UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. _____ )
|
|
|
Filed by the Registrant
þ
|
Filed by a Party other than the Registrant
o
|
Check the appropriate box:
|
þ
|
|
Preliminary Proxy Statement.
|
o
|
|
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 Pursuant to §240.14a-12.
|
INTERWOVEN, INC.
(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):
|
o
|
|
No fee required.
|
þ
|
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
(1)
|
|
Title of each class of securities to which transaction applies: Common Stock,
par value $0.001 per share, of Interwoven, Inc.
|
|
|
(2)
|
|
Aggregate number of securities to which transaction applies: 53,706,675 shares
of Common Stock, which includes the issuance of up to 147,000 shares of Common
Stock pursuant to the Interwoven, Inc. Employee Stock Purchase Plan prior to the
completion of the merger, options to purchase 6,176,322 shares of Common Stock with
exercise prices at or below $40.00, and 983,517 shares of Common Stock issuable upon
settlement of restricted stock units.
|
|
|
(3)
|
|
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):
The filing fee was determined based upon the sum of (A) 46,399,836 shares of Common
Stock multiplied by $16.20 per share,
(B) 147,000 shares of Common Stock
issuable pursuant to the Interwoven, Inc. 1999 Employee Stock Purchase Plan multiplied
by $3.59 per share (which is the difference between $16.20 and the
expected purchase price per share for the offering period),
(C) options to purchase 6,176,322 shares of Common Stock with
exercise prices at or below $40.00 multiplied by
$5.19 per share (which is the difference between $16.20 and the
weighted average exercise price per share), and (D) 983,517 shares of Common Stock
issuable upon settlement of restricted stock units multiplied by $16.20 per share. In
accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the
filing fee was determined by multiplying $.00003930 by the sum of the preceding
sentence.
|
|
|
(4)
|
|
Proposed maximum aggregate value of transaction:
$800,182,864
|
|
|
(5)
|
|
Total fee paid: $31,448
|
|
|
|
o
|
|
Fee paid previously with preliminary materials.
|
o
|
|
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.
|
|
(1)
|
|
Amount Previously Paid:
|
|
|
(2)
|
|
Form, Schedule or Registration Statement No.:
|
|
|
(3)
|
|
Filing Party:
|
|
|
(4)
|
|
Date Filed:
|
Preliminary
Copy Subject to Completion
[ ],
2009
To our stockholders:
We invite you to attend a special meeting of stockholders of
Interwoven, Inc. (Interwoven) to be held at
160 East Tasman Drive, San Jose, California 95134, at
[ ] a.m., local time, on
[ ],
2009.
At the special meeting, we will ask you to vote for the adoption
of the Agreement and Plan of Merger, dated as of
January 22, 2009, among Autonomy Corporation plc
(Autonomy), Milan Acquisition Corp., a wholly-owned
subsidiary of Autonomy, and Interwoven (the merger
agreement). As a result of the merger provided for in the
merger agreement (the merger), Interwoven will
become a wholly-owned subsidiary of Autonomy. We are also asking
you to expressly grant the authority to vote your shares to
adjourn the special meeting, if necessary, to solicit additional
proxies if there are not sufficient votes at the time of the
special meeting to adopt the merger agreement.
If the merger is completed, you will be entitled to receive
$16.20 in cash, without interest, for each share of Interwoven
common stock that you own.
After careful consideration, our Board of Directors unanimously
approved the merger agreement and determined that the merger
agreement, the merger and the other transactions contemplated by
the merger agreement are advisable, fair to and in the best
interests of Interwoven and its stockholders.
Our Board of
Directors recommends that you vote FOR adoption of
the merger agreement.
Our Board of Directors considered a number of factors in
evaluating the transaction and consulted with its legal and
financial advisors. The enclosed proxy statement also provides
detailed information about the merger agreement and the merger.
We encourage you to read this proxy statement carefully,
including its annexes.
Your vote is very important, regardless of the number of
shares you own.
The adoption of 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.
Only stockholders who owned shares of our common stock at the
close of business on February 4, 2009, the record date for
the special meeting, will be entitled to vote at the special
meeting. To ensure that your shares will be represented at the
special meeting, you are urged to complete, sign, date and
return the enclosed proxy card or voting instruction card as
soon as possible or vote via the Internet or telephone (if those
options are available to you). If you fail to do so, and do not
attend the special meeting, it will have the same effect as if
you voted AGAINST approval of the merger agreement.
If you have any questions about the merger please call MacKenzie
Partners, Inc., our proxy solicitor, toll-free at (800) 322-2885
or collect at
(212) 929-5500.
On behalf of our Board of Directors, I thank you for your
support and appreciate your consideration of this matter.
Sincerely,
Chief Executive Officer
160 East Tasman Drive
San Jose, CA 95134
(408) 774-2000
NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS
To Be Held On
[ ],
2009
To our stockholders:
You are cordially invited to attend the Special Meeting of
Stockholders of Interwoven, Inc., a Delaware corporation
(Interwoven), that will be held at 160 East Tasman
Drive, San Jose, California 95134, at
[ ] a.m., local time, on
[ ],
2009, for the following purposes:
1. To consider and vote upon a proposal to adopt the
Agreement and Plan of Merger, dated as of January 22, 2009,
among Autonomy Corporation plc (Autonomy), Milan
Acquisition Corp., a wholly-owned subsidiary of Autonomy, and
Interwoven (the merger agreement); and
2. To vote to adjourn the special meeting, if necessary, to
solicit additional proxies if there are not sufficient votes at
the time of the special meeting to adopt the merger agreement.
No other business will be considered at the special meeting. The
proposals are described more fully in the proxy statement.
Please give your careful attention to all of the information in
the proxy statement.
Only stockholders who owned shares of our common stock at the
close of business on February 4, 2009, the record date for
the special meeting, or their proxies can vote at this special
meeting or any adjournment(s) or postponement(s) that may take
place. The adoption of the merger agreement requires the
affirmative vote of the holders of a majority of the shares of
our common stock outstanding on the record date.
Our Board of
Directors unanimously recommends that you vote FOR
the adoption of the merger agreement and FOR the
adjournment of the special meeting, if necessary, to solicit
additional proxies.
Our stockholders have the right to dissent from the merger and
obtain payment in cash for the fair value of their shares of
common stock under applicable provisions of Delaware law. In
order to perfect and exercise appraisal rights, stockholders
must give written demand for appraisal of their shares to
Interwoven before the vote is taken on the adoption of the
merger agreement at the special meeting and must not vote in
favor of the adoption of the merger agreement. A copy of the
applicable Delaware statutory provisions is included as
Annex D of the attached proxy statement, and a summary of
these provisions can be found under the section of the attached
proxy statement entitled The Merger Appraisal
Rights.
Your vote is very important.
Whether or not you expect to
attend the special meeting in person, you are urged to complete,
sign, date and return the enclosed proxy card or voting
instruction card as soon as possible or vote via the Internet or
telephone (if those options are available to you) and thus
ensure that your shares will be represented at the special
meeting if you are unable to attend. Instructions for voting
your shares are included on the enclosed proxy or voting
instruction card. For specific instructions on how to vote your
shares, please refer to the section of this proxy statement
entitled The Special Meeting beginning on
page 10. If you do attend the special meeting and wish to
vote in person, you may withdraw your proxy and vote in person.
By Order of the Board of Directors
Secretary
This proxy statement is dated
[ ],
2009, and is first being mailed to stockholders of Interwoven on
or about
[ ],
2009.
TABLE OF
CONTENTS
|
|
|
|
|
|
|
Page
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
5
|
|
|
|
|
6
|
|
|
|
|
8
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
11
|
|
|
|
|
12
|
|
|
|
|
12
|
|
|
|
|
13
|
|
|
|
|
13
|
|
|
|
|
19
|
|
|
|
|
22
|
|
|
|
|
32
|
|
|
|
|
33
|
|
|
|
|
33
|
|
i
|
|
|
|
|
|
|
Page
|
|
|
|
|
33
|
|
|
|
|
37
|
|
|
|
|
40
|
|
|
|
|
40
|
|
|
|
|
41
|
|
|
|
|
42
|
|
|
|
|
43
|
|
|
|
|
43
|
|
|
|
|
43
|
|
|
|
|
44
|
|
|
|
|
44
|
|
|
|
|
44
|
|
|
|
|
45
|
|
|
|
|
45
|
|
|
|
|
46
|
|
|
|
|
49
|
|
|
|
|
50
|
|
|
|
|
52
|
|
|
|
|
54
|
|
|
|
|
55
|
|
|
|
|
56
|
|
|
|
|
57
|
|
|
|
|
59
|
|
|
|
|
60
|
|
|
|
|
60
|
|
|
|
|
60
|
|
|
|
|
60
|
|
|
|
|
60
|
|
ii
SUMMARY
TERM SHEET
This summary highlights selected information from this proxy
statement and may not contain all of the information that is
important to you. To fully understand the merger (the
merger) contemplated by the Agreement and Plan of
Merger, dated as of January 22, 2009, among Autonomy
Corporation plc (Autonomy), Milan Acquisition Corp.,
a wholly-owned subsidiary of Autonomy (Merger Sub)
and Interwoven, Inc. (Interwoven) (the merger
agreement) and for a more complete description of the
terms of the merger agreement, you should carefully read this
entire proxy statement and the documents to which we refer. See
the section of this proxy statement entitled Where You Can
Find More Information on page 60. We have included page
references in parentheses to direct you to a more complete
description of the topics presented in this summary. The merger
agreement is attached as Annex A to this proxy statement.
We encourage you to read the merger agreement as it is the legal
document that governs the merger. Except as otherwise
specifically noted in this proxy statement, we,
our, us and similar words in this proxy
statement refer to Interwoven, Inc.
Interwoven,
Inc. (page 9).
We are a provider of content management software solutions. Our
software and services enable organizations to leverage content
to drive business growth by improving online business
performance, increasing collaboration and streamlining business
processes both internally and externally.
Autonomy
Corporation plc and Milan Acquisition Corp. (page 9).
Autonomy is a global leader in infrastructure software,
principally providing software for automating the management,
processing and delivery of unstructured information by virtue of
extracting its meaning from and to sources across the internet,
the extended enterprise and other digital domains. Milan
Acquisition Corp. is a newly formed Delaware corporation and a
wholly-owned subsidiary of Autonomy that has been formed
specifically for the purpose of participating in the merger
transaction with Interwoven.
The
Merger (page 13).
Under the merger agreement, Merger Sub will merge with and into
Interwoven. After the completion of the merger, Autonomy will
own all of our outstanding stock. Our stockholders will receive
cash in the merger in exchange for their shares of Interwoven
common stock.
Merger
Consideration (page 43).
If the merger is completed, you will receive $16.20 in cash,
without interest and subject to any applicable withholding
taxes, in exchange for each share of Interwoven common stock
that you own unless you dissent and seek appraisal of the fair
value of your shares. After the merger is completed, you will
have the right to receive the merger consideration, but you will
no longer have any rights as an Interwoven stockholder.
Treatment
of Stock Options (page 44).
The treatment of Interwoven stock options in the merger will
depend on the exercise price of the stock options. For stock
options with exercise prices at or below $40.00, the merger
agreement provides that such stock options will be assumed by
Autonomy and become options to purchase Autonomy ordinary shares
on the same terms and conditions as are in effect immediately
prior to the completion of the merger, except that the exercise
price and number of shares subject to each such stock option
will be adjusted to reflect the trading price of Autonomy shares
at such time relative to the cash price payable in the merger.
For stock options with exercise prices above
$40.00 per share, the merger agreement provides that
such stock options will not be assumed by Autonomy, and will be
canceled upon the completion of the merger with no cash or other
consideration payable, whether or not then vested or
exercisable. For those stock options that are vested and have
exercise prices below $16.20 per share, the merger agreement
also provides that the option holder will be given the
opportunity to receive cash in the amount of the difference
between $16.20 and the exercise price for the option rather than
have the option assumed, less any applicable withholding taxes.
1
Treatment
of Restricted Stock Units (page 44).
Following the completion of the merger, Autonomy will assume all
outstanding restricted stock units on the same terms and
conditions as are in effect immediately prior to the completion
of the merger, except that the number of shares issuable upon
settlement of the restricted stock units will be adjusted to
reflect the trading price of Autonomy shares at such time
relative to the cash price payable in the merger.
Market
Price (page 59).
Our common stock is listed on The NASDAQ Global Select Market
under the ticker symbol IWOV. On January 21,
2009, the last full trading day prior to the public announcement
of the proposed merger, Interwoven common stock closed at $11.84
per share. On
[ ],
2009, the last full trading day prior to the date of this proxy
statement, Interwoven common stock closed at
$[ ] per share. Our stock price can
fluctuate significantly even over short periods of time. It is
impossible to predict the actual price of our stock immediately
prior to the completion of the merger.
Reasons
for the Merger (page 19).
In the course of reaching its decision to approve the merger and
the merger agreement, our Board of Directors considered a number
of factors, which are described below in this proxy statement.
Opinions
of Our Financial Advisors (page 22, Annex B and
Annex C).
In connection with the merger, each of Barclays Capital Inc.
(Barclays Capital) and Credit Suisse Securities
(USA) LLC (Credit Suisse) delivered an oral opinion
on January 21, 2009 (which was confirmed in writing on the
same day) to our Board of Directors that, as of January 21,
2009 and based upon and subject to the qualifications,
limitations and assumptions set forth therein, the merger
consideration to be offered to the holders of our common stock
pursuant to the merger agreement was fair, from a financial
point of view, to such holders. The full text of the written
opinions of each of Barclays Capital and Credit Suisse are
attached to this proxy statement as Annex B and
Annex C, respectively. Holders of our common stock are
encouraged to read these opinions carefully in their entirety
for a description of the procedures followed, assumptions made,
matters considered and limitations on the scope of review
undertaken.
Each of Barclays Capitals and Credit
Suisses opinions was provided to our Board of Directors
for its information in connection with its evaluation of the
merger consideration from a financial point of view. These
opinions do not address any other aspect of the proposed merger
and do not constitute a recommendation to any stockholder as to
how such stockholder should vote or act with respect to any
matters relating to the merger.
Recommendation
to Interwoven Stockholders (page 32).
After careful consideration, our Board of Directors unanimously
approved the merger agreement and determined that the merger
agreement, the merger and the other transactions contemplated by
the merger agreement are advisable, fair to and in the best
interests of Interwoven and its stockholders. Our Board of
Directors recommends that you vote FOR adoption of
the merger agreement.
Interwoven
Voting Agreements (page 33).
Concurrently with the execution of the merger agreement,
Autonomy obtained voting agreements and irrevocable proxies to
vote in favor of the adoption of the merger agreement from the
members of our Board of Directors and from Scipio M. Carnecchia,
our President, and John E. Calonico, Jr., our Chief
Financial Officer. As of February 4, 2009, the record date
for the special meeting, these directors and officers held less
than 1% of the outstanding shares of our common stock as of
February 4, 2009.
Autonomy
Irrevocable Undertakings (page 33).
Concurrently with the execution of the merger agreement,
Autonomy and Interwoven obtained an irrevocable undertaking from
certain shareholders of Autonomy to vote in favor of the
approval of the merger at an
2
extraordinary general meeting of Autonomys shareholders to
consider the merger. These undertakings were obtained from the
members of Autonomys Board of Directors and Andrew M.
Kanter, Chief Operating Officer of Autonomy, together holding an
aggregate of 22,728,735 ordinary shares of Autonomy
(representing approximately 9.6% of the outstanding ordinary
shares of Autonomy as of January 22, 2009).
Merger
Financing Agreements (page 55).
Concurrently with the execution of the merger agreement,
Citigroup Global Markets U.K. Equity Limited (Citi),
Deutsche Bank AG, London Branch (Deutsche Bank), and
Morgan Stanley & Co. Limited (Morgan
Stanley), entered into a placing agreement with Autonomy
under which Autonomy has raised £222 million through
the sale of its ordinary shares to institutional investors. In
addition, concurrently with the execution of the merger
agreement Barclays Commercial Bank, Eastern, a division of
Barclays Bank PLC (Barclays Bank), entered into a
credit facility with Autonomy in which, subject to certain
conditions, Barclays Bank has committed to lend to a subsidiary
of Autonomy approximately $237.5 million in cash to, among
other things, fund a portion of the merger consideration.
Autonomys obligation to complete the merger is not
conditioned upon these financing transactions occurring.
Interests
of Our Directors and Executive Officers in the Merger (page
33).
In considering the recommendation of our Board of Directors in
favor of the adoption of the merger agreement, you should be
aware that the consummation of the merger will result in certain
benefits to our directors and executive officers that are not
available to our stockholders generally, including the
following: (i) cash severance payments to our executive
officers whose employment is terminated following the merger,
(ii) accelerated vesting of stock options and restricted
stock units for our executive officers whose employment is
terminated following the merger, (iii) accelerated vesting
of stock options and restricted stock units held by our
directors upon the close of the merger, (iv) continuation
of health benefits coverage, and (v) continuation of
certain indemnification and insurance arrangements.
Appraisal
Rights (page 37 and Annex D).
Stockholders who do not wish to accept the $16.20 per share cash
consideration payable in the merger may seek, under Delaware
law, appraisal of the fair value of their shares by the Delaware
Court of Chancery. This value could be more or less than or the
same as the merger consideration of $16.20 in cash per share.
This right of appraisal is subject to a number of
restrictions and technical requirements. Generally, in order to
exercise appraisal rights, among other things, (1) you must
NOT vote in favor of the adoption of the merger agreement,
(2) you must make a written demand for appraisal in
compliance with Delaware law BEFORE the vote on the adoption of
the merger agreement, and (3) you must hold shares of
Interwoven common stock on the date of making the demand for
appraisal and continuously hold such shares through the
completion of the merger. Merely voting against the merger
agreement will not preserve your right of appraisal under
Delaware law. Also, if you submit a proxy that is not marked
AGAINST or ABSTAIN, this proxy will be
voted for the adoption of the merger agreement, and will result
in the waiver of appraisal rights. If you hold shares in the
name of a broker or other nominee, you must instruct your
nominee to take the steps necessary to enable you to assert
appraisal rights. If you or your nominee fails to follow all of
the steps required by the statute, you will lose your right of
appraisal.
Material
U.S. Federal Income Tax Consequences (page 40).
The merger will be taxable for U.S. federal income tax
purposes. Generally, this means that you will recognize taxable
gain or loss equal to the difference between the cash you
receive in the merger and your adjusted tax basis in your shares
of Interwoven common stock. Tax matters can be complicated and
the tax consequences of the merger to you will depend on the
facts of your own situation. You should consult your own tax
advisor to understand fully the tax consequences of the merger
to you.
3
Antitrust
Matters (page 41).
The
Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the HSR Act)
prohibits us from completing the merger until we have complied
with the HSR Act by furnishing certain information and materials
to the Antitrust Division of the U.S. Department of Justice
and the Federal Trade Commission and the required waiting period
has expired or been terminated. Both Autonomy and Interwoven
will file the required notification and report forms under the
HSR Act.
The
Special Meeting of Interwoven Stockholders (page 10).
Purpose, Time, Date and Place.
The special
meeting will be held to consider and vote upon the proposal to
adopt the merger agreement and, if necessary, to vote to adjourn
the special meeting to solicit additional proxies, at 160 East
Tasman Drive, San Jose, California 95134, at
[ ] a.m., local time, on
[ ],
2009.
Record Date and Voting Power.
You are entitled
to vote at the special meeting if you owned shares of Interwoven
common stock at the close of business on February 4, 2009,
the record date for the special meeting. You will have one vote
at the special meeting for each share of Interwoven common stock
you owned at the close of business on the record date. There are
[ ] shares
of Interwoven common stock entitled to be voted at the special
meeting.
Procedure for Voting.
To vote, you can
complete, sign, date and return the enclosed proxy card or
attend the special meeting and vote in person. If your shares
are held in street name by your broker, bank or
other nominee, you should instruct your broker to vote your
shares by following the instructions provided by your broker,
which may provide for voting by Internet or by telephone. Your
broker will not vote your shares without instruction from you.
Failure to instruct your broker to vote your shares will have
the same effect as a vote AGAINST adoption of the
merger agreement.
Required Vote.
The adoption of the merger
agreement requires the affirmative vote of the holders of a
majority of the outstanding shares of Interwoven common stock at
the close of business on the record date. Approval of the
proposal to adjourn the special meeting to solicit additional
proxies, if necessary, requires the affirmative vote of the
holders of a majority of the shares of Interwoven common stock
that was voted on the proposal at the special meeting.
The
Merger Agreement (page 43).
Limitation on Considering Other Takeover
Proposals.
We have agreed not to solicit,
initiate or knowingly encourage or facilitate a business
combination or other similar transaction with another party
while the merger is pending, and not to enter into discussions
or negotiations with another party regarding a business
combination or similar transaction while the merger is pending,
except under specified circumstances set forth in the merger
agreement.
Conditions to the Merger.
The obligations of
both Autonomy and Interwoven to complete the merger are subject
to the satisfaction or waiver of specified conditions set forth
in the merger agreement.
Termination of the Merger Agreement.
Autonomy
and Interwoven can terminate the merger agreement under
specified circumstances set forth in the merger agreement.
Termination Fees.
The merger agreement
requires us to pay Autonomy a termination fee in the amount of
$25 million if the merger agreement is terminated under
certain circumstances, including certain circumstances in
connection with an alternative takeover proposal, and a
termination fee in the amount of $7 million if the merger
agreement is terminated because the stockholders of Interwoven
did not adopt the merger agreement at the special meeting or at
any adjournment or postponement thereof (which is credited
against the $25 million fee if that is also payable). The
merger agreement requires Autonomy to pay us a termination fee
in the amount of $25 million if the merger agreement is
terminated under certain circumstances described in the merger
agreement, including certain circumstances relating to the
financing of the merger consideration or because the Autonomy
shareholders do not approve the merger.
4
Legal
Proceedings Regarding the Merger (page 42).
On January 26, 2009, a putative class action lawsuit was
filed in the Court of Chancery of the State of Delaware against
us and our directors. The complaint generally alleges that, in
connection with approving the merger, our directors breached
their fiduciary duties owed to Interwoven stockholders. The
complaint seeks, among other things, a declaration that the
merger agreement was entered into in violation of the
directors fiduciary duties and an injunction precluding
consummation of the merger. Based on our review of the
complaint, we believe that the claims are without merit and
intend to vigorously defend against them. However, there can be
no assurances that we will be successful in such defense.
5
QUESTIONS
AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING
|
|
Q:
|
What will happen to Interwoven as a result of the merger?
|
|
|
A:
|
If the merger is completed, we will become a wholly-owned
subsidiary of Autonomy.
|
|
|
Q:
|
What will happen to my shares of Interwoven common stock
after the merger?
|
|
|
A:
|
Upon completion of the merger, each outstanding share of
Interwoven common stock will automatically be canceled and will
be converted into the right to receive $16.20 in cash, without
interest and subject to any applicable withholding taxes,
assuming the stockholder has not properly exercised appraisal
rights under applicable Delaware law.
|
|
|
Q:
|
Will I own any shares of Interwoven common stock or Autonomy
ordinary shares after the merger?
|
|
|
A:
|
No. You will be paid cash for your shares of Interwoven
common stock. Our stockholders will not receive (or have the
option to receive) any Autonomy ordinary shares in exchange for
their shares instead of cash.
|
|
|
Q:
|
Will the merger be taxable to me?
|
|
|
A:
|
Generally, yes. For U.S. federal income tax purposes, generally
you will recognize a taxable gain or loss as a result of the
merger measured by the difference, if any, between the total
amount of cash you receive in the merger for your shares of
Interwoven common stock and your aggregate adjusted tax basis in
those shares. This gain or loss will be long-term capital gain
or loss if you have held your shares of Interwoven common stock
as a capital asset for more than one year as of the date of the
completion of the merger. You should read the section of this
proxy statement entitled The Merger Material
U.S. Federal Income Tax Consequences of the Merger
beginning on page 40 for a more complete discussion of the
U.S. federal income tax consequences of the merger.
|
|
|
Q:
|
Does our Board of Directors recommend adoption of the merger
agreement?
|
|
|
A:
|
Yes. Our Board of Directors recommends that our stockholders
vote FOR the adoption of the merger agreement. Our
Board of Directors considered many factors in deciding to
recommend the adoption of the merger agreement. These factors
are described below in this proxy statement.
|
|
|
Q:
|
What vote of the stockholders is required to adopt the merger
agreement?
|
|
|
A:
|
To adopt the merger agreement, stockholders of record at the
close of business on February 4, 2009 holding a majority of
the outstanding shares of Interwoven common stock must vote
FOR the adoption of the merger agreement. There are
[ ] shares
of Interwoven common stock entitled to be voted at the special
meeting.
|
|
|
Q:
|
Am I entitled to appraisal rights?
|
|
|
A:
|
Yes. Under Delaware law, you have the right to seek appraisal of
the fair value of your shares as determined by the Delaware
Court of Chancery if the merger is completed, but only if you
submit a written demand for an appraisal before the vote on the
merger agreement, do not vote in favor of adopting the merger
agreement and comply with the Delaware law procedures explained
in this proxy statement.
|
|
|
Q:
|
What do I need to do now?
|
|
|
A:
|
We urge you to read this proxy statement carefully, including
its annexes, 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 so that your shares can be
voted at the special meeting. If your shares are held in
street name by your broker, bank or other nominee,
you should instruct your broker to vote your shares by following
the instructions provided by your broker, which may provide for
voting by Internet or by telephone.
|
|
|
Q:
|
What happens if I do not return a proxy card or otherwise
appoint a proxy or provide voting instructions?
|
|
|
A:
|
The failure to return your proxy card or provide your broker
with voting instructions, if your shares are held in
street name, will have the same effect as voting
against adoption of the merger agreement.
|
6
|
|
A:
|
Yes. You may vote in person at the meeting, rather than signing
and returning your proxy card, if you own shares in your own
name. However, we encourage you to return your signed proxy
card, to ensure that your shares are voted. You may also vote in
person at the special meeting if your shares are held in
street name through a broker or bank provided that
you bring a legal proxy from your broker or bank and present it
at the special meeting. You may also be asked to present photo
identification for admittance.
|
|
|
Q:
|
May I revoke my proxy or change my vote after I have mailed
my signed proxy card or otherwise appointed a proxy?
|
|
|
A:
|
Yes. You may change your vote at any time before the shares
reflected on your proxy card are voted at the special meeting.
You can do this in one of three ways. First, you can send a
written, dated notice to our Secretary stating that you would
like to revoke your proxy. Second, you can complete, sign, date
and submit a new proxy card. Third, you can attend the meeting
and vote in person. Your attendance alone will not revoke your
proxy. If you have instructed a broker to vote your shares, you
must follow the directions received from your broker to change
your instructions.
|
|
|
Q:
|
If my shares are held in street name by my
broker, will my broker vote my shares for me?
|
|
|
A:
|
Your broker will not 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 voting against adoption of the merger agreement.
|
|
|
Q:
|
Should I send in my stock certificates now?
|
|
|
A:
|
No. After the merger is completed, you will receive written
instructions for exchanging your shares of Interwoven common
stock for the merger consideration of $16.20 in cash, without
interest, for each share of Interwoven common stock.
|
|
|
Q:
|
When do you expect the merger to be completed?
|
|
|
A:
|
We are working toward completing the merger as quickly as
possible and anticipate that the closing of the merger will
occur within four business days of the special meeting. However,
to complete the merger, in addition to obtaining stockholder
approval, all closing conditions must be satisfied or waived and
we cannot assure you that all conditions to the merger will be
satisfied or waived, or if satisfied or waived, as to the date
by which they will be satisfied or waived.
|
|
|
Q:
|
When will I receive the cash consideration for my shares of
Interwoven common stock?
|
|
|
A:
|
After the merger is completed, you will receive written
instructions, including a letter of transmittal, that explain
how to exchange your shares for the cash consideration payable
in the merger. When you properly return and complete the
required documentation described in the written instructions,
you will promptly receive from the paying agent a payment of the
cash consideration for your shares.
|
|
|
Q:
|
Whom should I call if I have questions or want additional
copies of documents?
|
|
|
A:
|
If you have any questions about the merger or this proxy
statement or, if you would like additional copies of this proxy
statement, or the proxy card you should call MacKenzie Partners,
Inc., our proxy solicitor, toll-free
at (800) 322-2885
or collect at
(212) 929-5500.
|
7
CAUTION
REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement, and the documents to which we refer you in
this proxy statement, contain forward-looking
statements, as defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that reflect our
current views as to future events and financial performance with
respect to our operations, the expected completion and timing of
the merger and other information relating to the merger. These
statements can be identified by the fact that they do not relate
strictly to historical or current facts. There are
forward-looking statements throughout this proxy statement,
including, among others, under the sections entitled
Summary Term Sheet, The Merger,
The Merger Opinions of Interwovens
Financial Advisors and in statements containing words such
as anticipate, estimate,
expect, will be, will
continue, likely to become,
intend, plan, believe and
other similar expressions. You should be aware that
forward-looking statements involve known and unknown risks and
uncertainties. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, we
cannot assure you that the results or developments we anticipate
will be realized, or even if realized, that they will have the
expected effects on our business or operations or on the merger
and related transactions. Factors that could cause actual
results to differ materially from those discussed in the
forward-looking statements contained in this proxy statement
include, among other things:
|
|
|
|
|
the occurrence of any event, change or other circumstance that
could give rise to the termination of the merger agreement;
|
|
|
|
the inability to complete the merger due to the failure to
obtain stockholder approval or the failure to satisfy other
conditions to consummation of the merger;
|
|
|
|
the failure of the merger to close for any other reason;
|
|
|
|
the risk that the merger agreement may be terminated in
circumstances which require us to pay Autonomy a termination fee
of up to $25 million;
|
|
|
|
the effect of the announcement of the merger on our customer and
employee relationships, operating results and business
generally, including risks we may experience a decline in sales
and regarding employee retention;
|
|
|
|
the risk that the proposed merger disrupts current plans and
operations and our inability to respond effectively to
competitive pressures, industry developments and future
opportunities;
|
|
|
|
the amount of the costs, fees, expenses and charges related to
the merger; and
|
|
|
|
actual and potential litigation challenging the merger.
|
While it is not possible to identify all factors, Interwoven
faces many risks and uncertainties that could cause actual
results to differ from our forward-looking statements, including
the risks described in the documents filed by Interwoven with
the Securities and Exchange Commission. See the section of this
proxy statement entitled Where You Can Find More
Information.
The forward-looking statements made in filing represent our
views as of the date of this proxy statement, and it should not
be assumed that the statements made herein remain accurate as of
any future date. We undertake no duty to any person to update
such statements in this proxy statement under any circumstances,
except as otherwise required by law. You should review any
additional disclosures made by Interwoven in its
Forms 10-K,
10-Q
and
8-K
filed
with the Securities and Exchange Commission.
8
THE
COMPANIES
Interwoven,
Inc.
Interwoven is a provider of content management software
solutions. Our software and services enable organizations to
leverage content to drive business growth by improving online
business performance, increasing collaboration and streamlining
business processes both internally and externally. Since our
inception, over 4,700 enterprise and professional services
organizations in 70 countries worldwide, including the customers
we acquired through acquisitions, have chosen our solutions.
We are incorporated under the laws of the state of Delaware. Our
executive offices are located at 160 East Tasman Drive,
San Jose, California 95134. Our telephone number is
(408) 774-2000.
Our common stock is listed on The NASDAQ Global Select Market
under the symbol IWOV.
Autonomy
Corporation plc
Autonomy is a global leader in infrastructure software,
principally providing software for automating the management,
processing and delivery of unstructured information by virtue of
extracting its meaning from and to sources across the internet,
the extended enterprise and other digital domains. Autonomy
remains committed to its core vision to be the standard platform
for automating the management, processing and delivery of all
forms of unstructured information. An historically important
portion of that market, and an entry into many sales
opportunities, includes the need to manage the workflow of
content in corporate repositories and on websites.
Autonomy is a company formed under the laws of England and
Wales. Autonomys executive offices are located at
Cambridge Business Park, Cowley Road, Cambridge CB4 0WZ, United
Kingdom. Autonomys phone number is
(011-44)
1223 448 000.
Milan
Acquisition Corp.
Milan Acquisition Corp. is a wholly-owned subsidiary of Autonomy
and has not engaged in any business activity other than in
connection with the merger. Merger Sub is incorporated under the
laws of the state of Delaware. Merger Subs executive
offices are located at Cambridge Business Park, Cowley Road,
Cambridge CB4 0WZ, United Kingdom. Merger Subs telephone
number is
(011-44)
1223 448 000.
9
THE
SPECIAL MEETING
We are furnishing this proxy statement to you as part of the
solicitation of proxies by our Board of Directors for use at the
special meeting.
Date,
Time and Place
The special meeting will be held at 160 East Tasman Drive,
San Jose, California 95134, at
[ ] a.m., local time, on
[ ],
2009.
Purpose
of the Special Meeting
At the special meeting, we are asking holders of record of our
common stock on February 4, 2009, to consider and vote on
the following proposals:
1. To consider and vote upon a proposal to adopt the
Agreement and Plan of Merger, dated as of January 22, 2009,
among Autonomy Corporation plc, Milan Acquisition Corp., a
wholly-owned subsidiary of Autonomy, and Interwoven; and
2. To vote to adjourn the special meeting, if necessary, to
solicit additional proxies if there are not sufficient votes at
the time of the special meeting to adopt the merger agreement.
No other business will be considered at the special meeting. A
copy of the merger agreement is attached to this proxy statement
as Annex A.
Record
Date and Stock Entitled to Vote
Our Board of Directors has fixed the close of business on
February 4, 2009 as the record date for determination of
Interwoven stockholders entitled to notice of and to vote at the
special meeting. Only holders of record of Interwoven common
stock on that date are entitled to notice of and to vote at the
special meeting. Each share of Interwoven common stock issued
and outstanding as of the record date entitles its holder to
cast one vote at the special meeting. At the close of business
on the record date,
[ ] shares
of Interwoven common stock were issued and outstanding and such
shares were held by approximately
[ ]
holders of record. As of the record date, the directors and
executive officers of our common stock and their affiliates held
[ ]
outstanding shares of Interwoven common stock.
Vote
Required
A majority of the outstanding shares of our common stock
entitled to vote at the special meeting must be voted in favor
of the proposal to adopt the merger agreement for the proposal
to pass. A majority of the shares of our common stock cast at
the special meeting (a quorum being present) must be voted in
favor of the adjournment proposal for the proposal to pass. The
inspector of elections appointed for the Interwoven special
meeting will tabulate the votes.
Voting of
Proxies and Voting over the Internet or by Telephone
The proxy card or voter instruction card accompanying this proxy
statement is solicited on behalf of our Board of Directors for
use at the special meeting.
General.
All shares represented by properly
executed proxies received in time for the special meeting will
be voted at the special meeting in the manner specified by the
holders. Properly executed proxies that do not contain voting
instructions will be voted FOR the adoption of the
merger agreement and FOR the adjournment of the
special meeting, if necessary, to solicit additional proxies. To
vote, please complete, sign, date and return the enclosed proxy
card or, if available, to appoint a proxy over the Internet or
by telephone, follow the instructions provided below. If you
attend the special meeting and wish to vote in person, you may
withdraw your proxy and vote in person. If your shares are held
in the name of your broker, bank or other nominee, you must
obtain a proxy, executed in your favor, from the holder of
record to be able to vote at the special meeting.
10
Abstentions.
Interwoven will count a properly
executed proxy marked ABSTAIN as present for
purposes of determining whether a quorum is present, but the
shares represented by that proxy will not be voted at the
special meeting. Abstentions on the proposal to adopt the merger
agreement will be treated as a vote AGAINST this
proposal for purposes of determining whether it has been
approved, and thus will affect the outcome. However, abstentions
on the adjournment proposal will be treated as neither a vote
FOR nor a vote AGAINST this proposal for
purposes of determining whether it has been approved, and thus
will not affect the outcome.
Broker non-votes.
Brokers who hold shares in
street name for customers have the authority to vote on
routine proposals when they have not received
instructions from beneficial owners. However, brokers are
precluded from exercising their voting discretion with respect
to approval of non-routine matters, such as the adoption of the
merger agreement and, as a result, absent specific instructions
from the beneficial owner of such shares, brokers are not
empowered to vote those shares, referred to generally as
broker non-votes. If your shares are held by a
broker, your broker will not be able to vote your shares for you
on the issuance proposal without instructions from you on how to
vote your shares. You should follow the directions provided by
your broker regarding how to instruct your broker to vote your
shares. Failure to instruct your broker how to vote on the
proposal to adopt the merger agreement will be treated as a vote
AGAINST this proposal for purposes of determining
whether the proposal has been approved, and thus will have an
effect on the outcome. Failure to instruct your broker on how to
vote on the adjournment proposal will be treated as neither a
vote FOR nor a vote AGAINST this
proposal for purposes of determining whether the proposal has
been approved, and thus will have no effect on the outcome.
Voting shares in person that are held through
brokers.
If your shares are held by your broker
or another nominee and you wish to vote those shares in person
at the special meeting, you must obtain from the nominee holding
your Interwoven common stock a properly executed legal proxy
identifying you as an Interwoven stockholder, authorizing you to
act on behalf of the nominee at the special meeting and
identifying the number of shares with respect to which the
authorization is granted.
Voting over the Internet or by telephone.
Most
beneficial owners whose stock is held in street name
receive instructions for authorizing votes by their banks,
brokers or other agents, rather than from our proxy card. A
number of brokers and banks are participating in a program
provided through Broadridge Financial Solutions, Inc. that
offers the means to authorize votes over the Internet and by
telephone. If your shares are held in an account with a broker
or bank participating in the Broadridge program you may
authorize a proxy to vote those shares over the Internet at
Broadridge Financial Solutions, Inc.s website at
www.proxyvote.com or by telephone by calling the telephone
number shown on the instruction form received from your broker
or bank.
Quorum
and Abstentions
In order to conduct business at the special meeting, a quorum
must be present. Interwovens bylaws provide that a quorum
at the special meeting will be the holders of a majority of the
stock outstanding on the record date for the meeting. Interwoven
will treat shares of common stock represented by a properly
signed and returned proxy, including abstentions and broker
non-votes, as present at the meeting for purposes of determining
the existence of a quorum. If sufficient votes to constitute a
quorum are not received by the date of the special meeting, the
persons named as proxies may propose one or more adjournments of
the meeting to permit further solicitation of proxies. The
persons named as proxies would generally exercise their
authority to vote in favor of adjournment.
Interwoven will count a properly executed proxy marked
ABSTAIN as present for purposes of determining
whether a quorum is present, but the shares represented by that
proxy will not be voted at the special meeting. If you abstain
from voting or do not vote, either in person or by proxy, it
will have the same effect as a vote against the adoption of the
merger agreement. However, abstentions on the adjournment
proposal will have no effect on the outcome of the vote on that
proposal.
11
Revocability
of Proxies
The grant of a proxy on the enclosed proxy card does not
preclude a stockholder from voting in person at the special
meeting. You may revoke your proxy at any time before the shares
reflected on your proxy card are voted at the special meeting by:
|
|
|
|
|
filing with our Secretary a properly executed and dated
revocation of proxy;
|
|
|
|
submitting a properly completed, executed and dated proxy card
to our Secretary bearing a later date; or
|
|
|
|
appearing at the special meeting and voting in person.
|
Your attendance at the special meeting will not in and of itself
constitute the revocation of a proxy. If you have instructed
your broker to vote your shares, you must follow the directions
received from your broker to change these instructions.
Solicitation
of Proxies
All proxy solicitation costs will be borne by us. In addition to
solicitation by mail, our directors, officers, employees and
agents may solicit proxies from stockholders by telephone or
other electronic means or in person. We also reimburse brokers
and other custodians, nominees and fiduciaries for their
expenses in sending these materials to you and getting your
voting instructions. We have retained the services of a paid
solicitor, MacKenzie Partners, Inc., 105 Madison Avenue, New
York, New York, 10016, to solicit proxies, and will pay a fee of
$12,500 plus expenses for such services.
You should not send your stock certificates with your proxy
card. A letter of transmittal with instructions for the
surrender of Interwoven common stock certificates will be mailed
to our stockholders as soon as practicable after completion of
the merger.
12
PROPOSAL 1
THE MERGER
The discussion under the sections of this proxy statement
entitled The Merger and The Merger
Agreement summarizes the material terms of the merger.
Although we believe that the description covers the material
terms of the merger, this summary may not contain all of the
information that is important to you. We encourage you to read
this proxy statement, the merger agreement and the other
documents referred to herein carefully for a more complete
understanding of the merger.
Background
of the Merger
On August 28, 2008, at the request of Anthony Bettencourt,
the Chief Executive Officer of Zantaz, an Autonomy subsidiary,
Joseph Cowan, our Chief Executive Officer, met with Sushovan
Hussain, the Chief Financial Officer of Autonomy, and
Mr. Bettencourt, to discuss ways in which Interwoven and
Autonomy might work together, and during that discussion,
Mr. Hussain indicated that Autonomy was interested in
exploring a potential acquisition of Interwoven. Mr. Cowan
informed Mr. Hussain that Interwoven was not pursuing a
sale of the company but was willing to engage in discussions
with Autonomy. On August 29, 2008, Interwoven and Autonomy
entered into a mutual non-disclosure agreement, and
Mr. Cowan, Scipio (Max) Carnecchia, our
President, John Calonico, our Chief Financial Officer,
Brian Andersen, our Vice President of Corporate Development, and
Rafiq Mohammadi, our Senior Vice President and Chief Technology
Officer, met with Mr. Hussain and Mr. Bettencourt.
During this meeting, the parties each presented an overview of
their respective businesses and exchanged high-level information
regarding the two companies. On September 1, 2008,
Mr. Cowan and Mr. Hussain spoke and further discussed
the possibility of an acquisition, and potential valuations for
Interwoven.
The parties continued to meet and exchange information on
September 2, 2008. After these discussions,
Mr. Hussain indicated that Autonomy anticipated that it
would make a proposal for a potential acquisition of Interwoven.
On September 4, 2008, Autonomy delivered a non-binding
letter to Interwoven indicating its interest in pursuing a
business combination in which it would acquire all of our
outstanding common stock for cash at a premium of 25% to 30%
above our
seven-day
average closing price over, up to a maximum of $20.00 per share.
Our seven day average closing price on September 3, 2008
was $14.46. In that letter, Autonomy indicated that it expected
the financing of the transaction to be funded with an equity and
debt financing, and that it did not expect the transaction to be
subject to any financing contingency. In addition, in that
letter, it requested that Interwoven enter into an agreement
providing for a
30-day
period of exclusivity.
On September 5, 2008, our Board of Directors met, together
with Mr. Calonico, Mr. Andersen and representatives of
Fenwick & West LLP, our outside legal counsel, to
discuss the Autonomy proposal and the meetings with Autonomy,
and to discuss the retention of Lehman Brothers Inc.
(Lehman Brothers) as financial advisor. At this
meeting, our Board of Directors also discussed the process for
discussions with Autonomy, the potential advantages and risks of
proceeding with discussions with Autonomy, including the effect
of those discussions on other strategic initiatives under
consideration by us. Representatives of Fenwick & West
reviewed the Boards fiduciary duties with respect to
considering a potential change in control transaction. Our Board
of Directors then authorized the retention of Lehman Brothers as
our financial advisor, and requested that its representatives
prepare a financial analysis of Interwoven and a financial
analysis of Autonomys proposal. In addition, our Board of
Directors discussed Autonomys request for an exclusivity
agreement under which Interwoven would agree not to negotiate
with, or solicit proposals from, third parties for a period of
30 days, and determined that such an agreement would not be
appropriate at this time. Following this meeting, on
September 6, 2008, Mr. Cowan discussed Autonomys
proposal with Mr. Hussain.
On September 7, 2008, our Board of Directors held a
meeting, together with Mr. Calonico, Mr. Andersen,
representatives of Lehman Brothers and Fenwick & West.
At that meeting, Mr. Cowan described recent discussions
with Autonomy. Representatives of Lehman Brothers then reviewed
a preliminary analysis of the proposed acquisition valuation and
of Interwoven on a stand-alone basis. The Board discussed with
management and our advisors the process by which we might
explore and evaluate a sale of the company, as well as our
prospects and risks as an independent company, and other
alternative transactions, including acquisitions by us of other
companies, and opportunities for Interwoven to be acquired by a
company other than Autonomy. Our Board of Directors and
financial advisors discussed other parties that might be
interested in a potential acquisition of
13
Interwoven, and the manner in which they should be contacted to
assess their interest. At the conclusion of this discussion, our
Board of Directors directed Mr. Cowan to have further
discussions with Autonomy to seek to clarify the terms of the
proposed transaction, including the price that Autonomy might
pay, and the source and certainty of Autonomys funds to
effect a potential transaction, and to work with Lehman Brothers
to determine the identity of other parties that might be
interested in, and capable of, acquiring Interwoven.
On September 8, 2008, Mr. Cowan again spoke with
Mr. Hussain and discussed valuation. During this
discussion, Mr. Cowan requested that Autonomy propose a
specific price per share. On September 9, 2008,
Mr. Hussain reiterated the proposed premium of 25% to 30%
set forth in the September 4 letter. In addition, Mr. Cowan
advised Mr. Hussain that Interwoven was not willing to
enter into an exclusivity agreement.
Later on September 9, 2008, our Board of Directors held a
meeting, together with members of senior management and
representatives of Lehman Brothers and Fenwick & West,
at which the Board discussed the current status of discussions
with Autonomy, and authorized Interwoven to continue discussions
with Autonomy. In addition, the Board discussed the process by
which we might contact other parties to determine their
potential interest in an acquisition of Interwoven, including
the potential benefits and risks of that process and the
identity of the other companies to be contacted. Following this
discussion, our Board authorized Lehman Brothers and
Mr. Cowan to contact those companies to determine whether
any of them were interested in potentially pursuing a
transaction with Interwoven.
On September 10, 2008, at the direction of our Board of
Directors, Mr. Cowan and representatives of Lehman Brothers
contacted representatives of five large enterprise software and
technology companies that the Board, after consultation with
Lehman Brothers, deemed likely to be interested in an
acquisition of Interwoven to determine whether they would be
interested in pursuing a strategic transaction. Between
September 10 and September 19, 2008, Lehman Brothers and
Mr. Cowan had discussions with representatives of each of
these companies, none of which indicated that they were
interested in pursuing a transaction with Interwoven at that
time.
On September 10, 2008, Mr. Calonico and
Mr. Andersen met with Mr. Hussain and
Mr. Bettencourt to discuss the process by which a potential
transaction could be evaluated and, on September 11,
Autonomy delivered a revised non-binding indication of interest
to Interwoven stating that it would expect to offer $19.00 to
$20.00 cash per share, and when over $19 with a premium not
exceeding 30%. In that letter, Autonomy again requested that
Interwoven enter into an agreement providing for a
30-day
period of exclusivity.
On September 11, 2008, our Board of Directors held a
meeting, together with members of senior management and
representatives of Lehman Brothers and Fenwick & West,
at which the Board discussed Autonomys proposal,
Autonomys request for exclusivity, and Autonomys
plans for the financing of the proposed transaction, as well as
the status of communications with other potential parties. In
addition, the Board discussed our anticipated financial results
for the quarter ending September 30, 2008. Representatives
of Fenwick & West discussed the Boards fiduciary
duties and the process for discussions with Autonomy. The Board
authorized management to continue the discussions with Autonomy,
but determined not to agree to exclusivity at this time.
On September 15, 2008, Mr. Cowan had multiple calls
with Mr. Hussain, in which Mr. Hussain indicated that
Autonomy was unwilling to proceed without an exclusivity
agreement, due to the substantial costs associated with the due
diligence process. Mr. Cowan advised Mr. Hussain that
we were not prepared to enter into an exclusivity agreement at
that time. Mr. Hussain and Mr. Cowan then agreed that,
while Interwoven would not at that time enter into an agreement
to negotiate exclusively with Autonomy, Interwoven would agree
to reimburse Autonomys transaction expenses (not to exceed
$250,000) if Interwoven entered into a definitive agreement with
another party.
On September 15, 2008, Lehman Brothers, our financial
advisor, publicly announced that it intended to file a petition
under Chapter 11 of the United States Bankruptcy Code.
On September 16, 2008, Interwoven and Autonomy executed a
revised non-disclosure agreement proposed by Interwoven. On
September 16, 17 and 18, 2008, representatives of
Interwoven and Autonomy met to conduct further due diligence
and, in particular, to discuss our products and technology, and
continued to discuss the process for negotiation of a
transaction. During these discussions, Autonomy continued to
request that Interwoven enter into an exclusivity agreement with
Autonomy. On September 17, 2008, we provided Autonomy with
access to an online data room in which we provided additional
due diligence materials.
14
On the evening of September 18, 2008, Interwoven executed
an agreement to reimburse Autonomys transaction expenses
(not to exceed $250,000) if Interwoven entered into a definitive
acquisition agreement with another party. Autonomy reiterated
its request that Interwoven agree to negotiate exclusively with
Autonomy. Mr. Cowan advised Autonomy that our Board would
be meeting on September 19 and would discuss this request, but
that it would not consider this request if it had not received a
draft of a definitive merger agreement from Autonomy. On
September 19, 2008, Morgan, Lewis & Bockius LLP,
Autonomys legal counsel, provided us with a proposed draft
of a merger agreement and a proposed draft of an exclusivity
agreement.
On September 19, 2008, our Board of Directors held a
meeting together with Mr. Calonico, Mr. Andersen and
representatives of Lehman Brothers and Fenwick & West,
at which the Board reviewed the status of discussions with
Autonomy and the anticipated plans and schedule for further
negotiations and due diligence, as well as the results of the
communications with other potential parties. Representatives of
Fenwick & West described the terms contained in the
draft merger agreement that had been provided by Autonomy.
Management and counsel reported that, based on discussions with
representatives of Autonomy, Autonomy appeared prepared to
proceed with negotiating a definitive acquisition agreement and
carrying out further due diligence, but only on an exclusive
basis, and that Autonomy had expressed concerns about the effect
any delay in entering into an exclusivity agreement and
commencing negotiations on the merger agreement might have on
its interest in proceeding with a potential transaction with us.
Our Board of Directors discussed the fact that none of the other
companies contacted by Mr. Cowan and representatives of
Lehman Brothers had indicated that they were interested in
pursuing a transaction with us, and discussed the possibility
that delaying negotiations with Autonomy in order to pursue
further alternatives might jeopardize any possible transaction
with Autonomy. In addition, the Board discussed possible
alternative strategic transactions, including potential material
acquisitions by Interwoven of two other companies, the
significant risks associated with completing these acquisitions
and integrating the acquired companies with Interwoven. The
Board also discussed risks relating to the emerging financial
crisis and the resulting uncertainties in global capital
markets. Following this discussion, the Board authorized the
execution of an exclusivity agreement with Autonomy through
September 30, 2008 (and providing for extension by mutual
agreement of the parties). In addition, the Board discussed the
recent developments involving Lehman Brothers, and that it was
anticipated that Barclays Capital would acquire certain assets
of Lehman Brothers, including its North American investment
banking franchise. The Board noted that it was anticipated that
Barclays Bank, an affiliate of Barclays Capital, would be
providing debt financing for Autonomy, and accordingly the Board
authorized our management to engage Credit Suisse to provide a
separate opinion as to the fairness, from a financial point of
view, of the consideration to be paid to our stockholders in any
transaction with Autonomy.
