SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of January, 2000
CREO PRODUCTS INC.
(Exact name of Registrant as specified in its charter)
3700 Gilmore Way
Burnaby, B.C. Canada V5G 4M1
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.)
Form 20-F x Form 40-F
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(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
Yes No x
--- ---
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-__.)
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Registrant hereby incorporates by reference in the report on Form 6-K the
following Exhibits:
Exhibit
Number Description of Exhibits
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1 Creo Products Inc. Material Change Report under
Section 85(1) of the Securities Act (British
Columbia) and Material Change Report under
Section 75(2) of the Securities Act (Ontario)
on Form 27, filed on January 20, 2000 with the
British Columbia Securities Commission,
Province of British Columbia, Canada and the
Ontario Securities Commission, Province of
Ontario, Canada.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CREO PRODUCTS INC.
By: /s/ Thomas Kordyback
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Name: Thomas Kordyback
Title: Vice President, Finance,
Chief Financial Officer
and Secretary
Date: January 24, 2000
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EXHIBIT 1 TO FORM 6-K
Creo Products Inc. Material Change Report under Section 85(1) of
the Securities Act (British Columbia) and Material Change Report under
Section 75(2) of the Securities Act (Ontario) on Form 27, filed on
January 20, 2000 with the British Columbia Securities Commission,
Province of British Columbia, Canada and the Ontario Securities
Commission, Province of Ontario, Canada.
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FORM 27
MATERIAL CHANGE REPORT UNDER SECTION 85(1) OF THE
SECURITIES ACT (BRITISH COLUMBIA)
MATERIAL CHANGE REPORT UNDER
SECTION 75(2) OF THE SECURITIES ACT (ONTARIO)
1. Reporting Issuer
CREO PRODUCTS INC. ("Creo")
3700 Gilmore Way
Burnaby, British Columbia
V5G 4M1
2. Date of Material Change
January 18, 2000
3. Press Release
Date of Issuance: January 18, 2000
Place of Issuance: Vancouver, British Columbia and
Herzlia, Israel
4. Summary of Material Change
Creo has entered into an asset purchase agreement dated January
17, 2000 (the "Asset Purchase Agreement") with Scitex
Corporation Ltd. ("Scitex") of Herzlia, Israel to combine their
respective worldwide prepress operations. The combined entity
will capitalize on strong synergies in technology, products,
service and distribution to create a leading provider of
worldwide digital prepress solutions.
Under the Asset Purchase Agreement, Creo will acquire all of the
assets of Scitex's digital preprint and print-on-demand
businesses (the "Business") in exchange for 13,250,000 common
shares in the capital of Creo valued, based on the closing price
of Creo's shares on the Nasdaq National Market on January 14,
2000, at US$537 million.
Upon completion of the transaction, Scitex will become a major
shareholder in Creo with approximately 27% of the outstanding
shares of Creo on a fully diluted basis. Rimon Ben-Shaoul,
Chair of Scitex's Board and Yoav Z. Chelouche, Scitex's
President and Chief Executive Officer, will be added to Creo's
board of directors, and Mr. Chelouche will be appointed Co-Chair
of the board, together with Dr. Raffi Amit.
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Closing of the transaction is subject to regulatory approvals
and the approval of Creo's shareholders at a meeting to be held
on March 30, 2000.
5. Full Description of Material Change
The following are the principal terms of the Asset Purchase Agreement:
Assets to be acquired: All of the assets of the Business including:
(i) shares of various subsidiaries;
(ii) intellectual property (including
patents, trademarks and know-how)
primarily used in the Business, subject
to a license back to Scitex, generally
at fair market value, to use this
intellectual property in the retained
business;
(iii) a licence to use the "Scitex" name and
logo in the Business;
(iv) inventory and other current assets,
real property, receivables, third party
software;
(v) other assets reflected on the audited
balance sheet of the Business dated
December 31, 1999 ("December Balance
Sheet"), with changes as may occur in
the ordinary course of business to the
Closing;
(vi) cash or equivalents in an amount
sufficient to bring the book value of
the net tangible assets of the Business
included in the December Balance Sheet,
to US$221 million.
