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FILED PURSUANT TO RULE 424(b)(2)
REGISTRATION NO. 333-32781
320,001 SHARES
ASCEND COMMUNICATIONS, INC.
COMMON STOCK
The 320,001 shares (the "Shares") of Common Stock of Ascend
Communications, Inc., a Delaware corporation ("Ascend" or the "Company") offered
by this Prospectus were issued in connection with the merger of Ascend
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of
Ascend ("Sub") with and into StonyBrook Services Inc., a New York corporation
("StonyBrook"), which was consummated on December 27, 1996 (the "StonyBrook
Merger"), and the exercise of options assumed by Ascend in connection with the
StonyBrook Merger. The Shares may be sold from time to time by or on behalf of
certain former shareholders and option holders of StonyBrook (the "Selling
Stockholders") who are described in this Prospectus under "Selling
Stockholders." As part of the StonyBrook Merger, the Company has agreed to
register the Shares under the Securities Act of 1933, as amended (the
"Securities Act"). The Company has also agreed to use its best efforts to cause
the registration statement covering the Shares to remain effective until the
earlier of (i) December 27, 1998, (ii) the date on which the Selling
Stockholders can sell all the Shares pursuant to Rule 144 of the Securities Act,
or (iii) when all the Shares have been resold pursuant to Rule 144 or an
effective registration statement. The Company will not receive any of the
proceeds from the sale of the Shares by the Selling Stockholders. See "Use of
Proceeds."
The Company has been advised by the Selling Stockholders that they intend to
sell all or a portion of the Shares from time to time in The Nasdaq National
Market, in negotiated transactions or otherwise, and on terms and at prices then
obtainable. The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholders in the distribution
of any of the Shares may be deemed to be "underwriters" within the meaning of
the Securities Act, and any commission received by them and any profit on the
resale of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The Company has agreed to
indemnify in certain circumstances the Selling Stockholders against certain
liabilities, including liabilities under the Securities Act. The Selling
Stockholders have agreed to indemnify in certain circumstances the Company
against certain liabilities, including liabilities under the Securities Act.
See "Plan of Distribution."
The Company will bear all out-of-pocket expenses incurred in connection with
the registration of the Shares, including, without limitation, all registration
and filing fees imposed by the Securities and Exchange Commission (the
"Commission"), the National Association of Securities Dealers ("NASD") and blue
sky laws, printing expenses, transfer agents' and registrars' fees, and the
reasonable fees and disbursements of the Company's outside counsel and
independent accountants and a single counsel for all of the Selling
Stockholders, but excluding underwriting discounts and commissions and transfer
or other taxes and other costs and expenses incident to the offering and sale of
the shares to the public which shall be borne by the Selling Stockholders.
THE SHARES HAVE NOT BEEN REGISTERED FOR SALE UNDER THE SECURITIES LAWS OF ANY
STATE OR JURISDICTION AS OF THE DATE OF THIS PROSPECTUS. BROKERS OR DEALERS
EFFECTING TRANSACTIONS IN THE SHARES SHOULD CONFIRM THE REGISTRATION OF THE
SHARES UNDER THE SECURITIES LAWS OF THE STATES IN WHICH SUCH TRANSACTIONS OCCUR,
OR THE EXISTENCE OF ANY EXEMPTIONS FROM SUCH REGISTRATION.
The Company's Common Stock is quoted on The Nasdaq National Market. On
August 5, 1997, the last sales price of the Company's Common Stock as
reported on The Nasdaq National Market was $53.19.
________________________________
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY.
________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
________________________________
The date of this Prospectus is August 7, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the Commission's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as at the Regional Offices of the Commission
located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60611 and 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such material can also be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the fees prescribed by the Commission. Ascend's Common
Stock is traded on The Nasdaq National Market. Reports and other information
concerning Ascend can also be inspected at the offices of the National
Association of Securities Dealers, Inc., Market Listing Section, 1735 K Street,
N.W., Washington, D.C. 20006. Such reports and other information may also be
inspected without charge at a Web site maintained by the Commission. The
address of the site is http:\\www.sec.gov.
The Company has also filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act. This Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement, copies of
which may be obtained from the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, upon payment of the fees prescribed
by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated herein by reference:
1. The description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A filed on March 31, 1994;
2. Ascend Communications, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1996;
3. Ascend Communications, Inc.'s Quarterly Report on Form 10-Q for the three
month period ended March 31, 1997;
4. Reports on Form 8-K dated January 31, 1997, April 8, 1997, July 11, 1997
and July 30, 1997;
5. Ascend Communications, Inc.'s Registration Statement on Form S-4 filed on
April 22, 1997;
6. Cascade Communications Corp. Annual Report on Form 10K for the year ended
December 31, 1996; and
7. Cascade Communications Corp. Quarterly Report on Form 10Q for the three
month period ended March 31, 1997.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents or reports. Any statement contained in a document
incorporated by reference or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
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. The Company will provide without charge to each person to
whom this Prospectus is delivered, upon written or oral request, a copy of any
or all of the foregoing documents incorporated by reference in this Prospectus
(other than any exhibits thereto). Requests for such documents should be
directed to Ascend Communications, Inc. at One Ascend Plaza, 1701 Harbor Bay
Parkway, Alameda, California 94502 (telephone number (510) 769-6001), Attn:
Investor Relations.
2
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THE COMPANY
Ascend develops, manufactures, markets, sells and supports a broad range of
high-speed integrated remote networking products that enable its customers to
build: ("POP") termination equipment for Internet service providers ("ISPs") and
remote site Internet access equipment for Internet subscribers; (ii) high speed
Internet Protocol ("IP"), Frame Relay and Asynchronous Transfer Mode ("ATM")
switches for application in telecommunications carriers and ISP backbone
networks; (iii) extensions and enhancements to corporate backbone networks that
facilitate access to these networks by remote offices, telecommuters and mobile
computer users; and (iv) videoconferencing and multimedia access facilities.