On September 20 and 21, 2008, representatives of Interwoven and
Autonomy discussed various issues relating to the draft
exclusivity agreement and merger agreement. On
September 21, 2008, Interwoven executed the exclusivity
agreement in which it agreed that it would refrain from engaging
in discussions with any other parties until September 30,
2008, and which superseded and terminated the prior agreement
for expense reimbursement. From September 21 through
October 10, 2008, representatives of Autonomy and
Interwoven continued to negotiate the draft merger agreement,
and Autonomy continued its due diligence review, and on
September 24 and 25, 2008, representatives of Interwoven and
Autonomy met to discuss Interwovens business, and aspects
of the potential integration of that business with
Autonomys business.
On September 25, 2008, we engaged Credit Suisse to provide
an opinion as to the fairness, from a financial point of view,
of the consideration to be paid to our stockholders in any
transaction with Autonomy.
On October 1, 2008, the Interwoven Board of Directors held
a meeting, at which the Board reviewed the status of discussions
with Autonomy, and Autonomys plans with respect to the
financing of the proposed merger. Representatives of
Fenwick & West described the current state of the
negotiations on the draft merger agreement and representatives
of Fenwick & West and Barclays Capital also discussed
Autonomys plans for financing the proposed transaction.
Following this discussion, the Board authorized the extension of
the exclusivity period with Autonomy.
On September 22, 2008, certain assets of Lehman Brothers,
including its North American investment banking franchise, were
acquired by Barclays Capital. As a result, the individuals from
Lehman Brothers who had been advising us were subsequently hired
by Barclays Capital.
15
On October 2, 2008, we entered into a letter agreement with
Barclays Capital, pursuant to which Barclays Capital was engaged
to provide financial advisory services in connection with a
potential sale of Interwoven and, if requested by the Board of
Directors, to provide an opinion as to the fairness, from a
financial point of view, of the consideration to be offered to
our stockholders in any such sale transaction.
On October 3, 2008, Mr. Calonico, Mr. Andersen,
Andrew Kanter, Autonomys Chief Operating Officer, and the
parties respective counsel participated in a negotiation
of the merger agreement.
Between September 11, 2008, the date of Autonomys
revised indication of interest, and October 8, 2008, our
closing stock price decreased approximately 20%, from $13.86 to
$11.15. In addition, during the same period, Autonomys
stock price declined approximately 30%, from 1040 pence to 730
pence, substantially increasing the number of shares of its
stock that it would need to sell to finance a transaction
through an equity offering. Further, global financial markets
experienced significant deterioration and volatility during this
period, increasing the difficulty in agreeing upon a valuation
of our company and the difficulty to Autonomy of financing the
proposed transaction. Accordingly, Michael Lynch, Chief
Executive Officer of Autonomy, had a discussion with
Mr. Cowan on October 8, 2008 in which he advised
Mr. Cowan that he did not believe that a transaction would
be approved by Autonomys shareholders or could be financed
at the prices previously proposed given current market
conditions.
Between October 8, 2008 and October 13, 2008,
Mr. Cowan had several discussions with Mr. Lynch and
Mr. Hussain to discuss the continuing market volatility and
the interest of Autonomy in acquiring us. Mr. Lynch
expressed continued interest in pursuing a transaction, but
stated that Autonomy could now only pay a price per share in the
range of $15.00 to $16.00 due to changes in the stock prices of
the two companies and Autonomys requirement that the
premium not exceed 30%. On October 13, 2008,
Mr. Hussain sent an email to Mr. Calonico and
Mr. Cowan indicating that Autonomys stock price had
just increased and that this increase, if sustained, could
enable Autonomy to offer a price of $16.00 per share. The
exclusivity agreement between Interwoven and Autonomy was not
extended on its expiration on October 13, 2008, and active
negotiations by our counsel on the proposed merger agreement
were terminated.
On October 16, 2008, our Board of Directors held a meeting,
together with Mr. Calonico, Mr. Carnecchia,
Mr. Andersen and representatives of Fenwick &
West. At this meeting, the Board and management reviewed third
quarter results, their expectations for the fourth quarter, and
market conditions in our industry. Mr. Cowan then reported
on the status of discussions with Autonomy. The Board then
discussed various strategic initiatives for us as an independent
company, including the acquisition of another company.
Between October 9, 2008 and October 16, 2008, our
stock price increased from $10.49 to $13.27. On October 17,
2008, Mr. Lynch and Mr. Cowan had a discussion in
which they discussed transaction valuation, and in which
Mr. Lynch reiterated that Autonomy could not offer more
than a 30% premium to our then-current stock price. On
October 20, 2008, Mr. Lynch had a further discussion
with Mr. Cowan in which he indicated that based on the
current prices of the two companies shares, a price in the
range of $17.00 to 17.50 per share could be possible. On
October 22, 2008, our Board of Directors held a meeting,
together with representatives of Barclays Capital and
Fenwick & West, at which the Board reviewed this new
proposal, the outlook for our business as an independent
company, the risks of remaining independent (including risks
resulting from continued weakened global market conditions) and
the risks of proceeding with discussions with Autonomy, and the
strategic rationale for the proposed transaction.
Representatives of Barclays Capital then discussed this revised
proposal, and reviewed an analysis of the proposed valuation and
of Interwoven on a stand-alone basis. The Board also discussed
certain issues with respect to the draft merger agreement. Among
other things, the Board discussed the requirement of the London
Stock Exchange that the shareholders of Autonomy approve the
merger, and discussed the risk to us of a failure by
Autonomys shareholders to vote in favor of the merger. Our
Board of Directors directed management to continue discussions
with Autonomy regarding valuation, and to seek to obtain an
agreement by Autonomy to pay a
break-up
fee
to Interwoven in the event that the merger agreement was
terminated as a result of the failure by Autonomys
shareholders to vote in favor of the merger.
Mr. Cowan and Mr. Lynch continued to communicate
regarding our valuation from October 22, 2008 through
October 25, 2008. From October 20, 2008 to
October 27, 2008, our stock price decreased from $13.17 to
$11.42. Because of the high volatility in our and
Autonomys trading prices and uncertainty as to
Autonomys ability to
16
finance the proposed transaction in view of adverse conditions
in equity capital markets and credit markets, active
negotiations were terminated.
On November 25, 2008, Mr. Lynch sent Mr. Cowan an
email indicating that Autonomy continued to be interested in a
transaction.
On December 1, 2008, Mr. Lynch had a discussion with
Mr. Cowan in which Mr. Lynch proposed a transaction at
a premium of approximately 30% to our then-current stock price,
representing a price of approximately $16.50.
On December 2, 2008, our Board of Directors met, together
with members of senior management and representatives of
Fenwick & West. At this meeting, the Board and
management reviewed our expectations for the fourth quarter of
2008, our initial expectations for 2009, market conditions and
trends in our industry (including continued weakened global
market conditions) and our business strategy. The Board,
management and our advisors then discussed the new offer, the
status of negotiations when discussions terminated in October,
the risks involved in our business and strategic plan, and our
potential value as an independent company. Following this
discussion, our Board of Directors authorized us to resume
discussions with Autonomy, and directed Mr. Cowan to
indicate to Autonomy that we would require that a definitive
acquisition agreement must provide for payment of a
break-up
fee
to Autonomy in the event that the merger agreement was
terminated as a result of the failure by Autonomys
shareholders to vote in favor of the merger. Mr. Cowan
communicated this to Mr. Lynch on December 6, 2008.
However, between November 28, 2008 (the trading day
preceding the December 1 proposal) and December 5, 2008,
our closing stock price decreased approximately 19%, from $13.01
to $10.52, and, as a result, on December 6, 2008,
Mr. Lynch advised Mr. Cowan that any transaction would
need to place a lower value on our stock than previously
indicated. As a result, the parties suspended discussions
pending further market developments.
On December 23, 2008, Mr. Cowan received a call from
Mr. Hussain indicating a desire to reengage in discussions.
Mr. Cowan instructed Mr. Hussain to indicate any
interest in writing and advised him that he would take the
information to the Board for consideration. On December 26,
2008, Autonomy delivered a non-binding indication of interest to
Mr. Cowan proposing a transaction at $16.00 per share,
which Autonomy noted represented a 38% premium to our average
closing price over the 30 and 60 day periods ending
December 23, 2008 and a 41% premium to our $11.31 closing
price on December 23, 2008. Autonomy also reiterated that
their proposal was not subject to any financing contingency, and
requested a new
30-day
exclusivity period.
On December 29, 2008, our Board of Directors held a meeting
with its financial and legal advisors to discuss this proposal.
At this meeting, representatives of Barclays Capital reviewed
updated financial analyses and representatives of
Fenwick & West discussed with the Board the status of
the transaction terms, and the Board authorized Bob L. Corey,
the chairman of our Board of Directors, and Mr. Cowan to
resume discussions with Autonomy.
On December 30, 2008, Mr. Cowan, Mr. Corey,
Mr. Lynch, Mr. Hussain and Mr. Kanter had further
discussions regarding transaction price. Later on
December 30, 2008, our Board of Directors held a meeting to
review the status of the discussions with Autonomy.
On December 31, 2008, in a discussion among Mr. Corey,
Mr. Cowan and Mr. Lynch, Autonomy proposed an increase
in the price to $16.20 per share. During this call,
Mr. Corey outlined conditions required by Interwoven to
continue this process. Among other things, Mr. Corey
indicated that the sources of the funding for the proposed
acquisiton had to be certain and in place, and he indicated a
timetable for completion of negotiations and due diligence. Our
Board of Directors met on December 31, 2008 and discussed
the new proposal, as well as current and anticipated conditions
in our business. Following discussion, our Board of Directors
authorized us to proceed with discussions with Autonomy, and
directed that certain of the other companies which we had
contacted in September be again contacted to determine whether
they now had any interest in discussing a possible acquisition
of Interwoven.
Between January 1 and January 5, 2009, Interwoven and
Autonomy continued to negotiate the terms of the definitive
merger agreement, and Autonomy conducted further due diligence.
In addition, during this period, representatives of Barclays
Capital contacted certain of the other companies previously
contacted by representatives of Lehman Brothers, each of which
indicated that they were not interested in proceeding with
acquisition discussions with us. Autonomy also provided us with
a draft of a credit agreement which would provide a portion of
17
the funds for the proposed transaction, and requested that we
enter into a new exclusivity agreement with Autonomy in order to
enable further discussions to proceed.
On January 5, 2009, our Board of Directors met, together
with Mr. Andersen and representatives of
Fenwick & West. At this meeting, the Board discussed
our fourth quarter results and expectations for the first
quarter of 2009 and weakening global market conditions, the
discussions that had been conducted with Autonomy, and the
results of communications with other companies. The Board also
discussed a potential material acquisition by Interwoven that
had been under discussion, including the results of our due
diligence review of the target company. In addition, the Board
discussed Autonomys request for a new exclusivity
agreement. Following this discussion, the Board authorized the
execution of an exclusivity agreement with Autonomy through
January 7, 2009 (and providing for extension by mutual
agreement of the parties).
Between January 5 and January 20, 2009, Interwoven and
Autonomy continued to negotiate the terms of the definitive
merger agreement and of the voting agreements and irrevocable
undertakings to be signed by the directors and certain executive
officers of the two companies, and Autonomy conducted further
due diligence, including a detailed review of our fourth quarter
results of operations and sales pipeline. Autonomy also provided
us with a draft of the documents in connection with its proposed
equity financing, which would provide a portion of the funds for
the proposed transaction.
On January 7, 2009, Mr. Lynch informed Mr. Cowan
that the results of Autonomys due diligence to date were
satisfactory and that Autonomy was interested in completing due
diligence, including reviewing our 2008 consolidated financial
statements. Later on January 7, 2009, our Board of
Directors met, together with Mr. Calonico,
Mr. Andersen and representatives of Fenwick &
West, and discussed the status of negotiations of definitive
agreements and of the due diligence process.
On January 15, 2009, our Board of Directors met, together
with Mr. Carnecchia, Mr. Calonico, Mr. Andersen
and representatives of Barclays Capital, Credit Suisse and
Fenwick & West. At this meeting, representatives of
Fenwick & West reviewed the terms of the proposed
merger agreement and Autonomys financing agreements. The
Board discussed the progress that had been made in negotiations
with Autonomy and the terms of the agreements to be signed by
Autonomy in connection with its proposed debt and equity
financings. Barclays Capital and Credit Suisse each reviewed
with our Board of Directors their respective financial analyses
with respect to the proposed merger. Our Board of Directors also
reviewed with management, and discussed, weakening business
conditions in 2009 and our outlook
,
as well as the
continuing deterioration in global financial markets. The Board
of Directors authorized management to continue to work toward
completion of diligence and the finalization of a definitive
acquisition agreement with Autonomy.
Between January 15 and January 20, 2009, Autonomy completed
its due diligence, including with respect to our 2008
consolidated financial statements, we reviewed and provided
input on Autonomys debt and equity financing documents,
and we and Autonomy completed the negotiation of the draft
merger agreement.
On the morning of January 21, 2009, our Board of Directors
met, together with members of our senior management and
representatives of Barclays Capital, Credit Suisse and
Fenwick & West. At this meeting, the Board first
received an update on the status of negotiations with Autonomy
from our management and representatives of Fenwick &
West and Barclays Capital. Representatives of
Fenwick & West discussed with the Board the proposed
merger agreement, copies of which had been previously
distributed to our Directors. Representatives of Barclays
Capital and Credit Suisse then each separately provided the
Board with updated financial analyses, and informed the Board of
Directors that there had been no material change to the factors
presented in their respective financial reviews of the proposed
transaction on January 15, 2009 (other than as a result of
changes in trading prices of our stock and the stock of other
companies described in their analyses). The Board also discussed
the terms of the agreements to be entered into by Autonomy for
its debt and equity financing. At the conclusion of their
respective presentations, each of Barclays Capital and Credit
Suisse provided the Board of Directors with its oral opinion
(subsequently confirmed in writing) that, as of January 21,
2009 and based upon and subject to various qualifications,
considerations, assumptions and limitations set forth in their
respective written opinions, the consideration to be offered to
the holders of our common stock in the merger was fair, from a
financial point of view, to such stockholders. Such opinions are
attached to this proxy statement as Annex B and
Annex C, respectively. Following those presentations, the
Board of Directors unanimously determined that the merger and
the merger
18
agreement were advisable, fair to and in the best interests of
our stockholders, approved the merger agreement and the merger,
and recommended that our stockholders vote to adopt the merger
agreement.
The merger agreement and related documents were subsequently
finalized, executed and delivered by Interwoven and Autonomy in
the evening of January 21, 2009 (the morning of
January 22, 2009 in London), concurrently with the
execution by Autonomy of definitive agreements for its equity
and debt financings. Before the opening of the market in London
on January 22, 2009, the parties announced the execution of
the merger agreement.
Reasons
for the Merger
In the course of reaching its decision to approve the merger
agreement and to recommend that our stockholders vote to adopt
the merger agreement, the Board of Directors consulted with our
senior management, financial advisors and legal counsel, and
considered a number of potentially positive factors in its
deliberations concerning the merger, including the following:
|
|
|
|
|
the belief that in order to maximize value for our stockholders,
we would need to either successfully implement an aggressive
growth and acquisition strategy or be acquired, and the
significant business, market, organizational, management and
execution risks associated with an aggressive growth and
acquisition strategy;
|
|
|
|
current and projected challenging economic and market
conditions, including the significant risks and uncertainties
that these challenging conditions presented for our company, and
the fact that these challenging conditions substantially
increased the difficulty of planning for our future business;
|
|
|
|
in view of current economic and market conditions, the
substantial uncertainty regarding our 2009 financial results,
including in relation to current analyst and investor
expectations;
|
|
|
|
the fact that, having solicited indications of interest from
those companies we believed might be interested in and capable
of proceeding with an acquisition of Interwoven, none of such
companies indicated that they had interest in proceeding with
such a transaction;
|
|
|
|
the fact that the merger consideration of $16.20 per share was a
44% premium to the closing trading price of our common stock of
$11.22 on January 20, 2009, the day prior to the day the
Board of Directors approved the merger agreement, a 29% premium
to the average closing price of our common stock of $12.56 for
the ten trading days ended January 20, 2009, and a 37%
premium to the average closing price of our common stock of
$11.80 for the 30 trading days ended January 20, 2009;
|
|
|
|
the fact that the merger consideration is all cash, which
provides certainty of value to our stockholders;
|
|
|
|
the likelihood that the merger would be consummated, the absence
of a financing condition in the merger agreement, and the fact
that the placing agreement pursuant to which Citi, Deutsche Bank
and Morgan Stanley are committed to conduct and underwrite an
equity placement of Autonomys ordinary shares, and the
credit facility pursuant to which Barclays Bank is committed to
extend credit to Autonomy, in each case in order to fund the
consideration to be paid in the merger, would be entered into
contemporaneously with the merger agreement;
|
|
|
|
the financial analyses of Credit Suisse presented to the Board
of Directors on January 21, 2009, and the opinion of Credit
Suisse delivered to the Board of Directors that, as of
January 21, 2009, based upon and subject to the various
qualifications, considerations, assumptions and limitations set
forth in their opinion, the merger consideration to be received
by the holders of our 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 setting forth the
assumptions made, matters considered and limitations in
connection with the opinion is attached to this proxy statement
as Annex C, which stockholders are urged to read in its
entirety);
|
|
|
|
the financial analyses of Barclays Capital presented to the
Board of Directors on January 21, 2009, and the opinion of
Barclays Capital delivered to the Board of Directors that, as of
January 21, 2009, based upon and subject to the various
qualifications, limitations and assumptions set forth therein,
the merger consideration to be offered to the holders of our
common stock pursuant to the merger agreement was fair, from a
financial
|
19
|
|
|
|
|
point of view, to such holders (the full text of the written
opinion setting forth the procedures followed, assumptions made,
matters considered and limitations on the scope of the review
undertaken in connection with the opinion is attached to this
proxy statement as Annex B, which stockholders are urged to
read in its entirety);
|
|
|
|
|
|
the fact that our Board of Directors or any committee thereof,
in the exercise of its fiduciary duties, would be permitted in
accordance with the terms of the merger agreement to authorize
our management to provide information to and engage in
negotiations with a third party following receipt of a bona fide
written unsolicited proposal or offer that our Board of
Directors (or any committee thereof) determines in good faith is
reasonably likely to lead to a superior proposal in the manner
provided in the merger agreement, subject to specified
conditions;
|
|
|
|
the fact that our Board of Directors or any committee thereof,
in the exercise of its fiduciary duties, would be permitted in
accordance with the terms of the merger agreement to terminate
the merger agreement following receipt of a bona fide written
superior proposal in the manner provided in the merger
agreement, subject to specified conditions, including the
payment of a $25 million termination fee to Autonomy;
|
|
|
|
the fact that holders of approximately 9.6% of Autonomys
outstanding shares had agreed to vote the shares held by them in
favor of the merger;
|
|
|
|
that if Autonomys shareholders vote against approval of
the merger, or if Autonomy is unable to secure funding
sufficient to consummate the merger, Autonomy will be required
to pay us a termination fee of $25 million; and
|
|
|
|
the fact that the merger would be subject to the approval of our
stockholders.
|
The Board of Directors also considered a number of potentially
countervailing factors in its deliberations concerning the
merger, including the following:
|
|
|
|
|
that we would no longer exist as an independent company
following the completion of the merger, and our stockholders
would no longer participate in our growth or from any future
increase in the value of Interwoven or from any synergies that
may be created by the merger;
|
|
|
|
that, under the terms of the merger agreement, we would be
prohibited from soliciting other acquisition proposals and we
would be required to pay to Autonomy a termination fee of
$25 million in cash if the merger agreement were terminated
under certain circumstances specified in the merger agreement,
including if we exercised our right to terminate the merger
agreement to accept a superior proposal, which may deter others
from proposing an alternative transaction that otherwise could
be more advantageous to our stockholders;
|
|
|
|
the fact that any gains from the exchange of our shares for cash
in the merger would be taxable to our stockholders for
U.S. federal income tax purposes;
|
|
|
|
the fact that if the closing of the merger occurs before
April 22, 2009, then the closing is conditioned on our
having a specified minimum amount of cash, marketable securities
and other eligible investments;
|
|
|
|
that under the terms of the merger agreement, we agreed that we
would carry on our business in the ordinary course of business
consistent with past practice and, subject to specified
exceptions, that we would not take a number of actions related
to the conduct of our business without the prior consent of
Autonomy (such consent to certain of which cannot be
unreasonably withheld or delayed);
|
|
|
|
the fact that the merger would require the approval of
Autonomys shareholders;
|
|
|
|
that if our stockholders voted against adoption of the merger
agreement with Autonomy, we would be required to pay a fee of
$7 million to Autonomy;
|
|
|
|
that if the merger does not close, we would have foregone
opportunities to pursue the growth of our company, our officers
and other employees would have expended extensive efforts
attempting to complete the transaction and would have
experienced significant distractions from their work during the
pendency of the
|
20
|
|
|
|
|
transaction and we would have incurred substantial transaction
costs in connection with the transaction and such costs would
harm our operating results; and
|
|
|
|
|
|
that if the merger does not close, our business may be adversely
affected by the announcement of the pending merger, as our
customers may reduce their business with us pending the closing
of the merger.
|
Our Board of Directors also considered the interests of our
directors and executive officers in the merger which existed as
of the time of the Board of Directors determination and
recommendation, which are described herein under the section of
this proxy statement entitled The Merger
Interests of Our Directors and Executive Officers in the
Merger beginning on page 33.
The preceding discussion is not meant to be an exhaustive
description of the information and factors considered by our
Board of Directors. In view of the wide variety of factors
considered in connection with its evaluation of the merger and
the complexity of these matters, the 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. In considering the
factors described above, individual members of the Board of
Directors may have given different weight to different factors.
After its consideration of the preceding factors and
deliberations, our Board of Directors unanimously determined
that the merger and the merger agreement were advisable, fair to
and in the best interests of, our stockholders, approved the
merger agreement and the merger, and recommended that our
stockholders vote to adopt the merger agreement.
21
Opinions
of Interwovens Financial Advisors
Barclays
Capital Inc.
Interwoven engaged Barclays Capital to act as its financial
advisor with respect to a possible sale of Interwoven. On
January 21, 2009, Barclays Capital rendered its oral
opinion (which was subsequently confirmed in writing) to
Interwovens Board of Directors that, as of such date and
based upon and subject to the qualifications, limitations and
assumptions stated in its opinion, the consideration to be
offered to the stockholders of Interwoven in the proposed
transaction is fair, from a financial point of view, to such
stockholders.
The full text of Barclays Capitals written opinion,
dated as of January 21, 2009 is attached as Annex B to
this proxy statement. Barclays Capitals written opinion
sets forth, among other things, the assumptions made, procedures
followed, factors considered and limitations upon the review
undertaken by Barclays Capital in rendering its opinion. You are
encouraged to read the opinion carefully in its entirety. The
following is a summary of Barclays Capitals opinion and
the methodology that Barclays Capital used to render its
opinion. This summary is qualified in its entirety by reference
to the full text of the opinion.
Barclays Capitals opinion, the issuance of which was
approved by Barclays Capitals Fairness Opinion Committee,
is addressed to the Board of Directors of Interwoven, addresses
only the fairness, from a financial point of view, of the
consideration to be offered to the stockholders of Interwoven in
the proposed transaction and does not constitute a
recommendation to any stockholder of Interwoven as to how such
stockholder should vote with respect to the proposed transaction
or any other matter. The terms of the proposed transaction were
determined through arms-length negotiations between
Interwoven and Autonomy and were unanimously approved by
Interwovens Board of Directors. Barclays Capital did not
recommend any specific form of consideration to Interwoven or
that any specific form of consideration constituted the only
appropriate consideration for the proposed transaction. Barclays
Capital was not requested to address, and its opinion does not
in any manner address, Interwovens underlying business
decision to proceed with or effect the proposed transaction. In
addition, Barclays Capital expressed no opinion on, and its
opinion does not in any manner address, the fairness of the
amount or the nature of any compensation, including any stock
options or RSUs granted, to any officers, directors or employees
of any parties to the proposed transaction, or any class of such
persons, relative to the consideration to be offered to the
stockholders of Interwoven in the proposed transaction. No
limitations were imposed by Interwovens Board of Directors
upon Barclays Capital with respect to the investigations made or
procedures followed by it in rendering its opinion.
In arriving at its opinion, Barclays Capital, among other things:
|
|
|
|
|
reviewed and analyzed the merger agreement and the specific
terms of the proposed transaction;
|
|
|
|
reviewed and analyzed publicly available information concerning
Interwoven that Barclays Capital believed to be relevant to its
analysis, including Interwovens Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007 and Quarterly
Reports on
Form 10-Q
for the fiscal quarters ended March 31, 2008, June 30,
2008 and September 30, 2008;
|
|
|
|
reviewed and analyzed financial and operating information with
respect to the business, operations and prospects of Interwoven
furnished to Barclays Capital by Interwoven, including estimated
financials for the fiscal quarter ended December 31, 2008
and financial projections of Interwoven prepared by management
of Interwoven (including estimated quarterly cash flows for 2009
and internal projections relative to Wall Street estimates);
|
|
|
|
reviewed and analyzed a trading history of Interwovens
common stock from January 20, 2004 to January 20, 2009
and a comparison of the trading history from January 18,
2008 to January 20, 2009 with those of other companies that
Barclays Capital deemed relevant;
|
|
|
|
reviewed and analyzed a comparison of the historical financial
results and present financial condition of Interwoven with those
of other companies that Barclays Capital deemed relevant;
|
|
|
|
reviewed and analyzed a comparison of the financial terms of the
proposed transaction with the financial terms of certain other
transactions that Barclays Capital deemed relevant;
|
22
|
|
|
|
|
reviewed and analyzed published estimates of third party
research analysts with respect to the future financial
performance of Interwoven;
|
|
|
|
reviewed and analyzed the results of Barclays Capitals
efforts to solicit indications of interest and definitive
proposals from third parties with respect to an acquisition of
Interwoven;
|
|
|
|
reviewed and analyzed the Revolving Facility Agreement, dated as
of January 22, 2009, between Autonomy NA Holdings Inc., as
borrower, Autonomy and Autonomy Systems Limited, as original
guarantors, and Barclays Commercial Bank, Eastern, a division of
Barclays Bank PLC, as original lender and agent, and the Placing
Agreement, dated as of January 22, 2009, between Autonomy,
Citigroup Global Markets U.K. Equity Limited, Deutsche Bank AG,
London Branch and Morgan Stanley & Co. International
PLC, and the specific terms of the financing of the proposed
transaction;
|
|
|
|
reviewed and analyzed alternatives available to Interwoven on a
stand-alone basis to fund its future capital and operating
requirements;
|
|
|
|
had discussions with the management of Interwoven concerning its
business, operations, assets, financial condition and
prospects; and
|
|
|
|
undertook such other studies, analyses and investigations as
Barclays Capital deemed appropriate.
|
In arriving at its opinion, Barclays Capital assumed and relied
upon the accuracy and completeness of the financial and other
information used by Barclays Capital without any independent
verification of such information. Barclays Capital also relied
upon the assurances of management of Interwoven that they were
not aware of any facts or circumstances that would make such
information inaccurate or misleading. With respect to the
financial projections of Interwoven, upon advice of Interwoven,
Barclays Capital assumed that such projections were reasonably
prepared on a basis reflecting the best currently available
estimates and judgments of the management of Interwoven as to
Interwovens future financial performance and that
Interwoven would perform in accordance with such projections. In
arriving at its opinion, Barclays Capital assumed no
responsibility for and expressed no view as to any such
projections or estimates or the assumptions on which they were
based. In arriving at its opinion, Barclays Capital assumed that
the proposed transaction would be consummated in accordance with
the terms of the merger agreement. Further, in arriving at its
opinion, Barclays Capital did not conduct a physical inspection
of the properties and facilities of Interwoven and did not make
or obtain any evaluations or appraisals of the assets or
liabilities of Interwoven. Barclays Capitals opinion was
necessarily based upon market, economic and other conditions as
they existed on, and could be evaluated as of, the date of its
written opinion. Barclays Capital assumed no responsibility for
updating or revising its opinion based on events or
circumstances that may have occurred after, the date of its
written opinion. In addition, Barclays Capital expressed no
opinion as to whether the maintenance of the cash position
closing condition set forth in Section 7.2(d) of the merger
agreement would be satisfied or whether the financing proposed
for the proposed transaction (or any alternative financing
arrangements) would be available to Autonomy.
In connection with rendering its opinion, Barclays Capital
performed certain financial, comparative and other analyses as
summarized below. In arriving at its opinion, Barclays Capital
did not ascribe a specific range of values to the shares of
Interwovens common stock but rather made its determination
as to fairness, from a financial point of view, to
Interwovens stockholders of the consideration to be
offered to such stockholders in the proposed transaction on the
basis of various financial and comparative analyses. The
preparation of a fairness opinion is a complex process and
involves various determinations as to the most appropriate and
relevant methods of financial and comparative analyses and the
application of those methods to the particular circumstances.
Therefore, a fairness opinion is not readily susceptible to
summary description.
In arriving at its opinion, Barclays Capital did not attribute
any particular weight to any single analysis or factor
considered by it but rather made qualitative judgments as to the
significance and relevance of each analysis and factor relative
to all other analyses and factors performed and considered by it
and in the context of the circumstances of the particular
transaction. Accordingly, Barclays Capital believes that its
analyses must be considered as a whole, as considering any
portion of such analyses and factors, without considering all
analyses and factors as a whole, could create a misleading or
incomplete view of the process underlying its opinion.
23
The following is a summary of the material financial analyses
used by Barclays Capital in preparing its opinion to
Interwovens Board of Directors. Certain financial analyses
summarized below include information presented in tabular
format. In order to fully understand the financial analyses used
by Barclays Capital, the tables must be read together with the
text of each summary, as the tables alone do not constitute a
complete description of the financial analyses. In performing
its analyses, Barclays Capital made numerous assumptions with
respect to industry performance, general business and economic
conditions and other matters, many of which are beyond the
control of Interwoven or any other parties to the proposed
transaction. For purposes of its review, Barclays Capital
utilized, among other things, projections of the future
financial performance of Interwoven, as prepared by the
management of Interwoven. None of Interwoven, Autonomy, Barclays
Capital or any other person assumes responsibility if future
results are materially different from those discussed. Any
estimates contained in these analyses are not necessarily
indicative of actual values or predictive of future results or
values, which may be significantly more or less favorable than
as set forth below. In addition, analyses relating to the value
of the businesses do not purport to be appraisals or reflect the
prices at which the businesses may actually be sold.
Historical
Trading Analysis
To illustrate the trend in the historical trading prices of
Interwovens common stock, Barclays Capital considered
historical data with regard to the trading prices of
Interwovens common stock for the five-year period from
January 20, 2004 to January 20, 2009 (the
Five-Year Period) and the one-year period from
January 18, 2008 to January 20, 2009 (the LTM
Period). On January 20, 2009, the last trading day
before the delivery of its written opinion, Barclays Capital
noted that the closing price of Interwovens common stock
was $11.22.
For the LTM Period, Barclays Capital noted that the closing
price of Interwovens common stock ranged from $10.10 to
$15.88 per share, and as of January 20, 2009
Interwovens
30-day,
90-day
and
one-year trailing average closing prices were $12.24, $11.81 and
$12.68 per share, respectively. For the Five-Year Period,
Barclays Capital noted that the closing price of
Interwovens common stock ranged from $6.49 to $17.18 per
share, with a five-year average closing price of $11.14 per
share. Barclays Capital compared this data to the closing price
of Interwovens common stock of $11.22 per share on
January 20, 2009 and the transaction consideration of
$16.20 per share.
Barclays Capital then compared such historical trading data for
Interwoven with the relative stock price performance during the
same period of Autonomy and of selected indices and companies
that Barclays Capital, based on its experience in the data
management software industry, deemed comparable to Interwoven.
The indices and companies selected for this analysis were Open
Text Corporation, Vignette Corporation, the NASDAQ composite
index and the S&P 500 index. Barclays Capital noted that
during the LTM Period, the closing price of Interwovens
common stock decreased 16.0%, compared to Autonomy which
increased 1.3%, Open Text Corporation which increased 2.4%,
Vignette Corporation which decreased 51.9%, the NASDAQ composite
index which decreased 38.4%, and the S&P 500 index which
decreased 39.2%.
In addition, to illustrate the trend in Interwovens
historical ratio of enterprise value to projected forward twelve
months revenue, or FTM revenue multiple, Barclays Capital
considered historical data with regard to the FTM revenue
multiple for Interwoven over the Five-Year Period. These
historical FTM revenue multiples were calculated using publicly
available information, Wall Street analyst research reports and
consensus estimates available through the Institutional
Brokerage Estimate System, or IBES. Barclays Capital calculated
Interwovens FTM revenue multiple based on the transaction
enterprise value and using Interwoven management projections and
also using Wall Street analyst estimates and noted that such
multiples, in each case, were above Interwovens trailing
average historical FTM revenue multiples for the periods
one-year, three-years and five-years prior to January 20,
2009.
Selected
Comparable Company Analysis
Barclays Capital reviewed and compared specific financial and
operating data relating to Interwoven to a group of selected
companies that Barclays Capital, based on its experience in the
data management software industry, deemed comparable to
Interwoven. As described below, Barclays Capital applied public
valuation metrics of the comparable companies to Interwoven
management forecasts to determine a range of implied prices per
share of Interwoven.
24
Barclays included the following companies in its review:
|
|
|
|
|
Informatica Corporation
|
|
|
|
Open Text Corporation
|
|
|
|
Vignette Corporation
|
|
|
|
CommVault Systems, Inc.
|
Barclays Capital calculated and analyzed various financial
multiples of each of the selected comparable companies based on
publicly available information, Wall Street analyst research
reports and consensus estimates available through IBES. Barclays
Capital calculated and analyzed the multiples of each selected
companys enterprise value to 2009 calendar year expected
revenues, as well as the multiples of each companys share
price to 2009 calendar year expected cash earnings per share, or
cash EPS. The enterprise value of each company was obtained by
adding its short and long-term debt to the sum of the market
value of its fully diluted common stock, the book value of any
minority interest in other equity and the value of any material
debt-equivalent liabilities less any cash and cash equivalents.
The results of these analyses are summarized below:
|
|
|
|
|
|
|
|
|
|
|
CY 2009E
|
|
CY 2009E
|
|
|
Price/
|
|
Enterprise Value/
|
Company
|
|
Cash EPS
|
|
Revenue
|
|
Informatica Corporation
|
|
|
15.0
|
x
|
|
|
1.87
|
x
|
Open Text Corporation
|
|
|
11.6
|
x
|
|
|
2.01
|
x
|
Vignette Corporation
|
|
|
32.3
|
x
|
|
|
0.18
|
x
|
CommVault Systems, Inc.
|
|
|
16.0
|
x
|
|
|
1.62
|
x
|
Barclays Capital selected the comparable companies listed above
because their businesses and operating profiles are reasonably
similar to that of Interwoven. However, because of the inherent
differences between the business, operations and prospects of
Interwoven and those of the selected comparable companies,
Barclays Capital believed that it was inappropriate to, and
therefore did not, rely solely on the quantitative results of
the selected comparable company analysis. Accordingly, Barclays
Capital also made qualitative judgments concerning differences
between the business, financial and operating characteristics
and prospects of Interwoven and the selected comparable
companies that could affect the public trading values of each in
order to provide a context in which to consider the results of
the quantitative analysis. These qualitative judgments related
primarily to the differing sizes, growth prospects,
profitability levels and degree of operational risk between
Interwoven and the companies included in the selected company
analysis. Based upon these judgments, Barclays Capital selected
an estimated 2009 price to cash earnings per share multiple
range of 12.0x to 16.0x, and an estimated 2009 enterprise value
to revenue multiple of 1.50x to 2.00x, for Interwoven and
applied such ranges to the management projections provided by
Interwoven to Barclays Capital to calculate a range of implied
prices per share of Interwoven. The following summarizes the
result of these calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Price
|
|
|
|
|
per Share of
|
Multiple
|
|
Range
|
|
Interwoven
|
|
CY 2009E price to cash earnings per share
|
|
|
12.0x - 16.0
|
x
|
|
$
|
9.12 - $12.16
|
|
CY 2009E enterprise value to revenue
|
|
|
1.50x - 2.00
|
x
|
|
$
|
12.01 - $14.58
|
|
Barclays Capital noted that on the basis of the selected
comparable company analysis, the transaction consideration of
$16.20 per share was above the range of implied values per share
calculated.
Selected
Precedent Transaction Analysis
Barclays Capital reviewed and compared the purchase prices and
financial multiples paid in selected other transactions that
Barclays Capital, based on its experience with merger and
acquisition transactions, deemed relevant. Barclays Capital
chose such transactions based on, among other things, the
similarity of the applicable
25
target companies in the transactions to Interwoven with respect
to the size and similarity of their businesses. The following
transactions were reviewed:
|
|
|
|
|
|
|
Announced
|
|
|
|
|
|
Date
|
|
|
Acquiror
|
|
Target
|
|
|
09/04/08
|
|
|
Open Text Corporation
|
|
Captaris, Inc.
|
|
03/31/08
|
|
|
Hewlett-Packard Company
|
|
Tower Software
|
|
04/12/07
|
|
|
Allen Systems Group, Inc.
|
|
Mobius Management Systems, Inc.
|
|
11/02/06
|
|
|
Oracle Corporation
|
|
Stellent, Inc.
|
|
08/10/06
|
|
|
International Business Machines Corporation
|
|
FileNet Corporation
|
|
08/04/06
|
|
|
Open Text Corporation
|
|
Hummingbird Ltd.
|
|
10/20/05
|
|
|
EMC Corporation
|
|
Captiva Software Corporation
|
|
08/22/05
|
|
|
BEA Systems, Inc.
|
|
Plumtree Software, Inc.
|
|
10/21/03
|
|
|
Open Text Corporation
|
|
IXOS Software AG
|
|
10/14/03
|
|
|
EMC Corporation
|
|
Documentum, Inc.
|
|
08/06/03
|
|
|
Interwoven, Inc.
|
|
iManage, Inc.
|
|
10/03/02
|
|
|
Documentum, Inc.
|
|
eRoom Technology, Inc.
|
The reasons for and the circumstances surrounding each of the
selected precedent transactions analyzed were diverse and there
are inherent differences in the business, operations, financial
conditions and prospects of Interwoven and the companies
included in the selected precedent transaction analysis.
Accordingly, Barclays Capital believed that a purely
quantitative selected precedent transaction analysis would not
be particularly meaningful in the context of considering the
proposed transaction. Barclays Capital therefore made
qualitative judgments concerning differences between the
characteristics of the selected precedent transactions and the
proposed transaction which would affect the acquisition values
of the selected target companies and Interwoven. Based upon
these judgments, Barclays Capital selected a range of multiples
of enterprise value to twelve months forward revenues of 1.75x
to 2.75x, and applied such range to the Interwoven management
projections for the twelve months ending December 31, 2009
provided to Barclays Capital, to calculate a range of implied
prices per share of Interwoven of $13.31 to $18.31.
Barclays Capital noted that on the basis of the selected
precedent transaction analysis, the transaction consideration of
$16.20 per share was within the range of implied values per
share calculated using management projections.
Transaction
Premium Analysis
In order to assess the premium offered to the stockholders of
Interwoven in the proposed transaction relative to the premiums
offered to stockholders in other transactions, Barclays Capital
reviewed the premiums paid in the domestic technology industry
for 69 merger and acquisition transactions since 2002 valued
between $500 million and $1.5 billion. For each
transaction, Barclays Capital calculated the premium per share
paid by the acquirer by comparing the announced transaction
value per share to the target companys historical closing
share price: (i) one trading day prior to announcement, and
(ii) 30 calendar days prior to announcement. The results of
this transaction premium analysis are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium Paid
|
|
|
First
|
|
|
|
Third
|
Period
|
|
Quartile
|
|
Median
|
|
Quartile
|
|
One-day
premium
|
|
|
15.9
|
%
|
|
|
25.1
|
%
|
|
|
38.1
|
%
|
Thirty-day
premium
|
|
|
23.2
|
%
|
|
|
32.9
|
%
|
|
|
40.0
|
%
|
The reasons for and the circumstances surrounding each of the
transactions analyzed in the transaction premium analysis were
diverse and there are inherent differences in the business,
operations, financial conditions and prospects of Interwoven and
the companies included in the transaction premium analysis.
Accordingly, Barclays Capital believed that a purely
quantitative transaction premium analysis would not be
particularly meaningful in the context of considering the
proposed transaction. Barclays Capital therefore made
qualitative
26
judgments concerning the differences between the characteristics
of the selected transactions and the proposed transaction which
would affect the acquisition values of the target companies and
Interwoven. Based upon these judgments, Barclays Capital
selected a
one-day
premium range of 15% to 40% and a
thirty-day
premium range of 20% to 40%, as compared to the closing price of
Interwovens common stock on January 20, 2009, to
calculate a range of implied prices per share of Interwoven. The
following summarizes the result of these calculations:
|
|
|
|
|
|
|
|
|
|
|
Implied Price
|
|
|
|
|
|
per Share of
|
|
Multiple
|
|
Range
|
|
Interwoven
|
|
|
One-day
premium
|
|
15% - 40%
|
|
$
|
12.90 - $15.71
|
|
Thirty-day
premium
|
|
20% - 40%
|
|
$
|
13.76 - $16.06
|
|
Barclays Capital noted that on the basis of the transaction
premium analysis, the transaction consideration of $16.20 per
share was above the ranges of implied values per share,
calculated based on the ranges of
one-day
and
thirty-day
premiums, each using the closing price of Interwovens
common stock on January 20, 2009.
Discounted
Cash Flow Analysis
Barclays Capital performed a discounted cash flow analysis of
Interwoven which is a traditional valuation methodology used to
derive a valuation of an asset by calculating the present
value of estimated future cash flows of the asset.
Present value refers to the current value of future
cash flows or amounts and is obtained by discounting those
future cash flows or amounts by a discount rate that takes into
account macroeconomic assumptions and estimates of risk, the
opportunity cost of capital, expected returns and other
appropriate factors.
To calculate the estimated enterprise value of Interwoven using
the discounted cash flow method, Barclays Capital added
(i) Interwovens projected, fully-taxed unlevered free
cash flows for fiscal years 2009 through 2013 based on
management projections, each amount discounted to its present
value using a range of selected discount rates; (ii) the
terminal value of Interwoven as of December 31,
2013, discounted to its present value using a range of selected
discount rates and (iii) Interwovens future net
operating loss benefits for fiscal years 2009 through 2012 based
on management projections, each amount discounted to its present
value using a range of selected discount rates. The after-tax
unlevered free cash flows were calculated by taking the
tax-affected earnings before interest, tax expense and
amortization (excluding amortization of intangible assets and
purchased technology and stock based compensation expense),
adding depreciation and amortization (excluding amortization of
intangible assets and purchased technology), subtracting capital
expenditures and adjusting for changes in working capital. The
residual value of Interwoven at the end of the forecast period,
or terminal value, was estimated by selecting a
range of perpetuity growth rates of 2.0% to 3.0%, which was
derived by analyzing the projected growth in Interwovens
future cash flows and the growth rates of mature technology
companies deemed comparable by Barclays Capital and applying
such range to the management projections. The future net
operating loss benefits, or NOLs, were calculated by utilizing
the current federal and state NOLs and tax credit carryforwards
derived from publicly available SEC filings to offset Interwoven
managements projected annual tax expense, based on a
statutory income tax rate of 39.6%. Based on Interwoven
management protections, the NOL balance was projected to reach
zero by 2012 and Interwoven was projected to pay a full tax rate
in 2013 and beyond. The range of after-tax discount rates of
12.0% to 16.0% was selected based on Barclays Capitals
market expertise. Barclays Capital then calculated a range of
implied prices per share of Interwoven by subtracting estimated
net debt as of December 31, 2008, from the estimated
enterprise value and dividing such amount by the fully diluted
number of shares of Interwovens common stock. This
analysis indicated a range of equity values per share of
Interwoven common stock of $11.38 to $14.77.
Barclays Capital noted that on the basis of the discounted cash
flow analysis, the transaction consideration of $16.20 per share
was above the range of implied values per share calculated using
management projections.
General
Barclays Capital is an internationally recognized investment
banking firm and, as part of its investment banking activities,
is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions,
investments for passive and control purposes, negotiated
underwritings, competitive bids, secondary distributions of
listed and unlisted securities, private placements and
valuations for estate, corporate and
27
other purposes. Interwovens Board of Directors selected
Barclays Capital because of the familiarity of its professionals
with Interwoven and its qualifications, reputation and
experience in the valuation of businesses and securities in
connection with mergers and acquisitions generally, as well as
substantial experience in transactions comparable to the
proposed transaction.
Barclays Capital is acting as financial advisor to Interwoven in
connection with the proposed transaction. As compensation for
its services in connection with the proposed transaction,
Interwoven will pay Barclays Capital a fee of approximately
$7.2 million, payable on completion of the proposed
transaction. In addition, Interwoven has agreed to reimburse
Barclays Capital for a portion of its reasonable out-of-pocket
expenses incurred in connection with the proposed transaction
and to indemnify Barclays Capital for certain liabilities that
may arise out of its engagement by Interwoven and the rendering
of Barclays Capitals opinion. Barclays Capital or its
affiliates has performed various investment banking and
financial services for Autonomy and its affiliates in the past
and has received customary fees for such services. Specifically,
Autonomy currently has a term loan facility in place with
Barclays Bank PLC, which is an affiliate of Barclays Capital,
and Barclays Commercial Bank, Eastern, a division of Barclays
Bank PLC plans to make available a new term loan facility to
Autonomy as part of the financing of the proposed transaction
and will receive customary fees in connection therewith. On
September 22, 2008, certain assets of Lehman Brothers Inc.,
including its North American investment banking franchise, were
acquired by Barclays Capital. The current term loan facility was
entered into with Barclays Bank PLC prior to such acquisition of
Lehman Brothers and prior to the subsequent engagement of
Barclays Capital as a financial advisor to Interwoven.
In the ordinary course of its business, Barclays Capital
actively trades in the securities of Interwoven for its own
account and for the accounts of its customers and, accordingly,
may at any time hold a long or short position in such securities.
Credit
Suisse Securities (USA) LLC
Fairness
Opinion Delivered to the Interwovens Board of
Directors
Interwoven retained Credit Suisse to deliver an opinion to the
Board of Directors with respect to the fairness to holders of
Interwoven common stock, from a financial point of view, of the
merger consideration. On January 21, 2009, at a meeting of
the Board of Directors held to evaluate the merger, Credit
Suisse rendered to the Board of Directors an oral opinion,
subsequently confirmed in writing and dated January 21,
2009
,
to the effect that, as of that date and based upon
and subject to the factors, assumptions, limitations,
qualifications and other considerations described in Credit
Suisses written opinion, the merger consideration to be
received by the holders of Interwoven common stock in the merger
was fair, from a financial point of view, to such holders.
The full text of Credit Suisses written opinion, dated
January 21, 2009 to the Board of Directors, which sets
forth, among other things, the procedures followed, assumptions
made, matters considered and limitations and qualifications on
the scope of the review undertaken by Credit Suisse in rendering
its opinion, is attached as Annex C hereto and is
incorporated herein by reference in its entirety. You are urged
to read this opinion carefully in its entirety. Credit
Suisses opinion was provided to the Board of Directors in
connection with its consideration of the merger and addresses
only the fairness to the holders of Interwoven common stock,
from a financial point of view, of the merger consideration set
forth in the merger agreement and does not address any other
aspect or implication of the merger or any other agreement,
arrangement or understanding entered into in connection with the
merger or otherwise, including, without limitation, the fairness
of the amount or nature of, or any other aspect relating to, any
compensation to any officers, directors or employees of any
party to the merger, or class of such persons, relative to the
merger consideration or otherwise and does not constitute advice
or a recommendation to any stockholder as to how such
stockholder should vote or act on any matter relating to the
merger. The issuance of Credit Suisses opinion was
approved by an authorized internal committee of Credit Suisse.
The summary of Credit Suisses opinion herein is qualified
in its entirety by reference to the full text of the opinion.
In arriving at its opinion, Credit Suisse reviewed the merger
agreement and certain related documents as well as certain
publicly available business and financial information relating
to Interwoven. Credit Suisse also reviewed certain other
information relating to Interwoven, including financial
forecasts, provided to or discussed with Credit
28
Suisse by Interwoven, and met with Interwovens management
to discuss Interwovens business and prospects. Credit
Suisse also considered certain financial and stock market data
of Interwoven, and compared that data with similar data for
other publicly held companies in businesses Credit Suisse deemed
similar to those of Interwoven and considered, to the extent
publicly available, the financial terms of certain other
business combinations and transactions which have been effected
or announced. Credit Suisse also considered such other
information, financial studies, analyses and investigations and
financial, economic and market criteria which it deemed relevant.
In connection with its review, Credit Suisse did not
independently verify any of the foregoing information and it
assumed that such information is and relied on such information
being complete and accurate in all material respects. With
respect to the financial forecasts for Interwoven,
Interwovens management advised Credit Suisse, and Credit
Suisse assumed, that such forecasts have been reasonably
prepared on bases reflecting the best currently available
estimates and judgments of Interwovens management as to
the future financial performance of Interwoven. Credit Suisse
also assumed, with the consent of the Board of Directors, that
in the course of obtaining any regulatory or third party
consents, approvals or agreements in connection with the merger,
no modification, delay, limitation, restriction or condition
will be imposed that would have an adverse effect on Interwoven
or the merger and that the merger will be consummated in
accordance with the terms of the merger agreement without
waiver, modification or amendment of any material term,
condition or agreement thereof. In addition, Credit Suisse was
not requested to make, and has not made, an independent
evaluation or appraisal of the assets or liabilities (contingent
or otherwise) of Interwoven, nor has Credit Suisse been
furnished with any such evaluations or appraisals.
Credit Suisses opinion is necessarily based upon
information made available to it as of the date the opinion was
delivered, upon financial, economic, market and other conditions
as they existed and could be evaluated on the date of the
opinion and upon certain assumptions regarding such financial,
economic, market and other conditions, which are currently
subject to unusual volatility and which, if different than
assumed, would have a material impact on Credit Suisses
analyses. Credit Suisse was not requested to and did not solicit
any expressions of interest from any other parties with respect
to the sale of all or any part of Interwoven or any other
alternative transaction. Credit Suisse did not advise Interwoven
on the form or amount of the merger consideration nor did Credit
Suisse participate in negotiations with respect to the terms of
the merger agreement or the transactions contemplated thereby.
Credit Suisses opinion does not address the merits of the
merger as compared to alternative transactions or strategies
that may be available to Interwoven, nor does it address the
underlying business decision of Interwoven to proceed with the
merger.
Financial
Analyses
In preparing its opinion, Credit Suisse performed a variety of
financial and comparative analyses, including those described
below. The summary of Credit Suisses analyses described
below is not a complete description of the analyses underlying
Credit Suisses opinion. The preparation of a fairness
opinion is a complex process involving various determinations as
to the most appropriate and relevant methods of financial
analysis and the application of those methods to the particular
circumstances and, therefore, a fairness opinion is not readily
susceptible to partial analysis or summary description. In
arriving at its opinion, Credit Suisse made qualitative
judgments with respect to the analyses and factors that it
considered. Credit Suisse arrived at its opinion based on the
results of all analyses undertaken by it and assessed as a whole
and did not draw, in isolation, conclusions from or with regard
to any one factor or method of analysis. Accordingly, Credit
Suisse believes that its analyses must be considered as a whole
and that selecting portions of its analyses and factors without
considering all analyses and factors or the narrative
description of the analyses, could create a misleading or
incomplete view of the processes underlying its analyses and
opinion.
