SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [x]
Filed by Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
S3 Incorporated
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
S3 INCORPORATED
2841 MISSION COLLEGE BOULEVARD
SANTA CLARA, CA 95054
(408) 588-8000
February 2, 1999
Dear Stockholder:
You are cordially invited to attend the Special Meeting of Stockholders of
S3 Incorporated which will be held on Thursday, February 25, 1999, at 10:00 a.m.
California time, at the Company's office located at 2841 Mission College
Boulevard, Santa Clara, California.
The formal Notice of the Special Meeting and the Proxy Statement have been
made a part of this invitation.
After reading the Proxy Statement, please mark, date, sign and return, at
an early date, the enclosed proxy in the prepaid envelope addressed to
EquiServe, our agent, to ensure that your shares will be represented.
Your shares cannot be voted unless you sign, date and return the enclosed
proxy or attend the Special Meeting in person.
Sincerely,
/s/ Kenneth F. Potashner
Chairman of the Board,
President and Chief Executive Officer
<PAGE>
S3 INCORPORATED
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Notice of Special Meeting of Stockholders
to be Held on February 25, 1999
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To the Stockholders of S3 Incorporated:
A Special Meeting of Stockholders of S3 Incorporated (the "Company") will
be held at the Company's office located at 2841 Mission College Boulevard, Santa
Clara, California, at 10:00 a.m. California time, on Thursday, February 25,
1999, for the following purposes:
1. To amend the Company's Restated Certificate of Incorporation to increase
the number of authorized shares of Common Stock, par value $0.0001 per share,
from 70,000,000 to 120,000,000;
2. To transact such other business as may properly come before the meeting
and any adjournment thereof.
These items are fully discussed in the following pages, which are made part
of this Notice. Stockholders of record as of the close of business on January
25, 1999 are entitled to notice of and to vote at the Special Meeting and any
adjournment thereof. A complete list of stockholders entitled to vote will be
available at the Secretary's office, 2841 Mission College Boulevard, Santa
Clara, California, for ten days before the meeting.
Stockholders are requested to complete, date, sign and return the enclosed
proxy card as promptly as possible. The giving of such proxy will not affect
your right to vote in person should you decide to attend the Special Meeting.
By Order of the Board of Directors
/s/ Ronald T. Yara
Secretary
Santa Clara, California
February 2, 1999
<PAGE>
S3 INCORPORATED
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PROXY STATEMENT
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INFORMATION CONCERNING SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of S3 Incorporated, a Delaware corporation (the
"Company"), of proxies in the accompanying form to be used at the Special
Meeting of Stockholders to be held at 10:00 a.m. California time at the
Company's office located at 2841 Mission College Boulevard, Santa Clara,
California, on Thursday, February 25, 1999 and any adjournment thereof (the
"Special Meeting"). The shares represented by the proxies received in response
to this solicitation and not revoked will be voted at the Special Meeting. A
proxy may be revoked at any time before it is exercised by filing with the
Secretary of the Company a written revocation or a duly executed proxy bearing a
later date or by voting in person at the Special Meeting. On the matters coming
before the Special Meeting for which a choice has been specified by a
stockholder by means of the ballot on the proxy, the shares will be voted
accordingly. If no choice is specified, the shares will be voted FOR approval of
Proposal 1 as such proposal is described in the Notice of Special Meeting and in
this Proxy Statement.
Stockholders of record at the close of business on January 25, 1999 are
entitled to notice of and to vote at the Special Meeting. As of the close of
business on such date, the Company had 51,731,160 shares of Common Stock
outstanding and entitled to vote. Each holder of Common Stock is entitled to one
vote for each share held as of the record date.
A majority of the shares of Common Stock outstanding and entitled to vote
as of January 25, 1999 must be present at the Special Meeting in person or by
proxy in order to constitute a quorum for the transaction of business.
Abstentions with respect to any matter are treated as shares present or
represented and entitled to vote on that matter and thus have the same effect as
negative votes. If shares are not voted by the broker who is the record holder
of the shares, or if shares are not voted in other circumstances in which proxy
authority is defective or has been withheld with respect to any matter, these
non-voted shares will have the same effect as negative votes.
The expense of printing and mailing proxy materials will be borne by the
Company. In addition to the solicitation of proxies by mail, solicitation may be
made by certain directors, officers and other employees of the Company by
personal interview, telephone or facsimile. No additional compensation will be
paid to such persons for such solicitation. The Company will reimburse brokerage
firms and others for their reasonable expenses in forwarding solicitation
materials to beneficial owners of the Company's Common Stock. The Company has
retained Morrow & Co., Inc. to assist in the solicitation of proxies at a cost
of approximately $2,500.00.
