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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 10, 1999
REGISTRATION NO. 333-37957
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LEVEL ONE COMMUNICATIONS, INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 33-0128224
(State of Incorporation) (I.R.S. Employer Identification No.)
9750 GOETHE ROAD
SACRAMENTO, CALIFORNIA 95827
(916) 855-5000
(Address and telephone number of registrant's principal executive offices)
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ROBERT S. PEPPER, Ph.D.
9750 GOETHE ROAD
SACRAMENTO, CALIFORNIA 95827
(916) 855-5000
(Name, address, and telephone number of agent for service)
COPIES TO:
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JOHN KEHOE GILLES S. ATTIA, ESQ. KENNETH R. LAMB, ESQ.
9750 GOETHE ROAD GRAY CARY WARE & PETER T. HEILMANN, ESQ.
SACRAMENTO, CALIFORNIA 95827 FREIDENRICH LLP GIBSON DUNN & CRUTCHER LLP
(916) 855-5000 400 CAPITOL MALL, SUITE 2100 ONE MONTGOMERY STREET
SACRAMENTO, CALIFORNIA 95814 TELESIS TOWER
(916) 930-3200 SAN FRANCISCO, CA 94104
(415) 393-8200
</TABLE>
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 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]
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 from 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.[ ]
<PAGE> 2
DEREGISTRATION OF SECURITIES
The purpose of this Post-Effective Amendment No. 1 to the Registration
Statement on Form S-3 (this "Amendment") of Level One Communications,
Incorporated ("Level One") is to deregister all shares of Level One common
stock, $0.001 par value per share (the "Common Stock"), registered pursuant to
the Registration Statement on Form S-3 filed by Level One on October 15, 1997
(the "Registration Statement") and not sold pursuant to the Registration
Statement and to update the prospectus to reflect information that has changed
as a result of the acquisition of Level One by Intel Corporation, a Delaware
corporation ("Intel").
Pursuant to an Agreement and Plan of Merger dated as of March 4, 1999
among Level One, Intel and Intel RSW Corporation, a Delaware corporation and
wholly owned subsidiary of Intel ("Intel RSW"), Level One agreed to merge with
Intel RSW, with Level One to be the surviving corporation. As a result of the
merger, Level One has become a wholly owned subsidiary of Intel. On August 10,
1999, Intel, Level One and State Street Bank and Trust Company of California,
N.A. entered into a supplemental indenture (the "Supplemental Indenture") under
which Level One remains obligated under the Notes and pursuant to which Intel
issued a guaranty, which guarantees Level One's due and punctual payment of
principal, premium, if any, and interest under the 4% Convertible Subordinated
Notes due 2004 (the "Notes"). The Level One Common Stock is being deregistered
because: (i) pursuant to the Supplemental Indenture and the indenture to which
it relates, the Notes have become convertible into Intel common stock; and (ii)
a Form 15 deregistering all of Level One's Common Stock is being simultaneously
filed with the Securities and Exchange Commission.
This Amendment does not deregister, and Level One intends that the
Registration Statement remain effective with respect to, offers and sales of the
Notes by the holders of the Notes.
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PROSPECTUS
4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
In August and September 1997, Level One issued and sold $115,000,000 in
principal amount of 4% Convertible Subordinated Notes due 2004 to the initial
purchasers who then sold the notes to persons they reasonably believed to be
"qualified institutional buyers," as defined by Rule 144A under the Securities
Act, or other institutional "accredited investors," as defined in Regulation D
of the Securities Act. Those sales of the notes were exempt from the
registration requirements of the Securities Act. The noteholders named in
this prospectus or their transferees, pledgees, donees or successors may offer
and sell the notes from time to time pursuant to this prospectus.
The notes issued and sold in the original offering in reliance on Rule
144A have been designated for trading on the PORTAL System of the National
Association of Securities Dealers, Inc. Notes sold pursuant to the registration
statement of which this prospectus forms a part will not remain eligible for
trading on the PORTAL System.
The notes may be sold by the selling noteholders named in this prospectus
from time to time directly to purchasers or through agents, underwriters or
dealers. If required, the names of any such agents or underwriters involved in
the sale of the notes in respect of which this prospectus is being delivered and
the applicable agent's commission, dealer's purchase price or underwriter's
discount, if any, will be set forth in an accompanying supplement to this
prospectus.
Neither Intel nor Level One will receive proceeds from the sales of the
notes by the noteholders.
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.
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THE DATE OF THIS PROSPECTUS IS AUGUST 10, 1999
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PROSPECTUS SUMMARY
The following information does not purport to be complete and is qualified
in its entirety by, and should be read in conjunction with, the more detailed
information in this prospectus and in the documents, financial statements and
other information incorporated by reference herein. This prospectus contains
certain forward-looking statements that involve risks and uncertainties. Level
One's actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors. Unless the context
suggests otherwise, references in this prospectus to "Level One," "Us" or "We"
mean Level One Communications, Incorporated and its subsidiaries. Level One will
not undertake to update any forward-looking statement that may be made from time
to time, by or on behalf of, Level One.
LEVEL ONE
Pursuant to an Agreement and Plan of Merger dated as of March 4, 1999
among Level One, Intel and Intel RSW Corporation, a wholly owned subsidiary of
Intel, Level One merged with Intel RSW, as a result of which Level One became a
subsidiary of Intel. On August 10, 1999, Level One, Intel and State Street Bank
and Trust Company of California, N.A. entered into a supplemental indenture
under which Level One remains obligated under the notes and pursuant to which
Intel has agreed to issue its common stock in connection with conversion of the
notes and has issued a guaranty, which guarantees due and punctual payment of
the notes by Level One.
Level One is a leader in communications integrated circuit technology, and
provides silicon connectivity solutions for high-speed telecommunications and
networking applications. Its products are used for high-speed analog and digital
signal transmission and to build and connect networks to systems that transport
information within an office or around the world. Its 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 enable you to use intranets, the Internet and the World
Wide Web. Level One combines its strengths in analog and digital circuit design
with its communications systems expertise to produce mixed-signal solutions with
increased functionality and greater reliability.
This results in lower total system cost.
Level One's advanced products are key components for digitized voice, data
and multimedia networks, linking homes and businesses across the nation and
around the world. In North America today, there are approximately 1.3 billion
miles of copper phone wire in place. The creation of access technologies is
critical to the exploitation of these copper lines for transmission of high
speed digital signals required by today's networking and telecommunications
needs. Level One leverages the installed base of copper wire by developing and
offering integrated circuits that facilitate the implementation of a growing
number of advanced interactive, multimedia, and enterprise networking
applications. These include:
- videoconferencing;
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- advanced faxing capabilities;
- telecommuting;
- image retrieval;
- teleconferencing;
- wide area connectivity;
- leased line backup;
- file transfer;
- PC access;
- remote LAN; and
- computer-aided design, engineering and manufacturing.
Simultaneously, Level One has initiated programs to provide solutions
that serve the growing needs of the future mixed-media, coaxial cable, fiber and
wireless environments.
Level One develops and sells products to meet the needs of the
communications connectivity market which includes the networking market and the
telecommunications market. Level One's networking products address the rapid
evolution of the LAN networking connectivity markets. For these markets, Level
One produces a variety of products:
- Transceivers, which are communications devices capable of both
transmitting and receiving, for Ethernet and Fast Ethernet
applications.
- Ethernet repeaters having four ports on a single integrated circuit.
- Managed Ethernet repeaters.
- Integrated transceiver solutions.
The term "Ethernet" refers to a local network used to transfer
information at 10 million bits per second. Fast Ethernet transfers information
at 100 million bits per second. Level One's telecommunications products service
the growing demand for high-speed digital transmission. These products include
data pumps and fully integrated transceivers that transport high-speed data in
internationally standardized formats and rates to meet the long and short
distance information transmission requirement of its customers.
Level One was incorporated in California in November 1985 and
reincorporated in Delaware in December 1998. Level One's principal executive
offices are located at 9750 Goethe
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Road, Sacramento, California 95827, and its telephone number is (916) 855-5000.
As of December 27, 1998, Level One had 821 employees.
THE OFFERING
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Securities Offered................................... $115,000,000 principal amount of 4% Convertible
Subordinated Notes due 2004
Interest Payment Dates............................... March 1 and September 1, beginning March 1, 1998
Maturity............................................. September 1, 2004
Conversion........................................... Convertible into common stock, $0.001, of Intel
at any time through the close of business on the final
maturity date of the notes, unless previously redeemed
or repurchased, at a conversion price of $31.0077519 per
share, subject to adjustment in certain events. The
conversion price has been adjusted to reflect a 3-for-2
stock split which was effective for Level One common
stock on March 30, 1998 and the exchange ratio of 0.86
used in the merger of Intel and Level One to convert
Level One common stock into Intel common stock. See
"Description of Notes -- Conversion."
Guaranty............................................. Intel has irrevocably and unconditionally guaranteed
the payment of principal, premium, if any, and interest
on the notes on a subordinated basis. See "Description
of Notes-- Guaranty."
Optional Redemption.................................. Level One may not redeem the notes at its option prior
to September 7, 2000. Thereafter, Level One may redeem
the notes on at least 20 days' notice at its option, in
whole or in part at any time, initially at 102.286% of
the principal amount thereof, and thereafter at prices
declining to 100% at maturity, together with accrued
and unpaid interest. See "Description of Notes--
Optional Redemption by Level One."
</TABLE>
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Repurchase at Option of Holders Upon a
Change in Control or Termination of Public
Trading.............................................. In the event of a change in control of Intel or
termination of public trading of Intel common stock,
each noteholder may require Level One to repurchase all
or a portion of the holder's notes for cash or, at
Level One's option, Intel common stock, which will be
valued at 95% of the average of the closing prices for
the five trading days immediately preceding and
including the third trading day prior to the repurchase
date, at a repurchase price of 105% of the principal
amount of the notes to be repurchased, plus accrued and
unpaid interest to the repurchase date. See
"Description of Notes -- Repurchase at Option of
Holders."
Ranking.............................................. Subordinate to all existing and future Level One Senior
Indebtedness. The indenture governing the terms of the
notes (the "Indenture") contains no limitations on the
incurrence of additional Level One Senior Indebtedness
or other indebtedness by Level One. See "Description of
Notes -- Subordination."
Registration Rights.................................. Level One has agreed to keep the registration statement
of which this prospectus forms a part effective until
September 25, 1999 or such shorter period ending when
there ceases to be any securities requiring
registration outstanding. Level One will be required to
pay liquidated damages to the holders of the notes, as
the case may be, under certain circumstances if Level
One is not in compliance with its registration
obligations. See "Description of Notes -- Registration
Rights."
Listing.............................................. The notes are currently eligible for trading on the
PORTAL Market. Notes sold pursuant to this prospectus
will not remain eligible for trading on the PORTAL
Market.
</TABLE>
USE OF PROCEEDS
Level One will receive no proceeds from the sale of the notes under this
registration statement.
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DESCRIPTION OF NOTES
The notes were issued under an indenture dated as of August 15, 1997
between Level One and State Street Bank and Trust Company of California, as
trustee. In connection with the acquisition of Level One by Intel, Level One,
State Street and Intel supplemented the indenture on August 10, 1999 and Intel
issued its guaranty of the notes.
We have summarized the material terms and provisions of the indenture, the
supplemental indenture, the guaranty and the registration rights agreement in
this section. We have also filed the form of each of these agreement as exhibits
to the registration statement. You should read these documents for additional
information before you buy any notes.
GENERAL
The notes are unsecured general obligations of Level One subordinate in
right of payment to certain other obligations of Level One as described under "
- -- Subordination" and are convertible into Intel common stock as described under
" -- Conversion."
The notes have the following characteristics:
- they are limited to $115,000,000 aggregate principal amount;
- they were issued in fully registered form only in denominations
of $1,000 and multiples of $1,000;
- they will mature on September 1, 2004 unless earlier redeemed at
Level One's option or repurchased by Level One at the holder's
option upon a change in control of Intel or the termination of
public trading of Intel's common stock;
- Level One will pay 4% interest on them per year payable
semi-annually on March 1 and September 1, to holders of record at
the close of business on the preceding February 15 and August 15.
Interest payments are subject to certain exceptions in the case of
conversion, redemption or repurchase of such notes prior to the
applicable interest payment date;
- interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months;
- principal and premium, if any, on the notes will be payable, and the
notes may be presented for conversion, registration of transfer and
exchange at the office of Level One maintained by Level One for such
purposes in the Borough of Manhattan, The City of New York, which
shall initially be an office or agency of State Street. In addition,
interest may, at Level One's option, be paid by check mailed to such
holders, provided that a holder of notes with an aggregate principal
amount in excess of $2,000,000 will be paid by wire transfer in
immediately available funds at the election of such holder; and
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- repayment of principal, premium, if any, and interest has been
guaranteed by Intel.
The indenture does not contain any financial covenants or any restrictions
on the payment of dividends, the repurchase of securities of Level One or the
incurrence of additional indebtedness, including indebtedness that is senior to
the notes. The indenture contains no covenants or other provisions to afford
protection to holders of notes in the event of a highly leveraged transaction or
a change in control of Level One except to the limited extent described under "
- -- Repurchase at Option of Holders" below.
No service charge will be made for any registration or transfer or
exchange of notes, but Level One may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Level One is not required to exchange or register the transfer of:
- any note for a period of 15 days preceding any selection of notes
to be redeemed;
- any note or portion thereof selected for redemption;
- any note or portion thereof surrendered for conversion; or
- any note or portion thereof surrendered for repurchase in connection
with a change in control of Intel or the termination of public
trading of Intel's common stock.
The notes are currently eligible for trading in the Portal Market. Notes
sold pursuant to this prospectus will not remain eligible for trading on the
Portal Market.
CONVERSION
The noteholders may, subject to final maturity, prior redemption or
repurchase, convert any notes or portions thereof, in denominations of $1,000 or
multiples thereof, into common stock of Intel, at the conversion price of
$31.0077519 per share, subject to adjustment as described below. Except as
described below, no adjustment will be made on conversion of any notes for
interest accrued on the notes or for dividends on any common stock issued. If
notes are converted after a record date for the payment of interest and prior to
the next succeeding interest payment date, Level One must pay funds equal to the
interest payable on the succeeding interest payment date on the principal amount
so converted, other than notes called for redemption by Level One. Intel is not
required to issue fractional shares of common stock upon conversion of notes
and, in lieu thereof, a cash adjustment based upon the market price of the
common stock on the last business day prior to the date of conversion will be
paid.
In the case of notes redeemed by Level One, conversion rights will expire
at the close of business on the business day preceding the date fixed for
redemption, unless Level One defaults in payment of the redemption price. A note
for which a holder has delivered a repurchase notice in connection with a change
in control of Intel or the termination of public trading of Intel's
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common stock exercising such holder's option to require Level One to repurchase
such note may be converted only if such notice is withdrawn by a written notice
of withdrawal delivered by the holder to Level One prior to the close of
business on the business day immediately preceding the date fixed for
repurchase.