In its analyses, Credit Suisse considered industry performance,
general business, economic, market and financial conditions and
other matters, many of which are beyond Interwovens
control. No company, transaction or business used in Credit
Suisses analyses as a comparison is identical to
Interwoven, its business or the merger, and an evaluation of the
results of the analyses is not entirely mathematical. Rather,
the analyses involve complex considerations and judgments
concerning financial and operating characteristics and other
factors that could affect the merger, public trading or other
values of the companies, business segments or transactions
analyzed. The estimates contained in Credit Suisses
analyses and the ranges of valuations resulting from any
particular analysis
29
are not necessarily indicative of actual values or predictive of
future results or values, which may be significantly more or
less favorable than those suggested by the analyses. In
addition, analyses relating to the value of businesses or
securities do not purport to be appraisals or to reflect the
prices at which businesses or securities actually may be sold.
Accordingly, the estimates used in, and the results derived
from, Credit Suisses analyses are inherently subject to
substantial uncertainty.
Credit Suisse was not requested to, and it did not, recommend
the specific consideration payable in the merger, which
consideration was determined between Interwoven and Autonomy,
and the decision to enter into the merger agreement was solely
that of Interwovens Board of Directors. Credit
Suisses opinion and financial analyses were only one of
many factors considered by the Board of Directors in its
evaluation of the proposed merger and should not be viewed as
determinative of the views of either of the Board of Directors
or Interwovens management with respect to the merger or
the consideration to be paid in the merger.
The following is a summary of the material financial analyses
reviewed with Interwovens Board of Directors in connection
with Credit Suisses opinion dated January 21, 2009.
The financial analyses summarized below include information
presented in tabular format. In order to fully understand Credit
Suisses 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 in the tables 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 Credit Suisses
financial analyses.
The implied per share equity reference
ranges set forth below were based on the fully diluted shares
outstanding of Interwovens common stock, including the
dilutive effect of all outstanding restricted stock and
in-the-money options based primarily on publicly available
information as well as certain information provided by
Interwovens management.
Selected
Companies Analysis
Credit Suisse reviewed financial and stock market information of
Interwoven and the following three selected publicly traded
companies in the enterprise content management industry:
|
|
|
|
|
Open Text Corporation
|
|
|
|
Epiq Systems, Inc.
|
|
|
|
Vignette Corporation
|
Although none of the selected companies is directly comparable
to Interwoven, the companies included were chosen because they
are publicly traded companies with operations that for purposes
of analysis may be considered similar to certain operations of
Interwoven.
Credit Suisse reviewed, among other things, trading statistics
and per share stock prices of the selected companies as a
multiple of their calendar year 2008 estimated earnings per
share and their calendar year 2009 estimated earnings per share.
Credit Suisse also reviewed the aggregate market values
(fully-diluted equity values plus all indebtedness minus cash)
of the selected companies as a multiple of their calendar year
2008 estimated revenues and their calendar year 2009 estimated
revenues and as a multiple of their calendar year 2008 estimated
earnings before interest, taxes, depreciation and amortization
(which we refer to as EBITDA), their calendar year
2009 estimated EBITDA and their estimated next twelve months
(NTM) EBITDA. All statistics related to the selected
companies that were reviewed by Credit Suisse in connection with
its analysis were based on closing stock prices on January 20,
2009 and research analysts estimates. Credit Suisse also
reviewed certain operating statistics of the selected companies,
including revenue, revenue growth, EBITDA margin, and long-term
growth rates. Credit Suisse applied a range of selected
multiples derived from the selected companies analysis to
revenue, EBITDA and earnings per share data of Interwoven, using
the estimates of Interwovens management for 2009, in order
to derive implied estimated per share equity reference ranges.
30
This analysis indicated the following implied per share equity
reference ranges for Interwovens common stock, as compared
to the merger consideration:
|
|
|
Implied per Share Equity Reference Range for Interwoven
|
|
Per Share Consideration in Merger
|
|
$11.37 - $17.07
|
|
$16.20
|
Selected
Transactions Analysis
Credit Suisse reviewed publicly available information and data
for the following twelve selected transactions announced since
November 1, 2005:
|
|
|
Target
|
|
Acquiror
|
|
Captaris, Inc.
|
|
Open Text Corporation
|
i2 Technologies, Inc.
|
|
JDA Software Group, Inc.
|
Optio Software, Inc.
|
|
Bottomline Technologies, Inc.
|
Document Sciences Corporation
|
|
EMC Corporation
|
Optimost LLC
|
|
Interwoven Inc.
|
Zantaz, Inc.
|
|
Autonomy Corporation plc
|
Mobius Management Systems, Inc.
|
|
Allen Systems Group, Inc.
|
DocuCorp International, Inc.
|
|
Skywire Software, LLC
|
Stellent, Inc.
|
|
Oracle Corporation
|
FileNet Corporation
|
|
International Business Machines Corp.
|
Hummingbird Ltd.
|
|
Open Text Corporation
|
Verity, Inc.
|
|
Autonomy Corporation
|
While none of the companies that participated in the selected
transactions are directly comparable to Interwoven, the
companies that participated in the selected transactions are
companies with operations that, for the purposes of analysis,
may be considered similar to certain of Interwovens
results, market size and product profile.
Credit Suisse compared the fully diluted aggregate value of each
target company as a multiple of that target companys
revenue and EBITDA, and the price to earnings ratio on both a
last twelve months (LTM) and NTM basis. All
statistics related to the selected transactions that were
reviewed by Credit Suisse in connection with its analysis were
based on publicly available financial information at the time of
announcement of the relevant transaction. Credit Suisse then
applied ranges of selected multiples derived from the selected
transactions to LTM and NTM revenues, EBITDA and price to
earnings ratio data of Interwoven, using actual results for LTM
revenues, EBITDA and price to earnings ratio data and the
estimates of Interwovens management for NTM revenues,
EBITDA and price to earnings ratio data, in order to derive
implied estimated per share equity reference ranges.
This analysis indicated the following implied per share equity
reference ranges for Interwovens common stock, as compared
to the merger consideration:
|
|
|
|
|
Implied per Share Equity Reference Range for Interwoven
|
|
Per Share Consideration in Merger
|
|
$12.01 - $22.41
|
|
$
|
16.20
|
|
Discounted
Cash Flow Analysis
Credit Suisse calculated the estimated present value of the
unlevered, after-tax free cash flows that Interwovens
business could generate from calendar years 2009 through 2013,
using projected financial information that was provided by
Interwovens management. Credit Suisse estimated the
unlevered, after-tax free cash flows by using estimated earnings
before interest and taxes for each of the calendar years 2009
through 2013 and adjusting for taxes, depreciation and
amortization, capital expenditures and changes in working
capital. Credit Suisse estimated the present value of
Interwovens net operating losses for the calendar years
2008 through 2013, using projected financial information that
was provided by Interwovens management. Credit Suisse then
calculated a range of estimated terminal values for Interwoven
by multiplying the terminal year net operating profit after
taxes,
31
based on estimates of Interwovens management, by selected
NTM net operating profit after taxes multiples of 6.0x to 9.0x.
The present values as of December 31, 2008 of the cash
flows, the terminal value and the net operating losses of
Interwoven were then calculated using discount rates ranging
from 9.5% to 12.5%. The resulting present values of the cash
flows of Interwoven ranged from $138 million to
$145 million, the resulting present values of the terminal
value of Interwoven ranged from $311 million to
$520 million and the resulting present values of the net
operating losses of Interwoven ranged from $47 million to
$49 million. Credit Suisse then added the estimated net
cash of Interwoven to the sum of the present values as of
December 31, 2008 of the cash flows, the terminal value and
the net operating losses of Interwoven to calculate the implied
equity value of Interwoven, which ranged from $681 million
to $900 million. The resulting implied equity values were
then calculated on a per share basis.
This analysis indicated the following implied per share equity
reference range for Interwovens common stock, as compared
to the merger consideration:
|
|
|
Implied per Share Equity Reference Range for Interwoven
|
|
Per Share Consideration in Merger
|
|
$13.93 - $18.06
|
|
$16.20
|
Miscellaneous
Interwoven selected Credit Suisse based on Credit Suisses
qualifications, experience and reputation, and its familiarity
with Interwoven and its business. Credit Suisse is an
internationally recognized investment banking firm and is
regularly engaged in the valuation of businesses and securities
in connection with mergers and acquisitions, leveraged buyouts,
negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private
placements and valuations for corporate and other purposes.
Neither Credit Suisse nor its affiliates have provided
investment banking or other financial services to Interwoven,
Autonomy or their respective affiliates in the past two years.
Credit Suisse is a full service securities firm engaged in
securities trading and brokerage activities as well as providing
investment banking and other financial services. In the ordinary
course of its business, Credit Suisse and its affiliates may
acquire, hold or sell, for Credit Suisses and its
affiliates own accounts and for the accounts of customers,
equity, debt and other securities and financial instruments
(including bank loans and other obligations) of Interwoven,
Autonomy and any other companies that may be involved in the
merger, as well as provide investment banking and other
financial services to such companies.
Pursuant to the engagement agreement between Interwoven and
Credit Suisse, Interwoven has agreed to pay Credit Suisse a
customary fee, upon rendering its opinion to the Board of
Directors, which fee is not contingent on the consummation of
the merger. In addition, Interwoven also agreed to reimburse
Credit Suisse for expenses resulting from or arising out of its
engagement, including the fees and expenses of Credit
Suisses outside legal counsel, and to indemnify Credit
Suisse and related parties against certain liabilities and other
items arising out of Credit Suisses engagement.
Recommendation
of the Board of Directors
At a special meeting of our Board of Directors held on
January 21, 2009, our Board of Directors approved the
merger agreement, the merger and the other transactions
contemplated thereby, determined that it was advisable, fair to
and in the best interests of Interwoven and its stockholders
that Interwoven enter into the merger agreement and consummate
the merger on the terms and subject to the conditions set forth
in the merger agreement, directed that the merger agreement be
submitted to a vote for adoption at the special meeting, and
recommended that our stockholders adopt the merger agreement.
Our Board of Directors recommends that our stockholders vote
FOR adoption of the merger agreement.
In considering the recommendation of our Board of Directors with
respect to the merger agreement, you should be aware that
certain directors and executive officers of Interwoven have
interests with respect to the merger that are in addition to or
different than their interests as stockholders of Interwoven
generally. See the section of this proxy statement entitled
The Merger Interests of Our Directors and
Executive Officers in the Merger beginning on page 33.
32
Interwoven
Voting Agreements
In connection with the execution of the merger agreement, each
member of our Board of Directors, consisting of Charles M.
Boesenberg, Ronald E.F. Codd, Joseph L. Cowan, Bob L. Corey,
Frank J. Fanzilli, Jr., Roger J. Sippl and Thomas L.
Thomas, as well as Scipio M. Carnecchia, our President, and John
E. Calonico, Jr., our Chief Financial Officer, executed a
voting agreement with and delivered an irrevocable proxy to
Autonomy relating to the shares of Interwoven common stock owned
by them (which also covers any shares of Interwoven common stock
that may be issued upon the exercise of any options or the
settlement of any restricted stock units held by such
individuals). As of January 22, 2009, these individuals
held an aggregate of 104,255 shares of our common stock
(representing less than 1% of our outstanding shares on
January 22, 2009), 432,081 restricted stock units and
options to purchase 1,593,500 shares of our common stock.
As of February 4, 2009, the record date for the special
meeting, these directors and officers held an aggregate of
[ ] shares
of our common stock, or less than 1% of the outstanding shares
of our common stock as of February 4, 2009. Under the
voting agreements, these individuals agreed to vote their shares
of Interwoven common stock (including any newly acquired shares):
|
|
|
|
|
in favor of approval of the merger and the approval and adoption
of the merger agreement and the terms thereof; and
|
|
|
|
against the following actions (other than the merger and the
transactions contemplated by the merger agreement): (A) any
extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving Interwoven
or any subsidiary of Interwoven, to the extent any such
transaction would constitute an Acquisition Transaction (as
defined below); and (B) any reorganization,
recapitalization, dissolution or liquidation of Interwoven or
any subsidiary of Interwoven, to the extent any such transaction
would constitute an Acquisition Transaction.
|
Each of these stockholders also agreed not to sell, encumber,
grant an option with respect to or dispose of any of the
securities, restricted stock units or options of Interwoven
owned by such stockholder except, subject to certain conditions,
for transfers to the stockholders immediate family or upon
the death of the stockholder.
The voting agreements terminate upon the earlier of the
consummation of the merger or the valid termination of the
merger agreement.
Autonomy
Irrevocable Undertakings
In connection with the execution of the merger agreement, the
members of Autonomys Board of Directors and Andrew M.
Kanter, Chief Operating Officer of Autonomy, executed an
irrevocable undertaking in favor of Autonomy and Interwoven to
vote in favor of the approval of the merger at an extraordinary
general meeting of Autonomys shareholders to consider the
merger. As of January 22, 2009, these individuals held an
aggregate of 22,728,735 ordinary shares of Autonomy
(representing approximately 9.6% of the outstanding shares of
Autonomy on January 22, 2009) and options to subscribe
for 1,099,250 ordinary shares of Autonomy.
Under the irrevocable undertakings, these individuals agreed to
vote their ordinary shares or other securities of Autonomy and
any newly acquired shares or other securities to approve all of
the resolutions required to be approved by the shareholders of
Autonomy to approve the merger, and not to transfer or pledge
their shares until after the vote has been taken. The approval
of the merger by Autonomys shareholders will be sought at
an extraordinary general meeting of Autonomys shareholders
currently anticipated to be held on February 16, 2009.
Interests
of Our Directors and Executive Officers in the Merger
In considering the recommendation of our Board of Directors to
vote FOR adoption of the merger agreement, you
should be aware that there are provisions of the merger
agreement and other arrangements that will result in certain
benefits to our directors and executive officers, but not to
stockholders generally. As described in more detail below, these
interests relate to or arise from:
|
|
|
|
|
the potential receipt of severance payments by our executive
officers;
|
|
|
|
accelerated vesting of outstanding stock options and restricted
stock units held by our executive officers and directors;
|
33
|
|
|
|
|
the continuation of health care coverage for our executive
officers and directors; and
|
|
|
|
the continued indemnification of, and provision of
directors and officers insurance to, our current
directors and executive officers following the merger.
|
Our Board of Directors was aware of these interests and
considered them, among other matters, in approving the merger
agreement and the merger and in making its recommendation.
Stockholders should take these benefits into account in deciding
whether to vote for adoption of the merger agreement.
Interwoven
Employment Agreements
Our employment letter agreement with Joseph L. Cowan, our Chief
Executive Officer, dated March 16, 2007, as amended,
provides that Mr. Cowan will be entitled to the following
benefits:
|
|
|
|
|
a severance payment equal to 150% of his then-current annual
base salary plus 150% of his then-current annual target
incentive compensation, less applicable withholdings;
|
|
|
|
full acceleration of vesting of his initial stock option to
purchase 300,000 shares of our common stock and his initial
restricted stock unit award as to 300,000 shares of our
common stock; and
|
|
|
|
the provision of group medical coverage through the Consolidated
Omnibus Budget Reconciliation Act of 1995 (COBRA)
for up to 18 months at our expense;
|
if, within 12 months following the merger, he resigns
because of a material diminution in his duties, responsibilities
or authority (including if he no longer serves as Chief
Executive Officer of Interwoven following the merger), we
materially breach the agreement or his current annual base
salary is reduced, or he is terminated for reasons other than
his intentionally engaging in unfair competition with us,
committing certain crimes (or being found guilty of a felony) or
willfully and continually failing to substantially perform
duties his with us. We also have agreed to increase
Mr. Cowans severance payments by up to
$2 million to the extent necessary to offset any excise tax
imposed by Section 4999 of the Internal Revenue Code plus
an amount equal to the sum of the federal, state, local and
excise taxes due, although we currently do not expect that any
such offset will be necessary in connection with the merger.
Mr. Cowans entitlement to these severance payments is
conditioned upon him providing us and our affiliates a general
liability release and waiver of claims.
On September 4, 2007, we entered into letter agreements
with Scipio M. Carnecchia, our President, and John E.
Calonico, Jr., our Senior Vice President, Chief Financial
Officer and Secretary. These agreements provide that if the
executive officer is terminated without Cause (as defined below
under Executive Officer Equity Awards)
in connection with or following the merger, then he will be
entitled to receive certain compensation including severance
payments, health benefits and acceleration of vesting of equity
compensation awards. The amount of severance payments under the
letter agreements will be equal to the sum of (a) nine
months of the executive officers salary at the time of
termination (or, if greater, his salary as of the date of the
agreement) and (b) 75% of his total on target
bonus amount in effect for the year in which he is terminated,
plus any earned but unpaid bonus for any prior year to the
extent previously accrued by us. We have also agreed to provide
continued group medical coverage through COBRA to the executive
officer and his dependents for up to nine months at our expense.
In addition, the agreements provide that each stock option
granted and restricted stock unit awarded to the executive
officer after October 1, 2005 will immediately vest, and
any sale and transfer restrictions applicable to stock options
held by the executive officer at October 1, 2005 will
lapse, as to the greater of (x) 50% of the number of any
unvested shares (or vested shares with sale and transfer
restrictions) subject to such options or restricted stock units
at the closing of the merger or (y) the number of shares
scheduled to be vested (or released from sale and transfer
restrictions) under such stock options or restricted stock units
as of the 9 month anniversary date of the executive
officers termination of employment had the executive
officer remained employed by us through such date (but treating
cliff vesting or any non-monthly vesting as occurring in ratable
increments on a monthly basis). The executive officers
entitlement to these severance payments is conditioned upon him
providing us and our affiliates a general liability release and
waiver of claims, and him providing certain transitional
services to us.
On August 6, 2003, we entered into a letter agreement with
Rafiq Mohammadi which provides that Mr. Mohammadi will be
entitled to a payment equal to 6 months annual base salary
if following the merger he
34
(a) is terminated for reasons other than his willful
misconduct or gross negligence in the performance of his duties,
his dishonest or fraudulent conduct, his deliberate attempt to
do an injury to us, his conduct that materially harms us or is
materially detrimental to our reputation, including any felony
conviction, or his breach of any element of his employee
confidentiality and assignment of inventions agreement, or
(b) resigns because his base salary or target incentive
bonus are reduced by a different proportion than the
compensation of all other members of our management, his
principal office is relocated by more than 30 miles from
its location prior to the closing of the merger, or his position
is materially and adversely changed or his responsibilities as
in effect on the effective date of the merger are materially
reduced, in each case without his consent.
The table below summarizes the value of the change in control
benefits payable to Mr. Cowan, Mr.Carnecchia,
Mr. Calonico, and Mr. Mohammadi pursuant to their
employment agreements upon completion of the merger and assumes,
solely for purposes of providing the information therein, that
the merger closed and qualifying termination occurred on
January 21, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrinsic Value of
|
|
|
|
|
|
|
Cash Severance
|
|
|
|
|
|
COBRA
|
|
|
Accelerated
|
|
|
|
|
Name
|
|
Payments
|
|
|
Cash Bonus
|
|
|
Premiums(1)
|
|
|
Equity Awards(2)
|
|
|
Total
|
|
|
Joseph L. Cowan
|
|
$
|
712,500
|
|
|
$
|
637,500
|
|
|
$
|
17,442
|
|
|
$
|
5,016,938
|
|
|
$
|
6,384,380
|
|
Scipio M. Carnecchia
|
|
$
|
225,000
|
|
|
$
|
225,000
|
|
|
$
|
13,192
|
|
|
$
|
471,469
|
|
|
$
|
934,661
|
|
John E. Calonico, Jr.
|
|
$
|
228,750
|
|
|
$
|
125,813
|
|
|
$
|
13,192
|
|
|
$
|
374,625
|
|
|
$
|
742,380
|
|
Rafiq Mohammadi
|
|
$
|
190,000
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
190,000
|
|
|
|
|
(1)
|
|
Represents the estimated value of COBRA premiums for medical,
dental and vision benefits over the
9-month
term
of the obligation, in the case of Mr. Carnecchia and
Mr. Calonico, or
18-month
term of the obligation, in the case of Mr. Cowan, based on
in each case the number of his dependents that received medical,
dental or vision benefits under our benefit plans as of
December 31, 2008.
|
|
(2)
|
|
These amounts are included in and further described in the next
table.
|
Executive
Officer Equity Awards
In addition to the equity awards identified above for
Mr. Cowan, Mr. Carnecchia and Mr. Calonico,
certain equity awards held by our other executive officers
provide for acceleration of vesting of 50% of the unvested
shares subject to such award at the time of termination if the
executive officer is terminated without Cause (as defined
below), in connection with the merger. The following table lists
the aggregate number of unvested shares that will vest in
connection with the merger by type of award and summarizes the
value of the payouts pursuant to these awards, assuming, solely
for purposes of providing the information therein, that the
merger closed and the qualifying termination occurred on
January 21, 2009 (intrinsic values are based upon the
merger consideration of $16.20 per share, and in the case of
stock options are reduced by the exercise price).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Intrinsic Value of
|
|
|
|
Number of
|
|
|
Unvested
|
|
|
Accelerated Options
|
|
|
|
Unvested
|
|
|
Restricted Stock
|
|
|
and Restricted
|
|
Name
|
|
Options to Vest(1)
|
|
|
Units to Vest(1)
|
|
|
Stock Units
|
|
|
Joseph L. Cowan
|
|
|
168,750
|
|
|
|
300,000
|
|
|
$
|
5,016,938
|
|
Scipio M. Carnecchia
|
|
|
26,042
|
|
|
|
23,750
|
|
|
$
|
471,469
|
|
John E. Calonico, Jr.
|
|
|
|
|
|
|
23,125
|
|
|
$
|
374,625
|
|
Steven Martello
|
|
|
|
|
|
|
16,250
|
|
|
$
|
263,250
|
|
David A. Nelson-Gal
|
|
|
|
|
|
|
7,000
|
|
|
$
|
113,400
|
|
Benjamin E. Kiker, Jr.
|
|
|
18,750
|
|
|
|
12,500
|
|
|
$
|
303,750
|
|
Rafiq Mohammadi
|
|
|
|
|
|
|
10,000
|
|
|
$
|
162,000
|
|
Jeffrey Kissling
|
|
|
40,000
|
|
|
|
20,000
|
|
|
$
|
418,800
|
|
|
|
|
(1)
|
|
These amounts represent the total number of shares subject to
the applicable type of award that will vest in connection with
the merger (i.e., 50% of the number of any unvested shares
subject to equity awards that
|
35
|
|
|
|
|
provide for acceleration of vesting as a result of a termination
of employment in connection with the merger, except for the
equity awards made to Mr. Cowan, Mr. Carnecchia and
Mr. Calonico).
|
For purposes of our letter agreements with Mr. Carnecchia
and Mr. Calonico described under Interests of Our
Directors and Executive Officers in the Merger
Interwoven Employment Agreements and the equity award
agreements with our other executive officers discussed above
Cause is defined as (i) willfully engaging in
gross misconduct that is materially and demonstrably injurious
to us; (ii) willful act(s) of dishonesty undertaken by the
executive officer and intended to result in his substantial gain
or personal enrichment at our expense; or (iii) the
executive officers willful and continued failure to
substantially perform his duties with us; and a termination
without Cause includes a termination of employment
by the executive officer within 30 days of any of the
following events: (i) the assignment of any duties
inconsistent with or reflecting a materially adverse change in
the executive officers position, duties or
responsibilities with us, without his concurrence, (ii) the
relocation of our principal executive offices or relocating the
executive officers principal place of business in excess
of 50 miles from our current executive offices, or
(iii) for Mr. Carnecchia and Mr. Calonico, a
reduction in the executive officers annual base salary or
the sum of the executive officers annual base salary and
annual target bonus compensation as in effect immediately prior
to the merger.
Non-Employee
Directors
The equity awards of our non-employee directors provide for
acceleration of vesting of 100% of the unvested shares subject
to such equity awards prior to the consummation of the merger.
In addition, pursuant to a policy adopted by our Board of
Directors, the health benefits coverage currently provided to
our non-employee directors shall continue to be provided for a
period of five years after closing of the merger, with the cost
of such coverage to be paid by the surviving entity for the
first three years of such five-year term and to be paid by the
individual director for the two years thereafter.
The table below summarizes the value of the change in control
benefits payable to our non-employee directors upon completion
of the merger and assumes, solely for purposes of providing the
information therein, that the merger closed on January 21,
2009 (intrinsic values are based upon the merger consideration
of $16.20 per share, and in the case of stock options are
reduced by the exercise price).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Intrinsic Value of
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Unvested
|
|
|
Accelerated Options
|
|
|
|
|
|
|
|
|
|
Unvested
|
|
|
Restricted Stock
|
|
|
and Restricted
|
|
|
Health Benefits
|
|
|
|
|
Name
|
|
Options to Vest
|
|
|
Units to Vest
|
|
|
Stock Units
|
|
|
Coverage(1)
|
|
|
Total
|
|
|
Charles M. Boesenberg
|
|
|
4,545
|
|
|
|
8,332
|
|
|
$
|
150,750
|
|
|
$
|
33,566
|
|
|
$
|
184,316
|
|
Ronald E. F. Codd
|
|
|
10,000
|
|
|
|
5,000
|
|
|
$
|
115,700
|
|
|
$
|
48,914
|
|
|
$
|
164,614
|
|
Bob L. Corey
|
|
|
10,000
|
|
|
|
5,000
|
|
|
$
|
115,700
|
|
|
$
|
33,566
|
|
|
$
|
149,266
|
|
Frank J. Fanzilli, Jr.
|
|
|
10,000
|
|
|
|
5,000
|
|
|
$
|
115,700
|
|
|
$
|
48,389
|
|
|
$
|
164,089
|
|
Roger J. Sippl
|
|
|
13,333
|
|
|
|
9,999
|
|
|
$
|
185,673
|
|
|
$
|
|
|
|
$
|
185,673
|
|
Thomas L. Thomas
|
|
|
10,000
|
|
|
|
5,000
|
|
|
$
|
115,700
|
|
|
$
|
34,092
|
|
|
$
|
149,792
|
|
|
|
|
(1)
|
|
Represents the estimated cost of three years of health benefits
coverage at the fully insured equivalent rate for 2008, in each
case for the director and the number of his dependents that
received medical, dental or vision benefits under our benefit
plans as of December 31, 2008. These amounts do not take
into account annual rate increases that may occur.
|
Employee
Stock Purchase Plan
Certain of our executive officers are participants in the
Interwoven Amended and Restated Employee Stock Purchase Plan
(ESPP). Under the terms of the ESPP, all
participants, including such executive officers, may purchase
shares of our common stock at a purchase price equal to 85% of
the lesser of (a) the fair market value of a share of
Interwoven common stock on the participants enrollment
date, or (b) the fair market value of a share of Interwoven
common stock on the exercise date. We will shorten the currently
ongoing offering period that extends beyond the effective time
of the merger, so that a new purchase date will occur on the
earlier of April 30, 2009 and the day immediately prior to
the closing of the merger, and all applicable shares will be
purchased by ESPP
36
participants prior to the effective time of the merger. The ESPP
will be terminated immediately following the new purchase date
and no new purchase or offering period will commence or
purchases occur after that time.
Indemnification
of Directors and Executive Officers and Insurance
The merger agreement provides that all rights of indemnification
for acts or omissions occurring at or prior to the completion of
the merger that exist in favor of the current directors,
officers and employees of Interwoven as provided in our
certificate of incorporation or bylaws or any of our existing
indemnification agreements and in effect as of the date of the
merger agreement will continue in full force and effect after
the merger in accordance with their terms. Autonomy has agreed
to indemnify such persons to the same extent such persons are
entitled to be indemnified pursuant to the certificate of
incorporation, bylaws or such agreements. The merger agreement
further provides that for a period of six years following the
completion of the merger, the surviving corporation in the
merger will, and Autonomy will cause the surviving corporation
to, maintain our current directors and officers
liability insurance or provide substitute directors and
officers liability insurance with terms and conditions no
less favorable than our directors and officers
liability insurance, which insurance shall cover those persons
who were, as of the date of the merger agreement, covered by our
directors and officers liability insurance policy.
Autonomy will not be required to pay an annual premium for the
insurance that exceeds 250% of the annual premium that we were
paying for our insurance as of the date of the merger agreement.
If the amount of the aggregate annual premiums necessary to
maintain or procure the insurance coverage exceeds the maximum
amount, the surviving corporation during the six-year period is
required to maintain or procure as much coverage as possible for
aggregate annual premiums not to exceed the maximum amount. In
lieu of the foregoing, Autonomy or Interwoven is entitled to
purchase a tail policy providing at least the same coverage and
amounts and containing terms and conditions that are no less
advantageous to our former officers and directors as the current
policies of directors and officers and fiduciary
liability insurance maintained by us covering the six-year
period.
Appraisal
Rights
If the merger is completed, holders of Interwoven common stock
will be entitled to appraisal rights under Section 262 of
the Delaware General Corporation Law
(Section 262), provided that they comply with
the conditions established by Section 262.
The discussion below is not a complete summary regarding your
appraisal rights under Delaware law and is qualified in its
entirety by reference to the text of the relevant provisions of
Delaware law, which are attached to this proxy statement as
Annex D. Stockholders intending to exercise appraisal
rights should carefully review Annex D. Failure to follow
precisely any of these statutory procedures may result in a
termination or waiver of these rights.
A record holder of shares of Interwoven common stock who makes
the demand described below with respect to such shares, who
continuously is the record holder of such shares through the
completion of the merger, who otherwise complies with the
statutory requirements of Section 262 and who neither votes
in favor of the adoption of the merger agreement nor consents
thereto in writing will be entitled to an appraisal by the
Delaware Court of Chancery (the Delaware Court) of
the fair value of his or her shares of Interwoven common stock.
All references in this summary of appraisal rights to a
stockholder or holders of shares of Interwoven
common stock are to the record holder or holders of shares
of Interwoven common stock. Except as set forth herein,
stockholders of Interwoven will not be entitled to appraisal
rights in connection with the merger.
Under Section 262, where a merger is to be submitted for
approval at a meeting of stockholders, such as the special
meeting, not less than 20 days prior to the meeting a
constituent corporation must notify each of the holders of its
stock for whom appraisal rights are available that such
appraisal rights are available and include in each such notice a
copy of Section 262. This proxy statement shall constitute
such notice to the record holders of Interwoven common stock.
Stockholders who desire to exercise their appraisal rights must
satisfy all of the conditions of Section 262. Those
conditions include the following:
|
|
|
|
|
Stockholders electing to exercise appraisal rights must not vote
FOR the adoption of the merger agreement. Also,
because a submitted proxy not marked AGAINST or
ABSTAIN will be voted
|
37
|
|
|
|
|
FOR the adoption of the merger agreement, the
submission of a proxy not marked AGAINST or
ABSTAIN will result in the waiver of appraisal
rights.
|
|
|
|
|
|
A written demand for appraisal of shares must be filed with us
before the taking of the vote on the merger agreement at the
special meeting on
[ ],
2009. The written demand for appraisal should specify the
stockholders name and mailing address, and that the
stockholder is thereby demanding appraisal of his or her
Interwoven common stock. The written demand for appraisal of
shares is in addition to and separate from a vote against the
adoption of the merger agreement or an abstention from such
vote. Merely voting against the adoption of the merger agreement
will not preserve your right of appraisal or constitute written
demand for appraisal under Delaware law.
|
|
|
|
A demand for appraisal should be executed by or for the
stockholder of record, fully and correctly, as such
stockholders name appears on the share certificate. If the
shares are owned of record in a fiduciary capacity, such as by a
trustee, guardian or custodian, this demand must be executed by
or for the fiduciary. If the shares are owned by or for more
than one person, as in a joint tenancy or tenancy in common,
such demand should be executed by or for all joint owners. An
authorized agent, including an agent for two or more joint
owners, may execute the demand for appraisal for a stockholder
of record. However, the agent must identify the record owner and
expressly disclose the fact that, in exercising the demand, he
is acting as agent for the record owner. A person having a
beneficial interest in Interwoven common stock held of record in
the name of another person, such as a broker or nominee, must
act promptly to cause the record holder to follow the steps
summarized below in a timely manner to perfect whatever
appraisal rights the beneficial owners may have.
|
|
|
|
A stockholder who elects to exercise appraisal rights should
mail or deliver his, her or its written demand to Interwoven at
160 E. Tasman Drive, San Jose, California 95134,
Attention: Secretary.
|
Within 10 days after the completion of the merger, the
surviving corporation shall provide notice of the completion of
the merger to all of our stockholders who have complied with
Section 262 and have not voted for the adoption of the
merger agreement.
Within 120 days after the completion of the merger, either
the surviving corporation or any stockholder who has complied
with the required conditions of Section 262 may file a
petition in the Delaware Court, with a copy served on the
surviving corporation in the case of a petition filed by a
stockholder, demanding a determination of the fair value of the
shares of all dissenting stockholders. A person who is the
beneficial owner of shares of our common stock held in a voting
trust or by a nominee on behalf of such person may, in such
persons own name, file the petition described in the
previous sentence. There is no present intent on the part of the
surviving corporation to file an appraisal petition and
stockholders seeking to exercise appraisal rights should not
assume that the surviving corporation will file such a petition
or that the surviving corporation will initiate any negotiations
with respect to the fair value of such shares. Accordingly,
holders of Interwoven common stock who desire to have their
shares appraised should initiate any petitions necessary for the
perfection of their appraisal rights within the time periods and
in the manner prescribed in Section 262.
Within 120 days after the completion of the merger, any
stockholder who has satisfied the requirements of
Section 262 will be entitled, upon written request, to
receive from the surviving corporation a statement setting forth
the aggregate number of shares of Interwoven common stock not
voting in favor of the adoption of the merger agreement and with
respect to which demands for appraisal were received by
Interwoven or the surviving corporation and the number of
holders of such shares. Such statement must be mailed within
10 days after the stockholders request has been
received by the surviving corporation or within 10 days
after the expiration of the period for the delivery of demands
as described above, whichever is later.
If a petition for an appraisal is timely filed, at the hearing
on such petition, the Delaware Court will determine which
stockholders are entitled to appraisal rights. The Delaware
Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by
certificates to submit their certificates 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 Delaware Court may dismiss the proceedings as to
such stockholder. Where proceedings are not dismissed, the
Delaware Court will appraise the shares of Interwoven common
stock owned by
38
such stockholders, determining the fair value of such shares
exclusive of any element of value arising from the
accomplishment or expectation of the merger, together with a
fair rate of interest, if any, to be paid upon the amount
determined to be the fair value. Unless the Delaware Court of
Chancery in it 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.
Although we believe that the $16.20 per share cash consideration
payable in the merger is fair, no representation is made as to
the outcome of the appraisal of fair value as determined by the
Delaware Court and stockholders should recognize that such an
appraisal could result in a determination of a value higher or
lower than, or the same as, the consideration they would receive
pursuant to the merger agreement. Moreover, we do not anticipate
that the surviving corporation will offer more than the $16.20
per share cash consideration to any stockholder exercising
appraisal rights and reserve the right to assert, in any
appraisal proceeding, that, for purposes of Section 262,
the fair value of a share of Interwoven common stock
is less than the $16.20 per share merger consideration. In
determining fair value, the Delaware Court is
required to take into account all relevant factors. The Delaware
Supreme Court has stated that proof of value by any
techniques or methods which are generally considered acceptable
in the financial community and otherwise admissible in
court should be considered and that fair price
obviously requires consideration of all relevant factors
involving the value of a company. The Delaware Supreme
Court has stated that in making this determination of fair value
the court must consider market value, asset value, dividends,
earnings prospects, the nature of the enterprise and any other
facts which could be ascertained as of the date of the merger
which throw any light on future prospects of the merged
corporation. Section 262 provides that fair value is to be
exclusive of any element of value arising from the
accomplishment or expectation of the merger. The Delaware
Supreme Court has stated that such exclusion is a narrow
exclusion that does not encompass known elements of value, but
which rather applies only to the speculative elements of value
arising from such accomplishment or expectation. The Delaware
Supreme Court has construed Section 262 to mean that
elements of future value, including the nature of the
enterprise, which are known or susceptible of proof as of the
date of the merger and not the product of speculation, may be
considered.
The cost of the appraisal proceeding may be determined by the
Delaware Court and taxed against the parties as the Delaware
Court deems equitable in the circumstances. However, costs do
not include attorneys and expert witness fees. Each
dissenting stockholder is responsible for his or her
attorneys and expert witness expenses, although, upon
application of a dissenting stockholder, the Delaware Court may
order that all or a portion of the expenses incurred by any
dissenting stockholder in connection with the appraisal
proceeding, including without limitation, reasonable
attorneys fees and the fees and expenses of experts, be
charged pro rata against the value of all shares of stock
entitled to appraisal.
Any stockholder who has duly demanded appraisal in compliance
with Section 262 will not, after the completion of the
merger, be entitled to vote for any purpose any shares subject
to such demand or to receive payment of dividends or other
distributions on such shares, except for dividends or
distributions payable to stockholders of record at a date prior
to the completion of the merger.
At any time within 60 days after the completion of the
merger, any stockholder will have the right to withdraw his
demand for appraisal and to accept the $16.20 per share cash
consideration offered in the merger agreement. After this
period, a stockholder may withdraw his, her or its demand for
appraisal and receive payment for his, her or its shares as
provided in the merger agreement only with the consent of the
surviving corporation. If no petition for appraisal is filed
with the court within 120 days after the completion of the
merger, stockholders rights to appraisal (if available)
will cease. Inasmuch as the surviving corporation will have no
obligation to file such a petition, any stockholder who desires
a petition to be filed is advised to file it on a timely basis.
Any stockholder may withdraw such stockholders demand for
appraisal by delivering to the surviving corporation a written
withdrawal of his or her demand for appraisal and acceptance of
the merger consideration, except (i) that any such attempt
to withdraw made more than 60 days after the completion of
the merger will require written approval of the surviving
corporation and (ii) that no appraisal proceeding in the
Delaware Court shall be dismissed as to any stockholder without
the approval of the Delaware Court, and such approval may be
conditioned upon such terms as the Delaware Court deems just.
39
Failure by any Interwoven stockholder to comply fully with the
procedures described above and set forth in Annex D to this
proxy statement may result in termination of such
stockholders appraisal rights. In view of the complexity
of exercising your appraisal rights under Delaware law, if you
are considering exercising these rights you should consult with
your legal counsel.
Delisting
and Deregistration of Our Common Stock
If the merger is completed, Interwoven common stock will be
delisted from the NASDAQ Global Select Market and will be
deregistered under the Securities Exchange Act of 1934.
Material
U. S. Federal Income Tax Consequences of the Merger
The following summary is a general discussion of the material
U.S. federal income tax consequences to our stockholders
whose common stock is converted into cash in the merger. This
summary is based on the current provisions of the Internal
Revenue Code of 1986, as amended (the Code),
applicable Treasury Regulations, judicial authority, and
administrative rulings, all of which are subject to change,
possibly with retroactive effect. Any such change could alter
the tax consequences to our stockholders as described herein. No
ruling from the Internal Revenue Service has been or will be
sought with respect to any aspect of the transactions described
herein. This summary is for the general information of our
stockholders only and does not purport to be a complete analysis
of all potential tax effects of the merger. For example, it does
not consider the effect of any applicable state, local, or
foreign income tax laws, or of any non-income-tax laws. In
addition, this discussion does not address the tax consequences
of transactions effectuated prior to or after the completion of
the merger (whether or not such transactions occur in connection
with the merger), including, without limitation, the acquisition
or disposition of shares of Interwoven common stock other than
pursuant to the merger, or the tax consequences to holders of
options issued by Interwoven which are assumed, replaced,
exercised, or converted, as the case may be, in connection with
the merger. In addition, it does not address all aspects of
U.S. federal income taxation that may affect particular
Interwoven stockholders in light of their particular
circumstances, including holders:
|
|
|
|
|
who are subject to special tax rules such as dealers in
securities, mutual funds, regulated investment companies, real
estate investment trusts, partnerships, insurance companies, or
tax-exempt entities;
|
|
|
|
who are foreign persons;
|
|
|
|
who hold their shares through a partnership or another
pass-through entity;
|
|
|
|
who are subject to the alternative minimum tax provisions of the
Code;
|
|
|
|
who acquired their shares in connection with stock option or
stock purchase plans or in other compensatory transactions;
|
|
|
|
who hold their shares as a hedge or as part of a hedging,
straddle, or other risk reduction strategy; or
|
|
|
|
who hold common stock which constitutes qualified small business
stock for purposes of Section 1202 of the Code.
|
The following summary also does not address holders of stock
options. Furthermore, this summary only applies to stockholders
that hold their shares as capital assets within the
meaning of Section 1221 of the Code (generally, property
held for investment.
If a partnership holds shares of our capital stock, the tax
treatment of a partner generally will depend on the status of
the partner and on the activities of the partnership. Partners
of partnerships holding our stock should consult their tax
advisors.
Treatment
of Holders of Interwoven Common Stock
The conversion of Interwoven common stock into the right to
receive cash in the merger will be a taxable transaction for
U.S. federal income tax purposes. Generally, this means
that our stockholders will recognize capital gain or loss equal
to the difference between (1) the amount of cash they
receive in the merger, and (2) their adjusted tax basis in
their Interwoven common (generally the purchase price paid by
the stockholder to acquire such stock).
40
For this purpose, Interwoven stockholders who acquired different
blocks of shares of Interwoven common stock at different times
for different prices must calculate gain or loss separately for
each identifiable block of shares of Interwoven common stock
surrendered in the exchange.
This gain or loss will be long-term capital gain or loss if the
holder has held Interwoven common stock for more than one year
as of the date of the completion of the merger. Under current
law, long-term capital gains of stockholders who are
individuals, trusts, and estates are subject to a maximum
federal income tax rate of 15%, whereas the maximum federal
income tax rate on ordinary income and short-term capital gains
(that is, gain on capital assets held for not more than one
year) of an individual is currently 35% (not taking into account
any phase-out of tax benefits such as personal exemptions and
certain itemized deductions). For corporations, capital gains
and ordinary income are taxed at the same maximum rate of 35%.
Capital losses are subject to limitations on deductibility for
both corporations and individuals. Capital losses not offset by
capital gains may be deducted against a non-corporate
stockholders ordinary income only up to a maximum annual
amount of $3,000, and non-corporate stockholders may carry
forward unused capital losses in certain circumstances. A
corporate stockholder can deduct capital losses only to the
extent of capital gains; unused capital losses may be carried
back three years and forward five years.
Backup
Withholding
An Interwoven stockholder may be subject to backup
withholding (at a current rate of 28%) with respect to
certain reportable payments including taxable
proceeds received in exchange for the stockholders shares
of Interwoven common stock in the merger. Backup withholding
will generally not apply, however, to an Interwoven stockholder
who furnishes the paying agent with a correct taxpayer
identification number on
Form W-9
(and who does not subsequently become subject to backup
withholding) or who otherwise establishes a basis for exemption
from backup withholding (such as a corporation). In addition,
certain foreign persons (such as certain nonresident aliens) may
establish an exemption from, or a reduced rate of, backup
withholding by delivering the proper version of
Form W-8
(generally
Form W-8BEN
if the stockholder is a nonresident alien individual or foreign
entity) to the paying agent. Each Interwoven stockholder and, if
applicable, each other payee, should complete and sign the
Form W-9
included with the letter of transmittal (or other applicable
form such as a
Form W-8)
in order to provide the information and certification necessary
to avoid the imposition of backup withholding, unless an
exemption applies and is established in a manner satisfactory to
the paying agent. Any amounts withheld from payments to an
Interwoven stockholder under the backup withholding rules
generally will be allowed as a credit against the Interwoven
stockholders U.S. federal income tax liability,
provided that the stockholder furnishes the required information
to the IRS. Interwoven stockholders who fail to provide their
correct taxpayer identification numbers and the appropriate
certifications, or to establish an exemption as described above,
will be subject to backup withholding on cash they receive in
the merger and may be subject to a $50 penalty imposed by the
IRS. If the paying agent withholds on a payment to a stockholder
and the withholding results in an overpayment of taxes by that
stockholder, a refund may be obtained from the IRS, provided
that the stockholder furnishes the required information to the
IRS.
The foregoing discussion of the U.S. federal income tax
consequences of the merger is for our stockholders general
information only. Accordingly, our stockholders should consult
their own tax advisors with respect to the particular tax
consequences to them of the merger, including the applicable
federal, state, local, and foreign tax consequences.
Antitrust
Matters
Under the HSR Act and the rules that have been promulgated under
the HSR Act, acquisitions of a sufficient size may not be
completed unless information has been furnished to the Antitrust
Division of the U.S. Department of Justice and to the
Federal Trade Commission and applicable waiting period
requirements have been satisfied or early termination of the
waiting period has been granted. The merger of Interwoven with
and into Merger Sub and the conversion of shares of Interwoven
stock into the right to receive the merger consideration is
subject to the provisions of the HSR Act. Under the HSR Act, the
merger cannot be completed until the expiration or early
termination of the waiting period following the filing of
Hart-Scott-Rodino
Notification and Report Forms by Autonomy and Interwoven. Both
Autonomy and Interwoven will file the required notification and
report forms.
41
The merger agreement generally provides that Autonomy and
Interwoven will use reasonable best efforts to complete the
merger as promptly as practicable, including commercially
reasonable efforts to obtain any clearance required under the
HSR Act, subject to the more specific provisions in the merger
agreement addressing regulatory matters.
At any time before or after the completion of the merger,
notwithstanding that the applicable waiting period has ended or
approval has been granted, any state, foreign country, or
private individual could take action to enjoin the merger under
the antitrust laws as it deems necessary or desirable in the
public interest or any private party could seek to enjoin the
merger on anti-competitive grounds. We cannot be sure that a
challenge to the merger will not be made or that, if a challenge
is made, that we will prevail.
Legal
Proceedings Regarding the Merger
On January 26, 2009, a putative class action lawsuit was
filed in the Court of Chancery of the State of Delaware against
us and our directors. The case is captioned City of Roseville
Employees Retirement System, on behalf of itself and all
others similarly situated v. Interwoven, Inc. et. al. Case
No. 4312-.
The complaint generally alleges that, in connection with
approving the merger, our directors breached their fiduciary
duties owed to Interwoven stockholders. The complaint alleges
that, among other things, our directors engaged in self-dealing,
failed to properly value Interwoven, and disregarded alleged
conflicts of interest, and that the merger was the product of a
flawed process designed to ensure the sale to Autonomy and
subvert the interests of our stockholders. The complaint seeks,
among other things, certification of the case as a class action,
a declaration that the merger agreement was entered into in
violation of the directors fiduciary duties, a direction
requiring that the directors exercise their fiduciary duties to
obtain a transaction that is in the best interests of
Interwovens stockholders, an injunction precluding
consummation of the merger, rescission of the merger or any of
the terms thereof to the extent implemented, an award of costs,
and other unspecified relief. Based on our review of the
complaint, we believe that the claims are without merit and
intend to vigorously defend against them. However, there can be
no assurances that we will be successful in such defense.
42
THE
MERGER AGREEMENT
The following description summarizes the material provisions of
the merger agreement and is qualified in its entirety by
reference to the complete text of the merger agreement. The
merger agreement is included as Annex A to this proxy
statement. We encourage you to read it carefully and in its
entirety. The merger agreement has been included to provide you
with information regarding its terms. It is not intended to
provide any other factual information about Interwoven. Such
information can be found elsewhere in this proxy statement and
in the other public filings Interwoven makes with the Securities
and Exchange Commission, which are available without charge at
www.sec.gov.
Merger
Consideration
Upon completion of the merger, each outstanding share of
Interwoven common stock, other than shares held by stockholders
who demand and perfect their appraisal rights, will be converted
into the right to receive $16.20 in cash, without interest. The
price of $16.20 per share was determined through
arms-length negotiations between us and Autonomy. Upon
completion of the merger, no shares of Interwoven common stock
will remain outstanding and all shares will automatically be
canceled and will cease to exist.
Conversion
of Shares; Procedures for Exchange of Certificates
Effective automatically upon completion of the merger, you will
have the right to receive $16.20 per share of Interwoven common
stock in cash, without interest. Prior to the completion of the
merger, Autonomy will designate a bank or trust company
reasonably acceptable to us to act as paying agent under the
merger agreement. The merger agreement provides that on the day
the merger is completed or promptly following the completion of
the merger, Autonomy will deposit, or cause to be deposited,
with the paying agent cash amounts sufficient to enable the
paying agent to pay the aggregate merger consideration to the
holders of shares of Interwoven common stock.
The merger agreement provides that as promptly as practicable
after the completion of the merger, the surviving corporation in
the merger will cause the paying agent to mail to each record
holder of certificates representing outstanding shares of
Interwoven common stock whose shares were converted into the
right to receive a portion of the merger consideration a letter
of transmittal and instructions for use in surrendering
certificates in exchange for the merger consideration.
No
stockholder should surrender any certificates until the
stockholder receives the letter of transmittal and other
materials for such surrender.
Upon surrender of a stock
certificate for cancellation to the paying agent, together with
a letter of transmittal, duly completed and executed in
accordance with the instructions, and such other customary
documents as the paying agent may reasonably require, the holder
of such certificate will be entitled to receive the merger
consideration into which the number of shares of Interwoven
common stock previously represented by such stock certificate
shall have been converted pursuant to the merger agreement,
without any interest thereon. The certificates so surrendered
will be canceled.
In the event of a transfer of ownership of shares of Interwoven
common stock which is not registered in our transfer records,
payment may be made with respect to such shares to the
transferee if the stock certificate representing such shares is
presented to the paying agent, is properly endorsed or otherwise
in proper form for transfer, and the transferee either pays any
applicable transfer taxes relating to such transfer, or
establishes that such transfer taxes have been paid or are not
applicable.
If your stock certificate has been lost, stolen or destroyed,
the paying agent will deliver to you the applicable merger
consideration for the shares represented by that certificate if:
|
|
|
|
|
you make an affidavit claiming such certificate has been lost,
stolen or destroyed; and
|
|
|
|
if required by Autonomy, you post a bond in such reasonable
amount as Autonomy may direct as indemnity against any claim
that may be made with respect to that certificate against
Autonomy.
|
You should not send your certificates now and should send
them only pursuant to instructions set forth in the letters of
transmittal to be mailed to stockholders promptly after the
completion of the merger. In all cases, the merger consideration
will be paid only in accordance with the procedures set forth in
the merger agreement and such letters of transmittal.
43
The merger agreement provides that one year after the completion
of the merger, the paying agent will deliver to the surviving
corporation any funds made available to the paying agent which
have not been disbursed to holders of Interwoven common stock,
and that any holders of certificates who have not complied with
the above-described procedures to receive payment of the merger
consideration during such one year period may thereafter look
only to Autonomy and the surviving corporation for payment of
the merger consideration to which they are entitled, without any
interest thereon.
The cash paid to you upon conversion of your shares of
Interwoven common stock will be issued in full satisfaction of
all rights relating to the shares of Interwoven common stock
Effect on
Interwoven Stock Options
The merger agreement provides that all Interwoven stock options
with exercise prices at or below $40.00 will be assumed by
Autonomy and become rights to purchase Autonomy ordinary shares
on the same terms and conditions as are in effect immediately
prior to the completion of the merger, except that the exercise
price and number of shares subject to each such stock option
will be adjusted to reflect the trading price of Autonomy shares
at such time relative to the cash price payable in the merger.
The merger agreement provides that all Interwoven stock options
with exercise prices above $40.00 shall be canceled upon the
completion of the merger with no cash or other consideration
payable, whether or not then vested or exercisable.
Under the terms of the merger agreement, all optionees with
outstanding vested stock options will be entitled, at the
optionees election, to receive in cash the difference
between $16.20 and the exercise price per share for each vested
share subject to an outstanding stock option, less applicable
withholding taxes. Such cash payment will be in lieu of the
assumption of the vested portion of the options by Autonomy, and
the conversion of such vested portion of the options into
options to purchase Autonomy ordinary shares.
Many of our outstanding unvested stock options to acquire
Interwoven common stock do not provide that the vesting and
exercisability of those options will be accelerated by reason of
change in control events (such as the completion of the merger).
