As filed with the Securities and Exchange Commission on August 28, 2001
Registration No. 333-67850
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SECURITIES AND EXCHANGE COMMISSION
---------------
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MICROTUNE, INC.
(Exact name of registrant as specified in its charter)
---------------
Delaware 75-2883117
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) No.)
2201 Tenth Street
Plano, Texas 75074
(972) 673-1600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
Everett ("Buddy") Rogers
CFO and Vice President of Finance and Administration
2201 Tenth Street
Plano, Texas 75074
(972) 673-1600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Copies to:
Nancy A. Richardson, Esq. P. Steven Hacker, Esq.
Vice President and General Counsel Thomas B. Montano, Esq.
Microtune, Inc. John J. Gilluly III, Esq.
2201 Tenth Street Gray Cary Ware & Freidenrich LLP
Plano, Texas 75074 1221 S. MoPac Expressway, Suite 400
Telephone:(972) 673-1600 Austin, Texas 78746
Facsimile:(972) 673-1876
Telephone:(512) 457-7000
Facsimile:(512) 457-7001
---------------
Approximate date of commencement of proposed sale to the public: From time
to time after the Effective Date of this Registration Statement as determined
in light of market conditions and other factors.
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 for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
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Title of each Class of
Securities to be Amount to be Proposed Maximum Proposed Maximum Amount of
Registered(1) Registered Offering Price Per Unit(2)(3) Aggregate Offering Price(3)(4) Registration Fee(8)
-----------------------------------------------------------------------------------------------------------------------
Primary Offering:
Common Stock, $0.001 par
value (5).............. (6) (6)
Preferred Stock, $0.001
par value.............. (6) (6)
Debt Securities......... (6) (6)
Warrants................ (6) (6)
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Subtotal............... N/A N/A $183,045,000 $45,761
Secondary Offering:
Common Stock, $0.001 par
value offered by
selling stockholders... 3,500,000 $19.13(7) $ 66,955,000 $16,739
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Subtotal............... 3,500,000 $19.13 $ 66,955,000 $16,739
-----------------------------------------------------------------------------------------------------------------------
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Total.................. $250,000,000 $62,500
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(1) There are being registered hereunder such indeterminate number of shares of
common stock and preferred stock, such indeterminate number of warrants to
purchase common stock, preferred stock or debt securities and such
indeterminate principal amount of debt securities as shall have a maximum
aggregate offering price not to exceed $250,000,000, including any shares
of common stock sold by selling stockholders. If any debt securities are
issued at an original issue discount, then the offering price of such debt
securities shall be in such principal amount as shall result in a maximum
aggregate initial offering price not to exceed $250,000,000, less the
aggregate dollar amount of all securities previously issued hereunder. Any
securities registered hereunder may be sold separately or as units with
other securities registered hereunder. The securities registered also
include such indeterminate amounts and numbers of common stock, preferred
stock and debt securities as may be issued upon conversion of or exchange
of preferred stock or debt securities that provide for conversion or
exchange, upon exercise of warrants or pursuant to the antidilution
provisions of any such securities.
(2) In United States dollars or the equivalent thereof in any other currency,
currency unit or units, or composite currency or currencies based on the
exchange rate applicable at the time of initial offering.
(3) The proposed maximum per share or unit and aggregate offering prices per
class of security will be determined from time to time by the registrant in
connection with the issuance by the registrant of the securities registered
hereunder.
(4) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933 at the statutory rate of
$250 per $1,000,000 of securities registered.
(5) The aggregate amount of common stock registered hereunder is limited, with
respect to at the market offerings, to that which is permissible under Rule
415(a)(4) under the Securities Act of 1933.
(6) Not required to be included in accordance with General Instruction II.D. of
Form S-3.
(7) Based on the average of the high and low sales price of our common stock on
August 16, 2001 in the Nasdaq National Market.
(8) Previously paid in connection with our initial Form S-3 filing on August
17, 2001.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION, DATED AUGUST 28, 2001
$250,000,000
[MICROTUNE, INC. LOGO]
Common Stock
Preferred Stock
Debt Securities
Warrants
------------
We and selling stockholders may offer and sell from time to time, in one or
more offerings, up to $250,000,000 of any combination of the common stock,
preferred stock, debt securities or warrants we describe in this prospectus. If
we decide to offer and sell our common stock, selling stockholders may use this
prospectus to offer and sell up to 3.5 million shares of our common stock owned
by them. Before we or any selling stockholders sell any of these securities, we
will provide a supplement to this prospectus. Any prospectus supplement will
inform you about the specific terms of an offering by us or any selling
stockholders and may also add, update or change information contained in this
document. You should read this prospectus and any prospectus supplement
carefully before you decide to invest in our securities.
------------
INVESTING IN OUR SECURITIES INVOLVES RISKS.
SEE "RISK FACTORS" ON PAGE 6.
------------
Our common stock trades on the Nasdaq National Market under the symbol
"TUNE."
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
------------
This prospectus may not be used to consummate sales of securities unless it
is accompanied by a prospectus supplement.
------------
Prospectus dated , 2001.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information contained in this Prospectus is not complete and may be +
+changed. We may not sell these securities until the Registration Statement +
+filed with the Securities and Exchange Commission is effective. This +
+Prospectus is not an offer to sell these securities and is not soliciting an +
+offer to buy these securities in any state where the offer or sale is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
TABLE OF CONTENTS
Page
----
ABOUT THIS PROSPECTUS...................................................... 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 1
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION......................... 2
WHERE YOU CAN FIND MORE INFORMATION........................................ 3
MICROTUNE, INC............................................................. 4
RECENT DEVELOPMENTS........................................................ 5
RISK FACTORS............................................................... 6
RATIOS OF EARNINGS TO FIXED CHARGES........................................ 18
USE OF PROCEEDS............................................................ 18
THE SECURITIES WE MAY OFFER................................................ 19
SELLING STOCKHOLDERS....................................................... 20
DESCRIPTION OF CAPITAL STOCK............................................... 22
DESCRIPTION OF DEBT SECURITIES............................................. 25
DESCRIPTION OF WARRANTS.................................................... 32
PLAN OF DISTRIBUTION....................................................... 34
VALIDITY OF SECURITIES..................................................... 36
EXPERTS.................................................................... 36
----------------
i
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we
filed with the SEC utilizing a shelf registration process. Under this shelf
registration process, we may sell any combination of the securities described
in this prospectus in one or more offerings. If we decide to offer and sell our
common stock, selling stockholders may use this prospectus to offer and sell up
to 3.5 million shares of our common stock owned by them. The maximum aggregate
dollar amount of securities that may be offered and sold by us and selling
stockholders under this prospectus is $250,000,000. We have provided to you in
this prospectus a general description of the securities we may offer. Each time
we sell our securities, or the selling stockholders sell common stock owned by
them, we or the selling stockholders will provide a prospectus supplement that
will contain specific information about the terms of that offering. For a more
complete understanding of the securities, you should refer to our registration
statement on Form S-3, of which this prospectus is a part, including its
exhibits, together with any information incorporated in this prospectus by
reference. See "Incorporation of Certain Documents By Reference." We may also
add, update or change in the prospectus supplement any of the information
contained in this prospectus.
Neither we nor the selling stockholders have authorized any dealer,
salesperson or other person to give any information or to make any
representation other than those contained or incorporated by reference in this
prospectus and any accompanying prospectus supplement. You must not rely upon
any information or representation not contained or incorporated by reference in
this prospectus or any accompanying prospectus supplement as if we had
authorized it. This prospectus and any accompanying prospectus supplement do
not constitute an offer to sell or the solicitation of an offer to buy any
securities other than the registered securities to which they relate, nor does
this prospectus and any accompanying prospectus supplement constitute an offer
to sell or the solicitation of any offer to buy securities in any jurisdiction
to any person to whom it is unlawful to make such offer or solicitation in such
jurisdiction. You should not assume this prospectus or any prospectus
supplement is correct on any date after their respective dates, even though
this prospectus or any prospectus supplement is delivered or securities are
sold on a later date.
References in this prospectus and any accompanying prospectus supplement to
the terms "we," "us," or "Microtune" or other similar terms refer to Microtune,
Inc. unless we state or the context indicates otherwise.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the information we file with
them, which means:
. incorporated documents are considered part of the prospectus;
. we can disclose important information to you by referring you to those
documents; and
. information that we file with the SEC will automatically update this
prospectus.
The following documents that we filed with the SEC either pursuant to the
Securities Act of 1933 or the Securities Exchange Act of 1934 are incorporated
by reference and made a part of this prospectus:
. Our Annual Report on Form 10-K for the fiscal year ended December 31,
2000;
. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
. Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2001;
and
. The description of our securities contained in Item 1 to our
Registration Statement on Form 8-A filed with the SEC on July 14, 2000.
In addition, pursuant to Rule 3-05(b)(4)(iii) of Regulation S-X, the
consolidated financial statements of HMTF Acquisition (Bermuda) Ltd. (HMTF
Acquisition), and Temic Telefunken Hochfrequenztechnik GMBH (Temic) that appear
on pages F-26 through F-42 of our Registration Statement on Form S-1
(Registration No. 333-36340) are incorporated herein by reference.
This prospectus is part of a registration statement on Form S-3 filed with
the SEC. We are incorporating by reference the documents listed above and any
future filings that we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 prior to the sale of all the
securities covered by this prospectus.
1
We will provide, without charge, to each person to whom this prospectus is
delivered, upon oral or written request, a copy of any or all of the documents
incorporated by reference in this prospectus (other than exhibits to those
documents unless the exhibits are specifically incorporated by reference into
the information that this prospectus incorporates). Written or telephone
requests should be directed to Investor Relations at Microtune, Inc., 2201
Tenth Street, Plano, Texas 75074, telephone number (972) 673-1600.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus, any prospectus supplement and the documents we incorporate
by reference in this prospectus and any prospectus supplement contain "forward-
looking statements" within the meaning of Section 27A of the Securities Act of
1933, and Section 21E of the Securities Exchange Act of 1934. For this purpose,
any statements contained in this prospectus or any prospectus supplement or
incorporated by reference in this prospectus or any prospectus supplement that
are not statements of historical fact may be deemed to be forward-looking
statements. We may, in some cases, use words such as "project," "believe,"
"anticipate," "plan," "expect," "estimate," "intend," "should," "will," "could"
or "may" or other words that convey uncertainty of future events or outcomes to
identify forward-looking statements. For a discussion of important factors that
could affect our actual results or cause our actual results to differ
materially from the results anticipated by these forward-looking statements,
please refer to the section entitled "Risk Factors". These important factors
also include the factors that we identify in the documents we incorporate by
reference. You should read these factors and the other cautionary statements
made in this prospectus, any prospectus supplement and the documents we
incorporate by reference as being applicable to all related forward-looking
statements wherever they appear.
2
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, along with other information,
with the SEC. You may read and copy any document we file at the public
reference facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. The SEC maintains an Internet site
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC. The address of that
website is www.sec.gov.
This prospectus constitutes part of a registration statement on Form S-3
filed under the Securities Act with respect to the securities offered. As
permitted by the SEC's rules, this prospectus omits some of the information,
exhibits and undertakings included in the registration statement.
Statements contained in this prospectus as to the contents of any contract
or other document are not necessarily complete, and in each instance we refer
you to the copy of the contract or document filed as an exhibit to the
registration statement, each such statement being qualified in all respects by
that reference.
3
MICROTUNE, INC.
We are a radio frequency silicon and systems company, providing high-
performance radio frequency tuners, upstream amplifiers and transceivers to the
broadband communications markets. Using proprietary technologies and advanced
design methodologies, we have designed and developed radio frequency integrated
circuits and radio frequency systems, called modules, for a variety of
broadband communications access devices, including cable modems, PC/TVs (which
are multimedia personal computers with broadband reception capabilities), set-
top boxes, digital TVs and other consumer electronic devices. Our radio
frequency products are the gateway devices for reception of video, audio, data
and/or voice over existing broadband communications infrastructures, such as
cable and terrestrial. Our tuners receive and tune radio frequency signals,
transferring a selected signal (or channel) to the rest of the system's
electronics for further operation. Our upstream amplifiers transmit radio
frequency data from the user through the broadband system, amplifying the
signal to levels required by the network. Our transceivers, consisting of both
tuners and upstream amplifiers, enable interactivity by permitting two-way, or
bi- directional, communications. Our latest radio frequency integrated circuit
products offer a high level of integration, resulting in significant cost,
performance, size, reliability and manufacturability benefits. Our radio
frequency module products provide a complete, manufacturing-ready radio
frequency system, eliminating a customer's need for radio frequency design and
manufacturing expertise.
We are a Delaware corporation with our principal executive offices located
at 2201 Tenth Street, Plano, Texas 75074. Our telephone number is (972) 673-
1600. Our fiscal year ends on December 31. We maintain a website at
www.microtune.com. The reference to our website does not constitute
incorporation by reference of the information contained at this site.
