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Filed by 3dfx Interactive, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12(b)
under the Securities Exchange Act of 1934
Subject Company: 3dfx Interactive, Inc.
Commission File No. 333-38678
On December 15, 2000, 3dfx Interactive, Inc. issued the following press release:
Press Contacts: Investor Relations Contacts:
Scott Taylor Diane Sha
3dfx Interactive, Inc. 3dfx Interactive, Inc.
(408) 719-5920 (408) 935-4075
[email protected] [email protected]
Nikki Tanis
Tanis Communications Inc.
(408) 371-9394
(408) 431-1757
[email protected]
FOR IMMEDIATE RELEASE
3DFX ANNOUNCES THREE MAJOR INITIATIVES TO PROTECT
CREDITORS AND MAXIMIZE SHAREHOLDER VALUE
Board of Directors Initiates Cost-Cutting Measures, Recommends To Shareholders
Sale of Company Assets to NVIDIA Corporation for $112 million and Dissolution of
Company
SAN JOSE, Calif., December 15, 2000 - In an effort to protect its creditors and
maximize shareholder value, 3dfx Interactive, Inc. (Nasdaq: TDFX - news)
announced today that it will substantially reduce all of its workforce as part
of an initiative to significantly reduce expenses. In addition, the company said
its Board of Directors will recommend to its shareholders that they approve the
sale of most of the company's assets to NVIDIA Corporation (Nasdaq: NVDA- news)
as outlined in a definitive agreement
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between the companies that was signed today, and also approve a plan to dissolve
the company following completion of the asset sale.
"After aggressively pursuing a wide range of options that take into
consideration the interests of our creditors, our shareholders, our employees
and our customers," said Alex Leupp, president and CEO, 3dfx Interactive Inc.,
"we strongly believe that to reduce expenses, sell our assets and dissolve the
company provides the highest return to our creditors, shareholders, and
employees."
"We expect that the combined technologies of 3dfx and NVIDIA will
continue the legacy that 3dfx began in 1994, " Leupp continued. "NVIDIA is the
number one supplier of graphics technology to the OEM market. With the addition
of 3dfx's high-quality technology that leads the retail market, we believe the
combination of the two will result in even greater PC graphics leadership."
The target market for 3dfx has historically been the retail graphics
market, a market that 3dfx has dominated since 1998. The segment represents
approximately 10 percent of the overall graphics market, and is subject to
extreme volatility and unpredictability. Specifically, high inventory expenses,
decreasing margins, and slowing demand have done irreparable harm to 3dfx. While
the company had recently announced plans to expand its business into additional
markets, it has been unable to invest in its expansion under current business
and financial market conditions.
The company announced that it plans to substantially reduce its costs in order
to best conserve its resources. These cost-cutting measures include a reduction
of
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substantially all of the company's workforce by early next year, reduction in
office space, and other efforts to reduce non-essential expenses. 3dfx is also
providing manufacturing services to third parties to help cover the overhead
associated with its Juarez, Mexico manufacturing facility pending the sale of
that facility. In the meantime, 3dfx expects to continue to maintain an adequate
workforce to support its customers.
The Board of Directors, with the assistance of the company's advisors,
has undergone exhaustive efforts to explore many alternatives including raising
new financing to continue its operations and exploring various strategic
alliances and business combinations. It has concluded that the best interests of
the creditors and shareholders will be served by selling its assets to NVIDIA
Corporation, as outlined in a definitive agreement between the companies signed
today, and also to approve the plan for dissolution.
Under the terms of the agreement signed today, NVIDIA has agreed to pay
a value of $112 million ($70 million cash and one million shares of registered
NVIDIA common stock as value based on NVIDIA's closing price on December 14,
2000).
Upon signing the definitive agreement, NVIDIA has agreed to loan to 3dfx
$15 million for working capital, which will be credited to the cash portion of
the purchase price. In addition, 3dfx and NVIDIA have agreed to stay the patent
infringement litigation between them through closing of the transaction, at
which time the suits will be jointly dismissed with prejudice. Assets included
in the transaction include all 3dfx intellectual property and chip inventory as
well as certain other assets. In addition, upon
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signing the definitive agreement, 3dfx transferred to NVIDIA the "3dfx" and
"Voodoo" brand names and trademarks.
The closing of the transaction is subject to a variety of conditions,
including 3dfx shareholder approval, receipt of governmental approvals including
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and receipt of all
necessary consents of third parties.
After closing the NVIDIA asset sale and upon 3dfx shareholder approval,
3dfx will proceed to pay or adequately provide for its debts and liabilities.
3dfx will thereafter distribute its remaining assets to its shareholders in one
or more distributions.
