As filed with the Securities and Exchange Commission on January 14, 2003.
Registration No. 333-101304
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ACTIVISION, INC.
(Exact name of registrant as specified in its charter)
Delaware 7372 95-4803544
(State or other jurisdiction Primary standard industrial (I.R.S. Employer
of incorporation or organization) classification code number)Identification No.)
3100 Ocean Park Boulevard
Santa Monica, California 90405
(310) 255-2000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
--------------------------
Ronald Doornink
President
Activision, Inc.
3100 Ocean Park Boulevard
Santa Monica, California 90405
(310) 255-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies To:
Bryan Cave LLP
1290 Avenue of the Americas
New York, New York 10104
Attention: Kenneth L. Henderson, Esq.
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ] ______________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ] ____________
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Subject to Completion, Dated January 14, 2003
The information in the prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
PROSPECTUS
$250,000,000
ACTIVISION, INC.
Debt Securities
Preferred Stock
Common Stock
Warrants
Rights
Purchase Contracts
Units
We may offer from time to time the following types of securities:
o our debt securities, in one or more series, which may be senior debt
securities or subordinated debt securities, in each case consisting of
notes or other unsecured evidences of indebtedness;
o shares of our preferred stock;
o shares of our common stock;
o warrants to purchase any of the other securities that may be sold under
this prospectus;
o rights to purchase preferred stock or common stock;
o purchase contracts to acquire any of the other securities that may be sold
under this prospectus; and
o any combination of these securities, individually or as units.
We may offer and sell, from time to time, in one or more offerings, up to
$250,000,000 of any combination of the securities we describe in this prospectus
in connection with our acquisition of the assets, business or securities of
other companies whether by purchase, merger, or any other form of business
combination.
Together with this registration statement, we are concurrently filing on
Form S-3 (Registration Number 333-101301) a registration statement for the sale
of up to $500 million of any combination of securities detailed in that
registration statement.
If necessary, we will provide a prospectus supplement each time we issue
securities. The prospectus supplement will provide information about the terms
of that offering and also may add, update or change information contained in
this prospectus. You should read this prospectus and any prospectus supplement,
as well as the documents incorporated or deemed to be incorporated by reference
in this prospectus, carefully before you invest.
This prospectus may also be used for the resale of securities we issue in
connection with an acquisition. We have not authorized any person to use this
prospectus in connection with resales of securities without our prior written
consent.
Our principal executive offices are located at 3100 Ocean Park Boulevard,
Santa Monica, California 90405, and our telephone number is (310) 255-2000.Our
common stock is traded on the Nasdaq National Market under the symbol "ATVI." On
January 10, 2003, the closing sale price of our common stock as reported by
Nasdaq was $15.06 per share.
Investing in our securities involves risks that are described in the "Risk
Factors" section beginning on page 2 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is January , 2003.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS ........................................................1
FORWARD LOOKING STATEMENTS ...................................................2
RISK FACTORS .................................................................2
ABOUT ACTIVISION ............................................................10
RATIOS OF EARNINGS TO FIXED CHARGES .........................................12
USE OF PROCEEDS .............................................................12
OFFERED SECURITIES ..........................................................12
DESCRIPTION OF DEBT SECURITIES ..............................................14
DESCRIPTION OF CAPITAL STOCK ................................................24
DESCRIPTION OF WARRANTS .....................................................29
DESCRIPTION OF RIGHTS .......................................................31
DESCRIPTION OF PURCHASE CONTRACTS ...........................................31
DESCRIPTION OF UNITS ........................................................32
LEGAL MATTERS ...............................................................32
EXPERTS .....................................................................32
WHERE YOU CAN FIND MORE INFORMATION .........................................32
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE .............................32
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, using a "shelf" registration
process. Under the shelf process, we may, from time to time, sell in one or more
offerings up to $250,000,000 of any of the debt securities, preferred stock,
common stock, warrants, rights, purchase contracts and units in connection with
the acquisition of the assets, business or securities of other companies whether
by purchase, merger, or any other form of business combination. In this
prospectus we will refer to the debt securities, preferred stock, common stock,
warrants, rights, purchase contracts and units collectively as the "securities."
For each acquisition, we expect to negotiate the terms with the owner(s) or
controlling person(s) of the assets, businesses, or securities we plan to
acquire. The securities issued in each acquisition will be valued at prices
which are based upon or reasonably related to market prices, or our valuation,
of the same or similar securities. Such valuation may occur at the time we agree
to the terms of an acquisition, the time of delivery of our securities, during
periods ending at or about such times based on average market prices, or
otherwise.
With our written consent, persons who have received or will receive
securities under this prospectus in connection with acquisitions may use this
prospectus to sell such securities at a later date. We refer to these persons in
the prospectus as "selling security holders." Please see the information
described under the heading "Offered Securities" to find out more information
about resales of the securities by the selling security holders.
This prospectus provides you with a general description of the securities
that we may sell. If necessary, each time that we sell securities, we will
provide a prospectus supplement that will contain specific information about the
terms of that offering. The prospectus supplement also may add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
under the heading "Where You Can Find More Information." We are only selling
these securities in states where the sale is permitted.
The registration statement that contains this prospectus, including the
exhibits to the registration statement, contains additional information about us
and the securities offered under this prospectus. That registration statement
can be read at the SEC's web site or at the SEC's offices referenced under the
heading "Where You Can Find More Information."
FORWARD LOOKING STATEMENTS
We make statements in this prospectus and the documents incorporated by
reference that are considered forward looking statements under the federal
securities laws. Such forward looking statements are based on the beliefs of our
management as well as assumptions made by and information currently available to
them. The words "anticipate," "believe," "may," "estimate," "expect," and
similar expressions, and variations of such terms or the negative of such terms,
are intended to identify such forward looking statements.
All forward looking statements are subject to certain risks, uncertainties
and assumptions. If one or more of these risks or uncertainties materialize, or
if underlying assumptions prove incorrect, our actual results, performance or
achievements could differ materially from those expressed in, or implied by, any
such forward looking statements. Important factors that could cause or
contribute to such difference include those discussed under "Risk Factors" in
this prospectus and under "Business-Factors Affecting Future Performance" in our
Annual Report on Form 10 K for the fiscal year ended March 31, 2002. You should
not place undue reliance on such forward looking statements, which speak only as
of their dates. We do not undertake any obligation to update or revise any
forward looking statements, whether as a result of new information, future
events or otherwise. You should carefully consider the information set forth
under the heading "Risk Factors."
RISK FACTORS
You should carefully consider the risks described below before investing in
our securities. The occurrence of any of the following risks could harm our
business and our prospects. In that event, our business may be negatively
affected, the price of our stock may decline and you may lose part or all of
your investment.
We depend on a relatively small number of brands for a significant portion of
our revenues and profits.
A significant portion of our revenues are derived from products based on a
relatively small number of popular brands each year. In addition, many of these
products have substantial production or acquisition costs and marketing budgets.
In fiscal 2002, 50% of our worldwide net publishing revenues (35% of
consolidated net revenues) was derived from two brands, one of which accounted
for 44% and the other of which accounted for 6% of worldwide net publishing
revenues (31% and 4%, respectively, of consolidated net revenues). In fiscal
2001, two brands accounted for 49% of our worldwide net publishing revenues (37%
of consolidated net revenues), one of which accounted for 39% and the other of
which accounted for 10% of worldwide net publishing revenues (29% and 8%,
respectively, of consolidated net revenues). We expect that a limited number of
popular brands will continue to produce a disproportionately large amount of our
revenues. Due to this dependence on a limited number of brands, the failure of
one or more products based on these brands to achieve anticipated results may
significantly harm our business and financial results.
Our future success depends on our ability to release popular products.
The life of any one game product is relatively short, in many cases less
than one year. It is therefore important for us to be able to continue to
develop many high quality new products that are popularly received. If we are
unable to do this, our business and financial results may be negatively
affected.
We focus our development and publishing activities principally on products
that are, or have the potential to become, franchise brand properties. Many of
these products are based on intellectual property and other character or
2
story rights acquired or licensed from third parties. These license and
distribution agreements are limited in scope and time, and we may not be able to
renew key licenses when they expire or to include new products in existing
licenses. The loss of a significant number of our intellectual property licenses
or of our relationships with licensors could have a material adverse effect on
our ability to develop new products and therefore on our business and financial
results.
Transitions in console platforms have a material impact on the market for
interactive entertainment software.
When new console platforms are announced or introduced into the market,
consumers typically reduce their purchases of game console entertainment
software products for current console platforms in anticipation of new platforms
becoming available. During these periods, sales of our game console
entertainment software products can be expected to slow down or even decline
until new platforms have been introduced and have achieved wide consumer
acceptance. Each of the three current principal hardware producers launched a
new platform in recent years. Sony made the first shipments of its PlayStation 2
console system in North America and Europe in the fourth quarter of calendar
year 2000. Microsoft made the first shipments of its Xbox console system in
North America in November 2001 and in Europe and Japan in the first quarter of
calendar 2002. Nintendo made the first shipments of its Nintendo GameCube
console system in North America in November 2001 and in Europe in May 2002.
Additionally, in June 2001, Nintendo launched its Game Boy Advance hand held
device. We believe the next hardware transition cycle will occur in 2005. Delays
in the launch, shortages, technical problems or lack of consumer acceptance of
these platforms could adversely affect our sales of products for these
platforms.
We must make significant expenditures to develop products for new platforms
which may not be successful or released when anticipated.
The interactive entertainment software industry is subject to rapid
technological change. New technologies could render our current products or
products in development obsolete or unmarketable. We must continually anticipate
and assess the emergence and market acceptance of new interactive entertainment
software platforms well in advance of the time the platform is introduced to
consumers. New platforms have historically required the development of new
software and also have the effect of undermining demand for products based on
older technologies. Because product development cycles are difficult to predict,
we must make substantial product development and other investments in a
particular platform well in advance of introduction of the platform. If the
platforms for which we develop new software products or modify existing products
are not released on a timely basis or do not attain significant market
penetration, or if we develop products for a delayed or unsuccessful platform,
we may not be able to recover in revenues our development costs which could be
significant and our business and financial results could be significantly
harmed. An announcement by Sega Corporation in calendar 2001 that it was
discontinuing its Dreamcast platform shows that even experienced hardware
manufacturers are not immune to failure.
We are exposed to seasonality in the purchases of our products.
The interactive entertainment software industry is highly seasonal, with
the highest levels of consumer demand occurring during the year-end holiday
buying season. As a result, our net revenues, gross profits and operating income
have historically been highest during the second half of the year. Additionally,
in a platform transition period, sales of game console software products can be
significantly affected by the timeliness of introduction of game console
platforms by the manufacturers of those platforms, such as Sony, Microsoft and
Nintendo. The timing of hardware platform introduction is also often tied to
holidays and is not within our control. Further, delays in development, licensor
approvals or manufacturing can also affect the timing of the release of our
products, causing us to miss key selling periods such as the year-end holiday
buying season.
3
We depend on skilled personnel.
Our success depends to a significant extent on our ability to identify,
hire and retain skilled personnel. The software industry is characterized by a
high level of employee mobility and aggressive recruiting among competitors for
personnel with technical, marketing, sales, product development and management
skills. We may not be able to attract and retain skilled personnel or may incur
significant costs in order to do so. If we are unable to attract additional
qualified employees or retain the services of key personnel, our business and
financial results could be negatively impacted.
We depend on Sony, Nintendo and Microsoft for the manufacture and approval of
products that we develop for their hardware platforms.
Generally, when we develop interactive entertainment software products for
hardware platforms offered by Sony, Nintendo and Microsoft, the products are
manufactured exclusively by that hardware manufacturer. Our hardware platform
licenses with Sony, Nintendo and Microsoft provide that the manufacturer may
change prices for the manufacturing of products.
In addition, these agreements include other provisions such as approval rights
of all products and related promotional materials that give the manufacturer
substantial control over our costs and the release of new titles. Since each of
the manufacturers is also a publisher of games for its own hardware platforms
and manufactures products for all of its other licensees, a manufacturer may
give priority to its own products or those of our competitors in the event of
insufficient manufacturing capacity. Our business and financial results could be
materially harmed by unanticipated delays in the manufacturing and delivery of
our products by Sony, Nintendo and Microsoft. In addition, our business and
financial results could be materially harmed if Sony, Nintendo or Microsoft used
their rights under these agreements to delay the manufacture or delivery of our
products, limit the costs recoverable by us to manufacture software for their
consoles, or elect to manufacture software themselves or use developers other
than us.
If our products contain defects, our business could be harmed significantly.
Software products as complex as the ones we publish may contain undetected
errors when first introduced or when new versions are released. We cannot assure
you that, despite extensive testing prior to release, errors will not be found
in new products or releases after shipment, resulting in loss of or delay in
market acceptance. This loss or delay could significantly harm our business and
financial results.
Inadequate intellectual property protections could prevent us from enforcing or
defending our proprietary technology.