These products support existing digital and analog networks.
Ascend has four product families, each of which is focused on a major
application segment: MAX products for wide area network ("WAN") access to
corporate backbone networks, Internet access in POPs and multimedia access
facilities; GRF and the Cascade products for high performance IP, Frame Relay
and ATM switching in Internet and carrier backbone networks; Pipeline and
NetWarp products for telecommuting, remote office access and Internet access by
individual sites or users; and Multiband products for videoconferencing and
multimedia networks. Ascend's products offer integrated security and network
management functionality. These products support a wide variety of application
interfaces, switched digital services, digital modem services and digital and
analog access line types. This wide range of connectivity and interoperability
options significantly increases the number of telecommunication carrier, ISP
POP, corporate and individual sites that can benefit from Ascend's products.
Ascend's products are distributed and serviced globally and Ascend maintains
marketing and sales relationships with ISPs, including UUNET, PSI, BBN, MCI,
Demon Internet (UK) and IIJ (Japan), with major telecommunications carriers,
including AT&T, Sprint, MCI, GTE, Pacific Bell, Southwestern Bell, British
Telecom, France Telecom, Deutsche Telecom and NTT in Japan, with video equipment
providers, including Compression Labs, PictureTel and VTEL, and with value-added
resellers and distributors throughout the world. See "Information Concerning
Ascend--Business."
On December 27, 1996, Ascend completed the StonyBrook Merger. As a result
of the StonyBrook Merger, StonyBrook became a wholly-owned subsidiary of the
Company. The Merger was treated as a pooling of interests for accounting and
financial reporting purposes. Upon consummation of the StonyBrook Merger, the
Company issued approximately 290,490 shares of its Common Stock (29,049 of which
are subject to an escrow) and assumed outstanding options which in January 1997
were exercised for an additional 189,501 shares of Ascend Common Stock (18,950
of which are subject to an escrow).
In April 1997, Ascend acquired Whitetree, Inc. ("Whitetree"), a privately
held developer and supplier of high-speed LAN switching products based on
Ethernet and ATM technology. As a result of this acquisition, Whitetree became a
wholly-owned subsidiary of Ascend. Ascend issued approximately 1,315,000 shares
of Ascend Common Stock in exchange for all the outstanding shares of Whitetree.
In addition, Ascend assumed all outstanding Whitetree stock options to purchase
approximately 99,000 shares of Ascend Common Stock. The combination was
accounted for as a pooling of interests.
On June 30, 1997, Ascend acquired Cascade Communications Corp.
("Cascade"), a leading provider of high performance, multi-service wide area
network switches that enable public service providers and private network
managers to provide cost-effective, high-speed data, video and voice
communications services to end users. As a result of the acquisition, Cascade
became a wholly-owned subsidiary of Ascend. Ascend issued approximately 66
million shares of Ascend Common Stock in exchange for all the outstanding
shares of Cascade. In addition, Ascend assumed all outstanding Cascade stock
options to purchase approximately 9 million shares of Ascend Common Stock.
This combination was accounted for as a pooling of interests.
The principal executive offices of Ascend are located at One Ascend Plaza,
1701 Harbor Bay Parkway, Alameda, California 94502 and its telephone number at
that location is (510) 769-6001.
RISK FACTORS
The following risk factors should be considered in conjunction with the
other information included and incorporated by reference in this Prospectus
before purchasing the Common Stock offered hereby. This Prospectus contains
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act. Actual results could differ
materially from those projected in these forward-looking statements as a result
of a variety of factors, including those set forth below and elsewhere in this
Prospectus.
Integration of Operations and Technologies of Ascend and Cascade.
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Achieving the anticipated benefits of the combination of Ascend and Cascade
will depend in part upon whether the integration of Ascend's and Cascade's
businesses is accomplished in an efficient and effective manner, and there can
be no assurance as to the extent that this will occur, if at all. The
combination of the two companies will require, among other things, integration
of the companies' respective products, technologies, management information
systems, distribution channels and key personnel and the coordination of their
sales, marketing and research and development efforts. There can be no
assurance that such integration will be accomplished smoothly or successfully,
if at all. If significant difficulties are encountered in the integration of
the existing products or technologies or the development of new products and
technologies, resources could be diverted from new product development, and
delays in new product introductions could occur. Successful integration of the
two companies' sales and marketing organizations will require the sales and
marketing personnel of each company to learn about the often technically-
complex products, services and technologies of the other company. As compared
to Ascend, Cascade's product lines have traditionally experienced longer, more
complex sales cycles. There can be no assurance that the combined company will
be able to take full advantage of the combined sales forces' efforts. The
difficulties of integrating Ascend and Cascade may be increased by the
necessity of coordinating organizations with distinct cultures and widely
dispersed operations. Ascend and a majority of its employees are located in
California, while Cascade and a majority of its employees are located in
Massachusetts. The integration of operations and technologies following the
combination will require the dedication of management and other personnel
which may distract their attention from the day-to-day business of the
combined company, the development or acquisition of new technologies, and the
pursuit of other business acquisition opportunities. Failure to successfully
accomplish the integration and development of the two companies' operations
and technologies would likely have a material adverse effect on the combined
company's business, financial condition and results of operations. In
addition, as commonly occurs with mergers of technology companies, during the
pre-merger and integration phases, aggressive competitors may undertake
initiatives to attract customers through various incentives which could have a
material adverse effect on the business, results of operations and financial
conditions of Ascend, Cascade and/or the combined company. See Ascend's
Registration Statement on Form S-4 as filed with the Securities Exchange
Commission on April 22, 1997.