However, certain stock options held by our directors and
employees provide, by their terms, the vesting of either all
shares not yet vested or 12 months of vesting under those
stock options upon a change in control (such as the completion
of the merger). In addition, the vesting of certain stock
options held by our directors, officers and employees will
accelerate if they are terminated within a specified period
after the completion of the merger. The accelerated vesting of
stock options held by our directors and executive officers is
described under the section of this proxy statement entitled
The Merger Interests of Our Directors and
Executive Officers in the Merger beginning on page 33.
Effect on
Interwoven Restricted Stock Units
The merger agreement provides that all Interwoven restricted
stock units will be assumed by Autonomy on the same terms and
conditions as are in effect immediately prior to the completion
of the merger, except that the number of shares subject to each
such restricted stock award will be adjusted to reflect the
trading price of Autonomy shares at such time relative to the
cash price payable in the merger.
Certain restricted stock units held by our directors provide, by
their terms, the vesting of all restricted stock units not yet
vested under those restricted stock units upon a change in
control (such as the completion of the merger). In addition, the
vesting of certain restricted stock options held by our officers
will accelerate if they are terminated within a specified period
after the completion of the merger. The accelerated vesting of
restricted stock units held by our officers is described under
the section of this proxy statement entitled The
Merger Interests of Our Directors and Executive
Officers in the Merger beginning on page 33.
Effect on
Interwoven Employee Stock Purchase Plan
The merger agreement provides that the last offering period
under the ESPP will end on the earlier of (1) the day
immediately prior to the completion of the merger and
(2) April 30, 2009. Under the terms of the ESPP, all
participants may purchase shares of our common stock at a
purchase price equal to 85% of the lesser of (a) the fair
value of a share of our common stock on November 3, 2008,
or (b) the fair value of a share of our common stock on
44
either April 30, 2009 or, if the merger closes prior to
April 30, 2009, the day immediately prior to the completion
of the merger. The merger agreement further provides that any
purchase rights outstanding on the earlier of (1) the day
immediately prior to the completion of the merger and
(2) April 30, 2009 will be exercised, and each share
of Interwoven common stock acquired upon exercise of such
purchase right will be converted in the merger into the right to
receive $16.20 in cash, without interest. The ESPP will be
terminated immediately following the exercise of any outstanding
purchase rights and no new purchase or offering period will
commence or purchases occur after that time.
Effective
Time of the Merger
The merger will become effective upon the filing of a
certificate of merger with the Delaware Secretary of State or at
such later time as is agreed upon by Autonomy and Interwoven and
specified in the certificate of merger. The filing of the
certificate of merger will occur on the closing date. Subject to
the terms and conditions of the merger agreement and in
accordance with Delaware law, upon the completion of the merger,
Merger Sub, a wholly-owned subsidiary of Autonomy and a party to
the merger agreement, will merge with and into Interwoven.
Interwoven will survive the merger as a wholly-owned subsidiary
of Autonomy.
Representations
and Warranties
The merger agreement contains representations and warranties of
each party to the agreement. The representations and warranties
in the merger agreement are complicated and not easily
summarized. You are urged to read carefully and in their
entirety the sections of the merger agreement entitled
Representations and Warranties of the Company and
Representations and Warranties of Parent and Merger
Sub in Articles III and IV, respectively, of the
merger agreement attached as Annex A to this proxy
statement. However, the assertions embodied in the
representations and warranties made by Interwoven are qualified
by information and statements made in a confidential disclosure
letter that Interwoven provided to Autonomy in connection with
the signing of the merger agreement. While Interwoven does not
believe that such disclosure letter contains information that
applicable securities laws require it to publicly disclose
(other than information that has already been so disclosed), the
disclosure letter does contain information that modifies,
qualifies and creates exceptions to the representations and
warranties set forth in the merger agreement. Accordingly, you
should not rely on the representations and warranties in the
merger agreement as characterizations of the actual state of
facts, since such representations and warranties were made by
the parties to the merger agreement to and solely for the
benefit of each other, and they are modified in important part
by the underlying disclosure letter. The disclosure letter
contains information that has been included in Interwovens
general prior public disclosures, as well as additional
non-public information. Moreover, information concerning the
subject matter of the representations and warranties may have
changed since the date of the merger agreement, which subsequent
information may or may not be fully reflected in
Interwovens public disclosures.
The merger agreement contains representations and warranties of
Interwoven as to, among other things:
|
|
|
|
|
organization, standing and corporate power;
|
|
|
|
subsidiaries;
|
|
|
|
our capital structure;
|
|
|
|
authority and noncontravention;
|
|
|
|
governmental approvals;
|
|
|
|
Securities and Exchange Commission documents, financial
statements and absence of undisclosed liabilities;
|
|
|
|
this proxy statement;
|
|
|
|
absence of certain changes or events between September 30,
2008 and the date of the merger agreement;
|
|
|
|
litigation;
|
45
|
|
|
|
|
contracts;
|
|
|
|
compliance with laws;
|
|
|
|
notes and accounts receivables;
|
|
|
|
employee benefit plans;
|
|
|
|
taxes;
|
|
|
|
intellectual property and software;
|
|
|
|
property and assets;
|
|
|
|
environmental matters;
|
|
|
|
transactions with related parties;
|
|
|
|
brokers and other advisors;
|
|
|
|
opinions of financial advisors;
|
|
|
|
insurance;
|
|
|
|
absence of restrictions on business;
|
|
|
|
transaction fees and expenses;
|
|
|
|
suppliers and customers;
|
|
|
|
immigration matters; and
|
|
|
|
solvency.
|
In addition, the merger agreement contains representations and
warranties by Autonomy and Merger Sub as to:
|
|
|
|
|
organization, standing and corporate power;
|
|
|
|
the capital structure of Merger Sub;
|
|
|
|
authority and noncontravention;
|
|
|
|
governmental approvals;
|
|
|
|
litigation;
|
|
|
|
information supplied by Autonomy and Merger Sub for this proxy
statement;
|
|
|
|
status of Autonomy and Merger Sub as an interested
stockholder under Delaware law;
|
|
|
|
interim operations of Merger Sub;
|
|
|
|
brokers; and
|
|
|
|
Autonomys financing arrangements.
|
The merger agreement provides that the representations and
warranties of Interwoven, Autonomy and Merger Sub will not
survive the completion of the merger.
Covenants
Conduct
of Interwoven Business
We have agreed in the merger agreement that, except as expressly
permitted or contemplated by the merger agreement or required by
law or the terms of an existing contract disclosed by us to
Autonomy, and except for certain actions set forth in the
disclosure schedule or otherwise consented to by Autonomy in
writing, between the date of the merger agreement and the
earlier of the termination of the merger agreement or the
completion of the merger, we will and will cause our
subsidiaries to use commercially reasonable efforts to
(a) operate our respective
46
businesses in the ordinary course consistent with past practice,
(b) comply with all applicable laws in all material
respects and (c) use commercially reasonable efforts to
preserve and keep intact our current business organizations, the
services of our officers, employees and consultants and
relationships with customers, suppliers, licensors, licensees,
distributors and others we have business dealing with. In
addition, we have agreed in the merger agreement that, subject
to the exceptions described above, between the date of the
merger agreement and the earlier of the termination of the
merger agreement or the completion of the merger, neither we nor
any of our subsidiaries may, without Autonomys written
consent (which, as to certain of the matters listed below, may
not be unreasonably withheld):
|
|
|
|
|
declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, stock or property) in respect
of, any of our capital stock;
|
|
|
|
split, combine or reclassify any of our capital stock or issue
or authorize the issuance of any other securities in respect of,
in lieu of, or in substitution for shares of our capital stock
or any of our other securities;
|
|
|
|
purchase, redeem or otherwise acquire any shares of our capital
stock or any other of our securities or any rights, warrants, or
options to acquire any such shares or other securities;
|
|
|
|
issue, deliver, sell, grant, pledge or otherwise encumber any
shares of our capital stock, any other voting securities or
other securities convertible into, or any rights warrants or
options to acquire, any such shares, voting securities or
convertible securities, or any phantom stock,
phantom stock rights, RSUs, stock appreciation
rights or stock based performance units, other than in certain
cases the grant of options and issuances of our common stock
under one or more of our stock plans in the ordinary course of
business or pursuant to outstanding contractual obligations;
|
|
|
|
amend our certificate of incorporation or bylaws (or similar
organizational documents of any of our subsidiaries) or adopt a
stockholders rights plan;
|
|
|
|
directly or indirectly acquire, any division, business or equity
interest of any person or any assets forming part of such a
division or business that have a purchase price in excess of
$250,000 individually or $500,000 in the aggregate;
|
|
|
|
sell, lease, license, mortgage, sell and leaseback or otherwise
encumber or dispose of any of our properties or other assets
with a fair market value in excess of $100,000 individually or
$250,000 in the aggregate to a third party (except as permitted
by the merger agreement, with respect to properties or other
assets no longer used in the operation of our business
and/or
in
the ordinary course of business);
|
|
|
|
make any capital expenditure or expenditures in any fiscal
quarter in an aggregate amount for such quarter that exceeds the
amount budgeted for in our capital expenditure plan for such
quarter;
|
|
|
|
repurchase or prepay any indebtedness for borrowed money except
as required by the terms of such indebtedness; incur any
indebtedness for borrowed money or guarantee any such
indebtedness of another person or issue or sell any debt
securities or options, warrants, calls or other rights to
acquire any debt securities of Interwoven or any of our
subsidiaries, guarantee any debt securities of another person,
enter into any keep well or other agreement to
maintain any financial statement condition of another person or
enter into any arrangement having the economic effect of any of
the foregoing; or make any loans, advances or capital
contributions to, or investments in, any other person
(1) in excess of $50,000 in the aggregate, or (2) in
any amount not in the ordinary course of business consistent
with past practice, excluding in each case indebtedness to,
loans from, or investments in, Interwoven or any direct or
indirect wholly owned subsidiary and advances of expenses to
employees;
|
|
|
|
pay, discharge, settle or satisfy any material claims (including
claims of stockholders), liabilities or obligations (whether
absolute, accrued, asserted or unasserted, contingent or
otherwise), other than in the ordinary course of business
consistent with past practice or as required by the terms of a
contract or applicable law, or involving any material limitation
on our conduct of the business, or waive or release any right of
material value;
|
47
|
|
|
|
|
enter into, modify, amend or terminate (A) any contract
that if so entered into, modified, amended or terminated would
reasonably be expected to have a material adverse effect on us,
impair in any material respect our ability to perform our
obligations under the merger agreement or prevent or materially
delay the consummation of the transactions contemplated by the
merger agreement, (B) any other material contract
(excluding contracts or amendments entered into or made in the
ordinary course of business consistent with past practice),
(C) any contract that grants any license to our
intellectual property (other than contracts or amendments
entered into or made in the ordinary course of business
consistent with past practice) or (D) any contract that
contains a covenant restricting our ability (or that, following
the consummation of the merger, would restrict the ability of
Autonomy) to compete in any business or with any person or in
any geographic area;
|
|
|
|
enter into any contract that, if in effect as of the date of the
merger agreement, would reasonably be expected to conflict with,
or result in a 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 (subject to certain
exceptions) in or upon any of our properties or other assets
under, or give rise to any increased, additional, accelerated or
guaranteed right or entitlement of any third party under, or
result in any material alteration of, any provision of such
contract;
|
|
|
|
subject to certain exceptions, (A) increase in any manner
the compensation, bonus or pension, welfare, severance or fringe
benefits of, or pay any bonus to, any current or former
director, officer, employee or consultant (excluding bonuses not
in excess of $5,000 to any one non-officer employee and in any
event not exceeding $100,000 in the aggregate), (B) grant
or pay to any current or former director, officer, employee or
consultant any benefit not provided for under any contract or
benefit plan other than the payment of cash compensation in the
ordinary course of business consistent with past practice,
(C) grant any awards under any benefit plan, (D) take
any action to fund or in any other way secure the payment of
compensation or benefits under any contract or benefit plan,
(E) exercise any discretion to accelerate the vesting or
payment of any compensation or benefit under any contract or
benefit plan, (F) adopt any new benefit plan or arrangement
or amend, modify or terminate any existing benefit plan, in each
case for the benefit of any current or former director, officer,
employee or consultant, other than required by applicable law or
tax qualification requirement or (G) forgive any loans to
directors, officers or employees o; provided, however, that
Interwoven may implement its regular increases to compensation,
bonus and benefit plans, payment and arrangements with current
employees and employees hired subsequent to the date of the
merger agreement, in the ordinary course of business on
substantially the same schedule as previously implemented by the
Company;
|
|
|
|
adopt or enter into any collective bargaining agreement or other
labor union contract;
|
|
|
|
fail to use reasonable efforts to maintain existing insurance
policies or comparable replacement policies to the extent
available for a reasonable cost;
|
|
|
|
change our fiscal year, revalue our material assets, or make any
changes in financial, actuarial, reserving, statutory or tax
accounting methods, principles or practices, except in each case
as required by GAAP or applicable law;
|
|
|
|
change any material tax election or settle or compromise any
material tax liability, or agree to an extension of a statute of
limitations with respect to material taxes; or
|
|
|
|
authorize any of, or commit or agree to take any of, the
foregoing actions.
|
The covenants in the merger agreement relating to the conduct of
our business are complicated and not easily summarized. You are
urged to read carefully and in its entirety Section 5.1 of
the merger agreement entitled Conduct of Business in
Annex A to this proxy statement.
Other
Covenants
The merger agreement contains a number of other covenants on the
part of the parties, including covenants relating to:
|
|
|
|
|
preparation of this proxy statement and our stockholder meeting;
|
48
|
|
|
|
|
Autonomys extraordinary general meeting of shareholders;
|
|
|
|
Autonomys access to our information prior to the
completion of the merger;
|
|
|
|
the parties use of reasonable best efforts to complete the
merger as promptly as practicable, including obtaining antitrust
clearance;
|
|
|
|
the continuation of indemnification of our directors and
officers and maintenance of directors and officers
liability insurance following the completion of the merger;
|
|
|
|
the payment of fees of expenses;
|
|
|
|
public announcements;
|
|
|
|
stockholder litigation;
|
|
|
|
the treatment of our employees whose employment with Autonomy is
continued following the completion of the merger;
|
|
|
|
the treatment of stock options and restricted stock units under
our various plans;
|
|
|
|
cooperation on integration planning;
|
|
|
|
operations of Merger Sub; and
|
|
|
|
matters relating to Autonomys financing agreements.
|
No
Solicitation of Alternative Transactions by Interwoven
We have agreed in the merger agreement, between the date of the
merger agreement and the earlier of the termination of the
merger agreement or the completion of the merger, to certain
limitations on our ability to take action with respect to
alternative acquisition transactions. Except as set forth below,
we have agreed to not:
|
|
|
|
|
solicit, initiate, cause or knowingly encourage or facilitate,
any inquiries or the making of any proposal or offer that
constitutes or is reasonably likely to lead to a Company
Takeover Proposal (as defined below); or
|
|
|
|
participate in any negotiations or substantive discussions
regarding any Company Takeover Proposal, or furnish to any
person any non-public information in connection with or in
furtherance of, or otherwise cooperate with or knowingly assist
any person in connection with, any Company Takeover Proposal.
|
Notwithstanding these limitations, the merger agreement provides
that our Board of Directors may furnish information to, enter
into discussions or negotiations with and cooperate in or
facilitate any effort or attempt to make, implement or accept a
Company Takeover Proposal from, a person who has made a written
bona fide
Company Takeover Proposal not solicited in
violation of the provisions described above if the Board of
Directors of Interwoven has:
|
|
|
|
|
determined (after consultation with our financial advisor and
outside counsel) that such proposal constitutes or could
reasonably be expected to lead to a Company Superior Proposal
(as defined below);
|
|
|
|
determined (after consultation with our outside legal counsel)
that failure to take such actions would be reasonably likely to
result in a breach of our Board of Directors fiduciary
obligations to Interwoven stockholders under applicable law;
|
|
|
|
provided written notice to Autonomy of its intent to furnish
information or enter into discussions or negotiations with such
person at least one business day prior to taking any such
action; and
|
|
|
|
obtained from such person an executed confidentiality agreement
containing terms relating to confidentiality that are no less
favorable to Interwoven than those contained in the
confidentiality agreement we entered into with Autonomy.
|
We are required by the merger agreement to furnish substantially
concurrently to Autonomy all nonpublic information provided to
the person who has made the Company Takeover Proposal to the
extent that such information has not been previously provided to
Autonomy.
49
Under the merger agreement, a Company Takeover
Proposal means any inquiry, proposal or offer, whether or
not conditional, with respect to a proposed or potential
Acquisition Transaction from a person other than Autonomy.
Under the merger agreement, an Acquisition
Transaction means:
|
|
|
|
|
a merger, consolidation, dissolution, recapitalization or other
business combination involving Interwoven or its subsidiaries;
|
|
|
|
for the issuance of, in a single transaction or series of
related transactions, 15% or more of the equity securities of
Interwoven as consideration for the assets or securities of
another person; or
|
|
|
|
to acquire in any manner, directly or indirectly, in a single
transaction or series of related transactions, 15% or more of
the equity securities of Interwoven or assets (including equity
securities of any subsidiary) that represent 15% or more of the
total consolidated assets of Interwoven, other than the
transactions contemplated by the merger agreement.
|
Under the merger agreement, Company Superior
Proposal means any
bona fide
written offer made by
a third party, that if consummated would result in such person
(or its stockholders) owning, directly or indirectly, greater
than 50% of Interwoven common stock then outstanding (or of the
surviving entity in a merger or the direct or indirect parent of
the surviving entity in a merger) or all or substantially all of
the total consolidated assets of Interwoven on terms that our
Board determines in good faith (following consultation with our
financial advisor and outside counsel and in light of all
relevant circumstances, including all the terms and conditions
of such proposal and the merger agreement) to (i) be more
favorable to our stockholders from a financial point of view
than the transactions contemplated with Autonomy and
(ii) be reasonably likely to be completed, taking into
account any financing and approval requirements and all other
financing, legal, regulatory and other aspects of such proposal.
In addition to our obligations set forth above, the merger
agreement provides that we must promptly, but in no event later
than 24 hours after any of our officers becomes aware that
any Company Takeover Proposal has been received by us, or any
inquiry or request for information that we believe would
reasonably be expected to lead to a Company Takeover Proposal
has been received by us, advise Autonomy orally and in writing
of (1) any inquiry or request for information that we
reasonably believe could lead to a Company Takeover Proposal,
and (2) the terms and conditions of any such Company
Takeover Proposal, request or inquiry and the identity of the
person making the Company Takeover Proposal, inquiry or request.
We are required to keep Autonomy informed in all material
respects on a timely basis of any material change in the status
of, or any material modification or material amendment to, any
Company Takeover Proposal, and to provide Autonomy, as soon as
practicable, with copies of any written offer, all
correspondence and any other written material sent or provided
to us or any of our subsidiaries from any person that describes
any of the terms or conditions of any such request, Company
Takeover Proposal or inquiry.
The merger agreement provides that our Board of Directors is not
prevented from withholding, withdrawing, amending, modifying or
changing its recommendation in favor of the adoption of the
merger agreement and, in the case of a tender or exchange offer
by a person other than Autonomy or its affiliates made directly
to our stockholders, recommending that our stockholders accept
the tender or exchange offer, if, prior to the special meeting,
our Board of Directors determines in good faith (after receiving
the advice of its financial advisors and outside legal counsel)
that the failure of our Board of Directors to so act would be
reasonably likely to result in a breach of its fiduciary
obligations to Interwovens stockholders under applicable
law. The merger agreement also provides that our Board of
Directors will not make such a change in its recommendation in
response to a Company Superior Proposal until 72 hours
after we have notified Autonomy of our intent to do so,
negotiated with Autonomy during such period with respect to any
revisions to the terms of the merger that Autonomy elects to
propose, and considered any such revisions in determining
whether to change such recommendation.
Conditions
to the Merger
The merger agreement provides that the parties obligations
to complete the merger are subject to the following conditions:
|
|
|
|
|
the adoption of the merger agreement by the requisite vote of
Interwovens stockholders;
|
|
|
|
the approval of the merger agreement by the requisite vote of
Autonomys shareholders;
|
|
|
|
the expiration or termination of the waiting period under the
HSR Act; and
|
50
|
|
|
|
|
no temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition that has
the effect of preventing the consummation of the merger being in
effect, where the violation of such order or injunction that
would occur if the merger were completed would reasonably be
expected to have a material adverse effect on Interwoven or
Autonomy.
|
The merger agreement provides that Autonomys and Merger
Subs obligations to complete the merger are subject to the
following additional conditions:
|
|
|
|
|
as of the date of the merger agreement and as of the date of the
completion of the merger, (i) our representations and
warranties regarding our authority to enter into and consummate
the merger agreement (contained in section 3.4(a) of the
merger agreement) shall be true and correct in all respects,
(ii) our representations and warranties that are qualified
by material adverse effect must be true and correct in all
respects, and (iii) our remaining representations and
warranties must be true and correct (except, in each case, to
the extent that any such representation and warranty expressly
speaks as of an earlier date, in which case such representation
and warranty shall be true and correct as of such earlier date)
except, with respect to (iii), where the failure of such other
representations and warranties to be true or correct,
individually or in the aggregate, has not had and would not
reasonably be expected to have a material adverse effect on us;
|
|
|
|
we must have performed in all material respects all of our
obligations under the merger agreement;
|
|
|
|
from the date of the merger agreement through the completion of
the merger, there must not have been any fact, event or
circumstance that, individually or in the aggregate, has caused
or would reasonably be expected to have, a material adverse
effect on us; and
|
|
|
|
if the completion of the merger occurs before April 22,
2009 and (i) before March 20, 2009, we must have
provided Autonomy with evidence that we hold at least
$174,198,525 in cash, marketable securities and other eligible
investments, or (ii) on or after March 20, 2009 and
before April 1, 2009, we must have provided Autonomy with
evidence that we hold at least $179,198,525 in cash, marketable
securities and other eligible investments, or (iii) on or
after April 1, 2009 and before April 22, 2009, we must
have provided Autonomy with evidence that we hold at least
$185,198,525 in cash, marketable securities and other eligible
investments.
|
The merger agreement also provides that our obligation to
complete the merger is subject to the following additional
conditions:
|
|
|
|
|
the representations and warranties of Autonomy and Merger Sub
shall be true and correct (without giving effect to any
limitation as to materiality set forth therein) both
as of the date of the merger agreement and as of the date of the
completion of the merger (except to the extent that any such
representation and warranty expressly speaks as of an earlier
date, in which case such representation and warranty shall be
true and correct as of such earlier date), except where the
failure of the representations and warranties to be true and
correct individually or in the aggregate (i) would not
reasonably be expected to impair in any material respect the
ability of Autonomy or Merger Sub to perform its obligations
under the merger agreement and (ii) would not reasonably be
expected to prevent or materially delay the consummation of any
of the transactions contemplated by merger agreement; and
|
|
|
|
Autonomy and Merger Sub must have performed in all material
respects all of their respective obligations under the merger
agreement.
|
The merger agreement provides that a material adverse
effect means a material adverse effect on the business,
assets, condition (financial or otherwise) or results of
operations of a party and its subsidiaries, taken as a whole, or
to the ability of either party to perform its obligations under
the merger agreement or to consummate the merger or the other
transactions contemplated by merger agreement; provided,
however, none of the following shall be deemed in and of
themselves, either alone or in combination, to constitute, and
none of the following shall be taken into account in determining
whether there has been or will be, a material adverse effect:
|
|
|
|
|
any change in the market price or trading volume of the
outstanding securities of such party;
|
|
|
|
any failure by such party to meet internal projections or
forecasts or published revenue or earnings predictions;
|
51
|
|
|
|
|
any adverse effect to the extent attributable to the
announcement or pendency of the merger (including cancellations
in customer orders, reduction in sales, disruption in
relationships with suppliers, distributors, partners or similar
relationships or loss of employees);
|
|
|
|
any adverse effect that results from changes attributable to
conditions affecting the industries in which such party
participates, the United States or United Kingdom economy as a
whole, or foreign economies in any locations where such party or
any of such partys subsidiaries has material operations or
sales (to the extent that such changes in each case do not
disproportionately adversely affect such party and its
subsidiaries taken as a whole compared to similarly situated
companies in such partys industry);
|
|
|
|
any adverse effect that results from (A) any party taking
any action at the written request of the other party, or
(B) any party taking any action required by the merger
agreement; or
|
|
|
|
any adverse effect that results from any act of God, any act of
terrorism, war or other armed hostilities, any regional,
national or international calamity or any other similar event.
|
Termination
of the Merger Agreement
The merger agreement provides that it may be terminated at any
time prior to the completion of the merger:
|
|
|
|
|
by mutual written consent of Interwoven and Autonomy;
|
|
|
|
by either Interwoven or Autonomy:
|
|
|
|
|
|
if the merger is not completed on or before June 22, 2009
(the Termination Date), provided that if on
June 22, 2009 the expiration or termination of the waiting
period under the HSR Act shall not have occurred but all other
conditions to the completion of the merger have been satisfied
(or in the case of conditions that by their terms are to be
satisfied at the completion of the merger, shall be capable of
being satisfied on June 22, 2009), then either Autonomy or
Interwoven shall have the right, in its sole discretion by
providing written notice to the other on or before June 22,
2009 to extend the Termination Date to September 22, 2009,
provided further that a party may not terminate the merger
agreement on this basis if such partys action or failure
to act was a principal cause of or resulted in the failure of
the merger to be completed on or before such date;
|
|
|
|
if any temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition that has
the effect of preventing the merger shall be in effect and shall
have become final and nonappealable, provided that a party may
not terminate the merger agreement on this basis if the
imposition of such legal restraint was attributable to the
failure of such party or any affiliate of such party to perform
any of its obligations under the merger agreement;
|
|
|
|
if the stockholders of Interwoven shall not have adopted the
merger agreement at the special meeting or at any adjournment or
postponement thereof, provided that a party may not terminate
the merger agreement on this basis if the failure to obtain our
stockholders adoption of the merger agreement was
attributable to the failure of such party or any affiliate of
such party to perform any of its obligations under the merger
agreement (a termination described in this paragraph being
referred to herein as a Interwoven No-Vote
Termination);
|
|
|
|
if Autonomy shall not have obtained its shareholders
approval of the merger at its extraordinary general meeting,
provided that a party may not terminate the merger agreement on
this basis if the failure to obtain Autonomys
shareholders approval of the merger was attributable to
the failure of such party or any affiliate of such party to
perform any of its obligations under the merger agreement (a
termination described in this paragraph being referred to herein
as an Autonomy No-Vote Termination);
|
|
|
|
|
|
if we have breached or failed to perform any of our
representations, warranties, covenants or agreements in the
merger agreement, which breach or failure to perform would give
rise to the failure of the closing condition in favor of
Autonomy that relates to such matters, subject to our ability to
cure such breach or failure to perform within 20 days after
written notice, provided that Autonomy may not terminate the
merger agreement on this basis if it has committed a material
breach of any of its representations, warranties, covenants or
agreements in the merger agreement;
|
52
|
|
|
|
|
if any of the following events occurs: (i) any change of
our Board of Directors recommendation to our stockholders
to adopt the merger agreement; (ii) our Board of Directors
or any committee thereof fails to publicly confirm its
recommendation and declaration of advisability of the merger
agreement within five business days after a written request by
Autonomy that it do so, (iii) our Board of Directors adopts
a resolution approving, endorsing or recommending an Acquisition
Transaction, (iv) we enter into a definitive agreement
providing for the consummation of a transaction that constitutes
an Acquisition Transaction, (v) a tender offer or exchange
offer for any outstanding shares of capital stock of Interwoven
that constitutes an Acquisition Transaction (other than by
Autonomy) is commenced prior to obtaining the approval of the
Interwoven stockholders at the special meeting and our Board of
Directors fails to recommend against acceptance of such tender
offer or exchange offer by its stockholders within ten business
days after commencement of such tender offer or exchange offer
(provided that any right to terminate pursuant to this
clause (v) must be exercised, if at all, by Autonomy within
10 days of the expiration of such ten business day period),
or (vi) our Board of Directors publicly announces its
intention to do any of the foregoing (a termination described in
this paragraph being referred to herein as an Interwoven
Change of Recommendation Termination);
|
|
|
|
if any of our directors or officers willfully and materially
breaches the non-solicitation covenant set forth in the merger
agreement (a termination described in this paragraph being
referred to herein as an Interwoven Solicitation
Termination); or
|
|
|
|
|
|
if Autonomy or Merger Sub has breached or failed to perform any
of their representations, warranties, covenants or agreements in
the merger agreement, which breach or failure to perform would
give rise to the failure of the closing condition in favor of
Interwoven that relates to such matters, subject to their
ability to cure such breach or failure to perform within
20 days after written notice, provided that Interwoven may
not terminate the merger agreement on this basis if it has
committed a material breach of any of its representations,
warranties, covenants or agreements in the merger agreement;
|
|
|
|
at any time prior to obtaining the adoption of the merger
agreement by our stockholders, if (i) we receive a Company
Superior Proposal that did not result, directly or indirectly,
from a willful breach of the merger agreement, (ii) our
Board of Directors authorizes, subject to complying with the
terms of the merger agreement, entry into an acquisition
agreement with respect to a Company Superior Proposal and we
notify Autonomy in writing that we intend to enter into such
acquisition agreement, attaching the most current version of
such agreement to such notice, (iii) Autonomy does not
make, within 72 hours of receipt of the written
notification of our intention to enter into a binding agreement
for a Company Superior Proposal, a binding, unconditional offer,
that our Board of Directors determines in good faith after
consultation with its financial advisors, is (A) at least
as favorable, from a financial point of view, to our
stockholders as the Company Superior Proposal and
(B) reasonably likely to be completed, and
(iv) Interwoven concurrently with such termination pays to
Autonomy in immediately available funds any fees required to be
paid pursuant to the merger agreement (a termination described
in this paragraph being referred to herein as a Superior
Proposal Termination);
|
|
|
|
if there shall have occurred (1) the failure of
Autonomys Board of Directors to recommend that
Autonomys shareholders vote to approve the merger
agreement and the merger, or any withdrawal or modification of
Autonomys Board of Directors recommendation to its
shareholders to approve the merger agreement or the merger,
(2) the failure of Autonomy to include in the circular to
be sent to its shareholders the recommendation of
Autonomys Board of Directors to its shareholders to
approve the merger, (3) the Autonomy Board of Directors or
any committee thereof fails to publicly confirm its
recommendation that Autonomys shareholders vote to approve
the merger within five business days after a written request by
Interwoven that it do so, or (iii) the Autonomy Board of
Directors publicly announces its intention to do any of the
foregoing (a termination described in this paragraph being
referred to herein as an Autonomy Change of Recommendation
Termination); or
|
|
|
|
if Autonomy or Merger Sub fails to obtain proceeds pursuant to
the Financing Agreements (see the section of this proxy
statement entitled The Merger Financing Agreements
beginning on page 55 for a discussion of the Financing
Agreements) (or any alternative financing permitted by the
merger
|
53
|
|
|
|
|
agreement) sufficient to consummate the transactions
contemplated by the merger agreement, or fails to close the
merger, by the earlier of (a) the date 15 business days
after satisfaction or waiver of the conditions set forth in the
merger agreement (excluding conditions that, by their terms,
cannot be satisfied until the closing of the merger, but which
would be reasonably capable of being satisfied at the closing)
and (b) the day preceding the Termination Date (a
termination described in this paragraph being referred to herein
as a Financing Related Termination).
|
The merger agreement provides that in the event of termination
of the merger agreement, the merger agreement shall forthwith
become void and have no effect, without any liability or
obligation on the part of any party, other than with respect to
the treatment of confidential information, the payment of
transaction expenses and the possible payment of termination
fees, provided that no such termination will relieve any party
from any liability resulting from any willful breach of the
merger agreement.
Fees and
Expenses
Whether or not the merger is completed, all fees and expenses
incurred in connection with the merger agreement shall be paid
by the party incurring such fees or expenses. However, we will
share equally with Autonomy all fees and expenses (other than
the fees and expenses of attorneys and accountants) incurred in
connection with the printing and filing this proxy statement
with the Securities and Exchange Commission and any amendments
or supplements thereto and the premerger notification and report
forms under the HSR Act.
We must pay Autonomy a termination fee equal to $25 million
in cash if the merger agreement is terminated under any of the
following circumstances:
|
|
|
|
|
if (1) the merger agreement is terminated pursuant to an
Interwoven No-Vote Termination, (2) prior to any such
termination but following the date of the merger agreement a
bona fide
Company Takeover Proposal shall have been made
or communicated to Interwoven or shall have been made directly
to the stockholders of Interwoven generally, or any person shall
have announced an intention to make or communicate a Company
Takeover Proposal, in each case which, on the date of the
special meeting, has not been withdrawn, and (3) within
twelve months following the termination of the merger agreement
an agreement providing for the consummation of a transaction
that would result in a person (or its stockholders) owning,
directly or indirectly, 50% or more of Interwoven common stock
then outstanding is entered into, and such transaction is
subsequently consummated, or within such
12-month
period such a transaction is consummated;
|
|
|
|
if Autonomy terminates the merger agreement pursuant to an
Interwoven Change of Recommendation Termination or an Interwoven
Solicitation Termination; or
|
|
|
|
if we terminate the merger agreement pursuant to a Superior
Proposal Termination.
|
In addition, we must pay Autonomy an amount equal to
$7 million in cash if the merger agreement is terminated
due to an Interwoven No-Vote Termination. The $25 million
termination fee shall be reduced by any amount that we pay or
are required to pay due to an Interwoven No-Vote Termination. We
are not required to pay the $25,000,000 termination fee on more
than one occasion and in the event we pay the $25,000,000
termination fee, we shall have no further liability with respect
to the merger or the merger agreement.
Autonomy must pay us a termination fee equal to $25 million
if the merger agreement is terminated under any of the following
circumstances:
|
|
|
|
|
if we terminate the merger agreement pursuant to an Autonomy
Change of Recommendation Termination;
|
|
|
|
if we terminate the merger agreement pursuant to a Financing
Related Termination; or
|
|
|
|
if either we or Autonomy terminates the merger agreement
pursuant to an Autonomy No-Vote Termination.
|
To the extent that payment of such amount by Autonomy would
violate the laws of England and Wales or the rules and
regulations of the London Stock Exchange plc, then the amount
payable by Autonomy will be reduced to equal the maximum amount
that may be paid without violating such laws or rules. Autonomy
is not required to pay the $25 million termination fee on
more than one occasion and in the event Autonomy pays the
$25 million termination fee, it shall have no further
liability with respect to the merger or the merger agreement.
54
THE
MERGER FINANCING AGREEMENTS
Concurrently with the execution of the merger agreement, Citi,
Deutsche Bank and Morgan Stanley entered into a placing
agreement with Autonomy under which Autonomy has raised
£222 million through the sale of its ordinary shares
to institutional investors. This equity financing was completed,
and the funds received by Autonomy, on January 27, 2009.
In addition, concurrently with the execution of the merger
agreement, Barclays Bank entered into a revolving facility
agreement with Autonomy in which Barclays Bank has committed to
lend to a subsidiary of Autonomy $237.5 million to, among
other things, fund a portion of the merger consideration. The
obligations of Barclays Bank to lend under the facility
agreement are subject to (1) certain specified
representations being correct and not misleading in all material
respects when made or deemed to have been made and if there are
any misrepresentations made by a subsidiary of Autonomy (not
being Autonomy NA Holdings, Inc. or Merger Sub), such
misrepresentations not being material in the context of the
funding, (2) there being no breach of certain specified
events of default and if there is any breach of such events of
default by a subsidiary of Autonomy (not being Autonomy NA
Holdings, Inc. or Merger Sub), such breach not being material in
the context of the financing, (3) there being no breach of
certain specified insolvency-related events of default,
(4) the conditions of the merger agreement having been
satisfied other than the payment obligations, and no
circumstances existing that, individually or in the aggregate,
has caused or would reasonably expected to have a material
adverse effect on Interwoven, and (5) there being no change
in control or sale of all or substantially all of the assets of
the borrower (Autonomy Holdings NA, Inc.).
Autonomys obligation to complete the merger is not
conditioned upon these financing transactions occurring,
although the ability of Autonomy to pay the full merger
consideration will likely require that Autonomy obtain a portion
of the merger consideration funds pursuant to the credit
facility or alternate financing.
55
PROPOSAL 2
AUTHORITY TO ADJOURN THE SPECIAL MEETING
The
Adjournment Proposal
If at the special meeting the number of shares of our common
stock represented and voting in favor of adoption of the merger
agreement is not sufficient to adopt the merger agreement, we
may move to adjourn the special meeting in order to enable our
Board of Directors to solicit additional proxies in respect of
such proposal. In that event, we will ask our stockholders to
vote only upon the adjournment proposal, and not the proposal
regarding the adoption of the merger agreement.
In this proposal, we are asking you to authorize the holder of
any proxy solicited by our Board of Directors to vote in favor
of granting discretionary authority to the proxy or
attorney-in-fact to adjourn the special meeting to another time
and place for the purpose of soliciting additional proxies. If
our stockholders approve the adjournment proposal, we could
adjourn the special meeting and any adjourned session of the
special meeting and use the additional time to solicit
additional proxies, including the solicitation of proxies from
our stockholders that have previously voted. Among other things,
approval of the adjournment proposal could mean that, even if we
had received proxies representing a sufficient number of votes
against the adoption of the merger agreement to defeat that
proposal, we could adjourn the special meeting without a vote on
the merger agreement and seek to convince the holders of those
shares to change their votes to votes in favor of adoption of
the merger agreement.
Failure of this proposal to pass will not affect the ability of
the holder of any proxy solicited by us to adjourn the special
meeting in the event that a sufficient number of shares of our
common stock are not represented at the special meeting to
establish a quorum, or for any other lawful purpose.
Votes
Required and Board Recommendation
Approval of the proposal to vote to adjourn the special meeting
to solicit additional proxies if there are not sufficient votes
at the time of the special meeting to adopt the merger
agreement, if necessary, requires the affirmative vote of the
holders of a majority of the shares of Interwoven common stock
that was voted on the proposal at the special meeting.
Abstentions and broker non-votes will have no effect on the
adjournment proposal.
For the reasons set forth in this proxy statement, our Board of
Directors unanimously recommend that you vote FOR
the adjournment of the special meeting, if necessary, to solicit
additional proxies.
56
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of
January 22, 2009, with respect to the beneficial ownership
of our common stock by:
|
|
|
|
|
each person known by us to be the beneficial owner of more than
5% of our common stock;
|
|
|
|
each of our executive officers who are identified as named
executive officers in the proxy statement for our 2008
Annual Meeting of Stockholders;
|
|
|
|
each of directors; and
|
|
|
|
all of our executive officers and directors as a group.
|
Except as otherwise indicated, the address of each beneficial
owner is
c/o Interwoven,
Inc., 160 East Tasman Drive, San Jose, California 95134.
The percentage of shares beneficially owned is based on
46,399,836 shares of common stock outstanding as of
January 22, 2009. Unless indicated below, the persons and
entities named in the table have sole voting and sole investment
power with respect to all shares beneficially owned, subject to
community property laws where applicable. Shares of common stock
subject to options or restricted stock units that are currently
exercisable or settleable within 60 days of
January 22, 2009 are deemed to be outstanding for the
purposes of calculating the amount of beneficial ownership of
that person, and for the purpose of computing the percentage
ownership of that person, but are not treated as outstanding for
the purpose of computing the percentage ownership of any other
person.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Issuable
|
|
|
|
|
|
|
|
|
|
Under Securities
|
|
|
|
|
|
|
Amount of
|
|
|
Exercisable or
|
|
|
|
|
|
|
Beneficial
|
|
|
Settleable
|
|
|
Aggregate
|
|
Name and Address of Beneficial Owner
|
|
Ownership(1)
|
|
|
Within 60 Days
|
|
|
Percentage
|
|
|
Dimensional Fund Advisors LP(2)
|
|
|
3,103,858
|
|
|
|
|
|
|
|
6.7
|
%
|
The Bank of New York Mellon Corporation(3)
|
|
|
2,849,473
|
|
|
|
|
|
|
|
6.1
|
|
Marc C. Cohodes(4)
|
|
|
2,580,578
|
|
|
|
|
|
|
|
5.6
|
|
The Vanguard Group, Inc.(5)
|
|
|
2,422,305
|
|
|
|
|
|
|
|
5.2
|
|
Joseph L. Cowan
|
|
|
144,250
|
|
|
|
143,750
|
|
|
|
*
|
|
John E. Calonico, Jr.
|
|
|
348,131
|
|
|
|
321,533
|
|
|
|
*
|
|
Scipio M. Carnecchia
|
|
|
474,025
|
|
|
|
447,084
|
|
|
|
1.0
|
|
Benjamin E. Kiker, Jr.
|
|
|
66,889
|
|
|
|
56,250
|
|
|
|
*
|
|
Steven J. Martello
|
|
|
309,457
|
|
|
|
295,000
|
|
|
|
*
|
|
David A. Nelson-Gal
|
|
|
97,742
|
|
|
|
90,000
|
|
|
|
*
|
|
Charles M. Boesenberg
|
|
|
52,736
|
|
|
|
47,273
|
|
|
|
*
|
|
Ronald E. F. Codd
|
|
|
106,312
|
|
|
|
100,500
|
|
|
|
*
|
|
Bob L. Corey
|
|
|
82,251
|
|
|
|
78,966
|
|
|
|
*
|
|
Frank J. Fanzilli, Jr.
|
|
|
93,750
|
|
|
|
90,000
|
|
|
|
*
|
|
Roger J. Sippl
|
|
|
42,855
|
|
|
|
38,333
|
|
|
|
*
|
|
Thomas L. Thomas
|
|
|
97,384
|
|
|
|
70,000
|
|
|
|
*
|
|
All 13 directors and executive officers as a group
|
|
|
2,081,202
|
|
|
|
1,861,075
|
|
|
|
4.3
|
%
|
|
|
|
*
|
|
Less than 1%
|
|
(1)
|
|
Includes shares over which the person currently holds or shares
voting or investment power. Also includes any shares listed
under the column Shares Issuable Under Securities
Exercisable or Settleable Within 60 Days.
|
|
(2)
|
|
Based solely on information set forth in a Schedule 13G/A
filed with the Securities and Exchange Commission on
February 6, 2008 by Dimensional Fund Advisors LP
reporting sole power to vote or direct the vote of and sole
power to dispose or direct the disposition of
3,103,858 shares, none of which are actually owned by it.
Dimensional Fund Advisors LP (formerly, Dimensional
Fund Advisors Inc.) (Dimensional), an
investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, furnishes investment advice to
|
57
|
|
|
|
|
four investment companies registered under the Investment
Company Act of 1940, and serves as investment manager to certain
other commingled group trusts and separate accounts. Dimensional
disclaims beneficial ownership of such shares. The address of
Dimensional Fund Advisors LP is 1299 Ocean Avenue, Santa
Monica, CA 90401.
|
|
(3)
|
|
Based solely on information set forth in a Schedule 13G
filed with the Securities and Exchange Commission on
February 14, 2008 by The Bank of New York Mellon
Corporation and certain direct and indirect subsidiaries of the
Bank of New York Mellon Corporation, reporting sole power to
vote or direct the vote of 2,599,887 shares; shared power
to vote or direct the vote of 10,400 shares; sole power to
dispose or direct the disposition of 2,839,073 shares; and
shared power to dispose or direct the disposition of
10,400 shares. The address of The Bank of New York Mellon
Corporation is One Wall Street, 31st Floor, New York, NY 10286.
|
|
(4)
|
|
Based solely on information set forth in a Schedule 13G/A
filed with the Securities and Exchange Commission on
February 12, 2008 by Marc C. Cohodes, reporting sole power
to vote and the sole power to direct the disposition of a total
of 2,580,578 shares held by Copper River Partners, L.P. and
the other investment funds and accounts over which Marc C.
Cohodes holds investment control and voting control with respect
to their investments. The address of Marc C. Cohodes is
c/o Copper
River Management, L.P., 12 Linden Place, Second Floor, Red Bank,
New Jersey 07701.
|
|
(5)
|
|
Based solely on information set forth in a Schedule 13G
filed with the Securities and Exchange Commission on
February 13, 2008 by The Vanguard Group, Inc., reporting
sole power to vote or direct the vote of 47,388 shares and
sole power to dispose or direct the disposition of
2,422,305 shares. The address of The Vanguard Group, Inc.
is 100 Vanguard Blvd., Malvern, PA 19355.
|
58
PRICE
RANGE OF OUR COMMON STOCK AND DIVIDENDS
Our common stock is listed on The NASDAQ Global Select Market
under the ticker symbol IWOV. This table shows, for
the periods indicated, the high and low sales price per share
for Interwoven common stock as reported by The NASDAQ Global
Select Market.
|
|
|
|
|
|
|
|
|
|
|
Interwoven
|
|
|
|
Common Stock
|
|
|
|
High
|
|
|
Low
|
|
|
Year ended December 31, 2009
|
|
|
|
|
|
|
|
|
First Quarter (through January 27, 2009)
|
|
$
|
15.72
|
|
|
$
|
11.14
|
|
Year ended December 31, 2008
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
$
|
14.07
|
|
|
$
|
9.67
|
|
Third Quarter
|
|
$
|
16.01
|
|
|
$
|
11.57
|
|
Second Quarter
|
|
$
|
13.78
|
|
|
$
|
10.40
|
|
First Quarter
|
|
$
|
14.67
|
|
|
$
|
10.63
|
|
Year ended December 31, 2007
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
$
|
14.96
|
|
|
$
|
12.05
|
|
Third Quarter
|
|
$
|
15.66
|
|
|
$
|
11.63
|
|
Second Quarter
|
|
$
|
16.93
|
|
|
$
|
13.07
|
|
First Quarter
|
|
$
|
17.30
|
|
|
$
|
14.15
|
|
The following table sets forth the closing price per share of
our common stock, as reported by the NASDAQ Global Select Market
on January 21, 2009, the last full trading day before the
public announcement of the merger, and on
[ ],
2009, the latest practicable trading day before the printing of
this proxy statement:
|
|
|
|
|
|
|
Common Stock
|
|
|
|
Closing Price
|
|
|
January 21, 2009
|
|
$
|
11.84
|
|
[ ],
2009
|
|
$
|
[ ]
|
|
The above tables contain only historical information and may not
provide meaningful information to stockholders in determining
whether to approve the adoption of the merger agreement.
Stockholders are urged to obtain current market quotations for
Interwoven common stock and to carefully review the other
information contained in this proxy statement in considering
whether to approve the adoption of the merger agreement.
The approximate number of holders of record of the shares of our
common stock was
[ ]
as of February 4, 2009. This number does not include
stockholders whose shares are held by other entities. The actual
number of our stockholders is greater than the number of holders
of record.
We have not declared or paid any cash dividends on our capital
stock since our incorporation. We currently intend to retain
future earnings, if any, for use in our business and, therefore,
do not anticipate paying any cash dividends in the foreseeable
future.
59
OTHER
MATTERS
As of the date of this proxy statement, our Board of Directors
is not aware of any matter to be presented for action at the
special meeting, other than the matters set forth in this proxy
statement. Our bylaws provide that only such business shall be
conducted at a special meeting of stockholders as shall have
been brought before the meeting pursuant to our notice of such
meeting.
STOCKHOLDER
PROPOSALS TO BE PRESENTED AT THE NEXT ANNUAL
MEETING
We will hold an Annual Meeting of Stockholders in 2009 only if
the merger is not completed prior to such time. For a
stockholder proposal to be included in our proxy materials for
the 2009 Annual Meeting of Stockholders, the proposal must have
been received at our principal executive offices, addressed to
the Secretary, not later than the close of business on
January 1, 2009. Stockholder business that is not intended
for inclusion in our proxy materials may be brought before the
2009 Annual Meeting of Stockholders so long as we receive notice
of the proposal as specified by our Bylaws, addressed to the
Secretary at our principal executive offices no earlier than
March 6, 2009 and no later than April 5, 2009; unless
our 2009 Annual Meeting of Stockholders is held on or before
May 5, 2009 or on or after August 5, 2009, in which
case, notice by stockholders must be received not earlier than
the close of business on the 90th day prior to the date of
the annual meeting and not later than the close of business on
the later of (i) the 60th day prior to such annual
meeting or (ii) the 10th day following the day on
which public disclosure of the day of the annual meeting was
made.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange
Commission. You may read and copy any reports, statements or
other information that we file with the Securities and Exchange
Commission at the Securities and Exchange Commission public
reference room at the following location: Public Reference Room,
100 F Street, N.E., Washington, D.C. 20549.
Please call the Securities and Exchange Commission at
1-800-SEC-0330
for further information on the public reference room. These
Securities and Exchange Commission filings are also available to
the public from commercial document retrieval services and at
the website maintained by the Securities and Exchange Commission
at www.sec.gov. Reports, proxy statements and other information
concerning us may also be inspected at the offices of The NASDAQ
Stock Market at 1735 K Street, N.W.,
Washington, D.C. 20006.
MISCELLANEOUS
You should rely only on the information contained in this proxy
statement. 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
[ ],
2009. You should not assume that the information contained in
this proxy statement is accurate as of any date other than that
date. Neither the mailing of this proxy statement to
stockholders nor the issuance of cash in the merger creates any
implication to the contrary.
Your vote is important. To vote your shares, please complete,
date, sign and return the enclosed proxy card (if you are a
holder of record) or instruction card (if you were forwarded
these materials by your broker or nominee) as soon as possible
in the enclosed envelope. Please call our proxy solicitor,
MacKenzie Partners, Inc., toll-free at
(800) 322-2885
or collect at
(212) 929-5500
if you have any questions about this proxy statement the special
meeting or the merger, or need assistance with the voting
procedures.
CERTAIN
INFORMATION REGARDING INTERWOVEN AND AUTONOMY
Autonomy has supplied all information contained in this proxy
statement relating to Autonomy and Merger Sub and we have
supplied all information relating to us.
