SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): March 4, 1998
ALLIANCE SEMICONDUCTOR CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 0-22594 77-0057842
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
3099 North First Street, San Jose, California 95134-2006
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 383-4900
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Item 5. Other Events
On March 4, 1998, the Registrant ("Alliance") entered into an agreement
(the "Agreement") for the sale by Alliance of 35 million shares (the "Shares")
of stock of United Semiconductor Corporation ("USC"), for a purchase price of
1.05 billion New Taiwan Dollars (approximately US$32.84 million at exchange
rates prevailing on March 4, 1998). The sale is subject to certain conditions
precedent, including receipt of approval from certain Taiwan regulatory
authorities.
Under the terms of the Agreement, if at any time a "Liquidity Event"
occurs, Alliance will be entitled to receive, in addition to the initial payment
of 1.05 billion New Taiwan Dollars, a contingent payment of up to 19 New Taiwan
Dollars per Share, or up to an additional 665 million New Taiwan Dollars. Upon
occurrence of a Liquidity Event, Alliance may elect to receive its contingent
payment with respect to all or a portion of the Shares; provided that Alliance
may only receive one contingent payment with respect to each Share; and provided
further that Alliance may not request to receive a contingent payment with
respect to fewer than five million Shares. Subject to the foregoing, Alliance
may request contingent payments with respect to different portions of Shares in
connection with different Liquidity Events.
A "Liquidity Event" is defined as an event by which United
Microelectronics Corporation ("UMC"), or its successor(s) with respect to USC
shares, will have the opportunity to receive value from transfer of its
ownership of shares of stock in USC in an arm-length transaction other
than by way of transfer to employees for incentives, whether or not UMC or its
successor(s) in fact participates in such opportunity. A Liquidity Event will
include, for example, completion of a public offering of USC securities on a
recognized securities exchange; a sale of USC stock owned by UMC or by a UMC
successor in an arms-length transaction; or a sale of all or substantially all
of the assets of USC. For purposes of the Agreement, a "successor" of UMC will
be any entity which succeeds to and/or acquires from UMC, in the aggregate, more
than 5 million shares of USC common stock under circumstances in which such
transaction does not qualify as a Liquidity Event; there may be multiple
successors to UMC under the Agreement, and there may be multiple Liquidity
Events as to each separate successor.
USC, a Taiwan corporation located in Hsin-Chu, Taiwan, is a foundry
joint venture between Alliance, UMC and S3 Incorporated that was formed in 1995.
Alliance paid approximately 1.95 billion New Taiwan Dollars for its 18.99%
equity interest in USC. As a result of the sale of shares pursuant to the
Agreement, Alliance's percentage ownership in USC will decrease to 15.49%.
Alliance maintains its right to purchase up to approximately 25% of the
manufacturing capacity of USC.
Risk Factors
All statements in this Report reflecting Alliance's anticipation of
receiving funds are forward-looking; the risk factors set forth below could
cause actual results to differ materially from those in the forward-looking
statements. The parties must obtain approval from Taiwan government authorities
(including the Hsin-Chu Science-Based Industrial Park authorities and the Taiwan
Securities and Futures Commission) in order for funds to be transferred to
Alliance pursuant to the Agreement. Alliance does not currently anticipate any
difficulty in obtaining such approval, but there can be no assurance that such
approval will not be delayed or withheld, either with respect to the initial
payment or with respect to any contingent payment. Additionally, there is a risk
that the party or parties obliged to make payment (initial or contingent) to
Alliance may, due to reasons of credit or otherwise, be unwilling or unable to
make payment to Alliance when due (assuming that requisite government approval
for such payments is obtained). Moreover, payments to be made to Alliance
pursuant to the Agreement will be calculated in New Taiwan Dollars. The exchange
rate of the New Taiwan Dollar to the U.S. dollar is subject to material change,
particularly in light of the uncertainties caused by the current financial and
economic conditions in Asia; there can be no assurance that on the date or dates
Alliance receives payments pursuant to the Agreement (assuming that requisite
government approval for such payments is obtained and the obligor(s) makes such
payments), the New Taiwan Dollar will not have materially deteriorated in value
against the U.S. dollar as compared to the rate prevailing on March 4, 1998
(approximately 32 New Taiwan Dollars to one U.S. dollar). The forward-looking
statements in this Report speak only as of March 19, 1998 (the date this Report
is filed with the Securities and Exchange Commission). The Company expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to reflect any
change in the Company's expectations with regard thereto or to reflect any
change in events, conditions or circumstances on which any such forward-looking
statement is based, in whole or in part.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
10.1* Sale and Transfer Agreement dated as of March 4, 1998.
* Confidential treatment has been requested for a
portion of this document. Confidential portions
omitted have been filed separately with the
Securities and Exchange Commission.
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.
ALLIANCE SEMICONDUCTOR CORPORATION
Dated: March 19, 1998 By: /s/ Charles Alvarez
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Charles Alvarez, Vice President --
Finance and Administration, and
Chief Financial Officer