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<PAGE>
Fluctuations in Quarterly Operating Results. Ascend has experienced rapid
-------------------------------------------
quarterly growth in net sales principally due to the emergence of markets for
WAN switching and remote access products, increased market acceptance of their
products and the expansion of their product lines and distribution channels.
Due to the rapidly changing nature of the markets for Ascend's products, as
well as the likelihood of increased competition, there can be no assurance
that Ascend's rate of growth in net sales will continue or that Ascend will be
able to sustain profitability in the future. Ascend's quarterly operating
results may be affected by a wide variety of factors, including competition,
the mix of products sold, the mix of distribution channels employed, success
in developing, introducing and shipping new products, price reductions for
products, changes in the levels of inventory held by third party resellers,
the timing of orders from and shipments to customers, seasonality and general
economic conditions. A significant portion of Ascend's revenues in prior
periods has been derived from relatively large sales to a limited number of
customers, and therefore the failure of Ascend to secure expected large sales
may have a material adverse impact on the results of operations of the
combined company. Ascend expects that its gross margins could be adversely
affected in future periods by price adjustments as a result of increased
competition. Ascend also expects that its gross margins could be adversely
affected in future periods by increased sales of its Pipeline products as a
percentage of net sales. These products have lower gross margins than Ascend's
other products. In addition, Ascend's use of third parties to distribute its
products to certain end-user customers may adversely affect its gross
margins. Quarterly sales and operating results of Ascend will generally depend
on the volume and timing of and ability to fulfill orders received within the
quarter, which are difficult to forecast. In recent quarters, a substantial
portion of Ascend's revenue resulted from orders and shipments during the
latter part of the quarter. Significant portions of Ascend's expense levels
are relatively fixed in advance based in large part on its forecasts of future
sales. If sales are below expectations in any given quarter, the adverse
impact of the shortfall on the operating results of Ascend may be magnified to
the extent Ascend is unable to adjust spending to compensate for the
shortfall. Ascend may also increase spending in response to competition or to
pursue new market opportunities. Accordingly, there can be no assurance that
Ascend will be able to sustain profitability in the future, particularly on a
quarter-to-quarter basis.
Dependence on the Internet Market; Internet Product and Customer
----------------------------------------------------------------
Concentration. The recent growth in Ascend's net sales, to a certain extent,
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has been attributable to the use of its products in connection with the
Internet and Intranets. Sales of Ascend's MAX products, which are used as POP
4
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call concentration devices by ISPs, accounted for approximately 87%, 82%, 63%
and 26% of Ascend's net sales in the first quarter ended March 31, 1997 and in
the fiscal years ended 1996, 1995 and 1994, respectively. Similarly, sales of
Ascend's Pipeline products, which are used for Internet and Intranet access by
service subscribers, were approximately 6%, 12%, 20% and 10% of net sales in
the first quarter ended March 31, 1997 and in the fiscal years ended 1996,
1995 and 1994, respectively. Revenue from Cascade's Frame Relay and ATM
switching products (principally, the B-STDX 9000 and CBX 500), which are used
by ISPs and public service providers as wide area data network switching
devices, have represented substantially all of Cascade's revenue since January
1, 1996. The market for Internet and Intranet access and switching products is
new and evolving, and it is difficult to predict its size or future growth
rate. Sales of the MAX and Pipeline products and of the B-STDX 9000 and CBX
500 products by Ascend will likely depend in large part upon the continued
growth in demand for Internet and Intranet access and networks, sustained
adoption by end-user customers of the Internet for commerce and communication
and continued acceptance of Ascend's products. There can be no assurance that
this industry and infrastructure will continue to develop, that this adoption
will occur or that acceptance of Ascend's products will continue. Ascend
believes that competition in these markets will increase significantly in the
future. Any adverse development regarding the Internet access industry, the
data network equipment market, adoption of the Internet or acceptance of
Ascend's products could adversely affect Ascend's business, results of
operations and financial condition. In North America, Ascend sells a
substantial percentage of its products, particularly its MAX products, to
ISPs. Sales to ISPs accounted for approximately 20% and 21% of Ascend's net
sales in 1996 and 1995, respectively. Sales to one of these ISPs, UUNET,
accounted for approximately 24%, 7% and 11% of net sales in the first quarter
ended March 31, 1997 and in the fiscal years ended 1996 and 1995,
respectively. Sales to another of these ISPs, BBN, accounted for approximately
12% of net sales in the first quarter ended March 31, 1997. Cascade sales were
concentrated among ISPs and public service providers. The level of sales, if
any, to any particular ISP or public service provider may vary considerably
from period to period. Accordingly, there can be no assurance that sales by
Ascend to these entities, individually or as a group, will equal or exceed
historical levels of Ascend and Cascade in any future period. Any development
that would result in a substantial decrease or delay in sales to one or more
of these entities, including actions by competitors, technological changes or
regulation affecting the growth of network infrastructure, could have a
material adverse effect on Ascend's business, results of operations and
financial condition.
Developing Markets; Market Acceptance of Products. Market acceptance of
-------------------------------------------------
Ascend's products for applications other than Internet and Intranet access
and switching is important to the success of Ascend. Specifically, some of
Ascend's products are targeted at access to corporate backbone networks and
local area networks ("LANs") by remote offices, telecommuters and mobile
users, and videoconferencing and multimedia access facilities, while other
Ascend products are targeted at switching within the public carrier and
corporate backbone networks. Ascend's success in generating significant sales
in these emerging markets will depend in part on its ability to educate users
about the benefits of its technologies and to develop effective distribution
channels to address these markets. These markets are diverse and rapidly
evolving, and it is difficult to predict their potential size or future growth
rate. Moreover, Ascend's limited resources relative to certain of its
competitors may restrict its ability to remain current with respect to
developments in these markets and to effectively pursue marketing activities
in multiple markets simultaneously. Accordingly, there can be no assurance
that Ascend's products will be widely accepted in these new markets or that
Ascend will be able to identify additional markets. The inability of Ascend to
continue to penetrate the various markets for its products or to successfully
expand the markets for its products would have a material adverse effect on
Ascend's business, results of operations and financial condition.