60
TABLE OF
CONTENTS
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
Article I The Merger
|
|
|
A-1
|
|
1.1.
|
|
The Merger
|
|
|
A-1
|
|
1.2.
|
|
Closing
|
|
|
A-1
|
|
1.3.
|
|
Effective Time
|
|
|
A-2
|
|
1.4.
|
|
Effects of the Merger
|
|
|
A-2
|
|
1.5.
|
|
Certificate of Incorporation; By-laws
|
|
|
A-2
|
|
1.6.
|
|
Directors
|
|
|
A-2
|
|
1.7.
|
|
Officers
|
|
|
A-2
|
|
|
|
|
|
|
Article II Effect of the Merger on the Capital Stock of the
Constituent Entities; Exchange of Certificates; Company Stock
Options
|
|
|
A-2
|
|
2.1.
|
|
Effect on Capital Stock
|
|
|
A-2
|
|
2.2.
|
|
Exchange of Certificates
|
|
|
A-3
|
|
2.3.
|
|
Company Equity Awards; ESPP
|
|
|
A-4
|
|
2.4.
|
|
Adjustments to Prevent Dilution
|
|
|
A-5
|
|
|
|
|
|
|
Article III Representations and Warranties of the Company
|
|
|
A-5
|
|
3.1.
|
|
Organization, Standing and Corporate Power
|
|
|
A-5
|
|
3.2.
|
|
Subsidiaries
|
|
|
A-5
|
|
3.3.
|
|
Capital Structure
|
|
|
A-6
|
|
3.4.
|
|
Authority; Noncontravention
|
|
|
A-8
|
|
3.5.
|
|
Governmental Approvals
|
|
|
A-10
|
|
3.6.
|
|
Company SEC Documents; No Undisclosed Liabilities
|
|
|
A-10
|
|
3.7.
|
|
Information Supplied
|
|
|
A-11
|
|
3.8.
|
|
Absence of Certain Changes or Events
|
|
|
A-11
|
|
3.9.
|
|
Litigation
|
|
|
A-11
|
|
3.10.
|
|
Contracts
|
|
|
A-12
|
|
3.11.
|
|
Compliance with Laws
|
|
|
A-13
|
|
3.12.
|
|
Notes and Accounts Receivable
|
|
|
A-14
|
|
3.13.
|
|
Employee Benefit Plans
|
|
|
A-14
|
|
3.14.
|
|
Taxes
|
|
|
A-16
|
|
3.15.
|
|
Intellectual Property; Software
|
|
|
A-18
|
|
3.16.
|
|
Properties and Assets
|
|
|
A-20
|
|
3.17.
|
|
Environmental Matters
|
|
|
A-21
|
|
3.18.
|
|
Transactions with Related Parties
|
|
|
A-22
|
|
3.19.
|
|
Brokers and Other Advisors
|
|
|
A-22
|
|
3.20.
|
|
Opinion of Financial Advisor
|
|
|
A-22
|
|
3.21.
|
|
Insurance
|
|
|
A-22
|
|
3.22.
|
|
No Restrictions on Business
|
|
|
A-22
|
|
3.23.
|
|
Schedule of Fees
|
|
|
A-22
|
|
3.24.
|
|
Suppliers and Customers
|
|
|
A-23
|
|
3.25.
|
|
Immigration Matters
|
|
|
A-23
|
|
3.26.
|
|
Solvency
|
|
|
A-23
|
|
A-i
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
Article IV Representations and Warranties of Parent and Merger
Sub
|
|
|
A-23
|
|
4.1.
|
|
Organization, Standing and Corporate Power
|
|
|
A-23
|
|
4.2.
|
|
Capital Structure of Merger Sub
|
|
|
A-23
|
|
4.3.
|
|
Authority; Noncontravention
|
|
|
A-24
|
|
4.4.
|
|
Governmental Approvals
|
|
|
A-24
|
|
4.5.
|
|
Litigation
|
|
|
A-25
|
|
4.6.
|
|
Information Supplied
|
|
|
A-25
|
|
4.7.
|
|
Interested Stockholder
|
|
|
A-25
|
|
4.8.
|
|
Interim Operations of Merger Sub
|
|
|
A-25
|
|
4.9.
|
|
Brokers
|
|
|
A-25
|
|
4.10.
|
|
Financing Agreements
|
|
|
A-25
|
|
|
|
|
|
|
Article V Covenants Relating to Conduct of Business
|
|
|
A-25
|
|
5.1.
|
|
Conduct of Business
|
|
|
A-25
|
|
5.2.
|
|
No Solicitation by the Company
|
|
|
A-28
|
|
|
|
|
|
|
Article VI Additional Agreements
|
|
|
A-30
|
|
6.1.
|
|
Preparation of the Proxy Statement; Stockholder Meetings
|
|
|
A-30
|
|
6.2.
|
|
Parent General Meeting; Other Actions
|
|
|
A-31
|
|
6.3.
|
|
Access to Information; Confidentiality
|
|
|
A-32
|
|
6.4.
|
|
Reasonable Best Efforts
|
|
|
A-33
|
|
6.5.
|
|
Indemnification, Exculpation and Insurance
|
|
|
A-34
|
|
6.6.
|
|
Fees and Expenses
|
|
|
A-34
|
|
6.7.
|
|
Public Announcements
|
|
|
A-34
|
|
6.8.
|
|
Stockholder Litigation
|
|
|
A-35
|
|
6.9.
|
|
Employee Matters
|
|
|
A-35
|
|
6.10.
|
|
Company Stock Options
|
|
|
A-35
|
|
6.11.
|
|
Company RSUs
|
|
|
A-37
|
|
6.12.
|
|
Cooperation
|
|
|
A-37
|
|
6.13.
|
|
Operations of Merger Sub
|
|
|
A-37
|
|
6.14.
|
|
Financing Agreements
|
|
|
A-37
|
|
|
|
|
|
|
Article VII Conditions Precedent
|
|
|
A-38
|
|
7.1.
|
|
Conditions to Each Partys Obligation to Effect the Merger
|
|
|
A-38
|
|
7.2.
|
|
Conditions to Obligations of Parent and Merger Sub
|
|
|
A-39
|
|
7.3.
|
|
Conditions to Obligation of the Company
|
|
|
A-39
|
|
7.4.
|
|
Frustration of Closing Conditions
|
|
|
A-40
|
|
|
|
|
|
|
Article VIII Termination, Amendment and Waiver
|
|
|
A-40
|
|
8.1.
|
|
Termination
|
|
|
A-40
|
|
8.2.
|
|
Termination Fee
|
|
|
A-42
|
|
8.3.
|
|
Effect of Termination
|
|
|
A-43
|
|
8.4.
|
|
Amendment
|
|
|
A-43
|
|
8.5.
|
|
Extension; Waiver
|
|
|
A-44
|
|
8.6.
|
|
Procedure for Termination or Amendment
|
|
|
A-44
|
|
A-ii
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
Article IX General Provisions
|
|
|
A-44
|
|
9.1.
|
|
Nonsurvival of Representations and Warranties
|
|
|
A-44
|
|
9.2.
|
|
Notices
|
|
|
A-44
|
|
9.3.
|
|
Definitions
|
|
|
A-45
|
|
9.4.
|
|
Interpretation
|
|
|
A-46
|
|
9.5.
|
|
Counterparts
|
|
|
A-46
|
|
9.6.
|
|
Entire Agreement; No Third-Party Beneficiaries
|
|
|
A-46
|
|
9.7.
|
|
Governing Law
|
|
|
A-46
|
|
9.8.
|
|
Assignment
|
|
|
A-46
|
|
9.9.
|
|
Specific Enforcement; Consent to Jurisdiction
|
|
|
A-47
|
|
9.10.
|
|
WAIVER OF JURY TRIAL
|
|
|
A-47
|
|
9.11.
|
|
Severability
|
|
|
A-47
|
|
9.12.
|
|
Obligations of Parent
|
|
|
A-47
|
|
A-iii
AGREEMENT
AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this
Agreement
), dated as of January 22,
2009, is by and among Autonomy Corporation plc, a corporation
formed under the laws of England and Wales
(
Parent
), Milan Acquisition Corp., a
corporation organized under the laws of the State of Delaware
and a wholly owned subsidiary of Parent (
Merger
Sub
), and Interwoven, Inc., a Delaware corporation
(the
Company
).
W I T N E
S S E T H:
WHEREAS, the Boards of Directors of Parent, Merger Sub and the
Company have each approved, adopted and declared advisable this
Agreement and the merger of Merger Sub with and into the
Company, upon the terms and subject to the conditions set forth
in this Agreement;
WHEREAS, Parent, Merger 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, (i) Parent has entered into a Placing Agreement
with Deutsche Bank AG, London Branch, Morgan Stanley &
Co. International plc, and Citigroup Global Markets U.K. Equity
Limited dated as of the date hereof (the
Placing
Agreement
) and (ii) Autonomy NA Holdings Inc., a
subsidiary of Parent, as Borrower, and Parent and Autonomy
Systems Limited, as Original Guarantors, have entered into a
Revolving Facility Agreement with Barclays Bank plc, Eastern
Larger Business, as Original Lender, and Barclays Bank plc,
Eastern Larger Business, as Agent, dated as of the date hereof,
as may be amended from time to time (the
Loan
Agreement
and, together with the Placing
Agreement, the
Financing Agreements
);
WHEREAS, concurrently with the execution of this Agreement, as a
condition and inducement to Parents willingness to enter
into this Agreement, certain stockholders of the Company have
entered into a Voting Agreement (the
Voting
Agreement
) pursuant to which such stockholders are,
among other things, covenanting to vote in favor of the adoption
of this Agreement and otherwise to support the transactions
contemplated hereby;
WHEREAS, concurrently with the execution and delivery of this
Agreement, certain shareholders of Parent are executing and
delivering one or more Irrevocable Undertakings, dated as of the
date of this Agreement (the
Irrevocable
Undertakings
), pursuant to which such shareholders
are, among other things, covenanting to vote in favor of the
approval of the Merger upon the terms and conditions of this
Agreement and otherwise to support the transactions contemplated
hereby and the Financing Agreements.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this
Agreement, the parties hereto agree as follows:
ARTICLE I
The
Merger
1.1.
The Merger
. On the terms and
subject to the conditions set forth in this Agreement, and in
accordance with the Delaware General Corporation Law (the
DGCL
), at the Effective Time, (a) Merger
Sub shall merge with and into the Company (the
Merger
), and (b) the separate corporate
existence of Merger Sub shall cease and the Company shall
continue its corporate existence under Delaware law as the
surviving entity in the Merger (the
Surviving
Entity
), and the corporate existence of the Company,
with all of its rights, privileges, immunities, powers and
franchises, shall continue unaffected by the Merger.
1.2.
Closing
. The closing of the
Merger (the Closing) will take place at
10:00 a.m. (Pacific Time) on a date to be specified by the
parties (the Closing Date), which shall be no later
than the fourth Business Day after satisfaction or waiver of the
conditions set forth in Article VII (other than those
conditions that by their terms are to be satisfied at the
Closing, but subject to the satisfaction or waiver of those
conditions at such time), at the offices of Morgan,
Lewis & Bockius LLP, One Market Street,
San Francisco, California 94105, unless another date, place
or time is agreed to in writing by the parties hereto.
A-1
1.3.
Effective Time
. Subject to the
provisions of this Agreement, as promptly as practicable on the
Closing Date, the Company and Merger Sub shall cause the
certificate of merger in the form attached as Exhibit A
(the Certificate of Merger) to be executed and filed
with the Secretary of State of the State of Delaware in
accordance with Section 251(c) of the DGCL. The Merger
shall become effective at such time as the Certificate of Merger
has been duly filed with the Secretary of State of the State of
Delaware or at such later date or time as may be agreed by
Merger Sub and the Company in writing and specified in the
Certificate of Merger in accordance with the DGCL (the effective
date and time of the Merger being hereinafter referred to as the
Effective Time).
1.4.
Effects of the Merger
. The
Merger shall have the effects set forth in this Agreement and
the applicable provisions of the DGCL.
1.5.
Certificate of Incorporation; By-laws
.
(a) The Certificate of Incorporation of the Company, as the
Surviving Entity shall be amended and restated to read the same
as the Certificate of Incorporation of Merger Sub as in effect
immediately prior to the Effective Time, except that
Article I of the Certificate of Incorporation of the
Surviving Entity shall read as follows: The name of this
corporation is Interwoven, Inc.. As so amended and
restated, the Certificate of Incorporation of the Company shall
be the Certificate of Incorporation of the Surviving Entity
until thereafter changed or amended as provided therein or by
the DGCL or other applicable Law.
(b) The By-laws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the By-laws of the
Surviving Entity until thereafter changed or amended as provided
therein or by applicable Law;
provided
,
however
,
that the By-laws of the Surviving Entity shall be amended as
necessary to comply with the obligations of the Surviving Entity
set forth in Section 6.4 hereof.
1.6.
Directors
. The directors of
Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Entity at the Effective Time until
the earlier of their resignation or removal or until their
respective successors are duly designated, as the case may be.
1.7.
Officers
. The officers of
Merger Sub immediately prior to the Effective Time shall be the
officers of the Surviving Entity at the Effective Time 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
Effect of
the Merger on the Capital Stock of the Constituent Entities;
Exchange
of Certificates; Company Stock Options
2.1.
Effect on Capital Stock
. At
the Effective Time, as a result of the Merger and without any
action on the part of Merger Sub or the Company or the holder of
any capital stock of Merger Sub or the Company or any other
person:
(a)
Merger Consideration
. Each share (a
Share
or, collectively, the
Shares
) of the common stock, par value $0.001
per share, of the Company (
Company Common
Stock
) issued and outstanding immediately prior to the
Effective Time other than (i) Shares owned by Parent,
Merger Sub or any other direct or indirect subsidiary of Parent,
and (ii) Shares owned by the Company or any direct or
indirect subsidiary of the Company, and in each case not held on
behalf of third parties (each, an
Excluded
Share
and collectively,
Excluded
Shares
) shall be converted into the right to receive
$16.20 in cash from Merger Sub (the
Per Share Merger
Consideration
). At the Effective Time, all of the
Shares shall cease to be outstanding, shall be cancelled and
shall cease to exist, and each certificate (a
Certificate
) formerly representing any of the
Shares (other than Excluded Shares) shall thereafter represent
only the right to receive the Per Share Merger Consideration,
without interest.
(b)
Cancellation of Excluded Shares
. Each
Excluded Share shall, by virtue of the Merger and without any
action on the part of the holder of the Excluded Share, cease to
be outstanding, be cancelled without payment of any
consideration therefor and shall cease to exist.
A-2
(c)
Merger Sub
. At the Effective Time,
each share of common stock, par value $0.001 per share, of
Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one share of common
stock, par value $0.001 per share, of the Surviving Entity.
(d)
Dissenting Shares
.
(i) Notwithstanding any provision of this Agreement to the
contrary, Shares that are outstanding immediately prior to the
Effective Time and that are held by stockholders of the Company
who have demanded and perfected appraisal rights for such shares
in accordance with Section 262 of the DGCL (collectively,
the
Dissenting Shares
) shall not be converted
into or represent the right to receive the Per Share Merger
Consideration. Such stockholders shall be entitled to receive
payment of the appraised value of such shares of Company Common
Stock held by them in accordance with Section 262 of the
DGCL, unless and until such stockholders fail to perfect or
effectively withdraw or otherwise lose their appraisal rights
under Section 262 of the DGCL. All Shares held by Company
stockholders who shall have failed to perfect or who shall have
effectively withdrawn or lost their right to appraisal of such
shares under Section 262 of the DGCL shall thereupon be
deemed to have been converted into and to have become
exchangeable for, as of the Effective Time, the right to receive
the Per Share Merger Consideration in cash, without any interest
thereon (subject to any applicable withholding taxes), upon the
surrender or transfer, in the manner provided in
Section 2.1(a), of the corresponding Certificate.
(ii) The Company shall give Parent (A) prompt notice
of any demands for appraisal received by the Company,
withdrawals of such demands, and any other related instruments
served pursuant to the DGCL and received by the Company and
(B) the opportunity to participate in all negotiations and
proceedings with respect to demands for appraisal under the
DGCL. The Company shall not, except with the prior written
consent of Parent, make any payment with respect to any demands
for appraisal or offer to settle or settle any such demands.
2.2.
Exchange of Certificates
.
(a)
Paying Agent
. On or promptly
following the Closing Date, Parent shall deliver or cause to be
delivered to a paying agent selected prior to the Closing Date
by Parent with the Companys prior approval, which shall
not be unreasonably withheld (the
Paying
Agent
), amounts sufficient in the aggregate to make
all payments of the Per Share Merger Consideration pursuant to
Section 2.1(a) (such cash being hereinafter referred to as
the
Exchange Fund
). The Exchange Fund will be
held in trust for the benefit of the holders of record of Shares
(other than Excluded Shares). Any interest and other income
resulting from such investment shall become a part of the
Exchange Fund, and any amounts in excess of the amounts payable
under Section 2.1(a) shall be promptly returned to Parent.
(b)
Exchange Procedures
. As promptly as
practicable (and in any event within two Business Days) after
the Effective Time, the Surviving Entity shall cause the Paying
Agent to mail to each holder of record of Shares (other than
Excluded Shares) (i) a letter of transmittal in customary
form specifying that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon
delivery of the Certificates (or affidavits of loss in lieu of
the Certificates as provided in Section 2.2(e)) to the
Paying Agent, such letter of transmittal to be in such form and
have such other provisions as Parent and the Company may
reasonably agree, and (ii) instructions for use in
effecting the surrender of the Certificates (or affidavits of
loss in lieu of the Certificates as provided in
Section 2.2(e)) in exchange for the Per Share Merger
Consideration. Upon surrender of a Certificate (or affidavit of
loss in lieu of the Certificate as provided in
Section 2.2(e)) to the Paying Agent in accordance with the
terms of such letter of transmittal, duly executed, the holder
of such Certificate shall be entitled to receive in exchange
therefor a cash amount in immediately available funds (after
giving effect to any required tax withholdings as provided in
Section 2.2(f)) equal to (x) the number of Shares
represented by such Certificate (or affidavit of loss in lieu of
the Certificate as provided in Section 2.2(e)) multiplied
by (y) the Per Share Merger Consideration, and the
Certificate so surrendered shall forthwith be cancelled. No
interest will be paid or accrued on any amount payable upon due
surrender of the Certificates. In the event of a transfer of
ownership of Shares that is not registered in the transfer
records of the Company, a check for any cash to be exchanged
upon due surrender of the Certificate may be issued to such
transferee if the Certificate formerly representing such Shares
is presented to the Paying Agent, accompanied
A-3
by all documents required to evidence and effect such transfer
and to evidence that any applicable stock transfer taxes have
been paid or are not applicable.
(c)
Transfers
. From and after the
Effective Time, there shall be no transfers on the stock
transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time. If, after
the Effective Time, any Certificate is presented to the Paying
Agent, it shall be cancelled and exchanged for the cash amount
in immediately available funds to which the holder of the
Certificate is entitled pursuant to this Article II.
(d)
Termination of Exchange Fund
. Any
portion of the Exchange Fund (including the proceeds of any
investments of the Exchange Fund) that remains unclaimed by the
stockholders of the Company for 365 days after the
Effective Time shall be delivered to the Surviving Entity. Any
holder of Shares (other than Excluded Shares) who has not
theretofore complied with this Article II shall thereafter
look only to the Surviving Entity and Parent for payment of the
Per Share Merger Consideration (after giving effect to any
required tax withholdings as provided in Section 2.2(f))
upon due surrender of such holders Certificates (or
affidavits of loss in lieu of the Certificates), without any
interest thereon. Notwithstanding the foregoing, none of the
Surviving Entity, Parent, the Paying Agent or any other person
shall be liable to any former holder of Shares for any amount
properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar Laws.
(e)
Lost, Stolen or Destroyed
Certificates
. In the event any Certificate shall
have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate
to be lost, stolen or destroyed and, if required by Parent, the
posting by such person of a bond in customary and reasonable
amount and upon such customary and reasonable terms as may be
required by Parent as indemnity against any claim that may be
made against it or the Surviving Entity with respect to such
Certificate, the Paying Agent will issue a check in the amount
(after giving effect to any required tax withholdings) equal to
the number of Shares represented by such lost, stolen or
destroyed Certificate multiplied by the Per Share Merger
Consideration.
(f)
Withholding Rights
. Parent and the
Surviving Entity shall each be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this
Agreement to any holder of Shares such amounts as it 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 other applicable state, local
or foreign tax law. To the extent that amounts are so withheld
by the Surviving Entity or Parent, as the case may be, such
withheld amounts (i) shall be remitted by Parent or the
Surviving Entity, as applicable, to the applicable Governmental
Authority, and (ii) shall be treated for all purposes of
this Agreement as having been paid to the holder of Shares in
respect of which such deduction and withholding was made by the
Surviving Entity or Parent, as the case may be.
2.3.
Company Equity Awards; ESPP
.
(a)
Options
. At the Effective Time, all
Company Stock Options outstanding immediately prior to the
Effective Time with an exercise price at or below $40.00 per
share of Company Common Stock (a Lower Priced
Option) shall be assumed by Parent in accordance with, and
to the extent provided in, Section 6.10. At the Effective
Time, all Company Stock Options outstanding immediately prior to
the Effective Time with an exercise price in excess of $40.00
per share of Company Common Stock (a Higher Priced
Option) shall not be assumed by Parent and shall
accordingly be cancelled with no cash or other consideration to
be paid to the holders of such cancelled Company Stock Options.
At the Effective Time, all of such Higher Priced Options shall
cease to be outstanding, shall be cancelled and shall cease to
exist.
(b)
Contingent Option
Exercises
. Notwithstanding anything to the
contrary in this Agreement or the Company Stock Plans, the
Company shall be permitted to take such actions as it may deem
necessary or appropriate to permit the exercise of all vested
Company Stock Options (including Company Stock Options that will
vest upon the consummation of the Merger) on a cashless basis
contingent upon the Closing. With respect to each current or
former employee of the Company or its Subsidiaries who exercises
one or more Company Stock Options on such a cashless basis, the
Company shall at the time of such exercise collect, either in
the form of cash or through the withholding of a portion of the
shares of Company Common Stock otherwise issuable upon such
exercise, all federal, state and local income, employment and
other payroll withholding taxes at the applicable rates and
shall pay all such withholding taxes in cash to the appropriate
taxing authorities promptly when due. The holders of Company
Stock Options exercised on the foregoing basis shall be entitled
to receive, promptly following
A-4
the Effective Time, cash in respect of each share of Company
Common Stock issued in connection with such cashless exercise,
net of any shares withheld to satisfy the applicable withholding
taxes, in an amount equal to the excess, if any, of (i) the
Per Share Merger Consideration, over (ii) the exercise
price per share of Company Common Stock at which such Company
Stock Option was exercisable immediately prior to the Effective
Time.
(c)
Treatment of Company RSUs
. At the
Effective Time, each Company RSU outstanding immediately prior
to the Effective Time shall be assumed by Parent in accordance
with Section 6.11.
(d)
ESPP
. All purchase rights under the
ESPP outstanding on the earlier of (a) April 30, 2009
and (b) the day immediately prior to the Effective Time
(such earlier date, the ESPP Purchase Date), shall
automatically be exercised, in accordance with the terms of the
ESPP and resolutions of the Board relating thereto to the extent
required pursuant to the terms of the ESPP, on the ESPP Purchase
Date, and the shares of Company Common Stock purchased under
those exercised rights shall at the Effective Time be cancelled
and converted into the right to receive the consideration
payable pursuant to Section 2.1. No further purchase rights
shall be granted or exercised under the ESPP thereafter. No
consent or approval of the participants in the ESPP is required
in connection with the final purchase date and termination of
the ESPP in accordance with this Section 2.3(d), and the
ESPP and the agreement or agreements evidencing each outstanding
purchase right under the ESPP permit each of the actions
contemplated by this Section 2.3(d).
2.4.
Adjustments to Prevent
Dilution
. In the event that after the date hereof
and prior to the Effective Time, the Company changes the number
of Shares or securities convertible or exchangeable into or
exercisable for Shares issued and outstanding prior to the
Effective Time as a result of a reclassification, stock split
(including a reverse stock split), stock dividend or
distribution, recapitalization or other similar transaction, the
Per Share Merger Consideration shall be equitably adjusted.
ARTICLE III
Representations
and Warranties of the Company
The Company represents and warrants to Parent and Merger Sub
that, except as set forth in the disclosure letter (with
specific reference to the Section or Subsection of this
Agreement to which the information stated in such disclosure
relates) delivered by the Company to Parent concurrently with
the execution of this Agreement (the
Company Disclosure
Letter
),
provided
,
however
, that
disclosure in any Section of the Company Disclosure Letter shall
be deemed to have been set forth in all other applicable
Sections of the Company Disclosure Letter where the
applicability of such disclosure to such other Sections is
reasonably apparent notwithstanding the omission of any
cross-reference to such other Section in the Company Disclosure
Letter;
provided
,
further
, that the mere listing
of the name of a Contract, the parties thereto and the date
thereof shall not make the applicability of such disclosure
reasonably apparent for purposes of the immediately
preceding proviso unless such listing contains other descriptive
language making the applicability of such disclosure reasonably
apparent:
3.1.
Organization, Standing and Corporate
Power
. The Company and each of its Subsidiaries
is an entity duly organized, validly existing and in good
standing under the Laws of the jurisdiction in which it is
formed and has all requisite power and authority to carry on its
business as now being conducted. The Company and each of its
Subsidiaries is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which the nature of its
business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary,
other than (A) in any jurisdiction that does not recognize
the concept of good standing, and (B) in such jurisdictions
where the failure to be so qualified or licensed or to be in
good standing would not reasonably be expected to have a
Material Adverse Effect on the Company. The Company has Made
Available to Parent complete and correct copies of its
Certificate of Incorporation (the
Company
Certificate
) and By-laws (the
Company By-laws
).
The Company has Made Available to Parent or its representatives
correct and complete copies of the minutes of all meetings of
stockholders, the Company Board and each committee of the
Company Board held since December 31, 2004.
3.2.
Subsidiaries
. Section 3.2
of the Company Disclosure Letter lists all of the Subsidiaries
of the Company and, for each such Subsidiary, the state of
formation. All the outstanding shares of capital stock of, or
other equity interests in, each such Subsidiary have been
validly issued and are fully paid and nonassessable and are
owned
A-5
directly or indirectly by the Company (other than shares owned
of record by other persons as nominee for, or on behalf of, the
Company or a Subsidiary), free and clear of all pledges, claims,
liens, charges, title defects, easements, encumbrances, rights
of first offer or refusal or security interests of any kind or
nature whatsoever (collectively,
Liens
), and
free of any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other equity interests. Except
for the capital stock or other equity or voting interests of its
Subsidiaries and publicly traded securities held for investment
that do not exceed 5% of the outstanding securities of any
entity, the Company does not own, directly or indirectly, any
capital stock or other equity or voting interests in any person.
3.3.
Capital Structure
.
(a) The authorized capital stock of the Company consists of
125,000,000 Shares and 5,000,000 shares of preferred
stock, par value $0.001 per share (
Company Preferred
Stock
). At the close of business on January 15,
2009, (i) 46,397,353 Shares were issued and
outstanding, (ii) no Shares were issued and held by the
Company in its treasury, and (iii) no shares of Company
Preferred Stock were issued and outstanding, or issued and held
by the Company in its treasury.
(b) As of January 15, 2009 and regarding any rights or
awards which grant a right to acquire Shares from the Company,
including any awards which grant a right to purchase Shares from
the Company under the Company Stock Plans (
Company
Stock Options
) and restricted stock units of the
Company granted under the Company Stock Plans (
Company
RSUs
) (collectively,
Company Equity
Awards
):
(i) The Company has reserved 223 Shares for issuance
to employees, consultants and directors pursuant to the Metacode
Technologies, Inc. Amended and Restated 1995 Stock Plan (the
M Stock Plan
), all of which Shares are
subject to outstanding unexercised Company Stock Options
thereunder. No Shares outstanding thereunder are unvested and
subject to repurchase rights in favor of the Company and no
Shares are reserved for issuance upon the exercise of additional
Company Stock Options.
(ii) The Company has reserved 30,248 Shares for
issuance to employees, consultants and directors pursuant to the
1996 Stock Option Plan and the 1998 Stock Option Plan
(collectively, the
1996 Stock Plan
), all of
which Shares are subject to outstanding unexercised Company
Stock Options thereunder. No Shares outstanding thereunder are
unvested and subject to repurchase rights in favor of the
Company and no Shares are reserved for issuance upon the
exercise of additional Company Stock Options.
(iii) The Company has reserved 482,654 Shares for
issuance to employees, consultants and directors pursuant to the
iManage, Inc. 1997 Stock Option Plan, as amended (the
1997 Stock Plan
), all of which Shares are
subject to outstanding unexercised Company Stock Options
thereunder. No Shares outstanding thereunder are unvested and
subject to repurchase rights in favor of the Company and no
Shares are reserved for issuance upon the exercise of additional
Company Stock Options.
(iv) The Company has reserved 219,286 Shares for
issuance to employees, consultants and directors pursuant to the
iManage, Inc. 2000 Non-Officer Stock Option Plan (the
iM 2000 Stock Plan
), all of which Shares are
subject to outstanding unexercised Company Stock Options
thereunder. No Shares outstanding thereunder are unvested and
subject to repurchase rights in favor of the Company and no
Shares are reserved for issuance upon the exercise of additional
Company Stock Options.
(v) The Company has reserved 540 Shares for issuance
to employees, consultants and directors pursuant to the Ajuba
Solutions, Inc. 1998 Amended and Restated Stock Option Plan (the
A Stock Plan
), all of which Shares are
subject to outstanding unexercised Company Stock Options
thereunder. No Shares outstanding thereunder are unvested and
subject to repurchase rights in favor of the Company and no
Shares are reserved for issuance upon the exercise of additional
Company Stock Options.
(vi) The Company has reserved 4,178,229 Shares for
issuance to employees, consultants and directors pursuant to the
1999 Equity Incentive Plan (the
1999 Stock
Plan
), of which (A) 3,368,293 Shares are
subject to outstanding unexercised Company Stock Options
thereunder and 809,936 Shares are subject to issuance
pursuant to unvested Company RSUs (B) no Shares outstanding
thereunder are unvested and subject to repurchase rights in
favor of the Company and (C) no Shares are reserved for
issuance upon the exercise of
A-6
additional Company Stock Options that may be granted thereunder
in accordance with the limitations and restrictions of
Section 5.1(a)(ii) of this Agreement.
(vii) The Company has reserved 1,093,974 Shares for
issuance to employees, consultants and directors pursuant to the
2000 Stock Incentive Plan (the
2000 Stock
Plan
), of which (A) 990,393 Shares are
subject to outstanding unexercised Company Stock Options
thereunder and 103,581 Shares are subject to issuance
pursuant to unvested Company RSUs, (B) no Shares
outstanding thereunder are unvested and subject to repurchase
rights in favor of the Company and (C) no Shares are
reserved for issuance upon the exercise of additional Company
Stock Options or Company RSUs that may be granted thereunder in
accordance with the limitations and restrictions of
Section 5.1(a)(ii) of this Agreement.
(viii) The Company has reserved 2,635 Shares for
issuance to employees, consultants and directors pursuant to the
MediaBin, Inc. 2001 Stock Option Plan, as amended (the
M 2001 Stock Plan
), all of which Shares are
subject to outstanding unexercised Company Stock Options
thereunder. No Shares outstanding thereunder are unvested and
subject to repurchase rights in favor of the Company and no
Shares are reserved for issuance upon the exercise of additional
Company Stock Options.
(ix) The Company has reserved 418,941 Shares for
issuance to employees, consultants and directors pursuant to the
2003 Acquisition Plan (the
2003 Stock Plan
),
of which (A) 330,985 Shares are subject to outstanding
unexercised Company Stock Options thereunder, (B) no Shares
outstanding thereunder are unvested and subject to repurchase
rights in favor of the Company and (C) 87,956 Shares
are reserved for issuance upon the exercise of additional
Company Stock Options or Company RSUs that may be granted
thereunder in accordance with the limitations and restrictions
of Section 5.1(a)(ii) of this Agreement.
(x) The Company has reserved 464,801 Shares for
issuance to employees, consultants and directors pursuant to the
Optimost, LLC 2006 Equity Compensation Plan (the
2006
Stock Plan
), all of which Shares are subject to
outstanding unexercised Company Stock Options thereunder. No
Shares outstanding thereunder are unvested and subject to
repurchase rights in favor of the Company and no Shares are
reserved for issuance upon the exercise of additional Company
Stock Options.
(xi) The Company has reserved 342,736 Shares for
issuance to employees, consultants and directors pursuant to the
Discovery Mining, Inc. 2003 Stock Option Plan (the
DM
Stock Plan
), all of which Shares are subject to
outstanding unexercised Company Stock Options thereunder. No
Shares outstanding thereunder are unvested and subject to
repurchase rights in favor of the Company and no Shares are
reserved for issuance upon the exercise of additional Company
Stock Options.
(xii) The Company has reserved 3,956,776 Shares for
issuance to employees, consultants and directors pursuant to the
2008 Equity Incentive Plan (the
2008 Stock
Plan
), of which (A) 385,100 Shares are
subject to outstanding unexercised Company Stock Options and
70,000 Shares are subject to issuance pursuant to unvested
Company RSUs thereunder, (B) no Shares outstanding
thereunder are unvested and subject to repurchase rights in
favor of the Company and (C) 3,501,676 Shares are
reserved for issuance upon the exercise of additional Company
Stock Options or Company RSUs that may be granted thereunder in
accordance with the limitations and restrictions of
Section 5.1(a)(ii) of this Agreement.
(xiii) The Company has reserved 3,764,031 Shares for
issuance to employees under the Companys 1999 Employee
Stock Purchase Plan (
ESPP
), of which
2,044,705 Shares have been issued pursuant to the exercise
of purchase rights and 1,719,326 Shares are available for
future issuance thereunder. The current Offering
Period (as defined in the ESPP) commenced under the ESPP
on November 1, 2008 and will end on the earlier of
(1) the day immediately prior to the Effective Time and
(2) April 30, 2009, and except for the purchase rights
granted on such commencement date to participants in the current
Offering Period, there are no other purchase rights or options
outstanding under the ESPP. A maximum of 147,000 Shares may
be purchased under the current Offering Period (as defined in
the ESPP) under the ESPP on the final purchase date thereunder
which is to occur on the earlier of (x) the day immediately
prior to the Effective Time and (y) April 30, 2009.
The Company has taken all required actions to terminate the ESPP
and to cause the Offering Period to terminate effective
automatically on the earlier of (i) the day immediately
prior to the Effective Time and (ii) April 30, 2009.
A-7
(xiv) The Company has Made Available to Parent true and
correct copies of all Company Stock Plans and the forms of all
agreements and instruments relating to or issued thereunder and
such agreements and instruments have not been amended, modified
or supplemented and there are no agreements to amend, modify or
supplement such agreements or instruments in any case from the
form provided to Parent.
(c) Section 3.3(c) of the Company Disclosure Letter
contains a correct and complete list of Company Equity Awards as
of the close of business on January 15, 2009, including
Company Stock Options, and Company RSUs under the Company Stock
Plans, including the holder, date of grant, term, number of
Shares and, where applicable, exercise price and vesting
schedule, including vesting commencement date and whether the
vesting will be accelerated by the execution of this Agreement
or consummation of the Merger or by termination of employment or
change of position following consummation of the Merger. Other
than the Company Stock Options and Company RSUs, there are no
other outstanding equity awards under the Company Stock Plans as
of the close of business on January 15, 2009. Except as set
forth above in this Section 3.3, as of the close of
business on January 15, 2009, there are no outstanding
stock appreciation rights, rights to receive Shares on a
deferred basis or other rights that are linked to the value of
Shares granted under the Company Stock Plans or otherwise. 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 or issued in violation of any purchase option, call
option, right of first refusal, preemptive right, subscription
right or any similar right under any provision of the DGCL, the
Company Certificate, Company By-laws or any Contract to which
the Company is a party or otherwise bound. Each Company Equity
Award (i) was granted in material compliance with all
applicable Laws and all of the terms and conditions of the
Company Stock Plans pursuant to which it was issued,
(ii) has an exercise price per Share equal to or greater
than the fair market value of a Share at the close of business
on the date of such grant and is not subject to
Section 409A of the Code, (iii) has a grant date
identical to the date on which the Company Board or compensation
committee of the Company Board actually awarded such Company
Equity Award, (iv) provides, in the case of each
outstanding Company RSU, for the issuance of the underlying
Shares within thirty (30) days of the vesting of that RSU
and is not otherwise subject to Section 409A of the Code,
and (v) qualifies for the tax and accounting treatment
afforded to such Company Equity Award in the Companys tax
returns and the Companys financial statements,
respectively.
(d) There are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or
convertible into, or exchangeable for, securities having the
right to vote) on any matters on which stockholders of the
Company may vote. Except as set forth above in this
Section 3.3, as of the close of business on
January 15, 2009, there are not issued, reserved for
issuance or outstanding (A) any shares of capital stock or
other voting securities of the Company, (B) any securities
of the Company or any of its Subsidiaries convertible into or
exchangeable or exercisable for shares of capital stock or
voting securities of the Company or any of its Subsidiaries or
(C) any warrants, calls, options or other rights of any
kind to acquire from the Company or any of its Subsidiaries, or
any obligation of the Company or any of its Subsidiaries to
issue, any capital stock, voting securities or securities
convertible into or exchangeable or exercisable for capital
stock or voting securities of the Company or any of its
Subsidiaries.
(e) There are not any outstanding obligations of the
Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any securities of the Company or any of its
Subsidiaries or to issue, deliver or sell, or cause to be
issued, delivered or sold, any such securities, or to provide
funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any person (other than any
Subsidiary). Neither the Company nor any of its Subsidiaries is
a party to any voting agreement with respect to the voting of
any such securities. There are no accrued and unpaid dividends
with respect to any outstanding shares of capital stock of the
Company. There are no registration rights or other agreements or
understandings to which the Company or any of its Subsidiaries
is a party or by which it or they are bound with respect to any
capital stock of the Company or any of its Subsidiaries
(f) The Shares constitute the only classes of securities of
the Company or its Subsidiaries registered or required to be
registered under the Securities Exchange Act of 1934, as amended
(the
Exchange Act
).
3.4.
Authority; Noncontravention.
(a) The Company has the requisite corporate power and
authority to enter into this Agreement and, subject to the
adoption of this Agreement by the affirmative vote of the
holders of a majority of the outstanding Shares (the
A-8
Company Stockholder Approval
), to consummate
the Merger and the other transactions contemplated, by this
Agreement. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the Merger and
the other transactions contemplated by 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 or to
consummate the transactions contemplated hereby, subject, in the
case of the Merger, to receipt of the Company Stockholder
Approval. This Agreement has been duly executed and delivered by
the Company and, assuming the due authorization, execution and
delivery by each of the other parties hereto, constitutes a
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms (subject to
applicable bankruptcy, solvency, fraudulent transfer,
reorganization, moratorium and other Laws affecting
creditors rights generally from time to time in effect and
by general principles of equity). As of the date hereof, the
Company Board, at a meeting duly called and held at which all
the directors of the Company were present in person or by
telephone, duly and unanimously adopted resolutions
(i) declaring that this Agreement, the Merger and the other
transactions contemplated by this Agreement are advisable and in
the best interests of the Company and the Companys
stockholders, (ii) approving and adopting this Agreement,
the Merger and the other transactions contemplated by this
Agreement, (iii) directing that the adoption of this
Agreement be submitted to a vote at a meeting of the
stockholders of the Company and (iv) recommending that the
stockholders of the Company adopt this Agreement, which
resolutions have not been rescinded, modified or withdrawn in
any manner. The Company Board has taken all action necessary to
render the provisions of Section 203 of the DGCL
inapplicable to this Agreement, the Merger, and the other
transactions contemplated by this Agreement (based on the
representation of Parent in Section 4.8). Except for
Section 203 of the DGCL (which has been rendered
inapplicable by action of the Company Board), no
moratorium, control share, fair
price, or other antitakeover laws or regulations
(together,
Takeover Laws
) are applicable to
the Merger and the other transactions contemplated by this
Agreement and the Voting Agreement.
(b) The execution and delivery of this Agreement do not,
and the consummation of the Merger and the other transactions
contemplated by this Agreement and compliance with the
provisions 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 termination, cancellation or acceleration of any material
obligation or to the loss of a material benefit under, or result
in the creation of any Lien (other than Permitted Liens) in or
upon any of the properties or other assets of the Company or any
of its Subsidiaries under, (i) the Company Certificate or
the Company By-laws or the comparable organizational documents
of any of its Subsidiaries, (ii) any loan or credit
agreement, bond, debenture, note, mortgage, policy, certificate
of coverage, indenture, lease or other contract, agreement,
obligation, commitment, legally binding arrangement or legally
binding understanding (each, a
Contract
), to
which the Company or any of its Subsidiaries is a party or any
of their respective properties or other assets is subject or
(iii) subject to the governmental filings and other
Necessary Consents referred to in Section 3.5, any Law
applicable to the Company or any of its Subsidiaries or their
respective properties or other assets, other than, in the case
of clauses (ii) and (iii), any such conflicts, violations,
breaches, defaults, losses or Liens that individually or in the
aggregate (A) have not had and would not reasonably be
expected to have a Material Adverse Effect, (B) would not
reasonably be expected to impair in any material respect the
ability of the Company to perform its obligations hereunder and
(C) would not reasonably be expected to prevent or
materially delay the consummation of any of the transactions
contemplated by this Agreement.
(c) For purposes of this Agreement,
Material
Adverse Effect
means, when used in connection with the
Company or Parent, as the case may be, a material adverse effect
on the business, assets, condition (financial or otherwise) or
results of operations of such Party and its Subsidiaries, taken
as a whole, or to the ability of the Party to perform its
obligations under this Agreement or to consummate the Merger or
the other transactions contemplated by this Agreement;
provided
,
however
, none of the following shall be
deemed in and of themselves, either alone or in combination, to
constitute, and none of the following shall be taken into
account in determining whether there has been or will be, a
Material Adverse Effect: (i) any change in the market price
or trading volume of the outstanding securities of such Party;
(ii) any failure by such Party to meet internal projections
or forecasts or published revenue or earnings predictions;
(iii) any adverse effect to the extent attributable to the
announcement or pendency of the Merger (including cancellations
in customer orders, reduction in sales, disruption in
relationships with suppliers, distributors, partners or similar
relationships or loss of employees); (iv) any adverse
effect that results from changes attributable to conditions
affecting the industries in which such Party participates, the
United States or
A-9
United Kingdom economy as a whole, or foreign economies in
any locations where such Party or any of such Partys
Subsidiaries has material operations or sales (to the extent
that such changes in each case do not disproportionately
adversely affect such Party and its Subsidiaries taken as a
whole compared to similarly situated companies in such
Partys industry); (v) any adverse effect that results
from (A) any Party taking any action at the written request
of the other Party, or (B) any Party taking any action
required by this Agreement; or (vi) any adverse effect that
results from any act of God, any act of terrorism, war or other
armed hostilities, any regional, national or international
calamity or any other similar event.
3.5.
Governmental Approvals
. No
consent, approval, order or authorization of, or registration,
declaration or filing with, any Federal, state, local or foreign
government, any court, administrative, regulatory or other
governmental agency, commission or authority or any
non-governmental self-regulatory agency, commission or authority
(each, a
Governmental Authority
) is required
by the Company or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by the Company or the
consummation by the Company of the Merger or the other
transactions contemplated by this Agreement, except for those
required under or in relation to (a) the premerger
notification and report form under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the
HSR
Act
), (b) the Exchange Act, (c) the
Certificate of Merger to be filed with the Secretary of State of
the State of Delaware, (d) any appropriate or required
filings with and approvals of Nasdaq, (e) the assumption of
Lower Priced Options granted under the Interwoven 1999 Equity
Incentive Plan and the iManage, Inc. 1997 Stock Option Plan
pursuant to any Approved Rollover Offer (as defined in
Section 6.10(f)), and (f) such other consents,
approvals, orders, authorizations, registrations, declarations
and filings the failure of which to be obtained or made
individually or in the aggregate would not reasonably be
expected to (x) have a Material Adverse Effect,
(y) impair in any material respect the ability of the
Company to perform its obligations hereunder or (z) prevent
or materially delay the consummation of any of the transactions
contemplated by this Agreement. The consents, approvals, orders,
authorizations, registrations, declarations and filings set
forth in (a) through (f) above or listed in
Section 3.5 of the Company Disclosure Letter are referred
to herein as
Necessary Consents
.
3.6.
Company SEC Documents; No Undisclosed
Liabilities
.
(a) The Company has filed on a timely basis all reports,
schedules, forms, statements and other documents with the SEC
required to be filed by the Company since December 31, 2004
(such documents, the
Company SEC Documents
).
No Subsidiary of the Company is required to file, or files, any
form, report or other document with the SEC. As of their
respective dates, the Company SEC Documents complied in all
material respects with the requirements of the Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder (the
Securities Act
), or the
Exchange Act, as the case may be, applicable to such Company SEC
Documents, and none of the Company SEC Documents 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, unless
such information contained in any Company SEC Document has been
corrected by a later-filed Company SEC Document. The financial
statements of the Company included in the Company SEC Documents
complied, as of their respective dates, as to form in all
material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally
accepted accounting principles (
GAAP
)
(except, in the case of unaudited 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 financial position
of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of
unaudited statements, to the absence of footnote disclosure and
to normal and recurring year-end audit adjustments).
(b) Except (i) as set forth in the financial
statements (or disclosed in the related footnotes) included in
the Companys Annual Report on
Form 10-K
for the year ended December 31, 2007 or the Companys
Quarterly Report on
Form 10-Q
filed prior to the date hereof for the quarter ended
September 30, 2008 or (ii) as incurred in the ordinary
course of business since September 30, 2008, or in
connection with the Merger and related transactions, neither the
Company nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent
or otherwise) that individually or in the aggregate have had or
would reasonably be expected to have a Material Adverse Effect.
As of the date of this Agreement, the Company does not have any
indebtedness for borrowed money, or guarantees of indebtedness
of any other person.
A-10
(c) To the Knowledge of the Company, as of the date of this
Agreement, none of the Company SEC Documents is the subject of
ongoing SEC review or outstanding SEC comment.
(d) As of the date of this Agreement, the Company has no
intention to restate the most recent audited financial
statements or any of the unaudited financial statements filed
thereafter included in the Company SEC Documents. As of the date
of this Agreement, the Company has not had any dispute with any
of its auditors regarding accounting matters or policies during
any of its past three full years or during the current fiscal
year-to-date
which was required to be reported to the Company Board. The
books and records of the Company and each of its Subsidiaries
have been, and are being maintained in all material respects in
accordance with applicable Law and accounting requirements and
the Companys financial statements are consistent in all
material respects with such books and records.
3.7.
Information Supplied
. None of
the information supplied or to be supplied by the Company
specifically for inclusion or incorporation by reference in the
proxy statement relating to the Company Stockholders Meeting
(together with any amendments thereof or supplements thereto, in
each case in the form or forms mailed to the Companys
stockholders, the
Proxy Statement
) will, at
the date the Proxy Statement is first mailed to the stockholders
of the Company and at the time of the Company Stockholders
Meeting, 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. The
Proxy Statement will comply as to form in all material respects
with the requirements of the Exchange Act. Notwithstanding the
foregoing, no representation or warranty is made by the Company
with respect to statements made or incorporated by reference in
the Proxy Statement based on information supplied by Parent or
Merger Sub specifically for inclusion or incorporation by
reference in the Proxy Statement.
3.8.
Absence of Certain Changes or
Events
. Except for the transactions contemplated
by this Agreement, between September 30, 2008 and the date
of this Agreement, (a) the Company and its Subsidiaries
have conducted their respective businesses only in the ordinary
course of business consistent with past practice and
(b) there has been (i) no state of facts, change,
development, event, effect, condition or occurrence that,
individually or in the aggregate, has caused or would reasonably
be expected to have, a Material Adverse Effect on the Company;
(ii) no declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or
property) with respect to any of the Companys capital
stock; (iii) no purchase, redemption or other acquisition
of any shares of capital stock or other securities of the
Company or the issuance of any options, warrants, calls, or
rights to acquire such shares or securities (other than grants
of Company Stock Options or Company RSUs); (iv) no split,
combination or reclassification of any of the Companys
capital stock 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 the Companys capital stock or
other securities of the Company (other than Shares issuable upon
the exercise of outstanding Company Stock Options, Company RSUs
or other awards under the Company Stock Plans or outstanding
purchase rights under the ESPP); (v) no granting by the
Company or any of its Subsidiaries to any current or former
director or officer, or any other employees of (1) an
increase in compensation, bonus or other benefits (including
grants of stock options, stock appreciation rights or other
stock-based awards) or any such granting of any type of
compensation or benefits to any current or former director or
officer not previously receiving or entitled to receive such
type of compensation or benefit, or (2) the right to
receive any severance or termination pay, or increases therein
(other than in both instances (1) and (2) increases
made as required by Law or severance as required by Law);
(vi) no 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 a
change in GAAP or applicable Law; (vii) no material
election with respect to taxes by the Company or any of its
Subsidiaries or any settlement or compromise of any material tax
liability or refund; (viii) no revaluation of the
Companys or any of its Subsidiaries material assets;
or (ix) no grants of material refunds, credits, rebates or
other allowances by the Company to any end user, customer,
reseller or distributor, in each case, other than in the
ordinary course of business consistent with past practice.
3.9.
Litigation
. As of the date of
this Agreement, there is no action, suit or proceeding, claim,
arbitration or litigation by or before any Governmental
Authority (each, an
Action
) pending or, to
the Knowledge of the Company, threatened, and to the Knowledge
of the Company, there is no investigation by any Governmental
Authority pending or threatened, (A) against the Company or
any of its Subsidiaries and that is material to the Company and
its Subsidiaries, or (B) that challenges or seeks to
prevent, enjoin or otherwise delay the Merger. To the Knowledge
of the Company, as of the date of this Agreement no event has
occurred or circumstances exist that
A-11
would reasonably be expected to give rise or serve as a valid
basis for any material Action. As of the date of this Agreement,
there is no Action pending or, to the Knowledge of the Company,
threatened against any current or, to the Knowledge of the
Company, former director or employee of the Company or any of
its Subsidiaries with respect to which the Company or any of its
Subsidiaries has or is reasonably likely to have an
indemnification obligation. As of the date of this Agreement,
there is no unsatisfied judgment, penalty or award against or
affecting the Company or any of its Subsidiaries or any of their
respective properties or assets. As of the date of this
Agreement, there is no judgment, decree, injunction, rule or
order of any Governmental Authority (each, an
Order
) to which the Company or any of its
Subsidiaries or any of their respective properties or assets are
subject. There has not been since January 1, 2004, and as
of the date of this Agreement there are not, any internal
investigations or inquiries being conducted by the Company, its
Board of Directors or, to the Knowledge of the Company, any
third party or Governmental Authority at the request of any of
the foregoing concerning any conflict of interest, self-dealing,
fraudulent or deceptive conduct or other misfeasance or
malfeasance issues.
3.10.
Contracts
.
(a) Section 3.10 of the Company Disclosure Letter sets
forth, as of the date of this Agreement, a list of, and the
Company Made Available to Parent true and correct copies of:
(i) all Contracts of the Company or any of its Subsidiaries
that would be required to be filed as an exhibit to an Annual
Report on
Form 10-K
under the Exchange Act (if such report was filed by the Company
with the SEC on the date of this Agreement);
(ii) all Contracts of the Company, any of its Subsidiaries
or any of its Affiliates that contain a covenant expressly
restricting the ability of the Company or any of its
Subsidiaries (or which, following the consummation of the
Merger, would reasonably be expected to restrict the ability of
Parent or any of its Subsidiaries) to compete or engage in any
significant business practice with respect to the development,
manufacturing, marketing or distribution of any of the
Companys current products or services in any material
respect, including Contracts with most favored
customer pricing provisions;
(iii) all Contracts (including employment, consulting,
bonus, compensation, severance, or retention Contracts) of the
Company or any of its Subsidiaries with any Affiliate of the
Company (other than any of its Subsidiaries) other than
(A) offer letters, employment agreements or consulting
agreements providing solely for at will employment or services
and containing no right to any pay or benefits after employment
or services have been terminated or upon any change in control,
(B) stock option and RSU agreements, and (C) invention
assignment agreements, arbitration of dispute agreements and
other standard employment-related documents on the
Companys standard forms;
(iv) all Contracts of the Company or any of its
Subsidiaries pursuant to which any third party is authorized to
use, copy, market, distribute or in any other manner exploit any
Intellectual Property of the Company or any of its Subsidiaries
other than Contracts entered into with distributors, resellers,
customers and service providers (including marketing,
advertising, and other service providers) in the ordinary course
of business and non-exclusive immaterial Contracts;
(v) all Contracts of the Company or any of its Subsidiaries
pursuant to which the Company or such Subsidiary is granted
rights in Intellectual Property of any third Person that are
embodied in or incorporated into any of the Companys
products (excluding any licenses for software that is
shrink-wrap software or similar commercially
available software and licenses for Open Source Materials (as
defined in Section 3.15);
(vi) all material joint venture, partnership or other
similar Contracts to which the Company or any of its
Subsidiaries is a party that result in the creation of a
separate legal entity;
(vii) all Contracts of the Company or any of its
Subsidiaries involving the lease of real property with an annual
payment of greater than $50,000;
(viii) all loan agreements, credit agreements, letters of
credit, notes, debentures, bonds, mortgages, indentures,
promissory notes and other Contracts of the Company or any of
its Subsidiaries relating to the borrowing of money or extension
of credit other than standard invoice terms for payments of
invoices in connection with sales of the Companys products
or services (collectively,
Debt Obligations
)
pursuant to
A-12
which any material indebtedness of the Company or any of its
Subsidiaries is outstanding or may be incurred and all
guarantees of or by the Company or any of its Subsidiaries of
any Debt Obligations of any other Person;
(ix) all Contracts providing for indemnification by the
Company or its Subsidiaries of any Indemnified Parties (as
defined in Section 6.5 hereof); and
(x) all Contracts and arrangements of the Company or any of
its Subsidiaries pursuant to which the Company or any Subsidiary
of the Company has any material obligations or liabilities
(whether absolute, accrued, contingent or otherwise), as
guarantor, surety, co-signer, endorser, co-maker, or otherwise
in respect of any obligation of any other Person, or any
material capital maintenance or similar agreements or
arrangements requiring the Company or any Subsidiary to support
the financial condition of any other Person.