The conversion right may be exercised by delivering the note at the
specified office of a conversion agent, accompanied by a duly signed and
completed notice of conversion, together with any funds that may be required as
described in the preceding paragraph. The conversion date shall be the date on
which the required documentation, and any funds that may be required, shall have
been so delivered. Certificates representing shares of common stock will not be
issued or delivered unless all taxes and duties, if any, payable by the holder
have been paid.
The adjusted conversion price is subject to adjustment, in certain events,
including:
- the issuance of Intel common stock as a dividend or distribution
on Intel common stock;
- certain subdivisions and combinations of the Intel common stock;
- the issuance to all holders of Intel common stock of certain rights
or warrants to purchase Intel common stock at less than the then
current market price of the Intel common stock;
- the dividend or other distribution to all holders of Intel common
stock of shares of capital stock of Intel, other than Intel common
stock, or evidences of indebtedness of Intel or assets, including
securities, but excluding those rights, warrants, dividends and
distributions referred to above or paid exclusively in cash;
- dividends or other distributions consisting exclusively of cash,
excluding any cash portion of distributions referred to in the
preceding bullet above, to all holders of Intel common stock to the
extent that such distributions, combined together with all other
such all-cash distributions made within the preceding 12 months in
respect of which no adjustment has been made plus any cash and the
fair market value of other consideration payable in respect of any
tender offers by Intel or any of its subsidiaries for Intel common
stock concluded within the preceding 12 months in respect of which
no adjustment has been made, exceeds 10% of Intel's market
capitalization on the record date for such distribution;
- the purchase of Intel common stock pursuant to a tender offer made
by Intel or any of its subsidiaries to the extent that the same
involves an aggregate consideration that, together with any cash and
the fair market value of any other consideration payable in any
other tender offer by Intel or any of its subsidiaries for Intel
common stock expiring within the 12 months preceding such tender
offer in respect of which no adjustment has been made plus the
aggregate amount of any such all-cash distributions referred to in
the immediately preceding bullet
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point above to all holders of Intel common stock within the 12
months preceding the expiration of such tender offer in respect of
which no adjustments have been made, exceeds 10% of Intel's market
capitalization on the expiration of such tender offer; and
- payment in respect of a tender offer or exchange offer by a person
other than Intel or any subsidiary of Intel in which, as of the
closing of the tender or exchange offer, the Intel board of
directors is not recommending rejection of the offer. This
adjustment will only be made if the tender offer or exchange offer
is for an amount which increases that person's ownership of Intel
common stock to more than 25% of the total shares of Intel common
stock outstanding, and only if the cash and value of any other
consideration included in such payment per share of Intel common
stock exceeds the current market price per share of Intel common
stock on the business day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender or
exchange. In addition, this adjustment will not be made, if, as of
the closing of the offer, the offering documents with respect to
such offer disclose a plan or an intention to cause Intel to engage
in any transaction described below in " -- Consolidation, Merger or
Assumption."
In the case of any reclassification or change of the Intel common stock,
other than changes in par value or change resulting from a subdivision or
combination, or a consolidation, merger, or combination involving Intel or a
sale or conveyance to another corporation of the property and assets of Intel as
an entirety or substantially as an entirety, in each case as a result of which
holders of Intel common stock shall be entitled to receive stock, other
securities, other property or assets with respect to or in exchange for such
Intel common stock, the holders of the notes will be entitled thereafter to
convert their notes into the kind and amount of shares of stock, other
securities or other property or assets which they would have owned or been
entitled to receive upon such reclassification, change, consolidation, merger,
combination, sale or conveyance had such notes been converted into Intel common
stock immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance, assuming, in a case in which Intel's
stockholders may exercise rights of election, that a holder of notes would not
have exercised any rights of election as to the stock, other securities or other
property or assets receivable in connection therewith and received per share the
kind and amount received per share by a plurality of non-electing shares.
If a taxable distribution to holders of Intel common stock results in
any adjustment of the conversion price, the noteholders may, in certain
circumstances, be subject to United States income tax; in certain other
circumstances, the absence of such an adjustment may result in a taxable
dividend to the holders of Intel common stock. See "Certain Federal Income
Tax Considerations."
Intel may reduce the conversion price of the notes by any amount for any
period of at least 20 days, in which case Intel shall give at least 15 days'
notice of such decrease, if its board of directors has made a determination that
such decrease would be in Intel's best interests, or if it
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deems advisable to avoid or diminish any income tax to holders of Intel common
stock resulting from any dividend or distribution of stock, or rights to acquire
stock, or from any event treated as such for income tax purposes. See "Certain
Federal Income Tax Considerations."
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least l% in the conversion price then in
effect; provided that any adjustment that would otherwise be required to be made
shall be carried forward and taken into account in any subsequent adjustment.
Except as stated above, the conversion price will not be adjusted for the
issuance of Intel common stock or any securities convertible into or
exchangeable for Intel common stock or carrying the right to purchase any of the
foregoing.
The authorized capital stock of Intel consists of 4,500,000,000 shares of
common stock, $0.001 par value, and 50,000,000 shares of preferred stock,
$0.001.
As of July 26, 1999, there were approximately 3,310,705,351 shares of
Intel common stock outstanding. Holders of Intel common stock are entitled to
one vote per share on all matters to be voted upon by Intel stockholders. Intel
stockholders may not cumulate votes for the election of directors. Intel common
stockholders are entitled to receive ratably such dividends, if any, as may be
declared from time to time by the Intel board of directors out of funds legally
available for dividend payments. In the event of a liquidation, dissolution or
winding up of Intel, Intel common stockholders are entitled to share ratably in
all assets remaining after payment of liabilities. The Intel common stock has no
preemptive or conversion rights or other subscription rights nor do redemption
or sinking fund provisions apply to the Intel common stock. All outstanding
shares of Intel common stock are fully paid and non-assessable, and the shares
of Intel common stock to be outstanding after the merger will be fully paid and
non-assessable. Harris Trust and Savings Bank is the transfer agent and
registrar for the Intel common stock. Harris Trust's address is 311 West Monroe,
P.O. Box A3504, Chicago, Illinois 60690. See Intel's description of its common
stock set forth in Intel's registration statement on form 8-B filed May 3, 1989.
As of August 10,1999, no shares of Intel preferred stock were outstanding.
Although Intel presently does not intend to do so, its board may issue without
stockholder approval Intel preferred stock with voting and conversion rights
that could negatively affect the voting power or other rights of the Intel
common stockholders.
OPTIONAL REDEMPTION BY LEVEL ONE
Level One may not redeem the notes before September 7, 2000. At any time
on or after September 7, 2000, the notes may be redeemed at Level One's option
on at least 20 but not more than 60 days' notice, in whole or in part, at the
following prices, which are expressed in percentages of the principal amount,
together with accrued interest to, but excluding, the date fixed for redemption;
provided that if a redemption date is an interest payment date, the semi-annual
payment of interest becoming due on such date shall be payable to the holder of
record as of the relevant record date.
If redeemed during the 12-month period beginning September 1, or September
7, 2000 through August 31, 2001 in the case of the first such period:
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<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
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2000 102.286%
2001 101.714%
2002 101.143%
2003 101.143%
</TABLE>
and 100% at September 1, 2004.
If fewer than all the notes are to be redeemed, State Street will select
the notes to be redeemed in principal amounts of $1,000 or multiples thereof by
lot or, in its discretion, on a pro rata basis or by a method State Street
considers fair and appropriate. If any note is to be redeemed in part only, a
new note or notes in principal amount equal to the unredeemed principal portion
thereof will be issued. If a portion of a holder's notes is selected for partial
redemption and such holder converts a portion of such notes, such converted
portion shall be deemed to be taken from the portion selected for redemption.
No sinking fund is provided for the notes.
REPURCHASE AT OPTION OF HOLDERS
The indenture provides that, upon a change in control of Intel or the
termination of public trading of Intel's common stock, the noteholders may
require Level One to repurchase all of the holder's notes, or any portion
thereof that is an integral multiple of $1,000, 40 days after Level One sends
notice to the holders. Level One must repurchase the notes for cash at a price
equal to 105% of the principal amount of the notes, together with accrued
interest, if any, to the repurchase date; provided, however, that if a
repurchase date is an interest payment date, the semi-annual payment of interest
becoming due on such date shall be payable to the holder of record as of the
relevant record date.
Level One may, at its option, in lieu of paying the repurchase price in
cash, cause Intel to pay the repurchase price with Intel common stock valued at
95% of the average of the closing prices of the Intel common stock for the five
consecutive trading days ending on and including the third trading day preceding
the repurchase date. Payment may not be made with Intel common stock unless
Level One satisfies certain conditions with respect to such payment as provided
in the indenture.
Within 15 calendar days after the occurrence of a change in control of
Intel or the termination of public trading of Intel's common stock, Level One is
obligated to mail to all holders of record of the notes a notice of the
occurrence of such event and of the repurchase right. Level One must deliver a
copy of notice to State Street and cause a copy or a summary of such notice to
be published in a newspaper of general circulation in the city of New York. To
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exercise the repurchase right, a holder of such notes must deliver, on or before
the 35th day after Level One's notice, written notice to Level One, or an agent
designated by Level One for such purpose, and State Street of the holder's
exercise of such right, together with the notes with respect to which the right
is being exercised, duly endorsed for transfer.
A change in control of Intel will be deemed to have occurred when:
- any "person" or "group," as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act) of shares representing more than 50% of the
combined voting power of the then outstanding securities entitled to
vote generally in elections of directors of Intel;
- approval by stockholders of Intel of any plan or proposal for the
liquidation, dissolution or winding up of Intel;
- Intel consolidates with or merges into any other corporation or any
other corporation merges into Intel and the outstanding Intel common
stock of Intel is changed or exchanged into or for other assets or
securities as a result, unless the stockholders of Intel immediately
before such transaction own, directly or indirectly immediately
following such transaction, at least 51% of the combined voting
power of the outstanding voting securities of the corporation
resulting from such transaction in substantially the same proportion
as their ownership of the outstanding securities entitled to vote
generally in elections of directors of Intel immediately before such
transaction;
- Intel conveys, transfers or leases all or substantially all of
its assets to any person; or
- any time the directors of Intel as of August 10, 1999 or directors
of Intel who were nominated, elected or endorsed by directors who
were director as of August 10, 1999 do not constitute a majority of
the Board of Directors of Intel, or, if applicable, a successor
corporation to Intel.
However, even if any of the above events occur, a change in control of
Intel shall not be deemed to have occurred if either:
- the last sale price of Intel's common stock for any five trading
days during the ten trading days immediately preceding the date of
the change in control of Intel is at least equal to 105% of the
conversion price in effect on such day; or
- in the case of a merger or consolidation otherwise constituting a
change in control of Intel, all of the consideration, excluding cash
payments for fractional shares, consists of common stock traded on a
United States national securities exchange or quoted on the Nasdaq
National Market, or which will be so traded or quoted when issued or
exchanged in connection with such a change in control of Intel,
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<PAGE> 15
and as a result of such transaction or transactions such notes
become convertible solely into such common stock.
Under this definition, if the current Board of Directors of Level One were
to approve a new director or directors and then resign, no Change in Control
would occur even though the current Board of Directors would thereafter cease to
be in office.
The termination of public trading of Intel's common stock will be deemed
to have occurred when Intel's common stock, or other common stock into which the
notes are then convertible, is neither listed for trading on a United States
national securities exchange nor approved for trading on an established
automated over-the-counter trading market in the United States.
If either a change in control of Intel or the termination of public
trading of Intel's common stock were to occur, there can be no assurance that
Level One would have sufficient financial resources, or would be able to arrange
financing, to pay the repurchase price in cash for all notes tendered by holders
thereof. Level One's ability to repurchase notes with cash may also be limited
or prohibited by the terms of its then-existing borrowing arrangements.
Moreover, although under the indenture Level One may elect, subject to
satisfaction of certain conditions, to pay the repurchase price for the notes
using shares of Intel common stock, any future credit agreements or other
agreements relating to other indebtedness, including other Level One's Senior
Indebtedness, to which Level One becomes a party may contain restrictions on or
prohibitions of the repurchase of the notes by Level One that apply even if the
purchase price is paid with shares of capital stock.
If either a change in control of Intel or the termination of public
trading of Intel's common stock occurs at a time when Level One is prohibited
from repurchasing notes, Level One could seek the consent of its lenders to the
repurchase of the notes or could attempt to refinance the borrowings that
contain such prohibition. If Level One does not obtain such a consent or repay
such borrowings, Level One would remain prohibited from repurchasing notes. In
such case, Level One's failure to repurchase the notes would constitute an event
of default under the indenture whether or not payment of the repurchase price is
permitted by the subordination provisions of the indenture. Any such default
may, in turn, cause a default under Level One's Senior Indebtedness. Moreover,
the occurrence of a change in control of Intel or the termination of public
trading of Intel's common stock may, in turn, cause a default under Level One's
Senior Indebtedness. As a result, in either case, payment of the repurchase
price of the notes with cash would, absent a waiver, be prohibited under the
subordination provisions of the indenture until the Level One's Senior
Indebtedness is paid in full. See "-- Subordination" below.
No notes may be redeemed at the option of holders upon a change in control
of Intel or the termination of public trading of Intel's common stock if there
has occurred and is continuing an event of default described under " -- Events
of Default and Remedies" below.
SUBORDINATION
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<PAGE> 16
The indebtedness evidenced by the notes is, to the extent provided in the
indenture, subordinate to the prior payment in full of all Level One's Senior
Indebtedness, whether presently outstanding or incurred or created after the
date of the indenture. Level One's Senior Indebtedness includes:
- all indebtedness for money borrowed or evidenced by notes,
debentures, bonds or other securities and all other obligations of
Level One constituting the deferred purchase price of property or
assets;
- all indebtedness due and owing with respect to letters of credit;
- all indebtedness or other obligations due and owing with respect to
interest rate and currency swap agreements, cap, floor and collar
agreements, currency spot and forward contracts and other similar
agreements and arrangements;
- all indebtedness consisting of commitment or standby fees due and
payable to lending institutions with respect to credit facilities or
letters of credit available to Level One;
- all obligations under leases required or permitted to be capitalized
under generally accepted accounting principles or under any lease or
related document that provides that Level One is contractually
obligated to purchase or cause a third party to purchase and thereby
guarantee a minimum residual value of the lease property to the
lessor and the obligations of Level One under such lease or related
document to purchase or to cause a third party to purchase such
leased property;
- all indebtedness or obligations of others of the kinds described in
any of the preceding bullet points assumed by or guaranteed,
directly or indirectly in any manner by Level One or in effect
guaranteed, and all obligations of Level One under any such
guarantee or other arrangements; and
- all renewals, extensions, refundings, deferrals, amendments or
modifications of indebtedness or obligations of the kinds described
in any of the preceding bullet points.
