<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
ACTIVISION, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
[LOGO]
3100 OCEAN PARK BOULEVARD
SANTA MONICA, CALIFORNIA 90405
July 29, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
of Activision, Inc. The meeting will be held on Wednesday, September 24, 1997,
beginning at 9:00 a.m. at the Loews Santa Monica Beach Hotel, 1700 Ocean Avenue,
Santa Monica, California 90401.
Information about the meeting and the various matters on which the
stockholders will act is included in the Notice of Annual Meeting of
Stockholders and Proxy Statement which follow. Also included is a Proxy Card and
postage paid return envelope.
It is important that your shares be represented at the Annual Meeting.
Whether or not you plan to attend, we hope that you will complete and return
your Proxy Card in the enclosed envelope as promptly as possible.
Sincerely,
[SIG]
Robert A. Kotick
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
[SIG]
Brian G. Kelly
SECRETARY
<PAGE>
[LOGO]
3100 OCEAN PARK BOULEVARD
SANTA MONICA, CALIFORNIA 90405
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held September 24, 1997
------------------------
To the Stockholders of Activision, Inc.
The 1997 Annual Meeting of Stockholders of Activision, Inc. (the "Company")
will be held at the Loews Santa Monica Beach Hotel, 1700 Ocean Avenue, Santa
Monica, California 90401, on Wednesday, September 24, 1997 at 9:00 a.m., local
time, for the following purposes:
1. To elect six directors of the Company to hold office for one year terms
and until their respective successors are duly elected and qualified.
2. To adopt an amendment to the Company's 1991 Stock Option and Stock Award
Plan to increase the number of shares of the Company's Common Stock
reserved for issuance thereunder.
3. To transact such other business as may properly come before the meeting
or any adjournment(s) or postponement(s) thereof.
The foregoing items of business are described more fully in the Proxy
Statement accompanying this Notice.
The Board of Directors of the Company has fixed the close of business on
July 28, 1997 as the record date for determining the stockholders entitled to
receive notice of, and to vote at, the Annual Meeting.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE URGED TO COMPLETE, SIGN, DATE
AND RETURN THE ACCOMPANYING PROXY CARD PROMPTLY IN THE ENVELOPE PROVIDED,
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. NO POSTAGE IS REQUIRED IF
THE PROXY CARD IS MAILED IN THE UNITED STATES. STOCKHOLDERS WHO ARE PRESENT AT
THE ANNUAL MEETING MAY WITHDRAW THEIR PROXY AND VOTE IN PERSON IF THEY SO
DESIRE. IT IS IMPORTANT THAT YOUR PROXY CARD BE RETURNED PROMPTLY IN ORDER TO
AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION.
By Order of the Board of Directors,
[SIG]
Brian G. Kelly
SECRETARY
July 29, 1997
Santa Monica, California
<PAGE>
[LOGO]
3100 OCEAN PARK BOULEVARD
SANTA MONICA, CALIFORNIA 90405
------------------------
PROXY STATEMENT
for the
Annual Meeting of Stockholders
to be held on September 24, 1997
------------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of Activision, Inc., a Delaware corporation
(the "Company"), of proxies from the holders (the "Stockholders") of the
Company's issued and outstanding shares of common stock, $.000001 par value per
share (the "Common Stock"), to be used at the Annual Meeting of Stockholders to
be held on Wednesday, September 24, 1997, at the Loews Santa Monica Beach Hotel,
1700 Ocean Avenue, Santa Monica, California 90401, at 9:00 a.m., local time, and
at any adjournment(s) or postponement(s) of such meeting (the "Annual Meeting"),
for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders.
This Proxy Statement and enclosed Proxy Card are first being mailed to the
Stockholders of the Company on or about July 29, 1997.
At the Annual Meeting, the Stockholders will be asked to consider and vote
upon the following proposals (the "Proposals"):
1. The election of six directors of the Company ("Directors") to hold
office for one year terms and until their respective successors are duly
elected and qualified.
2. To adopt an amendment to the Company's 1991 Stock Option and Stock Award
Plan (the "Employee Stock Plan") to increase the number of shares of the
Company's Common Stock reserved for issuance thereunder.
3. Such other business as may properly come before the Annual Meeting.
Only the holders of record of the Common Stock at the close of business July
28, 1997 (the "Record Date") are entitled to notice of and to vote at the Annual
Meeting. Each share of Common Stock is entitled to one vote on all matters. As
of the Record Date, 14,313,113 shares of Common Stock were outstanding.
A majority of the outstanding shares of Common Stock entitled to vote at the
Annual Meeting must be represented at the Annual Meeting in person or by proxy
to constitute a quorum for the transaction of business at the Annual Meeting. A
plurality of all the votes cast at the Annual Meeting is sufficient to elect a
Director (Proposal 1). The affirmative vote of stockholders owning at least a
majority of all outstanding shares of Common Stock voting on the proposal is
required for approval of Proposal 2. Abstentions and broker non-votes will not
be included in vote totals and will have no effect on the outcome of the vote on
Proposal 2.
The Common Stock represented by all properly executed Proxy Cards returned
to the Company will be voted at the Annual Meeting as indicated or, if no
instruction is given, in favor of all of the Proposals. As to any other business
which may properly come before the Annual Meeting, all properly executed Proxy
Cards returned to the Company will be voted by the persons named therein in
accordance with their best judgment. The Company does not presently know of any
other business
<PAGE>
which may come before the Annual Meeting. Any person giving a proxy has the
right to revoke it at any time before it is exercised (a) by filing with the
Secretary of the Company a duly signed revocation or a proxy bearing a later
date or (b) by electing to vote in person at the Annual Meeting. Mere attendance
at the Annual Meeting will not serve to revoke a proxy.
Effective August 3, 1992, the Company effected a one-for-ten reverse stock
split of its outstanding Common Stock and, effective at the close of business on
October 20, 1993, the Company implemented a one-for-three reverse stock split of
its outstanding Common Stock. All figures in this Proxy Statement relating to
outstanding shares and historical share issuances reflect such reverse stock
splits.