We regard our software as proprietary and rely on a combination of
copyright, trademark and trade secret laws, employee and third party
nondisclosure agreements and other methods to protect our proprietary rights. We
own or license various copyrights and trademarks. While we provide "shrinkwrap"
license agreements or limitations on use with our software, it is uncertain to
what extent these agreements and limitations are enforceable. We are aware that
some unauthorized copying occurs within the computer software industry, and if a
significantly greater amount of unauthorized copying of our interactive
entertainment software products were to occur, it could cause material harm to
our business and financial results.
Policing unauthorized use of our products is difficult, and software piracy
can be a persistent problem, especially in some international markets. Further,
the laws of some countries where our products are or may be distributed either
do not protect our products and intellectual property rights to the same extent
as the laws of the United States, or are poorly enforced. Legal protection of
our rights may be ineffective in such countries, and as we leverage our software
products using emerging technologies such as the Internet and online services,
our ability to protect our intellectual property rights and to avoid infringing
intellectual property rights of others may diminish. We cannot assure you that
existing intellectual property laws will provide adequate protection for our
products in connection with these emerging technologies.
4
We may be subject to intellectual property claims.
As the number of interactive entertainment software products increases and
the features and content of these products continue to overlap, software
developers increasingly may become subject to infringement claims. Many of our
products are highly realistic and feature materials that are based on real world
examples, which may inadvertently infringe upon the intellectual property rights
of others. Although we believe that we make reasonable efforts to ensure that
our products do not violate the intellectual property rights of others, it is
possible that third parties still may claim infringement. From time to time, we
receive communications from third parties regarding such claims. Existing or
future infringement claims against us, whether valid or not, may be time
consuming and expensive to defend.
Intellectual property litigation or claims could force us to do one or
more of the following:
o Cease selling, incorporating or using products or services that
incorporate the challenged intellectual property;
o Obtain a license from the holder of the infringed intellectual
property, which if available at all, may not be available on
commercially favorable terms; or
o Redesign our interactive entertainment software products, which
could cause us to incur additional costs, delay introduction and
possibly reduce commercial appeal of our products.
Any of these actions may cause material harm to our business and
financial results.
We rely on independent third parties to develop some of our software products.
We often rely on independent third party interactive entertainment software
developers to develop some of our software products. Since we depend on these
developers in the aggregate, we remain subject to the following risks:
o Continuing strong demand for developers' resources, combined with
recognition they receive in connection with their work, may cause
developers who worked for us in the past to either work for our
competitors in the future or to renegotiate our agreements with
them on terms less favorable for us.
o Limited financial resources and business expertise and inability
to retain skilled personnel may force developers out of business
prior to completing our products or require us to fund additional
costs.
o Our competitors may acquire the businesses of key developers or
sign them to exclusive development arrangements. In either case,
we would not be able to engage such developers' services for our
products.
Increased competition for skilled third party software developers also has
compelled us to agree to make significant advance payments on royalties to game
developers. If the products subject to these arrangements do not generate
sufficient revenues to recover these royalty advances, we would have to
write-off unrecovered portions of these payments, which could cause material
harm to our business and financial results. In a few cases, we also agree to pay
developers fixed per unit product royalties after royalty advances are fully
recouped. To the extent that sales prices of products on which we have agreed to
pay a fixed per unit royalty are marked down, our profitability could be
adversely affected.
5
We operate in a highly competitive industry.
The interactive entertainment software industry is intensely competitive
and new interactive entertainment software products and platforms are regularly
introduced. Our competitors vary in size from small companies to very large
corporations with significantly greater financial, marketing and product
development resources than we have. Due to these greater resources, certain of
our competitors can undertake more extensive marketing campaigns, adopt more
aggressive pricing policies, pay higher fees to licensors for desirable motion
picture, television, sports and character properties and pay more to third party
software developers than we can. We believe that the main competitive factors in
the interactive entertainment software industry include: product features; brand
name recognition; compatibility of products with popular platforms; access to
distribution channels; quality of products; ease of use; price; marketing
support; and quality of customer service.
We compete primarily with other publishers of personal computer and video
game console interactive entertainment software. Significant third party
software competitors currently include, among others: Acclaim Entertainment,
Inc.; Capcom Co. Ltd.; Eidos PLC; Electronic Arts Inc.; Infogrames SA; Konami
Company Ltd.; Namco Ltd.; Midway Games, Inc.; Sega Enterprises, Ltd.; Take-Two
Interactive Software, Inc.; THQ Inc. and Vivendi Universal Publishing. In
addition, integrated video game console hardware and software companies such as
Sony Computer Entertainment, Nintendo Co. Ltd. and Microsoft Corporation compete
directly with us in the development of software titles for their respective
platforms.
We also compete with other forms of entertainment and leisure activities.
For example, we believe that the overall growth in the use of the Internet and
online services by consumers may pose a competitive threat if customers and
potential customers spend less of their available time using interactive
entertainment software and more using the Internet and online services.
We may face difficulty obtaining access to retail shelf space necessary to
market and sell our products effectively.
Retailers of our products typically have a limited amount of shelf space
and promotional resources, and there is intense competition among consumer
interactive entertainment software products for high quality retail shelf space
and promotional support from retailers. To the extent that the number of
products and platforms increases, competition for shelf space may intensify and
may require us to increase our marketing expenditures. Retailers with limited
shelf space typically devote the most and highest quality shelf space to the
best selling products. We cannot assure you that our new products will
consistently achieve such "best seller" status. Due to increased competition for
limited shelf space, retailers and distributors are in an increasingly better
position to negotiate favorable terms of sale, including price discounts, price
protection, marketing and display fees and product return policies. Our products
constitute a relatively small percentage of any retailer's sales volume, and we
cannot assure you that retailers will continue to purchase our products or to
provide our products with adequate levels of shelf space and promotional support
on acceptable terms. A prolonged failure in this regard may significantly harm
our business and financial results.
Our sales may decline substantially without warning and in a brief period of
time because we generally do not have long-term contracts for the sale of our
products.
We currently sell our products directly through our own sales force to mass
merchants, warehouse club stores, large computer and software specialty chains
and through catalogs, as well as to a limited number of distributors, in the
United States and Canada. Outside North America, we sell our products directly
to retailers as well as third party distributors in certain territories. Our
sales are made primarily on a purchase order basis without long-term agreements
or other forms of commitments. The loss of, or significant reduction in sales
to, any of our principal retail customers or distributors could significantly
harm our business and financial results. Our two largest customers, Wal-Mart
Stores, Inc. and Toys "R" Us, Inc., accounted for approximately 14% and 7%,
respectively, of our consolidated net revenues for fiscal 2002. Our five largest
retailers including Wal-Mart and Toys "R" Us, accounted for approximately 35% of
our consolidated net revenues for fiscal 2002. Wal-Mart and Toys "R" Us,
6
accounted for approximately 10% and 9%, respectively, of our consolidated net
revenues for fiscal 2001. Our five largest retailers, including Wal-Mart and
Toys "R" Us, accounted for approximately 34% of our consolidated net revenues
for 2001.
We may permit our customers to return our products and to receive pricing
concessions which could reduce our net revenues and results of operations.
We are exposed to the risk of product returns and price protection with
respect to our distributors and retailers. Return policies allow select
distributors and retailers to return defective, shelf-worn and damaged products
in accordance with terms granted. Price protection policies, when granted and
applicable, allow customers a credit against amounts they owe us with respect to
merchandise unsold by them. We may permit product returns from or grant price
protection to our customers under certain conditions. The conditions our
customers must meet to be granted the right to return products or price
protection are, among other things, compliance with applicable payment terms,
delivery to us of weekly inventory and sell-through reports, and consistent
participation in the launches of our premium title releases. We may also
consider other factors, including the facilitation of slow moving inventory and
other market factors. When we offer price protection, we offer it with respect
to a particular product to all of our retail customers; however, only those
customers who meet the conditions detailed above can avail themselves of such
price protection. We also offer a 90-day limited warranty to our end users that
our products will be free from manufacturing defects. Although we maintain a
reserve for returns and price protection, and although we may place limits on
product returns and price protection, we could be forced to accept substantial
product returns and provide price protection to maintain our relationships with
retailers and our access to distribution channels. Product returns and price
protection that exceed our reserves could significantly harm our business and
financial results.
We may be burdened with payment defaults and uncollectible accounts if our
distributors or retailers cannot honor their credit arrangement with us.
Distributors and retailers in the interactive entertainment software
industry have from time to time experienced significant fluctuations in their
businesses, and a number of them have failed. The insolvency or business failure
of any significant retailer or distributor of our products could materially harm
our business and financial results. We typically make sales to most of our
retailers and some distributors on unsecured credit, with terms that vary
depending upon the customer's credit history, solvency, credit limits and sales
history, as well as whether we can obtain sufficient credit insurance. Although
we have insolvency risk insurance to protect against our customers' bankruptcy,
insolvency or liquidation, this insurance contains a significant deductible and
a co-payment obligation, and the policy does not cover all instances of
non-payment. In addition, while we maintain a reserve for uncollectible
receivables, the reserve may not be sufficient in every circumstance. As a
result, a payment default by a significant customer could significantly harm our
business and financial results.
We may not be able to maintain our distribution relationships with key vendors.
Our CD Contact, NBG and CentreSoft subsidiaries distribute interactive
entertainment software and hardware products and provide related services in the
Benelux territories, Germany and the United Kingdom, respectively, and, via
export, in other European territories for a variety of entertainment software
publishers, many of which are our competitors, and hardware manufacturers. These
services are generally performed under limited term contracts. While we expect
to use reasonable efforts to retain these vendors, we may not be successful in
this regard. The cancellation or non-renewal of one or more of these contracts
could significantly harm our business and financial results. Sony and Nintendo
products accounted for approximately 34% and 8%, respectively, of our worldwide
net distribution revenues for fiscal 2002.
7
Our international revenues may be subject to regulatory requirements as well as
currency fluctuations.
Our international revenues have accounted for a significant portion of our
total revenues. International sales and licensing accounted for 49%, 43% and 51%
of our total net revenues in fiscal 2002, 2001 and 2000, respectively. We expect
that international revenues will continue to account for a significant portion
of our total revenues in the future. International sales may be subject to
unexpected regulatory requirements, tariffs and other barriers. Additionally,
foreign sales which are made in local currencies may fluctuate. Presently, we
engage in limited currency hedging activities. Although exposure to currency
fluctuations to date has been insignificant, fluctuations in currency exchange
rates may in the future have a material negative impact on revenues from
international sales and licensing and thus our business and financial results.
Our software may be subject to governmental restrictions or rating systems.
Legislation is periodically introduced at the local, state and federal
levels in the United States and in foreign countries to establish a system for
providing consumers with information about graphic violence and sexually
explicit material contained in interactive entertainment software products. In
addition, many foreign countries have laws that permit governmental entities to
censor the content and advertising of interactive entertainment software. We
believe that mandatory government-run rating systems eventually may be adopted
in many countries that are significant markets or potential markets for our
products. We may be required to modify our products or alter our marketing
strategies to comply with new regulations, which could delay the release of our
products in those countries.
Due to the uncertainties regarding such rating systems, confusion in the
marketplace may occur, and we are unable to predict what effect, if any, such
rating systems would have on our business. In addition to such regulations,
certain retailers have in the past declined to stock some of our products
because they believed that the content of the packaging artwork or the products
would be offensive to the retailer's customer base. While to date these actions
have not caused material harm to our business, we cannot assure you that similar
actions by our distributors or retailers in the future would not cause material
harm to our business.
Our software may be subject to legal claims.
Within the past three years, two lawsuits, Linda Sanders, et al. v. Meow
Media, Inc., et al., United States District Court for the District of Colorado,
and Joe James, et al. v. Meow Media, Inc., et al., United States District Court
for the Western District of Kentucky, Paducah Division, have been filed against
numerous video game companies, including us, by the families of victims who were
shot and killed by teenage gunmen in attacks perpetrated at schools. These
lawsuits allege that the video game companies manufactured and/or supplied these
teenagers with violent video games, teaching them how to use a gun and causing
them to act out in a violent manner. Both lawsuits referenced in this paragraph
have been dismissed and are currently undergoing various stages of the appeals
process. The dismissal of the Joe James lawsuit has been affirmed by the United
States Court of Appeals for the Sixth Circuit. While our general liability
insurance carrier has agreed to defend us in these lawsuits, it is uncertain
whether or not the insurance carrier would cover all or any amounts which we
might be liable for if the lawsuits are not decided in our favor. If either of
the lawsuits are ultimately decided against us and our insurance carrier does
not cover the amounts we are liable for, it could have a material adverse effect
on our business and financial results. It is possible that similar additional
lawsuits may be filed in the future. Payment of significant claims by insurance
carriers may make such insurance coverage materially more expensive or
unavailable in the future, thereby exposing our business to additional risk.
We may face limitations on our ability to integrate additional acquired
businesses or to find suitable acquisition opportunities.
