-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, APr9Nva6LwTV8CNQ0i0EbKADQd/96HUS6bsdg9PryyAQV3DTQ2hZIja10mJk2PyF bDh+IWjUc62xzlPYbsqcyg== 0000912057-96-011747.txt : 19960607 0000912057-96-011747.hdr.sgml : 19960607 ACCESSION NUMBER: 0000912057-96-011747 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960524 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960606 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRACTAL DESIGN CORP CENTRAL INDEX KEY: 0000930884 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 770276903 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26822 FILM NUMBER: 96577707 BUSINESS ADDRESS: STREET 1: 335 SPRECKLES DRIVE CITY: APTOS STATE: CA ZIP: 95003 BUSINESS PHONE: 4086885300 MAIL ADDRESS: STREET 1: 335 SPRACKELS DR CITY: APTOS STATE: CA ZIP: 95003 8-K 1 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) MAY 24, 1996 ------------ FRACTAL DESIGN CORPORATION - ------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) CALIFORNIA 77-0276903 - ------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 335 SPRECKELS DRIVE, APTOS, CALIFORNIA 95003 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (408) 688-5300 ------------------------- N/A - ------------------------------------------------------------------------------- (Former name or former address, if changed since last report) -1- Item 2. ACQUISITION OR DISPOSITION OF ASSETS. Pursuant to the Agreement and Plan of Reorganization (the "Reorganization Agreement") by and among Fractal Design Corporation ("Fractal"), Fractal Acquisition Corporation ("Merger Sub"), a wholly-owned subsidiary of Fractal, and Ray Dream, Inc., a California corporation ("Ray Dream") dated as of February 17, 1996 and the related Agreement of Merger (the "Merger Agreement"), filed with the California Secretary of State on May 24, 1996, Merger Sub was merged with and into Ray Dream (the "Merger"). As a result of the Merger, Ray Dream has become a wholly-owned subsidiary of Fractal. At the time the Merger became effective on May 24, 1996 (the "Effective Date"), each share of Common Stock of Ray Dream outstanding immediately prior to the Effective Date was converted into and exchanged for 0.565249 shares of Common Stock of Fractal. The aggregate number of shares of Common Stock of Fractal issued in accordance with the terms of the Reorganization Agreement and the Merger Agreement upon such conversion and exchange was 3,165,660 shares. Under the terms of the Reorganization Agreement, a total of 316,556 shares of Common Stock of Fractal issued as described in the preceding paragraph will be held in escrow for the purpose of indemnifying Fractal against certain liabilities of Ray Dream. Such escrow will expire on September 30, 1996. In addition, pursuant to the Reorganization Agreement, Fractal has reserved an aggregate of 219,459 shares of its Common Stock for issuance upon exercise of previously outstanding options to purchase Ray Dream Common Stock, which options vest and become exercisable in accordance with the terms of the respective, original Ray Dream stock option agreements. The amount of consideration paid in connection with the Merger was determined in arms-length negotiations between officers of Fractal and Ray Dream. The terms of the transaction were approved by the Boards of Directors and the shareholders of Fractal, Merger Sub and Ray Dream. Further information with respect to the Merger is set forth in Fractal's Registration Statement on Form S-4 under the caption "The Merger," declared effective by the Commission on April 26, 1996. -2- Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Incorporated by reference from Registrant's Registration Statement filed on Form S-4 (Registration No. 333-2110), declared effective by the Commission on April 26, 1996. (b) PRO FORMA FINANCIAL INFORMATION. It is currently impracticable for the Registrant to provide the pro forma combined financial statements of Fractal and Ray Dream required pursuant to Article 11 of Regulation S-X. In accordance with Items 7(a)(4) and 7(b)(2) of the Instructions to Form 8-K, the Registrant will file such financial statements as soon as they are available, and in no event later than August 7, 1996. (c) EXHIBITS. 2.1* Agreement and Plan of Reorganization dated January 28, 1994 among Registrant, Fractal Acquisition Corporation and Ray Dream, Inc. 2.2 Agreement of Merger dated as of May 24, 1996 among Registrant, Fractal Acquisition Corporation and Ray Dream, Inc. as filed with the California Secretary of State on May 24, 1996. 