<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 29, 1997
Commission file number 0-27168
METACREATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-4102687
(State of Incorporation) (I.R.S. Employer Identification Number)
6303 Carpinteria Ave., Carpinteria CA 93013
(Address of principal executive offices)
(805) 566-6200
(Registrant's telephone number, including area code)
<PAGE>
Item 2. Acquisition or Disposition of Assets
------------------------------------
MetaTools, Inc., a Delaware corporation ("MetaTools"), and Fractal Design
Corporation, a California corporation ("Fractal"), entered into an Agreement and
Plan of Reorganization, dated as of February 11, 1997 (the "Reorganization
Agreement"), among MetaTools, Fractal and Rook Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of MetaTools ("Merger Sub"). Pursuant
to the Reorganization Agreement, Merger Sub merged with and into Fractal,
Fractal became a wholly-owned subsidiary of MetaTools, the name of MetaTools was
changed to "MetaCreations Corporation" (the "Combined Company"), and each
outstanding share of Common Stock of Fractal, $0.001 par value ("Fractal Common
Stock"), was converted into 0.749 shares of the Common Stock of the Combined
Company, $0.001 par value (the "Exchange Ratio") (collectively, the "Merger").
Pursuant to the Reorganization Agreement, each outstanding option to purchase
Fractal Common Stock under Fractal's stock option plans was assumed by MetaTools
and became an option or right to purchase Combined Company Common Stock, with
appropriate adjustments made to the number of shares issuable thereunder and the
exercise price thereof, based on the Exchange Ratio. No fraction of a share of
Common Stock of the Combined Company was issued. In lieu thereof, each holder
of shares of Fractal Common Stock who was entitled to receive a fraction of a
share of Common Stock of the Combined Company (after aggregating all fractional
shares) received a cash amount equal to such fraction multiplied by the average
closing price of Common Stock of MetaTools, $0.001 par value, for the most
recent trading days prior to the Effective Time. The Merger was effected on May
29, 1997 (the "Effective Time"), pursuant to an Agreement and Plan of Merger
filed with the Secretaries of State of Delaware and California. A total of
approximately 9,055,000 shares of Combined Company Common Stock were issued in
connection with the Merger.
The Merger is intended to be a tax-free reorganization under Section 368(a)
of the Internal Revenue Code of 1986, as amended, and is intended to be treated
as a pooling of interests for financial reporting purposes in accordance with
generally accepted accounting principles. The assets of Fractal were used,
prior to the Effective Time of the Merger, for the development, marketing and
support of software tools for the creation, editing and manipulation of computer
graphics images and digital art, a use which the Registrant intends to continue
immediately following the Merger.
Item 7. Pro Forma Financial Information
-------------------------------
The following financial statements and exhibits are filed as part of this
report, where indicated.
(a) Financial statements of business acquired, prepared pursuant to Rule
3.05 of Regulation S-X:
It is impracticable for the Registrant to provide audited financial
statements of Fractal at this time. Such audited financial statements
will be filed as soon as practicable, but not later than August 12,
1997.
-2-
<PAGE>
(b) Pro forma financial information required pursuant to Article 11 of
Regulation S-X:
It is impracticable for the Registrant to provide the level of pro
forma financial information pursuant to Article 11 of Regulation S-X
assuming a business combination between the Registrant and Fractal at
this time. The required pro forma financial information will be filed
as soon as practicable, but not later than August 12, 1997; however,
selected pro forma financial information has been provided below.
The following table sets forth the unaudited pro forma consolidated
statements of operations of the Combined Company for the years ended
December 31, 1995 and 1996, which has been derived from the audited
historical consolidated statements of operations of MetaTools for the
fiscal years ended December 31, 1995 and 1996, the audited historical
consolidated statement of operations of Fractal for the fiscal year
ended March 31, 1996 and the unaudited historical consolidated
statement of operations of Fractal for the fiscal year ended March 31,
1997. The unaudited pro forma consolidated statements of operations of
the Combined Company should be read in conjunction with the audited
historical consolidated financial statements and notes thereto of
MetaTools and Fractal, respectively.
