UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14C
(RULE 14c101)
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
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Check the appropriate box: |
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Preliminary Information Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14c5(d)(2)) |
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Definitive Information Statement |
IGATE CORPORATION
(Name Of Registrant As Specified In Its Charter)
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Payment of Filing Fee (Check the appropriate box): |
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14c5(g) and 011. |
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Title of each class of securities to which transaction applies:
common stock, par value $0.01 per share |
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(2) |
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Aggregate number of securities to which transaction applies:
(A) 80,936,374 shares of common stock outstanding, (B) 1,932,355 shares of common stock
underlying outstanding stock options, with a weighted average exercise price of $25.29 per share, (C) 1,723,200 shares of common stock issuable in respect of outstanding performance share awards, (D) 43,674 shares of common stock issuable in respect
of outstanding restricted stock units and (E) 1,370,430 shares of common stock issuable in respect of restricted shares. |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 011 (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) 80,936,374 shares of common stock, 1,723,200 shares of common stock issuable in respect of outstanding
performance share awards, 43,674 shares of common stock issuable in respect of outstanding restricted stock units and 1,370,430 shares of common stock issuable in respect of restricted shares, multiplied by $48.00 per share and (b) 1,932,355 shares
of common stock underlying outstanding stock options multiplied by $22.71, which is the difference between $48.00 and the weighted average exercise price of $25.29 per share. In accordance with Section 14(g) of the Securities Exchange Act of 1934,
as amended, the filing fee was determined by multiplying 0.0001162 by the sum of the preceding sentence. |
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Proposed maximum aggregate value of transaction:
$4,079,420,326.05. |
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Total fee paid: |
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$474,029. |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 011(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing. |
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(1) |
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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IGATE CORPORATION
100 Somerset Corporation Blvd.
Bridgewater, NJ 08807
Telephone: (510) 896-3007
May [●], 2015
NOTICE OF ACTION BY WRITTEN CONSENT OF SHAREHOLDERS
Dear IGATE Corporation Shareholder:
On April 27, 2015, we
announced a proposed merger (the Merger) with a wholly-owned, indirect subsidiary of Cap Gemini S.A. (SA), one of the worlds foremost providers of IT, consulting, technology and outsourcing services.
To implement the Merger, on April 25, 2015, we entered into an agreement and plan of merger (the Merger Agreement), by and among SA,
Capgemini North America, Inc. (NA and, together with SA, Parent or Capgemini), Laporte Merger Sub, Inc. (Merger Sub), and IGATE Corporation (the Company), a copy of which is attached as
Annex A to this information statement (this Information Statement). Upon completion of the Merger, each share of common stock of the Company, par value $0.01 per share, issued and outstanding immediately prior to the consummation of
the Merger, other than shares held in treasury and shares owned by Parent or Merger Sub, will automatically be converted into the right to receive $48.00 in cash, without interest. Assuming that we do not receive and accept a superior proposal from
a third party prior to May 25, 2015 (subject to extension for Parents right to renegotiate the terms of the Merger Agreement), the closing of the Merger will occur upon the satisfaction of customary closing conditions, including, but not
limited to, receipt of U.S. and foreign regulatory approvals.
Our board of directors has unanimously determined that the Merger is in the best interests
of the Company and approved the entry into the Merger Agreement. Our board of directors unanimously recommended that our shareholders adopt the Merger Agreement. The adoption of the Merger Agreement by our shareholders required the affirmative vote
of a majority of the votes cast by the holders of outstanding shares of our common stock entitled to vote thereon, or written consent of the holders who would have been entitled to cast the minimum number of votes that would be necessary to
authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting, in favor of adopting the Merger Agreement. The Merger Agreement and the transactions contemplated thereby, including the Merger, were
adopted by shareholders holding a majority of our outstanding common stock, acting by written consent in lieu of a meeting (the Written Consent) in accordance with our Third Amended and Restated Articles of Incorporation and the
Pennsylvania Business Corporation Law of 1988. As a result, no further action by any shareholder of the Company is required under applicable law or the Merger Agreement (or otherwise) to adopt the Merger Agreement or complete the transactions
contemplated thereby, including the Merger, and the Company will not be soliciting your vote for the adoption of the Merger Agreement and will not call a shareholders meeting for purposes of voting on the adoption of the Merger Agreement. This
notice and the accompanying Information Statement shall constitute notice to you from the Company of the Written Consent contemplated by Section 2524 of the Pennsylvania Business Corporation Law of 1988.
Following the consummation of the Merger, our stock will no longer be publicly traded and we will cease making filings with the Securities and Exchange
Commission and we will otherwise cease being required to comply with the rules relating to publicly held companies. We intend to and will delist from trading on The NASDAQ Stock Market, LLC and apply for termination of registration of our common
stock under the Securities Exchange Act of 1934, as amended, as soon after the completion of the Merger as the requirements for such delisting and termination are met.
We are not asking you for a proxy, and you are requested not to send us a proxy.
