AGREEMENT AND PLAN OF MERGER
AMONG
ACTIVISION, INC.,
ACTIVISION HOLDINGS, INC.
AND
ATVI MERGER SUB, INC.
DATED AS OF JUNE 9, 2000
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), entered into as of June
__, 2000, by and among Activision, Inc., a Delaware corporation (the
"Company"), Activision Holdings, Inc., a Delaware corporation ("Holdings")
and a direct, wholly owned subsidiary of the Company, and ATVI Merger Sub,
Inc., a Delaware corporation ("Merger Sub") and a direct, wholly owned
subsidiary of Holdings.
PRELIMINARY STATEMENTS
1. As of the date hereof, the Company's authorized capital stock
consists of fifty-five million (55,000,000) shares, of which (i) fifty
million (50,000,000) shares are designated common stock, par value $.000001
per share (the "Company Common Stock"), (ii) four million five hundred
thousand (4,500,000) shares are designated preferred stock, par value
$.000001 per share (the "Company Preferred Stock") and (iii) five hundred
thousand (500,000) shares are designated Series A Junior Preferred Stock, par
value $.000001 per share (the "Company Series A Preferred Stock"). As of May
18, 2000, 25,905,761 shares of Company Common Stock were issued and
outstanding and 576,734 shares were held in the Company's treasury, and no
shares of Company Preferred Stock or Company Series A Preferred Stock were
issued and outstanding.
2. As of the date hereof, Holdings' authorized capital stock consists
of fifty-five million (55,000,000) shares, of which (i) fifty million
(50,000,000) shares are designated common stock, par value $.000001 per share
(the "Holdings Common Stock"), (ii) four million five hundred thousand
(4,500,000) shares are designated preferred stock, par value $.000001 per
share (the "Holdings Preferred Stock") and (iii) five hundred thousand
(500,000) shares are designated Series A Junior Preferred Stock, par value
$.000001 per share (the "Holdings Series A Preferred Stock"). As of the date
hereof, one hundred (100) shares of Holdings Common Stock were issued and
outstanding and owned by the Company and no shares were held in Holdings'
treasury and no shares of Holdings Preferred Stock or Holdings Series A
Preferred Stock were issued and outstanding.
3. As of the date hereof, Merger Sub's authorized capital stock
consists of two hundred (200) shares of common stock, par value $.01 per
share (the "Merger Sub Common Stock"), of which one hundred (100) shares are
issued and outstanding on the date hereof and owned by Holdings.
4. The designations, rights and preferences, and the qualifications,
limitations and restrictions of the Holdings Common Stock are the same as
those of the Company Common Stock.
5. The Amended and Restated Certificate of Incorporation of Holdings
(the "Holdings Charter") and the By-laws of Holdings (the "Holdings By-laws")
in effect immediately after the Effective Date (as hereinafter defined) will
contain provisions identical to the Amended and Restated Certificate of
Incorporation of the Company, as amended from time to time (the "Company
Charter"), and By-laws of the Company (the "Company By-laws") in effect
immediately before the Effective Date (other than as required by Section
251(g) of the General Corporation Law of the State of Delaware (the "DGCL")).
6. The directors and executive officers of the Company immediately
prior to the Merger (as hereinafter defined) will be the directors and
executive officers of Holdings as of the Effective Date.
7. Holdings and Merger Sub are newly formed corporations organized for
the purpose of participating in the transactions herein contemplated.
8. The Company desires to create a new holding company structure by
merging Merger Sub with and into the Company, with (a) the Company continuing
as the surviving corporation of such merger and (b) each outstanding share
(or any fraction thereof) of Company Common Stock being converted in such
merger into a like number of shares of Holdings Common Stock, all in
accordance with the terms of this Agreement (the "Merger").
9. The boards of directors of Holdings, Merger Sub and the Company,
the Company, in its capacity as the sole stockholder of Holdings, and
Holdings, in its capacity as the sole stockholder of Merger Sub, have
approved this Agreement and the Merger upon the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained in this Agreement, and intending to be legally bound
hereby, the Company, Holdings and Merger Sub hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. In accordance with Section 251(g) of the DGCL and
subject to, and upon the terms and conditions of, this Agreement, Merger Sub
shall, at the Effective Date, be merged with and into the Company, the
separate corporate existence of Merger Sub shall cease, and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation"). At the Effective Date, the effects of the Merger shall be as
provided in Section 259 of the DGCL.
