===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: May 14, 1997
(Date of earliest event reported)
S3 INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 0-21126 77-0204341
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2801 MISSION COLLEGE BOULEVARD, SANTA CLARA, CA 95052-8058
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 588-8000
===============================================================================
<PAGE>
Item 5. Other Events.
------------
On May 14, 1997, the Board of Directors of S3 Incorporated (the
"Company") declared a dividend distribution of one "Right" for each outstanding
share of common stock, par value $0.0001 per share (the "Common Stock"), of the
Company to stockholders of record at the close of business on June 1, 1997 (the
"Record Date"). Except as set forth below, each Right, when exercisable,
entitles the registered holder to purchase from the Company one one-thousandth
of a share of a new series of preferred stock, designated as Series A
Participating Preferred Stock, par value $0.0001 per share (the "Preferred
Stock"), at a price of $85.00 (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and The First National Bank of Boston,
as "Rights Agent."
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earliest of (i) a public announcement
that a person, entity or group of affiliated or associated persons and/or
entities (an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock,
other than as a result of repurchases of stock by the Company or certain
inadvertent actions by institutional or certain other stockholders, or (ii) ten
days (unless such date is extended by the Board of Directors) following the
commencement of (or a public announcement of an intention to make) a tender
offer or exchange offer which would result in any person, entity or group of
affiliated or associated persons and/or entities becoming an Acquiring Person.
Until the Distribution Date the Rights will be evidenced, with respect
to any of the Common Stock certificates outstanding as of the Record Date, by
such Common Stock certificate together with this Summary of Rights. The Rights
Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with Common Stock certificates. From as soon as
practicable after the Record Date and until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuance of the Common Stock will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Stock outstanding as of
the Record Date (with or without this Summary of Rights attached) will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date, and the separate Rights Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on the earliest of (i) May 14, 2007, (ii) consummation of a merger
transaction with a Person or group who acquired Common Stock pursuant to a
Permitted Offer (as defined below), and is offering in the merger the same price
per share and form of consideration paid in the Permitted Offer, or (iii)
redemption or exchange of the Rights by the Company as described below.
The number of Rights associated with each share of Common Stock shall
be proportionately adjusted to prevent dilution in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the Common Stock. The
Purchase Price payable, and the number of shares of Preferred Stock or other
securities or property issuable, upon exercise of the Rights are subject to
-2-
<PAGE>
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for Preferred Stock, certain convertible securities or
securities having the same or more favorable rights, privileges and preferences
as the Preferred Stock at less than the current market price of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly cash dividends
out of earnings or retained earnings) or of subscription rights or warrants
(other than those referred to above). With certain exceptions, no adjustments in
the Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction
(whether or not the Company is the surviving corporation) or 50% or more of the
Company's assets or earning power are sold (in one transaction or a series of
transactions), proper provision shall be made so that each holder of a Right
(other than an Acquiring Person) shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price, that number of
shares of common stock of either the Company, in the event that it is the
surviving corporation of a merger or consolidation, or the acquiring company
(or, in the event there is more than one acquiring company, the acquiring
company receiving the greatest portion of the assets or earning power
transferred) which at the time of such transaction would have a market value of
two times the Purchase Price (such right being called the "Merger Right"). In
the event that a Person becomes the beneficial owner of 15% or more of the
outstanding shares of Common Stock (unless pursuant to a tender offer or
exchange offer for all outstanding shares of Common Stock at a price and on
terms determined prior to the date of the first acceptance of payment for any of
such shares by at least a majority of the members of the Board of Directors who
are not officers of the Company and are not Acquiring Persons or Affiliates or
Associates thereof to be both adequate and otherwise in the best interests of
the Company and its stockholders (a "Permitted Offer")), then proper provision
shall be made so that each holder of a Right will for a 60-day period (subject
to extension under certain circumstances) thereafter have the right to receive
upon exercise that number of shares of Common Stock (or, at the election of the
Company, which election may be obligatory if sufficient authorized shares of
Common Stock are not available, a combination of Common Stock, property, other
securities (e.g., Preferred Stock) and/or a reduction in the exercise price of
the Right) having a market value of two times the Purchase Price (such right
being called the "Subscription Right"). The holder of a Right will continue to
have the Merger Right whether or not such holder exercises the Subscription
Right. Notwithstanding the foregoing, upon the occurrence of any of the events
giving rise to the exercisability of the Merger Right or the Subscription Right,
any Rights that are or were at any time after the Distribution Date owned by an
Acquiring Person shall immediately become null and void.