In order that your shares of Common Stock may be represented at the Annual
Meeting, you are requested to:
-- indicate your instructions on the Proxy Card;
-- date and sign the Proxy Card;
-- mail the Proxy Card promptly in the enclosed envelope; and
-- allow sufficient time for the Proxy Card to be received on or before
11:00 a.m. on September 15, 1997.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT, AND, IF
GIVEN OR MADE, SUCH INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED AND THE DELIVERY OF THIS PROXY STATEMENT SHALL, UNDER NO
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Six Directors are to be elected to serve until the Company's next Annual
Meeting of Stockholders and until their respective successors are duly elected
and qualified. Except where otherwise instructed, proxies solicited by this
Proxy Statement will be voted for the election of each of the six nominees
listed below, all of whom are presently members of the Board. Each nominee has
consented to be named in this Proxy Statement and to serve as a Director if
elected. However, if any nominee shall become unable to stand for election as a
Director at the Annual Meeting, an event not now anticipated by the Board, the
proxy will be voted for a substitute designated by the Board or, if no
substitute is selected by the Board prior to or at the Annual Meeting, for a
motion to reduce the membership of the Board to the number of nominees
available. All Directors serve for one year terms. There is no family
relationship between any nominee and any other nominee or Executive Officer of
the Company.
DIRECTORS/NOMINEES
The names of the nominees, and certain information about them (including
their terms of service), are set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
- ------------------------------------ --- ------------------------------------------------- ---------
<S> <C> <C> <C>
Harold A. Brown..................... 45 Partner, Gang Tyre Ramer & Brown, Inc. 1996
Barbara S. Isgur (1) (2)............ 55 Sr. Vice President, Stratagem 1991
Brian G. Kelly...................... 34 President, Chief Operating Officer and 1995
Secretary of the Company
Robert A. Kotick.................... 34 Chairman and Chief Executive Officer of the 1991
Company
Steven T. Mayer (1) (2)............. 52 Consultant 1991
Robert J. Morgado................... 54 Chairman, Maroley Media Group 1997
</TABLE>
- ------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
MR. BROWN has been a director of the Company since November 1996. Mr. Brown
is a partner in the law firm of Gang, Tyre, Ramer & Brown, Inc. He has been with
Gang, Tyre, Ramer & Brown since 1976 and a principal since 1980. He graduated
Order of the Coif from Boalt Hall (UC Berkeley) Law School in 1976. Since 1984,
he has served as Executive Director of the Entertainment Law Institute at the
University of Southern California and has been a member of the Board, Treasurer
and Chairman of the Finance and Audit Committee of the Geffen Playhouse since
1996. In addition, Mr. Brown has been a member of the Hebrew Union College Los
Angeles Board of Overseers since 1994. Gang, Tyre, Ramer & Brown, Inc. has from
time to time performed legal services for the Company.
MS. ISGUR has been a director of the Company since February 1991. She is a
Senior Vice President of Stratagem, an investment banking firm specializing in
the software industry, and has held such position since September 1993. Ms.
Isgur also served as President of BSI Consulting from 1990 to 1993. She served
as a Vice President of Needham & Co., a high technology investment banking firm,
from 1989 to 1990. During 1988, Ms. Isgur served as a Vice President at
Manufacturers Hanover Securities. From 1985 to 1988, she was a principal of D.H.
Brown Associates. Ms. Isgur was a Vice President and microcomputer industry
analyst at Paine Webber, Incorporated from 1981 to 1985. Ms. Isgur is a member
of the Audit Committee and the Compensation Committee of the Board.
3
<PAGE>
MR. KELLY has been a director of the Company since July 1995. He has served
as Secretary of the Company since May 1991, Chief Operating Officer since July
1995 and President since July 1997. He also served as Chief Financial Officer of
the Company from February 1991 until July 1995. Mr. Kelly served as Vice
President-Finance of International Consumer Technologies Corporation ("ICT")
from December 1990 to January 1995 and as director of ICT from February 1994 to
January 1995. In January 1995, ICT was merged with and into a subsidiary of the
Company. From September to December 1990, he served as Vice President-Finance of
Leisure Concepts, Incorporated. Mr. Kelly served in various capacities, most
recently as Vice President-Finance and Administration, of Vista Organization,
Ltd., a motion picture production company, from 1987 to 1990. From 1984 to 1987,
Mr. Kelly was employed by Peat Marwick Main & Co. Mr. Kelly holds a bachelor
degree in accounting from Rutgers University, is a certified public accountant,
and holds a law degree from the Fordham University School of Law.
MR. KOTICK has been a Director, Chairman of the Board and Chief Executive
Officer of the Company since February 1991. Mr. Kotick was Chairman and Chief
Executive Officer of Leisure Concepts, Incorporated, a public company in the
licensing and merchandising business, from June 1990 to December 1990. He was
also a founder of ICT and acted as its President as well as a director from its
inception in 1986 to January 1995.
MR. MAYER has been a Director of the Company since February 1991. Mr. Mayer
is an independent multimedia consultant to a number of major corporations. From
1984 until December 1992, Mr. Mayer was Chairman of the Board of Digital F/X,
Incorporated, a manufacturer of video production equipment. Mr. Mayer was a
founder of Atari Corporation in 1973, and served as a Division President of
Warner Communications-Entertainment Software until 1985, when he left to start
Take One Partners, Incorporated, the predecessor to Digital F/X. Mr. Mayer is a
member of the Audit Committee and the Compensation Committee of the Board.
MR. MORGADO has been a Director of the Company since February 1997. Mr.
Morgado is Chairman of Maroley Media Group, a media entertainment investment
company he established in 1995. From 1985 to 1995, he was the Chairman and Chief
Executive Officer of the Warner Music Group, Inc. Mr. Morgado serves on the
Board of Trustees of the New School for Social Research and is the Chairman of
the Board of Governors of the Mannes College of Music. Mr. Morgado also is
Chairman of the Board of World Communications, Inc., a position he has held
since January 1997; he also has been a member of the Boards of Nest
Entertainment since January 1996, Berkshire Bank since January 1989 and United
Medical Enterprises since April 1996.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION
OF EACH NOMINEE FOR DIRECTOR.
4
<PAGE>
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board held seven meetings and acted two times by unanimous written
consent during the Company's full fiscal year ended March 31, 1997. In such
fiscal year, each incumbent Director attended all of the meetings of the Board
and of each committee thereof of which he or she was a member, except that
Barbara Isgur did not attend one Board meeting.
The Board has established an Audit Committee and a Compensation Committee.
The Board does not have a nominating committee or a committee performing the
functions of a nominating committee.
