SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
ACTV, INC.
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(Name of issuer)
COMMON STOCK, PAR VALUE $0.10 PER SHARE
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(Title of class of securities)
00088 E 10 4
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(CUSIP number)
Diana M. Daniels, Esq.
Vice President, General Counsel and Secretary
The Washington Post Company
1150 15th Street, N.W.
Washington, DC 20071
Tel. (202) 334-6000
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(Name, address and telephone number of person authorized
to receive notices and communications)
March 11, 1997
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(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 which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(b)(3) or (4), check
the following box [ ].
Check the following box if a fee is being paid with the statement [ ].
(A fee is not required only if the reporting person: (1) has a
previous statement on file reporting beneficial ownership of more than
five percent of the class of securities described in Item 1; and (2)
has filed no amendment subsequent thereto reporting beneficial
ownership of five percent or less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
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CUSIP No. 00088 E 10 4 Schedule13D Page 2 of 21 Pages
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Amendment No. 3
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Washington Post Company
53-0182885
(I.R.S. Employer Indemnification No.)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2 (d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 2,341,334 (see text of Items 4 and 5)
REPORTING --------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
1,341,334 (see text of Items 4 and 5)
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,000,000 (see text of Items 4 and 5)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,341,334 (see text of Items 4 and 5)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ] (See text of Items 4 and 5)
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13 PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
19.8% (see text of Item 5)
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14 TYPE OF REPORTING PERSON
CO
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Item 1. Security and Issuer.
The Washington Post Company, a Delaware corporation ("TWP"),
hereby amends and restates in its entirety its Statement on Schedule
13D (the "Original 13D") relating to the common stock, par value $0.10
per share (the "Common Stock"), of ACTV, Inc., a Delaware corporation
(the "Issuer") with its principal executive offices at 1270 Avenue of
the Americas, New York, NY 10020, as such Original 13D was filed with
the Securities and Exchange Commission (the "Commission") by TWP on
March 26, 1992 and subsequently amended. Item 2. Identity and
Background.
(a)-(c) and (f). This Statement is being filed by The
Washington Post Company, a Delaware corporation ("TWP"). The address
of the principal business and the principal office of TWP is 1150 15th
Street, N.W., Washington, DC 20071. The principal business activities
of TWP consist of newspaper publishing (principally The Washington
Post), television broadcasting (through the ownership and operation of
six network-affiliated stations), the ownership and operation of
cable television systems, and magazine publishing (Newsweek magazine).
The names, business addresses, principal occupations of
employment (and the names, principal businesses and addresses of any
corporation or other organization in which such occupations or
employment are conducted) and citizenship of the directors and
executive officers of TWP are set forth in Annex A hereto and are
incorporated herein by reference.
(d) and (e). During the last five years, neither TWP nor, to
the best knowledge of TWP, any of the directors and executive officers
of TWP have (i) been convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors) or (ii) been 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.
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Item 3. Source and Amount of Funds or Other Consideration.
TWP has invested an aggregate amount of $3,314,768
(including $314,768 of accrued interest) in ACTV, Inc. Such investment
was made from the working capital of TWP and separately forwarded as
follows: (i) $1,427,900 for the purchase of the 8% Convertible
Promissory Note due September 15, 1995, as amended by the letters
dated May 29, 1992 and June 30, 1992, from W. C. Samuels, of the
Issuer, to R. Hamachek, of TWP (as so amended, the "Note"), together
with $314,768 representing interest on the Note, for a total of
$1,742,688, which was converted into 871,334 shares of Common Stock
based on the price of $2.00 per share on March 11, 1994; (ii)
$1,500,000 for the purchase of Common Stock upon the exercise of an
option granted under the Option and Majority Control Rights Agreement
dated March 17, 1992, as amended by the letters dated May 29, 1992,
June 30, 1992, July 14, 1992 and March 11, 1993, from W. C. Samuels,
of the Issuer, to R. Hamachek, of TWP, and the Amendment (the
"Amendment Agreement") dated June 15, 1993, to the Option Agreement
between the Issuer and TWP (as so amended, the "Option Agreement"), by
and among the Issuer, TWP, Michael J. Freeman, Ph.D., John A. Lack,
William Samuels, David Reese, David Regal and James Crook (each of
such individuals being an officer and/or director of the Issuer);
(iii) $100 as consideration for entering into the Option Agreement;
and (iv) $72,000 for the purchase of 720,000 shares of Common Stock
(the"Initial Shares") pursuant to the Common Stock Purchase Agreement
dated March 17, 1992, by and between the Issuer and TWP (the "Common
Stock Purchase Agreement").