23.1 Consent of KPMG Peat Marwick LLP, independent auditors of Ray Dream. * Incorporated by reference from Registrant's Registration Statement filed on Form S-4 (Registration No. 333-2110), declared effective by the Commission on April 26, 1996. -3- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Fractal Design Corporation (Registrant) Dated: June 6, 1996 By: /s/ LESLIE WRIGHT ------------------------------------------ Leslie Wright Chief Operating Officer, Chief Financial Officer and Assistant Secretary -4- INDEX TO EXHIBITS Exhibit No. Exhibit -------- -------- 2.1* Agreement and Plan of Reorganization dated February 17, 1996 Registrant, Fractal Acquisition Corporation, and Ray Dream, Inc. 2.2 Agreement of Merger dated as of May 24, 1996 among Registrant, Fractal Acquisition Corporation and Ray Dream, Inc. as filed with the California Secretary of State on May 24, 1996 23.1 Consent of KPMG Peat Marwick LLP, independent auditors of Ray Dream. * Incorporated by reference from Registrant's Registration Statement filed on Form S-4 (Registration No. 333-2110), declared effective by the Commission on April 26, 1996. -5- EX-2.2 2 EXHIBIT 2.2 AGREEMENT OF MERGER OF FRACTAL DESIGN CORPORATION FRACTAL ACQUISITION CORPORATION AND RAY DREAM, INC. This Agreement of Merger, is made and entered into on May 24, 1996 ("Merger Agreement"), by and among Fractal Acquisition Corporation ("Merger Sub"), a California corporation and a wholly owned subsidiary of Fractal Design Corporation, a California corporation ("Acquiror"), Acquiror and Ray Dream, Inc., a California corporation ("Target" or the "Surviving Corporation"). RECITALS A. Acquiror, Merger Sub and Target have entered into an Agreement and Plan of Reorganization dated as of February 17, 1996 (the "Agreement and Plan of Reorganization") providing for certain representations, warranties, covenants and agreements in connection with the transactions contemplated hereby. B. The Boards of Directors of Target, Acquiror and Merger Sub deem it advisable and in their mutual best interests and in the best interests of the shareholders of Target and Merger Sub, respectively, that Target be acquired by Acquiror through a merger ("Merger") of Merger Sub with and into Target, pursuant to the California Corporations Code (the "California Law"). C. The Boards of Directors of Acquiror, Merger Sub and Target and the shareholders of Acquiror or Merger Sub and Target have approved the Merger. AGREEMENTS The parties hereto hereby agree as follows: 1. Merger Sub shall be merged with and into Target, and Target shall be the surviving corporation. 2. The Merger shall become effective at such time (the "Effective Time" of the Merger) as this Merger Agreement and the officers' certificates of Merger Sub and Target are filed with the Secretary of State of the State of California pursuant to Section 1103 of the California Law. 3. At the Effective Time, each share of Common Stock of Target ("Target Common Stock") issued and outstanding immediately prior to the Effective Time (other than shares to be canceled pursuant to Section 8 and shares, if any, held by persons who have not voted such shares for approval of the Merger and with respect to which such persons are entitled to exercise dissenters' rights in accordance with Chapter 13 of California Law ("Dissenting Shares")) (collectively, the "Exchangeable Shares") shall be converted and exchanged for such number of shares of Common Stock of Acquiror ("Acquiror Common Stock") as is determined by a ratio (the "Exchange Ratio"), the numerator of which is 3,250,000 and the denominator of which is equal to the sum of (i) the number of shares of Target Common Stock outstanding plus (ii) the number of shares of Target Common Stock exercisable as of the Effective Time pursuant to the terms of all outstanding stock options of Target. 4. Any Dissenting Shares shall not be converted into Acquiror Common Stock but shall be converted into the right to receive such consideration as may be determined to be due with respect to such Dissenting Shares pursuant to the law of the State of California. If after the Effective Time of the Merger any Dissenting Shares shall lose their status as Dissenting Shares, then as of the occurrence of the event which causes the loss of such status, such shares shall be converted into Acquiror Common Stock in accordance with Section 3, and Acquiror shall, upon surrender by such shareholder of certificate or certificates representing shares of Target Common Stock, issue and deliver the number of shares of Acquiror Common Stock to which such shareholder would otherwise be entitled hereunder (which shares shall be deemed to be "Exchangeable Shares" for the purpose of this Agreement). 5. Notwithstanding any other term or provision hereof, no fractional shares of Acquiror Common Stock shall be issued, but in lieu thereof each holder of Target Common Stock who would otherwise, but for rounding as provided herein, be entitled to receive a fraction of a share of Acquiror Common Stock shall receive from Acquiror an amount of cash equal to the product of (i) such fraction multiplied by the closing price of a share of Acquiror Common Stock on the date of the Effective Time of the Merger, as reported on the Nasdaq National Market. All certificates representing shares of Target Common Stock held by a single holder shall be aggregated prior to determining the number of fractional shares so that no Target shareholder shall receive cash in an amount greater than the value of one full share of Acquiror Common Stock. 