The Audit Committee is composed of Ms. Isgur and Mr. Mayer. The function of
the Audit Committee is to recommend to the Board the independent public
accountants to be engaged by the Company and to review the Company's general
policies and procedures with respect to audits and accounting and financial
controls, the scope and results of the auditing engagement and the extent to
which the Company has implemented changes suggested by the internal audit staff
and the independent public accountants. The Audit Committee also reviews the
terms of material related party transactions. No member of the Audit Committee
is an employee of the Company. The Audit Committee met twice during the fiscal
year ended March 31, 1997.
The Compensation Committee is composed of Ms. Isgur and Mr. Mayer. The
Compensation Committee reviews and makes recommendations to the Board concerning
the Company's executive compensation policy. The Compensation Committee also
serves as the committee to administer the Company's Employee Stock Plan. No
member of the Compensation Committee is an employee of the Company. The
Compensation Committee met once during the fiscal year ended March 31, 1997. See
"Compensation Committee Interlocks and Insider Participation in Compensation
Decisions" and "Compensation Committee Report on Executive Compensation."
EXECUTIVE OFFICERS AND KEY EMPLOYEES
None of the Executive Officers of the Company are related, and each holds
office at the pleasure of the Board. As of July 28, 1997, the Executive Officers
and certain key employees of the Company were as set forth below.
EXECUTIVE OFFICERS
JOHN T. BAKER, IV, 37, has served as Senior Vice President, Corporate
Development since July 1997 and Vice President, Operations, Administration and
Planning from October 1995 to July 1997. From 1992 to 1995, Mr. Baker was
employed with Robertson Ceco Corporation, most recently as Senior Vice
President, Finance and Administration of its Metal Buildings Group. Prior to
that, Mr. Baker was engaged in principal investing, from 1990 to 1992 as a Vice
President at Sixx Holdings, Inc. and from 1988 to 1992 as a Vice President of
The Thompson Company. Mr. Baker holds a Bachelor of Business Administration
degree from the University of Wisconsin and a Master of Business Administration
degree from Harvard University.
LAWRENCE GOLDBERG, 38, has served as Senior Vice President, Business Affairs
and General Counsel since July 1997 and Vice President, Business Affairs and
General Counsel from August 1994 to July 1997. Mr. Goldberg was an attorney at
Rosenfeld, Meyer and Susman from 1986 to 1994 and a principal from 1991 to 1994.
From 1984 until 1986, Mr. Goldberg was an attorney at O'Melveny & Myers. Mr.
Goldberg received his law degree from the University of California at Los
Angeles and he holds a Bachelor of Science degree in industrial and labor
relations from Cornell University.
BRIAN G. KELLY, President since July 1997, Chief Operating Officer since
July 1995 and Secretary since May 1991. Biographical information regarding Mr.
Kelly is set forth under "Nominees for Election as Directors."
5
<PAGE>
ROBERT A. KOTICK, Chairman of the Board and Chief Executive Officer since
February 1991. Biographical information regarding Mr. Kotick is set forth under
"Nominees for Election as Directors."
BARRY J. PLAGA, 35, has served as Senior Vice President and Chief Financial
Officer since July 1997, Vice President, Finance of the Company from February
1991 to July 1997 and Chief Accounting Officer from March 1992 to July 1997. In
addition, Mr. Plaga was Controller of ICT and Disc Company, Inc. ("TDC"), a
former wholly owned subsidiary of ICT, from January 1991 until January 1995.
Prior to joining ICT, Mr. Plaga was Chief Financial Officer of RMED
International from April to December, 1990. Prior to his employment at RMED, Mr.
Plaga was Chief Financial Officer and Secretary of Strategic Mortgage
Investments, Inc., for whom he served in various capacities from 1987. Mr. Plaga
is a certified public accountant and holds a Bachelor of Science degree in
accounting and a Master of Accounting degree from the University of Southern
California.
OTHER KEY EMPLOYEES
STEPHEN E. CRANE, 43, has served as Vice President, Production since July
1997 and Vice President of Technology from August 1995 to July 1997. From 1994
to 1995, Mr. Crane was the Vice President of Development of Knowledge Adventure,
Inc., a publisher of educational computer games and CD-ROM reference products
for children. From 1992 to 1994, he served as Director of 3DO Development at
Electronic Arts, Inc. and from 1987 to 1992 he was the Director of Desktop
Products at Digital F/X Incorporated. Mr. Crane was a post-doctoral fellow at
Caltech in the Department of Chemistry and Chemical Engineering. He holds a
doctorate degree in geophysics from the University of California at San Diego
and a bachelor of science degree in earth and planetary sciences from the
Massachusetts Institute of Technology.
BRADLEY CRYSTAL, 37, has served as Vice President, OEM Sales since July 1997
and as Director of OEM Sales from March 1995 to July 1997. From 1984 to 1995, he
was employed by Apple Computer, Inc. where he held various positions in
marketing and field sales. Mr. Crystal holds a B.A. in political science from
Stanford University.
ROBERT J. DEWAR, 42, has served as Senior Vice President, International
since July 1997 and Managing Director of the Company's European operations since
October 1996. From 1989 to 1996, Mr. Dewar was employed with Electronic Arts,
most recently as Vice President and Chief Operating Officer of Electronic Arts
Europe. From 1987 to 1989, Mr. Dewar was the Finance and Operational Director at
Mirrorsoft, the software publishing arm under the Maxwell Communication
Corporation. From 1985 to 1987, Mr. Dewar worked as the Financial and
Operational Director for Nationwide Refrigeration Supplies. Mr. Dewar holds a
degree in Business Studies and Economics from Dundee University and qualified as
a Chartered Accountant in 1983.
ALAN R. GERSHENFELD, 34, has served as Senior Vice President, Studios since
July 1997, Vice President of Production from October 1994 to July 1997 and Vice
President of Creative Affairs from August 1993 to July 1997. From 1992 to 1993,
Mr. Gershenfeld was the Associate Director for Programming/Director of
Screenwriting Competition for Philadelphia Festival of World Cinema and from
1989 to 1991 he was a post-production/delivery supervisor at Edward R. Pressman
Film Corp. Mr. Gershenfeld holds a bachelor degree in international relations
from Swarthmore College.
