UNITED STATES

 

 

SECURITIES AND EXCHANGE COMMISSION

 

 

Washington, D.C. 20549

 

 

 

 

 

SCHEDULE 13D

 

 

Under the Securities Exchange Act of 1934

Cheetah Mobile Inc.

(Name of Issuer)

 

Class A ordinary shares

(Title of Class of Securities)

 

163075 1041

(CUSIP Number)

 

Kingsoft Corporation Limited

Kingsoft Tower

No.33 Xiaoying West Road

Haidian District, Beijing 100085

People’s Republic of China

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

October 1, 2017

(Date of Event Which Requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. x

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* This statement on Schedule 13D (the “Schedule 13D”) constitutes an initial Schedule 13D filing on behalf of Kingsoft Corporation Limited (“Kingsoft”), with respect to the Class A ordinary shares, par value $0.000025 per share (“Class A Ordinary Shares”), of Cheetah Mobile Inc., a Cayman Islands company (the “Issuer”). The Class A Ordinary Shares beneficially owned by Kingsoft were previously reported on a Schedule 13G filed on February 13, 2015, as amended by amendments thereto.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 


1      This is the CUSIP number for the American depositary shares, each representing ten Class A ordinary shares of the Issuer.

 


 


 

CUSIP No.

163075 104

 

 

1

Names of Reporting Persons

Kingsoft Corporation Limited

2

Check the Appropriate Box if a Member of a Group

(a)         ¨

(b)         ¨

3

SEC Use Only

 

4

Source of Funds (See Instructions)

WC, OO

5

Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  ¨

6

Citizenship or Place of Organization

The People’s Republic of China

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON
WITH

7

Sole Voting Power

275,161,571 Ordinary Shares(1)

8

Shared Voting Power

399,445,025 Ordinary Shares(2) 

9

Sole Dispositive Power

674,606,596 Ordinary Shares(1)

10

Shared Dispositive Power

0

11

Aggregate Amount Beneficially Owned by Each Reporting Person

674,606,596 Ordinary Shares(1)

12

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)  ¨

13

Percent of Class Represented by Amount in Row (11)

47.2%(3)

14

Type of Reporting Person (See Instructions)

CO

 


(1)         Includes (i) 5,040,877 Class A Ordinary Shares, (ii) 6,759,670 Class A Ordinary Shares represented by ADSs, and (iii) 263,361,024 Class B Ordinary Shares, beneficially owned by Kingsoft Corporation Limited. The rights of the holders of Class A Ordinary Shares and Class B Ordinary Shares of the Issuer are identical, except with respect to conversion rights and voting rights. Each Class B Ordinary Share is entitled to ten votes per share, whereas each Class A Ordinary Share is entitled to one vote per share. Each Class B Ordinary Share is convertible at the option of the holder into one Class A Ordinary Share. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances.

 

(2)         Represents 399,445,025 Class B Ordinary Shares held by Kingsoft Corporation Limited.

 

(3)         The calculation is based on 1,430,736,715 Ordinary Shares (including Class A and Class B Ordinary Shares) outstanding as of March 31, 2017, as disclosed in the Issuer’s annual report on Form 20-F filed with the Commission on April 26, 2017, assuming conversion of all Class B Ordinary Shares into the same number of Class A Ordinary Shares.

 

2



 

Item 1.         Security and Issuer.

 

This Schedule 13D relates to the Class A Ordinary Shares of the Issuer, including Class A Ordinary Shares represented by American depositary shares (the “ADSs”), each representing ten Class A Ordinary Shares, of Cheetah Mobile Inc. (the “Issuer”), an exempted company incorporated with limited liability and existing under the laws of the Cayman Islands. The ADSs are listed on the New York Stock Exchange (“NYSE”) under the symbol “CMCM.” The Issuer has also issued Class B ordinary shares, par value $0.000025 per share (“Class B Ordinary Shares”).

 

The principal executive offices of the Issuer are located at Building No. 8, Hui Tong Times Square, Yaojiayuan South Road, Beijing 100123, People’s Republic of China.

