Filed pursuant to Rule 424(b)(3)
Registration No. 333-50208
PROSPECTUS SUPPLEMENT NO. 1 DATED JULY 2, 2001
TO PROSPECTUS DATED DECEMBER 4, 2000
TERAYON COMMUNICATION SYSTEMS, INC.
367,804 Shares of Common Stock
Please read this prospectus supplement in conjunction with the prospectus dated
December 4, 2000 (the "Prospectus"). The table on page 19 of the Prospectus
setting for the information concerning the selling stockholders is superseded by
the following table:
SELLING STOCKHOLDERS
In our acquisition of Digitrans, which we consummated in September 2000, we
issued to all of the selling stockholders shares of our common stock, and we
agreed to register all of those shares for resale. We also agreed to use
reasonable efforts to keep the registration statement effective until September
27, 2001. Our registration of the shares of common stock does not necessarily
mean that the selling stockholders will sell all or any of the shares.
The following table sets forth certain information regarding the beneficial
ownership of the common stock, as of June 29, 2001, by each of the selling
stockholders.
The information provided in the table below with respect to each selling
stockholder has been obtained from that selling stockholder. Except as otherwise
disclosed below, none of the selling stockholders has, or within the past three
years has had, any position, office or other material relationship with us.
Because the selling stockholders may sell all or some portion of the shares of
common stock beneficially owned by them, we cannot estimate the number of shares
of common stock that will be beneficially owned by the selling stockholders
after this offering. In addition, the selling stockholders may have sold,
transferred or otherwise disposed of, or may sell, transfer or otherwise dispose
of, at any time or from time to time since the date on which they provided the
information regarding the shares of common stock beneficially owned by them, all
or a portion of the shares of common stock beneficially owned by them in
transactions exempt from the registration requirements of the Securities Act of
1933.
Beneficial ownership is determined in accordance with Rule 13d-3(d)
promulgated by the Commission under the Securities Exchange Act of 1934. Unless
otherwise noted, each person or group identified possesses sole voting and
investment power with respect to shares, subject to community property laws
where applicable. None of the share amounts set forth below represents more than
1% of our outstanding stock as of June 29, 2001, adjusted as required by rules
promulgated by the SEC.
Shares Shares
Selling Stockholder Number of Shares Being Offered Held in Escrow*
------------------------------- ---------------- -------------- ----------------
Bear, Stearns Securities Corp. as
Pledgee/selling stockholder, selling through
Bear, Stearns & Co, Inc. 273,173 273,173 0
The D.W. Thomas Companies, Inc. 30,353 30,353 30,353
Ray Mason Truluck 25,280 25,280 19,365
Warren Harding Davis, Jr. 19,229 19,229 14,442
Clayton Charles Dore 19,229 19,229 14,442
* 30,353 shares of our common stock are held in the name of Embassy & Co.
pursuant to an Indemnification Escrow Agreement with The D.W. Thomas Companies,
Inc. 48,209 shares of our common stock are held in the name of Embassy & Co.
pursuant to Retention Escrow Agreements with Mason Truluck, Warren Davis, Jr.
and Clayton Dore.