<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 1998
REGISTRATION STATEMENT NO. 333-65433
================================================================================
SECURITIES AND EXCHANGE COMMISSION
---------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
LEVEL ONE COMMUNICATIONS, INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 33-0128224
(STATE OF OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
9750 GOETHE ROAD
SACRAMENTO, CALIFORNIA 95827
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
---------------
JOHN KEHOE
SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER
LEVEL ONE COMMUNICATIONS, INCORPORATED
9750 GOETHE ROAD
SACRAMENTO, CALIFORNIA 95827
(916) 855-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
GILLES S. ATTIA
GRAHAM & JAMES LLP
400 CAPITOL MALL, SUITE 2400
SACRAMENTO, CALIFORNIA 95814
TELEPHONE: (916) 558-6700
FACSIMILE: (916) 441-6700
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this registration statement.
---------------
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================
PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT OFFERING PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE TO BE PRICE PER AGGREGATE REGISTRATION
REGISTERED REGISTERED(1) SHARE(1) OFFERING PRICE(1) FEE(3)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par
value per share........ 4,217,855(2) $18.87 $79,590,923.85 $23,479.33
=======================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee required
by Section 6(b) of the Securities Act and computed pursuant to Rule 457(c)
under the Securities Act based upon the average of the high and low prices
of the Common Stock of the Registrant on October 2, 1998, as reported on
the Nasdaq National Market.
(2) Includes 256,493 shares of Common Stock of the Registrants reserved for
issuance upon exercise of warrants.
(3) Registration fee previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE>
PROSPECTUS
[LOGO]
LEVEL ONE COMMUNICATIONS, INCORPORATED
4,217,855 shares of Common Stock
These shares of common stock are being sold by the selling shareholders
listed beginning on page 9. Level One will not receive any proceeds from the
sale of these shares.
Level One's common stock is traded on the Nasdaq National Market under the
symbol "LEVL." The last reported sale price on 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>
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.
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Level One files reports with the SEC on a regular basis that contain
financial information and results of operations. You may read or copy any
document that Level One files with the SEC at the SEC's Public Reference Room
at 450 5th Street, N.W., Washington, D.C. 20549. You may obtain information
about the Public Reference Room by calling the SEC for further information at
1-800-SEC-0330. Level One's SEC filings are also available at the SEC's web
site at www.sec.gov.
INCORPORATION BY REFERENCE
To avoid repeating information in this prospectus that has already been filed
with the SEC, we have "incorporated by reference" the following SEC filings of
Level One (SEC File No. 22068). This information is considered a part of this
prospectus. Those documents are:
(1) Form 10-K for the year ended December 29, 1997;
(2) Form 10-Q for the quarters ended March 29, June 28 and September 27;
(3) Form 8-K, Form 8-K/A (Amendment No. 1), 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
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.
We Rely on Third Party Contract Manufacturing and Assembly
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 and in
sufficient quantities to meet customer demand and to deliver the wafers in a
timely manner at competitive prices. We may sustain an adverse impact on our
operating results from problems that may occur with the supply, cost,
timeliness, yield and quality of wafer deliveries from our suppliers. Although
we have supply agreements with three of our wafer suppliers, there can be no
assurance that unforeseen demand, supplier interruptions or other unforeseen
changes will not have a material adverse impact on our business and financial
results. For example, 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.
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.
There is also a risk that we and/or our suppliers will not keep pace with the
rapid change in manufacturing technologies. Other companies similar to us have
suffered reduced yields, delayed product deliveries and increased expenses as a
result of failing to successfully transition to next-generation manufacturing
technologies. Our business, financial condition and results of operations could
be materially adversely affected if such manufacturing technology transitions
are substantially delayed or inefficiently implemented.
We are dependent on third-part assembly companies to package or test our
products. Our business, financial condition and results of operations could be
materially adversely affected from problems with the cost, timeliness, yield
and quality of product deliveries from these suppliers.
Our Operating Results Depend on New Product Development and Market Acceptance
In the semiconductor industry, price competition is intense and product life
cycles short and, 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.
4
<PAGE>
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 projected market share for the
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 or economic conditions or user preferences cause
different communications technologies to experience growth not anticipated by
us or our competitors.
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 products lines, our operating results could be materially adversely
affected.
Recent and Planned Growth in Our Business May Place a Significant Strain on Our
Management Resources
We are currently experiencing significant growth relative to the
semiconductor industry which has placed, and could continue to place, a
significant strain on our management and personnel resources. For example, in
July 1998 we acquired Acclaim Communications, Inc. and 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 will require 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 our recent and future growth, our business, financial condition and results
of operations could be materially adversely affected.