This Proxy Statement and the accompanying form of proxy are being mailed to
stockholders on or about February 4, 1999 to all stockholders entitled to vote
at the meeting.
IMPORTANT
Please mark, sign and date the enclosed proxy and return it at your
earliest convenience in the enclosed postage-prepaid return envelope so
that, whether you intend to be present at the Special Meeting or not, your
shares can be voted. This will not limit your rights to attend or vote at
the Special Meeting.
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<PAGE>
PROPOSAL TO AMEND THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
The Board of Directors has approved the following proposal: an increase in
the number of authorized shares of Common Stock, par value $0.0001 per share
("Common Stock"). If the proposal is approved by the stockholders, the Company's
Restated Certificate of Incorporation will be amended to increase the number of
authorized shares of Common Stock to 120,000,000.
PROPOSAL 1
PROPOSED AMENDMENT TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has approved the amendment of Article IV of the
Company's Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 70,000,000 to 120,000,000. The Board of
Directors recommends that the Company's stockholders approve this amendment.
The Board of Directors believes that it is in the Company's best interests
to increase the number of authorized shares of Common Stock in order to have
additional authorized but unissued shares available for issuance to meet
business needs as they arise. The Board of Directors believes that the
availability of such additional shares will help the Company attract and retain
talented employees through the grant of stock options and other stock-based
incentives. The Board of Directors also believes that the availability of such
shares will provide the Company with the flexibility to issue Common Stock for
other proper corporate purposes which may be identified by the Board of
Directors in the future, such as stock splits, stock dividends, financings or
acquisitions. The issuance of additional shares of Common Stock may have a
dilutive effect on earnings per share and, for a person who does not purchase
additional shares to maintain his or her pro rata interest, on a stockholder's
percentage voting power.
The Board of Directors does not recommend this proposed amendment with the
intent to use the ability to issue additional Common Stock to discourage tender
offers or takeover attempts. However, the availability of authorized Common
Stock for issuance could render more difficult or discourage a merger, tender
offer, proxy contest or other attempt to obtain control of the Company. Neither
the management of the Company nor the Board of Directors is aware of any
existing or planned effort on the part of any party to accumulate material
amounts of Common Stock or to acquire control of the Company by means of merger,
tender offer, proxy contest or otherwise, or to change the Company's management,
nor is the Company aware of any offer by any person to acquire any material
amount of Common Stock or assets of the Company.
Of the 70,000,000 shares of Common Stock currently authorized for issuance,
approximately 18,300,000 shares are unissued but all of such shares are reserved
for issuance pursuant to the Company's stock option and purchase plans or for
issuance upon conversion of the Company's outstanding 5-3/4% Convertible Notes
due 2003. There are currently no shares unreserved for issuance. The authorized
shares of Common Stock in excess of those issued will be available for issuance
at such times and for such corporate purposes as the Board of Directors may deem
advisable without further action by the Company's stockholders, except as may be
required by applicable laws or the rules of any stock exchange or national
securities association trading system on which the securities may be listed or
traded. The Company's management has no arrangements, agreements, understandings
or plans at the present time for the issuance or use of the additional shares of
Common Stock proposed to be authorized. Upon issuance, such shares will have the
same rights as the outstanding shares of Common Stock. Holders of Common Stock
do not have preemptive rights. The Board of Directors does not intend to issue
any Common Stock except on terms which the Board deems to be in the best
interests of the Company and its then-existing stockholders.
The full text of Article IV, as such Article is proposed to be amended
pursuant to this proposal, is set forth in Appendix A hereto.
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<PAGE>
Vote Required and Effective Date
The affirmative vote of the holders of a majority of the Company's
outstanding Common Stock is required to approve this proposal. If approved by
the stockholders, the proposed amendment to Article IV will become effective
upon the filing of a Certificate of Amendment with the Secretary of State of
Delaware amending the Company's Restated Certificate of Incorporation, which
will occur as soon as reasonably practicable.
The Board of Directors recommends a vote for the proposal to amend Article
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IV of the Company's Restated Certificate of Incorporation as set forth in
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Appendix A.