 

Item 2.         Identity and Background.

 

(a)—(c), (f)                                   This Schedule 13D is being filed by Kingsoft, a company continued as a company with limited liability under the laws of the Cayman Islands (the “Reporting Person”). Kingsoft is principally engaged in (i) research and development of games, (ii) provision of online games, mobile games and casual game services, (iii) provision of cloud storage and cloud computation services, and (iv) design, research and development and sales and marketing of office software products and services of WPS Office. Kingsoft’s business address is Kingsoft Tower, No. 33, Xiaoying West Road, Haidian District, Beijing 100085, People’s Republic of China. The name, business address, present principal occupation or employment and citizenship of each of the executive officers and directors of Kingsoft are set forth in Schedule A hereto and are incorporated herein by reference.

 

(d), (e)             During the last five years, neither the Reporting Person nor, to the best knowledge of the Reporting Person, any of the persons listed on Schedule A hereto has been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

Item 3.         Source and Amount of Funds or Other Consideration.

 

This Schedule 13D is being filed because, under the facts and circumstances described in Items 2, 4 and 5, the Reporting Person and Mr. Fu (as defined in Item 4) may be deemed to be a group within the meaning of Section 13(d)(3) of the Act. This filing is not being made as a result of any particular acquisitions or dispositions of Ordinary Shares by the Reporting Person.

 

The descriptions of the principal terms of the Kingsoft Voting Proxy (as defined in Item 4) under Item 4 are incorporated herein by reference in its entirety.

 

3



 

Item 4.         Purpose of Transaction.

 

On February 12, 2017, the Reporting Person and Sheng Fu (“Mr. Fu”) entered into a voting proxy agreement (the “Kingsoft Voting Proxy”), pursuant to which the Reporting Person agreed to designate Mr. Fu as its proxy to exercise on its behalf voting rights pertaining to up to 399,445,025 Class B Ordinary Shares that it owns at any shareholders’ meeting of the Issuer, subject to certain additional rights and obligations of Mr. Fu and the Reporting Person, including, among other things, (i) prohibitions on Mr. Fu from participation or investment in any businesses competing with the principal businesses of the Issuer and the Reporting Person, (ii) Mr. Fu’s obligation to use best efforts to retain the Issuer’s core management team, (iii) the Reporting Person’s right to revoke the voting proxy in the event that Mr. Fu breaches the aforementioned undertakings under (i) and (ii)(collectively, the “Undertakings”), and (iv) agreement to increase the size and change the composition of the Issuer’s current nine-member board of directors, such that there will be 11 directors, including three directors from the Issuer’s management, one director designated by the Reporting Person, one director designated by Tencent Holdings Limited, and six independent directors. The six independent directors shall be nominated by Mr. Fu and agreed upon by the Reporting Person (such agreement about the Issuer’s board composition, the “Board Composition Agreement”).

 

The Kingsoft Voting Proxy became effective on October 1, 2017 and will terminate if Mr. Fu breaches the Undertakings, by mutual written agreement between Mr. Fu and the Reporting Person, or the Reporting Person has disposed of all the shares delegated to Mr. Fu under the Kingsoft Voting Proxy, each in accordance with the terms of the Kingsoft Voting Proxy.

 

References to the Kingsoft Voting Proxy in this Schedule 13D are qualified in their entirety by reference to the Kingsoft Voting Proxy, a copy of which is attached hereto as Exhibit A and is incorporated herein by reference in its entirety.

 

Except as indicated above, the Reporting Person has no plans or proposals which relate to or would result in any of the actions specified in paragraphs (a) through (j) of Item 4 of Schedule 13D.

 

Item 5.         Interest in Securities of the Issuer.

 

(a)—(b)     The responses of the Reporting Person to Rows (11) through (13) of the cover pages of this Schedule 13D are hereby incorporated by reference in this Item 5. The percentage of the class of securities identified pursuant to Item 1 beneficially owned by the Reporting Person is based on 1,430,736,715 Ordinary Shares (including Class A and Class B Ordinary Shares) outstanding as of March 31, 2017, as disclosed in the Company’s annual report on Form 20-F filed with the SEC on April 26, 2017, assuming conversion of all Class B Ordinary Shares into the same number of Class A Ordinary Shares.

