<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 23, 1998
REGISTRATION STATEMENT NO. 333-65433
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
---------------
AMENDMENT NO. 1 TO
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, CALIFORNIA 95827
(916) 855-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
GILLES S. ATTIA
WILLIAM W. BARKER
GRAHAM & JAMES LLP
400 CAPITOL MALL, SUITE 2400
SACRAMENTO, CALIFORNIA 95814
TELEPHONE: (916) 558-6700
FACSIMILE: (916) 441-6700
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>
PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT OFFERING PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE TO BE PRICE PER AGGREGATE REGISTRATION
REGISTERED REGISTERED(1) SHARE(1) OFFERING PRICE(1) FEE(3)
- ---------------------------------------------------------------------------------------
<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 Registrants reserved for
issuance upon exercise of warrants.
(3) Registration fee previously paid.
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
[LOGO]
LEVEL ONE COMMUNICATIONS, INCORPORATED
4,217,855 SHARES OF COMMON STOCK
These shares of common stock are being sold by the selling shareholders
listed beginning on page 9. Level One will not receive any proceeds from the
sale of these shares.
Level One's common stock is traded on the Nasdaq National Market under the
symbol "LEVL." The last reported sale price on November , 1998 was $ per
share.
The common stock may be sold in transactions on the Nasdaq National Market at
market prices then prevailing, in negotiated transactions, or otherwise. See
"Plan of Distribution."
----------------
THIS OFFERING INVOLVES MATERIAL RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
----------------
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 NOVEMBER , 1998
<PAGE>
QUESTIONS AND ANSWERS ABOUT THIS OFFERING
Q.WHAT IS THE PURPOSE OF THIS OFFERING?
A. The purpose of this offering is to register the resale of common stock
received by the selling stockholders in connection with the acquisition by
Level One of Acclaim Communications, Inc. in July 1998. Selling stockholders
are required to deliver a copy of this prospectus in connection with any
sale of shares.
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 common
stock.
Q. HOW LONG WILL THE SELLING STOCKHOLDERS BE ABLE TO USE THIS PROSPECTUS?
A. Under the terms of a registration rights agreement, Level One agreed to keep
this prospectus effective until July 6, 1999. After that, the selling
stockholders will no longer be able to use this prospectus to sell their
shares.
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Level One files reports with the SEC on a regular basis that contain
financial information and results of operations. You may read or copy any
document that Level One files with the SEC at the SEC's Public Reference Room
at 450 5th Street, N.W., Washington, D.C. 20549. You may obtain information
about the Public Reference Room by calling the SEC for further information at
1-800-SEC-0330. Level One's SEC filings are also available at the SEC's web
site at www.sec.gov.
INCORPORATION BY REFERENCE
To avoid repeating information in this prospectus that has already been filed
with the SEC, we have "incorporated by reference" the following SEC filings of
Level One (SEC File No. 22068). This information is considered a part of this
prospectus. Those documents are:
(1)Form 10-K for the year ended December 29, 1997;
(2)Form 10-Q for the quarters ended March 29, June 28 and September 27;
(3) Form 8-K, Form 8-K/A (Amendment No. 1) and Form 8-K/A (Amendment No.
2), filed with the SEC July 17, September 21 and October 7, 1998;
(4) Form 8-K filed with the SEC on November 20, 1998;
(5) Description of common stock in Item 1 and 2 of form 8-A filed on July
9, 1993; and
(6) All other documents subsequently filed under Sections 13(a), 13(c), 14
or 15(d).
We will send you a copy of these filings, at no cost to you, if you write or
call us:
Investor Relations
Level One Communications, Incorporated
9750 Goethe Road
Sacramento, California 95827
(916) 855-5000
LEVEL ONE'S BUSINESS
Level One designs and sells semiconductor chips in the semiconductor
industry. Our products are described as application specific standard
integrated circuits, or "ASSPs." Our products are used for high-speed analog
and digital signal transmission, to build and connect networks to systems that
transport information, within an office or around the world. Our products are
used to produce systems for local area networks, called "LANs," wide area
networks, called "WANs," and public telephone transmission networks. LANs,
WANs, and telephone transmission networks are what makes it possible for you to
use intranets, the Internet, and the World Wide Web. Level One combines its
strengths as an industry leader in analog and digital circuit design with its
communications systems expertise to produce solutions with increased
functionality.