<TABLE>
<CAPTION>
(UNAUDITED)
---------------------
YEAR ENDED
DECEMBER 31,
---------------------
1995 1996
------- -------
<S> <C> <C>
Net revenues............................. $46,260 $62,936
Cost of revenues......................... 10,081 11,677
------- -------
Gross profit............................ 36,179 51,259
Operating expenses:
Sales and marketing..................... 22,331 28,936
General and administrative.............. 4,590 5,883
Research and development................ 5,639 8,224
Write-off of acquired in-process
technology and other acquisition costs. -- 17,047
------- -------
Total operating expenses.............. 32,560 60,090
------- -------
Income (loss) from operations............ 3,619 (8,831)
Other income............................. 634 3,397
------- -------
Income (loss) before provision for
income taxes............................ 4,253 (5,434)
Provision for income taxes............... 1,827 2,216
------- -------
Net income (loss)........................ $ 2,426 $(7,650)
======= =======
Amortization of costs related to the
issuance of mandatory redeemable
Series B convertible preferred stock
and preferred stock dividend
requirement............................. (89) --
------- -------
Net income (loss) applicable to common
stockholders............................ $ 2,337 $(7,650)
======= =======
Net income (loss) per common share....... $ .15 $ (.37)
======= =======
Weighted average number of shares
outstanding............................. 15,267 20,590
======= =======
</TABLE>
-3-
<PAGE>
The following table sets forth the unaudited pro forma consolidated
statements of operations of the Combined Company for each of the nine
quarters in the period ended March 31, 1997. The unaudited pro forma
consolidated statements of operations of the Combined Company for the
eight quarters in the period ended December 31, 1996 have been derived
from the unaudited historical consolidated statements of operations of
MetaTools for the eight quarters in the period ended December 31, 1996
and the unaudited historical consolidated statements of operations of
Fractal for the eight quarters in the period ended March 31, 1997. The
unaudited pro forma consolidated statement of operations of the
Combined Company for the quarter ended March 31, 1997 has been derived
from the unaudited statement of operations of both MetaTools and
Fractal for the quarter ended March 31, 1997. This unaudited pro
forma quarterly information has been prepared on the same basis as
the annual information presented above and, in management's opinion,
reflects all adjustments (consisting only of normal recurring
entries) necessary for a fair presentation of the information for
the quarters presented when read in conjunction with the audited and
unaudited historical consolidated financial statements and notes
thereto of MetaTools and Fractal, respectively. The operating
results for any quarter are not necessarily indicative of results
for any future period.
<TABLE>
<CAPTION>
(UNAUDITED)
--------------------------------------------------------------------------------------------------
THREE MONTHS ENDED
-------------------------------------------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31,
1995 1995 1995 1995 1996 1996 1996 1996 1997
------- -------- --------- --------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues...................... $9,464 $10,298 $12,255 $14,243 $13,983 $14,854 $18,175 $ 15,924 $13,252
Cost of revenues.................. 2,323 2,490 2,467 2,801 2,693 2,718 3,284 2,982 2,668
------- ------- ------- ------- ------- ------- ------- -------- -------
Gross profit..................... 7,141 7,808 9,788 11,442 11,290 12,136 14,891 12,942 10,584
Operating expenses:
Sales and marketing.............. 4,670 5,473 5,761 6,427 6,342 7,003 7,879 7,712 7,331
General and administrative....... 977 1,090 1,064 1,459 1,286 1,394 1,424 1,779 1,632
Research and development......... 1,016 1,334 1,575 1,714 1,834 2,071 2,100 2,219 3,059
Write-off of acquired
in-process technology and
other acquisition costs......... -- -- -- -- 1,865 -- 733 14,449 --
------- ------- ------- ------- ------- ------- ------- -------- -------
Total operating expenses....... 6,663 7,897 8,400 9,600 11,327 10,468 12,136 26,159 12,022
------- ------- ------- ------- ------- ------- ------- -------- -------
Income (loss) from operations..... 478 (89) 1,388 1,842 (37) 1,668 2,775 (13,217) (1,438)
Other income...................... 65 57 150 362 888 859 811 839 811
------- ------- ------- ------- ------- ------- ------- -------- -------
Income (loss) before provision
(benefit) for income taxes....... 543 (32) 1,538 2,204 851 2,527 3,566 (12,378) (627)
Provision (benefit) for
income taxes..................... 394 179 681 573 576 767 781 92 (195)
------- ------- ------- ------- ------- ------- ------- -------- -------
Net income (loss)................. $ 149 $ (211) $ 857 $ 1,631 $ 275 $ 1,760 $ 2,785 $(12,470) $ (432)
======= ======= ======= ======= ======= ======= ======= ======== =======
Amortization of costs
related to the issuance of
mandatory redeemable
Series B convertible
preferred stock and
preferred stock dividend
requirement...................... (72) (72) (72) 127 -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------- -------
Net income (loss) applicable
to common stockholders.......... $ 77 $ (283) $ 785 $ 1,758 $ 275 $ 1,760 $ 2,785 $(12,470) $ (432)
======= ======= ======= ======= ======= ======= ======= ======== =======
Net income (loss) per
common share..................... $ .01 $ (.02) $ .05 $ .09 $ .01 $ .08 $ .12 $ (.60) $ (.02)
======= ======= ======= ======= ======= ======= ======= ======== =======
Weighted average number of
shares outstanding............... 13,499 11,580 15,788 20,623 22,898 22,793 22,727 20,895 22,261
======= ======= ======= ======= ======= ======= ======= ======== =======
</TABLE>
-4-
<PAGE>
(c) Exhibits in accordance with Item 601 of Regulation S-K:
Exhibits
--------
2.1 Agreement and Plan of Reorganization, dated as of February 11,
1997, among MetaTools Inc., a Delaware corporation, Fractal
Design Corporation, a Delaware corporation, and Rook Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of
MetaTools.
