SECURITIES EXCHANGE AND COMMISSION Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): December 15, 1995
EXAR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-14225 94-1741481
(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
48720 Kato Road, Fremont, California 94538
(Address of principal executive offices) (Zip Code)
(510) 438-7000
(Registrant's telephone number, including area code)
Item 5.Other Events.
On December 15, 1995 the Board of Directors of Exar Corporation (the "Company")
declared a dividend of one preferred share purchase right (a "Right") for each
outstanding share of common stock, par value $.0001 per share
(the "Common Shares"), of the Company. The dividend is payable
on January 10, 1996 (the "Record Date") to the stockholders of record
on that date. Each Right entitles the registered holder to purchase from
the Company one onehundredth of a share of Series A Junior Participating
Preferred Stock, par value $.0001 per share (the "Preferred Stock"),
at a price of $118.50 per one one-hundredth of a Preferred Share
(the "Purchase Price"), subject to adjustment. Each one one-hundredth
of a share of Preferred Stock has designations and the powers,
preferences and rights, and the qualifications, limitations and
restrictions which make its value approximately equal to the value of
a Common Share. The description and terms of the Rights are set forth
in a Rights Agreement dated as of December 15, 1995 (the "Rights Agreement"),
between the Company and The First National Bank of Boston, as Rights Agent
(the "Rights Agent").
Initially, the Rights will be evidenced by the stock
certificates representing the Common Shares then outstanding, and no separate
Right Certificates, as defined, will be distributed. Until the earlier to
occur of (i) 10 days following a public announcement that a person,
entity or group of affiliated or associated persons (an "Acquiring Person")
have acquired beneficial ownership of 15% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person or entity
becomes an Acquiring Person) following the commencement of, or announcement
of an intention to make, a tender offer or exchange offer the consummation
of which would result in the beneficial ownership by a person or group of
15% or more of such outstanding Common Shares (the earlier of such dates
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate with or without a copy of
the Summaryof Rights, which is included in the Rights Agreement as
Exhibit C thereof (the "Summary of Rights"), attached thereto.
The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Share certificates issued after the Record Date,
upon transfer or new issuance of Common Shares, will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender
or transfer of any certificates for Common Shares outstanding as of the
Record Date, even without such notation or a copy of the Summary of
Rights being attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed
to holders of record of the Common Shares as of the close of business
on the Distribution Date and such separate Right Certificates alone
will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on December 15, 2005 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier
redeemed by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are
subject to 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 Shares, (ii) upon the grant to holders
of the Preferred Shares of certain rights or warrants to subscribe for
or purchase Preferred Shares at a price, or securities convertible
into Preferred Shares with a conversion price, less than the then
current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in
Preferred Shares) or of subscription rights or warrants (other than
those referred to above). The exercise of Rights for Preferred
Shares is at all times subject to the availability of a sufficient
number of authorized but unissued Preferred Shares.
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Shares
or a stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidation or combinations of the Common Shares
occurring, in any case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of $1.00 but will be entitled
to an aggregate dividend of 100 times the dividend declared per Common
Share. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $100
but will be entitled to an aggregate payment of 100 times the payment
made per Common Share. Each Preferred Share will have 100 votes,
voting together with the Common Shares. Finally, in the event of
any merger, consolidation or other transaction in which Common Shares
are exchanged, each Preferred Share will be entitled to receive 100
times the amount of consideration received per Common Share. These
rights are protected by customary anti-dilution provisions. Because of
the nature of the Preferred Shares' dividend and liquidation rights,
the value of one one-hundredth of a Preferred Share should approximate
the value of one Common Share.
In the event that any person becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereafter
be void), will for a 60-day period have the right to receive upon
exercise that number of Common Shares having a market value of two times
the exercise price of the Right (or, if such number of shares is not
and cannot be authorized, the Company may issue Preferred Stock, cash,
debt, stock or a combination thereof in exchange for the Rights).
This right will terminate 60 days after the date on which the Rights
become nonredeemable (as described below), unless there is an injunction
or similar obstacle to exercise of the Rights, in which event this
right will terminate 60 days after the date on which the Rights again
become exercisable.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise thereof at the
then current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction will
have a market value of two times the exercise price of the Right.
At any time after the acquisition by a person or group of affiliated
or associated persons of beneficial ownership of 15% or more of the
outstanding Common Shares and prior to the acquisition by such person or
group of 50% or more of the outstanding Common Shares, the Board of
Directors of the Company may exchange the Rights (other than Rights
owned by such person or group which have become void), in whole or
in part, at an exchange ratio of one Common Share, or one one-hundredth
of a Preferred Share, per Right (or, if the number of shares is not
and cannot be authorized, the Company may issue cash, debt, stock or a
combination thereof in exchange for the Rights), subject to adjustment.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Preferred Shares will be
issued (other than fractions which are integral multiples of the number
of one one-hundredths of a Preferred Share issuable upon the exercise of
one Right, which may, at the option of the Company, be evidenced by
depositary receipts), and in lieu thereof, an adjustment in cash will be
made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
At any time prior to the earlier of (i) the close of business on the
day of the first public announcement that a person has become an
Acquiring Person or (ii) the Final Expiration Date, the Board of
Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price").
Following the expiration of the above periods, the Rights become
nonredeemable. Immediately upon any 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.
The terms of the Rights may be amended by the Board of Directors
of the Company without the consent of the holders of the Rights,
including an amendment to lower the threshold for exercisability
of the Rights from 15% to any percentage which is (i) greater than
the largest percentage of the outstanding Common Shares then known
to the Company to be beneficially owned by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of
the Company or any Subsidiary, or any entity holding Common Shares pursuant
to the terms of any such plan) and (ii) not less than 10%, except that
from and after such time as any person becomes an Acquiring Person no
such amendment may adversely affect the interest of the holders of
the Rights.
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 Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors.
The Rights should not interfere with any merger or other business
combination approved by the Board of Directors since the Rights may be
redeemed by the Company at $.01 per Right prior to the earliest of (i)
the twentieth day following the time that a person or group has acquired
beneficial ownership of 15% or more of the Common Shares (unless extended
for one or more 10 day periods by the Board of Directors), (ii) a Change
of Control, or (iii) the final expiration date of the rights.
Item 7.Exhibits.
1. Rights Agreement, dated as of December 15, 1995, between Exar
Corporation, and The First National Bank of Boston, with exhibits.
2. Form of letter to be sent to Exar Corporation stockholders, dated
January 11, 1996.
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, thereunto duly authorized.
Exar Corporation
Dated: December 15, 1995 By: /s/ George D. Wells
George D. Wells President
INDEX TO EXHIBITS
1. Rights Agreement, dated as of
December 15, 1995, between
Exar Corporation and The First National Bank of Boston,
as Rights Agent.
2. Form of letter to be sent to
Exar Corporation stockholders,
dated January 11, 1996.