As filed with the Securities and Exchange Commission March 20, 1998
Registration No. 333-
_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
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 Incorporation)
(I.R.S. Employer Identification No.)
______________________
9750 Goethe Road
Sacramento, California 95827
(916) 855-5000
(Address of principal executive offices)
_______________________
Robert S. Pepper, Ph. D.
President
LEVEL ONE COMMUNICATIONS, INCORPORATED
9750 Goethe Road
Sacramento, California 95827
(916) 855-5000
(Name, address and telephone number of agent for service)
_____________________________
Approximate date of commencement of proposed sale to the public: As soon as
possible following effectiveness of the registration statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. *
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Proposed Maximum Proposed Maximum
Registration to be Amount to be Offering Aggregate Amount
Registered Registered Price per Share* Offering Price of Fee
<S> <C> <C> <C> <C>
Common Stock, 25,500 $14.00 $357,000.00 $ 123.11
no par value
Total 25,500 $14.00 $357,000.00 $ 123.11
</TABLE>
*Based on the $14.00 per share exercise price for the Common Stock to be
purchased pursuant to a Warrant issued February 2, 1996. The exercise
price was the market price for the Common Stock at time the Warrant was
issued.
<PAGE>
LEVEL ONE COMMUNICATIONS, INCORPORATED
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501 OF REGULATION S-K
REGISTRATION STATEMENT
ITEM NUMBER AND CAPTION
PROSPECTUS CAPTION
1. Forepart of the Registration
Page of Prospectus Outside Front Cover Page
2. Inside Front and Outside Back
Cover Pages of Prospectus Inside Front and Outside Back Cover Pages
3. Summary Information, Risk Factors
and Ratio Earnings to Fixed Charges. Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Inside Front Cover Page
6. Dilution Not Applicable
7. Selling Security Holders Principal and Selling Shareholders
8. Plan of Distribution Underwriting
9. Description of Securities to
be Registered Not Applicable
10. Interests of Named Experts
and Counsel Interests of Named Experts and Counsel
11. Material Changes Recent Developments
12. Incorporation of Certain
Information by Reference Incorporation of Certain Information by Reference
13. Disclosure of Commission Position Disclosure of Commission Position on
Indemnification for Securities on
Indemnification for Securities
Act Liabilities Act Liabilities
<PAGE>
PROSPECTUS
25,500 SHARES
LEVEL ONE COMMUNICATIONS, INCORPORATED
COMMON STOCK
_____________________________________
SALES REPRESENTATIVE WARRANT
_____________________________________
This Prospectus refers to 25,500 shares of Common Stock, no par value, of
Level One Communications, Incorporated (the "Company"), which are being offered
for sale pursuant to the terms of a stock purchase warrant (the "Warrant")
issued February 2, 1996 in connection with an incentive agreement with an
independent sales representative company (the "Warrant Holder"). The Warrant
Agreement was privately negotiated in a transaction not involving a public
offering in reliance on the exemptions contained in Section 4 of the Securities
Act of 1933.
The Warrant exercise price per share is $14.00, the market price for the
Common Stock at time the Warrant was issued.
The Warrant Holder's right to exercise the Warrant vests at 20% per year
from the date of issuance, subject to certain conditions, including
registration of the Common Stock underlying the Warrant.
The Warrant Holder's right to purchase shares will continue to vest for as
long as Warrant Holder is engaged by the Company as a sales representative
under a separate sales representative agreement. If the sales representative
relationship between Warrant Holder and the Company is terminated for any
reason prior to February 2 , 2001, Warrant Holder shall be entitled to purchase
only the number of shares for which Warrant Holder was vested on the last
Vesting Date prior to such termination. The Warrant does not affect any of the
rights or relationships of Warrant Holder or the Company under such sales
representative agreement.
The Warrant expires at 5 p.m., Eastern Standard Time, on February 2, 2006,
and any vested purchase right which has not been exercised prior to that date
and time shall terminate automatically.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is March 20, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Commission. Such reports, proxy and information statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following regional offices of the Commission: New York Regional
Office, Seven World Trade Center, New York, New York, 10048, and the Chicago
Regional Office, 500 West Madison Street, Chicago, Illinois, 60661. Copies of
such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 upon payment of the
prescribed fees. The Common Stock of the Company is quoted on the NASDAQ
National Market System. Reports, proxy and information statements and other
information concerning the Company may be inspected at the National Association
of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006.
ADDITIONAL INFORMATION
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the shares of Common Stock offered
hereby, reference is hereby made to the Registration Statement. Statements
contained herein concerning the provisions of any documents are not necessarily
complete, and each such statement is qualified in its entirety by reference to
the copy of such document filed with the Commission.