Incorporated by reference to the Registrant's Registration
Statement on Form S-4 (File No. 333-25939) filed with the
Securities and Exchange Commission on April 28, 1997.
2.2 Agreement and Plan of Merger among Fractal Design Corporation, a
California corporation, and Rook Acquisition Corp., a Delaware
corporation, dated as of May 29, 1997.
2.3 Certificate of Amendment of Restated Certificate of Incorporation
of MetaTools, Inc.
2.4 Specimen Common Stock Certificate of Registrant.
-5-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
METACREATIONS CORPORATION
(Registrant)
Date: June 11, 1997 /s/ TERANCE A. KINNINGER
------------------------------------------
Terance A. Kinninger
Vice President and Chief Financial Officer
-6-
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Title
- ------ -------------
2.1 Agreement and Plan of Reorganization, dated as of February 11, 1997,
by and among MetaTools, Inc., a Delaware corporation, Fractal Design
Corporation, a California corporation, and Rook Acquisition Corp., a
Delaware corporation and a wholly-owned subsidiary of MetaTools.
Incorporated by reference to the Registrant's Registration Statement
on Form S-4 (File No. 333-25939) filed with the Securities and
Exchange Commission on April 28, 1997.
2.2 Agreement and Plan of Merger among Fractal Design Corporation, a
California corporation, and Rook Acquisition Corp., a Delaware
corporation, dated as of May 29, 1997.
2.3 Certificate of Amendment of Restated Certificate of Incorporation of
MetaTools, Inc.
2.4 Specimen Common Stock Certificate of Registrant.
<PAGE>
EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, is made and entered into as of May 29,
1997 ("Merger Agreement"), among Fractal Design Corporation, a California
----------------
corporation ("Fractal" or the "Surviving Corporation"), and Rook Acquisition
------- ---------------------
Corp., a Delaware corporation ("Sub"; Fractal and Sub are sometimes jointly
---
referred to herein as the "Constituent Corporations").
------------------------
INTENDING TO BE LEGALLY BOUND, and in consideration of the promises and
material covenants and agreements contained herein, the Constituent Corporations
hereby agree as follows:
ARTICLE I
The Merger
----------
1.1 Merger of Sub With and Into Fractal.
-----------------------------------
(a) Agreement to Acquire Fractal. Subject to the terms of this Merger
----------------------------
Agreement and in accordance with the Agreement and Plan of Reorganization dated
as of February 11, 1997 (the "Reorganization Agreement") among Fractal, Sub and
------------------------
MetaTools, Inc. ("MetaTools"), Fractal shall be acquired by MetaTools through a
---------
merger (the "Merger") of Sub into Fractal. As used herein, the term "MetaTools
------ ---------
Common Stock" shall mean the Common Stock, par value $0.001 per share, of
- ------------
MetaTools, and the term "Closing" shall mean the closing of the Merger pursuant
-------
to the Reorganization Agreement.
(b) Effective Time of the Merger. The Merger shall become effective
----------------------------
at such time (the "Effective Time of the Merger") as this Merger Agreement and
----------------------------
officers' certificates of each Constituent Corporation are filed with the
Secretary of State of the State of California pursuant to Section 1103 of the
California General Corporation Law.
(c) Surviving Corporation. At the Effective Time of the Merger, Sub
---------------------
shall be merged into Fractal and the separate corporate existence of Sub shall
cease. Fractal shall be the surviving corporation in the Merger, and the
separate corporate existence of Fractal, with all its purposes, objects,
rights, privileges, powers, immunities and franchises, shall continue unaffected
and unimpaired by the Merger.