6. The conversion of Target Common Stock into Acquiror Common Stock as provided by this Merger Agreement shall occur automatically at the Effective Time of the Merger without action by the holders thereof. Each holder of Target Common Stock shall thereupon be entitled to receive his, her or its shares of Acquiror Common Stock in accordance with Section 3. Such shareholder shall receive certificates that represent the applicable number of shares of Acquiror Common Stock in accordance with the following procedures: -2- (a) As soon as practicable after the Effective Time of the Merger, Acquiror shall make available for exchange in accordance with Section 3, through such reasonable procedures as Acquiror may adopt, the Acquiror Common Stock issuable pursuant to Section 3 in exchange for outstanding shares of Target Common Stock. (b) Promptly after the Effective Time of the Merger, the Exchange Agent (as defined in Section 1.7 of the Agreement and Plan of Reorganization) shall mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time of the Merger represented outstanding shares of Target Common Stock (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the certificates shall pass, only upon delivery of the certificates to the Exchange Agent and shall be in such form and have such other provisions as Acquiror may reasonably specify) and (ii) instructions for use in effecting the surrender of the certificates in exchange for Acquiror Common Stock. Upon surrender of a certificate for cancellation to the Exchange Agent or to such other agent or agents as may be appointed by Acquiror, together with such letter of transmittal, duly executed, the holder of such certificate shall be entitled to receive in exchange therefor the number of shares of Acquiror Common Stock to which the holder of Target Common Stock is entitled pursuant to Section 3 hereof and is represented by the certificate so surrendered, along with a check representing the value of any fractional shares as defined pursuant to Section 5 hereof, less such number of shares to be deposited in an escrow fund on such holder's behalf pursuant to Article VIII of the Agreement and Plan of Reorganization. The certificate so surrendered shall forthwith be canceled. As soon as practicable after the Effective Time of the Merger, and subject to and in accordance with the provisions of Article VIII of the Agreement and Plan of Reorganization, Acquiror shall cause to be distributed to the Escrow Agent (as defined in Article VIII of the Agreement and Plan of Reorganization) a certificate or certificates representing ten percent (10%) of the product of (i) the Exchange Ratio multiplied by (ii) the number of Exchangeable Shares less the number of Exchangeable Shares that are Dissenting Shares (the "Escrow Shares") of Acquiror Common Stock which shall be registered in the name of the holders of Certificates canceled pursuant to this Section 6(b), but held by the Escrow Agent in escrow. Such shares shall be beneficially owned by such holders and shall be held in escrow and shall be available to compensate Acquiror for certain damages as provided in Article VIII of the Agreement and Plan of Reorganization. To the extent not used for such purposes, such shares shall be released, all as provided in Article VIII of the Agreement and Plan of Reorganization. In the event of a transfer of ownership of Target Common Stock which is not registered in the transfer records of Target, Acquiror Common Stock may be delivered to a transferee if the certificate representing such Target Common Stock is presented to Acquiror and accompanied by all documents required to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid. Until surrendered as contemplated by this Section 6, each certificate shall be deemed at any time after the Effective Time of Merger to represent the right to receive upon such surrender such shares of the Acquiror Common Stock as provided by Section 3 and the provisions of applicable law. -3- (c) No dividends on the Target Common Stock shall be paid to the holder of any unsurrendered certificate until the holder of record of such certificate shall surrender such certificate. Subject to the effect, if any, of applicable escheat and other laws, following surrender of any certificate, there shall be delivered to the person entitled thereto, without interest, the amount of dividends theretofore paid with respect to the Target Common Stock so withheld as of any date subsequent to the Effective Time of the Merger and prior to such date of delivery. (d) The Acquiror Common Stock delivered upon the surrender for exchange of Target Common Stock in accordance with the terms hereof shall be deemed to have been delivered in full satisfaction of all rights pertaining to such Target Common Stock. There shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the Target Common Stock that were outstanding immediately prior to the Effective Time of the Merger. If, after the Effective Time of the Merger, certificates are presented to Acquiror for any reason, they shall be canceled and exchanged as provided in this Section 6. 