We intend to pursue additional acquisitions of companies, properties and
other assets that can be purchased or licensed on acceptable terms and which we
believe can be operated or exploited profitably. Some of these
8
transactions could be material in size and scope. While we will continually be
searching for additional acquisition opportunities, we may not be successful in
identifying suitable acquisitions. As the interactive entertainment software
industry continues to consolidate, we face significant competition in seeking
and consummating acquisition opportunities. We may not be able to consummate
potential acquisitions or an acquisition may not enhance our business or may
decrease rather than increase our earnings. In the future, we may issue
additional securities in connection with one or more acquisitions, which may
dilute our existing shareholders. Future acquisitions could also divert
substantial management time and result in short term reductions in earnings or
special transaction or other charges. In addition, we cannot guarantee that we
will be able to successfully integrate the businesses that we may acquire into
our existing business. Our shareholders may not have the opportunity to review,
vote on or evaluate future acquisitions.
Our shareholder rights plan, charter documents and other agreements may make it
more difficult to acquire us without the approval of our Board of Directors.
We have adopted a shareholder rights plan under which one right entitling
the holder to purchase two three-hundredths of a share of our Series A Junior
Preferred Stock price at an exercise price of $40 per share (subject to
adjustment) is attached to each outstanding share of common stock. Such
shareholder rights plan makes an acquisition of control in a transaction not
approved by our Board of Directors more difficult. Our Amended and Restated
By-laws have advance notice provisions for nominations for election of nominees
to the Board of Directors which may make it more difficult to acquire control of
us. Our long-term incentive plans provide in many cases for acceleration of
stock options following a change in control, which has the effect of making an
acquisition of control more expensive. In addition, some of our officers have
severance compensation agreements that provide for substantial cash payments and
accelerations of other benefits in the event of a change in control. These
agreements and arrangements may also inhibit a change in control and may have a
negative effect on the market price of our common stock.
Our stock price is highly volatile.
The trading price of our common stock has been and could continue to be
subject to wide fluctuations in response to certain factors, including:
o Quarter to quarter variations in results of operations
o Our announcements of new products
o Our competitors' announcements of new products
o Our product development or release schedule
o General conditions in the computer, software, entertainment, media or
electronics industries
o Timing of the introduction of new platforms and delays in the actual
release of new platforms
o Changes in earnings estimates or buy/sell recommendations by analysts
o Investor perceptions and expectations regarding our products, plans
and strategic position and those of our competitors and customers
In addition, the public stock markets experience extreme price and trading
volume volatility, particularly in high technology sectors of the market. This
volatility has significantly affected the market prices of securities of many
technology companies for reasons often unrelated to the operating performance of
the specific companies. These broad market fluctuations may adversely affect the
market price of our common stock.
9
We do not pay cash dividends on our common stock.
We have not paid any cash dividends on our common stock and do not
anticipate paying dividends in the near future.
ABOUT ACTIVISION
We are a leading international publisher of interactive entertainment
software products. We have built a company with a diverse portfolio of products
that spans a wide range of categories and target markets and that is used on a
variety of game hardware platforms and operating systems. We have created,
licensed and acquired a group of highly recognizable brands which we market to a
growing variety of consumer demographics.
Our products cover the action/adventure, action sports, racing,
role-playing, simulation, first-person action and strategy game categories. We
offer our products in versions which operate on the Sony PlayStation, Sony
PlayStation 2, Nintendo 64, Nintendo GameCube and Microsoft Xbox console
systems, the Nintendo Game Boy Advance hand held device, as well as on personal
computers. Driven partly by the enhanced capabilities of the current generation
of platforms, we believe that in the next few years there will be continued
growth in the market for interactive entertainment software and we plan to
leverage our skills and resources to extend our leading position in the
industry.
Our publishing business involves the development, marketing and sale of
products, either directly, by license or through our affiliate label program
with third party publishers. In addition to publishing, we maintain distribution
operations in Europe that provide logistical and sales services to third party
publishers of interactive entertainment software, our own publishing operations
and manufacturers of interactive entertainment hardware.
Our objective is to be a worldwide leader in the development, publishing
and distribution of quality interactive entertainment software products that
deliver a highly satisfying consumer entertainment experience. Our strategy
includes the following elements:
Create and Maintain Diversity in Product Mix, Platforms and Markets. We
believe that maintaining a diversified mix of products can reduce our operating
risks and enhance profitability. Therefore, we develop and publish products
spanning a wide range of product categories, including action/adventure, action
sports, racing, role-playing, simulation, first-person action and strategy, and
products designed for target audiences ranging from game enthusiasts and
children to mass market consumers and "value priced" buyers. Presently, we
concentrate on developing, publishing and distributing products that operate on
Sony PlayStation 2, Nintendo GameCube and Microsoft Xbox console systems,
Nintendo Game Boy Advance hand held device and the personal computer. We
typically offer our products for use on multiple platforms in order to reduce
the risks associated with any single platform, leverage our costs over a larger
installed base and increase unit sales.
Create, Acquire and Maintain Strong Brands. We focus development and
publishing activities principally on products that are, or have the potential to
become, franchise properties with sustainable consumer appeal and brand
recognition. These products can thereby serve as the basis for sequels, prequels
and related new products that can be released over an extended period of time.
We believe that the publishing and distribution of products based in large part
on franchise properties enhances predictability of revenues and the probability
of high unit volume sales and operating profits. We have entered into a series
of strategic relationships with the owners of intellectual property pursuant to
which we have acquired the rights to publish products based on franchises such
as Star Trek, various Disney films such as Toy Story 2 and Marvel Comics'
properties such as Spider Man, X Men, Blade, Iron Man and Fantastic Four. We
have also capitalized on the success of our Tony Hawk's Pro Skater products to
sign long term agreements, many of which are exclusive, with numerous other
action-sports athletes including superstars Mat Hoffman in BMX biking, Kelly
Slater in surfing, Shaun Palmer in snowboarding, Shaun Murray in wakeboarding
and Travis Pastrana in motorcross biking and establish the "Activision O2" brand
as the dominant brand in the action-sports category.
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Enforce Disciplined Product Selection and Development Processes. The
success of our publishing business depends, in significant part, on our ability
to develop games that will generate high unit volume sales and that can be
completed up to our high quality standards. Our publishing units have
implemented a formal control process for the selection, development, production
and quality assurance of our products. We apply this process, which we refer to
as the "Greenlight Process," to products under development with external, as
well as internal resources. The Greenlight Process includes in depth reviews of
each project at five intervals during the development process by a team that
includes several of our highest ranking operating managers and coordination
between our sales and marketing personnel and development staff at each step in
the process.
We develop our products using a strategic combination of our internal
development resources and external development resources acting under contract
with us, some of who are independent and in some of which we have a capital
investment. We typically select our external developers based on their track
record and expertise in producing products in the same category. One developer
will often produce the same game for multiple platforms and will produce sequels
to the original game. We believe that this selection process allows us to
strengthen and leverage the particular expertise of our internal and external
development resources.
Continue to Improve Profitability. We are continually striving to reduce
our risk and increase our operating leverage and efficiency with the goal of
increased profitability. We believe the key factor affecting our profitability
will be the success rate of our product releases. Therefore, our product
selection and development process includes, as a significant component, periodic
evaluations of the expected commercial success of products under development.
Through this process, titles that we determine to be less promising are either
discontinued before we incur additional development costs, or if necessary,
corrections can be made in the development process. In addition, our focus on
cross platform releases and branded products will, we believe, contribute to
this strategic goal.
In order to further our emphasis on improved profitability, we have
implemented a number of operational initiatives. We have increased our product
development capabilities by allocating a portion of our product development
investments to experienced independent development companies working under
contract with us, thereby taking advantage of specialized third party developers
without incurring the fixed overhead obligations associated with increased
internally employed staff. Additionally, we have acquired certain experienced
and specialized developers when, in our opinion, we can enhance profitability
through the elimination of royalty obligations. Our sales and marketing
operations work with our studio resources to increase the visibility of new
product launches and to coordinate timing and promotion of product releases. Our
finance and administration and sales and marketing personnel work together to
improve inventory management and accounts receivables collections. We have
broadly instituted objective based reward programs that provide incentives to
management and staff throughout the organization to produce results that meet
our financial objectives.
Grow Through Continued Strategic Acquisitions and Alliances. The
interactive entertainment industry is consolidating, and we believe that success
in this industry will be driven in part by the ability to take advantage of
scale. Specifically, smaller companies are more capital constrained, enjoy less
predictability of revenues and cash flow, lack product diversity and must spread
fixed costs over a smaller revenue base. Several industry leaders are emerging
that combine the entrepreneurial and creative spirit of the industry with
professional management, the ability to access the capital markets and the
ability to maintain favorable relationships with strategic developers, property
owners and retailers. Through 14 completed acquisitions since 1997, we believe
that we have successfully diversified our operations, our channels of
distribution, our development talent pool and our library of titles, and have
emerged as one of the industry's leaders. We intend to continue to expand our
resources through acquisitions, strategic relationships and key license
transactions. We expect to focus our acquisition strategy on increasing our
development capacity through the acquisition of or investment in selected
experienced development firms, and expanding our intellectual property library
through licenses and strategic relationships with intellectual property owners.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our unaudited historical ratios of earnings
to fixed charges for the periods indicated below:
Six Months
Year Ended March 31, Ended September 30,
--------------------------- -------------------
1998 1999 2000 2001 2002 2001 2002
Ratio of
earnings
to fixed
charges....... 3.48 4.66 A 4.00 28.95 2.73 27.51
A Due to the loss in fiscal year 2000, the ratio coverage was less than 1:1.
Additional earnings of $38.6 million must be generated to achieve coverage
of 1:1.
In calculating the ratio of earnings to fixed charges, earnings consist of
income (loss) from continuing operations before loss from equity investees,
income taxes and extraordinary items, plus fixed charges. Fixed charges consist
of interest expense and rental expense representative of the interest factor.
As we have no preferred stock issued, a ratio of earnings to combined fixed
charges and preferred dividends is not presented.
USE OF PROCEEDS
This prospectus relates to securities that may be offered and issued by us
from time to time in connection with the acquisition of various assets,
businesses or securities. Other than the assets, business, or securities
acquired, there usually will be no proceeds to us from these offerings. When
this prospectus is used by a selling security holder in a public reoffering or
resale of securities acquired pursuant to this prospectus, we will usually not
receive any proceeds from such sale by the selling security holder. However, any
proceeds received by us from the offering of securities pursuant to this
prospectus or upon any resale of securities acquired pursuant to this prospectus
will be used for general corporate purposes, including capital expenditures,
working capital, repayment or reduction of long term and short term debt and the
financing of acquisitions and other business combinations. We may invest funds
that we do not immediately require in marketable securities.
OFFERED SECURITIES
We may issue and sell the securities offered by this prospectus in
connection with our acquisition in the future of the assets, business or
securities of other companies whether by purchase, merger, or any other form of
business combination. The specific terms upon which we will issue securities
will be determined by negotiation with the owner(s) or controlling person(s) of
the assets, businesses, or securities we plan to acquire. The securities issued
in each acquisition will be valued at prices which are based upon or reasonably
related to market prices, or our valuation, of the same or similar securities.
Such valuation may occur at the time we agree to the terms of an acquisition,
the time of delivery of our securities, during periods ending at or about such
times based on average market prices, or otherwise.
This prospectus, as amended or supplemented if appropriate, has also been
prepared for use by selling security holders who receive our securities in
acquisitions, including securities received under this prospectus. In general,
the persons to whom we issue securities under this prospectus will be able to
resell our securities in the public market without further registration and
without being required to deliver a prospectus. However, certain persons who
receive large blocks of our securities may want to resell those securities in
distributions that would require the delivery of a prospectus. With our prior
written consent, this prospectus may be used by selling security holders who may
wish to sell securities. As used in this prospectus, "selling security holders"
may include donees and pledgees selling securities received from a selling
security holder. However, no person who receives the
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securities covered by this prospectus will be authorized to use this prospectus
for an offer of such securities without first obtaining our written consent. We
may limit our consent to a specified time period and subject to certain
limitations and conditions, which may vary by agreement.
Selling security holders may agree that:
o an offering of securities under this prospectus be effected in an
orderly manner through securities dealers, acting as broker or dealer,
selected by us;
o they will enter into custody agreements with one or more banks with
respect to such securities; and
o that they make sales only by one or more of the methods described in
this prospectus, as appropriately supplemented or amended when
required.
Selling security holders may sell securities:
o through the Nasdaq National Market or any national securities exchange
on which our securities have been approved for listing in the future
or otherwise;
o directly to purchasers in privately negotiated transactions;
o by or through brokers or dealers, in ordinary brokerage transactions
or transactions in which the broker solicits purchasers;
o in block trades in which the broker or dealer will attempt to sell
securities as an agent but may position and resell a portion of the
block as principal;
o in transactions in which a broker or dealer purchases as principal for
resale for its own account;
o through underwriters or agents; or
o in any combination of these methods.
Securities may be sold at a fixed offering price, which may be changed, at
the prevailing market price at the time of sale, at prices related to such
prevailing market price or at negotiated prices. Any brokers, dealers,
underwriters or agents may arrange for others to participate in any such
transaction and may receive compensation in the form of discounts, commissions
or concessions from selling security holders and/or the purchasers of
securities. The proceeds to a selling security holder from any sale of
securities will be reduced by any compensation and of any expenses to be borne
by the selling security holder.