Upon any distribution of assets of Level One upon any dissolution, winding
up, liquidation or reorganization of Level One, the payment of the principal of,
or premium, if any, and interest on the notes is to be subordinated to the
extent provided in the indenture in right of payment to the prior payment in
full, in cash or in such other form of payment as may be acceptable to the
holders thereof, of all of Level One's Senior Indebtedness. Moreover, upon any
acceleration of the notes because of an event of default, the holders of any
indebtedness senior to the notes then outstanding would be entitled to payment
in full of all obligations in respect of such senior indebtedness before the
holders of the notes are entitled to receive any payment or distribution in
respect of the notes.
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<PAGE> 17
Level One may not make any payment upon or in respect of the notes if a
default in the payment of principal of, premium, if any, interest, or other
payment due on Level One's Senior Indebtedness occurs and is continuing beyond
any applicable period of grace. Payments on the notes shall be resumed on the
date on which such default is cured or waived or ceases to exist.
Level One may also not make any payment upon or in respect of the notes if
any other default occurs and is continuing with respect to Designated Senior
Indebtedness that permits holders of the Designated Senior Indebtedness as to
which such default related to accelerate its maturity and if State Street and
Level One each receive a notice of such default from a holder of Designated
Senior Indebtedness. Designated Senior Indebtedness means any particular amount
of Level One's Senior Indebtedness in which the instrument creating or
evidencing the same or the assumption or guarantee thereof expressly provides
that such Senior Indebtedness shall be Designated Senior Indebtedness for
purposes of the indenture. Payments on the notes shall be resumed on in case of
a nonpayment default with respect to Designated Senior Indebtedness, on the
earlier of the date on which such nonpayment default is cured or waived or
ceases to exist or 179 days after the date on which the applicable notice is
received. No new period of payment blockage may be commenced pursuant to a
notice unless 365 days have elapsed since the first day of the effectiveness of
the immediately prior notice, and all scheduled payments of principal, premium,
if any, and interest on the notes that have become due have been paid in full in
cash.
Notwithstanding the foregoing, if State Street or any holder of notes
receives any payment or distribution of assets of Level One of any kind in
respect of the notes in contravention of any of the terms of the indenture,
before all of Level One's Senior Indebtedness is paid in full, then such payment
or distribution will be held by the recipient in trust for the benefit of the
holders of Level One's Senior Indebtedness, for application to the payment of
all of Level One's Senior Indebtedness remaining unpaid to the extent necessary
to make payment in full of all Level One's Senior Indebtedness remaining unpaid.
No provision contained in the indenture or the notes affects the absolute
and unconditional obligation of Level One to pay, when due, principal of,
premium, if any, and interest on, the notes. The subordination provisions of the
indenture and the notes will not prevent the occurrence of any default or event
of default or limit the rights of any holder of notes to pursue any other rights
or remedies with respect to the notes.
As a result of these subordination provisions, upon the liquidation,
bankruptcy, reorganization, insolvency, receivership or similar proceedings or
an assignment for the benefit of the creditors of Level One or a marshaling of
assets or liabilities of Level One and its subsidiaries, holders of the notes
may receive ratably less than other creditors.
EVENTS OF DEFAULT AND REMEDIES
An event of default is defined in the indenture as being:
- default in payment of the principal of, or premium, if any, on
the notes;
- default for 30 days in payment of any installment of interest on
the notes;
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<PAGE> 18
- default by Level One in the observance or performance of any other
covenants in the indenture for 45 days after notice is given in
accordance with the indenture;
- default in the payment of the repurchase price in respect of the
note on the repurchase date therefor;
- failure to provide timely notice of a change in control of Intel
or the termination of public trading of Intel's common stock;
- failure of Level One or any of Level One's significant subsidiaries
to make any payment at maturity, including any applicable grace
period, on obligations of, or guaranteed or assumed by, Level One or
any significant subsidiary for borrowed money, in an amount in
excess of $5,000,000 and continuance of such failure for 30 days
after notice given in accordance with the indenture;
- default by Level One or any significant subsidiary with respect to
any obligations of, or guaranteed or assumed by, Level One or any
significant subsidiary for borrowed money, which default results in
the acceleration of obligations in an amount in excess of $5,000,000
without such obligations having been discharged or such acceleration
having been rescinded or annulled for 30 days after notice given in
accordance with the indenture; and
- certain events involving bankruptcy, insolvency or reorganization
of Level One or any significant subsidiary.
State Street is required give to the registered holders of the notes
notice of all uncured defaults known to it within 90 days after the occurrence
of a default unless State Street in good faith determines that the withholding
of such notice is in the best interest to such registered holders.
If any event of default shall have occurred and be continuing, State
Street or the holders of at least 25% in principal amount of the notes then
outstanding may declare the principal of and premium, if any, on the notes to be
due and payable immediately. If Level One cures all defaults, except the
nonpayment of interest on, premium, if any, and principal of any notes which
shall have become due by acceleration, and certain other conditions are met,
such declaration may be canceled and past defaults may be waived by the holders
of a majority in principal amount of notes then outstanding.
If an event of default resulting from certain events of bankruptcy,
insolvency or reorganization occurs, all unpaid principal of and accrued
interest on the outstanding notes will become due and payable immediately
without any declaration or other act on the part of State Street or any holders
of notes, subject to the limitations provided in the indenture.
The holders of a majority in principal amount of the outstanding notes may
direct the time, method and place of conducting any proceeding for any remedy
available to State Street or exercising any trust or power conferred on State
Street, subject to certain limitations specified in
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<PAGE> 19
the indenture. State Street shall be entitled to receive from such holders
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in complying with any such direction, before
proceeding to exercise any right or power under the indenture at the direction
of such holders. The right of a holder to institute a proceeding with respect to
the indenture is subject to certain conditions precedent, including the written
notice by such holder of an event of default and an offer to indemnify to State
Street, along with the written request by the holders of at lease 25% in
principal amount of the outstanding notes that such a proceeding be instituted,
but the holder has an absolute right to institute suit for the enforcement of
payment of the principal of, and premium, if any, and interest on, such holder's
notes when due and to convert such notes.
The holders of at least a majority in principal amount of the outstanding
notes may on behalf of the holders of all notes waive any past defaults, except:
- a default in payment of the principal of, or premium, if any, or
interest on, any note when due;
- a failure by Level One to cause Intel to convert any notes into
common stock; or
- in respect of certain provisions of the indenture which cannot be
modified or amended without the consent of the holder of each
outstanding note affected thereby.
Level One is required to furnish to State Street annually within 120 days
of the end of the fiscal year a statement of certain officers of Level One
stating whether or not to the best of their knowledge Level One is in default in
the performance and observation of certain terms of the indenture and, if they
have knowledge that Level One is in default, specifying such default. Level One
is also required, upon becoming aware of any default or event of default, to
deliver to State Street a statement specifying such default or event of default
and the action Level One has taken, is taking or proposes to take with respect
thereto.
CONSOLIDATION, MERGER OR ASSUMPTION
The indenture provides that Level One may not, directly or indirectly,
consolidate with or merge with or into another person or sell, lease, convey or
transfer all or substantially all of its assets, whether in a single transaction
or a series of related transactions, to another person or group of affiliated
persons, unless
1. either
- in the case of a merger or consolidation that does not
involve a transfer of all or substantially all of Level
One's assets, Level One is the surviving entity; or
- the resulting, surviving or transferee entity is a corporation
organized under the laws of the United States, any of the
fifty states or the District of
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<PAGE> 20
Columbia and expressly assumes by written agreement all of the
obligations of Level One in connection with the notes and the
indenture;
2. no default or event of default under the indenture exists at the
time of the transaction or will occur immediately after giving
effect on a pro forma basis to such transaction; and
3. the other conditions contained in the indenture are satisfied.
MODIFICATIONS OF THE INDENTURE
The indenture contains provisions permitting Level One and State Street to
modify the indenture or any supplemental indenture or the rights of the holders
of the notes, with the consent of the holders of at least a majority of the
principal amount of the notes at the time outstanding. However, the following
modifications and amendments will not be effective against any holder without
its consent:
- extend the fixed maturity of any note;
- reduce the rate or extend the time or payment of interest on any
note;
- reduce the principal amount of or premium, if any, on any note;
- reduce any amount payable upon redemption or repurchase of any
note;
- impair, or change in any respect adverse to the holders of notes,
the obligation of Level One to repurchase any note upon the
happening of a change in control of Intel or the termination of
public trading of Intel's common stock;
- impair or adversely affect the right of a noteholder to institute
suit for the payment of his note;
- change the currency in which the notes are payable;
- impair or change in any respect adverse to the holder of the notes,
the right to convert the notes into Intel common stock subject to
the terms set forth in the indenture, as supplemented; or
- modify the provisions of the indenture with respect to the
subordination of the notes in a manner adverse to the holders of
the notes.
In addition, no amendment may reduce the required percentage of notes for
future amendments, without the consent of the holders of all of the notes then
outstanding.
INTEL'S GUARANTY
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Intel has irrevocably and unconditionally guaranteed the payment of
principal, premium, if any, and interest on the notes on a subordinated basis.
Intel, the world's largest chip maker, is also a leading manufacturer of
computer, networking and communications products. Intel designs, develops,
manufactures and markets computer components and related products.
Intel's major products include microprocessors, chipsets, embedded
processors and microcontrollers, flash memory products, graphics products,
network and communications products, systems management software, conferencing
products and digital imaging products. Intel sells its products to:
- original equipment manufacturers of computer systems and
peripherals;
- personal computer users; and
- other manufacturers, including makers of a wide range of
industrial and telecommunications equipment.
Intel had approximately 64,500 employees at December 26, 1998, and 1998
net revenues of $26,273 million. Intel is headquartered in Santa Clara,
California.
Intel's obligations under the guaranty are junior and subordinated to
the Intel's Senior Indebtedness on substantially the same basis as the notes
are junior and subordinated to Level One's Senior Indebtedness. Intel's
Senior Indebtedness includes:
- all indebtedness of Intel evidenced by notes, debentures, bonds
or other similar instruments or securities;
- all indebtedness of Intel for money borrowed;
- all indebtedness or other obligations of Intel with respect to
interest rate, currency, equity and other swap agreements, cap,
floor and collar agreements, currency spot and forward contracts,
and similar agreements and arrangements;
- all indebtedness or other obligations of Intel with respect to
letters of credit, bank guarantees and bankers' acceptances;
- all lease obligations of Intel which are required or permitted to
be capitalized on the books of Intel in accordance with generally
accepted accounting principles;
- all indebtedness and lease obligations of others of the kinds
described in the preceding bullets assumed by or guaranteed in
any manner by Intel; and
- all renewals, extensions or refundings of the foregoing.
The guaranty will terminate upon the earliest of;
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- the date on which there are no notes outstanding;
- the merger or consolidation of Level One into Intel or the sale of
Level One to a third party if such third party purchaser issues its
own guaranty in replacement of Intel's guaranty; or
- the date on which the indenture has been discharged.
The guaranty does not significantly limit or impair Intel's ability to
merge with, consolidate with, or sell or transfer a significant amount of its
assets to a third party if the third party agrees to assume Intel's obligations
under the indenture.
REGISTRATION RIGHTS AGREEMENT
Level One and the initial purchasers of the notes entered into a
registration rights agreement pursuant to which Level One, at its expense, has
filed with the Securities and Exchange Commission the registration statement of
which this prospectus is a part. The registration statement covers resales of
the notes by their holders. Level One has agreed to use its best efforts to keep
the registration statement effective until the earlier of September 25, 1999 or
until the registration statement is no longer required for transfer of the
notes. For purposes of the foregoing, Level One is not required to register
resales of any note that has been effectively registered under the Securities
Act and disposed of in accordance with the registration statement or any resale
of the note occurring after the date on which such note is distributed to the
public pursuant to Rule 144 under the Securities Act or is salable pursuant to
Rule 144(k) under the Securities Act, or any similar provisions then in force,
or the date on which such note ceases to be outstanding, whichever date is
earliest.
If the registration statement ceases to be effective or usable, without
being succeeded immediately by an additional registration statement filed and
declared effective, for a period of time which shall exceed 90 days in the
aggregate in any period of 365 consecutive days, Level One will pay liquidated
damages to each noteholder, during the first 90-day period immediately following
the occurrence of such registration default in an amount equal to $0.05 per week
per $1,000 principal amount of notes which are held by such holder and required
to be included in the registration statement. The rate of accrual of the
liquidated damages will increase by an additional $0.05 per week per $1,000
principal amount of notes for each subsequent 90-day period until the
registration statement again becomes effective and becomes available for
effecting sales of notes, up to a maximum amount of liquidated damages of $0.25
per week per $1,000 principal amount of notes. When the registration statement
again becomes effective and becomes available for effecting sales of notes,
liquidated damages will cease to accrue with respect to such default. All
accrued liquidated damages shall be paid to the holders of notes in the same
manner as interest payments on the notes on semiannual payment dates which
correspond to interest payment dates for the notes. The use of the registration
statement for effecting resales of notes may be suspended in certain
circumstances described in the registration rights agreement upon notice by
Level One to the holders of the notes, subject to the rights of the
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<PAGE> 23
holders of notes to receive liquidated damages if the aggregate number of days
of such suspensions in any year exceeds the periods described above.
Level One will provide to each registered holder copies of such prospectus
and take certain other actions as are required to permit unrestricted resales of
the notes. A holder who sells the notes pursuant to the registration statement
generally will be required to be named as a selling stockholder in the related
prospectus and to deliver a prospectus to purchasers and will be bound by the
provisions of the registration rights agreement which are applicable to such
holder, including certain indemnification provisions. Holders of the note will
be required to deliver information to be used in connection with the
registration statement in order to have their notes included in the registration
statement.
SATISFACTION AND DISCHARGE
Level One may discharge its obligations under the indenture while notes
remain outstanding if all outstanding notes will become due and payable at their
scheduled maturity within one year or all outstanding notes are scheduled for
redemption within one year, and, in either case, Level One has deposited with
State Street an amount sufficient to pay and discharge all outstanding notes on
the date of their scheduled maturity or the scheduled date of redemption.
GOVERNING LAW
The indenture, the registration rights agreement, the guaranty and the
notes are governed by and construed in accordance with the laws of the State of
New York.
TRUSTEE, PAYING AGENT, CONVERSION AGENT, REGISTRAR AND CUSTODIAN
State Street is the trustee under the indenture and has been appointed by
Level One as the initial paying agent, conversion agent, registrar and custodian
with regard to the notes. Level One and Intel may maintain deposit accounts and
conduct other banking transactions with State Street or its affiliates in the
ordinary course of business, and State Street and its affiliates may from time
to time in the future provide banking and other services to Level One and Intel
in the ordinary course of their business.
