UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the
Registrant
þ
Filed by a Party Other than the
Registrant
o
Check the appropriate box:
þ
Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
o
Definitive
Proxy Statement
o
Definitive
Additional Materials
o
Soliciting
Material under
§240.14a-12
UNICA CORPORATION
(Name of Registrant as Specified In
Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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1.
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Title of each class of securities to which transaction applies:
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Common stock, par value $.01 per share, of Unica Corporation
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2.
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Aggregate number of securities to which transaction applies:
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21,609,541 shares of Unica common stock,
2,478,255 shares of Unica common stock underlying
outstanding stock options and 1,368,705 shares of Unica
common stock subject to settlement of restricted stock units,
each outstanding as of August 19, 2010
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3.
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(Set forth the amount on which the filing fee is calculated and
state how it was determined):
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The filing fee was determined based on the sum of
(a) 21,609,541 shares of Unica common stock multiplied
by $21.00 per share; (b) 2,478,255 shares of Unica
common stock underlying outstanding stock options with exercise
prices less than $21.00 per share multiplied by $15.15 (which is
the difference between $21.00 per share and the weighted average
exercise price per share); and (c) 1,368,705 shares of
Unica common stock subject to settlement of restricted stock
units multiplied by $21.00 per share. The filing fee was
determined by multiplying $0.00007130 by the sum of the
preceding sentence.
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4.
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Proposed maximum aggregate value of transaction:
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$520,088,729
$37,083
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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UNICA
CORPORATION
Reservoir Place North
170 Tracer Lane
Waltham, Massachusetts
02451-1379
[ ],
2010
Dear Stockholder:
You are cordially invited to attend a special meeting of
stockholders of Unica Corporation (Unica) to be held
on
[ ],
2010, at 10:00 a.m., local time, at the offices of Wilmer
Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston,
Massachusetts 02109.
At the special meeting, you will be asked to consider and vote
upon a proposal to adopt the Agreement and Plan of Merger, dated
as of August 12, 2010, by and among International Business
Machines Corporation (IBM), Amaroo Acquisition
Corp., a wholly-owned subsidiary of IBM, and Unica, as such
agreement may be amended from time to time. Pursuant to the
merger agreement, Amaroo Acquisition Corp. will merge with and
into Unica and as a result, under Delaware law, Unica will
become a wholly-owned subsidiary of IBM. We are also asking that
you grant the authority to vote your shares to adjourn the
special meeting to a later date, if necessary or appropriate, to
solicit additional proxies in the event there are not sufficient
votes in favor of adoption of the merger agreement at the time
of the special meeting.
If the merger is completed, Unica stockholders will be entitled
to receive $21.00 in cash, without interest and less any
applicable withholding taxes, for each share of Unica common
stock owned by them as of the date of the merger.
Our board of directors unanimously determined that the merger
agreement and the terms and conditions of the merger and the
merger agreement are fair to and advisable and in the best
interests of Unica and its stockholders. Our board of directors
has unanimously approved the merger agreement, the merger and
the other transactions contemplated thereby.
Our board of
directors unanimously recommends that you vote FOR
the adoption of the merger agreement at the special meeting.
Our board of directors considered a number of factors in
evaluating the transaction and consulted with our legal and
financial advisors. The enclosed proxy statement provides
detailed information about the merger agreement and the merger.
We encourage you to read this proxy statement carefully in its
entirety.
Your vote is very important, regardless of the number of
shares you own.
The proposal to adopt the merger
agreement must be approved by the holders of a majority of the
outstanding shares of our common stock entitled to vote at the
special meeting. Therefore, if you do not return your proxy card
in the mail, submit a proxy via the Internet or telephone or
attend the special meeting and vote in person, then your
decision not to respond will have the same effect as if you
voted AGAINST adoption of the merger agreement. Only
stockholders who owned shares of Unica common stock at the close
of business on
[ ],
2010, the record date for the special meeting, will be entitled
to vote at the special meeting. To vote your shares, you may
return your proxy card, submit a proxy via the Internet or
telephone or attend the special meeting and vote in person. Even
if you plan to attend the meeting,
we urge you to promptly
submit a proxy for your shares via the Internet or telephone or
by completing, signing, dating and returning the enclosed proxy
card.
If you sign, date and return your proxy card or submit a proxy
via the Internet or telephone without indicating how you wish to
vote, your proxy will be voted FOR the adoption of
the merger agreement and FOR the adjournment of the
special meeting to a later date, if necessary or appropriate, to
solicit additional proxies in the event there are not sufficient
votes in favor of adoption of the merger agreement at the time
of the special meeting. If you fail to submit a proxy, your
shares will not be counted for purposes of determining whether a
quorum is present at the special meeting. If you attend the
special meeting and wish to vote in person, you may revoke your
proxy and vote in person.
Thank you for your continued support of Unica.
Sincerely,
Yuchun Lee
Chief Executive Officer, President and Chairman
This proxy statement is dated
[ ],
2010 and is first being mailed to stockholders of Unica on or
about
[ ],
2010.
UNICA CORPORATION
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS AND PROXY
STATEMENT
To the Stockholders of Unica Corporation:
Unica Corporation, a Delaware corporation (Unica),
will hold a special meeting of stockholders at the offices of
Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street,
Boston, Massachusetts 02109, at 10:00 a.m., local time, on
[ ],
2010, for the following purposes:
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To consider and vote upon the adoption of the Agreement and Plan
of Merger, dated as of August 12, 2010, by and among
International Business Machines Corporation, a New York
corporation (IBM), Amaroo Acquisition Corp., a
Delaware corporation and wholly-owned subsidiary of IBM, and
Unica, as such agreement may be amended from time to
time; and
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To consider and vote upon the adjournment of the special meeting
to a later date, if necessary or appropriate, to solicit
additional proxies in the event there are not sufficient votes
in favor of adoption of the merger agreement at the time of the
special meeting.
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Unica may also conduct such other business as may properly come
before the special meeting, or any adjournment or postponement
thereof, by or at the direction of the board of directors. Only
record holders of Unica common stock at the close of business on
[ ],
2010 are entitled to receive notice of, and will be entitled to
vote at, the special meeting, including any adjournments or
postponements of the special meeting. Your vote is important.
The affirmative vote of the holders of a majority of the
outstanding shares of our common stock entitled to vote at the
special meeting is required to adopt the merger agreement and
the affirmative vote of the holders of a majority in voting
power of the shares of our common stock present or represented
by proxy at the special meeting and voting on such matter is
required to approve the proposal to adjourn the special meeting,
provided that a quorum is present. If a quorum is not present at
the special meeting, then the special meeting may be adjourned
with the affirmative vote of the holders of a majority of the
shares present in person or by proxy and entitled to vote on
such matter.
Under Delaware law, if the merger is completed, holders of Unica
common stock who do not vote in favor of adoption of the merger
agreement will have the right to seek appraisal of the fair
value of their shares as determined by the Delaware Court of
Chancery. In order to exercise your appraisal rights, you must
submit a written demand for an appraisal of your shares prior to
the stockholder vote on the merger agreement, not vote in favor
of adoption of the merger agreement and comply with other
Delaware law procedures explained in the accompanying proxy
statement. See The Merger Appraisal
Rights beginning on page 38 of the proxy statement
and Annex D to the proxy statement.
We urge you to complete, sign, date and return your proxy card
as promptly as possible by mail or by faxing the card to the
attention of Jason W. Joseph at
(781) 207-5834,
whether or not you expect to attend the special meeting. If you
are unable to attend in person and you properly complete, sign
and return your proxy card, your shares will be voted at the
special meeting in accordance with your proxy. You may also
submit a proxy by telephone by calling 1-800-PROXIES
(1-800-776-9437) in the United States and 1-718-921-8500 from
foreign countries or through the Internet at www.voteproxy.com
using the control number on your proxy card. If your shares are
held in street name by your broker or other nominee,
only such broker or other nominee can vote your shares unless
you obtain a valid legal proxy from such broker or nominee. You
should follow the directions provided by your broker or nominee
regarding how to instruct such broker or nominee to vote your
shares.
If you sign, date and return your proxy card without indicating
how you wish to vote, your proxy will be voted FOR
adoption of the merger agreement and FOR adjournment
of the special meeting, if necessary or appropriate, to permit
solicitations of additional proxies. If you fail to return your
proxy card and do not submit your proxy via the Internet or by
telephone, your shares will effectively be counted as a vote
against adoption of the merger agreement, will not be counted
for purposes of determining whether a quorum is present at the
special meeting and will have no effect on the proposal to
adjourn the special meeting to a later date, if necessary or
appropriate, to permit solicitations of additional proxies, if a
quorum is present. If you do attend the special meeting and wish
to vote in person, you may revoke your proxy and vote in person.
You
may revoke your proxy in the manner described in the enclosed
proxy statement at any time before it has been voted at the
special meeting.
Our board of directors unanimously recommends that you vote
FOR adoption of the merger agreement and
FOR adjournment of the special meeting to a later
date, if necessary or appropriate, to solicit additional proxies
in the event there are not sufficient votes in favor of adoption
of the merger agreement at the time of the special meeting.
The merger is described in the accompanying proxy statement,
which we urge you to read carefully. A copy of the merger
agreement is attached as Annex A to the proxy statement.
Waltham, Massachusetts
[ ],
2010
By Order of the Board of Directors,
Jason W. Joseph
Vice President, General Counsel & Secretary
YOUR VOTE
IS IMPORTANT.
Whether or not you plan to attend the special meeting, please
complete, sign and date the enclosed proxy card and return it
promptly in the envelope provided or by faxing it to the
attention of Jason W. Joseph at
(781) 207-5834,
or submit a proxy by telephone by calling 1-800-PROXIES
(1-800-776-9437)
in the United States and
1-718-921-8500
from foreign countries or through the Internet at
www.voteproxy.com. Giving your proxy now will not affect your
right to vote in person if you attend the special meeting.
UNICA
CORPORATION
SPECIAL
MEETING OF STOCKHOLDERS
TABLE OF
CONTENTS
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iii
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1
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2
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2
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12
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30
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32
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38
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Annexes
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Annex A Agreement and Plan of Merger
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Annex B Stockholders Agreement
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Annex C Opinion of Jefferies &
Company, Inc.
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Annex D Section 262 of the General
Corporation Law of the State of Delaware
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ii
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER
The following Q&A is intended to address some commonly
asked questions regarding the special meeting of stockholders
and the merger. These questions and answers may not address all
questions that may be important to you as a Unica stockholder.
We urge you to read carefully the more detailed information
contained elsewhere in this proxy statement, the annexes to this
proxy statement and the documents we refer to in this proxy
statement.
Except as otherwise specifically noted in this proxy statement,
we, our, us and similar
words in this proxy statement refer to Unica Corporation. In
addition, throughout this proxy statement, we refer to Unica
Corporation as Unica, to Amaroo Acquisition Corp. as
merger sub and to International Business Machines
Corporation as IBM.
The
Special Meeting
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Q:
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Why am I receiving this proxy statement?
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A:
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Our board of directors is furnishing this proxy statement in
connection with the solicitation of proxies to be voted at a
special meeting of our stockholders, or at any adjournments or
postponements of the special meeting, at which our stockholders
will be asked to vote to adopt the merger agreement that we
describe herein.
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Where and when is the special meeting of stockholders?
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A:
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The special meeting of our stockholders will be held on
[ ],
2010 at 10:00 a.m., local time, at the offices of Wilmer
Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston,
Massachusetts 02109.
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What am I being asked to vote on?
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A:
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You are being asked to vote to adopt a merger agreement that
provides for the acquisition of Unica by IBM. The proposed
acquisition would be accomplished through a merger of Amaroo
Acquisition Corp., a wholly-owned subsidiary of IBM, which we
refer to as merger sub, with and into Unica. As a result of the
merger, we will become a wholly-owned subsidiary of IBM, and our
common stock will cease to be listed on The NASDAQ Global
Market, will not be publicly traded and will be deregistered
under the Securities Exchange Act of 1934, as amended (which we
refer to in this proxy statement as the Securities
Exchange Act).
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In addition, you are being asked to grant to the proxies
identified in the enclosed proxy card discretionary authority to
adjourn the special meeting to a later date, if necessary or
appropriate, to solicit additional proxies in the event there
are not sufficient votes in favor of adoption of the merger
agreement. If we do not receive proxies from stockholders
holding a sufficient number of shares to adopt the merger
agreement, we could use the additional time to solicit
additional proxies in favor of adoption of the merger agreement.
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Q:
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How does Unicas board recommend that I vote?
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A:
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At a meeting held on August 12, 2010, our board of
directors unanimously approved the merger agreement and
determined that the merger agreement and the terms and
conditions of the merger and the merger agreement are fair to
and advisable and in the best interests of Unica and its
stockholders.
Our board of directors unanimously recommends
that you vote FOR the adoption of the merger
agreement and FOR the proposal to adjourn the
special meeting to a later date, if necessary or appropriate, to
solicit additional proxies in the event there are not sufficient
votes in favor of adoption of the merger agreement at the time
of the special meeting.
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The
Proposed Merger
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What will I be entitled to receive pursuant to the merger?
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A:
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As a result of the merger, our stockholders will be entitled to
receive $21.00 in cash, without interest and less any applicable
withholding taxes, for each share of our common stock they own
as of the date of the
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completion of the merger. For example, if you own
100 shares of our common stock, you will be entitled to
receive $2,100.00 in cash, without interest, less any applicable
withholding taxes, in exchange for your 100 shares upon the
completion of the merger.
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What regulatory approvals and filings are needed to complete
the merger?
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The merger is subject to compliance with the applicable
requirements of the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, or the HSR Act,
and clearance under the antitrust laws of various foreign
jurisdictions. See The Merger Regulatory
Matters beginning on page 45.
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When do you expect the merger to be completed?
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We are working toward completing the merger as quickly as
possible and currently expect to consummate the merger in the
fourth quarter of calendar year 2010. In addition to obtaining
stockholder approval, we must satisfy all other closing
conditions, including the receipt of regulatory approvals.
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What rights do I have if I oppose the merger?
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Stockholders of record as of the record date are entitled to
appraisal rights under Delaware law by following the procedures
and satisfying the requirements specified in Section 262 of
the General Corporation Law of the State of Delaware. A copy of
Section 262 is attached as Annex D to this proxy
statement. See The Merger Appraisal
Rights beginning on page 38.
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Will the merger be taxable to me?
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A:
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The receipt of cash pursuant to the merger will be a taxable
transaction for U.S. federal income tax purposes, and may also
be a taxable transaction under applicable state, local or
foreign income or other tax laws. Generally, for U.S. federal
income tax purposes, a U.S. stockholder will recognize gain or
loss equal to the difference between the amount of cash received
by the stockholder in the merger and the stockholders
adjusted tax basis in the shares of our common stock converted
into cash in the merger. If you are a
non-U.S.
holder, the merger will generally not be a taxable transaction
to you under U.S. federal income tax laws unless you have
certain connections to the United States, but may be a taxable
transaction to you under
non-U.S.
federal income tax laws, and you are encouraged to seek tax
advice regarding such matters. Because individual circumstances
may differ, we recommend that you consult your own tax advisor
to determine the particular tax effects to you. See The
Merger Material United States Federal Income Tax
Consequences of the Merger beginning on page 43.
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Voting
and Proxy Procedures
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Q:
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Who is entitled to vote at the special meeting?
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A:
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Only stockholders of record as of the close of business on
[ ],
2010 are entitled to receive notice of the special meeting and
to vote the shares of our common stock that they held at that
time at the special meeting, or at any adjournments or
postponements of the special meeting.
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Q:
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What vote is required to adopt the merger agreement?
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A:
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Adoption of the merger agreement requires the affirmative vote
of the holders of a majority of the outstanding shares of our
common stock entitled to vote at the special meeting.
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As of
[ ],
2010, the record date for determining who is entitled to vote at
the special meeting, there were
[ ] shares
of our common stock issued and outstanding. Under a stockholders
agreement dated as of August 12, 2010, our chairman and
chief executive officer, and certain trusts affiliated with our
chairman and chief executive officer, who collectively are the
beneficial owners of approximately 20% of our outstanding shares
of common stock as of August 12, 2010, have agreed to vote
the shares of our common stock they own in favor of the adoption
of the merger agreement.
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Q:
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What vote is required to adjourn the special meeting to a
later date, if necessary or appropriate, in order to solicit
additional proxies from our stockholders in the event there are
not sufficient votes in favor of adoption of the merger
agreement at the time of the special meeting?
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A:
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Approval of the proposal to adjourn the special meeting to a
later date, if necessary or appropriate, in order to solicit
additional proxies from our stockholders in the event there are
not sufficient votes in favor of adoption of the merger
agreement at the time of the special meeting requires the
affirmative vote of the holders of a majority in voting power of
the shares of our common stock present or represented by proxy
at the special meeting and voting on such matter, provided that
a quorum is present. If a quorum is not present at the special
meeting, then the special meeting may be adjourned with the
affirmative vote of the holders of a majority of the shares
present in person or by proxy and entitled to vote on such
matter.
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Our by-laws provide that a quorum is present at the special
meeting if the holders of a majority in voting power of the
shares of our common stock issued and outstanding and entitled
vote at the meeting are present in person or represented by
proxy.
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Q:
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If my broker holds my shares in street name, will
my broker vote my shares for me?
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A:
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No. Your broker will not be able to vote your shares
without instructions from you. You should instruct your broker
to vote your shares following the procedure provided by your
broker. Without instructions, your shares will not be voted,
which will have the same effect as if you voted
AGAINST the adoption of the merger agreement but
will have no effect on the proposal to adjourn the special
meeting to a later date, if necessary or appropriate, in order
to solicit additional proxies from our stockholders in the event
there are not sufficient votes in favor of adoption of the
merger agreement at the time of the special meeting, if a quorum
is present.
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What do I need to do now?
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A:
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We urge you to read this proxy statement carefully and consider
how the merger affects you. Then mail your completed, dated and
signed proxy card in the enclosed return envelope as soon as
possible, or submit a proxy via the Internet or telephone, so
that your shares can be voted at the special meeting of our
stockholders. If you hold your shares of our common stock in
street name, follow the instructions you receive
from your broker or bank.
Please do not send your stock
certificates with your proxy card.
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Q:
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May I vote in person?
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A:
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Yes. If your shares are registered in your name, you may attend
the special meeting and vote your shares in person, rather than
signing and returning your proxy card or submitting a proxy via
the Internet or telephone. If your shares are held in
street name, you must obtain a proxy from your
broker or other nominee in order to attend the special meeting
and vote in person. Even if you plan to attend the special
meeting in person, we urge you to complete, sign, date and
return the enclosed proxy or submit a proxy via the Internet or
telephone to ensure that your shares will be represented at the
special meeting.
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Q:
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How do I vote my shares of common stock? May I submit a proxy
via the Internet or telephone?
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A:
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If your shares are registered in your name, you may cause your
shares to be voted by returning a signed proxy card or vote in
person at the special meeting. Additionally, you may submit a
proxy authorizing the voting of your shares via the Internet at
www.voteproxies.com or telephonically by calling
1-800-PROXIES
(1-800-776-9437)
in the United States and
1-718-921-8500
from foreign countries. You must have the enclosed proxy card
available, and follow the instructions on the proxy card, in
order to submit a proxy via the Internet or telephone.
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If your shares are held in street name through a
broker or other nominee, you may provide voting instructions by
completing and returning the voting form provided by your broker
or nominee, or via the Internet or telephone through your broker
or nominee, if such a service is provided. To provide voting
instructions via the Internet or telephone through your broker
or nominee, you should follow the instructions on the voting
form provided by your broker or nominee.
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Q:
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What happens if I do not return my proxy card, submit a proxy
via the Internet or telephone or attend the special meeting and
vote in person?
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A:
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The adoption of the merger agreement requires the affirmative
vote of the holders of a majority of the outstanding shares of
our common stock entitled to vote at the special meeting.
Therefore, if you do not return your proxy card, submit a proxy
via the Internet or telephone, or attend the special meeting and
vote in person, it will have the same effect as if you voted
AGAINST the adoption of the merger agreement. In the
event that a quorum is not present in person or represented by
proxy at the special meeting, it is expected that the meeting
will be adjourned to solicit additional proxies. If a quorum is
not present at the special meeting, then the special meeting may
be adjourned with the affirmative vote of the holders of a
majority of the shares present in person or by proxy and
entitled to vote on such matter. If a quorum is present in
person or represented by proxy at the special meeting, approval
of the proposal to adjourn the special meeting to a later date,
if necessary or appropriate, to solicit additional proxies in
the event there are not sufficient votes in favor of adoption of
the merger agreement at the time of the special meeting requires
the affirmative vote of the holders of a majority in voting
power of the shares of our common stock present or represented
by proxy at the special meeting and voting on such matter and,
therefore, if you do not vote in person or by proxy, it will
have no effect on the outcome of such proposal to adjourn.
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Q:
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May I change my vote after I have mailed my signed proxy card
or delivered a proxy via the Internet or telephone?
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A:
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Yes. You may change your vote at any time before your proxy card
is voted at the special meeting.
If you have sent a proxy
directly to Unica
, you may revoke your proxy by:
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delivering a written revocation of the proxy or a
later dated, signed proxy card, to our corporate secretary at
our corporate offices at Unica Corporation, Reservoir Place
North, 170 Tracer Lane, Waltham, Massachusetts
02451-1379,
or by fax to the attention of Jason W. Joseph, Vice President,
General Counsel & Secretary, at
(781) 207-5834,
on or before the business day prior to the special meeting;
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delivering a new, later dated proxy by telephone or
via the Internet until immediately prior to the special meeting;
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delivering a written revocation or a later dated,
signed proxy card to us at the special meeting prior to the
taking of the vote on the matters to be considered at the
special meeting; or
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attending the special meeting and voting in person.
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If you have instructed a broker or other nominee to vote your
shares
, you may revoke your proxy only by following the
directions received from your broker or nominee to change those
instructions.
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Revocation of a proxy will not affect any vote taken prior to
revocation. Attendance at the special meeting will not in itself
constitute the revocation of a proxy; you must vote in person at
the special meeting to revoke a previously delivered proxy.
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Q:
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What should I do if I receive more than one set of voting
materials?
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A:
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You may receive more than one set of voting materials, including
multiple copies of this proxy statement and multiple proxy cards
or voting instruction cards. For example, if you hold your
shares in more than one brokerage account, you will receive a
separate voting instruction card for each brokerage account in
which you hold shares. If you are a stockholder of record and
your shares are registered in more than one name, you will
receive more than one proxy card. Please complete, sign, date
and return (or submit via the Internet or telephone with respect
to) each proxy card and voting instruction card that you receive.
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Q:
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What happens if I sell or otherwise transfer my shares of
Unica common stock before the special meeting?
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A:
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The record date for the special meeting is earlier than the date
of the special meeting and the date that the merger is expected
to be completed. If you sell or otherwise transfer your shares
of our common stock after the record date but before the special
meeting, you will retain your right to vote at the special
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meeting, but will transfer the right to receive the merger
consideration and lose the right to seek appraisal. Even if you
sell or otherwise transfer your shares of our common stock after
the record date, we urge you to complete, sign, date and return
the enclosed proxy or submit your proxy via the Internet or
telephone.
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Q:
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Should I send in my stock certificates now?
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A:
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No. After the merger is completed, you will receive written
instructions for exchanging your shares of our common stock for
the merger consideration of $21.00 in cash, without interest and
less any applicable withholding taxes, for each share of our
common stock you hold.
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Q:
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Who can help answer my questions?
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A:
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If you would like additional copies, without charge, of this
proxy statement or if you have questions about the merger,
including the procedures for voting your shares, you should
contact:
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Unica Corporation
Attn: Investor Relations
Reservoir Place North
170 Tracer Lane
Waltham, Massachusetts
02451-1379
(781) 839-8514
Neither the Securities and Exchange Commission nor any state
securities regulatory agency has approved or disapproved the
merger, passed upon the merits or fairness of the merger or
passed upon the adequacy or accuracy of the disclosures in this
proxy statement. Any representation to the contrary is a
criminal offense.
vii
FORWARD-LOOKING
INFORMATION
This proxy statement contains forward-looking
statements, as defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act that are based on our current
expectations, assumptions, beliefs, estimates and projections
about our company and our industry. The forward-looking
statements are subject to various risks and uncertainties that
could cause actual results to differ materially from those
described in the forward-looking statements. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as anticipate,
believe, estimate, expect,
forecast, intend, plan,
project, should and similar expressions.
Factors that may affect those forward-looking statements
include, among other things:
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the risk that the merger may not be consummated in a timely
manner, if at all,
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the risk that the merger agreement may be terminated in
circumstances that require us to pay IBM a termination fee of
$14.25 million in connection therewith,
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risks regarding a loss of or a substantial decrease in purchases
by our major customers,
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risks related to diverting managements attention from our
ongoing business operations,
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risks regarding employee retention, and
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other risks detailed in our current filings with the Securities
and Exchange Commission, including our most recent filings on
Form 10-K
and
Form 10-Q,
which discuss these and other important risk factors concerning
our operations.
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We caution you that reliance on any forward-looking statement
involves risks and uncertainties, and that although we believe
that the assumptions on which our forward-looking statements are
based are reasonable, any of those assumptions could prove to be
inaccurate, and as a result, the forward-looking statements
based on those assumptions could be incorrect. In light of these
and other uncertainties, you should not conclude that we will
necessarily achieve any plans and objectives or projected
financial results referred to in any of the forward-looking
statements. We do not undertake to release the results of any
revisions of these forward-looking statements to reflect future
events or circumstances.
1
This summary highlights selected information from this proxy
statement and may not contain all of the information that is
important to you. To understand the merger fully and for a more
complete description of the legal terms of the merger, you
should read carefully this entire proxy statement, the annexes
to this proxy statement and the documents we refer to in this
proxy statement. See Where You Can Find More
Information on page 66. The merger agreement is
attached as Annex A to this proxy statement. We encourage
you to read the merger agreement, which is the legal document
governing the merger. Each item in this summary references
another section of this proxy statement with more detailed
disclosure about that item.
The
Companies (page 15)
Unica Corporation
Attn: Investor Relations
Reservoir Place North
170 Tracer Lane
Waltham, Massachusetts
02451-1379
Telephone:
(781) 839-8514
Incorporated in December 1992 in Massachusetts and
reincorporated in Delaware in June 2003, Unica Corporation is a
global provider of enterprise marketing management, or EMM,
software designed to help businesses increase their revenues and
improve the efficiency and measurability of their marketing
operations. Focused exclusively on the needs of marketers,
Unicas software delivers key capabilities to track and
analyze online and offline customer behavior, generate demand
and manage marketing processes, resources and assets.
Unicas software streamlines the entire marketing process
for relationship, brand and Internet marketing from
analysis and planning, to budgeting, production management,
execution and measurement. As the most comprehensive EMM suite
on the market, Unicas suite of products delivers a
marketing system of record a dedicated
solution through which marketers capture, record and easily
manage marketing activity, information and assets, rapidly
design campaigns, and report on performance.
International Business Machines Corporation
New Orchard Road
Armonk, New York 10504
Telephone:
(914) 499-1900
IBM, a New York corporation, creates business value for clients
and solves business problems through integrated solutions that
leverage information technology and deep knowledge of business
processes. IBM solutions typically create value by reducing a
clients operational costs or by enabling new capabilities
that generate revenue. These solutions draw from an industry
leading portfolio of consulting, delivery and implementation
services, enterprise software, systems and financing.
Amaroo Acquisition Corp.
New Orchard Road
Armonk, New York 10504
Telephone:
(914) 499-1900
Amaroo Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of IBM, was organized solely for the
purpose of entering into the merger agreement and completing the
merger and the other transactions contemplated by the merger
agreement. Amaroo Acquisition Corp. has not conducted any
business operations other than in connection with the
transactions contemplated by the merger agreement. Upon
consummation of the merger, Amaroo Acquisition Corp. will cease
to exist and Unica will continue as the surviving corporation.
2
Merger
Consideration (page 46)
If the merger is completed, you will be entitled to receive
$21.00 in cash, without interest and less any applicable
withholding taxes, in exchange for each share of Unica common
stock that you own immediately prior to the effective time of
the merger and for which you have not properly exercised
appraisal rights.
After the merger is completed, you will have the right to
receive the merger consideration, but you will no longer have
any rights as a Unica stockholder as a result of the merger.
Unica stockholders will receive the merger consideration in
exchange for their Unica common stock in accordance with the
instructions contained in the letter of transmittal to be sent
to holders of Unica common stock as soon as reasonably
practicable after the closing of the merger, unless the Unica
stockholder has properly demanded appraisal of its shares.
Treatment
of Stock Options and Other Equity-Based Awards
(page 41)
Stock
Options
Each outstanding option to acquire our common stock granted
under our 1993 stock option plan and our 2003 stock option plan
will be cancelled and will be converted into the right of the
holder thereof to receive an amount, in cash, without interest
and less any applicable withholding taxes, equal to the product
of the number of shares of our common stock that are subject to
such option, and the excess, if any, of $21.00 per share over
the exercise price per share of the common stock subject to such
option.
Holders of outstanding options to acquire our common stock
granted under our 2005 stock incentive plan that are vested or
that are vesting in connection with the merger will be offered
the opportunity to have their options treated as described above
for the options outstanding under our 1993 and 2003 stock option
plans, which we refer to as being cashed out. Each
outstanding option to acquire our common stock granted under our
2005 stock incentive plan that is vested or that is vesting in
connection with the merger whose holder chooses not to have
cashed out and any other option not being cancelled in the
manner described in the prior paragraph, whether or not vested,
will be converted into an option to acquire, on substantially
the same terms and conditions as were applicable to such option
prior to the effective time of the merger, the number of shares
of common stock of IBM equal to the product of the number of
shares of our common stock that are subject to such option, and
the exchange ratio determined in accordance with the merger
agreement, rounded down to the nearest whole IBM share. The
exercise price per share of common stock of IBM as of
immediately following such conversion will be equal to the per
share exercise price for the shares of our common stock
otherwise purchasable pursuant to such option divided by the
exchange ratio, rounded up to the nearest whole cent.
Our 2005 stock incentive plan provides for certain acceleration
of vesting of options, except to the extent otherwise provided
in an agreement evidencing an option, in the event of a
change-in-control
of us. The merger will constitute a
change-in-control
for this purpose.
Restricted
Stock Units
IBM will pay to each holder of our restricted stock units,
following each applicable date after the closing date of the
merger on which any restricted stock unit held by such holder at
the effective time of the merger would have vested (each such
date is referred to herein as a lapse date) pursuant
to the terms of our stock plans or the terms of any such
restricted stock unit as in effect immediately prior the
effective time, an amount, in cash, equal to the product of
$21.00 per share and the number of restricted stock units held
by the holder at the effective time that, on any particular
lapse date, would have so vested, so long as such holder remains
employed with IBM.
Our 2005 stock incentive plan provides for certain acceleration
of vesting of restricted stock units, except to the extent
otherwise provided in an agreement evidencing a restricted stock
unit, in the event of a
change-in-control
of us. The merger will constitute a
change-in-control
for this purpose.
3
Market
Prices and Dividend Data (page 12)
Our common stock is listed on The NASDAQ Global Market under the
symbol UNCA. On August 12, 2010, the last full
trading day before the public announcement of the merger, the
closing price for our common stock was $9.55 per share and on
[ ],
2010, the latest practicable trading day before the printing of
this proxy statement, the closing price for our common stock was
$[ ] per share.
We did not declare or pay any cash dividends on our common stock
during the three most recent fiscal years.
Material
United States Federal Income Tax Consequences of the Merger
(page 43)
The conversion of shares of our common stock into the right to
receive $21.00 per share of cash merger consideration will be a
taxable transaction to our stockholders for U.S. federal
income tax purposes. See The Merger Material
United States Federal Income Tax Consequences of the
Merger beginning on page 43.
Tax matters can be complicated, and the tax consequences of
the merger to you will depend on the facts of your own
situation. We strongly recommend that you consult your own tax
advisor to fully understand the tax consequences of the merger
to you.
Recommendation
of Unicas Board of Directors and Reasons for the Merger
(page 20)
Our board of directors unanimously recommends that you vote
FOR the adoption of the merger agreement and
FOR the proposal to adjourn the special meeting to a
later date, if necessary or appropriate, to solicit additional
proxies in the event there are not sufficient votes in favor of
adoption of the merger agreement at the time of the special
meeting. At a meeting of our board of directors on
August 12, 2010, after consultation with our financial and
legal advisors, our board of directors unanimously determined
that the merger agreement and the merger are fair to and
advisable and in the best interests of Unica and its
stockholders and unanimously approved the merger agreement.
In the course of reaching its decision, our board of directors
consulted with our senior management, financial advisor and
legal counsel, reviewed a significant amount of information and
considered a number of factors. For a discussion of the factors
considered by our board of directors in reaching its decision to
approve the merger agreement and recommend that our stockholders
adopt the merger agreement, see The Merger
Recommendation of Unicas Board of Directors and Reasons
for the Merger beginning on page 20.
Opinion
of Unicas Financial Advisor (page 23)
Unica retained Jefferies & Company, Inc., or
Jefferies, to act as its financial advisor in connection with
the merger and to render to the Unica board of directors an
opinion as to the fairness to the holders of Unica common stock
of the consideration of $21.00 per share in cash to be received
by such holders. At the meeting of the Unica board of directors
on August 12, 2010, Jefferies rendered its oral opinion to
the Unica board of directors, subsequently confirmed in writing,
to the effect that, as of August 12, 2010 and based upon
and subject to the various considerations set forth in its
opinion, the consideration of $21.00 per share in cash to be
received by holders of Unica common stock pursuant to the merger
agreement was fair, from a financial point of view, to such
holders.
Jefferies opinion sets forth, among other things, the
assumptions made, procedures followed, matters considered and
limitations on the scope of the review undertaken by Jefferies
in rendering its opinion. Jefferies opinion was directed
to the Unica board of directors and addresses only the fairness
from a financial point of view of the consideration of $21.00
per share of Unica common stock, as of the date of the opinion.
It does not address any other aspects of the merger and does not
constitute a recommendation as to how any holder of Unica common
stock should vote on the merger or any matter related thereto.
The full text of the written opinion of Jefferies is attached to
this proxy statement as Annex C. Unica encourages its
stockholders to read Jefferies opinion carefully and in
its entirety. For a further discussion of Jefferies
opinion, see The Merger Opinion of
Unicas Financial Advisor beginning on page 23.
4
The
Special Meeting of Unicas Stockholders
(page 12)
Date, Time and Place.
A special meeting of our
stockholders will be held on
[ ],
2010, at the offices of Wilmer Cutler Pickering Hale and Dorr
LLP, 60 State Street, Boston, Massachusetts 02109, at
10:00 a.m., local time, to consider and vote on the:
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adoption of the merger agreement, and
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adjournment of the special meeting to a later date, if necessary
or appropriate, to solicit additional proxies in the event there
are not sufficient votes in favor of adoption of the merger
agreement at the time of the special meeting.
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Record Date and Voting Power.
You are entitled
to vote at the special meeting if you owned shares of our common
stock at the close of business on
[ ],
2010, the record date for the special meeting. You will have one
vote at the special meeting for each share of our common stock
you owned at the close of business on the record date. There are
[ ] shares
of our common stock outstanding and entitled to be voted at the
special meeting.
Quorum.
A quorum of stockholders is necessary
to hold a valid special meeting. Under our by-laws, a quorum is
present at the special meeting if the holders of a majority in
voting power of the shares of our common stock issued and
outstanding and entitled vote at the meeting are present in
person or represented by proxy.
Required Vote.
The adoption of the merger
agreement requires the affirmative vote of the holders of a
majority of the shares of our common stock outstanding and
entitled to vote at the close of business on the record date.
Approval of the proposal to adjourn the special meeting, if
necessary or appropriate, to solicit additional proxies in the
event there are not sufficient votes in favor of adoption of the
merger agreement at the time of the special meeting requires the
affirmative vote of the holders of a majority in voting power of
the shares of our common stock present or represented by proxy
at the special meeting and voting on such matter, provided that
a quorum is present. If a quorum is not present at the special
meeting, then the special meeting may be adjourned with the
affirmative vote of the holders of a majority of the shares
present in person or by proxy and entitled to vote on such
matter.
Interests
of Unicas Executive Officers and Directors in the Merger
(page 32)
When considering the recommendation of Unicas board of
directors, you should be aware that members of Unicas
board of directors and Unicas executive officers have
interests in the merger in addition to their interests as Unica
stockholders generally, as described below. These interests may
be different from, or in conflict with, your interests as Unica
stockholders. The members of our board of directors were aware
of these additional interests, and considered them, when they
approved the merger agreement.
Each of Messrs. Yuchun Lee, Peter Cousins, John Hogan,
Kevin Keane, Paul McNulty, and David Sweet and Ms. Vivian
Vitale have entered into employment arrangements with IBM. These
employment arrangements will supersede and replace the executive
retention agreements that they are currently party to with us
and they will not be entitled to any of the benefits under their
existing executive retention agreements or to any extra
acceleration of vesting of equity-based awards upon termination
of employment under the generally applicable terms of our 2005
stock incentive plan as a result of the merger. The employment
arrangements with IBM are conditioned upon the closing of the
merger and the executive officers continued employment
with Unica through the closing of the merger, and will provide
certain retention/severance payments and equity compensation
benefits to such individuals, as described below. In addition,
Mr. Lee has entered into a new non-competition and
non-solicitation agreement that will supersede and replace the
non-competition and non-solicitation arrangements that he is
currently bound by with us, effective upon the closing of the
merger.
5
Pursuant to employment arrangements between IBM and each of
Messrs. Yuchun Lee, Peter Cousins, John Hogan, Kevin
Keane, Paul McNulty, and David Sweet and Ms. Vivian Vitale:
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each of these executive officers will initially receive the
following annual base salaries: Mr. Lee
$415,000; Mr. Cousins $270,000;
Mr. Hogan $270,000; Mr. Keane
$210,000; Mr. McNulty $250,000;
Mr. Sweet $270,000; and
Ms. Vitale $225,000;
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upon the closing of the merger, each of these executive officers
will be entitled to the vesting of 50% of such executives
then unvested options, and the remaining 50% of such
executives then unvested options will be converted into
options to acquire IBM stock and will continue to vest in
accordance with their original vesting schedules;
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upon the closing of the merger, each of these executive officers
will be entitled to the vesting of 50% of such executives
then unvested restricted stock units, and the remaining 50% of
such executives then unvested restricted stock units will
be converted into the right to receive cash payments based on
the value of the merger consideration on each subsequent vesting
date of the restricted stock units;
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any options that remain unvested, and any cash payments with
respect to restricted stock units that are unpaid, in each case,
as of the second anniversary of the closing of the merger (with
respect to Messrs. Lee, Cousins, Hogan, Keane, McNulty, and
Sweet) or the first anniversary of the closing of the merger
(with respect to Ms. Vitale), will vest or be paid in full
as of such anniversary date;
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subject to the execution of IBMs standard release of
claims, if any of these executive officers is terminated by IBM
without cause (as such term is defined in the
executive officers employment arrangement with IBM) prior
to the second anniversary of the closing of the merger (with
respect to Messrs. Lee, Cousins, Hogan, Keane, McNulty, and
Sweet) or the first anniversary of the closing of the merger
(with respect to Ms. Vitale), any options held by such
executive officer that are unvested as of such termination will
vest in full, and any cash payments with respect to restricted
stock units that are unpaid as of such termination will be paid,
as of such termination;
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Messrs. Lee, Cousins, Hogan, Keane, McNulty, and Sweet will
be entitled to participate in a retention program pursuant to
which each such executive officer will be eligible to receive
the following aggregate amounts (with payments under such
program made following each of four six-month milestone periods
through the second anniversary of the closing of the merger):
Mr. Lee $1,100,000;
Mr. Cousins $600,000;
Mr. Hogan $600,000; Mr. Keane
$550,000; Mr. McNulty $575,000; and
Mr. Sweet $600,000;
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Ms. Vitale will be entitled to participate in a retention
program pursuant to which she will be eligible to receive a cash
payment equal to $440,000 on the first anniversary of the
closing of the merger; and
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if the employment of any of these executive officers is
terminated by IBM without cause (as such term is
defined in the executive officers employment arrangement
with IBM) prior to the first anniversary of the closing of the
merger, such executive officer will be entitled to a lump sum
cash payment equal to the sum of the executives highest
base salary in effect during the
12-month
period preceding the closing of the merger and the executive
officers then current target annual cash bonus, provided
that the executive officer executes IBMs standard release
of claims and satisfies all conditions to make the release
effective.
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Executive retention agreements entered into by us with Kevin P.
Shone, James Feiger and Jason W. Joseph will remain in effect
following the merger because they have not entered into
employment arrangements with IBM. Such executive retention
agreements provide each such executive officer with severance
payments and acceleration of vesting of equity awards, among
other benefits, if his employment is terminated under certain
specified circumstances following the merger. In general, the
retention agreements provide that if a
change-in-control
(as defined in such agreements) occurs and the executives
employment with us or our successor is terminated by us or our
successor, other than for cause, disability or
death, or by the executive for good reason (as
those terms are defined in the agreements) within 12 months
following a
6
change-in-control
of us, then the executive would be entitled to, in addition to
those benefits set forth in our 2005 stock incentive plan, the
following benefits:
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Accelerated vesting of (i) 75% of the executives
unvested equity awards (inclusive of any accelerated vesting
provided for in our 2005 stock incentive plan) if the executive
has been employed by us for at least one year but less than two
years or (ii) 100% of the executives unvested equity
awards if the executive has been employed by us for at least two
years, except that the agreement with Mr. Shone provides
for 100% vesting if Mr. Shone has been employed for at
least one year;
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Cash severance payments equal to the sum of the executives
highest base salary in effect during the 12-month period
preceding the
change-in-control
and the executives target annual cash bonus in effect at
the time of the
change-in-control;
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Continuation of health care benefits for the executive and his
family for a period of 12 months following termination of
employment; and
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Payment in cash of accrued but unpaid salary and unused vacation
accrued through the termination date and a pro rata portion of
the executives previous years bonus based on the
termination date.
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The merger constitutes a
change-in-control
and IBM will constitute our successor under the retention
agreements.
In connection with the execution of the merger agreement, we
have awarded a special transaction bonus of $100,000 in cash to
each of Mr. Shone and Mr. Joseph which will be paid
contingent upon the closing of the merger.
We also expect that each of our executive officers will enter
into an agreement with us that will provide, contingent on the
closing of the merger, for the cancelation of the portions of
the options granted to them under our 2005 stock incentive plan
that are vested or vest in connection with the merger, in
exchange for a cash payment equal to the product obtained by
multiplying the number of shares subject to the vested portion
of such option by the difference between the per share merger
consideration and the exercise price of such option, less
applicable withholding taxes.
In addition, in connection with the execution of the merger
agreement, we have accelerated, contingent on the closing of the
merger, the vesting of all of the stock options and restricted
stock units granted under our 2005 stock incentive plan in
February 2010 to each of our non-employee directors.
The surviving corporation will assume, and IBM will cause the
surviving corporation to comply with and honor, all rights to
indemnification, advancement of expenses and exculpation from
liabilities for acts or omissions occurring at or prior to the
effective time of the merger existing in favor of our and our
subsidiaries current or former directors or officers as
provided in our and their respective certificates of
incorporation or bylaws (or comparable organizational documents)
and any indemnification or other agreements as in effect on the
date of the merger agreement. We have entered into
indemnification agreements with each of our directors and
executive officers. Each indemnification agreement provides that
we will indemnify the director or executive officer to the
fullest extent permitted by law for claims arising in his or her
capacity as our director, officer, employee or agent, provided
that he or she acted in good faith and in a manner that he or
she reasonably believed to be in, or not opposed to, our best
interests and, with respect to any criminal proceeding, had no
reasonable cause to believe that his or her conduct was
unlawful. In the event that we do not assume the defense of a
claim against our director or executive officer, we are required
to advance his or her expenses in connection with his or her
defense, provided that he or she undertakes to repay all amounts
advanced if it is ultimately determined that he or she is not
entitled to be indemnified by us. In addition, IBM will obtain
or will cause to be obtained a tail insurance policy
with a claims period of six years from the effective time of the
merger with respect to directors and officers
liability insurance covering those persons who were, as of the
date of the merger agreement, covered by our directors and
officers liability insurance policy, for acts or omissions
occurring prior to the effective time of the merger, subject to
certain limitations.
7
Stockholders
Agreement (page 62)
Under a stockholders agreement dated as of August 12, 2010,
our chairman and chief executive officer, and certain trusts
affiliated with our chairman and chief executive officer, who
collectively are the beneficial owners of approximately 20% of
the outstanding shares of our common stock as of August 12,
2010, have agreed to vote their Unica shares in favor of
adoption of the merger agreement and, until the later of the
date of the special meeting of our stockholders called to vote
upon the adoption of the merger agreement and 6 months
after the date of such stockholders agreement, against any
takeover proposal. A copy of the stockholders agreement is
attached as Annex B to this proxy statement.
Conditions
to the Closing of the Merger (page 58)
Our, IBMs and merger subs obligations to effect the
merger are subject to the satisfaction or waiver of the
following conditions:
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the adoption of the merger agreement by our stockholders;
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the expiration or termination of any waiting period applicable
to the merger required under the HSR Act;
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the receipt of any other approval or the termination or
expiration of any waiting period under any other applicable
competition, merger control, antitrust or similar law that is
applicable to the merger; and
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the absence of any temporary restraining order, preliminary or
permanent injunction, or other judgment, order or decree issued
by a court of competent jurisdiction or other legal restraint or
prohibition that has the effect of preventing the consummation
of the merger.
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IBMs and merger subs obligations to effect the
merger are further subject to the satisfaction by us or waiver
by them of the following conditions:
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each of our representations and warranties contained in the
merger agreement is true and correct, to the extent required
under the merger agreement, as of the date of the merger
agreement and as of the closing date of the merger, as described
below under the heading The Merger Agreement
Conditions to the Closing of the Merger beginning on
page 58;
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our performance, in all material respects, of all obligations
required to be performed by us under the merger agreement at or
prior to the closing date of the merger;
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the absence of any claim, suit, action or proceeding brought or
threatened by a governmental entity:
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challenging or seeking to restrain or prohibit the consummation
of the merger or challenging the merger agreement;
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seeking to obtain damages from IBM or its subsidiaries that are
material, individually or in the aggregate, in relation to the
value of Unica and its subsidiaries, taken as a whole;
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seeking to prohibit or limit in any respect, or place conditions
on, the ownership or operation by us, IBM or our or its
respective affiliates of all or any portion of the business or
assets or any product, or requiring any such party to dispose
of, license or hold separate all or any portion of the business
or assets or any product of us, IBM or any of our or its
subsidiaries;
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seeking to impose limitations on the ability of IBM or any of
its affiliates to acquire or hold, or exercise full rights of
ownership of, our common stock or the common stock of the
surviving corporation or any of IBMs subsidiaries;
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seeking to prohibit IBM or any of its affiliates from
effectively controlling any of the business or operations of us
or our or IBMs subsidiaries; or
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seeking to prevent us or our or IBMs subsidiaries from
operating our or their respective businesses in substantially
the same manner as operated by us or them prior to the date of
the merger agreement;
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the absence of any temporary restraining order, preliminary or
permanent injunction or other judgment, order or decree issued
by a court of competent jurisdiction that could reasonably be
expected to result, directly or indirectly, in any of the
effects described in the immediate preceding condition;
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IBM shall have received evidence, in form and substance
reasonably satisfactory to it, that IBM or we have obtained all
material consents, approvals, authorizations, qualifications and
orders of all governmental entities legally required to effect
the merger, and all consents, licenses, approvals and waivers
agreed to by us, IBM and merger sub; and
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a material adverse effect has not occurred with respect to us
since the date of the merger agreement.
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Our obligations to effect the merger are subject to the further
satisfaction by IBM
and/or
merger sub or waiver by us of the following conditions:
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each of the representations and warranties of IBM and merger sub
contained in the merger agreement is true and correct, to the
extent required under the merger agreement, as of the date of
the merger agreement and as of the closing date of the merger,
as described below under the heading The Merger
Agreement Conditions to the Closing of the
Merger beginning on page 58; and
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IBMs and merger subs performance, in all material
respects, of all obligations required to be performed by them
under the merger agreement at or prior to the closing date of
the merger.
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No
Solicitation of Acquisition Proposals by Unica
(page 54)
We have agreed that we will not, and will not authorize or
permit any of our subsidiaries to, nor will we authorize or
permit any of our or our subsidiaries directors, officers
or employees or any of our or their investment bankers,
attorneys, accountants or other advisors or representatives to,
directly or indirectly:
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solicit, initiate or knowingly encourage, or take any other
action to knowingly facilitate, any takeover proposal or any
inquiries or the making of any proposal that could reasonably be
expected to lead to a takeover proposal (as defined in the
merger agreement and described below under the heading The
Merger Agreement Covenants Board
Recommendation beginning on page 55); or
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enter into, continue or otherwise participate in any discussions
or negotiations regarding, or furnish to any person any
information with respect to, or otherwise cooperate with any
person with respect to, any takeover proposal.
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Despite these general prohibitions, at any time prior to the
adoption of the merger agreement by our stockholders and subject
to the conditions described below under the heading The
Merger Agreement Covenants No
Solicitation of Acquisition Proposals beginning on
page 54, in response to a bona fide written unsolicited
takeover proposal that our board determines in good faith is, or
could reasonably be expected to lead to, a superior proposal (as
defined in the merger agreement and described below under the
heading The Merger Agreement
Covenants Board Recommendation) and which did
not result from our breach of the merger agreement, we may and
may permit and authorize our subsidiaries and our and our
subsidiaries representatives to:
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furnish information to a person making such a takeover proposal
(and its representatives) pursuant to a confidentiality
agreement which contains terms that are no less restrictive than
those contained in the confidentiality agreement between us and
IBM, provided that all such information has been provided, or is
concurrently provided, to IBM; and
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participate in discussions or negotiations with, and only with,
the person making such takeover proposal (and its
representatives) regarding such takeover proposal.
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Termination
of the Merger Agreement (page 59)
The merger agreement may be terminated under the following
circumstances:
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by our, IBMs and merger subs mutual written consent;
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by either IBM or us if:
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the merger is not consummated by the date that is six months
from the date of the merger agreement, but this right to
terminate the merger agreement will not be available to any
party whose action or failure to act has been a principal cause
of or resulted in the failure of the merger to occur on or
before such date and such action or failure to act constitutes a
breach of the merger agreement;
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any temporary restraining order, preliminary or permanent
injunction, or other judgment, order or decree issued by a court
of competent jurisdiction or other legal restraint or
prohibition having the effect of preventing the consummation of
the merger is in effect and has become final and
nonappealable; or
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our stockholders do not adopt the merger agreement at the
stockholders meeting (or at any adjournment or postponement
thereof) that we have called and held for such purpose;
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by us if IBM breaches a representation or warranty or fails to
perform a covenant or other agreement contained in the merger
agreement so that the related closing conditions cannot be
satisfied and such breach or failure to perform cannot be cured
by IBM or merger sub within 30 business days after such breach
or failure to perform, or if such breach or failure to perform
is curable by such date, IBM or merger sub, as the case may be,
does not commence to cure such breach or failure to perform
within 10 business days after receipt of written notice from us
and diligently pursue such cure thereafter; or
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by IBM if:
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we deliver a notice to IBM that our board of directors has
withdrawn or modified its recommendation that the merger
agreement or the merger or both are advisable in a manner
adverse to IBM or merger sub or such an adverse recommendation
change has occurred;
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we breach a representation or warranty or fail to perform a
covenant or other agreement contained in the merger agreement so
that the related closing conditions cannot be satisfied and such
breach or failure to perform cannot be cured by us within 30
business days after such breach or failure to perform, or if
such breach or failure to perform is curable by such date, we do
not commence to cure such breach or failure to perform within 10
business days after receipt of written notice from IBM and
diligently pursue such cure thereafter; or
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any legal restraint is in effect and has become final and
nonappealable that has one of the effects set forth in the
merger agreement and described below under the heading The
Merger Agreement Termination of the Merger
Agreement beginning on page 59.
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Termination
Fee and Expenses (page 60)
Each party will generally pay its own fees and expenses in
connection with the merger, whether or not the merger is
consummated.
We will be required to pay a termination fee of
$14.25 million to IBM if:
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a takeover proposal has been made to us or our stockholders, or
any person has announced an intention to make a takeover
proposal, or a takeover proposal otherwise becomes known to us
or generally known to our stockholders and thereafter:
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the merger agreement is terminated by either us or IBM because
the merger has not been consummated by the date that is six
months from the date of the merger agreement or the merger
agreement is terminated by either us or IBM because our
stockholders did not adopt the merger agreement at the
stockholders meeting (or at any adjournment or postponement
thereof) that we have called and held for such purpose; and
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within 12 months after such termination of the merger
agreement, either we or one of our subsidiaries enters into an
acquisition agreement with respect to any takeover proposal or
any takeover proposal is consummated (solely for purposes of
this provision, all references to 10% in the definition of
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takeover proposal, as described below under the
heading The Merger Agreement
Covenants Board Recommendation beginning on
page 55, are deemed to be references to 35%); or
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IBM terminates the merger agreement because we deliver a notice
to IBM that our board of directors has withdrawn or modified its
recommendation that the merger agreement or the merger or both
are advisable in a manner adverse to IBM or merger sub or such
an adverse recommendation change has occurred.
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Regulatory
Matters (page 45)
The HSR Act prohibits us from completing the merger until we
have furnished certain information and materials to the
Antitrust Division of the Department of Justice and the Federal
Trade Commission and the required waiting period has expired or
been terminated. Both parties will file the necessary filings
promptly following the filing of this proxy statement, and each
will request early termination of the waiting period. The merger
is also subject to review by the governmental authorities of
various other jurisdictions under the antitrust or competition
laws of those jurisdictions. We have filed or will file the
appropriate notifications in each such jurisdiction and are
pursuing the approval of the transaction.
Appraisal
Rights (page 38)
Record holders of our common stock as of the record date who do
not vote in favor of the merger may elect to pursue their
appraisal rights to receive the judicially determined fair
value of their shares, which could be more or less than,
or the same as, the per share merger consideration for the
common stock, but only if they comply with the procedures
required under Delaware law. For a summary of these Delaware law
procedures, see The Merger Appraisal
Rights beginning on page 38. An executed proxy that
is not marked AGAINST or ABSTAIN will be
voted FOR the adoption of the merger agreement and
will disqualify the stockholder submitting that proxy from
demanding appraisal rights.
A copy of Section 262 of the General Corporation Law of the
State of Delaware, or DGCL, is included as Annex D to this
proxy statement. Failure to follow the procedures set forth in
Section 262 of the DGCL will result in the loss of
appraisal rights. We encourage you to read these provisions
carefully and in their entirety.
ANY UNICA STOCKHOLDER WHO WISHES TO EXERCISE APPRAISAL RIGHTS OR
WHO WISHES TO PRESERVE HIS, HER OR ITS RIGHT TO DO SO SHOULD
REVIEW ANNEX D CAREFULLY AND SHOULD CONSULT HIS, HER OR ITS
LEGAL ADVISOR, SINCE FAILURE TO TIMELY AND FULLY COMPLY WITH THE
PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF SUCH
RIGHTS.
11
MARKET
PRICES AND DIVIDEND DATA
Our common stock is listed on The NASDAQ Global Market under the
symbol UNCA. This table shows, for the periods
indicated, the range of intraday high and low per share sales
prices for our common stock as reported on The NASDAQ Global
Market.
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Fiscal Quarters
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First
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Second
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Third
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Fourth
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Fiscal Year 2010
(Through ,
2010)
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High
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$
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8.13
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$
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9.71
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$
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11.00
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$
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[ ]
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Low
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$
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6.18
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$
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7.30
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$
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7.15
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$
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[ ]
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Fiscal Year 2009
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High
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$
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8.85
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$
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6.15
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$
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5.71
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$
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8.25
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Low
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$
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3.06
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$
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3.85
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$
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4.26
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$
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5.00
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Fiscal Year 2008
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High
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$
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13.01
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$
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9.58
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$
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8.69
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$
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9.35
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Low
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$
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8.37
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$
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6.15
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$
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6.20
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$
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7.31
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The following table sets forth the closing price per share of
our common stock, as reported on The NASDAQ Global Market on
August 12, 2010, the last full trading day before the
public announcement of the merger, and on
[ ],
2010, the latest practicable trading day before the printing of
this proxy statement:
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Common Stock
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Closing Price
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August 12, 2010
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$
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9.55
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[ ],
2010
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$
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You are encouraged to obtain current market quotations for our
common stock in connection with voting your shares of common
stock. If the merger is consummated, there will be no further
market for our common stock and our common stock will be
delisted from The NASDAQ Global Market and deregistered under
the Securities Exchange Act.
Dividends
We did not declare or pay any cash dividends on our common stock
during the three most recent fiscal years. In the event that the
merger is not consummated, we would expect to retain earnings,
if any, to fund the development and growth of our business and
would not anticipate paying cash dividends on our common stock
in the foreseeable future. In such event, our payment of any
future dividends would be at the discretion of our board of
directors after taking into account various factors, including
our financial condition, operating results, cash needs and
growth plans.
THE
SPECIAL MEETING
The enclosed proxy is solicited on behalf of the board of
directors of Unica for use at the special meeting of
stockholders or at any adjournment or postponement thereof.
Date,
Time and Place
We will hold the special meeting at the offices of Wilmer Cutler
Pickering Hale and Dorr LLP, 60 State Street, Boston,
Massachusetts 02109, at 10:00 a.m., local time, on
[ ],
2010.
Purpose
of the Special Meeting
At the special meeting, we will ask the holders of our common
stock to adopt the merger agreement, as it may be amended from
time to time, and, if there are not sufficient votes in favor of
adoption of the merger
12
agreement, to adjourn the special meeting to a later date, if
necessary or appropriate, to solicit additional proxies.
