<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 28, 1998
REGISTRATION STATEMENT NO. 333-65433
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
----------------------
AMENDMENT NO. 3 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 OR 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 AND 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
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 Registrant 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 December , 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 December , 1998
<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.
2
<PAGE>
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), Form 8-K/A (Amendment No. 2)
and Form 8-K/A (Amendment No. 3), filed with the SEC July 17,
September 21, October 7, and December 16, 1998;
(4) Form 8-K filed with the SEC on November 20, 1998;
(5) Form 8-K filed with the SEC on December 9, 1998;
(6) Description of common stock in Item 1 and 2 of Form 8-A filed on
July 9, 1993; and
(7) 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
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 LEVEL ONE
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.
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. Our 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.
RELIANCE ON THIRD PARTIES INCREASES RISK OF INCREASED COSTS OR DELAYS
We do not manufacture the silicon wafers used for our products. As a
result, we depend on our wafer suppliers to produce wafers at acceptable yields,
in sufficient quantities to meet customer demand, and at competitive prices. We
also depend on wafer suppliers to deliver wafers on time. To the extent that
this does not occur, we may be adversely impacted. Although we have supply
agreements with three of our wafer suppliers, unforeseen demand, supplier
interruptions or other unforeseen changes may also have a material adverse
impact on our business and financial results. In 1994 and 1995, we experienced
increased costs and delays in customer shipments because our foundries reduced
shipments without prior notice, which required us to transfer some of our
products to a new foundry. There is no assurance that this will not occur again
in the future.
Increased demand for semiconductor products can result in reduced wafer
availability from foundries and increased wafer prices. Even though we have
supply agreements with three of our wafer suppliers, foundry capacity
limitations could adversely affect our ability to deliver products on a timely
basis and could reduce our margins.
Similar cost increases and delays can result from third party assembly
companies that package or test our products.
OPERATING RESULTS DEPEND ON NEW PRODUCT DEVELOPMENT AND MARKET ACCEPTANCE
In the semiconductor industry, price competition is intense and product
life cycles are short. As a result, the average selling price for our products
decreases rapidly. Our operating results would be materially adversely affected
to the extent that we do not successfully develop and timely introduce new
products that achieve market acceptance and/or we do not achieve sufficient cost
reductions on existing products.
There can be no assurance that we will successfully identify new product
opportunities, that products or technologies developed by others will not render
our existing products or products under development obsolete or noncompetitive,
or that our products will achieve design wins with target customers. Because of
the increasing complexity of our new products, we could experience delays in
completing development and introduction of new products, which could result in
the failure to achieve our
4
<PAGE>
anticipated market share for new products. Our strategy is to develop new
products for the fastest growing segments of the communications market.
Market conditions, however, can change rapidly as technology, economic
conditions or user preferences cause different communications technologies to
experience growth not anticipated by our competitors or us.
To offset rapidly decreasing average selling prices for our products and to
maintain higher margins on our existing product lines, we rely primarily on
obtaining yield improvements to reduce manufacturing costs and on introducing
new products which incorporate advanced features and other price/performance
factors that result in higher average selling prices. To the extent we do not
achieve lower manufacturing costs and higher average selling prices for our
existing product lines, our operating results could be materially adversely
affected.
INABILITY TO MANAGE GROWTH MAY IMPACT OPERATING RESULTS
Our recent growth places a significant strain on our management and
personnel resources. In July 1998, we acquired Acclaim Communications, Inc. In
late November 1998, we acquired Jato Technologies, Inc. Integration of these
newly acquired businesses requires us to dedicate significant management
resources. Our ability to manage this growth effectively requires us to expand
and refine our operational, financial, management and control systems, as well
as significantly increase our development, testing, quality control, marketing,
logistics and service capabilities. If we do not effectively deploy our
resources to meet the needs of recent and future growth, our business, financial
condition and results of operations could be materially adversely affected.
LOSS OF KEY PERSONNEL MAY ADVERSELY IMPACT BUSINESS
We depend upon our ability to attract and retain key personnel. In the
semiconductor industry in particular, competition for qualified personnel is
intense and there can be no assurance that we will be able to retain and attract
such qualified personnel. This risk is exacerbated for us because our current
rapid growth and future growth plans will require us to retain key personnel and
attract additional qualified personnel.
