In an effort to further enhance its console development capabilities and game creation for the next-generation consoles, Activision, Inc., has acquired Northern California-based software developer Shaba Games LLC. Under the terms of the agreement, Shaba has become a wholly owned subsidiary of Activision, with Shaba's equity holders receiving 258,621 shares common stock in connection with the acquisition. Up to 68,965 additional shares of Activision common stock may also be issued to Shaba's equity holders over the course of several years, depending on the satisfaction of certain performance requirements and other criteria. As part of the transaction, Shaba's management team and key employees have signed long-term employment contracts with Activision. Shaba has worked with Activision on such games as MAT HOFFMAN'S PRO BMX and TONY HAWK'S PRO SKATER 3 for PlayStation. The company is currently in development on SHAUN MURRAY'S PRO WAKEBOARDER which will be available for PlayStation2, Xbox and GameCube.