Filing Pursuant to Rule 424(b)(3)
Registration Statement No. 333-48536
PROSPECTUS SUPPLEMENT NO. 14 DATED JULY 13, 2001
TO PROSPECTUS DATED JANUARY 22, 2001
TERAYON COMMUNICATION SYSTEMS, INC.
$500,000,000
of 5% Convertible Subordinated Notes Due 2007 and 5,951,673 Shares of
Common Stock Issuable Upon Conversion of the Notes
Please read this prospectus supplement in conjunction with the prospectus dated
January 22, 2001 (the "Prospectus"). The table on pages 21 through 24 of the
Prospectus setting forth information concerning the selling holders, prospectus
supplement no. 1 dated February 9, 2001, prospectus supplement no. 2 dated
February 16, 2001, prospectus supplement no. 3 dated February 20, 2001,
prospectus supplement no. 4 dated February 23, 2001, prospectus supplement no. 5
dated March 2, 2001, prospectus supplement no. 6 dated March 9, 2001, prospectus
supplement no. 7 dated March 16, 2001, prospectus supplement no. 8 dated March
23, 2001, prospectus supplement no. 9 dated April 27, 2001, prospectus
supplement no. 10 dated May 4, 2001, prospectus supplement no. 11 dated May 11,
2001, prospectus supplement no. 12 dated May 25, 2001 and prospectus supplement
no. 13 dated June 4, 2001, are superseded by the following table:
SELLING HOLDERS
We originally issued the Notes and the Notes were sold by the initial purchasers
in a transaction exempt from the registration requirements of the Securities Act
to persons reasonably believed by the initial purchasers to be qualified
institutional buyers or other institutional accredited investors. Selling
holders, including their transferees, pledgees or donees or their successors,
may from time to time offer and sell pursuant to this prospectus any or all of
the Notes and common stock into which the Notes are convertible. We agreed to
use reasonable efforts to keep the registration statement effective until July
26, 2002. Our registration of the Notes and the shares of common stock into
which the Notes are convertible does not necessarily mean that the selling
holders will sell any or all of the Notes or the shares of the common stock into
which the Notes are convertible.
The following table sets forth information, as of July 13, 2001, with respect to
the selling holders and the principal amounts of Notes beneficially owned by
each selling holder that may be offered under this prospectus. The information
is based on information provided by or on behalf of the selling holders. The
selling holders may offer all, some or none of the Notes or common stock into
which the Notes are convertible. Because the selling holders may offer all or
some portion of the Notes or the common stock, no estimate can be given as to
the amount of the Notes or the common stock that will be held by the selling
holders upon termination of any sales. In addition, the selling holders
identified below may have sold, transferred or otherwise disposed of all or a
portion of their Notes since the date on which they provided the information
regarding their Notes in transactions exempt from the registration requirements
of the Securities Act.
Principal Amount Common Stock
of Notes Issuable upon
Beneficially Owned Conversion Common
Selling Holder and Offered of the Notes Stock Offered
-------------- ------------------ ---------------- ---------------
Arbitex Master Fund, L.P. 1,200,000 14,284 14,284
Aventis Pension Master Trust 440,000 5,237 5,237
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Principal Amount Common Stock
of Notes Issuable upon
Beneficially Owned Conversion Common
Selling Holder and Offered of the Notes Stock Offered
------------ ------------------ ---------------- ---------------
Black Diamond Offshore, Ltd. 665,000 7,915 7,915
Boilermaker - Blacksmith Pension Trust 2,700,000 32,139 32,139
BS Debt Income Fund - Class A 15,000 178 178
CALAMOS(R) Convertible Portfolio - CALAMOS(R) Advisors Trust 150,000 1,785 1,785
CALAMOS(R) Convertible Technology Fund - CALAMOS(R)
Investment Trust 230,000 2,737 2,737
CALAMOS(R) High Yield Fund - CALAMOS(R) Investment Trust 245,000 2,916 2,916
City of Albany Pension Fund 245,000 2,916 2,916
City of Knoxville Pension System 640,000 7,618 7,618
Credit Suisse First Boston 1,000,000 11,903 11,903
Delta Airlines Master Trust 4,900,000 58,326 58,326
Delta Pilots Disability Survivorship Trust 200,000 2,380 2,380
Deutsche Bank Securities, Inc. 200,000 2,380 2,380
Double Black Diamond Offshore, LDC 2,708,000 32,234 32,234
ECT Investments, Inc. 1,000,000 11,903 11,903
Faria Fund, Ltd. 100,000 1,190 1,190
Greenlight Capital, L.P. 1,055,000 12,558 12,558
Greenlight Capital Offshore, Ltd. 2,413,000 28,722 28,722
Greenlight Capital Qualified, L.P. 2,532,000 30,139 30,139
