Exhibit 10.25
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement") was made and entered
into as of October 7, 2004, and amended and restated as of October 22, 2004,
between Pacific Data Images, Inc., a California corporation ("Target" and after
the Effective Time of the Merger (as defined below) the "Surviving
Corporation"), DreamWorks Animation SKG, Inc., a Delaware corporation (the
"Acquiror"), and DWA Acquisition Corp., a Delaware corporation ("Sub"). Target
and Sub are hereinafter collectively referred to as the "Constituent
Corporations."
The Constituent Corporations hereby agree as follows:
1. THE MERGER.
(a) MERGER OF SUB WITH AND INTO TARGET.
(i) AGREEMENT TO ACQUIRE TARGET. Subject to the terms of this
Agreement (the "Merger Agreement"), Target shall be acquired by Acquiror through
a merger (the "Merger") of Sub with and into Target. The closing of the Merger
(the "Closing") will take place at 10:00 a.m., New York time, on a date to be
specified by the parties (the "Closing Date") at the offices of Cravath, Swaine
& ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
(ii) EFFECTIVE TIME OF THE MERGER. The Merger shall be effective
(the "Effective Time") as prescribed by law.
(iii) SURVIVING CORPORATION. At the Effective Time of the Merger,
Sub shall be merged with and into Target and the separate corporate existence of
Sub shall thereupon cease. Target shall be the surviving corporation in the
Merger and the separate corporate existence of Target, with all its purposes,
objects, rights, privileges, powers, immunities and franchises, shall continue
unaffected and unimpaired by the Merger.
(b) EFFECT OF THE MERGER; ADDITIONAL ACTIONS.
(i) EFFECTS. The Merger shall have the effects set forth in Section
1107 of the California General Corporation Law (the "CGCL") and Section 259 of
the Delaware General Corporation Law.
(ii) ADDITIONAL ACTIONS. If, at any time after the Effective Time of
the Merger, Target shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions or things are necessary or
desirable (i) to vest, perfect or confirm of record or otherwise in Target its
right, title or interest in, to or under any of the rights, properties or assets
of either Constituent Corporation acquired or to be acquired by Target as a
result of, or in connection with, the Merger or (ii) to otherwise carry out the
purposes of this Agreement, each Constituent Corporation and its officers and
directors shall be deemed to have granted to Target an irrevocable power of
attorney to execute and deliver all such deeds, bills of sale, assignments and
assurances and to take and do all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such
rights, properties or assets in Target and otherwise to carry out the purposes
of this Agreement; and the officers and directors of Target are fully authorized
in the name of each Constituent Corporation or otherwise to take any and all
such actions.
2. THE CONSTITUENT CORPORATIONS.
(a) ORGANIZATION OF TARGET.
(i) INCORPORATION. Target was incorporated under the laws of the
State of California on August 13, 1980.
(ii) AUTHORIZED STOCK. Target is authorized to issue one class of
shares designated Common Stock in the aggregate amount of 30,000,000 shares
("Target Common Stock") .
(iii) OUTSTANDING STOCK. As of the date of this Agreement,
11,356,610 shares of Target Common Stock were outstanding.
(b) ORGANIZATION OF SUB.
(i) INCORPORATION. Sub was incorporated under the laws of the State
of Delaware on September 14, 2004.
(ii) AUTHORIZED STOCK. Sub is authorized to issue an aggregate of
1,000 shares of Common Stock ("Sub Stock").
(iii) OUTSTANDING STOCK. On the date hereof, an aggregate of 1,000
shares of Sub Stock are outstanding.
(c) TARGET SHAREHOLDER APPROVAL. The holders of a majority of the
outstanding shares of Target's Common Stock are expected to approve and adopt
this Agreement without a meeting by written consent in accordance with the
provisions of Section 603 of the CGCL.
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3. AMENDED ARTICLES OF INCORPORATION; BY-LAWS AND DIRECTORS AND OFFICERS OF
TARGET.
(a) AMENDMENT OF TARGET'S ARTICLES OF INCORPORATION.
(i) AUTHORIZED STOCK AT MERGER. At the Effective Time of the Merger,
Article V of the Articles of Incorporation of Target shall be amended in its
entirety to read as set forth on Exhibit A attached hereto.
(ii) ARTICLES OF INCORPORATION OF SURVIVING CORPORATION. The
Articles of Incorporation of Target in effect at the Effective Time of the
Merger, as amended as provided in clause (a)(i) above, shall be the Articles of
Incorporation of the Surviving Corporation unless and until amended as provided
by applicable law.
(b) BYLAWS. The Bylaws of Target, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended as provided by California law and such Bylaws.