ERIC A. JOHNSON, 33, has served as Senior Vice President, North American
Marketing since July 1997 and Vice President of Marketing from November 1994 to
July 1997. He previously served as the Senior Vice President of Activision
Merchandising and Licensing, Vice President of the Company's Creative Services
Division and General Manager of Activision Merchandising and its predecessor
operation at TDC, since 1989. From 1984 to 1989, Mr. Johnson was a partner in
Select Hotel Management, where he developed hotel properties throughout
Michigan. Mr. Johnson holds a bachelor degree in economics from the University
of Michigan.
6
<PAGE>
MITCHELL H. LASKY, 35, has served as Senior Vice President, Studios since
July 1997 and Vice President, Business Development from April 1996 to July 1997.
From 1995 to 1996, Mr. Lasky was founder and Chief Executive Officer of Serum, a
start-up developer of multiplayer internet games. From 1993 to 1995, Mr. Lasky
was a Senior Counsel for Disney Interactive. From 1988 to 1993, he was an
attorney for Irell & Manella. Mr. Lasky received his law degree from the
University of Virginia and he holds a Bachelor of Arts degree in history and
literature from Harvard University.
RONALD L. SCOTT, 36, has served as Senior Vice President, North American
Sales since July 1997 and as Vice President of North and Latin American Sales
and Distribution from July 1996 to July 1997. From 1987 until 1996, Mr. Scott
served in various capacities with The Nestle Food Company, most recently as
Director of Business Development. From 1984 until 1987, Mr. Scott was employed
by The Proctor and Gamble Distributing Co. Mr. Scott holds a bachelor degree in
economics and mathematics from Occidental College.
WILLIAM S. SWARTZ, 32, has served as Managing Director of Activision Japan
Ltd. since 1992 and Director of Marketing for Activision Japan Ltd. from 1990 to
1992. From 1987 to 1990, Mr. Swartz was Marketing Director of Koei Corporation.
Mr. Swartz holds a bachelor of arts degree in history from Duke University.
WOLFRAM VON EICHBORN, 37, has served as Managing Director of Activision
Germany GMBH since June 1997. From 1996 to 1997, Mr. von Eichborn was founder
and Managing Director of Take Us! Marketing GMBH which was merged into and with
a subsidiary of Activision Germany GMBH in June 1997. From 1993 to 1996, he
served as Managing Director of Electronic Arts GMBH and from 1991 to 1993, was
founder and Managing Director of Selling Points GMBH.
JOHN WATTS, 39, has served as Managing Director of Activision Australia Pty
Ltd. since October 1993. From July 1992 to October 1993, Mr. Watts served as
Director of Sales and Marketing for Winns Australia, and from March 1990 to July
1992, he was Director of Sales of Fox Video Pty Ltd. -- South Pacific.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of July 28, 1997, with
respect to the beneficial ownership of the Company's common stock by: (i) each
stockholder known by the Company to be the beneficial owner of more than 5% of
the Company's common stock; (ii) each Director and nominee; (iii) each Executive
Officer named in the Summary Compensation Table below; and (iv) all Executive
7
<PAGE>
Officers and Directors as a group. Unless otherwise noted, the persons named in
the table have sole voting and investment power with respect to all shares shown
as beneficially owned by him or it.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
(1)
--------------------------
PERCENT
BENEFICIAL OWNER AND ADDRESS AMOUNT OF CLASS
- ------------------------------------------------------------------------------ ----------- -------------
<S> <C> <C>
Robert A. Kotick (2).......................................................... 1,889,698 11.0%
Howard E. Marks (3)........................................................... 1,656,820 11.0%
615 N. Arden Drive
Beverly Hills, CA 90210
J&W Seligman & Co. Incorporated............................................... 1,252,800 8.8%
100 Park Avenue
New York, NY 10017
Stephen A. Wynn............................................................... 1,000,000 7.0%
c/o Mirage Resorts, Incorporated
Corporate Offices
3400 Las Vegas Blvd. South
Las Vegas, NV 89109
Brian G. Kelly (4)............................................................ 1,086,592 5.7%
Barry J. Plaga (5)............................................................ 133,171 *
Steven T. Mayer,
Director (6)................................................................ 65,095 *
Barbara S. Isgur,
Director (6)................................................................ 51,321 *
Harold A. Brown,
Director (7)................................................................ 20,000 *
Robert J. Morgado,
Director (7)................................................................ 20,000 *
All Directors and Executive Officers
as a Group (9 persons)...................................................... 3,466,452 17.9%
</TABLE>
- ------------------------
(1) Percent of Class, except with respect to Messrs. Kotick, Kelly, Marks, Plaga
and all Directors and Executive Officers as a Group, was computed based on
14,313,113 shares of Common Stock outstanding as of July 28, 1997, which
does not assume the exercise of any outstanding Director or employee
warrants or options. Percent of Class with respect to Messrs. Kotick, Kelly,
Marks, Plaga and all Directors and Executive Officers as a Group was
computed based on 14,313,113 shares of Common Stock outstanding as of July
28, 1997 and, in each such person's case, the number of shares of Common
Stock issuable upon the exercise of the warrants or options held by such
individual or, in the case of all Directors and Executive Officers as a
Group, the number of shares of Common Stock issuable upon the exercise of
the warrants or options exercisable within 60 days held by all such
individuals, but does not include the number of shares of Common Stock
issuable upon the exercise of any other outstanding Director or employee
warrants or options.
(2) Includes (i) 582,155 shares issuable upon the exercise of options
exercisable within 60 days held by such individual pursuant to the Employee
Stock Plan, (ii) 256,666 shares issuable upon the exercise of options not
exercisable within 60 days held by such individual pursuant to the Employee
Stock Plan, (iii) 110,414 shares issuable upon the exercise of currently
exercisable
8
<PAGE>
options issued to such individual as part of the January 1995 merger with
ICT in exchange for options to purchase shares of ICT stock previously held
by such person, and (iv) 37,481 shares owned directly by Delmonte
Investments, L.L.C., of which such individual is a controlling person.
(3) Includes (i) 496,795 shares issuable upon the exercise of options
exercisable within 60 days held
by such individual pursuant to the Employee Stock Plan, and (ii) 31,240
shares issuable upon the exercise of options not exercisable within 60 days
held by such individual pursuant to the Employee Stock Plan, and (iii)
128,224 shares issuable upon the exercise of currently exercisable options
issued to such individual as part of the January 1995 merger with ICT in
exchange for options to purchase shares of ICT stock previously held by such
person. Until July 1997, Mr. Marks was a director and Executive Officer of
the Company.