Liabilities Assumed: All liabilities of the Business to the extent
reflected on the December Balance Sheet or
incurred in the ordinary course or business
thereafter.
Closing: The first day of the month following the month
in which all closing conditions, including
regulatory approvals, and the expiration of
all required waiting periods, are satisfied or
waived. The required approvals include those
of certain governmental authorities in Israel,
the United States and Europe and, of course,
shareholder approval.
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Conduct of the Business: Until Closing, Scitex is required to operate
the Business (i) exclusively, to the extent
possible, as a separate entity for the benefit
of Creo and (ii) in the usual, regular and
ordinary course, and to use its reasonable
best efforts to preserve intact the Business
as conducted at December 31, 1999.
Profits and losses of the Business from
December 31, 1999 to Closing will be for the
account of Creo.
Cash adjustment: Within 45 days of closing, Scitex must deliver
audited financial statements of the Business
for the period from January 1, 2000 to Closing
("Closing Financial Statements"). Scitex will
pay Creo the amount of net income earned by
the Business as shown on these statements; if
there is a net loss, Creo will reimburse
Scitex, subject to adjustment to the extent of
any increase or decrease in net non-cash
tangible assets of the Business from
December 31, 1999 to Closing.
Non-compete: Until the later of five years from Closing and
the date on which Scitex owns less than 15% of
the outstanding Creo shares, Scitex agrees
that it will not, and that it will cause its
controlled subsidiaries not to compete
directly or indirectly with the Business.
Non-solicitation of
employees: The parties have agreed that they will not
solicit the employees of the other for a
period of two years from Closing.
Employee matters: (i) Creo has agreed for 18 months from
Closing to provide compensation and
benefits to employees of the Business
that are no less favourable in the
aggregate than those currently provided
by Scitex.
(ii) Scitex will cancel 50% of outstanding
unvested Scitex stock options held by
employees of the Business who move over
to Creo as of the Closing, and Creo
will issue replacement stock options
with an exercise price equal to the
fair market value of Creo common shares
on the date of grant, in an aggregate
amount equal to 50% of the spread
between the fair market value of Scitex
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shares as of the date of the Agreement,
and the exercise price of the unvested
Scitex options.
Board representation: For so long as Scitex owns 15% or more of
Creo's outstanding shares, it will be
permitted two representatives on Creo's board,
one of whom shall be a member of each of the
significant committees of the board. For so
long as Scitex owns 7.5% or more of the
outstanding Creo shares, it will be permitted
to designate a Co-Chair of Creo's board.
If Creo increases the size of its board, the
number of Scitex designees would increase
proportionately.
Services Agreement: The parties will enter into an agreement on
Closing pursuant to which Creo will provide
certain services to Scitex and certain of its
retained businesses.
Indemnities: Generally, the representations and warranties
of the parties will not survive the Closing,
except for certain representations of Scitex
as to:
(i) the accuracy, to the best of its
knowledge, of the December Financial
Statements and Closing Date Financial
Statements, which will survive until
December 31, 2000;
(ii) the assets being acquired being
sufficient to conduct the Business,
which will survive indefinitely;
(iii) payment of Taxes, which will survive
until 30 days after the expiry of any
applicable statute of limitations.
In addition, Scitex will indemnify Creo for
all liabilities in respect of income taxes of
the Business for all taxable periods prior to
December 31, 1999 and any income taxes imposed
upon gains related to the closing of the asset
purchase transactions.
The Asset Purchase Agreement also contemplates that at the Closing,
Scitex will enter into, among other agreements, a Standstill Agreement
having a 5 year term, except as indicated below.
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The Standstill Agreement
The principal terms of the Standstill Agreement are:
Parties subject to standstill: Scitex and each of its majority
subsidiaries.
Voting:
(i) Election of directors Scitex must vote in favour of nominees
nominated by Creo's board.