At any time prior to the earlier to occur of (i) a Person becoming an
Acquiring Person or (ii) the expiration of the Rights, the Company may redeem
the Rights in whole, but not in part, at a price of $0.01 per Right (the
"Redemption Price"), which redemption shall be effective upon the action of the
Board of Directors. Additionally, the Company may thereafter redeem the then
outstanding Rights in whole, but not in part, at the Redemption Price (i) if
such redemption is incidental to a merger or other business combination
transaction or series of transactions involving the Company but not involving an
Acquiring Person or certain related Persons or (ii) following an event giving
rise to, and the expiration of the exercise period for, the Subscription Right
if and for as long as the Acquiring Person triggering the Subscription Right
beneficially owns securities
-3-
<PAGE>
representing less than 15% of the outstanding shares of Common Stock and at the
time of redemption there are no other Acquiring Persons. The redemption of
Rights described in the preceding sentence shall be effective only as of such
time when the Subscription Right is not exercisable, and in any event, only
after ten business days' prior notice. Upon the effective date of the redemption
of the Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
Subject to applicable law, the Board of Directors, at its option, may
at any time after a Person becomes an Acquiring Person (but not after the
acquisition by such Person of 50% or more of the outstanding Common Stock),
exchange all or part of the then outstanding and exercisable Rights (except for
Rights which have become void) for shares of Common Stock at a rate of one share
of Common Stock per Right or, alternatively, for substitute consideration
consisting of cash, securities of the Company or other assets (or any
combination thereof).
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such stock). Each share of
Preferred Stock will have a preferential quarterly dividend in an amount equal
to 1,000 times the dividend declared on each share of Common Stock, but in no
event less than $25.00. In the event of liquidation, the holders of shares of
Preferred Stock will receive a preferred liquidation payment equal to the
greater of $1,000.00 or 1,000 times the payment made per each share of Common
Stock. Each share of Preferred Stock will have 1,000 votes, voting together with
the shares of Common Stock. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 1,000 times the amount and type of
consideration received per share of Common Stock. The rights of the Preferred
Stock as to dividends, liquidation and voting, and in the event of mergers and
consolidations, are protected by customary antidilution provisions. Fractional
shares of Preferred Stock will be issuable; however, (i) the Company may elect
to distribute depositary receipts in lieu of such fractional shares and (ii) in
lieu of fractional shares other than fractions that are multiples of one
one-thousandth of a share, an adjustment in cash will be made based on the
market price of the Preferred Stock on the last trading date prior to the date
of exercise.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. The Company and the Rights Agent retain broad
authority to amend the Rights Agreement; however, following any Distribution
Date any amendment may not adversely affect the interests of holders of Rights.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. THIS
SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS
INCORPORATED HEREIN BY REFERENCE.
-4-
<PAGE>
Item 7. Financial Statements and Exhibits.
---------------------------------
(c) Exhibits
4.1 Form of Rights Agreement dated as of May 14, 1997 between S3
Incorporated and The First National Bank of Boston, which
includes as Exhibit B the form of Rights Certificate. Pursuant to
the Rights Agreement, Rights Certificates will not be mailed
until the earlier of (i) a public announcement that a person or a
group of affiliated or associated persons has acquired beneficial
ownership of securities representing 15% or more of the
outstanding common stock or (ii) ten days after a person or a
group of affiliated or associated persons has commenced or
announced an intent to commence a tender offer or exchange offer
which, upon consummation thereof, would cause such person or
group to own beneficially securities representing 15% or more of
the outstanding common stock (filed as Exhibit 4.1 to the
Company's Registration Statement on Form 8-A and incorporated
herein by reference).
