- Additional Proxy Soliciting Materials (definitive) (DEFA14A)
November 20 2008 - 4:26PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 20, 2008 (November 17, 2008)
TRANSMETA CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
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000-31803
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77-0402448
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(Commission
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(IRS Employer
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File Number)
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Identification No.)
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2540 Mission College Boulevard, Santa Clara, CA
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95054
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(Address of principal executive offices)
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(Zip Code)
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(408) 919-3000
(Registrants telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.4225)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13-3-4(c))
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TABLE OF CONTENTS
Item 1.01 Entry Into a Material Definitive Agreement.
On November 17, 2008, Transmeta Corporation, a Delaware corporation (
Transmeta
), entered
into an Agreement and Plan of Merger (the
Merger Agreement
) with Novafora, Inc., a Delaware
corporation (
Novafora
), and Transformer Acquisition LLC, a Delaware limited liability company and
wholly-owned subsidiary of Novafora (
Merger Sub
), under which Transmeta will be merged with and
into Merger Sub, which will be the surviving entity, all subject to the terms and conditions set
forth in the Merger Agreement (the
Merger
).
Subject to the terms and conditions of the Merger Agreement, at the effective time of the
Merger, (i) each issued and outstanding share of Transmeta common stock will be converted into the
right to receive an amount in cash equal to the quotient (the
Per Share Merger Consideration
)
obtained by dividing (1) the Common Stock Merger Consideration (determined in the manner provided
below) by (2) the number of shares of Transmeta common stock outstanding as of the effective time
of the Merger, assuming the exercise of all Vested In-the-Money Options (as defined below) and (ii)
each issued and outstanding share of Transmeta Series B Preferred Stock will be converted into the
right to receive $7.50 (the
Per Preferred Share Merger Consideration
). In addition, at the
effective time of the Merger, (i) each outstanding option to purchase shares of Transmeta common
stock with a per share exercise price less than the Per Share Merger Consideration, to the extent
vested and exercisable (the
Vested In-the-Money Options
), will be converted into the right to
receive an amount in cash equal to the product obtained by multiplying (1) the difference between
the Per Share Merger Consideration and the per share exercise price of such Vested In-the-Money
Option, by (2) the number of vested shares of Transmeta common stock underlying such Vested
In-the-Money Option, (ii) each unvested option to purchase shares of Transmeta common stock and
each outstanding option to purchase shares of Transmeta common stock with a per share exercise
price greater than or equal to the Per Share Merger Consideration, whether vested or unvested, will
be automatically cancelled without any consideration payable in respect thereof, and (iii) each
outstanding warrant to purchase shares of Transmeta common stock (the
Transmeta Warrants
) will be
treated pursuant to the terms of such warrants, and the contractual obligations under such warrants
will, by virtue of the Merger, be assumed by Merger Sub as the surviving company in the Merger.
The Common Stock Merger Consideration equals $255.6 million plus the aggregate exercise price
of the Vested In-the-Money Options less the sum of (i) the Per Preferred Share Merger Consideration
payable with respect to shares of Transmeta Series B Preferred Stock outstanding immediately prior
to the effective time of the merger and (ii) the maximum aggregate cash consideration payable with
respect to Transmeta Warrants outstanding as of the effective time of the merger, determined
pursuant to the terms of the Transmeta Warrants. The Common Stock Merger Consideration is subject
to upward adjustment by the sum of, in each case determined as of the effective time of the Merger,
(i) the amount of any accounts receivable of Transmeta, (ii) the amount of any security deposits
for operating leases of the Transmeta, and (iii) the amount, if any, by which the amount of
Transmetas unrestricted cash, cash equivalents and short-term investments exceeds $244 million.
In addition, the Common Stock Merger Consideration is subject to downward adjustment by the sum of,
in each case determined as of the effective time of the Merger and, with respect to each of the
amounts unders clauses (i) through (viii) of this sentence, only to the extent unpaid as of the
effective time of the merger, (i) the amount of indebtedness of Transmeta, (ii) the amount of any
fees and expenses of any investment banker, broker, advisor or similar party, and any accountant,
legal counsel or other person retained by the Transmeta in connection with the Merger, (iii) the
amount of any bonus or gross-up payments to, or severances costs and expenses of, Transmeta
employees, (iv) the amount of obligations of Transmeta under its operating leases, (v) the amount
of premiums and other costs related to Transmetas current directors and officers liability
insurance policy and a six year extended reporting period endorsement with respect to the that
policy, (vi) the amount of any accounts payable, accrued compensation expense, income tax payable,
accrued restructuring costs and other accrued liabilities and current and long-term payables of the
Company, (vii) the amount, if any, by which (1) the aggregate elections made under the Transmeta
Pre-Tax Flexible Benefits Plan exceeds (2) the aggregate amount contributed to the Transmeta
Pre-Tax Flexible Benefits Plan through salary reductions, (viii) the amount of any payments made in
respect of dissenting shares, and (ix) the amount, if any, by which the amount of Transmetas
unrestricted cash, cash equivalents and short-term investments is less than $244 million.