Level One was incorporated in California in November 1985. Our executive
offices are located at 9750 Goethe Road, Sacramento, California 95827. Our
telephone number is (916) 855-5000.
3
<PAGE>
RISK FACTORS
THIS PROSPECTUS AND INFORMATION INCORPORATED BY REFERENCE CONTAIN FORWARD-
LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND
SECTION 21E OF THE EXCHANGE ACT. LEVEL ONE'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A
RESULT OF DIFFERENT FACTORS, INCLUDING THOSE DISCUSSED IN "RISK FACTORS" OR
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
Risks of Contract Manufacturing
Level One does not manufacture the silicon wafers used for its products.
Level One's wafers are manufactured by foundries located in the United States,
Europe and Asia. Level One is dependent upon these suppliers to produce wafers
at acceptable yields and to deliver them in a timely manner at competitive
prices. Level One 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, Level One may
experience difficulty in securing an adequate supply of wafers, and/or its
suppliers may increase wafer prices. Level One's operating results depend, in
substantial part, on its ability to maintain or increase the capacity available
from its existing or new foundries. In 1994 and 1995, Level One experienced
increased costs and delays in customer shipments as a result of a foundry
reducing shipments to Level One without prior notice, requiring Level One to
transfer products to a new foundry. Although Level One has supply agreements
with three of its foundries and Level One believes that it has planned to meet
customer demand, there can be no assurances that unforeseen demand, supplier
interruptions or other changes will not have a material impact on Level One'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. Level One's
business, financial condition and results of operations could be materially
adversely affected if any such transition is substantially delayed or
inefficiently implemented.
Level One is also dependent upon third-party assembly companies that package
or test Level One's devices. Level One depends upon these suppliers to produce
products in a timely manner and at competitive prices. Level One may sustain an
adverse financial impact from problems with the cost, timeliness, yield and
quality of product deliveries from these suppliers.
Risk of Dependence on New Products; Product Obsolescence
Level One's future success depends on its ability to timely develop and
introduce new products which compete effectively. Because of the complexity of
its products, Level One may experience delays in completing development and
introduction of new products, and, as a result, not achieve the market share
anticipated for such products. Level One's strategy is to develop products for
the fastest growing segments of the communications market. Level One conducts
its own analysis of market trends and reviews forecasts and information
provided by industry analysts. Market conditions may
4
<PAGE>
change rapidly as technology, economic, or user-preference conditions cause
different communications technologies to experience growth other than that
forecast by Level One or others. There can be no assurance that Level One 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 Level One's products or technologies obsolete or
noncompetitive, or that Level One'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, Level One 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 Level One's products do not achieve market
acceptance, Level One's operating results could be materially affected.
Risks Associated with Management of Growth; Dependence on Key Personnel
Level One is currently experiencing a period of significant growth relative
to the semiconductor industry which has placed, and could continue to place, a
significant strain on Level One's personnel and other resources. For example,
in July 1998 Level One completed the acquisition of Acclaim Communications,
Inc. and in November 1998 Level One announced the execution of a definitive
agreement to acquire Jato Technologies, Inc. Integration of newly acquired
businesses requires significant management resources. Level One's ability to
manage its growth effectively will require continued expansion and refinement
of Level One's operational, financial, management and control systems, as well
as a significant increase in Level One's development, testing, quality control,
marketing, logistics and service capabilities, any of which could place a
significant strain on Level One's resources.
Due to its recent growth, Level One depends to a significant extent upon its
ability to attract and retain key personnel. Competition for such personnel is
intense and there can be no assurance that Level One will be able to retain and
attract key personnel. Level One does not maintain key man life insurance on
any or its personnel. If Level One's management is unable to manage growth
effectively by hiring, retaining and integrating key personnel, Level One's
business, financial condition and results of operations could be materially
adversely affected.
Risks Associated with Intellectual Property Disputes
As is typical in the competitive semiconductor industry, companies often
assert that a competitor's product may infringe their intellectual property
rights. There can be no assurance that Level One's intellectual property rights
can be successfully defended or asserted or that Level One's intellectual
property rights will not be successfully invalidated, circumvented or
challenged. Intellectual property litigation, regardless of its outcome, could
result in substantial cost and a diversion of Level One's resources. As a
result, any infringement claim or other litigation against or by Level One
could have a material adverse effect on Level One's financial condition and
results of operations.