In the event TWP acquires further Common Stock it is
currently anticipated that the funds required to purchase such Common
Stock would be provided from TWP's working capital; however, TWP
reserves the right to finance such acquisitions, if any, by other
sources yet to be determined, including borrowings.
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Item 4. Purpose of Transaction.
TWP has entered into each of the following agreements:
(i) the Convertible Note Purchase Agreement dated March 17,
1992, by and between the Issuer and TWP, as amended by
the letter agreements dated May 29, 1992, and June 30,
1992 (as so amended, the "Note Purchase Agreement");
(ii) the Security Agreement dated March 17, 1992, by and
between the Issuer and TWP (the "Security Agreement");
(iii) the Common Stock Purchase Agreement;
(iv) the Option Agreement;
(v) the Standstill Agreement dated March 17, 1992, by and
between the Issuer and TWP, as amended by the letters
dated May 29, 1992, June 30, 1992, July 14, 1992, and
March 11, 1994, from W. C. Samuels, of the Issuer, to
R. Hamachek, of TWP (as so amended, the "Standstill
Agreement").
(vi) the Partnership Interest Purchase Agreement dated March
11, 1994, by and between ACTV Education, Inc., and
Post-Newsweek Education, Inc.;
(vii) the Security Agreement dated March 11, 1994, by and
between the Issuer and TWP (the "Second Security
Agreement");
(viii) the Voting Trust Agreement dated as of March 11,
1994, by and among TWP and the Issuer; and
(ix) the Option Agreement dated March 11, 1997, by and among
TWP and the Issuer (the "Issuer Option Agreement").
The agreements in (i)-(ix) above are sometimes collectively referred
to herein as the "Investment Agreements". The following description of
certain provisions of the Investment Agreements, including as to
capitalized terms not defined herein, is subject to and qualified in
its entirety by reference to
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Exhibits 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 hereto,
previously filed with the Commission, which are incorporated herein by
reference and Exhibit 16 hereto, filed herewith and incorporated
herein by reference. Note Purchase Agreement
Pursuant to the Note Purchase Agreement, the Issuer issued,
and TWP acquired, the Note for a purchase price of $1,427,900. On
March 11, 1994, TWP exercised its option under the Note Purchase
Agreement to convert all of the unpaid principal amount and all of the
accrued but unpaid interest due on the Note into shares of Common
Stock (the "Conversion") at a conversion price of $2.00 per share.
Pursuant to the Conversion, TWP acquired 871,334 shares of Common
Stock. Security Agreement
The Issuer's obligations to TWP under the Note were secured
by security interests in and liens as follows: first in priority with
respect to all payments and revenues to which the Issuer became
entitled pursuant to the license agreement dated November 2, 1987, by
and between the Issuer and Le Groupe Videotron Ltee ("LGV"), as
amended on November 12, 1992 (the "License Agreement"), second in
priority with respect to the collateral as to which Issuer granted a
first priority security interest pursuant to the Termination and
Settlement Agreement dated June 11, 1985 by and among the Issuer,
Michael J. Freeman, Berte Hirschfield, Catalyst I Partners, Nolan K.
Bushnell and Catalyst Technologies (the "Termination Agreement") and
first in priority with respect to any existing patents and patent
pending applications not subject to the Termination Agreement
(collectively the "Collateral"). The Security Agreement was terminated
by operation of its terms upon the Conversion. Common Stock Purchase
Agreement
Pursuant to the Common Stock Purchase Agreement, the Issuer
sold and TWP purchased the Initial Shares for a purchase price of
$72,000, which is par value therefor. The Initial Shares were
purchased for investment.
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Option Agreement
Pursuant to a Partnership Interest Purchase Agreement, ACTV
Education, Inc. (the "Purchaser"), a wholly owned subsidiary of the
Issuer, purchased on March 11, 1994, from Post-Newsweek Education,
Inc. (the "Seller"), an indirectly wholly owned subsidiary of TWP, its
51 percent interest in the general partnership formed between the
Purchaser and the Seller on July 14, 1992. In consideration for such
purchase, the Purchaser paid $2,500,000 in cash and executed a
Promissory Note dated March 11, 1994 (the "Second Note"), in the
principal amount of $2,000,000, which was duly paid as scheduled on or
about December 31, 1996.