1.2 Effective Date. If all the conditions to the Merger set forth in
Article III shall have been fulfilled or waived in accordance herewith, the
parties hereto shall cause a Certificate of Merger satisfying the
requirements of the DGCL to be properly executed, verified and delivered for
filing in accordance with the DGCL on the date hereof. The Merger shall
become effective upon the acceptance for record of the Certificate of Merger
by the Secretary of State of the State of Delaware in accordance with the
DGCL or at such later time which the parties hereto shall have agreed upon
and designated in the Certificate of Merger in accordance with applicable law
as the effective time of the Merger (the "Effective Date").
1.3 Certificate of Incorporation. From and after the Effective Date,
the Company Charter, as in effect immediately prior to the Effective Date,
shall be the certificate of incorporation of the Surviving Corporation (the
"Surviving Corporation Charter") until thereafter duly amended as provided
therein or by the DGCL, except as follows:
(a) Article FIRST thereof shall be amended so as to read in its
entirety as follows:
"The name of the Corporation is Activision Publishing,
Inc."
(b) Article FOURTH thereof shall be amended so as to read in its
entirety as follows:
"The total number of shares of all classes of capital
stock which the Corporation shall have authority to issue
is 200 shares of common stock, par value $.01 per share.
The Common Stock is sometimes hereinafter referred to as
the 'Capital Stock'."
A new Article TENTH shall be added thereto which shall be and
read in its entirety as follows:
"10.Vote of Stockholders of Activision Holdings, Inc.
Required to Approve Certain Actions.
Any act or transaction by or involving the Corporation
that requires for its adoption under the General
Corporation Law of the State of Delaware or this Amended
and Restated Certificate of Incorporation the approval of
the stockholders of the Corporation shall, pursuant to
Section 251(g) of the General Corporation Law of the
State of Delaware, require, in addition, the approval of
the stockholders of Activision Holdings, Inc., a Delaware
corporation, or any successor thereto by merger, by the
same vote that is required by the General Corporation Law
of the State of Delaware or this Amended and Restated
Certificate of Incorporation, as the case may be."
1.4 By-Laws. From and after the Effective Date, the Company By-laws,
as in effect immediately prior to the Effective Date, shall constitute the
By-laws of the Surviving Corporation (the "Surviving Corporation By-laws")
until thereafter duly amended as provided therein or by applicable law.
1.5 Directors. The directors of the Company in office immediately
prior to the Effective Date shall automatically become the directors of the
Surviving Corporation as of the Effective Date and will continue to hold
office from the Effective Date until their successors are duly elected or
appointed and qualified in the manner provided in the Surviving Corporation
Charter and Surviving Corporation By-laws, or as otherwise provided by law.
1.6 Officers. The officers of the Company in office immediately prior
to the Effective Date shall automatically become the officers of the
Surviving Corporation as of the Effective Date and will continue to hold
office from the Effective Date until the earlier of their resignation or
removal or until their successors are duly elected or appointed and qualified
in the manner provided in the Surviving Corporation Charter and Surviving
Corporation By-laws, or as otherwise provided by law.
ARTICLE II
CONVERSION OF SECURITIES.
2.1 Conversion of Company Common Stock and Company Rights. At the
Effective Date, by virtue of the Merger and without any action on the part of
Holdings, Merger Sub, the Company or the holder thereof, (i) each share of
Company Common Stock (or fraction of a share of Company Common Stock) issued
and outstanding immediately prior to the Effective Date (including treasury
shares) shall be converted into and thereafter represent one duly issued,
fully paid and nonassessable share (or equal fraction of a share) of Holdings
Common Stock and (ii) each right to purchase one one-hundredth of a share of
Company Series A Preferred Stock (each, a "Company Right") associated with
each share of Company Common Stock (or fraction of a Company Right) issued
and outstanding immediately prior to the Effective Date shall be converted
into and thereafter represent one right to purchase one one-hundredth of a
share of Holdings Series A Preferred Stock (each, a "Holdings Right") (or
equal fraction of a Holdings Right) on the same terms and conditions as the
Company Rights, and Holdings shall for all purposes be deemed to be a
successor to the Company under the Rights Agreement (as hereinafter defined).