If required at the time a particular offer of securities is made by the
Securities Act and the rules of the SEC, a supplement to this prospectus will be
delivered that identifies any persons reselling securities acquired under this
prospectus and will provide information about them and describe any material
arrangements for the distribution of securities and the terms of the offering,
including the names of any underwriters, brokers, dealers or agents and any
discounts, commissions or concessions and other items constituting compensation
from the selling security holder.
Selling security holders and any brokers, dealers, underwriters or agents
that participate with a selling security holder in the distribution of
securities may be deemed to be "underwriters" within the meaning of the
Securities Act, in which event any discounts, commissions or concessions
received by any such brokers, dealers,
13
underwriters or agents and any profit on the resale of the securities purchased
by them may be deemed to be underwriting commissions or discounts under the
Securities Act.
To comply with state securities laws, the securities covered by this
prospectus will be sold in certain jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the securities may
not be sold at all unless they have been offered or qualified for sale in those
states or any exemption from the registration or qualification requirement is
available.
We and the selling security holders may agree to indemnify each other
and/or any such brokers, dealers, underwriters or agents against certain civil
liabilities, including liabilities under the Securities Act. We may agree to
reimburse the selling security holders for certain expenses in connection with
the offering and sale of securities.
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities either separately, or together with, or upon
the conversion of or in exchange for, other securities. The debt securities may
be our unsecured and unsubordinated obligations or our subordinated obligations.
We use the term "senior debt securities" to refer to the unsecured and
unsubordinated obligations. We use the term "subordinated debt securities" to
refer to the subordinated obligations. The subordinated debt securities of any
series may be our senior subordinated obligations, subordinated obligations,
junior subordinated obligations or may have such other ranking as is described
in the relevant prospectus supplement. We may issue any of these types of debt
securities in one or more series.
Our senior debt securities may be issued from time to time under a senior
debt securities indenture with a trustee to be named in the senior debt
securities indenture. Our subordinated debt securities may be issued from time
to time under a subordinated debt securities indenture with a trustee to be
named in the subordinated debt securities indenture, which will describe the
specific terms of the debt securing series. We use the term "indenture" to refer
to the senior debt securities indenture or the subordinated debt securities
indenture. We use the term "indentures" to refer both the senior debt securities
indenture and the subordinated debt securities indenture. We use the term
"trustee" to refer to the trustee named in the senior debt securities indenture
or the subordinated debt securities indenture. We use the term "trustees" to
refer to both the trustee named in the senior debt securities indenture and the
subordinated debt securities indenture.
The following summary of selected provisions that will be in indentures and
in the debt securities is not complete. Before making an investment in our debt
securities, you should review the applicable prospectus supplement and the form
of applicable indenture, which will be filed with the Securities and Exchange
Commission in connection with the offering of the specific debt securities.
Some of our operations are conducted through our subsidiaries. Accordingly,
our cash flow and our ability to service our debt, including the debt
securities, are dependent upon the earnings of our subsidiaries and the
distribution of those earnings to us, whether by dividends, loans or otherwise.
The payment of dividends and the making of loans and advances to us by our
subsidiaries may be subject to statutory or contractual restrictions, are
contingent upon the earnings of our subsidiaries and are subject to various
business considerations. Our right to receive assets of any of our subsidiaries
upon their liquidation or reorganization (and the consequent right of the
holders of the debt securities to participate in those assets) will be
effectively subordinated to the claims of that subsidiary's creditors (including
trade creditors), except to the extent that we are recognized as a creditor of
that subsidiary, in which case our claims would still be subordinate to any
security interests in the assets of the subsidiary and any indebtedness of the
subsidiary senior to that held by us.
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General
We can issue an unlimited amount of debt securities under the indentures.
We can issue debt securities from time to time and in one or more series as
determined by us. In addition, we can issue debt securities of any series with
terms different from the terms of debt securities of any other series and the
terms of particular debt securities within any series may differ from each
other, all without the consent of the holders of previously issued series of
debt securities. The debt securities of each series will be our direct,
unsecured obligations.
The applicable prospectus supplement relating to the series of debt
securities will describe the specific terms of the debt securities being
offered, including, where applicable, the following:
o the title of the series of debt securities;
o whether the debt securities of the series will be senior debt
securities or subordinated debt securities;
o any limit on the aggregate principal amount of debt securities of the
series;
o the name of the trustee and its corporate trust office;
o whether the debt securities of the series are to be issuable in
registered or bearer form or both and whether the debt securities of
the series may be represented initially by a debt security in
temporary or permanent global form, and, if so, the initial depositary
with respect to such temporary or permanent global debt security and
the circumstances under which beneficial owners of interests in any
such temporary or permanent global debt security may exchange such
interests for debt securities of such series of like tenor and of any
authorized form and denomination and the authorized newspapers for
publication of notices to holders of bearer securities;
o any other terms required to establish a series of bearer securities,
including, but not limited to, tax compliance procedures;
o the price or prices at which the debt securities of the series will be
issued;
o the person to whom any interest will be payable on any debt securities
of the series, if other than the person in whose name the debt
security is registered at the close of business on the regular record
date for the payment of interest;
o the date or dates on which the principal of and premium, if any, on
the debt securities of the series is payable or the method or methods,
if any, used to determine those dates;
o the rate or rates at which the debt securities of the series will bear
interest or the method or methods, if any, used to calculate those
rate or rates;
o the date or dates, if any, from which interest on the debt securities
of the series will accrue, or the method or methods, if any, used to
determine those dates;
o the stated maturities of installments of interest, if any, on which
any interest on the debt securities of the series will be payable and
the regular record dates for any interest payable on any debt
securities of the series which are registered securities;
o the place or places where and the manner in which the principal of and
premium, if any, and interest, if any, on the debt securities of the
series will be payable and the place or places where the
15
debt securities of the series may be presented for transfer and, if
applicable, conversion or exchange and the place or places where
notices and demands in respect of the debt securities of the series
may be served on us;
o our right, if any, to redeem the debt securities, and the period or
periods within which, the price or prices at which and the terms and
conditions upon which, the debt securities of the series may be
redeemed, in whole or in part;
o our obligation, if any, to redeem or purchase the debt securities of
the series pursuant to any sinking fund or analogous provisions or at
the option of a holder of such debt securities, the conditions, if
any, giving rise to such obligation, and the period or periods within
which, the price or prices at which and the terms and conditions upon
which, the debt securities of the series shall be redeemed or
purchased, in whole or part, and any provisions for the remarketing of
such debt securities;
o the denominations in which any registered securities of the series are
to be issuable, if other than denominations of $1,000 and any integral
multiple thereof, and the denominations in which any bearer securities
of the series are to be issuable, if other than denominations of
$5,000;
o the currency or currencies, including composite currencies, of payment
of principal or premium, if any, and interest, if any, on the debt
securities of the series, if other than U.S. dollars, and, if other
than U.S. dollars, whether the debt securities of the series may be
satisfied and discharged other than as provided in the applicable
indenture;
o if the amount of payments of principal of, premium, if any, and
interest, if any, on the debt securities of the series is to be
determined by reference to an index, formula or other method, or based
on a coin or currency or currency unit other than that in which the
debt securities of the series are stated to be payable, the manner in
which these amounts are to be determined and the calculation agent, if
any, with respect thereto;
o if other than the principal amount thereof, the portion of the
principal amount of the debt securities of the series which will be
payable upon declaration or acceleration of the maturity thereof
pursuant to an event of default;
o if we agree to pay any additional amounts on any of the debt
securities, and coupons, if any, of the series to any holder in
respect of any tax, assessment or governmental charge withheld or
deducted, the circumstances and procedures under which we will make
these payments, and whether those additional amounts paid by us will
be treated as interest or principal pursuant to the applicable
indenture, and whether we will have the option to redeem these debt
securities rather than pay these additional amounts;
o whether the debt securities of the series are convertible or
exchangeable into other debt or equity securities, and, if so, the
terms and conditions upon which such conversion or exchange will be
effected, including the initial conversion or exchange price or rate
and any adjustments thereto, the conversion or exchange period and
other conversion or exchange provisions;
o whether the debt securities of the series are issuable upon the
conversion or exchange of other debt or equity securities, and, if so,
the terms and conditions upon which the issuance will be effected,
including the time, manner and place for the issuance;
o any terms applicable to debt securities of any series issued at an
issue price below their stated principal amount, including the issue
price thereof and the rate or rates at which the original issue
discount will accrue;
16
o whether the debt securities of the series are to be issued or
delivered (whether at the time of original issuance or at the time of
exchange of a temporary security of such series or otherwise), or any
installment of principal or any premium or interest is to be payable
only, upon receipt of certificates or other documents or satisfaction
of other conditions in addition to those specified in the applicable
indenture;
o whether the debt securities of the series, in whole or any specified
part, will not be defeasible pursuant to the applicable indenture and,
if other than by an officers' certificate, the manner in which any
election by us to defease the debt securities of the series will be
evidenced;
o any deletions from, modifications of or additions to the events of
default or our covenants with respect to the debt securities of the
series, whether or not these events of default or covenants are
consistent with the events of default or covenants set forth in this
prospectus and any change in the rights of the trustee or the
requisite holders of the debt securities of the series to declare the
principal amount of that series due and payable pursuant to the
applicable indenture;
o any special United States federal income tax considerations applicable
to the debt securities of the series; and
o any other terms of the debt securities of the series not inconsistent
with the provisions of the applicable indenture.
The prospectus supplement relating to any series of subordinated debt
securities being offered will also describe the subordination provisions
applicable to that series, if different from the subordination provisions
described in this prospectus. In addition, the prospectus supplement relating to
a series of subordinated debt will describe our rights, if any, to defer
payments of interest on the subordinated debt securities by extending the
interest payment period.
Debt securities may be issued as original issue discount securities to be
sold at a substantial discount below their principal amount. In the event of an
acceleration of the maturity of any original issue discount security, the amount
payable to the holder upon acceleration will be determined in the manner
described in the applicable prospectus supplement. Special United States federal
tax and other considerations applicable to original issue discount securities
will be described in the applicable prospectus supplement. In addition, special
United States federal tax considerations or other restrictions or terms
applicable to any debt securities to be issued in bearer form, offered
exclusively to non United States holders or denominated in a currency other than
United States dollars will be set forth in the applicable prospectus supplement.
The above is not intended to be an exclusive list of the terms that may be
applicable to any debt securities and we are not limited in any respect in our
ability to issue debt securities with terms different from or in addition to
those described above or elsewhere in this prospectus, provided that the terms
are not inconsistent with the applicable indenture. Any applicable prospectus
supplement will also describe any special provisions for the payment of
additional amounts with respect to the debt securities.
Subordination of Subordinated Debt Securities
Except as otherwise described in the applicable prospectus supplement
relating to a series of subordinated debt securities, the payment of the
principal of, premium, if any, and interest on any subordinated debt securities
will rank junior in right of payment to the prior payment in full of all senior
indebtedness.
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Form, Exchange, Registration and Transfer
The debt securities of a series may be issued as registered securities, as
bearer securities (with or without coupons attached) or as both registered
securities and bearer securities. Debt securities of a series may be issuable in
whole or in part in the form of one or more global debt securities, as described
below under " Global Debt Securities." Unless otherwise indicated in an
applicable prospectus supplement, registered securities will be issuable in
denominations of $1,000 and integral multiples thereof, and bearer securities
will be issuable in denominations of $5,000.
At the option of the holder, subject to the terms of the indentures and the
limitations applicable to global securities described in the applicable
prospectus supplement, the holder of the debt securities of any series can
exchange the debt securities for other debt securities in any authorized
denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to
global securities set forth in the applicable prospectus supplement, holders of
the debt securities of any series may present the debt securities for exchange
or for registration of transfer, duly endorsed or with the form of transfer
endorsed thereon duly executed if so required by us or the security registrar,
at the office of the security registrar or at the office of any transfer agent
designated by us for this purpose. Unless otherwise provided in the debt
securities of any series that the holder presents for transfer or exchange, we
will make no service charge for any registration of transfer or exchange, but we
may require payment of any taxes or other governmental charges.
In the event of any redemption of debt securities of any series, we will
not be required to:
o issue, register the transfer of or exchange debt securities of that
series during a period beginning at the opening of business 15 days
before any selection of debt securities of that series to be redeemed
and ending at the close of business on the day of mailing of the
relevant notice of redemption; or
o register the transfer of, or exchange any debt securities of the
series or portion thereof, called for redemption, except the
unredeemed portion of any being redeemed in part.
Covenants
All covenants, if any, that will apply to a particular series of debt
securities will be set forth in the indenture relating to such series of debt
securities.