The Purchaser's obligations under the Second Note were
secured, pursuant to the Second Security Agreement, by security
interests and liens as follows: first in priority with respect to any
existing United States patents of Purchaser and any pending patent
applications of Purchaser not subject to the Termination Agreement and
second in priority with respect to all collateral as to which the
Issuer had granted a first security interest to certain creditors
pursuant to the Termination Agreement. The Purchaser's obligations
under the Second Note were further guaranteed pursuant to an
unconditional Guaranty dated March 11, 1994 (the "Guaranty"), by the
Issuer. The Second Security Agreement and the Guaranty were terminated
following the payment in full of the Second Note.
By virtue of its exercise of the Education Option, TWP had
the right to exercise the Common Stock Option at a purchase price of
$2.00 per share on or prior to March 15, 1994, or thereafter at a
purchase price of $2.50 per share (each an "Option Price"), subject in
each case to certain anti-dilution adjustments. On March 11, 1994, TWP
exercised the Common Stock Option by purchasing 750,000 shares of
Common Stock at the Option Price of $2.00 per share.
The Option Agreement also gave TWP the right (the "Majority
Control Rights"), for a period of time, to purchase directly from the
Issuer the amount of shares of Common Stock necessary to bring
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TWP's percentage ownership of Common Stock to 51%. The Majority
Control Rights expired on March 17, 1997.
TWP, pursuant to its rights under each of the Option
Agreement, the Common Stock Purchase Agreement and the Note Purchase
Agreement has caused the Issuer to register the Common Stock owned by
TWP pursuant to such agreement under the Securities Act of 1933.
Standstill Agreement
The Standstill Agreement had a term of three years, which
expired on March 17, 1995. Subject to certain exceptions, the
Standstill Agreement barred TWP and its Affiliates from acquiring
additional Voting Stock without the Issuer's consent if TWP's
Beneficial Ownership (including through Affiliates) of Voting Stock
would have exceeded 40% of Total Voting Power of the Issuer.
Subject to certain exceptions, TWP was also restricted
from, inter alia, becoming a "participant" in certain "solicitation"
or "election contests" (as such terms are used in Regulation 14A
under Section 14 of the Securities Exchange Act of 1934 (the "1934
Act")) inconsistent with, or in opposition to, a recommendation of
the majority of the directors of the Issuer or from becoming a member
of certain specified groups, or party to any agreement, arrangement,
understanding or relationship, or acting in concert with any Person,
for the purpose of acquiring, holding, voting or disposing of any
Voting Stock, or otherwise becoming a "person" within the meaning of
Section 13(d)(3) of the 1934 Act, if TWP and such Persons owned an
aggregate amount of Voting Stock exceeding the limitations upon
Voting Stock permitted to be acquired or Beneficially Owned by TWP
and its Affiliates.
However, since the Standstill Agreement expired on March
17, 1995, TWP may now acquire additional Voting Stock.
Furthermore, TWP had agreed for the term of the Standstill
Agreement that, to the extent any shares acquired upon exercise of
the Right of First Refusal caused it and its Affiliates to
Beneficially Own Voting Stock in excess of the 40% limitation
described above, it would, and would cause its Affiliates
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to, vote all such excess Voting Stock beneficially owned by TWP and
its Affiliates in the same proportion as the votes cast by other
stockholders of the Issuer (or, at TWP's discretion in favor of any
proposal recommended by the Board of Directors).
Ross Hamachek, Vice President of Planning and Development
for TWP, resigned as director of the Issuer as of March 11, 1994,
pursuant to the amendment to the Standstill Agreement, and no
representative of TWP currently serves the Issuer in any capacity.
Except as set forth or incorporated by reference above, TWP
has no plans or proposals which relate to or would result in any of
the actions described in Item 4(a) through (j) of Schedule 13D under
Rule 13d-1(a). Depending upon prevailing economic and investment
considerations, including its continuing review of the business and
prospects of the Issuer and subject to its obligations under, and
certain restrictions set forth in, the Investment Agreements and
other factors that TWP may deem relevant, TWP may acquire or dispose
of, as the case may be, (i) additional securities of the Issuer, or
(ii) all or any of the shares of Common Stock owned by it, including
the Initial Shares, in the open market or in privately negotiated
transactions or otherwise, or engage in any other transaction it
deems necessary, desirable or appropriate, or otherwise change its
intentions with respect to any or all of the matters referred to in
this Item 4.