INFORMATION INCORPORATED BY REFERENCE
This Prospectus incorporates by reference the following documents:
1. The Company's latest Annual Report on Form 10-K filed pursuant to
Section 13(a) of the Exchange Act which contains financial
statements for the Company's latest fiscal year ended December 29,
1996; and
2. All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual
report referred to in (1) above.
3. All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
termination of this offering.
Any person to whom a copy of this Prospectus is delivered may obtain
without charge, upon written or oral request, a copy of any of the documents
incorporated by reference in this Prospectus, except for exhibits to such
documents. Requests for such copies should be directed to Bruce Dravis,
General Counsel, Level One Communications, Incorporated, 9750 Goethe Road,
Sacramento, California 95827, telephone (916) 855-5000.
<PAGE>
RISK FACTORS
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. THE STATEMENTS CONTAINED IN THIS PROSPECTUS THAT ARE NOT PURELY
HISTORICAL ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF
THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF
1934, INCLUDING WITHOUT LIMITATION STATEMENTS REGARDING THE COMPANY'S
EXPECTATIONS, BELIEFS, INTENTIONS OR STRATEGIES REGARDING THE FUTURE. ALL
FORWARD-LOOKING STATEMENTS INCLUDED IN THIS DOCUMENT ARE BASED ON INFORMATION
AVAILABLE TO THE COMPANY ON THE DATE HEREOF, AND THE COMPANY ASSUMES NO
OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY'S ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH IN THE
FOLLOWING RISK FACTORS AND ELSEWHERE IN THIS PROSPECTUS.
MANUFACTURING RISKS
The Company does not manufacture the wafers used for its products. The
Company's wafers are manufactured by foundries located in the United States,
Europe and Asia. The Company depends upon these suppliers to produce wafers at
acceptable yields and to deliver them in a timely manner at competitive prices.
The Company may sustain an adverse impact on operating results from problems
with the cost, timeliness, yield and quality of wafer deliveries from
suppliers. From time to time, the available industry-wide foundry capacity can
fluctuate significantly. During periods of constrained supply, the Company may
experience difficulty in securing an adequate supply of wafers, and/or its
suppliers may increase wafer prices. The Company's operating results depend in
substantial part on its ability to maintain or increase the capacity available
from its existing or new foundries. In prior years, the Company has experienced
increased costs and delays in customer shipments as a result of a foundry
reducing shipments to the Company without prior notice, requiring the Company
to transfer products to a new foundry. Although the Company believes that it
has planned to meet customer demand, there can be no assurances that unforeseen
demand, current supplier interruptions or other changes will not have a
material impact on the Company's business.
Manufacturing process technologies are subject to rapid change. Other
companies in the industry have experienced difficulty in migrating to new
manufacturing processes, and, consequently, have suffered reduced yields,
delays in product deliveries and increased expense levels. The Company's
business, financial condition and results of operations could be materially
adversely affected if any such transition is substantially delayed or
inefficiently implemented.
The Company is also dependent upon third-party assembly companies that
package the semiconductor die. The Company depends upon these suppliers to
produce products in a timely manner and at competitive prices. The Company may
sustain an adverse financial impact from problems with the cost, timeliness,
yield and quality of product deliveries from these suppliers.
FACTORS AFFECTING ANNUAL AND QUARTERLY OPERATING RESULTS
The semiconductor industry is characterized by rapid technological change,
intense competitive pressure and cyclical market patterns. The Company's
results of operations are affected by a wide variety of factors, including
general economic conditions, semiconductor industry environment, changes in
average selling prices, the timing of new product introductions (by the Company
and its customers), use of new technologies, the ability to safeguard patents
and intellectual property, and rapid change of demand for products. The level
of net revenues in any specific quarter can also be affected by the level of
orders placed during that quarter. The Company attempts to respond to changes
in market conditions as soon as possible; however, the rapidity of their onset
may make prediction of and reaction to such events difficult. Due to the
foregoing and other factors, past results, such as those described in this
Prospectus, may not be predictive of future performance.
DEPENDENCE ON NEW PRODUCTS
The Company's future success depends on its ability to timely develop and
introduce new products which compete effectively. Because of the complexity of
its products, the Company may experience delays in completing development and
introduction of new products, and, as a result, not achieve the market share
anticipated for such products. The Company's strategy is to develop products
for the fastest growing segments of the communications market. The Company
conducts its own analysis of market trends and reviews forecasts and
information provided by industry analysts. Market conditions may change rapidly
as technology, economic, or user-preference conditions cause different
communications technologies to experience growth other than that forecast by
the Company or others. There can be no assurance that the Company will
successfully identify new product opportunities and bring new products to
market in a timely manner, that products or technologies developed by others
will not render the Company's products or technologies obsolete or
noncompetitive, or that the Company's products will be selected for design into
the products of its targeted customers. In addition, the average selling price
for any particular product tends to decrease over the product's life. To offset
such price decreases, the Company relies primarily on obtaining yield
improvements and corresponding cost reductions in the manufacture of existing
products and on introducing new products which incorporate advanced features
and other price/performance factors such that higher average selling prices and
higher margins are achievable relative to existing product lines. To the extent
that cost reductions and new product introductions with higher margins do not
occur in a timely manner, or the Company's products do not achieve market
acceptance, the Company's operating results could be adversely affected.