Payment and Paying Agents
Unless otherwise indicated in an applicable prospectus supplement, payment
of principal of, premium, if any, and interest, if any, on debt securities of
the series will be made at an office of the agency designated by us in
accordance with the applicable indenture, except that at our option, payment of
principal and premium, if any, or interest also may be made by check payable to
payee and mailed to the address of payee as it appears in the debt securities
registrar or by wire transfer to an account maintained by the payee. Unless
otherwise indicated in an applicable prospectus supplement, payment of any
installment of interest on debt securities of a series will be made to the
person in whose name the debt security is registered at the close of business on
the regular record date for the interest payment.
Global Debt Securities
The debt securities of a series may be issued in whole or in the form of
one or more fully registered global securities. A debt security in global form
will be deposited with, or on behalf of, a depositary, which will be
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identified in an applicable prospectus supplement. Global debt securities are
expected to be deposited with the Depository Trust Company. A global debt
security may be issued in either registered or bearer form and in either
temporary or permanent form. Unless and until a debt security is exchanged in
whole or in part for the individual debt security represented thereby, a debt
security in global form may not be transferred except as a whole to the
depositary for the debt security or to a nominee or successor of the depositary.
If any debt securities of a series are issuable in global form, the applicable
prospectus supplement will describe the circumstances, if any, under which
beneficial owners of interests in a global debt security may exchange their
interests for definitive debt securities of that series of like tenor and
principal amount in any authorized form and denomination, the manner of payment
of principal of, premium, if any, and interest, if any, on the global debt
securities and the specific terms of the depositary arrangement with respect to
any global debt security.
The specific terms of the depositary arrangement with respect to a series
of debt securities will be described in the prospectus supplement relating to
the series. We anticipate that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a global security, the depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by such global security to the accounts of
institutions or persons, commonly known as participants, that have accounts with
the depositary or its nominee. The accounts to be credited will be designated by
the underwriters, dealers or agents. Ownership of beneficial interests in a
global security will be limited to participants or persons that may hold
interests through participants. Ownership of interests in such global security
will be shown on, and the transfer of those ownership interests will be effected
only through, records maintained by the depositary (with respect to
participants' interests) and such participants (with respect to the owners of
beneficial interests in such global security). The laws of some jurisdictions
may require that certain purchasers of securities take physical delivery of the
securities in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in a global security.
So long as the depositary, or its nominee, is the registered holder and
owner of such global security, the depositary or such nominee, as the case may
be, will be considered the sole owner and holder for all purposes of the debt
securities and for all purposes under the applicable indenture. Except as set
forth below or as otherwise provided in the applicable prospectus supplement,
owners of beneficial interests in a global security will not be entitled to have
the debt securities represented by such global security registered in their
names, will not receive or be entitled to receive physical delivery of debt
securities in definitive form and will not be considered to be the owners or
holders of any debt securities under the applicable indenture or such global
security. Accordingly, each person owning a beneficial interest in a global
security must rely on the procedures of the depositary and, if such person is
not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a holder of debt securities
under the applicable indenture of such global security. We understand that under
existing industry practice, in the event we request any action of holders of
debt securities or if an owner of a beneficial interest in a global security
desires to take any action that the depositary, as the holder of such global
security is entitled to take, the depositary would authorize the participants to
take such action, and that the participants would authorize beneficial owners
owning through such participants to take such actions or would otherwise act
upon the instructions of beneficial owners owning through them.
Payments of principal of and premium, if any, and interest, if any, on debt
securities represented by a global security will be made to the depositary or
its nominee, as the case may be, as the registered owner and holder of such
global security, against surrender of the debt securities at the principal
corporate trust office of the trustee. Interest payments will be made at the
principal corporate trust office of the trustee or by a check mailed to the
holder at its registered address. Payment in any other manner will be specified
in the prospectus supplement.
We expect that the depositary, upon receipt of any payment of principal,
premium, if any, of interest, if any, in respect of a global security, will
credit immediately participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of such global
security as shown on the records of the depositary. We expect that payments by
participants to owners of beneficial interests in a global security held
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through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in 'street name,' and will be the
responsibility of such participant. We are not responsible or liable (and
neither is the trustee or our agent) for any aspect of the records relating to,
or payments made on account of, beneficial ownership interests in a global
security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests or for any other aspect of the relationship
between the depositary and its participants or the relationship between such
participants and the owners of beneficial interests in such global security
owning through such participants.
Unless and until it is exchanged in whole or in part for debt securities in
definitive form, a global security may not be transferred except as a whole by
the depositary to a nominee of such depositary or by a nominee of such
depositary to such depositary or another nominee of such depositary.
Unless otherwise provided in the applicable prospectus supplement, debt
securities represented by a global security will be exchangeable for debt
securities in definitive form of like tenor as such global security in
denominations of $1,000 and in any greater amount that is an integral multiple
thereof if:
o the depositary notifies us and the trustee that it is unwilling or
unable to continue as depositary for such global security or if at any
time the depositary ceases to be a clearing agency registered under
the Exchange Act and a successor depositary is not appointed by us
within 90 days;
o we, in our sole discretion, determine not to have all of the debt
securities represented by a global security and notify the trustee
thereof; or
o there shall have occurred and be continuing an event of default or an
event which, with the giving of notice or lapse of time, or both,
would constitute an event of default with respect to the debt
securities.
Any debt security that is exchangeable pursuant to the preceding sentence
is exchangeable for debt securities registered in such names as the depositary
shall instruct the trustee. It is expected that such instructions may be based
upon directions received by the depositary from its participants with respect to
ownership of beneficial interests in such global security. Subject to the
foregoing, a global security is not exchangeable except for a global security or
global securities of the same aggregate denominations to be registered in the
name of the depositary or its nominee.
Events of Default
Unless otherwise indicated in an applicable prospectus supplement, each
indenture will provide that if an event of default occurs and is continuing with
respect to a series of debt securities, the trustee or the holders of not less
than 25% in aggregate principal amount of the outstanding debt securities of
that series may declare the principal amount (or, if any of the debt securities
of that series are original issue discount securities, that portion of the
principal amount of the debt securities as may be specified by the terms
thereof) of the debt securities of that series to be immediately due and
payable. Under certain circumstances, the holders of a majority in aggregate
principal amount of the outstanding debt securities of the series may rescind
the declaration.
Under each indenture, unless otherwise specified in an applicable
prospectus supplement with respect to a series of debt securities, the following
events will constitute an event of default with respect to a series of debt
securities:
o default in payment of the principal of any debt security of the series
or any required sinking fund payment;
o default in payment of any interest or other amounts on any debt
security of the series when due, continuing for 30 days;
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o with respect to each series of debt securities, failure to perform any
other of our covenants applicable to that series, which failure
continues for 60 days after written notice to us by the trustee or to
us and the trustee by the holders of at least 25% in principal amount
of the outstanding debt securities of that series specifying such
failure, requiring it to be remedied and stating that such notice is a
"Notice of Default";
o specified events of bankruptcy or insolvency; and
o any other event of default applicable to a series of debt securities
as set forth in the applicable prospectus supplement.
The trustee will give notice to holders of the debt securities of any
continuing default known to the trustee within 90 days after the occurrence of
the default. However, the trustee may withhold notice of any default under the
debt securities of a series, other than a payment default, if it determines that
withholding the notice is in the interests of the holders.
The holders of a majority in principal amount of the outstanding debt
securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee with respect to the debt securities of that
series so long as the direction does not conflict with any law or the indenture
and subject to other limitations provided for in the applicable indenture.
Before proceeding to exercise any right or power under the indenture at the
direction of holders, the trustee will be entitled to receive from the holders
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities which might be incurred by it in complying with the direction.
Unless otherwise specified in an applicable prospectus supplement with respect
to a series of debt securities, no holder will have any right to pursue any
remedy with respect to the applicable indenture or the debt securities, unless:
o the holder has previously given the trustee written notice of a
continuing event of default with respect to the debt securities of
that series;
o the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of the series have made a written request
to the trustee to pursue the remedy;
o the holder or holders have offered to the trustee reasonable security
or indemnity satisfactory to the trustee;
o the holders of a majority in aggregate principal amount of the
outstanding debt securities of the series have not given the trustee a
direction inconsistent with the request within 60 days after receipt
of the request; and
o the trustee has failed to comply with the request within the 60 day
period.
Notwithstanding the foregoing, the right of any holder of any debt security
or coupon to receive payment of the principal of, premium, if any, and interest
in respect of a debt security or payment of the coupon on the date specified for
payment in the debt security or coupon representing the installment of interest
(the "stated maturity" or "stated maturities") or to institute suit for the
enforcement of payment may not be impaired or adversely affected without the
holder's consent. The holders of at least a majority in aggregate principal
amount of the outstanding debt securities of any series may waive an existing
default with respect to that series and its consequences, other than (i) any
default in any payment of the principal of, and premium, if any, or interest on,
any debt security of the series, or (ii) any default in respect of the covenants
or provisions in the applicable indenture which may not be modified without the
consent of the holder of each outstanding debt security of the series affected
as described in "--Modification and Waiver," below.
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Unless otherwise specified in an applicable prospectus supplement, each
indenture will provide for us to deliver to the trustee within 120 days after
the end of each of our fiscal years an officers' certificate stating whether or
not the signers know of any default that occurred during the last fiscal year.
Modification and Waiver
Except as otherwise described in the applicable prospectus supplement, the
indentures will permit us and the applicable trustee to execute a supplemental
indenture without the consent of the holders of the debt securities or any
related coupons:
o to evidence the succession of another corporation to us and the
assumption by it of our obligations under the applicable indenture and
the debt securities;
o to add to our covenants, agreements and obligations for the benefit of
the holders of all the debt securities of any series or to surrender
any right or power conferred in the applicable indenture upon us;
o to provide that bearer securities may be registrable as to principal,
to change or eliminate any restrictions (including restrictions
relating to payment in the United States) on the payment of principal
of and premium, if any, or interest, if any, on bearer securities, to
permit bearer securities to be issued in exchange for registered
securities, to permit bearer securities to be issued in exchange for
bearer securities of other authorized denominations or to permit the
issuance of debt securities in uncertificated form;
o to establish the form or terms of debt securities of any series or
coupons as permitted by the applicable indenture;
o to provide for the acceptance of appointment under the applicable
indenture of a successor trustee with respect to the debt securities
of one or more series and to add to or change any provisions of that
indenture as shall be necessary to provide for or facilitate the
administration of the trusts by more than one trustee;
o to cure any ambiguity, defect or inconsistency;
o to add to, change or eliminate any provisions (which addition, change
or elimination may apply to one or more series of debt securities),
provided that the addition, change or elimination neither (a) applies
to any debt security of any series that was created prior to the
execution of the supplemental indenture and is entitled to the benefit
of that provision nor (b) modifies the rights of the holder of any
such debt security with respect to that provision;
o to add events of default for the benefit of all or any series of debt
securities;
o to secure the debt securities; or
o to make any other change that does not adversely affect the rights of
any holder of the debt securities.
Each indenture will also permit us and the applicable trustee, with the
consent of the holders of not less than a majority in aggregate principal amount
of the outstanding debt securities of the series affected by the supplemental
indenture, to execute a supplemental indenture to add provisions to, or change
in any manner or eliminate any provisions of, the indenture with respect to that
series of debt securities or modify in any manner the rights of the
22
holders of the debt securities of that series and any related coupons under the
applicable indenture. However, the supplemental indenture will not, without the
consent of the holder of each outstanding debt security affected thereby:
o change the stated maturity of the principal of, or any installment of
principal or interest on, the debt securities or any premium payable
upon redemption thereof;
o reduce the amount of principal of any original issue discount
securities that would be due and payable upon declaration of
acceleration of maturity thereof;
o reduce the principal amount of, or premium, if any, or the rate of
interest on, the debt securities;
o change the place or currency of payment of principal and premium, if
any, or interest, if any, on the debt securities;
o impair the right to institute suit for the enforcement of any payment
on or with respect to the debt securities;
o reduce the percentage of the outstanding debt securities of any series
necessary to modify or amend the indenture;
o modify the foregoing requirements or reduce the percentage in
principal amount of outstanding debt securities of any series
necessary to waive any covenant or past default; or
o in the case of subordinated debt securities, amend or modify any of
the provisions of the applicable indenture relating to subordination
of the debt securities in any manner adverse to the holders of the
debt securities.
Holders of not less than a majority of the principal amount of the
outstanding debt securities of any series may waive certain past defaults and
may waive compliance by us with certain of the restrictive covenants described
above with respect to the debt securities of that series.
Discharge and Defeasance
Unless otherwise indicated in an applicable prospectus supplement, we will
be able to discharge all of our obligations, other than administrative
obligations such as facilitating transfers and exchanges of certificates and
replacement of lost or mutilated certificates, relating to a series of debt
securities under an indenture by depositing cash and/or U.S. Government
obligations with the trustee in an amount sufficient to make all of the
remaining payments of principal, premium and interest on those debt securities
when those payments are due. We can do this only if we have delivered to the
trustee, among other things, an opinion of counsel based on a United States
Internal Revenue Service ruling or other change in U.S. federal income tax law
stating that holders will not recognize any gain or loss for U.S. federal income
tax purposes as a result of this deposit.