Because the Merger Agreement has been adopted by less than the unanimous consent of our shareholders, we are providing the accompanying Information Statement
to shareholders of record as of the record date for the Merger Agreement. The accompanying Information Statement is for informational purposes only. However, we urge you to read the Information Statement in its entirety for a more complete
description of the transactions referenced above and the actions taken by our board of directors and the holders of a majority of our outstanding common stock.
We thank you for your continued support and interest in IGATE Corporation.
Sincerely,
Ashok Vemuri
President and Chief Executive Officer
Neither the U.S.
Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the Merger, passed upon the fairness of the Merger or passed upon the adequacy or accuracy of the disclosures in this notice or the
accompanying Information Statement. Any representation to the contrary is a criminal offense.
This Information Statement is dated May [●], 2015
and being mailed to you on or about May [●], 2015.
NOTICE ABOUT INFORMATION CONTAINED IN THIS INFORMATION STATEMENT
You should assume that the information in this Information Statement or any supplement is accurate only as of the date on the front page of this Information
Statement. Our business, financial condition, results of operations and prospects may have changed since that date and may change again.
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TABLE OF CONTENTS
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Annex A Merger Agreement
Annex B Voting Agreement
Annex C Opinion of
Merrill Lynch, Pierce, Fenner & Smith Incorporated
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FORWARD-LOOKING STATEMENTS
This Information Statement and the documents to which we refer in this Information Statement contain statements that are not historical
facts and that constitute forward-looking statements within the meaning of such term under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of
1934. These forward-looking statements include statements regarding our business outlook, the demand for the products and services, the expected completion and timing of the Merger and other information relating to the Merger and all other
statements in this Information Statement other than recitation of historical facts. Words such as will,, intends, expects, anticipates,, estimates, predicts,
believes, should, potential, may, forecast, objective, plan, targets or similar expressions are intended to identify such forward-looking statements.
Forward-looking statements in this Information Statement are subject to risks and uncertainties that could cause actual results or events to differ from such statements, including, without limitation, the occurrence of any event, change or other
circumstances that could give rise to the termination of the Merger Agreement, the failure to receive, on a timely basis or otherwise, the required approvals by government or regulatory agencies, the risk that a closing condition to the proposed
Merger may not be satisfied, and that the Merger may not be consummated, in a timely manner or at all, changes in laws and regulations, economic conditions, adverse litigation and the ability of the Company to retain and hire key personnel and
maintain relationship with customers, suppliers and other business partners pending the consummation of the proposed Merger. These and other risks are discussed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended
December 31, 2014, or our Annual Report, entitled Risk Factors and in other sections of our Annual Report, including Managements Discussion and Analysis of Financial Condition and Results of Operations. Actual
results may differ materially from those contained in the forward-looking statements in this Information Statement. Any forward-looking statements are based on information currently available to us and we assume no obligation to update these
statements as circumstances change. All subsequent written and oral forward-looking statements concerning the Merger or other matters addressed in this Information Statement and attributable to us or any person acting on our behalf are expressly
qualified in their entirety by the cautionary statements contained or referred to in this section.
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SUMMARY
This summary highlights selected information from this information statement (this Information Statement) and may not contain
all of the information that is important to you. To understand the merger (the Merger) contemplated by the Agreement and Plan of Merger (the Merger Agreement), dated as of April 25, 2015, by and among Cap Gemini S.A., a
French société anonyme (SA), Capgemini North America, Inc. (NA and, together with SA, Parent or Capgemini), Laporte Merger Sub, Inc., a Pennsylvania corporation and a wholly owned
subsidiary of NA (Merger Sub), and IGATE Corporation, a Pennsylvania corporation, fully, and for a more complete description of the legal terms of the Merger, you should carefully read this entire Information Statement, the annexes
attached to this Information Statement and the documents referred to or incorporated by reference in this Information Statement. We have included page references in parentheses to direct you to the appropriate place in this Information Statement for
a more complete description of the topics presented in this summary. In this Information Statement, the terms IGATE, Company, we, us and our refer to IGATE Corporation. All references in
this Information Statement to terms defined in the notice to which this Information Statement is attached have the meanings provided in that notice. All references to defined terms not defined herein or in the notice to which this Information
Statement is attached shall have the meanings ascribed to them in the Merger Agreement attached as Annex A to this Information Statement.
The Parties to the Merger Agreement (page 15)
The Company. IGATE Corporation is a global leader in providing integrated
technology and operations-based information technology solutions. The Company provides solutions to clients business challenges by leveraging our technology and process capabilities and offering productized applications and platforms that
provide the necessary competitive and innovation edge to clients across industries, through a combination of speed, agility and imagination. The Companys principal executive offices are located at 100 Somerset Corporate Blvd., Bridgewater, NY
08807 and its telephone number is (908) 219-8050. The Companys website is www.igate.com. Additional information about the Company is included in documents incorporated by reference into this Information Statement and our filings with the
Securities and Exchange Commission, copies of which may be obtained without charge by following the instructions in Where You Can Find More Information beginning on page 66.