Microtune, MicroTune and the Microtune logo are our trademarks. All other brand
names and trademarks appearing in this prospectus are the property of their
holders.
4
RECENT DEVELOPMENTS
Securities Litigation
Starting on July 11, 2001, multiple purported securities fraud class action
complaints were filed in the United States District Court for the Southern
District of New York. We are aware of at least three such complaints: Berger v.
Goldman, Sachs & Co., Inc. et al.; Atlas v. Microtune et al.; and Ellis
Investments Ltd. v. Goldman Sachs & Co., Inc. et al. The complaints are brought
purportedly on behalf of all persons who purchased our common stock from August
4, 2000 through December 6, 2000. According to the law firm that filed it, the
Atlas complaint names as defendants Microtune, Douglas J. Bartek, our Chairman
and Chief Executive Officer, Everett Rogers, our Chief Financial Officer and
Vice President of Finance and Administration, and several investment banking
firms that served as underwriters of our initial public offering. The Berger
and Ellis Investment Ltd. complaints assert claims against the underwriters
only. More such lawsuits may be filed. Among other things, the complaints
allege liability under Sections 11 and 15 of the Securities Act of 1933 and
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, on the grounds
that the registration statement for our initial public offering did not
disclose that: (1) the underwriters had agreed to allow certain of their
customers to purchase shares in the offering in exchange for excess commissions
paid to the underwriters; and (2) the underwriters had arranged for certain of
their customers to purchase additional shares in the aftermarket at pre-
determined prices. We are aware that similar allegations have been made in
lawsuits challenging over 140 other initial public offerings conducted in 1999
and 2000. No specific amount of damages is claimed in the three complaints
involving our initial public offering. These cases are subject to the Private
Securities Litigation Reform Act of 1995, and we expect that the cases will be
consolidated into a single action. We expect that motions to dismiss each of
these actions will be filed. We believe that the allegations against Microtune,
Mr. Bartek and Mr. Rogers are without merit, and intend to contest them
vigorously. We are unable at this time to determine whether the outcome of the
litigation will have a material impact on our results of operations or
financial condition in any future period.
5
RISK FACTORS
This prospectus and each accompanying prospectus supplement contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth below and elsewhere in this prospectus.
If we are unable to migrate our customers over time from our modules using
discrete components to our radio frequency silicon products or our modules that
incorporate our radio frequency silicon products, our operating results could
be harmed.
Currently, most of our revenues are from the sale of our tuner modules using
discrete, third-party components. Our future success will depend on our ability
to successfully migrate our customers from our modules that use discrete
components to our radio frequency silicon products, or MicroModules containing
the MicroTuner and our other silicon products, by convincing leading equipment
manufacturers to select these products for design into their own products. If
we are not able to convince these manufacturers to incorporate our silicon
products our operating results could be harmed.
We have not completed our integration with Microtune KG's operations and we
may be unable to do so effectively. In addition, we may be unable to integrate
operations that we may acquire in the future.
We combined with Microtune KG in January 2000, and we are still in the
process of integrating Microtune KG's German and Philippines operations with
ours. Integrating operations of two ongoing businesses can be difficult,
especially when they are located in different countries. In addition to
integrating the operational aspects of our two companies, we will also face
challenges coordinating and consolidating our financial reporting functions.
For example, our accounting functions utilize different software programs, and
Microtune KG's consolidated financial statements have historically been
prepared based on German generally accepted accounting principles. We may not
be able to complete this integration on a timely and cost-effective basis.
From time to time, we expect to continue to evaluate acquisitions and may
make additional acquisitions in the future. Our acquisition of Microtune KG was
our first acquisition of a business. Accordingly, we have limited
organizational experience in acquiring and integrating businesses, and we will
need to develop the relevant skills if we are to be successful in realizing the
benefits of any future acquisitions. If in the future we acquire technologies
or businesses, we could have difficulty integrating acquired technology into
our product offerings or integrating our technology with an acquired company's
products. We could also have difficulty coordinating and integrating overall
business strategies, financial reporting functions, controls, procedures and
policies, as well as sales and marketing and research and development efforts.
Assimilating employees into our corporate culture and coordinating operations
across geographically dispersed locations could prove to be difficult or time
consuming. Moreover, we currently do not know and cannot predict the accounting
treatment of any future acquisition, in part because we cannot be certain what
accounting regulations, conventions or interpretations may prevail in the
future. These difficulties could disrupt our ongoing business, distract our
management and employees and increase our expenses. Furthermore, we may have to
incur debt or issue equity securities to pay for any future acquisitions, and
those issuances could be dilutive to our existing stockholders.
As a result of the Microtune KG acquisition, we have recorded $36.3 million
of goodwill and acquired intangibles which will be amortized over one to five
years.
This amortization, if continued, would increase our net loss or decrease our
net income by approximately $7.1 million in each of the years 2001 through
2004. However, in June 2001, the Financial Accounting Standards Board (FASB)
issued SFAS No. 141, Business Combinations, and No. 142, Goodwill and Other
Intangible Assets, effective for fiscal years beginning after December 15,
2001. Under the new rules, acquired goodwill and intangible assets recorded
having indefinite lives will no longer be amortized, but will be subject
6
to annual impairment tests. Other acquired intangible assets will continue to
be amortized over their useful lives. We will apply the new rules on accounting
for goodwill and other intangible assets recorded as a result of the Microtune
KG acquisition beginning in the first quarter of 2002. During 2002, we will
perform the first of the required impairment tests of goodwill and indefinite
lived intangible assets as of January 1, 2002. We have not yet determined what
the effect of these tests will be on our earnings or financial position. If our
investment is subject to earlier than expected write-offs, our net income or
net loss in any given period could be lower than anticipated and the market
price of our stock could decline.
We are dependent upon third parties, some of whom compete with us, for the
supply of components for our module manufacturing. Our failure to obtain
components for our module manufacturing would seriously harm our ability to
ship modules to our customers in a timely manner.
Many of the components for our modules are sole-sourced, meaning that we
depend upon one supplier for a specific component. At times we have experienced
significant difficulties in obtaining an adequate supply of components
necessary for our manufacturing operations, which have on occasion prevented us
from delivering radio frequency products to our customers in a timely manner.
For example, in 2000, we did not receive our expected allocation of components
from several significant sole-source suppliers which constrained our ability to
meet customer demand. We may experience similar shortages of components in the
future.
We usually do not have long-term supply agreements with our suppliers and
instead obtain components on a purchase order basis. Our suppliers typically
have no obligation to supply products to us for any specific period, in any
specific quantity or at any specific price, except as set forth in a particular
purchase order. Our requirements often represent a small portion of the total
production capacity of our suppliers, and our suppliers may reallocate capacity
to other customers even during periods of high demand for our radio frequency
products. In addition, some of our suppliers offer or may offer products that
compete with our radio frequency products. As a result, these suppliers may
preferentially allocate their components to in-house or third party
manufacturers, rather than us.
If our suppliers were to become unable or unwilling to continue
manufacturing or supplying the components that we utilize in our radio
frequency products, our business would be seriously harmed. As a result, we
would have to identify and qualify substitute suppliers or design around the
component. This would be time-consuming and difficult, and may result in
unforeseen manufacturing and operations problems. This may also require our
customers to requalify our parts for their products, which may be a lengthy
process. The loss of a significant supplier or the inability of a supplier to
meet performance and quality specifications or delivery schedules could impede
our ability to meet customer demand for timeliness, performance and quality,
which could harm our reputation and our business.
If we are unable to develop and introduce new radio frequency products
successfully and in a cost-effective and timely manner or to achieve market
acceptance of our new products, our operating results would be substantially
harmed.
Our future success depends on our ability to develop new radio frequency
products for existing and new markets, introduce these products in a cost-
effective and timely manner, meet customer specifications and convince leading
equipment manufacturers to select these products for design into their own new
products. Our quarterly results in the past have been, and are expected in the
future to continue to be, dependent on the introduction and market acceptance
of a relatively small number of new products and the timely completion and
delivery of those products to our customers. For example, we believe that
market acceptance of our radio frequency integrated circuits for the cable
modem market will be limited until the time that we introduce radio frequency
integrated circuits with the power requirements that conform to the evolving
specifications of some cable modem manufacturers.
7
The development of new radio frequency products is highly complex, and from
time to time we have experienced delays in completing the development and
introduction of new products. In addition, some of our new product development
efforts are focused on producing silicon products utilizing architectures and
technologies with which we have no experience and delivering performance
characteristics such as low power consumption at levels that we have not
previously achieved. If we are not able to develop and introduce these new
products successfully and in a cost-effective and timely manner, we will not be
able to penetrate our target markets successfully and our operating results
would be substantially harmed.
We face intense competition in the broadband communications and radio
frequency tuner markets, which could reduce our market share in existing
markets and affect our ability to enter new markets.
The broadband communications and radio frequency tuner markets are intensely
competitive. We expect competition to continue to increase as industry
standards become well known and as other competitors enter our target markets.
We compete with, or may in the future compete with, a number of major domestic
and international suppliers of integrated circuit and system modules in the
cable modem, PC/TV, set-top box, cable telephony, digital TV and automotive
markets. We compete primarily with tuner manufacturers such as Alps, Panasonic,
Philips Electronics, Samsung and Thomson, with semiconductor companies such as
Anadigics, Analog Devices, Broadcom and Maxim, and potentially with companies
such as Conexant and Silicon Wave. Among other things, several of our
competitors have broader product and service offerings and could bundle their
competitive tuner products with other products and services they offer. This
competition has resulted and may continue to result in declining average
selling prices for our radio frequency products.
Many of our current and potential competitors have advantages over us,
including:
. longer operating histories and presence in key markets;
. greater name recognition;
. access to larger customer bases;
. significantly greater financial, sales and marketing, manufacturing,
distribution, technical and other resources;
. relationships with potential customers as a result of the sales of other
components, which relationships our competitors can leverage into sales
of products competitive with our radio frequency products; and
. broader product and service offerings that may allow them to compete
effectively by bundling their products.
As a result, our competitors may be able to adapt more quickly to new or
emerging technologies and changes in customer requirements and may be able to
devote greater resources to the development, promotion and sale of their
products.
Consolidation by industry participants, including in some cases,
acquisitions of some of our customers or suppliers by our competitors, or
acquisitions of our competitors by our customers or suppliers, could create
entities with increased market share, customer base, technology and marketing
expertise in markets in which we compete. In fact, some of our suppliers offer
or may offer products that compete with our radio frequency products. These
developments may significantly and adversely affect our current markets, the
markets we are seeking to serve and our ability to compete successfully in
those markets, thereby harming our results of operations.
If we do not anticipate and adapt to evolving industry standards in the
radio frequency tuner and broadband communications markets, or if industry
standards develop more slowly than expected, our products could become obsolete
and we could lose market share.
Products for broadband communications applications generally are based on
industry standards that are continuously evolving. In some cases, the
development of these standards takes longer than originally anticipated. We
have directed our development toward producing radio frequency products that
comply with the
8
evolving standards. The delayed development of a standard in our target markets
has resulted in slower deployment of new technologies, which may harm our
ability to sell our radio frequency products, or the continued use of
proprietary technologies. The continued delay in the development of the
standards could result in fewer manufacturers purchasing our radio frequency
products in favor of continuing to use the proprietary technologies designed by
our competitors. Either of the aforementioned effects would result in
diminished revenues and consequently harm our business. Further, if new
industry standards emerge, our products or our customers' products could become
unmarketable or obsolete. We may also have to incur substantial unanticipated
costs to comply with these new standards.
Our ability to adapt to changes and to anticipate future standards and the
rate of adoption and acceptance of those standards is a significant factor in
maintaining or improving our competitive position and prospects for growth. Our
inability to anticipate the evolving standards in the broadband communications
markets and, in particular, in the radio frequency market, or to develop and
introduce new products successfully into these markets, could result in
diminished revenues and consequently harm our business.
The average selling price of our products will likely decrease over time. If
the selling price reductions are greater than we expect, our operating results
will be harmed.
Historically, the average selling price of our products has decreased over
the products' lives. In addition, as the markets for radio frequency integrated
circuit products and transceivers mature, we believe that it is likely that the
average unit prices of our radio frequency products will decrease in response
to competitive pricing pressures, increased sales discounts, new product
introductions and product bundling. To offset these decreases, we rely
primarily on achieving yield improvements and other cost reductions for
existing products and on introducing new products that can often be sold at
higher average selling prices.
Although we will seek to increase the sales of our higher margin products,
our sales, product and process development efforts may not be successful. Our
new products or processes may not achieve market acceptance. To the extent we
are unable to reduce costs or sell our higher margin products, our results of
operations would suffer.
We expect our quarterly operating results to continue to fluctuate.