Record
Date; Shares Entitled to Vote; Quorum
Only holders of record of our common stock at the close of
business on
[ ],
2010, the record date, are entitled to notice of, and to vote
at, the special meeting. On the record date,
[ ] shares
of our common stock were issued and outstanding and held by
approximately
[ ]
holders of record. Holders of record of our common stock on the
record date are entitled to one vote per share at the special
meeting on the proposal to adopt the merger agreement and the
proposal to adjourn the special meeting to a later date, if
necessary or appropriate, to solicit additional proxies.
A quorum of stockholders is necessary to hold a valid special
meeting. Under our by-laws, a quorum is present at a meeting if
the holders of a majority in voting power of the shares of our
common stock issued and outstanding and entitled vote at the
meeting are present in person or represented by proxy. In the
event that a quorum is not present at the special meeting, it is
expected that the meeting will be adjourned to solicit
additional proxies. For purposes of determining the presence of
a quorum, abstentions will be counted as shares present and
broker non-votes (where a broker or nominee does not exercise
discretionary authority to vote on a matter), if any, will also
be counted as shares present. If a quorum is not present at the
special meeting, then the special meeting may be adjourned with
the affirmative vote of the holders of a majority of the shares
present in person or by proxy and entitled to vote on such
matter. For purposes of such vote with respect to adjournment,
abstentions will have the same effect as a vote against such
matter, but broker non-votes will have no effect on such matter.
Vote
Required
The adoption of the merger agreement requires the affirmative
vote of the holders of a majority of the outstanding shares of
our common stock entitled to vote at the special meeting.
Adoption of the merger agreement is a condition to the closing
of the merger.
Approval of the proposal to adjourn the special meeting to a
later date, if necessary or appropriate, in order to solicit
additional proxies from our stockholders requires the
affirmative vote of the holders of a majority in voting power of
the shares of our common stock present or represented by proxy
at the special meeting and voting on such matter, provided that
a quorum is present.
Voting by
Unica Directors and Executive Officers
Under a stockholders agreement dated as of August 12, 2010,
our chairman and chief executive officer, and certain trusts
affiliated with our chairman and chief executive officer, who
collectively are the beneficial owners of approximately 20% of
the outstanding shares of our common stock as of August 12,
2010, have agreed to vote their Unica shares in favor of
adoption of the merger agreement.
At the close of business on the record date, our directors and
executive officers (other than our chairman and chief executive
officer) and their affiliates owned and were entitled to vote
shares of our common stock, which represented approximately
[ ]% of the shares of our
outstanding common stock on that date. We expect that these
directors and executive officers will vote all of their shares
of our common stock FOR adoption of the merger
agreement and FOR the proposal to adjourn the
special meeting to a later date, if necessary or appropriate, to
solicit additional proxies.
Voting of
Proxies
If your shares are registered in your name, you may cause your
shares to be voted at the special meeting by returning a signed
proxy card or voting in person at the meeting. Additionally, you
may submit a proxy authorizing the voting of your shares via the
Internet at www.voteproxies.com or by telephone by calling
1-800-PROXIES
(1-800-776-9437) in the United States or 1-718-921-8500 from
foreign countries. You must
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have the enclosed proxy card available, and follow the
instructions on the proxy card, in order to submit a proxy via
the Internet or telephone.
If your shares are registered in your name and you plan to
attend the special meeting and wish to vote in person, you will
be given a ballot at the meeting. If your shares are registered
in your name, you are encouraged to submit a proxy even if you
plan to attend the special meeting in person.
Voting instructions are included on your proxy card. All shares
represented by properly executed proxies received in time for
the special meeting will be voted at the special meeting in
accordance with the instructions of the stockholder. Properly
executed proxies that do not contain voting instructions will be
voted FOR the adoption of the merger agreement and
FOR the proposal to adjourn the special meeting to a
later date, if necessary or appropriate, to solicit additional
proxies, provided that no proxy that is specifically marked
AGAINST the proposal to adopt the merger agreement
will be voted FOR the adjournment proposal unless it
is specifically marked FOR the adjournment proposal.
If your shares are held in street name through a
broker or other nominee, you may provide voting instructions by
completing and returning the voting form provided by your broker
or nominee or via the Internet or by telephone through your
broker or nominee, if such a service is provided. To provide
voting instructions via the Internet or telephone, you should
follow the instructions on the voting form provided by your
broker or nominee. If you plan to attend the special meeting,
you will need a proxy from your broker or nominee in order to be
given a ballot to vote the shares. If you do not return your
brokers or nominees voting form, provide voting
instructions via the Internet or telephone through your broker
or nominee, if possible, or attend the special meeting and vote
in person with a proxy from your broker or nominee, it will have
the same effect as if you voted AGAINST the adoption
of the merger agreement.
Revocability
of Proxies
Any proxy you give pursuant to this solicitation may be revoked
by you at any time before it is voted. Proxies may be revoked as
follows:
If you have sent a proxy directly to Unica
, you may
revoke it by:
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delivering to our corporate secretary at our corporate offices
at Unica Corporation, Reservoir Place North, 170 Tracer Lane,
Waltham, Massachusetts
02451-1379,
or by fax to the attention of Jason W. Joseph, Vice President,
General Counsel & Secretary, at
(781) 207-5834,
on or before the business day prior to the special meeting, a
written revocation of the proxy or a later dated, signed proxy
card;
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delivering a new, later dated proxy by telephone or via the
Internet until immediately prior to the special meeting;
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delivering a written revocation or a later dated, signed proxy
card to us at the special meeting prior to the taking of the
vote on the matters to be considered at the special
meeting; or
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attending the special meeting and voting in person.
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If you have instructed a broker or nominee to vote your
shares
, you may revoke your proxy only by following the
directions received from your broker or nominee to change those
instructions.
Revocation of a proxy will not affect any vote taken prior to
revocation. Attendance at the special meeting will not in itself
constitute the revocation of a proxy; you must vote in person at
the special meeting to revoke a previously delivered proxy.
Board of
Directors Recommendations
Our board of directors has unanimously approved the merger
agreement and determined that the merger agreement and the
merger are fair to and advisable and in the best interests of
Unica and its stockholders.
Our board of directors
unanimously recommends that Unica stockholders vote
FOR the proposal to adopt the merger agreement and
also unanimously recommends that stockholders vote
FOR the proposal to adjourn the special meeting to a
later date, if necessary or appropriate, to permit the
solicitation of
14
additional proxies in the event there are not sufficient
votes in favor of adoption of the merger agreement at the time
of the special meeting.
Abstentions
and Broker Non-Votes
Stockholders that abstain from voting on a particular matter and
shares held in street name by brokers or nominees
who indicate on their proxies that they do not have
discretionary authority to vote such shares as to a particular
matter will not be counted as votes in favor of such matter. For
purposes of determining the presence of a quorum, abstentions
will be counted as shares present and broker non-votes (where a
broker or nominee does not exercise discretionary authority to
vote on a matter), if any, will also be counted as shares
present. Abstentions and broker non-votes will have the same
effect as votes against the adoption of the merger agreement and
will have no effect on the proposal to adjourn the special
meeting to a later date, if necessary or appropriate, to solicit
additional proxies in the event there are not sufficient votes
in favor of adoption of the merger agreement at the time of the
special meeting, provided that a quorum is present.
Solicitation
of Proxies
The expense of soliciting proxies in the enclosed form will be
borne by Unica. We may reimburse brokers, banks and other
custodians, nominees and fiduciaries representing beneficial
owners of shares for their expenses in forwarding soliciting
materials to such beneficial owners. Proxies may be solicited by
certain of our directors, officers and employees, personally or
by telephone, facsimile or other means of communication. No
additional compensation will be paid for such services.
Stockholder
List
A list of our stockholders entitled to vote at the special
meeting will be available for examination by any Unica
stockholder at the special meeting. For ten days prior to the
special meeting, this stockholder list will be available for
inspection by any stockholder for any purpose germane to the
special meeting during ordinary business hours at our corporate
offices located at Unica Corporation, Reservoir Place North, 170
Tracer Lane, Waltham, Massachusetts
02451-1379.
THE
COMPANIES
Unica
Corporation
Unica Corporation is a global provider of enterprise marketing
management, or EMM, software designed to help businesses
increase their revenues and improve the efficiency and
measurability of their marketing operations. Focused exclusively
on the needs of marketers, Unicas software delivers key
capabilities to track and analyze online and offline customer
behavior, generate demand and manage marketing processes,
resources and assets. Unicas software streamlines the
entire marketing process for relationship, brand and Internet
marketing from analysis and planning, to budgeting,
production management, execution and measurement. As the most
comprehensive EMM suite on the market, Unicas suite of
products delivers a marketing system of
record a dedicated solution through which
marketers capture, record and easily manage marketing activity,
information and assets, rapidly design campaigns, and report on
performance.
Unica was incorporated in December 1992 in Massachusetts and
reincorporated in Delaware in June 2003 and its principal
executive offices are located at Reservoir Place North, 170
Tracer Lane, Waltham, Massachusetts
02451-1379.
Unicas website is located at
http://www.unica.com.
Additional information regarding Unica is contained in our
filings with the Securities and Exchange Commission. See
Where You Can Find More Information beginning on
page 66.
International
Business Machines Corporation
IBM, a New York corporation, creates business value for clients
and solves business problems through integrated solutions that
leverage information technology and deep knowledge of business
processes. IBM
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solutions typically create value by reducing a clients
operational costs or by enabling new capabilities that generate
revenue. These solutions draw from an industry leading portfolio
of consulting, delivery and implementation services, enterprise
software, systems and financing.
IBMs principal executive offices are located at New
Orchard Road, Armonk, New York 10504 and its telephone number is
(914) 499-1900.
Additional information regarding IBM is contained in IBMs
filings with the Securities and Exchange Commission. See
Where You Can Find More Information beginning on
page 66.
Amaroo
Acquisition Corp.
Amaroo Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of IBM, was organized solely for the
purpose of entering into the merger agreement and completing the
merger and the other transactions contemplated by the merger
agreement. Merger subs principal executive offices are
located at New Orchard Road, Armonk, New York, 10504 and its
telephone number is
(914) 499-1900.
Merger sub has not conducted any business operations other than
in connection with the transactions contemplated by the merger
agreement.
Upon consummation of the merger, merger sub will cease to exist
and Unica will continue as the surviving corporation.
THE
MERGER
The following discussion summarizes the material terms of the
merger. We urge you to read carefully the merger agreement,
which is attached as Annex A to this proxy statement.
Background
to the Merger
We have had a commercial relationship with IBM for over five
years. Commencing in December 2009, we and IBM had conversations
from time to time with respect to strengthening our commercial
relationship, including by integrating certain of our products
with certain products of IBM.
On February 5, 2010, Mr. Yuchun Lee, our Chief
Executive Officer, received a telephone call from Mr. Craig
Hayman, General Manager, Application & Integration
Middleware, of IBM. During the call, Mr. Hayman stated that
IBM was interested in exploring ways for IBM to strengthen its
commercial relationship with us.
On February 18, 2010, Mr. Lee met with Mr. Hayman
and Mr. Archie Colburn, Managing Director of Corporate
Development for IBM, at our offices. Messrs. Hayman and
Colburn discussed various possible commercial relationships,
including a possible business combination.
On March 5, 2010, Mr. Colburn called Mr. Lee and
suggested that we consider a possible business combination with
IBM.
On March 8, 2010, following up on previous discussions that
had taken place from time to time since 2006 regarding possible
commercial relationships, representatives of Unica and Company X
met to explore a commercial relationship. During this meeting,
Company X raised the possibility of considering an acquisition
of Unica and suggested that a meeting between the chief
executive officers of the two companies be scheduled to further
explore possible commercial relationships.
On March 9, 2010, Mr. Lee informed Mr. Ain, the
lead director of our board of directors, of the possible
interest of IBM and Company X in a potential acquisition of
Unica.
On March 22, 2010, representatives of Deutsche Bank, the
financial advisor to IBM, met with Mr. Lee and discussed
our financial performance and generally how we and IBM valued
our business.
On March 30, 2010, Mr. Colburn called Mr. Lee and
communicated that IBM would be interested in acquiring Unica for
$17 per share in cash.
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On April 1, 2010, at an informational meeting of our board
of directors, Mr. Lee communicated to the directors the
offer of IBM. It was the consensus of the directors that we
should engage a financial advisor to assist in the evaluation of
IBMs offer.
From April 9 to April 12, 2010, we interviewed prospective
financial advisors and discussed the results of the interviews
with Mr. Ain, our lead director.
On April 13, 2010, at an informational meeting of our board
of directors, Mr. Lee updated the directors as to the
interviews with prospective financial advisors and the board of
directors determined to engage Jefferies as financial advisor.
On April 14, 2010, we engaged Jefferies as our financial
advisor.
On April 23, 2010, our board of directors held a meeting at
which the directors discussed the $17 per share verbal offer
made by IBM to acquire Unica. Representatives of WilmerHale, our
legal counsel, reviewed for the directors their fiduciary
responsibilities. Representatives of Jefferies provided their
views regarding the offer. The board discussed various sales
processes that might be followed if the board were to determine
that it was advisable to pursue a sale of Unica. The board
determined not to pursue a sale of Unica at the $17 per share
price proposed by IBM and instructed Jefferies to communicate to
IBM that it would be willing to engage in further discussions
with IBM only if IBM were to increase its price to a level that
the board determined would merit further consideration. The
board also determined to establish a special committee comprised
of Messrs. Aron Ain (Chairman), Robert Schechter and Gary
Haroian with the power and authority to monitor and direct the
processes and procedures related to the review and evaluation of
any strategic transaction, including a possible sale of Unica.
On April 27, 2010, representatives of Jefferies
communicated to Mr. Colburn of IBM and Deutsche Bank that
the $17 price proposed by IBM was not acceptable to our board of
directors.
From April 27 to May 18, 2010, representatives of Jefferies
and representatives of Deutsche Bank met from time to time
(either in person or by phone) to discuss the valuation of
Unica. During this same period, Mr. Lee and
Mr. Colburn continued to discuss the possible acquisition
of Unica by IBM.
On May 7, 2010, representatives of Jefferies met with
Mr. Colburn in IBMs offices to discuss their
valuation analysis of Unica.
On May 13, 2010, at a regularly scheduled meeting of our
board of directors, there was discussion regarding the possible
sale of Unica.
On May 19, 2010, we received a letter from IBM in which IBM
offered to acquire us at a price of $19 per share, subject to
our granting to IBM exclusivity for a period of time during
which we would not be able to discuss an acquisition with any
other party.
On May 20, 2010, the special committee met to discuss the
increased offer from IBM. Representatives of Jefferies and
WilmerHale participated in the meeting. The special committee
determined that they would need further time to evaluate the
offer and scheduled a
follow-up
meeting for May 24, 2010.
On May 24, 2010, the special committee met to further
review the increased offer by IBM. Representatives of Jefferies
reviewed the increased offer. The special committee, after
discussion, instructed Mr. Lee to contact representatives
of IBM and explore IBMs willingness to increase its
acquisition price.
On May 24, 2010, following the special committee meeting,
Mr. Lee called Mr. Colburn and discussed IBMs
willingness to increase its offer price. Mr. Colburn
declined to increase the offer price.
On May 25, 2010, at a meeting of the special committee,
Mr. Lee updated the special committee as to his
conversations with Mr. Colburn. A representative of
WilmerHale reviewed for the special committee the boards
fiduciary responsibilities, and discussed different approaches
that might be followed if the board were ultimately to determine
to pursue a sale of Unica. The committee instructed Mr. Lee
to contact IBM, and Jefferies to contact Deutsche Bank, to
communicate the need for IBM to increase its price. The
committee
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also scheduled a meeting for later that day to consider the
results of the discussions between representatives of Unica and
IBM.
Subsequently, on May 25, 2010, Mr. Lee communicated to
Mr. Colburn the need for IBM to increase its price in order
for the board to consider the possible sale of Unica.
Mr. Colburn again declined to increase the offer price.
Later on May 25, at a meeting of the special committee,
Mr. Lee and representatives of Jefferies both reported that
IBM and Deutsche Bank had each confirmed that IBM was not
willing to increase its $19 per share offer. Representatives of
Jefferies presented their view regarding the offer. After
discussion, the special committee determined to recommend that
the board of directors reject the $19 per share offer by IBM, as
well as its request for exclusivity.
On May 25, 2010, Mr. Lee had dinner with the chief
executive officer of Company X to explore possible commercial
relationships. At the dinner, Company X expressed general
interest in considering a possible acquisition of Unica; there
was no discussion as to the price at which Company X might be
interested.
On May 27, 2010, at a meeting of our board of directors,
Mr. Lee and members of the special committee reviewed for
the board the events that had taken place since the last meeting
of the board of directors. A representative of WilmerHale
reviewed for the board their fiduciary responsibilities.
Representatives of Jefferies reviewed the $19 per share offer.
Representatives of Jefferies also reviewed other potentially
interested buyers of Unica, including Company X and Company Y,
which had in 2009 expressed general interest in considering an
acquisition of Unica. The directors concluded that, given the
inadequacy of the price proposed by IBM and the risk of
potential harm to the business that might result if the
possibility of an acquisition became known to customers or
competitors, potentially interested parties should not yet be
approached and that the issue would be reconsidered if and when
we were to receive an offer from IBM at a price that the board
of directors viewed as sufficient to warrant exploration of
possible alternatives. The board determined to reject the $19
per share offer made by IBM on May 19, 2010 as well as
IBMs request for exclusivity and directed representatives
of Jefferies to communicate that decision to representatives of
Deutsche Bank.
On May 27, 2010, representatives of Jefferies communicated
to representatives of Deutsche Bank the decision of the board to
not accept IBMs $19 per share offer.
From May 27 to June 16, there were from time to time
discussions between representatives of Jefferies and Deutsche
Bank as to the acquisition price.
On June 16, 2010, Mr. Colburn called Mr. Lee and
communicated that IBM would be willing to increase its offer
price to $20 per share. We then received a letter from IBM in
which IBM offered to acquire us at a price of $20 per share,
subject to a grant of exclusivity for a period of time.
On June 17, 2010, at a meeting of the special committee,
the increased offer by IBM was discussed. Representatives of
Jefferies and Mr. Lee reviewed the increased offer. The
directors then discussed whether, in light of the revised offer,
we should approach other potentially interested acquirors.
Representatives of Jefferies reviewed other potentially
interested acquirors. A representative of WilmerHale reviewed
the boards fiduciary duties, as well as the types of
deal protection provisions that would likely be
included in any definitive merger agreement. The committee
reviewed, for each identified potentially interested acquiror,
the potential strategic fit, financial capability, acquisition
history and likelihood that it would be willing or able to offer
a price higher than that offered by IBM. The committee also
discussed the potential harm that could be inflicted on its
business if the possibility of an acquisition of Unica became
public or otherwise known to customers and competitors. The
committee requested that Jefferies contact Company X and Company
Y with respect to their interest in a possible acquisition of
Unica. The committee determined that no other parties should be
contacted at that time in view of its assessment that it was
unlikely that any of them would make a higher offer and that
such contacts would create potential risk to our business.
On June 17, 2010, representatives of Jefferies contacted
Company X and Company Y and inquired as to their possible
interest in acquiring Unica.
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On June 21, 2010, at a meeting of the special committee,
the committee again considered the increased offer by IBM, as
well as the inquiries made by Jefferies. Representatives of
Jefferies reported that Company Y had responded that it was not
interested in considering an acquisition at the price level
provided by Jefferies and that Company X had responded that it
was not in a position to initiate a process to consider an
acquisition of Unica. Representatives of Jefferies again
reviewed, and the committee discussed, other potential
acquirors. The committee also discussed the request by IBM for a
period of exclusivity during which we would not be able to
discuss an acquisition with any third party. The committee
directed Jefferies to seek an improved offer from IBM before it
would consider any grant of exclusivity.
On June 22, 2010, representatives of Jefferies called
Mr. Colburn to discuss the need for IBM to increase its
price in order for the board to consider exclusivity.
On June 22, 2010, IBM submitted a revised offer for the
purchase of Unica at a price of $21 per share, subject to a
grant of exclusivity by that evening.
On June 22, 2010, at a meeting of our board of directors,
the directors considered the increased $21 per share offer by
IBM. Representatives of WilmerHale reviewed the boards
fiduciary duties in connection with the possible sale of Unica.
Jefferies presented its preliminary financial analyses of the
increased offer made by IBM. Representatives of Jefferies also
reviewed the likely level of interest of other potential
acquirors, as well as the previous discussions with Company X
and Company Y. After consideration of the alternatives, it was
the consensus of the board that we should seek to negotiate a
definitive merger agreement with IBM at the $21 per share price.
The board then discussed the grant of exclusivity required by
IBM as a condition to its offer. Representatives of WilmerHale
then discussed the types of provisions likely to be included in
any definitive merger agreement that relate to our ability to
respond to a superior acquisition proposal. It was the consensus
of the board that, under the circumstances, it would be in the
best interests of stockholders to grant the exclusivity required
by IBM as a condition to its $21 per share offer.
On June 22, 2010, we and IBM entered into an agreement
under which we agreed to grant exclusivity to IBM until
August 20, 2010, subject to earlier termination after
August 6 if IBM were to reduce its offer below $21 per share.
On June 30, 2010, we and IBM entered into a new
confidentiality agreement with respect to the proposed
transaction.
In early July 2010, representatives of IBM began their due
diligence review of Unica, including a review of an electronic
data room of documents established by us.
On July 16, 2010, Cravath Swaine & Moore LLP,
legal counsel to IBM, sent to WilmerHale an initial draft of a
definitive merger agreement.
During the second half of July and early August, 2010, IBM
conducted its legal, financial and business due diligence, and
we and IBM, and our respective legal counsel, negotiated the
terms of a definitive merger agreement, the stockholders
agreement and the offer letters.
On August 9, 2010, at a meeting of the special committee,
the committee reviewed the status of the negotiations of the
definitive merger agreement, and related stockholders agreement.
Representatives of WilmerHale reviewed the terms of the proposed
agreements, including, in particular, the provisions relating to
our ability to respond to, and ultimately accept, a superior
acquisition proposal and the termination fee payable by us if
our board were to withdraw its recommendation of the merger. The
committee also reviewed the terms of the proposed retention
agreements with certain members of management.
On August 11, 2010, at a meeting of our board of directors,
the directors considered the proposed merger agreement with IBM.
Representatives of Jefferies presented to the board of directors
its financial analyses of the proposed merger. Representatives
of WilmerHale and Morris, Nichols, Arsht & Tunnell
LLP, our Delaware counsel, reviewed, and discussed with the
directors, the terms of the merger agreement and stockholders
agreement and their impact on any potential future transaction.
The board then reviewed with representatives of Jefferies each
of the other companies that had been contacted, or had expressed
possible interest in an acquisition, prior to the grant of
exclusivity to IBM, and the consequences of allowing exclusivity
to expire,
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and the board concluded that it would not be advisable to allow
that exclusivity to expire and re-contact any such parties. The
directors also reviewed the terms of the proposed retention
agreements with certain members of management.
On August 12, 2010, our board of directors met to consider
and vote upon the merger agreement with IBM, which had been
previously distributed to them. Representatives of Jefferies
presented updated financial analyses to the board of directors
and then rendered to the board of directors its oral opinion,
subsequently confirmed in writing, that, as of August 12,
2010, and subject to the factors and assumptions set forth in
the opinion, the $21 per share to be paid to the holders of
shares of Unica common stock pursuant to the merger agreement
was fair from a financial point of view to such holders. The
full text of the opinion of Jefferies, dated as of
August 12, 2010, which sets forth, among other things, the
assumptions made, procedures followed, matters considered and
limitations of the review undertaken by Jefferies in connection
with such opinion, is attached hereto as Annex C. Following
such presentation and after further review and discussion, our
board of directors resolved to approve the merger agreement and
related matters and resolved to recommend that our stockholders
adopt the merger agreement, which is attached hereto as
Annex A.
Following the adjournment of the meeting of our board of
directors on August 12, 2010, the parties signed the merger
agreement. The signing of the merger agreement was publicly
announced on August 13, 2010, prior to the opening of
trading of our common stock on the Nasdaq Global Select Market.
Recommendation
of Unicas Board of Directors and Reasons for the
Merger
At a meeting of our board of directors on August 12, 2010,
our board of directors unanimously determined that the merger
agreement and the merger are fair to and advisable and in the
best interests of Unica and its stockholders. Our board of
directors unanimously approved the merger agreement.
Our
board of directors unanimously recommends that you vote
FOR the adoption of the merger agreement and
FOR the proposal to adjourn the special meeting to a
later date, if necessary or appropriate, to solicit additional
proxies in the event there are not sufficient votes in favor of
adoption of the merger agreement at the time of the special
meeting.
In the course of reaching its decision to approve the merger
agreement, to declare that the merger agreement and the merger
are fair to and advisable and in the best interests of Unica and
its stockholders and to recommend that Unicas stockholders
vote to adopt the merger agreement, our board of directors
consulted with our senior management and our financial advisor
Jefferies & Company, Inc. Our board of directors also
consulted with outside legal counsel regarding its fiduciary
duties and the terms of the merger agreement, the stockholders
agreement and related matters. The following discussion includes
the material reasons and factors considered by our board of
directors in making its recommendation, but is not, and is not
intended to be, exhaustive:
Merger Consideration.
Our board of directors
considered the following with respect to the merger
consideration to be received by Unicas stockholders:
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that stockholders will be entitled to receive merger
consideration of $21.00 per share in cash upon the closing of
the merger, providing liquidity and certainty of value as
compared to the uncertain future long-term value to stockholders
that might or might not be realized if we remained independent;
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the fact that the $21.00 per share value of the cash merger
consideration exceeded the highest historical trading price of
$17.98 per share, represents a 158.9% and 94.8% premium,
respectively, over the average closing price of our common stock
on The NASDAQ Global Market over the 90 and 60 trading day
periods ending on August 12, 2010 (the last trading day
prior to our board of directors approval of the merger
agreement) and represents a 119.9% premium over the closing
price of our common stock on The NASDAQ Global Market on
August 12, 2010 (the last trading day prior to our board of
directors approval of the merger agreement), and the
levels of those premiums as compared to the premiums in other
comparable merger transactions;
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the then current financial market conditions and the recent and
historical market prices of our common stock, including the
market price performance of our common stock relative to those
of other industry
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participants since our initial public offering in August 2005
and over the last 12 months. See Market Prices and
Dividend Data for information about our common stock
prices since October 1, 2007; and
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the determination, based on discussions with management and our
financial advisor, that IBM was the party most likely to have
the most interest in acquiring us at the highest price.
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Prospects in Remaining Independent.
Our board
of directors considered the possibility of continuing to operate
Unica as an independent public company, including the perceived
risks and uncertainties of remaining an independent public
company. In considering the alternative of pursuing growth as an
independent company, our board of directors considered the
following factors:
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increased competition, especially from competitors with greater
name recognition, more resources, financial and otherwise, and
broader product offerings than Unica; and
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the difficulty for Unica, as an independent company, to expand
its reach into new regions and markets where it does not have a
presence.
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Potential Alternative Acquisition by IBM.
Our
board of directors considered the possibility that, if we were
not to combine with IBM at this time, IBM would acquire another
company in the industry and, in such event, there would be less
likelihood that IBM would be an interested acquirer of us in the
future.
Opinion of Jefferies.
Our board of directors
considered the financial analysis presented by representatives
of Jefferies, as well as the opinion of Jefferies to our board
of directors that, as of August 12, 2010 and based upon and
subject to the factors and assumptions set forth in such
opinion, the $21.00 per share in cash to be paid to the holders
of shares of Unica common stock pursuant to the merger agreement
was fair, from a financial point of view, to such holders, as
more fully described in the section entitled
Opinion of Unicas Financial
Advisor beginning on page 23.
Financial Forecasts.
Our board of directors
considered the financial forecasts prepared by Unicas
management and summarized below under
Financial Forecasts beginning on
page 30. These financial forecasts were also provided to
Jefferies for purposes of the opinion described in the preceding
paragraph.
Terms of the Merger Agreement.
Our board of
directors considered the terms and conditions of the merger
agreement and the course of negotiations thereof, including:
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the conditions to IBMs obligation to complete the merger,
including the absence of a financing condition, the absence of a
need for a vote of IBMs stockholders, and the ability of
IBM to terminate the merger agreement under certain specified
circumstances;
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the structure of the transaction as a merger, requiring approval
by our stockholders, which would provide a period of time prior
to the closing of the merger during which an unsolicited
superior proposal could be made;
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our ability, under certain circumstances, to furnish information
to and conduct negotiations with a third party, if our board of
directors determines in good faith that the third party has made
a takeover proposal that is, or could reasonably be expected to
lead to, a superior proposal;
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the ability of our board of directors, in connection with a
superior proposal and under certain other circumstances, to
change its recommendation that our stockholders adopt the merger
agreement if our board of directors determines in good faith,
after consultation with its outside counsel and a financial
advisor of nationally recognized reputation, that the failure to
do so is reasonably likely to result in a breach of its
fiduciary duties to our stockholders;
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the requirement that we pay to IBM a termination fee of
$14.25 million if the merger agreement is terminated under
certain specified circumstances;
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the belief of our board of directors that, based upon
information provided by Unicas legal counsel and financial
advisor, the termination fee would not preclude or substantially
impede a possible superior proposal; and
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that Unicas stockholders will be entitled to appraisal
rights under Delaware law.
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In the course of its deliberations, our board of directors also
considered a variety of risks and factors weighing against the
merger, including:
Risks of Announcement and Closing.
Our board
of directors considered:
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the risks and contingencies related to the announcement and
pendency of the merger, including the impact on our employees
and our relationships with existing and prospective customers,
suppliers and business partners, as well as other third parties;
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the conditions to IBMs obligation to complete the merger
and the right of IBM to terminate the merger agreement under
certain specified circumstances;
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the risks of a delay in receiving, or a failure to receive, the
necessary antitrust approvals and clearances to complete the
merger; and
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the risks and costs to Unica if the merger is not completed,
including the diversion of management and employee attention,
potential employee attrition, the potential impact on our stock
price and the effect on our business relationships.
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Limitations on Unicas Business.
Our
board of directors considered the potential limitations on
Unicas pursuit of business opportunities due to
pre-closing covenants in the merger agreement whereby Unica
agreed that it will carry on its business in the ordinary course
of business consistent with past practice, and subject to
specified exceptions, will not take certain actions related to
the conduct of its business without the prior written consent of
IBM.
Solicitation of Interest.
Following receipt of
proposed terms for the merger from IBM, our board of directors,
with the assistance of Jefferies, considered other potential
acquirers and solicited interest from other parties that might
be potentially interested in a business combination with Unica.
Cash Transaction.
Our board of directors
considered that the merger consideration is cash and, as a
result, our stockholders will forego any potential future
increase in our value that might result from our possible
growth, and that income realized as a result of the merger
generally will be taxable to our stockholders.
Stockholder Vote.
Our board of directors
considered the requirement that the merger agreement obligates
Unica to submit the merger agreement for adoption by
Unicas stockholders even if our board of directors
withdraws its recommendation to our stockholders to adopt the
merger agreement.
Stockholders Agreement.
Our board of directors
considered that our chairman and chief executive officer, and
certain trusts affiliated with our chairman and chief executive
officer, who collectively beneficially own shares that represent
approximately 20% of the outstanding shares of our common stock
as of August 12, 2010, would be entering into a
stockholders agreement, which contains an agreement by them to
vote in favor of adoption of the merger agreement and against
any other takeover proposal.
Termination Fee and Other Alternative
Acquirers.
Our board of directors considered the
possibility that the $14.25 million termination fee payable
to IBM under the circumstances set forth in the merger agreement
might discourage a competing proposal to acquire Unica or reduce
the price of any such proposal.
Interests of Directors and Officers.
Our board
of directors considered the interests that certain of our
directors and executive officers may have with respect to the
merger in addition to their interests as Unica
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stockholders generally, as described in
Interests of Unicas Executive Officers
and Directors in the Merger on page 32.
The foregoing discussion is not intended to be exhaustive, but
we believe it addresses the material information and principal
factors considered by our board of directors in its
consideration of the merger.
In light of the variety of factors considered in connection with
its evaluation of the merger and the complexity of these
matters, our board of directors did not find it practicable to,
and did not, quantify or otherwise attempt to assign relative
weights to the various factors considered in reaching its
determination, and individual directors may have given different
weight to different factors. In addition, our board of directors
did not reach any specific conclusion with respect to any of the
factors or reasons considered. Instead, our board of directors
conducted an overall analysis of the factors and reasons
described above and determined that, in the aggregate, the
potential benefits considered outweighed the potential risks or
possible negative consequences of approving the merger agreement
and accordingly recommends that our stockholders vote
FOR the adoption of the merger agreement.
Opinion
of Unicas Financial Advisor
Unica retained Jefferies to act as a financial advisor to Unica
in connection with the merger and to render to the Unica board
of directors an opinion as to the fairness to the holders of
Unica common stock of the consideration of $21.00 per share in
cash to be received by such holders. At the meeting of the Unica
board of directors on August 12, 2010, Jefferies rendered
its oral opinion to the Unica board of directors, subsequently
confirmed in writing, to the effect that, as of August 12,
2010 and based upon and subject to the various considerations
set forth in its opinion, the consideration of $21.00 per share
in cash to be received by holders of Unica common stock pursuant
to the merger agreement was fair, from a financial point of
view, to such holders.
The full text of the written opinion of Jefferies, dated as
of August 12, 2010, is attached hereto as Annex C.
Jefferies opinion sets forth, among other things, the
assumptions made, procedures followed, matters considered and
limitations on the scope of the review undertaken by Jefferies
in rendering its opinion. Unica encourages its stockholders to
read Jefferies opinion carefully and in its entirety.
Jefferies opinion was directed to the Unica board of
directors and addresses only the fairness from a financial point
of view of the consideration of $21.00 per share of Unica common
stock, as of the date of the opinion. It does not address any
other aspects of the merger and does not constitute a
recommendation as to how any holder of Unica common stock should
vote on the merger or any matter related thereto. The summary of
the opinion of Jefferies set forth below is qualified in its
entirety by reference to the full text of the opinion.
In arriving at its opinion, Jefferies, among other things:
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reviewed a draft dated August 11, 2010 of the merger
agreement,
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|
reviewed certain publicly available financial and other
information about Unica,
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|
reviewed certain information furnished to Jefferies by
Unicas management, including financial forecasts and
analyses, relating to the business, operations and prospects of
Unica,
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held discussions with members of senior management of Unica
concerning the matters described in the prior two bullet points,
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reviewed the share trading price history and valuation multiples
for the Unica common stock and compared them with those of
certain publicly traded companies that Jefferies deemed relevant,
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|
compared the proposed financial terms of the merger with the
financial terms of certain other transactions that Jefferies
deemed relevant, and
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|
conducted such other financial studies, analyses and
investigations as Jefferies deemed appropriate.
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23
In Jefferies review and analysis and in rendering its
opinion, Jefferies assumed and relied upon, but did not assume
any responsibility to independently investigate or verify, the
accuracy and completeness of all financial and other information
that was supplied or otherwise made available by Unica to it or
that was publicly available (including, without limitation, the
information described above), or that was otherwise reviewed by
it. In its review, Jefferies relied on assurances of the
management of Unica that management was not aware of any facts
or circumstances that would make such information inaccurate or
misleading. In its review, Jefferies did not obtain any
independent evaluation or appraisal of any of the assets or
liabilities of, nor did Jefferies conduct a physical inspection
of any of the properties or facilities of, Unica. Jefferies was
not furnished with any such evaluations or appraisals of such
physical inspections and did not assume any responsibility to
obtain any such evaluations or appraisals.
With respect to the financial forecasts provided to and examined
by Jefferies, Jefferies opinion noted that projecting
future results of any company is inherently subject to
uncertainty. Unica informed Jefferies, however, and Jefferies
assumed, that such financial forecasts were reasonably prepared
on bases reflecting the then best currently available estimates
and good faith judgments of the management of Unica as to the
future financial performance of Unica. Jefferies expressed no
opinion as to Unicas financial forecasts or the
assumptions on which they were made.
Jefferies opinion was based on economic, monetary,
regulatory, market and other conditions existing and which could
be evaluated as of the date of its opinion. Jefferies expressly
disclaimed any undertaking or obligation to advise any person of
any change in any fact or matter affecting Jefferies
opinion of which Jefferies became aware after the date of its
opinion.
Jefferies made no independent investigation of any legal or
accounting matters affecting Unica, and Jefferies assumed the
correctness in all respects material to Jefferies analysis
of all legal and accounting advice given to Unica and its board
of directors, including, without limitation, advice as to the
legal, accounting and tax consequences of the terms of, and
transactions contemplated by, the merger agreement to Unica and
its stockholders. In addition, in preparing its opinion,
Jefferies did not take into account any tax consequences of the
transaction to any holder of Unica common stock. In rendering
its opinion, Jefferies assumed that the final form of the merger
agreement would be substantially similar to the last draft
reviewed by it. Jefferies also assumed that in the course of
obtaining the necessary regulatory or third party approvals,
consents and releases for the merger, no delay, limitation,
restriction or condition would be imposed that would have an
adverse effect on Unica, IBM or the contemplated benefits of the
merger.
Jefferies opinion was for the use and benefit of the Unica
board of directors in its consideration of the merger, and
Jefferies opinion did not address the relative merits of
the transactions contemplated by the merger agreement as
compared to any alternative transaction or opportunity that
might be available to Unica, nor did it address the underlying
business decision by Unica to engage in the merger or the terms
of the merger agreement or the documents referred to therein.
Jefferies opinion does not constitute a recommendation as
to whether any holder of Unica common stock should vote on the
merger or any matter related thereto. In addition, Jefferies was
not asked to address, and its opinion did not address, the
fairness to, or any other consideration of, the holders of any
class of securities, creditors or other constituencies of Unica,
other than the holders of Unica common stock. Jefferies
expressed no opinion as to the price at which Unica common stock
will trade at any time. Jefferies did not express any view or
opinion as to the fairness, financial or otherwise, of the
amount or nature of any compensation to be payable or to be
received by any of Unicas officers, directors or
employees, or any class of such persons, in connection with the
merger relative to the consideration to be received by holders
of Unica common stock. Jefferies opinion was authorized by
the Fairness Committee of Jefferies.
In preparing its opinion, Jefferies performed a variety of
financial and comparative analyses. The preparation of a
fairness opinion is a complex process involving various
determinations as to the most appropriate and relevant
quantitative and qualitative methods of financial analysis and
the applications of those methods to the particular
circumstances and, therefore, is not necessarily susceptible to
partial analysis or summary description. Jefferies believes that
its analyses must be considered as a whole. Considering any
portion of Jefferies analyses or the factors considered by
Jefferies, without considering all analyses and
24
factors, could create a misleading or incomplete view of the
process underlying the conclusion expressed in Jefferies
opinion. In addition, Jefferies may have given various analyses
more or less weight than other analyses, and may have deemed
various assumptions more or less probable than other
assumptions, so that the range of valuations resulting from any
particular analysis described below should not be taken to be
Jefferies view of Unicas actual value. Accordingly,
the conclusions reached by Jefferies are based on all analyses
and factors taken as a whole and also on the application of
Jefferies own experience and judgment.
In performing its analyses, Jefferies made numerous assumptions
with respect to industry performance, general business,
economic, monetary, regulatory, market and other conditions and
other matters, many of which are beyond Unicas and
Jefferies control. The analyses performed by Jefferies are
not necessarily indicative of actual values or actual future
results, which may be significantly more or less favorable than
suggested by such analyses, and neither Jefferies nor we assume
any responsibility if future results differ materially from
those suggested herein. In addition, analyses relating to the
per share value of Unica common stock do not purport to be
appraisals or to reflect the prices at which shares of Unica
common stock may actually be sold. The analyses performed were
prepared solely as part of Jefferies analysis of the
fairness, from a financial point of view, of the consideration
of $21.00 per share in cash to be received by holders of Unica
common stock pursuant to the merger, and were provided to the
Unica board of directors in connection with the delivery of
Jefferies opinion.
The following is a summary of the material financial and
comparative analyses performed by Jefferies in connection with
Jefferies delivery of its opinion. The financial analyses
summarized below include information presented in tabular
format. In order to fully understand Jefferies financial
analyses, the tables must be read together with the text of each
summary. The tables alone do not constitute a complete
description of the financial analyses. Considering the data
described below without considering the full narrative
description of the financial analyses, including the
methodologies and assumptions underlying the analyses, could
create a misleading or incomplete view of Jefferies
financial analyses.
Transaction
Overview
Based upon the approximately 24.6 million shares of Unica
common stock that were outstanding as of August 2, 2010,
assuming the vesting of
in-the-money
stock options (calculated using the treasury stock method) and
restricted stock units, Jefferies noted that the consideration
of $21.00 per share implied an equity value of approximately
$517.5 million. Net of approximately $43.1 million of
cash and cash equivalents (as of June 30, 2010), Jefferies
noted that the consideration implied an enterprise value of
approximately $474.4 million. Jefferies also noted that the
consideration of $21.00 per share of Unica common stock
represented:
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a premium of 118.8% over the closing price per share of Unica
common stock on August 11, 2010 of $9.60, and
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a premium of 133.1% over the closing price per share of Unica
common stock on July 16, 2010 of $9.01.
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Comparable
Public Company Analysis
Using publicly available information and information provided by
Unicas management, Jefferies analyzed the trading
multiples of Unica and the corresponding trading multiples of
the following license model enterprise application vendors and
software as a service (SaaS) companies with
estimated revenues between $100 million and
$500 million for fiscal year 2010, which are collectively
referred to as the Unica Selected Comparable
Companies:
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License Model Enterprise Application Vendors
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Actuate Corporation,
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Art Technology Group, Inc.,
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Epicor Software Corporation,
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25
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Manhattan Associates, Inc.,
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MicroStrategy Incorporated,
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Pegasystems Inc.,
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Saba Software, Inc.,
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Concur Technologies, Inc.,
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Constant Contact, Inc.,
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Kenexa Corporation,
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LivePerson, Inc.,
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Rightnow Technologies, Inc.,
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Taleo Corporation and
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The Ultimate Software Group, Inc.
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In its analysis, Jefferies derived and compared multiples for
Unica and the Unica Selected Comparable Companies, calculated as
follows:
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the enterprise value divided by estimated revenue for fiscal
year 2010, which is referred to as Enterprise Value/2010E
Revenue,
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the enterprise value divided by estimated revenue for fiscal
year 2011, which is referred to as Enterprise Value/2011E
Revenue,
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the enterprise value divided by estimated earnings before
interest, taxes, depreciation and amortization, or EBITDA, for
fiscal year 2010, which is referred to as Enterprise
Value/2010E EBITDA,
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the enterprise value divided by estimated EBITDA for fiscal year
2011, which is referred to as Enterprise Value/2011E
EBITDA,
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the price per share divided by estimated earnings per share, or
EPS, for fiscal year 2010, which is referred to as
Price/2010E EPS,
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the price per share divided by estimated EPS for fiscal year
2011, which is referred to as Price/2011E
EPS and
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the estimated EPS for fiscal year 2010 divided by estimated
5-year
earnings growth rate, which is referred to as 2010E PEG
Ratio.
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This analysis indicated the following:
Comparable
Public Company Multiples
License Model Enterprise Application Vendors
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75
th
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25
th
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Benchmark
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Percentile
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Percentile
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Median
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|
Enterprise Value/2010E Revenue
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1.8
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x
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1.4
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x
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1.6
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x
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Enterprise Value/2011E Revenue
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1.6
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x
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1.4
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x
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1.5
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x
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Enterprise Value/2010E EBITDA
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9.9
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x
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8.5
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x
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9.1
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x
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Enterprise Value/2011E EBITDA
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7.9
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x
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6.8
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x
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7.3
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x
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Price/2010E EPS
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18.8
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x
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15.0
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x
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17.2
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x
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Price/2011E EPS
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17.9
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x
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11.4
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x
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13.1
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x
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2010E PEG Ratio
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1.38
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0.82
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1.27
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26
Comparable
Public Company Multiples
SaaS Companies
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75
th
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25
th
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Benchmark
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Percentile
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Percentile
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Median
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Enterprise Value/2010E Revenue
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3.8
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x
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2.6
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x
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3.2
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x
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Enterprise Value/2011E Revenue
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3.3
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x
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2.1
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x
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2.7
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x
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Enterprise Value/2010E EBITDA
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25.7
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x
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13.7
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x
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19.8
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x
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Enterprise Value/2011E EBITDA
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17.0
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x
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11.2
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x
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13.4
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x
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Price/2010E EPS
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72.4
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x
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29.2
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x
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41.9
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x
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Price/2011E EPS
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36.1
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x
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23.6
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x
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28.5
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x
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2010E PEG Ratio
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2.35
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1.47
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1.56
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Using the reference ranges for the benchmarks set forth below,
Jefferies determined implied enterprise values for Unica, then
added cash and cash equivalents to determine implied equity
values. In determining the number of shares outstanding for
purposes of calculating implied values per share of Unica common
stock, Jefferies assumed the vesting of
in-the-money
stock options (using the treasury stock method) and restricted
stock units. These analyses indicated the ranges of implied
values per share of Unica common stock set forth opposite the
relevant benchmarks below, compared, in each case, to the
consideration of $21.00 per share:
Comparable
Public Company Reference Ranges and Implied Price Ranges
License Model Enterprise Application Vendors
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Reference
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Implied Price
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Benchmark
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Range
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Range
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Enterprise Value/2010E Revenue
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1.7x - 2.1x
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$10.22 - $12.10
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Enterprise Value/2011E Revenue
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1.5x - 2.0x
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|
$10.39 - $13.23
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Enterprise Value/2010E EBITDA
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10.0x - 12.0x
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$9.32 - $10.74
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Enterprise Value/2011E EBITDA
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8.0x - 10.0x
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$8.95 - $10.73
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Price/2010E EPS
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17.5x - 22.5x
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|
$7.90 - $10.02
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Price/2011E EPS
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14.0x - 19.0x
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$8.10 - $10.82
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2010E PEG Ratio
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1.00 - 1.50
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$14.81 - $21.93
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Comparable
Public Company Reference Ranges and Implied Price Ranges
SaaS Companies
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Reference
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Implied Price
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Benchmark
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Range
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Range
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Enterprise Value/2010E Revenue
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|
2.8x - 3.3x
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|
$15.14 - $17.48
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Enterprise Value/2011E Revenue
|
|
2.3x - 3.0x
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|
$14.65 - $18.90
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Enterprise Value/2010E EBITDA
|
|
15.0x - 20.0x
|
|
$12.87 - $16.40
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Enterprise Value/2011E EBITDA
|
|
12.0x - 15.0x
|
|
$12.51 - $15.16
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Price/2010E EPS
|
|
30.0x - 40.0x
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|
$13.19 - $17.40
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Price/2011E EPS
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|
25.0x - 35.0x
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|
$14.07 - $19.47
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2010E PEG Ratio
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|
1.25 - 1.75
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$18.37 - $25.49
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No company utilized in the comparable company analysis is
identical to Unica. In evaluating the selected companies,
Jefferies made judgments and assumptions with regard to industry
performance, general business, economic, market and financial
conditions and other matters, many of which are beyond
Unicas and Jefferies control. Mathematical analysis,
such as determining the median, is not in itself a meaningful
method of using comparable company data.
27
Comparable
Transactions Analysis
Using publicly available information and other information,
Jefferies examined the following nine transactions involving
application software companies announced since January 1,
2009. The transactions considered and the month and year each
transaction was announced were as follows:
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Date Announced
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Acquiror
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Target
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July 2010
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Adobe Systems Incorporated
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Day Software Holding AG
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July 2010
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Roper Industries, Inc.
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iTradeNetwork, Inc.
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March 2010
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Pegasystems Inc.
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Chordiant Software, Inc.
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February 2010
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International Business Machines Corporation
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Initiate Systems, Inc.
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November 2009
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|
JDA Software Group Incorporated
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|
i2 Technologies, Inc.
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September 2009
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Adobe Systems Incorporated
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|
Omniture, Inc.
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July 2009
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International Business Machines Corporation
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SPSS Inc.
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July 2009
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Oracle Corporation
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GoldenGate Software, Inc.
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May 2009
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Open Text Corporation
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Vignette Corporation
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Using publicly available estimates and other information for
each of these transactions, Jefferies reviewed the enterprise
value as a multiple of the target companys:
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revenue for the last 12 months, or LTM, which is referred
to below as Enterprise Value/LTM Revenue and
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|
LTM EBITDA, which is referred to below as Enterprise
Value/LTM EBITDA.
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This analysis indicated the following:
Comparable
Transactions Multiples
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75
th
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25
th
|
|
|
Benchmark
|
|
Percentile
|
|
Percentile
|
|
Median
|
|
Enterprise Value/LTM Revenue
|
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|
4.8
|
x
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|
1.7
|
x
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|
3.9
|
x
|
Enterprise Value/LTM EBITDA
|
|
|
26.5
|
x
|
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|
11.8
|
x
|
|
|
14.8
|
x
|
Using the reference range of 3.5x to 4.5x Unicas
Enterprise Value/LTM Revenue, Jefferies determined implied
enterprise values for Unica, then added cash and cash
equivalents to determine implied equity values. After assuming
the vesting of
in-the-money
stock options (using the treasury stock method) and restricted
stock units, these analyses indicated the ranges of implied
values per share of Unica common stock of approximately $17.76
to $22.18 using Enterprise Value/LTM Revenue, compared to the
consideration of $21.00 per share.
Using the reference range of 20.0x to 30.0x Unicas
Enterprise Value/LTM EBITDA, Jefferies determined implied
enterprise values for Unica, then added cash and cash
equivalents to determine implied equity values. After assuming
the vesting of
in-the-money
stock options (using the treasury stock method) and restricted
stock units, these analyses indicated the ranges of implied
values per share of Unica common stock of approximately $16.01
to $22.88 using Enterprise Value/LTM EBITDA, compared to the
consideration of $21.00 per share.
No transaction utilized as a comparison in the comparable
transaction analysis is identical to the merger. In evaluating
the merger, Jefferies made numerous judgments and assumptions
with regard to industry performance, general business, economic,
market, and financial conditions and other matters, many of
which are beyond Unicas and Jefferies control.
Mathematical analysis, such as determining the median, is not in
itself a meaningful method of using comparable transaction data.
28
Premiums
Paid Analysis
Using publicly available information, Jefferies analyzed the
premiums offered in all North American software merger and
acquisition transactions since January 1, 2008 having
equity consideration between $100 million and
$1 billion.
For each of these transactions, Jefferies calculated the premium
represented by the offer price over the target companys
closing share price one trading day and twenty trading days
prior to the transactions announcement. This analysis
indicated the following premiums for those time periods prior to
announcement:
Premiums
Paid
Multiples
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|
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|
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|
|
|
|
|
|
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|
75
th
|
|
25
th
|
|
|
Time Period Prior to Announcement
|
|
Percentile
|
|
Percentile
|
|
Median
|
|
1 day
|
|
|
41.1
|
%
|
|
|
13.7
|
%
|
|
|
28.3
|
%
|
20 days
|
|
|
56.4
|
%
|
|
|
19.1
|
%
|
|
|
36.2
|
%
|
Using a reference range of 13.7% to 41.1% premium for
August 11, 2010, Jefferies performed a premiums paid
analysis using the closing prices per share of Unica common
stock on such date. This analysis indicated a range of implied
values per share of Unica common stock of approximately $10.91
to $13.55, compared to the consideration of $21.00 per share.
Using a reference range of 19.1% to 56.4% premium for
July 16, 2010, Jefferies performed a premiums paid analysis
using the closing prices per share of Unica common stock on such
date. This analysis indicated a range of implied values per
share of Unica common stock of approximately $10.73 to $14.09,
compared to the consideration of $21.00 per share.
Discounted
Cash Flow Analysis
Jefferies performed a discounted cash flow analysis to estimate
the present value of the free cash flows of Unica through the
fiscal year ending September 30, 2015 using Unica
managements financial projections, discount rates ranging
from 12.0% to 16.0%, and terminal growth rates of free cash flow
after fiscal year 2015 ranging from 3.0% to 5.0%. To determine
the implied total equity value for Unica, Jefferies added cash
and cash equivalents to the implied enterprise value for Unica.
After assuming the vesting of
in-the-money
stock options (using the treasury stock method) and restricted
stock units, this analysis indicated a range of implied values
per share of Unica common stock of approximately $17.28 to
$30.26, compared to the consideration of $21.00 per share of
Unica common stock.
General
Jefferies opinion was one of many factors taken into
consideration by the Unica board of directors in making its
determination to approve the merger and should not be considered
determinative of the views of the Unica board of directors or
management with respect to the merger or the consideration.
Jefferies was selected by the Unica board of directors based on
Jefferies qualifications, expertise and reputation.
Jefferies is an internationally recognized investment banking
and advisory firm. Jefferies, as part of its investment banking
business, is regularly engaged in the valuation of businesses
and securities in connection with mergers and acquisitions,
negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private
placements, financial restructurings and other financial
services.
In the ordinary course of business, Jefferies and its affiliates
may trade or hold securities of Unica or IBM
and/or
their
respective affiliates for its own account and for the accounts
of its customers and, accordingly, may at any time hold long or
short positions in those securities.
Pursuant to an engagement agreement between Unica and Jefferies
dated April 14, 2010, Unica has agreed to pay Jefferies a
fee for its services of approximately $5.2 million,
$500,000 of which was paid upon delivery of Jefferies
opinion and the remainder of which is payable contingent upon
consummation of the
29
merger. In addition, Unica has agreed to reimburse Jefferies for
expenses incurred. Unica also has agreed to indemnify Jefferies
against liabilities arising out of or in connection with the
services rendered and to be rendered by it under its engagement.
Jefferies has, in the past, provided financial advisory services
to IBM and may do so in the future and has received, and may
receive, fees for the rendering of such services. In addition,
Jefferies may seek to, in the future, provide financial advisory
and financing services to Unica, IBM or entities that are
affiliated with Unica or IBM, for which it would expect to
receive compensation.
Financial
Forecasts
Our management made available to IBM certain non-public business
and financial information about Unica as a stand-alone company,
including financial forecasts for the fiscal years ending
September 30, 2010, 2011, 2012, 2013, 2014 and 2015. These
forecasts did not give effect to the merger. The financial
forecasts were based on numerous assumptions made by our
management, including assumed annual growth rates with respect
to subscriptions and licenses, assumed annual renewal rates with
respects to subscriptions and maintenance and assumed rates of
our cost of goods sold margins.
The adjustments to net income and earnings per share in the
forecasts excluded all stock-based compensation expense. Free
cash flow is calculated by adding back to net income
depreciation and amortization, adding or subtracting changes in
working capital, including deferred revenue, and subtracting
capital expenditures and other income. Adjusted net income,
adjusted earnings per share, earnings before interest, taxes,
depreciation and amortization, or EBITDA, and free
cash flow are non-GAAP measures that are used by management as
supplemental financial measurements to evaluate our operational
trends and should not be considered as alternatives to net
income, earnings per share or cash flow as indicators of our
operating performance. Adjusted net income, adjusted earnings
per share, EBITDA and free cash flow are not defined under GAAP
and, accordingly, they may not be comparable measurements to
those used by other companies.
The financial forecasts for Unicas 2010 through 2015
fiscal years made available to IBM were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Years Ending September 30,
|
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
|
Dollars (In millions)
|
|
Revenue
|
|
$
|
116.5
|
|
|
$
|
143.6
|
|
|
$
|
186.4
|
|
|
$
|
231.4
|
|
|
$
|
281.7
|
|
|
$
|
343.9
|
|
Adjusted Net Income
|
|
$
|
9.2
|
|
|
$
|
13.7
|
|
|
$
|
20.9
|
|
|
$
|
31.1
|
|
|
$
|
38.0
|
|
|
$
|
47.8
|
|
Adjusted Earnings Per Share
|
|
$
|
0.41
|
|
|
$
|
0.60
|
|
|
$
|
0.91
|
|
|
$
|
1.35
|
|
|
$
|
1.63
|
|
|
$
|
2.03
|
|
EBITDA
|
|
$
|
15.9
|
|
|
$
|
22.4
|
|
|
$
|
32.8
|
|
|
$
|
47.2
|
|
|
$
|
57.5
|
|
|
$
|
72.0
|
|
For the financial forecasts that were provided to Jefferies, for
fiscal year 2010, Unicas management adjusted the forecasts
summarized above to include the full-year impact of the Pivotal
Veracity acquisition by Unica completed on January 12,
2010, and to adjust for the write-down of deferred revenue that
occurred in conjunction with that acquisition. In addition,
Unicas management also adjusted projections for fiscal
year 2010 to reflect the then most current state of Unicas
business based on three quarters of actual performance and to
include pro forma free cash flow forecasts for fiscal years 2010
through 2015. The financial forecasts for fiscal years 2011
through 2015 were unchanged. These adjustments, along with the
unchanged financial forecasts for fiscal years 2011 through
2015, were presented to the board of directors of Unica. The
following tables include these adjustments made by Unicas
management and presented to the board of directors of Unica:
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2010
|
|
Fiscal Year 2010
|
|
|
(Adjusted)
|
|
|
|
|
Dollars (In millions)
|
|
Pro forma Revenue
|
|
$
|
118.6
|
|
|
$
|
116.5
|
|
Pro forma Adjusted Net Income
|
|
$
|
10.7
|
|
|
$
|
9.2
|
|
Pro forma Adjusted Earnings Per Share
|
|
$
|
0.47
|
|
|
$
|
0.41
|
|
Pro forma EBITDA
|
|
$
|
17.9
|
|
|
$
|
15.9
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Years ending September 30,
|
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
|
Dollars (In millions)
|
|
Pro forma Free Cash Flow
|
|
$
|
15.9
|
|
|
$
|
19.6
|
|
|
$
|
32.2
|
|
|
$
|
44.9
|
|
|
$
|
56.1
|
|
|
$
|
70.9
|
|
Unicas as adjusted financial forecasts presented above
were reviewed with our board of directors and were used by
Jefferies in connection with its financial analysis of the
merger consideration.