MANAGEMENT OF GROWTH; DEPENDENCE ON KEY PERSONNEL
The Company is currently experiencing a period of significant growth which
has placed, and could continue to place, a significant strain on the Company's
personnel and other resources. The Company's ability to manage its growth
effectively will require continued expansion and refinement of the Company's
operational, financial and management and control systems as well as a
significant increase in the Company's development, testing, quality control,
marketing, logistics and service capabilities, any of which could place a
significant strain on the Company's resources. The Company's success also
depends to a significant extent upon the continued services of its key
personnel and its ability to attract and retain key technical, sales and
management personnel in the future. Competition for such personnel is intense
and there can be no assurance that the Company will be able to attract and
retain key technical, sales and management personnel in the future. If the
Company's management is unable to manage growth effectively, maintain the
quality and marketability of the Company's products and retain, hire and
integrate key personnel, the Company's business, financial condition and
results of operations could be materially adversely affected.
INTELLECTUAL PROPERTY
The Company relies upon patent, trademark, trade secret and copyright law
to protect its intellectual property. There can be no assurance that such
intellectual property rights can be successfully asserted or will not be
invalidated, circumvented or challenged. Litigation, regardless of its outcome,
could result in substantial cost and diversion of resources for the Company.
Any infringement claim or other litigation against or by the Company could have
a material effect on the Company's financial condition and results of
operations. In November 1995 the Company commenced infringement litigation
against a competitor. See "Recent Developments".
SEMICONDUCTOR INDUSTRY
The semiconductor industry has historically been cyclical and subject to
significant economic downturns at various times. The Company may experience
substantial period-to-period fluctuations in operating results due to general
semiconductor industry conditions, overall economic conditions or other
factors.
In addition, the securities of many high technology companies have
historically been subject to extreme price and volume fluctuations, factors
which may affect the market price of the Company's Common Stock. As is common
in the semiconductor industry, the Company frequently ships more product in the
third month of a quarter than in the other months. If a disruption in the
Company's production or shipping occurs near the end of a quarter, the
Company's revenues for that quarter could be adversely affected.
The Company must order wafers and build inventory in advance of product
shipments. There is risk that the Company could produce excess or insufficient
inventories of particular products because the Company's markets are volatile
and subject to rapid technology and price changes. This inventory risk is
heightened because certain of the Company's customers place orders with long
lead times which may be subject to cancellation or rescheduling by that
customer. To the extent the Company produces excess or insufficient inventories
of particular products, the Company's revenues and earnings could be adversely
affected.
Increased demand for semiconductor products may result in a reduction in
the availability of wafers from foundries. Such capacity limitations may
adversely affect the Company's ability to deliver products on a timely basis
and affect the Company's margins. Additionally, the Company believes that
during periods of strong demand and/or restricted semiconductor capacity,
customers will over-order to assure an adequate supply. Certain of the
Company's customers may cancel or postpone orders without notice if product
becomes available elsewhere.
Shortages of components from other suppliers could cause the Company's
customers to cancel or delay programs incorporating the Company's products,
resulting in the cancellation or delay of orders for the Company's products.
INTENSE COMPETITION
The semiconductor industry is intensely competitive. The Company's
competition consists of semiconductor companies and semiconductor divisions of
vertically integrated companies. In the telecom market, the Company's principal
competitors are Brooktree Corporation (a subsidiary of Rockwell International,
Inc.), Crystal Semiconductor, Inc. (a subsidiary of Cirrus Logic, Inc.)
("Crystal"), Dallas Semiconductor, Inc., Lucent Technologies Inc. ("Lucent"),
PMC-Sierra Inc. and Siemens A.G. In the networking market, the Company's
principal competitors are Advanced Micro Devices, Inc., Broadcom Corporation,
Crystal, Integrated Circuit Systems, Inc., Lucent, Micro Linear Corp., National
Semiconductor Corporation, Quality Semiconductor, Inc., Seeq Technologies, Inc.
and Texas Instruments, Incorporated. Many of these competitors have longer
operating histories, greater name recognition, access to larger customer bases
and significantly greater financial and other resources than the Company with
which to pursue engineering, manufacturing, marketing and distribution of
products.