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<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of January 4, 1999,
as to shares of the Company's Common Stock beneficially owned by: (i) each of
the Company's executive officers, (ii) each of the Company's directors, (iii)
all directors and executive officers of the Company as a group, and (iv) each
person who is known by the Company to own beneficially more than 5% of the
Company's Common Stock.
<TABLE>
<CAPTION>
Shares Percentage
Beneficially Beneficially
Owned(1) Owned(1)(2)
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<S> <C> <C>
Terry N. Holdt(3).................................................. 911,811 1.7%
Kenneth F. Potashner .............................................. 20,000 *
Walter D. Amaral(3)................................................ 116,312 *
Daniel A. Karr(3) ................................................. 51,475
Paul G. Franklin(3)................................................ 127,917 *
Ronald T. Yara(3).................................................. 447,188 *
John C. Colligan(3)................................................ 45,000 *
Robert P. Lee(3)................................................... 60,000 *
Carmelo J. Santoro(3).............................................. 48,536 *
All directors and executive officers
as a group (9 persons)........................................... 1,828,239 3.4
State of Wisconsin Investment Board(4)............................. 3,811,500 7.4
P.O. Box 7842
Madison, WI 53707
<FN>
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* Amount represents less than 1% of the Company's Common Stock.
(1) To the Company's knowledge, the persons named in the table have sole voting
and investment power with respect to all shares of Common Stock shown as
beneficially owned by them, subject to community property laws where
applicable and the information contained in the footnotes to this table.
(2) For purposes of computing the percentage of outstanding shares held by each
person or group of persons named above on a given date, shares with such
person or group has the right to acquire within 60 days after such date are
deemed to be outstanding, but are not deemed to be outstanding for the
purposes of computing the percentage ownership of any other person.
(3) Includes shares issuable upon exercise of options within 60 days of January
4, 1999 as follows: John C. Colligan, 45,000; Robert P. Lee, 60,000;
Carmelo J. Santoro, 48,536; Terry N. Holdt, 681,151; Ronald T. Yara,
214,452; Paul G. Franklin, 118,519; Daniel A. Karr, 50,014; and Walter D.
Amaral, 116,312.
(4) According to the Schedule 13G, dated January 26, 1998, filed by the State
of Wisconsin Investment Board, the State of Wisconsin Investment Board has
sole voting power and sole dispositive power with respect to all shares
listed in the table.
</FN>
</TABLE>
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<PAGE>
STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
The deadline for submitting stockholder proposals to be included in the
Company's proxy statement and form of proxy for its 1999 Annual Meeting of
Stockholders was January 18, 1999. A stockholder proposal may still be eligible
for presentation at that meeting if the stockholder gives timely notice of the
proposal in writing to the Secretary of the Company at the principal executive
offices of the Company and otherwise complies with the provisions of the
Company's Bylaws. To be timely, the Company's Bylaws provide that the Company
must have received the stockholder's notice not less than 50 days nor more than
75 days prior to such meeting. However, if notice or prior public disclosure of
the date of the annual meeting is given or made to stockholders less than 65
days prior to the meeting date, the Company must receive the stockholder's
notice by the earlier of (i) the close of business on the 15th day after the
earlier of the day the Company mailed notice of the annual meeting date or
provided such public disclosure of the meeting date and (ii) two days prior to
the scheduled date of the annual meeting. The Secretary should be contacted in
writing at the address on the first page of this Proxy Statement to obtain
additional information as to the proper form and content of notices of
stockholder proposals.
OTHER MATTERS
No other business may be considered at the Special Meeting, or any
adjournment thereof, except such procedural matters as may be necessary to
conduct the meeting. The proxy holders will vote in regard to such procedural
matters according to their discretion insofar as such proxies are not limited to
the contrary.
Whether or not you intend to be present at the Special Meeting, we urge you
to return your signed proxy promptly.
By Order of the Board of Directors
/s/ Ronald T. Yara
Secretary
Santa Clara, California
February 2, 1999
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<PAGE>
APPENDIX A
PROPOSED AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION-INCREASE IN AUTHORIZED SHARES
(Item I on the proxy card)
ARTICLE IV
A. Number and Classes of Stock. This Corporation is authorized to issue two
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classes of stock, designated "Preferred Stock" and "Common Stock," respectively.