The financial forecasts shown above are included in this proxy
statement to provide our stockholders access to certain
nonpublic information considered by our board of directors
during its evaluation of the merger, provided to Jefferies in
connection with its opinion to our board of directors, as more
fully described in the section entitled Opinion of
Unicas Financial Advisor beginning on page 23,
and provided to IBM for the purpose of allowing it to evaluate
the merger. The inclusion of this information should not be
regarded as an indication to any stockholder that our board of
directors or any other recipient of this information considered,
or now considers, it to be predictive of actual future results,
and they should not be relied on as such. The forecasts reflect
numerous estimates and assumptions with respect to industry
performance, general business, economic, regulatory, market and
financial conditions, as well as matters specific to our
business, all of which are difficult to predict and many of
which are beyond our control. As a result, there can be no
assurance that the forecasted results will be realized or that
actual results will not be significantly higher or lower than
such forecasts. As the forecasts cover multiple years, such
information by its nature becomes less predictive with each
successive year. Also, the economic and business environments
can and do change quickly, which adds a significant level of
unpredictability, unreliability and execution risk. These
factors create significant doubt as to whether the forecasts for
fiscal years 2010 and beyond are likely to be achieved. As a
result, the forecasts are not necessarily indicative of future
results. In addition, our management prepared the forecasts
prior to the execution of the merger agreement and, accordingly,
the forecasts do not reflect the effects of the merger, which
may cause results to differ materially. Accordingly, readers of
this proxy statement are cautioned not to place undue reliance
on the financial forecasts.
The financial forecasts stated above were prepared for internal
use in connection with the merger and not with a view toward
public disclosure or toward complying with generally accepted
accounting principles in the United States, or GAAP, the
published guidelines of the Securities and Exchange Commission
regarding forecasts or the guidelines established by the
American Institute of Certified Public Accountants for
preparation and presentation of prospective financial
information. The forecasts included in this proxy statement were
prepared by, and are the responsibility of, our management. We
do not assume any responsibility to update these forecasts.
Neither our independent registered public accounting firm, nor
any other independent accountants, have compiled, examined or
performed any procedures with respect to the financial forecasts
contained herein, nor have they expressed any opinion or any
other form of assurance on such forecasts or their
achievability, and assume no responsibility for, and disclaim
any association with, the financial forecasts. Furthermore, the
financial forecasts do not take into account any circumstances
or events occurring after the date the forecasts were prepared
that were unforeseen by our management at the time of
preparation. We have made publicly available our actual results
of operations for the quarter ended June 30, 2010. Our
stockholders should review our Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2010 to obtain this
information. See Where You Can Find More Information
beginning on page 66.
None of Unica or our affiliates, advisors, officers, directors
or representatives has made or makes any representation to any
stockholder or other person regarding the ultimate performance
of Unica compared to the information contained in the forecasts
or that forecasted results will be achieved.
BY INCLUDING IN THIS PROXY STATEMENT A SUMMARY OF ITS
INTERNAL FINANCIAL FORECASTS, UNICA UNDERTAKES NO OBLIGATIONS TO
UPDATE, OR PUBLICLY DISCLOSE ANY UPDATE TO, THESE FINANCIAL
FORECASTS TO REFLECT CIRCUMSTANCES OR EVENTS, INCLUDING
UNANTICIPATED EVENTS, THAT MAY HAVE OCCURRED OR THAT MAY OCCUR
AFTER THE PREPARATION OF THESE FORECASTS, EVEN IN THE EVENT THAT
ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL FORECASTS
ARE SHOWN TO BE IN ERROR OR CHANGE.
31
Interests
of Unicas Executive Officers and Directors in the
Merger
When considering the recommendation of our board of directors,
you should be aware that members of our board of directors and
our executive officers have interests in the merger in addition
to their interests as Unica stockholders generally, pursuant to
certain agreements between such directors and executive officers
and us and, in the case of certain of the executive officers,
pursuant to employment arrangements with IBM. These interests
are described below and may be different from, or in conflict
with, your interests as a Unica stockholder. The members of our
board of directors were aware of the material facts as to these
additional interests, and considered them, when they approved
the merger agreement.
Overview
Prior to our entering into the merger agreement, each of our
executive officers was party to an executive retention agreement
pursuant to which he or she would be entitled to certain
payments and benefits if a
change-in-control
(as defined in such agreements) occurs and the executives
employment with us or our successor is terminated by us or our
successor, other than for cause, disability or
death, or by the executive for good reason (as
those terms are defined in the agreements) within 12 months
following a
change-in-control
of us, in addition to those benefits set forth in our 2005 stock
incentive plan. The merger will constitute a
change-in-control
and IBM will constitute our successor under each executive
retention agreement.
Each of Messrs. Yuchun Lee, Peter Cousins, John Hogan,
Kevin Keane, Paul McNulty, and David Sweet and Ms. Vivian
Vitale have entered into employment arrangements with IBM. These
employment arrangements will supersede and replace the executive
retention agreements that they are currently party to with us
and they will not be entitled to any of the benefits under their
existing executive retention agreements or to any extra
acceleration of vesting of equity-based awards upon termination
of employment under the generally applicable terms of our 2005
stock incentive plan as a result of the merger. The employment
arrangements with IBM will be effective upon the closing of the
merger and will provide certain retention/severance payments and
equity compensation benefits to such individuals. In addition,
Mr. Lee has entered into a new non-competition and
non-solicitation agreement that will supersede and replace the
non-competition and
non-solicitation
arrangements that he is currently bound by with us, effective
upon the closing of the merger. The remaining executive officers
will continue to be bound by their current non-competition and
non-solicitation arrangements.
The executive retention agreements with Messrs. Kevin P.
Shone, James Fieger and Jason W. Joseph will remain in effect
following the merger because they have not entered into
employment arrangements with IBM.
Our non-employee directors and certain of our executive officers
are entitled to certain other payments and benefits in
connection with the merger, as described below in Other
Compensation and Benefit Arrangements.
Unica
Executive Retention Agreements
In December 2008, our compensation committee adopted a form of
executive retention agreement, the provisions of which establish
benefits to our executive officers in the event of a termination
of employment following a
change-in-control
of us. Each of our executive officers entered into an executive
retention agreement in substantially that form, except for the
material differences noted herein. The agreements are primarily
intended to reinforce and encourage the continued employment and
dedication of our key personnel without distraction from the
possibility of a
change-in-control
and related events and circumstances.
In general, the retention agreements provide that if a
change-in-control
(as defined in such agreements) occurs and the executives
employment with us or our successor is terminated by us or our
successor, other than for cause, disability or
death, or by the executive for good reason (as
those terms are defined in the
32
agreements) within 12 months following a
change-in-control
of us, then the executive would be entitled to, in addition to
those benefits set forth in our 2005 stock incentive plan, the
following benefits:
|
|
|
|
|
Accelerated vesting of (i) 75% of the executives
unvested equity awards (inclusive of any accelerated vesting
provided for in our 2005 stock incentive plan) if the executive
has been employed by us for at least one year but less than two
years or (ii) 100% of the executives unvested equity
awards if the executive has been employed by us for at least two
years, except that the agreement with Mr. Shone provides
for 100% vesting if Mr. Shone has been employed for at
least one year;
|
|
|
|
Cash severance payments equal to the sum of the executives
highest base salary in effect during the
12-month
period preceding the
change-in-control
and the executives target annual cash bonus in effect at
the time of the
change-in-control;
|
|
|
|
Continuation of health care benefits for the executive and his
family for a period of 12 months following termination of
employment; and
|
|
|
|
Payment in cash of accrued but unpaid salary and unused vacation
accrued through the termination date and a pro rata portion of
the executives previous years bonus based on the
termination date.
|
The merger will constitute a
change-in-control
and IBM will constitute our successor under these agreements.
The executive retention agreements with Mr. Shone,
Mr. Feiger and Mr. Joseph will remain in effect
following the merger because they have not entered into
employment arrangements with IBM.
IBM
Employment Arrangements
Each of Messrs. Yuchun Lee, Peter Cousins, John Hogan,
Kevin Keane, Paul McNulty, and David Sweet and Ms. Vivian
Vitale has entered into an employment arrangement with IBM that
is conditioned upon the closing of the merger and the executive
officers continued employment with Unica through the
closing of the merger. Upon closing of the merger and the
effectiveness of these employment arrangements, the executive
retention agreements entered into between Unica and these
executive officers will terminate and they will no longer be
entitled to any payments or benefits under those agreements or
to any extra acceleration of vesting of equity-based awards upon
termination of employment under the generally applicable terms
of our 2005 stock incentive plan as a result of the merger. Each
executive officers employment by IBM is at
will and may be terminated at any time for any reason,
subject to the obligations described below and applicable law.
Salary.
The employment arrangements between
IBM and each of Messrs. Lee, Cousins, Hogan, Keane, McNulty
and Sweet provide that the base salary to which each executive
officer will be entitled to receive from IBM will be the same as
the base salary to which each was entitled to receive from
Unica. The employment arrangement between IBM and
Ms. Vitale provides for a specified salary. Under their
employment arrangements with IBM, the executive officers
initially will receive the following annual base salaries:
Mr. Lee $415,000; Mr. Cousins
$270,000; Mr. Hogan $270,000;
Mr. Keane $210,000;
Mr. McNulty $250,000;
Mr. Sweet $270,000; and
Ms. Vitale $225,000.
Treatment of Unica Equity Awards.
The
employment arrangements between IBM and each of the executive
officers provides that, upon the closing of the merger, each
executive officer will be entitled to the vesting of 50% of such
executives then unvested options, and the remaining 50% of
such executives then unvested options will be converted
into options to acquire IBM stock and will continue to vest in
accordance with their original vesting schedules. In addition,
the employment arrangement between IBM and each of the executive
officers provides that, upon the closing of the merger, each
executive officer will be entitled to the vesting of 50% of such
executives then unvested restricted stock units, and the
remaining 50% of such executives then unvested restricted
stock units will be converted into the right to receive cash
payments based on the value of the merger consideration on each
subsequent vesting date of the restricted stock units. The
general treatment of options and restricted stock units in the
merger, including such awards held by our executive officers, is
described below under Treatment of Options
Outstanding Under Our Stock Plans and
Treatment of Restricted Stock Units
Outstanding Under Our Stock Plans beginning on
page 41.
33
Any options that remain unvested, and any cash payments with
respect to restricted stock units that are unpaid, in each case,
as of the second anniversary of the closing of the merger (with
respect to Messrs. Lee, Cousins, Hogan, Keane, McNulty, and
Sweet) or the first anniversary of the closing of the merger
(with respect to Ms. Vitale), will vest or be paid in full
as of such anniversary date. In addition, subject to the
execution of IBMs standard release of claims, if an
executive officer is terminated by IBM without cause
(as such term is defined in the executive officers
employment arrangement with IBM) prior to the second anniversary
of the closing of the merger (with respect to Messrs. Lee,
Cousins, Hogan, Keane, McNulty, and Sweet) or the first
anniversary of the closing of the merger (with respect to
Ms. Vitale), any options held by such executive officer
that are unvested as of such termination will vest in full, and
any cash payments with respect to restricted stock units that
are unpaid as of such termination will be paid, as of such
termination. If an executive officers employment
terminates for any reason other than by IBM without
cause, such executive officer will forfeit any
unvested options and any unpaid cash payments with respect to
resticted stock units.
Retention Program.
Under the terms of the
employment arrangements between IBM and each of
Messrs. Lee, Cousins, Hogan, Keane, McNulty, and Sweet,
each such executive officer will be entitled to participate in a
retention program pursuant to which each such executive officer
will be eligible to receive cash payments following each of four
six-month milestone periods through the second anniversary of
the closing of the merger, subject to continued employment
through the applicable payment dates and the achievement of
certain milestones set forth in the employment arrangements. The
following are the aggregate amounts payable pursuant to this
retention program: Mr. Lee $1,100,000;
Mr. Cousins $600,000;
Mr. Hogan $600,000; Mr. Keane
$550,000; Mr. McNulty $575,000; and
Mr. Sweet $600,000. If any of the executive
officers are terminated by IBM without cause (as
such term is defined in the executive officers employment
arrangement) prior to the second anniversary of the closing of
the merger, the executive officer will be entitled to receive
the retention payment for the then-applicable six-month
milestone period, subject to the execution of IBMs
standard release of claims.
Transition Program.
Under the terms of the
employment arrangement between IBM and Ms. Vitale,
Ms. Vitale will be entitled to participate in a transition
program pursuant to which she will be entitled to receive a cash
payment equal to $440,000 on the first anniversary of the
closing of the merger, subject to continued employment through
the applicable payment date and the achievement of certain
milestones set forth in her employment arrangement. If
Ms. Vitale is terminated without cause by IBM
prior to the first anniversary of the closing of the merger, she
will be entitled to the full amount of her cash payment under
the transition program, subject to the execution of IBMs
standard release of claims.
Termination Payments.
The employment
arrangements with IBM provide that, if the executive
officers employment is terminated by IBM without
cause (as such term is defined in the executive
officers employment arrangement with IBM) prior to the
first anniversary of the closing of the merger, such executive
officer will be entitled to a lump sum cash payment equal to the
sum of the executives highest base salary in effect during
the
12-month
period preceding the closing of the merger and the
executives then current target annual cash bonus, provided
that the executive officer executes IBMs standard release
of claims and satisfies all conditions to make the release
effective. This is the same termination payment the executive
officers would have been entitled to receive from us pursuant to
the executive retention agreements currently in effect.
Definition of
Cause.
Cause is defined
in each such employment arrangement as cause, as determined by
IBM in accordance with its standard policies and procedures,
which includes, among other things, any violation of IBM policy
and/or
failure to perform satisfactorily, and without regard to how
cause is defined in any plan, policy or program, any
offer letter, any agreement between the executive and Unica, or
any amendment thereto.
Non-Competition
Agreements
Mr. Lee has executed a related noncompetition agreement,
which provides that for certain periods following termination of
employment and following the closing of the merger, Mr. Lee
will be subject to restrictive covenants that generally prohibit
him, in any capacity, directly or indirectly, from participating
or engaging in the design, development, manufacture, production,
marketing, sale or servicing of any product, or
34
the provision of any service, that directly relates to marketing
automation (including without limitation, systems and tools for
behavioral marketing), marketing resource management, campaign
management, lead management, marketing or sales analytics, web
analytics or product recommendations. This noncompetition
agreement replaces his existing agreements with us.
Any executive officer not entering into a noncompetition
agreement with IBM will continue to be bound by the terms of the
executive officers existing noncompetition agreement with
Unica, which provides for restrictions during the one-year
period after his or her employment ends.
Other
Compensation and Benefit Arrangements
Special
Transaction Bonuses
In connection with the execution of the merger agreement, we
have awarded a special transaction bonus of $100,000 in cash to
each of Mr. Joseph and Mr. Shone which will be paid
contingent upon the closing of the merger to recognize their
significant contribution to the due diligence and merger
process. These bonuses do not constitute severance for any
purpose.
Cash
Payments for Option Cancelation
It is expected that each of our executive officers will enter
into agreements with us that will provide, contingent on the
closing of the merger, for the cancelation of the portions of
the options granted to them under our 2005 stock incentive plan
that are vested or vest in connection with the merger, in
exchange for a cash payment equal to the product obtained by
multiplying the number of shares subject to the vested portion
of such option by the difference between the per share merger
consideration and the exercise price of such option, less
applicable withholding taxes.
Treatment
of Equity Awards Held by Our Non-Employee Directors
In connection with the execution of the merger agreement, we
have accelerated, contingent on the closing of the merger, the
vesting of all of the stock options and restricted stock units
granted under our 2005 stock incentive plan in February 2010 to
each of our non-employee directors. As a result, an option to
purchase 5,000 shares of our common stock will become
immediately exercisable and an award of 5,000 restricted stock
units will become fully vested at the closing of the merger for
each of Aron J. Ain, Gary E. Haroian, Carla Hendra, Louis
Hernandez, Jr., James A. Perakis and Robert P. Schechter.
The general treatment of options and restricted stock units in
the merger, including such awards held by our directors, is
described below under Treatment of Options
Outstanding Under Our Stock Plans and
Treatment of Restricted Stock Units
Outstanding Under Our Stock Plans beginning on
page 41.
Compensation
Summary
The following table sets forth the following cash compensation
for each of our executive officers:
|
|
|
|
|
the expected annual base salary (with respect to
Messrs. Yuchun Lee, Peter Cousins, John Hogan, Kevin Keane,
Paul McNulty, and David Sweet and Ms. Vivian Vitale) or
severance payment (with respect to Messrs. Kevin P. Shone,
James Fieger and Jason W. Joseph), as applicable, each executive
officer is expected to receive from IBM following the closing of
the merger; and
|
35
|
|
|
|
|
the aggregate cash retention or transition bonus each executive
officer will be eligible to receive following the closing of the
merger.
|
|
|
|
|
|
|
|
|
|
|
|
Annual Base
|
|
Aggregate Cash
|
|
|
Salary/Severance
|
|
Retention/Transition
|
Name of Executive Officer
|
|
Payment
|
|
Bonus
|
|
Yuchun Lee
|
|
$
|
415,000
|
|
|
$
|
1,100,000
|
|
Kevin P. Shone
|
|
$
|
364,000
|
|
|
$
|
0
|
|
Peter Cousins
|
|
$
|
270,000
|
|
|
$
|
600,000
|
|
James Fieger
|
|
$
|
460,000
|
|
|
$
|
0
|
|
John Hogan
|
|
$
|
270,000
|
|
|
$
|
600,000
|
|
Jason W. Joseph
|
|
$
|
299,000
|
|
|
$
|
0
|
|
Kevin Keane
|
|
$
|
210,000
|
|
|
$
|
550,000
|
|
Paul McNulty
|
|
$
|
250,000
|
|
|
$
|
575,000
|
|
David Sweet
|
|
$
|
270,000
|
|
|
$
|
600,000
|
|
Vivian Vitale
|
|
$
|
225,000
|
|
|
$
|
440,000
|
|
The table below sets forth, as of August 9, 2010, for each
of our directors and executive officers, the number of stock
options whose vesting will accelerate at the closing of the
merger and the dollar value of such accelerated stock options,
as well as the number of all vested and unvested stock options
held (including the stock options whose vesting will accelerate
at the closing of the merger) and the dollar value of all such
vested and unvested stock options held, pursuant to the terms of
the executive officers employment arrangement with IBM, in
the case of Messrs. Yuchun Lee, Peter Cousins, John Hogan,
Kevin Keane, Paul McNulty, and David Sweet and
Ms. Vivian Vitale, or the executive retention agreements
with Unica, in the case of Messrs. Shone, Fieger and
Joseph, as in effect as of August 9, 2010, and assuming
that each director and executive officer exercises all vested
in-the-money
stock options and receives $21.00 per share of common stock
pursuant to the merger. The table below does not take into
account any additional acceleration of vesting of options that
could occur upon termination of employment under certain
specified circumstances pursuant to the employment arrangements
with IBM or the executive retention agreements with Unica.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Number of
|
|
|
|
|
|
|
|
|
Options whose
|
|
|
|
|
|
|
|
|
Vesting will
|
|
Dollar Value of
|
|
|
|
|
|
|
Accelerate
|
|
Accelerated
|
|
Total Number
|
|
Dollar Value
|
Name
|
|
at the Closing
|
|
Options(1)
|
|
of All Options(2)
|
|
of All Options(1)
|
|
Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aron J. Ain
|
|
|
5,000
|
|
|
$
|
61,250
|
|
|
|
70,000
|
|
|
$
|
793,050
|
|
Gary E. Haroian
|
|
|
5,000
|
|
|
$
|
61,250
|
|
|
|
11,250
|
|
|
$
|
161,600
|
|
Carla Hendra
|
|
|
5,000
|
|
|
$
|
61,250
|
|
|
|
40,000
|
|
|
$
|
504,150
|
|
Louis Hernandez, Jr.
|
|
|
5,000
|
|
|
$
|
61,250
|
|
|
|
8,753
|
|
|
$
|
122,499
|
|
Yuchun Lee
|
|
|
51,250
|
|
|
$
|
760,763
|
|
|
|
479,999
|
|
|
$
|
7,836,382
|
|
James A. Perakis
|
|
|
5,000
|
|
|
$
|
61,250
|
|
|
|
65,000
|
|
|
$
|
763,050
|
|
Robert P. Schechter
|
|
|
5,000
|
|
|
$
|
61,250
|
|
|
|
83,333
|
|
|
$
|
950,046
|
|
Other Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin P. Shone
|
|
|
12,500
|
|
|
$
|
191,070
|
|
|
|
75,000
|
|
|
$
|
1,161,250
|
|
Peter Cousins
|
|
|
15,729
|
|
|
$
|
245,320
|
|
|
|
48,333
|
|
|
$
|
764,411
|
|
James Fieger
|
|
|
23,125
|
|
|
$
|
325,606
|
|
|
|
120,000
|
|
|
$
|
1,689,200
|
|
John Hogan
|
|
|
24,688
|
|
|
$
|
386,818
|
|
|
|
88,333
|
|
|
$
|
1,404,211
|
|
Jason W. Joseph
|
|
|
11,614
|
|
|
$
|
180,364
|
|
|
|
78,333
|
|
|
$
|
1,231,361
|
|
Kevin Keane
|
|
|
17,553
|
|
|
$
|
271,533
|
|
|
|
77,498
|
|
|
$
|
1,196,183
|
|
Paul McNulty
|
|
|
20,313
|
|
|
$
|
310,043
|
|
|
|
65,000
|
|
|
$
|
994,750
|
|
David Sweet
|
|
|
30,625
|
|
|
$
|
479,806
|
|
|
|
129,998
|
|
|
$
|
2,068,068
|
|
Vivian Vitale
|
|
|
13,750
|
|
|
$
|
184,438
|
|
|
|
40,000
|
|
|
$
|
524,600
|
|
36
|
|
|
(1)
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|
The dollar value of options is calculated by subtracting the per
share exercise price of the options from $21.00 per share and
multiplying the amount of this difference by the number of
shares subject to the options. The amounts reflect hypothetical
exercises at $21.00 per share.
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|
(2)
|
|
The number of all options includes options whose vesting will
accelerate at the closing of the merger and options that remain
unvested as of the closing of the merger.
|
The table below sets forth, as of August 9, 2010, for each
of our directors and executive officers, the number of
restricted stock units whose vesting will accelerate at the
closing of the merger and the dollar value of such restricted
stock units, as well as the number of all restricted stock units
held (inclusive of those vesting at the closing of the merger)
and the dollar value of all such restricted stock units held,
pursuant to the terms of the executive officers employment
arrangement with IBM, in the case of Messrs. Yuchun Lee,
Peter Cousins, John Hogan, Kevin Keane, Paul McNulty, and
David Sweet and Ms. Vivian Vitale, or the executive
retention agreements with Unica, in the case of
Messrs. Shone, Fieger and Joseph, as in effect as of
August 9, 2010. The table below does not take into account
any additional acceleration of vesting of restricted stock units
that could occur upon termination of employment under certain
specified circumstances pursuant to the employment arrangements
with IBM or the executive retention agreements with Unica.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total Number of
|
|
|
|
|
|
|
|
|
RSUs whose Vesting
|
|
Dollar Value of
|
|
|
|
|
|
|
will Accelerate at
|
|
Accelerated
|
|
Total Number
|
|
Dollar Value
|
Name
|
|
the Closing
|
|
RSUs(1)
|
|
of All RSUs(2)
|
|
of All RSUs(1)
|
|
Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aron J. Ain
|
|
|
5,000
|
|
|
$
|
105,000
|
|
|
|
5,000
|
|
|
$
|
105,000
|
|
Gary E. Haroian
|
|
|
5,000
|
|
|
$
|
105,000
|
|
|
|
5,000
|
|
|
$
|
105,000
|
|
Carla Hendra
|
|
|
5,000
|
|
|
$
|
105,000
|
|
|
|
5,000
|
|
|
$
|
105,000
|
|
Louis Hernandez, Jr.
|
|
|
5,000
|
|
|
$
|
105,000
|
|
|
|
5,000
|
|
|
$
|
105,000
|
|
Yuchun Lee
|
|
|
46,250
|
|
|
$
|
971,250
|
|
|
|
92,500
|
|
|
$
|
1,942,500
|
|
James A. Perakis
|
|
|
5,000
|
|
|
$
|
105,000
|
|
|
|
5,000
|
|
|
$
|
105,000
|
|
Robert P. Schechter
|
|
|
5,000
|
|
|
$
|
105,000
|
|
|
|
5,000
|
|
|
$
|
105,000
|
|
Other Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin P. Shone
|
|
|
15,625
|
|
|
$
|
328,125
|
|
|
|
62,500
|
|
|
$
|
1,312,500
|
|
Peter Cousins
|
|
|
20,000
|
|
|
$
|
420,000
|
|
|
|
40,000
|
|
|
$
|
840,000
|
|
James Fieger
|
|
|
17,500
|
|
|
$
|
367,500
|
|
|
|
70,000
|
|
|
$
|
1,470,000
|
|
John Hogan
|
|
|
21,250
|
|
|
$
|
446,250
|
|
|
|
42,500
|
|
|
$
|
892,500
|
|
Jason W. Joseph
|
|
|
12,500
|
|
|
$
|
262,500
|
|
|
|
50,000
|
|
|
$
|
1,050,000
|
|
Kevin Keane
|
|
|
10,625
|
|
|
$
|
223,125
|
|
|
|
21,250
|
|
|
$
|
446,250
|
|
Paul McNulty
|
|
|
24,375
|
|
|
$
|
511,875
|
|
|
|
48,750
|
|
|
$
|
1,023,750
|
|
David Sweet
|
|
|
24,375
|
|
|
$
|
511,875
|
|
|
|
48,750
|
|
|
$
|
1,023,750
|
|
Vivian Vitale
|
|
|
25,000
|
|
|
$
|
525,000
|
|
|
|
50,000
|
|
|
$
|
1,050,000
|
|
|
|
|
(1)
|
|
The dollar value of restricted stock units is calculated by
multiplying the number of shares underlying the restricted stock
unit by $21.00.
|
|
(2)
|
|
The total number of restricted stock units consists of the total
number of restricted stock units prior to acceleration,
including restricted stock units whose vesting will accelerate
at the closing of the merger and restricted stock units that
will not be settled prior to the closing of the merger.
|
Indemnification
and Insurance
The surviving corporation will assume, and IBM will cause the
surviving corporation to comply with and honor, all rights to
indemnification, advancement of expenses and exculpation from
liabilities for acts or omissions occurring at or prior to the
effective time of the merger existing in favor of our and our
subsidiaries
37
current or former directors or officers as provided in our and
their respective certificates of incorporation or bylaws (or
comparable organizational documents) and any indemnification or
other agreements as in effect on the date of the merger
agreement. We have entered into indemnification agreements with
each of our directors and executive officers. Each
indemnification agreement provides that we will indemnify the
director or executive officer to the fullest extent permitted by
law for claims arising in his or her capacity as our director,
officer, employee or agent, provided that he or she acted in
good faith and in a manner that he or she reasonably believed to
be in, or not opposed to, our best interests and, with respect
to any criminal proceeding, had no reasonable cause to believe
that his or her conduct was unlawful. In the event that we do
not assume the defense of a claim against our director or
executive officer, we are required to advance his or her
expenses in connection with his or her defense, provided that he
or she undertakes to repay all amounts advanced if it is
ultimately determined that he or she is not entitled to be
indemnified by us.
In addition, IBM will obtain or will cause to be obtained a
tail insurance policy with a claims period of six
years from the effective time of the merger with respect to
directors and officers liability insurance covering
those persons who were, as of the date of the merger agreement,
covered by our directors and officers liability
insurance policy for acts or omissions occurring prior to the
effective time of the merger, on terms that are no less
favorable than our policies in effect on the date of the merger
agreement. Prior to the closing of the merger, IBM will prepay
such insurance for the six-year period, but in no event will IBM
or the surviving corporation be required to pay, with respect to
the entire six-year period following the effective time of the
merger, premiums for insurance which in the aggregate exceed
300% of the aggregate premiums paid by us for the period from
September 30, 2009 to, and including, September 30,
2010.
Appraisal
Rights
If you do not vote for the adoption of the merger agreement at
the special meeting and otherwise comply with the applicable
statutory procedures of Section 262 of the DGCL, summarized
herein, you may be entitled to appraisal rights under
Section 262 of the DGCL. In order to exercise and perfect
appraisal rights, a record holder of our common stock must
follow the steps prescribed in Section 262 of the DGCL and
summarized below properly and in a timely manner.
Section 262 of the DGCL is reprinted in its entirety as
Annex D to this proxy statement. Set forth below is a
summary description of Section 262 of the DGCL. The
following summary describes the material aspects of
Section 262 of the DGCL, and the law relating to appraisal
rights and is qualified in its entirety by reference to
Annex D. All references in Section 262 and this
summary to stockholder are to the record holder of
the shares of our common stock immediately prior to the
effective time of the merger as to which appraisal rights are
asserted. Failure to comply strictly with the procedures set
forth in Section 262 of the DGCL will result in the loss of
appraisal rights.
ANY UNICA STOCKHOLDER WHO WISHES TO EXERCISE APPRAISAL RIGHTS
OR WHO WISHES TO PRESERVE HIS, HER OR ITS RIGHT TO DO SO SHOULD
REVIEW ANNEX D CAREFULLY AND SHOULD CONSULT HIS, HER OR ITS
LEGAL ADVISOR, SINCE FAILURE TO TIMELY COMPLY WITH THE
PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF SUCH
RIGHTS.
Under the DGCL, holders of our common stock who follow the
procedures set forth in Section 262 of the DGCL will be
entitled to have their shares appraised by the Delaware Court of
Chancery, or the Delaware Court, and to receive payment in cash
of the fair value of those shares, exclusive of any
element of value arising from the accomplishment or expectation
of the merger.
Under Section 262 of the DGCL, where a merger agreement
relating to a proposed merger is to be submitted for adoption at
a meeting of stockholders, as in the case of the special
meeting, the corporation, not less than 20 days prior to
such meeting, must notify each of its stockholders who was a
stockholder on the record date with respect to shares for which
appraisal rights are available, that appraisal rights are so
available, and must include in each such notice a copy of
Section 262 of the DGCL. This proxy statement constitutes
such notice to the holders of our common stock and
Section 262 of the DGCL is attached to this proxy statement
as Annex D. Any stockholder who wishes to exercise such
appraisal rights or who wishes to
38
preserve his right to do so should review the following
discussion and Annex D carefully and should consult his,
her or its legal advisor, because failure to timely and properly
comply with the procedures specified will result in the loss of
appraisal rights under the DGCL.
If you wish to exercise appraisal rights you must not vote for
the adoption of the merger agreement and must deliver to Unica,
before the vote on the proposal to adopt the merger agreement, a
written demand for appraisal of such stockholders shares
of our common stock. If you sign and return a proxy card or vote
by submitting a proxy by telephone, through the Internet or by
fax, without expressly directing that your shares of our common
stock be voted against the adoption of the merger agreement, you
will effectively waive your appraisal rights because such shares
represented by the proxy will be voted for the adoption of the
merger agreement. Accordingly, if you desire to exercise and
perfect appraisal rights with respect to any of your shares of
common stock, you must either refrain from executing and
returning the enclosed proxy card and from voting in person or
by submitting a proxy by telephone, through the Internet or by
fax, in favor of the proposal to adopt the merger agreement or
check either the against or the abstain
box next to the proposal on such card or vote in person or by
submitting a proxy by telephone, through the Internet or by fax,
against the proposal or register in person an abstention with
respect thereto. A vote or proxy against the adoption of the
merger agreement will not, in and of itself, constitute a demand
for appraisal.
A demand for appraisal will be sufficient if it reasonably
informs Unica of the identity of the stockholder and that such
stockholder intends thereby to demand appraisal of such
stockholders shares of common stock. This written demand
for appraisal must be separate from any proxy or vote abstaining
from or voting against the adoption of the merger agreement. If
you wish to exercise your appraisal rights you must be the
record holder of such shares of our common stock on the date the
written demand for appraisal is made and you must continue to
hold such shares through the effective time of the merger.
Accordingly, a stockholder who is the record holder of shares of
common stock on the date the written demand for appraisal is
made, but who thereafter transfers such shares prior to the
effective time of the merger, will lose any right to appraisal
in respect of such shares.
Only a holder of record of shares of our common stock on
[ ],
2010, the record date for the special meeting, is entitled to
assert appraisal rights for such shares of our common stock
registered in that holders name. A demand for appraisal
should be executed by or on behalf of the holder of record,
fully and correctly, as the holders name appears on the
stock certificates and must state that such person intends
thereby to demand appraisal of his, her or its shares. If the
shares are owned of record in a fiduciary capacity, such as by a
trustee, guardian or custodian, execution of the demand for
appraisal should be made in that capacity, and if the shares are
owned of record by more than one person, as in a joint tenancy
or tenancy in common, the demand should be executed by or on
behalf of all joint owners. An authorized agent, including one
for two or more joint owners, may execute the demand for
appraisal on behalf of a holder of record; however, the agent
must identify the record owner or owners and expressly disclose
the fact that, in executing the demand, he or she is acting as
agent for such owner or owners.
A record holder such as a broker who holds shares as nominee for
several beneficial owners may exercise appraisal rights with
respect to the shares of our common stock held for one or more
beneficial owners while not exercising such rights with respect
to the shares held for other beneficial owners; in such case,
the written demand should set forth the number of shares as to
which appraisal is sought. Where the number of shares of our
common stock is not expressly stated, the demand will be
presumed to cover all shares held in the name of the record
owner. If you hold your shares in brokerage accounts or other
nominee forms and wish to exercise your appraisal rights, you
are urged to consult with your broker to determine the
appropriate procedures for the making of a demand for appraisal.
All written demands for appraisal of shares must be mailed or
delivered to: Unica Corporation, Reservoir Place North, 170
Tracer Lane, Waltham, Massachusetts
02451-1379,
Attention: Jason W. Joseph, Secretary.
Within ten days after the effective time of the merger, we will
notify each stockholder of the effective time of the merger who
properly asserted appraisal rights under Section 262 and
has not voted for the adoption of the merger agreement. Within
120 days after the effective time of the merger, but not
thereafter, we or any
39
stockholder who has complied with the statutory requirements
summarized above may commence an appraisal proceeding by filing
a petition in the Delaware Court demanding a determination of
the fair value of the shares held by such stockholder. If no
such petition is filed, appraisal rights will be lost for all
stockholders who had previously demanded appraisal of their
shares. We are not under any obligation, and we have no present
intention, to file a petition with respect to appraisal of the
value of the shares. Accordingly, if you wish to exercise your
appraisal rights, you should regard it as your obligation to
take all steps necessary to perfect your appraisal rights in the
manner prescribed in Section 262 of the DGCL.
Within 120 days after the effective time of the merger, any
stockholder who has complied with the provisions of
Section 262 of the DGCL will be entitled, upon written
request, to receive from us a statement setting forth the
aggregate number of shares of our common stock not voted in
favor of adoption of the merger agreement and with respect to
which demands for appraisal were received by us, and the number
of holders of such shares. Such statement must be mailed within
ten days after the written request therefor has been received by
us or within ten days after expiration of the period for
delivery of appraisal demands, whichever is later. A person who
is the beneficial owner of shares of such stock held either in a
voting trust or by a nominee on behalf of such person may, in
such persons own name, file an appraisal petition or
request from us the statement described in this paragraph.
If a petition for an appraisal is timely filed and a copy
thereof served upon us, we will then be obligated, within
20 days after such service, to file with the Delaware
Register in Chancery a duly verified list containing the names
and addresses of the stockholders who have demanded appraisal of
their shares and with whom agreements as to the value of their
shares have not been reached. After notice to the stockholders
as required by the Delaware Court, the Delaware Court is
empowered to conduct a hearing on such petition to determine
those stockholders who have complied with Section 262 and
who have become entitled to appraisal rights thereunder. The
Delaware Court may require the stockholders who demanded
appraisal rights of our shares of common stock to submit their
stock certificates to the Register in Chancery for notation
thereon of the pendency of the appraisal proceeding; and if any
stockholder fails to comply with such direction, the Delaware
Court may dismiss the proceedings as to such stockholder.
After the Delaware Court determines which stockholders are
entitled to appraisal, the appraisal proceeding shall be
conducted in accordance with the rules of the Delaware Court,
including any rules specifically governing appraisal
proceedings. Through such proceeding the Delaware Court shall
determine the fair value of the shares exclusive of any element
of value arising from the accomplishment or expectation of the
merger, together with interest, if any, to be paid upon the
amount determined to be the fair value. In determining such fair
value, the Delaware Court shall take into account all relevant
factors. Unless the Delaware Court in its discretion determines
otherwise for good cause shown, interest from the effective date
of the merger through the date of payment of the judgment shall
be compounded quarterly and shall accrue at 5% over the Federal
Reserve discount rate (including any surcharge) as established
from time to time during the period between the effective date
of the merger and the date of payment of the judgment. If you
are considering seeking appraisal, you should be aware that the
fair value of your shares as determined under Section 262
of the DGCL could be more than, the same as or less than the
consideration you are entitled to receive pursuant to the merger
agreement if you did not seek appraisal of your shares and that
investment banking opinions as to the fairness from a financial
point of view of the consideration payable in a merger are not
necessarily opinions as to fair value under Section 262 of
the DGCL.
The Delaware Court will direct the payment of the fair value of
the shares of our common stock to those stockholders who have
perfected appraisal rights, together with interest, if any. The
Delaware Court will determine the amount of interest, if any, to
be paid on the amounts to be received by persons whose shares of
our common stock have been appraised. The costs of the action
(which do not include attorneys or expert fees or
expenses) may be determined by the Delaware Court and taxed upon
the parties as the Delaware Court deems equitable. The Delaware
Court may also order that all or a portion of the expenses
incurred by any stockholder in connection with an appraisal,
including without limitation reasonable attorneys fees and
the fees and expenses of experts utilized in the appraisal
proceeding, be charged pro rata against the value of all of the
shares entitled to appraisal. In the absence of such
determination or assessment, each party bears its own expenses.
40
Any stockholder who has duly demanded and perfected an appraisal
in compliance with Section 262 of the DGCL will not, after
the effective time of the merger, be entitled to vote his or her
shares for any purpose or be entitled to the payment of
dividends or other distributions thereon, except dividends or
other distributions payable to holders of record of shares of
our common stock as of a date prior to the effective time of the
merger.
At any time within 60 days after the effective time of the
merger, any stockholder will have the right to withdraw his or
her demand for appraisal and to accept the cash payment for his
or her shares pursuant to the merger agreement. After this
period, a stockholder may withdraw his or her demand for
appraisal only with our written consent. If no petition for
appraisal is filed with the Delaware Court within 120 days
after the effective time of the merger, a stockholders
right to appraisal will cease and he or she will be entitled to
receive the cash payment for his or her shares pursuant to the
merger agreement, as if he or she had not demanded appraisal of
his or her shares. No petition timely filed in the Delaware
Court demanding appraisal will be dismissed as to any
stockholder without the approval of the Delaware Court, and such
approval may be conditioned on such terms as the Delaware Court
deems just; provided, however, that any stockholder who has not
commenced an appraisal proceeding or joined that proceeding as a
named party may withdraw his, her or its demand for appraisal
and accept the merger consideration offered pursuant to the
merger agreement within 60 days after the effective date of
the merger.
If you properly demand appraisal of your shares of our common
stock under Section 262 and you fail to perfect, or
effectively withdraw or lose, your right to appraisal, as
provided in the DGCL, your shares will be converted into the
right to receive the consideration receivable with respect to
such shares in accordance with the merger agreement. You will
fail to perfect, or effectively lose or withdraw, your right to
appraisal if, among other things, no petition for appraisal is
filed within 120 days after the effective time of the
merger, or if you deliver to us a written withdrawal of your
demand for appraisal. Any such attempt to withdraw an appraisal
demand more than 60 days after the effective time of the
merger will require our written approval.
If you desire to exercise your appraisal rights, you must not
vote for the adoption of the merger agreement and must strictly
comply with the procedures set forth in Section 262 of the
DGCL.
Failure to take any required step in connection with the
exercise of appraisal rights will result in the termination or
waiver of such rights.
THE PROCESS OF DEMANDING AND EXERCISING APPRAISAL RIGHTS
REQUIRES STRICT COMPLIANCE WITH TECHNICAL PREREQUISITES. THOSE
INDIVIDUALS OR ENTITIES WISHING TO EXERCISE THEIR APPRAISAL
RIGHTS SHOULD CONSULT WITH THEIR OWN LEGAL COUNSEL IN CONNECTION
WITH COMPLIANCE UNDER SECTION 262 OF THE DGCL. TO THE
EXTENT THERE ARE ANY INCONSISTENCIES BETWEEN THE FOREGOING
SUMMARY AND SECTION 262 OF THE DGCL, THE DGCL SHALL GOVERN.
Treatment
of Options Outstanding Under Our Stock Plans
At the effective time of the merger, each outstanding option to
acquire our common stock granted under our 1993 stock option
plan and our 2003 stock option plan will be cancelled and will
be converted into the right of the holder thereof to receive an
amount, in cash, without interest and less any applicable
withholding taxes, equal to the product of the number of shares
of our common stock that are subject to such option, and the
excess, if any, of the merger consideration of $21.00 per share
over the exercise price per share of the common stock subject to
such option.
Holders of outstanding options to acquire our common stock
granted under our 2005 stock incentive plan that are vested or
that are vesting in connection with the merger will be offered
the opportunity to have their options treated as described above
for the options outstanding under our 1993 and 2003 stock option
plans, which we refer to as being cashed out. Each
outstanding option to acquire our common stock granted under our
2005 stock incentive plan that is vested or that is vesting in
connection with the merger whose holder chooses not to have
cashed out and any other option not being cancelled in the
manner described in the prior paragraph, whether or not vested,
will be converted into an option to acquire, on substantially
the same terms
41
and conditions as were applicable to such option prior to the
effective time of the merger, the number of shares of common
stock of IBM equal to the product of the number of shares of our
common stock that are subject to such option and the exchange
ratio, rounded down to the nearest whole IBM share. The exchange
ratio is a fraction, the numerator of which is the merger
consideration of $21.00 per share and the denominator of which
is the average closing price per share of the common stock of
IBM on the New York Stock Exchange Composite Transactions Tape
on the 20 trading days immediately prior to the closing date of
the merger. The exercise price per share of common stock of IBM
as of immediately following such conversion will be equal to the
per share exercise price for the shares of our common stock
otherwise purchasable pursuant to such option divided by the
exchange ratio, rounded up to the nearest whole cent.
Our 2005 stock incentive plan provides that, except to the
extent otherwise provided in an agreement evidencing any option,
in the event of a
change-in-control
of us, 25% of the then unvested options held by any individual
will become vested as of such
change-in-control.
In addition, under the plan, if an option holders
employment is terminated for good reason (as defined in our 2005
stock incentive plan and as described below) by the individual
or without cause (as defined in our 2005 stock incentive plan
and as described below) by us or the acquiring entity or our or
its affiliates within 12 months after the
change-in-control,
an additional 25% of the number of options that were unvested
immediately prior to the
change-in-control
(but not more than the total unvested number) will become
vested, with the number in the increase adjusted as the awards
have themselves adjusted for purposes of the
change-in-control
and any later event. The merger will constitute a
change-in-control
and IBM will constitute an acquiring entity under the terms of
our 2005 stock incentive plan. Our 2005 stock incentive plan
defines good reason as any significant diminution in
an individuals title, authority, or responsibilities from
and after the
change-in-control,
or any reduction in the annual cash compensation payable to the
individual from and after such
change-in-control.
Our 2005 stock incentive plan defines cause as any
willful failure by the individual, which failure is not cured
within 30 days of written notice to the individual , to
perform his or her material responsibilities, or willful
misconduct by the individual that affects the business
reputation of the company.
Treatment
of Restricted Stock Units Outstanding Under Our Stock
Plans
IBM will pay to each holder of our restricted stock units,
following each applicable date after the closing date of the
merger on which any restricted stock unit held by such holder at
the effective time of the merger would have vested (each such
date is referred to herein as a lapse date) pursuant
to the terms of our stock plans or the terms of any such
restricted stock unit as in effect immediately prior the
effective time, an amount, in cash, equal to the product of the
merger consideration of $21.00 per share and the number of
restricted stock units held by the holder at the effective time
of the merger that, on any particular lapse date, would have so
vested, provided that if such holders employment with IBM
terminates for any reason on or before any such lapse date, IBM
will have no obligation to pay such amount with respect to such
lapse date or any subsequent lapse date, other than with respect
to restricted stock units that vest pursuant to our stock plans
or the terms of any such restricted stock units as in effect
immediately prior to the effective time or any provisions for
acceleration of vesting contained in an offer letter or other
individual agreement that IBM enters into with such holder.
Our 2005 stock incentive plan provides that, except to the
extent otherwise provided in an agreement evidencing any
restricted stock unit, in the event of a
change-in-control
of us, 25% of the then unvested restricted stock units held by
any individual will become vested as of such
change-in-control.
In addition, under the plan, if a restricted stock unit
holders employment is terminated for good reason by the
individual or without cause by us or the acquiring entity or our
or its affiliates within 12 months after the
change-in-control,
an additional 25% of the number of restricted stock units that
were unvested immediately prior to the
change-in-control
(but not more than the total unvested number) will become
vested, with the number in the increase adjusted as the awards
have themselves adjusted for purposes of the
change-in-control
and any later event. The merger will constitute a
change-in-control
and IBM will constitute an acquiring entity under the terms of
our 2005 stock incentive plan.
42
Effective
Time of the Merger
The merger will become effective upon the filing of a
certificate of merger with the Secretary of State of the State
of Delaware or at such later time as is agreed upon by IBM and
us and specified in such certificate of merger. The filing of
the certificate of merger will occur as soon as practicable on
or after the closing, which will take place on a date to be
specified by IBM, merger sub and us and which will be no later
than the second business day after satisfaction or waiver of the
conditions to the closing of the merger set forth in the merger
agreement and described in this proxy statement, unless IBM and
we agree to hold the closing at a different time. We currently
anticipate the merger to be completed in the fourth quarter of
calendar year 2010.
Delisting
and Deregistration of Our Common Stock
If the merger is completed, our common stock will be delisted
from and will no longer be traded on The NASDAQ Global Market
and will be deregistered under the Securities Exchange Act.
Following the closing of the merger, we will no longer be an
independent public company.
Material
United States Federal Income Tax Consequences of the
Merger
The following discussion summarizes the material
U.S. federal income tax consequences of the merger to
holders of Unica common stock. This discussion is based upon the
provisions of the Internal Revenue Code of 1986, as amended,
which we refer to as the Code, the U.S. Treasury
Regulations promulgated thereunder and judicial and
administrative rulings, all as in effect as of the date of this
proxy statement and all of which are subject to change or
varying interpretation, possibly with retroactive effect. Any
such changes could affect the accuracy of the statements and
conclusions set forth herein.
This discussion assumes that holders of Unica common stock hold
their shares as capital assets within the meaning of
Section 1221 of the Code (generally, property held for
investment). This discussion does not address all aspects of
U.S. federal income taxation that may be relevant to a
holder of Unica common stock in light of such holders
particular circumstances, nor does it discuss the special
considerations applicable to holders of our common stock subject
to special treatment under the U.S. federal income tax
laws, such as, for example, financial institutions or
broker-dealers, mutual funds, partnerships or other pass-through
entities and their partners or members, tax-exempt
organizations, insurance companies, dealers in securities or
foreign currencies, traders in securities who elect
mark-to-market
method of accounting, controlled foreign corporations, passive
foreign investment companies, U.S. expatriates, holders who
acquired their Unica common stock through the exercise of
options or otherwise as compensation, holders who hold their
Unica common stock as part of a hedge, straddle, constructive
sale or conversion transaction, U.S. holders whose
functional currency is not the U.S. dollar, and holders who
exercise appraisal rights. This discussion does not address any
aspect of foreign, state, local, alternative minimum, estate,
gift or other tax law that may be applicable to a
U.S. holder.
We intend this discussion to provide only a general summary of
the material U.S. federal income tax consequences of the
merger to holders of Unica common stock. We do not intend it to
be a complete analysis or description of all potential
U.S. federal income tax consequences of the merger. The
U.S. federal income tax laws are complex and subject to
varying interpretation. Accordingly, the Internal Revenue
Service may not agree with the tax consequences described in
this proxy statement.
If an entity or arrangement treated as a partnership for
U.S. federal income tax purposes holds Unica common stock,
the tax treatment of a partner in such partnership generally
will depend on the status of the partner and activities of the
partnership. If you are a partner of a partnership holding Unica
common stock, you should consult your own tax advisor.
All holders should consult their own tax advisor to determine
the particular tax consequences to them (including the
application and effect of any state, local or foreign income and
other tax laws) of the receipt of cash in exchange for shares of
Unica common stock pursuant to the merger.
For purposes of this discussion, the term
U.S. holder means a beneficial owner of Unica
common stock that is, for U.S. federal income tax purposes:
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an individual citizen or resident of the United States;
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a corporation (including any entity treated as a corporation for
U.S. federal income tax purposes) created or organized in
or under the laws of the United States, any state thereof or the
District of Columbia;
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a trust if (1) its administration is subject to the primary
supervision of a court within the United States and one or more
U.S. persons have the authority to control all substantial
decisions of the trust or (2) it has a valid election in
effect under applicable U.S. Treasury Regulations to be
treated as a U.S. person; or
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an estate the income of which is subject to U.S. federal
income tax regardless of its source.
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A
non-U.S. holder
is a beneficial owner (other than a partnership) of Unica common
stock that is not a U.S. holder.
U.S.
Holders.
The conversion of shares of Unica common stock into cash
pursuant to the merger will be a taxable transaction for
U.S. federal income tax purposes. A U.S. holder
generally will recognize gain or loss for U.S. federal
income tax purposes equal to the difference, if any, between the
amount of cash received pursuant to the merger and such
U.S. holders adjusted tax basis in the shares
converted into cash pursuant to the merger. Such gain or loss
generally will be capital gain or loss, and will be long-term
capital gain or loss if the holders holding period for
such shares exceeds one year as of the date of the merger.
Long-term capital gains for certain non-corporate
U.S. holders, including individuals, are generally eligible
for a reduced rate of federal income taxation. The deductibility
of capital losses is subject to limitations. If a
U.S. holder acquired different blocks of Unica common stock
at different times or different prices, such U.S. holder
must determine its tax basis, holding period, and gain or loss
separately with respect to each block of Unica common stock.
A U.S. holder may, under certain circumstances, be subject
to information reporting and backup withholding at the
applicable rate (currently, 28%) with respect to the cash
received pursuant to the merger, unless such holder properly
establishes an exemption or provides its correct tax
identification number and otherwise complies with the applicable
requirements of the backup withholding rules. Backup withholding
is not an additional tax. Any amounts withheld under the backup
withholding rules can be refunded or credited against a
payees U.S. federal income tax liability, if any,
provided that such U.S. holder furnishes the required
information to the Internal Revenue Service in a timely manner.
Non-U.S.
Holders.
Any gain recognized on the receipt of cash pursuant to the
merger by a
non-U.S. holder
generally will not be subject to U.S. federal income tax
unless:
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the gain is effectively connected with a U.S. trade or
business of such
non-U.S. holder
(and, if required by an applicable income tax treaty, is also
attributable to a permanent establishment or, in the case of an
individual, a fixed base in the United States maintained by such
non-U.S. holder),
in which case the
non-U.S. holder
generally will be subject to tax on such gain in the same manner
as a U.S. holder and, if the
non-U.S. holder
is a foreign corporation, such corporation may be subject to
branch profits tax at the rate of 30% (or such lower rate as may
be specified by an applicable income tax treaty); or
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the
non-U.S. holder
is a nonresident alien individual who is present in the United
States for 183 days or more in the taxable year of the
merger and certain other conditions are met, in which case the
non-U.S. holder
generally will be subject to a 30% tax on the
non-U.S. holders
net gain realized in the merger, which may be offset by
U.S. source capital losses of the
non-U.S. holder,
if any; or
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the
non-U.S. holder
owned (directly, indirectly or constructively) more than 5% of
Unicas outstanding common stock at any time during the
five years preceding the merger, and Unica is or has been a
United States real property holding corporation for
U.S. federal income tax purposes during such period.
Although there can be no assurances in this regard, Unica does
not believe that it is or was a United States real
property holding corporation for U.S. federal income
tax purposes.
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A
non-U.S. holder
will be subject to information reporting and, in certain
circumstances, backup withholding (currently, at a rate of 28%)
will apply with respect to the cash received by such holder
pursuant to the merger, unless such
non-U.S. holder
certifies under penalties of perjury that it is a
non-U.S. holder
(and the payor does not have actual knowledge or reason to know
that the holder is a United States person as
44
defined under the Code) or such holder otherwise establishes an
exemption from backup withholding. Backup withholding is not an
additional tax and any amounts withheld under the backup
withholding rules may be refunded or credited against a
non-U.S. holders
U.S. federal income tax liability, if any.
Appraisal
Rights
Under specified circumstances a holder may be entitled to
appraisal rights in connection with the merger. If a holder of
Unica common stock receives cash pursuant to the exercise of
appraisal rights, such holder generally will recognize gain or
loss, measured by the difference between the cash received and
such holders tax basis in such stock. Interest, if any,
awarded in an appraisal proceeding by a court would be included
in such holders income as ordinary income for
U.S. federal income tax purposes. Holders of Unica common
stock who exercise appraisal rights are urged to consult their
own tax advisors.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE
IS INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT A
COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX
CONSEQUENCES RELEVANT TO UNICA STOCKHOLDERS. THE TAX
CONSEQUENCES OF THE MERGER MAY VARY DEPENDING UPON THE
PARTICULAR CIRCUMSTANCES OF EACH STOCKHOLDER. YOU SHOULD CONSULT
YOUR TAX ADVISOR CONCERNING THE FEDERAL, STATE, LOCAL, FOREIGN
OR OTHER TAX CONSEQUENCES OF THE MERGER TO YOU.
Regulatory
Matters
HSR
Act
The closing of the merger is subject to expiration or
termination of the applicable waiting periods under the HSR Act
and the rules thereunder. Under the HSR Act and the rules
thereunder, the merger may not be completed unless certain
information has been furnished to the Antitrust Division of the
U.S. Department of Justice and to the Federal Trade
Commission and applicable waiting periods expire or are
terminated. The HSR Act requires the parties to observe a
30-day
waiting period (the initial
30-day
waiting period), during which time the merger may not be
consummated, unless that initial
30-day
waiting period is terminated early. If, before the expiration of
the initial
30-day
waiting period, the Antitrust Division of the
U.S. Department of Justice or the Federal Trade Commission
issues a request for additional information, the parties may not
consummate the transaction until 30 days after Unica and
IBM have each substantially complied with such request for
additional information (unless this period is shortened pursuant
to a grant of earlier termination). IBM and Unica will file
their respective notification and report forms pursuant to the
HSR Act with the Antitrust Division of the Department of Justice
and the Federal Trade Commission promptly following the filing
of this proxy statement, and each will request early termination
of the waiting period.
At any time before the effective time of the merger, the Federal
Trade Commission, the Antitrust Division of the
U.S. Department of Justice, state attorneys general, or
private parties can file suit under the antitrust laws to enjoin
consummation of the merger or to impose conditions on the
merger. There can be no assurance that the merger will not be
challenged on antitrust grounds or, if such a challenge is made,
that the challenge will not be successful.
Other
Jurisdictions
The completion of the merger is also subject to comparable
notifications and review under the antitrust laws of various
foreign jurisdictions, including Austria, Brazil and Italy.
Unica and IBM have filed or intend to file notifications with
the appropriate governmental entities in each of those
jurisdictions. Some of these jurisdictions do not require
regulatory approval, consent or agreement prior to completing
the merger. With respect to jurisdictions that do require
regulatory approval, consent or agreement prior to completing
the merger, Unica and IBM expect to observe the applicable
waiting periods prior to completing the merger. It is possible
that any of the governmental entities with which notifications
are filed may seek, as conditions for granting approval of the
merger, various regulatory concessions. There can be no
assurance that Unica and IBM will be able or willing to satisfy
or comply with these conditions.
45
THE
MERGER AGREEMENT
The following summary describes certain material provisions of
the merger agreement. This summary is not complete and is
qualified in its entirety by reference to the complete text of
the merger agreement, which is attached to this proxy statement
as Annex A and incorporated into this proxy statement by
reference. We urge you to read carefully the merger agreement in
its entirety because this summary may not contain all the
information about the merger agreement that is important to you.
The merger agreement and the following description have been
included to provide you with information regarding the terms of
the merger agreement. It is not intended to provide any other
factual information about Unica or IBM. Such information can be
found elsewhere in this proxy statement and in the other public
filings we and IBM make with the SEC, which are available,
without charge, at
http://www.sec.gov.
The representations and warranties described below and included
in the merger agreement were made for the purposes of the merger
agreement by Unica and IBM to each other as of specific dates.
The assertions embodied in those representations and warranties
were made solely for purposes of the merger agreement and may be
subject to important qualifications and limitations agreed to by
Unica and IBM in connection with negotiating the terms of that
agreement. Moreover, the representations and warranties may be
subject to a contractual standard of materiality that may be
different from what may be viewed as material to stockholders,
or may have been made for the purpose of allocating risk between
Unica and IBM rather than establishing the matters addressed by
such representations and warranties as facts. The merger
agreement is described in this proxy statement and included as
Annex A only to provide you with information regarding its
terms and conditions, and not to provide any other factual
information regarding Unica and IBM or their respective
businesses.