The ability of the Company to compete successfully in the rapidly evolving
area of high performance integrated circuit technology depends on factors both
within and outside of the Company's control. Such factors include, without
limitation, success in designing and manufacturing new products, implementing
new technologies, intellectual property programs, product quality, reliability,
price, efficiency of production, and general economic conditions. There is no
assurance that the Company will be able to compete successfully against current
and future competitors. Increased competition may result in price reductions,
reduced gross margins and loss of market share, any of which may have a
material adverse effect on the Company's business, financial condition and
results of operations.
INTERNATIONAL OPERATIONS
Due to its reliance on international sales and foreign third-party
manufacturing and assembly operations, the Company is subject to the risks of
conducting business outside of the United States including government
regulatory risks, political, social and economic instability, potential
hostilities and changes in diplomatic and trade relationships. There can be no
assurance that one or more of the foregoing factors will not have a material
adverse effect on the Company's business, financial condition or operating
results. The recent economic downturn in several Asian countries has not
affected the Company in a material way, but there can be no assurances that
continued economic problems in Asia or any other region of the world will not
affect the Company.
INCREASED LEVERAGE
As a result of the Company's sale in August and September 1997 of its 4%
Convertible Subordinated Notes due 2004 (the "Notes"), the Company has incurred
approximately $115.0 million in additional indebtedness which increases the
ratio of its long-term debt to its total capitalization from 3.0%, at June 29,
1997, to 51.1%, as of September 28, 1997. As a result of this increased
leverage, the Company's interest obligations will increase substantially. The
degree to which the Company will be leveraged could adversely affect the
Company's ability to obtain additional financing for working capital,
acquisitions or other purposes and could make it more vulnerable to economic
downturns and competitive pressures. The Company's increased leverage could
also adversely affect its liquidity, as a substantial portion of available cash
from operations may have to be applied to meet debt service requirements and,
in the event of a cash shortfall, the Company could be forced to reduce other
expenditures and forego potential acquisitions to be able to meet such
requirements.
VOLATILITY OF NOTES AND STOCK PRICE
Economic and other external factors, many of which are beyond the control
of the Company, may have a significant impact on the Company's business and on
the market price of the Notes and the Common Stock into which the Notes are
convertible. Such factors include, without limitation, fluctuations in product
revenue and net income of the Company or its competitors, shortfalls in the
Company's operating results from levels forecast by securities analysts,
announcements concerning the Company, its competitors or customers,
announcements of technological innovations by the Company, its competitors or
its customers, the introduction of new products or changes in product pricing
policies by the Company, its competitors or its customers, market conditions in
the industry and the general state of the securities market. In addition, the
stock prices of many technology companies fluctuate significantly for reasons
that may be unrelated or disproportionate to operating results. These
fluctuations, as well as general economic, political and market conditions such
as recession or international instability, may adversely affect the market
price of the Notes and the Common Stock.
RECENT DEVELOPMENTS
On November 28, 1995, the Company initiated a patent infringement suit
against Seeq Technologies, Inc. in United States District Court for the
Northern District of California. The suit relates to two Level One patents,
No. 5,267,269 and No. 5,249,183, and to certain Seeq products used in Ethernet
system products. The suit seeks damages and injunctive relief. Seeq has denied
the allegations. On January 21, 1998, the Court denied Seeq's motion to declare
claims of the Level One patents invalid and granted Seeq's motion to amend its
counterclaim to include a claim that certain of the Company's products infringe
Seeq's U.S. Patent 5,504,738. Trial is set for August 1998. Although the
Company does not believe such litigation will have a material impact on the
Company, litigation, regardless of its outcome, could result in substantial
cost and diversion of resources of the Company.
On February 23, 1998, the Company announced that it had approved a 3-for-2
stock split to shareholders of record on March 9, 1998. The split will be
effective on March 30, 1998. Share and per share data included in this
Prospectus and in Company's reports filed to this date do not reflect the
effect of this split.
USE OF PROCEEDS
The Company will use any proceeds from the sale of shares for general
corporate purposes.
PLAN OF DISTRIBUTION
The Common Stock offered hereby will be sold directly to the Warrant Holder
upon exercise of the Warrant in accordance with its terms, without the use of
any broker or underwriter.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Counsel to the Company owns or has options to purchase 34,755 shares of
Registrant's Common Stock.
INDEMNIFICATION OF DIRECTORS AND OFFICERS;
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Company has provisions in its Amended and Restated Articles of
Incorporation which eliminate the liability of the Company's directors to the
Company and its shareholders for monetary damages to the fullest extent
permissible under California law and provisions which authorize the Company to
indemnify its directors and agents by bylaws, agreements or otherwise, to the
fullest extent permitted by law. Such limitation of liability does not affect
the availability of equitable remedies such as injunctive relief or rescission.