99.1 Press release dated May 15, 1997.
-5-
<PAGE>
SIGNATURE
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 hereunto duly authorized.
Dated: May 16, 1997.
S3 INCORPORATED
By /s/ Gary J. Johnson
------------------------------------
Gary J. Johnson, President and Chief
Executive Officer
-6-
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT PAGE
- ------- ----
4.1 Form of Rights Agreement dated as of May 14, 1997
between S3 Incorporated and The First National
Bank of Boston, which includes as Exhibit B the
form of Rights Certificate. Pursuant to the Rights
Agreement, Rights Certificates will not be mailed
until the earlier of (i) a public announcement
that a person or a group of affiliated or
associated persons has acquired beneficial
ownership of securities representing 15% or more
of the outstanding common stock or (ii) ten days
after a person or a group of affiliated or
associated persons has commenced or announced an
intent to commence a tender offer or exchange
offer which, upon consummation thereof, would
cause such person or group to own beneficially
securities representing 15% or more of the
outstanding common stock (filed as Exhibit 4.1 to
the Company's Registration Statement on Form 8-A
and incorporated herein by reference).
99.1 Press release dated May 15, 1997.
-7-
EXHIBIT 99.1
FOR MORE INFORMATION:
Contact Information:
Dale Lindly
(408) 588-8659
email: [email protected]
S3 Website Location:http://www.S3.com
FOR IMMEDIATE RELEASE
- ---------------------
S3 INCORPORATED ADOPTS STOCKHOLDER RIGHTS PLAN
SANTA CLARA, CA -- May 14, 1997 -- S3 Incorporated-R- (Nasdaq: SIII)
announced today that its Board of Directors adopted a Stockholder Rights Plan
that is designed to strengthen the ability of the Board of Directors to protect
S3's stockholders and other stakeholders.
To implement the plan, S3's Board declared a dividend of one preferred
stock purchase right (a "Right") for each outstanding share of S3 Common Stock
held of record at the close of business on June 1, 1997. Each Right represents a
contingent right to purchase, under certain circumstances, a fractional share of
a newly created series of S3 preferred stock.
The Rights would become exercisable and trade independently from S3
Common Stock upon the public announcement of the acquisition by a person or
group of 15 percent or more of S3's Common Stock, or ten days after commencement
of a tender or exchange offer for S3 Common Stock that would result in the
acquisition of 15 percent or more of S3's Common Stock.
The Rights expire May 14, 2007 unless redeemed earlier by S3's Board of
Directors. The Rights can be redeemed by the Board at a price of $0.01 per Right
at any time before the Rights become exercisable, but thereafter only in limited
circumstances. The Rights distribution will not be taxable to stockholders.
The rights plan is designed to protect S3 stockholders against abusive
or coercive takeover tactics and takeover tactics not in the best interests of
S3 and its stockholders, such as acquisitions of control without paying all
stockholders a fair premium, coercive tender offers and inadequate offers. It is
not intended to prevent an offer that the Board concludes is in the best
interests of S3 and its stockholders. Details of the rights plan will be
contained in a letter to be mailed to the Company's stockholders.
About S3 Incorporated
- ---------------------
S3 Incorporated, founded in 1989 with headquarters in Santa Clara,
California, is the world's largest supplier of multimedia acceleration hardware
and its associated software. S3 is committed to applying its expertise in audio,
video, graphics and platform acceleration to create innovative and affordable
products for the home, desktop and mobile markets. The Company's vision for the
future is to also bring a rich, consumer electronics-type experience to PC users
- -- integrating the best available consumer multimedia technologies into the
mainstream PC platform.