The
Merger
Subject to the terms and conditions of the merger agreement and
in accordance with Delaware law, at the effective time of the
merger, merger sub, a wholly-owned subsidiary of IBM and a party
to the merger agreement, will merge with and into us. We will
survive the merger as a wholly-owned subsidiary of IBM and the
separate corporate existence of merger sub will cease.
Effective
Time; Closing
The merger will become effective upon the filing of a
certificate of merger with the Secretary of State of the State
of Delaware or at such later time as is agreed upon by IBM and
us and specified in the certificate of merger. The filing of the
certificate of merger will occur as soon as practicable on or
after the date of closing, which will take place on a date to be
specified by IBM, merger sub and us and which will be no later
than the second business day after satisfaction or waiver of the
conditions to the closing of the merger set forth in the merger
agreement and described in this proxy statement, or at such
other time as is agreed upon by IBM and us. Although we expect
to complete the merger as soon as possible following the special
meeting of our stockholders (if our stockholders adopt the
merger agreement), we cannot specify when or assure that we and
IBM will satisfy or waive all of the conditions to the closing
of the merger. See Conditions to the Closing
of the Merger beginning on page 58.
Merger
Consideration
The merger agreement provides that each share of our common
stock outstanding immediately prior to the effective time of the
merger (other than shares held by us, IBM, merger sub or by
holders properly exercising appraisal rights under Delaware law)
will be converted at the effective time of the merger into the
right to receive $21.00 in cash, without interest and less any
applicable withholding taxes.
If any of our stockholders perfect appraisal rights with respect
to any of our shares of common stock, then we will treat those
shares as described under The Merger Appraisal
Rights beginning on page 38.
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Treatment
of Stock Options, Restricted Stock Units and Purchase
Rights
Stock
Options
At the effective time of the merger, each outstanding option to
acquire our common stock granted under our 1993 stock option
plan and our 2003 stock option plan will be cancelled and will
be converted into the right of the holder thereof to receive an
amount, in cash, without interest and less any applicable
withholding taxes, payable at or as soon as practicable
following the effective time of the merger, equal to the product
of:
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The number of shares of our common stock that are subject to
such option immediately prior to the effective time, and
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The excess, if any, of the merger consideration of $21.00 per
share over the exercise price per share of the common stock
subject to such option.
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Holders of outstanding options to acquire our common stock
granted under our 2005 stock incentive plan that are vested or
that are vesting in connection with the merger will be offered
the opportunity to have their options treated as described above
for the options outstanding under our 1993 and 2003 stock option
plans, which we refer to as being cashed out. Each
outstanding option to acquire our common stock granted under our
2005 stock incentive plan that is vested or that is vesting in
connection with the merger whose holder chooses not to have
cashed out and any other option not being cancelled in the
manner described in the prior paragraph, whether or not vested,
will be converted into an option to acquire, on substantially
the same terms and conditions as were applicable to such option
prior to the effective time of the merger, the number of shares
of common stock of IBM equal to the product of:
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The number of shares of our common stock that are subject to
such option, and
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The exchange ratio, as described below, rounded down to the
nearest whole IBM share.
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The exchange ratio is a fraction, the numerator of which is the
merger consideration of $21.00 per share and the denominator of
which is the average closing price per share of the common stock
of IBM on the New York Stock Exchange Composite
Transactions Tape on the 20 trading days immediately prior to
the closing date of the merger. The exercise price per share of
common stock of IBM as of immediately following such conversion
will be equal to the per share exercise price for the shares of
our common stock otherwise purchasable pursuant to such option
divided by the exchange ratio, rounded up to the nearest whole
cent.
Restricted
Stock Units
IBM will pay to each holder of our restricted stock units,
promptly (but in no event later than 20 business days) after
each applicable date after the closing date of the merger on
which any restricted stock unit held by such holder at the
effective time of the merger would have vested (each such date
is referred to herein as a lapse date) pursuant to
the terms of our stock plans or the terms of any such restricted
stock unit as in effect immediately prior the effective time, an
amount, in cash, equal to the product of:
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The merger consideration of $21.00 per share, and
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The number of restricted stock units held by the holder at the
effective time of the merger that, on any particular lapse date,
would have vested pursuant to the terms of our stock plans or
the terms of any such restricted stock unit as in effect
immediately prior the effective time,
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provided that if such holders employment with IBM
terminates for any reason on or before any such lapse date, IBM
will have no obligation to pay such amount with respect to such
lapse date or any subsequent lapse date, other than with respect
to restricted stock units that vest pursuant to our stock plans
or the terms of any such restricted stock units as in effect
immediately prior to the effective time or any provisions for
acceleration of vesting contained in an offer letter or other
individual agreement that IBM enters into with such holder.
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Purchase
Rights
Pursuant to the merger agreement, the next offering/purchase
period under our 2005 employee stock purchase plan will not
begin until further action is taken by our board of directors
and if the merger is consummated, our 2005 employee stock
purchase plan will terminate, effective upon the effective time
of the merger.
Surrender
of Stock Certificates; Payment of Merger Consideration; Lost
Certificates
Prior to the effective time of the merger, IBM will designate a
paying agent and, from time to time after the effective time of
the merger, IBM will make available to the paying agent funds in
amounts as necessary for the payment of the merger consideration.
As soon as reasonably practicable after the effective time of
the merger, the paying agent will mail to each person who was a
holder of record of our common stock immediately prior to the
effective time of the merger a letter of transmittal containing
instructions for exchanging certificates representing such
shares of our common stock. Such letter of transmittal will be
accompanied by a substitute IRS
Form W-9
or the applicable IRS
Form W-8.
After the effective time of the merger, each holder of a
certificate previously representing such shares of our common
stock will, upon surrender to the paying agent of a certificate,
together with a properly completed letter of transmittal, be
entitled to receive the merger consideration of $21.00 in cash,
less any applicable withholding taxes, for each share of our
common stock represented by such certificate.
No interest will be paid or shall accrue on the cash payable
upon surrender of any such certificate. The cash paid upon
surrender of any such certificate will be deemed to have been
paid in full satisfaction of all rights pertaining to the shares
of our common stock formerly represented by such certificate.
If any such certificate has been lost, stolen, defaced or
destroyed, the paying agent or the surviving corporation, as the
case may be, will pay the merger consideration with respect to
each share of our common stock formerly represented by such
certificate upon the making of an affidavit of that fact by the
person claiming such certificate to be lost, stolen, defaced or
destroyed and, if required by the surviving corporation, the
posting by such person of a bond in an amount as the surviving
corporation may direct as indemnity against any claim that may
be made against the surviving corporation with respect to such
certificate.
At any time following the six-month anniversary of the closing
date of the merger, the surviving corporation may require the
paying agent to deliver to it any funds previously made
available to the paying agent that have not been disbursed to
holders of certificates that formerly represented shares of our
common stock. After that point, stockholders will no longer be
able to receive the merger consideration from the paying agent.
Instead, they will be required to seek to obtain the merger
consideration only from IBM and the surviving corporation and in
so doing will be treated as general creditors with respect to
the payment of any such merger consideration, without any
interest thereon.
Directors
and Officers
The merger agreement provides that merger subs directors
and officers immediately prior to the effective time of the
merger will be the directors and officers, respectively, of the
surviving corporation until the earlier of their resignation or
removal or until their respective successors are duly elected
and qualified, as the case may be.
Representations
and Warranties
We have made a number of representations and warranties to IBM
and merger sub in the merger agreement regarding aspects of our
business and other matters pertinent to the merger. The topics
covered by these representations and warranties include the
following:
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our and our subsidiaries organization, good standing and
qualification and similar corporate matters;
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our subsidiaries;
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our and our subsidiaries capital structure;
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our corporate power and authority to execute and deliver the
merger agreement, to consummate the merger and the other
transactions contemplated by the merger agreement and to comply
with the terms of the merger agreement;
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the enforceability of the merger agreement against us;
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the approval of our board of directors of the merger agreement;
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the recommendation of our board of directors that our
stockholders vote to adopt the merger agreement;
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the absence of any violation of our charter documents, certain
contracts or laws or judgments to which we are subject as a
result of our execution and delivery of the merger agreement and
our consummation of the merger;
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the consents, approvals, notices and other similar actions with
respect to governmental entities required as a result of our
execution and delivery of the merger agreement and our
consummation of the merger;
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the filing of required reports and other documents by us with
the SEC, the compliance of such reports and documents with the
applicable requirements of the federal securities laws, rules
and regulations, the compliance of our financial statements
included in such reports and documents with applicable
accounting requirements and the rules and regulations of the
SEC, the absence of any outstanding or unresolved comments
received by us from the SEC and the absence of certain types of
undisclosed liabilities;
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compliance with the Sarbanes-Oxley Act of 2002;
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the preparation of our financial statements included in our
reports and documents filed with the SEC in accordance with GAAP;
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the absence of any joint venture, off-balance sheet partnership
or other similar arrangement entered into for the purpose of,
intended to, or with the known result of, avoiding the
disclosure of any material transaction or liability;
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the maintenance by us of internal control over financial
reporting and disclosure controls and procedures designed to
ensure timely and adequate reporting;
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the accuracy of the information supplied by us in connection
with this proxy statement;
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the conduct of our and our subsidiaries respective
businesses in the ordinary course of business consistent with
past practice, in each case from September 30, 2009 to the
date of the merger agreement;
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the absence, in each case from September 30, 2009 to the
date of the merger agreement, of:
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any material adverse effect;
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certain dividends or other distributions on our or our
subsidiaries capital stock;
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any splits, combinations or reclassifications of, or issuances
of securities in respect of, our or our subsidiaries
capital stock;
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grants by us or our subsidiaries to our or our
subsidiaries personnel of any bonus or award opportunity,
any loan or any increase in any type of compensation or
benefits, except for grants of normal bonus opportunities and
normal increases of base cash compensation in the ordinary
course of business consistent with past practice;
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any grant of any severance, separation, change in control or
retention benefits;
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any adoption or establishment of, or entry into, any amendment
of, modification to or termination of, any employee benefit;
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any grants or amendments of any award under any benefit plan or
benefit agreement;
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any action that is reasonably likely to result in the
acceleration of vesting or payment of any rights, compensation,
benefits or funding obligations under any benefit plan or
benefit agreement;
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any material change in financial or tax accounting methods,
principles or practices, except as required by GAAP or law;
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any material tax election or change in any material tax election;
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any settlement of material tax liabilities;
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any material write-down of material assets; and
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any licensing or other agreement with regard to the acquisition
or disposition of any material intellectual property or rights
to material intellectual property, other than non-exclusive
licenses granted in the ordinary course of business consistent
with past practice;
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the continuation of pricing, sales, receivables and payables
practices in the ordinary course of business consistent with
past practice and the absence of any promotional sales or
discount activity, except in the ordinary course of business
consistent with past practice, in each case since
September 30, 2009;
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certain pending and threatened litigation;
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specified and material contracts;
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our possession of all permits necessary to operate our business;
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our compliance with all applicable laws and judgments;
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the absence, since September 30, 2009, of changes in our
benefit plans or employment agreements;
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environmental matters;
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employee benefits matters;
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tax matters;
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title to our material properties and tangible assets, the
sufficiency of such material properties and tangible assets to
operate our and our subsidiaries respective businesses and
our rights to use our leased tangible properties and assets;
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our intellectual property;
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our insurance policies;
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the absence of unlawful payments;
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the inapplicability of any state takeover or similar statute or
regulation to the merger agreement and the merger;
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the required vote of our stockholders;
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our engagement of, and payment of fees to, brokers, investment
bankers and financial advisors, and fees payable by us to other
advisors in connection with the merger agreement and the merger;
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our receipt of a fairness opinion from Jefferies &
Company, Inc.; and
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our relationship with our auditors.
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Some of our representations and warranties are qualified by a
material adverse effect standard. The merger agreement provides
that a material adverse effect is any state of facts, change,
development, event, effect, condition, occurrence, action or
omission that, individually or in the aggregate, is reasonably
likely to:
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result in a material adverse effect on the business, assets,
properties, financial condition or results of operations of us
and our subsidiaries, taken as a whole; or
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prevent, materially impede or materially delay the consummation
by us of the merger or the other transactions contemplated by
the merger agreement; or
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result in a material impairment on the ability of IBM and its
subsidiaries to continue operating our business and our
subsidiaries businesses after the closing of the merger in
substantially the same manner as they were operated immediately
prior to the date of the merger agreement;
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provided that none of the following will be deemed either alone
or in combination to constitute, and none of the following will
be taken into account in determining whether there has been or
would be, a material adverse effect:
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general, legal, market, economic or political conditions
affecting the industry in which we operate, provided that such
conditions do not disproportionately affect us and our
subsidiaries, taken as a whole, in relation to other companies
in such industry;
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changes affecting general worldwide economic or capital market
conditions (including changes in interest or exchange rates),
provided that such changes do not disproportionately affect us
and our subsidiaries, taken as a whole, in relation to other
companies in the industry in which we operate;
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the pendency or announcement of the merger agreement or the
anticipated consummation of the merger, including, without
limitation, any reaction of any customer, employee, supplier,
reseller, partner or other constituency to the identity of IBM
or any of the transactions contemplated by the merger agreement;
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any suit, claim, action or proceeding that does not have a
reasonable likelihood of success on the merits, whether
commenced or threatened, which asserts allegations of a breach
of fiduciary duty relating to the merger agreement, violations
of securities laws in connection with this proxy statement or
otherwise in connection with any of the transactions
contemplated by the merger agreement;
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any decrease in the market price or trading volume of our common
stock (provided that the underlying cause or causes of any such
decrease may be deemed to constitute, in and of itself or
themselves, a material adverse effect and may be taken into
consideration when determining whether there has occurred a
material adverse effect);
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our failure to meet any internal or published projections,
forecasts or other predictions or published industry analyst
expectations of financial performance (provided that the
underlying cause or causes of any such failure may be deemed to
constitute, in and of itself and themselves, a material adverse
effect and may be taken into consideration when determining
whether there has occurred a material adverse effect);
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any change in GAAP or applicable laws which occurs or becomes
effective after the date of the merger agreement;
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actions or omissions of us or any of our subsidiaries taken with
the prior written consent of IBM; and
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any natural disaster, any act or threat of terrorism or war
anywhere in the world, any armed hostilities or terrorist
activities anywhere in the world, any threat or escalation of
armed hostilities or terrorist activities anywhere in the world
to the extent they do not disproportionately affect us and our
subsidiaries, taken as a whole, in relation to other companies
in the industry in which we operate.
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IBM and merger sub have made a number of representations and
warranties to us regarding various matters pertinent to the
merger. The topics covered by these representations and
warranties include the following:
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their organization and good standing;
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their corporate power and authority to execute and deliver the
merger agreement and consummate the merger;
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the absence of any violation of IBMs charter documents,
certain contracts or laws and judgments applicable to IBM as a
result of IBMs execution and delivery of the merger
agreement and the consummation of the merger;
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the enforceability of the merger agreement against them;
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the accuracy of information supplied by IBM and merger sub for
inclusion in this proxy statement;
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merger subs lack of prior operating activity;
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having sufficient funds for payments under the merger
agreement; and
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that neither IBM nor merger sub is an interested
stockholder under Delawares takeover statute.
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The representations and warranties of each of the parties to the
merger agreement will expire upon the consummation of the merger.
Covenants
Conduct
of Our Business Prior to the Merger
In the merger agreement, we have agreed that before the
effective time of the merger, subject to certain exceptions, we
will carry on our, and we will cause each of our subsidiaries to
carry on their, business in the ordinary course consistent with
past practice and use commercially reasonable efforts to comply
with all applicable laws and, to the extent consistent
therewith, use commercially reasonable efforts to keep available
the services of present officers, software developers and other
employees, to preserve assets and technology and relationships
with customers, suppliers, licensors, licensees, distributors
and others having material business dealings with us and our
subsidiaries and to maintain franchises, rights and permits.
In addition, we have agreed, with specified exceptions, to
various restrictions, including restrictions on our and our
subsidiaries ability to:
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declare, set aside or pay any dividends on, or make any other
distributions in respect of, capital stock or other equity or
voting interests;
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split, combine or reclassify capital stock or other equity or
voting interests, or issue any other securities in respect of,
in lieu of or in substitution for, capital stock or other equity
or voting interests;
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purchase, redeem or otherwise acquire any capital stock, other
equity or voting interests or any other of our or our
subsidiaries securities, or any options, warrants, calls
or rights to acquire any such capital stock or other securities;
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take any action that would result in any amendment, modification
or change of any of our or our subsidiaries indebtedness;
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issue, deliver, sell, pledge or otherwise encumber any capital
stock, other equity or voting interests or equity equivalents,
subject to certain exceptions, or securities convertible into,
or exchangeable or exercisable for, or any options, warrants,
calls or rights to acquire, any such stock, interests or equity
equivalents;
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amend or propose to amend our or our subsidiaries
organizational documents;
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acquire, or agree to acquire, any business or division thereof,
or any assets other than immaterial assets in the ordinary
course of business consistent with past practice;
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sell, lease, license or encumber any of our material properties
or assets, subject to certain exceptions for actions in the
ordinary course of business consistent with past practice;
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repurchase, prepay or incur any indebtedness;
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issue or sell rights to acquire any debt securities;
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guarantee any debt securities of another person;
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make any loans, advances or capital contributions to, or
investments in, any person, other than us or any of our direct
or indirect wholly owned subsidiaries;
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incur or commit to incur any capital expenditures that
individually are in excess of $375,000 or in the aggregate are
in excess of $750,000;
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pay, discharge, settle or satisfy any claims (including any
claims of stockholders or stockholder litigation relating to the
merger agreement), liabilities or obligations, other than the
payment, discharge, settlement or satisfaction in the ordinary
course of business consistent with past practice, or as required
by their terms, of claims, liabilities or obligations reserved
against in our most recent audited financial statements or
incurred after the date of such financial statements in the
ordinary course of business consistent with past practice, or
incurred in connection with the transactions contemplated by the
merger agreement;
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waive, relinquish, release, grant, transfer or assign any right
of material value;
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waive any material benefit of, or agree to modify in any adverse
respect, or fail to enforce, or consent to any matters to which
our consent is required under, any confidentiality, standstill
or similar contract to which we or our subsidiaries are a party
or bound;
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enter into, modify or amend in any material respect or exercise
any right to renew, any lease or sublease of real property;
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acquire any interest in real property;
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modify or amend in any material respect, or accelerate,
terminate or cancel, any material contract or waive any right to
enforce, relinquish, release, transfer or assign any rights or
claims thereunder, other than immaterial modifications or
amendments made in the ordinary course of business consistent
with past practice;
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adopt, establish, enter into, terminate, amend or modify any
benefit plan or benefit agreement; increase the compensation or
benefits of our personnel; make any payments not provided for
under the benefit plans and benefit agreements in effect on the
date of the merger agreement; grant or amend any award under any
benefit plan or remove or modify existing restrictions in any
benefit plan or benefit agreement or award made thereunder;
grant or pay any severance, separation, change in control,
termination, retention or similar compensation or benefits to,
or increase in any manner such compensation or benefits of, any
personnel; enter into any trust, annuity or insurance contract
or similar agreement or take any other action to fund or secure
the payment of compensation or benefits under any benefit plan
or benefit agreement; take any action to accelerate, or that
could reasonably be expected to result in the acceleration of,
the timing of payment or vesting of any rights, compensation,
benefits or funding obligations under any benefit plan or
benefit agreement or otherwise; or make any material
determination under any benefit plan or benefit agreement that
is inconsistent with the ordinary course of business or past
practice;
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form any subsidiary;
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enter into any contract which would conflict with, or be
violated by, the consummation of the merger or compliance with
the merger agreement;
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enter into any contract containing any restriction on our or our
subsidiaries ability to assign all or any portion of its
rights, interests or obligations thereunder, unless such
restriction expressly excludes any assignment to IBM;
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take any action or fail to take any action if such action or
failure to act could reasonably be expected to result in any
representation and warranty of us set forth in the merger
agreement that is qualified as to materiality becoming untrue
(as so qualified) or any such representation and warranty that
is not so qualified becoming untrue in any material respect;
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except as required by law, adopt or enter into any collective
bargaining agreement or other labor union contract applicable to
our employees or the employees of any of our subsidiaries;
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write-down any of our material assets, including any
intellectual property, or make any change in any financial or
tax accounting principle, method or practice other than as
required by GAAP or applicable law;
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make or change any tax election;
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engage in any of the following activities:
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trade loading practices or any other promotional sales or
discount activities with any customers or distributors with the
effect of accelerating to prior fiscal quarters (including the
current fiscal quarter) sales that would otherwise be expected
to occur in subsequent fiscal quarters;
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any practice which would have the effect of accelerating to
prior fiscal quarters (including the current fiscal quarter)
collections of receivables that would otherwise be expected to
be made in subsequent fiscal quarters;
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any practice which would have the effect of postponing to
subsequent fiscal quarters payments by us that would otherwise
be expected to be made in prior fiscal quarters (including the
current fiscal quarter); or
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any other promotional sales or discount activity in a manner
outside the ordinary course of business or inconsistent with
past practice;
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take any action or fail to take any action which would result in
the material loss or reduction of value of our and our
subsidiaries intellectual property, taken as a whole;
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enter into, extend or renew certain types of specified
contracts; and
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authorize, commit, resolve or agree to take any of the foregoing
actions.
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No
Solicitation of Acquisition Proposals
We have agreed that we will not, and will not authorize or
permit any of our subsidiaries to, nor will we authorize or
permit any of our or our subsidiaries directors, officers
or employees or any of our or their investment bankers,
attorneys, accountants or other advisors or representatives to,
directly or indirectly:
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solicit, initiate or knowingly encourage, or take any other
action to knowingly facilitate, any takeover proposal or any
inquiries or the making of any proposal that could reasonably be
expected to lead to a takeover proposal (as defined in the
merger agreement and described below under the heading
Covenants Board
Recommendation beginning on page 55); or
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enter into, continue or otherwise participate in any discussions
or negotiations regarding, or furnish to any person any
information with respect to, or otherwise cooperate with any
person with respect to, any takeover proposal.
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Despite these general prohibitions, at any time prior to the
adoption of the merger agreement by our stockholders and subject
to the conditions described below, we may, and may permit and
authorize our subsidiaries and our and our subsidiaries
representatives to:
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furnish information to a person making a bona fide written
unsolicited takeover proposal (and its representatives) pursuant
to a confidentiality agreement which contains terms that are no
less restrictive than those contained in the confidentiality
agreement between us and IBM, provided that all such information
has been provided, or is concurrently provided, to IBM; and
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participate in discussions or negotiations with, and only with,
the person making such takeover proposal (and its
representatives) regarding such takeover proposal.
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We may only take these actions if:
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our board of directors determines in good faith that such
takeover proposal is, or could reasonably be expected to lead
to, a superior proposal (as defined in the merger agreement and
described below);
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the takeover proposal did not result from our breach of the
merger agreement;
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we comply with our obligations to advise IBM, orally and in
writing, as promptly as possible and in any event within
24 hours of receipt of:
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any takeover proposal or request for information or inquiry that
we reasonably believe could lead to or contemplates a takeover
proposal; and
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the identity of the person making the takeover proposal, request
or inquiry and the terms and conditions of such takeover
proposal, request or inquiry (or any modification thereof);
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we comply with our obligations to provide to IBM promptly upon
receipt or delivery thereof, copies of all documents and
material written or electronic communications relating to any
such takeover proposal, request or inquiry exchanged between us,
our subsidiaries or any of our or our subsidiaries
directors, officers, employees, investment bankers, attorneys,
accountants and other advisors or representatives, on the one
hand, and the person making the takeover proposal or any of its
affiliates, or their respective officers, directors, employees,
investment bankers, attorneys, accountants or other advisors and
representatives, on the other hand; and
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we comply with our obligations to (on a daily basis at mutually
agreeable times) advise IBM of the progress of negotiations
concerning any takeover proposal, the material resolved and
unresolved issues related thereto and any other matters that are
related to the takeover proposal identified with reasonable
specificity by IBM.
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Board
Recommendation
The merger agreement provides that neither our board of
directors nor any committee of our board will, or will agree or
resolve to:
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withdraw or modify in a manner adverse to IBM or merger sub, or
propose publicly to withdraw or modify in a manner adverse to
IBM or merger sub, the recommendation or declaration of
advisability by our board of directors or any committee of our
board of the merger agreement or the merger (any such action,
resolution or agreement to take such action being referred to as
an adverse recommendation change);
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recommend, declare advisable or propose to recommend or declare
advisable, any takeover proposal, or resolve or agree to take
any such action; or
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cause or permit us to enter into any letter of intent,
memorandum of understanding, agreement in principle, acquisition
agreement, merger agreement, option agreement, joint venture
agreement, partnership agreement or other agreement constituting
or related to, or which is intended to or is reasonably likely
to lead to, any takeover proposal (other than a confidentiality
agreement, as discussed above).
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Notwithstanding the foregoing, subject to the conditions
described below, our board of directors may, at any time prior
to the adoption of the merger agreement by our stockholders, in
response to a superior proposal or an intervening event (as
defined in the merger agreement and as described below under
this heading), effect an adverse recommendation change. Our
board of directors may only effect an adverse recommendation
change if:
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our board of directors determines in good faith, after
consultation with its outside legal counsel and a financial
advisor of nationally recognized reputation, that the failure to
do so is reasonably likely to result in a breach of its
fiduciary duties to our stockholders under applicable law;
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our board of directors provides prior written notice to IBM (an
adverse recommendation change notice) that our board
of directors is prepared to effect an adverse recommendation
change and
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provides to IBM the most current version of any written
agreement relating to the superior proposal or provides
information describing the intervening event in reasonable
detail;
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IBM has been given five business days to make a proposal that
would, in the good faith judgment of our board of directors
(after consultation with a financial advisor of national
reputation and outside legal counsel), cause the superior
proposal to no longer constitute a superior proposal or obviate
the need for an adverse recommendation change as a result of the
intervening event (any amendment or modification of such
superior proposal requiring a new adverse recommendation change
notice and a new three business day period); and
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during the five or three business day period, as applicable,
before our board of directors effects an adverse recommendation
change, we negotiate in good faith with IBM regarding any
revisions to the terms of the merger and the other transactions
contemplated by the merger agreement proposed by IBM.
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The covenant in the merger agreement generally prohibiting us
from soliciting takeover proposals does not prevent us from
complying with
Rule 14d-9
and
14e-2(a)
promulgated under the Securities Exchange Act or from making any
disclosure to our stockholders if our board of directors
determines in good faith that failure to so disclose would be
inconsistent with applicable law; provided, however, that in no
event will we or our board of directors take, agree or resolve
to take any action with respect to an adverse recommendation
change that is prohibited by the merger agreement.
A takeover proposal means any inquiry, proposal or
offer from any person (other than IBM or merger sub or their
affiliates) relating to, or that could reasonably be expected to
lead to, in one or a series of transactions, any merger,
consolidation, business combination, recapitalization,
liquidation or dissolution involving us or any direct or
indirect acquisition, including by way of merger, consolidation,
tender offer, exchange offer, stock acquisition, asset
acquisition or similar transaction, of:
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assets or businesses that constitute or represent 10% or more of
the total revenue, net income, EBITDA or assets of us and our
subsidiaries, taken as a whole; or
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10% or more of the outstanding shares of our common stock or of
any class of capital stock of, or other equity or voting
interests in, one or more of our subsidiaries which, in the
aggregate, directly or indirectly hold the assets or businesses
referred to above.
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A superior proposal means any binding bona fide
written offer of any person (other than IBM or merger sub or
their affiliates) which did not result from a breach of the
non-solicitation covenants contained in the merger agreement and
that, if consummated, would result in such person or its
stockholders acquiring:
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more than 50% of the voting power of our common stock; or
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all or substantially all of our and our subsidiaries
assets, taken as a whole; and
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which offer, in the good faith judgment of our board of
directors, after consulting with a financial advisor of national
reputation and outside legal counsel, (i) provides
consideration which is more favorable to our stockholders than
the consideration provided in the merger (taking into account
all of the terms and conditions of such offer and the merger
agreement (including any changes to the terms of the merger
agreement proposed by IBM in response to such superior proposal
or otherwise)) and (ii) is reasonably capable of being
completed, taking into account all financial, legal, regulatory
and other aspects of such proposal.
An intervening event is an event, circumstance, fact
or other information unknown to our board of directors as of the
date of the merger agreement which becomes known before our
stockholders adopt the merger agreement and which causes our
board of directors to reasonably conclude in good faith, after
consultation with its outside legal counsel and a financial
advisor of nationally recognized reputation, that its failure to
effect an adverse recommendation change is reasonably likely to
result in a breach of its fiduciary duties to our stockholders
under applicable law. The term intervening event
does not include the receipt, existence or terms of a takeover
proposal or any matter relating to a takeover proposal or any
consequence of a takeover proposal.
56
Stockholders
Meeting
We have agreed, subject to any applicable legal restraints, to
convene and hold a stockholders meeting, for the purpose of the
adoption of the merger agreement by our stockholders, on the
30th calendar day (or first business day thereafter)
immediately following the date of mailing of the definitive
proxy statement to our stockholders. Notwithstanding the
foregoing, we may:
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extend the date of the stockholders meeting to the extent (and
only to the extent) necessary to obtain a quorum of the
stockholders to vote on the adoption of the merger agreement
(and we are required to use commercially reasonable efforts to
obtain such a quorum as promptly as practicable);
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adjourn or postpone the stockholders meeting to the extent (and
only to the extent) we reasonably determine that such an
adjournment or postponement is required by applicable law to
comply with comments made by the SEC with respect to the proxy
statement; and
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if we receive a new takeover proposal, the price or material
terms of a previously received takeover proposal are modified or
amended or an intervening event occurs, in any such case during
the five calendar day period immediately prior to the day of the
stockholders meeting, delay the stockholders meeting until the
date that is the fifth business day after the date on which the
stockholders meeting would otherwise have been held; provided,
however, that we may delay the stockholders meeting pursuant to
this clause related to a takeover proposal or intervening event
no more than once.
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We are required to hold the stockholders meeting regardless of
whether our board of directors determines prior to the date of
such meeting that the merger agreement is no longer advisable,
recommends that our stockholders reject the merger agreement or
makes any other adverse recommendation change. Further, our
obligation to hold the stockholders meeting will not be affected
by the commencement, public proposal, public disclosure or
communication to us or any other person of any takeover proposal.
Efforts
to Consummate the Merger; Regulatory Matters
We, IBM and merger sub have each agreed to use commercially
reasonable efforts to take, or cause to be taken, all actions
that are necessary, proper or advisable to consummate the
merger, including using commercially reasonable efforts to
accomplish the following:
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satisfying the conditions to closing, as discussed below under
Conditions to the Closing of the Merger
beginning on page 58;
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obtaining all necessary actions or non-actions, waivers,
consents, approvals, orders and authorizations from, and giving
of any necessary notices to, governmental entities and other
persons and the making of all necessary registrations,
declarations and filings (including filings under the HSR Act);
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taking all reasonable steps to provide any supplemental
information requested by a governmental entity, including
participating in meetings with officials of such entity;
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taking all reasonable steps as may be necessary to avoid any
suit, claim, action, investigation or proceeding by any
governmental entity or third party; and
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obtaining all necessary consents, approvals or waivers from any
third party.
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However, IBM is not required to agree to, or offer to, divest or
hold separate, or enter into any licensing, business restriction
or similar arrangement with respect to, any assets or any
portion of its or its subsidiaries businesses and we have
also agreed not to agree to, or offer to, divest or hold
separate or enter into any such arrangement with respect to our
or our subsidiaries assets or any portion of our or our
subsidiaries businesses without the prior written consent
of IBM. Furthermore, IBM and its subsidiaries are not obligated
to litigate or participate in the litigation of any suit, claim,
action or proceeding brought by any governmental entity which:
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challenges or seeks to restrain or prohibit the consummation of
the merger or the other transactions contemplated by the merger
agreement, including transactions under the stockholders
agreement;
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57
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seeks to obtain damages from IBM or its subsidiaries in relation
to the merger or the other transactions contemplated by the
merger agreement, including transactions under the stockholders
agreement;
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seeks to prohibit or limit in any respect, or place any
conditions on, the ownership or operation of all or any portion
of our or IBMs business or assets or any of our or
IBMs products or our or IBMs respective
subsidiaries business or assets or any of their products,
as a result of or in connection with the merger or any of the
other transactions contemplated by the merger agreement;
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seeks to require any such party to dispose of, license or hold
separate all or any portion of its business or assets or any
product, as a result of or in connection with the merger or any
of the other transactions contemplated by the merger agreement;
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seeks to impose limitations on the ability of IBM or its
affiliates to acquire or hold, or exercise full rights of
ownership of, any shares of its subsidiaries or our or the
surviving corporations common stock; or
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seeks to prohibit IBM or its affiliates from effectively
controlling any of the business or operations of us, our
subsidiaries or IBMs subsidiaries, or prevent us, our
subsidiaries or IBMs subsidiaries from operating their
business in substantially the same manner as operated
immediately prior to the date of the merger agreement.
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Conditions
to the Closing of the Merger
Our, IBMs and merger subs obligations to effect the
merger are subject to the satisfaction or waiver of the
following conditions:
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the adoption of the merger agreement by our stockholders;
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the expiration or termination of any waiting period applicable
to the merger required under the HSR Act;
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the receipt of any other approval or the termination or
expiration of any other waiting period under any other
applicable competition, merger control, antitrust or similar law
that is applicable to the merger; and
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the absence of any temporary restraining order, preliminary or
permanent injunction, or other judgment, order or decree issued
by a court of competent jurisdiction or other legal restraint or
prohibition that has the effect of preventing the consummation
of the merger.
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IBMs and merger subs obligations to effect the
merger are further subject to the satisfaction by us or waiver
by them of the following conditions:
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our representations and warranties contained in the merger
agreement that are qualified as to materiality or material
adverse effect shall be true and correct as so qualified, and
our representations and warranties that are not so qualified
shall be true and correct in all material respects, in each case
as of the date of the merger agreement and as of the closing
date of the merger, except that the accuracy of representations
and warranties that by their terms speak as of a specified date
will be determined as of that date, and IBM shall have received
a certificate to that effect;
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our performance, in all material respects, of all obligations
required to be performed by us under the merger agreement at or
prior to the closing date, and IBM shall have received a
certificate to that effect;
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the absence of any claim, suit, action or proceeding brought or
threatened by a governmental entity:
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challenging or seeking to restrain or prohibit the consummation
of the merger or challenging the merger agreement;
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seeking to obtain material damages from IBM or its subsidiaries;
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58
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seeking to prohibit or limit in any respect, or place conditions
on, the ownership or operation by us, IBM or our or its
respective affiliates of all or any portion of the business or
assets or any product, or requiring any such party to dispose
of, license or hold separate all or any portion of the business
or assets or any product of us, IBM or any of our or its
subsidiaries, in each case, as a result of or in connection with
the merger or any of the other transactions contemplated by the
merger agreement;
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seeking to impose limitations on the ability of IBM or any of
its affiliates to acquire or hold, or exercise full rights of
ownership of, our common stock or the common stock of the
surviving corporation or any of IBMs subsidiaries;
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seeking to prohibit IBM or any of its affiliates from
effectively controlling any of the business or operations of us
or our or IBMs subsidiaries; or
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seeking to prevent us or our or IBMs subsidiaries from
operating our or their respective businesses in substantially
the same manner as operated by us or them prior to the date of
the merger agreement;
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the absence of any temporary restraining order, preliminary or
permanent injunction or other judgment, order or decree issued
by a court of competent jurisdiction that could reasonably be
expected to result, directly or indirectly, in any of the
effects described in the immediate preceding condition;
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IBM shall have received evidence, in form and substance
reasonably satisfactory to it, that IBM or we have obtained all
material consents, approvals, authorizations, qualifications and
orders of all governmental entities legally required to effect
the merger and all consents, licenses, approvals and waivers
agreed to by us, IBM and merger sub; and
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a material adverse effect has not occurred with respect to us
since the date of the merger agreement, and IBM shall have
received a certificate to that effect.
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Our obligations to effect the merger are subject to the further
satisfaction by IBM
and/or
merger sub or waiver by us of the following conditions:
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IBMs and merger subs representations and warranties
contained in the merger agreement that are qualified as to
materiality shall be true and correct as so qualified, and the
representations and warranties that are not so qualified shall
be true and correct in all material respects, in each case as of
the date of the merger agreement and as of the closing date of
the merger, except that the accuracy of representations and
warranties that by their terms speak as of a specified date will
be determined as of that date, and we shall have received a
certificate to that effect; and
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IBMs and merger subs performance, in all material
respects, of all obligations required to be performed by them
under the merger agreement at or prior to the closing date of
the merger, and we shall have received a certificate to that
effect.
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Termination
of the Merger Agreement
The merger agreement may be terminated under the following
circumstances:
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by our, IBMs and merger subs mutual written consent;
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by either IBM or us if:
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the merger is not consummated by the date that is six months
from the date of the merger agreement, but this right to
terminate the merger agreement will not be available to any
party whose action or failure to act has been a principal cause
of or resulted in the failure of the merger to occur on or
before such date and such action or failure to act constitutes a
breach of the merger agreement;
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any temporary restraining order, preliminary or permanent
injunction, or other judgment, order or decree issued by a court
of competent jurisdiction or other legal restraint or
prohibition having the effect of preventing the consummation of
the merger is in effect and has become final and
nonappealable; or
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59
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our stockholders do not adopt the merger agreement at the
stockholders meeting (or at any adjournment or postponement
thereof) that we have called and held for such purpose;
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by us if IBM breaches a representation or warranty or fails to
perform a covenant or other agreement contained in the merger
agreement so that the related closing conditions cannot be
satisfied and such breach or failure to perform cannot be cured
by IBM or merger sub within 30 business days after such breach
or failure to perform, or if such breach or failure to perform
is curable by such date, IBM or merger sub, as the case may be,
does not commence to cure such breach or failure to perform
within 10 business days after receipt of written notice from us
and diligently pursue such cure thereafter; or
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by IBM if:
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we deliver a notice to IBM that our board of directors has
withdrawn or modified its recommendation that the merger
agreement or the merger or both are advisable in a manner
adverse to IBM or merger sub or such an adverse recommendation
change has occurred;
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we breach a representation or warranty or fail to perform a
covenant or other agreement contained in the merger agreement so
that the related closing conditions cannot be satisfied and such
breach or failure to perform cannot be cured by us within 30
business days after such breach or failure to perform, or if
such breach or failure to perform is curable by such date, we do
not commence to cure such breach or failure to perform within 10
business days after receipt of written notice from IBM and
diligently pursue such cure thereafter; or
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any temporary restraining order, preliminary or permanent
injunction or other judgment, order or decree issued by a court
of competent jurisdiction or other legal restraint or
prohibition is in effect and has become final and nonappealable
that has the effect of (i) restraining or prohibiting the
consummation of the merger, (ii) requiring payment of
material damages from IBM or any of its subsidiaries,
(iii) prohibiting or limiting in any respect, or placing
conditions on, the ownership or operation by us, IBM or our or
its respective affiliates of all or any portion of the business
or assets or any product, or requiring any such party to dispose
of, license or hold separate all or any portion of the business
or assets or any product of us, IBM or any of our or its
subsidiaries, in each case, as a result of or in connection with
the merger or any of the other transactions contemplated by the
merger agreement, (iv) imposing limitations on the ability
of IBM or any of its affiliates to acquire or hold, or exercise
full rights of ownership of, our common stock or the common
stock of the surviving corporation or any of IBMs
subsidiaries, (v) prohibiting IBM or any of its affiliates
from effectively controlling any of the business or operations
of us or our or IBMs subsidiaries, or (vi) preventing
us, our subsidiaries or IBMs subsidiaries from operating
our or their respective businesses in substantially the same
manner as operated by us or them prior to the date of the merger
agreement.
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Termination
Fee and Expenses
Each party will generally pay its own fees and expenses in
connection with the merger agreement, the stockholders agreement
and the transactions contemplated by the merger agerement,
whether or not the merger is consummated.
We will be required to pay a termination fee of
$14.25 million to IBM if:
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a takeover proposal has been made to us or our stockholders, or
any person has announced an intention to make a takeover
proposal (whether or not conditional and whether or not
withdrawn), or a takeover proposal otherwise becomes known to us
or generally known to our stockholders and thereafter:
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the merger agreement is terminated by either us or IBM because
the merger has not been consummated by the date that is six
months from the date of the merger agreement or the merger
agreement is terminated by either us or IBM because our
stockholders did not adopt the merger agreement at the
stockholders meeting (or at any adjournment or postponement
thereof) that we have called and held for such purpose; and
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60
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within 12 months after such termination of the merger
agreement, either we or one of our subsidiaries enters into an
acquisition agreement with respect to any takeover proposal or
any takeover proposal is consummated (solely for purposes of
this provision, all references to 10% in the definition of
takeover proposal are deemed to be references to
35%); or
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IBM terminates the merger agreement because we have delivered an
adverse recommendation change notice or an adverse
recommendation change has occurred.
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Indemnification
and Insurance
The surviving corporation will assume, and IBM will cause the
surviving corporation to comply with and honor, all rights to
indemnification, advancement of expenses and exculpation from
liabilities for acts or omissions occurring at or prior to the
effective time of the merger existing in favor of our and our
subsidiaries current or former directors or officers as
provided in our and their respective certificates of
incorporation or bylaws (or comparable organizational documents)
and any indemnification or other agreements as in effect on the
date of the merger agreement.
In the event the surviving corporation consolidates with or
merges into another entity and is not the continuing or
surviving entity of such consolidation or merger or transfers
all or substantially all of its properties and assets to another
entity, or if IBM dissolves the surviving corporation, IBM will
cause the successors and assigns of the surviving corporation to
comply with and honor the indemnification and other obligations
set forth above.
IBM will obtain or will cause to be obtained as of the effective
time of the merger a tail insurance policy with a
claims period of six years from the effective time of the merger
with respect to directors and officers liability
insurance covering those persons who were, as of the date of the
merger agreement, covered by our directors and
officers liability insurance policy, for acts or omissions
occurring prior to the effective time of the merger, on terms
that are no less favorable than our policies in effect on the
date of the merger agreement. Prior to the closing of the
merger, IBM will prepay such insurance for the six-year period,
but in no event will IBM or the surviving corporation be
required to pay, with respect to the entire six-year period
following the effective time of the merger, premiums for
insurance which in the aggregate exceed 300% of the aggregate
premiums paid by us for the period from September 30, 2009
to, and including, September 30, 2010.
Additional
Agreements
Except as would violate applicable law or securities exchange
rules, we and IBM have agreed to consult with each other prior
to making any press release or other public statements with
respect to the merger.
Except as would violate applicable law, we have agreed to give
prompt notice to IBM in writing of:
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the occurrence of any matter or event that:
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is, or is reasonably likely to be, material (individually or in
the aggregate) to our and our subsidiaries business,
assets, properties, condition (financial or otherwise) or
results of operations, taken as a whole; or
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has resulted, or is reasonably likely to result, in any
representation and warranty of us in the merger agreement that
is qualified as to materiality becoming untrue or any such
representation and warranty that is not so qualified becoming
untrue in any material respect; or
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has resulted, or is reasonably likely to result, in the
inability to satisfy any of the conditions to IBMs and
merger subs obligations to consummate the merger;
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our failure to perform in any material respect any of our
obligations set forth in the merger agreement;
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61
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any notice or other communication:
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from any person (other than a governmental entity) alleging that
notice to or consent of such person is required in connection
with the merger;
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from any of our customers, distributors or resellers to the
effect that such party is terminating or materially adversely
modifying its relationship with us or our subsidiaries as a
result of the merger; or
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from any governmental entity in connection with the merger,
which notice or other communication is material, including a
copy of any such notice or communication;
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any filing or notice made by us with any governmental entity in
connection with the merger, including a copy of any such filing
or notice; and
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any actions, suits, claims, investigations or proceedings
commenced or, to our knowledge, threatened against, relating to
or involving or otherwise affecting us or our subsidiaries that,
if pending on the date of the merger agreement, would have been
required to have been disclosed pursuant to the merger
agreement, or that relate to the consummation of the merger.
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IBM has agreed to provide us with prompt notice of:
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any of the representations or warranties made by IBM or merger
sub in the merger agreement becoming untrue or inaccurate such
that the related condition to our obligation to consummate the
merger could not be satisfied; or
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the failure of IBM or merger sub to perform in any material
respect any of their respective obligations under the merger
agreement such that the related condition to our obligation to
consummate the merger could not be satisfied.
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We have also agreed to provide IBM with the opportunity to
participate in the defense, at its own cost, of any litigation
against us or our board of directors related to the merger or
the other transactions contemplated by the merger agreement.
While we have not agreed to give IBM the right to direct the
defense of any such litigation, we have agreed to obtain the
prior written consent of IBM prior to settling or satisfying any
such claim.
Extension,
Waiver and Amendment of the Merger Agreement
We, IBM and merger sub may amend the merger agreement at any
time prior to the closing of the merger. However, after the
adoption of the merger agreement by our stockholders, no
amendment can be made that by law requires approval by our
stockholders without obtaining such approval.
We, IBM or merger sub may extend the time for performance of any
of the obligations or other acts of the other parties under the
merger agreement, waive any inaccuracies in another partys
representations and warranties and waive compliance with any of
the agreements or conditions contained in the merger agreement.
However, after the adoption of the merger agreement by our
stockholders, no waiver can be provided that by law requires
approval by our stockholders without obtaining such approval.
STOCKHOLDERS
AGREEMENT
As a condition to IBM entering into the merger agreement, our
chairman and chief executive officer, and certain trusts
affiliated with our chairman and chief executive officer,
entered into a Stockholders Agreement, or stockholders
agreement, with IBM, dated as of August 12, 2010, pursuant
to which each of such stockholders agreed, among other things,
to vote the shares of our common stock of which such stockholder
is the record or beneficial owner in favor of the adoption of
the merger agreement. As of
[ ],
2010, the record date for the special meeting, these
stockholders collectively beneficially own approximately
[ ]% of the issued and outstanding
shares of our common stock. In connection with the execution and
delivery of the stockholders agreement, IBM did not pay these
stockholders any consideration in addition to the consideration
62
they may receive pursuant to the merger agreement in respect of
their shares. A copy of the stockholders agreement is attached
as Annex B to this proxy statement.
In addition, each such stockholder agreed, during the period
ending on the date that is the later of the date of the special
meeting of our stockholders called to vote upon the adoption of
the merger agreement and 6 months from the date of the
stockholders agreement, to vote all of such stockholders
shares against (A) any other takeover proposal or
(B) any amendment of our certificate of incorporation or
bylaws (other than pursuant to or as contemplated by the merger
agreement) or any other proposal, action, agreement or
transaction which, in the case of this clause (B), could
reasonably be expected to (i) result in a breach of any
covenant, agreement, obligation, representation or warranty of
Unica contained in the merger agreement or of the stockholders
contained in the stockholders agreement, (ii) prevent,
impede, interfere or be inconsistent with, delay, discourage or
adversely affect the timely consummation of the merger or the
other transactions contemplated by the merger agreement or by
the stockholders agreement, (iii) dilute in any material
respect the benefits to IBM or merger sub of the merger and the
other transactions contemplated by the merger agreement or by
the stockholders agreement or (iv) change in any manner the
voting rights of our common stock.
Each such stockholder granted IBM and any designee of IBM an
irrevocable proxy to vote the stockholders shares in favor
of adoption of the merger agreement and otherwise in accordance
with the stockholders agreement.
Each such stockholder also agreed not to:
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sell, transfer, pledge, exchange, assign, tender or otherwise
dispose of, or enter into an option, call or other arrangement
with respect to the sale, transfer, pledge, exchange,
assignment, tender or other disposition of, its shares or any
rights to acquire securities of Unica, other than pursuant to
the stockholders agreement or the merger agreement, unless prior
to any such action, the transferee of such shares is a party to
the stockholders agreement, agrees to enter into the
stockholders agreement or enters into an agreement with IBM on
terms substantially identical to the terms of the stockholders
agreement; or
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enter into a voting agreement with respect to its shares or any
rights to acquire securities of Unica (other than the
stockholders agreement).
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Each such stockholder agreed to waive any appraisal rights in
connection with the merger.
The stockholders agreement will terminate upon the earlier of:
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the effective time of the merger; and
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the termination of the merger agreement in accordance with its
terms;
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provided that the provisions of the stockholders agreement
described in the second and third paragraphs of this section
above will survive until the expiration of the rights of IBM and
merger sub thereunder.
63
SECURITY
OWNERSHIP OF EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL
OWNERS
The following table sets forth information with respect to the
beneficial ownership of our common stock as of August 15,
2010 (or such other date as indicated) for:
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each person, entity or group whom we know to beneficially own
more than 5% of our outstanding common stock;
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each of our executive officers identified as named
executive officers in our most recent proxy statement and
each of our directors; and
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all of our executive officers and directors as a group.
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Beneficial ownership is determined in accordance with the rules
of the SEC, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Except as indicated
by footnote, to our knowledge, the persons and entities named in
the table have sole voting and investment power with respect to
all shares of common stock shown as beneficially owned by them,
subject to applicable community property laws. Securities that
may be beneficially acquired within 60 days of
August 15, 2010, including shares subject to options
exercisable within 60 days of August 15, 2010, and
restricted stock units vesting within 60 days of
August 15, 2010, are deemed to be beneficially owned by the
person or entity holding such securities for the purpose of
computing ownership of such person or entity, but are not
treated as outstanding for the purpose of computing the
ownership of any other person or entity. The information as to
beneficial ownership presented below table does not take into
account any accelerated vesting that may occur in connection
with the closing of the merger. The applicable percentages of
beneficial ownership are based on 21,596,146 shares of
common stock outstanding as of August 15, 2010.
Unless otherwise indicated, the address of each of the
individuals named below is:
c/o Unica
Corporation, Reservoir Place North, 170 Tracer Lane, Waltham,
Massachusetts 02451.
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Right to
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% of
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Acquire
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Total Number
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Common
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Outstanding
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Within
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Beneficially
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Stock
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Shares(1)
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60 Days
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Owned
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Outstanding
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5% Stockholders:
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Palo Alto Investors LLC(2)
470 University Ave.
Palo Alto, CA
94301-1812
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1,917,252
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1,917,252
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8.9
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%
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David Cheung(3)
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1,818,307
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1,818,307
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8.4
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%
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Directors and Executive Officers:
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Yuchun Lee(4)
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18,771
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389,999
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4,769,528
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(4)
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21.7
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%
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James A. Perakis
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33,983
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60,000
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93,983
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*
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Robert Schechter
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7,164
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78,333
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85,497
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*
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Aron J. Ain
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12,164
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65,000
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77,164
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*
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David Sweet
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17,919
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83,125
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101,044
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*
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Jason Joseph
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23,520
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49,272
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72,792
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*
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Carla Hendra
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7,164
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35,000
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42,164
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*
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Peter Cousins
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1,102
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19,897
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20,999
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*
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Kevin Shone
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11,778
|
|
|
|
29,687
|
|
|
|
41,465
|
|
|
|
*
|
|
Gary Haroian
|
|
|
7,164
|
|
|
|
6,250
|
|
|
|
13,414
|
|
|
|
*
|
|
Louis Henandez, Jr.
|
|
|
3,753
|
|
|
|
3,753
|
|
|
|
7,506
|
|
|
|
*
|
|
All executive officers and directors as a group (16 persons)
|
|
|
212,332
|
|
|
|
1,005,057
|
|
|
|
5,578,147
|
|
|
|
24.7
|
%
|
|
|
|
*
|
|
Less than 1.0%.
|
|
(1)
|
|
Information with respect to our 5% stockholders was provided
directly by such stockholders, and reflects their positions as
of August 15, 2010.
|
64
|
|
|
(2)
|
|
Information obtained from Palo Alto Investors (Palo
Alto) on August 17, 2010 and from Amendment
No. 2 to Schedule 13G filed on February 17, 2009
on behalf of William Leland Edwards, Anthony Joonkyoo Yun, MD,
Palo Alto and Palo Alto Investors, LLC (PAI). Each
of Mr. Edwards, Dr. Yun, Palo Alto and PAI shares
voting and dispositive power over and may be deemed to be the
beneficial owner of 1,917,252 shares of our common stock.
|
|
|
|
PAI is a registered investment adviser and is the general
partner and investment adviser of investment limited
partnerships and is the investment adviser to other investment
funds. PAIs clients have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from
the sale of, shares of our common stock. No individual client of
PAI separately holds more than five percent of our common stock.
|
|
|
|
Palo Alto is the manager of PAI. Mr. Edwards is the
controlling stockholder of Palo Alto. Dr. Yun is the
President of PAI and Palo Alto. Each of Mr. Edwards,
Dr. Yun, Palo Alto and PAI expressly disclaims membership
in a group and beneficial ownership of any shares of our common
stock except to the extent of his or its pecuniary interest
therein.
|
|
|
|
Shares reflected as beneficially owned by Palo Alto Investors,
LLC and affiliated funds consist of 975,601 shares held by
Palo Alto Small Cap Master Fund; 851,750 shares held by
Microcap Partners LP; and 89,901 shares held by UBTI Free
LP.
|
|
(3)
|
|
David Cheung is one of our co-founders and employees. Shares
beneficially owned by Mr. Cheung consist of
636,507 shares held by the David Cheung Living Trust,
718,530 shares held by the Angela Cheung Living Trust,
141,401 shares held by the David Cheung 2004 Grantor
Retained Annuity Trust and 321,869 shares held by the
Angela Cheung 2004 Grantor Retained Annuity Trust.
Mr. Cheung or his spouse is a trustee of each of these
trusts.
|
|
(4)
|
|
Shares deemed to be beneficially owned by Mr. Lee include
300,890 shares held by the Yuchun Lee Living Trust,
166,913 shares held by the 2001 Lee Charitable Trust,
1,000,000 shares held by the Yuchun Lee 2010 GRAT,
2,192,197 shares held by the Agustina Sumito Living Trust
and 686,616 shares held by the Lee Sumito Irrevocable
Trust. Mr. Lee is the trustee of each of these trusts
except for the Lee Sumito Irrevocable Trust. Mr. Lees
wife, Agustina Sumito Lee, is the trustee of the Lee Sumito
Irrevocable Trust. Shares deemed to be beneficially owned by
Mr. Lee also include 14,142 shares held by
Ms. Lee.
|
OTHER
MATTERS
At this time, we know of no other matters to be submitted at the
special meeting. If any other matters properly come before the
special meeting, it is the intention of the persons described in
the enclosed proxy card to vote the shares they represent as our
board of directors may recommend.
It is important that your shares be represented at the special
meeting, regardless of the number of shares which you hold.
Therefore, we urge you to complete, sign, date and return the
accompanying proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose or to submit
a proxy via the Internet or telephone.
HOUSEHOLDING
OF PROXY STATEMENT
As permitted by the Securities Exchange Act, only one copy of
this proxy statement is being delivered to stockholders residing
at the same address, unless our stockholders have notified us of
their desire to receive multiple copies of the proxy statement.
This is known as householding. We will promptly deliver, upon
oral or written request, a separate copy of this proxy statement
to any stockholder residing at a shared address to which only
one copy was mailed. Requests for additional copies of this
proxy statement, or requests to receive multiple or single
copies of proxy statements at a shared address in the future,
should be directed to: Unica Corporation, Reservoir Place
North, 170 Tracer Lane, Waltham, Massachusetts
02451-1379,
Attention: Jason W. Joseph, Secretary,
(781) 839-8514.
65
FUTURE
STOCKHOLDER PROPOSALS
If the merger is completed, there will be no public
participation in any future meetings of stockholders of Unica.
However, if the merger is not completed, Unicas public
stockholders will continue to be entitled to attend and
participate in our stockholders meetings. If the merger is not
completed, any proposal that a stockholder wishes to be
considered for inclusion in our proxy statement and proxy card
for our 2011 annual meeting of stockholders must comply with the
requirements of
Rule 14a-8
under the Securities Exchange Act and must be submitted to our
Secretary, Jason W. Joseph, at our address set forth in the
notice appearing before this proxy statement by
September 27, 2010. If a stockholder wishes to present a
proposal before the 2011 annual meeting but does not wish to
have the proposal considered for inclusion in our proxy
statement and proxy in accordance with
Rule 14a-8,
the stockholder must give written notice to our corporate
Secretary, Jason W. Joseph, at the address noted above. Our
Secretary must receive the notice not earlier than
October 28, 2010 and not later than November 27, 2010.
WHERE YOU
CAN FIND MORE INFORMATION
We are subject to the informational requirements of the
Securities Exchange Act, and file annual, quarterly and current
reports, proxy statements and other information with the SEC.
You can read our SEC filings through the Internet at the
SECs website at www.sec.gov. You may also read and copy
any document we file with the SEC at its public reference room
at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at
1-800-SEC-0330
for further information about the public reference room.
You may obtain any of the documents we file with the SEC,
without charge, by requesting them in writing or by telephone
from us at the following address:
Unica
Corporation
Reservoir Place North
170 Tracer Lane
Waltham, Massachusetts
02451-1379
Attention: Investor Relations
Telephone:
(781) 839-8514
If you would like to request documents from us, please do so by
[ ],
2010, to receive them before the special meeting. If you request
any documents from us, we will mail them to you by first class
mail, or another equally prompt method, promptly after we
receive your request.
MISCELLANEOUS
If you have any questions about this proxy statement, the
special meeting or the merger or need assistance with voting
procedures, you should contact:
Unica
Corporation
Telephone:
(781) 839-8514
You should not send in your Unica stock certificates until you
receive the transmittal materials from the exchange agent. Our
record stockholders who have further questions about their share
certificates or the exchange of our common stock for cash should
contact the exchange agent.
You should rely only on the information contained in this
proxy statement to vote on the proposals described herein. We
have not authorized anyone to provide you with information that
is different from what is contained in this proxy statement.