The Company's Bylaws, as amended, provide that the Company shall indemnify its
directors and officers to the fullest extent permitted by California law,
including circumstances in which indemnification is otherwise discretionary
under California law.
In addition, the Company has entered into agreements with its directors
and executive officers that will require the Company, among other things, to
indemnify them against certain liabilities that may arise by reason of their
status or service as directors or executive officers to the fullest extent not
prohibited by law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the provisions described in Item 6 above, or otherwise,
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Company of
expenses incurred or paid by a director, officer or controlling person of
Company 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, Company 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 of whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All expenses of the registration of the shares covered by this Prospectus
are to be borne by the Company. The Company will pay the registration fee of
$123.11 to the Securities and Exchange Commission. The Company prepared the
Registration Statement and will pay certain fees to its attorneys and
accountants in connection with their review of the Registration Statement and
their opinions and consents. The fees to be paid in connection with such
review, opinions and consents are estimated at approximately $3000. The
Company expects to incur no other material expense in connection with the
offering and distribution of shares of Common Stock hereunder.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
See the information under the caption "Indemnification of Directors and
Officers; Commission's Position on Indemnification for Securities Act
Violations" contained in the Prospectus.
ITEM 16. EXHIBITS.
Exhibit
NO.
4.1 Warrant Agreement.
5.1 Opinion of Counsel as to legality of securities being registered.
24.1 Consent of Independent Public Accountants (see p. II-5).
24.2 Consent of Counsel (contained in Exhibit 5.1 hereto).
25.1 Power of Attorney (see p. S-1).
ITEM 17. UNDERTAKINGS.
(a) The undersigned Company 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;
(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 hereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in the
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;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 19th day of
March, 1998.
LEVEL ONE COMMUNICATIONS, INCORPORATED
By: /S/ ROBERT S. PEPPER
Robert S. Pepper, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert S. Pepper and John Kehoe, jointly
and severally, his attorneys-in-fact, each with the power of substitution, for
him in any and all capacities, to sign any amendments to this Registration
Statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may 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 by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
/S/ ROBERT S. PEPPER President, Chief March 19, 1998
(Robert S. Pepper) Executive Officer and
Director
(Principal Executive Officer)
/S/ JOHN KEHOE Senior Vice President March 19, 1998
(John Kehoe) Chief Financial
Officer and Secretary
(Principal Financial Officer)
/S/ THOMAS J. CONNORS Director March 19, 1998
(Thomas J. Connors)
/S/ MARTIN JURICK Director March 19, 1998
(Martin Jurick)
/S/ PAUL GRAY Director March 19, 1998
(Paul Gray)
/S/ HENRY KRESSEL Director March 19, 1998
(Henry Kressel)
/S/ JOSEPH P. LANDY Director March 19, 1998
(Joseph P. Landy)
S-1
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to incorporation by
reference in this Registration Statement of our report dated February 28, 1997,
included in Level One Communications, Incorporated's Form 10-K for the year
ended December 29, 1996, and to all references to our firm included in this
Registration Statement.
Sacramento, California ARTHUR
ANDERSON LLP
March 13, 1998
<PAGE>
CONSENT OF COUNSEL
The consent of the General Counsel of the Company is contained in his
opinion filed as Exhibit 5.1 to the Registration Statement.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
Registration Statement on Form S-3
LEVEL ONE COMMUNICATIONS,
INCORPORATED
March 19, 1998
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
<S> <C> <C>
4.1 Warrant Agreement
5.1 Opinion of Counsel as to legality of securities being
registered
24.1 Consent of Independent Public Accountants (see p. II-
5)
24.2 Consent of Counsel (contained in Exhibit 5.1 hereto)
25.1 Power of Attorney (see p. S-1)
</TABLE>
<PAGE>
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT") OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS
(THE "LAWS") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE ACT OR QUALIFICATION UNDER THE LAWS UNLESS AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
IS OBTAINED THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE WITH THE ACT AND THE LAWS.
WARRANT DATE: FEBRUARY 2 , 1996
VOID AFTER FEBRUARY 2 , 2006
LEVEL ONE COMMUNICATIONS, INCORPORATED
COMMON STOCK PURCHASE WARRANT AGREEMENT
THIS CERTIFIES THAT, for good and valuable consideration, receipt of
which is hereby acknowledged, [_________________________] (together with its
permitted transferees, collectively referred to as the "Holder"), is entitled
to subscribe for and purchase from LEVEL ONE COMMUNICATIONS, INCORPORATED, a
California corporation (the "Company"), [________] shares of the Company's
Common Stock, no par value, as such number may be adjusted pursuant to Section
6 hereof (the "Shares"), at the price per Share as set forth in Section 2
hereof (the "Warrant Price"), at any time or from time to time during the
exercise period as set forth in Section 3 hereof.