Ilanot Batucha Investment House, Ltd. 300,000 3,571 3,571
Israel Brokerage & Investments IBI, Ltd. 100,000 1,190 1,190
Jefferies & Co. 875,000 10,415 10,415
JMG Capital Partners, L.P. 500,000 5,951 5,951
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Principal Amount Common Stock
of Notes Issuable upon
Beneficially Owned Conversion Common
Selling Holder and Offered of the Notes Stock Offered
-------------- ------------------ ---------------- ---------------
JMG Triton Offshore Fund, Ltd. 500,000 5,951 5,951
JRS, Ltd. 1,000,000 11,903 11,903
Julius Baer Securities, Inc. 250,000 2,975 2,975
KBC Financial Products USA, Inc. 900,000 10,713 10,713
Kettering Medical Center Funded-Depreciation Account 160,000 1,904 1,904
Knoxville Utilities Board Retirement System 400,000 4,761 4,761
Lehman Brothers, Inc. 1,200,000 14,284 14,284
Leonardo, L.P. 12,000,000 142,840 142,840
LibertyView Funds, L.L.C. 100,000 1,190 1,190
LibertyView Funds, L.P. 400,000 4,761 4,761
Lonestar Partners, L.P. 4,500,000 53,565 53,565
Louisiana Workers' Compensation Corporation 360,000 4,285 4,285
Lumber Industries, Inc. 750,000 8,927 8,927
Lydian Overseas Partners Master Fund 15,000,000 178,550 178,550
McMahan Securities Co., L.P. 1,000,000 11,903 11,903
Merrill, Lynch, Pierce, Fenner and Smith, Inc. 16,000 190 190
Morgan Stanley & Co. 2,500,000 29,758 29,758
Pacific Life Insurance Company 1,000,000 11,903 11,903
Port Authority of Allegheny County Retirement and Disability
Allowance Plan for the Employees Represented by Local 85 of
the Amalgamated Transit Union 2,825,000 33,626 33,626
Ramus Capital Group Holdings, Ltd. 200,000 2,380 2,380
Research Capital Corporation 750,000 8,927 8,927
Spear, Leads & Kellogg Capital Markets 2,400,000 28,568 28,568
SPT 1,100,000 13,093 13,093
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Principal Amount Common Stock
of Notes Issuable upon
Beneficially Owned Conversion Common
Selling Holder and Offered of the Notes Stock Offered
-------------- ------------------ ---------------- ---------------
Standard Mortgage Holding Corp. 500,000 5,951 5,951
The Class IC Company, Ltd. 1,500,000 17,855 17,855
The Dow Chemical Company Employees' Retirement Plan 5,325,000 63,385 63,385
The Fondren Foundation 165,000 1,964 1,964
Unifi, Inc. Profit Sharing Plan and Trust 255,000 3,035 3,035
United Food and Commercial Workers Local 1262 and Employees
Pension Fund 1,260,000 14,998 14,998
United Mizrahi Bank, Ltd. 50,000 595 595
Valentis Investors, L.L.C. 2,000,000 23,806 23,806
Van Waters & Rogers, Inc. Retirement Plan 770,000 9,165 9,165
Any other holders of Notes or future holders (3) 414,451,000 4,933,375 4,933,375
Total 500,000,000 5,951,673 5,951,673
(1) Assumes a conversion rate of 11.9033 shares of common stock per $1,000
principal amount of Notes and a cash payment in lieu of any fractional
interest.
(2) Assumes that any other holders of Notes or any future transferees do not
or will not beneficially own any common stock other than common stock
into which the Notes are convertible at the conversion rate of 11.9033
shares of common stock per $1,000 principal amount of Notes.
(3) The principal amount of Notes held by other holders or future holders
includes $195,597,000 principal amount of Notes repurchased by the
Company in February 2001 which is convertible into 2,328,258 shares of
common stock.
None of the selling holders nor any of their affiliates, officers, directors or
principal equity holders have held any position or office or have had any
material relationship with us within the past three years with the exception of
Deutsche Bank Securities, Inc. and Lehman Brothers, Inc. In the past three
years, Deutsche Bank, Inc. and Lehman Brothers, Inc. have acted as underwriters
of the Company's initial public offering and follow-on public offering and as
initial purchasers in the offering of the Notes. The selling holders purchased
all of the Notes in a private transaction. All of the Notes and the shares of
common stock into which the Notes are convertible are "restricted securities"
under the Securities Act.
Information concerning the selling holders may change from time to time and any
changed information will be set forth in supplements to this prospectus if and
when necessary. In addition, the conversion price, and therefore, the number of
shares of common stock issuable upon conversion of the Notes, is subject to
adjustment under certain circumstances. Accordingly, the aggregate principal
amount of Notes and the number of shares of common stock into which the Notes
are convertible may increase or decrease.
The date of this prospectus supplement is July 13, 2001.
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