SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
|x| Revised Preliminary Information Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
|_| Definitive Information Statement
SunRiver Corporation
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
|X No fee required.
|_| Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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P R E L I M I N A R Y C O P Y
SUNRIVER CORPORATION
Echelon IV, Suite 200
9430 Research Boulevard
Austin, Texas 78759-6543
INFORMATION STATEMENT
(Dated April __, 1997)
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. THE ACTIONS, DEFINED BELOW, HAVE ALREADY BEEN APPROVED BY WRITTEN CONSENT
OF SUNRIVER GROUP, INC. WHICH OWNS A MAJORITY OF THE COMPANY'S OUTSTANDING
SHARES OF COMMON STOCK. A VOTE OF THE REMAINING STOCKHOLDERS IS NOT NECESSARY.
GENERAL
This Information Statement is first being furnished on or about April __,
1997 to holders of record as of the close of business on April 9, 1997 of the
common stock, $.01 par value per share ("Common Stock"), of SunRiver
Corporation, a Delaware corporation (the "Company"), in connection with the
following (collectively, the "Actions"):
1. amending the Company's Certificate of Incorporation, as amended
("Certificate of Incorporation"), to increase the total number of shares of
Common Stock which the Company has authority to issue from 60,000,000 to
100,000,000; and
2. amending the Certificate of Incorporation to change the name of the
Company from SunRiver Corporation to Boundless Corporation.
The Board of Directors of the Company (the "Board") has approved, and
SunRiver Group, Inc. ("SunRiver Group"), which owned 26,439,380 shares
(approximately 52.9%) of the 50,016,629 shares of Common Stock outstanding, as
of April 2, 1997, has consented in writing to, the Actions.
Such approval and consent are sufficient under Section 228 of the Delaware
General Corporation Law and the Company's By-Laws to approve the Actions.
Accordingly, the Actions will not be submitted to the other Company stockholders
for a vote and this Information Statement is being furnished to stockholders
solely to provide them with certain information concerning the Actions in
accordance with the requirements of Delaware law and the Securities Exchange Act
of 1934, as amended, and the regulations promulgated thereunder, including
particularly Regulation 14C.
The Actions will be effective on the date that a Certificate of Amendment
of the Certificate of Incorporation with respect to the Actions is filed with
the Secretary of State of the State of Delaware. This filing will occur on or
after the 20th day following the date of this Information Statement.
The principal executive offices of the Company are located at Echelon IV,
Suite 200, 9430 Research Boulevard, Austin, Texas 78759-6543, and the Company's
telephone number is (512) 349-5800.
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AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF SHARES OF
COMMON STOCK FROM 60,000,000 TO 100,000,000
The Certificate of Incorporation will be amended to increase the number of
shares of authorized Common Stock from 60,000,000 to 100,000,000. Such increase
will be effected by amending the first sentence of Article Fourth of the
Certificate of Incorporation to read as follows:
"FOURTH: The total number of shares of all classes of stock which the
corporation shall have authority to issue is One Hundred One Million
(101,000,000) which are divided into One Million (1,000,000) shares of
Preferred Stock, par value $.01 per share, and One Hundred Million
(100,000,000) shares of Common Stock, par value $.01 per share."
As described in the following items 1 through 5, additional authorized
shares are required to reserve shares issuable upon exercise of warrants and
options, shares which may be issuable upon conversion of convertible notes,
shares issuable under an effective registration statement and shares for other,
as yet undetermined, purposes.
1. As of April 2, 1997, 50,016,629 shares of Common Stock and no shares of
Preferred Stock of the Company were outstanding and 12,286,416 shares of Common
Stock were issuable upon exercise of outstanding options and warrants, including
a warrant held by SunRiver Group to purchase 4,174,704 shares (the "SunRiver
Group Warrant"). In addition, the Company's registration statement on Form S-1,
declared effective on July 8, 1996 (the "Shelf Registration Statement"),
registered 14,444,210 shares of Common Stock under the Securities Act of 1933,
including 2,500,000 shares that may be issued and sold by the Company from time
to time. As of April 3, 1997, 1,360,849 of such 2,500,000 shares remained
unissued. The sum of such 50,016,629 shares outstanding, 12,286,416 shares
issuable upon exercise of outstanding options and warrants and 1,360,849 shares
which may be issued and sold by the Company, exceeds the 60,000,000 Common Stock
authorization by 3,663,894 shares. Until the Certificate of Incorporation is
amended to increase the authorized Common Stock sufficiently to allow for the
reservation of all 4,174,704 shares underlying the SunRiver Group Warrant,
SunRiver Group has agreed to refrain from exercising its right to purchase up to
2,654,565 shares upon exercise of the SunRiver Group Warrant to the extent
necessary to permit exercise by others of their options and warrants and the
offer and sale by the Company of newly issued Common Stock under the Shelf
Registration Statement.
2. Of the 6,000,000 shares of Common Stock issuable upon exercise of
options or stock grants made under the 1995 Incentive Plan previously approved
by the stockholders, as of April 2, 1997, options to purchase 4,512,045 shares
had been granted and were outstanding, 540,464 shares had been issued as stock
grants and none of the remaining 947,491 available shares were reserved for
future grants. Before such reservation can be made, an increase in the
authorized number of shares of Common Stock is necessary.