(4) Includes (i) 536,795 shares issuable upon the exercise of options
exercisable within 60 days held by such individual pursuant to the Employee
Stock Plan, (ii) 234,226 shares issuable upon the exercise of options not
exercisable within 60 days held by such individual pursuant to the Employee
Stock Plan, (iii) 246,800 shares issuable upon the exercise of currently
exercisable options issued to such individual as part of the January 1995
merger with ICT in exchange for options to purchase shares of ICT stock
previously held by such person, and (iv) 37,481 shares owned directly by
Delmonte Investments, L.L.C., of which such individual is a controlling
person.
(5) Includes (i) 48,228 shares issuable upon the exercise of options exercisable
within 60 days held by such individual pursuant to the Employee Stock Plan
and (ii) 17,000 shares issuable upon the exercise of options not exercisable
within 60 days held by such individual pursuant to the Employee Stock Plan.
(6) Includes (i) 28,667 shares issuable to each of Ms. Isgur and Mr. Mayer upon
the exercise of warrants exercisable within 60 days and (ii) 8,000 shares
issuable to each of Ms. Isgur and Mr. Mayer upon the exercise of warrants
not exercisable within 60 days held by each such individual.
(7) Includes 20,000 shares issuable to each of Mr. Brown and Mr. Morgado upon
the exercise of warrants not exercisable within 60 days held by each such
individual.
* Percent of Class less than 1%.
9
<PAGE>
COMMON SHARE PRICE PERFORMANCE GRAPH
The graph below compares the Company's cumulative total stockholder return
on its common stock in the period from April 1, 1992, through March 31, 1997,
with the total cumulative return of the NASDAQ Market Index and Hambrecht &
Quist High Technology Index over the same period.
The comparisons in the graph below are based on historical data and are not
intended to forecast the possible future performance of the Company's common
stock.
The graph below shall not be deemed to be incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 as amended, or under the Securities
Exchange Act of 1934 as amended, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ACTIVISION NASDAQ H&Q TECHNOLOGY
<S> <C> <C> <C>
3/31/92 $100.0 $100.0 $100.0
3/31/93 $640.0 $114.3 $108.8
3/31/94 $1,840.0 $123.1 $120.4
3/31/95 $1,280.0 $135.4 $155.3
3/31/96 $2,800.0 $182.4 $213.3
3/31/97 $2,400.0 $202.3 $272.3
</TABLE>
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
COMPENSATION OF DIRECTORS
Each Director who was not an employee of the Company was compensated at the
rate of $10,000 per year for his or her regular services as a Director, with an
additional $1,000 for each Board meeting attended in person, $750 for each Board
meeting attended via conference telephone, $750 for each meeting of a committee
of the Board of which such Director is a member attended in person and $500 for
each meeting of a committee of the Board of which such Director is a member
attended via conference telephone.
In November 1996 and February 1997, respectively, Mr. Brown and Mr. Morgado
were granted warrants to purchase 16,667 shares of the Company's Common Stock at
$11.80 per share; 25% of such warrants vest on the first anniversary of the date
of grant, and 12.5% of such warrants vest every
10
<PAGE>
six months thereafter. In addition, in February 1997, Mr. Brown and Mr. Morgado
each were granted warrants to purchase 3,333 shares of the Company's Common
Stock at $11.80 per share; such warrants vest 20% per annum beginning on the
first anniversary of the date of grant.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
annual and long-term compensation for services in all capacities to the Company
for the fiscal years ended March 31, 1997, 1996 and 1995, of those persons who
were at March 31, 1997 (i) the Chief Executive Officer of the Company and (ii)
the Company's three other most highly compensated Executive Officers whose
salary and bonus exceeded $100,000 (collectively, the "Named Executives"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL COMPENSATION SECURITIES
FISCAL ------------------------ UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS OPTIONS (#)
- ---------------------------------------------------------------- --------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Robert A. Kotick 1997 $ 192,975 -- 62,821
Chairman of the Board and 1996 175,000 -- 576,000
Chief Executive Officer 1995 164,455 -- 175,000
Howard E. Marks(2) 1997 $ 176,475 -- 58,021
Executive Vice President and Director 1996 160,000 -- 533,000
1995 149,814 -- 105,000
Brian G. Kelly 1997 $ 176,475 -- 58,021
President, Chief Operating Officer, 1996 160,000 -- 533,000
Secretary and Director 1995 152,724 -- 155,000
Barry J. Plaga 1997 $ 137,829 -- 40,228
Senior Vice President and 1996 104,500 -- 10,000
Chief Financial Officer 1995 94,500 -- --
</TABLE>
- ------------------------
(1) Includes deferrals for Section 401(k) Plan.
(2) Mr. Marks resigned as an Executive Officer and Director of the Company in
July 1997.
The following table sets forth information regarding individual grants of
options to purchase the Company's Common Stock during the Company's 1997 fiscal
year to each of the Named Executives. All such grants were made pursuant to the
Company's Employee Stock Plan. In accordance with the rules of the Securities
Exchange Commission ("SEC"), the table sets forth the hypothetical gains or
"option spreads" that would exist for the options at the end of their respective
ten year terms based on assumed annualized rates of compound stock price
appreciation of 5% and 10% from the dates the options were granted to the end of
the respective ten year option terms. In instances where the exercise price of
the option grants was higher than the market price of the Company's Common Stock
on the date of grant, the market price was used to calculate hypothetical gains,
and in many instances, resulted in no hypothetical gain. Actual gains, if any,
on option exercises are dependent on the future performance of the Company's
Common Stock. The hypothetical gains shown in this table are not intended to
forecast possible future appreciation, if any, of the stock price.