Upon delivery of this Common Stock Purchase Warrant Agreement (the
"Warrant") together with payment of the Warrant Price and an executed and fully
completed Warrant Subscription Form in the form of Exhibit A attached hereto at
the principal office of the Company at the time of exercise, the Holder will be
entitled to receive a certificate or certificates for the Shares so purchased.
The Shares that may be issued upon the exercise of this Warrant upon issuance
will be duly and validly issued, fully paid and nonassessable and free from all
taxes, liens, encumbrances and charges with respect thereto.
This Warrant is subject in all respects to the following terms and
conditions:
1. EXERCISE OF WARRANT. This Warrant may be exercised as to any vested
portion during the exercise period as set forth in Section 3 hereof, in whole
or in part, at any time or from time to time, in an amount relating to not less
than ten percent (10%) of the Shares. This Warrant may not be exercised as to
a fractional Share. In case of any partial exercise of this Warrant in
accordance with this Section, the Company will execute and deliver to the
Holder of this Warrant a new Warrant of like tenor and date for the balance of
the Shares purchasable hereunder.
2. WARRANT PRICE. The "Warrant Price" is the price at which the Holder
of this Warrant is entitled, upon exercise hereof, to subscribe for and
purchase one (1) Share. The Warrant Price shall be $21.00.
<PAGE>
3. VESTING; EXERCISE PERIOD; TERMINATION. The right to purchase shares
hereunder shall vest 20% per year on the anniversary date of this Warrant, as
follows:
Number of
VESTING DATE SHARES FIRST PURCHASABLE ON THAT DATE
February 2 , 1997
February 2 , 1998
February 2 , 1999
February 2 , 2000
February 2 , 2001 _____________
Total _____________
This Warrant will be exercisable only with respect to Shares for which
Holder's purchase right has vested. Holder's right to purchase shares
hereunder will continue to vest for as long as Holder is engaged by the Company
as a sales representative under a separate sales representative agreement. If
the sales representative relationship between Holder and the Company is
terminated for any reason prior to February 2 , 2001, Holder shall be entitled
to purchase only the number of Shares for which Holder was vested on the last
Vesting Date prior to such termination. This Warrant does not affect any of
the rights or relationships of Holder or the Company under such sales
representative agreement.
This Warrant expires at 5 p.m., Eastern Standard Time, on February 2,
2006, and any vested purchase right which has not been exercised prior to that
date and time shall terminate automatically. The Company shall have no
obligation to holder with respect to any unexercised purchase right.
4. TRANSFER OF WARRANT. This Warrant and all rights hereunder are
transferable by the Holder only with the consent of the Company, and subject
to the restrictions of any applicable foreign, federal, state or local law or
regulation, including but not limited to all applicable securities laws, and
subject to the conditions set forth in Section 5 hereof. It will be a
condition to any such transfer that the Holder (if any portion of this Warrant
is retained by it) and the transferee will each receive, accept and agree to
all of the terms of a new Warrant, of like tenor and date to this Warrant,
executed by the Company, for the portion so transferred and for the portion
retained.
5. CONDITION OF TRANSFER OR EXERCISE OF WARRANT. This Warrant may not
be transferred or exercised, in whole or in part, unless (a) the Company has
received, at the time of such transfer or exercise, a legal opinion of counsel
to Holder, in form and substance satisfactory to the Company and its counsel,
reciting the pertinent circumstances surrounding the proposed transfer or
exercise and stating that such transfer or exercise is exempt from the
prospectus and the registration requirements of the Securities Act of 1933, as
amended (the "Act") and the qualification requirements of the applicable state
securities laws (the "Laws"), or (b) a registration statement for the issuance
of shares hereunder is in effect.
6. STOCK SPLITS AND OTHER ADJUSTMENTS. If at any time this Warrant is
outstanding and unexercised there is any stock split (including a split in the
form of a share dividend) or reverse stock split of the Common Stock, the
number of Shares purchasable hereunder and the Warrant Price per Share shall be
proportionately adjusted. In the event of any reclassification of the Common
Stock or merger or reorganization of the Company at any time this Warrant is
outstanding and unexercised, Holder shall, upon exercise of this Warrant, not
be permitted to receive Shares, but shall receive securities equivalent to the
securities such Holder would have received in exchange for such Shares at the
time of such reclassification, merger or reorganization.
7. REGISTRATION ON FORM S-3. (a) By not later than February 2, 1997,
or upon Holder's request thereafter, Company shall use its best efforts to file
a registration statement on Form S-3 (or any successor form to Form S-3) for a
public offering of the Shares. All expenses incurred by the Company in
connection with such registration, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, and blue sky fees and expenses incurred in connection
with such a registration, shall be borne by the Company, but Company shall not
pay any underwriting discounts and selling commissions applicable to the sale
of Shares or any fees and disbursements of counsel for Holder.