ASSERTING AND DEFENDING INTELLECTUAL PROPERTY RIGHTS MAY IMPACT RESULTS OF
OPERATIONS REGARDLESS OF SUCCESS
In the semiconductor industry, competitors often assert intellectual
property infringement claims against one another. The success of our business
depends, in part, on our ability to defend our intellectual property. There can
be no assurance we can successfully defend or assert our intellectual property
rights or that third parties will not successfully invalidate, circumvent or
challenge our intellectual property rights. Intellectual property litigation,
regardless of its outcome, could cause us to expend
5
<PAGE>
substantial financial and management resources that could have a material
adverse affect on our business, financial condition and results of operations.
REVENUES ARE AFFECTED BY SHIPPING PRODUCTS NEAR THE END OF THE QUARTER
We frequently ship more products in the third month of each quarter than in
the first two months of each quarter. As a result, if we experience
unanticipated levels of production and/or shipping near the end of the quarter,
our revenues for that quarter could be materially affected. This fluctuation is
likely to impact our stock price from time to time.
EXCESS OR INSUFFICIENT INVENTORIES MAY ADVERSELY IMPACT REVENUES AND EARNINGS
If we produce excess or insufficient product inventories because we do not
accurately anticipate customer demand, our revenues and earnings could be
materially adversely impacted. First, some of our customers place orders with
long lead-time, which may be subject to cancellation or rescheduling without
significant penalty. Second, our inventory risk increases during periods of
strong demand and/or restricted semiconductor capacity because we believe based
on our past experience that customers often over-order to assure adequate supply
and then may cancel or postpone orders without notice or significant penalty if
other product becomes available. Third, component shortages from our customers'
suppliers could cause our customers to cancel or delay plans to incorporate our
products into the design of target products, resulting in the cancellation or
delay of orders for our products.
COMPETITION MAY AFFECT FINANCIAL CONDITION AND MARKET SHARE
Many of our competitors have longer operating histories, greater name
recognition, access to larger customer bases, and significantly greater
financial and other resources than us with which to pursue engineering,
manufacturing, marketing and distribution of products competitive with ours. In
the telecom market, our 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, our principal competitors are Advanced Micro Devices,
Inc., Broadcom Corporation, Crystal, Integrated Circuit Systems, Inc., Lucent
Micro Linear Corp., National Semiconductor Corporation, Quality Semiconductor,
lnc., Seeq Technologies, Inc. and Texas Instruments.
The competitive advantages held by many of our competitors could present a
risk to our ability to successfully compete by designing and manufacturing new
products, implementing new technologies, improving product quality, reliability
and price and achieving production efficiency. If we are unable to continue to
effectively compete in these critical areas it could result in reduced gross
margins for our products and/or a reduction in our market share, either of which
could have a material adverse effect on our business, financial condition and
results of operations.
6
<PAGE>
RISKS OF INTERNATIONAL OPERATIONS
Due to our reliance on international sales and foreign third-party
manufacturing and assembly operations, we are subject to the risks of conducting
business outside the United States. These international business risks include
governmental regulations, 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 risks will not have a material
adverse impact on our business, financial condition and results of operations.
INCREASED DEBT LEVERAGE DECREASES LIQUIDITY
We have incurred approximately $115 million in additional debt as a
result of our issuance of 4% Convertible Subordinated Notes due 2004 in
September 1997. These notes increased our ratio of long-term debt to total
capitalization from 3.0%, at September 28, 1997, to 44.6%, at September 27,
1998. This increased leverage has increased our interest expense
substantially. This increased leverage could adversely affect our ability to
obtain additional financing for working capital, acquisitions or other
purposes and could make us more vulnerable to economic downturns and
competitive pressures. This increased leverage could also affect our
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, we could be forced to reduce other expenditures and/or forego
potential acquisitions to be able to meet such requirements.
YEAR 2000 RISKS
We are currently in the process of determining whether there are any
critical areas in our business that are Year 2000 readiness dependent. We have
begun a comprehensive project to prepare our computer systems for the Year 2000.
We believe that there is a remote likelihood of an adverse impact on our
business due to problems with our internal systems or products. Our products
have no date specific functions or date dependencies and will operate according
to published specifications through the Year 2000 date rollover and dates in the
21st century.
As part of our Year 2000 assessment, we are contacting key suppliers of
products and services to determine whether such suppliers' operations, products
and services are Year 2000 capable and/or to monitor their progress toward Year
2000 capability. If our suppliers are not Year 2000 capable, we could
experience manufacturing interruptions or shutdowns, decreased yields, quality
inconsistencies, delayed or inaccurate product testing, delivery delays or
service interruptions, which could have a material adverse effect on our
business, financial condition or results of operations.
