable within 60 days of the date of this Prospectus
and 163,285 shares issuable upon exercise of options assumed by the Company
that are exerciseable within 60 days of the date of this Prospectus. If
the warrants or options are exercised before the end of the escrow period,
ten percent of the shares issued upon exercise of the warrants or options
will be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
(10) Includes 17,062 shares issuable upon exercise warrants assumed by the
Company that are exerciseable within 60 days of the date of this Prospectus
and 32,656 shares issuable upon exercise of options assumed by the Company
that are exerciseable within 60 days of the date of this Prospectus. If
the warrants or options are exercised before the end of the escrow period,
ten percent of the shares issued upon exercise of the warrants or options
will be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
(11) Includes 2,437 shares issuable upon exercise of warrants assumed by the
Company that are exerciseable within 60 days of the date of this Prospectus
and 56,048 shares issuable upon exercise of options assumed by the Company
that are exerciseable within 60 days of the date of this Prospectus. If
the warrants or options are exercised before the end of the escrow period,
ten percent of the shares issued upon exercise of the warrants or options
will be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
(12) Includes 6,093 shares issuable upon exercise of warrants assumed by the
Company that are exerciseable within 60 days of the date of this
Prospectus. If the warrants are exercised before the end of the escrow
period, ten percent of the shares issued upon exercise of the warrants will
be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
(13) Includes 9,750 shares issuable upon exercise of warrants assumed by the
Company that are exerciseable within 60 days of the date of this
Prospectus. If the warrants are exercised before the end of the escrow
period, ten percent of the shares issued upon exercise of the warrants will
be deposited into the escrow fund in accordance with the terms of the
Merger Agreement.
13
<PAGE>
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be offered and sold from time to
time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The Selling Stockholders may sell the Shares being
offered hereby on the Nasdaq National Market, or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
at negotiated prices. The Shares may be sold by one or more of the following
means of distribution: (a) a block trade in which the broker-dealer so engaged
will attempt to sell Shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker-
dealer as principal and resale by such broker-dealer for its own account
pursuant to this Prospectus; (c) an over-the-counter distribution in accordance
with the rules of the Nasdaq National Market; (d) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and/or
(e) in privately negotiated transactions. To the extent required, this
Prospectus may be amended and supplemented from time to time to describe a
specific plan of distribution. In connection with distributions of the Shares or
otherwise, the Selling Stockholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with such
transactions, broker-dealers or other financial institutions may engage in short
sales of the Company's Common Stock in the course of hedging the positions they
assume with Selling Stockholders. The Selling Stockholders may also sell the
Company's Common Stock short and redeliver the Shares to close out such short
positions. The Selling Stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions which require
the delivery to such broker-dealer or other financial institution of Shares
offered hereby, which Shares such broker-dealer or other financial institution
may resell pursuant to this Prospectus (as supplemented or amended to reflect
such transaction). The Selling Stockholders may also pledge Shares to a broker-
dealer or other financial institution, and, in the event of a default, such
broker-dealer or other financial institution, may effect sales of the pledged
Shares pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). In addition, any Shares that qualify for sale pursuant to Rule 144
may be sold under Rule 144 rather than pursuant to this Prospectus.
In effecting sales, brokers, dealers or agents engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
Selling Stockholders in amounts to be negotiated prior to the sale (which
compensation as to a particular broker, dealer or agent may be in excess of
customary commissions, discounts or concessions). Such brokers or dealers and
any other participating brokers or dealers may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales, and any
such commissions, discounts or concessions may be deemed to be underwriting
discounts or commissions under the Securities Act. The Company will pay all
expenses incident to the offering and sale of the Shares to the public other
than any commissions and discounts of underwriters.
In order to comply with the securities laws of certain states, if
applicable, the Shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Company has advised the Selling Stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of Shares in the
market and to the activities of the Selling Stockholders and their affiliates.
In addition, the Company will make copies of this Prospectus available to the
Selling Stockholders and has informed them of the need for delivery of copies of
this Prospectus to purchasers at or prior to the time of any sale of the Shares
offered hereby. 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.
At the time a particular offer of Shares is made, if required, a Prospectus
Supplement will be distributed that will set forth the number of Shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
14
<PAGE>
commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling
price to the public.
The sale of Shares by the Selling Stockholders is subject to compliance by
the Selling Stockholders with certain contractual restrictions with the Company
including certain restrictions contained in a registration rights agreement
between the Company and the Selling Stockholders. Among other restrictions, the
Selling Stockholders have agreed not to sell any shares by means of this
Prospectus during the period commencing twenty-eight days prior to the end of
each of the Company's fiscal quarters and ending two trading days after the
Company publicly announces its earnings for such quarter. There can be no
assurance that the Selling Stockholders will sell all or any of the Shares.