Voting Trust Agreement
On March 11, 1994, simultaneously with the Conversion and
the exercise of the Common Stock Option, TWP and the Issuer entered
into a Voting Trust Agreement whereby TWP deposited its 2,341,334
shares (the "Deposited Shares") with William C. Samuels (the "Voting
Trustee"). Pursuant to the Voting Trust Agreement, the Voting Trustee
is fully empowered and authorized to vote the Deposited Shares, in
his unrestricted discretion, at all meetings of stockholders of the
Issuer, as fully as any stockholders might do if personally present,
to make notice of meetings, and to otherwise act in
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respect of all Deposited Shares, except upon the occurrence of the
following events, in which case TWP shall have the right to vote the
Deposited Shares in its sole discretion:
(a) if any amendment to the Issuer's certificate of
incorporation requiring stockholder approval is
proposed by the Issuer's Board of Directors;
(b) in case of any reclassification or change of the
outstanding Common Stock of the Issuer (other than a
change in par value to no par value, or from no par
value to par value) or in case of any consolidation of
the Issuer with, or merger of the Issuer into, another
corporation, or in the case of a sale or conveyance to
another corporation or other entity of all or
substantially all of the property, assets or business
of the Issuer;
(c) upon the commencement of a proxy contest regarding the
Issuer's Board of Directors;
(d) if a person or entity acquires 20 percent or more of
the outstanding Common Stock of the Issuer; or
(e) if a conflict of interest (as determined by TWP in its
sole discretion) involving the Voting Trustee or the
successor Voting Trustee should arise.
TWP shall have the right to withdraw any or all Deposited
Shares from the restrictions of the Voting Trust Agreement for sale or
transfer to an unaffiliated third party. Further, the Voting Trust
Agreement has a term of ten years, but shall terminate independently
if: (i) TWP exercises the Majority Control Rights; (ii) an entity,
through a tender or exchange offer, seeks 15% or more of the Common
Stock; (iii) the Voting Trustee fails to deliver a stock certificate
to TWP or such other person as TWP shall designate within 5 days of
TWP's exercise of the withdrawal rights described above.
Issuer Option Agreement
On March 11, 1997, TWP entered into the Issuer Option
Agreement with the Issuer. Pursuant to the Issuer Option Agreement,
the Issuer has acquired an option (the "Option") to purchase up to an
aggregate 1,000,000 shares of Common Stock from TWP. The Option must
be exercised by March 31,
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1999, and is subject to revocation by TWP if the number of issued and
outstanding shares of Common Stock is 23,000,000 or more. The option
exercise price is $4.00 per share for shares purchased by March 31,
1998, and $5.00 per share for shares purchased thereafter. As
consideration for the grant of the Option by TWP, the Issuer has
agreed to pay to TWP the sum of $250,000 in two equal installments.
The first such installment was paid upon the execution of the Issuer
Option Agreement. The second such installment is to be paid on
January 2, 1998. The Option shall terminate automatically if the
Issuer fails to pay such second installment on January 2, 1998 or
fails to exercise the Option by March 31, 1999.
Item 5. Interest in Securities of the Issuer.
TWP is deemed to beneficially own, in the aggregate,
2,341,334 shares of Common Stock, or 19.8 percent of the outstanding
Common Stock. Such amount of shares is based on the ownership of the
720,000 shares of Common Stock constituting the Initial Shares, the
ownership of 871,334 shares of Common Stock issued to TWP upon the
Conversion and the 750,000 shares of Common Stock issued to TWP upon
exercise of the Common Stock Option. Such percentage of shares is
calculated on the basis that the 11,838,734 shares of Common Stock
which the Issuer has disclosed were issued and outstanding on March
19, 1997, continue to be the only shares of Common Stock outstanding.
Pursuant to the Voting Trust Agreement, William C. Samuels
serves as the Voting Trustee for TWP's Deposited Shares as described
in Item 4 above. Certain information about Mr. Samuels is set forth
below:
William C. Samuels
ACTV, Inc.
1270 Avenue of the Americas
New York, NY 10020
President and Chief Executive Officer
To the best knowledge of TWP, during the last five years,
Mr. Samuels has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), nor has he
been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such
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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.