Upon the defeasance and discharge, the holders of the debt securities of
the series will no longer be entitled to the benefits of the applicable
indenture, except for the purposes of registration of transfer and exchange of
the debt securities of the series and replacement of lost, stolen or mutilated
debt securities and may look only to the deposited funds or obligations for
payment.
The Trustees under the Indentures
The trustees under the indentures, and/or one or more of their respective
affiliates, may be lenders under our credit agreements and may provide other
commercial banking, investment banking and other services to us and/or our
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subsidiaries and affiliates. Each trustee will be permitted to engage in other
transactions with us and/or our subsidiaries and affiliates. However, if any
trustee acquires any conflicting interest, as defined in the Trust Indenture
Act, it must eliminate the conflict or resign.
The trustees will perform only those duties that are specifically set forth
in the indentures, unless an event of default occurs and is continuing. In case
an event of default occurs and is continuing, a trustee will exercise the same
degree of care and skill as a prudent individual would exercise in the conduct
of his or her own affairs.
Applicable Law
The debt securities and the indentures will be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
Trust Indenture Act is applicable.
Conversion or Exchange
If and to the extent indicated in the applicable prospectus supplement, the
debt securities of any series may be convertible or exchangeable into other
securities, the specific terms on which debt securities of any series may be so
converted or exchanged will be set forth in the applicable prospectus
supplement. These terms may include provisions for conversion or exchange,
either mandatory, at the option of the holder, or at our option, in which case
the number of shares of other securities to be received by the holders of debt
securities would be calculated as of a time and in the manner stated in the
applicable prospectus supplement.
DESCRIPTION OF CAPITAL STOCK
The following description of our common stock and preferred stock, together
with the additional information we include in any applicable prospectus
supplements, summarizes the material terms and provisions of the common stock
and preferred stock that we may offer under this prospectus. For the complete
terms of our common stock and preferred stock, please refer to our Amended and
Restated Certificate of Incorporation, as amended, and our Amended and Restated
Bylaws that are incorporated by reference into the registration statement which
includes this prospectus. The General Corporation Law of Delaware may also
affect the terms of these securities. While the terms we have summarized below
will apply generally to any future common stock or preferred stock that we may
offer, we will describe the particular terms of any series of these securities
in more detail in the applicable prospectus supplement. If we indicate in a
prospectus supplement, the terms of any common stock or preferred stock we offer
under that prospectus supplement may differ from the terms we describe below.
Under our Amended and Restated Certificate of Incorporation, as amended,
our authorized capital stock consists of 130,000,000 shares of stock, $.000001
par value per share, consisting of 125,000,000 shares of common stock, 3,750,000
shares of serial preferred stock and 1,250,000 shares of Series A Junior
Preferred Stock. As of November 12, 2002, we had 66,995,133 shares of common
stock outstanding and no shares of preferred stock outstanding. All outstanding
shares of common stock are duly authorized, validly issued, fully paid and
nonassessable.
Common Stock
Each outstanding share of common stock entitles the holder to one vote on
all matters submitted to a vote of stockholders, including the election of
directors. There is no cumulative voting in the election of directors, which
means that the holders of a majority of the outstanding shares of common stock
can elect all of the directors then standing for election. Subject to
preferences which may be applicable to any outstanding shares of preferred
stock, holders of common stock are entitled to such distributions as may be
declared from time to time by our Board of Directors out of funds legally
available. We have not paid, and have no current plans to pay, cash dividends on
our common stock. We intend to retain all earnings for use in our business.
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Holders of common stock have no conversion, redemption or preemptive rights
to subscribe to any of our securities. All outstanding shares of common stock
are fully paid and nonassessable. In the event of any liquidation, dissolution
or winding up of the affairs of holders of our common stock will be entitled to
share ratably in our assets remaining after provision for payment of liabilities
to creditors and preferences applicable to outstanding shares of preferred
stock.
The rights, preferences and privileges of holders of common stock are
subject to the rights of the holders of any outstanding shares of preferred
stock. At present, no shares of preferred stock are outstanding. Each share of
common stock includes a right to purchase two three-hundredths of a share of
Series A Junior Preferred Stock pursuant to a rights agreement between us and
Continental Stock Transfer & Trust Company, as rights agent. As of November 12,
2002, we had approximately 3,200 stockholders of record, excluding banks,
brokers and depository companies that are stockholders of record for the account
of beneficial owners.
The transfer agent for our common stock is Continental Stock Transfer &
Trust Company, 17 Battery Place, New York, New York 10004.
Shareholder Rights Plan
On April 18, 2000, our board of directors approved a shareholders rights
plan. Under the rights plan, each common shareholder at the close of business on
April 19, 2000 received a dividend of one right for each share of common stock
held. Each right represents the right to purchase two three-hundredths (2/300)
of a share of our Series A Junior Preferred Stock at an exercise price of
$40.00. Initially, the rights are represented by our common stock certificates
and are neither exercisable nor traded separately from our common stock. The
rights will only become exercisable if a person or group acquires 15% or more of
our common stock, or announces or commences a tender or exchange offer which
would result in the bidder's acquiring 15% or more of our common stock.
In the event that any person or group acquires 15% or more of our
outstanding common stock, each holder of a right (other than such person or
members of such group) will then have the right to receive, upon exercise of a
right, in lieu of shares of Series A Junior Preferred Stock, the number of
shares of our common stock having a value equal to two times the then current
exercise price of the right. If we are acquired in a merger or other business
combination transaction after a person has acquired 15% or more of our common
stock, each holder of a right will then have the right to receive, upon exercise
of a right, a number of the acquiring company's common shares having a market
value equal to two times the then current exercise price of the right. For
persons who, as of the close of business on April 18, 2000, beneficially own 15%
or more of the our common stock, the rights plan "grandfathers" their current
level of ownership, so long as they do not purchase additional shares in excess
of certain limitations.
We may redeem the rights for $.01 per right at any time prior to
approximately the tenth day following the first public announcement of the
acquisition of 15% of our common stock. At any time after a person has acquired
15% or more (but before any person has acquired more than 50%) of our common
stock, we may exchange all or part of the rights for shares of common stock at
an exchange ratio of one share of common stock per right. The rights expire on
April 18, 2010.
Our rights agreement has anti-takeover effects. The rights may cause
substantial dilution to a person or group that attempts to acquire us without
conditioning the offer on a substantial number of rights being acquired,
redeemed or declared invalid. Accordingly, the existence of the rights may deter
acquirors from making takeover proposals or tender offers. However, the rights
are not intended to prevent a takeover, but rather are designed to enhance the
ability of our board of directors to negotiate with an acquiror on behalf of all
of the stockholders. In addition, the rights should not interfere with a proxy
contest.
Preferred Stock
General
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Our board of directors is authorized to issue shares of preferred stock
from time to time up to an aggregate of 5,000,000 shares of our preferred stock,
which includes 1,250,000 authorized shares of Series A Junior Preferred Stock
issuable pursuant to the rights agreement described above. Our board of
directors is authorized to issue shares of preferred stock in one or more
series, and to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption, including sinking fund
provisions, the redemption price or prices, and the liquidation preferences or
other special rights, qualifications, limitations or restrictions as are
permitted by the Delaware General Corporation Law for each series of preferred
stock.
The prospectus supplement will describe the terms of any series of
preferred stock being offered, including:
o the designation of the shares and the number of shares that constitute
the series;
o the dividend rate (or the method of calculation thereof), if any, on
the shares of the series and the priority as to payment of dividends
with respect to other classes or series of our capital stock and the
payment date of dividends;
o the dividend periods (or the method of calculation thereof);
o the date from which dividends on the preferred stock shall accumulate,
if applicable;
o the voting rights of the shares;
o the liquidation preference and the priority as to payment of the
liquidation preference with respect to other classes or series of our
capital stock and any other rights of the shares of the series upon
our liquidation or winding up;
o whether the preferred stock will rank senior or junior to or on a
parity with any other class or series of preferred stock;
o whether or not and on what terms the shares of the series will be
subject to redemption or repurchase at our option;
o whether and on what terms the shares of the series will be convertible
into or exchangeable for other securities;
o the provision of a sinking fund, if any, for the preferred stock;
o whether the shares of the series of preferred stock will be listed on
a securities exchange;
o any special United States federal income tax considerations applicable
to the series; and
o the other rights and privileges and any qualifications, limitations or
restrictions of the rights or privileges of the series.
Dividends
Unless otherwise set forth in the applicable prospectus supplement, holders
of shares of preferred stock will be entitled to receive, when and as declared
by our board of directors out of our funds legally available therefor, an annual
cash dividend payable at the dates and at the rates, if any, per share per annum
as set forth in the applicable prospectus supplement.
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Unless otherwise set forth in the applicable prospectus supplement, each
series of preferred stock will rank junior as to dividends to any preferred
stock that may be issued in the future that is expressly senior as to dividends
to that preferred stock. If we should fail at any time to pay accrued dividends
on any senior shares at the time the dividends are payable, we may not pay any
dividend on the junior preferred stock or redeem or otherwise repurchase shares
of junior preferred stock until the accumulated but unpaid dividends on the
senior shares have been paid or set aside for payment in full by us.
Unless otherwise set forth in the applicable prospectus supplement, no
dividends (other than in common stock or other capital stock ranking junior to
the preferred stock of any series as to dividends and upon liquidation) may be
declared or paid or set aside for payment, nor may any other distribution be
declared or made upon the common stock, or any of our other capital stock
ranking junior to or on a parity with the preferred stock of that series as to
dividends, nor may any common stock or any of our other capital stock ranking
junior to or on a parity with the preferred stock of that series as to dividends
be redeemed, purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any of that stock) by us (except by conversion into or exchange for
other capital stock of ours ranking junior to the preferred stock of that series
as to dividends) unless:
o if that series of preferred stock has a cumulative dividend, full
cumulative dividends on the preferred stock of that series have been
or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for all past dividend
periods and the then current dividend period; and
o if such series of preferred stock does not have a cumulative dividend,
full dividends on the preferred stock of such series have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for the then
current dividend period.
However, any monies deposited in any sinking fund with respect to any
preferred stock in compliance with the provisions of the sinking fund may be
applied to the purchase or redemption of that preferred stock in accordance with
the terms of the sinking fund, regardless of whether at the time of the
application full dividends, including cumulative dividends, upon shares of the
preferred stock outstanding on the last dividend payment date have been paid or
declared and set apart for payment. In addition, any junior or parity preferred
stock or common stock may be converted into or exchanged for our stock ranking
junior to the preferred stock as to dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360 day year of twelve 30 day months, unless otherwise set forth in the
applicable prospectus supplement. Accrued but unpaid dividends will not bear
interest, unless otherwise set forth in the applicable prospectus supplement.
Redemption
All shares of any series of preferred stock will be redeemable to the
extent set forth in the prospectus supplement relating to the series. All shares
of any series of preferred stock will be convertible into shares of common stock
or into shares of any other series of preferred stock to the extent set forth in
the applicable prospectus supplement.
Liquidation Rights
Unless otherwise set forth in the applicable prospectus supplement, in the
event of our liquidation, dissolution or winding up, the holders of shares of
each series of preferred stock are entitled to receive out of our assets
available for distribution to stockholders, before any distribution of assets is
made to holders of (i) any other shares of preferred stock ranking junior to
that series of preferred stock as to rights upon liquidation, dissolution or
27
winding up and (ii) shares of common stock, liquidating distributions per share
in the amount of the liquidation preference specified in the applicable
prospectus supplement for that series of preferred stock plus any dividends
accrued and accumulated but unpaid to the date of final distribution. However,
the holders of each series of preferred stock will not be entitled to receive
the liquidating distribution of, plus such dividends on, those shares until the
liquidation preference of any shares of our capital stock ranking senior to that
series of the preferred stock as to the rights upon liquidation, dissolution or
winding up shall have been paid (or a sum set aside therefor sufficient to
provide for payment) in full.
If upon our liquidation, dissolution or winding up, the amounts payable
with respect to the preferred stock, and any other preferred stock ranking as to
any distribution on a parity with the preferred stock are not paid in full, then
the holders of the preferred stock and the other parity preferred stock will
share ratably in any distribution of assets in proportion to the full respective
preferential amount to which they are entitled. Unless otherwise specified in a
prospectus supplement for a series of preferred stock, after payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of shares of preferred stock will not be entitled to any further participation
in any distribution of our assets. Neither a consolidation or merger of us with
another corporation nor a sale of securities shall be considered a liquidation,
dissolution or winding up of us.
Voting Rights
The holders of each series or class of preferred stock we may issue will
have no voting rights, except as required by law and as described below or in
the applicable prospectus supplement. Our board of directors may, upon issuance
of a series or class of preferred stock, grant voting rights to the holders of
that series or class to elect additional board members if we fail to pay
dividends in a timely fashion.
Unless otherwise set forth in an applicable prospectus supplement, without
the affirmative vote of a majority of the shares of any class of preferred stock
then outstanding, we may not:
o increase or decrease the aggregate number of authorized shares of that
class;
o increase or decrease the par value of the shares of that class; or
o alter or change the powers, preferences or special rights of the
shares of that class so as to affect them adversely.