This proxy statement is dated
[ ],
2010. You should not assume that the information contained in
this proxy statement is accurate as of any date other than that
date (or as of an earlier date if so indicated in this proxy
statement). Neither the mailing of this proxy statement to
stockholders nor the issuance of cash in the merger creates any
implication to the contrary. This proxy statement does not
constitute a solicitation of a proxy in any jurisdiction where,
or to or from any person to whom, it is unlawful to make a proxy
solicitation.
Your vote is important. You may vote by returning the enclosed
proxy card, submitting a proxy via the Internet or telephone or
attending the special meeting and voting in person.
66
Annex A
EXECUTION
COPY
AGREEMENT AND PLAN OF MERGER
Among
INTERNATIONAL BUSINESS MACHINES CORPORATION
AMAROO ACQUISITION CORP.
and
UNICA CORPORATION
Dated as of August 12, 2010
TABLE OF CONTENTS
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|
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|
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Page
|
|
ARTICLE I
|
|
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|
|
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The Merger
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|
|
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|
SECTION 1.01. The Merger
|
|
|
2
|
|
SECTION 1.02. Closing
|
|
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2
|
|
SECTION 1.03. Effective Time of the Merger
|
|
|
2
|
|
SECTION 1.04. Effects of the Merger
|
|
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2
|
|
SECTION 1.05. Certificate of Incorporation and Bylaws
|
|
|
2
|
|
SECTION 1.06. Directors
|
|
|
3
|
|
SECTION 1.07. Officers
|
|
|
3
|
|
|
|
|
|
|
ARTICLE II
|
|
|
|
|
|
Conversion of Securities
|
|
|
|
|
|
SECTION 2.01. Conversion of Capital Stock
|
|
|
3
|
|
SECTION 2.02. Appraisal Rights
|
|
|
4
|
|
SECTION 2.03. Exchange of Certificates
|
|
|
4
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|
|
|
ARTICLE III
|
|
|
|
|
|
Representations and Warranties
|
|
|
|
|
|
SECTION 3.01. Representations and Warranties of the Company
|
|
|
7
|
|
SECTION 3.02. Representations and Warranties of Parent and Sub
|
|
|
43
|
|
|
|
|
|
|
ARTICLE IV
|
|
|
|
|
|
Covenants Relating to Conduct of Business
|
|
|
|
|
|
SECTION 4.01. Conduct of Business
|
|
|
46
|
|
SECTION 4.02. No Solicitation
|
|
|
52
|
|
SECTION 4.03. Conduct by Parent
|
|
|
55
|
|
i
|
|
|
|
|
|
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Page
|
|
ARTICLE V
|
|
|
|
|
|
Additional Agreements
|
|
|
|
|
|
SECTION 5.01. Preparation of the Proxy Statement; Stockholders Meeting
|
|
|
56
|
|
SECTION 5.02. Access to Information; Confidentiality
|
|
|
58
|
|
SECTION 5.03. Commercially Reasonable Efforts; Consultation and Notice
|
|
|
59
|
|
SECTION 5.04. Equity Awards
|
|
|
63
|
|
SECTION 5.05. Indemnification, Exculpation and Insurance
|
|
|
66
|
|
SECTION 5.06. Fees and Expenses
|
|
|
67
|
|
SECTION 5.07. Public Announcements
|
|
|
68
|
|
SECTION 5.08. Resignation of Directors
|
|
|
68
|
|
SECTION 5.09. Sub Compliance
|
|
|
69
|
|
|
|
|
|
|
ARTICLE VI
|
|
|
|
|
|
Conditions Precedent
|
|
|
|
|
|
SECTION 6.01. Conditions to Each Partys Obligation to Effect the Merger
|
|
|
69
|
|
SECTION 6.02. Conditions to Obligations of Parent and Sub
|
|
|
69
|
|
SECTION 6.03. Conditions to Obligation of the Company
|
|
|
71
|
|
SECTION 6.04. Frustration of Closing Conditions
|
|
|
71
|
|
|
|
|
|
|
ARTICLE VII
|
|
|
|
|
|
Termination, Amendment and Waiver
|
|
|
|
|
|
SECTION 7.01. Termination
|
|
|
71
|
|
SECTION 7.02. Effect of Termination
|
|
|
72
|
|
SECTION 7.03. Amendment
|
|
|
73
|
|
SECTION 7.04. Extension; Waiver
|
|
|
73
|
|
|
|
|
|
|
ARTICLE VIII
|
|
|
|
|
|
General Provisions
|
|
|
|
|
|
SECTION 8.01. Nonsurvival of Representations and Warranties
|
|
|
73
|
|
SECTION 8.02. Notices
|
|
|
73
|
|
SECTION 8.03. Definitions
|
|
|
75
|
|
SECTION 8.04. Exhibits; Interpretation
|
|
|
76
|
|
SECTION 8.05. Counterparts
|
|
|
77
|
|
SECTION 8.06. Entire Agreement; No Third-Party Beneficiaries
|
|
|
77
|
|
SECTION 8.07. Governing Law
|
|
|
77
|
|
SECTION 8.08. Assignment
|
|
|
77
|
|
SECTION 8.09. Consent to Jurisdiction; Service of Process; Venue
|
|
|
77
|
|
ii
|
|
|
|
|
|
|
Page
|
|
SECTION 8.10. Waiver of Jury Trial
|
|
|
78
|
|
SECTION 8.11. Enforcement
|
|
|
78
|
|
SECTION 8.12. Consents and Approvals
|
|
|
79
|
|
SECTION 8.13. Severability
|
|
|
79
|
|
|
|
|
EXHIBIT A
|
|
Form of Amended and Restated Certificate of Incorporation of the Surviving Corporation
|
iii
GLOSSARY
|
|
|
Term
|
|
Section
|
409A Authorities
|
|
3.01(m)(xi)
|
1993 Plan
|
|
3.01(c)(i)
|
2003 Plan
|
|
3.01(c)(i)
|
2005 Plan
|
|
3.01(c)(i)
|
Acquisition Agreement
|
|
4.02(b)(i)
|
Adjusted Option
|
|
5.04(a)(ii)
|
Adverse Recommendation Change
|
|
4.02(b)
|
Adverse Recommendation Change Notice
|
|
4.02(b)
|
Affiliate
|
|
8.03(a)
|
Agreement
|
|
Preamble
|
Appraisal Shares
|
|
2.02
|
Assumed Shares
|
|
5.04(a)(v)
|
Bankruptcy and Equity Exception
|
|
3.01(d)
|
Baseline Financials
|
|
3.01(e)(i)
|
Benefit Agreements
|
|
3.01(g)(i)
|
Benefit Plans
|
|
3.01(k)(i)
|
Cash-Out Option
|
|
5.04(a)(vi)
|
Certificate
|
|
2.01(c)
|
Certificate of Merger
|
|
1.03
|
Closing
|
|
1.02
|
Closing Date
|
|
1.02
|
Code
|
|
2.03(f)
|
Commonly Controlled Entity
|
|
3.01(k)(i)
|
Company
|
|
Preamble
|
Company Bylaws
|
|
3.01(a)
|
Company Certificate
|
|
3.01(a)
|
Company Common Stock
|
|
2.01
|
Company Letter
|
|
3.01
|
Company Personnel
|
|
3.01(g)(i)
|
Company Preferred Stock
|
|
3.01(c)(i)
|
Company Stock Plans
|
|
3.01(c)(i)
|
Confidentiality Agreement
|
|
4.02(a)
|
Contract
|
|
3.01(d)
|
Derivative Work
|
|
3.01(p)(iii)
|
DGCL
|
|
1.01
|
Effective Time
|
|
1.03
|
Environmental Claims
|
|
3.01(l)
|
Environmental Law
|
|
3.01(l)
|
Environmental Permits
|
|
3.01(1)
|
ERISA
|
|
3.01(m)(i)
|
ESPP
|
|
3.01(c)(i)
|
Equity Equivalents
|
|
3.01(c)(iii)
|
Exchange Act
|
|
3.01(d)
|
iv
|
|
|
Term
|
|
Section
|
Exchange Ratio
|
|
5.04(a)(vi)
|
FCC
|
|
5.02(b)
|
FCC Licenses
|
|
5.02(b)
|
FCPA
|
|
3.01(s)
|
Filed SEC Documents
|
|
3.01(e)(i)
|
GAAP
|
|
3.01(e)(i)
|
Governmental Entity
|
|
3.01(d)
|
GPL
|
|
3.01(p)(ii)(O)
|
Grant Date
|
|
3.01(c)(iii)
|
Hazardous Materials
|
|
3.01(l)
|
HSR Act
|
|
3.01(d)
|
indebtedness
|
|
3.01(c)(iv)
|
Intellectual Property
|
|
3.01(p)(iv)
|
Intervening Event
|
|
4.02(b)
|
IRS
|
|
3.01(m)(ii)
|
Judgment
|
|
3.01(d)
|
knowledge
|
|
8.03(b)
|
Lapse Date
|
|
5.04(a)(vi)
|
Law
|
|
3.01(d)
|
Leased Real Property
|
|
3.01(o)(iii)
|
Legal Restraints
|
|
6.01(c)
|
LGPL
|
|
3.01(p)(ii)(O)
|
Liens
|
|
3.01(b)
|
Major Customer
|
|
3.01(i)(i)(T)
|
Major Customer Contract
|
|
3.01(i)(i)(T)
|
Major Supplier
|
|
3.01(i)(i)(U)
|
Major Supplier Contract
|
|
3.01(i)(i)(U)
|
Material Adverse Effect
|
|
8.03(c)
|
Material Contract
|
|
3.01(i)(i)
|
Merger
|
|
Recitals
|
Merger Consideration
|
|
2.01(c)
|
Non-Affiliate Plan Fiduciary
|
|
3.01(m)(ix)
|
Nonqualified Deferred Compensation Plan
|
|
3.01(m)(xi)
|
Offer Letters
|
|
Recitals
|
Parent
|
|
Preamble
|
Parent Common Stock
|
|
5.04(a)(vi)
|
Paying Agent
|
|
2.03(a)
|
Pension Plan
|
|
3.01(m)(i)
|
Permits
|
|
3.01(j)
|
Permitted Liens
|
|
3.01(i)(i)(E)
|
person
|
|
8.03(d)
|
Post-Signing Returns
|
|
4.01(b)
|
Proxy Statement
|
|
3.01(d)
|
Release
|
|
3.01(l)
|
Residual Shares
|
|
5.04(a)(v)
|
Rollover Option
|
|
5.04(a)(vi)
|
v
|
|
|
Term
|
|
Section
|
RSU Agreements
|
|
3.01(c)(v)
|
RSU Applicable Amount
|
|
5.04(a)(vi)
|
RSU Holder
|
|
5.04(a)(vi)
|
RSUs
|
|
3.01(c)(i)
|
SEC
|
|
3.01(d)
|
SEC Documents
|
|
3.01(e)(i)
|
Section 262
|
|
2.02)
|
Securities Act
|
|
3.01(e)(i)
|
Software
|
|
3.01(p)(iv)
|
SOX
|
|
3.01(e)(ii)
|
Specified Contracts
|
|
3.01(i)(i)
|
Stockholder Approval
|
|
3.01(u)
|
Stockholders Agreement
|
|
Recitals
|
Stockholders Meeting
|
|
5.01(c)
|
Stock Option Agreements
|
|
3.01(c)(v)
|
Stock Options
|
|
3.01(c)(i)
|
Sub
|
|
Preamble
|
Subsidiary
|
|
8.03(e)
|
Superior Proposal
|
|
4.02(a)
|
Surviving Corporation
|
|
1.01
|
Takeover Proposal
|
|
4.02(a)
|
tax return
|
|
3.01(n)(xx)
|
taxes
|
|
3.01(n)(xx)
|
taxing authority
|
|
3.01(n)(xx)
|
Termination Date
|
|
7.01(b)(i)
|
Termination Fee
|
|
5.06(b)
|
Third Party Software
|
|
3.01(p)(iv)
|
Welfare Plan
|
|
3.01(m)(iv)
|
vi
AGREEMENT AND PLAN OF MERGER dated as of August 12, 2010 (this
Agreement
), by and among INTERNATIONAL BUSINESS MACHINES
CORPORATION, a New York corporation (
Parent
), AMAROO ACQUISITION
CORP., a Delaware corporation and a wholly owned subsidiary of Parent
(
Sub
), and UNICA CORPORATION, a Delaware corporation (the
Company
).
WHEREAS the Board of Directors of each of the Company and Sub deems it in the best interests
of their respective stockholders to consummate the merger (the
Merger
), on the terms and
subject to the conditions set forth in this Agreement, of Sub with and into the Company in which
the Company would become a wholly owned subsidiary of Parent, and such Boards of Directors have
approved this Agreement, declared its advisability and recommended that this Agreement be adopted
by the stockholders of the Company or Sub, as the case may be;
WHEREAS Parent, Sub and the Company desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe various conditions to
the Merger;
WHEREAS concurrently with the execution and delivery of this Agreement and as a condition to
the willingness of Parent and Sub to enter into this Agreement, certain stockholders of the Company
are entering into a stockholders agreement with Parent (the
Stockholders Agreement
),
pursuant to which such stockholders shall agree, among other things, to take certain actions in
furtherance of the Merger;
WHEREAS concurrently with the execution and delivery of this Agreement and as a condition to
the willingness of Parent to enter into this Agreement, certain employees of the Company are
entering into agreements with Parent pursuant to which such employees shall agree, among other
things, to certain non-competition, non-solicitation and no hire restrictions; and
WHEREAS concurrently with the execution and delivery of this Agreement and as a condition to
the willingness of Parent to enter into this Agreement, certain employees of the Company have
executed offer letters (the
Offer Letters
) regarding the employment of such employees
following the consummation of the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
The Merger
SECTION 1.01.
The Merger.
Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the General Corporation Law of the State of Delaware (the
DGCL
), Sub shall be merged with and into the Company at the Effective Time. At the
Effective Time, the separate corporate existence of Sub shall cease and the Company shall continue
as the surviving corporation (the
Surviving Corporation
).
SECTION 1.02.
Closing.
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, which shall be not
later than the second business day after satisfaction or (to the extent permitted by law) waiver of
the conditions set forth in Article VI (other than those that by their terms are to be satisfied or
waived at the Closing, it being understood that the occurrence of the Closing shall remain subject
to the satisfaction or waiver of such conditions at Closing), at the offices of Cravath, Swaine &
Moore LLP, 825 Eighth Avenue, New York, New York 10019, unless another time, date or place is
agreed to in writing by Parent and the Company;
provided
,
however
, that if all the
conditions set forth in Article VI shall not have been satisfied or (to the extent permitted by
law) waived on such second business day, then the Closing shall take place on the first business
day on which all such conditions shall have been satisfied or (to the extent permitted by law)
waived. The date on which the Closing occurs is referred to in this Agreement as the
Closing
Date
.
SECTION 1.03.
Effective Time of the Merger.
Upon the terms and subject to the
conditions set forth in this Agreement, as soon as practicable on or after the Closing Date, the
parties shall file a certificate of merger (the
Certificate of Merger
) in such form as is
required by, and executed and acknowledged in accordance with, the relevant provisions of the DGCL.
The Merger shall become effective at such date and time as the Certificate of Merger is duly filed
with the Secretary of State of the State of Delaware or, to the extent permitted by applicable Law,
at such subsequent date and time as Parent and the Company shall agree and specify in the
Certificate of Merger. The date and time at which the Merger becomes effective is referred to in
this Agreement as the
Effective Time
.
SECTION 1.04.
Effects of the Merger.
The Merger shall have the effects set forth in
Section 259 of the DGCL.
SECTION 1.05.
Certificate of Incorporation and Bylaws.
(a) The certificate of
incorporation of the Company as in effect immediately prior to the Effective Time shall be amended
by virtue of the Merger at the Effective Time to read in the form of Exhibit A hereto and, as so
amended, shall be the certificate of incorporation of the
2
Surviving Corporation until thereafter changed or amended as provided therein or by applicable
Law.
(b) Parent shall cause the bylaws of the Surviving Corporation to be amended and restated in
their entirety so that the bylaws of Sub as in effect immediately prior to the Effective Time shall
be the bylaws of the Surviving Corporation until thereafter changed or amended as provided therein
or by applicable Law, except that all references to the name of Sub shall be changed to refer to
the name of the Company.
SECTION 1.06.
Directors.
The directors of Sub immediately prior to the Effective Time
shall be the directors of the Surviving Corporation until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as the case may be.
SECTION 1.07.
Officers.
The officers of Sub immediately prior to the Effective Time
shall be the officers of the Surviving Corporation until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as the case may be.
ARTICLE II
Conversion of Securities
SECTION 2.01.
Conversion of Capital Stock.
At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of Common Stock, par value
$.01 per share, of the Company (the
Company Common Stock
), or the holder of any shares of
capital stock of Sub:
(a)
Capital Stock of Sub.
Each issued and outstanding share of common stock
of Sub, par value $0.01 per share, shall be converted into and become one fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
(b)
Cancellation of Treasury Stock and Parent-Owned Stock.
All shares of
Company Common Stock that are owned as treasury stock by the Company or owned by Parent or
Sub immediately prior to the Effective Time shall automatically be cancelled and shall
cease to exist, and no consideration shall be delivered or deliverable in exchange
therefor.
(c)
Conversion of Company Common Stock.
Each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time (other than (i) shares to be
cancelled in accordance with Section 2.01(b) and (ii) except as provided in Section 2.02,
the Appraisal Shares) shall be converted into the right to receive $21.00 in cash, without
interest (the
Merger Consideration
). At the Effective Time such shares shall no
longer be
3
outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a certificate
or evidence of shares in book-entry form that immediately prior to the Effective Time
represented any such shares (a
Certificate
) shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration in accordance with
the terms of this Agreement. The right of any holder of any share of Company Common Stock
to receive the Merger Consideration shall be subject to and reduced by the amount of any
withholding that is required under applicable tax Law, such withholding to be pursuant to
the terms of Section 2.03(f) and any applicable tax Law.
SECTION 2.02.
Appraisal Rights.
Notwithstanding anything in this Agreement to the
contrary, shares (the
Appraisal Shares
) of Company Common Stock issued and outstanding
immediately prior to the Effective Time that are held by any holder who is entitled to demand and
properly demands appraisal of such shares pursuant to, and who complies in all respects with, the
provisions of Section 262 of the DGCL (
Section 262
) shall not be converted into the right
to receive the Merger Consideration as provided in Section 2.01(c), but instead such holder shall
be entitled to payment of the fair value of such shares in accordance with the provisions of
Section 262. At the Effective Time, the Appraisal Shares shall no longer be outstanding and shall
automatically be cancelled and shall cease to exist, and each holder of a certificate or evidence
of shares in book-entry form that immediately prior to the Effective Time represented Appraisal
Shares shall cease to have any rights with respect thereto, except the right to receive the fair
value of such shares in accordance with the provisions of Section 262. Notwithstanding the
foregoing, if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the
right to appraisal under Section 262 or a court of competent jurisdiction shall determine that such
holder is not entitled to the relief provided by Section 262, then the right of such holder to be
paid the fair value of such holders Appraisal Shares under Section 262 shall cease and such
Appraisal Shares shall be deemed to have been converted at the Effective Time into, and shall have
become, the right to receive the Merger Consideration as provided in Section 2.01(c). The Company
shall serve prompt notice to Parent of any demands for appraisal of any shares of Company Common
Stock, withdrawals of any such demands and any other related instruments served pursuant to the
DGCL received by the Company, and Parent shall have the right to participate in and direct all
negotiations and proceedings with respect to such demands. The Company shall not, without the
prior written consent of Parent, make any payment with respect to, or settle or offer to settle,
any such demands, or agree to do or commit to do any of the foregoing.
SECTION 2.03.
Exchange of Certificates.
(a)
Paying Agent.
Prior to the
Effective Time, Parent shall designate a bank or trust company reasonably acceptable to the Company
to act as agent for the payment of the Merger Consideration upon surrender of Certificates (the
Paying Agent
), and, from time to time after the Effective Time, Parent shall make
available, or cause the Surviving Corporation to make available, to the Paying Agent funds in
amounts and at the times necessary for the payment of the Merger
4
Consideration pursuant to Section 2.01(c) upon surrender of Certificates, it being understood
that all such funds shall be invested as directed by Parent and that any and all interest or other
amounts earned with respect to funds made available to the Paying Agent pursuant to this Agreement
shall be turned over to Parent.
(b)
Exchange Procedure.
As soon as reasonably practicable after the Effective Time,
the Surviving Corporation or Parent shall cause the Paying Agent to mail to each holder of record
of a Certificate (i) a form of letter of transmittal (which shall include an accompanying
substitute IRS Form W-9 or the applicable IRS Form W-8, 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 Paying Agent and shall be in a form and have such other
provisions (including customary provisions regarding delivery of an agents message with respect
to shares held in book-entry form) as Parent may reasonably specify and which shall be reasonably
acceptable to the Company) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent,
together with such letter of transmittal, duly completed and validly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such Certificate shall
be entitled to receive in exchange therefor the amount of cash equal to the Merger Consideration
that such holder has the right to receive pursuant to Section 2.01(c), and the Certificate so
surrendered shall forthwith be cancelled. In the event of a transfer of ownership of Company
Common Stock that is not registered in the stock transfer books of the Company, payment of the
Merger Consideration in exchange therefor may be made to a person other than the person in whose
name the Certificate so surrendered is registered if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving Corporation that such
tax has been paid or is not applicable. No interest shall be paid or shall accrue on the cash
payable upon surrender of any Certificate.
(c)
No Further Ownership Rights in Company Common Stock.
All Merger Consideration
paid upon the surrender of a Certificate in accordance with the terms of this Article II shall be
deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company
Common Stock formerly represented by such Certificate. At the close of business on the day on
which the Effective Time occurs, the stock transfer books of the Company shall be closed, and there
shall be no further registration of transfers on the stock transfer books of the Surviving
Corporation of the shares that were outstanding immediately prior to the Effective Time. If, after
the close of business on the day on which the Effective Time occurs, Certificates are presented to
the Surviving Corporation or the Paying Agent for transfer or any other reason, they shall be
cancelled and exchanged as provided in this Article II.
5
(d)
No Liability.
None of Parent, Sub, the Company, the Surviving Corporation or the
Paying Agent shall be liable to any person in respect of any Merger Consideration that would
otherwise have been payable in respect of any Certificate which is delivered to a public official
in accordance with any applicable abandoned property, escheat or similar Law. If any Certificates
shall not have been surrendered immediately prior to the date on which any Merger Consideration
would otherwise escheat to or become the property of any Governmental Entity, any Merger
Consideration payable in accordance with this Article II in respect thereof shall, to the extent
permitted by applicable Law, become the property of the Surviving Corporation, free and clear of
all claims or interest of any person previously entitled thereto.
(e)
Lost Certificates.
If any Certificate shall have been lost, stolen, defaced or
destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to
be lost, stolen, defaced or destroyed and, if required by the Surviving Corporation, the posting by
such person of a bond in such amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the Paying Agent or the
Surviving Corporation, as the case may be, shall pay the Merger Consideration in respect of such
lost, stolen, defaced or destroyed Certificate.
(f)
Withholding Rights.
Parent, the Surviving Corporation or the Paying Agent shall
be entitled to deduct and withhold from the Merger Consideration otherwise payable pursuant to this
Agreement to any holder of shares of Company Common Stock such amounts as Parent, the Surviving
Corporation or the Paying Agent is required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended (the
Code
), or any
provision of state, local or foreign tax Law. To the extent that amounts are so withheld and paid
over to the appropriate taxing authority by Parent, the Surviving Corporation or the Paying Agent,
such withheld amounts shall be treated for all purposes of this Agreement as having been paid to
the holder of the shares of Company Common Stock in respect of which such deduction and withholding
was made by Parent, the Surviving Corporation or the Paying Agent.
(g)
Termination of Fund.
At any time following the six-month anniversary of the
Closing Date, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to
it any funds (including any interest received with respect thereto) that had been made available to
the Paying Agent pursuant to Section 2.03(a) and that have not been disbursed to holders of
Certificates, and thereafter, subject to time limitations in Section 2.03(d), such holders shall be
entitled to look only to Parent and the Surviving Corporation (subject to abandoned property,
escheat or other similar Laws) as general creditors thereof with respect to the payment of any
Merger Consideration that may be payable upon surrender of any Certificates held by such holders,
as determined pursuant to this Agreement, without any interest thereon.
6
ARTICLE III
Representations and Warranties
SECTION 3.01.
Representations and Warranties of the Company.
Except as set forth in
the letter (with specific reference to the Section of this Agreement to which the information
stated in such disclosure relates;
provided
, that disclosure contained in any section of
the Company Letter shall be deemed to be disclosed with respect to any other Section of this
Agreement to the extent that it is readily apparent from the face of such disclosure that such
disclosure is applicable to such other Section of this Agreement) delivered by the Company to
Parent prior to the date of this Agreement (the
Company Letter
), the Company represents
and warrants to Parent and Sub as follows:
(a)
Organization, Standing and Corporate Power.
Each of the Company and its
Subsidiaries (i) is a corporation or other legal entity duly organized, validly existing
and in good standing under the Laws of the jurisdiction of its organization (except, in the
case of good standing, for entities organized under the Laws of any jurisdiction that does
not recognize such concept), (ii) has all requisite corporate, company, partnership or
other organizational power and authority to carry on its business as currently conducted
and (iii) is duly qualified or licensed to do business and is in good standing in each
jurisdiction (except, in the case of good standing, any jurisdiction that does not
recognize such concept) in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing necessary, other than
where the failure to be so organized, existing, qualified or licensed or in good standing
(except, in the case of clause (i) above, with respect to the Company), individually or in
the aggregate, is not reasonably likely to have a Material Adverse Effect. The Company has
made available to Parent complete and correct copies of the certificate of incorporation of
the Company, as amended to the date of this Agreement (the
Company Certificate
),
and the bylaws of the Company, as amended to the date of this Agreement (the
Company
Bylaws
), and the certificate of incorporation and bylaws (or similar organizational
documents) of each of its Subsidiaries, in each case as amended to the date of this
Agreement. The Company has made available to Parent complete and correct copies of the
minutes (or, in the case of draft minutes, the most recent drafts thereof) of all meetings
of the stockholders, the Board of Directors and each committee of the Board of Directors of
the Company and each of its Subsidiaries held since October 1, 2006 (other than portions of
any minutes (or drafts thereof) related to the transactions contemplated by this Agreement
or any Takeover Proposal). The Company has made available to Parent complete and correct
copies of all resolutions of the Board of Directors of the Company, and each committee
thereof, in respect of this Agreement and the transactions contemplated hereby.
7
(b)
Subsidiaries.
Section 3.01(b) of the Company Letter sets forth a complete
and correct list of each Subsidiary of the Company, its place and form of organization, its
address and each jurisdiction in which it is authorized to conduct or actually conducts
business. All the outstanding shares of capital stock of, or other equity or voting
interests in, each such Subsidiary are owned by the Company, by one or more wholly owned
Subsidiaries of the Company or by the Company and one or more wholly owned Subsidiaries of
the Company, free and clear of all pledges, claims, liens, charges, options, security
interests or other encumbrances of any kind or nature whatsoever (collectively,
Liens
), except for transfer restrictions imposed by applicable securities Laws,
and are duly authorized, validly issued, fully paid and nonassessable. Except for the
capital stock of, or other equity or voting interests in, its Subsidiaries, the Company
does not own, directly or indirectly, any capital stock of, or other equity or voting
interests in, any person.
(c)
Capital Structure.
(i) The authorized capital stock of the Company
consists of 90,000,000 shares of Company Common Stock and 10,000,000 shares of Preferred
Stock, par value $.01 per share, of the Company (the
Company Preferred Stock
).
At the close of business on August 9, 2010, (A) 21,513,708 shares of Company Common Stock
(excluding treasury shares) were issued and outstanding, none of which were subject to
vesting or transfer restrictions and/or subject to forfeiture back to the Company or
repurchase by the Company, (B) 415,766 shares of Company Common Stock were held by the
Company as treasury shares, (C) 5,398,073 shares of Company Common Stock were reserved and
available for issuance in the aggregate pursuant to the 2005 Stock Incentive Plan of the
Company (the
2005 Plan
), the 2003 Stock Option Plan of the Company (the
2003
Plan
) and the 1993 Stock Option Plan of the Company (the
1993 Plan
, and,
together with the 2005 Plan, the 2003 Plan and the ESPP (as defined below), the
Company Stock Plans
), of which (x) 2,482,520 shares of Company Common Stock were
subject to outstanding options (other than rights under the Companys 2005 Employee Stock
Purchase Plan (the
ESPP
)) to acquire shares of Company Common Stock from the
Company (such options, together with any other stock options granted after August 9, 2010
under the Company Stock Plans or otherwise, the
Stock Options
) and (y) a maximum
of 1,328,205 shares of Company Common Stock were subject to outstanding restricted share
units (such restricted share units, together with any other restricted share units granted
after August 9, 2010 pursuant to the Company Stock Plans or otherwise, the
RSUs
)
and (D) 571,000 shares of Company Common Stock were reserved and available for issuance
pursuant to the ESPP. All outstanding Stock Options and RSUs have been granted under the
Company Stock Plans. Other than the Company Stock Plans, there is no plan, Contract or
arrangement providing for the grant of Stock Options or RSUs. No shares of Company
Preferred Stock are issued or outstanding. No shares of Company Common Stock are owned by
any Subsidiary of the Company. Section 3.01(c)(i) of the Company
8
Letter sets forth (1) a complete and correct list, as of the close of business on
August 9, 2010, of all outstanding Stock Options, the number of shares of Company Common
Stock subject to each such Stock Option, the grant date, exercise price per share, vesting
schedule and expiration date of each such Stock Option, the name of the holder thereof, an
indication of whether or not each such holder is a current employee or director of the
Company or any of its Subsidiaries, whether or not such Stock Option (or any portion
thereof) is intended to qualify as an incentive stock option under Section 422 of the
Code and the name of the Company Stock Plan pursuant to which each such Stock Option was
granted and (2) a complete and correct list, as of the close of business on August 9, 2010,
of all outstanding RSUs, the number of shares of Company Common Stock subject to each such
RSU, the grant date and vesting schedule of each such RSU, the name of the holder thereof,
an indication of whether or not each such holder is a current employee or director of the
Company or any of its Subsidiaries and the name of the Company Stock Plan pursuant to which
such RSU was granted. As of the date of this Agreement, other than the outstanding Stock
Options, the outstanding RSUs and the rights under the ESPP, there are no outstanding
rights of any person to receive Company Common Stock under the Company Stock Plans or
otherwise, on a deferred basis or otherwise. As of the close of business on August 9,
2010, there were outstanding rights to purchase 50,375 shares of Company Common Stock on
the last day of the current offering period in effect under the ESPP (assuming the fair
market value per share of Company Common Stock on the last day of the current offering
period in effect under the ESPP will be equal to the Merger Consideration). As of the last
day of the most recent payroll period ending prior to the date of this Agreement, the
aggregate amount credited to the accounts of participants in the ESPP was $385,232.35 and
the aggregate amount credited to such accounts for such payroll period was $55,463.92.
(ii) Except as set forth in Section 3.01(c)(i), as of the close of business on August
9, 2010, no shares of capital stock of, or other equity or voting interests in, the
Company, or securities convertible into, or exchangeable or exercisable for, or options,
warrants, shares of deferred stock, restricted stock awards, stock appreciation rights,
phantom stock awards or other rights to acquire any such capital stock of, or other equity
or voting interests in, the Company, or other rights that are linked to the value of
Company Common Stock or the value of the Company or any part thereof, were issued,
reserved for issuance or outstanding. From the close of business on August 9, 2010 to the
date of this Agreement, (A) there have been no issuances by the Company of shares of
capital stock of, or other equity or voting interests in, the Company, other than
issuances of shares of Company Common Stock pursuant to the exercise of Stock Options or
rights under the ESPP or the settlement of RSUs, in each case outstanding as of August 9,
2010, and only if and to the extent required by their respective terms as in effect on
such date and (B) there have been no issuances by the Company
9
of securities convertible into, or exchangeable or exercisable for, or options,
warrants, shares of deferred stock, restricted stock awards, stock appreciation rights,
phantom stock awards, other rights to acquire shares of capital stock of, or other equity
or voting interests in, the Company, or other rights that are linked to the value of
Company Common Stock or the value of the Company or any part thereof, other than rights
under the ESPP.
(iii) All outstanding shares of capital stock of the Company are, and all shares that
may be issued pursuant to the Company Stock Plans will be, when issued in accordance with
the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. Except as set forth in this Section 3.01(c), there are no
(A) bonds, debentures, notes or other indebtedness of the Company or any of its
Subsidiaries and (B) securities or other instruments or rights (including stock
appreciation rights, phantom stock awards or other similar rights) issued by, or other
obligations of, the Company or any of its Subsidiaries, in each case, that are linked to,
or the value of which is in any way based upon or derived from, the value of any class of
capital stock of, or other equity or voting interests in, the Company or any of its
Subsidiaries, the value of the Company, any of its Subsidiaries or any part thereof, or
any dividends or other distributions declared or paid on any shares of capital stock of,
or other equity or voting interests in, the Company or any of its Subsidiaries, or which
have or which by their terms may have at any time (whether actual or contingent) the right
to vote (or which are convertible into, or exchangeable for, securities having the right
to vote) on any matters on which stockholders of the Company or any of its Subsidiaries
may vote (the items referred to in clauses (A) and (B) collectively,
Equity
Equivalents
). Except as set forth in this Section 3.01(c), there are no securities,
options, warrants, calls, rights or Contracts of any kind to which the Company or any of
its Subsidiaries is a party, or by which the Company or any of its Subsidiaries is bound,
obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock of, or other equity or
voting interests in, or securities convertible into, or exchangeable or exercisable for,
shares of capital stock of, or other equity or voting interests in, the Company or any of
its Subsidiaries or obligating the Company or any of its Subsidiaries to issue, grant,
extend or enter into any such security, option, warrant, call, right or Contract. With
respect to the Stock Options, (1) each Stock Option intended to qualify as an incentive
stock option under Section 422 of the Code so qualifies, (2) each grant of a Stock Option
was duly authorized no later than the date on which the grant of such Stock Option was by
its terms to be effective (the
Grant Date
) by all necessary corporate action,
including, as applicable, approval by the Board of Directors of the Company (or a duly
constituted and authorized committee thereof) and any required stockholder approval by the
necessary number of votes or written consents, and the award agreement governing such
grant (if any) was duly executed and delivered by each party
10
thereto, (3) each such grant
was made in accordance with the terms of the applicable Company Stock Plan, the Exchange Act
and all other applicable Laws and regulatory rules or requirements, including the rules of
The NASDAQ Stock Market LLC and any other exchange on which Company securities are traded,
(4) the per share exercise price of each Stock Option was not less than the fair market
value (within the meaning of Section 422 of the Code, in the case of each Stock Option
intended to qualify as an incentive stock option, and within the meaning of Section 409A
of the Code, in the case of each other Stock Option, other than any Stock Option that is
exempt from Section 409A of the Code due to the effective date provisions thereof) of a
share of Company Common Stock on the applicable Grant Date and (5) each such grant was
properly accounted for in accordance with GAAP in the financial statements (including the
related notes) of the Company and disclosed in the Companys SEC Documents in accordance
with the Exchange Act and all other applicable Laws. Except pursuant to the forfeiture
conditions of the Stock Options and RSUs outstanding as of the date of this Agreement and
except pursuant to the cashless exercise or tax withholding provisions of such Stock
Options and RSUs, in each case as in effect on the date of this Agreement, there are no
outstanding contractual or other obligations of the Company or any of its Subsidiaries to
(I) repurchase, redeem or otherwise acquire any shares of capital stock of, or other
equity or voting interests in, the Company or any of its Subsidiaries or (II) vote or
dispose of any shares of capital stock of, or other equity or voting interests in, the
Company or any of its Subsidiaries. The Company is not a party to any voting agreement
with respect to any shares of capital stock of, or other equity or voting interests in,
the Company or any of its Subsidiaries and, to the knowledge of the Company, as of the
date of this Agreement there are no irrevocable proxies and no voting agreements with
respect to any shares of capital stock of, or other equity or voting interests in, the
Company or any of its Subsidiaries. The Company has not knowingly granted, and there is
no and has been no Company policy or practice to grant, Stock Options prior to, or
otherwise coordinate the grant of Stock Options with, the release or other public
announcement of material information regarding the Company or its Subsidiaries or their
financial results or prospects.
(iv) Neither the Company nor any of its Subsidiaries has any (A) indebtedness for
borrowed money, (B) indebtedness evidenced by any bond, debenture, note, mortgage,
indenture or other debt instrument or debt security, (C) accounts payable to trade
creditors and accrued expenses not arising in the ordinary course of business, (D) amounts
owing as deferred purchase price for the purchase of any property, (E) capital lease
obligations or (F) guarantees with respect to any indebtedness or obligation of a type
described in clauses (A) through (E) above of any other person (other than, in the case of
clauses (A), (B) and (D), accounts payable to trade creditors and accrued expenses, in
each case arising in the ordinary course of business) (collectively,
indebtedness
).
11
(v) All Stock Options and RSUs may be treated in accordance with Section 5.04(a) and
all rights to purchase shares of Company Common Stock under the ESPP may be treated in
accordance with Section 5.04(b). No holder of any Stock Option, RSU or right under the
ESPP is entitled to any treatment of such Stock Option, RSU or right under the ESPP other
than as provided with respect to such Stock Option, RSU or right under the ESPP in Section
5.04(a) or Section 5.04(b), as applicable, and after the Closing no holder of a Stock
Option, RSU or right under the ESPP (or former holder of a Stock Option, RSU or right
under the ESPP) or any current or former participant in the Company Stock Plans or any
other Benefit Plan or Benefit Agreement shall have the right thereunder to acquire any
capital stock of the Company or any other equity interest therein (including phantom stock
or stock appreciation rights). All outstanding Stock Options are evidenced by individual
written stock option agreements (the
Stock Option Agreements
) and all
outstanding RSUs are evidenced by individual written restricted share unit agreements (the
RSU Agreements
), in each case substantially identical to the applicable forms
set forth in Section 3.01(c)(v) of the Company Letter, copies of which individual
agreements have previously been made available in complete and correct form to Parent and
its counsel, and no Stock Option Agreement or RSU Agreement contains terms that are
inconsistent with, or in addition to, the terms contained in such forms.
(d)
Authority; Noncontravention.
The Company has the requisite corporate
power and authority to execute and deliver this Agreement, to consummate the Merger and the
other transactions contemplated by this Agreement, subject, in the case of the Merger, to
obtaining the Stockholder Approval, and to comply with the provisions of this Agreement.
Assuming the accuracy of Section 3.02(f), the execution and delivery of this Agreement by
the Company, the consummation by the Company of the Merger and the other transactions
contemplated by this Agreement and the compliance by the Company with the provisions of
this Agreement have been duly authorized by all necessary corporate action on the part of
the Company, and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement, to comply with the terms of this Agreement or to consummate the
Merger and the other transactions contemplated by this Agreement, subject, in the case of
the Merger, to obtaining the Stockholder Approval. This Agreement has been duly executed
and delivered by the Company and, assuming the due execution and delivery of this Agreement
by Parent and Sub, constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except as enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar Laws relating to the enforcement of creditors rights generally and by
general principles of equity (the
Bankruptcy and Equity Exception
). The Board of
Directors of the Company, at a meeting duly called and held at which all of the directors
of the
12
Company were present, duly and unanimously adopted resolutions (i) approving and
adopting this Agreement, the Merger and the other transactions contemplated by this
Agreement, (ii) approving and declaring advisable the Stockholders Agreement and the
transactions contemplated thereby, (iii) declaring that this Agreement and the Merger are
fair to and advisable and in the best interests of the Company and the Companys
stockholders, (iv) directing that the adoption of this Agreement be submitted to a vote at
a meeting of the Companys stockholders to be held as set forth in Section 5.01(c) and (v)
recommending that the Companys stockholders adopt this Agreement, which resolutions,
except to the extent expressly permitted by Section 4.02, have not been rescinded, modified
or withdrawn in any way. The execution and delivery of this Agreement, the consummation of
the Merger and the other transactions contemplated by this Agreement and compliance by the
Company with the provisions of this Agreement do not and will not conflict with, or result
in any violation or breach of, or default (with or without notice or lapse of time or both)
under, or give rise to a right of, or result in, termination, cancellation or acceleration
of any obligation or to a loss of a benefit under, or result in the creation of any Lien in
or upon any of the properties or assets of the Company or any of its Subsidiaries under, or
give rise to any increased, additional, accelerated or guaranteed rights or entitlements
under (including any right of a holder of a security of the Company or any of its
Subsidiaries to require the Company or any of its Subsidiaries to acquire such security),
any provision of (A) the Company Certificate or the Company Bylaws or the certificate of
incorporation or bylaws (or similar organizational documents) of any of its Subsidiaries,
(B) any loan or credit agreement, bond, debenture, note, mortgage, indenture, guarantee,
lease or other contract, commitment, agreement, instrument, binding arrangement or
understanding, obligation, undertaking or license, whether oral or written (each, including
all amendments thereto, a
Contract
), or Permit to or by which the Company or any
of its Subsidiaries is a party or bound or to or by which any of their respective
properties or assets are subject or bound or (C) subject to the governmental filings and
other matters referred to in the following sentence, any (1) Federal, state or local,
domestic or foreign, statute, law, code, ordinance, rule or regulation of any Governmental
Entity (each, a
Law
), assuming receipt of the Stockholder Approval and the
adoption of this Agreement by Parent, as the sole stockholder of Sub, or (2) Federal, state
or local, domestic or foreign, judgment, injunction, order, writ or decree of any
Governmental Entity (each, a
Judgment
), in each case, applicable to the Company
or any of its Subsidiaries or their respective properties or assets, other than, in the
case of clauses (B) and (C), any such conflicts, violations, breaches, defaults,
terminations, cancellations, accelerations, losses, Liens, rights or entitlements that,
individually or in the aggregate, are not reasonably likely to (x) have a Material Adverse
Effect or (y) impair in any material respect the ability of the Company to perform its
obligations under this Agreement. No consent, approval, order or authorization of,
registration, declaration or filing with, or notice to, any Federal, state or local,
13
domestic or foreign, government or any court, administrative agency or commission or
other governmental, quasi-governmental or regulatory authority or agency, domestic or
foreign (a
Governmental Entity
), is required by or with respect to the Company or
any of its Subsidiaries in connection with the execution and delivery of this Agreement by
the Company, the consummation by the Company of the Merger and the other transactions
contemplated by this Agreement or the compliance by the Company with the provisions of this
Agreement, except for (I) the filing of a premerger notification and report form by the
Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
HSR Act
), and the filings and receipt, termination or expiration, as applicable,
of such other approvals or waiting periods required under any other applicable competition,
merger control, antitrust or similar Law, (II) the filing with the Securities and Exchange
Commission (the
SEC
) of a proxy statement relating to the adoption of this
Agreement by the Companys stockholders (as amended or supplemented from time to time, the
Proxy Statement
) and such reports under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (collectively, the
Exchange Act
), as may be required in connection with this Agreement and the
Merger and the other transactions contemplated by this Agreement, (III) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other jurisdictions in which the Company or any
of its Subsidiaries is qualified to do business, (IV) any filings required under the rules
and regulations of The NASDAQ Stock Market LLC and (V) such other consents, approvals,
orders, authorizations, registrations, declarations, filings and notices the failure of
which to be obtained or made, individually or in the aggregate, are not reasonably likely
to (x) have a Material Adverse Effect or (y) impair in any material respect the ability of
the Company to perform its obligations under this Agreement.
(e)
SEC Documents.
(i) To the extent complete and correct copies are not
available on the SECs website, the Company has made available to Parent complete and
correct copies of all reports, schedules, forms, statements and other documents filed with
or furnished to the SEC by the Company since October 1, 2006 (such documents available on
the SECs website or made available to Parent, together with all information incorporated
therein by reference, the
SEC Documents
). Since October 1, 2006, the Company has
filed with or furnished to the SEC each report, schedule, form, statement or other document
or filing required by Law to be filed or furnished by the Company at or prior to the time
so required. No Subsidiary of the Company is required to file or furnish any report,
schedule, form, statement or other document with, or make any other filing with, or furnish
any other material to, the SEC. As of their respective dates, each of the SEC Documents
complied as to form in all material respects with the requirements of the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (collectively, the
Securities Act
) and the
14
Exchange Act, in each case, applicable to such SEC Document, and none of the SEC
Documents at the time it was filed or furnished contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Except to the extent that information contained in
any SEC Document filed or furnished and publicly available prior to the date of this
Agreement (a
Filed SEC Document
) has been revised or superseded by a later filed
or furnished Filed SEC Document, none of the SEC Documents contains any untrue statement of
a material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. To the extent complete and correct copies are not
available on the SECs website, the Company has made available to Parent copies of all
comment letters received by the Company from the SEC since October 1, 2006 and relating to
the SEC Documents, together with all written responses of the Company thereto. As of the
date of this Agreement, there are no outstanding or unresolved comments in such comment
letters received by the Company from the SEC. As of the date of this Agreement, to the
knowledge of the Company none of the SEC Documents is the subject of any ongoing review by
the SEC. The financial statements (including the related notes) of the Company included in
the SEC Documents complied, at the time the respective statements were filed, as to form in
all material respects with the applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, were prepared in accordance with generally
accepted accounting principles in effect from time to time in the United States of America
(
GAAP
) (except, in the case of unaudited quarterly financial statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and their consolidated results of operations and cash
flows for the periods then ended (subject, in the case of unaudited quarterly financial
statements, to normal and recurring year-end audit adjustments). Except as set forth in
the most recent audited financial statements (including the notes thereto) included in the
Filed SEC Documents (the
Baseline Financials
), the Company and its Subsidiaries
have no material liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) other than such liabilities or obligations (A) with respect to or
arising from the transactions contemplated by this Agreement, (B) incurred in the ordinary
course of business consistent with past practice after the date of the Baseline Financials
but prior to the date of this Agreement, (C) incurred on or after the date of this
Agreement that is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect or (D) clearly disclosed in the unaudited financial statements
(including the notes thereto) included in the Companys Form 10-Q for the period ended June
30, 2010, filed with the SEC on August 5, 2010.
15
(ii) The Company is in compliance in all material respects with the provisions of
the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder
(collectively,
SOX
) applicable to it. The Company has promptly disclosed, by
filing a Form 8-K, any change in or waiver of the Companys code of ethics, as required
by Section 406(b) of SOX. To the knowledge of the Company, there have been no
violations of provisions of the Companys code of ethics since the adoption of such
code of ethics, including any minor violations not material to the Companys business.
(iii) The principal executive officer of the Company and the principal financial
officer of the Company each has made all certifications required by Rule 13a-14 and
15d-14 under the Exchange Act and Sections 302 and 906 of SOX, as applicable, with
respect to the SEC Documents, and the statements contained in such certifications were
accurate as of the date they were made. For purposes of this Agreement, principal
executive officer and principal financial officer shall have the meanings given to
such terms in SOX. Neither the Company nor any of its Subsidiaries has outstanding, or
has arranged any outstanding, extension of credit to directors or executive officers
within the meaning of Section 402 of SOX.
(iv) Neither the Company nor any of its Subsidiaries is a party to or bound by,
or has any commitment to become a party to or bound by, any joint venture, off-balance
sheet partnership or any similar Contract (including any Contract relating to any
transaction or relationship between or among the Company and any of its Subsidiaries,
on the one hand, and any unconsolidated Affiliate, including any structured finance,
special purpose or limited purpose entity or person, on the other hand, or any
off-balance sheet arrangements (as defined in Item 303(a) of Regulation S-K of the
SEC)), where the purpose or intended or known result or effect of such joint venture,
partnership or Contract is to avoid disclosure of any material transaction involving,
or material liabilities of, the Company or any of its Subsidiaries in the Companys or
any of its Subsidiaries published financial statements or other SEC Documents.
(v) The Company maintains internal control over financial reporting (as defined
in Rule 13a-15(f) of the Exchange Act) in compliance with the Exchange Act.
(vi) The Company maintains disclosure controls and procedures (as defined in Rule
13a-15(e) of the Exchange Act) in compliance with the Exchange Act.
(f)
Information Supplied.
None of the information included or incorporated by
reference in the Proxy Statement will, at the date it is first mailed to the Companys
stockholders, at the time of the Stockholders Meeting or at the
16
time of any amendment or supplement thereof, as amended or supplemented at such
date or time, contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading, except that no
representation is made by the Company with respect to statements made or incorporated by
reference therein based on information supplied by or on behalf of Parent or Sub
specifically for inclusion or incorporation by reference in the Proxy Statement. The Proxy
Statement will comply as to form in all material respects with the requirements of the
Exchange Act.
(g)
Absence of Certain Changes or Events.
(i) From September 30, 2009 to
the date of this Agreement, the Company and its Subsidiaries have conducted their
respective businesses only in the ordinary course of business consistent in all material
respects with past practice and there has not been (A) any Material Adverse Effect
(including any Material Adverse Effect resulting from an occurrence prior to September 30,
2009), (B) any declaration, setting aside or payment of any dividend on, or other
distribution (whether in cash, stock or property) in respect of, any of the Companys or
any of its Subsidiaries capital stock or other equity or voting interests, except for
dividends by a direct or indirect wholly owned Subsidiary of the Company to its parent, (C)
any split, combination or reclassification of any of the Companys or any of its
Subsidiaries capital stock or other equity or voting interests or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of or in
substitution for shares of capital stock of, or other equity or voting interests in, the
Company or any of its Subsidiaries, (D)(1) any grant by the Company or any of its
Subsidiaries to any current or former director, officer, employee, contractor or consultant
of the Company or any of its Subsidiaries (collectively,
Company Personnel
) of
any bonus or award opportunity, any loan or any increase in any type of compensation or
benefits, except for grants of normal bonus opportunities and normal increases of base cash
compensation, in each case, in the ordinary course of business consistent with past
practice or (2) any payment by the Company or any of its Subsidiaries to any Company
Personnel of any bonus or award, except for bonuses or awards paid prior to the date of
this Agreement in the ordinary course of business consistent with past practice, (E) any
grant by the Company or any of its Subsidiaries to any Company Personnel of any severance,
separation, change in control, retention, termination or similar compensation or benefits
or increase therein or of the right to receive any severance, separation, change in
control, retention, termination or similar compensation or benefits or increase therein,
(F) any adoption or establishment of or entry by the Company or any of its Subsidiaries
into, any amendment of, modification to or termination of, or agreement to amend, modify or
terminate, or any termination of (or
announcement of an intention to amend, modify or terminate), (1) any employment,
deferred compensation, change in control, severance, termination,
17
employee benefit, loan,
indemnification, retention, equity or equity-based compensation, consulting or similar
Contract between the Company or any of its Subsidiaries, on the one hand, and any Company
Personnel, on the other hand, (2) any Contract between the Company or any of its
Subsidiaries, on the one hand, and any Company Personnel, on the other hand, the benefits
of which are contingent, or the terms of which are altered, upon the occurrence of a
transaction involving the Company of the nature contemplated by this Agreement (alone or in
combination with any other event) or (3) any trust or insurance Contract or other agreement
to fund or otherwise secure payment of any compensation or benefit to be provided to any
Company Personnel (all such Contracts under this clause (F), including any such Contract
that is entered into on or after the date of this Agreement, collectively,
Benefit
Agreements
), (G) any grant or amendment of any award under any Benefit Plan or Benefit
Agreement (including the grant or amendment of Stock Options, RSUs, restricted stock, stock
appreciation rights, performance units, stock repurchase rights or other equity or
equity-based compensation) or the removal or modification of any restrictions in any such
award, (H) any payment to any Company Personnel of any compensation or benefit not provided
for under any Benefit Plan or Benefit Agreement, other than the payment of base cash
compensation in the ordinary course of business consistent with past practice, (I) the
taking of any action to accelerate, or that is reasonably likely to result in the
acceleration of, the time of vesting or payment of any rights, compensation, benefits or
funding obligations under any Benefit Plan or Benefit Agreement or otherwise, (J) any
material change in financial or tax accounting methods, principles or practices by the
Company or any of its Subsidiaries, except insofar as may have been required by GAAP or
applicable Law, (K) any material tax election or change in any material tax election or any
settlement or compromise of any material tax liability, (L) any material write-down by the
Company or any of its Subsidiaries of any of the material assets of the Company or any of
its Subsidiaries or (M) any licensing or other agreement with regard to the acquisition or
disposition of any material Intellectual Property or rights thereto, other than
nonexclusive licenses granted in the ordinary course of the business of the Company and its
Subsidiaries consistent with past practice.
(ii) Since September 30, 2009, each of the Company and its Subsidiaries has
continued all pricing, sales, receivables and payables practices in accordance with the
ordinary course of business consistent with past practice and has not engaged, except
in the ordinary course of business consistent with past practice, in (A) any trade
loading practices or any other promotional sales or discount activity with any
customers or distributors with the effect of accelerating to prior fiscal quarters
(including the current fiscal quarter) sales to the trade or otherwise that would
otherwise be expected to occur in subsequent fiscal quarters, (B) any practice that
would have the effect
of accelerating to prior fiscal quarters (including the current fiscal quarter)
collections of receivables that would otherwise be expected to be made in
18
subsequent
fiscal quarters, (C) any practice that would have the effect of postponing to
subsequent fiscal quarters payments by the Company or any of its Subsidiaries that
would otherwise be expected to be made in prior fiscal quarters (including the current
fiscal quarter) or (D) any other promotional sales or discount activity.
(h)
Litigation.
Section 3.01(h) of the Company Letter sets forth, as of the
date of this Agreement, a complete and correct list of each claim, action, suit or
judicial, administrative or regulatory proceeding or investigation pending or, to the
knowledge of the Company, threatened by or against the Company or any of its Subsidiaries
(i) for money damages (other than for immaterial amounts), (ii) that seeks injunctive
relief, (iii) that may give rise to any legal restraint on or prohibition against or limit
the material benefits to Parent of the Merger or the other transactions contemplated by
this Agreement or (iv) that, if resolved in accordance with plaintiffs demands, is
reasonably likely to have a Material Adverse Effect. There is no Judgment of any
Governmental Entity or arbitrator outstanding against, or, to the knowledge of the Company,
investigation, proceeding, notice of violation, order of forfeiture or complaint by any
Governmental Entity involving, the Company or any of its Subsidiaries that, individually or
in the aggregate, is reasonably likely to have a Material Adverse Effect.
(i)
Contracts.