1.2 Effect of the Merger; Additional Actions.
----------------------------------------
(a) Effects. The Merger shall have the effects set forth in Section
-------
1107 of the California General Corporation Law.
(b) Additional Actions. If, at any time after the Effective Time of
------------------
the Merger, the Surviving Corporation shall consider or be advised that any
further action is necessary or desirable to carry out the purposes of the
Reorganization Agreement and to vest the Surviving Corporation with
<PAGE>
full right, title and possession to the assets, property, rights, privileges,
powers and franchises of Fractal and Sub, the officers and directors of Fractal
and Sub are fully authorized in the name of their respective corporations or
otherwise to take, and will take, all such lawful and necessary action.
ARTICLE II
The Constituent Corporations
----------------------------
2.1 Organization of Fractal.
-----------------------
(a) Incorporation. Fractal was incorporated under the laws of the
-------------
State of California on April 10, 1991.
(b) Authorized Stock. Fractal is authorized to issue an aggregate of
----------------
fifty-five million (55,000,000) shares of Common Stock ("Fractal Common Stock")
--------------------
and five million (5,000,000) shares of Preferred Stock ("Fractal Preferred
-----------------
Stock").
(c) Outstanding Stock. As of the record date for purposes of voting
-----------------
on the Merger, April 11, 1997, 12,034,126 shares of Fractal Common Stock were
outstanding, and no shares of Fractal Preferred Stock were outstanding.
2.2 Organization of Sub.
-------------------
(a) Incorporation. Sub was incorporated under the laws of the State
-------------
of Delaware on December 12, 1996.
(b) Authorized Stock. Sub is authorized to issue an aggregate of 100
----------------
shares of Common Stock, par value $0.001 ("Subsidiary Stock").
----------------
(c) Outstanding Stock. On the date hereof, an aggregate of 100 shares
-----------------
of Subsidiary Stock are outstanding.
ARTICLE III
Articles of Incorporation of the Surviving Corporation
------------------------------------------------------
3.1 Amendment of Fractal's Articles of Incorporation. At the Effective
------------------------------------------------
Time of the Merger, the Articles of Incorporation of the Surviving Corporation
shall be amended and restated in their entirety to read as set forth in Exhibit
A hereto.
-2-
<PAGE>
ARTICLE IV
Effect of the Merger on the Capital Stock of the
------------------------------------------------
Constituent Corporations; Exchange of Certificates
--------------------------------------------------
4.1 Effect on Capital Stock. As of the Effective Time of the Merger, by
-----------------------
virtue of the Merger and without any action on the part of the holder of any
shares of Fractal Common Stock:
(a) Capital Stock of Sub. Each issued and outstanding share of
--------------------
capital stock of Sub shall be converted into one share of Common Stock of the
Surviving Corporation. Each stock certificate of Sub evidencing ownership of
any such shares shall continue to evidence ownership of such shares of capital
stock of the Surviving Corporation.
(b) Cancellation of MetaTools-Owned and Fractal-Owned Stock. Each
-------------------------------------------------------
share of Fractal Common Stock that is owned directly or indirectly by Sub,
MetaTools or Fractal or by any wholly-owned subsidiary of MetaTools or Fractal
shall be canceled and extinguished without any conversion thereof.
(c) Conversion of Fractal Common Stock. Each issued and outstanding
----------------------------------
share of Fractal Common Stock immediately prior to the Effective Time (other
than shares to be canceled pursuant to Section 4.1(b) hereof and shares, if any,
held by persons exercising dissenters' rights in accordance with Chapter 13 of
the California General Corporation Law ("Dissenting Shares")) shall be canceled,
-----------------
extinguished and be converted automatically into the right to receive 0.749
shares of MetaTools Common Stock upon the surrender of the certificate
representing each such share of Fractal Common Stock.