Pursuant to the Issuer Option Agreement, TWP and the Issuer
share beneficial ownership of 1,000,000 shares of Common Stock.
Except as set forth above, neither TWP, nor, to the best
knowledge of TWP, any person listed on Annex A, has effected any
transactions in Common Stock during the past 60 days.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Other than the information set forth in response to Item 3
and Item 4 and the copies of the Investment Agreements filed as
Exhibits 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16
hereto, respectively, which are incorporated herein by reference,
there are no contracts, arrangements, understandings or relationships
(legal or otherwise) between TWP and any other person or, to the best
knowledge of TWP, between any of TWP's directors and executive
officers and any other person with respect to any securities of the
Issuer.
Item 7. Material To Be Filed as Exhibits.
Exhibit 1: Note Purchase Agreement.*
Exhibit 2: Security Agreement.*
Exhibit 3: Common Stock Purchase Agreement.*
Exhibit 4: Option Agreement.*
Exhibit 5: Standstill Agreement.*
Exhibit 6: Letter dated May 29, 1992, from W. C. Samuels, of the
Issuer, to R. Hamachek, of TWP.*
Page 12 Of 21
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Exhibit 7: Letter dated June 30, 1992, from W. C. Samuels, of the
Issuer, to R. Hamachek, of TWP.*
Exhibit 8: Letter dated July 14, 1992, from W. C. Samuels, of the
Issuer, to R. Hamachek, of TWP.*
Exhibit 9: Letter dated March 11, 1993, from W. C. Samuels, of the
Issuer, to R. Hamachek, of TWP.*
Exhibit 10: Amendment dated June 15, 1993, to the Option Agreement
between the Issuer and TWP.*
Exhibit 11: Partnership Interest Purchase Agreement dated March 11,
1994, by and between the Purchaser and the Seller.*
Exhibit 12: Security Agreement dated March 11, 1994, by and between
the Issuer and TWP.*
Exhibit 13: Voting Trust Agreement dated March 11, 1994, by and among
the Voting Trustee, the Issuer and TWP.*
Exhibit 14: Letter dated March 11, 1994, from W. C. Samuels of the
Issuer, to R. Hamachek of TWP concerning the Option Agreement.*
Exhibit 15: Letter dated March 11, 1994, from W. C. Samuels of the
Issuer to R. Hamachek of TWP concerning the Standstill
Agreement.*
Exhibit 16: Option Agreement dated March 11, 1997, by and between the
Issuer and TWP.**
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* Previously filed.
** Filed electronically herewith.
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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: March 20, 1997
THE WASHINGTON POST COMPANY,
by /s/ John B. Morse, Jr.
---------------------------
Name: John B. Morse, Jr.
Title: Vice President-Finance
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ANNEX A TO SCHEDULE 13D
Following is a list of the directors and executive officers
of The Washington Post Company setting forth the business address and
present principal occupation or employment (and the name, principal
business and address of any corporation or organization in which such
employment is conducted) of each person. The business address of each
person whose principal occupation or employment is with The Washington
Post Company is 1150 15th Street, N.W., Washington, DC 20071. Each of
the persons against whose name an asterisk appears is a director of
The Washington Post Company.
Each of the persons named below is a citizen of the United
States of America.
Business Address and Principal Occupation or
Name Employment
Warren Buffett* Chairman and Chief Executive Officer
Berkshire Hathaway Inc.
1440 Kiewit Plaza
Omaha, NE 68131
Daniel Burke* Retired President
Capital Cities/ABC, Inc.
77 W. 66th Street
New York, NY 10023
James E. Burke* Chairman
Partnership for a Drug-Free America
(charitable organization)
405 Lexington Avenue
New York, NY 10174
Martin Cohen* Vice President
The Washington Post Company
George J. Gillespie, III* Attorney
Member of Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Ralph E. Gomory* President
Alfred P. Sloan Foundation
(charitable organization)
630 Fifth Avenue, Suite 2550
New York, NY 10111
Donald E. Graham* Chairman of the Board and
Chief Executive Officer
The Washington Post Company
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Business Address and Principal Occupation or
Name Employment
Katharine Graham* Chairman of the Executive Committee
The Washington Post Company
Donald R. Keough* Chairman
Allen & Company Incorporated
711 Fifth Avenue
New York, NY 10022
Barbara Scott Preiskel* Attorney
60 E. 42nd Street, Suite 3125
New York, NY 10165
William J. Ruane* Chairman of the Board
Ruane, Cunniff & Co., Inc.