$11.6 million of the aggregate amount payable to Transmeta security holders in the Merger will
be held in an escrow account and is to be released upon the closing of the Merger, all pursuant to
the terms and conditions of the Escrow Agreement dated November 14, 2008 entered into among
Transmeta, Novafora, Intellectual Venture Funding LLC and Silicon Valley Bank (the
Escrow
Agreement
). The foregoing description of the Escrow Agreement is qualified in its entirety by
reference to the full text of the Escrow Agreement, which is filed as Exhibit 99.1 to this Current
Report on Form 8-K and is incorporated herein by reference.
The Merger Agreement has been unanimously approved by the Board of Directors of Transmeta.
Consummation of the Merger is subject to customary closing conditions, including the approval
of the Merger by the stockholders of Transmeta; the absence of certain governmental restraints; the
accuracy in all material respects of the representations in the Merger Agreement, except as would
not have a material adverse effect on Transmetas business or ability to consummate the Merger; and
the performance in all material respects of the covenants under the Merger Agreement. The Merger
is intended to be treated as a taxable purchase of securities of Transmeta under the Internal
Revenue Code of 1986, as amended.
Transmeta has agreed not to, directly or indirectly, (i) solicit, initiate, seek or knowingly
encourage, knowingly facilitate or knowingly induce the making, submission or announcement of any
proposal relating to any alternative business combination transaction; (ii) furnish or make
available any non-public information regarding Transmeta to any person in connection with or in
response to any proposal relating to any alternative business combination transaction; (iii) enter
into, participate or engage in, or continue any discussions or negotiations with any person in
connection with or in response to any proposal relating to any alternative business combination
transaction; (iv) agree to, accept, approve, endorse or recommend (or publicly propose or announce
any intention or desire to agree to, accept, approve, endorse or recommend) any proposal relating
to any alternative business combination transaction or adopt a board resolution to do any of the
foregoing; (v) enter into any letter of intent or similar document or agreement (binding or not
binding) contemplating or otherwise relating to any proposal relating to any alternative business
combination transaction; and (vi) grant any discretionary waiver or release under any effective
standstill or similar agreement with respect to the Transmeta, or any class of equity securities of
Transmeta.
In addition, in
connection with the proposed merger with Novafora, Transmeta has agreed to certain restrictions on the conduct of its business that require Transmeta to conduct its business in
the ordinary course consistent with past practices, subject to specific limitations, including a
restriction on Transmetas ability to enter into any future licensing transaction prior to closing
of the Merger without Novaforas consent.
The Merger Agreement contains certain termination rights for both Novafora and Transmeta and
provides that in certain specified circumstances, Transmeta must pay Novafora a termination fee of
$5,000,000 (generally in the event the Board of Directors of Transmeta changes its recommendation
that the stockholders of Transmeta vote in favor of the Merger, or elects to pursue a superior
acquisition proposal from a third party).
The description of the proposed Merger in this report does not purport to be complete and is
qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as
Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference. The
Merger Agreement has been included to provide investors and security holders with information
regarding its terms. The Merger Agreement is not intended to provide any other factual information about Transmeta.
The Merger Agreement contains representations and warranties of Transmeta made to and solely for
the benefit of Novafora and Merger Sub. The assertions embodied in those representations and
warranties are qualified by information in a confidential disclosure schedule that Transmeta has
delivered to Novafora in connection with signing the Merger Agreement. Accordingly, investors and
security holders should not rely on the representations and warranties as characterizations of the
actual state of facts, since they were only made as of the date of the Merger Agreement and are
modified in important part by the underlying disclosure schedule. Moreover, information concerning
the subject matter of the representations and warranties may change after the date of the Merger
Agreement.
Concurrently with the execution of the Merger Agreement, Transmetas directors and executive
officers and certain entities affiliated with them have entered into voting agreements with
Novafora (the
Voting Agreements
) and have agreed, in their capacity as stockholders of Transmeta,
to vote shares of Transmeta common stock held by them (which in the aggregate represent
approximately 18% of the outstanding shares of Transmeta common stock as of the date hereof) in
favor of the Merger and against any proposal made in opposition to the Merger. The foregoing
description of the Voting Agreements is qualified in its entirety by reference to the full text of
the Voting Agreements, the forms of which are filed as Exhibits 99.2, 99.3 and 99.4 to this Current
Report on Form 8-K and are incorporated herein by reference.