(d) Stock Options. At the Effective Time, all options to purchase
-------------
Fractal Common Stock then outstanding shall be assumed by MetaTools in
accordance with provisions described below:
(i) At the Effective Time, each outstanding option to purchase
shares of Fractal Common Stock (each, a "Fractal Option") granted under
--------------
Fractal's 1993 Stock Option Plan, 1995 Stock Option Plan, 1995 Directors' Stock
Option Plan and 1992 Assumed Ray Dream, Inc. Stock Option Plan (collectively the
"Fractal Stock Option Plans"), whether vested or unvested, shall be, in
--------------------------
connection with the Merger, assumed by MetaTools. Each Fractal Option so assumed
by MetaTools shall continue to have, and be subject to, the same terms and
conditions set forth in the applicable Fractal Stock Option Plan and option
agreement governing such Fractal Option immediately prior to the Effective Time,
except that (A) such Fractal Option shall be exercisable (or will become
exercisable in accordance with it terms) for that number of whole shares of
MetaTools Common Stock equal to the product of the number of shares of Fractal
Common Stock that were issuable upon exercise of such Fractal Option immediately
prior to the Effective Time multiplied by 0.749, rounded down to the nearest
whole number of shares of MetaTools Common Stock, and (B) the per share exercise
price for the shares of MetaTools Common Stock issuable upon exercise of such
assumed Fractal Option shall be equal to the quotient determined by dividing the
exercise price
-3-
<PAGE>
per share of Fractal Common Stock at which such Fractal Option was exercisable
immediately prior to the Effective Time by 0.749, rounded up to the nearest
whole cent.
(ii) Promptly following the Effective Time, MetaTools will issue
to each holder of an outstanding Fractal Option a document evidencing the
foregoing assumption of such Fractal Option by MetaTools.
(e) Dissenters' Rights. If holders of Fractal Common Stock are
------------------
entitled to dissenters' rights in connection with the Merger under Chapter 13 of
the California General Corporation Law, any Dissenting Shares shall not be
converted into MetaTools Common Stock but shall be converted into the right to
receive such consideration as may be determined to be due with respect to such
Dissenting Shares pursuant to Chapter 13 of the California General Corporation
Law.
(f) Fractional Shares. No fractional shares of MetaTools Common Stock
-----------------
shall be issued, but in lieu thereof, each holder of shares of Fractal Common
Stock who would otherwise be entitled to a fraction of a share of MetaTools
Common Stock (after aggregating all fractional shares of MetaTools Common Stock
to be received by such holder) shall be entitled to receive from MetaTools an
amount of cash (rounded to the nearest whole cent) equal to the product of (i)
such fraction, multiplied by (ii) the average closing price of one share of
MetaTools Common Stock for the ten (10) most recent days that MetaTools Common
Stock has traded ending on the trading day immediately prior to the Effective,
as reported on the Nasdaq National Market.
4.2 Exchange of Certificates.
------------------------
(a) Exchange Agent. Prior to the Closing Date, MetaTools shall
--------------
designate a bank or trust company with assets of not less than $500 million to
act as exchange agent (the "Exchange Agent") in the Merger.
--------------
(b) MetaTools to Provide Common Stock. Promptly after the Effective
---------------------------------
Time, MetaTools shall make available to the Exchange Agent for exchange in
accordance with Section 4.1 herein, the aggregate number of shares of MetaTools
Common Stock issuable in exchange for outstanding shares of Fractal Common
Stock.
(c) Exchange Procedures. Promptly after the Effective Time, the
-------------------
Surviving Corporation shall cause to be mailed to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Fractal Common Stock (the "Certificates") and
------------
which shares were converted into the right to receive shares of MetaTools Common
Stock, (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and which shall be in such
form and have such other provisions as MetaTools may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of MetaTools Common Stock. Upon
surrender of a Certificate for cancellation to the Exchange Agent or to such
other agent or agents as may be appointed by MetaTools, together with such
letter of transmittal, duly completed and validly executed in
-4-
<PAGE>
accordance with the instructions thereto, the holder of such Certificate shall
be entitled to receive in exchange therefor a certificate representing the
number of whole shares of MetaTools Common Stock, plus cash in lieu of
fractional shares, to which such holder is entitled, and the Certificate so
surrendered shall forthwith be canceled. Until so surrendered, each outstanding
Certificate that, prior to the Effective Time, represented shares of Fractal
Common Stock will be deemed from and after the Effective Time, for all corporate
purposes, other than the payment of dividends, to evidence the ownership of the
number of full shares of MetaTools Common Stock into which such shares of
Fractal Common Stock shall have been so converted and the right to receive an
amount in cash in lieu of the issuance of any fractional shares.
(d) Distributions With Respect to Unexchanged Shares. No dividends or
------------------------------------------------
other distributions with respect to MetaTools Common Stock declared or made
after the Effective Time and with a record date after the Effective Time will be
paid to the holder of any unsurrendered Certificate with respect to the shares
of MetaTools Common Stock represented thereby until the holder of record of such
Certificate shall surrender such Certificate. Subject to applicable law,
following surrender of any such Certificate, there shall be paid to the record
holder of the certificates representing whole shares of MetaTools Common Stock
issued in exchange therefor, without interest, at the time of such surrender,
the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of MetaTools
Common Stock.
