Item 1.01 Entry into a Material Definitive Agreement. for Activision

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ATVI » Topics » Item 1.01 Entry into a Material Definitive Agreement.

This excerpt taken from the ATVI 8-K filed Jul 15, 2008.

Item 1.01 Entry into a Material Definitive Agreement.

As previously disclosed, Activision, Inc. (“Activision”) entered into a Business Combination Agreement, dated as of December 1, 2007 (the “Business Combination Agreement”), by and among Activision, Sego Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of Activision (“Merger Sub”), Vivendi S.A., a société anonyme organized under the laws of France (“Vivendi”), VGAC LLC, a limited liability company organized under the laws of the State of Delaware and an indirect wholly-owned subsidiary of Vivendi (“VGAC”), and Vivendi Games, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Vivendi and a direct wholly-owned subsidiary of VGAC (“Vivendi Games”). On July 9, 2008, Activision completed the merger of Merger Sub into Vivendi Games and the acquisition by VGAC of shares of Company common stock (the “Transactions”) contemplated by the Business Combination Agreement. Upon the closing of the Transactions, Activision was renamed Activision Blizzard, Inc. (the “Company”).

Investor Agreement

In connection with the closing of the Transactions, on July 9, 2008, the Company entered into an Investor Agreement (the “Investor Agreement”) with Vivendi, VGAC and Vivendi Games. The Investor Agreement contains various agreements among the parties regarding, among other things:

· Vivendi’s and VGAC’s agreement to vote their respective shares of the Company’s common stock in favor of (a) the nominees proposed for election as directors of the Company by the independent nominating committee, subject to certain limited exceptions, and (b) the nominees proposed for election as directors of the Company by the executive nominating committee, in each case, so long as such nominees are nominated in accordance with the Company’s amended and restated certificate of incorporation and amended and restated bylaws;

· the reimbursement of Vivendi by the Company for stock-settled equity award expenses and the payment of cash-settled equity awards as they relate to equity awards granted by Vivendi and its controlled affiliates to certain of Vivendi Games’ employees prior to the closing date of the Transactions;

· the Company’s agreement to provide Vivendi with its quarterly consolidated financial statements and to use its reasonable best efforts to comply with Vivendi’s consolidation and financial reporting process;

· the grant of certain registration rights to Vivendi and its affiliates, including demand and piggyback registration rights;

· Vivendi’s and VGAC’s agreements to provide the Company with at least five business days, notice of its intention to enter into any agreement to consummate a “control block sale” (as such term is defined in the Investor Agreement) and to provide certain other information related thereto; and

· Vivendi’s and VGAC’s agreements to vote their respective shares of the Company’s common stock to ratify those actions taken by the Activision stockholders at the 2007 annual meeting of Activision stockholders.

Tax Sharing Agreement

Also in connection with the closing of the Transactions, on July 9, 2008, the Company entered into a Tax Sharing Agreement (the “Tax Sharing Agreement”) with Vivendi Holding I Corp., a Delaware corporation (“VHIC”), and Vivendi Games. The Tax Sharing Agreement sets forth various agreements among the parties relating to, without limitation:

· the joining of the Company and/or certain of its subsidiaries in the filing of certain consolidated, combined or unitary income or franchise tax returns that VHIC may elect or be required to file;

· the payments to the appropriate tax authorities of certain tax liabilities;

· the payment by the Company and subsidiaries of the Company to VHIC of amounts representing certain tax liabilities attributable to the Company and its subsidiaries;

· the payment by VHIC to the Company of (or the offsetting of certain obligations of the Company to pay VHIC with) amounts in respect of fifty percent of the tax liability associated with certain distributions that may be made by non-U.S. subsidiaries of Vivendi Games to the Company (or certain U.S. subsidiaries of the Company) during the five year period following the closing date of the Transactions;

· VHIC’s indemnification of the Company for certain tax liabilities imposed on the Company arising in periods prior to the closing of the Transactions in respect of Vivendi Games or its subsidiaries or resulting from VHIC’s failure to pay;

· the control of certain tax contests with certain taxing authorities; and

· the resolution of certain tax disputes between the parties.