(i) Section 3.01(i) of the Company Letter sets forth, as of
the date of this Agreement, (with specific reference to the subsection of this Section
3.01(i) to which such Contract relates) a complete and correct list of:
(A) each Contract pursuant to which the Company or any of its
Subsidiaries has agreed not to compete with any person in any area or to engage
in any activity or business, or pursuant to which any benefit or right is
required to be given or lost, or any penalty or detriment is incurred, as a
result of so competing or engaging;
(B) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound providing for exclusivity or any similar requirement or
pursuant to which the Company or any of its Subsidiaries is restricted in any
way, or which after the Effective Time could restrict Parent or any of its
Subsidiaries in any way, with respect to the development, manufacture,
marketing or distribution of their respective products or services or otherwise
with respect to the operation of their businesses, or pursuant to which any
benefit or right is required to be given or lost, or any penalty or detriment
is incurred, as a result of non-compliance with any such exclusive or
restrictive
requirements or which requires the Company or any of its Subsidiaries to
refrain from granting license or franchise rights to any other person;
19
(C) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound or with respect to which the Company or any of its
Subsidiaries has any obligation with (1) any Affiliate of the Company or any of
its Subsidiaries, (2) any Company Personnel, (3) any union or other labor
organization or (4) any Affiliate of any such person (other than, in each case,
(I) offer letters or employment agreements that are terminable at will by the
Company or any of its Subsidiaries both without any penalty and without any
obligation of the Company or any of its Subsidiaries to pay severance or other
compensation or benefits (other than accrued base salary, accrued commissions,
accrued bonuses, accrued vacation pay, accrued floating holidays and legally
mandated benefits), (II) invention assignment and confidentiality agreements
relating to the assignment of inventions to the Company or any of its
Subsidiaries not involving the payment of money and (III) Benefit Plans and
Benefit Agreements other than offer letters or employment agreements);
(D) each Contract under which the Company or any of its Subsidiaries has
incurred any indebtedness having an aggregate principal amount in excess of
$100,000;
(E) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound creating or granting a Lien (including Liens upon
properties or assets acquired under conditional sales, capital leases or other
title retention or security devices), other than (1) Liens for taxes not yet
due and payable, that are payable without penalty or that are being contested
in good faith and for which adequate reserves have been established, (2) Liens
for assessments and other governmental charges or landlords, carriers,
warehousemens, mechanics, repairmens, workers or similar Liens incurred in
the ordinary course of business, consistent with past practice, in each case
for sums not yet due and payable or due but not delinquent or being contested
in good faith by appropriate proceedings, (3) Liens incurred in the ordinary
course of business, consistent with past practice, in connection with workers
compensation, unemployment insurance and other types of social security or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return of money
bonds and similar obligations and (4) Liens incurred in the ordinary course of
business consistent with past practice that are not reasonably likely to
adversely interfere in a material way with the use of the properties or
assets encumbered thereby (collectively,
Permitted Liens
);
20
(F) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound (other than Benefit Plans and Benefit Agreements)
containing any provisions (1) contemplating or relating in any way to a change
in control or similar event with respect to the Company or one or more of its
Subsidiaries, including provisions requiring consent or approval of, or notice
to, any Governmental Entity or other person in the event of a change in control
of the Company or one or more of its Subsidiaries, or otherwise having the
effect of providing that the consummation of the Merger or any of the other
transactions contemplated by this Agreement or the execution, delivery or
effectiveness of this Agreement will materially conflict with, result in a
material violation or material breach of, or constitute a default (with or
without notice or lapse of time or both) under, such Contract, or give rise
under such Contract to any right of, or result in, a termination, right of
first refusal, material amendment, revocation, cancellation or material
acceleration of any obligation, or a loss of a material benefit or the creation
of any material Lien upon any of the properties or assets of the Company,
Parent or any of their respective Subsidiaries, or to any increased,
guaranteed, accelerated or additional material rights or material entitlements
of any person, (2) prohibiting or imposing any restrictions on the assignment
of all or any portion of such Contract by the Company or its Subsidiaries
(without regard to any exception permitting assignments to subsidiaries or
Affiliates), including provisions requiring consent or approval of, or notice
to, any Governmental Entity or other person in the event of a change in control
of the Company or one or more of its Subsidiaries, or (3) having the effect of
providing that the consummation of the Merger or any of the other transactions
contemplated by this Agreement or the execution, delivery or effectiveness of
this Agreement will require that a third party be provided with access to
source code or that any source code be released from escrow and provided to any
third party;
(G) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound providing for payments of royalties or other license fees
to third parties in excess of $20,000 annually, that is not terminable without
penalty on 90 days or less notice;
(H) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound granting a third party any license to Intellectual Property
that is not limited to the internal use of such third party;
(I) each Contract pursuant to which the Company or any of its
Subsidiaries has been granted any license to Intellectual Property,
21
other than
nonexclusive licenses granted in the ordinary course of business of the Company
and its Subsidiaries consistent with past practice;
(J) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound granting the other party to such Contract or a third party
most favored nation pricing or terms that (1) applies to the Company or any
of its Subsidiaries or (2) following the Effective Time, would apply to Parent
or any of its Subsidiaries other than the Surviving Corporation or its
Subsidiaries;
(K) each Contract pursuant to which the Company or any of its
Subsidiaries has agreed or is required to provide any third party with access
to source code, to provide for source code to be put in escrow or to grant a
contingent license to source code;
(L) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound for any joint venture (whether in partnership, limited
liability company or other organizational form) or alliance or similar
arrangement;
(M) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound for any development, marketing, resale, distribution or
similar arrangement relating to any product or service;
(N) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound with any Governmental Entity;
(O) each material Contract to or by which the Company or any of its
Subsidiaries is a party or bound entered into in the last five years in
connection with the settlement or other resolution of any suit, claim, action,
investigation or proceeding that has any material continuing obligations,
liabilities or restrictions;
(P) each Contract to or by which the Company or any of its Subsidiaries
is a party or bound providing for future performance by the Company or any of
its Subsidiaries in consideration of amounts previously paid;
(Q) each material Contract to or by which the Company or any of its
Subsidiaries is a party or bound for professional services engagements for a
fixed fee that guarantees a specific result;
22
(R) each Contract between the Company or any of its Subsidiaries and any
of the 50 largest customers of the Company and its Subsidiaries (determined on
the basis of revenues received by the Company or any of its Subsidiaries in the
four consecutive fiscal quarter period ended March 31, 2010 or, for Contracts
signed during the four consecutive fiscal quarter period ended March 31, 2010,
on the basis of the first year annual contract value (each such customer, a
Major Customer
, and each such Contract, a
Major Customer
Contract
));
(S) each Contract between the Company or any of its Subsidiaries and any
of the 10 largest licensors or other suppliers to the Company and its
Subsidiaries (determined on the basis of amounts paid by the Company or any of
its Subsidiaries in the four consecutive fiscal quarter period ended March 31,
2010 (each such licensor or other supplier, a
Major Supplier
, and
each such Contract, a
Major Supplier Contract
));
(T) except for the Contracts disclosed above, each Contract (other than
Benefit Plans and Benefit Agreements) which has aggregate future sums due to or
from the Company or any of its Subsidiaries, taken as a whole, (i) during the
period commencing on the date of this Agreement and ending on the 12-month
anniversary of this Agreement, in excess of $150,000 or (ii) in aggregate more
than $500,000 during the life of the Contract; and
(U) except for the Contracts disclosed above, each material Contract to
or by which the Company or any of its Subsidiaries is a party or bound not made
in the ordinary course of business consistent with past practice.
The Contracts of the Company or any of its Subsidiaries of the type referred to in clauses
(A) through (U) of this subsection (i) are collectively referred to in this Agreement as
Specified Contracts
. The Company has made available to Parent a complete and
correct copy of each of the Specified Contracts, including all amendments thereto. Each
Contract of the Company or any of its Subsidiaries that is material to the Company and its
Subsidiaries (a
Material Contract
), as well as each Specified Contract, is in
full force and effect (except for those Contracts that have expired in accordance with
their terms) and is a legal, valid and binding agreement of the Company or such Subsidiary,
as the case may be, and, to the knowledge of the Company, of each other party thereto,
enforceable against the Company or such Subsidiary, as the case may be, and, to the
knowledge of the Company, against the other party or parties thereto, in each case, in
accordance with its terms, subject to the Bankruptcy and Equity
23
Exception. Each of the Company and its Subsidiaries has performed or is performing in all
material respects, all obligations required to be performed by it under the Material
Contracts and Specified Contracts and is not (with or without notice or lapse of time or
both) in breach in any material respect or default thereunder, and has not knowingly waived
or failed to enforce any material rights or benefits thereunder (other than in the ordinary
course of business consistent with past practice), and, to the knowledge of the Company, no
other party to any of the Material Contracts or Specified Contracts is (with or without
notice or lapse of time or both) in breach in any material respect or default thereunder.
To the knowledge of the Company, as of the date of this Agreement, there has occurred no
event giving (with or without notice or lapse of time or both) to others any right of
termination, material amendment or cancellation of any Material Contract or Specified
Contract. To the knowledge of the Company, there are no circumstances that are reasonably
likely to occur that could reasonably be expected to adversely affect the ability of the
Company or any of its Subsidiaries to perform its material obligations under any Material
Contract or Specified Contract.
(ii) None of the Major Customers or Major Suppliers has terminated, failed to
renew or requested any material amendment to any of its Major Customer Contracts or
Major Supplier Contracts, or any of its existing relationships (other than renewals and
amendments in the ordinary course of business not adverse in any material respect to
the Company or its Subsidiaries, taken as a whole) with the Company or any of its
Subsidiaries.
(j)
Permits; Compliance with Laws.
The Company and its Subsidiaries have in
effect all certificates, permits, licenses, franchises, approvals, concessions,
qualifications, registrations, certifications and similar authorizations from any
Governmental Entity (collectively,
Permits
) that are necessary for them to own,
lease or operate their properties and assets and to carry on their businesses in all
material respects as currently conducted. Section 3.01(j) of the Company Letter sets
forth, as of the date of the Agreement, a complete and correct list of the Permits that are
material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a
whole. Each of the Company and its Subsidiaries is, and since October 1, 2006 has been, in
compliance in all material respects with all applicable Laws and Judgments, and no
condition or state of facts exists that is reasonably likely to give rise to a material
violation of, or a material liability or default under, any such applicable Law or
Judgment. The execution and delivery of this Agreement by the Company does not, and the
consummation of the Merger and the other transactions contemplated by this Agreement and
compliance with the terms hereof are not reasonably likely to, cause the revocation or
cancellation of any material Permit. As of the date of this Agreement, neither the Company
nor any of its Subsidiaries has received any written communication during the past three
years from any person that alleges that the Company or any of its
24
Subsidiaries is not in compliance in all material respects with, or is subject to
liability under, any Permit, Law or Judgment or relating to the revocation or modification
of any material Permit. Neither the Company nor any of its Subsidiaries has received any
notice that any investigation or review by any Governmental Entity is pending with respect
to the Company or any of its Subsidiaries or any of the material assets or operations of
the Company or any of its Subsidiaries or that any such investigation or review is
contemplated.
(k)
Absence of Changes in Benefit Plans; Employment Agreements; Labor
Relations.
(i) Except as disclosed in the Filed SEC Documents, since September 30,
2009, none of the Company or any of its Subsidiaries has adopted, entered into,
established, terminated, amended or modified or agreed to adopt, enter into, establish,
terminate, amend or modify (or announced an intention to adopt, enter into, establish,
terminate, amend or modify) any collective bargaining agreement or any employment, bonus,
pension, profit sharing, deferred compensation, incentive compensation, equity or
equity-based compensation, performance, retirement, thrift, savings, cafeteria, paid time
off, perquisite, fringe benefit, vacation, unemployment, severance, change in control,
termination, retention, disability, death benefit, hospitalization, medical or other
welfare benefit or other similar plan, program, policy, arrangement or understanding
(whether oral or written, formal or informal, funded or unfunded and whether or not legally
binding or subject to the Laws of the United States) sponsored, maintained, contributed to
or required to be sponsored, maintained or contributed to by the Company, any of its
Subsidiaries or any other person or entity that, together with the Company, is treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code or with respect to which
the Company is otherwise jointly or severally liable under applicable Law (each, a
Commonly Controlled Entity
), in each case, providing compensation or benefits to
any Company Personnel, including the Company Stock Plans, but not including the Benefit
Agreements (all such plans, programs, policies, arrangements and understandings, including
any such plan, program, policy, arrangement or understanding entered into, adopted or
established on or after the date of this Agreement, collectively,
Benefit Plans
),
or has made any change in any actuarial or other assumption used to calculate funding
obligations with respect to any Pension Plan, or any change in the manner in which
contributions to any Pension Plan are made or the basis on which such contributions are
determined.
(ii) There are no collective bargaining or other labor union agreements to which
the Company or any of its Subsidiaries is a party or by which any of them is bound.
Since October 1, 2006, neither the Company nor any of its Subsidiaries has encountered
any labor union organizing activity, or had any actual or, to the knowledge of the
Company, threatened employee strikes, work stoppages, slowdowns or lockouts and, to the
knowledge of the Company, no labor union organizing activity, strike, work stoppage,
25
slowdown or lockout is threatened. None of the employees of the Company or any of
its Subsidiaries is represented by any labor union, works council or similar
organization with respect to his or her employment by the Company or such Subsidiary.
The Company and its Subsidiaries do not have any obligation (including to inform or
consult with any such employees or their representatives in respect of the Merger or
the other transactions contemplated by this Agreement) with respect to any such
organization. Each of the Company and its Subsidiaries is, and since October 1, 2006
has been, in compliance in all material respects with all applicable Laws and Judgments
relating to labor relations, employment and employment practices, occupational safety
and health standards, terms and conditions of employment, payment of wages,
classification of employees, immigration, visa, work status, human rights, pay equity
and workers compensation, and is not, and since October 1, 2006 has not, engaged in
any unfair labor practice. There is no unfair labor practice charge or complaint
against the Company or any of its Subsidiaries pending or, to the knowledge of the
Company, threatened, in each case before the National Labor Relations Board or any
comparable Governmental Entity. No question concerning representation has been raised
or is, to the knowledge of the Company, threatened respecting the employees of the
Company or any of its Subsidiaries. No grievance or arbitration proceeding arising out
of a collective bargaining agreement is pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries.
(l)
Environmental Matters.
(i) Each of the Company and its Subsidiaries is,
and has been, in compliance in all material respects with all Environmental Laws, and
neither the Company nor any of its Subsidiaries has received any (A) communication alleging
that the Company or such Subsidiary is in violation of, or may have liability under, any
Environmental Law or (B) currently outstanding written request by any Governmental Entity
for information pursuant to any Environmental Law; (ii) (A) each of the Company and its
Subsidiaries possesses and is in compliance in all material respects with all Permits
required under Environmental Laws (
Environmental Permits
) for the conduct of its
operations, (B) all such Environmental Permits are valid and in good standing and (C)
neither the Company nor any of its Subsidiaries has been advised in writing by any
Governmental Entity of any actual or potential change in any material respect in the status
or terms and conditions of any such Environmental Permit; (iii) there are no material
Environmental Claims pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries; (iv) there has been no Release of or exposure to any
Hazardous Material that is reasonably likely to form the basis of any material
Environmental Claim against the Company or any of its Subsidiaries; (v) neither the Company
nor any of its Subsidiaries has retained or assumed, either contractually or by operation
of Law, any liabilities or obligations that are reasonably likely to form the basis of any
26
material Environmental Claim against the Company or any of its Subsidiaries; (vi)
there are no underground or aboveground storage tanks, generators or known or suspected
asbestos-containing materials on, at, under or about any property owned, operated or leased
by the Company or any of its Subsidiaries, nor, to the knowledge of the Company, were there
any underground storage tanks on, at, under or about any such property in the past; (vii)
neither the Company nor any of its Subsidiaries stores, generates or disposes of Hazardous
Materials (excluding office, cleaning or similar supplies used in the ordinary course of
the Companys or any of its Subsidiaries operations) at, on, under, about or from property
owned or leased by the Company or any of its Subsidiaries; and (viii) there are no past or
present events, conditions, circumstances, activities, practices, incidents, actions or
plans that are reasonably likely to form the basis of a material Environmental Claim
against the Company or any of its Subsidiaries.
For all purposes of this Agreement, (A)
Environmental Claims
means
any and all administrative, regulatory or judicial actions, suits, Judgments,
demands, directives, claims, Liens, investigations, proceedings or written or oral
notices of noncompliance or violation by or from any person alleging liability of
any kind or nature (including liability or responsibility for the costs of
enforcement proceedings, investigations, cleanup, governmental response, removal
or remediation, natural resource damages, property damages, personal injuries,
medical monitoring, penalties, contribution, indemnification and injunctive
relief) arising out of, based on or resulting from (1) the presence or Release of,
or exposure to, any Hazardous Material at any location, or (2) the failure to
comply with any Environmental Law; (B)
Environmental Law
means any Law,
Judgment, legally binding agreement or Permit issued, promulgated or entered into
by or with any Governmental Entity relating to pollution, the environment
(including ambient air, surface water, groundwater, land surface or subsurface
strata), natural resources, the climate, human health and safety or the protection
of endangered or threatened species; (C)
Hazardous Materials
means any
petroleum or petroleum products, radioactive materials or wastes, asbestos in any
form, polychlorinated biphenyls, hazardous or toxic substances and any other
chemical, material, substance or waste that is prohibited, limited or regulated
under any Environmental Law; and (D)
Release
means any actual or
threatened release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into or through the
environment or within any building, structure, facility or fixture.
(m)
Employee Benefits Matters.
(i) Section 3.01(m)(i) of the Company Letter
sets forth a complete and correct list of all employee welfare benefit plans (as defined
in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
(
ERISA
)), all employee pension benefit plans (as
27
defined in Section 3(2) of ERISA) (each, a
Pension Plan
) and all other
Benefit Plans and Benefit Agreements that, in each case, are in effect as of the date of
this Agreement. The Company has made available to Parent complete and correct copies of
(A) each Benefit Plan and each Benefit Agreement (or, in the case of any unwritten Benefit
Plans or Benefit Agreements, written descriptions thereof), including any amendments
thereto, (B) the two most recent annual reports, or such similar reports, statements,
information returns or material correspondence required to be filed with or delivered to
any Governmental Entity, if any, with respect to each Benefit Plan (including reports filed
on Form 5500 with accompanying schedules and attachments), (C) the most recent summary plan
description (if any), and any summary of material modifications, prepared for each Benefit
Plan for which a summary plan description is required under applicable Law, (D) each trust
agreement and group annuity or insurance Contract and other documents relating to the
funding or payment of compensation or benefits under each Benefit Plan and Benefit
Agreement (if any) and (E) the two most recent actuarial valuations for each Benefit Plan
(if any). Each Benefit Plan and Benefit Agreement has been administered, funded and
invested in all material respects in accordance with its terms. The Company and its
Subsidiaries and each Benefit Plan and Benefit Agreement are in compliance in all material
respects with applicable Law, including ERISA and the Code, and the terms of any collective
bargaining agreements or other labor union Contracts.
(ii) Each Pension Plan intended to be tax qualified under the Code has been the
subject of a favorable determination, qualification or opinion letter from the U.S.
Internal Revenue Service (the
IRS
) with respect to all tax Law changes with
respect to which the IRS is currently willing to provide a determination letter to the
effect that such Pension Plan is qualified and exempt from United States Federal income
taxes under Sections 401(a) and 501(a), respectively, of the Code, and no such letter
has been revoked (nor, as of the date of this Agreement, has revocation been
threatened) and no event has occurred since the date of the most recent such letter or
application therefor relating to any such Pension Plan that is reasonably likely to
adversely affect the qualification of such Pension Plan or materially increase the
costs relating thereto or require security under Section 307 of ERISA. Each Benefit
Plan required to have been approved by any non-United States Governmental Entity (or
permitted to have been approved to obtain any beneficial tax or other status) has been
so approved or timely submitted for approval, no such approval has been revoked (nor,
as of the date of this Agreement, has revocation been threatened) and no event has
occurred since the date of the most recent approval or application therefor relating to
any such Pension Plan that is reasonably likely to affect any such approval relating
thereto or increase the costs relating thereto. The Company has made available to
Parent a complete and correct copy of the most recent determination, qualification,
opinion or approval letter or similar document
28
received from a Governmental Entity with respect to each Benefit Plan intended to
qualify for favorable tax treatment or other status, as well as a complete and correct
copy of each pending application for a determination, qualification, opinion or
approval letter or similar document, if any, and a complete and correct list of all
amendments to any such Benefit Plans as to which a favorable determination,
qualification, opinion or approval letter has not yet been received.
(iii) Neither the Company nor any Commonly Controlled Entity has sponsored,
maintained, contributed to or been obligated to maintain or contribute to, or has any
actual or contingent liability under, any Benefit Plan that is a defined benefit plan
(as defined in Section 3(35) of ERISA) or a multiemployer plan (within the meaning of
Section 4001(a)(3) of ERISA), or that is subject to Section 302 or Title IV of ERISA or
Section 412 of the Code or that is otherwise a defined benefit pension plan or that
provides for the payment of termination indemnities, other than any such plan that is
sponsored by a Governmental Entity, and neither the Company nor any Commonly Controlled
Entity could incur any liability with respect to any such plan (under Title IV of ERISA
or otherwise).
(iv) No Benefit Plan or Benefit Agreement that provides welfare benefits, whether
or not subject to ERISA (each, a
Welfare Plan
), is funded through a welfare
benefits fund (as such term is defined in Section 419(e) of the Code), or is unfunded
or self-insured. There are no understandings, agreements or undertakings, written or
oral, that would prevent any Welfare Plan (including any Welfare Plan covering retirees
or other former employees) from being amended or terminated without material liability
to the Company or any of its Subsidiaries at or at any time after the Effective Time.
No Welfare Plan provides benefits, and there are no understandings, written or oral,
with respect to the provision of welfare benefits, after termination of employment,
except where the cost thereof is borne entirely by the former employee (or his or her
eligible dependents or beneficiaries) or as required by Section 4980B(f) of the Code or
any similar state statute or foreign Law. The Company and its Subsidiaries have
complied in all material respects with the applicable requirements of Section 4980B(f)
of the Code, Sections 601-609 of ERISA and any similar state statute or foreign Law
with respect to each Benefit Plan that is a group health plan (as defined in Section
5000(b)(1) of the Code or any similar state statute).
(v) Section 3.01(m)(v) of the Company Letter sets forth, as of the date of this
Agreement, a complete and correct list of (A) each Benefit Plan and each Benefit
Agreement pursuant to which any Company Personnel could become entitled to any
additional compensation, severance or other benefits or any acceleration of the time of
payment or vesting of any compensation,
29
severance or other benefits as a result of the Merger and the other transactions
contemplated by this Agreement (alone or in combination with any other event, including
any termination of employment on or following the Closing), or any compensation or
benefits the value of which would be calculated on the basis of the Merger and the
other transactions contemplated by this Agreement (alone or in combination with any
other event, including any termination of employment on or following the Closing), (B)
the names of all Company Personnel entitled to any such compensation or benefits
actually payable as of the Closing Date or upon termination of employment after the
Closing Date, (C) the category or type of each such form of compensation or benefit to
which such Company Personnel is entitled, (D) the aggregate value of each such form of
compensation or benefit actually payable as of the Closing Date and each such form of
compensation or benefit that would be payable upon termination of employment or
otherwise after the Closing Date, in each case, to all Company Personnel, and (E) the
aggregate value of any such compensation or benefits that would be paid to each
individual set forth in Section 3.01(m)(v) of the Company Letter as of the Closing Date
and upon termination of employment. Except as expressly set forth in Section 5.04, no
Company Personnel will be entitled to any severance, separation, change in control,
termination, bonus, retention or other additional compensation or benefits or any
acceleration of the time of payment or vesting of any compensation or benefits as a
result of the Merger and the other transactions contemplated by this Agreement (alone
or in combination with any other event, including any termination of employment on or
following the Closing) or any compensation or benefits related to or contingent upon,
or the value of which will be calculated on the basis of, the Merger and the other
transactions contemplated by this Agreement (alone or in combination with any other
event, including any termination of employment on or following the Closing). The
execution and delivery of this Agreement, the consummation of the Merger and the other
transactions contemplated by this Agreement (alone or in combination with any other
event, including any termination of employment on or following the Closing) and
compliance by the Company with the provisions of this Agreement do not and will not (A)
trigger any funding (through a grantor trust or otherwise) of, or increase the cost of,
or give rise to any other obligation under, any Benefit Plan, Benefit Agreement or any
other employment arrangement, (B) trigger the forgiveness of indebtedness owed by any
Company Personnel to the Company or any of its Affiliates or (C) result in any
violation or breach of, or a default (with or without notice or lapse of time or both)
under, or limit to the Companys or any of its Subsidiaries ability to amend, modify
or terminate, any Benefit Plan or Benefit Agreement.
30
(vi) No deduction of any amount payable pursuant to the terms of the Benefit Plans
or Benefit Agreements has been disallowed or is subject to disallowance under Section
162(m) of the Code.
(vii) All reports, returns and similar documents with respect to each Benefit Plan
required to be filed with any Governmental Entity or distributed to any Benefit Plan
participant have been duly and timely filed or distributed. All participant data
necessary to administer each Benefit Plan and Benefit Agreement is in the possession of
the Company or its Subsidiaries and is in a form that is sufficient for the proper
administration of the Benefit Plans and Benefit Agreements in accordance with their
terms and all applicable Laws and such data is complete and correct in all material
respects. Neither the Company nor any of its Subsidiaries has received notice of any,
and, to the knowledge of the Company, there are no, pending investigations by any
Governmental Entity with respect to, or pending termination proceedings or other
material claims (except claims for benefits payable in the normal operation of the
Benefit Plans and Benefit Agreements), suits or proceedings against or involving or
asserting any rights or claims to benefits under, any Benefit Plan or Benefit
Agreement.
(viii) All material contributions, premiums and benefit payments under or in
connection with each Benefit Plan and Benefit Agreement that are required to have been
made by the Company or any of its Subsidiaries in accordance with the terms of such
Benefit Plan and Benefit Agreement and applicable Laws have been timely made. No
Benefit Plan, or any insurance Contract related thereto, requires or permits a
retroactive increase in premiums or payments on termination of such Benefit Plan or
such insurance Contract. Neither the Company nor any of its Subsidiaries has incurred,
or could reasonably be expected to incur, any unfunded liabilities in relation to any
Benefit Plan or Benefit Agreement.
(ix) With respect to each Benefit Plan, (A) there has not occurred any
prohibited transaction in which the Company, any of its Subsidiaries or any of their
respective directors, officers or employees or, to the knowledge of the Company, any
trustee, administrator or other fiduciary of such Benefit Plan or trust created
thereunder, in each case, who is not a director, officer or employee of the Company or
any of its Subsidiaries (a
Non-Affiliate Plan Fiduciary
), has engaged that
could subject the Company, any of its Subsidiaries or any of their respective
directors, officers or employees or any Non-Affiliate Plan Fiduciary to the tax or
penalty on prohibited transactions imposed by Section 4975 of the Code or the sanctions
imposed under Title I of ERISA or any other applicable Law and (B) none of the Company,
any of its Subsidiaries or any of their respective directors, officers or employees or,
to the knowledge of the Company, any Non-Affiliate Plan Fiduciary, or any
31
agent of any of the foregoing, has engaged in any transaction or acted in a
manner, or failed to act in a manner, that could subject the Company, any of its
Subsidiaries or any of their respective directors, officers or employees or any
Non-Affiliate Plan Fiduciary to any material liability for breach of fiduciary duty
under ERISA or any other applicable Law. No Benefit Plan or related trust has been
terminated, nor has there been any reportable event (as such term is defined in
Section 4043 of ERISA) for which the 30-day reporting requirement has not been waived
with respect to any Benefit Plan during the last five years, and no notice of a
reportable event will be required to be filed in connection with the Merger or the
other transactions contemplated by this Agreement.
(x) Neither the Company nor any of its Subsidiaries has any liability or
obligations, including under or on account of a Benefit Plan or Benefit Agreement,
arising out of the hiring of persons to provide services to the Company or any of its
Subsidiaries and treating such persons as consultants or independent contractors and
not as employees of the Company or any of its Subsidiaries.
(xi) Each Benefit Plan and each Benefit Agreement that is a nonqualified deferred
compensation plan within the meaning of Treas. Reg. Section 1.409A-1(a)(1)(a) (a
Nonqualified Deferred Compensation Plan
) (A) was operated in compliance with
Section 409A of the Code between January 1, 2005 and December 31, 2008, based upon a
good faith, reasonable interpretation of (1) Section 409A of the Code and (2) the final
Treasury Regulations and other guidance issued by the IRS thereunder, to the extent
applicable (clauses (1) and (2), together, the
409A Authorities
) and (B) has
been operated in compliance with the 409A Authorities since January 1, 2009. Each
Nonqualified Deferred Compensation Plan has been in documentary compliance with the
409A Authorities since January 1, 2009.
(n)
Taxes.
(i) Each of the Company and its Subsidiaries has timely filed all
tax returns required to be filed by it in the manner prescribed by applicable Law. All
such tax returns are complete and correct in all material respects. Each of the Company
and its Subsidiaries has timely paid all material taxes due, and the most recent financial
statements contained in the Filed SEC Documents reflect an adequate reserve, in accordance
with GAAP, for all material taxes payable by the Company and its Subsidiaries for all
taxable periods and portions thereof through the date of such financial statements.
(ii) No tax return of the Company or any of its Subsidiaries is currently, or has
been, under audit or examination by any taxing authority, and no written, or to the
knowledge of the Company unwritten, notice of such an audit or examination has been
received by the Company or any of its
32
Subsidiaries. There is no material deficiency, refund litigation, proposed
adjustment in writing or matter in controversy with respect to any taxes due and owing
by the Company or any of its Subsidiaries. Each material deficiency resulting from any
completed audit or examination or concluded litigation relating to taxes by any taxing
authority has been timely paid. The relevant statute of limitations is closed with
respect to the tax returns of the Company and its Subsidiaries for all years.
(iii) There is no currently effective agreement or other document extending, or
having the effect of extending, the period of assessment or collection of any taxes,
and no power of attorney (other than powers of attorney authorizing employees of the
Company to act on behalf of the Company) with respect to any taxes has been executed or
filed with any taxing authority.
(iv) No Liens for taxes exist with respect to any assets or properties of the
Company or any of its Subsidiaries, except for statutory Liens for taxes not yet due
and payable or being contested in good faith through appropriate proceedings and for
which adequate reserves in accordance with GAAP have been established.
(v) None of the Company or any of its Subsidiaries is a party to or bound by or
currently has any liability under any tax sharing agreement, tax indemnity obligation
or similar agreement, arrangement or practice with respect to taxes (including any
advance pricing agreement, closing agreement (including pursuant to Section 7121 of the
Code) or other agreement relating to taxes with any taxing authority).
(vi) None of the Company or any of its Subsidiaries will be required to include in
a taxable period ending after the Effective Time taxable income attributable to income
that accrued (for purposes of the financial statements of the Company included in the
Filed SEC Documents) in a prior taxable period but was not recognized for tax purposes
in any prior taxable period as a result of the installment method of accounting, the
completed contract method of accounting, the long-term contract method of accounting,
the cash method of accounting or Section 481 of the Code or comparable provisions of
any tax Law or as a result of prepaid amounts or deferred revenue received on or prior
to the Effective Time.
(vii) Neither the Company nor any of its Subsidiaries has been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code or made an
election under Section 897(i) of the Code to be treated as a domestic corporation for
purposes of Sections 897, 1445 and 6039C of the Code.
33
(viii) Neither the Company nor any of its Subsidiaries has ever (A) made an
election under Treasury Regulation Section 301.7701-3(c) to be treated as a partnership
or disregarded entity for U.S. Federal income tax purposes or (B) made a similar
election under any comparable provision of any Federal, state or local, domestic or
foreign tax Law.
(ix) Section 3.01(n)(ix) of the Company Letter sets forth the following
information with respect to the Company and its Subsidiaries as of the most recent
practicable date: the amount of any net operating losses, unused investment or other
credits, unused foreign tax credits or excess charitable contributions of the Company
or any of its Subsidiaries for Federal income tax, alternative minimum tax or any other
tax purposes (including dates of expiration of such items, any limitations on such
items and all Schedules M-1 and M-3 prepared or filed by the Company or any of its
Subsidiaries).
(x) No amount, economic benefit or other entitlement that could be received
(whether in cash or property or the vesting of property) as a result of the Merger and
the other transactions contemplated by this Agreement (alone or in combination with any
other event, including any termination of employment on or following the Closing) by
any person who is a disqualified individual (as such term is defined in Treasury
Regulation Section 1.280G-1) with respect to the Company would be characterized as an
excess parachute payment (as such term is defined in Section 280G(b)(1) of the Code).
Section 3.01(n)(x) of the Company Letter sets forth (A) the Companys reasonable, good
faith estimate of the maximum amount that could be paid to each such disqualified
individual as a result of the Merger and the other transactions contemplated by this
Agreement (alone or in combination with any other event, including any termination of
employment on or following the Closing) and (B) the base amount (as such term is
defined in Section 280G(b)(3) of the Code) for each such disqualified individual, in
each case calculated as of the date of this Agreement. No person is entitled to any
gross-up, make-whole or other additional payment from the Company or any of its
Subsidiaries in respect of any tax (including Federal, state, local and foreign income,
excise and other taxes (including taxes imposed under Section 4999 or 409A of the
Code)) or interest or penalty related thereto.
(xi) The Company and its Subsidiaries have complied in all material respects with
all applicable Laws relating to the payment and withholding of taxes (including
withholding of taxes pursuant to Sections 1441, 1442, 3102 and 3402 of the Code or
similar provisions under any other Law) and have, within the time and the manner
prescribed by applicable Law, withheld from and paid over to the proper taxing
authorities all amounts required to be so withheld and paid over under applicable Laws.
34
(xii) Neither the Company nor any of its Subsidiaries has constituted either a
distributing corporation or a controlled corporation (A) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code in the two years prior
to the date of this Agreement or (B) in a distribution that could otherwise constitute
part of a plan or series of related transactions (within the meaning of Section
355(e) of the Code) in conjunction with the Merger or any of the other transactions
contemplated by this Agreement.
(xiii) Each of the Company and its Subsidiaries has disclosed on its U.S. Federal
income tax returns all positions taken therein that could give rise to a substantial
understatement of U.S. Federal income tax within the meaning of Section 6662 of the
Code.
(xiv) All related party transactions involving the Company or any of its
Subsidiaries are at arms length in compliance with Section 482 of the Code and the
Treasury Regulations promulgated thereunder and any comparable provision of any tax
Law.
(xv) Neither the Company nor any of its Subsidiaries (A) owns any interest in any
person that is treated as a passive foreign investment company within the meaning of
Section 1297(a) of the Code with respect to the Company or such Subsidiary or (B) has
ever made an election under Section 1362 of the Code to be treated as an S corporation
for U.S. Federal income tax purposes or made a similar election under any comparable
provision of any tax Law.
(xvi) Each of the Company and its Subsidiaries has conducted all aspects of its
business in accordance with the terms and conditions of all tax rulings and tax
concessions that were provided by any relevant taxing authority.
(xvii) Neither the Company nor any of its Subsidiaries has ever participated in any
listed transaction, as defined in Treasury Regulation Sections 1.6011-4(b)(2) or
301.6111-2(b)(2).
(xviii) For purposes of this Agreement, (A)
taxes
means all (1) Federal,
state and local, domestic and foreign income, franchise, property, sales, excise,
employment, payroll, social security, value-added, ad valorem, transfer, withholding
and other taxes, including taxes based on or measured by gross receipts, profits,
sales, use or occupation, tariffs, levies, impositions, assessments or governmental
charges of any nature whatsoever, including any interest, penalties or additions with
respect thereto, and any obligations under any Contracts with any other person with
respect to such amounts, (2) liability for the payment of any amounts of the types
described in clause (1) as a result
35
of being a member of an affiliated, consolidated, combined, unitary or aggregate
group and (3) liability for the payment of any amounts as a result of an express or
implied obligation to indemnify any other person with respect to the payment of any
amounts of the type described in clause (1) or (2); (B)
taxing authority
means any Governmental Entity exercising regulatory authority in respect of any taxes;
and (C)
tax return
means any Federal, state or local, domestic or foreign
return, declaration, report, estimate, form, claim for refund, information return,
statement (including any statement pursuant to Treasury Regulation Section 1.6011-4(a))
or other document relating to taxes, including any certificate, schedule or attachment
thereto.
(xix) Each of the Company and its Subsidiaries possesses and has made available
to Parent copies of all Federal, state, county, local, municipal or foreign Tax Returns
(including any related or supporting information related to any of the foregoing)
relating to Federal, state and local income, franchise, license, excise, net worth,
property or sales and use taxes for taxable periods ending after December 31, 2002.
(o)
Properties.
(i) Each of the Company and its Subsidiaries has good and
marketable title to, or in the case of leased tangible property and leased tangible assets
has valid and enforceable leasehold interests in, all of its material properties and
tangible assets, free and clear of all Liens, except for Permitted Liens.
(ii) The material properties and tangible assets owned or leased by the Company and
its Subsidiaries, or which they otherwise have the right to use, are sufficient
(subject to normal wear and tear) to operate their businesses in substantially the same
manner as they are currently conducted. The assets of the Company and each of its
Subsidiaries are each in good working order, and have been maintained in accordance
with prudent industry practice.
(iii) Section 3.01(o)(iii) of the Company Letter sets forth a complete and correct
list of all real property and interests in real property leased by the Company or any
of its Subsidiaries (each such property, a
Leased Real Property
). Neither
the Company nor any of its Subsidiaries currently owns, or has previously owned, in fee
any real property or interests in real property.
(iv) With respect to each Leased Real Property, (A) the Merger and the other
transactions contemplated by this Agreement do not require the consent of any party to
any lease, (B) neither the Company nor any of its Subsidiaries has subleased, licensed
or otherwise granted anyone the right to use or occupy such Leased Real Property or any
portion thereof and (C) neither the Company nor any of its Subsidiaries has
collaterally assigned or granted any other security interest in any such leasehold
estate or any interest therein.
36
(v) Each of the Company and its Subsidiaries is in compliance in all material
respects with the terms of all material leases of Leased Real Property to which it is a
party and under which it is in occupancy, and each such lease is a legal, valid and
binding agreement of the Company or its Subsidiary, as the case may be, and, to the
knowledge of the Company, of each other party thereto, enforceable against the Company
or such Subsidiary, as the case may be, and, to the knowledge of the Company, against
the other party or parties thereto, in each case, in accordance with its terms, subject
to the Bankruptcy and Equity Exception. Each of the Company and its Subsidiaries
enjoys peaceful and undisturbed possession in all material respects under all the
leases to the material Leased Real Property to which it is a party and under which it
is in occupancy.
(p)
Intellectual Property.
(i) Section 3.01(p)(i) of the Company Letter sets
forth a complete and correct list of all issued patents, patent applications, registered
trademarks, tradenames and service marks and applications therefor, registered copyrights
and applications therefor, and domain names and applications therefor, if any, owned by or
licensed to the Company or any of its Subsidiaries as of the date of this Agreement. The
Company has made available to Parent complete and correct copies of, and Section 3.01(p)(i)
of the Company Letter sets forth a complete and correct list of, all license agreements
relating to Intellectual Property to or by which the Company or any of its Subsidiaries is
a party or bound as of the date of this Agreement, other than (except with respect to
licenses or rights referred to in clause (ii)(L) below) nonexclusive licenses granted in
the ordinary course of the business of the Company and its Subsidiaries consistent with
past practice.
(ii) (A) The Company and each of its Subsidiaries owns, or is licensed or
otherwise has the right to use (in each case, without payments to third parties and
free and clear of any Liens) all Intellectual Property necessary for or material to the
conduct of its business as currently conducted and such rights are not subject to
termination by any third party.
(B) All issued patents, patent applications, registered trademarks,
tradenames and service marks and applications therefor, registered copyrights
and applications therefor and domain names and applications therefor owned by
the Company or any of its Subsidiaries have been duly registered and/or filed,
as applicable, with or issued by each applicable Governmental Entity in each
applicable jurisdiction, all necessary affidavits of continuing use have been
filed, and all necessary maintenance fees have been paid to continue all such
rights in effect.
37
(C) To the knowledge of the Company, none of the Company or any of its
Subsidiaries or any of its or their products or services has infringed upon or
otherwise violated, or is infringing upon or otherwise violating, the
Intellectual Property rights of any person.
(D) There is no suit, claim, action, investigation or proceeding pending
or, to the knowledge of the Company, threatened with respect to, and neither
the Company nor any of its Subsidiaries has been notified in writing of, any
possible infringement or other violation in any material respect by the Company
or any of its Subsidiaries or any of its or their products or services of the
Intellectual Property rights of any person. Since October 1, 2005, the Company
has not been notified in writing of any possible infringement or other
violation in any material respect by the Company or any of its Subsidiaries or
any of its or their products or services of the Intellectual Property rights of
any person. To the knowledge of the Company, there is no investigation pending
or threatened with respect to any possible infringement or other violation in
any material respect by the Company or any of its Subsidiaries or any of its or
their products or services of the Intellectual Property rights of any person.
(E) To the knowledge of the Company, no person or any product or service
of any person is infringing upon or otherwise violating in any material respect
any Intellectual Property rights of the Company or any of its Subsidiaries.
(F) The Company and its Subsidiaries have taken reasonable measures to
maintain the confidentiality of their Intellectual Property. Each of the
former or current members of management or key personnel of the Company or any
of its Subsidiaries, including all former and current employees, agents,
consultants and independent contractors who have contributed to or participated
in the conception and development of Intellectual Property owned, intended to
be owned or used by the Company or any of its Subsidiaries, have assigned or
otherwise transferred to the Company or any of its Subsidiaries all ownership
and other rights of any nature whatsoever (to the extent permitted by Law) of
such person in any material Intellectual Property owned, intended to be owned
or used by the Company or any of its Subsidiaries, and none of the former or
current members of management or key personnel of the Company or any of its
Subsidiaries, including all former and current employees, agents, consultants
and independent contractors who have contributed to or participated in the
conception and development of Intellectual Property owned, intended to be owned
or used by the Company or any of its
38
Subsidiaries, have a valid claim against the Company or any of its
Subsidiaries in connection with the involvement of such persons in the
conception and development of any material Intellectual Property owned,
intended to be owned or used by the Company or any of its Subsidiaries, and no
such claim has been asserted or, to the knowledge of the Company, threatened.
To the knowledge of the Company, none of the current employees of the Company
or any of its Subsidiaries has any patents issued or applications pending for
any device, process, design or invention of any kind now used or needed by the
Company or any of its Subsidiaries in furtherance of their business as
currently conducted, which patents or applications have not been assigned to
the Company or any of its Subsidiaries.
(G) The execution and delivery of this Agreement, the consummation of the
Merger and the other transactions contemplated by this Agreement and the
compliance with the provisions of this Agreement do not and will not conflict
with, or result in any violation of or default (with or without notice or lapse
of time or both) under, or give rise to any right, license or encumbrance
relating to, any material Intellectual Property owned or used by the Company or
any of its Subsidiaries or with respect to which the Company or any of its
Subsidiaries now has or has had any agreement with any third party, or any
right of termination, cancellation or acceleration of any material Intellectual
Property right or obligation set forth in any agreement to or by which the
Company or any of its Subsidiaries is a party or bound, or the loss or
encumbrance of any material Intellectual Property or material benefit related
thereto, or result in the creation of any Lien in or upon any material
Intellectual Property or right.
(H) To the extent Third Party Software is distributed or utilized in
services provided to customers of the Company or any of its Subsidiaries
together with the Intellectual Property of the Company or any of its
Subsidiaries, (1) any third party rights have been identified in Section
3.01(p)(ii)(H)(1) of the Company Letter, (2) all necessary licenses have been
obtained and (3) no royalties or payments are due (or such royalties and
payments are identified in Section 3.01(p)(ii)(H)(3) of the Company Letter).
(I) None of the source code or other material trade secrets of the Company
or any of its Subsidiaries has been published or disclosed by the Company or
any of its Subsidiaries, except pursuant to a non-disclosure agreement that is,
in all material respects, in the standard form used by the Company that has
been made available to Parent prior to the date of this Agreement, or, to the
knowledge of the
39
Company, by any other person to any person except pursuant to licenses or
Contracts requiring such other person to keep such trade secrets confidential.
(J) No person has any marketing or distribution rights to any material
Intellectual Property of the Company or any of its Subsidiaries.
(K) Neither the Company nor any of its Subsidiaries has assigned, sold or
otherwise transferred ownership of any material issued patent, patent
application, registered trademark or application therefor, service mark,
registered copyright or application therefor or any other material Intellectual
Property since October 1, 2005.
(L) No licenses or rights have been granted to a third party to distribute
the source code for, or to use any source code to create Derivative Works of,
any product currently marketed by, commercially available from or under
development by the Company or any of its Subsidiaries for which the Company or
one of its Subsidiaries possesses the source code.
(M) The Company and each of its Subsidiaries has (1) created and has
safely stored back-up copies of all their material computer programs and
Software (including object code, source code and associated data and
documentation) and (2) taken reasonable steps to protect their material
Intellectual Property and their rights thereunder, and to the knowledge of the
Company, no such rights to any material Intellectual Property have been lost or
are in jeopardy of being lost through failure to act by the Company or any of
its Subsidiaries.
(N) Section 3.01(p)(ii)(N) of the Company Letter identifies any and all
open source, public source or freeware Software or any modification or
derivative thereof, including any version of any Software licensed pursuant to
any GNU General Public License (
GPL
), GNU Lesser/Library General
Public License (
LGPL
), that is used in, incorporated into, integrated
or bundled with any Intellectual Property, product or service of the Company or
any of its Subsidiaries.
(O) The Company and its Subsidiaries are in compliance with all Contracts
pursuant to which any source code of the Company or any of its Subsidiaries has
been placed into escrow (other than any non-compliance which would not (with or
without notice or lapse of time or both) affect whether such source code would
be released from such escrow), neither the Company nor any of its Subsidiaries
is in
40
material breach or default under any such Contract and no source code has
been released from escrow pursuant to any such Contract.
(iii) For purposes of this Agreement,
Derivative Work
shall have the
meaning set forth in 17 U.S.C. Section 101.
(iv) For purposes of this Agreement, (A)
Intellectual Property
means
Software, trademarks, service marks, brand names, certification marks, trade dress,
assumed names, domain names, trade names and other indications of origin, the goodwill
associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any extension,
modification or renewal of any such registration or application; patents, applications
for patents (including divisions, provisionals, continuations, continuations in-part
and renewal applications), and any renewals, extensions or reissues thereof, in any
jurisdiction; trade secrets, know-how, formulae, processes, procedures, research
records, records of invention, test information, market surveys and Software, whether
patentable or not in any jurisdiction and rights in any jurisdiction to limit the use
or disclosure thereof by any person; writings and other works and any renewals or
extensions thereof; any similar intellectual property or proprietary rights; and any
claims or causes of action (pending, threatened or which could be filed) arising out of
any infringement or misappropriation of any of the foregoing; (B)
Software
means all types of computer software programs, including operating systems, application
programs, software tools, firmware and software imbedded in equipment, including both
object code and source code; the term Software shall also include all written or
electronic data, documentation and materials that explain the structure or use of
Software or that were used in the development of Software or are used in the operation
of the Software including logic diagrams, flow charts, procedural diagrams, error
reports, manuals and training materials, look-up tables and databases; and (C)
Third Party Software
means Software with respect to which a third party holds
any copyright or other ownership right (and, therefore, such Software is not owned
exclusively by the Company or any of its Subsidiaries).
(q)
Receivables.
As of the date of this Agreement, all the accounts
receivable of the Company (i) represented actual indebtedness or other obligations incurred
by the applicable account debtors and (ii) had arisen from bona fide transactions in the
ordinary course of business.
(r)
Insurance.
To the knowledge of the Company, the Company or its
Subsidiaries maintain policies of fire and casualty, liability and other forms of insurance
in such amounts, with such deductibles and against such risks and losses as are customary
for businesses in the Companys and its Subsidiaries business. Section 3.01(r) of the
Company Letter sets forth, as of the date of this
41
Agreement, a complete and correct list of the insurance policies maintained by
the Company and its Subsidiaries and the annualized premium payable with respect to each
such policy. All such policies are in full force and effect, all premiums due and payable
thereon have been paid, and no notice of cancellation or termination has been received with
respect to any such policy which has not been replaced on substantially similar terms prior
to the date of such cancellation. There is no material claim pending under any such
policies as to which coverage has been questioned, denied or disputed.
(s)
Unlawful Payments.
Neither the Company nor any of its Subsidiaries, nor
any of the directors, officers, agents, employees, representatives, franchisees or
distributors of the Company or any of its Subsidiaries, has taken any action, directly or
indirectly, that: (A) violated the FCPA or (B) would have violated the FCPA (in any case
where the Company, any of its Subsidiaries, or any other Person referenced above may not
have been subject to the FCPA). There have been no false or fictitious entries
made in the books or records of the Company or any of its Subsidiaries relating to any
payment that the FCPA prohibits, and neither the Company nor any of its Subsidiaries has
established or maintained a secret or unrecorded fund for use in making any such payments.
As used in this Agreement, the
FCPA
means the Foreign Corrupt Practices Act of
1977, as amended from time to time.
(t)
State Takeover Statutes.
Assuming the accuracy of Section 3.02(f), the
approval of the Merger by the Board of Directors of the Company referred to in Section
3.01(d) constitutes the only action necessary to render inapplicable to this Agreement, the
Stockholders Agreement, the Merger, the other transactions contemplated by this Agreement,
including the transactions under the Stockholders Agreement, and compliance with the terms
of this Agreement, the restrictions on business combinations (as defined in Section 203
of the DGCL) set forth in Section 203 of the DGCL to the extent, if any, such restrictions
would otherwise be applicable to this Agreement, the Stockholders Agreement, the Merger,
the other transactions contemplated by this Agreement, including transactions under the
Stockholders Agreement, or compliance with the terms of this Agreement. No other state
takeover or similar statute or regulation is applicable to this Agreement, the Stockholders
Agreement, the Merger, the other transactions contemplated by this Agreement or compliance
with the terms of this Agreement.
(u)
Voting Requirements.
The affirmative vote at the Stockholders Meeting or
any adjournment or postponement thereof of the holders of a majority of the outstanding shares of Company Common Stock entitled to vote thereon in favor of adopting this Agreement (the
Stockholder Approval
) is the only vote
of the holders of any class or series of the Companys capital stock necessary to
42
approve
or adopt this Agreement or to consummate the Merger and the other transactions contemplated
by this Agreement.
(v)
Brokers; Schedule of Fees and Expenses.
No broker, investment banker,
financial advisor or other person, other than Jefferies & Company, Inc., the fees and
expenses of which will be paid by the Company or one or more of its Subsidiaries, is
entitled to any brokers, finders, financial advisors or other similar fee or commission
in connection with the Merger and the other transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company or any of its Subsidiaries.
The Company has delivered to Parent complete and correct copies of all agreements under
which any such fees or commissions are payable and all indemnification and other agreements
related to the engagement of the persons to whom such fees are payable. The fees and
expenses of any accountant, broker, financial advisor, consultant, legal counsel or other
person retained by the Company or any of its Subsidiaries in connection with this Agreement
or the Merger and the other transactions contemplated by this Agreement incurred or to be
incurred by the Company or any of its Subsidiaries in connection with this Agreement or the
Merger and the other transactions contemplated by this Agreement will not exceed the fees
and expenses set forth in Section 3.01(v) of the Company Letter.
(w)
Opinion of Financial Advisor.
The Company has received the written
opinion of Jefferies & Company, Inc. to the effect that, as of the date of this Agreement,
and based upon and subject to the factors and assumptions set forth therein, the Merger
Consideration to be received by the stockholders of the Company pursuant to this Agreement
is fair to such stockholders from a financial point of view, a copy of which opinion will
be delivered to Parent solely for informational purposes as promptly as practicable after
the date of this Agreement.
(x)
Auditor Relationship.
Section 3.01(x) of the Company Letter sets forth a
complete and correct list of all relationships, audit or otherwise (including a description
of services that the Company or any of its Subsidiaries has received, or is receiving, in
connection with each such relationship), between the Company or any of its Subsidiaries, on
the one hand, and PricewaterhouseCoopers or any of its Affiliates, on the other hand.
SECTION 3.02.
Representations and Warranties of Parent and Sub.
Parent and Sub
represent and warrant to the Company as follows:
(a)
Organization.
Each of Parent and Sub is a corporation duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
organization and has all requisite corporate power and authority to carry on its
business as currently conducted.
43
(b)
Authority; Noncontravention.
Each of Parent and Sub has the requisite
corporate power and authority to execute and deliver this Agreement, to consummate the
Merger and the other transactions contemplated by this Agreement and to comply with the
provisions of this Agreement (subject, in the case of the Merger, to the adoption of this
Agreement by Parent, as the sole stockholder of Sub). The execution and delivery of this
Agreement by Parent and Sub, the consummation by Parent and Sub of the Merger and the other
transactions contemplated by this Agreement and the compliance by Parent and Sub with the
provisions of this Agreement have been duly authorized by all necessary corporate action on
the part of Parent and Sub, and no other corporate proceedings on the part of Parent or Sub
are necessary to authorize this Agreement, to comply with the terms of this Agreement or to
consummate the Merger and the other transactions contemplated by this Agreement (subject,
in the case of the Merger, to the adoption of this Agreement by Parent, as the sole
stockholder of Sub). This Agreement has been duly executed and delivered by Parent and
Sub, as applicable, and, assuming the due execution and delivery of this Agreement by the
Company, constitutes a valid and binding obligation of Parent and Sub, as applicable,
enforceable against Parent and Sub, as applicable, in accordance with its terms, subject to
the Bankruptcy and Equity Exception. The execution and delivery of this Agreement, the
consummation of the Merger and the other transactions contemplated by this Agreement and
the compliance by Parent and Sub with the provisions of this Agreement do not and will not
conflict with, or result in any violation or breach of, or default (with or without notice
or lapse of time or both) under, or give rise to a right of, or result in, termination,
cancellation or acceleration of any obligation or to a loss of a material benefit under, or
result in the creation of any Lien in or upon any of the properties or assets of Parent or
Sub under, or give rise to any increased, additional, accelerated or guaranteed rights or
entitlements under, any provision of (i) the certificate of incorporation or bylaws of
Parent or Sub, (ii) any Contract or Permit to or by which Parent or Sub is a party or bound
or to or by which their respective properties or assets are subject or bound or otherwise
under which Parent or Sub has rights or benefits or (iii) subject to the governmental
filings and other matters referred to in the following sentence, any Law (assuming receipt
of the Stockholder Approval and the adoption of this Agreement by Parent, as the sole
stockholder of Sub) or Judgment, in each case, applicable to Parent or Sub or their
respective properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, violations, breaches, defaults, terminations, cancellations, accelerations,
losses, Liens, rights or entitlements that, individually or in the aggregate, are not
reasonably likely to impair in any material respect the ability of each of Parent and Sub
to perform its obligations under this Agreement or prevent or materially impede or
materially delay the consummation of the Merger or the
other transactions contemplated by this Agreement. No consent, approval, order or
authorization of, registration, declaration or filing with, or notice to, any Governmental
Entity is required by or with respect to Parent or Sub in connection
44
with the execution and
delivery of this Agreement by Parent and Sub, the consummation by Parent and Sub of the
Merger or the other transactions contemplated by this Agreement or the compliance by Parent
and Sub with the provisions of this Agreement, except for (A) the filing of a premerger
notification and report form under the HSR Act and the filings and receipt, termination or
expiration, as applicable, of such other approvals or waiting periods required under any
other applicable competition, merger control, antitrust or similar Law, (B) the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in which the Company or
any of its Subsidiaries is qualified to do business and (C) such other consents, approvals,
orders, authorizations, registrations, declarations, filings and notices, the failure of
which to be obtained or made, individually or in the aggregate, are not reasonably likely
to impair in any material respect the ability of each of Parent and Sub to perform its
obligations under this Agreement or prevent or materially impede or materially delay the
consummation of the Merger or the other transactions contemplated by this Agreement.
(c)
Information Supplied.
None of the information supplied or to be supplied
by Parent or Sub specifically for inclusion or incorporation by reference in the Proxy
Statement will, at the date the Proxy Statement is first mailed to the Companys
stockholders, at the time of the Stockholders Meeting or at the time of any amendment or
supplement thereof, as amended or supplemented at such date or time, contain any untrue
statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
(d)
Interim Operations of Sub.
Sub was formed solely for the purpose of
engaging in the Merger and the other transactions contemplated by this Agreement and has
engaged in no business other than in connection with the Merger and the other transactions
contemplated by this Agreement.
(e)
Financing.
Parent and Sub have, and will have available to them upon the
Effective Time, sufficient funds to perform all of their respective obligations under this
Agreement and to consummate the Merger and the other transactions contemplated hereby,
including payment in full of the Merger Consideration and the amounts payable to the
holders of Cash-Out Options, and to pay all associated fees, costs and expenses.
(f)
State Takeover Statutes.
Neither Parent nor Sub has been an interested
stockholder with respect to the Company at any time within three years of the date of this
Agreement, as those terms are used in Section 203 of DGCL.
45
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01.
Conduct of Business.
(a)
Conduct of Business by the Company.