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL
RATES OF STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM OF 10 YEARS (6)
--------------------------------------------- -------------------------------------
% OF TOTAL
OPTIONS 5% 10%
GRANTED TO EXERCISE ----------------- -----------------
OPTIONS EMPLOYEES OR BASE PRICE PRICE
GRANTED IN FISCAL PRICE EXPIRATION PER AGGREGATE PER AGGREGATE
NAME (#) YEAR (1) ($/SHARE) DATE SHARE VALUE SHARE VALUE
- -------------------------------------------- ------- ---------- --------- ---------- ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert A. Kotick............................ 35,000 1.8% $13.00(2) 4/01/06 $21.18 $ 286,300 $33.72 $ 725,200
12,821 0.7% $11.05(3) 7/17/06 $18.00 $ 89,106 $28.66 $ 225,778
15,000 0.8% $10.56(4) 12/20/06 $17.20 $ 99,600 $27.39 $ 252,450
Howard Marks................................ 30,200 1.6% $13.00(2) 4/01/06 $21.18 $ 247,036 $33.72 $ 625,744
12,821 0.7% $11.05(3) 7/17/06 $18.00 $ 89,106 $28.66 $ 225,778
15,000 0.8% $10.56(4) 12/20/06 $17.20 $ 99,600 $27.39 $ 252,450
Brian G. Kelly.............................. 30,200 1.6% $13.00(2) 4/01/06 $21.18 $ 247,036 $33.72 $ 625,744
12,821 0.7% $11.05(3) 7/17/06 $18.00 $ 89,106 $28.66 $ 225,778
15,000 0.8% $10.56(4) 12/20/06 $17.20 $ 99,600 $27.39 $ 252,450
Barry J. Plaga.............................. 8,433 0.4% $13.00(2) 4/01/06 $21.18 $ 68,982 $33.72 $ 174,732
1,795 -- $11.05(3) 7/17/06 $18.00 $ 12,745 $28.66 $ 31,610
15,000 0.8% $10.20(5) 7/16/06 $16.61 $ 96,150 $26.46 $ 243,900
15,000 0.8% $10.56(4) 12/20/06 $17.20 $ 99,600 $27.39 $ 252,450
</TABLE>
- ------------------------
(1) Under the Employee Stock Plan, options to purchase an aggregate of
approximately 1,941,000 shares of the Common Stock were granted during the
fiscal year ended March 31, 1997 and options to purchase approximately
5,178,000 shares of the Common Stock were outstanding as of March 31, 1997.
No stock appreciation rights were granted to any of the Named Executives
during the last fiscal year.
(2) Stock options were granted at an exercise price equal to the low bid price
of the Company's Common Stock on April 1, 1996. The options vest ratably in
equal installments over a five year period beginning on the first
anniversary date after the date of grant.
(3) Stock options were granted at an exercise price greater than the low bid
price of the Company's Common Stock on July 17, 1996 and vested in full on
such date.
(4) Stock options were granted at an exercise price greater than the low bid
price of the Company's Common Stock on December 20, 1996 and vested in full
on such date.
(5) Stock options were granted at an exercise price greater than the low bid
price of the Company's Common Stock on July 16, 1996 and vest in full on
November 1, 1997.
(6) Based on 14,144,895 shares of Common Stock outstanding as of March 31, 1997
and the low bid price as of such date of $10.50 per share, holders of Common
Stock as of such date would realize hypothetical gains over the ten year
period comparable to the option terms reflected in the above table of
$93,404,309, assuming a 5% annualized stock appreciation rate, and
$236,704,857, assuming a 10% annualized stock appreciation rate.
Shown below is further information with respect to the unexercised options
to purchase shares of the Common Stock granted prior to the fiscal year ending
March 31, 1997 and under the Employee Stock Plan to the Named Executives and
held by them at March 31, 1997.
12
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END OPTIONS AT FY-END (2)
ACQUIRED ON VALUE (1) ---------------------------- --------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------- ------------- ----------- ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Kotick.................. -- -- 167,821 85,000 $ 843,104 $ 453,460
Howard E. Marks................... -- -- 124,221 54,600 $ 573,764 $ 267,900
Brian G. Kelly.................... -- -- 154,221 74,600 $ 783,764 $ 407,900
Barry J. Plaga.................... 10,000 $ 42,360 35,795 21,000 $ 223,559 $ 36,000
</TABLE>
- ------------------------
(1) Market value on the date of exercise, less option exercise price.
(2) Upon the exercise of an option, an individual does not receive a cash
payment equal to the amount contained in the column "Value of Unexercised
In-the-Money Options at FY-End." No cash is realized until the shares
received upon the exercise of an option are sold. The amounts contained in
such column reflect the increase in the price of the Common Stock from the
option award date to March 31, 1997, in each case multiplied by the number
of shares covered by the option. These increases ($5.02/$5.33 for Mr.
Kotick, $4.62/$4.91 for Mr. Marks, $5.08/$5.47 for Mr. Kelly and $6.25/$1.71
for Mr. Plaga) are based on the reported last sale price of the Common Stock
on March 31, 1997 ($11.25 per share) as compared to the exercise price of
the options.
INDEBTEDNESS OF MANAGEMENT
In December 1994, the Company provided a loan to Mr. Kotick in the amount of
$44,000 to fund the state and local tax liabilities incurred by Mr. Kotick as a
result of distributions made to him by ICT of shares of the Common Stock. Such
loan bore interest at a rate of 8.5% per annum and was evidenced by a promissory
note (the "First Note") with a maturity date of April 30, 1995. In April 1995,
the Company extended the maturity date of all payments due under the First Note
and provided an additional loan to Mr. Kotick in the amount of $100,000 to
assist in his payment of Federal income taxes. As evidence of such extension and
the making of the additional $100,000 loan, the First Note was canceled and Mr.
Kotick issued two new promissory notes in favor of the Company, one with a
principal balance of $100,000 and the other with a principal balance of
$49,319.39. Each of such promissory notes bore interest at 9.0% per annum, had a
maturity date of April 28, 1996, which was subsequently extended, and was to be
secured by certain shares of Common Stock owned by Mr. Kotick as well as his
primary residence. Such promissory notes were repaid in full by Mr. Kotick in
May 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The members of the Company's Compensation Committee for fiscal 1997 were
Barbara Isgur and Steven Mayer. Both members are non-employee Directors of the
Company and neither has any direct or indirect material interest in or
relationship with the Company outside of his or her position as a Director. To
the Company's knowledge, there were no other interrelationships involving
members of the Compensation Committee or other Directors of the Company
requiring disclosure.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Although all final decisions regarding compensation of senior executive
officers, other than those relating to grants of awards under the Employee Stock
Plan, which are made by the Compensation Committee, are made by the Board, the
Board takes into consideration the recommendations of its Compensation Committee
in making such decisions. The Compensation Committee is responsible for
conducting annual reviews of the compensation package provided to the Company's
Chief Executive Officer and all other Executive Officers of the Company, as well
as the general compensation policies of
13
<PAGE>
the Company. Such annual review includes a comparison of the Company's executive
compensation, corporate performance, growth, share appreciation and total return
to the Stockholders with that of similar companies, and a comparison of actual
comparable performance with internal targets and plans. In addition, the
Compensation Committee in preparing its recommendations to the Board with
respect to executive compensation will generally take into account and give
substantial weight to the Chief Executive Officer's recommendations relating to
compensation to be paid to Executive Officers other than himself. The
Compensation Committee's objective is to provide compensation that is fair and
equitable to both the employee and the Company and that provides appropriate
incentives to the employee. Consideration is given to the employee's overall
responsibilities, professional qualifications, business experience, job
performance, technical expertise and their resultant combined value to the
Company's long-term performance and growth.