(b) Each Contract (w) that is referenced in
Sections 3.10(a)(i) through (x) above, (x) that
is a top 20 customer Contract of the Company or any Subsidiary
of the Company based on the aggregate license revenue for each
of the fiscal years ended December 31, 2008, 2007, and
2006, the aggregate consulting revenue for each of the fiscal
years ended December 31, 2008, 2007, and 2006 and the
aggregate maintenance revenue for the fiscal year ended
December 31, 2008, (y) that is a supply Contract
(excluding purchase orders given or received in the ordinary
course of business, and licenses for Open Source Materials)
under which the Company or any Subsidiary of the Company paid or
received in excess of $100,000 for the fiscal year ended
December 31, 2008, or (z) that is a license for Open
Source Materials (collectively,
Material
Contracts
), is in full force and effect as of the date
of this Agreement (except for those Contracts that have expired
in accordance with their terms) and, as of the date of this
Agreement, constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms (subject to
(A) applicable bankruptcy, insolvency, fraudulent transfer
and conveyance, moratorium, reorganization, receivership and
similar Laws relating to or affecting the enforcement of the
rights and remedies of creditors generally and
(B) principles of equity (regardless of whether considered
and applied in a proceeding in equity or at law)), of the
Company or the applicable Subsidiary, and the Company or the
applicable Subsidiary has performed all of its material
obligations under, and is not in violation or breach of or
default under, any such Contract or agreement except for such
violation or breach which would not reasonably be expected to
have a Material Adverse Effect on the Company. To the Knowledge
of the Company, as of the date of this Agreement, the other
parties to any such Contract or agreement have performed all of
their obligations under, and are not in violation or breach of
or default under, any such Contract or agreement except for such
violations or breaches which would not reasonably be expected to
have a Material Adverse Effect on the Company.
(c) The Company has Made Available all Contracts of the
Company or any of its Subsidiaries containing
standstill or similar provisions that purport, after
the Effective Time, to restrict any Affiliate of the Company
that would include Parent or any of its Subsidiaries or
Affiliates.
3.11.
Compliance with Laws
.
(a) The Company and each of its Subsidiaries has been since
December 31, 2004 and is in compliance with all statutes,
laws, ordinances, rules, regulations, judgments, orders and
decrees of any Governmental Authority (collectively,
Laws
) applicable to it, its properties or
other assets or its business or operations, except where any
failures to be in compliance have not had and would not
reasonably be expected to have individually or in the aggregate
a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received, since December 31, 2004 and
prior to the date of this Agreement, a notice or other written
communication alleging or relating to a possible material
violation of any Laws applicable to its businesses or operations
that would reasonably be expected to have individually or in the
aggregate a Material Adverse Effect. The Company and its
Subsidiaries have in effect all material permits, licenses,
variances, exemptions, authorizations, operating certificates,
franchises, orders and approvals of all Governmental Authorities
(collectively,
Permits
) necessary to carry on
their businesses as now conducted, and there has occurred no
material violation of, default (with or without notice or lapse
of time or both) under, or event giving to others any right of
termination, amendment or cancellation of, with or without
notice or lapse of time or both, any Permit. There is no event
that has occurred that, to the Knowledge of the Company, would
reasonably be expected to result in the revocation,
cancellation, non-renewal or adverse modification of any such
Permit that individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect. Assuming all Closing
Consents are made or obtained, the Merger, in and of itself,
would not cause the revocation or cancellation of any such
Permit. Neither the Company nor any of its Subsidiaries has
A-13
taken any action covered by the Worker Adjustment and Retraining
Notification Act of 1988, as amended (WARN Act), or any similar
applicable state, local or foreign Law and neither the Company
nor any of its Subsidiaries are currently engaged in any layoffs
or employment terminations sufficient in number to trigger
application of any such Laws.
(b) Since December 31, 2004, (i) neither the
Company nor any of its Subsidiaries has received, nor otherwise
has any Knowledge of, any written notice from any Governmental
Authority that (x) alleges any material noncompliance (or
that the Company or any of its Subsidiaries is under
investigation or the subject of an inquiry by any such
Governmental Authority for such alleged material noncompliance)
with any applicable Law, or (y) would be reasonably likely
to result in a material fine, assessment or cease and desist
order, or the suspension, revocation or material limitation or
restriction of any material Permit; and (ii) neither the
Company nor any of its Subsidiaries has entered into any
agreement or settlement with any Governmental Authority with
respect to its non-compliance with, or violation of, any
applicable Law.
(c) The Company and each of its officers and directors are
in compliance with, and have complied, in all material respects
with (i) the applicable provisions of the Sarbanes-Oxley
Act of 2002 and the related rules and regulations promulgated
under such act (
Sarbanes-Oxley
) or the
Exchange Act and (ii) the applicable listing and corporate
governance rules and regulations of Nasdaq. To the Knowledge of
the Company, as of the date of this Agreement, there are no
significant deficiencies or material weaknesses in the design or
operation of the Companys internal controls which could
adversely affect the Companys ability to record, process,
summarize and report financial data. To the Knowledge of the
Company, as of the date of this Agreement, there is no fraud
relating to the Company, any of its Subsidiaries, or their
respective businesses that involves management or other
employees who have a significant role in the Companys
internal controls. To the Knowledge of the Company, as of the
date of this Agreement, none of the Company SEC Documents is the
subject of ongoing SEC review or outstanding SEC comment. As of
the date of this Agreement, the Company has no intention to
restate any of the SEC Financial Statements. As of the date of
this Agreement, the Company has not had any dispute with any of
its auditors regarding accounting matters or policies during any
of its past three full years or during the current fiscal
year-to-date
which was required to be reported to the Companys Board of
Directors. The books and records of the Company and each of its
Subsidiaries have been, and are being maintained in all material
respects in accordance with applicable Law and accounting
requirements and the SEC Financial Statements are consistent in
all material respects with such books and records.
3.12.
Notes and Accounts
Receivable
. All notes and accounts receivable of
the Company and its Subsidiaries shown on the balance sheet
included in the Companys Quarterly Report on
Form 10-Q
for the quarterly period ended September 30, 2008 as filed
with the SEC, or thereafter acquired by the Company or any of
its Subsidiaries, have been collected or are current and
collectible in the ordinary course (in the case of any such note
in accordance with its terms, and in the case of any such
account within 90 days after billing) at the aggregate
recorded amounts thereof on the Companys books, less the
allowance for uncollectible accounts provided on the
above-referenced balance sheet, as such allowances may have been
adjusted on the Companys books in the ordinary course of
business to date, which adjustment, if material, is disclosed in
Section 3.12 of the Company Disclosure Letter. As of the
date of this Agreement, no note or receivable of the Company or
its Subsidiaries is subject to an asserted counterclaim or
setoff that if successful would reasonably be expected to have a
Material Adverse Effect on the Company.
3.13.
Employee Benefit Plans
.
(a) Section 3.13(a) of the Company Disclosure Letter
sets forth a correct and complete list of all employee
benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
(
ERISA
)), and all other employee benefit
plans, programs, agreements or policies, including bonus plans,
employment, consulting or other compensation agreements,
collective bargaining agreements, Company Stock Plans,
individual stock option agreements to which the Company is a
party granting stock options to acquire Shares that have not
been granted under a Company Stock Plan, incentive, stock
purchase, stock appreciation rights and other equity or
equity-based compensation, or deferred compensation
arrangements, change in control, termination or severance plans
or arrangements, stock purchase, severance pay, sick leave,
vacation pay, salary continuation for disability,
hospitalization, medical insurance, life insurance and
scholarship plans and programs (other than offer
A-14
letters, employment agreements or consulting agreements that
provide solely for at will employment (or where, by applicable
Law, such concept of at-will employment is not recognized) or
services and containing no right to any pay or benefits after
employment or services have been terminated except as required
by applicable Law) maintained by the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries
contributed or is obligated to contribute thereunder for current
employees of the Company or any of its Subsidiaries (the
Employees
) and current and former directors
of the Company (collectively, the
Company
Plans
).
(b) Correct and complete copies of the following documents,
with respect to each of the Company Plans (other than a
Multiemployer Plan), have been delivered or Made Available to
Parent by the Company, to the extent applicable: (i) any
plans, all amendments and attachments thereto and related trust
documents, insurance contracts or other funding arrangements,
and amendments thereto; (ii) the most recent
Forms 5500 and all schedules thereto and the most recent
actuarial report, if any; (iii) the most recent IRS
determination or opinion letter; and (iv) the most recent
summary plan descriptions.
(c) The Company Plans have been maintained in accordance
with their terms and with all provisions of ERISA, the Code and
other applicable Laws, and neither the Company (or any of its
Subsidiaries) nor any party in interest or
disqualified person with respect to the Company
Plans has engaged in a non-exempt prohibited
transaction within the meaning of Section 4975 of the
Code or Section 406 of ERISA. No fiduciary has any
liability for breach of fiduciary duty or any other failure to
act or comply in connection with the administration or
investment of the assets of any Company Plan.
(d) To the Knowledge of the Company, the Company Plans
intended to qualify under Section 401 of the Code are so
qualified and any trusts intended to be exempt from Federal
income taxation under Section 501 of the Code are so exempt
and the Company is not aware of any circumstances likely to
result in the loss of the qualification of any such Company Plan
under Section 401(a) of the Code or trusts under
Section 501 of the Code.
(e) Neither the Company nor its Subsidiaries nor any trade
or business (whether or not incorporated) that is treated as a
single employer, with any of them under Section 414(b),
(c), (m) or (o) of the Code has any current or
contingent liability with respect to (i) a plan subject to
Title IV or Section 302 of ERISA or Section 412
or 4971 of the Code or (ii) any multiemployer
plan (as defined in Section 4001(a)(3) of ERISA).
Each Company Plan that is intended to meet the requirements for
tax-favored treatment under Subchapter B of Chapter 1 of
Subtitle A of the Code meets such requirements.
(f) All material contributions (including all employer
contributions and employee salary reduction contributions)
required to have been made under any of the Company Plans
(including workers compensation) or by Law (without regard to
any waivers granted under Section 412 of the Code), to any
funds or trusts established thereunder or in connection
therewith have been made by the due date thereof (including any
valid extension).
(g) All material reports, returns and similar documents
with respect to the Company Plans required to be filed with any
Governmental Authority have been timely filed.
(h) There are no pending actions, claims or lawsuits that
have been asserted or instituted against the Company Plans, the
assets of any of the trusts under the Company Plans or the
sponsor or administrator of any of the Company Plans, or against
any fiduciary of the Company Plans with respect to the operation
of any of the Company Plans (other than routine benefit claims),
nor does the Company have any Knowledge of facts that could form
the basis for any such action, claim or lawsuit.
(i) Except as set forth in Section 3.13(i) of the
Company Disclosure Letter, none of the Company Plans provides
for post-employment life or health insurance, benefits or
coverage for any participant or any beneficiary of a
participant, except as may be required under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended
(
COBRA
), or Law. Each of the Company and any
ERISA Affiliate that maintains a group health plan
within the meaning of Section 5000(b)(1) of the Code is in
material compliance with the notice and continuation
requirements of Section 4980B of the Code, COBRA,
Part 6 of Subtitle B of Title I of ERISA and the
regulations thereunder.
(j) Except as set forth in Section 3.13(j) of the
Company Disclosure Letter (to the extent applicable, in each
case broken down as to each item), neither the execution and
delivery of this Agreement nor the consummation of
A-15
the transactions contemplated hereby, including the Company
Stockholder Approval or the Merger, will (i) result in any
payment becoming due to any Employee, including severance pay or
any increase in severance pay upon termination of employment
after the date hereof, (ii) increase any benefits otherwise
payable under any Company Plan, (iii) result in the
acceleration of the time of payment or vesting of any such
benefits under any Company Plan, increase the amount payable, or
result in any material obligation pursuant to, any Company Plan,
(iv) result in any obligation to fund any trust or other
arrangement with respect to compensation or benefits under a
Company Plan or (v) limit or restrict the right of the
Company or, after the consummation of the transactions
contemplated hereby, Parent to merge, amend or terminate any
Company Plan. Except as set forth in Section 3.13(i) of the
Company Disclosure Letter, since September 30, 2008, the
Company, including the Company Board, any committee thereof and
any officer of the Company, has not taken any action to increase
the compensation or benefits payable after the date hereof to
any officer having the title of senior vice president or higher
of the Company.
(k) Neither the Company nor any of its Subsidiaries has a
contract, plan or commitment, whether legally binding or not, to
create any additional Company Plan or to modify any existing
Company Plan, except as required by applicable Law or tax
qualification requirement. There has been no amendment to,
announcement by the Company or any of its Subsidiaries relating
to, or change in employee participation or coverage under, any
Company Plan that would increase materially the expense of
maintaining such plan above the level of the expense incurred
therefor for the most recent fiscal year.
(l) Any individual who performs services for the Company or
any of its Subsidiaries (other than through a contract with an
organization other than such individual) and who is not treated
as an employee of the Company or any of its Subsidiaries for
Federal income tax purposes by the Company or any of its
Subsidiaries is, to the Knowledge of the Company, not an
employee for such purposes.
(m) Section 3.13 of the Company Disclosure Letter sets
forth a list of all Company Plans covering employees of the
Company or any of its Subsidiaries and maintained by the Company
or any of its Subsidiaries outside of the United States (the
Foreign Plans
). The Foreign Plans have been
operated in accordance, and are in compliance, with their
constituent documents and all applicable Laws in all material
respects. There are no unfunded material liabilities under or in
respect of the Foreign Plans, and all material contributions or
other material payments required to be made to or in respect of
the Foreign Plans prior to the Closing Date have been made or
will be made prior to the Closing Date;
(n) Neither the Company nor any of its Subsidiaries is a
party to any contract, agreement or other arrangement providing
for the payment of any amount that would not reasonably be
expected to not be deductible by reason of Section 162(m)
or Section 280G of the Code.
(o) Section 3.13(o) of the Company Disclosure Letter
sets forth a list of all plans, programs, Contracts or
arrangements to which the Company or any of its Subsidiaries is
a party, or to which either is subject, which, to the Knowledge
of the Company as of the date of this Agreement, provide for the
payment of deferred compensation subject to Section 409A of
the Code (collectively, the
Section 409A
Plans
). The Company has operated each such
Section 409A Plan in good faith compliance with the
applicable requirements of Section 409A of the Code, the
final and proposed Treasury Regulations issued thereunder and
all other applicable Internal Revenue Service guidance provided
thereunder. To the Knowledge of the Company, the Company has
adopted the requisite amendments to bring each Section 409A
Plan into documentary compliance with the applicable
requirements of the final Treasury Regulations under
Section 409A of the Code. Except as set forth on
Section 3.13(o) of the Company Disclosure Letter, the
Company has not entered into any agreement or arrangement to,
and does not otherwise have any obligation to, indemnify or hold
harmless any individual for any liability that results from the
failure to comply with the requirements of Section 409A of
the Code or comparable provision of any other applicable Law,
and does not have any liability for non-reporting or
underreporting of income subject to Section 409A of the
Code or comparable provision of any other applicable Law.
3.14.
Taxes
.
(a) The Company and each of its Subsidiaries has timely
filed, or has caused to be timely filed on its behalf (taking
into account any extension of time within which to file), all
material tax returns required to be filed by it, and all such
filed tax returns are correct and complete in all material
respects. All taxes shown to be due on such tax
A-16
returns, and all material taxes otherwise required to be paid by
the Company or any of its Subsidiaries, have been timely paid in
full.
(b) All taxes due and payable by the Company and its
Subsidiaries have been adequately provided for in the financial
statements of the Company and its Subsidiaries for all periods
ending through the date hereof. No material deficiency with
respect to taxes has been proposed, asserted or assessed against
the Company or any of its Subsidiaries that has not been paid in
full or fully resolved in favor of the taxpayer. There are no
material unresolved questions or claims concerning the
Companys or any of its Subsidiaries tax liabilities
that are not disclosed or provided for in the Company SEC
Documents. No reductions have been made to the current tax
reserve and valuation allowance previously reported to Parent.
(c) The income tax returns of the Company and each of its
Subsidiaries have been examined by and settled with (or received
a no change letter from) the Internal Revenue
Service (the
IRS
) or the appropriate state,
local or foreign taxing authority (or the applicable statute of
limitations has expired) for all years through 2003. All
material assessments for taxes due with respect to such
completed and settled examinations or any concluded litigation
have been fully paid.
(d) Neither the Company nor any of its Subsidiaries has any
obligation under any agreement (either with any person or any
taxing authority) with respect to material taxes.
(e) Neither the Company nor any of its Subsidiaries has
constituted either a distributing corporation or a
controlled corporation (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of
stock qualifying for tax-free treatment under Section 355
of the Code since January 1, 2006.
(f) Neither the Company nor any of its Subsidiaries has
(i) been a member of an affiliated group of corporations
within the meaning of Section 1504 of the Code, other than
the affiliated group of which the Company is the common parent
or (ii) any material liability for the taxes of any other
person (other than the Company or any of its Subsidiaries) under
any state, local or foreign law, as a transferee or successor,
by contract, or otherwise.
(g) No audit or other administrative or court proceedings
are pending with any taxing authority with respect to any
Federal, state or local income or other material taxes of the
Company or any of its Subsidiaries, and no written notice
thereof has been received by the Company or any of its
Subsidiaries. No issue has been raised by any taxing authority
in any presently pending tax audit that could be material and
adverse to the Company or any of its Subsidiaries for any period
after the Effective Time. Neither the Company nor any of its
Subsidiaries has any outstanding agreements, waivers or
arrangements extending the statutory period of limitations
applicable to any claim for, or the period for the collection or
assessment of, any Federal, state or local income or other
material taxes.
(h) Neither the Company nor any of its Subsidiaries is
currently receiving any tax benefit or credit or other favorable
tax treatment that will not be extended and available to the
Company and its Subsidiaries following the Merger, other than
the limitation that will result under Section 382 and 383
of the Code because the Merger constitutes an ownership
change within the meaning of Section 382(g) of the
Code.
(i) No written claim that could give rise to material taxes
has been made within the previous five years by a taxing
authority in a jurisdiction where the Company or any of its
Subsidiaries does not file tax returns that the Company or any
of its Subsidiaries is or may be subject to taxation in that
jurisdiction or must file tax returns.
(j) The Company has Made Available to Parent correct and
complete copies of (i) all income and franchise tax returns
of the Company and its Subsidiaries for the preceding three
taxable years and (ii) any audit report issued within the
last three years (or otherwise with respect to any audit or
proceeding in progress) relating to income or franchise taxes of
the Company or any of its Subsidiaries.
(k) No Liens for taxes exist with respect to any properties
or other assets of the Company or any of its Subsidiaries,
except for Liens for taxes not yet due.
(l) The Company and each of its Subsidiaries has withheld
and paid over all material taxes required to have been withheld
and paid over, and in all material respects has complied with
all information reporting and
A-17
withholding requirements, including maintenance of required
records with respect thereto in connection with amounts paid or
owing to any employee, creditor, independent contractor, or
other third party.
(m) Neither the Company nor any of its Subsidiaries has
entered into any reportable transaction within the
meaning of Treasury
Regulation Section 1.6011-4(b).
(n) Neither the Company nor any of its Subsidiaries has a
permanent establishment in any country outside of its country of
incorporation.
(o) All material 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 as well as any comparable
provisions of state, local, or foreign Law.
(p) Neither the Company nor any of its Subsidiaries will be
required to include any item of income in, or exclude any item
of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of
any: (i) intercompany transactions or excess loss accounts
described in Treasury Regulations under Section 1502 of the
Code (or any similar provision of state, local, or foreign tax
Law), (ii) installment sale or open transaction disposition
made on or prior to the Closing Date or (iii) prepaid
amount received on or prior to the Closing Date.
(q) Neither the Company nor any of its Subsidiaries is or
at any time has been subject to (i) the dual consolidated
loss provisions of Section 1503(d) of the Code,
(ii) the overall foreign loss provisions of
Section 904(f) of the Code or (iii) the
recharacterization provisions of Section 952(c)(2) of the
Code.
(r) For purposes of this Agreement
(i)
taxes
shall mean any federal, state,
local, or foreign taxes of any kind (including those measured by
or referred to as income, franchise, gross receipts, sales, use,
ad valorem
, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, value
added, property, windfall profits, customs, duties or similar
fees, assessments or charges of any kind whatsoever) together
with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority with respect
thereto, domestic or foreign and shall include any transferee or
successor liability in respect of taxes (whether by contract or
otherwise) and any several liability in respect of any tax as a
result of being a member of any affiliated, consolidated,
combined, unitary or similar group and (ii)
tax
returns
shall mean any return, report, claim for
refund, estimate, information return or statement or other
similar document required to be filed with any taxing authority
with respect to taxes, including any schedule or attachment
thereto, and including any amendment thereof.
3.15.
Intellectual Property; Software
.
(a) As used in this Agreement,
Intellectual
Property
means: (i) inventions (whether or not
patentable), trade secrets, technical data, customer lists,
designs, methods, processes, technology, ideas, know-how,
product road maps and other proprietary information and
materials (
Proprietary Information
);
(ii) trademarks and service marks (whether or not
registered), trade names, logos, trade dress and other
proprietary indicia and all goodwill associated therewith;
(iii) documentation, advertising copy, marketing materials,
web-sites, specifications, mask works, drawings, graphics,
databases, recordings and other works of authorship, whether or
not protected by copyright; (iv) computer programs,
including any and all software implementations of algorithms,
models and methodologies, whether in source code or object code,
firmware, development tools, , design documents, flow-charts,
user manuals and training materials relating thereto and any
translations thereof and all media on which any of the foregoing
is recorded (collectively,
Software
);
(v) domain names, uniform resource locators
(
URLs
) and other names and locators
associated with the Internet (collectively,
Domain
Names
); and (vi) all forms of legal rights and
protections that may be obtained for, or may pertain to, the
Intellectual Property set forth in clauses (i) through
(v) in any country of the world (
Intellectual
Property Rights
), including all letters patent, patent
applications, provisional patents, design patents, PCT filings,
invention disclosures and other rights to inventions or designs
(
Patents
), all registered and unregistered
copyrights in both published and unpublished works, all
trademarks, service marks, trade names and other proprietary
indicia (whether or not registered), trade secret rights, mask
works, moral rights or other literary property or authors
rights, and all applications, registrations, issuances,
divisions, continuations, renewals, reissuances and extensions
of the foregoing.
A-18
(b) The Company Disclosure Letter contains a complete and
accurate list of all United States, international and foreign:
(i) patents and patent applications (including provisional
applications); (ii) registered trademarks and material
unregistered trademarks, applications to register trademarks,
intent-to-use
applications, or other registrations or applications related to
trademarks; and (iii) registered copyrights and
applications for copyright registration; in each case that is
owned by or filed in the name of the Company
and/or
one
or more of its Subsidiaries (whether exclusively, jointly with
another Person or otherwise) (
Company Registered
Intellectual Property
). All registration, maintenance
and renewal fees related to Company Registered Intellectual
Property that are currently due have been paid and all required
documents and certificates related to such Company Registered
Intellectual Property have been filed with the relevant
Governmental Authority or other authorities in the
United States or foreign jurisdictions, as the case may be,
for the purposes of maintaining such Company Registered
Intellectual Property and perfecting Companys or its
Subsidiarys ownership interests therein. All Company
Registered Intellectual Property is valid and subsisting. The
Company is not aware of any challenges (or any substantial basis
therefor) with respect to the validity or enforceability of any
Company Registered Intellectual Property.
(c) The Company
and/or
one
or more of its Subsidiaries (i) exclusively own the entire
right, interest and title to all Intellectual Property that is
used in or necessary for the businesses of the Company and its
Subsidiaries as they are currently conducted free and clear of
Liens (including the design, manufacture, license and sale of
all products currently sold or licensed by the Company or its
Subsidiaries), or (ii) otherwise have a valid license or
right to use or otherwise enjoy such Intellectual Property.
(d) The Intellectual Property described in
Section 3.14(c) (collectively, the
Company
Intellectual Property
) constitutes all the
Intellectual Property used in or necessary for the operation of
the Companys and its Subsidiaries businesses as they
are currently conducted.
(e) None of the products or services currently or formerly
developed, manufactured, sold, distributed, provided, shipped or
licensed, by the Company or any of its Subsidiaries, has
infringed or infringes upon, has misappropriated or
misappropriates or otherwise unlawfully used or uses, the
Intellectual Property Rights of any third party. Neither the
Company nor any of its Subsidiaries, by conducting its business
as currently conducted, has infringed or infringes upon, has
misappropriated or misappropriates or otherwise unlawfully used
or uses, any Intellectual Property Rights of a third party.
(f) Neither the Company nor any of its Subsidiaries has
received any written notice alleging that the Company or any of
its Subsidiaries or any of their respective products, services,
activities or operations infringe upon, misappropriates or
otherwise unlawfully use any Intellectual Property Rights of a
third party, nor, to the Knowledge of the Company, is there any
reasonable basis therefor. No Action has been instituted, or, to
the Knowledge of the Company, threatened, relating to any
Intellectual Property formerly or currently used by the Company
or any of its Subsidiaries and, to the Knowledge of the Company,
none of the Company Intellectual Property is subject to any
outstanding Order. Neither Company nor any of its Subsidiaries
has received any opinion of counsel that any third party patents
apply to or are infringed upon by any products or services of
the Company or any of its Subsidiaries.
(g) To the Knowledge of the Company, no Person has
infringed or is infringing any Intellectual Property Rights of
the Company or any of its Subsidiaries or has otherwise
misappropriated or is otherwise misappropriating any Company
Intellectual Property, including any employee or former employee
of Company, or has breached any license or agreement involving
any Company Intellectual Property. The Company has not entered
into any agreement granting any third party the right to bring
infringement actions with respect to, or otherwise enforce
rights with respect to any Intellectual Property Rights of the
Company.
(h) The Company and its Subsidiaries have taken reasonable
steps to protect and preserve the confidentiality of any
Proprietary Information that is (i) (A) owned by the
Company or any of its Subsidiaries, (B) is considered by
the Company to be confidential or trade secret information, and
(C) is not covered by an issued patent, or
(ii) disclosed to the Company or its Subsidiaries from a
third party under a contractual obligation of non-disclosure.
A-19
To the Knowledge of the Company, no such Proprietary Information
has lost its protection as a trade secret as a result of any
public disclosure by the Company or any of its Subsidiaries.
(i) The Company has a policy of obtaining from each
employee, consultant and contractor of the Company and its
Subsidiaries who is or was involved in the creation or
development of any Intellectual Property of the Company or its
Subsidiaries a valid written irrevocable assignment of all
Intellectual Property conceived or developed by such employee,
consultant or contractor in connection with their services for
the Company and its Subsidiaries (
Work Product
Agreements
). To the Knowledge of the Company, there
are no material breaches of such policy or of such Work Product
Agreements. The Company does not believe it is or will be
necessary to use any inventions of any of its employees,
consultants or contractors made prior to their employment by, or
performance of services for, the Company and its Subsidiaries.
(j) The Company and its Subsidiaries use commercially
available antivirus software with the intention of protecting
Companys software products from becoming infected by
viruses and other harmful code. To the Knowledge of the Company,
the Companys software products do not contain any computer
code that is designed and has the ability to disrupt, disable,
harm, distort or otherwise impede the legitimate operations of
such software products by or for the Company or its authorized
users, other than standard license key software for time-limited
licenses.
(k) The Company and its Subsidiaries possess source code
for all Software owned by the Company or its Subsidiaries and
own or have valid licenses for all Software incorporated in any
products of the Company or its Subsidiaries. Except for software
development tools, development kits, bug fixes, error
corrections and similar code licensed or otherwise provided in
the ordinary course of business, the source code of any of the
Companys Software have not been licensed or otherwise
provided by the Company or its Subsidiaries to another Person
(other than escrow arrangements in the ordinary course of
business) and have been safeguarded and protected as
confidential and proprietary Company information.
(l)
Open Source Materials
means any
software that contains, or is derived in any manner (in whole or
in part) from, any software that is distributed as free
software, open source software (e.g., Linux) or similar
licensing or distribution models, including software licensed or
distributed under any of the following licenses or distribution
models, or licenses or distribution models similar to any of the
following: (i) GNU General Public License (GPL) or
Lesser/Library (LGPL), (ii) Mozilla Public License (MPL),
(iii) BSD licenses, (iv) the Artistic License (e.g.
PERL), (v) the Netscape Public License, (vi) the Sun
Community Source License (SCSL), (vii) the Sun Industry
Standards License (SISL), and (viii) the Apache License.
Neither the Company nor any of its Subsidiaries have
incorporated Open Source Materials into, or combined Open Source
Materials with, the Software distributed or marketed by the
Company or its Subsidiaries, which Open Source Materials
require, as a condition of use, modification or distribution of
such Open Source Materials that proprietary Company software
incorporated into, derived from or distributed with such Open
Source Materials be (x) disclosed or distributed in source
code form, (y) licensed for the purpose of making
derivative works, or (z) redistributable at no charge.
(m) Except as specifically identified and described in the
Company Disclosure Letter, with respect to all products
distributed by the Company or its Subsidiaries as of or prior to
the date of this Agreement, no Open Source Materials:
(i) form part of any product of the Company or its
Subsidiaries; or (ii) were or are distributed, in whole or
in part, in conjunction with any products of the Company or its
Subsidiaries.
(n) The Company and its Subsidiaries are not parties to any
agreements with any industry standard-setting organizations that
require, as a condition of participation, that the Company or
such Subsidiary license, or make available, any Intellectual
Property to any third party.
3.16.
Properties and Assets
.
(a) The Company does not own any real property.
(b) Section 3.16(b) of the Company Disclosure Letter
sets forth a list by address, tenant, landlord and date of lease
of all leases, subleases, licenses and similar agreements and
all amendments thereto (each such lease, sublease, license or
similar agreement and all amendments thereto, being a
Lease
) of all leasehold or subleasehold
estates and other rights to use or occupy any land, buildings,
structures, improvements, fixture or
A-20
other interest in real property held by or for the Company or
its Subsidiaries (the
Leased Real Property
).
Section 3.16(b) of the Company Disclosure Letter sets forth
all sublicenses, licenses and other grants by the Company or any
of its Subsidiaries to any person of the right to use or occupy
such Leased Real Property or any portion thereof involving, in
any such case, payments of more than $50,000 annually. The
Company has a good and valid leasehold interest in and to the
Leased Real Property, subject to no Liens, except Permitted
Liens. Each Lease is in full force and effect. There exists no
default by or condition caused by the Company, or to the
Knowledge of the Company as of the date of this Agreement, any
other parties, which with the giving of notice, the passage of
time or both could become a default under any Lease. True and
complete copies of all Leases involving payments of more than
$50,000 per year have been Made Available to Parent. No consent
of any party is necessary for the lessee to legally occupy each
Leased Real Property from and after the Closing.
(c) The Leased Real Property constitutes all of the real
property leased or occupied by the Company or any of its
Subsidiaries. Except as disclosed in Section 3.16(c) of the
Company Disclosure Letter, there are no parties in possession or
parties having any right to occupy any of the Real Property
other than the Company.
(d) The Company and each of its Subsidiaries has such good
and valid title to, or such valid rights by lease, license,
other agreement or otherwise to use, all assets and properties
(in each case, tangible and intangible) necessary to enable the
Company and its Subsidiaries to conduct their business as
currently conducted, except for Permitted Liens.
3.17.
Environmental Matters
. Except
as disclosed in Section 3.17 of the Company Disclosure
Letter, (a) as of the date of this Agreement, no notice,
notification, demand, request for information, citation,
summons, complaint or order has been received by, and no action,
claim, suit, proceeding or review or investigation is pending
or, to the Knowledge of the Company, threatened by any person
against, the Company, any of its Subsidiaries or any person
whose liability the Company or any of its Subsidiaries has or
may have retained or assumed either contractually or by
operation of law with respect to any matters relating to or
arising out of any Environmental Law; (b) the Company and
its Subsidiaries have at all times been and are currently in
compliance in all material respects with all Environmental Laws,
including possessing all material permits, authorizations,
licenses, exemptions and other governmental authorizations
required for their operations under applicable Environmental
Laws; (c) the Company and its Subsidiaries do not have any
material Environmental Liabilities and, to the Knowledge of the
Company, no facts, circumstances or conditions relating to,
arising from, associated with or attributable to (i) any
real property currently or formerly owned, operated or leased by
the Company or its Subsidiaries or operations thereon or
(ii) any person whose liability the Company or any of its
Subsidiaries has or may have retained or assumed either
contractually or by operation of law would reasonably be
expected to result in material Environmental Liabilities;
(d) neither the Company nor any of its Subsidiaries is
subject to any order, decree, injunction or agreement with any
Governmental Authority or any indemnity or other agreement with
any third party relating to liability or obligations arising
under any Environmental Law; and (e) with respect to any
real property currently or formerly owned or leased, as the case
may be, by the Company or its Subsidiaries, to the Knowledge of
the Company, there have been no Releases of Hazardous Materials
that have resulted in or are reasonably likely to result in a
claim against the Company or its Subsidiaries.
As used in this Agreement, the term
Environmental
Laws
means Federal, state, local and foreign statutes,
Laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, codes, injunctions, permits, governmental
agreements and common law standards of conduct relating to the
protection of human health as it relates to Hazardous Materials
exposure or the protection of the environment, including the
transportation, use, storage and disposal of Hazardous Materials.
As used in this Agreement, the term
Environmental
Liabilities
with respect to any person means any and
all liabilities of or relating to such person or any of its
Subsidiaries (including any entity that is, in whole or in part,
a predecessor of such person or any of such Subsidiaries),
whether vested or unvested, contingent or fixed, including
contractual, that (i) arise under applicable Environmental
Laws or with respect to Hazardous Materials and (ii) relate
to actions occurring or conditions existing on or prior to the
Closing Date.
As used in this Agreement, the term
Hazardous
Materials
means all substances or materials regulated
under, or otherwise defined as hazardous, toxic, explosive,
dangerous, flammable or radioactive pursuant to, any
Environmental Law including (i) petroleum compounds,
asbestos containing material, mold, medical waste and
A-21
polychlorinated biphenyls and (ii) in the United States,
all substances defined as Hazardous Substances, Oils, Pollutants
or Contaminants in the National Oil and Hazardous Substances
Pollution Contingency Plan, 40 C.F.R. Section 300.5.
As used in this Agreement, the term
Release
means any release, spill, emission, discharge, leaking, pumping,
injection, deposit, disposal, dispersal, leaching or migration
into the indoor or outdoor environment (including ambient air,
surface water, groundwater, and surface or subsurface strata) or
into or out of any property, including the movement of Hazardous
Materials through or in the air, soil, surface water,
groundwater or property.
3.18.
Transactions with Related
Parties
. Since December 31, 2007, there has
been no transaction, or series of similar transactions,
agreements, arrangements or understandings, nor are there any
currently proposed transactions, or series of similar
transactions, agreements, arrangements or understandings to
which the Company or any of its Subsidiaries was or is to be a
party, that would be required to be disclosed under
Item 404 of
Regulation S-K
promulgated under the Securities Act.
3.19.
Brokers and Other
Advisors
. No broker, investment banker, financial
advisor or other person, other than Credit Suisse Securities
(USA) LLC and Barclays Capital Inc., the fees and expenses of
which will be paid by the Company in accordance with the
Companys agreements with such firms (a complete copy of
which has heretofore been Made Available to Parent), is entitled
to any brokers, finders, financial advisors or
other similar fee or commission, or the reimbursement of
expenses, in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of
the Company or its Subsidiaries.
3.20.
Opinion of Financial
Advisor
. The Company has received the opinions of
Credit Suisse Securities (USA) LLC and Barclays Capital Inc.,
each dated January 21, 2009 to the effect that, as of such
date, the Merger Consideration is fair from a financial point of
view to the holders of Shares, a complete copy of which opinions
will be made available to Parent as soon as practicable after
the date of this Agreement.
3.21.
Insurance
.
(a) As of the date of this Agreement, all material
insurance policies, binders of insurance and fidelity bonds that
cover the Company or any of its Subsidiaries or their respective
businesses, properties, assets, directors or employees (the
Policies
) are in full force and effect and
are enforceable in accordance with their terms, and the
consummation of the Merger will not, pursuant to the terms of
such material Policy, give any party thereto a right to
terminate such Policy. There are no pending material claims
under any of such Policies as to which to the Knowledge of the
Company as of the date of this Agreement, coverage has been
questioned, denied or disputed by the insurer or in respect of
which the insurer has reserved its rights.
(b) All premiums due under the Policies have been paid in
full or, with respect to premiums not yet due, accrued. Neither
the Company nor any of its Subsidiaries has received prior to
the date of this Agreement a notice of cancellation of any
current Policy (other than at its scheduled expiration date) or
of any material changes that are required in the conduct of the
business of the Company or any of its Subsidiaries as a
condition to the continuation of coverage under, or renewal of,
any such current Policy. To the Knowledge of the Company, there
is no existing default or event which, with the giving of notice
or lapse of time or both, would constitute a default under any
material Policy or entitle any insurer to terminate or cancel
any material Policy. To the Knowledge of the Company, as of the
date of this Agreement there is no threatened termination of, or
material premium increase with respect to, any material Policy
and none of such Policies provides for retroactive material
premium adjustments.
3.22.
No Restrictions on
Business
. As of the date of this Agreement, there
is no Order that has been entered against or is binding by its
terms upon the Company or any of its Subsidiaries which has or
would reasonably be expected to have the effect of prohibiting
or impairing any significant business practice of the Company or
any of its Subsidiaries or the conduct of business by the
Company or any of its Subsidiaries as currently conducted.
3.23.
Schedule of
Fees
. Section 3.23 of the Company Disclosure
Letter sets forth the Companys good faith estimate, as of
the date of this Agreement, of the estimated fees and expenses
incurred and to be incurred by the Company and its Subsidiaries
in connection with the negotiation, execution and delivery of
this Agreement and the other agreements and documents (including
the Proxy Statement) contemplated hereby, and the performance of
its obligations hereby and thereby (including the fees and
expenses of Credit Suisse Securities (USA) LLC, Barclays
A-22
Capital Inc. and of the Companys legal counsel and
accountants) (assuming for the purposes of making such estimates
that Parent and the Company receive early termination of the
waiting period applicable to the Merger under the HSR Act).
3.24.
Suppliers and
Customers
. Between September 30, 2008 and
the date of this Agreement, other than with regard to expiration
of Contracts according to their terms or completion of
performance of work, services, or other obligations according to
the terms of any Contract, no material supplier or customer has
canceled or otherwise terminated its relationship with the
Company or any of its Subsidiaries. Between September 30,
2008 and the date of this Agreement, neither the Company nor any
of its Subsidiaries has received written notice that any such
supplier or customer intends to cancel or terminate its
relationship with the Company or any of its Subsidiaries, and no
such supplier or customer will be entitled to any material
refund as a result of the consummation of the transactions
contemplated by this Agreement.
3.25.
Immigration Matters
. The
Company and its Subsidiaries have complied in all material
respects with all relevant provisions of Section 274(A) of
the Immigration and Nationality Act, as amended (the
Immigration Act
).
3.26.
Solvency
. Neither the Company
nor any of its Subsidiaries is unable to pay its debts as they
become due, has suspended making payments on any of its debts by
reason of actual or anticipated financial difficulties or, by
reason of actual or anticipated financial difficulties,
commenced negotiations with one or more of its creditors with a
view to rescheduling any of its indebtedness. The value of the
assets of the Company and its Subsidiaries, taken as a whole, is
not less than the liabilities of the Company and its
Subsidiaries, taken as a whole (taking into account contingent
and prospective liabilities).
ARTICLE IV
Representations
and Warranties of Parent and Merger Sub
Parent and Merger Sub represent and warrant to the Company that,
except as set forth in the disclosure letter (with specific
reference to the Section or Subsection of this Agreement to
which the information stated in such disclosure relates)
delivered by Parent to the Company concurrently with the
execution of this Agreement (the
Parent Disclosure
Letter
),
provided
,
however
, that
disclosure in any Section of the Parent Disclosure Letter shall
be deemed to have been set forth in all other applicable
sections of the Parent Disclosure Letter where the applicability
of such disclosure to such other Sections is reasonably apparent
notwithstanding the omission of any cross-reference to such
other Section in the Parent Disclosure Letter;
provided
,
further
, that the mere listing of the name of a Contract,
the parties thereto and the date thereof shall not make the
applicability of such disclosure reasonably apparent
for purposes of the immediately preceding proviso unless such
listing contains other descriptive language making the
applicability of such disclosure reasonably apparent:
4.1.
Organization, Standing and Corporate
Power
. Each of Parent and Merger Sub is an entity
respectively duly incorporated and validly existing and duly
organized, validly existing and in good standing under the Laws
of the jurisdiction in which it is formed and in each case has
all requisite power and authority to carry on its business as
now being conducted. Each of Parent and Merger Sub is duly
qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such
qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed
individually or in the aggregate has not resulted in, and would
not reasonably be expected to result in, material direct or
indirect costs or liabilities to Parent. Parent has provided the
Company with complete and correct copies of the certificate of
incorporation and by-laws of Parent and Merger Sub, in each case
as amended to the date of this Agreement.
4.2.
Capital Structure of Merger
Sub
. The authorized capital stock of Merger Sub
consists solely of 1,000 shares of common stock, par value
0.001 per share, all of which are validly issued and
outstanding. All of the issued and outstanding capital stock of
Merger Sub is owned by Parent free of any Lien. Merger Sub has
not conducted any business prior to the date of this Agreement
and has no assets, liabilities or obligations of any nature
other than those incident to its formation and pursuant to this
Agreement and the Merger, the Financing Agreements and the other
transactions contemplated by such agreements.
A-23
4.3.
Authority; Noncontravention
.
(a) Each of Parent and Merger Sub has all requisite power
and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement and the Financing
Agreements. The Board of Directors of Parent, at a meeting duly
called and held, duly resolved (A) to approve this
Agreement, the Merger, the Financing Agreements and the other
transactions contemplated hereby and thereby (
Parent
Board Approval
), (B) that it is in the best
interests of Parent and its shareholders that Parent and Merger
Sub enter into this Agreement, and that Parent enter into the
Financing Agreements, and that Parent and Merger Sub consummate
the Merger on the terms and subject to the conditions set forth
herein and therein, (C) to convene an extraordinary general
meeting of Parent (the
Parent General
Meeting
) to approve the consummation of the Merger
upon the terms of this Agreement, to be held as promptly as
practicable after the date of this Agreement (the
Parent Board Recommendation
). The affirmative
vote of a simple majority of the votes of those shareholders
present in person or by proxy at the Parent General Meeting or,
if a poll is called, the affirmative vote of the holders of a
majority of the votes cast at the Parent General Meeting
(whether in person or by proxy) for approval of the consummation
of the Merger upon the terms of this Agreement and the
transactions contemplated by this Agreement (insofar as
shareholder approval is required) (the
Parent
Shareholder Approval
) are the only votes of the
holders of any class or series of share capital of Parent
necessary to enable Parent to consummate the transactions
contemplated by this Agreement and the Financing Agreements. No
vote, other than the Parent Shareholder Approval, is required by
Law, the memorandum and articles of association of Parent or
otherwise in order for Parent to approve this Agreement or the
Financing Agreements or to consummate the transactions
contemplated hereby or thereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate or other organizational action on the part
of Merger Sub (except for the approval by the sole stockholder
of Merger Sub, which approval Parent shall cause to be obtained
immediately following the execution and delivery of this
Agreement) and no other corporate proceedings on the part of
Merger Sub are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Parent and Merger Sub,
and the Financing Agreements have been duly executed and
delivered by Parent and, assuming the due authorization,
execution and delivery by the other parties thereto, each
constitutes a legal, valid and binding obligation of Parent and
Merger Sub, as applicable, enforceable against Parent and Merger
Sub, as applicable, in accordance with its terms (subject to
applicable bankruptcy, solvency, fraudulent transfer,
reorganization, moratorium and other Laws affecting
creditors rights generally from time to time in effect and
by general principles of equity).
(b) The execution and delivery of this Agreement and the
Financing Agreements do not, and the consummation of the Merger
and the other transactions contemplated by this Agreement and
the Financing Agreements and compliance with the provisions of
this Agreement and the Financing Agreements 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 termination, cancellation or acceleration of any
obligation or to the loss of a benefit under, or result in the
creation of any Lien in or upon any of the properties or other
assets of Parent or Merger Sub under (i) the Memorandum and
Articles of Association of Parent or certificate of
incorporation or by-laws of Merger Sub, (ii) any Contract
to which Parent or Merger Sub is a party or to which any of
their respective properties or other assets is subject or
(iii) subject to the Necessary Consents referred to in
Section 4.4 hereof, any Law applicable to Parent or Merger
Sub or their respective properties or other assets, other than,
in the case of clauses (ii) and (iii), any such conflicts,
violations, breaches, defaults, rights, losses or Liens that
individually or in the aggregate (A) would not reasonably
be expected to impair in any material respect the ability of
Parent or Merger Sub to perform its obligations under this
Agreement and the Financing Agreements and (B) would not
reasonably be expected to prevent or materially delay the
consummation of any of the transactions contemplated by this
Agreement and the Financing Agreements.
4.4.
Governmental Approvals
. No
consent, approval, order or authorization of, action, or
registration, declaration or filing with, any Governmental
Authority is required by Parent or Merger Sub in connection with
the execution and delivery of this Agreement by Parent and
Merger Sub or the Financing Agreements by Parent, or the
consummation by Parent and Merger Sub of the Merger or the other
transactions contemplated by this Agreement (and, with respect
to Parent, the Financing Agreements), except for Necessary
Consents (
provided
, that, for purposes of this
Section 4.4, clause (e) of the definition of
Necessary Consents shall be deleted and restated in
its entirety to include such other consents, approvals, orders,
authorizations, registrations, declarations and filings the
A-24
failure of which to be obtained or made individually or in the
aggregate would not reasonably be expected to (x) impair in
any material respect the ability of Parent or Merger Sub to
perform its obligations under this Agreement and the Financing
Agreements or (y) prevent or materially delay the
consummation of any of the transactions contemplated by this
Agreement and by the Financing Agreements).
4.5.
Litigation
. As of the date of
this Agreement, there is no suit, claim, action, investigation
or proceeding pending or, to the Knowledge of Parent or Merger
Sub, overtly threatened against or affecting Parent or Merger
Sub or any of their respective assets or properties before or by
any Governmental Authority that, individually or in the
aggregate, would reasonably be expected to prevent or materially
impede or delay the consummation of the Merger and the other
transactions contemplated by this Agreement, nor is there any
Order of any Governmental Authority or arbitrator outstanding
against Parent or Merger Sub that, individually or in the
aggregate, would reasonably be expected to prevent or materially
delay the consummation of the Merger and the other transactions
contemplated by this Agreement.
4.6.
Information Supplied
. None of
the information supplied or to be supplied by Parent or
Merger Sub specifically for inclusion or incorporation by
reference in the Proxy Statement will, at the date it is first
mailed to the stockholders of the Company and at the time of the
Company Stockholders Meeting, 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.
4.7.
Interested
Stockholder
. Neither Parent nor Merger Sub, nor
any of their affiliates or associates
has been an interested stockholder of the Company at
any time within three years of the date of this Agreement, as
those terms are used in Section 203 of the DGCL.
4.8.
Interim Operations of Merger
Sub
. Merger Sub was formed solely for the purpose
of engaging in the transactions contemplated hereby, has not
engaged in any other business activities other than in
connection with the transactions contemplated by this Agreement
and the Financing Agreements.
4.9.
Brokers
. No broker, investment
banker, finder or financial advisor or other Person has been
retained by, or is authorized to act on behalf of, Parent or any
of its Subsidiaries, and is entitled to any brokers,
finders, financial advisors or other similar fee or
commission in connection with the transactions contemplated by
this Agreement (other than Deutsche Bank AG, London Branch,
Morgan Stanley & Co. International plc, and Citigroup
Global Markets U.K. Equity Limited whose brokerage, investment
banking, finders and financial advisory fees shall be paid by
Parent).
4.10.
Financing Agreements
. Parent
has provided to the Company true and correct copies of the
Financing Agreements as of the date of this Agreement. As of the
date of this Agreement, there is no breach or default on the
part of any party to either of the Financing Agreements, and as
of the date of this Agreement Parent has no Knowledge that the
financing contemplated by either of the Financing Agreements
will not be obtained prior to the Effective Time. To the
Knowledge of Parent, as of the date of this Agreement no fact,
event or circumstance has occurred or otherwise exists that
would reasonably be expected to entitle any of the parties to
the Financing Agreements to terminate the applicable Financing
Agreement or preclude or materially impede the performance by
Parent of any of its covenants or agreements in the Financing
Agreements or the satisfaction by Parent of any the conditions
set forth in the Financing Agreements.
ARTICLE V
Covenants
Relating to Conduct of Business
5.1.
Conduct of Business
.
(a)
Conduct of Business by the
Company
. During the period from the date of this
Agreement to the Effective Time, the Company shall, and shall
cause each of its Subsidiaries to, use its commercially
reasonable efforts to carry on its business in the ordinary
course consistent with past practice and comply with all
applicable Laws in all material respects, and, to the extent
consistent therewith, use its commercially reasonable efforts to
preserve intact its current business organizations, keep
available the services of its current officers, employees and
consultants and preserve its relationships with customers,
suppliers, licensors, licensees, distributors and others having
business
A-25
dealings with it. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to
the Effective Time, except as provided in Section 5.1(a) of
the Company Disclosure Letter, as otherwise expressly
contemplated by this Agreement, or as may be required to comply
with applicable Law or any Contract of the Company or any of its
Subsidiaries that has been disclosed in the Company Disclosure
Letter) the Company shall not, and shall not permit any of its
Subsidiaries to, without Parents prior written consent
(which consent shall not be unreasonably withheld or delayed):
(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, other than
dividends or distributions 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 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
(C) purchase, redeem or otherwise acquire any shares of its
capital stock or any other securities thereof or any rights,
warrants or options to acquire any such shares or other
securities;
(ii) issue, deliver, sell, grant, pledge or otherwise
encumber or subject to any Lien any shares of its capital stock,
any other voting securities or any securities convertible into,
or any rights, warrants or options to acquire, any such shares,
voting securities or convertible securities, or any
phantom stock, phantom stock rights,
RSUs, stock appreciation rights or stock based performance units
(other than (A) the issuance of Shares upon the exercise of
Company Stock Options, pursuant to the ESPP, or pursuant to
Company RSUs, that are outstanding on the date hereof or granted
after the date hereof in accordance with clause (B) below,
in either case in accordance with their terms on the date hereof
(or on the date of grant, if later), and (B) the grant of
Company Stock Options or Company RSUs to employees hired any
time after the date hereof to acquire Shares in accordance with
the Companys ordinary course of business consistent with
past practice,
provided
, that, in any event, (x) the
Company shall not grant Company Stock Options or Company RSUs to
acquire more than 300,000 Shares in the aggregate, and
(y) such Company Stock Options are granted with an exercise
price per share not less than the fair market value per share of
Company Common Stock on the grant date, become exercisable and
vest on a schedule of monthly over 48 months and do not
provide for any accelerated vesting in connection with the
transactions contemplated by this Agreement.