2.2 Conversion of Merger Sub Common Stock. At the Effective Date each
share of Merger Sub Common Stock issued and outstanding immediately prior to
the Effective Date shall be converted into and thereafter represent one duly
issued, fully paid and nonassessable share of common stock, par value $.01
per share, of the Surviving Corporation.
2.3 Cancellation of Holdings Common Stock. At the Effective Date, each
share of Holdings Common Stock that is owned by the Company immediately prior
to the Merger shall automatically be canceled and retired and shall cease to
exist.
2.4 Rights of Certificate Holders. From and after the Effective Date,
holders of certificates formerly evidencing shares of Company Common Stock
and Company Rights shall cease to have any rights as stockholders of the
Company, except as provided by law; except, however, that such holders shall
have the rights set forth in Section 2.5 below.
2.5 No Surrender of Certificates. Until thereafter surrendered for
transfer or exchange, each outstanding stock certificate that, immediately
prior to the Effective Date, evidenced Company Common Stock and the
associated Company Right shall be deemed and treated for all corporate
purposes to evidence the ownership of the number of shares of Holdings Common
Stock and Holdings Rights into which such shares of Company Common Stock and
Company Rights were converted pursuant to the provisions of Section 2.1
above.
2.6 Conversion of Company Stock Options and Warrants.
(a) At the Effective Date, each option and warrant, whether or not
exercisable, to purchase shares of Company Common Stock which is then
outstanding and unexercised (a "Company Option" or a "Company Warrant," as
the case may be) shall cease to represent a right to acquire shares of
Company Common Stock and shall be converted automatically into an option or
warrant to acquire, under the same terms and conditions as were applicable to
such Company Option or Company Warrant immediately prior to the Effective
Date, shares of Holdings Common Stock, and Holdings shall assume each Company
Option and Company Warrant and each option and warrant plan or agreement
pursuant to which such Company Option and Company Warrant was granted, as the
case may be. The number of shares of Holdings Common Stock purchasable upon
exercise of such Company Option or Company Warrant shall be equal to the
number of shares of Company Common Stock that were purchasable under such
Company Option or Company Warrant immediately prior to the Effective Date.
The terms of each Company Option and Company Warrant shall, in accordance
with its terms, be subject to adjustment as appropriate to reflect any stock
split, stock dividend, recapitalization or other similar transaction with
respect to Holdings Common Stock on or subsequent to the Effective Date.
Notwithstanding the foregoing, the number of shares and the per share
exercise price of each Company Option which is intended to be an "incentive
stock option" (as defined in Section 422 of the Internal Revenue Code (the
"Code")) shall be adjusted in accordance with the requirements of Section 424
of the Code. Accordingly, with respect to any incentive stock options,
fractional shares shall be rounded down to the nearest whole number of shares
and where necessary the per share exercise price shall be rounded up to the
nearest cent.
(b) At or prior to the Effective Date, Holdings shall reserve for
issuance the number of shares of Holdings Common Stock necessary to satisfy
Holdings' obligations under Section 2.6(a).
2.7 Conversion of Company Notes.
(a) At the Effective Date, each 6 3/4% Convertible Subordinated
Note due 2005 of the Company, convertible in whole or in part into shares of
Company Common Stock which is then issued and outstanding (a "Company Note")
shall cease to be convertible into shares of Company Common Stock and shall
be convertible, under the same terms and conditions as were applicable to
such Company Note immediately prior to the Effective Date, into shares of
Holdings Common Stock. The number of shares of Holdings Common Stock
issuable upon conversion of such Company Note shall be equal to the number of
shares of Company Common Stock that were issuable under the Company Note
immediately prior to the Effective Date.
(b) As soon as practicable after the Effective Date, Holdings
shall deliver to each holder of an outstanding Company Note an appropriate
notice setting forth such holder's rights pursuant thereto, and such Company
Note shall continue in effect on the same terms and conditions (including
antidilution provisions).
(c) At or prior to the Effective Date, Holdings shall reserve for
issuance the number of shares of Holdings Common Stock necessary to satisfy
Holdings' obligations under Section 2.7(a).