The Company and the Selling Stockholders have agreed to certain
indemnification obligations with respect to the sale of the Shares by use of
this Prospectus.
The Company has agreed with certain of the Selling Stockholders to keep the
Registration Statement of which this Prospectus constitutes a part effective
until July 6, 1999, the one year anniversary of the effective time of the
Merger. The Company intends to deregister any of the Shares not sold by the
Selling Stockholders at the end of such one year period; however, it is
anticipated that at such time any unsold Shares may be freely tradeable subject
to compliance with Rule 144 of the Securities Act, as such rule may be
applicable to each Selling Stockholder.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon by Graham &
James LLP, Sacramento, California, counsel to the Company.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries,
except Acclaim Communications, Inc., as of December 29, 1996 and for each of the
two years in the period ended December 29, 1996, included in this Prospectus
have been audited by Arthur Andersen LLP as stated in their report incorporated
by reference herein in the registration statement. The financial statements of
Acclaim Communications, Inc. for the two years ended December 31, 1996
(consolidated with those of the Company) have been audited by Deloitte & Touche
LLP as stated in its report incorporated by reference herein. Such consolidated
financial statements of the Company and its subsidiaries are incorporated by
reference herein in reliance upon the respective reports of such firms given
upon their authority as experts in accounting and auditing. All of the foregoing
firms are independent auditors.
15
<PAGE>
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE BY THIS
PROSPECTUS TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED
IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING
STOCKHOLDER OR BY ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES
OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SHARES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION
IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE OF OR OFFER TO SELL THE SHARES MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
TABLE OF CONTENTS
PAGE
Available Information............................................ 5
Incorporation of Certain Documents By Reference.................. 5
The Company...................................................... 6
Risk Factors..................................................... 7
Use of Proceeds.................................................. 10
Selling Stockholders............................................. 11
Plan of Distribution............................................. 14
Legal Matters.................................................... 15
Experts.......................................................... 15
LEVEL ONE COMMUNICATIONS, INCORPORATED
4,217,855 SHARES
OF
COMMON STOCK
---------------------
PROSPECTUS
---------------------
October , 1998
---
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The Company will pay all expenses incident to the offering and sale to the
public of the Shares being registered other than any commissions and discounts
of underwriters, dealers or agents and any transfer taxes. Such expenses are set
forth in the following table. All of the amounts shown are estimates except the
Securities and Exchange Commission ("SEC") registration fee.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee $23,479
NASDAQ National Market listing fee.. $17,500
Legal fees and expenses............. $15,000
Accounting fees and expenses........ $10,000
Miscellaneous expenses.............. $20,000
Total............................. $85,979
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant has provisions in its Amended and Restated Articles of
Incorporation which eliminate the liability of the Registrant's directors to the
Registrant and its shareholders for monetary damages to the fullest extent
permissible under California law and provisions which authorize the Registrant
to indemnify its directors and agents by bylaws, agreements or otherwise, to the
fullest extent permitted by law. Such limitation of liability does not affect
the availability of equitable remedies such as injunctive relief or rescission.
The Registrant's Bylaws, as amended, provide that the Registrant shall indemnify
its directors and officers to the fullest extent permitted by California law,
including circumstances in which indemnification is otherwise discretionary
under California law.
In addition, the Registrant has entered into agreements with its directors
and executive officers that will require the Registrant, among other things, to
indemnify them against certain liabilities that may arise by reason of their
status of service as directors or executive officers to the fullest extent not
prohibited by law.
The indemnification provisions in the Bylaws and the indemnification
agreements entered into between the Registrant and its directors and officers
may be sufficiently broad to permit indemnification of the Registrant's
directors and officers for liabilities arising under the Securities Act.
ITEM 16. EXHIBITS
2.1* Agreement and Plan of Reorganization by and between the Company,
Aardvark Acquisition Corp. and Acclaim Communications, Inc.
4.1** Amended and Restated Articles of Incorporation of the Company, as
amended.
1
<PAGE>
4.2*** Bylaws of the Company, as amended.
4.3**** Registration Rights Agreement, by and among the Company and the former
stockholders of Acclaim Communications, Inc.
5.1 Opinion of Graham & James LLP.
23.1 Consent of Arthur Andersen LLP, Independent Auditors.
23.2 Consent of Deloitte and Touche LLP, Independent Auditors.
23.3 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-4).
- ------------------------
* Filed with the Registrant's Form 8-K filed with the Commission on
July 17, 1998, and is incorporated by reference herein (the "Form 8-K").
** Incorporated by reference to Exhibit 3.1 to the Report on Form 10-K for
the Fiscal Year Ended December 28, 1997.
*** Incorporated by reference to Registration Statement No. 33-65810 dated
August 19, 1994.
**** Included as an exhibit to the Agreement and Plan of Reorganization filed
with the Form 8-K, and is incorporated by reference herein.