(e) Transfers of Ownership. If any certificate for shares of
----------------------
MetaTools Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such exchange will have paid to MetaTools or any agent designated by
it any transfer or other taxes required by reason of the issuance of a
certificate for shares of MetaTools Common Stock in any name other than that of
the registered holder of the Certificate surrendered, or will have established
to the satisfaction of MetaTools or any agent designated by it that such tax has
been paid or is not payable.
(f) No Further Ownership Rights in Fractal Common Stock. All shares
---------------------------------------------------
of MetaTools Common Stock issued upon the surrender for exchange of shares of
Fractal Common Stock in accordance with the terms of this Section 4.2 (including
any cash paid in respect thereof) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Fractal Common Stock,
and there shall be no further registration of transfers on the records of the
Surviving Corporation of shares of Fractal Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided herein.
(g) Lost, Stolen or Destroyed Certificates. In the event any
--------------------------------------
Certificates evidencing shares of Fractal Common Stock shall have been lost,
stolen or destroyed, the Exchange Agent shall issue in exchange for such lost,
stolen or destroyed Certificates, upon the making of an affidavit of that fact
by the holder thereof, such shares of MetaTools Common Stock and cash for
-5-
<PAGE>
fractional shares, if any; provided, however, that MetaTools may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificates to deliver a bond in such
sum as it may reasonably direct as indemnity against any claim that may be made
against MetaTools or the Exchange Agent with respect to the Certificates alleged
to have been lost, stolen or destroyed.
ARTICLE V
Termination
-----------
5.1 Termination by Mutual Agreement. Notwithstanding the approval of this
-------------------------------
Merger Agreement by the shareholders of Fractal, this Merger Agreement may be
terminated at any time prior to the Effective Time of the Merger by mutual
agreement of the Boards of Directors of the Constituent Corporations.
5.2 Termination of Reorganization Agreement. Notwithstanding the approval
---------------------------------------
of this Merger Agreement by the shareholders of Fractal, this Merger Agreement
shall terminate forthwith if the Reorganization Agreement is terminated as
provided therein.
5.3 Effects of Termination. In the event of the termination of this
----------------------
Merger Agreement, this Merger Agreement shall become void and there shall be no
liability on the part of either Fractal or Sub or their respective officers or
directors, except as otherwise provided in the Reorganization Agreement.
ARTICLE VI
General Provisions
------------------
6.1 Amendment. This Merger Agreement may be amended by the parties hereto
---------
any time before or after approval hereof by the shareholders of Fractal, but
after such approval, no amendment shall be made that by law requires the further
approval of shareholders without obtaining such approval. This Merger Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.
6.2 Service of Process. The Surviving Corporation may be served with
------------------
process in Delaware in any proceeding for enforcement of any obligation of Sub,
as well as for enforcement of any obligation of the Surviving Corporation
arising from the Merger, including any suit or other proceeding to enforce the
right of any stockholders as determined in appraisal proceedings pursuant to the
provisions of Section 262 of the Delaware General Corporation Law. The Surviving
Corporation irrevocably appoints the Secretary of State of Delaware as its agent
to accept service of process in any such suit or other proceedings. A copy of
such process may be mailed by the Secretary of State of Delaware to the
Surviving Corporation c/o MetaCreations Corporation, 6303 Carpinteria Avenue,
Carpinteria, CA 93013, Attn: Terance Kinninger, Chief Financial Officer.
-6-
<PAGE>
6.3 Counterparts. This Merger Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one agreement.
6.4 Governing Law. This Merger Agreement shall be governed by and
-------------
construed and enforced in accordance with the laws of the State of California as
applied to agreements made and performed in California by residents of
California.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Merger Agreement as
of the date first written above.
FRACTAL DESIGN CORPORATION
By: /s/ Mark Zimmer
-------------------------------------
Mark Zimmer
President and Chief Executive Officer
By: /s/ Craig Johnson
-------------------------------------
Craig Johnson
Secretary
ROOK ACQUISITION CORP.
By: /s/ John Wilczak
-------------------------------------
John Wilczak
President
By: /s/ Jeffrey Saper
-------------------------------------
Jeffrey Saper
Secretary
<PAGE>
EXHIBIT A
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FRACTAL DESIGN CORPORATION
Article I
The name of this corporation is "Fractal Design Corporation."
Article II
The purpose of this corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
Corporations Code.