ARTICLE III
CONDITIONS OF MERGER
3.1 Conditions Precedent. The obligations of the parties to this
Agreement to consummate the Merger and the transactions contemplated hereby
shall be subject to fulfillment or waiver by the parties hereto of each of
the following conditions:
(a) Prior to the Effective Date, no order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or
restraining order shall have been enacted, entered, promulgated or enforced
by any court or governmental or regulatory authority or instrumentality which
prohibits or makes illegal the consummation of the Merger or the transactions
contemplated hereby.
(b) Prior to the Effective Date, the Company shall have received
the consent of PNC Bank, National Association, under that certain Credit
Agreement dated as of June 21, 1999, among the Company, Head Games
Publishing, Inc., Expert Software, Inc., the financial institutions signatory
thereto and PNC Bank, to consummate the Merger and create the holding company
structure contemplated hereby.
ARTICLE IV
COVENANTS
4.1 Election of Directors. The Company, in its capacity as the sole
stockholder of Holdings, shall elect each person who is then a member of the
board of directors of the Company as a director of Holdings (and to be the
only directors of Holdings), each of whom shall serve until the next annual
meeting of shareholders of Holdings and until his successor shall have been
elected and qualified or until such director's earlier resignation or
removal.
4.2 Intentionally Omitted.
4.3 Rights Plan and Stock Option Plans. The Company and Holdings shall
take or cause to be taken all actions necessary or desirable in order for
Holdings to assume the Rights Agreement, between the Company and Continental
Stock Transfer & Trust Company, as rights agent, dated as of April 18, 2000,
pursuant to which the Company Rights were issued (the "Rights Agreement"),
and each stock option and warrant plan or agreement pursuant to which the
Company Options and Company Warrants were granted, as the case may be.
4.4 Further Assurances. Subject to the terms of this Agreement, the
parties hereto shall take all such reasonable and lawful actions which may be
necessary or appropriate in order to effectuate the Merger, which shall
include executing and delivering an Assumption Agreement, effective upon the
Merger, in such form as the Company and Holdings determine to be appropriate
to evidence the Company's assignment to and Holdings' assumption of such
rights, interests, obligations and liabilities as the Company and Holdings
determine to be appropriate. If, at any time after the Effective Date, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of either of Merger Sub or the Company acquired
or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of each of Merger Sub and the
Company, all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of each of Merger Sub and the Company
or otherwise, all such other actions and things as may be necessary or
desirable to vest, perfect or confirm any and all right, title and interest
in, to and under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out this Agreement.
ARTICLE V
TERMINATION AND AMENDMENT
5.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Date
by action of the board of directors of the Company, Holdings or Merger Sub if
it is determined that for any reason the completion of the transactions
provided for herein would be inadvisable or not in the best interest of such
corporation or its stockholders. In the event of such termination and
abandonment, this Agreement shall become void and neither the Company,
Holdings or Merger Sub nor their respective stockholders, directors or
officers shall have any liability or rights with respect to such termination
and abandonment.
5.2 Amendments. This Agreement may be supplemented, amended or
modified by the mutual consent of the boards of directors of the parties to
this Agreement; provided, however, that, any amendment effected subsequent to
stockholder approval shall be subject to the restrictions contained in the
DGCL. No amendment of any provision of this Agreement shall be valid unless
the same shall be in writing and signed by all of the parties hereto.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws.
6.2 Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original
but all of which shall constitute one and the same agreement.
6.3 Entire Agreement. This Agreement, including the documents and
instruments referred to herein, constitutes the entire agreement and
supersedes all other prior agreements, arrangements and understandings, both
written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
<PAGE>
IN WITNESS WHEREOF, Holdings, Merger Sub and the Company have caused
this Agreement to be executed as of the date first written above by the
respective officers thereunto duly authorized.
ACTIVISION, INC.
By:/s/ Brian G. Kelly
_______________________________________
Name: Brian G. Kelly
Title:Co-Chairman
ACTIVISION HOLDINGS, INC.
By:/s/ Brian G. Kelly
_______________________________________
Name: Brian G. Kelly
Title:President
ATVI MERGER SUB, INC.
By:/s/ Brian G. Kelly
_______________________________________
Name: Brian G. Kelly
Title:President
