Item 1.01. Entry into a Material Definitive Agreement.
On May 17, 2016 inContact Inc. (the Company) entered into an Agreement and Plan of Merger (the Merger Agreement)
with NICE-Systems Ltd., a company organized under the laws of the State of Israel (Parent), and Victory Merger Sub Inc., a wholly owned indirect subsidiary of Parent (Merger Sub), providing for the merger of Merger Sub with
and into the Company (the Merger), with the Company surviving the Merger as a wholly owned indirect subsidiary of Parent.
At
the time the Merger is consummated (the Effective Time), each share of common stock of the Company (the Company Common Stock) issued and outstanding as of immediately prior to the Effective Time (other than shares of Company
Common Stock held by the Company or shares subject to equity awards whose treatment is described below or owned by Parent or any of its subsidiaries, or held by any subsidiary of the Company, and shares owned by stockholders who have properly
exercised and perfected appraisal rights under Delaware law) will be cancelled and extinguished and automatically converted into the right to receive cash in an amount equal to $14.00, without interest thereon. Each outstanding and vested restricted
stock unit or option to purchase Company Common Stock will be cancelled and extinguished and automatically converted into the right to receive an amount in cash equal to $14.00 per share less, in the case of options, the exercise price per share
underlying such option. Each outstanding and unvested restricted stock unit, share or restricted stock and option to purchase Company Common Stock or other right to purchase or receive Company Common Stock will be converted into an option to
purchase or other right to purchase or receive American Depositary Shares of Parent, with the same vesting schedule of such equity award continuing after the Merger, subject to existing vesting conditions and the exercise price of options adjusted
in accordance with applicable tax law.
The consummation of the Merger is subject to certain conditions, including, without limitation,
(i) the receipt of the necessary approval of the Merger from the Companys stockholders; (ii) the expiration or termination of any waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the United States and
any other applicable foreign antitrust and competition laws; (iii) approval of the Merger by the Committee on Foreign Investment in the United States (CFIUS); (iv) all applicable approvals from the Federal Communications
Commission as well as all applicable state utility commissions or similar state or local governmental authorities and (v) the absence of any law or order restraining, enjoining or otherwise prohibiting the Merger. In addition, the obligations
of the Parent and Merger Subsidiary, on the one hand, and the Company, on the other hand, to consummate the Merger are subject to certain other conditions, including, without limitation, (x) the accuracy of the other partys
representations and warranties (subject to certain materiality qualifiers) and (y) the other partys performance of its obligations and covenants contained in the Merger Agreement in all material respects. In addition, the obligations of
the Parent and Merger Subsidiary to consummate the Merger are subject to there not having occurred any event, occurrence, revelation or development of a state of circumstances or facts which, individually or in the aggregate, has had or would
reasonably be expected to have a material adverse effect on the condition (financial or otherwise), business, assets or results of operations of the Company and its subsidiaries, taken as a whole, from December 31, 2015 through the closing of
the Merger, subject, in each case, to certain exclusions set forth in the Merger Agreement.
Parent has delivered to the Company a
commitment letter entered into by Parent and certain of its subsidiaries with certain financial institutions with respect to certain debt facilities, the proceeds of which will be used by Parent to fund a portion of the consideration to be paid in
the Merger (the Debt Financing). The availability of the Debt Financing or other financing is not a condition to the consummation of the Merger.
The Merger Agreement contains customary representations and warranties by Parent, Merger Sub and the Company. The Merger Agreement also
contains customary covenants and agreements, including with respect to the operations of the business of the Company and its subsidiaries between signing and closing, governmental filings and approvals and other matters.
The Merger Agreement generally prohibits the Companys solicitation of proposals relating to alternative business combination
transactions and restricts the Companys ability to furnish information to, or participate in any discussions or negotiations with, any third party with respect to any such transaction, subject to certain exceptions.
The Merger Agreement contains termination rights for each of Parent, Merger Sub and the Company,
and further provides that upon termination of the Merger Agreement under specified circumstances, the Company may be required to pay Parent a termination fee of $34,140,000.
The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the full text of the Merger Agreement, which is attached as Exhibit 2.1 and is incorporated herein by reference.
The Merger Agreement contains representations and warranties by each of Parent, Merger Sub and the Company. These representations and
warranties were made solely for the benefit of the parties to the Merger Agreement and:
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should not be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
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may have been qualified in the Merger Agreement by disclosures that were made to the other party in connection with the negotiation of the Merger Agreement;
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may apply contractual standards of materiality that are different from materiality under applicable securities laws; and
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were made only as of the date of the Merger Agreement or such other date or dates as may be specified in the Merger Agreement.
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All executives have entered into retention letters with Parent. These letters provide, in addition to other items, an extended post-Merger protection period
under the Companys Change in Control Severance Compensation Policy.