We Depend on Key Personnel--Competition for Qualified Personnel in Our Industry
is Particularly Intense
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. In addition, we do not
maintain key man life insurance on any of our personnel. If we do not retain
key personnel and hire additional qualified personnel, our business, financial
condition and results of operations could be materially adversely affected.
We May Not Successfully Assert or Defend Our Intellectual Property Rights
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
5
<PAGE>
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 substantial
financial and management resources that could have a material adverse affect on
our business, financial condition and results of operations.
Our Revenues are Affected by Production and Shipping Near the End of the
Quarter--Stock Price Volatility
We frequently ship more product in the third month of each quarter relative
to 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
and our revenues for that quarter could be materially affected. To the extent
our actual revenues for any given quarter materially differ from those
projected by stock market analysts, it could result in volatility in our stock
price.
Risks Associated with Excess or Insufficient Inventories
We order wafers and build inventory in advance of receiving our customer
orders. There is a risk that we could produce excess or insufficient product
inventories if we fail to accurately anticipate customer demand. This risk is
heightened for three primary reasons. First, certain of our customers place
long lead time orders 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 customer's 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. To the
extent that we produce excess or insufficient product inventories because we do
not accurately anticipate customer demand, our revenues and earnings could be
materially adversely affected.
We Experience Intense Competition from Competitors in the Semiconductor
Industry
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,
Inc., Seeq Technologies, Inc. and Texas Instruments, Inc.
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>
We Rely on International Sales and Foreign Third Party Manufacturing and
Assembly
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. To date, the recent economic downturn in
several Asian countries has not affected us in a material way, but there can be
no assurance that continued or worsened economic problems in Asia or any other
region of the world where we conduct business will not affect us in the future.
Our Debt Leverage is Increased by Our 4% Convertible Subordinated Notes due
2004
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 adversely 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.
We Have Not Fully Completed Our Assessment of Year 2000 Compliance and
Readiness
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 towards
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 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
7
<PAGE>
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 OWNED AFTER OFFERING
BENEFICIALLY PURSUANT TO THIS ----------------------
SELLING STOCKHOLDER OWNED(1) PROSPECTUS(2) NUMBER PERCENT
- ------------------- ------------ ---------------- --------- ----------
<S> <C> <C> <C> <C>
Visveswar Akella(3)..... 1,302,460 1,302,460 -- --
Tom Hsien-Chin Hsieh and
Ling Ling T. Hsieh..... 1,360 1,360 -- --
Eugene Fleisher......... 3,429 3,429 -- --
Swaminathan Ganesan..... 1,360 1,360 -- --
Steve Gulesserian....... 1,209 1,209 -- --
Joseph Toste............ 3,930 3,930 -- --
Douglas Denny........... 2,116 2,116 -- --
Anindya Chakraborty..... 2,947 2,947 -- --
Frances Hsin-Pei Wang... 2,154 2,154 -- --
Durvasula Sastry........ 9,071 9,071 -- --
Jagannadham Akella...... 7,257 7,257 -- --
Seshagiri Rao
Mandalika.............. 3,628 3,628 -- --
Ethindrababu A. Baktha.. 3,628 3,628 -- --
David E. Dukinfield..... 3,401 3,401 -- --
Diosdado P. Banatao(4).. 1,307,848 1,307,848 -- --
Angel Ventures,
L.P.(5)................ 583,672 583,672 -- --
Jones M. Castro, Jr.
and/or Marina E. Cas-
tro, JTWROS............ 9,750 9,750 -- --
Phurpa G. LadenLa and
Sophie C. LandenLa,
TTEES UTD, 10/14/85,
Phurpa G. LadenLa and
Sophie C. LadenLa,
Trustors............... 4,875 4,875 -- --
Stephen R. Dohrmann..... 4,062 4,062 -- --
Capquest Ventures, In-
corporated............. 9,750 9,750 -- --
Alfredo Alforque........ 1,625 1,625 -- --
Reynaldo S. Factoran.... 1,625 1,625 -- --
Gil Espinosa............ 1,625 1,625 -- --
Juan Magdaraog.......... 812 812 -- --
Rogelio Laraya.......... 812 812 -- --
Diosdado Rey Banatao.... 3,250 3,250 -- --
Desi R. Banatao......... 3,250 3,250 -- --
Tala M. Banatao......... 3,250 3,250 -- --
Thomas Alexander(6)..... 56,990 56,990 -- --
Adaptive Technologies,
LLC(7)................. 33,753 33,753 -- --
Chong-Moon Lee(8)....... 640,420 640,420 -- --
Ravinder Sajwan(9)...... 240,445 77,160 -- --
Ramjit Johl(10)......... 117,991 85,335 -- --
Satish Sathe(11)........ 75,371 19,323 -- --
LINC Capital, Inc.(12).. 6,093 6,093 -- --
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
SHARES WHICH SHARES BENEFICIALLY
SHARES MAY BE SOLD OWNED AFTER OFFERING
BENEFICIALLY PURSUANT TO THIS ----------------------
SELLING STOCKHOLDER OWNED(1) PROSPECTUS(2) NUMBER PERCENT
- ------------------- ------------ ---------------- --------- ----------
<S> <C> <C> <C> <C>
Silcon Valley Bank(13).. 9,750 9,750 -- --
Brian Creek & Evelyn G.