The indenture and the Trust Indenture Act of 1939 contain certain
limitations on the rights of State Street, should it become a creditor of Level
One or Intel, to obtain payment of claims in certain cases or to realize on
certain property received in respect of any such claim as security or otherwise.
Subject to the Trust Indenture Act, State Street will be permitted to engage in
other transactions, provided, however, that if it acquires any conflicting
interest, it must eliminate such conflict or resign.
BOOK-ENTRY; DELIVERY AND FORM; GLOBAL CERTIFICATES
Upon the initial transfer pursuant to the registration statement of which
this prospectus forms a part, the notes may be represented by one or more fully
registered global notes as well as notes in definitive form registered in the
name of individual purchasers or their nominees. Each
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<PAGE> 24
global note will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York, which we sometimes refer to as DTC, and registered
in the name of DTC or its nominee, Cede & Co., or will remain in the custody of
State Street pursuant to a FAST Balance Certificate Agreement between DTC and
State Street.
DTC is a limited purpose trust company organized under the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934.
DTC holds the securities of its participant organizations and facilitates
the clearance and settlement of transactions in those securities among its
participants through electronic book- entry changes in accounts of its
participants. The electronic book-entry system eliminates the need for physical
securities certificates. DTC's participants include securities brokers and
dealers, including the underwriters, banks, trust companies, clearing
corporations and certain other organizations, some of which, and/or their
representatives, own DTC. Banks, brokers, dealers, trust companies and others
who clear through, or maintain a custodial relationship with, a participant,
either directly or indirectly, also have access to DTC's book-entry system
Upon deposit of the global note, DTC will credit the accounts of
participants with portions of the principal amount of the global note and
ownership, and transfers of, interests in the global note will be shown on, and
effected only through, records maintained by DTC or by the participants,
including any indirect participants. The laws of some states require that
certain persons take physical delivery in definitive form of securities that
they own, which could limit the ability to transfer notes. Except as described
below, owners of interests in the global note will not have notes registered in
their names, will not receive physical delivery of notes in definitive form and
will not be considered the registered owners thereof under the indenture for any
purpose.
Payments in respect of the principal of, premium, if any, and interest on
any notes registered in the name of DTC or Cede & Co. on any relevant record
date will be payable by State Street to DTC or Cede & Co., as applicable, in its
capacity as the registered holder under the indenture. Level One and State
Street will treat the person in whose names the notes are registered as the
owners thereof for the purpose of receiving such payments and for any and all
other purposes. Consequently, neither Level One nor State Street will have any
responsibility or liability for the payment of such amounts to beneficial owners
of the notes or for any other matter relating to actions or practices of DTC or
any of its participants. Level One understands that DTC's current practice, upon
receipt of any payment in respect of securities such as the notes, is to credit
the accounts of the relevant participants with the payment on the payment date,
in amounts proportionate to their respective holdings in principal amount of
beneficial interests in the relevant security as shown on the records of DTC,
unless DTC has reason to believe it will not receive payment on such payment
date. Payments by the participants to the beneficial owners of notes will be
governed by standing instructions and customary practices and will be the
responsibility of participants and the beneficial owners of the notes and not
the responsibility of the DTC, State Street or Level One. Neither Level One nor
State Street will be liable for any
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<PAGE> 25
delay by DTC or any of its participants in identifying the beneficial owners of
the notes. Level One and State Street may conclusively rely on and will be
protected in relying on instructions from DTC and Cede & Co. for all purposes.
Neither Level One nor State Street has any responsibility or liability for any
aspect of DTC's records or any participant's records relating to or payments
made on account of beneficial ownership interests in the global note, or for
maintaining, supervising or reviewing any of DTC's records or any participant's
records relating to the beneficial ownership interests in the global note or any
other matter relating to the actions and practices of DTC or any of its
participants.
So long as DTC, or its nominee, is the registered owner or holder of a
global note, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the notes represented by such global note for all
purposes under the indenture and the notes. No beneficial owner of an interest
in a global note will be able to transfer the interest except in accordance with
DTC's applicable procedures, in addition to those provided for under the
indenture. Transfers between participants in DTC will be effected in the
ordinary way in accordance with DTC rules.
Level One expects that DTC will take any action permitted to be taken by a
holder of notes only at the direction of one or more participants to whose
account the DTC interests in a global note is credited and only in respect of
such portion of the aggregate principal amount of the notes as to which such
participant or participants has or have given such direction.
If DTC is at any time unwilling or unable to continue as a depositary for
a global note and a successor depositary is not obtained, Level One will issue
note certificates in exchange for the global note. Such notes shall be
registered in names of the owners of the beneficial interests in the global note
as provided by the participants. Upon issuance of note certificates, State
Street is required to register the notes in the name of, and cause the notes to
be delivered to, the person or persons identified as the beneficial owner as DTC
shall direct.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Level One believes to be reliable, but Level
One takes no responsibility for the completeness or accuracy thereof.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain United States federal income tax
considerations relating to the purchase, ownership and disposition of the notes,
but does not purport to be a complete analysis of all the potential tax
considerations relating thereto. This summary is based on laws, regulations,
rulings and decisions now in effect, all of which are subject to change. This
summary deals only with holders that will hold notes as "capital assets" within
the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended,
which we sometimes refer to as the Code, and does not address tax considerations
applicable to investors that may be subject to special tax rules, such as banks,
tax-exempt organizations, insurance companies, dealers in securities or
currencies, or persons that will hold notes as a position in a hedging
transaction, "straddle," "conversion," or "integrated" transaction for tax
purposes or persons deemed to sell notes under the constructive sale provisions
of the Code and holders that have a functional currency other than the U.S.
dollar. In addition, this discussion applies only to a holder who is
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either (i) a citizen or resident of the United States; (ii) an entity formed
under the laws of the U.S. or a state of the U.S.; (iii) an estate the income of
which is subject to U.S. federal income tax regardless of its source; (iv) a
trust subject to the primary supervision of a court within the U.S. and which
has one or more U.S. persons who have the authority to control all substantial
decisions of the trust; or (v) any other person whose income or gain with
respect to the notes or Intel common stock is effectively connected with the
conduct of a U.S. trade or business as determined under U.S. income tax rules.
Level One has not sought any ruling from the Internal Revenue Service, the IRS,
or an opinion of counsel with respect to the statements made and the conclusions
reached in the following summary, and there can be no assurance that the IRS
will agree with such statements and conclusions. In addition, the IRS is not
precluded from successfully adopting a contrary position. This summary does not
consider the effect of any applicable foreign, state, local or other tax laws,
or tax laws other than income tax laws.
HOLDERS OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR
SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE,
LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY AND
UNDER ANY ESTATE, GIFT OR OTHER TAX LAW.
TAXATION OF INTEREST
Interest paid on the notes will be included in the income of a holder as
ordinary income at the time it is treated as received or accrued, in accordance
with the holder's regular method of tax accounting. Failure of Level One to
maintain the effectiveness of the registration statement as described under
"Description of Notes--Registration Rights" will cause additional interest to
accrue on the notes in the manner described therein. Level One does not intend
to treat the possibility of a change in the interest rate as affecting the yield
to maturity of any note. Similarly, Level One does not intend to treat the
possibility of the occurrence of an event requiring it to repurchase the notes
as affecting the yield to maturity of any note.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange, retirement or other taxable disposition of a note
other than conversion into stock of Intel pursuant to the conversion feature of
the notes, a holder will recognize gain or loss equal to the difference between
the amount received on such disposition (other than amounts received in respect
of accrued and unpaid interest, which will be taxable as such) and the holder's
tax basis in the note. A holder's tax basis in a note will be, in general, the
cost of the note to the holder, increased by market discount that the holder has
elected to include in income as it accrues, as discussed below, and decreased by
market premium that a holder has elected to amortize, as discussed below. Gain
or loss realized on the sale, exchange or retirement of a note generally will be
capital gain or loss, and will be long-term capital gain or loss if, at the time
of such sale, exchange or retirement, the note had been held for more than one
year.
CONVERSION OF THE NOTES
The federal income tax consequences of converting the notes into stock of
Intel are unclear. Based on a published ruling issued by the IRS, Level One
intends to take the position
26
<PAGE> 27
that, since Intel is not a co-obligor under the notes (but rather is only a
guarantor), a conversion of a note into stock of Intel pursuant to the
conversion feature of the notes is a taxable transaction for federal income tax
purposes. Provided the conversion is a taxable event, a holder who converts
generally will recognize gain or loss measured by the difference between the
fair market value of the Intel stock received, plus any cash payment received in
lieu of a fractional share of Intel stock, and the holder's tax basis in the
converted note. In addition, provided the conversion is a taxable event, the
holding period for the Intel common stock received will begin on the day after
the conversion, and the holder's basis in the Intel common stock received will
be the fair market value of that stock at the time of conversion. Since the
consequences of converting a note into Intel common stock are uncertain,
however, purchasers of notes should consult their tax advisors in order to
determine the manner in which they should treat a conversion of the notes.
MARKET DISCOUNT
A holder that acquires a note with market discount must generally treat as
ordinary income any gain realized on a complete or partial disposition or
retirement of the note, including a prepayment or a conversion, to the extent
that the market discount has accrued during the holder's period of ownership.
See "Conversion of the Notes," above. A holder will be deemed to have purchased
a note with market discount if the stated principal of the note exceeds the
purchase price of the note by more than a statutorily defined de minimis amount.
The market discount accrued during the holder's period of ownership will
generally equal a ratable portion of the note's market discount, based on the
number of days the holder has held the note at the time of such disposition or
retirement, as a percentage of the number of days from the date the holder
acquired the note to its date of maturity.
Subject to certain limitations, a holder may elect to include the market
discount in gross income as it accrues during the period of ownership (rather
than upon disposition, retirement) based on a constant yield method, taking into
account compounding of interest. Any such election will also constitute an
election to include market discount in income currently on all other bonds and
notes acquired by such holder on or after the first day of the first taxable
year to which the election applies. A holder who purchases a note at a market
discount and who does not elect to include market discount in income as it
accrues may be required to defer the deduction of all or a portion of the
interest expense on any indebtedness incurred or maintained to purchase or carry
the note.
MARKET PREMIUM
A holder acquiring a note with market premium, as described below, may
generally elect to amortize the market premium using a constant yield method
over the remaining term of the note (or, if shorter, over the period from the
date of purchase to the date of an assumed redemption option exercise). The
market premium is the excess of the amount payable on maturity (or on an earlier
redemption date if it results in a smaller amortizable market premium) over the
holder's tax basis in the note immediately following the purchase (reduced by an
amount equal to the value of the conversion option). For purposes of determining
the market premium and the amortization period, Level One will be deemed to
exercise its optional
27
<PAGE> 28
redemption rights in a manner that maximizes the holder's yield on the note. A
note which is redeemed prior to the time at which it is assumed that the note
would be redeemed may result in the holder deducting the remaining bond premium
at the time of redemption. Holders should consult their tax advisors regarding
the ability to deduct market premium with respect to a note.
The amortized market premium may offset interest otherwise required to be
included in respect of the note during any taxable year by the amortized amount
of such market premium. An election to amortize market premium applies to all
taxable debt obligations then owned and thereafter acquired by the holder and
may be revoked only with the consent of the IRS.
ADJUSTMENT TO CONVERSION PRICE
Holders of convertible debt instruments such as the notes may, in certain
circumstances, be deemed to have received constructive distributions where the
conversion ratio of such instruments is adjusted. Certain of the possible
adjustments provided in the notes, including, without limitation, adjustments in
respect of taxable dividends to stockholders of Intel, might give rise to
constructive distributions taxable as dividends.
DISTRIBUTIONS ON INTEL STOCK
Distributions, if any, paid on a share of Intel common stock will
constitute dividends for U.S. federal income tax purposes to the extent of
current and accumulated earnings and profits of Intel, as determined for federal
income tax purposes, allocable to the distribution. Dividends paid to holders
that are U.S. corporations may qualify for the dividends-received deduction. To
the extent that a holder receives distributions on a share of Intel common stock
in excess of Intel's current and accumulated earnings and profits, the
distribution first will be treated as a reduction of basis to the extent of the
holder's basis in the share, and any such distribution in excess of that basis
will be treated as long-term or short-term capital gain, depending on the
holder's holding period for the share.
SALE OF COMMON STOCK
Upon the sale or exchange of Intel common stock, a holder generally will
recognize capital gain or loss equal to the difference between (i) the amount of
cash and the fair market value of any property received upon the sale or
exchange and (ii) such holder's adjusted tax basis in the Intel common stock.
Such capital gain or loss will be long-term capital gain or loss if the holder's
holding period in Intel common stock is more than one year at the time of the
sale or exchange. See " -- Conversion of the Notes," above.
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
In general, information reporting requirements will apply to payments of
principal, premium, if any, and interest on a note, payments of dividends on
Intel common stock, payments of the proceeds of the sale of a note (including,
as discussed above, upon conversion) and payments of the proceeds of the sale of
Intel common stock, and a 31% backup withholding tax may apply to such payments
if the holder either (i) fails to demonstrate that the holder comes
28
<PAGE> 29
within certain exempt categories of holders or (ii) fails to furnish or certify
his correct taxpayer identification number to the payor in the manner required,
is notified by the IRS that he has failed to report payments of interest and
dividends properly, or under certain circumstances, fails to certify that he has
not been notified by the IRS that he is subject to backup withholding for
failure to report interest and dividend payments. Any amounts withheld under the
backup withholding rules from a payment to a holder will be allowed as a credit
against such holder's United States federal income tax and may entitle the
holder to a refund, provided that the required information is furnished to the
IRS.
SELLING NOTEHOLDERS
The notes offered hereby were originally issued by Level One and sold by
Robertson, Stephens & Company, Alex. Brown & Sons Incorporated and Montgomery
Securities, in a transaction exempt from the registration requirements of the
Securities Act, to persons reasonably believed by such initial purchaser to be
"qualified institutional buyers," as defined in Rule 144A under the Securities
Act, or other institutional "accredited investors," as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act. The selling noteholders and
their transferees, pledgees, donees or successors may from time to time offer
and sell pursuant to this prospectus any or all of the notes.
The following table sets forth information with respect to the selling
noteholders and the respective principal amounts of notes beneficially owned by
each selling noteholder that may be offered pursuant to this prospectus. Such
information has been obtained from the selling noteholders. None of the selling
noteholders has, or within the past three years has had, any position, office or
other material relationship with Level One or any of its predecessors or
affiliates, except as noted below. Because the selling noteholders may offer all
or some portion of the notes pursuant to this prospectus, no estimate can be
given as to the amount of the notes that will be held by the selling noteholders
upon termination of any such sales. In addition, the selling noteholders
identified below may have sold, transferred or otherwise disposed of all or a
portion of their notes since the date on which they provided the information
regarding their notes in transactions exempt from the registration requirements
of the Securities Act.