Our quarterly results of operations have fluctuated significantly in the
past and may fluctuate significantly in the future due to a number of factors,
many of which are not in our control. These factors include:
. timing, cancellation and rescheduling of significant customer orders,
which result in revenues being shifted from one quarter to another;
. the ability of our customers to procure the necessary components for
their end-products that utilize our radio frequency tuners to conduct
their operations as planned for any quarter;
. pricing concessions on volume sales to particular customers for
established time frames;
. slowdowns in customer demand and related industry-wide increases in
inventories;
. our inability to predict our customers' demand for our products;
. changes in our product and customer mix between quarters;
. labor disputes at our manufacturing facilities in the Philippines, which
may cause temporary slowdowns or shutdowns of operations; and
. quality problems with our radio frequency tuners that result in
significant returns.
Our manufacturing operations could be adversely impacted and our financial
performance worsened if our labor unions cause labor slowdowns or shutdowns at
our union factory.
One of our manufacturing facilities in the Philippines is covered by union
representation. This facility currently manufactures a significant portion of
our radio frequency products. If we experience labor
9
slowdowns or shutdowns at this facility due to actions by the labor union, our
manufacturing output, and consequently our revenues, would diminish, our costs
would increase and, consequently, our business would be harmed.
We believe that transitioning our silicon products to higher performance
process technologies will be important to our future competitive position. If
we fail to make this transition efficiently, our competitive position could be
seriously harmed.
We continually evaluate the benefits, on a product-by-product basis, of
migrating to higher performance process technologies in order to produce more
efficient and higher performance integrated circuits. We believe this migration
is required to remain competitive. Other companies in the industry have
experienced difficulty in
migrating to new process technologies and, consequently, have suffered reduced
yields, delays in product deliveries and increased expense levels. We may
experience similar difficulties.
Moreover, we are dependent on our relationships with foundries to
successfully migrate to higher performance processes. Our foundry suppliers may
not make higher performance process technologies available to us on a timely or
cost-effective basis, if at all. If our foundry suppliers do not make higher
performance process technologies available to us on a timely or cost-effective
basis or if we experience difficulties in migrating to these advanced
processes, our competitive position and business prospects could be seriously
harmed.
Because we depend on a few significant customers for a substantial portion
of our revenues, the loss of a key customer could seriously harm our business.
We have derived a substantial portion of our revenues from sales to a
relatively small number of customers. As a result, the loss of any significant
customer could significantly harm our revenues. Sales to DaimlerChrysler
accounted for approximately 19% of our consolidated net revenues for the year
ended December 31, 2000 and 24% of consolidated net revenues for the six months
ended June 30, 2001. Sales to DaimlerChrysler, Motorola/General Instruments,
Askey and Panasonic accounted for approximately 29%, 13%, 11% and 11%,
respectively, of consolidated net revenues for the three months ended June 30,
2001. Sales to our twenty largest customers, including sales to their
respective manufacturing subcontractors, accounted for approximately 77% of our
total sales for the year ended December 31, 2000 and 94% of our total sales for
the three months ended June 30, 2001. We believe that our future operating
results will continue to depend on the success of our largest customers and on
our ability to sell existing and new products to these customers in significant
quantities. The loss of a key customer or a reduction in our sales to any key
customer could harm our revenues and consequently our financial condition.
If we are unable to continue to sell existing and new products to our key
customers in significant quantities or to attract new significant customers,
our future operating results could be harmed.
We may not be able to maintain or increase sales to our key customers or to
attract new significant customers for a variety of reasons, including the
following:
. most of our customers can stop purchasing our radio frequency products
with limited notice to us without incurring any significant contractual
penalty;
. most of our customers typically buy our radio frequency products through
a purchase order, which does not require them to purchase a minimum
amount of our radio frequency products;
. many of our customers and potential customers have pre-existing
relationships with our current or potential competitors, which may
affect their decision to purchase our radio frequency products;
. some of our customers or potential customers offer or may offer products
that compete with our radio frequency products; and
. our longstanding relationships with some of our larger customers may
also deter other potential customers who compete with these customers
from buying our radio frequency products.
10
If we do not maintain or increase sales to existing customers or attract
significant new customers, our revenues would diminish and consequently our
business would be harmed.
The sales cycle for our radio frequency products is long, and we may incur
substantial non-recoverable expenses and devote significant resources to sales
that may not occur when anticipated or at all.
Our customers typically conduct significant evaluation, testing,
implementation and acceptance procedures before they purchase our radio
frequency products. As a result, we may expend significant financial and other
resources to develop customer relationships before we recognize any revenues
from these relationships, and we may never recognize any revenues from these
efforts. Our customers' evaluation processes are frequently lengthy and may
range from three months to one year or more. In many situations, our customers
design their products to specifically incorporate our radio frequency products,
and our radio frequency products must be designed to meet their stringent
specifications. This process can be complex and may require significant
engineering, sales, marketing and management efforts on our part. This process
becomes more complex if we simultaneously qualify our products with multiple
customers.
Uncertainties involving the ordering and shipment of our radio frequency
products could harm our business.
Our sales are typically made pursuant to individual purchase orders, and we
generally do not have long-term supply arrangements with our customers,
including our most significant customers in terms of volume of sales. Our sales
orders typically provide that our customers may cancel orders until 90 days
prior to the shipping date and may reschedule shipments up to 30 days prior to
the shipping date; however, in the past, we have permitted customers to cancel
orders less than 90 days before the expected date of shipment, in many cases
with little or no penalty. Moreover, we routinely manufacture or purchase
inventory based on estimates of customer demand for our radio frequency
products, which demand is difficult to predict. The cancellation or deferral of
product orders, the return of previously sold products or overproduction due to
the failure of anticipated orders to materialize could result in our holding
excess or obsolete inventory that could substantially harm our business,
financial condition and results of operations. In addition, our inability to
produce and ship radio frequency products to our customers in a timely manner
could harm our reputation and damage our relationships with our customers.
We customize a substantial portion of our radio frequency products to
address our customers' specific radio frequency needs. If we do not sell our
customer-specific products in large volumes, we may be unable to cover our
fixed costs or may be left with substantial unsaleable inventory.
We manufacture a substantial portion of our radio frequency products to
address the needs of individual customers. Frequent product introductions by
systems manufacturers make our future success dependent on our ability to
select development projects that will result in sufficient volumes to enable us
to achieve manufacturing efficiencies. Because customer-specific radio
frequency products are developed for unique applications, we expect that some
of our current and future customer-specific radio frequency products may never
be produced in volume and may impair our ability to cover our fixed
manufacturing costs. In addition, if our customers fail to purchase these
customized radio frequency products from us, we risk having substantial
unsaleable inventory. If we have substantial unsaleable inventory, our
financial condition would be harmed.
Other technologies for the broadband communications market will compete with
some of our target markets. If these technologies prove to be more reliable,
faster or less expensive or become more popular, the demand for our radio
frequency products and our revenues may decrease.
Some of our target markets, such as cable modem and cable telephony
services, are competing with a variety of non-radio frequency based broadband
communications technologies, including digital subscriber line technology. Many
of these technologies may compete effectively with cable modem and cable
telephony services. If any of these competing technologies are more reliable,
faster or less expensive, reach more customers or have other advantages over
radio frequency based broadband technology, the demand for our radio frequency
products and our revenues may decrease.
11
Our success depends on the continued growth of the broadband communications
markets generally and the radio frequency product markets specifically.
We derive a substantial portion of our revenues from sales of radio
frequency products into markets related to broadband communication
applications, in particular, the cable modem market. These markets are
characterized by:
. intense competition;
. rapid technological change; and
. short product life cycles, especially in the consumer electronics
markets.
Although the broadband communications markets generally have grown rapidly
in the last few years, these markets may not continue to grow or a significant
slowdown in these markets may occur. In particular, the set-top box, cable
modem and cable telephony markets may not grow at a rate sufficient for us to
achieve profitability. Because of the intense competition in the broadband
communications markets, the unproven technology of many products addressing
these markets and the short life cycles of many consumer products, it is
difficult to predict the potential size and future growth rate of the radio
frequency product markets. In addition, the broadband communications markets
are transitioning from analog to digital, as well as expanding to new services,
including internet access, cable telephony and interactive television. The
future growth of the radio frequency product markets are partially dependent
upon the market acceptance of products and technologies addressing the
broadband communications markets, and we cannot assure you that the radio
frequency technologies upon which our products are based will be accepted by
any of these markets. If the demand for radio frequency products is not as
great as we expect, we may not be able to generate sufficient revenues to
become successful.
The semiconductor industry is cyclical. If there is a sustained upturn in
the semiconductor market, there could be a resulting increased demand for
foundry services, significantly reducing product availability and increasing
our costs.
The semiconductor industry periodically experiences increased demand and
production capacity constraints. An increased demand for semiconductors could
substantially increase the cost of producing our radio frequency products,
particularly our integrated circuit products, and consequently reduce our
profit
margins. As a result, we may experience substantial period-to-period
fluctuations in future results of operations due to general semiconductor
industry conditions.
We primarily depend on a single third-party wafer foundry to manufacture all
of our integrated circuit products, which reduces our control over the
integrated circuit manufacturing process and could increase costs and decrease
availability of our integrated circuit products.
We do not own or operate a semiconductor fabrication facility. We primarily
rely on IBM, an outside foundry, to produce most of our integrated circuit
radio frequency products, although we are in the process of qualifying x-FAB
for manufacturing our newer integrated circuit products. We do not have a long-
term supply agreement with IBM and instead obtain manufacturing services on a
purchase order basis. IBM has no obligation to supply products to us for any
specific period, in any specific quantity or at any specific price, except as
set forth in a particular purchase order. Our requirements represent a small
portion of the total production capacity of this foundry, and IBM may
reallocate capacity to other customers even during periods of high demand for
our integrated circuits. If IBM were to become unable or unwilling to continue
manufacturing our integrated circuits, our business would be seriously harmed.
As a result, we would have to identify and qualify substitute foundries, which
would be time consuming and difficult, resulting in unforeseen manufacturing
and operations problems. In addition, if competition for foundry capacity
increases, our product costs may increase, and we may be required to pay
significant amounts to secure access to manufacturing services. If we do not
qualify or receive supplies from additional foundries, including x-FAB, we may
be exposed to increased risk of capacity shortages due to our dependence on
IBM.
12
We depend on a single third-party subcontractor for integrated circuit
packaging, which reduces our control over the integrated circuit packaging
process and could increase costs and decrease availability of our integrated
circuit products.
Our integrated circuit products are packaged by a sole independent
subcontractor, Amkor, using facilities located in South Korea. We do not have
long-term agreements with Amkor and typically obtain services from it on a
purchase order basis. Our reliance on Amkor involves risks such as reduced
control over delivery schedules, quality assurance and costs. These risks could
result in product shortages or increase our costs of packaging our products. If
Amkor is unable or unwilling to continue to provide packaging services of
acceptable quality, at acceptable costs and in a timely manner, our business
would be seriously harmed. We would also have to identify and qualify
substitute subcontractors, which could be time consuming and difficult and may
result in unforeseen operations problems.
Our inability to maintain or grow revenues from international sales could
harm our financial results.
For the six months ended June 30, 2001, 50% of our net revenues were from
sales outside of North America. We plan to increase our international sales
activities by hiring additional international sales personnel. Our
international sales will be limited if we cannot do so. Even if we are able to
expand our international operations, we may not succeed in maintaining or
increasing international market demand for our products.
Currency fluctuations related to our international operations could harm our
financial results.
A significant portion of our international revenues and expenses are
denominated in foreign currencies. Accordingly, in the past, we have
experienced significant fluctuations in our financial results due to changing
exchange rates rather than operational changes. For example, in the three
months ended June 30, 2001, we recognized a foreign currency exchange loss of
approximately $1.2 million. We expect currency fluctuations to continue, which
may significantly impact our financial results in the future. We may choose to
engage in currency hedging activities to reduce these fluctuations.
Our international operations, including our operations in Germany, the
Philippines, Hong Kong, Taiwan and Korea, may be negatively affected by actions
taken or events that occur in these countries.
We currently have facilities and suppliers located outside of the U.S.,
including research and development operations in Ingolstadt, Germany, two
manufacturing facilities in Manila, Philippines, and sales offices in Hong
Kong, Taiwan and Korea. As a result, our operations are affected by the local
conditions in those countries, as well as actions taken by the governments of
those countries. For example, if the Philippines government enacts restrictive
laws or regulations, or increases taxes paid by manufacturing operations in
that country, the cost of manufacturing our products in Manila could increase
substantially, causing a decrease in our gross margins and profitability. In
addition, if the U.S. imposes significant import restrictions on our products,
our ability to import our products into the U.S. from our international
manufacturing and packaging facilities could be diminished or eliminated. Local
economic and political instability in areas in the Far East, in particular in
the Philippines where there has been political instability in the past, could
result in unpleasant or intolerable conditions for our workers, and ultimately
could result in a shutdown of our facilities.
