UNITED STATES
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 (Date of earliest event reported): June 6, 2003
COREL CORPORATION
(Exact name of registrant as specified in its charter)
1600 Carling Avenue
Ottawa, Ontario, Canada KIZ 8R7
(Address of principal executive offices including zip code)
(613) 728-8200
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events and Required FD Disclosure
Corel Corporation ("Corel") entered into an acquisition agreement with Corel Holdings, L.P. ("AcquisitionCo") and Vector CC Acquisitions Inc. ("BuyerCo") (Acquisition Co. and Buyer Co, together, "Vector") dated as of June 6, 2003 (the "Acquisition Agreement") under which Vector has agreed to acquire all of the outstanding common shares of Corel ("Common Shares") pursuant to a plan of arrangement (the "Arrangement") at a price of US$1.05 per share, payable in cash. See press release dated June 6, 2003 attached as Exhibit 99 hereto.
Pursuant to the Arrangement, each Common Share issued and outstanding at the effective time of the Arrangement (other than the Common Shares held by Vector and its affiliates) will be converted into (1) one new Series B Preferred Share of Corel (a "Series B Share") and (2) one new common share of Corel (a "New Common Share"). Upon the closing of the transaction, (i) each Series B Share will be transferred to BuyerCo and (ii) each New Common Share will be transferred to AcquisitionCo, in exchange for total cash consideration of US$1.05.
An affiliate of Vector, Vector CC Holdings, L.L.C. ("Vector CC Holdings") holds 22,890,000 Series A preferred convertible shares of Corel ("Series A Shares") being all of the outstanding Series A Shares of Corel and representing approximately 19.75% of the issued and outstanding Common Shares, assuming conversion of the Series A Shares.
The Acquisition Agreement contains (1) mutual representations and warranties, (2) covenants with respect to the operation of Corel prior to consummation of the acquisition, including covenants with respect to the taking of certain actions to reduce operating expenses, and (3) conditions to the parties' obligations to consummate the transaction, including the holding of a special meeting of the securityholders of Corel to consider and approve the Arrangement and to approve the termination of Corel's shareholder rights plan, the receipt of Court and all required regulatory approvals, conditions with respect to the maintenance by Corel of specified levels of cash and working capital, and a condition that there will be no material adverse change in the financial condition, results of operations or prospects of Corel between the date of the Acquisition Agreement and the date of completion.
The Arrangement is subject to the approval by the holders, present in person or by proxy at the meeting, of two-thirds of the Common Shares and options and warrants exercisable for Common Shares at a per Common Share price of less than US$1.05 per share, and, separately, by a majority of the holders of such securities, present in person or by proxy at the meeting, excluding any Common Shares which may be acquired by Vector on the conversion of any of its Series A Shares. Vector Holdings has agreed to vote its Series A Shares in favour of the Arrangement. Corel has agreed to make an application to Canadian securities regulators for relief from the requirements for a formal valuation of Corel. Upon the completion of the transaction, Vector and its affiliates will own all of the outstanding shares of Corel. See Acquisition Agreement attached as Exhibit 2. |