5
<PAGE>
Risks of the Semiconductor Industry
- --Risks of Investing in a Cyclical Business
The semiconductor industry has historically been cyclical and subject to
significant economic downturns at various times. Level One 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 semiconductor companies have historically
been subject to extreme price and volume fluctuations, factors which may affect
the market price of Level One's Common Stock. As is common in the semiconductor
industry, Level One frequently ships more product in the third month of a
quarter than in the other months. If a disruption in Level One's production or
shipping occurs near the end of a quarter, Level One's revenues for that
quarter could be materially affected.
- --Risks Associated with Shortages, Limitations on Manufacturers' Capacity and
Excess Inventory
Level One orders wafers and builds inventory in advance of product shipments.
There is a risk that Level One could produce excess or insufficient inventories
of particular products because of a failure to accurately estimate customer
demand. This inventory risk is heightened because certain of Level One's
customers place orders with long lead times which may be subject to
cancellation or rescheduling by that customer without significant penalty. To
the extent Level One produces excess or insufficient inventories of particular
products, Level One's revenues and earnings could be adversely affected.
Although Level One has supply agreements with three of its foundries,
increased demand for semiconductor products may result in a reduction in the
availability of wafers from foundries and increased wafer prices. Such capacity
limitations may adversely affect Level One's ability to deliver products on a
timely basis and could affect Level One's margins. Additionally, Level One
believes that during periods of strong demand and/or restricted semiconductor
capacity, customers will over-order to assure an adequate supply and then may
cancel or postpone orders without notice if product becomes available
elsewhere. As a result, during such periods, it is more difficult for Level One
to anticipate customer demand.
Shortages of components from other suppliers could cause Level One's
customers to cancel or delay programs incorporating Level One's products into
the design of target products, resulting in the cancellation or delay of orders
for Level One's products.
- --Risks Associated with Intense Competition in the Semiconductor Industry
Level One's competition consists of semiconductor companies and semiconductor
divisions of vertically integrated companies. In the telecom market, Level
One's principal competitors are Rockwell International, Inc., Crystal
Semiconductor, Inc. (a subsidiary of Cirrus Logic, Inc.), Dallas Semiconductor,
Inc., Lucent Technologies Inc., PMC-Sierra Inc. and Siemens A.G. In the
networking market, Level One's principal competitors are Advanced Micro
Devices, Inc., Broadcom Corporation, Crystal, Integrated Circuit Systems, Inc.,
Lucent, Micro Linear Corp., National
6
<PAGE>
Semiconductor Corporation, Quality Semiconductor, Inc., Seeq Technologies, Inc.
and Texas Instruments, Inc. Many of these competitors have longer operating
histories, greater name recognition, access to larger customer bases and
significantly greater financial and other resources than Level One with which
to pursue engineering, manufacturing, marketing and distribution of products.
These competitive advantages could present a risk to Level One's business
because the ability to compete successfully in the semiconductor industry
depends on designing and manufacturing new products, implementing new
technologies, improving product quality, reliability and price and achieving
production efficiency. If Level One is unable to continue to effectively
compete in these critical areas it could result in reduced gross margins for
Level One's products and/or a reduction in Level One's market share, either of
which could have a material adverse effect on Level One's business, financial
condition and results of operations.
Risk of International Operations
Due to its reliance on international sales and foreign third-party
manufacturing and assembly operations, Level One 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 Level One's business, financial condition or operating
results. To date, the recent economic downturn in several Asian countries has
not affected Level One 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 Level One in the future.
Risk of Increased Leverage
As a result of Level One's sale in August and September 1997 of its 4%
Convertible Subordinated Notes due 2004, Level One 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 September 28, 1997, to
44.6%, at September 27, 1998. This increased leverage will increase Level One's
interest expense substantially. The degree to which Level One will be leveraged
could adversely affect Level One'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. Level One'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, Level One could be
forced to reduce other expenditures and/or forego potential acquisitions to be
able to meet such requirements.
Risks Associated With Year 2000 Compliance
Level One recognizes the need to complete its assessment of its Year 2000
issues to ensure that its operations will not be adversely impacted by Year
2000 software failures. Level One is in the process of determining whether
there exist any material relationships on which Level One's Year 2000 readiness
is dependent. Level One has initiated a comprehensive project to prepare its
computer systems for the Year 2000. Company management believes that the
likelihood of a material adverse impact due to problems with internal systems
or products sold to customers is remote and anticipates that the cost of these
projects over the next two years will not have a material effect on Level One's
financial position or overall trends in results of operations. Level One's
products have
7
<PAGE>
no specific date functions or date dependencies and will operate according to
published specifications through the Year 2000 date rollover and dates in the
21st century. Level One is contacting critical suppliers of products and
services to determine that the suppliers' operations and the products and
services they provide are Year 2000 capable or to monitor their progress toward
Year 2000 capability.