The Company's Executive Officer compensation program, administered by the
Compensation Committee of the Board of Directors, is based upon the following
guiding principles:
1. Competitive pay and benefits that allow the Company to attract and
retain people with the skills critical to the long-term success of the
Company.
2. Motivate and reward individual and team performance in attaining
business objectives and maximizing Stockholder value.
3. Emphasize the granting of equity-based awards over cash compensation
so as to align the interests of Executives Officers with those of the
Stockholders.
The key elements of the Company's executive compensation package consist of
base salary, annual bonus, stock options and restricted stock. The Company's
policies with respect to each of these elements are discussed below. In
addition, while the elements of compensation described below are considered
separately, the Compensation Committee also considers and will continue to
review the full compensation package provided by the Company to the individual,
including severance, pension, insurance and other benefits.
BASE SALARIES. An Executive Officer's base salary is determined by
evaluating the responsibilities of the position held, the individual's
experience and the competitive marketplace for executive talent. The base
salary, taken in the context of the executive's entire compensation package, is
intended to be competitive with base salaries paid to Executive Officers with
comparable qualifications, experience and responsibilities at other similar
companies.
ANNUAL BONUSES. In addition to a base salary, each Executive Officer is
eligible for an annual cash bonus. The Compensation Committee will, in
determining the amount of annual cash bonuses, if any, to be paid to Executive
Officers, review the performance of the Company and, if appropriate, the Common
Stock during the fiscal year then ended, and non-financial performance measures
such as the respective executive's performance, effort and role in promoting the
long-term growth of the Company, as well as such other matters as the
Compensation Committee may deem appropriate. Financial factors include, among
other things, revenue growth of the Company and profitability of the Company and
its individual business units. The Compensation Committee will consider the
grant of restricted stock or stock options in lieu of cash bonuses.
STOCK OPTIONS AND RESTRICTED STOCK. The purpose of long-term awards,
currently in the form of stock options and grants of restricted stock, is to
align the interests of the Executive Officers with the interests of the
Stockholders. Additionally, long-term awards offer Executive Officers an
incentive for the achievement of superior performance over time and foster the
retention of key management personnel. The Compensation Committee favors the
granting of equity-based awards over cash compensation for such reasons and also
believes that the granting of stock options and restricted stock better
motivates Executive Officers to exert their best efforts on behalf of the
Company and the
14
<PAGE>
Stockholders. In determining annual stock option grants, the Compensation
Committee bases its decision on the individual's performance and potential to
improve Stockholder value. In fiscal 1997, the Compensation Committee made stock
option grants to each of the Company's Executive Officers. The amount of share
options granted ranged from 40,000 to 63,000 and the exercise prices thereof
ranged from $10.20 to $13.00 per share.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. With respect to the base salary
paid to Mr. Kotick, the Company's Chief Executive Officer, in the fiscal year
ended March 31, 1997, the Compensation Committee conducted an informal survey of
the base salaries of Chief Executive Officers of several other computer software
companies similar to the Company and the qualifications, experience and
responsibilities of such Chief Executive Officers. As a result of such
comparison, Mr. Kotick's annual base salary was increased from $192,000 to
$225,000 effective April 1, 1997. In addition, in fiscal 1997, the Compensation
Committee granted to Mr. Kotick options to purchase an aggregate of 62,821
shares of the Common Stock at a weighted average exercise price of $12.02.
FEDERAL TAX IMPLICATIONS FOR EXECUTIVE COMPENSATION. It is the
responsibility of the Compensation Committee of the Board to address the issues
raised by the recent change in Federal tax law which makes certain
non-performance-based compensation to executives of public companies, including
the Company, in excess of $1,000,000 non-deductible beginning in 1994. In this
regard, the Compensation Committee is obligated to determine whether any actions
with respect to this new limit need to be taken by the Company. At the present
time, it is not anticipated that any Executive Officer of the Company will
receive any compensation in excess of this amount.
COMPENSATION COMMITTEE
Barbara S. Isgur
Steven T. Mayer
15
<PAGE>
PROPOSAL 2
APPROVAL OF AN INCREASE IN THE AGGREGATE
NUMBER OF SHARES OF COMMON STOCK RESERVED
FOR ISSUANCE UNDER THE EMPLOYEE STOCK OPTION PLAN
The Company's Employee Stock Plan was approved by the Stockholders of the
Company on February 28, 1992 and automatically terminates on November 26, 2001.
On June 24, 1992, the Board, in order to comply with securities laws of
California, adopted an amendment to the Employee Stock Plan, which amendment did
not require the prior approval of the Stockholders. On each of December 15,
1992, January 27, 1995, September 19, 1995 and August 1, 1996, the Stockholders
approved an amendment to the Employee Stock Plan proposed by the Board
increasing the aggregate number of shares of Common Stock reserved for issuance
under the Employee Stock Plan and, in the case of one amendment, expanding the
scope of eligible participants.
Pursuant to the terms of the Employee Stock Plan, individuals whose
judgment, initiative and efforts are responsible for the success of the Company
may be granted options, stock appreciation rights, restricted stock, deferred
stock or other stock-based awards relating to the Common Stock. The total number
of shares of the Common Stock authorized for award under the Employee Stock Plan
is 6,066,667. As of July 29, 1997, there are outstanding options to purchase
5,204,347 shares of the Company's Common Stock, 2,659,082 of which options are
currently vested and exercisable. As a matter of general Company policy, options
under the Employee Stock Plan are typically granted at exercise prices equal to
or greater than the market value of the Common Stock on the date of grant.