If the amendment would adversely alter or change the powers, preferences or
special rights of one or more series of a class of preferred stock, but not the
entire class, then only the shares of the affected series will have the right to
vote on the amendment.
Miscellaneous
Unless otherwise set forth in an applicable prospectus supplement, the
holders of our preferred stock will have no preemptive rights. All shares of
preferred stock being offered by the applicable prospectus supplement will be
fully paid and not liable to further calls or assessment by us. If we should
redeem or otherwise reacquire shares of our preferred stock, then these shares
will resume the status of authorized and unissued shares of preferred stock
undesignated as to series, and will be available for subsequent issuance. There
are no restrictions on repurchase or redemption of the preferred stock while
there is any arrearage on sinking fund installments except as may be set forth
in an applicable prospectus supplement. Payment of dividends on any series of
preferred stock may be restricted by loan agreements, indentures and other
transactions entered into by us. Any material contractual restrictions on
dividend payments will be described or incorporated by reference in the
applicable prospectus supplement.
When we offer to sell a series of preferred stock, we will describe the
specific terms of the series in the applicable prospectus supplement. If any
particular terms of a series of preferred stock described in a prospectus
supplement differ from any of the terms described in this prospectus, then the
terms described in the applicable prospectus supplement will be deemed to
supersede the terms described in this prospectus.
No Other Rights
The shares of a series of preferred stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the applicable prospectus supplement, our
charter or the applicable certificate of designation or as otherwise required by
law.
Transfer Agent
The transfer agent and registrar for each series of preferred stock will be
designated in the applicable prospectus supplement.
DESCRIPTION OF WARRANTS
We may issue, either separately or together with other securities, warrants
for the purchase of any of the other types of securities that we may sell under
this prospectus.
The warrants will be issued under warrant agreements to be entered into
between us and a bank or trust company, as warrant agent, all to be set forth in
the applicable prospectus supplement relating to any or all warrants in respect
of which this prospectus is being delivered. Copies of the form of agreement for
each warrant, which we refer to collectively as "warrant agreements," including
the forms of certificates representing the warrants, which we refer to
collectively as "warrant certificates" and reflecting the provisions to be
included in such agreements that will be entered into with respect to the
particular offerings of each type of warrant, have been or will be filed as
exhibits to the registration statement of which this prospectus forms a part or
as exhibits to documents which have been or will be incorporated by reference in
this prospectus.
The following description sets forth certain general terms and provisions
of the warrants to which any prospectus supplement may relate. The particular
terms of the warrants to which any prospectus supplement may relate and the
extent, if any, to which the general provisions may apply to the warrants so
offered will be described in the applicable prospectus supplement. The following
summary of certain provisions of the warrants, warrant agreements and warrant
certificates does not purport to be complete and is subject to, and is qualified
in its entirety by express reference to, all the provisions of the warrant
agreements and warrant certificates, including the definitions therein of
certain terms.
General
The prospectus supplement shall set forth the terms of the warrants in
respect of which this prospectus is being delivered as well as the related
warrant agreement and warrant certificates, including the following, where
applicable:
o the principal amount of, or the number of securities, as the case may
be, purchasable upon exercise of each warrant and the initial price at
which the principal amount or number of securities, as the case may
be, may be purchased upon such exercise;
o the designation and terms of the securities, if other than common
stock, purchasable upon exercise thereof and of any securities, if
other than common stock, with which the warrants are issued;
29
o the procedures and conditions relating to the exercise of the warrants;
o the date, if any, on and after which the warrants, and any securities
with which the warrants are issued, will be separately transferable;
o the offering price of the warrants, if any;
o the date on which the right to exercise the warrants will commence and
the date on which that right will expire;
o a discussion of any material United States federal income tax
considerations applicable to the exercise of the warrants;
o whether the warrants represented by the warrant certificates will be
issued in registered or bearer form, and, if registered, where they
may be transferred and registered;
o call provisions of the warrants, if any;
o antidilution provisions of the warrants, if any; and
o any other material terms of the warrants.
Exercise of Warrants
Each warrant will entitle the holder to purchase for cash that principal
amount of or number of securities, as the case may be, at the exercise price set
forth in, or to be determined as set forth in, the applicable prospectus
supplement relating to the warrants. Unless otherwise specified in the
applicable prospectus supplement, warrants may be exercised at the corporate
trust office of the warrant agent or any other office indicated in the
applicable prospectus supplement at any time up to 5:00 p.m. New York City time
on the expiration date set forth in the applicable prospectus supplement. After
5:00 p.m. New York City time on the expiration date, unexercised warrants will
become void. Upon receipt of payment and the warrant certificate properly
completed and duly executed, we will, as soon as practicable, issue the
securities purchasable upon exercise of the warrant. If less than all of the
warrants represented by the warrant certificate are exercised, a new warrant
certificate will be issued for the remaining amount of warrants.
No Rights of Security Holder Prior to Exercise
Prior to the exercise of their warrants, holders of warrants will not have
any of the rights of holders of the securities purchasable upon then exercise of
the warrants, and will not be entitled to:
o in the case of warrants to purchase debt securities, payments of
principal of, premium, if any, or interest, if any, on the debt
securities purchasable upon exercise; or
o in the case of warrants to purchase equity securities, the right to
vote or to receive dividend payments or similar distributions on the
securities purchasable upon exercise.
Exchange of Warrant Certificates
Warrant certificates will be exchangeable for new warrant certificates of
different denominations at the corporate trust office of the warrant agent or
any other office indicated in the applicable prospectus supplement.
30
DESCRIPTION OF RIGHTS
We may issue rights for the purchase of shares of preferred stock or common
stock. Each series of rights will be issued under a separate rights agreement
between us and a bank or trust company, all as set forth in the prospectus
supplement relating to the particular issue of rights. The bank or trust company
will act solely as our agent in connection with the certificates relating to the
rights and will not assume any obligation or relationship of agency or trust for
or with any holders of rights certificates or beneficial owners of rights. The
rights agreement and the rights certificates relating to each series of rights
have been or will be filed as exhibits to the registration statement of which
this prospectus forms a part or as exhibits to documents which have been or will
be incorporated by reference in this prospectus.
The applicable prospectus supplement will describe the terms of the rights
to be issued, including the following where applicable:
o the date for determining the stockholders entitled to the rights
distribution;
o the aggregate number of shares of preferred stock or common stock
purchasable upon exercise of such rights and the exercise price;
o the aggregate number of rights being issued;
o the date, if any, on and after which such rights may be transferable
separately;
o the date on which the right to exercise such rights shall commence and
the date on which such right shall expire;
o any special United States federal income tax consequences; and
o any other terms of such rights, including terms, procedures and
limitations relating to the distribution, exchange and exercise of
such rights.
DESCRIPTION OF PURCHASE CONTRACTS
We may issue, from time to time, purchase contracts, including contracts
obligating holders to purchase from us and us to sell to the holders, a
specified principal amount of debt securities or a specified number of shares of
common stock or preferred stock or any of the other securities that we may sell
under this prospectus at a future date or dates. The consideration payable upon
settlement of the purchase contracts may be fixed at the time the purchase
contracts are issued or may be determined by a specific reference to a formula
set forth in the purchase contracts. The purchase contracts may be issued
separately or as part of units consisting of a purchase contract and other
securities or obligations issued by us or third parties, including United States
treasury securities, securing the holders' obligations to purchase the relevant
securities under the purchase contracts. The purchase contracts may require us
to make periodic payments to the holders of the purchase contracts or units or
vice versa, and the payments may be unsecured or prefunded on some basis. The
purchase contracts may require holders to secure their obligations under the
purchase contracts.
The prospectus supplement will describe the terms of any purchase
contracts. The description in the prospectus supplement will not necessarily be
complete and will be qualified in its entirety by reference to the purchase
contracts, and, if applicable, collateral arrangements and depositary
arrangements, relating to the purchase contracts.
31
DESCRIPTION OF UNITS
We may, from time to time, issue units comprised of one or more of the
other securities that may be offered under this prospectus, in any combination.
Each unit will be issued so that the holder of the unit is also the holder of
each security included in the unit. Thus, the holder of a unit will have the
rights and obligations of a holder of each included security. The unit agreement
under which a unit is issued may provide that the securities included in the
unit may not be held or transferred separately at any time, or at any time
before a specified date.
Any applicable prospectus supplement will describe:
o the material terms of the units and of the securities comprising the
units, including whether and under what circumstances those securities
may be held or transferred separately;
o any material provisions relating to the issuance, payment, settlement,
transfer or exchange of the units or of the securities comprising the
units; and
o any material provisions of the governing unit agreement that differ
from those described above.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be passed
upon by Bryan Cave LLP, 1290 Avenue of the Americas, New York, New York 10104.
Kenneth L. Henderson, one of our directors, is a partner of Bryan Cave LLP. In
addition, Bryan Cave LLP owns approximately 14,250 shares of our common stock.
EXPERTS
Our consolidated financial statements and schedule for the year ended March
31, 2000, have been incorporated by reference herein and in this registration
statement in reliance upon the report of KPMG LLP, independent accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
The consolidated financial statements as of and for the years ended March
31, 2001 and March 31, 2002, incorporated in this prospectus by reference to the
Annual Report on Form 10-K for the year ended March 31, 2002 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission, or the SEC. You may read and copy such material at the Public
Reference Room maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1 800 SEC 0330 for more information on the
operation of the Public Reference Room. You can also find our SEC filings at the
SEC's web site at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we will make with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934:
32
o Our Annual Report on Form 10-K for the fiscal year ended March 31,
2002;
o Our Quarterly Reports on Form 10-Q for the quarterly periods ended
June 30, 2002 and September 30, 2002;
o Our Current Reports on Form 8-K filed on May 22, 2002, June 5, 2002
and June 6, 2002,; and
o The description of our common stock and the rights associated with our
common stock contained in our Registration Statement on Form S-3,
Registration No. 333-46425, and our Registration Statement on Form
8-A, File No. 001-15839, filed on April 19, 2000.
We filed a registration statement on Form S-4 to register with the SEC the
securities described in this prospectus. This prospectus is part of that
registration statement. As permitted by SEC rules, this prospectus does not
contain all of the information included in the registration statement and the
accompanying exhibits and schedules we file with the SEC. You may refer to the
registration statement and the exhibits and schedules for more information about
us and our securities. The registration statement and exhibits and schedules are
also available at the SEC's Public Reference Room or through its web site.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Activision, Inc.
3100 Ocean Park Boulevard
Santa Monica, California 90405
(310) 255-2000
Attn: Investor Relations
You should rely only on the information contained or incorporated in this
prospectus or any supplement. We have not authorized anyone else to provide you
with different information. You should not rely on any other representations.
Our affairs may change after this prospectus or any supplement is distributed.
You should not assume that the information in this prospectus or any supplement
is accurate as of any date other than the date on the front of those documents.
You should read all information supplementing this prospectus.
33
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("DGCL"), paragraphs A
and B of Article SIXTH of the Company's Amended and Restated Certificate of
Incorporation, as amended (the "Certificate of Incorporation"), and paragraph 5
of Article VII of the Company's Amended and Restated By-laws (the "By-Laws")
provide for the indemnification of the Company's directors and officers in a
variety of circumstances, which may include liabilities under the Securities Act
of 1933, as amended (the "Securities Act").
Paragraph B of Article SIXTH of the Certificate of Incorporation provides
mandatory indemnification rights to any officer or director of the Company who,
by reason of the fact that he or she is an officer or director of the Company,
is involved in a legal proceeding of any nature. Such indemnification rights
shall include reimbursement for expenses incurred by such officer or director in
advance of the final disposition of such proceeding in accordance with the
applicable provisions of the DGCL. Paragraph 5 of Article VII of the Company's
By-laws currently provides that the Company shall indemnify its directors and
officers to the fullest extent permitted by the DGCL.
Paragraph A of Article SIXTH of the Certificate of Incorporation contains a
provision which eliminates the personal liability of a director to the Company
and its stockholders for certain breaches of his or her fiduciary duty of care
as a director. This provision does not, however, eliminate or limit the personal
liability of a director (i) for any breach of such director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
the Delaware statutory provision making directors personally liable, under a
negligence standard, for unlawful dividends or unlawful stock repurchases or
redemptions, or (iv) for any transaction from which the director derived an
improper personal benefit. This provision offers persons who serve on the Board
of Directors of the Company protection against awards of monetary damages
resulting from negligent (except as indicated above) and "grossly" negligent
actions taken in the performance of their duty of care, including grossly
negligent business decisions made in connection with takeover proposals for the
Company. As a result of this provision, the ability of the Company or a
stockholder thereof to successfully prosecute an action against a director for a
breach of his duty of care has been limited. However, the provision does not
affect the availability of equitable remedies such as an injunction or
rescission based upon a director's breach of his duty of care.