During the period from the date of this Agreement to the Effective Time, except with the prior
written consent of Parent (which shall not be unreasonably delayed) or as specifically contemplated
by this Agreement or as set forth in Section 4.01(a) of the Company Letter, the Company shall, and
shall cause each of its Subsidiaries to, carry on their respective businesses in the ordinary
course consistent with past practice and use commercially reasonable efforts to comply with all
applicable Laws and, to the extent consistent therewith, use commercially reasonable efforts to
keep available the services of their present officers, software developers and other employees, to
preserve their assets and technology, their relationships with customers, suppliers, licensors,
licensees, distributors and others having material business dealings with them and to maintain
their franchises, rights and Permits. Without in any way limiting the generality of the foregoing,
during the period from the date of this Agreement to the Effective Time, except with the prior
written consent of Parent (which shall not be unreasonably delayed) or as specifically contemplated
by this Agreement or as set forth in Section 4.01(a) of the Company Letter (with specific reference
to the subsection of this Section 4.01 to which the information stated in such disclosure relates),
the Company shall not, and shall not permit any of its Subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or make any other distributions
(whether in cash, stock or property) in respect of, any of its capital stock or other
equity or voting interests, except for dividends by a direct or indirect wholly owned
Subsidiary of the Company to its parent, (B) split, combine or reclassify any of its
capital stock or other equity or voting interests, or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for, shares of its
capital stock or other equity or voting interests, (C) purchase, redeem or otherwise
acquire any shares of capital stock, other equity or voting interests or any other
securities of the Company or any of its Subsidiaries or any options, warrants, calls or
rights to acquire any such shares or other securities (including any Stock Options or
RSUs, except pursuant to the forfeiture conditions of such Stock Options or RSUs or the
cashless exercise or tax withholding provisions of such Stock Options or RSUs, in each
case only if and to the extent required by the terms of such awards as in effect on the
date of this Agreement) or (D) take any action that would result in any
amendment, modification or change of any term of any indebtedness of the Company or
any of its Subsidiaries;
(ii) issue, deliver, sell, pledge or otherwise encumber any (A) shares of its
capital stock, other equity or voting interests or Equity Equivalents (other than the
issuance of shares of Company Common Stock upon the exercise of
46
Stock Options or rights
under the ESPP and the settlement of RSUs, in each case outstanding as of the date of this
Agreement and only if and to the extent required by the terms of the Company Stock Plans
as in effect on the date of this Agreement), or (B) securities convertible into, or
exchangeable or exercisable for, or any options, warrants, calls or rights to acquire, any
such stock, interests or Equity Equivalents;
(iii) amend or propose to amend its certificate of incorporation or bylaws (or
similar organizational documents);
(iv) acquire or agree to acquire (A) by merging or consolidating with, or by
purchasing all or a substantial portion of the assets of, or by purchasing all or a
substantial equity or voting interest in, or by any other manner, any business or person
or division thereof or (B) any other assets other than immaterial assets acquired in the
ordinary course of business consistent with past practice;
(v) sell, lease, license, sell and lease back, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its material properties or assets
(including any shares of capital stock, equity or voting interests or other rights,
instruments or securities), except for (i) grants of nonexclusive licenses in the ordinary
course of business consistent with past practice, (ii) sales of inventory or used
equipment in the ordinary course of business consistent with past practice and (iii)
Permitted Liens incurred in the ordinary course of business consistent with past practice;
(vi) (A) repurchase, prepay or incur any indebtedness, including by way of a
guarantee or an issuance or sale of debt securities, or issue and sell options, warrants,
calls or other rights to acquire any debt securities of the Company or any of its
Subsidiaries, enter into any keep well or other Contract to maintain any financial
statement or similar condition of another person or enter into any arrangement having the
economic effect of any of the foregoing or (B) make any loans, advances or capital
contributions to, or investments in, any other person, other than the Company or any
direct or indirect wholly owned Subsidiary of the Company;
(vii) incur or commit to incur any capital expenditures, or any obligations or
liabilities in connection therewith, that individually are in excess of $375,000 or in the
aggregate are in excess of $750,000;
(viii) (A) pay, discharge, settle or satisfy any claims (including any claims of
stockholders and any stockholder litigation relating to this Agreement, the Merger or any
other transaction contemplated by this Agreement or otherwise), liabilities or obligations
(whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge, settlement or satisfaction in the ordinary course of business
consistent with past practice, or as
47
required by their terms on the date of this
Agreement, of claims, liabilities or obligations reserved against in the Baseline
Financials (for amounts not in excess of such reserves), incurred since the date of such
financial statements in the ordinary course of business consistent with past practice or
incurred in connection with the transactions contemplated in this Agreement, in each case,
the payment, discharge, settlement or satisfaction of which does not include any
obligation (other than the payment of money) to be performed by the Company or its
Subsidiaries following the Closing Date, (B) waive, relinquish, release, grant, transfer
or assign any right of material value or (C) waive any material benefits of, or agree to
modify in any adverse respect, or fail to enforce, or consent to any matter with respect
to which its consent is required under, any confidentiality, standstill or similar
Contract to or by which the Company or any of its Subsidiaries is a party or bound;
(ix) enter into any lease or sublease of real property (whether as a lessor,
sublessor, lessee or sublessee), or modify or amend in any material respect, or exercise
any right to renew, any lease or sublease of real property or acquire any interest in real
property;
(x) modify or amend in any material respect, or accelerate, terminate or cancel, any
material Contract or waive any right to enforce, relinquish, release, transfer or assign
any rights or claims thereunder, other than any immaterial modifications or amendments
made in the ordinary course of business consistent with past practice;
(xi) except as required to ensure that any Benefit Plan or Benefit Agreement as in
effect on the date of this Agreement is not then out of compliance with applicable Law or
as specifically required pursuant to this Agreement, (A) adopt, establish, enter into,
terminate, amend or modify any Benefit Plan or Benefit Agreement, (B) increase in any
manner the compensation or benefits of, or pay any bonus or award to, or grant any loan
to, any Company Personnel, (C) pay or provide to any Company Personnel any compensation or
benefit not provided for under a Benefit Plan or Benefit Agreement as in effect on the
date of this Agreement, other than the payment of base compensation in the ordinary course
of business consistent with past practice, (D) grant or amend any award under any Benefit
Plan (including the grant or amendment of Stock Options, RSUs, restricted stock, stock
appreciation rights, performance units, stock purchase rights or other equity or
equity-based
compensation) or remove or modify existing restrictions in any Benefit Plan or
Benefit Agreement or awards made thereunder, (E) grant or pay any severance, separation,
change in control, termination, retention or similar compensation or benefits to, or
increase in any manner the severance, separation, change in control, termination,
retention or similar compensation or benefits of, any Company Personnel, (F) enter into
any trust, annuity or insurance Contract or
48
similar agreement or take any other action to
fund or in any other way secure the payment of compensation or benefits under any Benefit
Plan or Benefit Agreement, (G) take any action to accelerate, or that could reasonably be
expected to result in the acceleration of, the time of payment or vesting of any rights,
compensation, benefits or funding obligations under any Benefit Plan or Benefit Agreement
or otherwise or (H) make any material determination under any Benefit Plan or Benefit
Agreement that is inconsistent with the ordinary course of business or past practice;
(xii) form any Subsidiary of the Company;
(xiii) enter into any Contract containing any provisions having the effect of
providing that the consummation of the Merger or the other transactions contemplated by
this Agreement or compliance by the Company with the provisions of this Agreement will
conflict with, result in any violation or breach of, or constitute a default (with or
without notice or lapse of time or both) under, such Contract, or give rise under such
Contract to any right of, or result in, a termination, right of first refusal, material
amendment, revocation, cancellation or material acceleration, or a loss of a material
benefit or the creation of any material Lien upon any of the properties or assets of the
Company, Parent or any of their respective subsidiaries, or to any increased, guaranteed,
accelerated or additional rights or entitlements of any person, except to the extent such
conflicts, results, defaults, rights, losses or entitlements are required by applicable
Law;
(xiv) enter into any Contract containing any restriction on the ability of the
Company or any of its Subsidiaries to assign all or any portion of its rights, interests
or obligations thereunder, unless such restriction expressly excludes any assignment to
Parent and any of its Subsidiaries following the consummation of the Merger and the other
transactions contemplated by this Agreement;
(xv) take any action or fail to take any action if such action or failure to act
could reasonably be expected to result in (A) any representation and warranty of the
Company set forth in this Agreement that is qualified as to materiality becoming untrue
(as so qualified) or (B) any such representation and warranty that is not so qualified
becoming untrue in any material respect;
(xvi) except as required by applicable Law, adopt or enter into any collective
bargaining agreement or other labor union Contract applicable to the employees of the
Company or any of its Subsidiaries;
(xvii) write-down any of its material assets, including any Intellectual Property,
or make any change in any financial or tax accounting principle, method or practice, other
than as required by GAAP or applicable Law;
49
(xviii) make or change any tax election;
(xix) engage in (A) any trade loading practices or any other promotional sales or
discount activity with any customers or distributors with the effect of accelerating to
prior fiscal quarters (including the current fiscal quarter) sales to the trade or
otherwise that would otherwise be expected to occur in subsequent fiscal quarters, (B) any
practice which would have the effect of accelerating to prior fiscal quarters (including
the current fiscal quarter) collections of receivables that would otherwise be expected to
be made in subsequent fiscal quarters, (C) any practice which would have the effect of
postponing to subsequent fiscal quarters payments by the Company or any of its
Subsidiaries that would otherwise be expected to be made in prior fiscal quarters
(including the current fiscal quarter) or (D) any other promotional sales or discount
activity, in each case in this clause (D) in a manner outside the ordinary course of
business or inconsistent with past practice;
(xx) take any action or fail to take any action which action or failure to act would
result in the material loss or reduction in value of the Intellectual Property of the
Company and its Subsidiaries, taken as a whole;
(xxi) enter into, extend or renew (A) any Contract or amendment thereof which, if
executed prior to the date of this Agreement, would have been required to have been
disclosed pursuant to Section 3.01(i)(i)(A), (B), (C), (E), (F), (H), (J), (L), (N), (P)
or (Q), (B) any Contract or amendment thereof that grants any person the right or ability
to access, license or use all or a material portion of the Intellectual Property of the
Company and its Subsidiaries, other than in the ordinary course of business consistent
with past practice or (C) any Contract providing for the services of any dealer,
distributor, sales representative or similar representative;
provided
,
however
, that solely for purposes of this clause (C) (and not clause (A) above)
the Company may enter into, extend or renew any Contract providing for the services of any
dealer, distributor, sales representative or similar representative;
provided
,
that with respect to this clause (C), in each case (x) such entry, extension or renewal is
in the ordinary course of business and is not inconsistent with past practice and (y) if
the entry, extension or renewal is other than on standard terms and conditions, including
any terms and conditions relating to geographic exclusivity, the Company shall have
provided Parent with prior written notice of the material terms of the proposed
Contract, extension or renewal and not less than 48 hours to comment on such terms;
(xxii) enter into any Contract or material amendment thereof which, if executed
prior to the date of this Agreement, would have been disclosed pursuant to Section
3.01(i)(i)(G), (I), or (K), other than any Contract pursuant to which the Company or any
of its Subsidiaries has been or is being granted a
50
license to source code in the ordinary
course of business of the Company and its Subsidiaries consistent with past practice; or
(xxiii) authorize any of, or commit, resolve or agree to take any of, the foregoing
actions.
(b)
Certain Tax Matters.
During the period from the date of this Agreement to the
Effective Time, (i) the Company and each of its Subsidiaries shall timely file all tax returns
(
Post-Signing Returns
) required to be filed by each such entity (after taking into
account any extensions), and all Post-Signing Returns shall be complete and correct in all material
respects and shall be prepared on a basis consistent with the past practice of the Company and in a
manner that does not distort taxable income (
e.g.
, by deferring income or accelerating
deductions);
provided
that no Post-Signing Returns shall be filed with any taxing authority
without Parents written consent, which consent shall not be unreasonably witheld or delayed; (ii)
the Company and each of its Subsidiaries shall timely pay all taxes due and payable; (iii) the
Company will accrue a reserve in its books and records and financial statements in accordance with
GAAP and past practice for all taxes payable by the Company or any of its Subsidiaries for which no
Post-Signing Return is due prior to the Effective Time; (iv) the Company and each of its
Subsidiaries will promptly notify Parent of any suit, claim, action, investigation, proceeding or
audit pending against or with respect to the Company or any of its Subsidiaries in respect of any
material amount of tax and will not settle or compromise any such suit, claim, action,
investigation, proceeding or audit without Parents prior written consent, which consent shall not
be unreasonably withheld or delayed; (v) none of the Company or any of its Subsidiaries will make
or change any tax election without Parents consent, which consent shall not be unreasonably
withheld or delayed; and (vi) the Company and each of its Subsidiaries will retain all books,
documents and records necessary for the preparation of tax returns and reports and tax audits.
(c)
Additional Tax Matters.
(i) The Company and each of its Subsidiaries shall
cooperate, and, to the extent within its control, shall cause its respective Affiliates, directors,
officers, employees, contractors, consultants, agents, auditors and representatives reasonably to
cooperate, with Parent in all tax matters, including by maintaining and making available to Parent
and its Affiliates all books and records relating to taxes.
(ii) The Company shall deliver to Parent at or prior to the Closing a certificate,
in form and substance satisfactory to Parent, duly executed and acknowledged, certifying
that the payment of the Merger Consideration and any payments made in respect of Appraisal
Shares pursuant to the terms of this Agreement are exempt from withholding pursuant to the
Foreign Investment in Real Property Tax Act.
51
(iii) No later than five business days prior to the Closing Date, the Company shall
deliver to the Parent a list of the Companys stockholders and holders of Stock Options
and RSUs, in each case along with such stockholders or holders taxpayer identification
numbers for U.S. Federal income tax purposes. The Company acknowledges and consents that
Parent shall be entitled to deliver such list to the Paying Agent for the purpose of
facilitating the payment of the Merger Consideration and the treatment of Stock Options
and RSUs as contemplated by Section 5.04.
(iv) The Company and its Subsidiaries shall, prior to the Closing Date, pay all
amounts owed pursuant to related party transactions under agreements or arrangements
involving the Company or any of its Subsidiaries and record all accounting adjustments
that are necessary and appropriate to accurately reflect any intercompany payment or
related transaction.
SECTION 4.02.
No Solicitation.
(a) Notwithstanding any provision in this Agreement
to the contrary, the Company shall not, nor shall it authorize or permit any of its Subsidiaries
to, nor shall it authorize or permit any director, officer or employee of the Company or any of its
Subsidiaries or any investment banker, attorney, accountant or other advisor or representative of
the Company or any of its Subsidiaries to, directly or indirectly, (i) solicit, initiate or
knowingly encourage, or take any other action to knowingly facilitate, any Takeover Proposal or any
inquiries or the making of any proposal that could reasonably be expected to lead to a Takeover
Proposal or (ii) enter into, continue or otherwise participate in any discussions or negotiations
regarding, or furnish to any person (or any representative thereof) any information with respect
to, or otherwise cooperate in any way with any person (or any representative thereof) with respect
to, any Takeover Proposal;
provided
,
however
, that at any time prior to obtaining
the Stockholder Approval, in response to a bona fide written unsolicited Takeover Proposal that the
Board of Directors of the Company determines in good faith constitutes or could reasonably be
expected to lead to a Superior Proposal, and which Takeover Proposal did not result from a breach
of this Section 4.02 or any other provision of this Agreement, the Company may, and may permit and
authorize its Subsidiaries and its representatives and its Subsidiaries representatives to, in
each case subject to compliance with Section 4.02(c) and the other provisions of this Agreement,
(A) furnish information with respect to the Company and its Subsidiaries to the person making such
Takeover Proposal (and its representatives) pursuant to a confidentiality agreement which contains
terms that are no less restrictive than those contained in that certain confidentiality and
non-disclosure letter agreement dated June 30, 2010 between Parent and the Company (as it may
be amended from time to time, the
Confidentiality Agreement
),
provided
that all
such information had been provided, or is concurrently provided, to Parent, and (B) participate in
discussions or negotiations with, and only with, the person making such Takeover Proposal (and its
representatives) regarding such Takeover Proposal. Without limiting the generality of the
foregoing, it is understood that any violation of the restrictions set forth in the preceding
sentence by any director, officer
52
or employee of the Company or any of its Subsidiaries or any
investment banker, attorney, accountant or other advisor or representative of the Company or any of
its Subsidiaries shall be deemed to be a breach of this Section 4.02(a) by the Company.
For purposes of this Agreement, the term
Takeover Proposal
means any inquiry,
proposal or offer from any person or group (other than Parent or Sub or any of their Affiliates)
relating to, or that could reasonably be expected to lead to, in one transaction or a series of
transactions, any merger, consolidation, business combination, recapitalization, liquidation or
dissolution involving the Company or any direct or indirect acquisition, including by way of any
merger, consolidation, tender offer, exchange offer, stock acquisition, asset acquisition, binding
share exchange, business combination, recapitalization, liquidation, dissolution, joint venture,
license agreement or similar transaction, of (i) assets or businesses that constitute or represent
10% or more of the total revenue, net income, EBITDA or assets of the Company and its Subsidiaries,
taken as a whole, or (ii) 10% or more of the outstanding shares of Company Common Stock or of any
class of capital stock of, or other equity or voting interests in, one or more of the Subsidiaries
of the Company which, in the aggregate, directly or indirectly hold the assets or businesses
referred to in clause (i) above.
For purposes of this Agreement, the term
Superior Proposal
means any binding bona
fide written offer which did not result from a breach of Section 4.02(a) made by any person (other
than Parent or Sub or any of their Affiliates) that, if consummated, would result in such person
(or, in the case of a direct merger between such person and the Company, the stockholders of such
person) acquiring, directly or indirectly, more than 50% of the voting power of the Company Common
Stock or all or substantially all the assets of the Company and its Subsidiaries, taken as a whole,
and which offer, in the good faith judgment of the Board of Directors of the Company (after
consultation with a financial advisor of national reputation and outside legal counsel), (i)
provides consideration which is more favorable to the stockholders of the Company than the
consideration provided in the Merger (taking into account all of the terms and conditions of such
offer and this Agreement (including any changes to the terms of this Agreement proposed by Parent
in response to such Superior Proposal or otherwise)) and (ii) is reasonably capable of being
completed, taking into account all financial, legal, regulatory and other aspects of such proposal.
(b) Neither the Board of Directors of the Company nor any committee thereof shall (or shall
agree or resolve to) (i) withdraw or modify in a manner adverse to
Parent or Sub, or propose publicly to withdraw or modify in a manner adverse to Parent or Sub,
the recommendation or declaration of advisability by such Board of Directors or any such committee
of this Agreement or the Merger (any such action, resolution or agreement to take such action being
referred to herein as an
Adverse Recommendation Change
), (ii) recommend, declare
advisable or propose to recommend or declare advisable, the approval or adoption of any Takeover
Proposal or resolve or agree to take any such action, or adopt or approve any Takeover Proposal, or
(iii) cause or permit the
53
Company to enter into any letter of intent, memorandum of understanding,
agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture
agreement, partnership agreement or other agreement (each, an
Acquisition Agreement
)
constituting or related to, or which is intended to or is reasonably likely to lead to, any
Takeover Proposal (other than a confidentiality agreement referred to in Section 4.02(a)), or
resolve or agree to take any such action. Notwithstanding the foregoing, at any time prior to the
Stockholder Approval, the Board of Directors of the Company may, in response to a Superior Proposal
or an Intervening Event, effect an Adverse Recommendation Change,
provided
that the Board
of Directors of the Company determines in good faith, after consultation with its outside legal
counsel and a financial advisor of nationally recognized reputation, that the failure to do so is
reasonably likely to result in a breach of its fiduciary duties to the stockholders of the Company
under applicable Law, and
provided
further
, that the Board of Directors of the
Company may not effect such an Adverse Recommendation Change unless (A) the Board of Directors of
the Company shall have first provided prior written notice to Parent (an
Adverse
Recommendation Change Notice
) that it is prepared to effect an Adverse Recommendation Change
in response to a Superior Proposal or an Intervening Event, which notice shall, in the case of a
Superior Proposal, attach the most current version of any written agreement relating to the
transaction that constitutes such Superior Proposal, and, in the case of an Intervening Event,
attach information describing such Intervening Event in reasonable detail, and (B) Parent does not
make, within five business days after the receipt of such notice, a proposal that would, in the
good faith judgment of the Board of Directors of the Company (after consultation with a financial
advisor of national reputation and outside legal counsel), (x) cause the offer previously
constituting a Superior Proposal to no longer constitute a Superior Proposal or (y) obviate the
need for an Adverse Recommendation Change as a result of an Intervening Event (it being understood
and agreed that any amendment or modification of such Superior Proposal shall require a new Adverse
Recommendation Change Notice and a new three business day period). The Company agrees that, during
the five or three business day period, as applicable, prior to its effecting an Adverse
Recommendation Change, the Company and its officers, directors and representatives shall negotiate
in good faith with Parent and its officers, directors and representatives regarding any revisions
to the terms of the Merger and the other transactions contemplated by this Agreement proposed by
Parent.
For purposes of this Agreement, the term
Intervening Event
means an event,
circumstance, fact or other information, unknown to the Board of Directors of the Company, as of
the date of this Agreement, which becomes known prior to the
Stockholder Approval and which causes the Board of Directors of the Company to reasonably
conclude in good faith, after consultation with its outside legal counsel and a financial advisor
of nationally recognized reputation, that its failure to effect an Adverse Recommendation Change is
reasonably likely to result in a breach of its fiduciary duties to the stockholders of the Company
under applicable Law;
provided
,
however
, that in no event shall the receipt,
existence or terms of a Takeover Proposal or any matter relating thereto or consequence thereof
constitute an Intervening Event.
54
(c) In addition to the obligations of the Company set forth in paragraphs (a) and (b) of this
Section 4.02, the Company shall, as promptly as possible and in any event within 24 hours after the
receipt thereof, advise Parent orally and in writing of (i) any Takeover Proposal or any request
for information or inquiry that the Company reasonably believes could lead to or contemplates a
Takeover Proposal and (ii) the terms and conditions of such Takeover Proposal, request or inquiry
(including any subsequent amendment or other modification to such terms and conditions) and the
identity of the person making any such Takeover Proposal, request or inquiry. Commencing upon the
provision of any notice referred to above, the Company (or its outside counsel) shall (A) on a
daily basis at mutually agreeable times, advise Parent (or its outside counsel) of the progress of
negotiations concerning any Takeover Proposal, the material resolved and unresolved issues related
thereto and any other matters identified with reasonable specificity by Parent (or its outside
counsel) and the material details (including material amendments or proposed amendments as to price
and other material terms) of any such Takeover Proposal, request or inquiry and (B) promptly upon
receipt or delivery thereof, provide Parent (or its outside counsel) with copies of all documents
and material written or electronic communications relating to any such Takeover Proposal (including
the financing thereof), request or inquiry exchanged between the Company, its Subsidiaries or any
of their respective officers, directors, employees, investment bankers, attorneys, accountants or
other advisors or representatives, on the one hand, and the person making a Takeover Proposal or
any of its Affiliates, or their respective officers, directors, employees, investment bankers,
attorneys, accountants or other advisors or representatives, on the other hand.
(d) Nothing contained in this Section 4.02 or elsewhere in this Agreement shall prohibit the
Company from (i) taking and disclosing to its stockholders a position contemplated by Rule 14d-9
and Rule 14e-2(a) promulgated under the Exchange Act or (ii) making any disclosure to its
stockholders if, in the good faith judgment of the Board of Directors of the Company, failure so to
disclose would be inconsistent with applicable Law;
provided
,
however
, that in no
event shall the Company or its Board of Directors or any committee thereof take, agree or resolve
to take any action prohibited by Section 4.02(b).
SECTION 4.03.
Conduct by Parent.
During the period from the date of this Agreement
to the Effective Time, except as consented to in writing by the Company prior to such action or as
specifically contemplated by this Agreement, Parent shall not,
and shall not permit any of its Subsidiaries to, take any action that is reasonably likely to
result in (a) any representation and warranty of Parent or Sub set forth in this Agreement that is
qualified as to materiality becoming untrue (as so qualified) or (b) any such representation and
warranty that is not so qualified becoming untrue in any material respect.
55
ARTICLE V
Additional Agreements
SECTION 5.01.
Preparation of the Proxy Statement; Stockholders Meeting.
(a) As
promptly as reasonably practicable following the date of this Agreement, the Company shall prepare
and, no later than the tenth calendar day (or, if such calendar day is not a business day, on the
first business day subsequent to such calendar day) immediately following the date of this
Agreement, file with the SEC the preliminary Proxy Statement. Notwithstanding anything contained
in this Agreement to the contrary, (x) if the Company does not receive comments from the SEC with
respect to the preliminary Proxy Statement and is not notified by the SEC that it will receive
comments, absent any Legal Restraint that has the effect of preventing such action, the Company
shall file with the SEC the definitive Proxy Statement, and shall cause the mailing of the
definitive Proxy Statement to the stockholders of the Company, on or prior to the second business
day after the tenth calendar day immediately following the date of filing of the preliminary Proxy
Statement with the SEC, and (y) if the Company does receive comments from the SEC with respect to
the preliminary Proxy Statement, absent any Legal Restraint that has the effect of preventing such
action, the Company shall file with the SEC the definitive Proxy Statement, and shall cause the
mailing of the definitive Proxy Statement to the stockholders of the Company, on or prior to the
second business day immediately following clearance by the SEC with respect to such comments. Each
of the Company and Parent shall furnish all information concerning such person to the other as may
be reasonably requested in connection with the preparation, filing and distribution of the Proxy
Statement. The Company shall promptly notify Parent upon the receipt of any comments from the SEC
or its staff or any request from the SEC or its staff for amendments or supplements to the Proxy
Statement and shall provide Parent with copies of all correspondence between it and its
representatives, on the one hand, and the SEC, on the other hand. Each of the Company and Parent
shall use commercially reasonable efforts to respond as promptly as practicable to any comments of
the SEC with respect to the Proxy Statement. Notwithstanding the foregoing, prior to filing or
mailing the Proxy Statement (or any amendment or supplement thereto) or responding to any comments
of the SEC with respect thereto, the Company (i) shall provide Parent an opportunity to review and
comment on such document or response, (ii) shall include in such document or response all comments
reasonably proposed by Parent and (iii) if the Board of Directors of the Company shall not have
made an Adverse Recommendation Change, shall not file or mail such document, or respond to the SEC,
prior to receiving the approval of Parent, which approval shall not be unreasonably withheld or
delayed. If, at any time prior to the Stockholders Meeting, any information relating to the Company, Parent
or any of their respective Affiliates, officers or directors should be discovered by the Company or
Parent which should be set forth in an amendment or supplement to the Proxy Statement, so that the
Proxy Statement shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they are
56
made, not misleading, the party that discovers such information shall promptly notify the
other parties hereto, and an appropriate amendment or supplement describing such information shall
be filed with the SEC and, to the extent required by applicable Law, disseminated to the
stockholders of the Company. If the Company receives a Takeover Proposal or if an Intervening
Event occurs, the ten calendar day periods referenced in this Section 5.01(a) and the two business
day period referenced in clause (y) of the second sentence of this Section 5.01(a) will be extended
by three calendar days.
(b) The Company agrees that the Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and that none of the information included or
incorporated by reference in the Proxy Statement will, at the date the Proxy Statement is filed
with the SEC or mailed to the stockholders of the Company or at the time of the Stockholders
Meeting, or at the time of any amendment or supplement thereof, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which they are made, not
misleading, except that no covenant is made by the Company with respect to statements made in the
Proxy Statement based on information supplied in writing by or on behalf of Parent or Sub
specifically for inclusion or incorporation for reference therein. Parent agrees that none of such
information will, at the date the Proxy Statement is filed with the SEC or mailed to the
stockholders of the Company or at the time of the Stockholders Meeting, or at the time of any
amendment or supplement thereof, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading.
(c) As promptly as practicable after the date of this Agreement, the Company shall, in
compliance with applicable Law, the Company Certificate, the Company By-Laws and the rules of The
NASDAQ Stock Market LLC, establish a record date (which will be as promptly as reasonably
practicable following the date of this Agreement) for, duly call, give notice of, convene and hold
a meeting of its stockholders, which meeting the Company shall, absent any Legal Restraint that has
the effect of preventing such action, cause to occur on the 30th calendar day (or, if such calendar
day is not a business day, on the first business day subsequent to such calendar day) immediately
following the date of mailing of the Proxy Statement (the
Stockholders Meeting
), for the
purpose of obtaining the Stockholder Approval, regardless of whether the Board of Directors of the
Company determines at any time that this Agreement is no longer advisable or recommends that the
stockholders of the Company reject it or any other Adverse Recommendation Change has occurred at
any time;
provided
,
however
, that (i) if the Company is unable to obtain a quorum
of its stockholders at such time, the Company may extend the date of the Stockholders Meeting to
the extent (and only to the extent) necessary in order to obtain a quorum of its stockholders and
the Company shall use its commercially reasonable efforts to obtain such a quorum as promptly as
practicable, (ii) the Company may adjourn or postpone the Stockholders Meeting to the
57
extent (and only to the extent) the Company reasonably determines that such adjournment or
postponement is required by applicable Law to comply with comments made by the SEC with respect to
the Proxy Statement and (iii) if the Company receives a new Takeover Proposal, the price or
material terms of a previously received Takeover Proposal are modified or amended or an Intervening
Event occurs, in any such case during the five calendar day period immediately prior to the day of
the Stockholders Meeting, the Company may delay the Stockholders Meeting until the date that is the
fifth business day after the date on which the Stockholders Meeting would otherwise have been held;
provided, however, that the Company may delay the Stockholders Meeting pursuant to this clause
(iii) no more than once. The notice of such Stockholders Meeting shall state that a resolution to
adopt this Agreement will be considered at the Stockholders Meeting. Subject to Section 4.02(b),
(x) the Board of Directors of the Company shall recommend to holders of Company Common Stock that
they adopt this Agreement and shall include such recommendation in the Proxy Statement and (y) the
Company shall use its commercially reasonable efforts to solicit the Stockholder Approval. Without
limiting the generality of the foregoing, the Company agrees that its obligations pursuant to this
Section 5.01(c) shall not be affected by the commencement, public proposal, public disclosure or
communication to the Company or any other person of any Takeover Proposal. The Company shall
provide updates to Parent with respect to the proxy solicitation for the Stockholders Meeting
(including interim results) as reasonably requested by Parent.
SECTION 5.02.
Access to Information; Confidentiality.
(a) Subject to compliance with
applicable Laws, the Company shall, and shall cause each of its Subsidiaries to, afford to Parent
and to Parents officers, employees, investment bankers, attorneys, accountants, consultants and
other representatives and advisors full access upon reasonable advance notice and during normal
business hours during the period prior to the Effective Time or the termination of this Agreement
to all their respective properties, assets, books, records, Contracts, Permits, documents,
information, directors, officers and employees, and during such period the Company shall, and shall
cause each of its Subsidiaries to, make available to Parent any information concerning its business
as Parent may reasonably request (including the work papers of PricewaterhouseCoopers LLP, subject
to the customary requirements of PricewaterhouseCoopers LLP). Following the date of this Agreement
and prior to the Effective Time, Parent may (but shall not be required to), following reasonable
notice to the Company, contact and interview any Company Personnel and review the personnel records
and such other information concerning the Company Personnel as Parent may reasonably request. No
investigation by Parent or any of its officers, directors, employees, investment bankers,
attorneys, accountants or other advisors or representatives and no other receipt of information by
Parent or any of its officers, directors, employees, investment bankers, attorneys, accountants or
other advisors or representatives shall operate as a waiver or otherwise affect any representation,
warranty, covenant, agreement or other provision of this Agreement, or the obligations of the
parties (or remedies with respect thereto) or the conditions to the obligations of the parties
under the Agreement. Except as required by
58
any applicable Law or Judgment, Parent will hold, and will direct its officers, employees,
investment bankers, attorneys, accountants and other advisors and representatives to hold, any and
all information received from the Company confidential in accordance with the Confidentiality
Agreement.
(b) Without limiting the generality of the foregoing, during the period from the date of this
Agreement to the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, as
and to the extent reasonably requested by Parent, provide Parent, to the extent applicable, with
(i) a materially complete and correct list of all licenses issued by the Federal Communications
Commission (the
FCC
) and held by the Company or any of its Subsidiaries (the
FCC
Licenses
), (ii) materially complete and correct copies of each FCC License, (iii) if
available, the address and physical location of the device(s) covered by each FCC License, (iv) if
available, a written description of the purpose of the device(s) covered by each FCC License, (v)
materially complete and correct copies of any Notices of Apparent Liability for Forfeiture issued
by the FCC against the Company or any of its Subsidiaries and (vi) all reasonably available
information in the possession of the Company or any of its Subsidiaries necessary for Parent to
make an independent determination that the Company and its Subsidiaries have complied with FCC
rules regarding changes of ownership control of the FCC Licenses (including descriptions of any
transactions that effected a change of ownership or control of the FCC Licenses (including any
intracompany reorganizations) and corporate organizational charts depicting the ownership structure
of the holder of the FCC Licenses before and after any such change of ownership or control).
(c) Subject to applicable law, the Company and Parent shall, and shall cause each of their
respective Subsidiaries to, cooperate to ensure an orderly transition and integration process in
connection with the Merger and the other transactions contemplated by this Agreement in order to
minimize the disruption to, and preserve the value of, the business of the Surviving Corporation
and its Subsidiaries.
SECTION 5.03.
Commercially Reasonable Efforts; Consultation and Notice.
(a) Upon the
terms and subject to the conditions set forth in this Agreement, each of the parties hereto agrees
to use its commercially reasonable efforts to take, or cause to be taken, all actions that are
necessary, proper or advisable to consummate and make effective the Merger and the other
transactions contemplated by this Agreement (including transactions under the Stockholders
Agreement), including using its commercially reasonable efforts to accomplish the following: (i)
the satisfaction of the conditions precedent set forth in Article VI, (ii) the obtaining of all
necessary actions or nonactions, waivers, consents, approvals, orders and authorizations from, and
the giving of any necessary notices to, Governmental Entities and other persons and the making of
all necessary registrations, declarations and filings (including filings under the HSR Act and
other registrations, declarations and filings with, or notices to, Governmental Entities, if any),
(iii) the taking of all reasonable steps to provide any supplemental information requested by a
Governmental Entity, including participating in meetings with
59
officials of such entity in the course of its review of this Agreement, the Merger or the
other transactions contemplated by this Agreement, (iv) the taking of all reasonable steps as may
be necessary to avoid any suit, claim, action, investigation or proceeding by any Governmental
Entity or third party and (v) the obtaining of all necessary consents, approvals or waivers from
any third party,
provided
, that this clause (v) shall not limit the rights of the Company
or its Board of Directors under Section 4.02(b). In connection with and without limiting the
generality of the foregoing, each of the Company and its Board of Directors shall, if any state
takeover statute or similar statute or regulation is or becomes applicable to this Agreement or any
of the Merger and the other transactions contemplated by this Agreement, including transactions
under the Stockholders Agreement, take all actions necessary to ensure that the Merger and the
other transactions contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or
regulation on this Agreement, the Stockholders Agreement, the Merger and the other transactions
contemplated by this Agreement. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, in no event shall Parent or Sub be obligated to, and the Company and its
Subsidiaries shall not without the prior written consent of Parent, agree or proffer to divest or
hold separate, or enter into any licensing, business restriction or similar arrangement with
respect to, any assets (whether tangible or intangible) or any portion of any business of Parent,
the Company or any of their respective Subsidiaries. Notwithstanding the foregoing or any other
provision of this Agreement to the contrary, in no event shall Parent or any of its Subsidiaries be
obligated to litigate or participate in the litigation of any suit, claim, action or proceeding,
whether judicial or administrative, brought by any Governmental Entity (A) challenging or seeking
to restrain or prohibit the consummation of the Merger or the other transactions contemplated by
this Agreement, including transactions under the Stockholders Agreement, or seeking to obtain from
Parent or any of its Subsidiaries any damages in relation therewith; (B) seeking to prohibit or
limit in any respect, or place any conditions on, the ownership or operation by the Company, Parent
or any of their respective Affiliates of all or any portion of the business or assets or any
product of the Company or its Subsidiaries or Parent or its Subsidiaries or to require any such
person to dispose of, license (whether pursuant to an exclusive or nonexclusive license) or hold
separate all or any portion of the business or assets or any product of the Company or its
Subsidiaries or Parent or its Subsidiaries, in each case as a result of or in connection with the
Merger or any of the other transactions contemplated by this Agreement; (C) seeking to directly or
indirectly impose limitations on the ability of Parent or any of its Affiliates to acquire or hold,
or exercise full rights of ownership of, any shares of Company Common Stock or any shares of common
stock of the Surviving Corporation or any of Parents Subsidiaries, including the right to vote
Company Common Stock or the shares of common stock of the Surviving Corporation or any of Parents
Subsidiaries on all matters properly presented to the stockholders of the Company, the Surviving
Corporation or any of Parents Subsidiaries, respectively; or (D) seeking to (1) directly or
indirectly prohibit Parent or any of its Affiliates from effectively controlling in any respect any
of the business or operations of the Company or its or Parents Subsidiaries or (2) directly or
60
indirectly prevent the Company or its or Parents Subsidiaries from operating any of their
business in substantially the same manner as operated by the Company and its or Parents
Subsidiaries immediately prior to the date of this Agreement. The Company and Parent shall provide
such assistance, information and cooperation to each other as is reasonably required to obtain any
such actions, nonactions, waivers, consents, approvals, orders and authorizations and, in
connection therewith, shall notify the other person promptly following the receipt of any comments
from any Governmental Entity and of any request by any Governmental Entity for amendments,
supplements or additional information in respect of any registration, declaration or filing with,
or notice to, such Governmental Entity and shall supply the other person with copies of all
correspondence between such person or any of its representatives, on the one hand, and any
Governmental Entity, on the other hand.
(b) (i) In connection with the continuing operation of the business of the Company and its
Subsidiaries between the date of this Agreement and the Effective Time, subject to applicable Law,
the Company shall consult in good faith on a reasonably regular basis with Parent to report
material, individually or in the aggregate, operational developments, material changes in the
status of relationships with customers and resellers, material changes in the status of ongoing
operations and other matters reasonably requested by Parent pursuant to procedures reasonably
requested by Parent;
provided
,
however
, that no such consultation shall operate as
a waiver or otherwise affect any representation, warranty, covenant, agreement or other provision
in this Agreement, or the obligations of the parties (or remedies with respect thereto) or the
conditions to the obligations of the parties under this Agreement.
(ii) Except as prohibited by applicable Law, the Company shall promptly notify
Parent in writing of:
(A) the occurrence of any matter or event that (1) is, or that is
reasonably likely to be, material (individually or in the aggregate) to the
business, assets, properties, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole, or (2) has
resulted, or is reasonably likely to result, in (I) any representation and
warranty of the Company set forth in this Agreement that is qualified as to
materiality becoming untrue, (II) any such representation and warranty that is
not so qualified becoming untrue in any material respect or (III) any condition
to the transactions contemplated hereby and set forth in Section 6.02 not being
satisfied;
(B) the failure of the Company to perform in any material respect any
obligation to be performed by it under this Agreement;
(C) any notice or other communication from any person (other than a
Governmental Entity) alleging that notice to or consent of such
61
person is required in connection with the Merger or the other transactions
contemplated by this Agreement;
(D) any notice or other communication from any customer, distributor or
reseller to the effect that such customer, distributor or reseller is
terminating or otherwise materially adversely modifying its relationship with
Company or any of its Subsidiaries as a result of the Merger or the other
transactions contemplated by this Agreement;
(E) any material notice or other material communication from any
Governmental Entity in connection with the Merger or the other transactions
contemplated by this Agreement, and a copy of any such notice or communication
shall be furnished to Parent, together with the Companys written notice;
(F) any filing or notice made by the Company with any Governmental Entity
in connection with the Merger or the other transactions contemplated by this
Agreement, and a copy of any such filing or notice shall be furnished to Parent
together with the Companys written notice; and
(G) any actions, suits, claims, investigations or proceedings commenced
or, to the knowledge of the Company, threatened against, relating to or
involving or otherwise affecting the Company or any of its Subsidiaries that,
if pending on the date of this Agreement, would have been required to have been
disclosed pursuant to Section 3.01(h) or that relate to the consummation of the
Merger or the other transactions contemplated by this Agreement;
provided
,
however
, that no such notification shall operate as a waiver or otherwise
affect any representation, warranty, covenant, agreement or other provision in this Agreement, or
the obligations of the parties (or remedies with respect thereto) or the conditions to the
obligations of the parties under this Agreement.
(iii) Parent shall give prompt notice to the Company of (A) any representation or
warranty made by Parent or Sub contained in this Agreement becoming untrue or
inaccurate such that the condition set forth in Section 6.03(a) could not be satisfied
or (B) the failure of Parent or Sub to perform in any material respect any obligation
to be performed by such party under this Agreement such that the condition set forth in
Section 6.03(b) could not be satisfied;
provided
,
however
, that no such
notification shall affect the representations, warranties, covenants, agreements or
obligations of the parties (or remedies with respect thereto) or the conditions to the
obligations of the parties under this Agreement.
62
(c) Without limiting the generality of the foregoing, the Company shall give Parent the
opportunity to participate in the defense, at its own cost, of any litigation against the Company
and/or its directors relating to the Merger or the other transactions contemplated by this
Agreement, including transactions under the Stockholders Agreement, and will obtain the prior
written consent of Parent prior to settling or satisfying any such claim, it being understood and
agreed that this Section 5.03(c) shall not give Parent the right to direct such defense.
(d) Immediately following the execution and delivery of this Agreement by each of the parties
hereto, Parent, as the sole stockholder of Sub, will adopt this Agreement.
SECTION 5.04.
Equity Awards.
(a) As soon as practicable following the date of this
Agreement, the Board of Directors of the Company (or, if appropriate, any committee administering
the Company Stock Plans) shall adopt such resolutions or take such other actions (including
obtaining any required consents) as may be required to effect the following:
(i) at the Effective Time, each Cash-Out Option shall be cancelled and the holder
thereof shall be entitled to receive in consideration for such cancellation an amount of
cash equal to the product of (A) the number of shares of Company Common Stock that are
subject to such Cash-Out Option immediately prior to the Effective Time and (B) the
excess, if any, of the Merger Consideration over the exercise price per share of Company
Common Stock subject to such Stock Option, which amount shall be payable to such holder at
or as soon as practicable following the Effective Time;
(ii) at the Effective Time, each Rollover Option shall be converted into an option to
acquire, on substantially the same terms and conditions as were applicable under the
Rollover Option (other than as set forth in this Section 5.04(a)(ii) or any applicable
Offer Letter), the number of shares of Parent Common Stock (rounded down to the nearest
whole share) determined by multiplying the number of shares of Company Common Stock
subject to such Rollover Option by the Exchange Ratio (as defined below), at an exercise
price per share of Parent Common Stock equal to (A) the per share exercise price for the
shares of Company Common Stock otherwise purchasable pursuant to such Rollover Option
divided by (B) the Exchange Ratio (each, as so adjusted, an
Adjusted Option
);
provided that such exercise price shall be rounded up to the nearest whole cent. The
adjustments provided in this Section 5.04(a)(ii) with respect to any Stock Options,
whether or not they are incentive stock options as defined in Section 422 of the Code,
are intended to be effected in a manner which is consistent with Section 424(a) of the
Code. As soon as reasonably practicable after the Effective Time, Parent shall deliver to
the holders of Adjusted Options appropriate notices setting forth such holders rights
pursuant
63
to the Company Stock Plans and Stock Option Agreements evidencing the grants of such
Adjusted Options and that such Adjusted Options and related agreements shall be assumed by
Parent and shall continue in effect on the same terms and conditions (other than as
specifically set forth in any applicable Offer Letter or with respect to exercisability
prior to vesting and subject to the adjustments required by this Section 5.04 after giving
effect to the Merger);
(iii) Parent shall pay to each RSU Holder promptly, and in no event later than twenty
business days, after each applicable Lapse Date, the RSU Applicable Amount; provided that
if such RSU Holders employment with Parent terminates for any reason on or before any
such Lapse Date, Parent shall have no obligation to pay, and such RSU Holder shall have no
right to receive, such RSU Applicable Amount or the RSU Applicable Amount attributable to
any subsequent Lapse Date (other than with respect to RSUs that vest pursuant to the
Company Stock Plans or any other terms of such RSUs as in effect immediately prior to the
Effective Time or due to any provisions for acceleration of vesting in any applicable
Offer Letter or any other offer letter that Parent enters into with such RSU Holder);
(iv) each provision in each Benefit Plan and Benefit Agreement providing for the
issuance, transfer or grant of any shares of Company Common Stock or any Stock Options,
RSUs or any other interests in respect of any capital stock (including any phantom stock
or stock appreciation rights) of the Company shall be deleted prior to the Effective Time,
and the Company shall ensure prior to the Effective Time that, following the Effective
Time, there shall be no rights to acquire shares of Company Common Stock, Stock Options,
RSUs or any other interests in respect of any capital stock (including any phantom stock
or stock appreciation rights) of the Company or the Surviving Corporation;
(v) any shares of Company Common Stock that remain available for issuance pursuant to
any Company Stock Plan as of the Effective Time (the
Residual Shares
) shall be
converted at the Effective Time into the number of shares of Parent Common Stock equal to
the product of the number of such Residual Shares and the Exchange Ratio (such shares of
Parent Common Stock, the
Assumed Shares
); and
(vi) As used in this Agreement, the following terms shall have the meanings specified
below:
Cash-Out Option
means any Stock Option (whether vested or unvested) that (x)
is outstanding immediately prior to the Effective Time that was granted under the 2003 Plan
or the 1993 Plan or (y) is designated as a Stock Option that will terminate as of the
Effective Time pursuant to the terms of any agreement between Parent or the Company on one
hand, and the holder of such Stock Option, on the other hand.
64
Exchange Ratio
means a fraction, the numerator of which is the Merger
Consideration applicable to a share of Company Common Stock and the denominator of which is
the average closing price per share of Parent Common Stock on the New York Stock Exchange
Composite Transactions Tape on the 20 trading days immediately preceding the Closing Date.
Lapse Date
means, with respect to an RSU Holder, any date after the Closing
Date on which any RSU held by such RSU Holder at the Effective Time would have vested
pursuant to the Company Stock Plans or any other terms of such RSU as in effect immediately
prior to the Effective Time.
Parent Common Stock
means common stock of Parent, par value $0.20 per share.
RSU Applicable Amount
means, with respect to any Lapse Date, an amount in
cash equal to the product of (x) the Merger Consideration and (y) the number of RSUs held
by the applicable RSU Holder at the Effective Time that, on such Lapse Date, would have
vested pursuant to the Company Stock Plans or any other terms of such RSUs as in effect
immediately prior to the Effective Time.
RSU Holder
means any person who, at the Effective Time, is a holder of RSUs.
Rollover Option
means any Stock Option that is not a Cash-Out Option.
(b) As soon as practicable following the date of this Agreement, the Board of Directors of the
Company (or, if appropriate, any committee administering the ESPP) shall adopt such resolutions or
take such other actions as may be required so that (i) participation in the ESPP shall be limited
to those employees who are participants on the date of this Agreement, (ii) except to the extent
necessary to maintain the status of the ESPP as an employee stock purchase plan within the
meaning of Section 423 of the Code and the Treasury Regulations thereunder, participants may not
increase their payroll deduction elections or rate of contributions from those in effect on the
date of this Agreement, (iii) no contribution period shall be commenced after the date of this
Agreement, (iv) the ESPP shall terminate, effective upon the earlier of the first purchase date
following the date of this Agreement and the last business day before the Effective Time, but
subsequent to the exercise of purchase rights on such purchase date (in accordance with the terms
of the ESPP) or termination of such purchase rights on such last business day (as provided for in
the following clause (v)), as applicable, and (v) if the ESPP remains in effect on the last
business day before the Effective Time, each purchase right under the ESPP outstanding on such day
shall be terminated in exchange for a cash payment equal to the excess of (A) the Merger
Consideration
over
(B) 85% of the lesser of (1) the fair market value of a share of Company
Common Stock on the first business day of the applicable contribution period and (2) the fair
market value of a share of Company Common Stock on the last business day of the applicable
contribution period;
65
provided
that the number of purchase rights with respect to which clause (v) shall be
applicable shall be subject to the limitations under the ESPP regarding the maximum number and
value of shares purchasable per participant with respect to any contribution period.
(c) All amounts payable pursuant to this Section 5.04 shall be subject to any required
withholding of taxes and shall be paid without interest.
(d) The Company shall take all reasonable steps as may be required to cause the transactions
contemplated by this Section 5.04 and any other dispositions of Company equity securities
(including derivative securities) in connection with this Agreement by each individual who is a
director or officer of the Company subject to Section 16 of the Exchange Act to be exempt under
Rule 16b-3 promulgated under the Exchange Act.
(e) At the Effective Time, by virtue of the Merger and without the need of any further
corporate action, Parent shall assume the Company Stock Plans (other than the ESPP), with the
result that (i) all obligations of the Company under such Company Stock Plans, including with
respect to Rollover Options outstanding at the Effective Time, shall be obligations of Parent
following the Effective Time and (ii) Parent may issue the Assumed Shares after the Effective Time
pursuant to the exercise of options or other equity awards granted under such Company Stock Plans
or any other plan of Parent or any its Affiliates. Parent may assume the Adjusted Options under an
existing equity incentive plan.
SECTION 5.05.
Indemnification, Exculpation and Insurance.
(a) Parent and Sub agree
that all rights to indemnification, advancement of expenses and exculpation from liabilities for
acts or omissions occurring at or prior to the Effective Time now existing in favor of the current
or former directors or officers of the Company and its Subsidiaries as provided in their respective
certificates of incorporation or bylaws (or comparable organizational documents) and any
indemnification or other agreements of the Company as in effect on the date of this Agreement and
set forth in Section 5.05 of the Company Letter shall be assumed by the Surviving Corporation in
the Merger, without further action, at the Effective Time, and shall survive the Merger and shall
continue in full force and effect in accordance with their terms, and Parent shall cause the
Surviving Corporation to comply with and honor the foregoing obligations without termination or
modification thereof.
(b) In the event that the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other person and is not the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers or conveys all or
substantially all its properties and assets to any person, or if Parent dissolves the Surviving
Corporation then, and in each such case, Parent shall cause proper provision to be made so that the
successors and assigns of the Surviving Corporation assume the obligations set forth in this
Section 5.05 and Parent shall cause
66
such successors and assigns to comply with and honor the foregoing obligations without
termination or modification thereof.
(c) Parent shall obtain, or cause to be obtained, as of the Effective Time a tail insurance
policy with a claims period of six years from the Effective Time with respect to directors and
officers liability insurance covering each person currently covered by the Companys directors
and officers liability insurance policy for acts or omissions occurring prior to the Effective
Time on terms that are no less favorable than those of such policy of the Company in effect on the
date of this Agreement, which insurance shall, prior to the Closing, be in effect and prepaid for
such six-year period;
provided
that in no event shall Parent or the Surviving Corporation
be required to pay, with respect to the entire six-year period following the Effective Time,
premiums for insurance under this Section 5.05(c) which in the aggregate exceed 300% of the
aggregate premiums paid by the Company for the period from September 30, 2009 to, and including,
September 30, 2010, for such purpose (which premiums for such period are hereby represented and
warranted by the Company to be $251,350);
provided
that Parent shall nevertheless be
obligated to provide such coverage, with respect to the entire six-year period following the
Effective Time, as may be obtained for such 300% amount. For the avoidance of doubt, nothing in
this Section 5.05(c) shall require Parent to make expenditures exceeding $754,050 in the aggregate.
If requested by Parent, the Company shall issue a broker of record letter naming the insurance
broker selected by Parent to effect such runoff coverage, and the Company shall provide all
cooperation and information reasonably requested by Parent and the selected insurance broker with
respect to the procurement of such runoff coverage.
(d) The provisions of this Section 5.05 (i) are intended to be for the benefit of, and will be
enforceable by, each indemnified party, his or her heirs and his or her representatives and (ii)
are in addition to, and not in substitution for, any other rights to indemnification or
contribution that any such person may have by contract or otherwise. The obligations of Parent and
the Surviving Corporation under this Section 5.05 shall not be terminated or modified in such a
manner as to adversely affect the rights of any indemnified party to whom this Section 5.05 applies
without the prior written consent of such affected indemnified party.
SECTION 5.06.
Fees and Expenses.
(a) Except as expressly set forth in this Section
5.06, all fees and expenses incurred in connection with this Agreement, the Stockholders Agreement
and the transactions contemplated by this Agreement shall be paid by the party incurring such fees
or expenses, whether or not the Merger is consummated.
(b) In the event that (i) a Takeover Proposal has been made to the Company or its stockholders
or any person has announced an intention (whether or not conditional and whether or not withdrawn)
to make a Takeover Proposal or a Takeover Proposal otherwise becomes known to the Company or
generally known to the
67
stockholders of the Company and thereafter (A) this Agreement is terminated by either Parent
or the Company pursuant to Section 7.01(b)(i) or Section 7.01(b)(iii) and (B) prior to the date
that is 12 months after such termination, the Company or any of its Subsidiaries enters into any
Acquisition Agreement with respect to any Takeover Proposal or any Takeover Proposal is consummated
(solely for purposes of this Section 5.06(b)(i)(B), the term
Takeover Proposal
shall have
the meaning set forth in the definition of Takeover Proposal contained in Section 4.02(a) except
that all references to 10% shall be deemed references to 35%) or (ii) this Agreement is terminated
by Parent pursuant to Section 7.01(c), then the Company shall pay Parent a fee equal to $14,250,000
(the
Termination Fee
) by wire transfer of same-day funds (A) in the case of a termination
by Parent pursuant to Section 7.01(c), within two business days after such termination and (B) in
the case of a payment as a result of any event referred to in Section 5.06(b)(i)(B), no later than
the first to occur of such events, in each case to an account designated by Parent.
(c) The Company acknowledges that the agreements contained in this Section 5.06 are an
integral part of the transactions contemplated by this Agreement and that, without these
agreements, Parent would not have entered into this Agreement. Accordingly, if the Company fails
promptly to pay the amounts due pursuant to this Section 5.06 and, in order to obtain such payment,
Parent commences a suit that results in a judgment against the Company for the amounts set forth in
this Section 5.06, the Company shall pay to Parent its reasonable costs and expenses (including
attorneys fees and expenses) in connection with such suit and any appeal relating thereto,
together with interest on the amounts set forth in this Section 5.06 at the prime rate of Citibank,
N.A. in effect on the date such payment was required to be made.
SECTION 5.07.
Public Announcements.
The parties agree that the initial press release
to be issued with respect to the transactions contemplated by this Agreement, including
transactions under the Stockholders Agreement, shall be in the form heretofore agreed to by the
parties. Parent and Sub, on the one hand, and the Company, on the other hand, shall, to the extent
at all reasonably practicable, consult with each other before making, and give each other a
reasonable opportunity to review and comment upon, any press release or other public statements
with respect to this Agreement, the Merger and the other transactions contemplated by this
Agreement, and shall not issue any such press release or make any such public statement prior to
such reasonably practicable consultation, except as may be required by applicable Law, court
process or by obligations pursuant to any listing agreement with any national securities exchange
or national securities quotation system.
SECTION 5.08.
Resignation of Directors.
At the Closing, if requested by the Parent,
the Company shall deliver to Parent evidence reasonably satisfactory to Parent of the resignation
of any or all the directors of the Company and any Subsidiary of the Company, effective at the
Effective Time.
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SECTION 5.09.
Sub Compliance.
Parent shall cause Sub to comply with all of Subs
obligations under this Agreement.
ARTICLE VI
Conditions Precedent
SECTION 6.01.
Conditions to Each Partys Obligation to Effect the Merger.
The
respective obligation of each party to effect the Merger is subject to the satisfaction or waiver
on or prior to the Closing Date of the following conditions:
(a)
Stockholder Approval.
The Stockholder Approval shall have been obtained.
(b)
Antitrust.
Any waiting period (and any extension thereof) applicable to the
Merger under the HSR Act shall have been terminated or shall have expired. Any other approval or
waiting period under any other applicable competition, merger control, antitrust or similar Law
shall have been obtained or terminated or shall have expired.
(c)
No Injunctions or Legal Restraints.
No temporary restraining order, preliminary
or permanent injunction or other Judgment issued by any court of competent jurisdiction or other
legal restraint or prohibition (collectively,
Legal Restraints
) that has the effect of
preventing the consummation of the Merger shall be in effect.
SECTION 6.02.
Conditions to Obligations of Parent and Sub.
The obligations of Parent
and Sub to effect the Merger are further subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(a)
Representations and Warranties.
The representations and warranties of the Company
contained herein that are qualified as to materiality or Material Adverse Effect shall be true and
correct (as so qualified), and the representations and warranties of the Company contained herein
that are not so qualified shall be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Closing Date with the same effect as though made as of the
Closing Date, except that the accuracy of representations and warranties that by their terms speak
as of a specified date will be determined as of such date. Parent shall have received a
certificate signed on behalf of the Company by the chief executive officer and chief financial
officer of the Company to such effect.
(b)
Performance of Obligations of the Company.
The Company shall have performed in
all material respects all obligations required to be performed by it under this Agreement at or
prior to the Closing Date, and Parent shall have received a certificate signed on behalf of the
Company by the chief executive officer and the chief financial officer of the Company to such
effect.
69
(c)
No Litigation.
There shall not be pending any claim, suit, action or proceeding
brought or threatened by any Governmental Entity (i) challenging or seeking to restrain or prohibit
the consummation of the Merger or challenging this Agreement, or seeking to obtain from Parent or
any of its Subsidiaries any damages that are material, individually or in the aggregate, in
relation to the value of the Company and its Subsidiaries, taken as a whole, (ii) seeking to
prohibit or limit in any respect, or place any conditions on, the ownership or operation by the
Company, Parent or all or any of their respective Affiliates of all or any portion of the business
or assets or any product of the Company or its Subsidiaries or Parent or its Subsidiaries or to
require any such person to dispose of, license (whether pursuant to an exclusive or nonexclusive
license) or hold separate all or any portion of the business or assets or any product of the
Company or its Subsidiaries or Parent or its Subsidiaries, in each case as a result of or in
connection with the Merger or the other transactions contemplated by this Agreement, (iii) seeking
to impose limitations on the ability of Parent or any of its Affiliates to acquire or hold, or
exercise full rights of ownership of, any shares of Company Common Stock or any shares of common
stock of the Surviving Corporation or any of Parents Subsidiaries, including the right to vote
Company Common Stock or the shares of common stock of the Surviving Corporation or any of Parents
Subsidiaries on all matters properly presented to the stockholders of the Company or the Surviving
Corporation or any of Parents Subsidiaries, respectively, or (iv) seeking to (A) prohibit Parent
or any of its Affiliates from effectively controlling in any respect any of the business or
operations of the Company or its or Parents Subsidiaries or (B) prevent the Company or its or
Parents Subsidiaries from operating any of their respective businesses in substantially the same
manner as operated by the Company and its or Parents Subsidiaries prior to the date of this
Agreement.
(d)
Legal Restraint.
No Legal Restraint that could reasonably be expected to result,
directly or indirectly, in any of the effects referred to in clauses (i) through (iv) of Section
6.02(c) shall be in effect.
(e)
Consents.
Parent shall have received evidence, in form and substance reasonably
satisfactory to it, that Parent or the Company shall have obtained (i) all material (individually
or in the aggregate) consents, approvals, authorizations, qualifications and orders of all
Governmental Entities legally required to effect the Merger and (ii) all consents, licenses
(whether exclusive or nonexclusive), approvals and waivers set forth on Section 6.02(e) of the
Company Letter.
(f)
No Material Adverse Effect.
Since the date of this Agreement, there shall not
have occurred a Material Adverse Effect. Parent shall have received a certificate signed on behalf
of the Company by the chief executive officer and the chief financial officer of the Company to
such effect.
70
SECTION 6.03.
Conditions to Obligation of the Company.
The obligation of the Company
to effect the Merger is further subject to the satisfaction or waiver on or prior to the Closing
Date of the following conditions:
(a)
Representations and Warranties.
The representations and warranties of Parent and
Sub contained herein that are qualified as to materiality shall be true and correct (as so
qualified), and the representations and warranties of Parent and Sub contained herein that are not
so qualified shall be true and correct in all material respects, in each case as of the date of
this Agreement and as of the Closing Date with the same effect as though made as of the Closing
Date, except that the accuracy of representations and warranties that by their terms speak as of a
specified date will be determined as of such date. The Company shall have received a certificate
signed on behalf of Parent by an authorized signatory of Parent to such effect.
(b)
Performance of Obligations of Parent and Sub.
Parent and Sub shall have performed
in all material respects all obligations required to be performed by them under this Agreement at
or prior to the Closing Date, and the Company shall have received a certificate signed on behalf of
Parent by an authorized signatory of Parent to such effect.
SECTION 6.04.
Frustration of Closing Conditions.
None of the Company, Parent or Sub
may rely on the failure of any condition set forth in Section 6.01, 6.02 or 6.03, as the case may
be, to be satisfied if such failure was caused by such partys failure to use commercially
reasonable efforts to consummate the Merger and the other transactions contemplated by this
Agreement, as required by and subject to Section 5.03, or by such partys breach of any other
provision of this Agreement.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01.
Termination.