3. In connection with the Company's acquisition of certain assets from
Digital Equipment Corporation in October 1995, including the financing for such
acquisition through The Chase Manhattan Bank, N.A. ("Chase") and the related
restructuring of the Company's obligations to NCR Corporation ("NCR"), SunRiver
Group pledged 21,439,380 shares of Common Stock to Chase and 5,000,000 shares of
Common Stock to NCR. In consideration for such pledges and, after authorized
shares become available, the Company expects to issue to SunRiver Group warrants
to purchase such number of shares of Common Stock at $3.875 per share, subject
to adjustment, as the Board determines is appropriate after obtaining
independent advice regarding the fairness of such warrants. However, the number
of such warrants will be reduced by the number of warrants equal in value to
$500,000, determined using the Black-Scholes valuation model or based on
independent advice regarding the appropriate reduction as consideration for the
Company having obtained the release of SunRiver Group's guarantee of obligations
of the Company's discontinued subsidiary, TradeWave Corporation, by paying
$500,000 to Microelectronics and Computer Technology Corporation.
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4. In February and March 1997, the Company sold a total of $1,400,000
principal amount of notes ("Notes") convertible into shares of Common Stock. The
notes bear interest at 8% per annum (or 16% per annum upon the occurrence of
certain events of default) payable, with principal, on December 31, 1998 (the
"Maturity Date"). Each Note is convertible, in whole or in part, during the
period beginning on the 90th day following the date the Notes were issued (the
"Original Date") until the later of the Maturity Date or the date the Note is
paid in full into that number of shares of Common Stock determined by dividing
the outstanding principal of and accrued and unpaid interest on the Note by (i)
82-1/2% of the average closing bid price ("Average Bid Price") for the Common
Stock on The Nasdaq SmallCap Market for the five trading days immediately
preceding the conversion date; or (ii), if the holder delivers written notice to
the Company between the 60th and 90th days after the Original Date that the
holder has elected the alternate conversion price, 82-1/2% of the Average Bid
Price for the five trading days immediately preceding the date of such notice,
in which case the holder is obligated to convert the entire balance of the Note
on or prior to the Maturity Date. The Company may compel conversion of the Notes
if they have not been converted into shares of Common Stock before the Maturity
Date and the Company may redeem the Notes if the Average Bid Price for any five
trading day period is less than $1.25.
The Company has issued a total of 1,204,775 shares of Common Stock which
are being held in escrow and which will be released, in whole or in part, to the
holders of the Notes upon their conversion. Such number was the number of shares
which would be issuable upon conversion of the Notes assuming a conversion based
on the market price of the Common Stock around the time that the Notes were
sold. If the market price of the Common Stock at the time the conversion of the
Notes is exercised is below the market price at the time the Notes were sold,
the Company will be required to issue additional shares of Common Stock to
satisfy the conversion. Although the number of such required additional shares
cannot be determined at this time, in such event, the Company will require
authorized shares beyond the current limit of 60,000,000 in order to meet its
obligations to the holders of the Notes.
5. The Board believes that it is desirable to have additional shares of
Common Stock available, as the occasion may arise, for possible future
financings and acquisitions, stock dividends, stock issuances pursuant to
employee benefit plans and other proper corporate purposes. Having such
additional shares available for issuance in the future would give the Company
greater flexibility by allowing shares to be issued without incurring the delay
and expense of obtaining stockholder approval. Except as described in this
Information Statement, the Company has no definitive plans or commitments to
issue additional Common Stock.
The additional shares of Common Stock, together with other authorized and
unissued shares, generally would be available for issuance without any
requirement for further stockholder approval, unless stockholder action is
required by applicable law, the Company's governing documents or by the rules of
the National Association of Securities Dealers, Inc. or any stock exchange on
which the Company's securities may then be listed.
Although the Board will authorize the issuance of additional shares of
Common Stock only when it considers doing so to be in the best interests of
stockholders, the issuance of additional shares of Common Stock may, among other
effects, have a dilutive effect on the earnings and equity per share of Common
Stock and on the voting rights of holders of shares of Common Stock. The
increase in the authorized number of shares of Common Stock also could be viewed
as having anti-takeover effects. Although the Board has no current plans to do
so, shares of Common Stock could be issued in various transactions that would
make a change in control of the Company more difficult or dilute the stock
ownership of a person seeking to obtain control. The Company is not aware of any
effort to accumulate shares of Common Stock or obtain control of the Company by
a tender offer, proxy contest, or otherwise, and the Company has no present
intention to use the increased shares of authorized Common Stock for
anti-takeover purposes.
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AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY
TO BOUNDLESS CORPORATION
The Certificate of Incorporation will be amended to change the name of the
Company from SunRiver Corporation to Boundless Corporation. The amendment will
be effected by amending Article First of the Certificate of Incorporation to
read as follows:
"FIRST: The name of the corporation (hereinafter called the "corporation")
is Boundless Corporation."
In 1996, the Company's wholly owned subsidiary, SunRiver Data Systems,
Inc., changed its name to Boundless Technologies, Inc. SunRiver Acquisition
Corp., a non-operating wholly owned subsidiary of the Company, intends to change
its name to Boundless Acquisition Corp. These changes arise out of the
settlement of the lawsuit brought in 1995 by Sun Microsystems, Inc. ("Sun
Microsystems") against the Company, its subsidiaries and SunRiver Group.
Sun Microsystems had alleged that the defendants infringed federally
registered and California registered SUN-based trademarks owned by Sun
Microsystems and violated California statutory and common laws of trademark and
tradename infringement, unfair competition, dilution and false advertising, all
based on allegations that the defendants' use of any SUNRIVER mark or name
creates a likelihood of confusion in violation of Sun Microsystems' rights. The
settlement requires the Company, its subsidiaries and SunRiver Group to stop
using any SunRiver-based mark or name except in limited circumstances.
The Board also believes that changing the Company's name to Boundless
Corporation will enhance the Company's business and prospects.
By Order of the Board of Directors,
Wayne Schroeder
Chief Financial Officer
Dated: April ___, 1997
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