3dfx will host a conference call today at 2 p.m. Pacific Standard Time,
3 p.m. Mountain, 4 p.m. Central, 5 p.m. Eastern, to discuss current developments
and its financial results for the third quarter fiscal 2001, ended October 31,
2000. To participate in the conference call, please dial 800-521-5428.
ABOUT 3DFX INTERACTIVE
3dfx Interactive is a global leader in enabling the emerging age of
visual communications, and the 3D multimedia revolution in personal computers
and consumer products. With its patented and award-winning graphics accelerator
chips, boards and software, 3dfx provides the technology to create high-impact
visual experiences. The company is recognized worldwide for its ability to bring
the world's finest games, educational content, interactive entertainment and
media-rich business applications to life. 3dfx products are available in retail
stores worldwide, and through leading PC makers including Compaq, Dell, Falcon
Northwest and Micron. 3dfx has headquarters in San Jose, Calif., with
engineering and manufacturing facilities in Richardson, Texas, Austin, Texas,
and Juarez, Mexico. The company also operates www.3dfxgamers.com, the premier
online community for Voodoo owners and gaming enthusiasts. 3dfx Interactive is
available on the Web at http://www.3dfx.com.
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This notice does not constitute an offer of any securities for sale. In
connection with the proposed asset sale by and between 3dfx Interactive, Inc.
("3dfx"), NVIDIA corporation ("NVIDIA") and NVIDIA Subsidiary (the "Asset
Sale"), 3dfx and NVIDIA plan to file with the SEC the Proxy Statement/Prospectus
of 3dfx and NVIDIA relating to the Asset Sale, as well as documents incorporated
by reference therein. You are urged to read the Proxy Statement/Prospectus when
it is filed and any other relevant documents filed with the SEC because they
contain important information. You may obtain the documents free of charge at
the SEC's web site, http://www.sec.gov. In addition, documents filed by 3dfx
with the SEC can be obtained by contacting 3dfx at the following address and
telephone number: Shareholder Relations, 4435 Fortran Drive, San Jose,
California 95134, telephone: (408) 935-4400. When it becomes available, please
read the Proxy Statement/Prospectus carefully before making a decision
concerning the Asset Sale. 3dfx, its officers, directors, employees and agents
may be soliciting proxies from 3dfx shareholders in connection with the Asset
Sale. Information concerning the participants in the solicitation will be set
forth in the Proxy Statement/Prospectus.
This press release contains forward-looking statements based on current
expectations that are inherently subject to risks and uncertainties. The words
"estimate," "project," "intend," "expect," "believe," "plan," and similar
expressions are intended to identify forward-looking statements. The Company's
actual results could differ materially from those currently anticipated due to a
number of factors, including, but not limited to, risks associated with the
Company's need for additional financing and its inability to satisfy debt
obligations in the face of a potential forced bankruptcy, claims of fraudulent
conveyance by the Company's creditors in the event proceeds from the Asset Sale
are insufficient to satisfy creditors, costs incurred if the Asset Sale is
terminated due to a superior proposal or the failure of the Company to obtain
shareholder approval for the Asset Sale, the failure of the Asset Sale to be
consummated, the failure of estimates of net proceeds from the Asset Sale to be
realized by the Company shareholders, amendment, delay in implementation or
termination of a planned Plan of Dissolution by the Company's shareholders, the
liability of Company shareholders for Company liabilities in the event
contingent reserves are insufficient to satisfy such liabilities, unexpected
revenue shortfalls and quarterly variations in operating results, the recent
downturn in the retail chip market and its adverse affect on the Company's
business, cost-cutting measures prompted by the need to conserve cash reserves,
the need to adequately support the retail/distributor channel, the Company's
limited operating history and the inability to assess future operating results,
volatility in the Company's stock price and its effect on the ability of
shareholders to sell their shares at attractive prices, the development of new
products and technologies and the effect on financial results, management of
product transitions, significant customer concentration and the potential
adverse effect on the Company's financial performance of a loss of significant
customers, the absence of long-term contracts or any assurances that historical
sales volumes will continue in the future, limited product diversity, the need
for developers and publishers to write software compatible with the Company's
products, dependence on single-source manufacturers and the Company's own
manufacturing facility, exposure to global economic factors, foreign business
practices, tax law and currency fluctuations, the inability to protect the
Company's proprietary rights, reliance on third-party licenses, potential loss
of market share, litigation expenses, the existence of a shareholder rights plan
that could discourage a third party from acquiring control of the Company, the
Company's recently completed merger with GigaPixel, as well as other factors set
forth in the Company's current report on Form 10-Q for the most recently ended
fiscal quarter and other reports and documents filed by Company with the
Securities and Exchange Commission from time to time.