<TABLE>
<CAPTION>
Principal Amount Of
Notes Beneficially Owned
Name And Offered Hereby
- ---- ------------------------
<S> <C>
Alexandra Global Investment $ 2,750,000
American Investors Life Insurance Company $ 1,000,000
Argent Classic Convertible Arbitrage Fund L.P. $ 1,700,000
Argent Classic Convertible Arbitrage Fund (Bermuda) L.P. $ 2,000,000
Associated Electric & Gas Insurance Services, LTD $ 250,000
BancAmerica Robertson Stephens $19,000,000
</TABLE>
29
<PAGE> 30
<TABLE>
<CAPTION>
Principal Amount Of
Notes Beneficially Owned
Name And Offered Hereby
- ---- ------------------------
<S> <C>
Bankers Trust International $ 5,000,000
Baptist Health of Miami $ 97,000
BT Alex. Brown Inc. $ 1,750,000
BT Holdings (New York) Inc. $ 500,000
CFW-C, L.P. $ 5,350,000
Chase Securities, Inc. $ 5,250,000
Colonial Penn Insurance Co. $ 562,000
Colonial Penn Life Ins. Co. $ 563,000
Credit Suisse First Boston $ 500,000
David Lipscombe University General Endowment $ 85,000
Dunham & Associates Fund II $ 25,000
Dunham & Associates Fund III $ 12,000
Employee Reinsurance Corporation $ 1,250,000
Engineers Joint Pension Fund $ 151,000
Equitable Life Assurance Separate Account Balanced $ 190,000
Equitable Life Assurance Separate Account Convertibles $ 2,715,000
Forest Global Convertible Fund Series A-5 $ 500,000
Forum Fulcrum Fd LP $ 500,000
Franklin Investors Securities Trust - Convertible $ 500,000
Securities Fund
The Frist Foundation $ 295,000
General Motors Investment Management Corporation $ 5,500,000
Glen Eagles Fund Ltd. $ 725,000
</TABLE>
30
<PAGE> 31
<TABLE>
<CAPTION>
Principal Amount Of
Notes Beneficially Owned
Name And Offered Hereby
- ---- ------------------------
<S> <C>
Hotel Union & Industry of Hawaii $ 370,000
Hudson River Trust Balanced Account $ 1,140,000
Hudson River Trust Growth & Income Account $ 1,165,000
Hudson River Trust Growth Investors $ 910,000
JP Morgan Securities Inc. $15,500,000
Lincoln National Convertible Securities Fund $ 1,225,000
Lincoln National Life Insurance $ 1,665,000
McMahan Securities Co., L.P. $ 88,000
Memphis Light, Water & Gas Retirement Fund $ 1,130,000
Motors Insurance Corporation $ 750,000
NationsBanc Montgomery Securities, Inc. $ 5,000,000
NatWest Securities Corporation $ 7,525,000
Nicholas-Applegate Income & Growth Fund $ 1,269,000
Northwestern Mutual Life Insurance Company $ 1,500,000
Occidental College $ 88,000
Palladin Overseas Fund $ 562,000
Palladin Partners I L.P. $ 562,000
Salomon Brothers Total Return Fund $ 250,000
San Diego Convertible $ 1,279,000
San Diego City Retirement $ 302,000
SBC Warburg Dillon Read Inc. $ 1,000,000
</TABLE>
31
<PAGE> 32
<TABLE>
<CAPTION>
Principal Amount Of
Notes Beneficially Owned
Name And Offered Hereby
- ---- ------------------------
<S> <C>
Sheperd Investments International, Ltd. $ 1,463,000
Smith Barney Inc. $ 5,500,000
Societe Generale Securities Corp. $ 1,000,000
Stark International $ 787,000
Strategic Money Management Company BV $ 1,000,000
Swiss Bank Corporation $ 4,250,000
TCW Group $ 75,000
United National Insurance $ 60,000
United National Insurance Company $ 60,000
Wake Forest University $ 236,000
Walker Art Center $ 140,000
Weirton Trust $ 380,000
</TABLE>
The selling noteholders identified above may have sold, transferred or
otherwise disposed of, in transactions exempt from the registration requirements
of the Securities Act, all or a portion of their notes since the date on which
the information in the preceding table is presented. Because the selling
noteholders may offer all or some of the notes that they hold pursuant to the
offering contemplated by this prospectus, no estimate can be given as to the
amount of the notes that will be held by the selling noteholders upon the
termination of this offering.
Information concerning the selling noteholders may change from time to
time and any such changed information will be set forth in supplements to this
prospectus if and when necessary.
PLAN OF DISTRIBUTION
The notes may be sold from time to time to purchasers directly by the
selling noteholders. Alternatively, the selling noteholders may from time to
time offer the notes to or through underwriters, broker/dealers or agents, who
may receive compensation in the form of
32
<PAGE> 33
underwriting discounts, concessions or commissions from the selling noteholders
or the purchasers of notes for whom they may act as agents. The selling
noteholders and any underwriters, broker/dealers or agents that participate in
the distribution of notes may be deemed to be "underwriters" within the meaning
of the Securities Act and any profit on the sale of notes by them and any
discounts, commissions, concessions or other compensation received by any such
underwriter, broker/dealer or agent may be deemed to be underwriting discounts
and commissions under the Securities Act.
The notes may be sold from time to time in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, any varying
prices determined at the time of sale or at negotiated prices. The sale of the
notes may be effected in transactions (which may involve crosses or block
transactions):
- on any national or international securities exchange or quotation
service on which the notes may be listed or quoted at the time of
sale;
- in the over-the-counter market;
- in transactions otherwise than on such exchanges or in the
over-the-counter market; or
- through the writing of options.
At the time a particular offering of the notes is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate
amount and type of notes being offered and the terms of the offering, including
the name or names of any underwriters, broker/dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
noteholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if
applicable, the notes will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain jurisdictions
the notes may not be offered or sold unless they have been registered or
qualified for sale in such jurisdictions or any exemption from registration or
qualification is available and is complied with.
The selling noteholders will be subject to applicable provisions of the
Securities Exchange Act and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of any of the notes by
the selling noteholders. The foregoing may affect the marketability of the
notes.
Pursuant to the registration agreement, all expenses of the registration
of the notes will be paid by Level One, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with
state securities or "blue sky" laws; provided, however, that the selling
noteholders will pay all underwriting discounts and selling commissions, if any.
The selling noteholders will be indemnified by Level One against certain civil
liabilities, including
33
<PAGE> 34
certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
WHERE YOU CAN FIND MORE INFORMATION
Intel is currently subject to the informational requirements of the
Securities Exchange Act and in accordance therewith has been and will be filing
reports, proxy statements and information statements and other information with
the Securities and Exchange Commission, or the Commission. Prior to August 10,
1999, Level One was subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith filed reports,
proxy statements and information statements and other information with the
Commission. After August 10, 1999, Intel's financial reports will (on a
consolidated basis) include the results of operations of Level One for the
periods following that date.
You may inspect and copy such reports, proxy statements and information
statements and other information at the public reference facilities maintained
by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at
Seven World Trade Center, Suite 1300, New York, New York 10048 and at the
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
You can also obtain copies of such material from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. You may obtain additional information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330 and reports, proxy
statements and information statements and other information filed electronically
by Level One with the Commission at the Commission's worldwide web site at
http:\\www.sec.gov. Intel's common stock is quoted on the Nasdaq National
Market. Reports, proxy statements and information statements and other
information concerning Intel may also be inspected at the National Association
of Securities Dealers, Inc. at 1735 K Street, N.W., Washington D.C. 20006.
The following documents filed by Level One with the Commission are hereby
incorporated by reference in this prospectus and made a part hereof:
1. Level One's annual report on form 10-K for the fiscal year ended
December 27, 1998;
2. Level One's quarterly report on form 10-Q for the fiscal quarter ended
March 28, 1999;
3. Level One's current reports on form 8-K dated February 3, 1999, and
March 8, 1999 and August 10, 1999; and
4. Combined proxy statement/prospectus on form S-4 of Level One and Intel
dated July 7, 1999.
The following documents filed by Intel with the Commission are hereby
incorporated by reference in this prospectus and made a part hereof:
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<PAGE> 35
1. Intel's annual report on form 10-K for the fiscal year ended December
26, 1998;
2. Intel's quarterly report on form 10-Q for the fiscal quarters ended
March 27, 1999 and June 26, 1999;
3. Intel's current reports on form 8-K dated January 14, 1999, March 12,
1999, April 14, 1999, July 8, 1999, July 14, 1999 and August 10, 1999; and
4. Intel's definitive proxy statement on schedule 14A dated April 6, 1999.
All reports and other documents filed by Intel or Level One pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act after the date
of this prospectus and before the termination of this offering shall be deemed
to be incorporated by reference in this prospectus and to be a part of this
prospectus from the date of filing of such reports and documents. Any statement
incorporated or deemed to be incorporated in this prospectus shall be deemed to
be modified or superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any other subsequently filed
document which also is or is deemed to be incorporated by reference in this
prospectus modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
Each of Level One and Intel will provide you without charge, upon your
request, a copy of any or all of the foregoing documents incorporated herein by
reference, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents. Requests for Level
One documents should be made to the attention of Level One Communications,
Incorporated, Attn: Investor Relations, 9750 Goethe Road, Sacramento, California
95827, Telephone: (916) 855-5000. Requests for Intel documents should be made to
the attention of Harris Trust & Savings Bank, 311 West Monroe, P.O. Box A3504,
Chicago, Illinois 60690-3504, Telephone: (800) 298-0146 (U.S. and Canada) and
(312) 360-5123 (worldwide).
LEGAL MATTERS
The validity of the notes has been passed upon for Level One by Graham &
James LLP, Sacramento, California.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements of Level One for the years ended
December 27, 1998, December 28, 1997 and December 29, 1996 incorporated by
reference in this prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto.
INDEPENDENT AUDITORS
35
<PAGE> 36
The consolidated financial statements of Intel Corporation for the years
ended December 26, 1998, December 27, 1997 and December 28, 1996 incorporated by
reference in this prospectus, have been audited by Ernst & Young LLP,
Independent Auditors, as indicated in their report with respect thereto.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Level One
pursuant to the foregoing provisions, or otherwise, Level One 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 Level One of expenses incurred or
paid by a director, officer or controlling person of Level One 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, Level
One 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.
Level One has provisions in its amended and restated certificate of
incorporation in effect as of August 10, 1999 that eliminate the liability of
Level One's directors to Level One and its stockholders for monetary damages for
breach of fiduciary duty as a director to the fullest extent permissible under
the General Corporation Law of Delaware. Level One's bylaws in effect on August
10, 1999 provide that Level One shall indemnify its officers, directors,
employees and agents to the extent permitted by the General Corporation Law of
Delaware.
The merger agreement between Intel and Level One provides that, after the
merger, Intel will, as permitted by law, indemnify persons who were Level One's
directors or officers before the merger who suffer liabilities or losses from
any threatened or actual claim or proceeding based on the merger agreement or on
the fact that the person was a Level One director or officer. The merger
agreement further provides that Intel will cause the Level One officers and
directors immediately prior to the merger to be covered by Level One's
directors' and officers' liability insurance policy or a similar policy for six
years after the merger.
In addition, Intel has agreed to honor Level One's agreements and charter
provisions to indemnify its officers and directors in effect on March 4, 1999.
Under the Level One certificate of incorporation in effect on March 4, 1999,
Level One must, to the maximum extent and in the manner permitted by the General
Corporation Law of Delaware, indemnify any person against expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit or proceeding
in which such person is or was a director or officer of the corporation. The
Level One's bylaws in effect on March 4, 1999 provide that Level One shall
indemnify its officers, directors, employees and agents to the extent permitted
by the General Corporation Law of Delaware.
36
<PAGE> 37
================================================================================
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by Level One or any selling holder.
This prospectus does not constitute an offer to sell or the solicitation of any
offer to buy any security other than the notes offered by this prospectus, nor
does it constitute an offer to sell or a solicitation of any offer to buy the
notes by anyone in any jurisdiction in which such offer or solicitation is not
authorized, or in which the person making such offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make such offer
or solicitation. Neither the delivery of this prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that
information contained herein is correct as of any time subsequent to the date
hereof.
================================================================================
37
<PAGE> 38
================================================================================
$115,000,000
4% Convertible Subordinated Notes Due 2004
LEVEL ONE
COMMUNICATIONS,
INCORPORATED
--------------
PROSPECTUS
--------------
================================================================================
<PAGE> 39
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by Level One in connection with
the issuance and distribution of the notes being registered hereunder. All of
the amounts shown are estimates (except for the SEC registration fee).
<TABLE>
<S> <C>
SEC registration fee $ 34,848
Printing fees and expenses $102,456
Legal fees and expenses $133,110
Audit $ 49,023
--------
TOTAL $319,473
========
</TABLE>
Item 15. Indemnification of Directors and Officers
Level One has provisions in its amended and restated certificate of
incorporation in effect as of August 10, 1999 that eliminate the liability of
Level One's directors to Level One and its stockholders for monetary damages for
breach of fiduciary duty as a director to the fullest extent permissible under
the General Corporation Law of Delaware. Level One's bylaws in effect on August
10, 1999 provide that Level One shall indemnify its officers, directors,
employees and agents to the extent permitted by the General Corporation Law of
Delaware.
The merger agreement between Intel and Level One provides that, after the
merger, Intel will, as permitted by law, indemnify persons who were Level One's
directors or officers before the merger who suffer liabilities or losses from
any threatened or actual claim or proceeding based on the merger agreement or on
the fact that the person was a Level One director or officer. The merger
agreement further provides that Intel will cause the Level One officers and
directors immediately prior to the merger to be covered by Level One's
directors' and officers' liability insurance policy or a similar policy for six
years after the merger.
In addition, Intel has agreed to honor Level One's agreements and charter
provisions to indemnify its officers and directors in effect on March 4, 1999.
Under the Level One certificate of incorporation in effect on March 4, 1999,
Level One must, to the maximum extent and in the manner permitted by the General
Corporation Law of Delaware, indemnify any person against expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit or proceeding
in which such person is or was a director or officer of the corporation. The
Level One's bylaws in effect on March 4, 1999 provide that Level One shall
indemnify its officers, directors, employees and agents to the extent permitted
by the General Corporation Law of Delaware.