International operations that we may develop or acquire in the future may
subject us to additional business risks, including political instability, and
changing or conflicting laws, regulations and tax systems.
We may develop or acquire additional international operations in Europe and
the Pacific Rim region. International expansion or acquisitions, and any
subsequent international operations, could be affected by the
13
local conditions in those countries, as well as actions taken by the
governments of those countries. To expand our operations internationally, we
will have to comply with the laws and regulations of each country in which we
conduct business. For example, if a foreign government enacts restrictive laws
or regulations, or increases taxes paid by manufacturing operations in that
country, the cost of manufacturing our products in that country could increase
substantially, causing a decrease in our gross margins and profitability. We
cannot assure you that we will be successful in obtaining any necessary
regulatory approvals, or in complying with applicable regulations in those
countries. Furthermore, even if such approvals are obtained or such regulations
are complied with, we cannot assure you that we will be able to continue to
comply with these regulations.
Our success could be jeopardized if key personnel leave.
Our future success depends largely upon the continued service of our
executive officers and other key management and technical personnel. Our
success also depends on our ability to continue to attract, retain and motivate
qualified personnel. Our personnel represent a significant asset as the source
of our technological and product innovations. The competition for qualified
personnel is intense in the radio frequency silicon and radio frequency systems
industries. We cannot assure you that we will be able to continue to attract
and retain qualified management, technical and other personnel necessary for
the design, development, manufacture and sale of our radio frequency products.
We may have difficulty attracting and retaining key personnel particularly
during periods of poor operating performance. The loss of the services of one
or more of our key employees or our inability to attract, retain and motivate
qualified personnel could harm our business.
Our manufacturing operations could be jeopardized and our production
decreased if our labor union causes labor slowdowns or shutdowns at our union
facility.
One of our manufacturing facilities is covered by union representation. This
facility currently manufactures a significant portion of our tuner module
products. If we experience labor slowdowns or shutdowns at this facility due to
actions by the labor union, our manufacturing output, and consequently our
revenues, could be diminished.
We must manage our growth.
If we fail to manage our growth, our reputation and results of operations
could be harmed. Our total number of employees has grown from 142 as of June
30, 2000 to 173 as of June 30, 2001, excluding manufacturing personnel in
Manila, Philippines. In addition, as of June 30, 2001, we had
1,157 manufacturing personnel in the Philippines. The growth has placed, and is
expected to continue to place, significant demands on our personnel, management
and other resources. We must continue to improve our operational, financial and
management information systems to keep pace with the growth of our business.
Our business may be harmed if we fail to protect our proprietary technology.
We rely on a combination of patents, trademarks, copyrights, trade secret
laws, confidentiality procedures and licensing arrangements to protect our
intellectual property rights. We currently have patents issued and pending in
the U.S. and in foreign countries. We intend to seek further U.S and
international patents on our technology. We cannot be certain that patents will
be issued from any of our pending applications, that patents will be issued in
all countries where our products can be sold or that any claims will be allowed
from pending applications or will be of sufficient scope or strength to provide
meaningful protection or any commercial advantage. Our competitors may also be
able to design around our patents. The laws of some countries in which our
products are or may be developed, manufactured or sold, including various
countries in Asia, may not protect our products or intellectual property rights
to the same extent as do the laws of the U.S., increasing the possibility of
piracy of our technology and products. Although we intend to vigorously defend
our intellectual property rights, we may not be able to prevent
misappropriation of our technology. Our competitors may also independently
develop technologies that are substantially equivalent or superior to our
technology.
14
We are the target of several securities fraud class action complaints and
are at risk of securities class action litigation. This could result in
substantial costs to us, drain our resources and divert our management's
attention.
Beginning July 11, 2001, multiple securities fraud class action complaints
were filed in the United States District Court for the Southern District of New
York. We are aware of at least three such complaints: Berger v. Goldman, Sachs
& Co., Inc. et al (S.D.N.Y. July 25, 2001), Atlas v. Microtune et al (S.D.N.Y.
Aug. 7, 2001) and Ellis Investment Ltd. v Goldman Sachs & Co., Inc. et al
(S.D.N.Y. August 7, 2001). Purportedly, the complaints are brought on behalf of
all persons who purchased our common stock from August 4, 2000 through December
6, 2000. According to the law firm that filed it, the Atlas complaint names as
defendants Microtune, Douglas J. Bartek, our Chairman and Chief Executive
Officer, Everett ("Buddy") Rogers, our Chief Financial Officer and Vice
President of Finance and Administration, and several investment banking firms
that served as underwriters of our initial public offering. The Berger and
Ellis Investment Ltd. complaints assert claims against the underwriters only.
More such lawsuits may be filed. Among other things, the complaints allege
liability under the federal securities laws as further set forth in "Recent
Developments" on the grounds that the registration statement for the initial
public offering did not disclose that: (1) the underwriters had agreed to allow
certain customers to purchase shares in the offering in exchange for excess
commissions paid to the underwriters; and (2) the underwriters had arranged for
certain customers to purchase additional shares in the aftermarket at pre-
determined prices. Microtune is aware that similar allegations have been made
in lawsuits challenging over 140 other initial public offerings conducted in
1999 and 2000. No specific amount of damages is claimed. These cases are
subject to the Private Securities Litigation Reform Act of 1995, and we expect
that the cases will be consolidated into a single action. We expect that
motions to dismiss each of these actions will be filed. We believe that the
allegations against Microtune, Mr. Bartek and Mr. Rogers are without merit, and
intend to contest them vigorously. Microtune is unable at this time to
determine whether the outcome of the litigation will have a material impact on
our results of operations or financial condition in any future period.
Our ability to sell our radio frequency products may suffer if any
outstanding claims of intellectual property infringement against us or one of
our customers is valid, if any other third party claims that we or our
customers infringe on their intellectual property or if any of our issued
patents are proven to be invalid.
The electronics industry is characterized by vigorous protection and pursuit
of intellectual property rights and positions, which have resulted in
significant and often protracted and expensive litigation. In addition, our
customers may be subject to infringement claims for products incorporating our
radio frequency products. If any claims of infringement are made against any of
our customers, our customers may seek to involve us in the infringement claim
and request indemnification from us. For example, we could be notified of a
claim against one of our customers for which the customer would make a claim
for indemnification from us. If the claim resulted in an adverse result for our
customer, it may reduce or completely eliminate marketing of its infringing
product, which would decrease sales of our radio frequency products to this
customer. Further, if our customer prevailed in its claim for indemnification
against us, or if we were found to infringe on any other third- party
intellectual property, we could be required to:
. pay substantial damages such as royalties on our historical and future
product sales;
. indemnify our customers for their legal fees and damages paid;
. stop manufacturing, using and selling the infringing products;
. expend significant resources to develop non-infringing technology;
. discontinue the use of some of our processes; or
. obtain licenses to the technology.
15
We may be unsuccessful in developing noninfringing products or negotiating
licenses upon reasonable terms. These problems might not be resolved in time to
avoid harming our results of operations.
Furthermore, we have initiated, and may initiate in the future, claims or
litigation against third parties for infringement of our proprietary rights or
to establish the validity of our proprietary rights. On January 24, 2001, we
filed a lawsuit alleging patent infringement in the United States Court for the
Eastern District of Texas, Sherman Division, against Broadcom Corporation. The
lawsuit is in the initial phases of discovery and its outcome is uncertain. If
we are unsuccessful in this litigation or other similar claims, then Broadcom
and others will be able to compete directly against us, which would materially
adversely effect our ability to sell our products and grow our business. Any
current or future litigation by or against us or one of our customers could
result in significant expense and divert the efforts of our technical personnel
and management, whether or not the litigation results in a favorable
determination.
Our customers' products are subject to governmental regulation.
Governmental regulation could place constraints on our customers and
consequently minimize their demand for our radio frequency products. The
Federal Communications Commission, or FCC, has broad jurisdiction over several
of our target markets in the U.S. Similar governmental agencies regulate our
target markets in other countries. Although our products are not directly
subject to current regulations of the FCC or any other federal or state
communications regulatory agency, much of the equipment into which our products
are incorporated is subject to direct government regulation. Accordingly, the
effects of regulation on our customers or the industries in which they operate
may, in turn, impede sales of our products. For example, demand for our radio
frequency products will decrease if equipment incorporating our products fails
to comply with FCC emissions specifications.
You may not be able to sell your securities at or above the price you paid.
We may determine the public offering price of the securities offered under
this prospectus through negotiations with third parties such as underwriters,
and this price may not be indicative of the prices that will prevail in the
trading market. The market price of our securities may fluctuate significantly
in response to a number of factors, some of which are beyond our control,
including:
. changes in financial estimates and recommendations by securities
analysts;
. changes in market valuations or the financial performance of other
companies supplying radio frequency integrated circuits and tuners;
. announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments; or
. fluctuations in stock market prices and volumes, which are particularly
common among the securities of technology companies.
As a result, you may not be able to sell your securities at or above the
price you paid.
We may be unable to obtain the capital required to grow our business.
From time to time, we may need to raise funds to meet our working capital
and capital expenditure needs through the sale of securities under this
prospectus or through other financing alternatives. We cannot be certain that
we would be able to obtain additional financing on favorable terms, if at all.
Our capital requirements depend upon several factors, including the rate of
market acceptance of our products, our ability to expand our customer base, our
level of expenditures for sales and marketing, the cost of product and service
upgrades and other factors. If our capital requirements vary materially from
those currently planned, we may require additional financing sooner than
anticipated. Further, if we issue equity securities, stockholders will
experience additional dilution and the new equity securities may have rights,
preferences or privileges senior to those of
16
existing holders of common stock. If we issue debt securities, the debt
securities will have rights senior to those
of existing holders of equity securities generally. If we cannot raise funds,
if needed, on acceptable terms, we may not be able to develop our products and
services, take advantage of future opportunities or respond to competitive
pressures or unanticipated requirements, any of which could harm our ability to
grow our business.
Future sales of our securities or the expectation of or uncertainty about
those sales may cause our stock price to decline.
The market price of our common stock or any other securities that we issue
could decline as a result of the registration or sale of substantial amounts of
our securities, including common stock, in the public market or to private
investors, or the expectation or uncertainty that those sales could occur.
These sales or the possibility that they may occur also could also make it more
difficult for us to raise funds through future offerings of securities.
Provisions in our charter documents and Delaware law may deter takeover
efforts that you may feel would be beneficial to you.
Several provisions of our amended and restated certificate of incorporation
and Bylaws may discourage, delay or prevent a merger or acquisition that you
may consider favorable and therefore may harm our stock price. Those provisions
include:
. authorizing the issuance of "blank check" preferred stock;
. providing for a classified board of directors with staggered, three-year
terms;
. prohibiting cumulative voting in the election of directors;
. limiting the persons who may call special meetings of the board or the
stockholders;
. prohibiting stockholder action by written consent;
. establishing advance notice requirements for nominations for election to
the board of directors or for proposing matters that can be acted on by
stockholders at stockholder meetings; and
. establishing super-majority voting requirements in some instances.
Management will have broad discretion in using the proceeds of any offering
of our securities.
We need to retain flexibility to respond to factors affecting our business.
Accordingly, our management will retain broad discretion as to the allocation
of the proceeds of any offering of our securities and may use the proceeds in a
manner with which you may not agree. If our management does not effectively use
the proceeds from any offering of our securities, we may not be able to operate
and grow our business successfully.
17
RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges and our deficiencies of
earnings to fixed charges and earnings to combined fixed charges and preferred
stock dividends for the periods indicated are as follows:
Six May 28, 1996
Months (inception)
Ended through
June 30, Year ended December 31, December 31,
-------- ----------------------------------- ------------
2000 2000 1999 1998 1997 1996
-------- -------- ------- ------- ------- ------------
Ratio of earnings to
fixed charges.......... -- -- -- -- -- --
Deficiency of earnings
to fixed charges....... $(12,277) $(29,760) $(8,508) $(3,487) $(2,406) $(623)
Ratio of earnings to
combined fixed charges
and preferred stock
dividends.............. -- -- -- -- -- --
Deficiency of earnings
to combined fixed
charges and preferred
stock dividends........ $(12,277) $(29,760) $(8,508) $(4,298) $(6,589) $(623)
We have computed the ratios of earnings to fixed charges shown above by
dividing income before income taxes and fixed charges by fixed charges. We have
computed the ratios of earnings to combined fixed charges and preferred stock
dividends by dividing income before income taxes and fixed charges by the sum
of fixed charges and preferred stock dividends. The term "fixed charges" means
the sum of the following: (a) interest expensed and capitalized; (b) amortized
premiums, discounts and capitalized expenses related to indebtedness; (c) an
estimate of the interest within rental expense; and (d) preference securities
dividend requirements of consolidated subsidiaries. For the periods presented,
our fixed charges consisted only of a percentage of rental expense of operating
leases that represents interest.