Integration of Recent Acquisitions. Ascend has completed several
----------------------------------
acquisitions of businesses, products and technologies since the beginning of
1995. These include the acquisition by Ascend of Morning Star Technologies,
Inc., NetStar, Inc., Subspace Communications, Incorporated and StonyBrook,
which were completed in 1996, InterCon Systems Corporation, which was
completed in February 1997, Whitetree, which was completed in April 1997 and
Cascade, which was completed in June 1997. Cascade acquired Arris Networks,
Inc. in 1996
5
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and Sahara, Inc. in January 1997. Ascend may acquire additional businesses,
products or technologies in the future, although there are no agreements with
respect to such transactions as of the date of this Prospectus. Achieving the
anticipated benefits of past and future acquisition transactions will depend
in part upon whether the integration of the acquired companies' businesses
with Ascend's business is accomplished in an efficient and effective manner,
and there can be no assurance that this will occur. The combination of Ascend
with such acquired companies will require, among other things, integration of
the companies' respective products, technologies, management information
systems, distribution channels and key personnel and coordination of their
research and development, sales and marketing and financial reporting efforts.
There can be no assurance that such integration will be accomplished smoothly
or successfully. If significant difficulties are encountered in the
integration of the existing product lines and technology, resources could be
diverted from new product development, and delays in new product introductions
could occur. The integration of product lines could also cause confusion or
dissatisfaction among existing customers of Ascend and the acquired companies.
The difficulties of such integration may be increased by the necessity of
coordinating geographically separated organizations with distinct cultures.
The integration of certain operations following an acquisition will require
the dedication of management and other personnel which may distract their
attention from the day-to-day business of Ascend. Failure to accomplish
successfully the integration of the operations of Ascend with the operations
of the acquired companies could have a material adverse effect on Ascend's
business, financial condition or results of operations.
New Product Development and Timely Introduction of New and Enhanced
-------------------------------------------------------------------
Products. The markets for Ascend's products are characterized by rapidly
- --------
changing technologies, evolving industry standards, frequent new product
introductions and short product life cycles. Inherent in the product
development process are a number of risks. The development of new,
technologically advanced products is a complex and uncertain process requiring
high levels of innovation, as well as the accurate anticipation of
technological and market trends. The introduction of new or enhanced products
also may require Ascend to manage the transition from older products in order
to minimize disruption in customer ordering patterns, to avoid excessive
levels of older product inventories and to ensure that adequate supplies of
new products can be delivered to meet customer demand. There can be no
assurance that Ascend will successfully develop, introduce or manage the
transition of new products. Products may contain undetected or unresolved
software or hardware errors when they are first introduced or as new versions
are released. There can be no assurance that, despite extensive testing,
software or hardware errors will not be found in new products or upgrades
after commencement of commercial shipments of new or enhanced products. The
inability of such products to gain market acceptance or problems associated
with new product transitions could adversely affect Ascend's results of
operations, particularly on a quarterly basis.
Competition. In the WAN and Internet access segments of the data networking
-----------
market, the primary competitors of Ascend are Cisco Systems, Inc. ("Cisco"),
Shiva Corporation ("Shiva"), Northern Telecom and 3Com Corporation ("3Com").
Cisco and 3Com have substantially greater financial, marketing and technical
resources than Ascend. In the WAN and Internet backbone switching segments of
the data networking market, the primary competitors of Ascend are Cisco,
Newbridge Networks, Bay Networks, Fore Systems and General Datacom, some of
which have substantially greater financial, marketing and technical resources
than Ascend. In the remote LAN and Internet subscriber access segments of the
data networking market, competition is widespread, although few companies have
positioned their products specifically as digital bandwidth on demand network
access systems. The primary competitors in these segments of the data networking
market are Cisco, Shiva and 3Com. In the videoconferencing and
multimedia access segments of the market, competitors include Teleos
Communications (a subsidiary of Madge Networks, Inc. ("Madge")), Adtran and
Promptus Communications (a subsidiary of GTI).
6
<PAGE>
Competitive factors in the access markets include core technology, breadth
of product features, scalability of products, product quality and
functionality, pricing, marketing and distribution resources, international
certifications and technical service and customer support. Competitive factors
in the market for switching products include breadth of network services
supported, conformance to industry standards, price per port, performance,
product features, network management capabilities, reliability and customer
support. In addition, customers of wide area networking products are
increasingly demanding integrated, end-to-end product portfolios from a single
vendor.
Ascend expects additional competition from existing competitors and from a
number of companies that may enter Ascend's existing and future markets. Some
of Ascend's current and potential competitors have substantially greater
financial, marketing and technical resources than they do. Many of Ascend's
current and potential competitors also have established relationships with
Ascend's current and potential customers. Increased competition could result
in price reductions, reduced profit margins and loss of market share, each of
which would adversely affect Ascend's operating results. There can be no
assurance that Ascend will be able to continue to compete successfully against
current and future competitors as markets evolve and competition increases.
Management of Growth. Ascend is currently experiencing rapid growth and
--------------------
expansion, which has placed, and will continue to place, a significant strain
on its administrative, operational and financial resources and increased
demands on its systems and controls. This growth has resulted in a continuing
increase in the level of responsibility for existing and new management
personnel. Continued growth of Ascend would require Ascend to recruit and hire
a substantial number of new engineering, technical support, sales, marketing
and managerial personnel. Competition for such highly-qualified personnel is
intense. There can be no assurance that Ascend will be successful at hiring or
retaining these personnel. The ability of Ascend to manage its growth
successfully will also require Ascend to continue to expand and improve its
operational, management and financial systems and controls and to expand its
manufacturing capacities. If management is unable to manage growth
effectively, the business, results of operations and financial condition of
Ascend could be materially and adversely affected.
