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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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): JULY 25, 1997
ELECTRONIC ARTS INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-17984 94-2838567
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(Commission File Number) (IRS Employer Identification No.)
1450 FASHION ISLAND BOULEVARD, SAN MATEO, CALIFORNIA 94404
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(Address of Principal Executive Offices) (Zip Code)
(650) 571-7171
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(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
This report on Form 8-K consists of 5 sequentially numbered pages. The exhibit
index is located at sequentially numbered page 5.
Page 1 of 5 Pages
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS.
On July 25, 1997, Electronic Arts Inc., a Delaware corporation
("Electronic Arts"), acquired control of Maxis, Inc., a Delaware corporation
("Maxis"), pursuant to the merger ("Merger") of Electronic Arts' wholly-owned
subsidiary, Village Acquisition Corporation, a Delaware corporation ("Merger
Sub"), into Maxis. The Merger was effected pursuant to an Agreement and Plan of
Reorganization dated as of June 4, 1997 ("Plan of Reorganization") by and among
Electronic Arts, Merger Sub and Maxis. The Merger was accounted for as a
"pooling of interests" transaction for accounting purposes and was structured to
be a "tax-free" reorganization for federal income tax purposes. The directors
and executive officers of Electronic Arts were not changed as a result of the
Merger. Prior to the Merger, Maxis was in the business of developing, publishing
and distributing consumer software for personal computers, offering products in
the entertainment, learning and personal creativity categories. Now that the
Merger has been consummated, Maxis is expected to continue its historical
business.
Pursuant to the terms of the Plan of Reorganization, each
share of Maxis Common Stock, $0.0001 par value ("Maxis Common Stock"), issued
and outstanding immediately prior to the effective time of the Merger was
exchanged for 0.3644 (the "Exchange Ratio") shares of Electronic Arts' Common
Stock, $0.01 par value ("Electronic Arts' Common Stock"). No fractional shares
of Electronic Arts' Common Stock were issued by virtue of the Merger, but in
lieu thereof each holder of Maxis Common Stock who would otherwise be entitled
to receive a fraction of a share of Electronic Arts' Common Stock, after
aggregating all shares of Electronic Arts' Common Stock to be received by such
holder, will have received from Electronic Arts an amount of cash (rounded to
the nearest whole cent) equal to the product of such fraction, multiplied by the
average closing price of one share of Electronic Arts' Common Stock for the five
(5) most recent days that Electronic Arts' Common Stock has traded ending on the
trading day immediately prior to the Effective Time, as reported on the Nasdaq
National Market.
At the Effective Time, as defined in the Plan Reorganization,
each outstanding option to purchase shares of Maxis Common Stock (each a "Maxis
Option") under the Maxis 1993 Stock Option Plan or the Maxis 1995 Stock Option
Plan (each a "Maxis Option Plan"), whether or not exercisable, was assumed by
Electronic Arts and will continue to have, and be subject to, the same terms and
conditions set forth in the applicable Maxis Option Plan immediately prior to
the Effective Time and the Stock Option Agreement by which it is evidenced,
except that (i) each Maxis Option was exercisable (or will become exercisable in
accordance with its terms) for that number of whole shares (and no fractional
shares) of Electronic Arts' Common Stock equal to the product of the number of
shares of Maxis Common Stock that were issuable upon exercise of such Maxis
Option immediately prior to the Effective Time multiplied by the Exchange Ratio,
rounded down to the nearest whole number of shares of Electronic Arts' Common
Stock, and (ii) the per share exercise price for the shares of Electronic Arts'
Common Stock issuable upon exercise of such assumed Maxis Option will be equal
to the quotient determined by dividing the exercise price per share of Maxis
Common Stock at which such Maxis Option was exercisable immediately prior
Page 2 or 5
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to the Effective Time by the Exchange Ratio, rounded up to the nearest whole
cent. In addition, Electronic Arts assumed the Maxis 1995 Stock Plan.
Pursuant to these exchange ratios, in the Merger a total of
4,108,804 shares of Electronic Arts' Common Stock were issued in exchange for
all the issued and outstanding shares of Maxis' capital stock, options to
purchase a total of 374,604 shares of Electronic Arts' Common Stock were assumed
by Electronic Arts in exchange for all issued and outstanding Maxis Options, and
310,764 shares of Electronic Arts' Common Stock were reserved for issuance
pursuant to the Maxis 1995 Stock Option Plan.
The Exchange Ratio was determined on the basis of, among other
things (i) a comparison of certain financial and stock market information for
Electronic Arts and certain financial information for Maxis with similar types
of information for certain other companies in businesses similar to those of
Electronic Arts and Maxis; and (ii) discussions between senior management of
Electronic Arts and Maxis regarding the business and prospects of their
respective companies.
The shares of Electronic Arts' Common Stock received by the
former Maxis stockholders have been registered under the Securities Act of 1933,
as amended.
Each person determined by Maxis to be an "affiliate" of Maxis
within the meaning of Rule 145 promulgated under the Securities Act, has
executed an agreement that, among other things, restricts sales, transfers and
other dispositions of both securities of Maxis held by such person and the
Electronic Arts Common Stock received by such person in connection with the
Merger in order to comply with the requirements of certain federal securities
laws and to help ensure that the Merger will be treated as a pooling of
interests for accounting purposes.
Each of Jeffrey B. Braun (the Chairman of the Board of
Directors of Maxis) and William R. Wright (the Chief Technical Designer and a
director of Maxis) have entered into agreements, in connection with the Merger,
amending their current Employment Agreements with Maxis whereby, as of the
Effective Date, such persons will become employees of Electronic Arts. Mr. Braun
and Mr. Wright have also entered into Noncompetition and Nonsolicitation
Agreements with Electronic Arts, restricting them for a period of two years from
the Effective Date from carrying on or engaging in certain business activities.
Page 3 of 5
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Electronic Arts has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ELECTRONIC ARTS INC.
Date: August 5, 1997 By /s/ Ruth A. Kennedy
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Ruth A. Kennedy
Senior Vice President, General Counsel
and Secretary
Page 4 of 5
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
<S> <C>
2.01 Form S-4 filed on June 25, 1997.(1)
2.02 Agreement and Plan of Reorganization dated as of June 4, 1997 by and among Electronic
Arts, Merger Sub and Maxis.(1)
2.03 Form of Certificate of Merger of Village Acquisition Corporation into Maxis, Inc.(1)
10.39 Maxis, Inc. 1993 Stock Option Plan and related agreement.(1)
10.40 Maxis, Inc. 1995 Stock Option Plan and related agreements.(1)
99.01 Maxis Employment Agreement Amendment dated June 4, 1997 by and between Registrant and
Jeffrey B. Braun.(1)
99.02 Maxis Employment Agreement Amendment dated June 4, 1997 by and between Registrant and
William R. Wright.(1)
99.03 Noncompetition and Nonsolicitation Agreement dated June 4, 1997 by and between
Registrant and Jeffrey B. Braun.(1)
99.04 Noncompetition and Nonsolicitation Agreement dated June 4, 1997 by and between
Registrant and William R. Wright.(1)
</TABLE>
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(1) Previously filed with Form S-4 filed on June 25, 1997.
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