Copies of the Investor Agreement and the Tax Sharing Agreement are filed herewith as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference. The foregoing descriptions of the Investor Agreement and the Tax Sharing Agreement are qualified in their entirety by reference to the full text of the Investor Agreement and the Tax Sharing Agreement.

Amendment to Credit Facilities

As previously disclosed, on April 29, 2008, Activision, acting on behalf of the Company, entered into a senior unsecured credit agreement with Vivendi, borrowings under which could not be effected until the closing of the Transactions. The credit agreement provides the Company with (a) a term loan credit facility in an aggregate amount of up to $400.0 million to be applied to fund that portion of the post-closing tender offer consideration, if any, in excess of $3.628 billion, (b) a term loan credit facility (the “Tranche B Facility”) in an aggregate amount of up to $150.0 million to be applied to repay certain indebtedness of Vivendi Games, and (c) a revolving credit facility in an aggregate amount at any time outstanding of up to $475.0 million to be used after the closing of the Transactions for general corporate purposes.

In connection with the closing of the Transactions, the Company and Vivendi entered into an amendment to the credit agreement, which, among other things, modifies the permitted uses for the Tranche B Facility. Pursuant to the amendment, the Company may draw on the Tranche B facility up to the lesser of (a) the principal amount of the Vivendi Games’ indebtedness and (b) the aggregate amount needed to pay for tendered shares after the use of all unrestricted cash on hand as part of the post-closing tender offer to be launched by the Company.

This excerpt taken from the ATVI DEFA14A filed Dec 6, 2007.

Item 1.01 Entry into a Material Definitive Agreement.

Business Combination Agreement

On December 2, 2007, Activision, Inc., a Delaware corporation (“Activision” or the “Company”) announced that it had entered into a Business Combination Agreement, dated as of December 1, 2007 (the “Business Combination Agreement”), by and among the Company, Sego Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), Vivendi S.A., a société anonyme organized under the laws of France (“Vivendi”), VGAC LLC, a limited liability company organized under the laws of the State of Delaware and an indirect wholly-owned subsidiary of Vivendi (“VGAC”), and Vivendi Games, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Vivendi and a direct wholly-owned subsidiary of VGAC (“Games” and, together with the Company, Merger Sub, Vivendi and VGAC, the “Parties”). The Business Combination Agreement contemplates a series of transactions, pursuant to which Vivendi and Activision will combine the respective businesses of Activision and Games (the “Transactions”). Each of the boards of directors of Activision, Merger Sub, Vivendi, VGAC and Vivendi Games have unanimously approved the Business Combination Agreement and the Transactions.

Merger and Share Purchase

Pursuant to the terms of the Business Combination Agreement, Merger Sub will merge with and into Games (the “Merger”), with Games being the surviving entity and continuing as a wholly-owned subsidiary of Activision after the Merger. At the effective time of the Merger (the “Effective Time”), by virtue of the Merger and without any action on the part of the holder of any shares of capital stock of any of the Parties, each share of common stock of Games (the “Games Common Stock”) issued and outstanding immediately prior to the Effective Time will be converted into the right to receive 369,136.36364 newly issued shares of the Company’s common stock (the “Company Common Stock”). No fractional shares of Company Common Stock will be issued in the Merger. Based on the exchange ratio and the number of shares of Games Common Stock outstanding as of November 26, 2007, Activision will issue a total of approximately 295.3 million shares of Company Common Stock in connection with the Merger.

Concurrently with the Merger, Vivendi will purchase from the Company approximately 62.9 million shares of Company Common Stock (the “Share Purchase” and, together with the Merger, the “Combination Transactions”) at a price of $27.50 per share of Company Common Stock (the “Per Share Transaction Price”). The aggregate consideration to be paid by Vivendi in the Share Purchase is approximately $1.731 billion in cash (the “Aggregate Share Purchase Consideration”).

In connection with the Combination Transactions, Activision will issue an aggregate of approximately 358.2 million shares of Company Common Stock, representing approximately 52.2% of the total number of shares of Company Common Stock outstanding immediately following consummation of the Combination Transactions.

Tender Offer

Within five business days after the closing of the Combination Transactions, the Company will launch a tender offer to purchase up to 146.5 million shares of Company Common Stock at the Per Share Transaction Price (the “Tender Offer”).