Lopez-Creek,........... 815 815 -- --
In Joint Tenancy
Daniel-Edward G. Lopez &
Karen Lopez,........... 815 815 -- --
In Joint Tenancy
Danilo S. Lopez & Evelyn
G. Lopez,.............. 3,245 3,245 -- --
In Joint Tenancy
</TABLE>
- --------
(1) Includes any shares as to which the individual has sole or shared voting
power or investment power and also any shares which the individual has the
right to acquire within 60 days of the date of this prospectus through the
exercise of any stock option or other right. Unless otherwise indicated in
the footnotes, each person has sole voting and investment power (or shares
such powers with his or her spouse) with respect to the shares shown as
beneficially owned.
(2) See "Plan of Distribution".
(3) Includes 36,562 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus.
If the warrants are exercised before the end of the escrow period, ten
percent of the shares issued upon exercise of the warrants will be
deposited into the escrow fund in accordance with the terms of the Merger
Agreement.
(4) Includes 70,687 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(5) Includes 12,187 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(6) Includes 7,312 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(7) Includes 4,265 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(8) Includes 80,437 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(9) Includes 9,701 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
and 163,285 shares issuable upon exercise of options assumed by Level One
that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(10) Includes 17,062 shares issuable upon exercise warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
and 32,656 shares issuable upon exercise of options assumed by Level One
that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(11) Includes 2,437 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
and 56,048 shares issuable upon exercise of options assumed by Level One
that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(12) Includes 6,093 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
(13) Includes 9,750 shares issuable upon exercise of warrants assumed by Level
One that are exerciseable within 60 days of the date of this prospectus
subject to the same escrow provision described in footnote (3).
10
<PAGE>
PLAN OF DISTRIBUTION
The common stock covered by this prospectus may be offered and sold from time
to time by the selling stockholders, including in one or more of the following
transactions:
. on the Nasdaq National Market;
. in the over-the-counter market;
. in transactions other than on the Nasdaq National Market or in the over-
the-counter market;
. in connection with short sales;
. by pledge to secure debts and other obligations;
. in connection with the writing of options, in hedge transactions, and in
settlement of other transactions in standardized or over the counter
options;
. in a combination of any of the above transactions; or
. pursuant to Rule 144, assuming the availability of an exemption from
registration.
The selling shareholders may sell their shares at market prices prevailing at
the time of sale, at prices related to prevailing market prices, at negotiated
prices, or at fixed prices.
Broker-dealers that are used to sell shares will either receive discounts or
commissions from the selling shareholders, or will receive commissions from the
purchasers for whom they acted as agents.
The sale of common stock by the selling stockholders is subject to compliance
by the selling stockholders with certain contractual restrictions with Level
One including certain restrictions contained in a registration rights agreement
between Level One and the selling stockholders. There can be no assurance that
the selling stockholders will sell all or any of the common stock.
Level One has agreed to keep this prospectus effective until July 6, 1999.
Level One intends to deregister any of the common stock not sold by the selling
stockholders immediately after that date. However, at that time, it is
anticipated that at such time any unsold common stock may be freely tradable in
compliance with Rule 144 of the Securities Act.
Level One and the selling stockholders have agreed to customary
indemnification obligations with respect to the sale of the common stock by use
of this prospectus.
11
<PAGE>
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon by Graham &
James LLP, Sacramento, California, counsel to Level One.
EXPERTS
The consolidated financial statements of Level One Communications, Inc. 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>
<S> <C>
SEC registration fee.............................................. $23,479
NASDAQ National Market listing fee................................ $17,500
Legal fees and expenses........................................... $15,000
Accounting fees and expenses...................................... $10,000
Miscellaneous expenses............................................ $20,000
-------
Total............................................................ $85,979
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Level One has provisions in its amended and restated articles of
incorporation which eliminate the liability of Level One's directors to Level
One and its shareholders for monetary damages to the fullest extent permissible
under California law and provisions which authorize Level One to indemnify its
directors and agents by bylaws, agreements or otherwise, to the fullest extent
permitted by law. Such limitation of liability does not affect the availability
of equitable remedies such as injunctive relief or rescission. Level One's
bylaws, as amended, provide that Level One shall indemnify its directors and
officers to the fullest extent permitted by California law, including
circumstances in which indemnification is otherwise discretionary under
California law.