In connection with the execution of the Merger Agreement, Transmeta entered into an Amendment
(the
Rights Agreement Amendment
) of the Rights Agreement dated January 15, 2002 between Transmeta
and Mellon Investor Services LLC (the
Rights Agreement
), for the purpose of making the provisions
of the Rights Agreement inapplicable to
the execution of the Merger Agreement and the
Voting Agreements; the announcement of the
Merger Agreement, the
Voting
Agreements and the Merger; and the consummation of the Merger. The
foregoing description of the Rights Agreement Amendment is qualified in its entirety by reference
to the full text of the Rights Agreement Amendment, which is filed as Exhibit 4.1 to this Current
Report on Form 8-K and is incorporated herein by reference.
Additional Information and Where to Find It
In connection with the proposed Merger, Transmeta will be filing a proxy statement and other
relevant documents concerning the Merger with the Securities and Exchange Commission. INVESTORS
AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Transmeta intends to mail the proxy statement to
its stockholders as soon as practicable. Investors and stockholders will be able to obtain a copy
of the proxy statement and other documents filed by Transmeta with the SEC free of charge at the
Web site maintained by the SEC at
http://www.sec.gov
. In addition, documents filed with the SEC by
Transmeta are available free of charge by contacting Transmeta Investor Relations (Kristine Mozes,
781-652-8875).
Transmeta, and its directors, executive officers, and employees may be deemed to be
participants in the solicitation of proxies from the stockholders of Transmeta in connection with
the proposed merger and related items. Information regarding the directors and executive officers
of Transmeta and their ownership of Transmeta stock is set forth in Transmetas proxy statement for
Transmetas 2008 annual meeting of stockholders, which was filed with the SEC on August 25, 2008.
Investors and stockholders may obtain additional information regarding the interests of those
participants by reading the proxy statement relating to the proposed merger when it becomes
available. Investors and stockholders can obtain a copy of that proxy statement free of charge at
the Web site maintained by the SEC at
http://www.sec.gov
.
Item 3.03 Material Modification to Rights of Security Holders.
The information concerning the Rights Agreement Amendment set forth above under Item 1.01 of
this Current Report on Form 8-K is hereby incorporated by reference into this Item 3.03 of this
Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit
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Number
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Exhibit Title or Description
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2.1
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Agreement and Plan of Merger dated as of November 17, 2008, by and
among Transmeta Corporation, Novafora, Inc. and Transformer
Acquisition LLC.
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4.1
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Amendment to Rights Agreement dated as of November 17, 2008 by and
between Transmeta Corporation and Mellon Investor Services LLC.
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99.1
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Escrow Agreement dated as of November 14, 2008 by and among
Transmeta Corporation, Novafora, Inc., Intellectual Venture
Funding LLC and Silicon Valley Bank.
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99.2
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Form of Voting Agreement dated as of November 17, 2008 by and
between Novafora, Inc. and Bryant R. Riley.
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99.3
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Form of Voting Agreement dated as of November 17, 2008 by and
between Novafora, Inc. and entities affiliated with Riley
Investment Management LLC.
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99.4
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Form of Voting Agreement dated as of November 17, 2008 by and
between Novafora, Inc. and each of R. Hugh Barnes, Lester M.
Crudele, Robert V. Dickinson, Murray A. Goldman, J.
Michael Gullard, Daniel Hillman, John OHara Horsley, Sujan
Jain, Rick Timmins and entities affiliated with Institutional Venture Partners.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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TRANSMETA CORPORATION
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Date: November 20, 2008
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By:
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/s/ John OHara Horsley
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John OHara Horsley,
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Executive Vice President,
General Counsel & Secretary
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Exhibit Index
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Exhibit
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Number
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Exhibit Title or Description
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2.1
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Agreement and Plan of Merger dated as of November 17, 2008, by and
among Transmeta Corporation, Novafora, Inc. and Transformer
Acquisition LLC.
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4.1
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Amendment to Rights Agreement dated as of November 17, 2008 by and
between Transmeta Corporation and Mellon Investor Services LLC.
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99.1
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Escrow Agreement dated as of November 14, 2008 by and among
Transmeta Corporation, Novafora, Inc., Intellectual Venture
Funding LLC and Silicon Valley Bank.
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99.2
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Form of Voting Agreement dated as of November 17, 2008 by and
between Novafora, Inc. and Bryant R. Riley.
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99.3
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Form of Voting Agreement dated as of November 17, 2008 by and
between Novafora, Inc. and entities affiliated with Riley
Investment Management LLC.
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99.4
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Form of Voting Agreement dated as of November 17, 2008 by and
between Novafora, Inc. and each of R. Hugh Barnes, Lester M.
Crudele, Robert V. Dickinson, Murray A. Goldman, J.
Michael Gullard, Daniel Hillman, John OHara Horsley, Sujan
Jain, Rick Timmins and entities affiliated with Institutional Venture Partners.
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