USE OF PROCEEDS
Unless we otherwise indicate in an applicable prospectus supplement, we
currently expect to use the net proceeds from the sale of any securities for
working capital and other general corporate purposes, including:
. to finance our growth;
. for capital expenditures made in the ordinary course of business; and
. for acquisitions of businesses, products and technologies that
complement or expand our business.
We may set forth additional information on the use of net proceeds from the
sale of securities we offer under this prospectus in a prospectus supplement
relating to the specific offering. Pending any specific application, we may
initially invest funds in short-term marketable securities or apply them to the
reduction of short-term indebtedness. We will receive no proceeds from the sale
of our common stock by the selling stockholders.
18
THE SECURITIES WE MAY OFFER
The descriptions of the securities contained in this prospectus, together
with the applicable prospectus supplements, summarize the terms and provisions
of the various types of securities that we may offer. We will describe in the
applicable prospectus supplement relating to any securities the particular
terms of the securities offered by that prospectus supplement. If we indicate
in the applicable prospectus supplement, the terms of the securities may differ
from the terms we have summarized below. We will also include in the prospectus
supplement information, where applicable, about material United States federal
income tax considerations relating to the securities, and the securities
exchange, if any, on which the securities will be listed.
We may sell from time to time, in one or more offerings:
. common stock;
. preferred stock;
. debt securities; and
. warrants to purchase any of the securities listed above.
In this prospectus, we refer to the common stock, preferred stock, debt
securities and warrants collectively as "securities." The maximum aggregate
dollar amount of all securities that we and any selling stockholders may issue
under this prospectus and all supplements to this prospectus will not exceed
$250,000,000.
If we decide to sell shares of our common stock, the selling stockholders
may sell up to 3.5 million shares of the common stock owned by them, subject to
any reductions or cutbacks as determined by us and the underwriters. The
selling stockholders are including their shares in this registration statement
because they were granted piggyback registration rights when they acquired
shares of our convertible preferred stock prior to our initial public offering
in August 2000.
If we issue debt securities at a discount from their original stated
principal amount, then, for purposes of calculating the total dollar amount of
all securities issued under this prospectus, we will treat the initial offering
price of the debt securities as the total original principal amount of the debt
securities.
This prospectus may not be used to consummate a sale of any securities
unless it is accompanied by a prospectus supplement.
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SELLING STOCKHOLDERS
The following table sets forth the name of each selling stockholder and its
relationship, if any, with us and:
. the number of shares of our common stock beneficially owned by each
selling stockholder as of August 22, 2001;
. the maximum number of shares of our common stock that may be offered for
the account of each selling stockholder; and
. the amount and percentage of our common stock to be beneficially owned
by each selling stockholder assuming the sale of all shares of common
stock that the selling stockholders may sell hereunder.
Beneficial ownership is determined in accordance with the rules of the SEC.
Except as set forth below, the entities named in this table have sole voting
and investment power with respect to all shares of common stock shown as
beneficially owned by them. The number of outstanding shares of our common
stock as of August 22, 2001 was 39,936,372.
Percentage
Shares of of
Shares of Maximum Common Stock Common Stock
Common Stock Number of Shares Beneficially Beneficially
Beneficially of Common Stock Owned After Owned After
Name of Selling Owned Prior That May Be Sold the the
Stockholder(3) to Offering Hereunder Offering(1) Offering(2)
--------------- ------------ ---------------- ------------ ------------
HMTF Europe Fund Cayman,
L.P. .................. 3,621,304 1,586,295 2,035,009 --
HMTF Europe Private Fund
Cayman, L.P. .......... 43,303 18,968 24,335 --
HM PG Europe I, C.V. ... 267,550 117,198 150,352 --
HMEU 1-EQ Coinvestors,
L.P. .................. 46,502 20,371 26,131 --
HMEU 1-P Coinvestors,
L.P. .................. 9,612 4,210 5,402 --
HMEU 1-EN Coinvestors,
L.P. .................. 6,187 2,710 3,477 --
HM 1-FOF Coinvestors
Cayman, L.P. .......... 336 143 193 --
HMTF Equity Fund IV
(1999) Cayman, L.P. ... 3,698,007 1,619,894 2,078,113 --
HMTF Private Equity Fund
IV (1999) Cayman,
L.P. .................. 26,196 11,476 14,720 --
HM 4-EN Coinvestors
Cayman, L.P. .......... 10,803 4,733 6,070 --
HM 4-P Coinvestors
Cayman, L.P. .......... 2,931 1,284 1,647 --
HM 4-EQ Coinvestors
Cayman, L.P............ 60,445 26,477 33,968 --
Hicks, Muse PG-IV
(1999), C.V. .......... 196,877 86,241 110,636 --
--------- --------- --------- ---
Total................. 7,990,053 3,500,000 4,490,053 --
========= ========= ========= ===
--------
* Less than 1% of the outstanding shares of our common stock.
(1) Assumes the sale of all shares of our common stock registered hereunder,
however, this prospectus provides that the selling stockholders may sell
only up to 3.5 million shares of the common stock owned by them, subject
to any reductions or cutbacks as determined by us and any underwriters, if
we decide to sell shares of our common stock.
(2) Because each selling stockholder may sell all or some of the shares
registered on its behalf only if we decide to sell shares of our common
stock, at this time no estimate can be given as to the percentage of
shares owned by each selling stockholder after the completion of any
offering. We will provide this percentage information in a prospectus
supplement at the time of any offering hereunder.
(3) Each of the selling stockholders listed above is an affiliate of Hicks,
Muse, Tate & Furst Incorporated, a private investment firm. As of August
22, 2001, Thomas O. Hicks, a partner of Hicks, Muse, Tate & Furst
Incorporated, directly held of record 38,669 shares of common stock and
5,016 shares of common stock as the trustee of certain trusts for the
benefit of his children. Mr. Hicks is also the indirect general partner of
each of the selling stockholders listed above and, accordingly, may be
deemed to beneficially own all or a
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portion of the shares of common stock owned by those entities. In addition,
Jack D. Furst, a partner of Hicks, Muse, Tate & Furst Incorporated, is a
Class II Director of Microtune and, as of August 22, 2001, directly held of
record 35,880 shares of common stock. Mr. Furst is also an officer of the
indirect general partner of each of the selling stockholders listed above
and, accordingly, may be deemed to beneficially own all or a portion of the
shares of common stock owned by those entities. Each of Mr. Hicks and Mr.
Furst disclaims beneficial ownership of all shares not owned by each of
them of record (except to the extent of any pecuniary interest therein). In
addition, Eric Lindberg, an employee of Hicks, Muse, Tate & Furst
Incorporated, was appointed as a Class III Director of Microtune and a
member of our audit committee in August 2001 and, as of August 22, 2001,
directly held of record 262 shares of common stock. Messrs. Furst and
Lindberg replaced Lawrence D. Stuart, Jr., a former partner of Hicks, Muse,
Tate & Furst Incorporated, and Philippe von Stauffenberg, an employee of
Hicks, Muse, Tate & Furst Incorporated, respectively, upon their
resignation from our board of directors in August 2001.
In January 2000, we combined with Microtune GmbH (formerly Temic Telefunken
Hochfrequenztechnik GmbH) and its wholly-owned subsidiaries and affiliated
companies, by acquiring HMTF Acquisition (Bermuda), Ltd. In connection with
this combination, we issued 2,898,602 shares of our Series E preferred
stock and a warrant to acquire 966,201 shares of our common stock to HMTF
Temic/Microtune Cayman, L.P., a Cayman Islands limited partnership and an
affiliate of Hicks, Muse, Tate & Furst Incorporated. In addition, in 1999
HMTF Temic/Microtune Cayman, L.P. purchased 833,334 shares of our Series D
preferred stock. In January 2000, we effected a 2-for-1 stock split of our
common stock. Following our stock split, HMTF Temic/Microtune Cayman, L.P.
owned 1,666, 668 shares of our Series D preferred stock, 5,797,204 shares
of our Series E preferred stock, and a warrant to acquire 1,932,402 shares
of our common stock. These shares were subsequently converted or exercised
into shares of our common stock and were distributed in a pro rata
distribution without consideration to the selling stockholders listed
above.
21
DESCRIPTION OF CAPITAL STOCK
General
Our authorized capital stock consists of 175,000,000 shares of stock,
including:
. 150,000,000 shares of common stock, $0.001 par value per share, of which
39,936,372 shares were issued and outstanding as of August 22, 2001; and
. 25,000,000 shares of preferred stock, $0.001 par value per share, of
which no shares are currently issued or outstanding.
Common Stock
This section describes the general terms of our common stock. For more
detailed information, you should refer to our amended and restated certificate
of incorporation, a copy of which has been filed with the SEC. Our amended and
restated certificate of incorporation is also incorporated by reference into
this prospectus.
Each holder of common stock is entitled to one vote for each share on all
matters to be voted upon by the stockholders and there are no cumulative voting
rights. Subject to preferences to which holders of preferred stock may be
entitled, holders of common stock are entitled to receive ratably the
dividends, if any, as may be declared from time to time by our board of
directors out of funds legally available therefor. In the event of our
liquidation, dissolution or winding up, holders of common stock would be
entitled to share in our assets remaining after the payment of liabilities and
the satisfaction of any liquidation preference granted to the holders of any
outstanding shares of preferred stock. Holders of common stock have no
preemptive or conversion rights or other subscription rights and there are no
redemption or sinking fund provisions applicable to the common stock. All
outstanding shares of common stock are, and any shares of common stock offered
by us in this offering, when issued and paid for, will be, fully paid and
nonassessable. The rights, preferences and privileges of the holders of common
stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of preferred stock or debt securities that we
may designate and issue in the future.
Preferred Stock
This section describes the general terms and provisions of our preferred
stock. If shares of preferred stock are offered by virtue of this prospectus, a
prospectus supplement will describe the specific terms of the shares of
preferred stock, as well as any general terms described in this section that
will not apply to those shares of preferred stock. We will file a copy of the
certificate of designation that contains the terms of each new series of
preferred stock with the SEC each time we issue a new series of preferred
stock. Each certificate of designation will establish the number of shares
included in a designated series and fix the designations, powers, privileges,
preferences and rights of the shares of each series as well as any applicable
qualifications, limitations or restrictions. In addition to the other
information contained in this prospectus or any applicable prospectus
supplement, you should refer to the applicable certificate of designation as
well as our restated certificate of incorporation before deciding to buy shares
of our preferred stock as described in the applicable prospectus supplement.
Our board of directors has been authorized to provide for the issuance of up
to 25 million shares of our preferred stock in multiple series without the
approval of stockholders. With respect to each series of our preferred stock,
our board of directors has the authority to fix the following terms:
. the designation of the series;
. the number of shares within the series;
. whether dividends are cumulative and, if cumulative, the dates from
which dividends are cumulative;
. the rate of any dividends, any conditions upon which dividends are
payable, and the dates of payment of dividends;
22
. whether the shares are redeemable, the redemption price and the terms of
redemption;
. the amount payable for each share you own if we dissolve or liquidate;
. whether the shares are convertible or exchangeable, the price or rate of
conversion or exchange, and the applicable terms and conditions of
conversion or exchange;
. any restrictions on issuance of shares in the same series or any other
series;
. voting rights applicable to the series of preferred stock; and
. any other rights, preferences or limitations of the series.
Your rights with respect to your shares of preferred stock will be
subordinate to the rights of our general creditors. Shares of our preferred
stock offered by us in this prospectus, when issued and paid for, will be fully
paid and nonassessable, and will not be entitled to preemptive rights unless
specified in the applicable prospectus supplement.
Limitation of Liability and Indemnification
Delaware law provides that a corporation has the ability to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding if the person acted
in good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the person's
conduct was unlawful. Our amended and restated certificate of incorporation
provides that our directors will not be personally liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director to
the maximum extent permitted by Delaware law. This limitation of liability does
not apply to liabilities arising under federal or state securities laws and
does not affect the availability of equitable remedies such as injunctive
relief or rescission.
Our Bylaws provide that we shall indemnify our directors, officers,
employees and agents to the fullest extent permitted by law including in
circumstances in which indemnification is otherwise discretionary under
Delaware law. Our Bylaws also permit us to secure insurance on behalf of any
officer, director, employee or other agent for any liability arising out of his
or her actions in that capacity, regardless of whether our Bylaws permit any
indemnification. We maintain directors' and officers' liability insurance and
intend to continue to maintain the insurance in the future.
We have also entered into agreements to indemnify our directors and
executive officers. In these agreements, we agree to indemnify these persons
for expenses (including attorneys' fees), judgments, fines and settlement
amounts incurred by any of them in any action or proceeding, including any
action by or in the right of us arising out of that person's services as our
director, officer, employee, agent or fiduciary or for any subsidiary of us or
any other company or enterprise to which the person provides services at our
request. We believe that these provisions and agreements are necessary to
attract and retain qualified persons as directors and executive officers.