In addition, Level One has entered into agreements with its directors and
executive officers that will require Level One, among other things, to
indemnify them against certain liabilities that may arise by reason of their
status of service as directors or executive officers to the fullest extent not
prohibited by law.
The indemnification provisions in the bylaws and the indemnification
agreements entered into between Level One and its directors and officers may be
sufficiently broad to permit indemnification of Level One's directors and
officers for liabilities arising under the Securities Act.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
2.1* Agreement and Plan of Reorganization by and between Level One,
Aardvark Acquisition Corp. and Acclaim Communications, Inc.
4.1** Amended and Restated Articles of Incorporation of Level One, as
amended.
4.2*** Bylaws of Level One, as amended.
4.3**** Registration Rights Agreement, by and among Level One and the former
stockholders of Acclaim Communications, Inc.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
5.1+ Opinion of Graham & James LLP.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.3 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-4).
</TABLE>
- --------
* Filed with the Level One's Form 8-K filed with the Commission on July 17,
1998, and is incorporated by reference herein (the "Form 8-K").
** Incorporated by reference to Exhibit 3.1 to the Report on Form 10-K for
the Fiscal Year Ended December 28, 1997.
*** Incorporated by reference to Registration Statement No. 33-65810 dated
August 19, 1994.
**** Included as an exhibit to the Agreement and Plan of Reorganization filed
with the Form 8-K, and is incorporated by reference herein.
+ Previously filed.
ITEM 17. UNDERTAKINGS
A. UNDERTAKING PURSUANT TO RULE 415
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) Securities
Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of this offering.
II-2
<PAGE>
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT
DOCUMENTS BY REFERENCE
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. UNDERTAKING IN RESPECT OF INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sacramento, State of California, on this 16th day of
December 1998.
LEVEL ONE COMMUNICATIONS,
INCORPORATED
/s/ John Kehoe
By: _________________________________
John Kehoe Senior Vice President
and Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Robert S.
Pepper and John Kehoe and each of them, as attorneys-in-fact, each with the
power of substitution, for him or her in any and all capacities, to sign any
amendment to this Registration Statement and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting to said attorneys-in-fact, and each of them, full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons on the 16th day of
December 1998 in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* President, Chief Executive Officer
______________________________________ and Director (Principal Executive
ROBERT S. PEPPER , PH.D. Officer)
/s/ John Kehoe Senior Vice President and Chief
______________________________________ Financial Officer (Principal
JOHN KEHOE Financial OFficer)
* Director
______________________________________
THOMAS J. CONNERS
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Director
______________________________________
PAUL GRAY, PH.D.
* Director
______________________________________
MARTIN JURICK
* Director
______________________________________
HENRY KRESSEL
* Director
______________________________________
JOSEPH P. LANDY
* Director
______________________________________
KENNETH A. PICKAR, PH.D.
</TABLE>
/s/ John Kehoe
* By:________________________________
JOHN KEHOE
ATTORNEY-IN-FACT
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
2.1* Agreement and Plan of Reorganization by and between the Company,
Aardvark Acquisition Corp. and Acclaim Communications, Inc......
4.1** Amended and Restated Articles of Incorporation of the Company,
as amended......................................................
4.2*** Bylaws of the Company, as amended...............................
4.3**** Registration Rights Agreement, by and among the Company and the
former stockholders of Acclaim Communications, Inc..............
5.1+ Opinion of Graham & James LLP...................................
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants..
23.3 Consent of Counsel (included in Exhibit 5.1)....................
24.1 Power of Attorney (included on page II-4).......................
</TABLE>
- --------
* Filed with the Registrant's Form 8-K filed with the Commission on July 17,
1998, and is incorporated by reference herein (the "Form 8-K").
** Incorporated by reference to Exhibit 3.1 to the Report on Form 10-K for
the Fiscal Year Ended December 28, 1997.
*** Incorporated by reference to Registration Statement No. 33-65810 dated
August 19, 1994.
**** Included as an exhibit to the Agreement and Plan of Reorganization filed
with the Form 8-K, and is incorporated by reference herein.
+ Previously filed.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 of our reports dated March
13, 1998 and 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