Article III
This corporation is authorized to issue one class of stock, designated
Common Stock, $.001 par value. The total number of shares of Common Stock which
this corporation is authorized to issue is One Hundred (100).
Article IV
(a) Limitation of Director's Liability. The liability of the directors of
----------------------------------
this corporation for monetary damages shall be eliminated to the fullest extent
permissible under California law.
(b) Indemnification of Corporate Agents. The corporation is authorized to
-----------------------------------
indemnify the directors and officers to the fullest extent permissible under
California law.
(c) Repeal or Modification. Any amendment, repeal or modification of the
----------------------
foregoing provision of this Article IV shall not adversely affect any right of
indemnification or limitation of liability of an agent of this corporation
relating to acts or omissions occurring prior to such amendment, repeal or
modification.
<PAGE>
ROOK ACQUISITION CORPORATION
OFFICER'S CERTIFICATE OF APPROVAL OF MERGER
The undersigned, John Wilczak, President, and Jeffrey Saper, Secretary, do
each hereby certify that:
1. They are the President and the Secretary, respectively, of Rook
Acquisition Corp., a Delaware corporation.
2. The Agreement and Plan of Merger attached to this Certificate
providing for the merger of this corporation with and into Fractal Design
Corporation, a California corporation, was duly approved by the Board of
Directors and by the sole shareholder of this corporation.
3. This corporation has one authorized class of shares, designated Common
Stock. The number of shares of Common Stock outstanding and entitled to vote
upon the merger was 100 shares.
4. Common Stock of MetaTools, Inc., a corporation organized under the
laws of the state of Delaware and the parent corporation of Rook Acquisition
Corp., is to be issued in the merger. No approval of the merger by the
outstanding shares of MetaTools, Inc., the owner of all the outstanding shares
of this corporation, is required.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Certificate this
29th day of May, 1997.
/s/ John Wilczak
------------------------
John Wilczak
President
/s/ Jeffrey Saper
------------------------
Jeffrey Saper
Secretary
Each of the undersigned further declares under penalty of perjury under the
laws of the State of California that the matters set fourth in this Certificate
are true and correct of his own knowledge.
Executed at Carpinteria, California on May 29, 1997.
/s/ John Wilczak
------------------------
John Wilczak
President
/s/ Jeffrey Saper
------------------------
Jeffrey Saper
Secretary
<PAGE>
FRACTAL DESIGN CORPORATION
OFFICERS' CERTIFICATE OF APPROVAL OF MERGER
The undersigned, Mark Zimmer, President and Chief Executive Officer, and
Craig Johnson, Secretary, do each hereby certify that:
1. They are the President and Chief Executive Officer and Secretary,
respectively, of Fractal Design Corporation, a California corporation.
2. The Agreement and Plan of Merger attached to this Certificate
providing for the merger of Rook Acquisition Corp., a Delaware corporation, with
and into this corporation, was duly approved by the Board of Directors and
shareholders of this corporation.
3. This corporation has two authorized classes of shares, designated as
Common Stock and Preferred Stock. The number of shares of Common Stock entitled
to vote upon the merger was 12,034,126 shares. There are no outstanding shares
of Preferred Stock. No shares of Preferred Stock were entitled to vote upon the
merger.
4. The principal terms of the Agreement and Plan of Merger were approved
by this corporation by the vote of a number of shares of Common Stock which
equaled or exceeded the vote required. The percentage vote required for such
approval was more than 50% of the Common Stock issued and outstanding as of the
record date.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this 29th day of May, 1997.
/s/ Mark Zimmer
--------------------------------------
Mark Zimmer
President and Chief Executive Officer
/s/ Craig Johnson
--------------------------------------
Craig Johnson
Secretary
Each of the undersigned further declares under penalty of perjury under the
laws of the State of California that the matters set forth in this Certificate
are true and correct of his own knowledge.
Executed at Scotts Valley, California, on May 29, 1997.
/s/ Mark Zimmer
--------------------------------------
Mark Zimmer
President and Chief Executive Officer
Executed at Palo Alto, California, on May 29, 1997.
/s/ Craig Johnson
--------------------------------------
Craig Johnson
Secretary
<PAGE>
EXHIBIT 2.3
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
METATOOLS, INC.
----------------------
METATOOLS, INC., a Delaware corporation (the "Corporation"), hereby
certifies as follows:
1. The current name of the Corporation is "METATOOLS, INC." The
Corporation's original Certificate of Incorporation was filed with the Secretary
of State of the State of Delaware on October 10, 1995 and the Corporation's
current Restated Certificate of Incorporation was filed with the Secretary of
State of the State of Delaware on December 15, 1995.