 

Holders of Class A Ordinary Share and Class B Ordinary Share have the same rights except for voting and conversion rights. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof. Each Class B Ordinary Share is entitled to ten votes per share, whereas each Class A Ordinary Share is entitled to one vote per share.

 

By virtue of the Board Composition Agreement set forth in the Kingsoft Voting Proxy as described herein, the Reporting Person and Mr. Fu, who is not a Reporting Person on this Schedule 13D, may be deemed to constitute a “group” within the meaning of Rule 13d-5(b) under the Act. By virtue of the terms set forth in the Kingsoft Voting Proxy, the Reporting Person may be deemed to share the voting power pertaining to up to 399,445,025 Class B Ordinary Shares that it beneficially owns with Mr. Fu. Except as otherwise stated herein, the Reporting Person expressly disclaims any beneficial ownership of the Ordinary Shares held by Mr. Fu.

 

4



 

Except as disclosed in this Schedule 13D, neither the Reporting Person nor any of the persons listed in Schedule A hereto beneficially owns any Ordinary Shares or have the right to acquire any Ordinary Shares.

 

Except as disclosed in this Schedule 13D, neither the Reporting Persons nor any of the persons listed in Schedule A hereto presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the Ordinary Shares which it may be deemed to beneficially own.

 

(c) Neither the Reporting Person nor, to the best knowledge of the Reporting Person, any of the persons listed in Schedule A hereto has effected any transaction in the Ordinary Shares during the past 60 days.

 

(d)  Except as disclosed in this Schedule 13D, to the best knowledge of the Reporting Person, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Ordinary Shares beneficially owned by any of the Reporting Persons.

 

(e)  Not applicable.

 

Item 6.         Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer.

 

The descriptions of the principal terms of the Kingsoft Voting Proxy under Item 4 are incorporated herein by reference in its entirety.

 

To the best knowledge of the Reporting Person, except as provided herein, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Person and any other person with respect to any securities of the Issuer, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies, or a pledge or contingency, the occurrence of which would give another person voting power over the securities of the Issuer.

 

Item 7.         Material to be Filed as Exhibits.

 

Exhibit No.

 

                Description

A

 

Voting Proxy Agreement, dated February 12, 2017, by and between Mr. Fu and Kingsoft.

 

5



 

SIGNATURE

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Date: October 10, 2017

 

 

 

Kingsoft Corporation Limited

 

 

 

 

 

By:

/s/ Yuk Keung Ng

 

Name: Yuk Keung Ng

 

Title: Director

 

6



 

SCHEDULE A
EXECUTIVE OFFICERS AND DIRECTORS

 

Kingsoft Corporation Limited

 

The business address of the following individual is c/o Kingsoft Corporation Limited, Kingsoft Tower, No. 33, Xiaoying West Road, Haidian District, Beijing 100085, People’s Republic of China.

 

Name

 

Country of Citizenship

Director:

 

 

Tao Zou

 

People’s Republic of China

Yuk Keung Ng

 

Hong Kong

Jun Lei

 

People’s Republic of China

Pak Kwan Kau

 

Hong Kong

Chi Ping Lau

 

Hong Kong

Shun Tak Wong

 

Hong Kong

David Yuen Kwan Tang

 

Hong Kong

Wenjie Wu

 

Hong Kong

 

 

 

Executive Officers:

 

 

Tao Zou

 

People’s Republic of China

Yuk Keung Ng

 

Hong Kong

Sheng Fu

 

People’s Republic of China

Yulin Wang

 

People’s Republic of China

Wei Liu

 

People’s Republic of China

 

7


Exhibit A

 

VOTING PROXY AGREEMENT

 

This Voting Proxy Agreement (this “Agreement”) is entered into on 12th February, 2017 (the Execution Date”) in Beijing, by and between:

 

1.                                      Kingsoft Corporation Limited, a company organized under the Laws of Cayman Islands (the “Company”), whose registered office is situated at Clifton House, 75 Fort Street, P.O. Box 1350 GT, George Town, Grand Cayman KY1-1108, Cayman Islands;

 

2.                                      Fu Sheng (“Mr. Fu”), a citizen of People’s Republic of China and ID Card Number is        .