(investment management)
767 Fifth Avenue, Suite 4701
New York, NY 10153
Richard D. Simmons* Retired
105 North Washington Street, Suite 202
Alexandria, VA 22314
Alan G. Spoon* President and Chief Operating Officer
The Washington Post Company
George W. Wilson* President
Monitor Publishing Company
(newspaper publishing)
Box 1177
Concord, NH 033012
Diana M. Daniels Vice President, General Counsel and Secretary
The Washington Post Company
Ross F. Hamachek Vice President-Planning and Development
The Washington Post Company
Beverly R. Keil Vice President-Human Resources
The Washington Post Company
Guyton H. Knight, III Vice President-Corporate Communications
The Washington Post Company
John B. Morse, Jr. Vice President-Finance and Chief Financial
and Accounting Officer
The Washington Post Company
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Business Address and Principal Occupation or
Name Employment
Patrick Butler Vice President
The Washington Post Company
Ralph Terkowitz Vice President-Technology
The Washington Post Company
Hal Jones Controller
The Washington Post Company
Christopher Schroeder Treasurer and Director of Corporate Strategy
The Washington Post Company
John F. Hockenberry Associate General Counsel
The Washington Post Company
James W. Keller Assistant Treasurer
The Washington Post Company
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Exhibit Index
Exhibit No. Description
16 Option Agreement dated March 11, 1997, by
and between the Issuer and TWP.
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EXHIBIT 16
OPTION AGREEMENT
OPTION AGREEMENT, made this 11th day of March 1997, by and
between The Washington Post Company ("Optionor"), a corporation having
its principal place of business at 1150 15th Street NW, Washington,
D.C., and ACTV, Inc. ("Optionee"), a corporation having its principal
place of business at 1270 Avenue of the Americas, New York, N.Y.
WHEREAS, Optionor currently owns 2,341,334 shares of Common
Stock Optionee; and
WHEREAS, Optionee desires to obtain from Optionor and
Optionor desires to provide to Optionee the Option to obtain from
Optionor up to 1 million shares of Common Stock of Optionee owned by
Optionor.
NOW, THEREFORE, in consideration of the recitals and the
mutual promises set forth below, the parties hereby agree as follows:
1. Grant of Option. In accordance with the terms and
conditions of this Option Agreement, Optionor hereby grants to
Optionee an option to purchase up to an aggregate of 1 million shares
of Common Stock of Optionee owned by Optionor ("Option Shares"). In
the event of any change in the number of issued and outstanding Common
Stock by reason of any stock dividend, split-up, recapitalization,
combination, conversion, exchange of shares or other change in the
corporate or capital structure of Optionee, the number of shares
subject to the Option and the purchase price shall be adjusted
appropriately. The adjustment shall be such as to put the parties in
the same position as if the Option had been fully exercised
immediately prior to the event occasioning the adjustment.
This Option may be revoked by the Optionor at any time
during the term of this Option Agreement if the number of issued and
outstanding shares of Common Stock of Optionee is 23,000,000 or more.
2. Exercise of Option. Optionee may exercise the Option in
whole or in part, at any time or from time to time prior to the
Expiration Date (as hereinafter defined), by written notice (which
shall be irrevocable and unconditional) to the Optionor specifying (i)
the number of shares it will purchase, (ii) the amount of cash to be
delivered to the Optionor pursuant to paragraph 3 hereof, and (iii)
the date for the closing ("Closing"), which shall in no event be later
than 10 business days after Optionee has exercised the Option. In no
event may the Option be exercised after March 31, 1999; such date of
expiration is hereinafter referred to as the "Expiration Date".
3. Price. If the Option is exercised on or prior to the
close of business on March 31, 1998, the Optionee may purchase Option
Shares at an option exercise price of $4.00 per share. If the Option
is exercised on or after April 1, 1998 through the close of business
on March 31, 1999, the Option may purchase Option Shares at an option
exercise price of $5.00 per share. At each Closing, (a) against
delivery of the Option Shares to be purchased, Optionee shall pay to
Optionor the aggregate purchase price for the Option Shares being
purchased at such Closing by delivery to Optionor by wire transfer of
same day funds in such amount to an account designated by Optionor,
and (b) Optionor shall deliver to Optionee a certificate or
certificates
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<PAGE>
representing the number of Option Shares so purchased, free and clear of
all liens, claims, charges and encumbrances of any kind or nature
whatsoever. At any such Closing, Optionee shall deliver (x) a letter
addressed to Optionor representing that the Option Shares so acquired will
not be offered for sale or otherwise disposed of in violation of the
Securities Act of 1933, as amended, and (y) a legal opinion addressed to
Optionee from Optionee's counsel, which counsel shall be satisfactory to
Optionor, stating that such purchase is legal and valid and in accordance
with law.