Delaware Anti-Takeover Law and Charter and Bylaw Provisions
Provisions of Delaware law and our amended and restated certificate of
incorporation and Bylaws could make it more difficult for a third party to
acquire us by means of a tender offer, a proxy contest or otherwise or to
remove our directors. These provisions are intended to discourage coercive
takeover practices and inadequate takeover bids and to encourage persons
seeking to acquire control of us to first negotiate with our Board of
Directors. We believe that the benefits of increased protection of our ability
to negotiate with the proponent of an unfriendly or unsolicited proposal to
acquire or restructure us outweigh the disadvantages of discouraging those
proposals because negotiation of those proposals could result in an improvement
of their terms.
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Delaware Anti-Takeover Law. We are subject to Section 203 of the Delaware
General Corporation Law. In general, Section 203 prohibits a publicly held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years following the date the
person became an interested stockholder, unless (with specific exceptions):
. the board of directors approves the transaction in which the stockholder
became an interested stockholder prior to the date the interested
stockholder attained that status;
. when the stockholder became an interested stockholder, he or she owned
at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding shares owned by persons who
are directors and also officers; or
. on or subsequent to the date the business combination is approved by the
board of directors, the business combination is authorized at an annual
or special meeting of stockholders by the affirmative vote of at least
two-thirds of the outstanding voting stock that is not owned by the
interested stockholder.
Generally, a "business combination" includes a merger, asset or stock sale,
or other transaction resulting in a financial benefit to the interested
stockholder. Generally, an "interested stockholder" is a person who, together
with affiliates and associates, owns, or within three years prior to the
determination of interested stockholder status, did own, 15% or more of a
corporation's voting stock. The existence of this provision would be expected
to have an anti-takeover effect with respect to transactions not approved in
advance by the board of directors, including discouraging attempts that might
result in a premium over the market price for the shares of common stock held
by stockholders.
Provisions of Our Amended and Restated Certificate of Incorporation and
Bylaws. Our amended and restated certificate of incorporation divides our Board
of Directors into three classes, as nearly equal in number as possible, serving
staggered terms. Approximately one-third of the board is elected each year. Our
classified board could prevent a party who acquires control of a majority of
our outstanding voting stock from obtaining control of our Board of Directors
until the second annual stockholders meeting following the date the acquiror
obtains the controlling stock interest. A classified board could also have the
effect of discouraging a potential acquiror from making a tender offer or
otherwise attempting to obtain control of us and could increase the likelihood
that incumbent directors will retain their positions.
Our amended and restated certificate of incorporation provides that our
directors may be removed (i) with cause by the affirmative vote of the holders
of at least a majority of the voting power of all of the then outstanding
shares of voting stock, voting as a single class, or (ii) without cause by the
affirmative vote of the holders of at least two-thirds of the voting power of
all of the then-outstanding shares of the voting stock.
Our Bylaws establish an advance notice procedure for stockholder proposals
to be brought before our annual meeting of stockholders, including proposed
nominations of persons for election to our Board of Directors. Stockholders at
an annual meeting may only consider proposals or nominations specified in the
notice of meeting or brought before the meeting by or at the direction of our
Board of Directors or by a stockholder who was a stockholder of record on the
record date for the meeting, who is entitled to vote at the meeting and who has
given to our Secretary a timely notice in proper written form in accordance
with our Bylaws, of the stockholder's intention to bring that business before
the meeting. Although the Bylaws do not give our Board of Directors the power
to approve or disapprove stockholder nominations of candidates or proposals
regarding other business to be conducted at a special or annual meeting of the
stockholders, the Bylaws may have the effect of precluding the conduct of
business at a meeting if the proper procedures are not followed or may
discourage or deter a potential acquiror from conducting a solicitation of
proxies to elect its own slate of directors or otherwise attempting to obtain
control of our company.
24
Under Delaware law, a special meeting of stockholders may be called by the
Board of Directors or by any other person authorized to do so in our amended
and restated certificate of incorporation or Bylaws. Our Bylaws authorize the
Board of Directors, the Chairman of the Board, the Vice Chairman of the Board,
our Chief Executive Officer, our President and any holder of at least 15% of
our outstanding voting stock to call a special meeting of stockholders. The
limits on the right of holders of less than 15% of our outstanding voting stock
to call a special meeting means that a stockholder owning less than 15% of our
outstanding voting stock cannot force stockholder consideration of a proposal
over the opposition of our Board of Directors by calling a special meeting of
stockholders prior to the time that a majority of our Board of Director
believes that consideration to be appropriate or until the next annual meeting
provided that the requestor meets the notice requirements. The restriction on
the ability of stockholders to call a special meeting means that a proposal to
replace our Board of Directors could be delayed until the next annual meeting.
Under Delaware law, stockholders may execute an action by written consent in
lieu of a stockholder meeting. Delaware law permits a corporation to eliminate
the ability of stockholders to take actions by written consent. Our amended and
restated certificate of incorporation prohibits actions by written consent of
stockholders. Denying stockholders the right to act by written consent may
lengthen the amount of time required to take stockholder actions since actions
by written consent may not be subject to the minimum notice requirement of a
stockholders meeting. Denying stockholders the right to act by written consent
may also deter hostile takeover attempts. A holder or group of holders
controlling a majority in interest of our capital stock would not be able to
amend our Bylaws or remove directors pursuant to a stockholders' written
consent. Any holder or group of holders would have to obtain the consent of a
majority of our Board of Directors, the Chairman of the Board, the Vice
Chairman of the Board, the Chief Executive Officer, the President or a holder
of at least 15% of our outstanding voting stock to call a stockholders' meeting
and wait until the notice periods, as determined by the Board of Directors
pursuant to our Bylaws, expire prior to taking any action.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare
Investor Services, 1601 Elm Street, Suite 4340, Dallas, Texas, 75201, phone:
(214) 969-1859.
Stock Market Listing
Our common stock is listed on the Nasdaq National Market. The trading symbol
for our common stock on this market is "TUNE."
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities in one or more series under an Indenture
between us and a trustee to be determined. A form of an Indenture is filed as
an exhibit to the registration statement of which this prospectus is a part.
Any Indenture will be subject to, and governed by, the Trust Indenture Act of
1939.
The following summary of certain provisions of the Indenture filed as an
exhibit to the registration statement does not purport to be complete and is
qualified in its entirety by express reference to the Indenture and any
specific securities resolution or any supplemental indenture authorizing a
series of debt securities. Copies of the resolution or supplemental indenture
will be filed with the SEC. Capitalized terms used in this section without
definition have the meanings given the terms in the Indenture.
The particular terms of the debt securities offered by a prospectus
supplement will be described in that supplement, along with any applicable
modifications or additions to the general terms of the debt securities as
described in this prospectus and in the Indenture. Accordingly, for a
description of the terms of any series of debt securities, reference must be
made to both the description of the debt securities in this prospectus and the
prospectus supplement.
25
General
The Indenture does not limit the amount of debt securities that can be
issued or our ability or that of our subsidiaries to incur, assume or guarantee
debt. In addition, the Indenture does not restrict our ability or that of our
subsidiaries to create or permit liens. It provides that the debt securities
may be issued from time to time in one or more series pursuant to the terms of
one or more securities resolutions or supplemental indentures creating the
series.
As of the date of this prospectus, there were no debt securities outstanding
under the Indenture.
Terms
Reference is made to the relevant prospectus supplement for the following
terms, if applicable, of the debt securities offered thereby:
. the designation, aggregate principal amount, currency or composite
currency in which principal or interest may be paid and denominations;
. the price at which the debt securities will be issued and, if an index
formula or other method is used, the method for determining amounts of
principal or interest;
. the maturity date and other dates, if any, on which principal will be
payable;
. the interest rate or rates, if any, or method of calculating the
interest rate or rates;
. the date or dates from which interest will accrue and on which interest
will be payable, and the record dates for the payment of interest;
. the manner of paying principal and interest;
. the place or places where principal and interest will be payable;
. the terms of any mandatory or optional redemptions by us, including any
sinking fund;
. the terms of any conversion or exchange rights;
. the terms of any redemptions at the option of holders;
. any tax indemnity provisions;
. if the debt securities provide that payments of principal or interest
may be made in a currency other than that in which debt securities are
denominated, the manner for determining the payments;
. the portion of principal payable upon acceleration of a discounted debt
security (as defined below);
. whether and upon what terms debt securities may be defeased;
. whether any events of default or covenants in addition to or in lieu of
those set forth in the Indenture apply;
. provisions for electronic issuance of debt securities or for debt
securities in uncertificated form;
. the ranking of the debt securities; and
. any other terms not inconsistent with the provisions of the Indenture.
We may issue debt securities as registered debt securities, bearer debt
securities or uncertificated debt securities and in such denominations as
specified in the terms of the series.
26
In connection with its original issuance, no bearer debt security will be
offered, sold or delivered to any location in the United States, and a bearer
debt security in definitive form may be delivered in connection with its
original issuance only upon presentation of a certificate in a form prescribed
by us to comply with United States laws and regulations.
Registration of transfer of registered debt securities may be requested upon
surrender thereof at any office or agency we maintain for that purpose and upon
fulfillment of all other requirements of the agent.
Securities may be issued under the Indenture as discounted debt securities
to be offered and sold at a discount from the principal amount thereof. Special
United States federal income tax and other considerations applicable thereto
will be described in the prospectus supplement relating to any discounted debt
securities. "Discounted debt security" means a security where the amount of
principal due upon acceleration is less than the stated principal amount
payable at maturity.
Covenants
Any covenants that may apply to a particular series of debt securities will
be described in the prospectus supplement relating thereto.
Ranking Of Debt Securities
Unless stated otherwise in a prospectus supplement, the debt securities will
not be secured by our properties or assets and will represent unsecured debt.
Unless stated otherwise in a prospectus supplement, unsecured debt securities
will rank equally and ratably with any other unsecured and unsubordinated debt.
The Indenture does not limit the ability of any of our subsidiaries to issue,
assume or guarantee debt, and the debt securities may be effectively
subordinated to all existing and future indebtedness and other liabilities and
commitments of our subsidiaries.
Successor Obligor
The Indenture provides that, unless otherwise specified in the securities
resolution establishing a series of debt securities, we may not consolidate
with or merge into, or transfer all or substantially all of our assets to, any
person in any transaction in which we are not the survivor, unless:
. the person is organized under the laws of the United States or a State
thereof or is organized under the laws of a foreign jurisdiction and
consents to the jurisdiction of the courts of the United States or a
State thereof;
. the person assumes by supplemental indenture all of our obligations
under the Indenture, the debt securities and any coupons;
. all required approvals of any regulatory body having jurisdiction over
the transaction have been obtained; and
. immediately after the transaction no default (as defined below) exists.
The successor will be substituted for us, and thereafter all of our
obligations under the Indenture, the debt securities and any coupons will
terminate.
Exchange Of Debt Securities
Registered debt securities may be exchanged for an equal aggregate principal
amount of registered debt securities of the same series and date of maturity in
such authorized denominations as may be requested upon surrender of the
registered debt securities at an office or agency we maintain for that purpose
and upon fulfillment of all other requirements of our agent.
27
Default and Remedies
Unless the securities resolution establishing the series otherwise provides
(in which event the prospectus supplement will so state), an "event of default"
with respect to a series of debt securities will occur if:
. we default in any payment of interest on any debt securities of that
series when the same becomes due and payable and the default continues
for a period of 30 days;
. we default in the payment of the principal and premium, if any, of any
debt securities of the series when the same becomes due and payable at
maturity or upon redemption, acceleration or otherwise;
. we default in the payment or satisfaction of any sinking fund obligation
with respect to any debt securities of that series as required by the
securities resolution establishing that series;
. we default in the performance of any of our other agreements applicable
to the series and the default continues for 60 days after the notice
specified below;
. pursuant to or within the meaning of any Bankruptcy Law (as defined
below), we:
. commence a voluntary case;
. consent to the entry of an order for relief against us in an
involuntary case;
. consent to the appointment of a Custodian (as defined below) for us
or for all or substantially all of our property; or
. make a general assignment for the benefit of our creditors;
. a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
. is for relief against us in an involuntary case;
. appoints a Custodian for us or for all or substantially all of our
property; or
. orders our liquidation, and the order or decree remains unstayed and
in effect for 60 days; or
. there occurs any other event of default provided for in such series.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time would
be, an event of default. If an event of default occurs and is continuing on a
series, the trustee, by notice to us, or the holders of at least 25% in
principal amount of the series, may declare the principal of and accrued
interest on all the debt securities of the series to be due and payable
immediately. Discounted debt securities may provide that the amount of
principal due upon acceleration is less than the stated principal amount. The
holders of a majority in principal amount of the series, by notice to the
trustee, may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing events of
default on the series have been cured or waived except nonpayment of principal
or interest that has become due solely because of the acceleration. If an event
of default occurs and is continuing on a series, the trustee may pursue any
available remedy to collect principal or interest then due on the series, to
enforce the performance of any provision applicable to the series, or otherwise
to protect the rights of the trustee and holders of the series.