Reliance on Third Party Telecommunications Carriers, Value-Added Resellers
--------------------------------------------------------------------------
and Distributors. Ascend's sales are to a significant degree, made through
- ----------------
telecommunications carriers, value-added resellers ("VARs") and distributors.
Accordingly, Ascend will be dependent upon the continued viability and
financial stability of these companies. While Ascend has contractual
relationships with many telecommunications carriers, VARs and distributors,
these agreements do not require the telecommunications carriers, VARs or
distributors to purchase Ascend's products and can be terminated by the
telecommunications carrier, VARs or distributor at any time. There can be no
assurance that any of the telecommunications carriers, VARs and distributors
will continue to market Ascend's or the combined company's products. The
telecommunication carrier customers, to the extent they are resellers, VARs
and distributors, generally offer products of several different companies,
including products that are competitive with Ascend's products. Accordingly,
there is a risk that these telecommunications carriers to the extent they are
resellers, VARs and distributors may give higher priority to products of other
suppliers, thus reducing their efforts to sell Ascend's products. Any special
distribution arrangements and product pricing arrangements that Ascend may
implement in one or more distribution channels for strategic purposes could
adversely affect gross profit margins for its products.
Dependence on Key Personnel. Ascend's success depends to a significant degree
---------------------------
upon the continuing contributions of its key management, sales, marketing and
product development personnel. Ascend does not have employment contracts with
its key personnel and does not maintain any key person life insurance
policies. The loss of key management, sales, marketing or
7
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technical personnel could adversely affect Ascend. The future success of
Ascend will depend in large part upon its ability to attract and retain highly-
skilled engineering, managerial, sales and marketing personnel. Competition
for such highly-qualified personnel is intense, and there can be no assurance
that Ascend will be successful in attracting and retaining such personnel.
Failure to attract and retain key personnel could have a material adverse
effect on the business, results of operations and financial condition of
Ascend.
Tariff and Regulatory Matters. Rates for telecommunications services are
-----------------------------
governed by tariffs of licensed carriers that are subject to regulatory
approval. Future changes in these tariffs could have a material adverse effect
on Ascend's business. For example, should tariffs for public switched digital
services increase in the future relative to tariffs for private leased
services, the cost-effectiveness of Ascend's products would be reduced, and
its business and results of operations could be adversely affected. In
addition, Ascend's products must meet standards and receive certification for
connection to the public telecommunications network prior to their sale. In
the United States, Ascend's products must comply with Part 15(a) (industrial
equipment), Part 15(b) (residential equipment) and Part 68 (analog lines) of
the Federal Communications Commission's regulations. Ascend's products also
must be certified by domestic telecommunications carriers. In countries
outside the United States, Ascend's products are subject to a wide variety of
governmental review and certification requirements. In addition, customers
outside the United States typically require that Ascend's products receive
certification from their country's primary telecommunications carriers. Any
future inability to obtain on a timely basis or retain domestic certification
or foreign regulatory approvals could have a material adverse effect on the
business, financial condition and results of operations of Ascend.
Dependence on Contract Manufacturers and Single-Source Suppliers. Ascend's
----------------------------------------------------------------
production operations consist primarily of materials planning and procurement,
quality control and final assembly, burn-in and testing of certain products.
Ascend relies on independent contractors to manufacture certain of its
products or components and subassemblies used in its products to its
specifications. Ascend is dependent upon single or limited source suppliers
for a number of components and parts used in its products, including certain
key microprocessors and integrated circuits. There can be no assurance that
these independent contractors and suppliers will be able to meet Ascend's
future requirements for manufactured products, components and subassemblies.
Ascend generally purchases single or limited source components pursuant to
purchase orders and have no guaranteed supply arrangements with these
suppliers. In addition, the availability of many of these components to Ascend
will be dependent in part on its ability to provide suppliers with accurate
forecasts of its future requirements. Ascend believes that there are alternative
suppliers or alternative components for all of the components contained in its
products. However, any extended interruption in the supply of any of the key
components currently obtained from a single or limited source or the time
necessary to transition a replacement supplier's product or a replacement
component into Ascend's products could disrupt Ascend's operations and have a
material adverse effect on the operating results in any given period. Ascend
purchases certain components from suppliers outside the United States; however,
all such purchases are denominated in U.S. dollars and Ascend believes that all
such components or alternate components are available from suppliers within the
United States. Ascend may also be subject to increases in component costs, which
could also have a material adverse effect on its operating results.
Dependence on Proprietary Technology. The success and ability of Ascend to
------------------------------------
compete will depend in part upon its proprietary technologies and continued
development
8
<PAGE>
and acquisition of additional proprietary technologies. Ascend relies on a
combination of patent, copyright and trade secret laws and non-disclosure
agreements to protect its proprietary technologies. Ascend currently holds
several United States patents and a foreign patent and has patent applications
pending. There can be no assurance that patents will be issued with respect to
pending or future patent applications of Ascend or that Ascend's patents will
be upheld as valid or will prevent the development of competitive products. In
addition, Ascend has generally entered into confidentiality or license
agreements with its employees, VARs, distributors, customers and potential
customers and have limited access to their software, documentation and other
proprietary information. There can be no assurance that the steps taken by
Ascend to protect its proprietary rights will be adequate to prevent
misappropriation of its technologies or that competitors will not
independently develop technologies that are substantially equivalent or
superior to its technology. In addition, the laws of some countries do not
protect proprietary rights to the same extent as do the laws of the United
States. Ascend is also subject to the risk of adverse claims and litigation
alleging infringement of the intellectual property rights of others. From time
to time, Ascend has received claims of infringement of other parties'
proprietary rights. Although Ascend believes that all such claims received to
date are immaterial, there can be no assurance that third parties will not
assert infringement claims in the future with respect to current or future
products of Ascend or that any such claims will not require Ascend to enter
into license arrangements or result in protracted and costly litigation,
regardless of the merits of such claims. No assurance can be given that any
necessary licenses will be available or that, if available, such licenses can
be obtained on commercially reasonable terms.