Level One has not yet fully developed contingency plans to address any
failure of its Year 2000 risk assessment plan to identify and fully remediate
any significant risk to its on-going operations. Development of contingency
plans is in progress and will develop in detail during calendar year 1999. Such
plans could include accelerated replacement of affected equipment or software,
temporary use of back-up equipment or software or the implementation of
temporary manual procedures to compensate for system deficiencies. There can
be, however, no assurance that Level One will be successful in developing
contingency plans which will adequately address the Year 2000 Problem, that any
contingency plans implemented by Level One would be adequate to meet Level
One's needs without materially impacting its operations, that any such plan
would be successful or that Level One's results of operations and financial
condition would not be materially and adversely affected by the delays and
inefficiencies inherent in conducting operations in an alternative manner.
Level One presently estimates that the total cost of addressing its Year 2000
Problems will be approximately $100,000 of which approximately 5% has been
expended to date. This estimate was derived utilizing numerous assumptions,
including the assumption that Level One has already identified its most
significant Year 2000 Problems and that the assessment, remediation and
contingency plans of its third party suppliers will be fulfilled in a timely
manner without significant additional cost to Level One. There can be no
guarantee that these assumptions are accurate, and actual costs could differ
materially from those anticipated.
8
<PAGE>
SELLING STOCKHOLDERS
The selling stockholders listed below received their shares of Level One
common stock in connection with the acquisition by Level One of Acclaim
Communications, whereby the selling shareholders exchanged their shares of
Acclaim Communications for shares of Level One.
Except as described in the table, none of the selling stockholders has held
any position or office or had a material relationship with Level One or any of
its affiliates within the past three years other than as a result of the
ownership of Level One's common stock. The information is "as of" the date of
this prospectus but may be amended or supplemented after this date.
<TABLE>
<CAPTION>
SHARES WHICH SHARES BENEFICIALLY
SHARES MAY BE SOLD OWNED AFTER OFFERING
BENEFICIALLY 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. Cas-
tro, 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, In-
corporated............. 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 -- --
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 -- --
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
SHARES WHICH SHARES BENEFICIALLY
SHARES MAY BE SOLD OWNED AFTER OFFERING
BENEFICIALLY PURSUANT TO THIS ----------------------
SELLING STOCKHOLDER OWNED(1) PROSPECTUS(2) NUMBER PERCENT
- ------------------- ------------ ---------------- --------- ----------
<S> <C> <C> <C> <C>
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,.............. 3,245 3,245 -- --
In Joint Tenancy
</TABLE>
- --------
(1) 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 Level
One 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 Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(5) Includes 12,187 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(6) Includes 7,312 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(7) Includes 4,265 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(8) Includes 80,437 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(9) Includes 9,701 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
and 163,285 shares issuable upon exercise of options assumed by Level One
that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(10) Includes 17,062 shares issuable upon exercise warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
and 32,656 shares issuable upon exercise of options assumed by Level One
that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(11) Includes 2,437 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
and 56,048 shares issuable upon exercise of options assumed by Level One
that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(12) Includes 6,093 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(13) Includes 9,750 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
10
<PAGE>
PLAN OF DISTRIBUTION
The common stock covered by this prospectus may be offered and sold from time
to time by the selling stockholders, including in one or more of the following
transactions:
. on the Nasdaq National Market;
. in the over-the-counter market;
. in transactions other than on the Nasdaq National Market or in the over-
the-counter market;
. in connection with short sales;
. by pledge to secure debts and other obligations;
. in connection with the writing of options, in hedge transactions, and in
settlement of other transactions in standardized or over the counter
options;
. in a combination of any of the above transactions; or
. pursuant to Rule 144, assuming the availability of an exemption from
registration.
The selling shareholders may sell their shares at market prices prevailing at
the time of sale, at prices related to prevailing market prices, at negotiated
prices, or at fixed prices.
Broker-dealers that are used to sell shares will either receive discounts or
commissions from the selling shareholders, or will receive commissions from the
purchasers for whom they acted as agents.