In June 1995, the Compensation Committee adopted compensation guidelines to
be used in fiscal 1996, pursuant to which the non-executive management of the
Company would be entitled to receive incentive compensation consisting of, among
other things, stock options and/or shares of restricted Common Stock so long as
the Company achieved certain increases in the Company's earnings for the fiscal
year. Similar programs have been adopted for the 1997 and 1998 fiscal years. In
order to ensure that the Company will have a sufficient number of shares of
restricted Common Stock which could be awarded to the employees pursuant to such
guidelines, and in order to have sufficient shares available to make continuing
option grants to new and existing employees, it is the Board's belief that an
increase in the number of shares available for distribution under the Employee
Stock Plan is necessary.
The Board is, therefore, requesting approval by the Stockholders of an
amendment to the Employee Stock Plan providing for an increase by 1,500,000
shares of Common Stock in the maximum number of shares that may be issued
pursuant to award grants made under the terms of the Employee Stock Plan,
raising the total number of shares of Common Stock reserved for issuance
thereunder to 7,566,667 shares. Since the inception of the Employee Stock Plan
through July 28, 1997, 583,786 stock options have been exercised and 137,500
shares of restricted stock have been granted. After the increase, 6,845,381
shares of Common Stock will be issued or available for issuance under the
Employee Stock Plan, constituting 32.4% of the total shares of Common Stock
outstanding on a fully diluted basis, assuming the granting of awards for all of
the Common Stock available for issuance under the Employee Stock Plan and the
issuance of such Common Stock upon the exercise thereof and assuming that all
options, rights and warrants for Common Stock currently outstanding are
exercised.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE
PROPOSED AMENDMENT TO THE EMPLOYEE STOCK PLAN
16
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations from certain
reporting persons that no other reports were required for such persons, the
Company believes that, during the fiscal year ended March 31, 1997, all filing
requirements pursuant to Section 16(a) of the Securities Exchange Act of 1934,
as amended, applicable to the Company's officers, Directors and greater than 10%
beneficial owners were complied with, except that Mr. Brown failed to file Form
3 on a timely basis and Mr. Marks and Mr. Plaga each failed to file one Form 4
on a timely basis with respect to one transaction.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick, LLP were the Company's independent public accountants for
the fiscal year ended March 31, 1997. Coopers & Lybrand, LLP were the Company's
independent public accountants for the fiscal year ended March 31, 1996 and for
more than five years prior to fiscal 1996. Representatives of KPMG Peat Marwick,
LLP are expected to be present at the Annual Meeting with the opportunity to
make a statement if they desire to do so, and they are expected to be available
to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the Annual Meeting of
Stockholders to be held in 1998 must be received by the Company at its principal
executive offices no later than April 20, 1998 for inclusion in the Company's
proxy statement and form of proxy relating to that meeting.
FINANCIAL AND OTHER INFORMATION
The Company's Annual Report for the fiscal year ended March 31, 1997,
including financial statements, accompanies this Proxy Statement. The Annual
Report is not a part of the proxy solicitation materials.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. Brokers and
nominees should forward soliciting materials to the beneficial owners of the
Common Stock held of record by such persons, and the Company will reimburse them
for their reasonable forwarding expenses. In addition to the use of the mail,
proxies may be solicited by Directors, officers and regular employees of the
Company, who will not be specially compensated for such services, by means of
personal calls upon, or telephonic or telegraphic communications with
Stockholders or their personal representatives.
OTHER MATTERS
The Board knows of no matters other than those described in this Proxy
Statement which are likely to come before the Annual Meeting. If any other
matters properly come before the Annual Meeting, the persons named in the
accompanying Proxy Card intend to vote the proxies received by them in
accordance with their best judgment with respect to all such matters.
STOCKHOLDERS ARE URGED TO FORWARD THEIR PROXY CARDS WITHOUT DELAY. A PROMPT
RESPONSE WILL BE GREATLY APPRECIATED.
By Order of the Board of Directors,
Brian G. Kelly
SECRETARY
17
<PAGE>
ACTIVISION, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned stockholder of Activision, Inc., a Delaware corporation (the
"Company"), hereby appoints Robert A. Kotick and Brian G. Kelly and each of
them, as proxy for the undersigned, with full power of substitution, to vote and
otherwise represent all the shares of common stock of the Company that the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held on Wednesday, September 24, 1997 at the Loews Santa Monica
Beach Hotel, 1700 Ocean Avenue, Santa Monica, California 90401, and at any
adjournment(s) or postponement(s) thereof, with the same effect as if the
undersigned were present and voting such shares, on the matters and in the
manner set forth below and as further described in the accompanying Proxy
Statement. The undersigned hereby revokes any proxy previously given with
respect to such shares.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and the accompanying Proxy Statement and Annual Report.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE. IF THIS PROXY IS EXECUTED BUT NO SPECIFICATION IS MADE, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES AND THE
PROPOSALS AND IN THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S)
THEREOF.
1. The election of the following persons as Directors of the Company to serve
for the respective terms as set forth in the accompanying Proxy Statement.
<TABLE>
<S> <C>
HAROLD A. BROWN / / FOR such nominee / / WITHHELD as to such nominee
BARBARA S. ISGUR / / FOR such nominee / / WITHHELD as to such nominee
BRIAN G. KELLY / / FOR such nominee / / WITHHELD as to such nominee
ROBERT A. KOTICK / / FOR such nominee / / WITHHELD as to such nominee
STEVEN T. MAYER / / FOR such nominee / / WITHHELD as to such nominee
ROBERT J. MORGADO / / FOR such nominee / / WITHHELD as to such nominee
</TABLE>
<PAGE>
<TABLE>
<S> <C>
2. The adoption of an amendment to the Company's 1991 Stock Option and / / FOR / / AGAINST / / ABSTAIN
Stock Award Plan to increase the number of shares of the Company's
Common Stock reserved for issuance thereunder.
3. To vote and otherwise represent the shares on any other matters which
may properly come before the meeting or any adjournment(s) or
postponement(s) thereof, in their discretion.
</TABLE>
/ / MARK HERE IF YOU PLAN TO ATTEND
THE MEETING
Please sign exactly as name appears
hereon and date. If the shares are
held jointly, each holder should
sign. When signing as an attorney,
executor, administrator, trustee,
guardian or as an officer signing for
a corporation, please give full title
under signature.
Dated ________________________ , 1997
_____________________________________
Signature
_____________________________________
Signature, if held jointly
Votes must be indicated by filling in
(x) in black or blue ink.
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
