EXHIBIT 99.4
[LOGO OF FRACTAL DESIGN CORPORATION]
April 28, 1997
Dear Shareholder:
Fractal Design Corporation, a California corporation ("Fractal"), has
entered into an Agreement and Plan of Reorganization (the "Reorganization
Agreement") with MetaTools, Inc., a Delaware corporation ("MetaTools"), and
Rook Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of MetaTools ("Merger Sub"), providing for a combination of Fractal and
MetaTools. Pursuant to the Reorganization Agreement, a special meeting of
shareholders (the "Meeting") of Fractal will be held at 0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxxxx on May 29, 1997 at 8:00 a.m. local time.
At the Meeting you will be asked to consider and vote upon the approval of
the Reorganization Agreement, which provides for the merger of Merger Sub with
and into Fractal (the "Merger"). Upon consummation of the Merger, Fractal will
become a wholly-owned subsidiary of MetaTools and, subject to approval of
MetaTools' stockholders, MetaTools will change its corporate name to
"MetaCreations Corporation" (the "Combined Company"). As a result of the Merger,
(i) each outstanding share of Fractal Common Stock will be converted into and be
exchangeable for 0.749 shares of Common Stock (the "Exchange Ratio") of the
Combined Company, par value $0.001 per share (the "Combined Company Common
Stock") and (ii) each outstanding option to purchase Fractal Common Stock under
Fractal's Option Plans will be assumed by MetaTools and will become an option or
right to purchase Combined Company Common Stock, with appropriate adjustments to
be made to the number of shares issuable thereunder and the exercise price
thereof based on the Exchange Ratio. The foregoing proposal is described more
fully in the accompanying Joint Proxy Statement/Prospectus.
Following the Merger, based on the shares of Fractal Common Stock and the
Common Stock of MetaTools (the "MetaTools Common Stock") outstanding as of
April 21, 1997, the former holders of Fractal Common Stock will own
approximately 39.5 percent of the Combined Company Common Stock and the
holders of MetaTools Common Stock will own approximately 60.5% of the Combined
Company Common Stock. In addition, following the Merger, three directors of
Fractal, Xxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxxxx Xxxxxxxxx, will be appointed to
the Board of Directors of the Combined Company. Furthermore, Xxxx Xxxxxx,
President and CEO of Fractal, and Xxxxxx Xxxxxx, Chairman and Vice President,
Research and Development of Fractal, will assume senior management positions
in the Combined Company.
Xxxxxxxxx Xxxxxx, the financial advisor retained by the Board of Directors
of Fractal in connection with the Merger, rendered its opinion on February 11,
1997 that, as of such date, the consideration to be received pursuant to the
Reorganization Agreement was fair to Fractal shareholders from a financial
point of view.
After careful consideration, Xxxxxxx's Board of Directors has unanimously
approved the Reorganization Agreement and the transactions contemplated
thereby and has unanimously concluded that they are fair, and in the best
interests of, Fractal and its shareholders. Your Board of Directors
unanimously recommends a vote in favor of the Merger.
In the materials accompanying this letter you will find a Notice of Special
Meeting of Shareholders, a Joint Proxy Statement/Prospectus relating to the
actions to be taken by the Fractal shareholders at the Meeting and a Proxy
Card. The Joint Proxy Statement/Prospectus more fully describes the proposed
transactions. Shareholders are urged to review carefully the information
contained in the accompanying Joint Proxy Statement/Prospectus, in particular
the information under the captions "Risk Factors," "The Merger and Related
Transactions--Joint Reasons for the Merger" and "--Fractal's Reasons for the
Merger" and "--Material Contacts and Board Deliberations" prior to voting on
the proposal.
All shareholders are cordially invited to attend the Meeting in person. You
may revoke your proxy at any time before it has been voted, and if you attend
the Meeting, you may vote in person if you wish even though you have
previously returned your proxy. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THE MEETING,
REGARDLESS OF THE NUMBER YOU HOLD. Approval of the Merger requires the
affirmative vote of the holders of a majority of the outstanding shares of
Fractal Common Stock. Therefore, please complete, sign and date, and return
your proxy in the enclosed envelope.
Sincerely,
/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
President and Chief Executive
Officer
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