The total number of shares which this Corporation shall have authority to issue
is one hundred twenty-five million (125,000,000). The number of shares of Common
Stock authorized to be issued is one hundred twenty million (120,000,000) with a
par value of $0.0001. The number of shares of Preferred Stock authorized to be
issued is five million (5,000,000) with a par value of $0.0001. The number of
authorized shares of Common Stock or Preferred Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the then outstanding shares of
Common Stock, without a vote of the holders of the Preferred Stock, or of any
series thereof, unless a vote of any such Preferred Stock holders is required
pursuant to the provisions established by the Board of Directors of this
Corporation (the "Board of Directors") in the resolution or resolutions
providing for the issue of such Preferred Stock, and if such holders of such
Preferred Stock are so entitled to vote thereon, then, except as may otherwise
be set forth in this Restated Certificate of Incorporation, the only stockholder
approval required shall be the affirmative vote of a majority of the combined
voting power of the Common Stock and the Preferred Stock so entitled to vote.
B. Preferred Stock. The Preferred Stock may be issued from time to time in
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one or more series. The Board of Directors is expressly authorized to provide
for the issue, in one or more series, of all or any of the remaining shares of
Preferred Stock and, in the resolution or resolutions providing for such issue,
to establish for each such series the number of its shares, the voting powers,
full or limited, of the shares of such series, or that such shares shall have no
voting powers, and the designations, preferences and relative, participating,
optional or other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof. The Board of Directors is
also expressly authorized (unless forbidden in the resolution or resolutions
providing for such issue) to increase or decrease (but not below the number of
shares of the series then outstanding) the number of shares of any series
subsequent to the issuance of shares of that series. In case the number of
shares of any such series shall be so decreased, the shares constituting such
decrease shall resume the status that they had prior to the adoption of the
resolution originally fixing the number of shares of such series.
C. Common Stock.
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1. Relative Rights of Preferred Stock and Common Stock. All preferences,
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voting powers, relative, participating, optional or other special rights and
privileges, and qualifications, limitations or restrictions of the Common Stock
are expressly made subject and subordinate to those that may be fixed with
respect to any shares of the Preferred Stock.
2. Voting Rights. Except as otherwise required by law or this Restated
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Certificate of Incorporation, each holder of Common Stock shall have one vote in
respect of each share of stock held by such holder of record on the books of the
corporation for the election of directors and on all matters submitted to a vote
of stockholders of the corporation.
3. Dividends. Subject to the preferential rights of the Preferred Stock,
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the holders of shares of Common Stock shall be entitled to receive, when and if
declared by the Board of Directors, out of the assets of this Corporation which
are by law available therefor, dividends payable either in cash, in property or
in shares of capital stock.
4. Dissolution, Liquidation or Winding Up. In the event of any dissolution,
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liquidation or winding up of the affairs of this Corporation, after distribution
in full of the preferential amounts, if any, to be distributed
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<PAGE>
to the holders of shares of the Preferred Stock, holders of Common Stock shall
be entitled, unless otherwise provided by law or this Restated Certificate of
Incorporation, to receive all of the remaining assets of the corporation of
whatever kind available for distribution to stockholders ratably in proportion
to the number of shares of Common Stock held by them respectively.
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<PAGE>
S3 INCORPORATED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned hereby authorizes KENNETH F. POTASHNER, TERRY N.
R HOLDT, WALTER D. AMARAL AND RONALD T. YARA, as Proxies with full power in
O each to act without the other and with the power of substitution in each,
X to represent and to vote all the shares of stock the undersigned is
Y entitled to vote at the Special Meeting of Stockholders of S3 Incorporated
to be held on February 25, 1999, or at any postponement or adjournment
thereof on the following matters set forth on the reverse side.
(Continued and to be signed on reverse side) /SEE REVERSE/
/ SIDE /
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/X/ Please mark
-- votes as in
this example
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR Proposal 1.
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<TABLE>
<S> <C> <C> <C> <C>
FOR AGAINST ABSTAIN
1. PROPOSAL TO AMEND THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF / / / / / /
COMMON STOCK, PAR VALUE $0.0001 PER SHARE, FROM 70,000,000 TO --- --- ---
120,000,000.
2. In their discretion, the proxies are authorized to vote upon such other FOR AGAINST ABSTAIN
business as may properly come before the meeting.
/ / / / / /
--- --- ---
</TABLE>
MARK HERE
FOR ADDRESS
CHANGE AND
NOTE AT LEFT / /
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Please sign where indicated below. When shares are held by
joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full
corporate name by an authorized officer. If a partnership,
please sign partnership name by an authorized person.
PLEASE MARK, SIGN, DATE AND Signature: Date
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RETURN THE PROXY PROMPTLY Signature: Date
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