Assuming that the maximum number of shares is tendered in the Tender Offer, the maximum aggregate purchase price for the shares of Company Common Stock tendered in the Tender Offer will be approximately $4.028 billion. Activision and Vivendi have agreed to fund the purchase of the shares tendered in the Tender Offer in the following way: (i) the Company will fund the first $2.928 billion of the tender offer consideration with the Aggregate Share Purchase Consideration, available cash on hand and, if necessary, with borrowings made under one or more new credit facilities (the “New Credit Facilities”); (ii) if the tender offer consideration exceeds $2.928 billion, Vivendi will pay the Company up to $700 million in cash in exchange for a number of newly issued shares of Company Common Stock equal to the amount contributed by Vivendi divided by the Per Share Transaction Price; and (iii) the Company will fund any additional amount in excess of $3.628 billion through borrowings made under the New Credit Facilities.

If the maximum number of shares is tendered in the Tender Offer, Vivendi will hold approximately 383.7 million shares of Company Common Stock, representing approximately 68.0% of the total number of shares of Company Common Stock outstanding immediately following consummation of the Tender Offer.

Post-Closing Governance and Management Structure

Following the closing of the Combination Transactions, the combined company’s board of directors will consist of eleven directors, including six directors designated by Vivendi, two Activision management directors and three independent directors who currently serve on the Company’s board of directors (the “Board”). Mr. René Penisson, currently a member of the management board of Vivendi and Chairman of Vivendi Games, will serve as Chairman of the combined company, and Mr. Brian G. Kelly, currently Co-Chairman of the Company, will serve as Co-Chairman of the combined company.

Mr. Robert A. Kotick, currently Chairman and Chief Executive Officer of the Company, will become President and Chief Executive Officer of the combined company. Mr. Bruce Hack, Vivendi Games’ current Chief Executive Officer, will serve as Vice-Chairman and Chief Corporate Officer of the combined company. Mr. Thomas Tippl, currently Chief Financial Officer of the Company, will be appointed Chief Financial Officer of the combined company, and Mr. Jean-François Grollemund, currently Chief Financial Officer of Vivendi Games, will be appointed Chief Accounting Officer of the combined company.

The Company has agreed to amend and restate its amended and restated certificate of incorporation, as amended (the “Certificate of Incorporation”) and its third amended and restated bylaws (the “Bylaws”) concurrently with the consummation of the Combination Transactions to provide for certain additional post-closing governance matters. For more information regarding the amendments to the Certificate of Incorporation and the Bylaws, see exhibits A and B to the Business Combination Agreement, a copy of which is filed herewith as Exhibit 2.1.

Representations and Warranties; Covenants

Each of the Company and Merger Sub has made customary representations and warranties to Vivendi and Vivendi Games in the Business Combination Agreement. In addition, the Business Combination Agreement contains customary covenants of the Company, including, among other things, covenants (i) to conduct its business in the ordinary course during the interim period between the execution of the Business Combination Agreement and the closing of the Combination Transactions, (ii) to cause a stockholder meeting to be held to consider approval of the principal terms of the Business Combination Agreement and the Transactions, including the issuance of shares of Company Common Stock in the Combination Transactions, (iii) subject to certain limited exceptions, not to solicit proposals relating to, enter into discussions concerning, or provide information in connection with, alternative business combination transactions, and (iv) subject to certain limited exceptions, not to make, or withdraw or modify in a manner materially adverse to Vivendi or Games, the recommendation of the Board.

Each of Vivendi, VGAC and Vivendi Games has made customary representations and warranties to the Company in the Business Combination Agreement. Vivendi and Vivendi Games have also agreed to customary covenants, including, among other things, covenants (i) by Vivendi Games to conduct its business in the ordinary course during the interim period between the execution of the Business Combination Agreement and the closing of the Combination Transactions, and (ii) by Vivendi and Vivendi Games not to solicit proposals relating to, enter into discussions concerning, or provide information in connection with, alternative business combination transactions.