II-1
<PAGE> 40
Item 16. Exhibits
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ---------- ---------------------------
<S> <C>
4.1 Indenture dated as of August 15, 1997 among Level One and State
Street Bank and Trust Company of California (National
Association), as Trustee.*
4.2 Form of 4% Convertible Subordinated Note due 2004.*
4.3 Registration Rights Agreement dated as of August 15, 1997 among
Level One and Robertson, Stephens & Company LLC, Alex. Brown &
Sons Incorporated, and Montgomery Securities.*
4.4 Supplemental Indenture dated as of August 10,1999 among Level One,
Intel Corporation and State Street Bank and Trust Company of
California, N.A., as Trustee.
4.5 Guaranty of Intel Corporation dated August 10, 1999.
5.1 Opinion of Graham & James LLP.*
12.1 Computation of Registrant's Ratio of Earnings to Fixed Charges.*
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ernst & Young LLP, Independent Auditors.
23.3 Consent of Graham & James LLP (included in Exhibit 5.1).*
24.1 Power of Attorney (See page II-4).*
25.1 Statement of Eligibility and Qualification Under the Trust
Indenture Act of 1939 of a Corporation designated to act as Trustee
on Form T-1.*
</TABLE>
* Filed with the registration statement on form S-3 filed with Securities and
Exchange Commission on October 15, 1997.
Item 17. Undertakings
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:
II-2
<PAGE> 41
(i) to include any prospectus required by Section 10(a) (3) of
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 and of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in a 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 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.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be
filed to include financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements
and information are contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the Form
F-3.
(5) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 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.
II-3
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has duly caused this Post-Effective Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Sacramento, and State of
California, on this 10th day of August, 1999.
LEVEL ONE COMMUNICATIONS, INCORPORATED
By: /s/ John Kehoe
-------------------------------------
John Kehoe, Senior Vice President,
Chief Financial Officer and Secretary
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.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
Robert S. Pepper* President, Chief Executive Officer August 10, 1999
- ------------------------------------- and Chairman of the Board of Directors
(Robert S. Pepper) (Principal Executive Officer)
/s/ John Kehoe Senior Vice President, Chief August 10, 1999
- ------------------------------------- Financial Officer and Secretary
(John Kehoe)
Thomas J. Connors* Director August 10, 1999
- -------------------------------------
(Thomas J. Connors)
Martin Jurick* Director August 10, 1999
- -------------------------------------
(Martin Jurick)
Paul Gray, Ph.D.* Director August 10, 1999
- -------------------------------------
(Paul Gray)
Henry Kressel, Ph.D.* Director August 10, 1999
- -------------------------------------
(Henry Kressel)
Joseph P. Landy* Director August 10, 1999
- -------------------------------------
(Joseph P. Landy)
Director
- -------------------------------------
(Kenneth A. Pickar, Ph.D.)
*By: /s/ John Kehoe
--------------------------------
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 1
Exhibit 4.4
LEVEL ONE COMMUNICATIONS, INCORPORATED, Company
INTEL CORPORATION, Guarantor
and
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A,
Trustee
SUPPLEMENTAL INDENTURE
Dated as of August 10, 1999
To
INDENTURE
Dated as of August 15, 1997
Relating to
Level One Communications, Incorporated
4% Convertible Subordinated Notes
Due 2004
<PAGE> 2
This SUPPLEMENTAL INDENTURE, dated as of the 10th day of August, 1999, by
and among LEVEL ONE COMMUNICATIONS, INCORPORATED, a corporation duly organized
and existing under the laws of the State of Delaware (the "Company"), INTEL
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (the "Guarantor"), and STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., a national banking association and Trustee under the Indenture
(as hereinafter defined) (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore entered into that
certain Indenture, dated as of August 15, 1997 (the "Indenture"), providing for
the issuance of 4% Convertible Subordinated Notes Due 2004 (the "Notes") in the
aggregate principal amount not to exceed one hundred fifteen million dollars
($115,000,000);
WHEREAS, the Company, Intel RSW Corporation, a Delaware corporation
("RSW"), and the Guarantor have entered into an Agreement and Plan of Merger,
dated as of March 4, 1999, (the "Merger Agreement"), pursuant to which RSW will
merge (the "Merger") with and into the Company, the Company will then become a
wholly-owned subsidiary of Guarantor, and each share of the Company's Common
Stock outstanding immediately prior to the effective time of the Merger (the
"Effective Time") will be converted into the right to receive 0.86 shares of
Common Stock of the Guarantor in accordance with the terms of the Merger
Agreement;
WHEREAS, Section 12.1 of the Indenture permits the Company to merge with
another corporation provided certain conditions are satisfied;
WHEREAS, Section 15.6 of the Indenture provides, among other things, that
if any merger of the Company with another corporation occurs as a result of
which holders of Company Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock, then the Company or the successor or purchasing
corporation, as the case may be, shall execute with Trustee a supplemental
indenture providing that each Note shall be convertible into the kind and amount
of shares of stock and other securities or property or assets (including cash)
receivable upon such merger by a holder of a number of shares of Company Common
Stock issuable upon conversion of such Notes immediately prior to such merger.
Section 15.6 of the Indenture further provides that, if in the case of any such
merger the stock or other securities and assets receivable thereupon by a holder
of shares of Company Common Stock includes shares of stock or other securities
and assets of a corporation other than the successor or purchasing corporation,
as the case may be, in such consolidation, merger, or combination, then such
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the holders
of the Notes as the Company's Board of Directors shall reasonably consider
necessary by reason of the foregoing, including to the extent practicable the
provisions providing for the repurchase rights set forth in Article XVI therein;
WHEREAS, the Guarantor is willing to guarantee, on a subordinated basis as
set forth more fully herein, the payment of the principal of, premium, if any,
and interest on the Notes;
2
<PAGE> 3
WHEREAS, Section 11.1 of the Indenture authorizes the Company, with the
consent of the Trustee, to supplement or amend the Indenture to comply with
Section 15.6 thereof and to correct or supplement provisions of or make other
provisions with respect to matters or questions arising under the Indenture that
do not adversely affect the rights of any Noteholder and the Trustee is
authorized by Section 11.1 of the Indenture to execute this Supplemental
Indenture without the consent of the holders of the Notes;
WHEREAS, the Company and the Guarantor desire to execute a supplemental
indenture that complies with Section 11.1 of the Indenture;
WHEREAS, all acts and things necessary to make this Supplemental Indenture
a valid and binding agreement for the purposes and objects herein expressed have
been duly done and performed, and the execution of this Supplemental Indenture
has been in all respects, duly authorized;
WHEREAS, the foregoing recitals are made as representations or statements
of fact by the Company or the Guarantor, as applicable, and not by the Trustee;
and
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, the receipt of which is hereby acknowledged, the Company
and the Guarantor hereby covenant and agree with the Trustee, for the equal and
proportionate benefit of the respective holders from time to time of the Notes,
to amend, modify and supplement the Indenture as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. The Form of Note (including the Form of Reverse of Note)
attached as Exhibit A to the Indenture is hereby amended by deleting all
references to "Common Stock of the Company" or "Company's Common Stock" and
inserting in lieu thereof the words "Common Stock."
Section 1.2. The Form of Reverse of Note attached as Exhibit A to the
Indenture is hereby further amended by:
(a) Deleting the reference to "$40" as it appears in the twelfth
paragraph thereof and inserting in lieu thereof the dollar amount of
"$31.00775194";
(b) Deleting the second sentence of the twelfth paragraph thereof in
its entirety;
(c) Deleting the sixteenth paragraph and inserting in lieu thereof
the following paragraph:
No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant
or agreement of the Company or the Guarantor in the Indenture or any
indenture supplemental thereto or in any Note, or because of the
creation of any indebtedness represented thereby or the
3
<PAGE> 4
guarantee by the Guarantor thereof, shall be had against any
incorporator, stockholder, officer or director, as such, past, present
or future, of the Company or the Guarantor or of any respective
successor corporation, either directly or through the Company or the
Guarantor or any respective successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by
the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released; provided, however, that the
foregoing shall not affect or impair the obligations of the Guarantor
hereunder.
Section 1.3. The terms defined in this Section 1.3 (except as herein
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Supplemental Indenture shall have the respective meanings
specified in this Section 1.3. All other terms used in this Supplemental
Indenture which are defined in the Indenture, the Trust Indenture Act of 1939 or
which are by reference therein defined in the Securities Act of 1933, as amended
(except as herein otherwise expressly provided or unless the context otherwise
requires), shall have the meanings assigned to such terms in the Indenture, said
Trust Indenture Act and in said Securities Act as in force at the date of the
execution of this Supplemental Indenture. The words "herein," "hereof" and
"hereunder," and words of similar import, refer to this Supplemental Indenture
as a whole and not to any particular Article, Section or other Subsection. The
terms defined in this Article include the plural as well as the singular.
(a) The definition of "Common Stock" contained in Section 1.1 of the
Indenture is hereby amended by deleting said definition in its entirety and
inserting in lieu thereof the following definition:
Common Stock: The term "Common Stock" shall mean any stock of any
class of Guarantor which has no preference in respect of dividends or
of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Guarantor and which is
not subject to redemption by the Guarantor. Subject to the provisions
of Section 15.6, however, shares issuable on conversion of Notes shall
include only shares of the class designated as Common Stock of the
Guarantor at the date of this Supplemental Indenture or shares of any
class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Guarantor
and which are not subject to redemption by the Guarantor; provided
that if at any time there shall be more than one such resulting class,
the shares of each such class then so issuable shall be substantially
in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.
(b) Section 1.1 of the Indenture is hereby amended to add the
following definitions:
Guarantor: The term "Guarantor" shall mean Intel Corporation, a
Delaware corporation, and shall include its successors and assigns.
4
<PAGE> 5
Guarantor Board of Directors: The term "Guarantor Board of
Directors" shall mean the Board of Directors of the Guarantor or a
committee of such Board duly authorized to act for it hereunder.
Guarantor Senior Indebtedness: The term "Guarantor Senior
Indebtedness" shall mean the principal of, premium, if any, and
interest on, and any other payment due pursuant to the terms of an
instrument (including, without limitation, fees, expenses, collection
expenses (including attorneys' fees), interest yield amounts,
post-petition interest and taxes) creating, securing or evidencing any
of the following, whether outstanding at the date hereof or hereafter
incurred or created:
(a) all indebtedness of the Guarantor evidenced by notes, debentures,
bonds or other similar instruments or securities (including, without limitation,
those which are convertible or exchangeable for securities of the Guarantor);
(b) all indebtedness of the Guarantor for money borrowed (including
any indebtedness secured by a mortgage, conditional sales contract or other lien
which is (i) given to secure all or part of the purchase price of property
subject thereto, whether given to the vendor of such property or to another or
(ii) existing on property at the time of acquisition thereof);
(c) all indebtedness or other obligations of the Guarantor with
respect to interest rate, currency, equity and other swap agreements, cap, floor
and collar agreements, currency spot and forward contracts, and similar
agreements and arrangements;
(d) all indebtedness or other obligations of the Guarantor with
respect to letters of credit (including reimbursement obligations with respect
thereto), bank guarantees and bankers' acceptances;
(e) all lease obligations of the Guarantor which are required or
permitted to be capitalized on the books of the Guarantor in accordance with
generally accepted accounting principles;
(f) all indebtedness of others of the kinds described in the
preceding clauses (a), (b), (c) or (d) and all lease obligations of others of
the kind described in the preceding clause (e) assumed by or guaranteed in any
manner by the Guarantor or in effect guaranteed by the Guarantor through an
agreement to purchase, contingent or otherwise, and all obligations of the
Guarantor under any such guarantee or other arrangements; and
(g) all renewals, extensions or refundings of indebtedness of the
kinds described in any of the preceding clauses (a), (b), (c), (d), or (f) and
all renewals or extensions of lease obligations of the kinds described in either
of the preceding clauses (e) or (f);
5
<PAGE> 6
unless, in the case of a particular indebtedness, lease, renewal,
extension or refunding, the instrument or lease creating or evidencing
the same or the assumption or guarantee of the same expressly provides
that such indebtedness, lease, renewal, extension or refunding is not
superior in right of payment to or is pari passu with or is
subordinated or junior to, the Guarantor's obligations under the
Guaranty. Notwithstanding the foregoing, Guarantor Senior Indebtedness
shall not include: (i) indebtedness evidenced by the Guaranty or
otherwise in respect of the Notes; (ii) any indebtedness or lease
obligation of any kind of the Guarantor to any subsidiary of the
Guarantor; and (iii) indebtedness for trade payables or constituting
the deferred purchase price of assets or services created or assumed
by the Guarantor in the ordinary course of business.
Guaranty: The term "Guaranty" shall mean the subordinated
guaranty by the Guarantor to the holders of the Notes dated as of the
date this Supplemental Indenture in the form of Exhibit A to the
Supplemental Indenture, dated as of August 10, 1999.
Resolution of Guarantor Board of Directors: The term "Resolution
of Guarantor Board of Directors" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Guarantor
to have been duly adopted by the Guarantor Board of Directors, or a
duly authorized committee thereof (to the extent permitted by
applicable law), and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
ARTICLE II
CONVERSION OF NOTES
Section 2.1. Section 15.2 of the Indenture is hereby amended by adding the
words "or shall cause the Guarantor to" immediately after the words "the Company
shall" that appear in the first sentence of the third paragraph thereof.
Section 2.2. Section 15.4 of the Indenture is hereby amended by deleting
such Section in its entirety and inserting in lieu thereof the following:
Section 15.4 Conversion Price. The conversion price (herein
called the "Conversion Price") shall be, subject to adjustment as
provided in this Article XV, $31.00775194 per share of Common Stock.
Section 2.3. Subsections (a) through (i) and (m) of Section 15.5 of the
Indenture are hereby amended by (i) deleting all references therein to "the
Company" and inserting in lieu thereof "the Guarantor," (ii) deleting all
references therein to "the Board of Directors" and inserting in lieu thereof
"the Guarantor Board of Directors," and (iii) deleting all references therein to
"Board Resolution" and inserting in lieu thereof "Resolution of Guarantor Board
of Directors."
Section 2.4. Section 15.6 of the Indenture is hereby amended by deleting
all references to "the Company" and inserting in lieu thereof "the Guarantor."
6
<PAGE> 7
Section 2.5. Section 15.7 of the Indenture is hereby amended by
deleting such Section in its entirety and inserting in lieu thereof the
following:
Section 15.7 Taxes on Shares Issued. The issue of stock
certificates on conversions of Notes shall be made without charge to
the converting Noteholder for any tax in respect of the issue thereof.
Neither the Company nor the Guarantor shall be required to pay any tax
which may be payable in respect of any transfer involved in the issue
and delivery of stock in any name other than that of the holder of any
Note converted, and neither the Company nor the Guarantor shall be
required to issue or deliver any such stock certificate unless and
until the person or persons requesting the issue thereof shall have
paid to the Guarantor the amount of such tax or shall have established
to the satisfaction of the Company and the Guarantor that such tax has
been paid.