4. Consideration. This Option is granted in consideration for
Optionee's payment to Optionor of the sum of Two Hundred Fifty Thousand
Dollars ($250,000) in two equal installments, the first installment to be
paid upon execution by the parties of this Option Agreement and the second
installment to be paid on January 2, 1998.
5. Automatic Termination Upon Expiration. If Optionee fails to
make the payment on January 2, 1998, specified in Section 4 hereof or fails
to exercise this Option in accordance with its terms and prior to the
Expiration Date, then this Option Agreement and the rights of Optionee
hereunder shall automatically and immediately terminate without notice on
such January 2, 1998 or March 31, 1999, respectively. In the event that
this Option is not exercised by Optionee, all sums paid to Optionor by
Optionee shall be retained by Optionor in consideration of the grant of
this Option.
6. Representations of Optionor. Optionor hereby represents and
warrants to Optionee that (i) Optionor has full corporate power and
authority to execute, deliver and perform its obligations hereunder and
this Option Agreement is the legal, valid and binding agreement of
Optionor, enforceable in accordance with its terms; and (ii) Optionor is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power to
enter into and perform this Option Agreement.
7. Representations of Optionee. Optionee hereby represents and
warrants to Optionor that (i) Optionee has full corporate power and
authority to execute, deliver and perform its obligations hereunder and
this Option Agreement is the legal, valid and binding agreement of
Optionee, enforceable in accordance with its terms and that each purchase
of shares under this Option Agreement will be duly authorized by Optionee,
will be legal and valid in accordance with law and not in violation of or
inconsistent with any provision of the Certificate of Incorporation or
By-laws of Optionee, in each case as amended, or any contract or other
commitment applicable to Optionee; and (ii) Optionee is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power to enter into and
perform this Option Agreement.
8. Expenses. The parties hereto shall pay their own expenses
incurred in connection with this Agreement.
9. Assignment. Neither Optionor nor Optionee may assign,
transfer, encumber or otherwise convey their rights hereunder and/or this
Option Agreement without the prior written consent of the other party,
which consent shall not be unreasonably withheld.
10. Governing Law. This Option Agreement shall be subject to and
construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed in that State without regard to its
conflict of law rules.
11. Notices. Any notice to be given hereunder by either party to
the other shall be given in writing and delivered either in person or by
prepaid overnight express service to the respective addresses noted above,
or such new address as one shall provide the other, in writing.
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<PAGE>
12. Severability. In the event that any term or provision of
this Option Agreement is determined to be void, unenforceable, or
contrary to law, the remainder of this Option Agreement shall continue
in full force and effect, provided that such continuation would not
diminish the benefits of this Option Agreement for either party.
13. Binding Effect. This Option Agreement shall bind and
benefit the parties and their respective officers, directors, agents,
personal representatives, authorized assigns, and authorized
successors in interest. However, no right or obligation herein may be
assigned or delegated by a party, either directly or indirectly by
transfer of control, without the prior written consent of the other
party, which consent shall not be unreasonably withheld.
14. Entire Agreement. This Option Agreement constitutes the
entire agreement between the parties governing this transaction. No
prior agreement or representation, whether verbal or written, shall
have any force or effect. This Option Agreement may be modified,
superseded or canceled only in writing signed by both parties.
15. Effect of Headings. The descriptive headings contained
herein are for convenience only and shall not affect in any way the
meaning or interpretation of this Option Agreement.
16. Counterparts. This Option Agreement may be signed in
counterparts, with the signatures on each counterpart having the same
legal effect as if all signatures appeared on the same instrument.
ACCORDINGLY, the parties hereby witness and execute this
Option Agreement on the date first written above.
OPTIONOR: OPTIONEE:
By /s/ Ross F. Hamachek By /s/ William C. Samuels
-------------------------- ------------------------------
Ross F. Hamachek William C. Samuels
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