(iii) amend the Company Certificate or the Company By-laws
or the comparable charter or organizational documents of any of
its Subsidiaries or adopt a stockholders rights plan
(
i.e
., poison pill);
(iv) directly or indirectly acquire (A) by merging or
consolidating with, or by purchasing all of or a substantial
equity interest in, or by any other manner, any division,
business or equity interest of any person or (B) any assets
forming part of such a division or business that have a purchase
price in excess of $250,000 individually or $500,000 in the
aggregate;
(v) sell, lease, license, mortgage, sell and leaseback or
otherwise encumber or subject to any Lien or otherwise dispose
of any of its properties or other assets with a fair market
value in excess of $100,000 individually or $250,000 in the
aggregate to a third party (except (A) by incurring
Permitted Liens, (B) with respect to properties or other
assets no longer used in the operation of the Companys
business
and/or
(C) in the ordinary course of business);
(vi) make capital expenditures in any fiscal quarter in an
aggregate amount for such quarter that exceeds by $50,000 the
amount budgeted for in the Companys capital expenditure
plan for such quarter, which expenditure plan has been provided
to Parent prior to the date of this Agreement.
(vii) (A) repurchase or prepay any indebtedness for
borrowed money except as required by the terms of such
indebtedness, (B) incur any indebtedness for borrowed money
or guarantee any such indebtedness of another person or issue or
sell any debt securities or options, warrants, calls or other
rights to acquire any debt securities of the Company or any of
its Subsidiaries, guarantee any debt securities of another
person, enter into any keep well or other agreement
to maintain any financial statement condition of another person
or enter into any arrangement having the economic effect of any
of the foregoing, or (C) make any loans, advances or
capital contributions to, or investments in, any other person
(1) in excess of $50,000 in the aggregate, or (2) in
any amount not in the ordinary course of business consistent
with past practice, excluding in each case
A-26
indebtedness to, loans from, or investments in, the Company or
any direct or indirect wholly owned Subsidiary of the Company
and advances of expenses to employees;
(viii) (A) pay, discharge, settle or satisfy any
material claims (including claims of stockholders), liabilities
or obligations (whether absolute, accrued, asserted or
unasserted, contingent or otherwise), (1) other than in the
ordinary course of business consistent with past practice or as
required by the terms of a Contract or Law, or
(2) involving any material limitation on the conduct of the
business of the Company or its Subsidiaries or (B) waive or
release any right of the Company or any of its Subsidiaries of
material value;
(ix) enter into, modify, amend or terminate (A) any
Contract that if so entered into, modified, amended or
terminated would reasonably be expected to (1) have a
Material Adverse Effect, (2) impair in any material respect
the ability of the Company to perform its obligations under this
Agreement or (3) prevent or materially delay the
consummation of any of the transactions contemplated by this
Agreement, (B) any other material Contract (excluding
Contracts or amendments entered into or made in the ordinary
course of business consistent with past practice), (C) any
Contract by which the Company or any of its Subsidiaries grants
any license to Company Intellectual Property (other than
Contracts or amendments entered into or made in the ordinary
course of business consistent with past practice) or
(D) any Contract that contains a covenant restricting the
ability of the Company or any of its Subsidiaries (or that,
following the consummation of the Merger, would restrict the
ability of Parent or any of its Subsidiaries, including the
Surviving Entity and its Subsidiaries) to compete in any
business or with any person or in any geographic area;
(x) enter into any Contract that if in effect as of the
date hereof would be required to be disclosed pursuant to
Section 3.10(a) hereof (other than Contracts required to be
disclosed pursuant to Section 3.10(b)(a)) to the extent
consummation of the transactions contemplated by this Agreement
or compliance by the Company with the provisions of this
Agreement would reasonably be expected to conflict with, or
result in a 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 (other than a Permitted Lien) in or upon
any of the properties or other assets of the Company or any of
its Subsidiaries under, or give rise to any increased,
additional, accelerated or guaranteed right or entitlement of
any third party under, or result in any material alteration of,
any provision of such Contract;
(xi) except as required to comply with applicable Law or
any Contract disclosed in Section 3.13 of the Company
Disclosure Letter, (A) increase in any manner the
compensation, bonus or pension, welfare, severance or fringe
benefits of, or pay any bonus to, any current or former
director, officer, employee or consultant of the Company or any
of its Subsidiaries (excluding bonuses not in excess of $5,000
to any one non-officer employee and in any event not exceeding
$100,000 in the aggregate), (B) grant or pay to any current
or former director, officer, employee or consultant of the
Company or any of its Subsidiaries any benefit not provided for
under any Contract or Company Plan other than the payment of
cash compensation in the ordinary course of business consistent
with past practice, (C) grant any awards under any Company
Plan (including the grant of Company Stock Options, stock
appreciation rights, stock based or stock related awards,
performance units, Company RSUs, or restricted stock or the
removal of existing restrictions in any Contract or Company Plan
or awards made thereunder, but excluding any awards permitted by
Section 5.1(a)(ii)), (D) take any action to fund or in
any other way secure the payment of compensation or benefits
under any Contract or Company Plan, (E) exercise any
discretion to accelerate the vesting or payment of any
compensation or benefit under any Contract or Company Plan,
(F) adopt any new employee benefit plan or arrangement or
amend, modify or terminate any existing Company Plan, in each
case for the benefit of any current or former director, officer,
employee or consultant of the Company or any of its
Subsidiaries, other than required by applicable Law or tax
qualification requirement or (G) forgive any loans to
directors, officers or employees of the Company or any of its
Subsidiaries;
provided
,
however
, that the Company
may implement its regular increases to compensation, bonus and
benefit plans, payment and arrangements with current employees
and employees hired in accordance with this Section 5.1, in
the ordinary course of business on substantially the same
schedule as previously implemented by the Company;
A-27
(xii) 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;
(xiii) fail to use reasonable efforts to maintain existing
insurance policies or comparable replacement policies to the
extent available for a reasonable cost;
(xiv) change its fiscal year, revalue any of its material
assets, or make any changes in financial, actuarial, reserving,
statutory or tax accounting methods, principles or practices,
except in each case as required by GAAP or applicable Law;
(xv) change any material tax election or settle or
compromise any material tax liability, or agree to an extension
of a statute of limitations with respect to material
taxes; or
(xvi) authorize any of, or commit or agree to take any of,
the foregoing actions.
(b) Prior to making any written communications to the
directors, officers or employees of the Company or any of its
Subsidiaries pertaining to compensation or benefit matters that
are affected by the transactions contemplated by this Agreement,
the Company shall provide Parent with a copy of the intended
communication, Parent shall have a reasonable period of time to
review and comment on the communication, and Parent and the
Company shall cooperate in providing any such mutually agreeable
communication.
(c)
Advice of Changes; Filings
. Each of
the Company and Parent shall as promptly as practicable advise
the other party orally and in writing upon obtaining Knowledge
of (i) any representation or warranty made by it (and, in
the case of Parent, made by Merger Sub) contained in this
Agreement that is qualified as to materiality or Material
Adverse Effect, as the case may be, becoming untrue or
inaccurate in any respect or any representation or warranty that
is not so qualified becoming untrue or inaccurate in any
material respect or (ii) the failure of it (and, in the
case of Parent, of Merger Sub) to comply with or satisfy in any
respect any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement;
provided
,
however
, that no such notification shall affect the
representations, warranties, covenants or agreements of the
parties (or remedies with respect thereto) or the conditions to
the obligations of the parties under this Agreement. The Company
and Parent shall promptly provide the other copies of all
filings made by such party with any Governmental Authority in
connection with this Agreement and the transactions contemplated
hereby.
5.2.
No Solicitation by the Company
.
(a) The Company agrees that neither it nor any of its
Subsidiaries shall, nor shall it authorize or permit any of its
or their respective directors, officers, employees or any
investment banker, financial advisor, attorney, accountant or
other advisor, agent or representative of the Company or any
Subsidiary (collectively,
Representatives
)
to, directly or indirectly, (i) solicit, initiate, cause,
or knowingly encourage or facilitate, any inquiries or the
making of any proposal or offer that constitutes or is
reasonably likely to lead to a Company Takeover Proposal or
(ii) participate in any negotiations or substantive
discussions regarding any Company Takeover Proposal, or furnish
to any person any non-public information in connection with or
in furtherance of, or otherwise cooperate with or knowingly
assist any person in connection with, any Company Takeover
Proposal. Without limiting the foregoing, it is agreed that any
violation of the restrictions set forth in the preceding
sentence by any Representative of the Company or any of its
Subsidiaries shall be a breach of this Section 5.2(a) by
the Company. The Company shall, and shall cause its Subsidiaries
and instruct its Representatives to, immediately cease and cause
to be terminated all existing discussions or negotiations with
any person conducted heretofore with respect to any Company
Takeover Proposal and request the prompt return or destruction
of all confidential information previously furnished.
Notwithstanding the foregoing, at any time prior to obtaining
the Company Stockholder Approval (and in no event after
obtaining such Company Stockholder Approval), in response to an
unsolicited
bona fide
written Company Takeover Proposal
made after the date hereof that the Company Board determines in
good faith (after consultation with its financial advisor and
its outside counsel) constitutes or could reasonably be expected
to lead to a Company Superior Proposal, the Company may, if the
Company Board determines in good faith (after consultation with
its outside counsel) that failure to take such action would be
reasonably likely to result in a breach of its fiduciary duties
to the stockholders of the Company under applicable Law, and
subject to compliance with Section 5.2(c) and after giving
Parent one Business Day written notice of such determination,
(A) furnish information with respect to the Company and its
Subsidiaries to the person making such
A-28
Company Takeover Proposal (and its Representatives) pursuant to
a customary confidentiality agreement not less restrictive of
such person than the Confidentiality Agreement;
provided
that all such information (to the extent that such information
has not been previously provided or Made Available to Parent) is
provided or Made Available to Parent, as the case may be, prior
to or substantially concurrent with the time it is provided or
Made Available to such person, as the case may be, and
(B) participate in discussions or negotiations with the
person making such Company Takeover Proposal (and its
Representatives) regarding such Company Takeover Proposal, and
otherwise cooperate with and assist the person making such
Company Takeover Proposal with respect to such Company Takeover
Proposal.
For purposes of this Agreement,
Company Takeover
Proposal
shall mean any inquiry, proposal or offer,
whether or not conditional, with respect to a proposed or
potential Acquisition Transaction from a person other than
Parent or its Affiliates or their respective Representatives (in
their capacities as such). An
Acquisition
Transaction
means (a) a merger, consolidation,
dissolution, recapitalization or other business combination
involving the Company or its Subsidiaries, (b) for the
issuance of, in a single transaction or series of related
transactions, 15% or more of the equity securities of the
Company as consideration for the assets or securities of another
person or (c) to acquire in any manner, directly or
indirectly, in a single transaction or series of related
transactions, 15% or more of the equity securities of the
Company or assets (including equity securities of any Subsidiary
of the Company) that represent 15% or more of the total
consolidated assets of the Company, other than the transactions
contemplated by this Agreement.
For purposes of this Agreement,
Company Superior
Proposal
shall mean any
bona fide
written offer
made by a third party, that if consummated would result in such
person (or its stockholders) owning, directly or indirectly,
greater than 50% of the Shares then outstanding (or of the
surviving entity in a merger or the direct or indirect parent of
the surviving entity in a merger) or all or substantially all of
the total consolidated assets of the Company on terms that the
Company Board determines in good faith (following consultation
with its financial advisor and its outside counsel and in light
of all relevant circumstances, including all the terms and
conditions of such proposal and this Agreement) to (i) be
more favorable to the stockholders of the Company from a
financial point of view than the transactions contemplated by
this Agreement and (ii) be reasonably likely to be
completed, taking into account any financing and approval
requirements and all other financing, legal, regulatory and
other aspects of such proposal.
(b) Neither the Company Board nor any committee thereof
shall (i) (A) withdraw (or modify in a manner adverse to
Parent), or resolve to withdraw (or modify in a manner adverse
to Parent), the approval, recommendation or declaration of
advisability by such Company Board or any such committee thereof
of this Agreement or the Merger (it being understood that taking
a neutral position or no position with respect to a Company
Takeover Proposal (other than in connection with a stop,
look and listen or similar communication of the type
contemplated by
Rule 14d-9(f)
under the Exchange Act) shall be considered an adverse
modification), or (B) recommend, adopt or approve, or
propose publicly to recommend, adopt or approve, any Acquisition
Transaction (any action described in this clause (i) being
referred to as a
Company Adverse Recommendation
Change
) or (ii) approve or recommend, or resolve
to approve or recommend, or allow the Company or any of its
Subsidiaries to execute or enter into, any letter of intent,
memorandum of understanding, agreement in principle, merger
agreement, acquisition agreement, option agreement, joint
venture agreement, partnership agreement or other similar
agreement constituting or related to, any Acquisition
Transaction (other than a confidentiality agreement pursuant to
Section 5.2(a));
provided
, that the foregoing shall
not prohibit accurate disclosure (and such disclosure shall not
be deemed a Company Adverse Recommendation Change for any
purpose under this Agreement) of the fact that a Company
Takeover Proposal has been made. Notwithstanding the foregoing,
the Company Board may make a Company Adverse Recommendation
Change if the Company Board determines in good faith (following
consultation with its financial advisor and its outside counsel)
that failure to take such action would be reasonably likely to
result in a breach of its fiduciary duties to the stockholders
of the Company under applicable Law;
provided
,
however
, that no Company Adverse Recommendation Change
may be made in response to a Company Takeover Proposal until
after 72 hours following Parents receipt of written
notice from the Company (an
Adverse Recommendation
Notice
) advising Parent that the Company Board has
determined that such Company Takeover Proposal is a Company
Superior Proposal, that the Company Board intends to make such
Company Adverse Recommendation Change and containing all
information required by Section 5.2(c), together with
copies of any written offer or proposal in respect of such
Company Superior Proposal (it being understood and agreed that
any
A-29
amendment to the financial terms or other material terms of such
Company Superior Proposal shall require a new Adverse
Recommendation Notice and a new
72-hour
period). During such 72 hour period, the Company shall, if
so requested by Parent, negotiate in good faith with Parent with
respect to any revised proposal from Parent in respect of the
terms of the transactions contemplated by this Agreement. In
making the determination that a Company Takeover Proposal
constitutes a Company Superior Proposal, the Company Board shall
take into account any changes to the terms of this Agreement
proposed by Parent (in response to an Adverse Recommendation
Notice or otherwise).
(c) In addition to the obligations of the Company set forth
in paragraphs (a) and (b) of this Section 5.2,
the Company shall promptly, and in no event later than
24 hours after any officer of the Company becomes aware of
the receipt thereof by the Company, advise Parent orally and in
writing of any request for information or other inquiry that the
Company reasonably believes could lead to any Company Takeover
Proposal, the terms and conditions of any such request, Company
Takeover Proposal or inquiry (including any changes thereto) and
the identity of the person making any such request, Company
Takeover Proposal or inquiry. The Company shall
(i) promptly keep Parent informed in all material respects
of any material change in the status of, or any material
modification or material amendment of any such request, Company
Takeover Proposal or inquiry and (ii) provide Parent as
soon as practicable copies of any written offer, all
correspondence and any other written material sent or provided
to the Company or any of its Subsidiaries from any person that
describes any of the terms or conditions of any such request,
Company Takeover Proposal or inquiry.
(d) Nothing contained in this Section 5.2 shall
prohibit the Company from (i) taking and disclosing to its
stockholders a position contemplated by
Rule 14d-9
or
Rule 14e-2(a)
or Item 1012(a) of
Regulation M-A
promulgated under the Exchange Act or (ii) making any
required disclosure to the stockholders of the Company if, in
the good faith judgment of the Company Board (after consultation
with its outside counsel), failure to so disclose would be
reasonably likely to result in a breach of its fiduciary duties
or other obligations to the stockholders of the Company under
applicable Law.
(e) Without limiting any other rights of Parent under this
Agreement, neither any Company Adverse Recommendation Change nor
any termination of this Agreement shall have any effect on any
of the approvals or other actions referred to herein for the
purpose of causing the Takeover Laws to be inapplicable to this
Agreement and the transactions contemplated hereby and thereby,
which approvals and actions are irrevocable.
ARTICLE VI
Additional
Agreements
6.1.
Preparation of the Proxy Statement;
Stockholder Meetings
.
(a) As soon as practicable, using its commercially
reasonable efforts to do so within seven days following the date
of this Agreement, the Company shall prepare and file with the
SEC the Proxy Statement. The Company shall respond promptly to
any comments from the SEC or the staff of the SEC on the Proxy
Statement. The Company shall use its reasonable efforts to cause
the Proxy Statement to be mailed to the stockholders of the
Company as promptly as practicable. No filing of, or amendment
or supplement to, the Proxy Statement will made by the Company,
without providing Parent and its counsel a reasonable
opportunity to review and comment thereon. If at any time prior
to the Effective Time any information relating to the Company or
Parent, or any of their respective Affiliates, directors or
officers, should be discovered by the Company or Parent that
should be set forth in an amendment or supplement to the Proxy
Statement, so that it would not include any misstatement of a
material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under
which they were 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 promptly filed with the SEC and, to the
extent required by Law, disseminated to the stockholders of the
Company. The Company shall notify Parent promptly of the receipt
of any comments from the SEC or the staff of the SEC and of any
request by the SEC or the staff of the SEC for amendments or
supplements to the Proxy Statement for additional information
and shall supply Parent with copies of all correspondence
between the Company or any of its Representatives, on the one
hand, and the SEC or the staff of the SEC, on the other hand,
with respect to the Proxy Statement or the Merger.
A-30
(b) The Company shall, as soon as practicable following the
clearance of the Proxy Statement by the SEC, establish a record
date for and promptly take any and all actions in connection
therewith, and duly call, give notice of, convene and hold, a
meeting of its stockholders (the
Company Stockholders
Meeting
) solely for the purpose of obtaining the
Company Stockholder Approval and the approval of any adjournment
of the Company Stockholders Meeting. Subject to
Section 5.2(b), the Company Board shall recommend to the
Companys stockholders adoption of this Agreement and the
Merger.
(c) The Company Board, or a committee thereof consisting of
non-employee directors (as such term is defined for purposes of
Rule 16b-3(d)
under the Exchange Act), shall adopt a resolution in advance of
the Effective Time authorizing the disposition by the Company
Insiders of their Shares for cash and the disposition of their
outstanding Options, in each case pursuant to the transactions
contemplated hereby, for purposes of qualifying those
dispositions for the exemption provided pursuant to
Rule 16b-3(e)
under the Exchange Act. For purposes of this Agreement,
Company Insiders
means those officers and
directors of the Company who are subject to the reporting
requirements of Section 16(a) of the Exchange Act.
6.2.
Parent General Meeting; Other Actions
.
(a) Subject to any applicable Laws and regulations, Parent
shall promptly prepare and use its commercially reasonable
efforts to post to its shareholders, as soon as practicable
following the date of this Agreement, the UK Class 1
Circular. The Company agrees to provide Parent with such
cooperation in connection with the preparation of the UK
Class 1 Circular as may be reasonably requested in writing
by Parent. Without limiting the generality of the foregoing,
Parent shall use its commercially reasonable efforts to
accomplish the foregoing within seven days following the date of
this Agreement, and Parent agrees that it will:
(i) respond promptly to any comments from the Financial
Services Authority (the
FSA
) on the draft UK
Class 1 Circular, provide copies of such comments promptly
to the Company and its advisors, and consult with the Company in
a reasonably timely manner as to the form and content of the UK
Class 1 Circular;
(ii) use its commercially reasonable efforts to ensure that
in each case the relevant draft(s) or redraft(s) of the UK
Class 1 Circular shall be provided as soon as practicable
to the Company so that the Company and its advisors can review
and comment upon the relevant draft(s) and redraft(s) to the
extent related to the Company or the Merger;
(iii) consider the reasonable comments of Company and its
advisors related to the Company or the Merger on the draft(s)
and redraft(s) referred to in Section 6.2(a)(ii); and
(iv) convene the Parent Shareholder Meeting and conduct the
vote to approve the Merger and the transactions contemplated by
this Agreement (insofar as shareholder approval is required) as
soon as reasonably practicable following the posting of the UK
Class 1 Circular.
(b) Subject to Section 6.2(c), Parent agrees that the
UK Class 1 Circular shall incorporate a unanimous
recommendation from Parents Directors to Parents
shareholders to vote in favor of the shareholder resolutions
necessary to effect the Merger and the transactions contemplated
by this Agreement (insofar as shareholder approval is required).
(c) Nothing in this Agreement shall prevent the Parent
Directors from withdrawing or modifying or proposing to withdraw
or modify their recommendation in favor the Parent Shareholder
Approval (a
Change of Parent Recommendation
)
if, in the exercise of their fiduciary obligations as Parent
Directors (as determined in good faith by the Parent Directors
after consultation with its financial advisors and outside legal
counsel) the failure to take such actions would be reasonably
likely to result in a breach of the Parent Directors
fiduciary obligations to Parent.
(d) If Parent is required to issue any supplement to
shareholders relating to information contained in the UK
Class 1 Circular (the
Supplement
),
Parent shall notify the Company as soon as reasonably
practicable of such requirement and shall:
(i) respond promptly to any comments from the
FSA
on
the Supplement, provide copies of such comments promptly to the
Company and its advisors, and consult with the Company as to the
form and content of all the documentation relating to the
Supplement relating to the Merger;
A-31
(ii) use its commercially reasonable efforts to ensure that
in each case the relevant draft(s) or redraft(s) of the
Supplement shall be provided as soon as practicable to the
Company so that the Company and its advisors can review and
comment upon the relevant draft(s) and redraft(s) to the extent
related to the Company or the Merger;
(iii) consider the reasonable comments of Company and its
advisors related to the Company or the Merger on the draft(s)
and redraft(s) referred to in Section 6.2(d)(ii); and
(iv) if required, convene a shareholder meeting of Parent
to approve any material change to the terms of this Agreement.
Parent agrees that none of the information included or
incorporated by reference in the UK Class 1 Circular or any
Supplement will (except to the extent revised or superseded by
amendments or supplements contemplated hereby), at the date the
UK Class 1 Circular or any Supplement is filed with the
United Kingdoms Financial Services Authority or mailed to
Parents shareholders or at the time of the Parent General
Meeting, 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;
provided
,
however
, that no representation is made
by Parent with respect to statements made in the UK Class 1
Circular or any Supplement based on information supplied by the
Company in writing expressly for inclusion in the UK
Class 1 Circular or any Supplement. The UK Class 1
Circular and any Supplement will comply as to form with the
requirements of the Listing Rules of the United Kingdom Listing
Authority made pursuant to the Financial Services and Markets
Act.
6.3.
Access to Information; Confidentiality
.
(a) The Company shall afford to Parent, and its
Representatives, reasonable access during normal business hours
during the period prior to the Effective Time or the termination
of this Agreement to all its and its Subsidiaries
properties, books, tax returns, contracts, commitments,
personnel, records, statutory filings and databases and, during
such period, the Company shall furnish promptly to Parent
(a) a copy of each report, schedule, registration statement
and other document filed by the Company during such period
pursuant to the requirements of Federal or state securities Laws
and (b) consistent with its legal obligations all other
information concerning the Company and its Subsidiaries
business, properties and personnel as Parent may reasonably
request;
provided
,
however
, that the Company shall
not be required to permit any access, or to deliver or make
available to Parent any information, to the extent that in the
reasonable judgment of the Company, such action would
(a) result in the disclosure of any trade secrets of third
parties, (b) violate any contractual obligation of the
Company with respect to confidentiality, (c) jeopardize
protections afforded the Company under the attorney-client
privilege or the attorney work product doctrine, or
(d) violate any Law. Except for disclosures expressly
permitted by the terms of the confidentiality agreement, dated
as of September 16, 2008, between Parent and the Company
(as it may be amended from time to time, the
Confidentiality Agreement
), each party shall
hold, and shall cause its Representatives to hold, all
information received from the other party, directly or
indirectly, in confidence in accordance with the Confidentiality
Agreement.
(b) During the period prior to the Effective Time or the
termination of this Agreement, the Company shall provide, and
shall cause its Subsidiaries and their respective officers,
employees, representatives and advisors, including legal and
accounting, to provide, to Parent and to the officers,
employees, attorneys, accountants and other representatives of
Parent, all cooperation that may be reasonably requested by
Parent in connection with Parents financing of the
consideration payable pursuant to Section 2.1(a), including
(i) participation in meetings, presentations, road shows,
due diligence sessions and sessions with rating agencies, and
(ii) assisting with the preparation of materials for rating
agency presentations, offering documents, private placement
memoranda, prospectuses and similar documents required in
connection with Parents financing of the consideration
payable pursuant to Section 2.1(a);
provided
,
however
, that nothing herein shall require such
cooperation to the extent it would involve or result in the
Company or any of its directors, officers or representatives
incurring any liability, or would interfere unreasonably with
the business or operations of the Company or its Subsidiaries or
otherwise result in any significant interference with the prompt
and timely discharge by such employees of their normal duties.
A-32
6.4.
Reasonable Best Efforts
.
(a) Upon the terms and subject to the conditions set forth
in this Agreement, each of the parties agrees to use its
reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Merger and the other
transactions contemplated by this Agreement, including using
reasonable best efforts to accomplish the following:
(i) the taking of all acts necessary to cause the
conditions to Closing to be satisfied as promptly as
practicable, (ii) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental
Authorities and the making of all necessary registrations and
filings (including filings with Governmental Authorities) and
the taking of all steps as may be necessary to obtain an
approval or waiver from, or to avoid an action or proceeding by
any Governmental Authority, (iii) the obtaining of all
necessary consents, approvals or waivers from third parties and
(iv) the execution and delivery of any additional
instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this
Agreement. In connection with and without limiting the first
sentence of this Section 6.4, each of the Company and the
Company Board and Parent and the Parent Board shall
(A) take all action reasonably necessary to ensure that no
state takeover statute or similar statute or regulation is or
becomes applicable to this Agreement, the Merger or any of the
other transactions contemplated by this Agreement and
(B) if any state takeover statute or similar statute
becomes applicable to this Agreement, the Merger or any of the
other transactions contemplated by this Agreement, take all
action reasonably 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 Merger and the
other transactions contemplated by this Agreement.
Notwithstanding the foregoing or anything else to the contrary
in this Agreement, nothing shall be deemed to require Parent to
(1) agree to, or proffer to, divest or hold separate any
assets or any portion of any business of Parent or any of its
Subsidiaries or, assuming the consummation of the Merger, the
Company or any of its Subsidiaries, (2) not compete in any
geographic area or line of business, (3) restrict the
manner in which, or whether, Parent, the Company, the Surviving
Entity or any of their respective Affiliates may carry on
business in any part of the world or restrict the exercise of
the full rights of ownership, (4) agree to any terms or
conditions that would impose any obligations on Parent or any of
its Subsidiaries or, assuming the consummation of the Merger,
the Company or any of its Subsidiaries, to maintain facilities,
operations, places of business, employment levels, products or
businesses or any other restriction, limitation or qualification
or (5) make any payments that, in the case of any of
clauses (1) through (5), would, or would reasonably be
likely to, individually or in the aggregate, have a Material
Adverse Effect on the Company and its Subsidiaries or on Parent
and its Subsidiaries (each, a
Negative Regulatory
Action
).
(b) Each of the parties hereto shall use its reasonable
best efforts to (i) cooperate in all respects with each
other in connection with any filing or submission with a
Governmental Authority in connection with the Merger and in
connection with any investigation, approval process or other
inquiry by or before a Governmental Authority relating to the
Merger, including any proceeding initiated by a private party,
and (ii) keep the other party informed in all material
respects and on a reasonably timely basis of any communication
received by such party from, or given by such party to, the
Federal Trade Commission (the
FTC
), the
Antitrust Division of the Department of Justice (the
DOJ
)or any other Governmental Authority and
of any material communication received or given in connection
with any proceeding by a private party, in each case regarding
the Merger. Without limiting the generality of the foregoing,
(i) Parent and the Company each agree to file a premerger
notification under the HSR Act within seven days after the date
of this Agreement, and (ii) each of Parent and the Company
shall use its commercially reasonable efforts to obtain promptly
any clearance required under the HSR Act for the consummation of
the Merger and the transactions contemplated hereby, and shall
use commercially reasonable efforts to comply promptly with any
inquiries or requests for additional information from the FTC
and the DOJ. No Party hereto shall independently participate in
any meeting or discussion with any Governmental Authority in
respect of any filings, applications, investigations, or other
inquiry without giving the other Parties hereto prior notice of
the meeting and, to the extent permitted by the relevant
Governmental Authority, the opportunity to attend and
participate (which shall be limited to outside antitrust counsel
only). Each party will consult with the other party in
connection with the preparation of all written presentations,
memoranda, briefs, arguments, opinions, proposals, or other
written submissions to any Governmental Authority that are
prepared in connection with obtaining the clearance required
under the HSR Act for the consummation of the Merger and the
transactions contemplated hereby.
A-33
6.5.
Indemnification, Exculpation and
Insurance
.
(a) All rights to indemnification and exculpation from
liabilities for acts, omissions or other matters occurring or
existing at or prior to the Effective Time now existing in favor
of the current or former directors, officers and employees of
the Company and its Subsidiaries (the
Indemnified
Parties
) as provided in the Company Certificate, the
Company By-laws or any agreement between the Company and any
Indemnified Parties (in each case, as in effect on the date
hereof) shall be assumed by the Surviving Entity in the Merger,
without further action, as of the Effective Time and shall
survive the Merger and shall continue in full force and effect
in accordance with their terms. Parent shall indemnify and hold
harmless, and provide advancement of expenses to the Indemnified
Parties to the same extent such persons have the right to be
indemnified and held harmless, or have the right to advancement
of expenses, by the Company pursuant to the Company Certificate,
the Company By-laws or any agreement between the Company and any
Indemnified Parties, in each case to the extent permitted by
applicable Law.
(b) For six years after the Effective Time, the Surviving
Entity shall (and Parent shall cause the Surviving Entity to)
maintain in effect the Companys current directors
and officers liability insurance in respect of acts,
omissions or other matters occurring or existing at or prior to
the Effective Time (including for acts or omissions occurring in
connection with the approval of this Agreement and the
consummation of the transactions contemplated hereby) covering
the Indemnified Parties currently covered by the Companys
directors and officers liability insurance policy (a
correct and complete copy of which has been heretofore Made
Available to Parent) on terms with respect to such coverage and
amount no less favorable than those of such policy in effect on
the date hereof;
provided
,
however
, that Parent
may substitute therefor policies of Parent containing terms with
respect to coverage and amount no less favorable to such
Indemnified Parties;
provided
,
further
,
however
, that in satisfying its obligation under this
Section 6.4(b), Parent shall not be obligated to pay
aggregate premiums in excess of 250% of the amount paid by the
Company in its last full fiscal year (the
Maximum
Premium
), it being understood and agreed that Parent
shall nevertheless be obligated to provide such coverage as may
be obtained for the Maximum Premium. In lieu of the foregoing,
Parent or the Company shall be entitled to purchase an extended
reporting period endorsement with respect to the Companys
current directors and officers liability insurance
(a
Reporting Tail Endorsement
) providing the
same coverage and amounts and containing substantially the same
terms and conditions as the current policies of directors
and officers liability insurance maintained by the
Company, covering the period of six years after the Effective
Time, and maintain such endorsement in full force and effect for
its full term. If the Companys existing insurance expires,
is terminated or canceled during such six-year period or exceeds
the Maximum Premium, the Surviving Entity shall obtain, and
Parent shall cause the Surviving Entity to obtain, as much
directors and officers liability insurance as can be
obtained for the remainder of such period for an annualized
premium not in excess of the Maximum Premium, on terms and
conditions no less advantageous to the Indemnified Parties than
the Companys existing directors and officers
liability insurance.
(c) The covenants contained in this Section 6.5 are
intended to be for the benefit of, and shall be enforceable by,
each of the Indemnified Parties and their respective heirs and
legal representatives, and shall not be deemed exclusive of any
other rights to which an Indemnified Party is entitled, whether
pursuant to Law, contract or otherwise. Parent shall pay all
expenses, including reasonable attorneys fees, that may be
incurred by Indemnified Parties and their respective heirs and
legal representatives in connection with their enforcement of
their rights provided in this Section 6.5.
6.6.
Fees and Expenses
. All fees
and expenses incurred in connection with this Agreement, the
Merger and the other transactions contemplated by this Agreement
shall be paid by the party incurring such fees or expenses,
whether or not the Merger is consummated, except that each of
the Company and Parent shall bear and pay one-half of the fees
and expenses (other than the fees and expenses of attorneys and
accountants) incurred in connection with the printing and filing
of the Proxy Statement with the SEC and any amendments or
supplements thereto and the premerger notification and report
forms under the HSR Act.
6.7.
Public Announcements
. Parent
and the Company shall consult with each other before issuing,
and give each other the opportunity to review and comment upon,
any press release or other public statements with respect to the
transactions contemplated by this Agreement, including the
Merger, and shall not issue any such press release or make any
such public statement prior to such consultation, except as may
be required by applicable Law, court process or by obligations
pursuant to any listing agreement with, or regulations of, any
national securities exchange
A-34
or national securities quotation system (including the
FSA/UKLAs Listing Rules and Disclosure and Transparency
Rules),
provided
,
however
, that the Company need
not consult with Parent in connection with any press release or
public statement to be issued or made solely with respect to any
Company Adverse Recommendation Change, any Acquisition
Transaction or any Company Takeover Proposal. The parties agree
that the initial press releases to be issued with respect to the
transactions contemplated by this Agreement shall be in the
forms heretofore agreed to by the parties.
6.8.
Stockholder Litigation
. The
Company shall promptly advise Parent orally and in writing of
any stockholder litigation against the Company
and/or
its
directors relating to this Agreement, the Merger
and/or
the
transactions contemplated by this Agreement and shall keep
Parent fully informed regarding any such stockholder litigation.
The Company shall give Parent the opportunity to consult with
the Company regarding the defense or settlement of any such
stockholder litigation, shall give due consideration to
Parents advice with respect to such stockholder litigation
and shall not settle any such litigation prior to such
consultation and consideration.
6.9.
Employee Matters
.
(a) Prior to the Effective Time, the Company shall, if
requested to do so by Parent with not less than five Business
Days written notice, terminate its defined contribution
401(k) plans. Parent shall provide, or cause the Surviving
Entity to provide, that the Employees are eligible to
participate in a defined contribution 401(k) plan immediately
following the Effective Time and that such defined contribution
plan shall accept eligible rollover distributions
for Employees from a terminated Company defined contribution
401(k) plan.
(b) As soon as reasonably practicable after the Effective
Time, Parent shall provide the employees of the Company and its
Subsidiaries who remain employed after the Effective Time
(
Continuing Employees
) with substantially
similar types and levels of benefits as those provided to
similarly situated employees of Parent. With regard to any
Company Plans for which service with Parent or any affiliate of
Parent is relevant for purposes of eligibility to participate
and vesting, including applicability of minimum waiting periods
for participation, but not for benefit accrual or accrual rates,
Parent shall treat and cause its corresponding benefit and
equity compensation plans to treat the service of the Continuing
Employees with the Company or any Subsidiary of the Company
prior to the Effective Time as service rendered to Parent or any
affiliate of Parent for purposes of eligibility to participate
and vesting, including applicability of minimum waiting periods
for participation, but not for benefit accrual or accrual rates.
Following the date of this Agreement, the Company shall deliver
to Parent a true and correct schedule setting forth such service
for each employee of the Company. Parent shall ensure that
(i) no Continuing Employee, nor any eligible dependents of
a Continuing Employee who, at the Effective Time, are
participating in the Company group health plans, shall be
excluded from Parents group health plans, or limited in
coverage thereunder, by reason of any waiting period restriction
or pre-existing condition limitation and (ii) Continuing
Employees are given credit for amounts paid under a Company Plan
during the plan year that includes the Effective Time for
purposes of applying deductibles, co-payments, and
out-of-pocket
maximums, as though such amounts had been paid in accordance
with the terms and conditions of a similar benefit plan
maintained by Parent for the plan year in which the Effective
Time occurs;
provided
,
however
, that
notwithstanding the foregoing, Parent shall not be required to
provide any coverage, benefits, or credit under clause (i)
or (ii) above that is not permitted under the terms of
Parents corresponding benefit plans.
(c) Parent or the Surviving Entity shall assume and honor
in accordance with their terms all written employment,
severance, retention and termination agreements (including any
change in control provisions therein) applicable to Continuing
Employees.
(d) Notwithstanding the foregoing, nothing contained herein
shall (1) be treated as an amendment of any particular
Company Plan, (2) give any third party any right to enforce
the provisions of this Section 6.9 or (3) obligate
Parent, the Surviving Entity or any of their Affiliates to
(i) maintain any particular Company Plan or
(ii) retain the employment of any particular employee.
6.10.
Company Stock Options
. At the
Effective Time, each Lower Priced Option outstanding immediately
prior to the Effective Time (whether or not then vested or
exercisable), together with each of the Company Stock
A-35
Plans under which such Lower Priced Options are outstanding,
shall be assumed by Parent subject to and in accordance with the
following provisions:
(a) Each such Lower Priced Option so assumed by Parent
under this Agreement (an
Assumed Option
)
shall continue to have, and be subject to, the same terms and
conditions (including the terms and conditions set forth in the
Company Stock Plan under which it was granted and the applicable
stock option agreement) as are in effect immediately prior to
the Effective Time, except that (i) such Assumed Option
shall be exercisable for that number of whole Parent Ordinary
Shares equal to the product of the number of shares of Company
Common Stock that were issuable upon exercise of such Company
Stock Option immediately prior to the Effective Time multiplied
by the Exchange Ratio and rounded down to the nearest whole
number of Parent Ordinary Shares, and (ii) the per share
exercise price for the Parent Ordinary Shares issuable upon
exercise of such Assumed Option will be equal to the quotient
determined by dividing the exercise price per share of Company
Common Stock at which such Assumed Option was exercisable
immediately prior to the Effective Time by the Exchange Ratio,
rounded up to the nearest whole cent (or, if greater, the
nominal value of Parent Ordinary Shares). It is the intention of
the parties that the Company Stock Options assumed by Parent
hereunder qualify, to the maximum extent permissible, following
the Effective Time as incentive stock options as
defined in Section 422 of the Code to the extent those
Assumed Options qualified as incentive stock options prior to
the Effective Time.
(b) None of the Higher Priced Options outstanding
immediately prior to the Effective Time shall be assumed by
Parent. Accordingly, the Company shall take all requisite or
appropriate action, including appropriate action by the Board of
Directors or Compensation Committee of the Board, to assure that
each such Higher Priced Option, whether or not then vested or
exercisable, shall terminate or expire at the Effective Time
without any required consent or approval of the holder of the
terminated or expired Company Stock Option and without any cash
or other consideration payable to the holder of the Company
Stock Option in connection with the termination or expiration of
that Company Stock Option (subject to any right of the holder of
such Company Stock Option to exercise such Company Stock Option
prior to the Effective Time), and the holder shall as of the
Effective Time cease to have any further right to acquire any
shares of Company Common Stock (and shall not obtain any right
to acquire any Parent Ordinary Shares) under such terminated or
expired Company Stock Option.
(c) For purposes of this Agreement,
(i)
Exchange Ratio
shall be equal to the
quotient obtained by dividing the Per Share Merger Consideration
by the Parent Fair Market Value, and (ii)
Parent
Fair Market Value
means the average of the volume
weighted average selling price per share of Parent Ordinary
Shares as quoted on the London Stock Exchange on the five
consecutive trading days ending on the last trading day
preceding the Closing Date (as converted to U.S. Dollars at
the currency exchange rate as quoted in the New York
edition of
The Wall Street Journal
on the Effective Time).
(d) For so long as Parent Ordinary Shares are listed for
trading on the London Stock Exchange or any other listing
exchange, Parent shall cause all Parent Ordinary Shares issued
with respect to each Company Stock Option so assumed to be
admitted to the Official List of the United Kingdom Listing
Authority and to trading on the London Stock Exchange or such
other listing exchange prior to or upon issuance of any such
Parent Ordinary Shares.
(e) No consent or approval of the holders of the
Lower-Priced Options is required in connection with
Parents assumption of those options in accordance with
Sections 2.3(a) and 6.10. The Company Stock Plans and the
agreement or agreements evidencing each outstanding Company
Stock Option permit each of the actions contemplated by this
Section 6.10.
(f) In the case of Lower Price Options granted under
(i) the Interwoven Inc. 1999 Equity Incentive Plan, Inland
Revenue Approved Rules for UK Employees, and (ii) the UK
Subplan under the iManage, Inc. 1997 Stock Option Plan, Parent
shall offer the grant of new stock options in consideration of
the surrender of some or all of such Lower Priced Options on
terms agreed with Her Majestys Revenue & Customs
(an
Approved Rollover Offer
) (unless such
terms agreed with Her Majestys Revenue & Customs
require the use of an exchange ratio materially more generous
than the Exchange Ratio provided in Section 6.10(c)
hereof),
provided
, that if and to the extent that either
no Approved Rollover Offer is made, or an Approved Rollover
A-36
Offer is made but is not accepted by all or any of the holders
of the relevant Lower Priced Options, the provisions of
sub-paragraphs
(a) (e) above shall apply to such Lower Priced
Options.
6.11.
Company RSUs
. At the
Effective Time, each Company RSU outstanding immediately prior
to the Effective Time, whether or not vested, shall be assumed
by Parent in accordance with the following provisions:
(a) Each such Company RSU so assumed by Parent under this
Agreement (an
Assumed RSU
) shall continue to
have, and be subject to, the same terms and conditions
(including the terms and conditions set forth in the Company
Stock Plan under which it was granted and the applicable
restricted stock unit agreement) as are in effect immediately
prior to the Effective Time, except that each Assumed RSU that
vests shall be settled for that number of whole Parent Ordinary
Shares equal to the product of the number of shares of Company
Common Stock that were issuable upon settlement of such Company
RSU immediately prior to the Effective Time multiplied by the
Exchange Ratio and rounded down to the nearest whole number of
Parent Ordinary Shares.
(b) For so long as Parent Ordinary Shares are listed for
trading on the London Stock Exchange or any other listing
exchange, Parent shall cause all Parent Ordinary Shares issued
with respect to each Company RSU so assumed to be admitted to
the Official List of the United Kingdom Listing Authority and to
trading on the London Stock Exchange or such other listing
exchange prior to or upon issuance of any such Parent Ordinary
Shares.
(c) No consent or approval of the holders of the Company
RSUs is required in connection with Parents assumption of
the Assumed RSUs in accordance with this Section 6.11. The
Company Stock Plans and the agreement or agreements evidencing
each outstanding Company RSU permit each of the actions
contemplated by this Section 6.11.
6.12.
Cooperation
. Each of the
Company and its Subsidiaries will, and will cause each of its
Representatives to, use its reasonable efforts, subject to
applicable Laws, to cooperate with and assist Parent and Merger
Sub in connection with planning the integration of the Company
and its Subsidiaries and their respective employees with the
business operations of Parent and its Subsidiaries.
6.13.
Operations of Merger
Sub
. Prior to the Closing, Merger Sub shall not,
and Parent shall not permit Merger Sub to, engage in any other
business activities other than in connection with the
transactions contemplated hereby and the obtaining of financing
for the consideration payable pursuant to Section 2.1(a).
6.14.
Financing Agreements
.
(a) Without the prior written consent of the Company, which
shall not be unreasonably withheld or delayed in situations
where the matter for which consent is sought would not
reasonably be expected to preclude or materially impede the
consummation of the transactions contemplated by this Agreement,
Parent shall not terminate the Placing Agreement or amend or
modify any term of the Placing Agreement or agree to or permit
any termination of the Placing Agreement or any amendment or
modification to any term of the Placing Agreement, waive any
provision or remedy under the Placing Agreement, or fail to
enforce any of its rights or remedies under the Placing
Agreement. Without the prior written consent of the Company,
which shall not be unreasonably withheld or delayed in
situations where the matter for which consent is sought would
not reasonably be expected to preclude or materially impede the
consummation of the transactions contemplated by this Agreement,
Parent shall not terminate the Loan Agreement or amend or modify
any term of the Loan Agreement or agree to or permit any
termination of the Loan Agreement or any amendment or
modification to any term of the Loan Agreement, waive any
provision or remedy under the Loan Agreement, or fail to enforce
any of its rights or remedies under the Loan Agreement if any
such action or failure to take action would preclude or
materially impede the consummation of the transactions
contemplated by this Agreement. Parent shall keep the Company
informed in all material respects on a timely basis of any
material modification or material amendment to either of the
Financing Agreements. Parent shall notify the Company promptly
(and in any event within two Business Days) of Parent having
Knowledge of (i) any inaccuracy in any representation or
warranty in the Financing Agreements of Parent or any other
party to the Financing Agreements, (ii) any breach of any
covenant or agreement in either of the Financing Agreements by
Parent or any other party to either of the Financing Agreements,
(iii) the expiration, termination, modification or
amendment of the Financing Agreements, (iv) the existence
of any fact, event or circumstance that, individually or
A-37
in the aggregate with all other facts, events or circumstances,
has had or would reasonably be expected to have an adverse
effect on Parents ability to obtain the financing
contemplated by the Financing Agreements, and (v) any
proposal by any party to a Financing Agreement to terminate,
modify or amend such Financing Agreement in any material
respect. Parent shall use its reasonable best efforts to
(i) satisfy all conditions set forth in the Financing
Agreements, (ii) consummate the financings contemplated by
the Financing Agreements, including by complying with all
reasonable requests or requirements of the other parties to the
Financing Agreements, (iii) perform all of its obligations
under the Financing Agreements, (iv) take any and all other
actions necessary or appropriate to consummate the transactions
contemplated by the Financing Agreements, and (v) not
commit any breach of or otherwise cause or permit any default
under the Financing Agreements.
(b) If any portion of the financing contemplated by the
Financing Agreements becomes unavailable on the terms and
conditions contemplated in the Financing Agreements as in effect
on the date hereof, or if any of the Financing Agreements shall
be terminated or modified in a manner materially adverse to
Parent for any reason, Parent shall use its commercially
reasonable efforts to arrange to obtain alternative financing
from alternative sources in an amount sufficient to consummate
the Merger (
Alternate Financing
). Parent
shall use its commercially reasonable efforts to take, or cause
to be taken, all things necessary, proper or advisable to
arrange promptly and consummate the Alternate Financing,
including (i) using commercially reasonable efforts to
(x) enter into definitive agreements with respect thereto;
and (z) consummate the Alternate Financing at or prior to
the Closing and (ii) seeking to enforce its rights under
such agreements. In the event Alternate Financing is obtained
and Parent enters into definitive agreements with respect
thereto, references in this Agreement to the Financing
Agreements shall be deemed to include such definitive
agreements, as applicable.
(c) Parent and Merger Sub agree and acknowledge that,
notwithstanding anything in this Agreement or the Financing
Agreements to the contrary, (a) the respective obligations
of Parent and Merger Sub to effect the Merger will not be
subject to the consummation of any of the transactions
contemplated by either of the Financing Agreements or to Parent
obtaining any of the financing contemplated thereby,
(b) neither Parent nor Merger Sub shall have any right to
terminate this Agreement on account of the termination of either
of the Financing Agreements or the failure of Parent to obtain
any of the financing contemplated thereby or any other financing
necessary to enable Parent to pay the consideration payable
pursuant to Section 2.1(a), and (c) for the avoidance
of doubt, the respective obligations of Parent and Merger Sub to
effect the Merger shall not be affected or excused by the
performance by Parent of its obligations under
Section 6.14(a) and (b), or by any failure of Parent to
obtain the financing contemplated by either of the Financing
Agreements or by the Alternate Financing.
ARTICLE VII
Conditions
Precedent
7.1.
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)
Company Stockholder Approval
. The
Company Stockholder Approval shall have been obtained.
(b)
Parent Shareholder Approval
. The
Parent Shareholder Approval shall have been obtained.
(c)
Antitrust
. Any waiting period (and
any extension thereof) applicable to the Merger under the HSR
Act shall have terminated or shall have expired.
(d)
No Injunctions or Restraints
. No
temporary restraining order, preliminary or permanent injunction
or other judgment, order or decree issued by any court of
competent jurisdiction or other statute, law, rule, legal
restraint or prohibition (collectively,
Restraints
) shall be in effect preventing the
consummation of the Merger, where the violation of such
Restraint that would occur if the Merger were consummated would
reasonably be expected to have a Material Adverse Effect on the
Company or on Parent.
A-38
7.2.
Conditions to Obligations of Parent and
Merger Sub
. The obligations of Parent and Merger
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
. (i) The representations and
warranties of the Company set forth in Section 3.4(a) shall
be true and correct in all respects; (ii) the
representations and warranties of the Company set forth herein
that are qualified by Material Adverse Effect shall be true and
correct in all respects; and (iii) all other
representations and warranties of the Company set forth herein
(other than the representations and warranties of the Company
set forth in Section 3.3) shall be true and correct, in the
case of clauses (i), (ii) and (iii), as of the date of this
Agreement and as of the Closing Date as though made on the
Closing Date (except to the extent that any such representation
and warranty expressly speaks as of an earlier date, in which
case such representation and warranty shall be true and correct
as of such earlier date), except (in the case of clause (iii))
where the failure of the representations and warranties to be
true and correct individually or in the aggregate has not had
and would not reasonably be expected to have a Material Adverse
Effect. The representations and warranties of the Company set
forth in clauses (a), (b) and (d) of Section 3.3
shall be true and correct in all material respects in the
aggregate as of the date of this Agreement and as of the Closing
Date as though made on the Closing Date (except to the extent
that any such representation and warranty expressly speaks as of
an earlier date, in which case such representation and warranty
shall be true and correct as of such earlier date). 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 the effect of the foregoing two sentences.
(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.
(c)
No Material Adverse Effect
. There
shall not have been any fact, event or circumstance occurring
after the date of this Agreement that, individually or in the
aggregate, has caused or would reasonably be expected to have, a
Material Adverse Effect on the Company.
(d)
Maintenance of Cash Position
. If the
Closing occurs before April 22, 2009, Parent shall have
received (i) evidence, in form and substance reasonably
satisfactory to it that the Company and its Subsidiaries
collectively hold at least the amount set forth below in cash,
marketable securities and other Eligible Investments
(
Closing Cash
), and (ii) a certificate
signed on behalf of the Company by the Chief Financial Officer
of the Company as to the matters referenced in (i). For purposes
of the preceding sentence, the following shall apply:
(x) if the Closing occurs before March 20, 2009, the
amount of Closing Cash shall equal at least $174,198,525;
(y) if the Closing occurs on or after March 20, 2009
and before April 1, 2009, the amount of Closing Cash shall
equal at least $179,198,525; and (z) if the Closing occurs
on or after April 1, 2009 and before April 22, 2009,
Closing Cash shall equal at least $185,198,525.