7. At the Effective Time of the Merger, the separate existence of Merger Sub shall cease, and Target shall succeed, without other transfer, to all of the rights and properties of Merger Sub and shall be subject to all the debts and liabilities thereof in the same manner as if Target had itself incurred them. All rights of creditors and all liens upon the property of each corporation shall be preserved unimpaired, provided that such liens upon property of Merger Sub shall be limited to the property affected thereby immediately prior to the Effective Time of the Merger. 8. At the Effective Time of the Merger, each share of the Common Stock of Merger Sub that is outstanding immediately prior to the Effective Time of the Merger shall be converted into one share of Common Stock of the Surviving Corporation and each share of capital stock of Target, including the Common Stock of the Surviving Corporation, owned by Acquiror or any direct or indirect wholly owned subsidiary of Acquiror or of Target immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof. 9. This Merger Agreement is intended as a plan of reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended, (the "Code") and to qualify as a reorganization under the provisions of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code. 10. The Amended and Restated Articles of Incorporation as set forth on SCHEDULE 1 to this Agreement of Merger shall be the Amended and Restated Articles of Incorporation of Target as the Surviving Corporation after the Merger unless thereafter amended. 11. (a) Notwithstanding the approval of this Merger Agreement by the shareholders of Target and Merger Sub, this Merger Agreement may be terminated at any time prior to the Effective Time of the Merger by mutual agreement of the Boards of Directors of Acquiror, Target and Merger Sub. (b) Notwithstanding the approval of this Merger Agreement by the shareholders of Target and Merger Sub, this Merger Agreement shall terminate forthwith in the event that the Agreement and Plan of Reorganization shall be terminated as therein provided. -4- (c) In the event of the termination of this Merger Agreement as provided above, this Merger Agreement shall forthwith become void and there shall be no liability on the part of Target, Acquiror or Merger Sub or their respective officers or directors, except as otherwise provided in the Agreement and Plan of Reorganization. (d) This Merger Agreement may be amended by the parties hereto any time before or after approval hereof by the shareholders of Target and Merger Sub, but, after such approval, no amendments shall be made which by law require the further approval of such shareholders without obtaining such approval. This Merger Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. -5- IN WITNESS WHEREOF, the parties have executed this Merger Agreement as of the date first written above. FRACTAL ACQUISITION CORPORATION By: /s/ MARK ZIMMER ----------------------------------------- Mark Zimmer, President and Chief Executive Officer By: /s/ CRAIG W. JOHNSON ----------------------------------------- Craig W. Johnson, Secretary FRACTAL DESIGN CORPORATION By: /s/ MARK ZIMMER ----------------------------------------- Mark Zimmer, President and Chief Executive Officer By: /s/ CRAIG W. JOHNSON ----------------------------------------- Craig W. Johnson, Secretary RAY DREAM, INC. By: /s/ JOSEPH CONSUL ----------------------------------------- Joseph Consul, Vice President Finance and Administration By: /s/ JOHN STOCKHOLM ----------------------------------------- John Stockholm, Secretary -6- SCHEDULE 1 AMENDED AND RESTATED ARTICLES OF INCORPORATION OF RAY DREAM, INC. ONE: The name of the corporation is RAY DREAM, Inc. TWO: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code. THREE: The Corporation is authorized to issue One Thousand shares of Common Stock of one class. FOUR: Section 1. The liability of the directors of this Corporation for monetary damages shall be eliminated to the fullest extent permissible under California law. Section 2. The Corporation is authorized to indemnify the directors and officers of the Corporation to the fullest extent permissible under California law (as defined in Section 317(g) of the California Corporations Code or elsewhere). Section 3. Any repeal or modification of the foregoing provisions of this Article Four by the shareholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. EX-23.1 3 EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders Fractal Design Corporation: We consent to the incorporation by reference in the registration statement on Form 8-K of Fractal Design Corporation of our report dated February 13, 1996, except as to Note 13, which was as of February 17, 1996, with respect to the consolidated balance sheets of Ray Dream, Inc. and subsidiary as of December 31, 1995,and 1994, and the related consolidated statements of operations, shareholders' euity, and chash flows for each of the years in the Three-year period ended December 31, 1995 which report appears in the Form S-4 of Fractal Design Corporation which was declared effective by the Securities and Exchange Commission on April 26, 1996. /s/ KPMG PEAT MARWICK LLP KPMG Peat Marwick LLP San Jose, California June 6, 1996 -----END PRIVACY-ENHANCED MESSAGE-----