 

Each of the parties to this Agreement is referred to herein individually as a “Party” and collectively as the “Parties”.

 

Whereas,

 

1.                                      Cheetah Mobile Inc. (“Cheetah”), a company organized under the Laws of Cayman Islands, whose American depositary shares have been listed on the New York Stock Exchange in the United States of America;

 

2.                                      As at the Execution Date, the Company holds 62.84% voting power in Cheetah;

 

3.                                      As at the Execution Date, Mr. Fu is the chief executive officer of Cheetah;

 

4.                                      To improve the Cheetah management efficiency, the Company agrees to revocably and conditionally delegate the voting rights (the relevant definition as follow) of the delegated shares in Cheetah to Mr. Fu, subject to certain conditions according this Agreement.

 

The Parties intending to be legally bound hereto hereby agree ad follow:

 

1.                                      Delegated Voting Rights.

 

1.1                               Upon the fulfillment of certain conditions precedent set forth in article 1.2, the Company hereby agrees to delegate the voting rights at general meetings of Cheetah attached to not more than 399,445,025 Class B ordinary shares of Cheetah ( the “Delegated Shares”, which equivalent to approximately 28% of all outstanding shares including the Class A shares and the Class B shares as of the Execution Date, or to approximately 25% of all outstanding shares including Class A shares and Class B shares at the basic of providing that all shares reserved under the ESOP in Cheetah have been issued) to Mr. Fu (the “Proposed Delegation”) , as the consideration of Mr. Fu undertakes the duty of diligence as set forth in article 1.2 hereinafter.

 

1.2                               The Proposed Delegation becomes effective subject to the fulfilment of the following conditions precedent: (1) The Proposed Delegation is compliance in all respects with all applicable Laws and the listing rules of the region and country where the Company and Cheetah listed; (2) Mr. Fu will not participate or have any direct investment in any business which may complete with the principle business of Cheetah and the Company; and (3) Mr. Fu will use his best endeavor to procure that the core management team of Cheetah and/or its subsidiaries will remain stable ((2) and (3) above, collectively as “Undertakings”).

 

1



 

1.3                               The Proposed Delegation is delegated to Mr. Fu only. Mr. Fu shall not delegate to any third party to exercise the Proposed Delegation as set forth in Clause 1.1 in any circumstance.

 

1.4                               In the event that Mr. Fu becomes in breach of the Undertakings as set forth in Clause 1.2, the Company shall give Mr. Fu a prior writing notice within 10 business days after the occurrence of such breach to request for cease of breach. this Agreement. If Mr. Fu fails to rectify within such 10 business days after receiving the foregoing notice, the Company shall have the rights to revoke the Proposed Delegation by way of a written notice and terminate this Agreement as such.

 

1.5                               For the avoidance of doubt, the Proposed Delegation in Clause 1.1 shall not restrict the Company from exercising the remaining voting right at the general meetings of Cheetah. The Company has the right to exercise the remaining voting rights, at its absolute discretion.

 

2.                                      Board Composition.

 

As of the Execution Date, the board of Cheetah consists of one director from Cheetah’s management, four directors designated by the Company, two directors designated by Tencent Holdings Limited and two independent directors. To improve Cheetah’s management and operation efficiency, the Parties agreed as follow:

 

2.1                               The new board composition of Cheetah shall consist of three directors from Cheetah’s management, one director designated by the Company, one director designated by Tencent Holdings Limited and six independent directors.

 

2.2                               The independent directors shall be nominated by Mr. Fu and appointed after the consultation between the Parties.