This Agreement may be terminated, and the Merger
contemplated hereby may be abandoned, at any time prior to the Effective Time, whether before or
after the Stockholder Approval has been obtained, upon written notice (other than in the case of
Section 7.01(a) below) from the terminating party to the non-terminating party specifying the
subsection of this Section 7.01 pursuant to which such termination is effected:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company, if:
(i) the Merger shall not have been consummated by the date that is six months from
date of this Agreement (the
Termination Date
) for any reason;
provided
,
however
, that the right to terminate this Agreement under this
71
Section 7.01(b)(i) shall not be available to any party whose action or failure to act has
been a principal cause of or resulted in the failure of the Merger to occur on or before
such date and such action or failure to act constitutes a breach of this Agreement;
(ii) any Legal Restraint having the effect set forth in Section 6.01(c) shall be in
effect and shall have become final and nonappealable; or
(iii) the Stockholders Meeting shall have been held and the Stockholder Approval
shall not have been obtained thereat or at any adjournment or postponement thereof;
(c) by Parent, in the event the Company has delivered an Adverse Recommendation Change Notice
or an Adverse Recommendation Change has occurred;
(d) by Parent, if (i) the Company shall have breached any of its representations or warranties
or failed to perform any of its covenants or other agreements contained in this Agreement, which
breach or failure to perform (A) would give rise to the failure of a condition set forth in Section
6.02(a) or 6.02(b) and (B) is incapable of being cured by the Company by the date that is 30
business days after such breach or failure or, if capable of being cured by the Company by such
date, the Company does not commence to cure such breach or failure within 10 business days after
its receipt of written notice thereof from Parent and diligently pursue such cure thereafter, or
(ii) if any Legal Restraint having any of the effects referred to in clauses (i) through (iv) of
Section 6.02(c) shall be in effect and shall have become final and nonappealable; or
(e) by the Company, if Parent shall have breached any of its representations or warranties or
failed to perform any of its covenants or other agreements contained in this Agreement, which
breach or failure to perform (i) would give rise to the failure of a condition set forth in Section
6.03(a) or 6.03(b) and (ii) is incapable of being cured by Parent or Sub by the date that is 30
business days after such breach or failure or, if capable of being cured by Parent or Sub by such
date, Parent or Sub, as the case may be, does not commence to cure such breach or failure within 10
business days after its receipt of written notice thereof from the Company and diligently pursue
such cure thereafter.
SECTION 7.02.
Effect of Termination.
In the event of termination of this Agreement by
either the Company or Parent as provided in Section 7.01, this Agreement shall forthwith become
void and have no effect, without any liability or obligation on the part of Parent, Sub or the
Company, other than the provisions of Section 3.01(v), the last sentence of Section 5.02(a),
Section 5.06, this Section 7.02 and Article VIII and except for any material, intentional breach by
a party of any of its representations, warranties, covenants or agreements set forth in this
Agreement (which material breach and liability
72
therefor shall not be affected by termination of this Agreement or any payment of the
Termination Fee pursuant to Section 5.06(b)).
SECTION 7.03.
Amendment.
This Agreement may be amended by the parties hereto at any
time, whether before or after the Stockholder Approval has been obtained;
provided
,
however
, that after the Stockholder Approval has been obtained, there shall be made no
amendment that by Law requires further approval by stockholders of the Company without the further
approval of such stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
SECTION 7.04.
Extension; Waiver.
At any time prior to the Effective Time, the parties
may (a) extend the time for the performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto or (c) waive compliance with any of the agreements or
conditions contained herein;
provided
,
however
, that after the Stockholder Approval
has been obtained, there shall be made no waiver that by Law requires further approval by
stockholders of the Company without the further approval of such stockholders. Any agreement on
the part of a party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party which specifically sets forth the terms of
such extension or waiver. The failure or delay by any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such rights nor shall any
single or partial exercise by any party to this Agreement of any of its rights under this Agreement
preclude any other or further exercise of such rights or any other rights under this Agreement.
ARTICLE VIII
General Provisions
SECTION 8.01.
Nonsurvival of Representations and Warranties.
None of the
representations and warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time. This Section 8.01 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the Effective Time.
SECTION 8.02.
Notices.
All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be delivered by hand or sent by facsimile or sent,
postage prepaid, by registered, certified or express mail or reputable overnight courier service
and shall be deemed given when so delivered by hand or sent by facsimile, or if mailed, three days
after mailing (one business day in the case of express mail or overnight courier service), as
follows (or at such other address for a party as shall be specified by notice given in accordance
with this Section 8.02):
73
if to Parent or Sub, to:
International Business Machines Corporation
New Orchard Road
Armonk, NY 10504
Facsimile: (914) 499-7803
Attention: Elias Mendoza
Vice President, Corporate Development
with a copy to:
International Business Machines Corporation
New Orchard Road
Armonk, NY 10504
Facsimile: (914) 499-6006
Attention: Mark Goldstein
Associate General Counsel
and with a copy to:
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Facsimile: (212) 474-3700
Attention: George F. Schoen, Esq.
if to the Company, to:
Unica Corporation
Reservoir Place North
170 Tracer Lane
Waltham, MA 02451
Facsimile: (781) 207-5834
Attention: Jason W. Joseph
Vice President, General Counsel & Secretary
with a copy to:
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, MA 02109
Facsimile: (617) 526-5000
Attention: Mark G. Borden, Esq.
Philip P. Rossetti, Esq.
74
SECTION 8.03.
Definitions
. For purposes of this Agreement:
(a)
Affiliate
means, with respect to any person, any other person directly or
indirectly controlling, controlled by or under common control with such first person;
(b) as it relates to the Company,
knowledge
means, with respect to any matter in
question, the actual knowledge, after reasonable inquiry, of any officer or employee of the Company
identified in Section 8.03(b) of the Company Letter;
(c)
Material Adverse Effect
means any state of facts, change, development, event,
effect, condition, occurrence, action or omission that, individually or in the aggregate, is
reasonably likely to (i) result in a material adverse effect on the business, assets, properties,
financial condition or results of operations of the Company and its Subsidiaries, taken as a whole,
(ii) prevent, materially impede or materially delay the consummation by the Company of the Merger
or the other transactions contemplated by this Agreement or (iii) result in a material impairment
on the ability of Parent and its Subsidiaries to continue operating the business of the Company and
its Subsidiaries after the Closing in substantially the same manner as it was operated immediately
prior to the date of this Agreement;
provided
,
however
, that none of the following
shall be deemed either alone or in combination to constitute, and none of the following shall be
taken into account in determining whether there has been or would be, a Material Adverse Effect on
the Company: (a) general, legal, market, economic or political conditions affecting the industry
in which the Company operates, provided that such conditions do not disproportionately affect the
Company and its Subsidiaries, taken as a whole, in relation to other companies in the industry in
which the Company operates, (b) changes affecting general worldwide economic or capital market
conditions (including changes in interest or exchange rates), provided that such changes do not
disproportionately affect the Company and its Subsidiaries, taken as a whole, in relation to other
companies in the industry in which the Company operates; (c) the pendency or announcement of this
Agreement or the anticipated consummation of the Merger, including, without limitation, any
reaction of any customer, employee, supplier, reseller, partner or other constituency to the
identity of Parent or any of the transactions contemplated by this Agreement;(d) any suit, claim,
action or proceeding that does not have a reasonable likelihood of success on the merits, whether
commenced or threatened, which asserts allegations of a breach of fiduciary duty relating to this
Agreement, violations of securities Laws in connection with the Proxy Statement or otherwise in
connection with any of the transactions contemplated by this Agreement; (e) any decrease in the
market price or trading volume of the Company Common Stock (it being understood that the underlying
cause or causes of any such decrease may be deemed to constitute, in and of itself or themselves, a
Material Adverse Effect and may be taken into consideration when determining whether
75
there has occurred a Material Adverse Effect); (f) the Companys failure to meet any internal
or published projections, forecasts or other predictions or published industry analyst expectations
of financial performance (it being understood that the underlying cause or causes of any such
failure may be deemed to constitute, in and of itself and themselves, a Material Adverse Effect and
may be taken into consideration when determining whether there has occurred a Material Adverse
Effect); (g) any change in GAAP or applicable Laws which occurs or becomes effective after the date
of this Agreement; (h) actions or omissions of the Company or any of its Subsidiaries taken with
the prior written consent of Parent; and (i) any natural disaster, any act or threat of terrorism
or war anywhere in the world, any armed hostilities or terrorist activities anywhere in the world,
any threat or escalation of armed hostilities or terrorist activities anywhere in the world to the
extent they do not disproportionately affect the Company and its Subsidiaries, taken as a whole, in
relation to other companies in the industry in which the Company operates.
(d)
person
means any natural person, corporation, limited liability company,
partnership, joint venture, trust, business association, Governmental Entity or other entity; and
(e) a
Subsidiary
of any person means any other person (i) more than 50% of whose
outstanding shares or securities representing the right to vote for the election of directors or
other managing authority of such other person are, now or hereafter, owned or controlled, directly
or indirectly, by such first person, but such other person shall be deemed to be a Subsidiary only
so long as such ownership or control exists, or (ii) which does not have outstanding shares or
securities with such right to vote, as may be the case in a partnership, joint venture or
unincorporated association, but more than 50% of whose ownership interest representing the right to
make the decisions for such other person is, now or hereafter, owned or controlled, directly or
indirectly, by such first person, but such other person shall be deemed to be a Subsidiary only so
long as such ownership or control exists.
SECTION 8.04.
Exhibits; Interpretation.
The headings contained in this Agreement or
in any Exhibit hereto and in the table of contents to this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement. Any capitalized terms
used in any Exhibit but not otherwise defined therein shall have the meaning as defined in this
Agreement. When a reference is made in this Agreement to an Article, Section, Subsection or
Exhibit, such reference shall be to a Section or Article of, or an Exhibit to, this Agreement
unless otherwise indicated. For all purposes hereof, the terms include, includes and
including shall be deemed followed by the words without limitation. The words hereof,
hereto, hereby, herein and hereunder and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement. The term or is not exclusive. The word extent in the phrase to the extent means
the degree to which a subject or other thing extends, and such phrase does not mean simply
76
if. Except as otherwise provided, any information made available to Parent by the Company
or its Subsidiaries shall include only that information contained in such documents stored on the
hard disk reflecting the contents of that certain virtual data room maintained by the Company
through Bowne & Co., Inc. and that Parents representatives have been granted access to as of 6:00
p.m., New York City time, on August 12, 2010, a copy of which shall be provided to Parent as
promptly as practicable following the date of this Agreement. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement
or instrument defined or referred to herein or in any agreement or instrument that is referred to
herein means such agreement or instrument as from time to time amended, modified or supplemented.
References to a person are also to its permitted successors and assigns.
SECTION 8.05.
Counterparts.
This Agreement may be executed in one or more
counterparts (including by facsimile), all of which shall be considered one and the same agreement
and shall become effective when one or more such counterparts have been signed by each of the
parties and delivered to the other parties.
SECTION 8.06.
Entire Agreement; No Third-Party Beneficiaries.
This Agreement (a)
together with the Exhibits hereto and the Company Letter, constitutes the entire agreement, and
supersedes all prior agreements and understandings, both written and oral, among the parties with
respect to the subject matter of this Agreement, except for the Confidentiality Agreement, and (b)
except for the provisions of Section 5.05, is not intended to confer upon any person other than the
parties hereto (and their respective successors and assigns) any rights (legal, equitable or
otherwise) or remedies, whether as third party beneficiaries or otherwise.
SECTION 8.07.
Governing Law.
This Agreement shall be governed by, and construed in
accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise
govern under applicable principles of conflicts of Laws thereof.
SECTION 8.08.
Assignment.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, in whole or in part, by operation of Law or otherwise by
any of the parties without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and obligations under this
Agreement to Parent or to any direct or indirect wholly owned Subsidiary of Parent, but no such
assignment shall relieve Sub of any of its obligations hereunder. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by, the
parties hereto and their respective successors and assigns.
SECTION 8.09.
Consent to Jurisdiction; Service of Process; Venue.
Each of the parties
hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the Delaware Court
of Chancery (and if the Delaware Court of Chancery shall be unavailable, any Delaware State court
and the Federal court of the United States of
77
America sitting in the State of Delaware) for the purposes of any suit, action or other
proceeding arising out of this Agreement or the Merger or any other transaction contemplated by
this Agreement (and agrees that no such action, suit or proceeding relating to this Agreement shall
be brought by it or any of its Subsidiaries except in such courts). Each of the parties further
agrees that, to the fullest extent permitted by applicable Law, service of any process, summons,
notice or document by U.S. registered mail to such persons respective address set forth above
shall be effective service of process for any action, suit or proceeding in the State of Delaware
with respect to any matters to which it has submitted to jurisdiction as set forth above in the
immediately preceding sentence. Each of the parties hereto irrevocably and unconditionally waives
(and agrees not to plead or claim), any objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement or the Merger or any of the other transactions
contemplated by this Agreement in the Delaware Court of Chancery (and if the Delaware Court of
Chancery shall be unavailable, in any Delaware State court or the Federal court of the United
States of America sitting in the State of Delaware) or that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
SECTION 8.10.
WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY
ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND
THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS,
THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 8.10.
SECTION 8.11.
Enforcement.
The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the parties hereto shall
be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in the Delaware Court of Chancery (and if
the Delaware Court of Chancery shall be unavailable, in any Delaware State court or the Federal
court of the United States of America sitting in the State of Delaware), this being in addition to
any other remedy to which they are entitled at Law or in equity. Each of the parties agrees that
it will not oppose the granting of an injunction, specific performance and other equitable relief
on the basis that (x) any party has an adequate remedy at law or (y) an award of specific
performance is not an appropriate remedy for any reason at law or equity.
78
SECTION 8.12.
Consents and Approvals.
For any matter under this Agreement requiring
the consent or approval of any party to be valid and binding on the parties hereto, such consent or
approval must be in writing and executed and delivered to the other parties by a person duly
authorized by such party to do so.
SECTION 8.13.
Severability.
If any provision of this Agreement or the application of
any such provision to any person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of any other provision hereof and the
invalidity of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
79
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement to be signed
by their respective officers thereunto duly authorized, all as of the date first written above.
|
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INTERNATIONAL BUSINESS MACHINES CORPORATION,
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|
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by
|
/s/ Elias Mendoza
|
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|
Name:
|
Elias Mendoza
|
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Title:
|
Vice President, Corporate Development
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AMAROO ACQUISITION CORP.,
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by
|
/s/ Jeff Doyle
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Name:
|
Jeff Doyle
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Title:
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President
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UNICA CORPORATION,
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by
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/s/ Yuchun Lee
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Name:
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Yuchun Lee
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Title:
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Chief Executive Officer,
President and Chairman
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80
EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SURVIVING CORPORATION
ARTICLE I
The name of the corporation (hereinafter called the
Corporation
) is Unica
Corporation.
ARTICLE II
The address of the Corporations registered office in the State of Delaware is 1209 Orange
Street, Wilmington, New Castle County, Delaware. The name of the registered agent at such address
is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of Delaware.
ARTICLE IV
The total number of shares of all classes of stock that the Corporation shall have authority
to issue is 1,000 shares of Common Stock having the par value of $0.01 per share.
ARTICLE V
The number of directors of the Corporation shall be fixed from time to time by the Board of
Directors of the Corporation.
ARTICLE VI
In furtherance and not in limitation of the powers conferred upon it by law, the Board of
Directors of the Corporation is expressly authorized to adopt, amend or repeal the Bylaws of the
Corporation.
ARTICLE VII
Unless and except to the extent that the Bylaws of the Corporation so require, the election of
directors of the Corporation need not be by written ballot.
ARTICLE VIII
To the fullest extent from time to time permitted by law, no director of the Corporation shall
be personally liable to any extent to the Corporation or its stockholders for monetary damages for
breach of his fiduciary duty as a director.
ARTICLE IX
Each person who is or was or had agreed to become a director or officer of the Corporation,
and each such person who is or was serving or who had agreed to serve at the request of the
Corporation as a director, officer, partner, member, employee or agent of another corporation,
partnership, limited liability company, joint venture, trust or other enterprise (including the
heirs, executor, administrators or estate of such person), shall be indemnified by the Corporation
to the fullest extent permitted from time to time by applicable law. Any repeal or modification of
this Article IX shall not adversely affect any right to indemnification of any person existing at
the time of such repeal or modification with respect to any matter occurring prior to such repeal
or modification.
2
Annex B
EXECUTION COPY
STOCKHOLDERS AGREEMENT dated as of August 12, 2010 (this
Agreement
), among INTERNATIONAL BUSINESS MACHINES CORPORATION, a
New York corporation (
Parent
), and each of THE INDIVIDUALS AND
OTHER PARTIES LISTED ON SCHEDULE A ATTACHED HERETO (each, a
Stockholder
and, collectively, the
Stockholders
).
WHEREAS Parent, Amaroo Acquisition Corp., a Delaware corporation and a wholly owned subsidiary
of Parent (
Sub
), and Unica Corporation, a Delaware corporation (the
Company
),
have contemporaneously with the execution of this Agreement entered into an Agreement and Plan of
Merger dated as of the date hereof (as the same may be amended or supplemented, the
Merger
Agreement
; capitalized terms used but not defined herein shall have the meanings set forth in
the Merger Agreement);
WHEREAS each Stockholder is the record or beneficial owner of the number of shares of Company
Common Stock set forth opposite such Stockholders name on Schedule A (such shares of capital stock
of the Company, the
Original Shares
, and together with any New Shares (as defined below),
the
Subject Shares
); and
WHEREAS as a condition to their willingness to enter into the Merger Agreement, Parent and Sub
have requested that the Stockholders enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties,
covenants and agreements set forth herein and in the Merger Agreement, each party hereto agrees as
follows:
SECTION 1.
Representations and Warranties of Each Stockholder.
Each Stockholder
jointly and severally hereby represents and warrants to Parent as follows:
(a)
Organization; Authority; Execution and Delivery; Enforceability.
If such
Stockholder is not a natural person, (i) such Stockholder is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization, (ii) the execution and
delivery of this Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated by this Agreement and the compliance by such Stockholder with the terms
of this Agreement have been duly authorized by all necessary action on the part of such
Stockholder and its governing body, members, stockholders and trustees, as applicable, and
(iii) no other proceedings on the part of such Stockholder (or such Stockholders governing body,
members, stockholders or trustees, as applicable) are necessary to authorize this Agreement, to
consummate the transactions contemplated by this Agreement or to comply with the terms of this
Agreement. Such Stockholder has all requisite corporate, company, partnership or other power and
authority to execute and deliver this Agreement (and each Person executing this Agreement on
behalf of such Stockholder that is not a natural person has full power, authority and capacity to
execute and deliver this Agreement on behalf of such Stockholder and to thereby bind such
Stockholder), to consummate the transactions contemplated by this Agreement and to comply with the
terms of this Agreement. This Agreement has been duly executed and delivered by such Stockholder
and, assuming due
authorization, execution and delivery by Parent, constitutes a valid and binding obligation
of such Stockholder, enforceable against such Stockholder in accordance with its terms. If such
Stockholder is married and the Subject Shares of such Stockholder constitute community property or
if spousal or other approval is required for this Agreement to be legal, valid and binding, this
Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholders spouse, enforceable against such spouse in accordance with its
terms.
(b)
No Conflicts; Consents.
The execution and delivery of this Agreement, the
consummation of the transactions contemplated by this Agreement and the compliance by such
Stockholder with the terms of this Agreement do not and will not conflict with, or result in any
violation or breach of, or default (with or without notice or lapse of time, or both) under, or
give rise to a right of, or result in termination, amendment, cancelation or acceleration of any
obligation or to loss of a material benefit under, or result in the creation of any Lien in or
upon any of the properties or assets of such Stockholder under, or give rise to any increased,
additional, accelerated or guaranteed rights or entitlements under, (i) if such Stockholder is not
a natural person, any provision of any certificate of incorporation, bylaws, or trust or other
organizational document of such Stockholder, (ii) any Contract to or by which such Stockholder is
a party or bound or to or by which any of the properties or assets of such Stockholder (including
such Stockholders Subject Shares) is bound or subject or (iii) subject to the governmental
filings and other matters referred to in the following sentence, any Law or Judgment, in each
case, applicable to such Stockholder or to such Stockholders properties or assets (including such
Stockholders Subject Shares) other than, in the case of clauses (ii) and (iii) of this paragraph,
conflicts, violations, breaches, defaults, rights, losses, Liens or entitlements that individually
or in the aggregate are not reasonably likely to (x) impair in any material respect the ability of
such Stockholder to perform its obligations under this Agreement or (y) prevent or materially
impede or delay the consummation of any of the transactions contemplated by this Agreement. No
consent, approval, order or authorization of, or registration, declaration or filing with, any
Governmental Entity or other Person (including with respect to natural persons, any spouse, and
with respect to trusts, any co-trustee or beneficiary) (
Consent
) is required by or with
respect to such Stockholder in connection with the execution and delivery of this Agreement by
such Stockholder, the consummation by such Stockholder of the transactions contemplated by this
Agreement or the compliance by such Stockholder with the terms of this Agreement, except for
(1) filings under the HSR Act and any other applicable competition, merger control, antitrust or
similar law or regulation, (2) filings with the SEC of such reports under the Exchange Act as may
be required in connection with this Agreement and the transactions contemplated hereby and (3)
those Consents which have already been obtained.
(c)
Ownership.
Such Stockholder is the record and beneficial owner of the number of
Original Shares set forth opposite such Stockholders name on Schedule A, and such Stockholders
Original Shares constitute all of the shares of Company Common Stock held of record, beneficially
owned or for which voting power or disposition power is held by such Stockholder. Such
Stockholder has good and marketable title, free and clear of any Liens, to those Original Shares
of which such Stockholder is the record owner. Such Stockholder does not own, of record or
beneficially, (i) any shares of capital stock of the Company other than the Original Shares or
(ii) any option, warrant, call or other right to acquire or receive capital stock or other equity
or voting interests in the Company, other than those set forth opposite such
Stockholders name on Schedule B. Such Stockholder has the sole right to vote and Transfer
such Stockholders Original Shares, and none of such Stockholders Original Shares are subject to
any voting trust or other agreement, arrangement or restriction with respect to the voting or the
Transfer of such Stockholders Original Shares, except as set forth in Sections 3 and 4 of this
Agreement.
(d)
Information.
None of the information relating to such Stockholder provided by or
on behalf of such Stockholder for inclusion in the Proxy Statement or any filing required to be
made with the SEC by the Company, Parent or Sub will, at the respective times such documents are
filed with the SEC and at the respective times such documents are first published, sent or given
to the Companys stockholders, at the time of any amendment or supplement of any such document or
at the time of the Stockholders Meeting, contain any untrue statement of material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading.
SECTION 2.
Representations and Warranties of Parent.
Parent hereby represents and
warrants to each Stockholder as follows: Parent has all requisite power and authority to execute
and deliver this Agreement, to consummate the transactions contemplated by this Agreement and to
comply with the terms of this Agreement. The execution and delivery of this Agreement by Parent,
the consummation by Parent of the transactions contemplated by this Agreement and the compliance by
Parent with the terms of this Agreement have been duly authorized by all necessary action on the
part of Parent and no other corporate proceedings on the part of Parent are necessary to authorize
this Agreement or to consummate the transactions contemplated by this Agreement. This Agreement
has been duly executed and delivered by Parent and, assuming due authorization (in the case of each
Stockholder that is not a natural person), execution and delivery by each Stockholder, constitutes
a valid and binding obligation of Parent, enforceable against Parent in accordance with its terms.
The execution and delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance by Parent with the terms of this Agreement will not,
conflict with, or result in any violation or breach of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of, or result in termination, cancelation or
acceleration of any obligation or to loss of a material benefit under, or result in the creation of
any Lien upon any of the properties or assets of Parent under, or give rise to any increased,
additional, accelerated or guaranteed rights or entitlements under, any provision of (i) the
certificate of incorporation or bylaws of Parent, (ii) any Contract to or by which Parent is a
party or bound or to or by which any of the properties or assets of Parent is subject or bound or
(iii) subject to the governmental filings and other matters referred to in the following sentence,
any Law or Judgment, in each case, applicable to Parent or its properties or assets other than, in
the case of clauses (ii) and (iii), conflicts, violations, breaches, defaults, rights, losses,
Liens or entitlements that individually or in the aggregate are not reasonably likely to (x) impair
in any material respect the ability of Parent to perform its obligations under this Agreement or
(y) prevent or materially impede or delay the consummation of any of the transactions contemplated
by this Agreement. No Consent is required by or with respect to Parent in connection with the
execution and delivery of this Agreement by Parent or the consummation by Parent of the
transactions contemplated hereby, other than as contemplated by the Merger Agreement.
SECTION 3.
Covenants of Each Stockholder.
Each Stockholder jointly and severally
covenants and agrees as follows:
(a) At any meeting of the stockholders of the Company called to vote upon the Merger
Agreement, the Merger or any of the other transactions contemplated by the Merger Agreement, or at
any postponement or adjournment thereof, or in any other circumstances upon which a vote, consent,
adoption or other approval (including by written consent solicitation) with respect to the Merger
Agreement, the Merger or any of the other transactions contemplated by the Merger Agreement is
sought, such Stockholder shall (i) appear at such meeting or otherwise cause its Subject Shares to
be counted as present thereat for purposes of calculating a quorum and (ii) vote (or cause to be
voted) all of such Stockholders Subject Shares in favor of, and shall consent to (or cause to be
consented to), the adoption of the Merger Agreement and the approval of the terms thereof and of
the Merger and each of the other transactions contemplated by the Merger Agreement.
(b) Prior to the date that is the later of (x) the date of the meeting of the stockholders of
the Company called to vote upon the Merger Agreement and (y) six months from the date of this
Agreement, at any meeting of the stockholders of the Company or at any postponement or adjournment
thereof or in any other circumstances upon which a vote, consent, adoption or other approval
(including by written consent solicitation) is sought, such Stockholder shall vote (or cause to be
voted) all of such Stockholders Subject Shares against, and shall not (and shall not commit or
agree to) consent to (or cause to be consented to), any of the following: (i) any Takeover
Proposal or any Acquisition Agreement relating thereto or (ii) any amendment of the Company
Certificate or the Company Bylaws (other than pursuant to or as contemplated by the Merger
Agreement) or any other proposal, action, agreement or transaction which, in the case of this
clause (ii), could reasonably be expected to (A) result in a breach of any covenant, agreement,
obligation, representation or warranty of the Company contained in the Merger Agreement or of the
Stockholders contained in this Agreement, (B) prevent, impede, interfere or be inconsistent with,
delay, discourage or adversely affect the timely consummation of the Merger or the other
transactions contemplated by the Merger Agreement or by this Agreement, (C) dilute in any material
respect the benefits to Parent or Sub of the Merger and the other transactions contemplated by the
Merger Agreement or by this Agreement or (D) change in any manner the voting rights of the Company
Common Stock (the matters described in clauses (i) and (ii), collectively, the
Vote-Down
Matters
).
(c) Such Stockholder shall not, and shall not commit or agree to, (i) sell, transfer, pledge,
exchange, assign, tender or otherwise dispose of (including by gift, merger or otherwise by
operation of law) (collectively,
Transfer
), or consent to or permit any Transfer of, any
Subject Shares (or any interest therein) or any rights to acquire any securities or equity
interests of the Company, or enter into any Contract, option, call or other arrangement with
respect to the Transfer (including any profit-sharing or other derivative arrangement) of any
Subject Shares (or any interest therein) or any rights to acquire any securities or equity
interests of the Company, to any Person other than pursuant to this Agreement or the Merger
Agreement, unless prior to any such Transfer the transferee of such Stockholders Subject Shares
is a party to this Agreement, enters into a stockholder agreement with Parent on terms
substantially identical to the terms of this Agreement or agrees to become a party to this
Agreement pursuant to a joinder agreement satisfactory to Parent, or (ii) enter into any voting
arrangement, whether
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by proxy, voting agreement or otherwise, with respect to any Subject Shares or rights to
acquire any securities or equity interests of the Company, other than this Agreement. Each
certificate or other instrument representing any Subject Shares shall bear a legend that such
Subject Shares are subject to the provisions of this Agreement, including this Section 3(c);
provided
,
however
, that nothing contained herein shall restrict the ability of
such Stockholder to exercise any Stock Options.
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(d) (i) Such Stockholder shall not commit or agree to take any action inconsistent with or
challenging the transactions contemplated by, or the terms of, this Agreement or the Merger
Agreement. Such Stockholder hereby waives any rights of appraisal, or rights to dissent from the
Merger, that such Stockholder may have.
(ii) Such Stockholder shall not, directly or indirectly, issue any press release with
respect to the Merger Agreement, this Agreement, the Merger or any of the other transactions
contemplated by the Merger Agreement or by this Agreement without the prior written consent
of Parent, except as may be required by applicable Law or court process.
(iii) Such Stockholder shall use commercially reasonable efforts to consult with Parent
prior to making any public statement with respect to the Merger Agreement, this Agreement,
the Merger or any of the other transactions contemplated by the Merger Agreement or by this
Agreement.
(e) Such Stockholder hereby agrees that, in the event (i) of any stock or extraordinary
dividend or other distribution, stock split, reverse stock split, recapitalization,
reclassification, reorganization, combination or other like change, of or affecting the Subject
Shares or (ii) that such Stockholder purchases or otherwise acquires beneficial ownership of or an
interest in, or acquires the right to vote or share in the voting of, any shares of capital stock
of the Company, in each case after the execution of this Agreement (including by conversion, the
exercise of Stock Options, the vesting of RSUs, operation of law or otherwise) (collectively, the
New Shares
), such Stockholder shall deliver promptly to Parent written notice of its
acquisition or receipt of New Shares which notice shall state the number of New Shares so acquired
or received. Such Stockholder agrees that any New Shares acquired or received by such Stockholder
pursuant to clause (i) or (ii) of this paragraph shall be subject to the terms of this Agreement,
including all covenants, agreements, obligations, representations and warranties set forth herein,
and shall constitute Subject Shares to the same extent as if those New Shares were owned by such
Stockholder on the date of this Agreement. Such Stockholder agrees that this Agreement and the
obligations hereunder shall be binding upon any Person to which record or beneficial ownership of
such Stockholders Subject Shares shall pass, whether by operation of Law or otherwise, including
such Stockholders heirs, guardians, administrators or successors, and such Stockholder further
agrees to take all actions necessary to effectuate the foregoing.
SECTION 4.
Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder
hereby irrevocably grants to, and appoints, Parent and any other individual designated in writing
by Parent, and each of them individually, such Stockholders proxy and attorney-in-fact (with full
power of substitution and re-substitution), for and in the name, place
and stead of such Stockholder, to vote all of such Stockholders Subject Shares at any meeting
of stockholders of the Company or any adjournment or postponement thereof, or grant a consent or
approval in respect of such Stockholders Subject Shares, (i) in favor of the adoption of the
Merger Agreement and the approval of the terms thereof and of the Merger and each of the other
transactions contemplated by the Merger Agreement, (ii) against any Vote-Down Matter and
(iii) otherwise in accordance with Section 3 of this Agreement. The proxy granted in this
Section 4 shall expire upon the expiration of all rights of Parent and Sub under Section 3 of this
Agreement.
(b) Each Stockholder represents that any proxies heretofore given in respect of such
Stockholders Subject Shares are not irrevocable, and that all such proxies are hereby revoked.
(c) Each Stockholder hereby affirms that the irrevocable proxy set forth in this Section 4 is
given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is
given to secure the performance of the duties of such Stockholder under this Agreement. Each
Stockholder hereby further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked. Each Stockholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. Each such irrevocable
proxy is executed and intended to be irrevocable in accordance with the provisions of
Section 212(e) of the DGCL.
SECTION 5.
Further Assurances.
Each Stockholder shall, from time to time, execute and
deliver, or cause to be executed and delivered, such additional or further consents, documents and
other instruments as Parent may request for the purpose of effectuating the matters covered by this
Agreement, including the grant of the proxies set forth in Section 4 of this Agreement.
SECTION 6.
Assignment.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, in whole or in part, by operation of Law or otherwise, by
any of the parties hereto without the prior written consent of the other parties hereto, except
that Parent may in its sole discretion assign, in whole or in one or more parts, any or all of its
rights, interests or obligations under this Agreement to any direct or indirect wholly owned
Subsidiary of Parent, but no such assignment shall relieve Parent of any of its obligations under
this Agreement. Any purported assignment in violation of this Section 6 shall be void. Subject to
the preceding sentences of this Section 6, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by, the parties hereto and their respective successors and assigns.
SECTION 7.
Termination.
This Agreement shall terminate upon the earlier of (i) the
Effective Time and (ii) the termination of the Merger Agreement in accordance with its terms, other
than Sections 3(b), 4(a) and 8, which shall survive and instead shall expire upon the expiration of
all rights of Parent and Sub thereunder.
SECTION 8.
General Provisions.
(a)
Amendments.
This Agreement may not be
amended except by an instrument in writing signed by each of the parties hereto.
(b)
Notices.
All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand or sent by facsimile or sent, postage
prepaid, by registered, certified or express mail or reputable overnight courier service and shall
be deemed given when so delivered by hand or sent by facsimile, or if mailed, three days after
mailing (one business day in the case of express mail or overnight courier service), to Parent in
accordance with Section 8.02 of the Merger Agreement and to the Stockholders at their respective
addresses set forth on Schedule A (or at such other address for a party as shall be specified by
notice given in accordance with this Section 8(b)).
(c)
Interpretation.
When a reference is made in this Agreement to a Section or a
Schedule, such reference shall be to a Section of, or a Schedule to, this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words
include, includes or including are used in this Agreement, they shall be deemed to be
followed by the words without limitation. The words hereof, hereto, hereby, herein and
hereunder and words of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement. The words date hereof shall
refer to the date of this Agreement. The term or is not exclusive. The word extent in the
phrase to the extent shall mean the degree to which a subject or other thing extends, and such
phrase shall not mean simply if. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms. Any agreement or instrument defined or
referred to herein or in any agreement or instrument that is referred to herein means such
agreement or instrument as from time to time amended, modified or supplemented. References to a
Person are also to its permitted successors and assigns.
(d)
Counterparts.
This Agreement may be executed in one or more counterparts
(including by facsimile), all of which shall be considered one and the same agreement and shall
become effective when one or more such counterparts have been signed by each of the parties and
delivered to the other parties.
(e)
Entire Agreement; No Third-Party Beneficiaries.
This Agreement (a) constitutes
the entire agreement, and supersedes all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter of this Agreement and (b) is not
intended to confer upon any Person other than the parties hereto and their respective successors
and assigns any rights (legal, equitable or otherwise, except the rights conferred upon those
Persons specified as proxies in Section 4) or remedies, whether as third party beneficiaries or
otherwise.
(f)
Governing Law.
This Agreement shall be governed by, and construed in accordance
with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under
applicable principles of conflicts of Laws thereof.
(g)
Severability.
If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of Law or public policy, all other conditions
and terms of this Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner and to the end that the transactions contemplated hereby
are fulfilled to the extent possible.
(h)
Consent to Jurisdiction; Service of Process; Venue.
Each of the parties hereto
irrevocably and unconditionally submits to the exclusive jurisdiction of the Delaware Court of
Chancery (and if the Delaware Court of Chancery shall be unavailable, any Delaware State court and
the Federal court of the United States of America sitting in the State of Delaware) for the
purposes of any suit, action or other proceeding arising out of this Agreement or the Merger or
any other transaction contemplated by this Agreement (and agrees that no such action, suit or
proceeding relating to this Agreement shall be brought by it or any of its Subsidiaries except in
such courts). Each of the parties further agrees that, to the fullest extent permitted by
applicable Law, service of any process, summons, notice or document by U.S. registered mail to
such Persons respective address set forth above shall be effective service of process for any
action, suit or proceeding in the State of Delaware with respect to any matter to which it has
submitted to jurisdiction as set forth above in the immediately preceding sentence. Each of the
Stockholders hereby appoints the Company as its agent for service of process for any claim,
action, suit or other proceeding in Delaware with respect to any matters to which it has submitted
to jurisdiction as set forth above. Each of the parties hereto irrevocably and unconditionally
waives (and agrees not to plead or claim), any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the Merger or any of the other transactions
contemplated by this Agreement in the Delaware Court of Chancery (and if the Delaware Court of
Chancery shall be unavailable, in any Delaware State court or the Federal court of the United
States of America sitting in the State of Delaware) or that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
(i)
Enforcement.
The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties hereto shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in the Delaware Court of Chancery (and if
the Delaware Court of Chancery shall be unavailable, in any Delaware State court or the Federal
court of the United States of America sitting in the State of Delaware), this being in addition to
any other remedy to which they are entitled at Law or in equity.
(j)
Waiver of Jury Trial.
Each party hereto hereby waives, to the fullest extent
permitted by applicable Law, any right it may have to a trial by jury in respect of any suit,
action or other proceeding directly or indirectly arising out of, under or in connection with this
Agreement. Each party hereto (a) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such party would not, in the event of any
action, suit or proceeding, seek to enforce the foregoing waiver and (b) acknowledges that it and
the other parties hereto have been induced to enter into this Agreement, by, among other things,
the mutual waiver and certifications in this Section 8(j).
(k)
Fiduciary Duties.
Notwithstanding anything in this Agreement to the contrary:
(i) each Stockholder makes no agreement or understanding herein in any capacity other
than in such Stockholders capacity as a record holder and beneficial owner of the Subject
Shares and not in such Stockholders capacity as a director, officer or employee of the
Company or any of its Subsidiaries; and
(ii) nothing herein shall be construed to limit or affect any actions or inactions by
such Stockholder or any representative of Stockholder, as applicable, serving on the Board
of Directors or any Subsidiary of the Company or as an officer or fiduciary of the Company
or any Subsidiary of the Company, acting in such persons capacity as a director, officer,
employee or fiduciary of the Company or any Subsidiary of the Company.
[
Signature page follows
]
IN WITNESS WHEREOF, Parent has caused this Agreement to be signed by its officer thereunto
duly authorized and each Stockholder has signed this Agreement, all as of the date first written
above.
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INTERNATIONAL BUSINESS MACHINES CORPORATION,
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by
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/s/ Elias Mendoza
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Name:
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Elias Mendoza
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Title:
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Vice President, Corporate Development
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[Signature Page to Stockholders Agreement]
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STOCKHOLDERS,
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/s/ Yuchun Lee
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Name:
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Yuchun Lee
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Address:
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170 Tracer Lane
Waltham, Massachusetts 02451
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/s/ Agustina Sumito Lee
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Name:
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Agustina Sumito Lee
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Address:
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c/o Yuchun Lee
170 Tracer Lane
Waltham, Massachusetts 02451
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AGUSTINA SUMITO LIVING TRUST,
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by
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/s/ Yuchun Lee
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Name:
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Yuchun Lee, Trustee
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Address:
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c/o Yuchun Lee
170 Tracer Lane
Waltham, Massachusetts 02451
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YUCHUN LEE 2010 GRAT,
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by
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/s/ Yuchun Lee
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Name:
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Yuchun Lee, Trustee
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Address:
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c/o Yuchun Lee
170 Tracer Lane
Waltham, Massachusetts 02451
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[Signature Page to Stockholders Agreement]
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LEE SUMITO IRREVOCABLE TRUST,
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by
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/s/ Agustina Sumito Lee
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Name:
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Agustina Sumito Lee, Trustee
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Address:
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c/o Yuchun Lee
170 Tracer Lane
Waltham, Massachusetts 02451
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YUCHUN LEE LIVING TRUST,
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by
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/s/ Yuchun Lee
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Name:
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Yuchun Lee, Trustee
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Address:
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c/o Yuchun Lee
170 Tracer Lane
Waltham, Massachusetts 02451
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2001 LEE CHARITABLE TRUST,
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by
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/s/ Yuchun Lee
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Name:
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Yuchun Lee, Trustee
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Address:
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c/o Yuchun Lee
170 Tracer Lane
Waltham, Massachusetts 02451
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[Signature Page to Stockholders Agreement]
Schedule A
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Number of Subject
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Name and Address of
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Number of Subject Shares
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Shares Owned
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Stockholder
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Owned of Record
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Beneficially
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Yuchun Lee
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18,771
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4,379,529
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Agustina Sumito Lee
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14,142
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14,142
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Agustina Sumito Living Trust
|
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2,192,197
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2,192,197
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Yuchun Lee 2010 GRAT
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1,000,000
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1,000,000
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Lee Sumito Irrevocable Trust
|
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686,616
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686,616
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Yuhun Lee Living Trust
|
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300,890
|
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300,890
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2001 Lee Charitable Trust
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166,913
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166,913
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Schedule B
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Number of Shares
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Number of Shares
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Name and Address of
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Subject to
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Subject to Unvested
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Stockholder
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Unexercised Options
|
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RSUs
|
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Yuchun Lee
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479,999
|
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92,500
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Annex
C
Jefferies & Company, Inc.
520 Madison Avenue
New York, New York 10022
tel
212.284.2300
Jefferies.com
August 12, 2010
The Board of Directors
Unica Corporation
Reservoir Place North
170 Tracer Lane
Waltham, MA 02451
Members of the Board:
We understand that Unica Corporation (the Company),
International Business Machines Corporation
(Parent), and a wholly-owned subsidiary of Parent
(Merger Sub) propose to enter into an Agreement and
Plan of Merger (the Merger Agreement), pursuant to
which Merger Sub will merge with and into the Company (the
Merger) in a transaction in which each outstanding
share of common stock, par value $0.01 per share, of the Company
(the Common Stock), other than shares of Common
Stock held in the treasury of the Company or owned by Parent or
Merger Sub, all of which shares will be canceled, or as to which
dissenters rights have been properly exercised, will be
converted into the right to receive $21.00 in cash (the
Consideration). The terms and conditions of the
Merger are more fully set forth in the Merger Agreement.
You have asked for our opinion as to whether the Consideration
to be received by the holders of shares of Common Stock pursuant
to the Merger Agreement is fair, from a financial point of view,
to such holders.
In arriving at our opinion, we have, among other things:
(i) reviewed a draft dated August 11, 2010 of the
Merger Agreement;
(ii) reviewed certain publicly available financial and
other information about the Company;
(iii) reviewed certain information furnished to us by the
Companys management, including financial forecasts and
analyses, relating to the business, operations and prospects of
the Company;
(iv) held discussions with members of senior management of
the Company concerning the matters described in
clauses (ii) and (iii) above;
(v) reviewed the share trading price history and valuation
multiples for the Common Stock and compared them with those of
certain publicly traded companies that we deemed relevant;
(vi) compared the proposed financial terms of the Merger
with the financial terms of certain other transactions that we
deemed relevant; and
(vii) conducted such other financial studies, analyses and
investigations as we deemed appropriate.
In our review and analysis and in rendering this opinion, we
have assumed and relied upon, but have not assumed any
responsibility to independently investigate or verify, the
accuracy and completeness of all financial and other information
that was supplied or otherwise made available by the Company or
that was publicly available (including, without limitation, the
information described above), or that was otherwise reviewed by
us. We have relied on assurances of the management of the
Company that it is not aware of any facts or circumstances that
would make such information inaccurate or misleading. In our
review, we did not obtain any independent evaluation or
appraisal of any of the assets or liabilities of, nor did we
conduct a
C-1
physical inspection of any of the properties or facilities of,
the Company, nor have we been furnished with any such
evaluations or appraisals of such physical inspections, nor do
we assume any responsibility to obtain any such evaluations or
appraisals.
With respect to the financial forecasts provided to and examined
by us, we note that projecting future results of any company is
inherently subject to uncertainty. The Company has informed us,
however, and we have assumed, that such financial forecasts were
reasonably prepared on bases reflecting the best currently
available estimates and good faith judgments of the management
of the Company as to the future financial performance of the
Company. We express no opinion as to the Companys
financial forecasts or the assumptions on which they are made.
Our opinion is based on economic, monetary, regulatory, market
and other conditions existing and which can be evaluated as of
the date hereof. We expressly disclaim any undertaking or
obligation to advise any person of any change in any fact or
matter affecting our opinion of which we become aware after the
date hereof.
We have made no independent investigation of any legal or
accounting matters affecting the Company, and we have assumed
the correctness in all respects material to our analysis of all
legal and accounting advice given to the Company and its Board
of Directors, including, without limitation, advice as to the
legal, accounting and tax consequences of the terms of, and
transactions contemplated by, the Merger Agreement to the
Company and its stockholders. In addition, in preparing this
opinion, we have not taken into account any tax consequences of
the transaction to any holder of Common Stock. We have assumed
that the final form of the Merger Agreement will be
substantially similar to the last draft reviewed by us. We have
also assumed that in the course of obtaining the necessary
regulatory or third party approvals, consents and releases for
the Merger, no delay, limitation, restriction or condition will
be imposed that would have an adverse effect on the Company,
Parent or the contemplated benefits of the Merger.
It is understood that our opinion is for the use and benefit of
the Board of Directors of the Company in its consideration of
the Merger, and our opinion does not address the relative merits
of the transactions contemplated by the Merger Agreement as
compared to any alternative transaction or opportunity that
might be available to the Company, nor does it address the
underlying business decision by the Company to engage in the
Merger or the terms of the Merger Agreement or the documents
referred to therein. Our opinion does not constitute a
recommendation as to how any holder of shares of Common Stock
should vote on the Merger or any matter related thereto. In
addition, you have not asked us to address, and this opinion
does not address, the fairness to, or any other consideration
of, the holders of any class of securities, creditors or other
constituencies of the Company, other than the holders of shares
of Common Stock. We express no opinion as to the price at which
shares of Common Stock will trade at any time. Furthermore, we
do not express any view or opinion as to the fairness, financial
or otherwise, of the amount or nature of any compensation
payable or to be received by any of the Companys officers,
directors or employees, or any class of such persons, in
connection with the Merger relative to the Consideration to be
received by holders of shares of Common Stock. Our opinion has
been authorized by the Fairness Committee of
Jefferies & Company, Inc.
We have been engaged by the Company to act as financial advisor
to the Company in connection with the Merger and will receive a
fee for our services, a portion of which is payable upon
delivery of this opinion and a significant portion of which is
payable contingent upon consummation of the Merger. We will also
be reimbursed for expenses incurred. The Company has agreed to
indemnify us against liabilities arising out of or in connection
with the services rendered and to be rendered by us under such
engagement. We have, in the past, provided financial advisory
services to Parent and may continue to do so and have received,
and may receive, fees for the rendering of such services. We
maintain a market in the securities of the Company, and in the
ordinary course of our business, we and our affiliates may trade
or hold securities of the Company or Parent
and/or
their
respective affiliates for our own account and for the accounts
of our customers and, accordingly, may at any time hold long or
short positions in those securities. In addition, we may seek
to, in
C-2
the future, provide financial advisory and financing services to
the Company, Parent or entities that are affiliated with the
Company or Parent, for which we would expect to receive
compensation. Except as otherwise expressly provided in our
engagement letter with the Company, our opinion may not be used
or referred to by the Company, or quoted or disclosed to any
person in any manner, without our prior written consent.
Based upon and subject to the foregoing, we are of the opinion
that, as of the date hereof, the Consideration to be received by
the holders of shares of Common Stock pursuant to the Merger
Agreement is fair, from a financial point of view, to such
holders.
Very truly yours,
/s/ Jefferies & Company, Inc.
JEFFERIES & COMPANY, INC.
C-3
Annex D
§ 262. Appraisal rights
(a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to
such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to § 228 of this
title shall be entitled to an appraisal by the Court of Chancery
of the fair value of the stockholders shares of stock
under the circumstances described in subsections (b) and
(c) of this section. As used in this section, the word
stockholder means a holder of record of stock in a
corporation; the words stock and share
mean and include what is ordinarily meant by those words; and
the words depository receipt mean a receipt or other
instrument issued by a depository representing an interest in
1or more shares, or fractions thereof, solely of stock of a
corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of
any class or series of stock of a constituent corporation in a
merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to
§ 251(g) of this title), § 252,
§ 254, § 255, § 256,
§ 257, § 258, § 263 or
§ 264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series
of stock, which stock, or depository receipts in respect
thereof, at the record date fixed to determine the stockholders
entitled to receive notice of the meeting of stockholders to act
upon the agreement of merger or consolidation, were either
(i) listed on a national securities exchange or
(ii) held of record by more than 2,000 holders; and further
provided that no appraisal rights shall be available for any
shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote
of the stockholders of the surviving corporation as provided in
§ 251(f) of this title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the
shares of any class or series of stock of a constituent
corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to
§§ 251, 252, 254, 255, 256, 257, 258, 263 and 264
of this title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository
receipts in respect thereof;
b Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or
depository receipts in respect thereof) or depository receipts
at the effective date of the merger or consolidation will be
either listed on a national securities exchange or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.
and b. of this paragraph; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.,
b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under § 253 or
§ 267 of this title is not owned by the parent
immediately prior to the merger, appraisal rights shall be
available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as
a result of an amendment to its certificate of incorporation,
any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all
of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this
section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is
practicable.
D-1
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record
date for notice of such meeting (or such members who received
notice in accordance with § 255(c) of this title) with
respect to shares for which appraisal rights are available
pursuant to subsection (b) or (c) of this section that
appraisal rights are available for any or all of the shares of
the constituent corporations, and shall include in such notice a
copy of this section and, if 1 of the constituent corporations
is a nonstock corporation, a copy of § 114 of this
title. Each stockholder electing to demand the appraisal of such
stockholders shares shall deliver to the corporation,
before the taking of the vote on the merger or consolidation, a
written demand for appraisal of such stockholders shares.
Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such
stockholders shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder
electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the
effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection
and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has
become effective; or
(2) If the merger or consolidation was approved pursuant to
§ 228, § 253, or § 267 of this
title, then either a constituent corporation before the
effective date of the merger or consolidation or the surviving
or resulting corporation within 10 days thereafter shall
notify each of the holders of any class or series of stock of
such constituent corporation who are entitled to appraisal
rights of the approval of the merger or consolidation and that
appraisal rights are available for any or all shares of such
class or series of stock of such constituent corporation, and
shall include in such notice a copy of this section and, if 1 of
the constituent corporations is a nonstock corporation, a copy
of § 114 of this title. Such notice may, and, if given
on or after the effective date of the merger or consolidation,
shall, also notify such stockholders of the effective date of
the merger or consolidation. Any stockholder entitled to
appraisal rights may, within 20 days after the date of
mailing of such notice, demand in writing from the surviving or
resulting corporation the appraisal of such holders
shares. Such demand will be sufficient if it reasonably informs
the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such
holders shares. If such notice did not notify stockholders
of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second
notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of
such constituent corporation that are entitled to appraisal
rights of the effective date of the merger or consolidation or
(ii) the surviving or resulting corporation shall send such
a second notice to all such holders on or within 10 days
after such effective date; provided, however, that if such
second notice is sent more than 20 days following the
sending of the first notice, such second notice need only be
sent to each stockholder who is entitled to appraisal rights and
who has demanded appraisal of such holders shares in
accordance with this subsection. An affidavit of the secretary
or assistant secretary or of the transfer agent of the
corporation that is required to give either notice that such
notice has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice,
each constituent corporation may fix, in advance, a record date
that shall be not more than 10 days prior to the date the
notice is given, provided, that if the notice is given on or
after the effective date of the merger or consolidation, the
record date shall be such effective date. If no record date is
fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next
preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the
merger or consolidation, the surviving or resulting corporation
or any stockholder who has complied with subsections (a)
and (d) of this section hereof and who is otherwise
entitled to appraisal rights, may commence an appraisal
proceeding by filing a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders.
D-2
Notwithstanding the foregoing, at any time within 60 days
after the effective date of the merger or consolidation, any
stockholder who has not commenced an appraisal proceeding or
joined that proceeding as a named party shall have the right to
withdraw such stockholders demand for appraisal and to
accept the terms offered upon the merger or consolidation.
Within 120 days after the effective date of the merger or
consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) of this
section hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate
number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholders
written request for such a statement is received by the
surviving or resulting corporation or within 10 days after
expiration of the period for delivery of demands for appraisal
under subsection (d) of this section hereof, whichever is
later. Notwithstanding subsection (a) of this section, a
person who is the beneficial owner of shares of such stock held
either in a voting trust or by a nominee on behalf of such
person may, in such persons own name, file a petition or
request from the corporation the statement described in this
subsection.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which shall within 20 days after
such service file in the office of the Register in Chancery in
which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the
value of their shares have not been reached by the surviving or
resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the
time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1
or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the
City of Wilmington, Delaware or such publication as the Court
deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs
thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall
determine the stockholders who have complied with this section
and who have become entitled to appraisal rights. The Court may
require the stockholders who have demanded an appraisal for
their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery
for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After the Court determines the stockholders entitled to
an appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including
any rules specifically governing appraisal proceedings. Through
such proceeding the Court shall determine the fair value of the
shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation,
together with interest, if any, to be paid upon the amount
determined to be the fair value. In determining such fair value,
the Court shall take into account all relevant factors. Unless
the Court in its discretion determines otherwise for good cause
shown, interest from the effective date of the merger through
the date of payment of the judgment shall be compounded
quarterly and shall accrue at 5% over the Federal Reserve
discount rate (including any surcharge) as established from time
to time during the period between the effective date of the
merger and the date of payment of the judgment. Upon application
by the surviving or resulting corporation or by any stockholder
entitled to participate in the appraisal proceeding, the Court
may, in its discretion, proceed to trial upon the appraisal
prior to the final determination of the stockholders entitled to
an appraisal. Any stockholder whose name appears on the list
filed by the surviving or resulting corporation pursuant to
subsection (f) of this section and who has submitted such
stockholders certificates of
D-3
stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal
rights under this section.
(i) The Court shall direct the payment of the fair value of
the shares, together with interest, if any, by the surviving or
resulting corporation to the stockholders entitled thereto.
Payment shall be so made to each such stockholder, in the case
of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender
to the corporation of the certificates representing such stock.
The Courts decree may be enforced as other decrees in the
Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the
Court and taxed upon the parties as the Court deems equitable in
the circumstances. Upon application of a stockholder, the Court
may order all or a portion of the expenses incurred by any
stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys fees
and the fees and expenses of experts, to be charged pro rata
against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights
as provided in subsection (d) of this section shall be
entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the
merger or consolidation); provided, however, that if no petition
for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholders demand for an
appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the
merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval
may be conditioned upon such terms as the Court deems just;
provided, however that this provision shall not affect the right
of any stockholder who has not commenced an appraisal proceeding
or joined that proceeding as a named party to withdraw such
stockholders demand for appraisal and to accept the terms
offered upon the merger or consolidation within 60 days
after the effective date of the merger or consolidation, as set
forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been
converted had they assented to the merger or consolidation shall
have the status of authorized and unissued shares of the
surviving or resulting corporation.
D-4
UNICA CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF
STOCKHOLDERS
TO BE HELD ON [ ], 2010
The undersigned hereby appoints Kevin P. Shone and Jason W. Joseph, and each of them, with full power of
substitution, proxies of the undersigned, to represent the undersigned and to vote the common stock as specified below
at the Special Meeting of Stockholders of Unica Corporation to be held on [ ], 2010 at 10:00 a.m., local time, at the
offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109, and at any
postponement or adjournment thereof, upon the following matters, all as more fully described in the Proxy Statement for
said Special Meeting (receipt of which is hereby acknowledged), and, in the discretion of the proxies, on any other matters
as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF THIS PROXY IS PROPERLY
EXECUTED, BUT NO VOTING DIRECTION IS INDICATED, THEN THIS PROXY WILL BE VOTED FOR THE
PROPOSAL TO ADOPT THE MERGER AGREEMENT AND FOR THE PROPOSAL TO ADJOURN THE SPECIAL
MEETING TO A LATER DATE, IF NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE NOT SUFFICIENT VOTES IN FAVOR
OF ADOPTION OF THE MERGER AGREEMENT.
Your
telephone or Internet proxy authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card. If you have submitted your
proxy by telephone or Internet, there is no need to mail back a proxy card.
(Continued and to be signed on the reverse side.)
n
1 4 4 7 5
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SPECIAL MEETING OF STOCKHOLDERS OF
UNICA CORPORATION
[
], 2010
PROXY VOTING INSTRUCTIONS
INTERNET
-
Access
www.voteproxy.com
and follow the on-screen instructions. Have your
proxy card available when you access the web page, and use the Company Number and Account Number
shown on your proxy card.
TELEPHONE
-
Call toll-free
1-800-PROXIES
(1-800-776-9437) in the United States or
1-718-921-8500
from foreign countries from any touch-tone telephone and follow the instructions.
Have your proxy card available when you call and use the Company Number and Account Number shown on
your proxy card.
Vote online/phone until 11:59 PM EST the day before the meeting.
MAIL
-
Sign, date and mail your proxy card in the envelope provided as soon as possible.
IN PERSON
-
You may vote your shares in person by attending the Special Meeting.
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COMPANY NUMBER
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ACCOUNT NUMBER
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Please
detach along perforated line and mail in the envelope provided
IF
you are not voting via telephone or the Internet.
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
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FOR
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AGAINST
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ABSTAIN
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1.
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The proposal to adopt the Agreement and Plan of Merger, dated
as of August 12, 2010, by and among International Business
Machines Corporation, a New York corporation, Amaroo
Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of IBM, and Unica Corporation, a Delaware corporation,
as such agreement may be amended from time to time.
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2.
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The proposal to adjourn the special meeting to a later date, if
necessary or appropriate, to
solicit additional proxies in the event there are not sufficient
votes in favor of adoption of the merger agreement at the time of
the special meeting.
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To change the address on your account, please check the box
at right and indicate your new address in the address space
above. Please note that changes to the registered name(s)
on the account may not be submitted
via this method.
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Signature
of Stockholder
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Date:
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Signature
of Stockholder
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Date:
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Note:
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Please sign exactly as your name or names appear on this Proxy.
When shares are held jointly, each holder should sign. When signing
as executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate name
by duly authorized officer, giving full title as such. If signer is a partnership,
please sign in partnership name by
authorized person.
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Unica (MM) (NASDAQ:UNCA)
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