(c) OFFICERS AND DIRECTORS OF SURVIVING CORPORATION. The directors of Sub
in effect immediately prior to the Effective Time of the Merger shall be the
directors of the Surviving Corporation, and the officers of Target immediately
prior to the Effective Time of the Merger shall be the officers of the Surviving
Corporation, in each case until the earlier of their resignation or removal or
until their respective successors shall have been duly elected and qualified.
4. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES.
(a) EFFECT ON CAPITAL STOCK. As of the Effective Time of the Merger, by
virtue of the Merger and without any action on the part of the holder of any
shares of Target Common Stock:
(i) CAPITAL STOCK OF SUB. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid and
non-assessable share of Target Common Stock. Each stock certificate of Sub
evidencing ownership of any such shares shall continue to evidence ownership of
such shares of capital stock of the Surviving Corporation.
(ii) CANCELLATION OF TREASURY STOCK. All shares of Target Common
Stock that are owned by Target (as treasury stock), Acquiror or Sub shall be
canceled and retired and shall cease to exist and no consideration shall be
delivered in exchange therefor.
(iii) CONVERSION OF TARGET COMMON STOCK. The issued and outstanding
shares of Target capital stock (other than shares to be canceled pursuant to
Section 4(a)(ii) hereof and shares, if any, held by persons exercising
dissenters' rights in accordance with Section 1300 of the CGCL) held by a holder
of record of Target capital stock immediately prior to the Effective Time shall
be converted, without any action on the part of such holder, into the right to
receive a number of whole shares of Class A common stock of Acquiror, $.01 par
value
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("Acquiror Common Stock"), determined by multiplying the number of shares of
Target capital stock held by such holder of Target capital stock by a fraction
(the "Exchange Ratio"), the numerator of which is $6.50, and the denominator of
which is the initial public offering price per share of Class A common stock of
the Acquiror in connection with its initial public offering (the "Merger
Consideration") and rounding the product up for any fraction equal to or greater
than one half, and rounding the product down for any fraction that is less than
one half. The initial public offering price per share of Class A common stock of
the Acquiror shall be determined by reference to the per share amount appearing
under the column "Price to Public" on the cover page of the Acquiror's
prospectus, dated October 28, 2004, regarding the offering of 29,000,000 shares
of Class A common stock of the Acquiror, without any deduction for underwriting
discounts and commissions.
(iv) CONVERSION OF TARGET OPTIONS. As of the Effective Time, each
outstanding option to purchase shares of Target Common Stock granted pursuant to
the PDI Inc. 1996 Equity Incentive Plan and the PDI Inc. 1998 Stock Plan (the
"Target Stock Option Plans"), whether vested or unvested (a "Target Option"),
will be converted into an option to purchase shares of Acquiror Common Stock
(each, an "Acquiror Option"). In addition, the Target Stock Option Plans shall
be terminated by resolution of the Target's board of directors. Except as
provided below, each such Target Option converted by Acquiror under this
Agreement shall retain its respective vesting schedule as set forth under the
applicable Target Stock Option Plan; however, the converted Target Options will
be governed by the 2004 Omnibus Incentive Compensation Plan as of the Effective
Time. The 2004 Omnibus Incentive Compensation Plan shall provide for terms and
conditions such that the converted Target Options shall continue to be subject
to the same terms and conditions that are comparable to those set forth in the
applicable Target Stock Option Plan, except that (i) each such option will be
exercisable for that number of whole shares of Acquiror Common Stock obtained by
multiplying the number of shares of Target Common Stock that would be issuable
upon exercise of such option immediately prior to the Effective Time, assuming
that all vesting conditions applicable to such option were then satisfied, by
the Exchange Ratio and rounded down to the nearest whole number of shares of
Acquiror Common Stock, and (ii) the per share exercise price for the shares of
Acquiror Common Stock issuable upon exercise of such converted Target Option
will be equal to the quotient determined by dividing the exercise price per
share of Target Common Stock at which such option was exercisable immediately
prior to the Effective Time by the Exchange Ratio, rounded up to the nearest
cent. Consistent with the terms of the Target Stock Option Plans and the
documents governing the outstanding Target Options under such plans, the Merger
will not terminate any of the outstanding Target Options under the Target Stock
Option Plans or accelerate the exercisability or vesting of such options or the
shares of Target Common Stock which will be subject to those options upon the
conversion of the Target Options in connection with the Merger. It is the
intention of the parties that the Target Options converted to Acquiror Options
qualify, to the maximum extent permissible, following the Effective Time, as
incentive stock options, as defined in Section 422 of the Code, to the extent,
and only to the extent, the Target Options so converted qualified as incentive
stock options prior to the Effective Time.