(b) In connection with such registration, the Company shall furnish
to the Holder such numbers of copies of a prospectus in conformity with the
requirements of the Act, and such other documents as it may reasonably request
in order to facilitate the disposition of Shares owned by it, and shall use its
best efforts to register and qualify the securities covered by such
registration statement under such other securities or blue sky laws of such
jurisdictions as shall be reasonably appropriate for the distribution of the
securities covered by the registration statement; PROVIDED THAT the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in
any such states or jurisdictions, and FURTHER PROVIDED THAT (anything in this
Warrant to the contrary notwithstanding with respect to the bearing of
expenses) if any jurisdiction in which the securities are qualified shall
require that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by selling shareholders, then such
expenses shall be payable by selling shareholders on a pro rata basis to the
extent required by such jurisdiction.
(c) The obligations of the Company to take any action pursuant to
this Section 7 are subject to the condition that the Holder shall furnish to
the Company such information regarding the Holder, the Shares held by it and
the intended method of disposition of such securities as the Company shall
reasonably request and as shall be required in connection with any action to be
taken by the Company.
(d) With respect to any Shares are included in a registration
statement under this Section 7:
(1) the Company will indemnify and hold harmless, to the
extent permitted by law, each Holder (including any person who controls such
Holder or underwriter within the meaning of the Act) requesting or joining in
any registration or underwriting (as defined in the Act) against any losses,
claims, damages or liabilities, joint or several, to which they may become
subject under the Act or otherwise, to the extent that such losses, claims,
damages or liabilities (or actions with respect thereto) arise out of or are
based on any untrue or alleged untrue statements of any material fact contained
in such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or arise out of any violation by the Company of any
rule or regulation promulgated under the Act applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration; and the Company will reimburse each such Holder, underwriter
or controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability, or action; PROVIDED, HOWEVER, that the indemnification
contained in this Section 7(d)(1) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in connection with such registration statement,
preliminary prospectus, final prospectus or amendments or supplements thereto,
in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Holder, underwriter or
controlling person;
(2) each Holder requesting or joining in a registration will
indemnify and hold harmless, to the extent permitted by law, the Company, each
of its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company within the meaning of
the Act, and each agent or underwriter for the Company (within the meaning of
the Act) against any losses, claims, damages or liabilities to which the
Company or any such director, officer, controlling person, agent or underwriter
may become subject under the Act or otherwise, to the extent that such losses,
claims, damages or liabilities (or actions with respect thereto) arise out of
or are based upon any untrue or alleged untrue statements of any material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary or final
prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration; and each such Holder will reimburse any
legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, agent or underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the indemnification contained in this Section 7(d)(2)
for each Holder shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of such Holder (which consent shall not be unreasonably withheld and
shall not exceed the amount of any proceeds received by that Holder from the
sale of its Registrable Securities); and
(3) promptly after receipt by an indemnified party under
this Section 7(d) of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 7(d), notify the indemnifying party in
writing of the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
join with any other indemnifying party to assume the defense thereof with
counsel mutually satisfactory to the parties; PROVIDED THAT the failure to
notify an indemnifying party promptly of the commencement of any such action,
if prejudicial to his ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
7(d) but the omission so to notify the indemnifying party will not relieve him
of any liability that he may have to any indemnified party other than under
this Section 7(d).
8. REPRESENTATIONS AND WARRANTIES AS TO ACQUISITION OF THE WARRANT AND
THE SHARES. (a) The Holder represents and warrants that the Warrant is
acquired for investment and not with a view to the sale or other distribution
thereof within the meaning of the Act, and the Holder has no present intention
of selling or otherwise disposing of the Warrants or the Shares. The Holder
has acquired the Warrant for its own account and no one else has any beneficial
ownership in the Warrant or the Shares.
(b) The Holder has been advised that the Warrant and the Shares
are not presently registered with the Securities and Exchange Commission (the
"SEC") or qualified under applicable state securities laws and accordingly may
not be offered, sold or otherwise transferred unless registered pursuant to the
Act or qualified under applicable state securities laws unless an opinion of
counsel, in form and substance satisfactory to the Company, is obtained that an
exemption from registration or qualification is available
(c) The Holder represents and warrants that (1) it is an
accredited investor within the meaning of Regulation D promulgated under the
Act; or (2) by reason of its business or financial experience, or the business
or financial experience of a professional advisor, if any, it has the capacity
to protect its own interests in connection with this transaction; or (3) it has
a preexisting personal or business relationship with the Company or any of its
officers, directors or controlling persons which is such that the Holder is
able to make an informed evaluation of this investment and protect its
interests in connection with this investment, and that Holder has received
information from the Company it finds sufficient to make such decision.