2. The Restated Certificate of Incorporation of the Corporation is hereby
amended by deleting, in its entirety, the current ARTICLE ONE and ARTICLE FOUR
thereof and inserting in place thereof a new ARTICLE ONE and a new ARTICLE FOUR
to read as follows:
"ARTICLE ONE
The name of this corporation is MetaCreations Corporation (the
"Corporation").
ARTICLE FOUR
This Corporation is authorized to issue two classes of shares to be
designated respectively Common Stock and Preferred Stock. The total number of
shares of Common Stock this Corporation shall have authority to issue is
75,000,000 shares, and shall have a par value of $0.001 per share, and the total
number of shares of Preferred Stock this Corporation shall have authority to
issue is 5,000,000 shares, and shall have a par value of $0.001 per share.
The Preferred Stock may be issued from time to time in one or more series
pursuant to a resolution or resolutions providing for such issue duly adopted by
the Board of Directors (authority to do so being hereby expressly vested in the
Board), and such resolution or resolutions shall also set forth the voting
powers, full or limited or none, of each such series of Preferred Stock and
shall fix the designations, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions of each
such series of Preferred Stock. The Board of Directors is authorized to alter
the designation, rights, preferences, privileges and restrictions granted
<PAGE>
to or imposed upon any wholly unissued series of Preferred Stock, and within the
limits and restrictions stated in any resolution or resolutions of the Board of
Directors originally fixing the number of shares constituting any series of
Preferred Stock, to increase or decrease (but not below the number of shares of
any such series then outstanding) the number of shares of any such series
subsequent to the issue of shares of that series."
The Amendment of this Certificate of Amendment of Restated Certificate of
Incorporation was duly adopted in accordance with Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS THEREOF, the Corporation has caused this Certificate of
Amendment of Restated Certificate of Incorporation to be signed as of the
29th day of May 1997, by John J. Wilczak, its President and Chief Executive
Officer, and attested by Jeffrey D. Saper, its Secretary, who hereby affirm and
acknowledge, under penalties of perjury, that this Certificate is the act and
deed of the Corporation and that the facts stated herein are true.
MetaTools, Inc.
/s/ John J. Wilczak
By ____________________________________
Name: John J. Wilczak
Title: President and Chief Executive Officer
ATTESTED:
/s/ Jeffrey D. Saper
By ________________________
Name: Jeffrey D. Saper
Title: Secretary
<PAGE>
H549802 EXHIBIT 2.4
COMMON STOCK COMMON STOCK
------------ ------------
NUMBER SHARES
------------ ------------
FBU
METACREATIONS
THIS CERTIFICATE IS SEE THE REVERSE
TRANSFERABLE IN BOSTON FOR CERTAIN
MA OR NEW YORK, NY DEFINITIONS
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
CUSIP 591016 10 0
THIS CERTIFIES THAT
SPECIMEN
IS THE RECORD HOLDER OF
FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK, $0.001 PAR VALUE, OF
METACREATIONS CORPORATION
transferable on the books of the Corporation in person or by duly authorized
attorney upon surrender of this Certificate properly endorsed. This Certificate
is not valid unless countersigned or registered by the Transfer Agent and
Registrar.
CERTIFICATE OF STOCK
WITNESS the facsimile seal of the Corporation and facsimile signatures of its
duly authorized officers.
Dated:
SPECIMEN [SEAL] SPECIMEN
ASSISTANT SECRETARY PRESIDENT
COUNTERSIGNED AND REGISTERED:
BANKBOSTON, N.A.
TRANSFER AGENT AND REGISTRAR
SPECIMEN
AUTHORIZED SIGNATURE
<PAGE>
The Corporation is authorized to issue Common Stock and Preferred Stock.
The Board of Directors of the Corporation has authority to fix the number of
shares and the designation of any series of Preferred Stock and to determine or
alter the rights, preferences, privileges and restrictions granted to or imposed
upon any unissued series of Preferred Stock.
The Corporation will furnish without charge to each stockholder who so
requests a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock of the
Corporation or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Such requests shall be made to
the Corporation's Secretary at the principal office of the Corporation.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT --.............Custodian............
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act...............................
in common (State)
UNIF TRF MIN ACT -- .......Custodian (until age......)
(Cust)
...........under Uniform Transfers
(Minor)
to Minors Act.....................
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, ________________________________hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________________Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
________________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated_________________________________
X ______________________________________
X ______________________________________
Signature(s) Guaranteed NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.
By_______________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.