International Sales. Ascend's international sales accounted for
-------------------
approximately 34%, 48%, 29% and 20% of net sales in the first quarter ended
March 31, 1997 and in the fiscal years ended 1996, 1995 and 1994,
respectively. Cascade's international sales accounted for approximately 19%,
16% and 20% of its net sales in 1996, 1995 and 1994, respectively. International
sales are expected to continue to account for a significant portion of
Ascend's net sales in future periods. International sales are subject to
certain inherent risks, including unexpected changes in regulatory
requirements and tariffs, difficulties in staffing and managing foreign
operations, longer payment cycles, problems in collecting accounts receivable
and potentially adverse tax consequences. Ascend depends on third party
resellers for a substantial portion of its international sales. Certain of
these third party resellers also act as resellers for competitors of Ascend
and could devote greater effort and resources to marketing competitive
products. The loss of certain of these third party resellers could have a
material adverse effect on the business and results of operations of Ascend.
Although Ascend's sales are denominated in U.S. dollars, fluctuations in
currency exchange rates could cause Ascend's products to become relatively
more expensive to customers in a particular country, leading to a reduction in
sales or profitability in that country. Furthermore, future international
activity may result in foreign currency denominated sales, and, in such event,
gains and losses on the conversion to U.S. dollars of accounts receivable and
accounts payable arising from international operations may contribute to
fluctuations in results of operations of Ascend. In addition, sales in Europe
and certain other parts of the world typically are adversely affected in the
third quarter of each calendar year as many customers and end-users reduce
their business activities during the summer months. These seasonal factors may
have an effect on the business, results of operations and financial condition
of Ascend.
Potential Issuance of Preferred Stock; Anti-Takeover Provisions. The Ascend
---------------------------------------------------------------
Board of Directors has the authority to issue up to 2,000,000 shares of
Preferred Stock and to fix the rights, preferences, privileges and restrictions,
including voting rights, of these shares without any further vote or action by
the stockholders. The rights of the holders of the Ascend Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
Preferred Stock that may be issued in the future. The issuance of the Preferred
Stock, while
9
<PAGE>
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult
for a third party to acquire a majority of the outstanding voting stock of
Ascend, thereby delaying, deferring or preventing a change in control of
Ascend. Furthermore, such Preferred Stock may have other rights, including
economic rights, senior to the Ascend Common Stock, and as a result, the
issuance of such stock could have a material adverse effect on the market
value of the Ascend Common Stock. Ascend has no present plans to issue shares
of Preferred Stock. Ascend may in the future adopt other measures that may
have the effect of delaying, deferring or preventing a change of control of
Ascend. Certain of such measures may be adopted without any further vote or
action by Ascend's stockholders. Ascend is also afforded the protections of
Section 203 of the DGCL, which could delay or prevent a change in control of
Ascend, impede a merger, consolidation or other business combination involving
Ascend or discourage a potential acquiror from making a tender offer or
otherwise attempting to obtain control of Ascend.
Volatility of Stock Price. Ascend's Common Stock has experienced significant
-------------------------
price volatility, and such volatility may occur in the future, particularly as
a result of quarter-to-quarter variations in the actual or anticipated
financial results of Ascend or of other companies in the networking industry,
announcements by Ascend or its competitors regarding new product introductions
or other developments affecting Ascend, or changes in financial estimates by
public market analysts. In addition, the market has experienced extreme price
and volume fluctuations that have affected the market price of many technology
companies' stocks and that have been unrelated or disproportionate to the
operating performance of these companies. These broad market fluctuations may
adversely affect the market price of Ascend's Common Stock. In the past,
following periods of volatility in the market price of a company's securities,
securities class action litigation has often been instituted against such a
company. Such litigation could result in substantial costs and a diversion of
management's attention and resources, which would have a material adverse
effect on the operating results and financial condition of Ascend.
10
<PAGE>
SELLING STOCKHOLDERS
The Selling Stockholders hold Shares which were issued by the Company in
the StonyBrook Merger or upon exercise of Options assumed by the Company
pursuant to the StonyBrook Merger. The Options were originally granted by
StonyBrook pursuant to StonyBrook's 1992 Stock Option Plan.
The table below lists the Selling Stockholders, the number of shares of
Ascend Common Stock which each owned as of July 31, 1997, the number of
Shares subject to sale pursuant to this Registration Statement, and the number
of the shares of Ascend Common Stock which each would own assuming that such
number of Shares were offered and assuming the sale of all such Shares.
<TABLE>
<CAPTION>
Shares Owned
Shares Owned Shares To After Offering
Selling Stockholder(1) Before Offering Be Offered Such Shares
- --------------------- --------------- ---------------- ----------------
<S> <C> <C> <C>
Ravi Gulati 193,660 193,660 0
Ken Packert 32,277 32,277 0
Kevin Koenig 32,277 32,277 0
Wei Shu 4,842 4,842 0
Scott Shulman 1,936 1,936 0
Donna Hammel 807 807 0
Jennifer Guerin 807 807 0
Larry Hackett 807 807 0
Neophytos Christodoulides 807 807 0
Michael Koenig 807 807 0
Ashok K. Gupta 162 162 0
Santhosh Kumar 194 194 0
Robert Murray 1,614 1,614 0
Hari Narayanan 113 113 0
Sridher Gopalakrishnan 113 113 0
Peter Eicher 202 202 0
Madan Kumar 162 162 0
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Shares Owned
Shares Owned Shares To After Offering
Selling Stockholder(1) Before Offering Be Offered Such Shares
- --------------------- --------------- ---------------- ----------------
<S> <C> <C> <C>
Janet Gulati 16,138 16,138 0
Sheila Gulati 16,138 16,138 0
Nicole Gulati 16,138 16,138 0
Totals 320,001 320,001 0
</TABLE>
- ----------------------
1 The persons named in the table have sole voting and investment power with
respect to all shares of Ascend Common Stock shown as beneficially owned by
them, subject to community property laws, where applicable.