(e)
Other Deliveries
. The Company shall
have delivered or caused to be delivered to Parent:
(i) a true and correct copy of the Certificate of Merger,
duly executed by the Company; and
(ii) a certificate of the Secretary of the Company
certifying as of the Closing Date (A) a true and correct
copy of the organizational documents of the Company, including
the Companys Certificate of Incorporation certified as of
a recent date by the Office of the Secretary of State of the
State of Delaware (the
Delaware Secretary of
State
), (B) a certificate of the Delaware
Secretary of State certifying the good standing of the Company
in Delaware as of a recent date, (C) a true and correct
copy of the resolutions constituting the Company Board Approval
and the Company Stockholder Approval and (D) as to
incumbency matters.
7.3.
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 Merger Sub set
forth in this Agreement shall be true and correct (without
giving effect to any limitation as to materiality
set
A-39
forth therein) both when made and as of the Closing Date, as
though made on and as of such date and time (except to the
extent that any such representation and warranty expressly
speaks as of an earlier date, in which case such representation
and warranty shall be true and correct as of such earlier date),
except where the failure of the representations and warranties
to be true and correct individually or in the aggregate
(i) would not reasonably be expected to impair in any
material respect the ability of Parent or Merger Sub to perform
its obligations under this Agreement and (ii) would not
reasonably be expected to prevent or materially delay the
consummation of any of the transactions contemplated by this
Agreement.
(b)
Performance of Obligations of Parent and Merger
Sub
. Parent and Merger 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 executive officer of Parent to
such effect.
7.4.
Frustration of Closing
Conditions
. None of the Company, Parent or Merger
Sub may rely on the failure of any condition set forth in
Section 7.1, 7.2 or 7.3, as the case may be, to be
satisfied if such failure was caused by such partys
failure to use its reasonable best efforts to consummate the
Merger and the other transactions contemplated by this
Agreement, as required by and subject to Section 6.3.
ARTICLE VIII
Termination,
Amendment and Waiver
8.1.
Termination
. This Agreement
may be terminated at any time prior to the Effective Time,
whether before or after receipt of the Company Stockholder
Approval or the Parent Shareholder Approval:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the Merger shall not have been consummated on or
before June 22, 2009 (the
Termination
Date
);
provided
,
however
, that if on
June 22, 2009 the condition to Closing set forth in
Section 7.1(c) or 7.1(d) shall not have been satisfied
but all other conditions to Closing shall have been satisfied
(or in the case of conditions that by their terms are to be
satisfied at the Closing, shall be capable of being satisfied on
June 22, 2009), then the Termination Date shall be extended
to September 22, 2009 if Parent notifies the Company, or
the Company notifies Parent, in writing on or prior to
June 22, 2009 of its election to extend the Termination
Date to September 22, 2009;
provided
,
further
, that the right to terminate this Agreement under
this Section 8.1(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 be consummated on or
before such date;
(ii) if any Restraint that would cause the condition set
forth in Section 7.1(d) not to be satisfied shall be in
effect and shall have become final and nonappealable;
provided
,
however
, that the right to terminate
this Agreement under this Section 8.1(b)(ii) shall not be
available to a party if the imposition of such Restraint was
attributable to the failure of such party or any Affiliate of
such party to perform any of its obligations under this
Agreement.
(iii) if this Agreement has been submitted to the
stockholders of the Company for adoption at the Company
Stockholder Meeting (including any adjournment or postponement
thereof) and the Company Stockholder Approval shall not have
been obtained at such meeting (including any adjournment or
postponement thereof);
provided
,
however
, that the
right to terminate this Agreement under this
Section 8.1(b)(iii) shall not be available to any Party if
the failure to obtain the Company Stockholder Approval is caused
by the failure of such Party or any Affiliate of such Party to
perform any of its obligations under this Agreement; or
(iv) if the Merger has been submitted to the shareholders
of Parent for approval at the Parent General Meeting (including
any adjournment or postponement thereof) and the Parent
Shareholder Approval shall not have been obtained at such
meeting (including any adjournment or postponement thereof);
provided
,
A-40
however
, that the right to terminate this Agreement under
this Section 8.1(b)(iv) shall not be available to any Party
if the failure to obtain the Parent Shareholder Approval is
caused by the failure of such Party or any Affiliate of such
Party to perform any of its obligations under this Agreement.
(c) by Parent, if the Company shall have breached or failed
to perform any of its representations, warranties, covenants or
agreements set forth in this Agreement, which breach or failure
to perform (A) would give rise to the failure of a
condition set forth in Section 7.2(a) or (b) and
(B) is incapable of being cured, or is not cured, by the
Company within 20 calendar days following receipt of written
notice from Parent of such breach or failure to perform (a
Company Material Breach
) (
provided
,
that there is not then pending any Parent Material Breach);
(d) by the Company, if Parent shall have breached or failed
to perform any of its representations, warranties, covenants or
agreements set forth in this Agreement, which breach or failure
to perform (i) would give rise to the failure of a
condition set forth in Section 7.3(a) or (b) and
(ii) is incapable of being cured, or is not cured, by
Parent within 20 calendar days following receipt of written
notice from the Company of such breach or failure to perform (a
Parent Material Breach
) (
provided
,
that there is not then pending any Company Material Breach);
(e) by Parent, if (i) a Company Adverse Recommendation
Change shall have occurred, (ii) the Company Board or any
committee thereof shall have failed to publicly confirm its
recommendation and declaration of advisability of this Agreement
and the Merger within five Business Days after a written request
by Parent that it do so, (iii) the Company Board adopts a
resolution approving, endorsing or recommending an Acquisition
Transaction, (iv) the Company enters into a definitive
agreement providing for the consummation of a transaction that
constitutes an Acquisition Transaction (an
Alternative
Acquisition Agreement
), (v) a tender offer or
exchange offer for any outstanding shares of capital stock of
the Company that constitutes an Acquisition Transaction (other
than by Parent) is commenced prior to obtaining the Company
Shareholder Approval and the Company Board fails to recommend
against acceptance of such tender offer or exchange offer by its
shareholders within ten Business Days after commencement of such
tender offer or exchange offer (
provided
that any right
to terminate pursuant to this clause (v) must be exercised,
if at all, by Parent within 10 days of the expiration of
such ten Business Day period), or (vi) the Company Board
publicly announces its intention to do any of the foregoing;
(f) by the Company, at any time prior to the time the
Company Stockholder Approval is obtained, if (i) the
Company Superior Proposal did not result, directly or
indirectly, from a willful breach of Section 5.2(a),
(ii) the Company Board authorizes the Company, subject to
complying with the terms of Section 5.2, to enter into an
Alternative Acquisition Agreement with respect to a Company
Superior Proposal and the Company notifies Parent in writing
that it intends to enter into such an Alternative Acquisition
Agreement, attaching the most current version of such agreement
(including all exhibits and other attachments thereto) to such
notice, (iii) Parent does not make, within 72 hours of
receipt of the Companys written notification of its
intention to enter into a binding agreement for a Company
Superior Proposal, (which period may be concurrent with the
72-hour
period set forth in Section 5.2(b)), a binding,
unconditional offer (including the complete form of definitive
acquisition agreement executed on behalf of Parent and all
exhibits and other attachments thereto, subject only to
acceptance by the Company by countersignature on behalf of the
Company, that the Company Board determines in good faith after
consultation with its financial advisors, is (A) at least
as favorable, from a financial point of view, to the
stockholders of the Company as the Company Superior Proposal and
(B) reasonably likely to be completed, and (iv) the
Company concurrently with such termination pays to Parent in
immediately available funds any fees required to be paid
pursuant to Section 8.2. The Company agrees that it will
not enter into an Alternative Acquisition Agreement referred to
in clause (i) above until after it has provided the
72-hour
notice to Parent required above, and during such
72-hour
period, to negotiate in good faith with Parent with respect to
any revisions to the terms of the transaction contemplated by
this Agreement proposed by Parent in response to a Company
Superior Proposal, if any;
(g) by Parent, if any director or officer of the Company
shall have willfully and materially breached Section 5.2(a);
A-41
(h) by the Company if (i) there shall have occurred
(A) the failure of the Board of Directors of Parent to
recommend that Parents shareholders vote to approve this
Agreement and the Merger, or any Change of Parent Recommendation
by Parent; or (B) the failure of Parent to include in the
UK Class 1 Circular the Parent Board Recommendation,
(ii) the Parent Board or any committee thereof shall have
failed to publicly confirm its recommendation that Parents
shareholders vote to approve the Merger within five Business
Days after a written request by the Company that it do so, or
(iii) the Parent Board publicly announces its intention to
do any of the foregoing.
(i) by the Company if Parent or Merger Sub fails to obtain
proceeds pursuant to the Financing Agreements (or any
alternative financing permitted by Section 6.14) sufficient
to consummate the transactions contemplated by this Agreement,
or fails to close the transactions contemplated herein (whether
or not as a result of a breach of Section 6.14), by the
earlier of (a) the date 15 Business Days after satisfaction
or waiver of the conditions set forth in Article VII
(excluding conditions that, by their terms, cannot be satisfied
until the Closing, but which would be reasonably capable of
being satisfied at Closing) and (b) the day preceding the
Termination Date.
8.2.
Termination Fee
.
(a) In the event that:
(i) this Agreement is terminated by either Parent or the
Company pursuant to Section 8.1(b)(iii) and (A) after
the date of this Agreement a
bona fide
Company Takeover
Proposal shall have been made or communicated to the Company or
shall have been made directly to the stockholders of the Company
generally, or any person shall have announced an intention to
make or communicate a Company Takeover Proposal, in each case
which, on the date of the Company Stockholder Meeting, has not
been withdrawn, and (B) within twelve months after such
termination the Company shall have entered into an Alternative
Acquisition Agreement which is subsequently consummated, or
shall have consummated, within such twelve-month period, an
Acquisition Transaction (
provided
, that for purposes of
Section 8.2(a)(i), all references to 15% in the
definition of Acquisition Transaction and Company Takeover
Proposal shall be deemed to refer to 50%); or
(ii) this Agreement is terminated by Parent pursuant to
Section 8.1(e) or Section 8.1(g); or
(iii) this Agreement is terminated by the Company pursuant
to Section 8.1(f),
then the Company shall (1) in the case of a Termination Fee
payable pursuant to clause (i) of this Section 8.2(a),
upon the date of such consummation of the Acquisition
Transaction, (2) in the case of a Termination Fee payable
pursuant to clause (ii) of this Section 8.2(a), within
two Business Days after the date of such termination, and
(3) in the case of a Termination Fee payable pursuant to
clause (iii) of this Section 8.2(a), concurrently with
such termination, pay Parent a fee equal to $25,000,000 (the
Termination Fee
) by wire transfer of
same-day
funds,
provided
, that the amount of the Termination Fee
payable pursuant to Section 8.2(a) shall be reduced by any
amount that the Company has paid, or is required to pay,
pursuant to Section 8.2(b).
(b) In the event this Agreement is terminated by the
Company or Parent pursuant to Section 8.1(b)(iii), then the
Company shall pay Parent a fee equal to $7,000,000 by wire
transfer of
same-day
funds. Such fee shall be payable within two Business Days after
the date of termination by Parent, or shall be payable
concurrently with such termination in the case of a termination
by the Company.
(c) In the event that the Company terminates this Agreement
pursuant to Section 8.1(h) or Section 8.1(i), or in
the event that either the Company or Parent terminates this
Agreement pursuant to Section 8.1(b)(iv), then Parent shall
pay to the Company a fee equal to $25,000,000 (the
Parent Termination Fee
) by wire transfer of
same-day
funds. Such fee shall be payable within two Business Days after
the date of termination by the Company, or shall be payable
concurrently with such termination in the case of a termination
by Parent.
(d) Notwithstanding anything in this Agreement to the
contrary, in the event that the Parent Termination Fee
(inclusive of the amounts in paragraph (f) below) exceeds
the maximum amount that may be paid without violating the Laws
of England and Wales, the rules of the FSA/UKLA or the London
Stock Exchange plc, then the amount of the Parent Termination
Fee shall be reduced to be equal to the maximum amount that may
be paid without violating
A-42
the Laws of England and Wales, the rules of the FSA/UKLA or the
London Stock Exchange plc (in each case, such maximum being that
which may be paid without shareholder approval).
(e) The Company acknowledges and agrees that the agreements
contained in Section 8.2 are an integral part of the
transactions contemplated by this Agreement, and that, without
these agreements, Parent would not enter into this Agreement. If
the Company fails promptly to pay the amount due pursuant to
Section 8.2(a) or (b), and, in order to obtain such
payment, Parent commences a suit that results in a judgment
against the Company for such fee, the Company shall pay to
Parent its reasonable costs and expenses (including reasonable
attorneys fees and expenses) incurred in connection with
such suit, together with interest on the amount of the fee from
the date such payment was required to be made until the date of
payment at the prime rate of Citibank, N.A. in effect on the
date such payment was required to be made.
(f) Parent acknowledges and agrees that the agreements
contained in Section 8.2 are an integral part of the
transactions contemplated by this Agreement, and that, without
these agreements, the Company would not enter into this
Agreement. If Parent fails promptly to pay the amount due
pursuant to Section 8.2(c), and, in order to obtain such
payment, the Company commences a suit that results in a judgment
against Parent for the Parent Termination Fee, Parent shall pay
to the Company its reasonable costs and expenses (including
reasonable attorneys fees and expenses) incurred in
connection with such suit, together with interest on the amount
of the Parent Termination Fee and expenses from the date such
payment was required to be made until the date of payment at the
prime rate of Citibank, N.A. in effect on the date such payment
was required to be made.
(g) Each of the parties hereto further acknowledges that
neither the payment of the Termination Fee or the fee described
in Section 8.2(b) by the Company nor the payment of the
Parent Termination Fee by Parent is a penalty, but in each case
is liquidated damages in a reasonable amount that will
compensate Parent or the Company, as the case may be, in the
circumstances in which such fees are payable and which do not
involve fraud for the efforts and resources expended and the
opportunities foregone while negotiating this Agreement and
reliance on this Agreement and on the expectation of the
consummation of the transactions contemplated hereby, which
amount would otherwise be impossible to calculate with precision.
8.3.
Effect of Termination
.
(a) In the event of termination of this Agreement by either
the Company or Parent as provided in Section 8.1, this
Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Parent,
Merger Sub or the Company, other than the provisions of the last
sentence of Section 6.3(a), Sections 6.6 and 8.2, this
Section 8.3 and Article IX, which provisions shall
survive such termination;
provided
that, subject to
Section 8.3(b), nothing herein shall relieve any party from
any liability for any willful breach hereof.
(b) In the event (i) the Company pays the Termination
Fee to Parent pursuant to Section 8.2(a) (and/or, if
applicable, the fee payable to Parent pursuant to
Section 8.2(b)), the Company (and its stockholders,
controlling persons, managers, employees, representatives,
members, directors, officers, Affiliates, assignees and agents)
shall have no further liability with respect to this Agreement
or the transactions contemplated by this Agreement to Parent or
its Affiliates (
provided
, that nothing in this Agreement
shall relieve such party from liability arising out of fraud);
it being understood that in no event shall the Company be
required to pay the Termination Fee on more than one occasion;
and (ii) Parent pays the Parent Termination Fee to the
Company pursuant to Section 8.2(c), Parent (and its
stockholders, controlling persons, managers, employees,
representatives, members, directors, officers, Affiliates,
assignees and agents) shall have no further liability with
respect to this Agreement or the transactions contemplated by
this Agreement to the Company or its Affiliates
(
provided
, that nothing in this Agreement shall relieve
such party from liability arising out of fraud); it being
understood that in no event shall Parent be required to pay the
Parent Termination Fee on more than one occasion.
8.4.
Amendment
. This Agreement may
be amended by the parties hereto at any time before or after
receipt of the Company Stockholder Approval or the Parent
Shareholder Approval;
provided
,
however
, that
after the Company Stockholder Approval has been obtained, there
shall be made no amendment that by Law requires further approval
by the stockholders of the Company without such approval having
been obtained;
provided
,
further
, that after the
Parent Shareholder Approval is obtained, there shall be made no
amendment that by Law requires further
A-43
approval by the shareholders of Parent without such approval
having been obtained. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the
parties hereto.
8.5.
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) subject to the
provisos to the first sentence of Section 8.4, waive
compliance with any of the agreements or conditions contained
herein. 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. The
failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a
waiver of such rights.
8.6.
Procedure for Termination or
Amendment
. A termination of this Agreement
pursuant to Section 8.1 or an amendment of this Agreement
pursuant to Section 8.4 shall, in order to be effective,
require, in the case of the Company, action by the Company
Board, or, with respect to any amendment of this Agreement
pursuant to Section 8.4, the Company Board or the duly
authorized committee or other designee of the Company Board to
the extent permitted by Law.
ARTICLE IX
General
Provisions
9.1.
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 9.1 shall not limit any covenant or agreement
of the parties that by its terms contemplates performance after
the Effective Time.
9.2.
Notices
. Except for notices
that are specifically required by the terms of this Agreement to
be delivered orally, all notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be
deemed given if delivered personally, facsimiled (that is
confirmed) or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
if to Parent or Merger Sub, to:
Autonomy Corporation plc
Cambridge Business Park
Cowley Rd
Cambridge, CB4 0WS
United Kingdom
Facsimile: +44 (0) 1223 448041
Attention: Chief Executive Officer
with a copy (which shall not constitute notice) to:
Morgan, Lewis & Bockius LLP
One Market Street, Spear Tower
San Francisco, California 94105
Facsimile:
(415) 442-1001
Attention: William A. Myers, Esq.
if to the Company, to:
Interwoven, Inc.
160 East Tasman Drive
San Jose, CA 95134, USA
Facsimile:
(408) 433-9424
Attention: Senior Vice President of Finance and Chief Financial
Officer
A-44
with a copy (which shall not constitute notice) to:
Fenwick & West LLP
555 California St.
San Francisco, CA 94104
Facsimile:
(650) 938-5200
and
(415) 281-1350
Attention: Matthew Quilter, Esq. and David
Michaels, Esq.
9.3.
Definitions
. For purposes of
this Agreement:
(a) an
Affiliate
of any person means
another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with, such first person;
(b)
Business Day
means any day other
than Saturday, Sunday or any other day on which banks are
legally permitted to be closed in San Francisco, United
States or London, United Kingdom.
(c)
Company Stock Plans
means
the stock plans of the Company described in
Section 3.3(b)(i) (xii) of this Agreement.
(d)
Eligible Investments
means any or
all of the following: (A) direct obligations of, or
obligations the timely payment of principal and interest on
which are unconditionally guaranteed by, the United States of
America; (B) money market funds rated in the highest
applicable category by Standard & Poors Ratings
Group and Moodys Investors Service; and (C) demand
deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the
laws of the United States of America or any State, or any
domestic branch of a foreign bank and subject to supervision and
examination by federal or state banking or depository
institution authorities.
(e)
Knowledge
of any person that is not
an individual means, (i) with respect to the Company
regarding any matter in question, the actual knowledge of the
employees of the Company and its Subsidiaries listed in
Section 9.3(e) of the Company Disclosure Letter and
(ii) with respect to Parent regarding any matter in
question, the actual knowledge of the employees of Parent and
its Subsidiaries listed in Section 9.3(e) of the Parent
Disclosure Letter;
(f)
Made Available
means that the
subject documents were:
(i) located in the electronic on-line data room organized
by the Company in connection with the diligence investigation
conducted by Parent;
(ii) otherwise delivered by the Company or its
Representatives to Parent or its Representatives; or
(iii) publicly available on the SECs EDGAR database;
(g)
person
means an individual,
corporation (including
not-for-profit),
partnership, limited liability company, joint venture, estate,
association, trust, unincorporated organization, Governmental
Authority or other entity of any kind or nature;
(h)
Permitted Liens
means (i) any
liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, (ii) carriers,
warehousemens, mechanics, materialmens,
repairmens or other similar liens, (iii) pledges or
deposits in connection with workers compensation,
unemployment insurance and other social security legislation and
(iv) in the case of Real Property, easements,
rights-of-way,
restrictions or other similar encumbrances incurred in the
ordinary course of business that do not, individually or in the
aggregate, materially impair the continued use, operation, value
or marketability of the specific parcel of Owned Real Property
or Leased Real Property to which they relate or the conduct of
the business of the Company and its Subsidiaries as presently
conducted;
(i) a
Subsidiary
of any person means
another person, an amount of the voting securities, other voting
rights or voting partnership interests of which is sufficient to
elect at least a majority of its board of directors or other
governing body (or, if there are no such voting interests, 50%
or more of the equity interests of which) is owned directly or
indirectly by such first person.
A-45
(j)
UK Class 1 Circular
means the
document which comprises a circular prepared in compliance with
the Listing Rules of the UK Listing Authority
(
UKLA
) under chapters 10 and 13 of the
UKLAs Listing Rules.
9.4.
Interpretation
. When a
reference is made in this Agreement to an Article, a Section,
Exhibit or Schedule, such reference shall be to an Article of, a
Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise indicated. The table of contents and 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,
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. All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument
that is referred to therein means such agreement, instrument or
statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments
thereto and instruments incorporated therein. References to a
person are also to its permitted successors and assigns. The
parties have participated jointly in the negotiating and
drafting of this Agreement. In the event of an ambiguity or a
question of intent or interpretation arises, this Agreement
shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
9.5.
Counterparts
. This Agreement
may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
9.6.
Entire Agreement; No Third-Party
Beneficiaries
. This Agreement, including the
Company Disclosure Letter and the Parent Disclosure Letter, the
Exhibits hereto and the Confidentiality Agreement
(a) constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this
Agreement and the Confidentiality Agreement and (b) except
for the provisions of Section 6.5, are not intended to
confer upon any person other than the parties any rights,
benefits or remedies. Without limiting the generality of the
foregoing, (a) Parent and Merger Sub acknowledge that the
Company has not made and is not making any representations or
warranties whatsoever regarding the subject matter of this
Agreement, express or implied, except as provided in
Article III, and that they are not relying and have not
relied on any representations or warranties whatsoever regarding
the subject matter of this Agreement, express or implied, except
as provided in Article III; and (b) the Company
acknowledges that Parent and Merger Sub have not made and are
not making any representations or warranties whatsoever
regarding the subject matter of this Agreement, express or
implied, except as provided in Article IV, and that it is
not relying and has not relied on any representations or
warranties whatsoever regarding the subject matter of this
Agreement, express or implied, except as provided in
Article IV.
9.7.
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.
9.8.
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 and any attempt to make any
such assignment without such consent shall be null and void,
except that (a) Merger Sub, Parent and any assignee of
either party may assign
and/or
charge all or any of its rights under this Agreement by way of
security to any bank, financial institution or other person
lending money or making other banking facilities available to
Parent
and/or
any
of its Subsidiaries in connection with the transactions
contemplated by this Agreement, and without limitation any such
person may assign such rights on the enforcement of security
under such financing arrangements, and (b) Merger Sub may
assign, in its sole discretion any or all of its rights,
A-46
interests and obligations under this Agreement to any direct,
wholly owned Subsidiary of Parent, but no such assignment (in
the case of either (a) or (b) above) shall relieve
Merger Sub or Parent of any of its obligations hereunder.
Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
9.9.
Specific Enforcement; Consent to
Jurisdiction
. The parties agree that irreparable
damage would occur and that the parties would not have any
adequate remedy at law 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 shall be entitled to seek an injunction
or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement
in the Court of Chancery of the State of Delaware or any 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. In addition, each of the
parties hereto (a) consents to submit itself to the
personal jurisdiction of either the Court of Chancery of the
State of Delaware or any Federal court of the United States of
America sitting in the State of Delaware in the event any
dispute arises out of this Agreement or the transactions
contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and
(c) agrees that it will not bring any action relating to
this Agreement or the transactions contemplated by this
Agreement in any court other than the Court of Chancery of the
State of Delaware or any Federal court of the United States of
America sitting in the State of Delaware.
9.10.
WAIVER OF JURY TRIAL
. Each
Party 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 (i) 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 (ii) acknowledges that it and the other Parties have
been induced to enter into this Agreement, by, among other
things, the mutual waiver and certifications in this
Section 9.10.
9.11.
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 provisions 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 to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
9.12.
Obligations of Parent
. Parent
shall ensure that Merger Sub and the Surviving Entity duly
performs, satisfies and discharges on a timely basis each of the
covenants, obligations and liabilities of Merger Sub and the
Surviving Entity under this Agreement, including
Section 2.1(a) hereof, and Parent shall be jointly and
severally liable with Merger Sub and the Surviving Entity for
the performance of the covenants and obligations of Merger Sub
and the Surviving Entity under this Agreement, including
Section 2.1(a) hereof.
A-47
IN WITNESS WHEREOF, Parent, Merger 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.
AUTONOMY CORPORATION PLC
Name: Andrew M. Kanter
|
|
|
|
Title:
|
Chief Operating Officer
|
MILAN ACQUISITION CORP.
Name: Andrew M. Kanter
|
|
|
|
Title:
|
Chief Operating Officer
|
INTERWOVEN, INC.
Name: Joseph L. Cowan
|
|
|
|
Title:
|
Chief Executive Officer
|
A-48
ANNEX A
DEFINED
TERMS
|
|
|
1996 Stock Plan
|
|
3.3(b)(ii)
|
1997 Stock Plan
|
|
.3(b)(iii)
|
1999 Stock Plan
|
|
.3(b)(vi)
|
2000 Stock Plan
|
|
3.3(b)(vii)
|
2003 Stock Plan
|
|
3.3(b)(ix)
|
2006 Stock Plan
|
|
3.3(b)(x)
|
2008 Stock Plan
|
|
3.3(b)(xii)
|
A Stock Plan
|
|
3.3(b)(v)
|
Acquisition Transaction
|
|
5.2(a)
|
Action
|
|
3.9
|
Adverse Recommendation Notice
|
|
5.2(b)
|
Affiliate
|
|
9.3(a)
|
Agreement
|
|
Preamble
|
Alternate Financing
|
|
6.14(b)
|
Alternative Acquisition Agreement
|
|
8.1(e)
|
Approved Rollover Offer
|
|
6.10(f)
|
Assumed Option
|
|
6.10(a)
|
Assumed RSU
|
|
6.10(a)
|
Business Day
|
|
9.3(b)
|
Certificate
|
|
2.1(a)
|
Certificate of Merger
|
|
1.3
|
Change of Parent Recommendation
|
|
6.2(c)
|
Closing
|
|
1.2
|
Closing Cash
|
|
7.2(d)
|
Closing Date
|
|
1.2
|
COBRA
|
|
3.13(i)
|
Code
|
|
2.32.3(a)
|
Company
|
|
Preamble
|
Company Adverse Recommendation Change
|
|
5.2(b)
|
Company By-laws
|
|
3.1
|
Company Certificate
|
|
3.1
|
Company Common Stock
|
|
2.1(a)
|
Company Disclosure Letter
|
|
Article III
|
Company Equity Awards
|
|
3.3(b)
|
Company Insiders
|
|
6.1(c)
|
Company Intellectual Property
|
|
3.15(d)
|
Company Material Breach
|
|
8.1(c)
|
Company Plans
|
|
3.13(a)
|
Company Preferred Stock
|
|
3.3(a)
|
Company Registered Intellectual Property
|
|
3.15(b)
|
Company RSUs
|
|
3.3(b)
|
Company SEC Documents
|
|
3.6(a)
|
Company Stock Options
|
|
3.3(b)
|
A-49
|
|
|
Company Stock Plans
|
|
9.3(c)
|
Company Stockholder Approval
|
|
3.4(a)
|
Company Stockholders Meeting
|
|
6.1(b)
|
Company Superior Proposal
|
|
5.2(a)
|
Company Takeover Proposal
|
|
5.2(a)
|
Confidentiality Agreement
|
|
6.3(a)
|
Continuing Employees
|
|
6.9(b)
|
Contract
|
|
3.4(b)
|
Debt Obligations
|
|
3.10(a)(viii)
|
Delaware Secretary of State
|
|
7.2(e)(ii)
|
DGCL
|
|
1.1
|
Dissenting Shares
|
|
2.1(d)(i)
|
DM Stock Plan
|
|
3.3(b)(xi)
|
DOJ
|
|
6.4(b)
|
Domain Names
|
|
3.15(a)
|
Effective Time
|
|
1.3
|
Eligible Investments
|
|
9.3(d)
|
Employees
|
|
3.13(a)
|
Environmental Laws
|
|
3.17
|
Environmental Liabilities
|
|
3.17
|
ERISA
|
|
3.13(a)
|
ESPP
|
|
3.3(b)(xiii)
|
ESPP Purchase Date
|
|
2.3(d)
|
Exchange Act
|
|
3.3(f)
|
Exchange Fund
|
|
2.2(a)
|
Exchange Ratio
|
|
6.10(c)
|
Excluded Share
|
|
2.1(a)
|
Excluded Shares
|
|
2.1(a)
|
Financing Agreements
|
|
Recitals
|
Foreign Plans
|
|
3.13(i)(m)
|
FSA
|
|
6.2(a)(i)
|
FTC
|
|
6.4(b)
|
GAAP
|
|
3.6(a)
|
Governmental Authority
|
|
3.5
|
Hazardous Materials
|
|
3.17
|
Higher Priced Option
|
|
2.3(a)
|
HSR Act
|
|
3.5
|
iM 2000 Stock Plan
|
|
3.3(b)(iv)
|
Immigration Act
|
|
3.25
|
Indemnified Parties
|
|
6.5(a)
|
Intellectual Property
|
|
3.15(a)
|
Intellectual Property Rights
|
|
3.15(a)
|
Irrevocable Undertakings
|
|
Recitals
|
IRS
|
|
3.14(c)
|
Knowledge
|
|
9.3(e)
|
A-50
|
|
|
Laws
|
|
3.11(a)
|
Lease
|
|
3.16(b)
|
Leased Real Property
|
|
3.16(b)
|
Liens
|
|
3.2
|
Loan Agreement
|
|
Recitals
|
Lower Priced Option
|
|
2.3(a)
|
M 2001 Stock Plan
|
|
3.3(b)(viii)
|
M Stock Plan
|
|
3.3(b)(i)
|
Made Available
|
|
9.3(f)
|
Material Adverse Effect
|
|
3.4(c)
|
Material Contracts
|
|
3.10(b)
|
Maximum Premium
|
|
6.5(b)
|
Merger
|
|
1.1
|
Merger Sub
|
|
Preamble
|
Necessary Consents
|
|
3.5
|
Negative Regulatory Action
|
|
6.4(a)
|
Open Source Materials
|
|
3.15(l)
|
Order
|
|
3.9
|
Parent
|
|
Preamble
|
Parent Board Approval
|
|
4.3(a)
|
Parent Board Recommendation
|
|
4.3(a)
|
Parent Disclosure Letter
|
|
Article IV
|
Parent Fair Market Value
|
|
6.10(c)
|
Parent General Meeting
|
|
4.3(a)
|
Parent Material Breach
|
|
8.1(d)
|
Parent Shareholder Approval
|
|
4.3(a)
|
Parent Termination Fee
|
|
8.2(a)(c)
|
Patents
|
|
3.15(a)
|
Paying Agent
|
|
2.2(a)
|
Per Share Merger Consideration
|
|
2.1(a)
|
Permits
|
|
3.11(a)
|
Permitted Liens
|
|
9.3(h)
|
person
|
|
9.3(g)
|
Placing Agreement
|
|
Recitals
|
Policies
|
|
3.21(a)
|
Proprietary Information
|
|
3.15(a)
|
Proxy Statement
|
|
3.7
|
Release
|
|
3.17
|
Reporting Tail Endorsement
|
|
6.5(b)
|
Representatives
|
|
5.2(a)
|
Restraints
|
|
7.1(d)
|
Sarbanes-Oxley
|
|
3.11(c)
|
Section 409A Plans
|
|
3.13(i)(o)
|
Securities Act
|
|
3.6(a)
|
Share
|
|
2.1(a)
|
A-51
|
|
|
Shares
|
|
2.1(a)
|
Software
|
|
3.15(a)
|
Subsidiary
|
|
9.3(i)
|
Supplement
|
|
6.2(d)
|
Surviving Entity
|
|
1.1
|
Takeover Laws
|
|
3.4(a)
|
tax returns
|
|
3.14(n)(r)
|
taxes
|
|
3.14(n)(r)
|
Termination Date
|
|
8.1(b)(i)
|
Termination Fee
|
|
8.2(a)
|
UK Class 1 Circular
|
|
9.3(j)
|
UKLA
|
|
9.3(i)
|
URLs
|
|
3.15(a)
|
Voting Agreement
|
|
Recitals
|
Work Product Agreements
|
|
3.15(i)
|
A-52
Exhibit A
CERTIFICATE
OF MERGER
of
MILAN
ACQUISITION CORP.
with and
into
INTERWOVEN,
INC.
Pursuant to Section 251(c) of the
General Corporation Law of the State of Delaware
Interwoven, Inc., a Delaware corporation (the
Company
), does hereby certify to the
following facts relating to the merger (the
Merger
) of Milan Acquisition Corp., a
Delaware corporation (
Sub
), with and into the
Company, with the Company remaining as the surviving corporation
of the Merger (the
Surviving Corporation
):
|
|
|
FIRST:
|
|
The Company and Sub are the constituent corporations of the
Merger, and each is a corporation incorporated pursuant to the
laws of the State of Delaware.
|
SECOND:
|
|
An Agreement and Plan of Merger dated January ,
2009 has been approved, adopted, certified, executed and
acknowledged by the Company and by Sub in accordance with the
provisions of Section 251 of the Delaware General
Corporation Law.
|
THIRD:
|
|
The Surviving Corporation of the Merger shall be Interwoven, Inc.
|
FOURTH:
|
|
Upon the effectiveness of the Merger, the Fourth Amended and
Restated Certificate of Incorporation of the Company is to be
amended and restated in its entirety as set forth in
Exhibit A
hereto and shall be the Certificate of
Incorporation of the Surviving Corporation until amended and
changed pursuant to the provisions of the Delaware General
Corporation Law.
|
FIFTH:
|
|
The executed Agreement and Plan of Merger is on file at the
principal place of business of the Surviving Corporation at
160 E. Tasman Drive, San Jose, CA 95134.
|
SIXTH:
|
|
A copy of the executed Agreement and Plan of Merger will be
furnished by the Surviving Corporation, on request and without
cost, to any stockholder of any constituent corporation of the
Merger.
|
[SEVENTH]:
|
|
[The Merger will become effective at 11:59 p.m., Eastern
Time on the date of filing this Certificate of Merger with the
Secretary of State of the State of Delaware.]
|
A-53
IN WITNESS WHEREOF
, the Company has caused this
Certificate of Merger to be executed by its duly authorized
officer as
of ,
2009.
INTERWOVEN, INC.
Name:
A-54
Exhibit A
AMENDED
AND RESTATED
CERTIFICATE OF INCORPORATION
OF
INTERWOVEN, INC.
ARTICLE I
The name of the corporation is Interwoven, Inc.
ARTICLE II
The registered office of the corporation is to be located at
3500 South Dupont Highway, in the City of Dover, in the County
of Kent, in the State of Delaware. The name of its registered
agent at that address is Incorporating Services, Ltd.
ARTICLE III
The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the
Delaware General Corporation Law.
ARTICLE IV
The total number of shares of stock which the corporation shall
have authority to issue is 1,000 shares of Common Stock,
par value $0.001 per share.
ARTICLE V
Unless and except to the extent that the Bylaws of the
corporation shall so require, the directors of the corporation
need not be elected by written ballot.
ARTICLE VI
In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware, the Board of Directors of the
corporation is expressly authorized to make, alter and repeal
the Bylaws of the corporation, subject to the power of the
stockholders of the corporation to alter or repeal any Bylaw
whether adopted by them or otherwise.
ARTICLE VII
To the fullest extent permitted by law, no director of the
corporation shall be personally liable for monetary damages for
breach of fiduciary duty as a director. Without limiting the
effect of the preceding sentence, if the Delaware General
Corporation Law is hereafter amended to authorize the further
elimination or limitation of the liability of a director, then
the liability of a director of the corporation shall be
eliminated or limited to the fullest extent permitted by
Delaware General Corporation Law, as so amended.
Neither any amendment nor repeal of this ARTICLE VII, nor
the adoption of any provision of this Certificate of
Incorporation inconsistent with this ARTICLE VII, shall
eliminate, reduce or otherwise adversely affect any limitation
on the personal liability of a director of the corporation
existing at the time of such amendment, repeal or adoption of
such an inconsistent provision.
ARTICLE VIII
Except as provided herein, from time to time any of the
provisions of this Certificate of Incorporation may be amended,
altered or repealed, and other provisions authorized by the laws
of the State of Delaware at the time in force may be added or
inserted, in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of
the corporation by this Certificate of Incorporation are granted
subject to the provisions of this ARTICLE VIII.
A-55
ANNEX B
|
|
|
|
|
745 Seventh Avenue
New York, NY 10019
United States
|
1/21/09
Board of Directors
Interwoven, Inc.
160 East Tasman Drive
San Jose, CA 95134
Members of the Board of Directors:
We understand that Interwoven, Inc., a Delaware corporation (the
Company), intends to enter into a transaction (the
Proposed Transaction) with Autonomy Corporation PLC,
a U.K. public limited company (Autonomy), pursuant
to which (i) Milan Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Autonomy
(Merger Sub), will merge with and into the Company
with the Company as the surviving corporation in the merger (the
Merger) and (ii) upon the effectiveness of the
Merger, each share of common stock of the Company (other than
shares owned by Autonomy, Merger Sub or any other direct or
indirect subsidiary of Autonomy or shares owned by the Company
or any other direct or indirect subsidiary of the Company), par
value $0.001 per share, shall be converted into the right to
receive $16.20 in cash. The terms and conditions of the Proposed
Transaction are set forth in more detail in the Agreement and
Plan of Merger, dated as of January 22, 2009, by and among
the Company, Autonomy and Merger Sub (the Agreement).
We have been requested by the Board of Directors of the Company
to render our opinion with respect to the fairness, from a
financial point of view, to the Companys stockholders of
the consideration to be offered to such stockholders in the
Proposed Transaction. We have not been requested to opine as to,
and our opinion does not in any manner address, the
Companys underlying business decision to proceed with or
effect the Proposed Transaction. In addition, we express no
opinion on, and our opinion does not in any manner address, the
fairness of the amount or the nature of any compensation,
including any stock options or RSUs granted, to any officers,
directors or employees of any parties to the Proposed
Transaction, or any class of such persons, relative to the
consideration to be offered to the stockholders of the Company
in the Proposed Transaction.
In arriving at our opinion, we reviewed and analyzed:
(1) the Agreement and the specific terms of the Proposed
Transaction, (2) publicly available information concerning
the Company that we believe to be relevant to our analysis,
including the Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007 and Quarterly
Reports on
Form 10-Q
for the fiscal quarters ended March 31, 2008, June 30,
2008 and September 30, 2008, (3) financial and
operating information with respect to the business, operations
and prospects of the Company furnished to us by the Company,
including estimated financials for the fiscal quarter ended
December 31, 2008 and financial projections of the Company
prepared by management of the Company (including estimated
quarterly cash flows for 2009 and internal projections relative
to Wall Street estimates), (4) a trading history of the
Companys common stock from January 20, 2004 to
January 20, 2009 and a comparison of the trading history
from January 18, 2008 to January 20, 2009 with those
of other companies that we deemed relevant, (5) a
comparison of the historical financial results and present
financial condition of the Company with those of other companies
that we deemed relevant, (6) a comparison of the financial
terms of the Proposed Transaction with the financial terms of
certain other transactions that we deemed relevant,
(7) published estimates of third party research analysts
with respect to the future financial performance of the Company,
(8) the results of our efforts to solicit indications of
interest and definitive proposals from third parties with
respect to an acquisition of the Company, (9) the Term and
Revolving Facility Agreement, dated as of January 22, 2009,
between Autonomy NA Holdings Inc., as borrower, Autonomy and
Autonomy Systems Limited, as original guarantors, and Barclays
Commercial
Barclays Capital Inc.
Barclays Bank Plc, New York Branch
B-1
Interwoven, Inc.
January 21, 2009
Page 2 of 3
Bank, Eastern, a division of Barclays Bank PLC, as original
lender and agent, and the Placing Agreement, dated as of
January 22, 2009, between Autonomy, Citigroup Global
Markets U.K. Equity Limited, Deutsche Bank AG, London Branch and
Morgan Stanley & Co. International PLC, and the
specific terms of the financing of the Proposed Transaction (the
Proposed Financing) and (10) alternatives
available to the Company on a stand-alone basis to fund its
future capital and operating requirements. In addition, we have
had discussions with the management of the Company concerning
its business, operations, assets, financial condition and
prospects and have undertaken such other studies, analyses and
investigations as we deemed appropriate.
In arriving at our opinion, we have assumed and relied upon the
accuracy and completeness of the financial and other information
used by us without any independent verification of such
information and have further relied upon the assurances of
management of the Company that they are not aware of any facts
or circumstances that would make such information inaccurate or
misleading. With respect to the financial projections of the
Company, upon advice of the Company we have assumed that such
projections have been reasonably prepared on a basis reflecting
the best currently available estimates and judgments of the
management of the Company as to the future financial performance
of the Company and that the Company will perform in accordance
with such projections. We assume no responsibility for and we
express no view as to any such projections or estimates or the
assumptions on which they are based. In arriving at our opinion,
we have assumed that the Proposed Transaction will be
consummated in accordance with the terms of the Agreement.
Further, in arriving at our opinion, we have not conducted a
physical inspection of the properties and facilities of the
Company and have not made or obtained any evaluations or
appraisals of the assets or liabilities of the Company. Our
opinion necessarily is based upon market, economic and other
conditions as they exist on, and can be evaluated as of, the
date of this letter. We assume no responsibility for updating or
revising our opinion based on events or circumstances that may
occur after the date of this letter.
In addition, we are not opining as to whether the maintenance of
cash position closing condition set forth in Section 7.2(d)
of the Agreement will be satisfied or whether the Proposed
Financing (or any alternative financing arrangements) will be
available to Autonomy.
Based upon and subject to the foregoing, we are of the opinion
as of the date hereof that, from a financial point of view, the
consideration to be offered to the stockholders of the Company
in the Proposed Transaction is fair to such stockholders.
We have acted as financial advisor to the Company in connection
with the Proposed Transaction and will receive a fee for our
services, which is contingent upon the consummation of the
Proposed Transaction. In addition, the Company has agreed to
reimburse a portion of our expenses and indemnify us for certain
liabilities that may arise out of our engagement. We or our
affiliates have performed various investment banking and
financial services for Autonomy in the past and received
customary fees for such services. Specifically, Autonomy
currently has a term loan facility (the Existing
Facility) in place with Barclays Bank PLC, which is an
affiliate of Barclays Capital Inc., and Barclays Commercial
Bank, Eastern, a division of Barclays Bank PLC, plans to make
available a new term loan facility to Autonomy as part of the
Proposed Financing and will receive customary fees in connection
therewith. On September 22, 2008, certain assets of Lehman
Brothers Inc. (Lehman Brothers), including its
North American investment banking franchise, were acquired
by Barclays Capital Inc. The Existing Facility was entered into
with Barclays Bank PLC prior to such acquisition of Lehman
Brothers and prior to the subsequent engagement of Barclays
Capital Inc. as a financial advisor to the Company. In the
ordinary course of our business, we actively trade in the
securities of the Company for our own account and for the
accounts of our customers and, accordingly, may at any time hold
a long or short position in such securities.
B-2
Interwoven, Inc.
January 21, 2009
Page 3 of 3
This opinion, the issuance of which has been approved by our
Fairness Opinion Committee, is for the use and benefit of the
Board of Directors of the Company and is rendered to the Board
of Directors in connection with its consideration of the
Proposed Transaction. This opinion is not intended to be and
does not constitute a recommendation to any stockholder of the
Company as to how such stockholder should vote with respect to
the Proposed Transaction.
Very truly yours,
BARCLAYS CAPITAL
B-3
ANNEX C
January 21, 2009
Board of Directors
Interwoven, Inc.
160 E. Tasman Drive
San Jose, CA 95134
Members of the Board:
You have asked us to advise you with respect to the fairness to
the holders of common stock, par value $0.001 per share
(Company Common Stock), of Interwoven, Inc. (the
Company) from a financial point of view, of the
Merger Consideration (as defined below) to be received by such
stockholders pursuant to the terms of the Agreement and Plan of
Merger, dated as of January 21, 2009 (the Merger
Agreement) by and among Autonomy Corporation PLC
(Parent), Milan Acquisition Corp. (Merger
Sub) and the Company. The Merger Agreement provides for,
among other things, the merger (the Merger) of the
Company with Merger Sub pursuant to which the Company will
become a wholly owned subsidiary of Parent and each outstanding
share of Company Common Stock will be converted into the right
to receive $16.20 in cash (the Merger Consideration).
In arriving at our opinion, we have reviewed the Merger
Agreement dated January 21, 2009 and certain related
documents as well as certain publicly available business and
financial information relating to the Company. We also have
reviewed certain other information relating to the Company,
including financial forecasts, provided to or discussed with us
by the Company, and have met with the management of the Company
to discuss the business and prospects of the Company. We also
have considered certain financial and stock market data of the
Company, and we have compared that data with similar data for
other publicly held companies in businesses we deemed similar to
those of the Company and we have considered, to the extent
publicly available, the financial terms of certain other
business combinations and transactions which have been effected
or announced. We also considered such other information,
financial studies, analyses and investigations and financial,
economic and market criteria which we deemed relevant.
In connection with our review, we have not independently
verified any of the foregoing information and have assumed that
such information is and have relied on such information being
complete and accurate in all material respects. With respect to
the financial forecasts for the Company that we have utilized,
the management of the Company has advised us, and we have
assumed at your direction, that such forecasts have been
reasonably prepared on bases reflecting the best currently
available estimates and judgments of the Companys
management as to the future financial performance of the
Company. We have also assumed, with your consent, that in the
course of obtaining any regulatory or third party consents,
approvals or agreements in connection with the Merger, no
modification, delay, limitation, restriction or condition will
be imposed that would have an adverse effect on the Company or
the Merger and that the Merger will be consummated in accordance
with the terms of the Merger Agreement without waiver,
modification or amendment of any material term, condition or
agreement thereof. In addition, we have not been requested to
make, and have not made, an independent evaluation or appraisal
of the assets or liabilities (contingent or otherwise) of the
Company, nor have we been furnished with any such evaluations or
appraisals.
Our opinion addresses only the fairness, from a financial point
of view, to the holders of Company Common Stock of the Merger
Consideration to be received in the Merger and does not address
any other aspect or implication of the Merger or any other
agreement, arrangement or understanding entered into in
connection with the Merger or otherwise, including, without
limitation, the fairness of the amount or nature of, or any
other aspect relating to, any compensation to any officers,
directors or employees of any party to the Merger, or class of
such persons, relative to
C-1
Board of Directors
Interwoven, Inc.
January 21, 2009
Page 2
the Merger Consideration or otherwise. The issuance of this
opinion was approved by our authorized internal committee.
Our opinion is necessarily based upon information made available
to us as of the date hereof, upon financial, economic, market
and other conditions as they exist and can be evaluated on the
date hereof and upon certain assumptions regarding such
financial, economic, market and other conditions, which are
currently subject to unusual volatility and which, if different
than assumed, would have a material impact on our analyses. We
were not requested to and did not solicit any expressions of
interest from any other parties with respect to the sale of all
or any part of the Company or any other alternative transaction.
We did not advise the Company on the form or amount of the
Merger Consideration nor did we participate in negotiations with
respect to the terms of the Merger Agreement or the transactions
contemplated thereby. Our opinion does not address the merits of
the Merger as compared to alternative transactions or strategies
that may be available to the Company, nor does it address the
underlying business decision of the Company to proceed with the
Merger.
We have acted as financial advisor to the Company solely to
render this opinion and will receive a fee for our services, the
entire amount of which is payable upon the rendering of our
opinion. In addition, the Company has agreed to indemnify us and
certain related parties for certain liabilities and other items
arising out of our engagement. Neither we nor our affiliates
have provided investment banking or other financial services to
Parent or its affiliates in the past two years. We are a full
service securities firm engaged in securities trading and
brokerage activities as well as providing investment banking and
other financial services. In the ordinary course of our
business, we and our affiliates may acquire, hold or sell, for
our and our affiliates own accounts and for the accounts
of customers, equity, debt and other securities and financial
instruments (including bank loans and other obligations) of the
Company, Parent and any other companies that may be involved in
the Merger, as well as provide investment banking and other
financial services to such companies.
It is understood that this letter is for the information of the
Board of Directors of the Company in connection with its
evaluation of the Merger and does not constitute a
recommendation to any stockholder as to how such stockholder
should vote or act on any matter relating to the proposed Merger.
Based upon and subject to the foregoing, it is our opinion that,
as of the date hereof, the Merger Consideration to be received
by the holders of Company Common Stock in the Merger is fair,
from a financial point of view, to such stockholders.
Very truly yours,
CREDIT SUISSE SECURITIES (USA) LLC
C-2
ANNEX D
SECTION 262
OF THE DELAWARE GENERAL CORPORATION LAW
SECTION 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
stock corporation and also a member of record of a nonstock
corporation; the words stock and share
mean and include what is ordinarily meant by those words and
also membership or membership interest of a member of a nonstock
corporation; and the words depository receipt mean a
receipt or other instrument issued by a depository representing
an interest in one or 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, § 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 and to vote at 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 subsection (f) of
§ 251 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, 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 of
this title is not owned by the parent corporation 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
D-1
procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply
as nearly as is practicable.
(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 such meeting with respect to shares for which appraisal
rights are available pursuant to subsection (b) or
(c) hereof 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. 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 or § 253 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. 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. 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.
D-2
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 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.
D-3
(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
DETACH HERE
INTERWOVEN, INC.
PROXY
Special Meeting of Stockholders [
], 2009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph L. Cowan and John E. Calonico, Jr., or either of them,
as proxies, each with full power of substitution, and hereby authorizes them to represent and to
vote, as designated on the reverse side, all shares of common stock of Interwoven, Inc. held of
record by the undersigned on February 4, 2009 at the Special Meeting of Stockholders of Interwoven,
Inc., to be held at the corporate headquarters of Interwoven, Inc. located at 160 East Tasman
Drive, San Jose, California, on [ ],[ ], 2009 at [ ] a.m., and at any and all
adjournments or postponements thereof, as hereinafter specified upon the proposals listed on the
reverse side and as more particularly described in the proxy statement dated [ ], 2009,
receipt of which is hereby acknowledged.
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES TO WHICH THIS PROXY RELATES WILL BE VOTED AS
SPECIFIED AND, IF NO SPECIFICATION IS MADE, WILL BE VOTED FOR PROPOSAL 1 AND, IF NECESSARY, FOR
PROPOSAL 2.
(Continued and to be signed on the reverse side)
SPECIAL MEETING OF STOCKHOLDERS OF
INTERWOVEN, INC.
[ ], 2009
Please, date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
þ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
To consider and vote
upon a proposal to adopt
the Agreement and Plan
of Merger, dated as of
January 22, 2009, among
Autonomy Corporation
plc, Milan Acquisition
Corp., a wholly-owned
subsidiary of Autonomy
Corporation plc and
Interwoven (the merger
agreement).
|
|
FOR
o
|
|
AGAINST
o
|
|
ABSTAIN
o
|
|
2.
|
To vote to adjourn the
special meeting, if
necessary, to solicit
additional proxies if there
are not sufficient votes at
the time of the special
meeting to adopt the merger
agreement.
|
|
FOR
o
|
|
AGAINST
o
|
|
ABSTAIN
o
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of Stockholder:
|
|
|
|
Date:
|
|
|
|
Signature of Stockholder:
|
|
|
|
Date:
|
|
|
Note:
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.
Interwoven (NASDAQ:IWOV)
Historical Stock Chart
From Aug 2024 to Sep 2024
Interwoven (NASDAQ:IWOV)
Historical Stock Chart
From Sep 2023 to Sep 2024