9. MISCELLANEOUS.
(a) The terms of this Warrant will be binding upon and will inure
to the benefit of the successors, assigns, heirs, executors and administrators
of the Company and of the Holder hereof and the holder(s) of the Common Stock
issued or issuable upon the exercise hereof. This Warrant may be amended only
by a writing signed by the Company and the Holder hereof.
(b) No Holder of this Warrant, as such, will be entitled to vote or
receive dividends or be deemed to be a shareholder of the Company for any
purpose, nor will anything contained in this Warrant be construed to confer
upon the Holder of this Warrant, as such, any rights of a shareholder of the
Company or any right to vote, give or withhold consent to any corporate action,
receive notice of meetings, receive dividends or subscription rights, or
otherwise.
(c) Receipt of this Warrant by the Holder hereof will constitute
acceptance of and agreement to the terms and conditions of this Warrant by
Holder.
(d) This Warrant is delivered in the State of California and shall
be construed, enforced and governed by the laws of the State of California
applicable to transactions entered into in such State, without giving effect to
principles of conflict of laws. This Warrant constitutes the entire agreement
between the parties hereto pertaining to the specific subject matter hereof and
thereof, and supersede all other agreements, understandings, negotiations and
discussions between them relating to the subject matter hereof and thereof. No
amendment or waiver of the terms of this Warrant shall be permitted except in a
writing signed by the party against whom enforcement of such amendment or
waiver is sought.
(e) Any notice herein required or permitted to be given will be in
writing and may be personally served or sent by courier or delivery service,
and will be deemed to be given upon delivery in person or, if mailed, upon the
earlier of receipt or five days after mailing. For the purposes hereof, the
address of the Company will be as set forth on the signature page hereof and
the address of the Holder hereof will be as set forth on the books of the
Company, or at such other address as any permitted Holder may specify by
written notice to the Company.
(f) Upon receipt of evidence reasonably satisfactory to the Company
of the ownership of and the loss, theft, destruction or mutilation of this
Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement reasonably satisfactory to the Company or (in the case of
mutilation) upon surrender and cancellation of the mutilated Warrant, the
Company will execute and deliver, in lieu thereof, a new Warrant of like tenor
and date.
(g) The descriptive headings herein have been inserted for
convenience only and will not be deemed to limit or otherwise affect the
construction of any provision hereof.
IN WITNESS WHEREOF, the parties have caused this Warrant to be signed by
its duly authorized officer as of the date first written above.
LEVEL ONE COMMUNICATIONS, INCORPORATED
By: ______________________________
Robert S. Pepper, Ph.D.
Chairman of the Board and Chief Executive
Officer
Level One Communications, Incorporated
9750 Goethe Road
Sacramento, CA 95827
HOLDER:
By: ______________________________
<PAGE>
EXHIBIT A
SUBSCRIPTION FORM
To: Level One Communications, Incorporated
9750 Goethe Road
Sacramento, CA 95827
Attn:
The undersigned, the holder of the attached warrant, hereby irrevocably
elects to exercise the purchase right represented by that warrant for, and to
purchase under that warrant, __________ shares of Common Stock of Level One
Communications, Incorporated, and herewith makes payment of
___________________________________ ($______) for those shares, and requests
that the certificates for those shares be issued in the name of
________________________, and delivered to ___________________________, whose
address is __________
____________________________________.
Dated: ______________________, ______.
_____________________________________________
<PAGE>
EXHIBIT
5.1
March 19, 1997
Level One Communications, Incorporated
9750 Goethe Road
Sacramento, CA 95827
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-3 to be
filed by Level One Communications, Incorporated (the "Company") with the
Securities and Exchange Commission (the "Registration Statement"), in
connection
with the registration under the Securities Act of 1933, as amended, of 25,500
shares of the Company's common stock, to be issued pursuant to the Company's
Sales Representative Warrant (the "Sales Rep Shares"). I have examined the
proceedings
taken and proposed to be taken in connection with the issuance and sale of the
Sales Rep Shares to be issued.
It is my opinion that, upon completion of the proceedings being taken or
contemplated to be taken prior to the issuance of the Sales Rep Shares pursuant
to
the Sales Representative Warrant, and upon completion of any proceedings taken
in order to permit such transactions to be carried out in accordance with the
securities laws of the
various states where required, the Sales Rep Shares will be legally and validly
issued, fully-paid and non-assessable.
I consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of my name wherever appearing in the
Registration Statement and any amendments thereto.
Sincerely,
/S/ BRUCE F. DRAVIS
Bruce F. Dravis
General Counsel