In connection with the filing of this Registration Statement and a
Registration Statement on Form S-3 which was filed by the Company on February
13, 1997 (the "Prior Registration Statement"), Ravi Gulati has entered into a
Registration and Stock Trading Agreement with the Company, a copy of which is
filed as Exhibit 4.1 to the Prior Registration Statement. The Registration and
Stock Trading Agreement provides that Mr. Gulati may sell or otherwise dispose
of the shares of Ascend Common Stock registered pursuant to this Agreement,
subject to the following restrictions:
(i) Mr. Gulati shall not offer, sell, exchange, pledge, transfer or
otherwise dispose of or engage in any sale equivalent transaction with
respect to, any of the shares of Ascend Common Stock issued or issuable in
the Merger unless at such time such transaction shall be permitted pursuant
to the provisions of SEC Rule 145 under the Securities Act (including any
applicable limitations on the amount of Ascend Common Stock to be sold as
set forth in Rule 145(d)(1) and the provisions of Rule 144 referred to
therein), or he shall have furnished to Ascend an opinion of counsel,
satisfactory to Ascend, to the effect that no registration under the
Securities Act would be required in connection with the proposed offer,
sale, exchange, pledge, transfer or other disposition or transaction, or a
Registration Statement under the Securities Act covering the proposed
offer, sale, exchange, pledge, transfer or other disposition or sale
equivalent transaction shall be effective under the Securities Act;
(ii) Mr. Gulati shall not offer or sell any of the shares of Ascend
Common Stock issued or issuable to him in the Merger except during such
periods as directors, officers and affiliates of Ascend
12
<PAGE>
are permitted to purchase and sell Ascend Common Stock pursuant to the
insider trading policies of Ascend (the "Window Periods"); and
--------------
(iii) during the effective period of the Registration Statement, Mr.
Gulati shall (A) offer for sale under the Registration Statement only those
shares of Ascend Common Stock which were issued to him pursuant to the
Merger Agreement and are registered under the Registration Statement;
(B) sell such shares in accordance with and subject to the terms,
conditions and covenants set forth in the Registration and Stock Trading
Agreement and in the Registration Statement; (C) to the extent required by
applicable law, cause to be furnished to any purchaser of such shares, and
to the broker-dealer, if any, through whom such shares may be offered, a
copy of the final prospectus contained in the Registration Statement, as
supplemented or amended through the date of the sale (the "Prospectus");
----------
(D) not engage in any stabilization activity in connection with any Ascend
securities other than as permitted under the Exchange Act; and (E) not bid
for or purchase any securities of Ascend or any rights to acquire Ascend
securities, or attempt to induce any person to purchase any Ascend
securities (except for Mr. Gulati's shares of Ascend Common Stock to be
sold to such person by means of the Prospectus) or any rights to acquire
Ascend securities other than as permitted under the Exchange Act.
The foregoing restrictions set forth in subparagraph (ii) above shall cease
without further action by Mr. Gulati or the Company upon and in the event of the
death of Mr. Gulati and the Company shall amend the Registration Statement to
the extent (if any) necessary to permit Mr. Gulati's estate, personal
representative(s), devisees and heirs, as the case may be to resell Mr. Gulati's
remaining shares pursuant to the Registration Statement.
In addition, each Selling Stockholder (other than Mr. Gulati) has entered
into a Registration and Option Stock Trading Agreement with the Company, the
form of which is filed as Exhibit 4.2 to the Prior Registration Statement.
Pursuant to the Registration and Option Stock Trading Agreements, each such
Selling Stockholder has agreed not to sell, transfer, pledge, or otherwise
dispose of, or reduce such Selling Stockholder's interest in or risk relating
to, any shares of Ascend Common Stock issued to such Selling Stockholder
pursuant to the Merger or upon exercise of any Assumed Options until after such
time as the Company has published (within the meaning of SEC Accounting Series
Release No. 135, as amended) financial results covering at least 30 days of
combined operations of the Company and StonyBrook. From and after the
publication of such results, such Selling Stockholder may sell or otherwise
dispose of the shares of Ascend Common Stock registered pursuant to this
Agreement, subject to the following restrictions:
(i) such Selling Stockholder shall not offer, sell, exchange,
pledge, transfer or otherwise dispose of or engage in any sale equivalent
transaction with respect to, any of the shares of Ascend Common Stock
issued or issuable upon exercise of such Selling Stockholder's assumed
options unless at such time such transaction shall be permitted pursuant to
the provisions of SEC Rule 145 under the
13
<PAGE>
Securities Act (including any applicable limitations on the amount of
Ascend Common Stock to be sold as set forth in Rule 145(d)(1) and the
provisions of Rule 144 referred to therein), or such Selling Stockholder
shall have furnished to Ascend an opinion of counsel, satisfactory to
Ascend, to the effect that no registration under the Securities Act would
be required in connection with the proposed offer, sale, exchange, pledge,
transfer or other disposition or Sale Equivalent Transaction, or a
Registration Statement under the Securities Act covering the proposed
offer, sale, exchange, pledge, transfer or other disposition or Sale
Equivalent Transaction shall be effective under the Securities Act;
(ii) such Selling Stockholder shall not offer or sell any of the
shares of Ascend Common Stock issued or issuable upon exercise of such
Selling Stockholder's Assumed Options except during Window Periods; and
--------------
(iii) during the effective period of the Registration Statement, such
Selling Stockholder shall (A) offer for sale under the Registration
Statement only those shares of Ascend Common Stock which were issued to
such Selling Stockholder upon exercise of the Assumed Options and are
registered under the Registration Statement; (B) sell such shares in
accordance with and subject to the terms, conditions and covenants set
forth in this Registration and Stock Trading Agreement and in the
Registration Statement; (C) to the extent required by applicable law, cause
to be furnished to any purchaser of such shares, and to the broker-dealer,
if any, through whom such shares may be offered, a copy of the Prospectus;
(D) not engage in any stabilization activity in connection with any Ascend
securities other than as permitted under the Exchange Act; and (E) not bid
for or purchase any securities of Ascend or any rights to acquire Ascend
securities, or attempt to induce any person to purchase any Ascend
securities (except for such Selling Stockholder's shares of Ascend Common
Stock to be sold to such person by means of the Prospectus) or any rights
to acquire Ascend securities other than as permitted under the Exchange
Act.