There is also a risk because we have not yet fully developed Year 2000
contingency plans to address any failure of our Year 2000 assessment to identify
and
7
<PAGE>
remediate significant Year 2000 risks to our business operations.
Development of contingency plans is in progress and will continue during
calendar year 1999. Such plans could include accelerating replacement of
affected equipment or software, using back-up equipment and software,
developing temporary manual procedures to compensate for system deficiencies,
and identifying Year 2000 capable suppliers and service providers. There can
be no assurance that any such contingency plans would adequately address the
Year 2000 problem. The failure to develop a successful contingency plan could
result in significant delays and inefficiency in our business which could have
a material adverse effect on our business, financial condition and results of
operations.
We presently estimate that the total cost of addressing our Year 2000
problems will be approximately $100,000 of which approximately 5% has been
expended to date. This cost estimate was derived utilizing numerous
assumptions, including the assumption that we have already identified our
most significant Year 2000 problems and that the assessment, remediation and
contingency plans of our third party suppliers will be fulfilled in a timely
manner without significant additional cost to us. There can be no assurance
that these assumptions are accurate, and actual costs could be significantly
higher were we or our customers and/or our suppliers to experience
significant interruptions in normal operations as a result of Year 2000
problems.
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 SHARES ISSUABLE OWNED AFTER OFFERING
BENEFICIALLY PURSUANT TO THIS UPON EXERCISE OF ----------------------
SELLING STOCKHOLDER OWNED(1) PROSPECTUS(2) OPTIONS/WARRANTS(3) NUMBER PERCENT
- ------------------- ------------ ---------------- ------------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Visveswar Akella.................. 1,302,460 1,302,460 36,562 -- --
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............... 1,307,848 1,307,848 70,687 -- --
Angel Ventures, L.P............... 583,672 583,672 12,187 -- --
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 -- --
Diosdado Rey Banatao.............. 3,250 3,250 -- --
Desi R. Banatao................... 3,250 3,250 -- --
Tala M. Banatao................... 3,250 3,250 -- --
Thomas Alexander.................. 56,990 56,990 7,312 -- --
Adaptive Technologies, LLC........ 33,753 33,753 4,265 -- --
Chong-Moon Lee.................... 640,420 640,420 80,437 -- --
Ravinder Sajwan................... 240,445 77,160 172,986 -- --
Ramjit Johl....................... 117,991 85,335 49,718 -- --
Satish Sathe...................... 75,371 19,323 58,485 -- --
LINC Capital, Inc................. 6,093 6,093 6,093 -- --
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
SHARES WHICH SHARES BENEFICIALLY
SHARES MAY BE SOLD SHARES ISSUABLE OWNED AFTER OFFERING
BENEFICIALLY PURSUANT TO THIS UPON EXERCISE OF ----------------------
SELLING STOCKHOLDER OWNED(1) PROSPECTUS(2) OPTIONS/WARRANTS(3) NUMBER PERCENT
- ------------------- ------------ ---------------- ------------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Silicon Valley Bank........................ 9,750 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) Represents shares issuable upon exercise of warrants and/or options
assumed by Level One that are exerciseable within 60 days of the date of
this prospectus. If any of the warrants or the options are exercised
before the end of the escrow period, ten percent of the shares issued
upon such exercise will be deposited into the escrow fund in accordance
with the terms of the Merger Agreement.
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 Communications,
Incorporated and its subsidiaries incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and is
incorporated by reference herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
12
<PAGE>
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- -------------------------------------------------------------------------------
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
-------------------
DECEMBER , 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>
<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
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>
<S> <C>
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>
<S> <C>
5.1+ Opinion of Graham & James LLP.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.3 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-4).
</TABLE>
- ----------
* Filed with Level One's Form 8-K filed with the Commission on July 17,
1998, and 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 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) of the
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 27th day of
December, 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
27th day of December, 1998, in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* 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
--------- -----
<S> <C>
* Director
- ---------------------------------------
PAUL GRAY, PH.D.
* Director
- ---------------------------------------
MARTIN JURICK
* Director
- ---------------------------------------
HENRY KRESSEL
* Director
- ---------------------------------------
JOSEPH P. LANDY
* Director
- ---------------------------------------
KENNETH A. PICKAR, PH.D.
* By: /s/ JOHN KEHOE
----------------------------------
JOHN KEHOE
ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<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..
23.3 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 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 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 December 9, 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 December 16, 1998, respectively, and to all references to our Firm
included in this registration statement.
Arthur Andersen LLP
By: /s/ ARTHUR ANDERSEN LLP
--------------------------
Sacramento, California
December 16, 1998