The trustee may require indemnity satisfactory to it before it enforces the
Indenture or the debt securities of the series. Subject to certain limitations,
holders of a majority in principal amount of the debt securities of the series
may direct the trustee in its exercise of any trust or power with respect to
the series. Except in the
28
case of default in payment on a series, the trustee may withhold from holders
of that series notice of any continuing default if it determines that
withholding the notice is in the interest of holders of the series. We are
required to furnish the trustee annually a brief certificate as to our
compliance with all conditions and covenants under the Indenture.
The Indenture does not have a cross-default provision. Thus, a default by us
on any other debt, including any other series of debt securities, would not
constitute an event of default. A securities resolution may provide for a
cross-default provision, in which case the prospectus supplement will describe
the terms of that provision.
Amendments and Waivers
The Indenture and the debt securities or any coupons of the series may be
amended, and any default may be waived, as follows. Unless the securities
resolution otherwise provides (in which event the prospectus supplement will so
state), we and the trustee may amend the debt securities, the Indenture and any
coupons with the written consent of the holders of a majority in principal
amount of the debt securities of all series affected voting as one class.
Unless the securities resolution otherwise provides (in which event the
prospectus supplement will so state), a default on a particular series may be
waived with the consent of the holders of a majority in principal amount of the
debt securities of the series. However, without the consent of each debt
security holder affected, no amendment or waiver may:
. reduce the amount of debt securities whose holders must consent to an
amendment or waiver;
. reduce the interest on or change the time for payment of interest on any
debt security;
. change the fixed maturity of any debt security or change the amount or
time for any payment of any sinking fund or similar fund;
. reduce the principal of any non-discounted debt security;
. reduce the amount of the principal of any discounted debt security that
would be due on acceleration, upon redemption or upon maturity;
. change the currency in which the principal of or interest on a debt
security is payable;
. make any change that materially adversely affects the right to convert
or exchange any debt security; or
. waive any default in payment of interest on or principal of a debt
security.
Without the consent of any debt security holder, we and the trustee may
amend the Indenture, the debt securities or any coupons to:
. cure any ambiguity, omission, defect or inconsistency;
. provide for assumption of our obligations to debt security holders in
the event of a merger or consolidation requiring such assumption;
. provide that specific provisions of the Indenture shall not apply to a
series of debt securities not previously issued;
. create a series and establish its terms;
. provide for a separate trustee for one or more series; or
. make any change that does not materially adversely affect the rights of
any debt security holder.
29
Legal Defeasance and Covenant Defeasance
Any series of our debt securities may be subject to the defeasance and
discharge provisions of the applicable indenture if so specified in the
applicable prospectus supplement. If those provisions are applicable, we may
elect either:
. legal defeasance--which will permit us to defease and be discharged
from, subject to limitations, all of our obligations with respect to
those debt securities; or
. covenant defeasance--which will permit us to be released from our
obligations to comply with covenants relating to those debt securities
as described in the applicable prospectus supplement, which may include
obligations concerning subordination of our subordinated debt
securities.
If we exercise our legal defeasance option with respect to a series of debt
securities, payment of those debt securities may not be accelerated because of
an event of default. If we exercise our covenant defeasance option with respect
to a series of debt securities, payment of those debt securities may not be
accelerated because of an event of default related to the specified covenants.
Unless otherwise provided in the applicable prospectus supplement, we may
invoke legal defeasance or covenant defeasance with respect to any series of
our debt securities only if:
. we irrevocably deposit with the trustee, in trust, an amount in funds or
U.S. government obligations which, through the payment of principal and
interest in accordance with their terms, will provide money in an amount
sufficient to pay, when due upon maturity or redemption, as the case may
be, the principal of, premium, if any, and interest on those debt
securities;
. we deliver to the trustee a certificate from a nationally recognized
firm of independent accountants expressing their opinion that the
payments of principal and interest when due and without reinvestment of
the deposited U.S. government obligations plus any deposited money
without investment will provide cash at such times and in such amounts
as will be sufficient to pay the principal, premium, and interest when
due with respect to all the debt securities of that series to maturity
or redemption, as the case may be;
. 123 days pass after the deposit is made and, during the 123-day period,
no default relating to our bankruptcy, insolvency or reorganization
occurs that is continuing at the end of that period;
. no event of default has occurred and is continuing on the date of the
deposit and after giving effect to the deposit;
. the deposit is not a default under any other agreement binding on us;
. we deliver to the trustee an opinion of counsel to the effect that the
trust resulting from the deposit is not, or is qualified as, a regulated
investment company under the Investment Company Act of 1940;
. in the case of legal defeasance, we shall have delivered to the trustee
an opinion of counsel in the U.S. reasonably acceptable to the trustee
confirming that (a) we have received from, or there has been published
by, the Internal Revenue Service a ruling or (b) since the date of the
indenture, there has been a change in the applicable federal income tax
law, in the case of either (a) or (b) to the effect that, and based upon
which the opinion of counsel shall confirm that, the holders of
outstanding debt securities will not recognize income, gain or loss for
federal income tax purposes as a result of this legal defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if this legal
defeasance had not occurred;
. in the case of covenant defeasance, we shall have delivered to the
trustee an opinion of counsel in the U.S. reasonably acceptable to the
trustee confirming that the holders of outstanding debt securities will
not recognize income, gain or loss for federal income tax purposes as a
result of this covenant defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if this covenant defeasance had not
occurred; and
30
. we deliver to the trustee an officers' certificate and an opinion of
counsel, each stating that all conditions precedent to the defeasance
and discharge of the debt securities of that series as contemplated by
the applicable indenture have been complied with.
Regarding the Trustee
We will identify a third party to act as trustee and registrar for debt
securities issued under the Indenture and, unless otherwise indicated in a
prospectus supplement, the trustee will also act as transfer agent and paying
agent with respect to the debt securities. We may remove the trustee with or
without cause if we so notify the trustee three months in advance and if we are
not in default during the three-month period. The trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for us or our affiliates, and may otherwise deal with us or our
affiliates, as if it were not trustee.
31
DESCRIPTION OF WARRANTS
The following description, together with the additional information we may
include in any applicable prospectus supplements, summarizes the material
terms and provisions of the warrants that we may offer under this prospectus
and the related warrant agreements and warrant certificates. While the terms
summarized below will apply generally to any warrants that we may offer, we
will describe the particular terms of any series of warrants in more detail in
the applicable prospectus supplement. If we indicate in the prospectus
supplement, the terms of any warrants offered under that prospectus supplement
may differ from the terms described below. Specific warrant agreements will
contain additional important terms and provisions and will be incorporated by
reference as an exhibit to the registration statement which includes this
prospectus.
General
We may issue warrants for the purchase of common stock, preferred stock or
debt securities in one or more series. We may issue warrants independently or
together with common stock, preferred stock and debt securities, and the
warrants may be attached to or separate from these securities.
We will evidence each series of warrants by warrant certificates that we
will issue under a separate agreement. We will enter into the warrant
agreement with a warrant agent. Each warrant agent will be a bank that we
select which has its principal office in the United States and a combined
capital and surplus of at least $50,000,000. We will indicate the name and
address of the warrant agent in the applicable prospectus supplement relating
to a particular series of warrants.
We will describe in the applicable prospectus supplement the terms of the
series of warrants, including:
. the offering price and aggregate number of warrants offered;
. the currency for which the warrants may be purchased;
. if applicable, the designation and terms of the securities with which
the warrants are issued and the number of warrants issued with each such
security or each principal amount of such security;
. if applicable, the date on and after which the warrants and the related
securities will be separately transferable;
. in the case of warrants to purchase debt securities, the principal
amount of debt securities purchasable upon exercise of one warrant and
the price at, and currency in which, this principal amount of debt
securities may be purchased upon exercise;
. in the case of warrants to purchase common stock or preferred stock, the
number of shares of common stock or preferred stock, as the case may be,
purchasable upon the exercise of one warrant and the price at which
these shares may be purchased upon exercise;
. the effect of any merger, consolidation, sale or other disposition of
our business on the warrant agreement and the warrants;
. the terms of any rights to redeem or call the warrants;
. any provisions for changes to or adjustments in the exercise price or
number of securities issuable upon exercise of the warrants;
. the dates on which the right to exercise the warrants will commence and
expire;
. the manner in which the warrant agreement and warrants may be modified;
. federal income tax consequences of holding or exercising the warrants;
. the terms of the securities issuable upon exercise of the warrants; and
. any other specific terms, preferences, rights or limitations of or
restrictions on the warrants.
32
Before exercising their warrants, holders of warrants will not have any of
the rights of holders of the securities purchasable upon such exercise,
including:
. in the case of warrants to purchase debt securities, the right to
receive payments of principal of, or premium, if any, or interest on,
the debt securities purchasable upon exercise or to enforce covenants in
the applicable indenture; or
. in the case of warrants to purchase common stock or preferred stock, the
right to receive dividends, if any, or payments upon our liquidation,
dissolution or winding up or to exercise voting rights, if any.
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities that we
specify in the applicable prospectus supplement at the exercise price that we
describe in the applicable prospectus supplement. Unless we otherwise specify
in the applicable prospectus supplement, holders of the warrants may exercise
the warrants at any time up to 5:00 P.M. eastern standard time on the
expiration date that we set forth in the applicable prospectus supplement.
After the close of business on the expiration date, unexercised warrants will
become void.
Holders of the warrants may exercise the warrants by delivering the warrant
certificate representing the warrants to be exercised together with specified
information, and paying the required amount to the warrant agent in immediately
available funds, as provided in the applicable prospectus supplement. We will
set forth on the reverse side of the warrant certificate and in the applicable
prospectus supplement the information that the holder of the warrant will be
required to deliver to the warrant agent.
Upon receipt of the required payment and the warrant certificate properly
completed and duly executed at the corporate trust office of the warrant agent
or any other office indicated in the applicable prospectus supplement, we will
issue and deliver the securities purchasable upon exercise. If fewer than all
of the warrants represented by the warrant certificate are exercised, then we
will issue a new warrant certificate for the remaining amount of warrants. If
we so indicate in the applicable prospectus supplement, holders of the warrants
may surrender securities as all or part of the exercise price for warrants.
Enforceability Of Rights By Holders Of Warrants
Each warrant agent will act solely as our agent under the applicable warrant
agreement and will not assume any obligation or relationship of agency or trust
with any holder of any warrant. A single bank or trust company may act as
warrant agent for more than one issue of warrants. A warrant agent will have no
duty or responsibility in case of any default by us under the applicable
warrant agreement or warrant, including any duty or responsibility to initiate
any proceedings at law or otherwise, or to make any demand upon us. Any holder
of a warrant may, without the consent of the related warrant agent or the
holder of any other warrant, enforce by appropriate legal action its right to
exercise, and receive the securities purchasable upon exercise of, its
warrants.
33
PLAN OF DISTRIBUTION
We may distribute the securities being offered hereby and the selling
stockholders may sell shares of our common stock they own in one or more of the
following ways from time to time:
. through agents to the public or to specific purchasers;
. through underwriters or dealers for resale to the public or to specific
purchasers;
. directly to specific purchasers; or
. through a combination of any such methods.
We may distribute the securities from time to time in one or more
transactions either (i) at a fixed price or prices, which may be changed, (ii)
at market prices prevailing at the time of sale, (iii) at prices related to the
prevailing market prices, or (iv) at negotiated prices.
We will set forth in a prospectus supplement the terms of the offering of
securities, including:
. the name or names of any agents or underwriters;
. the purchase price of the securities being offered and the proceeds we
will receive from the sale;
. the name of any selling stockholders and amount of common stock sold;
. the number of shares of our common stock owned by the selling
stockholders and any affiliations with us;
. any over-allotment options under which underwriters may purchase
additional securities from us or the selling stockholders;
. any agency fees or underwriting discounts and other items constituting
agents' or underwriters' compensation;
. any public offering price;
. any discounts or concessions allowed or reallowed or paid to dealers;
and
. any securities exchanges on which the securities may be listed.
The selling stockholders agreed that (1) they will not offer or sell any
shares of common stock pursuant to this prospectus other than as part of an
underwritten public offering in which we sell shares of our common stock and
(2) the maximum number of shares of common stock that they will sell pursuant
to this prospectus will not exceed 3.5 million shares of common stock. Since
the selling stockholders may sell all or some of their shares of common stock
that have been registered pursuant to this prospectus only if we sell our
common stock, no estimate can be made of the aggregate number of shares of
common stock that will be sold under this prospectus and any prospectus
supplement by the selling stockholders or owned by the selling stockholders
upon completion of any such sale, but such information will be provided in a
prospectus supplement prior to the sale.
