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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: November 2, 1998
(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
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Item 5. Other Events.
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On November 2, 1998, S3 Incorporated (the "Company") announced that it
appointed Kenneth Potashner as President and Chief Executive Officer of the
Company. The Board of Directors of the Company also increased the size of the
board by one, elected Mr. Potashner to fill the newly created vacancy and
elected Mr. Potashner Chairman of the Board. Terry N. Holdt, who returned from
his retirement in January 1998 to assume the role of interim President, Chief
Executive Officer and Chairman of the Company, will remain Vice Chairman of the
Company's Board of Directors.
In connection with his employment, Mr. Potashner entered into a three year
employment agreement which provides for a base salary of $500,000 per year and
participation in the Company's executive bonus plan and other executive benefit
programs. Under the agreement, Mr. Potashner is eligible to receive an annual
cash bonus of up to 200% of his base salary, with a minimum bonus payable of
$250,000 after the first year. Mr. Potashner also received two options to
purchase an aggregate of 4,500,000 shares of Common Stock of the Company. One
option for 1,500,000 shares vests upon the earlier of (i) six months from the
date of his employment, (ii) a change in control of the Company, or (iii)
termination of his employment without cause. A second option for 3,000,000
shares vests over four years from the date of his employment or earlier in
certain circumstances. In addition, Mr. Potashner is eligible for a one-time
"special cash bonus" on the third anniversary of the date of his employment in
the event that the Company's Common Stock has not achieved a $4.67 per share
increase in value ($7,000,000 divided by 1,500,000) from the date of his
employment. The one-time special cash bonus, if payable, will be equal to
$7,000,000 minus any increase above the stock price on his employment date for
1,500,000 shares. Such one-time bonus may also be payable in the event Mr.
Potashner's employment is terminated without cause following a change of control
of the Company. As a result of this special cash bonus, the Company may be
required to record a charge to earnings on a quarterly basis.
A copy of the press release issued November 2, 1998 is attached hereto as
Exhibit 99.1 and is incorporated by reference herein.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits
99.1 Press Release dated November 2, 1998.
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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: November 5, 1998.
S3 INCORPORATED
By /s/ Walter D. Amaral
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Walter D. Amaral
Chief Financial Officer
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EXHIBIT INDEX
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EXHIBIT
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99.1 Press Release dated November 2, 1998.
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EXHIBIT 99.1
Press Inquiries: Investor Relations:
Public Relations Investor Reltions
(408) 588-8000 (408) 588-8000
email: [email protected] email: [email protected]
S3 APPOINTS KENNETH POTASHNER AS PRESIDENT,
CHIEF EXECUTIVE OFFICER AND
CHAIRMAN
SANTA CLARA, Calif.--November 2, 1998--S3(R) Incorporated
(Nasdaq:SIII) today announced the appointment of Kenneth F.
Potashner as President, Chief Executive Officer and Chairman of
the Board. Mr. Potashner brings nearly 20 years of technology
experience to S3 and was most recently recognized at Maxwell
Technologies for leading the most successful US turnaround in
1997.
Mr. Potashner succeeds Terry Holdt, who returned from retirement
in January 1998 to assume the role of interim President, CEO and
Chairman of S3. Mr. Holdt will remain active as Vice Chairman of
the Board.
"After a lengthy executive search, we selected Ken because of
his tremendous experience managing technology companies and his
proven track record of growing a business and establishing long-
term financial success," said Terry Holdt. "We believe his
management prowess and S3's current product line-up will drive
S3 back into a financial and market leadership position."
"What attracted me to S3 was the company's future prospects and
the financial strength to execute upon them," said Kenneth
Potashner. "I believe S3 has the right products, future roadmaps
and an unprecedented ability to deliver the high volumes
required in today's competitive market. Capitalizing on these
strengths and working with its many talented people, I look
forward to expanding S3's position in the mobile and desktop
markets."
Mr. Potashner comes to S3 from Maxwell Technologies, where he
was President, CEO and Chairman since 1996. While at Maxwell,
Ken orchestrated the most successful turnaround in the US in
1997, with Maxwell posting an 800% increase in market
capitalization. Prior to Maxwell, Mr. Potashner served as
Executive Vice President and General Manager of Conner
Peripherals Disk Drive Operations. While at Conner, Mr.
Potashner re-established the Company as a leading supplier of
disk drives. Before that Potashner held numerous management
positions at Quantum Corporation, Digital
Equipment Corporation and Texas Instruments.
Mr. Potashner holds a B.S.E.E. from Lafayette College and an
M.S.E.E. from Southern Methodist University.
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About S3 Incorporated
S3 Incorporated, founded in 1989 with headquarters in Santa
Clara, California, is a premier supplier of multimedia
acceleration hardware and its associated software. S3 is
committed to applying its expertise in video, graphics and
multimedia acceleration to create innovative and affordable
products for the home, desktop and mobile markets.
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Except for the historical information contained herein, the
matters set forth in this press release, such as statements as
to S3's ability to compete in the marketplace, are forward-
looking statements that are subject to risk and uncertainties
that may cause actual results to differ materially, including
the impact of competitive products and pricing and of
alternative technological advances, and other risks detailed
from time to time in S3's SEC reports, including its Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998. These
forward-looking statements speak only as of the date hereof. S3
disclaims any intent or obligation to update these forward-
looking statements.
S3 is a registered trademark of S3 Incorporated. The S3 corporate
logo is a trademark of S3 Incorporated. Other marks referenced herein
are the property of their respective owners.