Closing Conditions

The consummation of the Combination Transactions is subject to customary closing conditions, including (i) approval of the principal terms of the Business Combination Agreement and the Transactions, including the issuance of shares of Company Common Stock in the Combination Transactions, by the Company’s stockholders, (ii) the absence of any injunction, legal restraint or prohibition preventing the consummation of the Combination Transactions, (iii) expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and clearance under European Union merger control regulations, (iv) subject to certain exceptions, the accuracy of each party's representations and warranties, (v) each party's compliance with its obligations under the Business Combination Agreement, (vi) the Company has obtained the New Credit Facilities, and (vii) solely with respect to the obligations of Vivendi, VGAC and Vivendi Games, receipt of authorization from the NASDAQ Stock Market for listing of the shares of Company Common Stock to be issued in connection with the Combination Transactions.

Termination; Termination Fees and Expense Reimbursement

The Business Combination Agreement contains certain termination rights for both Activision and Vivendi , including, among others, if the Combination Transactions are not completed on or before October 1, 2008. Upon termination of the Business Combination Agreement under specified circumstances, including a termination by the Company to enter into an agreement for an alternative transaction pursuant to a Superior Proposal (as defined in the Business Combination Agreement) or a termination in connection with a change by the Board of its recommendation of the Business Combination Agreement, the Company has agreed to pay Vivendi a termination fee of $180 million plus actual and reasonably documented out-of-pocket expenses incurred prior to the termination of the Business Combination Agreement in an amount not to exceed $15 million.

Voting and Lock-Up Agreements

Concurrently with the execution of the Business Combination Agreement, on December 1, 2007, Activision and Vivendi entered into voting and lock-up agreements with two Activision stockholders (the “Voting and Lock-Up Agreements”). The two stockholders that are a party to the Voting and Lock-Up Agreements are Mr. Robert A. Kotick and Mr. Brian G. Kelly (the “Activision Management Members”).

Under the Voting and Lock-Up Agreements, the Activision Management Members have agreed to vote all their shares of Company Common Stock in favor of the Business Combination Agreement and the Transactions at any regular or special meeting of the Company’s stockholders at which such matters are considered. In addition, under the Voting and Lock-Up Agreements, the Activision Management Members have agreed not to sell or otherwise dispose of (including pursuant to the Tender Offer) more than one third (1/3) of their shares of Common Stock or other equity securities of the Company during the 120-day period following the closing date of the Combination Transactions without Vivendi’s prior written consent.

Copies of the Business Combination Agreement and the Voting and Lock-Up Agreements are filed herewith as Exhibits 2.1, 10.1 and 10.2, respectively, and are incorporated herein by reference. The foregoing descriptions of the Business Combination Agreement and the Voting and Lock-Up Agreements are qualified in their entirety by reference to the full text of the Business Combination Agreement and the Voting and Lock-Up Agreements.

This excerpt taken from the ATVI 8-K filed Dec 6, 2007.

Item 1.01 Entry into a Material Definitive Agreement.

Business Combination Agreement

Merger and Share Purchase

Tender Offer

Post-Closing Governance and Management Structure

Representations and Warranties; Covenants

Closing Conditions

Termination; Termination Fees and Expense Reimbursement

Voting and Lock-Up Agreements

This excerpt taken from the ATVI 8-K filed Oct 23, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

Employment Agreement with Robin Kaminsky

On October 19, 2006, Activision Publishing, Inc. (“Activision Publishing”), the holding company for the active subsidiaries of Activision, Inc. (the “Company”), entered into an employment agreement (the “Agreement”) with Activision Publishing’s Executive Vice President of Publishing, Robin Kaminsky.

The Agreement is effective as of October 1, 2006 and has an initial term which expires on October 31, 2008. Ms. Kaminsky’s annual base salary will initially be $468,000 and will be reviewed on June 1st of each year during the term, at which time it will be increased by at least 4%. Ms. Kaminsky may also be entitled to an annual bonus of up to 75% of the amount of her base salary. Ms. Kaminsky will also receive a signing bonus of $35,000.