The foregoing restrictions set forth in subparagraph (ii) above shall
cease without further action by such Selling Stockholder or the Company upon and
in the event of the death of such Selling Stockholder and the Company shall
amend the Registration Statement to the extent (if any) necessary to permit such
Selling Stockholder's estate, personal representative(s), devisees and heirs, as
the case may be to resell such Selling Stockholder's remaining shares pursuant
to this Registration Statement.
The foregoing is a brief summary of certain provisions of the Registration
and Stock Trading Agreement, a copy of which is filed as Exhibit 4.1 to the
Prior Registration Statement and incorporated herein by reference, and the
Registration and the Option Stock Trading Agreements, the form of which is filed
as Exhibit 4.2 to the Prior Registration Statement and incorporated herein by
reference. The foregoing summary is qualified in all respects by reference to
the full text of each agreement. In case of any conflict between the foregoing
summary and the applicable agreement, the applicable agreement will control.
14
<PAGE>
PLAN OF DISTRIBUTION
Any or all of the Shares may be sold from time to time to purchasers
directly by any of the Selling Stockholders. Alternatively, the Selling
Stockholders may from time to time offer the Shares through underwriters,
dealers or agents who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Stockholders and/or the
purchasers of Shares for whom they may act as agents. The Selling Stockholders
and any such underwriters, dealers or agents that participate in the
distribution of Shares may be deemed to be underwriters, and any profit on the
sale of the Shares by them and any discounts, commissions or concessions
received by them may be deemed to be underwriting discounts and commissions
under the Securities Act. The Shares may be sold from time to time in one or
more transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. The Selling
Stockholders may from time to time enter into hedging transactions with respect
to the Shares.
At the time a particular offer of Shares is made, to the extent required, a
supplement to this Prospectus will be distributed which will identify and set
forth the aggregate amount of Shares being offered and the terms of the
offering, including the name or names of any underwriters, dealers or agents,
the purchase price paid by any underwriter for Shares purchased from the Selling
Stockholders, any discounts, commissions and other items constituting
compensation from the Selling Stockholders and/or the Company, and any
discounts, commissions or concessions allowed or reallowed or paid to dealers,
including the proposed selling price to the public. The Company will not
receive any of the proceeds from the sale by the Selling Stockholders of the
Shares offered hereby.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may not simultaneously engage in market
making activities with respect to the Shares for a period of nine business days
prior to the commencement of such distribution. In addition, and without
limiting the foregoing, the Selling Stockholders will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder
including, without limitation, Rules 10b-2, 10b-6 and 10b-7, which provisions
may limit the timing of purchases and sales of the Shares by the Selling
Stockholders.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states the Shares may not be sold unless the
Shares have been registered or qualified for sale in such state, or unless an
exemption from registration or qualification is available and is obtained.
The Company has agreed to indemnify in certain circumstances the Selling
Stockholders and the broker-dealers who may be deemed to be underwriters (if
any) of the securities covered by the Registration Statement against certain
liabilities, including liabilities under the Securities Act. The Selling
Stockholders have agreed to indemnify in certain circumstances the Company
against certain liabilities, including liabilities under the Securities Act.
The Company has agreed to use its best efforts to keep the Registration
Statement, of which this Prospectus constitutes a part, effective until the
earlier of (i) December 27, 1998, (ii) the date on which the Selling
Stockholders can sell all the Shares pursuant to Rule 144 of the Security Act,
or (iii) when all of the Shares have been resold pursuant to Rule 144 or an
effective registration statement.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders.
LEGAL MATTERS
The legality of the Shares is being passed upon by Gray Cary Ware &
Freidenrich, A Professional Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements of Ascend Communications, Inc. for
the year ended December 31, 1996 appearing in Ascend Communications Inc.'s
Registration Statement (Form S-4, No. 333-25287) has been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Cascade Communications Corp. as of
December 31, 1995 and 1996, and for each of the three years in the period
ended December 31, 1996 incorporated by reference in this prospectus have been
incorporated herein in reliance on the reports of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
15
<PAGE>
===============================================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING SHAREHOLDER OR BY ANY
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE REGISTERED
SECURITIES TO WHICH IT RELATES, OR AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, IN ANY JURISDICTION IN WHICH 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 AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
TABLE OF CONTENTS
PAGE
----
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Risk Factors............................................................... 3
Selling Stockholders....................................................... 11
Plan of Distribution....................................................... 15
Use of Proceeds............................................................ 15
Legal Matters.............................................................. 15
Experts.................................................................... 15
===============================================================================
===============================================================================
320,001 SHARES
ASCEND COMMUNICATIONS, INC.
COMMON STOCK
---------------------------
PROSPECTUS
---------------------------
August 7, 1997
================================================================================