The Company maintains a directors' and officers' insurance policy which
insures the officers and directors of the Company from any claim arising out of
an alleged wrongful act by such persons in their respective capacities as
officers and directors of the Company. In addition, the Company has entered into
indemnification agreements with its officers and directors containing provisions
which are in some respects broader than the specific indemnification provisions
contained in the DGCL. The indemnification agreements require the Company, among
other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers (other than liabilities arising from willful misconduct of a culpable
nature) and to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified. The Company believes that
these agreements are necessary to attract and retain qualified persons as
directors and officers.
It is currently unclear as a matter of law what impact these provisions
will have regarding securities law violations. The Commission takes the position
that indemnification of directors, officers and controlling persons against
liabilities arising under the Securities Act is against public policy as
expressed in the Securities Act and therefore is unenforceable.
Item 21. Exhibits
(a) Exhibits:
3.1 Our Amended and Restated Certificate of Incorporation, dated June
1, 2000 (incorporated by reference to Exhibit 2.5 of our Current
Report on Form 8-K, filed on June 16, 2000).
II-1
3.2 Our Certificate of Amendment of Amended and Restated Certificate
of Incorporation, dated June 9, 2000 (incorporated by reference
to Exhibit 2.7 of our Current Report on Form 8-K, filed on June
16, 2000).
3.3 Our Certificate of Amendment of Amended and Restated Certificate
of Incorporation, dated August 23, 2001 (incorporated by
reference to Exhibit 3.3 of Amendment No. 1 to our Registration
Statement on Form S-3, Registration No. 333-66280, filed on
August 31, 2001).
3.4 Our Certificate of Designation of Series A Junior Preferred
Stock, dated December 27, 2001 (incorporated by reference to
Exhibit 3.4 of our Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 2001).
3.5 Our Amended and Restated By-laws dated August 1, 2000
(incorporated by reference to Exhibit 3.2 of our Current Report
on form 8-K, filed July 11, 2001).
4.1 Rights Agreement dated as of April 18, 2000, between us and
Continental Stock Transfer & Trust Company, which includes as
exhibits the form of Right Certificates as Exhibit A, the Summary
of Rights to Purchase Series A Junior Preferred Stock as Exhibit
B and the form of Certificate of Designation of Series A Junior
Preferred Stock of Activision as Exhibit C, (incorporated by
reference to our Registration Statement on Form 8-A, Registration
No. 001-15839, filed April 19, 2000).
4.2 Form of Senior Debt Securities Indenture.*
4.3 Form of Senior Debt Securities.*
4.4 Form of Subordinated Debt Securities Indenture.*
4.5 Form of Subordinated Debt Securities.*
4.6 Form of Warrant Agreement (including form of Warrant
Certificate).*
4.7 Form of Rights Agreement (including form of Right Certificate).*
4.8 Form of Purchase Contract (including form of Purchase Contract
Certificate) and, if applicable, Pledge Agreement.*
4.9 Form of Unit Agreement (including form of Unit Certificate).*
4.10 Form of Common Stock Certificate.*
4.11 Certificate of Designation of Preferred Stock.*
4.12 Form of Preferred Stock Certificate.*
5.1 Opinion of Bryan Cave LLP as to the legality of securities being
registered.**
10.1 Confidential License Agreement for Nintendo Gamecube (Western
Hemisphere), dated as of November 9, 2001, between Nintendo of
America Inc. and Activision Publishing, Inc.***
10.2 License Agreement for the Nintendo Gamecube System (EEA), dated
as of June 5, 2002, between Nintendo Co., Ltd. and Activision,
Inc.***
10.3 Confidential License Agreement for Game Boy Advance (Western
Hemisphere), dated as of May 10, 2001, between Nintendo of
America, Inc. and Activision Publishing, Inc.***
10.4 Confidential License Agreement for the Game Boy Advance Video
Game System (EEA, Austrailia and New Zealand), dated as of
September 14, 2001, between Nintendo Co., Ltd. and Activision,
Inc.***
10.5 Microsoft Corporation Xbox Publisher License Agreement, dated as
of July 18, 2001, between Microsoft Corporation and Activision
Publishing, Inc.***
10.6 Amendment to Microsoft Corporation Xbox Publisher License
Agreement, dated as of April 19, 2002, between Microsoft
Corporation and Activision Publishing, Inc.***
10.7 Xbox Live Distribution Amendment to the Xbox Publisher Licensing
Agreement, dated as of October 28, 2002, between Microsoft
Corporation and Activision Publishing, Inc.***
10.8 Licensed Publisher Agreement, dated as of July 13, 2002, between
Sony Computer Entertainment America Inc. and Activision, Inc.***
10.9 Amendment to Licensed Publisher Agreement, dated as of April 1,
2000, between Sony Computer Entertainment America Inc. and
Activision, Inc.***
10.10 Playstation2 Licensed Publisher Agreement, dated as of March 23,
2001, between Sony Computer Entertainment Europe Limited and
Activision UK Limited.***
12.1 Computation of Ratio of Earnings to Fixed Charges.**
23.1 Consent of Bryan Cave LLP (included as part of Exhibit 5.1).**
23.2 Consent of KPMG LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
24.1 Power of attorney (included on signature page).**
25.1 Statement of Eligibility of Trustee on Form T-1.*
________________________
* To be filed, if necessary, subsequent to the effectiveness of this
registration statement by an amendment to this registration statement or
incorporated by reference pursuant to a Current Report on Form 8-K in
connection with the offering of securities registered hereunder.
** Previously filed.
*** Previously filed with registration statement on Form S-3 (333-101271).
Item 22. Undertakings
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission (the "Commission")
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20
II-3
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement;
provided, however, that clauses (1)(i) and (1)(ii) do not apply if the
additional information required to be included in a post effective
amendment by such clauses is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference in the
registration statement.
2. That, for purposes of determining any liability under the
Securities Act, each such post effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
3. (1) As follows: that prior to any public reoffering of the
securities registered hereunder through use of a prospectus which
is a part of this registration statement, by any person or party
who is deemed to be an underwriter within the meaning of Rule
145(c), the registrant undertakes that such reoffering prospectus
will contain the information called for by the applicable
registration form with respect to reofferings by persons who may
be deemed underwriters, in addition to the information called for
by the other items of the applicable form.
(2) That every prospectus: (i) that is filed pursuant to
paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Act and is used
in connection with an offering of securities subject to Rule 415,
will be filed as part of an amendment to the registration
statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
4. To remove from registration by means of a post effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
5. That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)1 or (4) or 497(h)
under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
6. That, for the purpose of determining any liability under the
Securities Act, each post- effective amendment that contains a
form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
7. To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13
of this form, within one business day of receipt of such request,
and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained
in documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
8. To supply by means of a post-effective amendment all required
information concerning a transaction, and the company being
acquired involved therein, that was not the subject of and
included in the registration statement when it became effective;
provided, however,
II-4
that where the transaction in which the securities are being
offered pursuant to the registration statement under the
Securities Act would itself qualify for an exemption from Section
5 of the Act, absent the existence of other similar (prior or
subsequent) transactions, a prospectus supplement could be used
to furnish the information necessary in connection with such
transaction.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Los Angeles, State of California, on January 13,
2003.
ACTIVISION, INC.
/s/ Ronald Doornink
By:---------------------------
Ronald Doornink, President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Name Title Date
--- ----- ----
* Chairman, Chief Executive January 13, 2003
------------------------ Officer and Director
(Robert A. Kotick)
* Co-Chairman and Director January 13, 2003
------------------------
(Brian G. Kelly)
/s/ Ronald Doornink
------------------------ President, Activision, Inc.; January 13, 2003
(Ronald Doornink) Chief Executive Officer,
Activision Publishing, Inc.
(PrincipalExecutive Officer)
* Executive Vice President and January 13, 2003
------------------------ Chief Financial Officer
(William J. Chardavoyne) (Principal Financial
and Accounting Officer)
*
------------------------ Director January 13, 2003
(Kenneth L. Henderson)
* Director January 13, 2003
-----------------------
(Barbara S. Isgur)
* Director January 13, 2003
-----------------------
(Steven T. Mayer)
* Director January 13, 2003
------------------------
(Robert J. Morgado)
*By: /s/ Ronald Doornink
------------------------
Ronald Doornink
(Attorney-in-fact)
II-6
EXHIBIT INDEX
Page Number in Signed
Exhibit No. Description Registration Statement
---------- ----------- -----------------------
3.1 Our Amended and Restated Certificate of Incorporation, dated June 1,
2000 (incorporated by reference to Exhibit 2.5 of our Current Report
on Form 8-K, filed on June 16, 2000).
3.2 Our Certificate of Amendment of Amended and Restated Certificate of
Incorporation, dated June 9, 2000 (incorporated by reference to
Exhibit 2.7 of our Current Report on Form 8-K, filed on June 16,
2000).
3.3 Our Certificate of Amendment of Amended and Restated Certificate of
Incorporation, dated August 23, 2001 (incorporated by reference to
Exhibit 3.3 of Amendment No. 1 to our Registration Statement on Form
S-3, Registration No. 333-66280, filed on August 31, 2001).
3.4 Our Certificate of Designation of Series A Junior Preferred Stock,
dated December 27, 2001 (incorporated by reference to Exhibit 3.4 of
our Quarterly Report on Form 10-Q for the quarterly period ended
December 31, 2001).
3.5 Our Amended and Restated By-laws dated August 1, 2000 (incorporated by
reference to Exhibit 3.2 of our Current Report on form 8-K, filed July
11, 2001).
4.1 Rights Agreement dated as of April 18, 2000, between us and
Continental Stock Transfer & Trust Company, which includes as exhibits
the form of Right Certificates as Exhibit A, the Summary of Rights to
Purchase Series A Junior Preferred Stock as Exhibit B and the form of
Certificate of Designation of Series A Junior Preferred Stock of
Activision as Exhibit C, (incorporated by reference to our
Registration Statement on Form 8-A, Registration No. 001-15839, filed
April 19, 2000).
4.2 Form of Senior Debt Securities Indenture.*
4.3 Form of Senior Debt Securities.*
4.4 Form of Subordinated Debt Securities Indenture.*
4.5 Form of Subordinated Debt Securities.*
4.6 Form of Warrant Agreement (including form of Warrant Certificate).*
4.7 Form of Rights Agreement (including form of Right Certificate).*
4.8 Form of Purchase Contract (including form of Purchase Contract
Certificate) and, if applicable, Pledge Agreement.*
4.9 Form of Unit Agreement (including form of Unit Certificate).*
4.10 Form of Common Stock Certificate.*
4.11 Certificate of Designation of Preferred Stock.*
4.12 Form of Preferred Stock Certificate.*
5.1 Opinion of Bryan Cave LLP as to the legality of securities being
registered.**
10.1 Confidential License Agreement for Nintendo Gamecube (Western
Hemisphere), dated as of November 9, 2001, between Nintendo of America
Inc. and Activision Publishing, Inc.***
10.2 License Agreement for the Nintendo Gamecube System (EEA), dated as of
June 5, 2002, between Nintendo Co., Ltd. and Activision, Inc.***
II-8
10.3 Confidential License Agreement for Game Boy Advance (Western
Hemisphere), dated as of May 10, 2001, between Nintendo of America,
Inc. and Activision Publishing, Inc.***
10.4 Confidential License Agreement for the Game Boy Advance Video Game
System (EEA, Austrailia and New Zealand), dated as of September 14,
2001, between Nintendo Co., Ltd. and Activision, Inc.***
10.5 Microsoft Corporation Xbox Publisher License Agreement, dated as of
July 18, 2001, between Microsoft Corporation and Activision
Publishing, Inc.***
10.6 Amendment to Microsoft Corporation Xbox Publisher License Agreement,
dated as of April 19, 2002, between Microsoft Corporation and
Activision Publishing, Inc.***
10.7 Xbox Live Distribution Amendment to the Xbox Publisher Licensing
Agreement, dated as of October 28, 2002, between Microsoft Corporation
and Activision Publishing, Inc.***
10.8 Licensed Publisher Agreement, dated as of July 13, 2002, between Sony
Computer Entertainment America Inc. and Activision, Inc. ("Playstation
license").***
10.9 Amendment to Licensed Publisher Agreement, dated as of April 1, 2000,
between Sony Computer Entertainment America Inc. and Activision, Inc.
("Playstation2 license").***
10.10 Playstation2 Licensed Publisher Agreement, dated as of March 23,
2001, between Sony Computer Entertainment Europe Limited and
Activision UK Limited.***
12.1 Computation of Ratio of Earnings to Fixed Charges.**
23.1 Consent of Bryan Cave LLP (included as part of Exhibit 5.1).**
23.2 Consent of KPMG LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
24.1 Power of attorney (included on signature page).**
25.1 Statement of Eligibility of Trustee on Form T-1.*
________________________
* To be filed, if necessary, subsequent to the effectiveness of this
registration statement by an amendment to this registration statement or
incorporated by reference pursuant to a Current Report on Form 8-K in connection
with the offering of securities registered hereunder.
** Previously filed.
*** Previously filed with registration statement on Form S-3 (333-101271).