Section 2.6. Section 15.8 of the Indenture and the third sentence of
Section 15.9 of the Indenture are hereby amended by deleting all references to
"the Company" and to insert in lieu thereof the words "the Guarantor."
Section 2.7. Section 15.10 of the Indenture is hereby amended by deleting
all references to "the Company" in clauses (a) through (d) thereof and inserting
in lieu thereof the words "the Guarantor."
ARTICLE III
CERTAIN, REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE GUARANTOR
Section 3.1. The Guarantor hereby represents, warrants and covenants that
(a) immediately after the Effective Time, no condition or event shall exist
which constitutes or would, after notice or lapse of time or both, constitute a
"default" or an "Event of Default" (both as defined in the Indenture), (b) it
has complied, or has caused the Company to comply, and will comply, or will
cause the Company to comply, with all applicable provisions of the Indenture and
(c) it has been authorized by the Guarantor Board of Directors to execute this
Supplemental Indenture.
ARTICLE IV
REPURCHASE UPON A REPURCHASE EVENT
Section 4.1. Section 16.2(f) of the Indenture is hereby amended by deleting
the reference to "the Company" appearing in the first sentence thereof and
inserting in lieu thereof the words "the Guarantor."
Section 4.2. Section 16.2(h) of the Indenture is hereby amended by deleting
such Section in its entirety and inserting in lieu thereof the following:
(h) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Notes shall be made without charge to the holder of Notes
being repurchased for such certificates or for any tax or duty in respect of the
issuance or delivery of such certificates or the securities represented thereby;
provided, however, that neither the Company nor the Guarantor shall be required
to pay any tax or duty which may be payable in respect of (i) income
7
<PAGE> 8
of the holder, or (ii) any transfer involved in the issue and delivery of
certificates for shares of Common Stock in any name other than that of the
holder of the Notes being repurchased, and neither the Company nor the Guarantor
shall be required to issue or deliver any such stock certificate unless and
until the person or persons requesting the issue thereof shall have paid to the
Company the amount of such tax or duty or shall have established, to the
satisfaction of the Company and the Guarantor, that such tax or duty has been
paid.
Section 4.3. Section 16.3(d) of the Indenture is hereby amended by deleting
the reference to "the Company" appearing in the first sentence thereof and
inserting in lieu thereof the words "the Guarantor."
Section 4.4. Section 16.4(c) of the Indenture is hereby amended by:
(a) Deleting the references to "the Company's Board of Directors"
appearing therein and inserting in lieu thereof the words "the Guarantor's Board
of Directors;"
(b) Deleting the reference to the date "August 27, 1997" as it
appears in the first sentence thereof and inserting in lieu thereof the date
"August 10, 1999;" and
(c) Deleting the reference to "the Company" as it appears in the
second sentence thereof and inserting in lieu thereof the words "the Guarantor."
Section 4.5. Section 16.4(e) of the Indenture is hereby amended by deleting
the references to "the Company" appearing therein and inserting in lieu thereof
the words "the Guarantor."
ARTICLE V
GUARANTY OF NOTES
Section 5.1. Guaranty of Notes. The Indenture is hereby amended to add the
following provisions as a new Article XVIII to be inserted immediately following
Article XVII of the Indenture.
ARTICLE XVIII
TERMS OF THE GUARANTY
Section 18.1. Guaranty Subordinated to Guarantor Senior Indebtedness. All
payments pursuant to the Guaranty by the Guarantor shall be subordinated in
accordance with the following provisions of this Article XVIII to the prior
payment in full of all Guarantor Senior Indebtedness, whether outstanding at the
date of the Guaranty or thereafter incurred or created.
Section 18.2. Payments to Noteholders. No direct or indirect payment shall
be made on the Guaranty by the Guarantor, if there shall have occurred and be
continuing (a) any default in the payment of principal, premium, if any, or
interest on any Guarantor Senior Indebtedness continuing beyond the period of
grace, if any, specified in the instrument or lease evidencing such Guarantor
Senior Indebtedness with respect to Guarantor Senior Indebtedness, or (b) any
other default with respect to any Guarantor Senior Indebtedness permitting the
acceleration
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<PAGE> 9
thereof and such default is the subject of a judicial proceeding or the
Guarantor receives notice of such a default from the holders of an aggregate of
not less than $50,000,000 aggregate principal amount of such Guarantor Senior
Indebtedness (provided, however, that in the case of Guarantor Senior
Indebtedness issued pursuant to an indenture such notice may be validly given
only by the trustee under such indenture), unless and until such default or
event of default shall have been cured or waived or shall have ceased to exist.
Upon any acceleration of the principal of the Notes or any payment by the
Guarantor, or distribution of assets of the Guarantor of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Guarantor, whether voluntary
or involuntary or in bankruptcy, insolvency, receivership or other proceedings,
all amounts due or to become due upon all Guarantor Senior Indebtedness shall
first be paid in full in money or money's worth, or payment thereof provided for
in accordance with its terms, before any payment is made by the Guarantor
pursuant to the Guaranty on account of the principal of (and premium, if any) or
interest on the Notes; and upon any such dissolution or winding-up or
liquidation or reorganization, any payment by the Guarantor, or distribution of
assets of the Guarantor of any kind or character, whether in cash, property or
securities, to which the holders of the Notes or the Trustee would be entitled
pursuant to or with respect to the Guaranty except for the provisions of this
Article XVIII, shall (except as aforesaid) be paid by the Guarantor or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Notes or by the
Trustee under this Indenture if received by them or it, directly to the holders
of Guarantor Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Guarantor Senior Indebtedness held by such holders, as
calculated by the Guarantor) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Guarantor Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay all Guarantor
Senior Indebtedness in full in money or money's worth, after giving effect to
any concurrent payment or distribution to or for the holders of Guarantor Senior
Indebtedness, before any payment or distribution is made to the holders of the
Notes or to the Trustee pursuant to the Guaranty.
In the event that, notwithstanding the foregoing, any payment by or
distribution of assets of the Guarantor of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee or the holders of the Notes before all Guarantor Senior Indebtedness
is paid in full in money or money's worth, or provision is made for such
payment, and if such fact shall then have been made known to a Responsible
Officer of the Trustee or, as the case may be, such Noteholder, then and in such
event such payment or distribution shall be paid over or delivered to the
holders of Guarantor Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Guarantor Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of all Guarantor Senior Indebtedness remaining unpaid to the extent necessary to
pay all Guarantor Senior Indebtedness in full in money or money's worth, after
giving effect to any concurrent payment or distribution to or for the holders of
such Guarantor Senior Indebtedness (but subject to the power of a court of
competent jurisdiction to make other equitable provision, which shall have been
determined by such court to give effect to the rights conferred in this Article
XVIII upon the Guarantor Senior
9
<PAGE> 10
Indebtedness and the holders thereof with respect to Notes or the holders
thereof or the Trustee, by a lawful plan of reorganization or readjustment under
applicable bankruptcy law).
The consolidation of the Guarantor with, or the merger of the Guarantor
into, another corporation or the liquidation or dissolution of the Guarantor
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Section 18.9 hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 18.2 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Section
18.9 hereof.
The holders of Guarantor Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the holders of the Notes, without
incurring responsibility to the holders of the Notes and without impairing or
releasing the obligations of the holders of the Notes hereunder to the holders
of Guarantor Senior Indebtedness: (i) change the manner, place or terms of
payment or change or extend the time of payment of, or renew or alter, Guarantor
Senior Indebtedness, or otherwise amend in any manner Guarantor Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Guarantor Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of Guarantor Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Guarantor and any other Person.
Section 18.3. Payments May Be Paid Prior to Dissolution. Nothing contained
in this Article XVIII shall prevent (i) the Guarantor, except under the
conditions described in Section 18.2, from making payments on the Guaranty at
any time, or (ii) the application by the Trustee of any monies deposited with it
for the purpose of making such payments pursuant to the Guaranty, to the holders
entitled thereto unless at least three Business Days prior to the date upon
which such payment would otherwise (except for the prohibitions contained in
Section 18.2) become due and payable, the Trustee shall have received the
written notice provided for in Section 18.6.
Section 18.4. Trustee to Take Action to Effectuate Subordination. The
Trustee shall take such action on behalf of each holder of Notes as may be
necessary or appropriate to effectuate, as between the holders of Guarantor
Senior Indebtedness and the Noteholders, the subordination as provided in this
Article XVIII.
Section 18.5. Subrogation of Notes. Subject to the payment in full of all
Guarantor Senior Indebtedness, the holders of the Notes shall be subrogated to
the rights of the holders of Guarantor Senior Indebtedness to receive payments
or distributions of cash, property or securities of the Guarantor applicable to
the Guarantor Senior Indebtedness to the extent that amounts otherwise payable
to such holders of Notes or otherwise distributable in respect of the Notes to
such holders of Notes pursuant to or with respect to the Guaranty shall instead
have been paid to the holders of Guarantor Senior Indebtedness pursuant to this
Article XVIII until all amounts due under the Guaranty shall be paid in full;
and, for the purposes of such subrogation, no payments or distributions to the
holders of the Guarantor Senior Indebtedness of any cash, property or securities
to which the holders of the Notes or the Trustee would be entitled pursuant to
or with respect to the Guaranty except for the provisions of this Article XVIII,
and no payments over
10
<PAGE> 11
pursuant to the provisions of this Article XVIII, to or for the benefit of the
holders of Guarantor Senior Indebtedness by holders of the Notes or the Trustee,
shall, as between the Guarantor, its creditors other than holders of Guarantor
Senior Indebtedness, and the holders of the Notes, be deemed to be a payment by
the Guarantor to or on account of the Guarantor Senior Indebtedness; it being
understood that the provisions of this Article XVIII are and are intended solely
for the purpose of defining the relative rights of the holders of the Notes, on
the one hand, and the holders of the Guarantor Senior Indebtedness, on the other
hand.
Nothing contained in this Article XVIII or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as between the Guarantor, its
creditors other than the holders of Guarantor Senior Indebtedness, and the
holders of the Notes, the obligation of the Guarantor, which is absolute and
unconditional, to pay to the holders of the Notes the principal of (and premium,
if any) and interest on the Notes as and when the same shall become due and
payable in accordance with the provisions of the Guaranty, or is intended to or
shall affect the relative rights of the holders of the Notes and creditors of
the Guarantor other than the holders of the Guarantor Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or the holder of any Note
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article XVIII of
the holders of Guarantor Senior Indebtedness in respect of cash, property or
securities of the Guarantor received pursuant to the Guaranty upon the exercise
of any such remedy.
Upon any payment or distribution of assets of the Guarantor referred to in
this Article XVIII, the Trustee, subject to the provisions of the Guaranty, and
the holders of the Notes shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which such dissolution, winding-up,
liquidation or reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the holders
of the Notes, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Guarantor Senior
Indebtedness and other indebtedness of the Guarantor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XVIII.
Section 18.6. Notices to Trustee and Guarantor Senior Indebtedness. The
Guarantor shall give prompt written notice in the form of an Officers'
Certificate to a Responsible Officer of the Trustee of any fact known to the
Guarantor which would prohibit the making of any payment of monies to or by the
Trustee in respect of the Guaranty pursuant to the provisions of this Article
XVIII. Notwithstanding the provisions of this Article XVIII or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee with respect to any monies deposited with the
Trustee by the Guarantor pursuant to the Guaranty in respect of the Notes
pursuant to the provisions of this Article XVIII, unless and until a Responsible
Officer of the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee from the Guarantor or a holder or holders
of Guarantor Senior Indebtedness or from any representative or trustee thereof
(provided, however, that in the case of Guarantor Senior Indebtedness issued
pursuant to an indenture such notice may be validly given only by the trustee
under such indenture); and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 8.1 shall be entitled in all
respects to assume that no such facts exist;
11
<PAGE> 12
provided, however, that if the Trustee shall not have received at least three
Business Days prior to the date upon which by the terms hereof any such monies
may become payable for any purpose (including, without limitation, the payment
of the principal of (or premium, if any) or interest on any Note) with respect
to such monies the notice provided for in this Section 18.6, then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such monies and to apply the same to the purpose
for which they were received, and shall not be affected by any notice to the
contrary which may be received by it within three Business Days prior to such
date; provided, further, that the immediately preceding proviso shall not apply
to any notice provided for in this Section 18.6 in the event such notice is
received and acknowledged by a Responsible Officer of the Trustee at least one
Business Day prior to such date.
The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Guarantor Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Guarantor Senior Indebtedness or a
representative of or trustee on behalf of any such holder or holders. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Guarantor Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XVIII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Guarantor Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XVIII, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Section 18.7. Trustee's Relation to Guarantor Senior Indebtedness. The
Trustee in its individual capacity shall be entitled to all the rights set forth
in this Article XVIII in respect of any Guarantor Senior Indebtedness at any
time held by it, to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Section 18.7 or elsewhere in this Indenture
shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Guarantor Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article XVIII, and no implied covenants or
obligations with respect to the holders of Guarantor Senior Indebtedness shall
be read into this Indenture against the Trustee. The Trustee shall not owe any
fiduciary duty to the holders of Guarantor Senior Indebtedness, but shall have
only such obligations to such holders as are expressly set forth in this Article
XVIII.
Section 18.8. No Impairment of Subordination. No right of any present or
future holder of any Guarantor Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Guarantor (including by way of an
amendment to the provisions of this Article XVIII) or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Guarantor
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
12
<PAGE> 13
Section 18.9. Guarantors May Consolidate, Etc., on Certain Terms.
(a) Except as set forth in Article XII, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation or merger of
the Guarantor with or into the Company or shall prevent any sale or conveyance
of the property of the Guarantor or the Company as an entirety or substantially
as an entirety including the sale of the Company in a transaction structured as
a merger, provided that any third party succeeding to the Guarantor's rights
shall execute a guaranty of the Notes substantially similar to the Guaranty.
Upon any such consolidation, merger, sale or conveyance, the Guaranty given by
the Guarantor shall no longer have any force or effect.
(b) Nothing contained in this Indenture (including, without
limitation, Section 18.9(a) hereof) or in any of the Notes shall prevent any
consolidation or merger of the Guarantor with or into a corporation or
corporations other than the Company (whether or not affiliated with the
Guarantor), or successive consolidations or mergers in which the Guarantor or
its successor or successors shall be a party or parties, or shall prevent any
sale or conveyance of the property of the Guarantor as an entirety or
substantially as an entirety, to a corporation other than the Company (whether
or not affiliated with the Guarantor) authorized to acquire and operate the
same; provided, however, that the Guarantor hereby covenants and agrees, that,
except as provided in Section 18.9(a), upon any such consolidation, merger, sale
or conveyance, the Guaranty, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be performed by the
Guarantor, shall be expressly assumed (in the event that the Guarantor is not
the surviving corporation in the merger), by supplemental indenture satisfactory
in form to the Trustee, executed and delivered to the Trustee, by the
corporation formed by such consolidation, or into which the Guarantor shall have
been merged, or by the corporation which shall have acquired such property. In
case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Guaranty and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Guarantor, such successor
corporation shall succeed to and be substituted for the Guarantor, with the same
effect as if it had been named herein as a Guarantor. Such successor corporation
thereupon may cause to be signed any Guaranty issuable hereunder which
theretofore shall not have been signed by the Guarantor and delivered to the
Trustee.