(iv) DISSENTERS' RIGHTS. If any holder of Target Common Stock (a
"Dissenting Holder") duly demands purchase of his, her or its shares of Target
Common Stock in
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connection with the Merger under Chapter 13 of the CGCL (such shares being
"Dissenting Shares"), the Dissenting Shares shall not be converted into Merger
Consideration but shall be converted into the right to receive an amount in cash
equal to the fair market value of such shares as may be determined to be due
with respect to such Dissenting Shares pursuant to the law of the State of
California. After the Effective Time of the Merger, Acquiror shall issue and
deliver to any holder of shares of Target Common Stock who shall have withdrawn
his, her or its demand for purchase or have failed to perfect or shall have
otherwise lost his, her or its right of purchase, in any case pursuant to the
CGCL, upon surrender by such Dissenting Shareholder of his, her or its,
certificate or certificates representing shares of Target Common Stock, the
Merger Consideration to which such Dissenting Shareholder is then entitled under
Section 4(a)(iii) of this Agreement.
(b) EXCHANGE OF CERTIFICATES.
(i) EXCHANGE AGENT. Prior to the Closing Date, Acquiror shall
appoint The Bank of New York to act as Exchange Agent (the "Exchange Agent") in
the Merger.
(ii) EXCHANGE PROCEDURES. At the Effective Time, the Exchange Agent
shall mail to each holder of record of a certificate (i) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates held by such person shall pass, only upon
proper delivery of the certificates to the Exchange Agent and shall be in a form
and have such other provisions as Acquiror may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the applicable Merger Consideration. Upon surrender of a certificate for
cancellation to the Exchange Agent, together with such letter of transmittal,
duly completed and validly executed, and such other documents as may reasonably
be required by the Exchange Agent, the holder of such certificate shall be
entitled to receive in exchange therefor the Merger Consideration with respect
to such shares, without interest and the certificate so surrendered shall
forthwith be canceled.
(iii) NO FURTHER OWNERSHIP RIGHTS IN TARGET COMMON STOCK. All Merger
Consideration delivered upon the surrender of certificates that represented
shares of Target Common Stock in accordance with the terms hereof shall be
deemed to have been paid in full satisfaction of all rights pertaining to such
shares of Target Common Stock theretofore represented by such certificates. At
the close of business on the day on which the Effective Time occurs the stock
transfer books of Target shall be closed, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Target capital stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
certificates are presented to the Surviving Corporation or the Exchange Agent
for transfer or any other reason, they shall be canceled and exchanged as
provided in this Section 4.
5. TERMINATION
(a) TERMINATION BY MUTUAL AGREEMENT. Notwithstanding the approval of this
Agreement by the shareholders of Target, this Agreement may be terminated at any
time prior to the Effective Time of the Merger by mutual written consent of the
Constituent Corporations.
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(b) EFFECTS OF TERMINATION. In the event of the termination of this
Agreement, this Agreement shall become void and there shall be no liability on
the part of either Target or Sub or their respective officers or directors.
6. GENERAL PROVISIONS.
(a) AMENDMENT. This Agreement may be amended by the boards of directors of
the Constituent Corporations and the Acquiror hereto any time prior to the
effective time of the Merger; however, after approval hereof by the shareholders
of the Constituent Corporations, no amendment shall be made which by law
requires the further approval of such shareholders without obtaining such
further approval. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
(b) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(c) GOVERNING LAW. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of New York,
without giving effect to its principles governing conflicts of laws, except to
the extent the laws of California or Delaware are mandatorily applicable to the
Merger.
(d) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among such parties pertaining to the subject matter hereof and thereof, and the
agreements contemplated hereby and all negotiations and drafts of the parties
with regard to the transactions contemplated herein, and any and all written or
oral agreements existing between the parties hereto regarding such transactions
are expressly canceled.
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The parties have duly executed this Agreement as of the date first written
above.
TARGET:
PACIFIC DATA IMAGES, INC.,
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
by /s/ ▇▇▇ ▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇
Title: Vice President and
Assistant Secretary
SUB:
DWA ACQUISITION CORP.,
by /s/ ▇▇▇ ▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇
Title: President
by /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary
ACQUIROR:
DREAMWORKS ANIMATION SKG, INC.,
by /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: General Counsel and Secretary
by /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial Officer and
Vice President
EXHIBIT A
AMENDMENT TO PACIFIC DATA IMAGES, INC.'S ARTICLES OF INCORPORATION:
ARTICLE V
The Corporation is authorized to issue one class of shares designated
"Common Stock." The total number of shares of Common Stock that the Corporation
is authorized to issue is one thousand, par value $0.01 per share.
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