(ii) Business combinations
and takeover defences Scitex must vote its shares, at its
election, either:
(a) as recommended by a majority of
Creo's board;
(b) in the same proportion as Creo's
other shareholders vote.
on the following matters voted on by
Creo shareholders:
(a) adoption and modification of
take-over defences;
(b) for three years from Closing, a
sale of Creo, including a sale of
substantially all its assets or a
merger, consolidation or
amalgamation in which it is not
the survivor if:
(i) the transaction has been
approved by at least 51% of
Creo's shareholders (or 75%
of those unaffiliated with
Scitex), and
(ii) Scitex receives a net
consideration at least equal
to US$490 million plus an
internal rate of return
calculated in accordance
with the provisions of the
standstill agreement.
Ownership restrictions: Scitex's ownership of Creo shares is
limited to the greater of (i) 15 million
shares and (ii) the percentage of Creo's
outstanding shares on a fully diluted
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basis to be owned by Scitex at Closing
(i.e. approximately 27%). To the extent
that the number of outstanding shares
increases, Scitex may purchase
additional shares to maintain its
percentage ownership.
Restrictions on sale: (i) Scitex may sell at any time with
the consent of a majority of the
non-Scitex directors of Creo;
(ii) during the first six months after
Closing Scitex may not sell
except to an affiliate which
agrees to be bound by the
Standstill Agreement;
(iii) during the second six months
after Closing, Scitex may not
sell except (a) to an affiliate
which agrees to be bound by the
Standstill Agreement; (b) up to
an aggregate of 10% of its
Shares, in compliance with the
provisions set out below during
years 2 to 5 following closing:
(a) pursuant to a registered
underwritten offering in
which no single purchase
acquires more than 2% of the
outstanding shares;
(b) pursuant to SEC Rule 144;
(c) to an affiliate which agrees
to be bound;
(d) pursuant to a tender offer
for all outstanding shares
by a third party that is not
rejected by the Creo board;
(e) up to 4.9% to any investor
in a private sale provided
that the investor does not
as a result hold, either
alone or as part of a group,
more than 5% of the
outstanding shares;
(f) to shareholders of Scitex by
way of dividend, provided
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that as a result no
shareholder holds more than
17% of the outstanding Creo
shares, unless the
shareholder agrees to be
bound by the Standstill
Agreement to the extent that
they are still in force
Control limitations: During the Standstill Period, neither
Scitex nor any of its majority or
wholly-owned subsidiaries may:
(i) seek to exercise controlling
influence over Creo (otherwise
than through its representation
on the board or through
exercising its voting rights in a
manner consistent with the
Standstill Agreement;
(ii) present any proposal to Creo or a
third party that would result in
a change of control of Creo or
increase Scitex's then percentage
ownership, including a merger,
recapitalization, sale of
substantially all the assets or
other business combination, or a
tender offer for Creo securities;
(iii) encourage or assist any other
person to make such a proposal;
(iv) publicly announce its interest in
engaging or having some other
person engage in any such
proposal;
(v) solicit or participate in a proxy
solicitation in opposition to a
recommendation of Creo's board;
(vi) form or become part of a group
for the purpose of acquiring,
holding, voting or disposing of
Creo securities;
(vii) make a shareholder proposal to
Creo's shareholders or seek to
elect any person to the board
except consistently with the
Standstill Agreement;
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(viii) engage in any other conduct,
whether alone or in concert with
others, designed to effect a
change in control of Creo or to
circumvent any of the preceding
restrictions.
Registration Rights: During years 2-5 following Closing
Scitex will have:
(i) two demand registration rights
exercisable only once during any
12 month period.
(ii) piggyback rights in connection
with an offering by Creo or any
other Creo shareholder.
6. Reliance on Section 85(2) of the Securities Act (British
Columbia)/Section 75(3) of the Securities Act (Ontario)
Not applicable.
7. Omitted Information
Not applicable.
8. Senior Officers
For further information contact:
Thomas Kordyback
Creo Products Inc.
3700 Gilmore Way
Burnaby, BC
V5G 4M1
Telephone: (604) 451-2743
Facsimile: (604) 419-4724
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9. Statement of Senior Officer
The foregoing accurately discloses the material change referred
to herein.
DATED at Vancouver, British Columbia this 18th day of January, 2000.
CREO PRODUCTS INC.
Per: "Thomas Kordyback"
(Authorized Signatory)
Thomas Kordyback, Vice President,
Finance, Chief Financial Officer
and Secretary
(Print Name and Title)
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