Section 18.10. Termination of Guaranty. This Guaranty shall terminate upon
the earliest of (i) the date in which there are no Notes outstanding under the
Indenture, (ii) the occurrence of an event described in Section 18.9(a), or
(iii) the date on which the provisions of Article XIII of the Indenture have
been satisfied in full.
Section 18.11. Guaranty Solely a Corporate Obligation. No recourse for the
payment of the principal of or interest on any Note, or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Guarantor in this Indenture or in any
supplemental indenture, or in any Note or Guaranty, or because of the creation
of any indebtedness represented thereby or the guarantee by the Guarantor
thereof, shall be had against any incorporator, stockholder, employee, agent,
officer or director or subsidiary, as such, past, present or future, of the
Guarantor or of any respective successor corporation.
13
<PAGE> 14
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1. This Supplemental Indenture shall become effective at the
Effective Time.
Section 6.2. This Supplemental Indenture shall be governed by and construed
in accordance with the Laws of the State of New York, without regard to the
principles of conflicts of laws thereof.
Section 6.3. Nothing in this Supplemental Indenture, expressed or implied,
shall give or be construed to give any person, firm or corporation, other than
the parties hereto and their successors hereunder, and the holders of the Notes
or the holders of Guarantor Senior Indebtedness, any legal or equitable right,
remedy or claim under or in respect to this Supplemental Indenture, or under any
covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
their successors hereunder and the holders of the Notes.
Section 6.4. After the Effective Time, any Notes authenticated and
delivered in substitution for, or in lieu of, Notes then outstanding and all
Notes presented or delivered to the Trustee on and after the Effective Time for
such purpose shall be either restated to give the effect to the Supplemental
Indenture or, in lieu thereof, stamped with a notation substantially as follows:
The principal amount of this Note has become convertible into
shares of the Common Stock of Intel Corporation at a conversion price
per share of $31.00775194, such conversion price being subject to
certain adjustments as set forth in the Indenture. Reference herein to
"Common Stock of the Company" or the "Company's Common Stock" shall be
deemed to be to the Common Stock of Intel Corporation. The payment of
principal of, premium, if any, and interest on the Notes has been
guaranteed by Intel Corporation on a subordinated basis as set forth
in the Indenture.
Nothing contained in this Supplemental Indenture shall require the holder
of any Note to submit or exchange such Note prior to the Effective Time in order
to obtain the benefits of the Guaranty or any other provisions hereunder.
The Company agrees to provide the Trustee with a stamp or means of
reproducing the above legend on the Notes without materially obscuring the text
of the Notes.
Anything herein contained to the contrary notwithstanding, the Trustee
shall not at any time be under any responsibility to acquire or cause any Note
now or hereafter outstanding to be presented or delivered to it for any purpose
provided for in this Section 6.4.
Section 6.5. By its exection of this Supplemental Indenture, the Guarantor
agrees to be bound by the terms of the Indenture applicable to it.
14
<PAGE> 15
Except as expressly supplemented by this Supplemental Indenture, the
Indenture, the Notes and the charge and obligation created thereby are in all
respects ratified and confirmed and all of the rights, remedies, terms,
conditions, covenants and agreements of the Indenture and the Notes issued
thereunder shall remain in full force and effect.
Section 6.6. If any provision of this Supplemental Indenture limits,
qualifies or conflicts with (a) another provision of this Supplemental
Indenture, or (b) any provision of the Indenture, which is required to be
included by any of the provisions of Section 310 to 317, inclusive, of the Trust
Indenture Act of 1939, such required provision shall control.
Section 6.7. The recitals contained in this Supplemental Indenture shall be
taken as statements of the Company or the Guarantor, as applicable, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Supplemental
Indenture.
Section 6.8. This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
[SIGNATURES ON FOLLOWING PAGE]
15
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
LEVEL ONE COMMUNICATIONS, INCORPORATED
By: /s/ Robert S. Pepper
-------------------------------------
Name: Robert S. Pepper
Title: President and Chief Executive
Officer
Attest:
/s/ John Kehoe
- ---------------------------------------
Name: John Kehoe
Title: Senior Vice President, Chief
Financial Officer and Secretary
INTEL CORPORATION
By: /s/ Arvind Sodhani
------------------------------------
Name: Arvind Sodhani
Title: Vice President and Treasurer
Attest:
/s/ Cary I. Klafter
- ---------------------------------------
Name: Cary I. Klafter
Title: Assistant Secretary
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., as Trustee
By: /s/ Scott C. Emmons
------------------------------------
[Signature Page to Supplemental Indenture among Intel Corporation,
Level One Communications, Incorporated and State Street Bank
and Trust Company of California, N.A.]
<PAGE> 17
Exhibit A
GUARANTY
Subject to the next paragraph below, Intel Corporation, a Delaware
corporation ("Intel") hereby irrevocably and unconditionally guarantees on a
subordinated basis to the holders of 4% Convertible Subordinated Notes Due 2004
(the "2004 Notes") issued by Level One Communications, Incorporated (the
"Company") under an Indenture dated as of August 15, 1997 between the Company
and State Street Bank and Trust Company of California, N.A., a national banking
association, as trustee (the "Trustee"), as supplemented by the Supplemental
Indenture, dated as of August 10, 1999 (the "Supplemental Indenture"), among the
Company, Intel and the Trustee, and to the Trustee and its successors and
assigns, irrespective of the validity and enforceability of the Indenture and
the 2004 Notes, that (i) the principal and premium, if any, of, and interest on
the 2004 Notes promptly will be paid in full in cash when due, whether at the
stated maturity, by acceleration, call for redemption or otherwise, and interest
on the overdue principal and interest, if any, of the 2004 Notes, if lawful, and
all other obligations of the Company to the holders of the 2004 Notes or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof, and (ii) in case of any
extension of time of payment or renewal of any 2004 Notes or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at the stated
maturity, by acceleration or otherwise. Failing payment when due by the Company
of any amount so guaranteed for whatever reason, the undersigned shall be
obligated to pay the same immediately. Intel hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the 2004 Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any holder of the 2004 Notes with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Intel hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenants that this Guaranty shall not be discharged
except by complete performance of the obligations contained in the 2004 Notes
and the Indenture. If any holder of 2004 Notes or the Trustee is required by any
court or otherwise to return to the Company or any custodian, Trustee,
liquidator or other similar official acting in relation to the Company, any
amount paid by the Company to the Trustee or such holder, this Guaranty, to the
extent theretofore discharged, shall be reinstated in full force and effect. The
undersigned agrees that it shall not be entitled to any right of subrogation in
relation to the holders of 2004 Notes in respect of any obligations guaranteed
hereby until payment in full of all obligations is guaranteed hereby.
It is the intention of Intel and the Company that the obligations of the
undersigned hereunder shall be, but not in excess of, the maximum amount
permitted by applicable law. Accordingly, if the obligations in respect of the
Guaranty would be annulled, avoided or subordinated to the creditors of the
undersigned by a court of competent jurisdiction in
<PAGE> 18
a proceeding actually pending before such court as a result of a determination
both that this Guaranty was made without fair consideration and, immediately
after giving effect thereto, the undersigned was insolvent or unable to pay its
debts as they mature or left with an unreasonably small capital, then the
obligations of the undersigned under this Guaranty shall be reduced by such
court if such reduction would result in the avoidance of such annulment,
avoidance or subordination; provided, however, that any reduction pursuant to
this paragraph shall be made in the smallest amount as is strictly necessary to
reach such result. For purposes of this paragraph, "for consideration,"
"insolvency," "unable to pay its debts as they mature," "unreasonably small
capital" and the effective times of reductions, if any, required by this
paragraph shall be determined in accordance with applicable law.
The undersigned shall be subrogated to all rights of the holders of 2004
Notes against the Company in respect of any amounts paid by the undersigned
pursuant to the provisions of this Guaranty or the Indenture; provided, however,
that the undersigned shall not be entitled to enforce or to receive any payments
arising out of, or based upon, such right of subrogation until the principal of,
and interest on all 2004 Notes issued hereunder shall have been paid in full.
The obligations of the undersigned under this Guaranty shall be, to the
extent and in the manner set forth in the Indenture, junior and subordinated to
the Guarantor Senior Indebtedness on the same basis as the 2004 Notes are junior
and subordinated to Senior Indebtedness.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
The validity and enforceability of this Guaranty shall not be affected by
the fact that it is not affixed to any particular 2004 Note.
The obligations of the undersigned to the holders of the 2004 Notes and to
the Trustee pursuant to this Guaranty and the Indenture are expressly set forth
in Article V of the Supplemental Indenture and reference is hereby made to the
Supplemental Indenture for the precise terms of this Guaranty and all of the
other provisions of the Indenture to which this Guaranty relates.
Capitalized terms used in this Guaranty which are not defined herein shall
have the meanings assigned to them in the Indenture, as supplemented.
A-2
<PAGE> 19
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly
executed.
Dated: August 10, 1999
INTEL CORPORATION
By:
-------------------------------------
Name
Its
[Guaranty of Level One 4% Convertible Subordinated Notes]
A-3
<PAGE> 1
Exhibit 4.5
GUARANTY
Subject to the next paragraph below, Intel Corporation, a Delaware
corporation ("Intel") hereby irrevocably and unconditionally guarantees on a
subordinated basis to the holders of 4% Convertible Subordinated Notes Due 2004
(the "2004 Notes") issued by Level One Communications, Incorporated (the
"Company") under an Indenture dated as of August 15, 1997 between the Company
and State Street Bank and Trust Company of California, N.A., a national banking
association, as trustee (the "Trustee"), as supplemented by the Supplemental
Indenture, dated as of August 10, 1999 (the "Supplemental Indenture"), among the
Company, Intel and the Trustee, and to the Trustee and its successors and
assigns, irrespective of the validity and enforceability of the Indenture and
the 2004 Notes, that (i) the principal and premium, if any, of, and interest on
the 2004 Notes promptly will be paid in full in cash when due, whether at the
stated maturity, by acceleration, call for redemption or otherwise, and interest
on the overdue principal and interest, if any, of the 2004 Notes, if lawful, and
all other obligations of the Company to the holders of the 2004 Notes or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof, and (ii) in case of any
extension of time of payment or renewal of any 2004 Notes or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at the stated
maturity, by acceleration or otherwise. Failing payment when due by the Company
of any amount so guaranteed for whatever reason, the undersigned shall be
obligated to pay the same immediately. Intel hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the 2004 Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any holder of the 2004 Notes with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Intel hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenants that this Guaranty shall not be discharged
except by complete performance of the obligations contained in the 2004 Notes
and the Indenture. If any holder of 2004 Notes or the Trustee is required by any
court or otherwise to return to the Company or any custodian, Trustee,
liquidator or other similar official acting in relation to the Company, any
amount paid by the Company to the Trustee or such holder, this Guaranty, to the
extent theretofore discharged, shall be reinstated in full force and effect. The
undersigned agrees that it shall not be entitled to any right of subrogation in
relation to the holders of 2004 Notes in respect of any obligations guaranteed
hereby until payment in full of all obligations is guaranteed hereby.
It is the intention of Intel and the Company that the obligations of the
undersigned hereunder shall be, but not in excess of, the maximum amount
permitted by applicable law.
<PAGE> 2
Accordingly, if the obligations in respect of the Guaranty would be annulled,
avoided or subordinated to the creditors of the undersigned by a court of
competent jurisdiction in a proceeding actually pending before such court as a
result of a determination both that this Guaranty was made without fair
consideration and, immediately after giving effect thereto, the undersigned was
insolvent or unable to pay its debts as they mature or left with an unreasonably
small capital, then the obligations of the undersigned under this Guaranty shall
be reduced by such court if such reduction would result in the avoidance of such
annulment, avoidance or subordination; provided, however, that any reduction
pursuant to this paragraph shall be made in the smallest amount as is strictly
necessary to reach such result. For purposes of this paragraph, "for
consideration," "insolvency," "unable to pay its debts as they mature,"
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
The undersigned shall be subrogated to all rights of the holders of 2004
Notes against the Company in respect of any amounts paid by the undersigned
pursuant to the provisions of this Guaranty or the Indenture; provided, however,
that the undersigned shall not be entitled to enforce or to receive any payments
arising out of, or based upon, such right of subrogation until the principal of,
and interest on all 2004 Notes issued hereunder shall have been paid in full.
The obligations of the undersigned under this Guaranty shall be, to the
extent and in the manner set forth in the Indenture, junior and subordinated to
the Guarantor Senior Indebtedness on the same basis as the 2004 Notes are junior
and subordinated to Senior Indebtedness.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
The validity and enforceability of this Guaranty shall not be affected by
the fact that it is not affixed to any particular 2004 Note.
The obligations of the undersigned to the holders of the 2004 Notes and to
the Trustee pursuant to this Guaranty and the Indenture are expressly set forth
in Article V of the Supplemental Indenture and reference is hereby made to the
Supplemental Indenture for the precise terms of this Guaranty and all of the
other provisions of the Indenture to which this Guaranty relates.
Capitalized terms used in this Guaranty which are not defined herein shall
have the meanings assigned to them in the Indenture, as supplemented.
2
<PAGE> 3
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly
executed.
Dated: August 10, 1999
INTEL CORPORATION
By: /s/ Arvind Sodhani
--------------------------------
Name Arvind Sodhani
Its Vice President and Treasurer
[Guaranty of Level One 4% Convertible Subordinated Notes]
3
<PAGE> 1
EXHIBIT 23.1
ARTHUR ANDERSEN LLP
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 report dated
February 26, 1999 (except with respect to certain information contained in Note
15 for which the date is March 4, 1999) included in Level One Communications,
Incorporated's Form 10-K for the year ended December 27, 1998 and to all
references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Sacramento, California
August 10, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent Auditors"
in Post-Effective Amendment No. 1 to the Registration Statement (Form S-3 No.
333-37957) and related Prospectus of Level One Communications, Incorporated
dated August 10, 1999, pertaining to the deregistration of securities of Level
One Communications, Incorporated, and to the incorporation by reference therein
of our report dated January 11, 1999, with respect to the consolidated financial
statements and schedule of Intel Corporation included in and/or incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 26, 1998,
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
San Jose, California
August 9, 1999