The shares of common stock that may be offered by the selling stockholders
under this prospectus were acquired upon conversion of shares of our preferred
stock purchased in private transactions prior to our initial public offering on
August 4, 2000. In those transactions, we granted the selling stockholders
rights to register the shares of common stock owned by them for resale subject
to reductions or cutbacks in the number of shares they may sell as determined
by us and any underwriters.
Agents
We may designate agents to solicit offers to purchase from time to time. Any
agent, which may be deemed to be an underwriter as that term is defined in the
Securities Act of 1933, will be named in a prospectus supplement, and any
commissions payable by us to that agent will be set forth in the prospectus
supplement.
34
Unless otherwise indicated in a prospectus supplement, any agent will be acting
on a best efforts basis for the period of its appointment or on a continuing
basis.
Underwriters
If we use underwriters for a sale of securities, the underwriters will
acquire the securities for their own account. The underwriters may resell the
securities in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more underwriters. The obligations of the underwriters to purchase the
securities will be subject to the conditions set forth in the applicable
underwriting agreement. We and the selling stockholders may have agreements
with the underwriters, dealers and agents to indemnify them against specified
civil liabilities, including liabilities under the Securities Act of 1933. We
may change from time to time any public offering price and any discounts or
concessions the underwriters allow or reallow or pay to dealers.
Dealers
If we use dealers for a sale of securities, we will sell the securities to
the dealer as principal. The dealer may then resell the securities to the
public at varying prices to be determined by the dealer at the time of resale.
Direct Sales
We may also sell securities directly to one or more purchasers without using
underwriters, dealers or agents.
Underwriters, dealers and agents that participate in the distribution of the
securities may be underwriters as defined in the Securities Act of 1933 and any
discounts or commissions they receive from us and any profit on their resale of
the securities may be treated as underwriting discounts and commissions under
the Securities Act of 1933. We will identify in the applicable prospectus
supplement any underwriters, dealers or agents and will describe their
compensation. We and the selling stockholders may have agreements with the
underwriters, dealers and agents to indemnify them against specified civil
liabilities, including liabilities under the Securities Act of 1933.
Underwriters, dealers and agents may engage in other transactions with us or
perform other services for us or our subsidiaries.
Trading Markets and Listing Of Securities
Other than our common stock and unless otherwise specified in a prospectus
supplement, each class or series of securities will be a new issue with no
established trading market. We may elect to list any other class or series of
securities on any exchange or trading market, but we are not obligated to do
so. It is possible that one or more underwriters may make a market in a class
or series of securities, but the underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. We cannot
give any assurance as to the liquidity of the trading market for any of the
securities.
Stabilization Activities
Any underwriter may engage in over-allotment transactions, stabilizing
transactions, short covering transactions and penalty bids in accordance with
Regulation M under the Securities Exchange Act of 1934. Over-allotment involves
sales in excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum price. Short
covering transactions involve purchases of the securities in the open market
after the distribution is completed to cover short positions. Penalty bids
permit the underwriters to reclaim a selling concession from a dealer when the
securities originally sold by the dealer are purchased in a covering
transaction to cover short positions. Those activities may cause the price of
the securities to be higher than it would otherwise be. If commenced, the
underwriters may discontinue any of the activities at any time.
35
VALIDITY OF SECURITIES
The validity of the common stock, preferred stock, warrants and debt
securities will be passed upon for us by Gray Cary Ware & Freidenrich LLP,
Austin, Texas.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 2000, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the Registration Statement of
which this prospectus is a part. Our financial statements are incorporated by
reference in reliance on Ernst & Young LLP's report, given upon their authority
as experts in accounting and auditing.
Ernst & Young LLP, independent auditors, have also audited the consolidated
financial statements of HMTF Acquisition (Bermuda) Ltd. and Temic Telefunken
Hochfrequentztechnik GmbH included in our Registration Statement on Form S-1
(Registration No. 333-36340) on pages F-26 through F-42 of that registration
statement, as set forth in their report, which is incorporated by reference in
this prospectus and elsewhere in the Registration Statement of which this
prospectus is a part. These financial statements are incorporated by reference
in reliance on Ernst & Young LLP's report, given upon their authority as
experts in accounting and auditing.
36
[MICROTUNE, INC. LOGO]
$250,000,000
PROSPECTUS
Neither we nor any selling stockholders have authorized any dealer,
salesperson or other person to give any information or to make any
representation other than those contained or incorporated by reference in this
prospectus and any accompanying prospectus supplement. You must not rely upon
any information or representation not contained or incorporated by reference in
this prospectus or any accompanying prospectus supplement as if we had
authorized it. This prospectus and any accompanying prospectus supplement do
not constitute an offer to sell or the solicitation of an offer to buy any
securities other than the registered securities to which they relate, nor does
this prospectus and any accompanying prospectus supplement constitute an offer
to sell or the solicitation of any offer to buy securities in any jurisdiction
to any person to whom it is unlawful to make such offer or solicitation in such
jurisdiction. You should not assume that this prospectus or any prospectus
supplement is correct on any date after the date of the prospectus or
prospectus supplement, or, even though this prospectus or any prospectus
supplement is delivered, or securities are sold, on a later date.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses Of Issuance and Distribution.
The following table sets forth all expenses to be paid by the Registrant,
other than the underwriting discounts and commissions payable by the Registrant
in connection with the sale of the securities being registered. All amounts
shown are estimates except for the SEC registration fee and the NASD filing
fee.
SEC registration fee............................................... $ 62,500
NASD filing fee.................................................... $ 25,500
Printing and engraving expenses.................................... $ 10,000
Legal fees and expenses............................................ $125,000
Accounting fees and expenses....................................... $ 50,000
Transfer agent, trustee and registrar fees......................... $ 5,000
Miscellaneous expense.............................................. $ 22,000
--------
Total expenses................................................... $300,000
========
Item 15. Indemnification Of Officers And Directors.
Delaware law provides that a corporation has the ability to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding if the person acted
in good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the person's
conduct was unlawful. Our amended and restated certificate of incorporation
provides that our directors will not be personally liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director to
the maximum extent permitted by Delaware law. Our Bylaws provide that the
Registrant shall indemnify its directors, officers, employees and agents to the
fullest extent permitted by Delaware law, including in circumstances in which
indemnification is otherwise discretionary under Delaware law. In addition, we
have entered into separate indemnification agreements with our directors,
officers and certain employees that require us to indemnify those individuals
against certain liabilities which may arise by reason of their status or
service (other than liabilities arising from willful misconduct of a culpable
nature). We also maintain director and officer liability insurance for these
individuals.
These indemnification provisions and the indemnification agreement to be
entered into between the Registrant and its officers and directors may be
sufficiently broad to permit indemnification of the Registrant's officers and
directors for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act of 1933.
The above discussion of our Amended and Restated Certificate of
Incorporation, our Bylaws and Section 145 of the Delaware General Corporation
Law and any indemnification agreements is not intended to be exhaustive and is
qualified in its entirety by such documents and statute.
II-1
Item 16. Exhibits And Financial Statement Schedules.
Exhibit
Number Description of Document
------- -----------------------
1.1 The form of equity underwriting agreement will be filed as an exhibit
to a Current Report of the Registrant on Form 8-K and incorporated
herein by reference.
1.2 The form of debt underwriting agreement will be filed as an exhibit to
a Current Report of the Registrant on Form 8-K and incorporated herein
by reference.
4.1 Amended and Restated Certificate of Incorporation of Microtune, Inc.,
incorporated herein by reference to Exhibit 3.2 to our Registration
Statement on Form S-1 (Registration No. 333-36340) declared effective
on August 4, 2000.
4.2 Amended and Restated Bylaws of Microtune, Inc., incorporated herein by
reference to Exhibit 3.4 to our Registration Statement on Form S-1
(Registration No. 333-36340) declared effective on August 4, 2000.
4.3 The form of any certificate of designation with respect to any
preferred stock issued hereunder will be filed as an exhibit to a
Current Report of the Registrant on Form 8-K and incorporated herein
by reference.
+4.4 Form of Indenture.
4.5 The form of note issued hereunder will be filed as an exhibit to a
Current Report of the Registrant on Form 8-K and incorporated herein
by reference.
4.6 The form of warrant issued hereunder will be filed as an exhibit to a
Current Report on Form 8-K and incorporated herein by reference.
+5.1 Opinion of Gray Cary Ware & Freidenrich LLP.
10.1 Form of Indemnification Agreement, a form of which was entered into
between the Registrant and each of its directors and officers and is
incorporated herein by reference to Exhibit 10.1 to our Registration
Statement on Form S-1 (Registration No. 333-36340) declared effective
on August 4, 2000.
+12.1 Computation of ratios of earnings to fixed charges.
*23.1 Consent of Ernst & Young LLP, independent auditors.
+23.2 Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1).
+24.1 Power of Attorney.
25.1 The Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of the Trustee under the Indenture will be
Incorporated herein by reference from a subsequent filing in
accordance with Section 3.5(b)(2) of the Trust Indenture Act of 1939.
--------
* Filed herewith
+ Previously filed
Item 17. Undertakings
Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions referenced in
Item 15 of this Registration Statement or otherwise, the Registrant has been
advised that in the opinion of the Commission indemnification is against public
policy as expressed in the Securities Act of 1933, and is, therefore,
unenforceable. In the event that a claim for indemnification against
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by a
director, officer or controlling person in connection with the securities being
registered hereunder, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of that issue.
II-2
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
2. That, for the purpose of determining any liability under the
Securities Act 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. For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this Registration Statement as of the time it was declared effective;
and
5. For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of Prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of the securities at the time
shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
The undersigned registrant hereby undertakes 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 section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Plano, State of Texas, on the 28th
day of August 2001.
MICROTUNE, INC.
/s/ Everett Rogers
By: _________________________________
Everett "Buddy" Rogers
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by each of the following
persons in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
* Chief Executive Officer August 28, 2001
______________________________________ and Chairman (Principal
Douglas J. Bartek Executive Officer)
/s/ Everett Rogers Chief Financial Officer August 28, 2001
______________________________________ (Principal Financial and
Everett "Buddy" Rogers Accounting Officer)
* Director August 28, 2001
______________________________________
Harvey B. Cash
* Director August 28, 2001
______________________________________
Walter S. Ciciora
* Director August 28, 2001
______________________________________
James H. Clardy
Vice Chairman August 28, 2001
______________________________________
Martin Englmeier
* Director August 28, 2001
______________________________________
Jack D. Furst
* Director August 28, 2001
______________________________________
Eric Lindberg
II-4
Signature Title Date
--------- ----- ----
* Director August 28, 2001
______________________________________
John Norsworthy
* Director August 28, 2001
______________________________________
William P. Tai
/s/ Everett Rogers
*By: ________________________
Everett "Buddy" Rogers
Attorney-In-Fact
II-5
Exhibit
Number Description of Document
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1.1 The form of equity underwriting agreement will be filed as an exhibit
to a Current Report of the Registrant on Form 8-K and incorporated
herein by reference.
1.2 The form of debt underwriting agreement will be filed as an exhibit to
a Current Report of the Registrant on Form 8-K and incorporated herein
by reference.
4.1 Amended and Restated Certificate of Incorporation of Microtune, Inc.,
incorporated herein by reference to Exhibit 3.2 to our Registration
Statement on Form S-1 (Registration No. 333-36340) declared effective
on August 4, 2000.
4.2 Amended and Restated Bylaws of Microtune, Inc., incorporated herein by
reference to Exhibit 3.4 to our Registration Statement on Form S-1
(Registration No. 333-36340) declared effective on August 4, 2000.
4.3 The form of any certificate of designation with respect to any
preferred stock issued hereunder will be filed as an exhibit to a
Current Report of the Registrant on Form 8-K and incorporated herein
by reference.
+4.4 Form of Indenture.
4.5 The form of note issued hereunder will be filed as an exhibit to a
Current Report of the Registrant on Form 8-K and incorporated herein
by reference.
4.6 The form of warrant issued hereunder will be filed as an exhibit to a
Current Report on Form 8-K and incorporated herein by reference.
+5.1 Opinion of Gray Cary Ware & Freidenrich LLP.
10.1 Form of Indemnification Agreement, a form of which was entered into
between the Registrant and each of its directors and officers and is
incorporated herein by reference to Exhibit 10.1 to our Registration
Statement on Form S-1 (Registration No. 333-36340) declared effective
on August 4, 2000.
+12.1 Computation of ratios of earnings to fixed charges.
*23.1 Consent of Ernst & Young LLP, independent auditors.
+23.2 Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1).
+24.1 Power of Attorney.
25.1 The Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of the Trustee under the Indenture will be
Incorporated herein by reference from a subsequent filing in
accordance with Section 3.5(b)(2) of the Trust Indenture Act of 1939.
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* Filed herewith
+ Previously filed
II-6