Pursuant to the Agreement, on October 19, 2006, Ms. Kaminsky received options to purchase an aggregate of 300,000 shares of the Company’s common stock. The first tranche of 200,000 options will vest in three equal installments on the first, second and third anniversary of the date of grant. The second tranche of 100,000 options will vest in their entirety on the third anniversary of the date of grant (subject to accelerated vesting if Ms. Kaminsky achieves certain performance objectives). All of the options have an exercise price equal to the market low of the Company’s stock on the date of the grant, and will be governed by Activision’s standard form of award agreement for similar grants.

Ms. Kaminsky was also granted 35,000 shares of restricted stock on October 19, 2006. The first tranche of 23,333 shares will vest in three equal installments on the first, second and third anniversary of the date of grant. The second tranche of 11,667 shares will vest in their entirety on the third anniversary of the date of grant (subject to accelerated vesting if Ms. Kaminsky achieves certain performance objectives).

The Agreement contains other provisions and provides for other benefits that are customary in the employment agreements of similarly situated executives.

Amendment of Second Amended and Restated 2002 Employee Stock Purchase Plan for International Employees

On October 20, 2006, the Board of Directors of the Company approved a non-substantive amendment to the Company’s Second Amended and Restated 2002 Employee Stock Purchase Plan for International Employees (the “Plan”). The Company made similar amendments to its other stock based compensation plans, as disclosed on Form 8-K, filed with the Securities and Exchange Commission on September 20, 2006. The amendment to the Plan clarifies that anti-dilution adjustments to equity awards under such plan are required and not discretionary actions of the Company. The purpose of this amendment is to ensure that customary anti-dilution adjustments to equity awards resulting from certain corporate transactions such as a stock split or a stock dividend do not result in the modification of an equity award for purposes of Statement of Financial Accounting Standards No. 123R, “Share-Based Payments.” If these anti-dilution adjustments were characterized as a modification of an equity award, the Company could be required to record incremental compensation expense. The amendment is designed to remove the potential for these types of corporate transactions to be characterized as modifications of equity awards. The Plan, as amended, is attached as Exhibit 10.1 to this report.

The Company has also attached its Third Amended and Restated 2002 Employee Stock Purchase Plan, as amended, as Exhibit 10.2 to this report.

This excerpt taken from the ATVI 8-K filed Oct 3, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

On October 3, 2006, Activision, Inc. (the “Company”) announced that Brian Hodous will serve as the Chief Customer Officer of Activision Publishing, Inc. (“Activision Publishing”), the holding company for the Company’s active subsidiaries. The Company expects Mr. Hodous to begin his employment on November 3, 2006.

Mr. Hodous and Activision Publishing entered into an employment agreement on October 3, 2006 (the “Agreement”), which will be effective on the date Mr. Hodous begins his employment. The Agreement has an initial term of three years. Mr. Hodous will receive an annual base salary of $375,000 until he relocates from the United Kingdom to the United States, at which point his minimum annual base salary will increase to $450,000 and shall remain subject to annual review. Mr. Hodous may also be entitled to an annual bonus of up to 75% of the amount of his base salary and is guaranteed a bonus of $230,000 for the current fiscal year. Mr. Hodous will also receive a signing bonus of $150,000.

On the effective date of the Agreement, Mr. Hodous will receive options to purchase an aggregate of 240,000 shares of the Company’s common stock, which will vest in three equal installments on the first, second, and third anniversary of that date. The options will have an exercise price equal to the fair market value of the Company’s stock on the date of the grant and will be governed by Activision’s standard form of award agreement.

Mr. Hodous will also be granted 21,000 shares of restricted stock on the effective date of the Agreement, which will vest in their entirety on the third anniversary of that date (subject to accelerated vesting if Mr. Hodous achieves certain performance objectives). In addition, in consideration for his abandoning certain benefits with his prior employer and foregoing certain other executive opportunities and related equity participations, Mr. Hodous will be granted an additional 25,000 shares of restricted stock, which will vest in two equal installments on the first and second anniversary of the effective date.

The Agreement contains other provisions and provides for other benefits that are customary in the employment agreements of similarly situated executives.

A copy of the press release announcing Mr. Hodous’s appointment is attached as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.

EXCERPTS ON THIS PAGE:

8-K	Jul 15, 2008

DEFA14A	Dec 6, 2007

8-K	Dec 6, 2007

8-K	Oct 23, 2006

8-K	Oct 3, 2006

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