ITEM 17. UNDERTAKINGS
A. UNDERTAKING PURSUANT TO RULE 415
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:
(i) to include any prospectus required by Section 10(a)(3) Securities Act of
1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table
in the effective Registration Statement;
(iii) 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 this offering.
2
<PAGE>
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT
DOCUMENTS BY REFERENCE
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
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. UNDERTAKING IN RESPECT OF INDEMNIFICATION
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 SEC 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.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sacramento, State of California, on this 6th day of
October 1998.
LEVEL ONE COMMUNICATIONS, INCORPORATED
BY: /s/ John Kehoe
----------------------------
John Kehoe
Senior Vice President
and Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Robert
S. Pepper and John Kehoe and each of them, as attorneys-in-fact, each with the
power of substitution, for him or her in any and all capacities, to sign any
amendment to this Registration Statement and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting to said 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 connection therewith, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons on the 6th
day of October 1998 in the capacities indicated.
SIGNATURE TITLE
/s/ Robert S. Pepper President, Chief Executive
- -------------------------
Robert S. Pepper, Ph.D. Officer and Director
(Principal Executive Officer)
/s/ John Kehoe Senior Vice President and
- -------------------------
John Kehoe Chief Financial Officer
(Principal Financial Officer)
/s/ Thomas J. Connors Director
- -------------------------
Thomas J. Connors
4
<PAGE>
/s/ Paul Gray Director
- -------------------------
Paul Gray, Ph.D.
/s/ Martin Jurick Director
- -------------------------
Martin Jurick
/s/ Henry Kressel Director
- -------------------------
Henry Kressel, Ph.D.
/s/ Joseph P. Landy Director
- -------------------------
Joseph P. Landy
/s/ Kenneth A. Pickar Director
- -------------------------
Kenneth A. Pickar, Ph.D.
5
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
2.1* Agreement and Plan of Reorganization by and between the Company,
Aardvark Acquisition Corp. and Acclaim Communications, Inc.
4.1** Amended and Restated Articles of Incorporation of the Company, as
amended.
4.2*** Bylaws of the Company, as amended.
4.3**** Registration Rights Agreement, by and among the Company and the former
stockholders of Acclaim Communications, Inc.
5.1 Opinion of Graham & James LLP.
23.1 Consent of Arthur Andersen LLP, Independent Auditors.
23.2 Consent of Deloitte and Touche LLP, Independent Auditors.
23.3 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-4).
- ------------------------
* Filed with the Registrant's Form 8-K filed with the Commission on
July 17, 1998, and is incorporated by reference herein (the "Form 8-K").
** Incorporated by reference to Exhibit 3.1 to the Report on Form 10-K for
the Fiscal Year Ended December 28, 1997.
*** Incorporated by reference to Registration Statement No. 33-65810 dated
August 19, 1994.
**** Included as an exhibit to the Agreement and Plan of Reorganization filed
with the Form 8-K, and is incorporated by reference herein.
<PAGE>
Exhibit 5.1
[Graham & James Letterhead]
October 7, 1998
Level One Communications, Incorporated
9750 Goethe Road
Sacramento, California 95827
RE: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by
you with the Securities and Exchange Commission on or about the date hereof
(the "Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of up to 4,217,855 shares of your
Common Stock, no par value (the "Shares"). All of the Shares are issued and
outstanding or reserved for issuance upon exercise of outstanding warrants and
may be offered for sale for the benefit of the selling stockholders named in
the Registration Statement. We understand that the Shares are to be sold from
time to time in the over-the-counter market at prevailing prices or as
otherwise described in the section entitled "Plan of Distribution" in the
Registration Statement. As your legal counsel, we have also examined the
proceedings taken by you in connection with the issuance of the Shares. We
assume that the consideration received by you and 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 the Shares are validly issued, fully paid and
non-assessable. We consent to use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name wherever
appearing in the Registration Statement, including the Prospectus constituting
a part thereof, and any amendments thereto.
Very truly yours,
GRAHAM & JAMES LLP
/s/ Graham & James LLP
<PAGE>
EXHIBIT 23.1
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated March 13, 1998 and
September 18, 1998 included in Level One Communications, Incorporated's Form
10-K for the year ended December 28, 1997 and the Form 8-K/A filed on July 17,
1998, amended on September 21, 1998 and amended on October 6, 1998,
respectively, and to all references to our Firm included in this registration
statement.
Sacramento, California
October 2, 1998
Arthur Andersen LLP
BY: /s/ ARTHUR ANDERSEN LLP
---------------------------
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Level One Communications, Incorporated on Form S-3 of our report on Acclaim
Communications, Inc. dated June 18, 1997, appearing in the Amendment No. 2 to
the Current Report on Form 8-K/A of Level One Communications, Incorporated as
filed on October 7, 1998. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
/s/ DELOITTE & TOUCHE LLP
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San Jose, California
October 7, 1998