The sale of common stock by the selling stockholders is subject to compliance
by the selling stockholders with certain contractual restrictions with Level
One including certain restrictions contained in a registration rights agreement
between Level One and the selling stockholders. There can be no assurance that
the selling stockholders will sell all or any of the common stock.
Level One has agreed to keep this prospectus effective until July 6, 1999.
Level One intends to deregister any of the common stock not sold by the selling
stockholders immediately after that date. However, at that time, it is
anticipated that at such time any unsold common stock may be freely tradable in
compliance with Rule 144 of the Securities Act.
Level One and the selling stockholders have agreed to customary
indemnification obligations with respect to the sale of the common stock by use
of this prospectus.
11
<PAGE>
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon by Graham &
James LLP, Sacramento, California, counsel to Level One.
EXPERTS
The consolidated financial statements of Level One 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, incorporated by reference
in this prospectus have been audited by Arthur Andersen LLP as stated in their
report incorporated by reference herein. The financial statements of Acclaim
Communications, Inc. for the two years ended December 31, 1996 (consolidated
with those of Level One) have been audited by Deloitte & Touche LLP as stated
in its report incorporated by reference herein. Such consolidated financial
statements of Level One 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.
12
<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
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Level One's Business....................................................... 3
Risk Factors.............................................................. 4
Selling Stockholders....................................................... 9
Plan of Distribution....................................................... 11
Legal Matters.............................................................. 12
Experts.................................................................... 12
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4,217,855 SHARES
LEVEL ONE COMMUNICATIONS, INCORPORATED
COMMON STOCK
---------------
PROSPECTUS
---------------
NOVEMBER , 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Level One 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 SEC registration fee.
<TABLE>
<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
Level One has provisions in its amended and restated articles of
incorporation which eliminate the liability of Level One's directors to Level
One and its shareholders for monetary damages to the fullest extent permissible
under California law and provisions which authorize Level One 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. Level One's
bylaws, as amended, provide that Level One 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, Level One has entered into agreements with its directors and
executive officers that will require Level One, 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 Level One and its directors and officers may be
sufficiently broad to permit indemnification of Level One's directors and
officers for liabilities arising under the Securities Act.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
2.1* Agreement and Plan of Reorganization by and between Level One,
Aardvark Acquisition Corp. and Acclaim Communications, Inc.
4.1** Amended and Restated Articles of Incorporation of Level One, as
amended.
4.2*** Bylaws of Level One, as amended.
4.3**** Registration Rights Agreement, by and among Level One and the former
stockholders of Acclaim Communications, Inc.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
5.1+ Opinion of Graham & James LLP.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
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).
</TABLE>
- --------
* Filed with the Level One'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.
+Previously filed.
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.
II-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.
II-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 23rd day of
November 1998.
LEVEL ONE COMMUNICATIONS,
INCORPORATED
/s/ John Kehoe
By: _________________________________
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 23rd day of
November 1998 in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* President, Chief Executive Officer
______________________________________ and Director (Principal Executive
ROBERT S. PEPPER , PH.D. Officer)
/s/ John Kehoe Senior Vice President and Chief
______________________________________ Financial Officer (Principal
JOHN KEHOE Financial OFficer)
* Director
______________________________________
THOMAS J. CONNERS
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Director
______________________________________
PAUL GRAY, PH.D.
* Director
______________________________________
MARTIN JURICK
* Director
______________________________________
HENRY KRESSEL
* Director
______________________________________
JOSEPH P. LANDY
* Director
______________________________________
KENNETH A. PICKAR, PH.D.
</TABLE>
/s/ JOHN KEHOE
* By:________________________________
JOHN KEHOE
ATTORNEY-IN-FACT
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
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 Public Accountants..
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).......................
</TABLE>
- --------
* 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.
+ Previously filed.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 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 or the Form 8-K/A
filed on October 7, 1998, respectively, and to all references to our Firm
included in this registration statement.
Arthur Andersen LLP
By:
/s/ Arthur Andersen LLP
-------------------------
Sacramento, California
November 23, 1998
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement 333-65433 of Level One Communications, Inc. on Form S-3
of our report dated June 18, 1997 on the financial statements of Acclaim
Communications, Inc., appearing in Amendment No. 2 to the Current Report on
Form 8-K/A of Level One Communications, Inc. as filed on October 7, 1998. We
also consent to the reference to us under the heading "Experts" in the
Prospectus, which is a part of this Registration Statement.
/s/ Deloitte & Touche LLP
_____________________________________
San Jose, California
November 19, 1998