 

3.                                      Representations and Warranties.

 

3.1                               The Company has the power to enter into this Agreement and perform the obligations and exercise the rights under this Agreement; Mr. Fu warrants that he is a natural person with full civil capacity, who has the capacity to enter into and perform this Agreement.

 

3.2                               This Agreement is valid and binding on the Parties, and is enforceable against the Parties in accordance with the terms hereunder.

 

3.3                               This Agreement is entered into by the Parties based on equality and free will without fraud, duress, taking advantages of the other Party’s hardship or any other situations which against the Parties’ true wishes. The terms and conditions of this Agreement fully reflect the genuine intention of the Parties hereto.

 

3.4                               In the event the Company propose to dispose of its shares in Cheetah, the Company agrees that it shall dispose of its other shares in Cheetah that are not the Delegated Shares first. For the avoidance of doubt, except for the agreement in this Clause 3.4, this Agreement shall not restrict the Company from further disposing of all or part of the Delegated Shares. If any of the Delegated Shares is disposed by the Company, the actual voting power delegated to Mr. Fu under Clause 1.1 in this Agreement shall decrease accordingly.

 

4.                                      Validity and Termination.

 

4.1                               This Agreement will become effective subject to the fulfilment of the following conditions:

 

2



 

(i)                                     This Agreement shall be entered into by the Parties;

 

(ii)                                  The parties have completed all the requirements and procedures with respect to all the disclosure, approvals, registrations and filings in relation to this Agreement as required by the laws, regulations and the respective applicable listing rules; and

 

(iii)                               Mr. Fu shall ensure that the investment agreement be entered into by and among Cheetah, Mr. Fu and the other relevant parties in relation to Cheetah’s investment to the robotics business that Mr. Fu has interest in.

 

4.2                               This Agreement may be terminated:

 

(i)                                     pursuant to the terms as set forth in Clause 1.4; or

 

(ii)                                  by mutual written consent between the Parties; or

 

(iii)                               after disposition of all the Delegated Shares by the Company.

 

5.                                      Confidentiality.

 

5.1                               The terms and conditions of this Agreement, including its existence, shall be considered confidential, and shall not be disclosed to third party without the prior written consent of the other Party; provided, however, a Party may disclose pursuant to the requirements of relevant laws, regulations, rules and the Hong Kong listing rules, or to disclose to its advisors who have a need to know.

 

6.                                      Miscellaneous.

 

6.1                               This Agreement shall be governed by and be interpreted pursuant to the laws of Cayman Island.

 

6.2                               Any dispute or claim arising out of or in relation to this Agreement (no matter it is tortious, contractual, statutory or in another nature, including any issues in relation to the existence, effectiveness, interpretation, violation or termination of this Agreement) (the “Dispute”) shall be submitted to and finally settled by arbitration at the Hong Kong International Arbitration Center (“HKIAC”) in accordance with the Rules of Arbitration of the International Chamber of Commerce in effect as of the Execution Date (the “Rules”). The Rules shall be deemed to be incorporated by reference into this section and may be amended by the rest part of this section. The arbitration tribunal shall be HKIAC in Hong Kong, and the arbitration procedures shall be governed by laws of Hong Kong.

 

6.3                               If any term of this Agreement becomes illegal, invalid or unenforceable, the other terms hereunder shall not be affected.  The Parties shall immediately negotiate in good faith to replace such illegal, invalid or unenforceable term with another provision to the satisfaction of the Parties.

 

6.4                               Any amendment to the this Agreement shall be negotiated and made by written supplemental agreement in Chinese signed by the Parties.

 

6.5                               This Agreement is executed in two (2) originals, and one for each Party.  Each original shall have the same effect.

 

(signature page follows)

 

3



 

Kingsoft Corporation Limited

 

 

 

 

 

/s/ Jun Lei

 

Authorized representative: Jun Lei

 

Title: Chairman

 

 

 

 

 

/s/ Sheng Fu

 

Sheng Fu

 

 

(Signature page to Kingsoft Voting Proxy Agreement)