Parent.
SA. SA is one of the
worlds foremost providers of consulting, technology and outsourcing services. Together with its affiliates, SA reported 2014 global revenues of EUR 10.573 billion. Together with its clients, SA creates and delivers business and technology
solutions that fit clients needs and drive the results they want. SAs principal executive offices are located at Place de lEtoile, 11, rue de Tilsitt, 75017 Paris, France, and its telephone number is +33(0)1 47 54 50 00. SAs
website is www.capgemini.com.
NA. NA is a wholly owned direct subsidiary of SA and carries out SAs North American
operations. NAs principal executive offices are located at 623 Fifth Avenue, 33rd Floor, New York, NY 10022, and its telephone number is (212) 314-8100. NAs website is www.capgemini.com.
Merger Sub. Merger Sub was formed by Parent solely for the purpose of completing the Merger with the Company. Merger Sub is a wholly
owned subsidiary of NA and has not carried on any activities to date, except for activities incidental to its incorporation and activities undertaken in connection with the transactions contemplated by the Merger Agreement. Merger Subs
principal executive offices are located at Place de lEtoile, 11, rue de Tilsitt, 75017 Paris, France.
The
Merger (page 17)
On April 25, 2015, the Company entered into the Merger Agreement with Parent and Merger Sub. Upon the terms and
subject to the conditions provided in the Merger Agreement, and in accordance with Pennsylvania law, at the effective time of the Merger (the Effective Time), Merger Sub will merge with and into the Company, with the Company continuing
as the surviving corporation. As a result, the Company will become an indirect, wholly owned subsidiary of Parent following the Effective Time. Because the Merger Consideration (as defined below) will be paid in cash, you will receive no equity
interest in Parent, and after the Effective Time you will have no equity interest in the Company.
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The Merger Consideration
Upon consummation of the Merger, each share of common stock of the Company, par value $0.01 per share (Company Common Stock),
issued and outstanding immediately prior to the consummation of the Merger, other than shares held in treasury and shares owned by Parent or Merger Sub, will automatically be converted into the right to receive $48.00 in cash, without interest (the
Merger Consideration).
We encourage you to read the Merger Agreement, which is attached as Annex A to this Information
Statement, as it is the legal document that governs the Merger.
Reasons for the Merger (page 23)
After consideration of various factors as discussed in The Merger Reasons for the Merger beginning on page 23, our board of
directors, after consideration of the opinion and analyses of Merrill Lynch, Pierce, Fenner & Smith Incorporated (BofA Merrill Lynch), the financial advisor to our board of directors, and after consultation with the
Companys legal advisors, has unanimously determined that the Merger is in the best interests of the Company and approved the entry into the Merger Agreement.
Required Shareholder Approval for the Merger
The adoption of the Merger Agreement by the shareholders of the Company required the affirmative vote of a majority of the votes cast by the
holders of outstanding shares of Company Common Stock entitled to vote thereon, or written consent of the majority of holders who would have been entitled to cast the minimum number of votes that would be necessary to authorize the action at a
meeting at which all shareholders entitled to vote thereon were present and voting, in favor of adopting the Merger Agreement. On April 25, 2015, shareholders holding in the aggregate a majority of the outstanding shares of Company Common Stock
delivered a written consent adopting the Merger Agreement and the transactions contemplated thereby, including the Merger (the Written Consent), which Written Consent provides that it shall be of no further force or effect following any
termination of the Merger Agreement in accordance with its terms (including, without limitation, a termination of the Merger Agreement in connection with the Company entering into a definitive agreement with a third party with respect to a superior
proposal). As a result, no further action by any shareholder of the Company is required under applicable law or the Merger Agreement (or otherwise) to adopt the Merger Agreement or the transactions contemplated thereby, including the Merger, and the
Company will not be soliciting your vote for the adoption of the Merger Agreement and will not call a shareholders meeting for purposes of voting on the adoption of the Merger Agreement. No action by the shareholders of Parent is required to
complete the Merger.
When actions are taken by written consent of less than all of the shareholders entitled to vote on a matter,
Pennsylvania law requires notice of the action to those shareholders who were entitled to vote thereon and did not consent. This Information Statement and the notice attached hereto constitute notice to you of action by written consent as required
by Pennsylvania law.
Opinion of Financial Advisor to our Board of Directors (page 31 and Annex C)
In connection with the Merger, BofA Merrill Lynch, the financial advisor to our board of directors, rendered to our board of directors
an oral opinion, confirmed by delivery of a written opinion, dated April 25, 2015, as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of Company Common Stock, of the Merger Consideration to be
received by such holders in the Merger. The full text of the written opinion, dated April 25, 2015, of BofA Merrill Lynch, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the
review undertaken, is attached as Annex C to this document and is incorporated by reference herein in its entirety. BofA Merrill Lynch provided its opinion to our board of directors (in its capacity as such) for the benefit and use of our board
of directors in connection with and for purposes of its evaluation of the Merger Consideration from a financial point of view. BofA
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Merrill Lynchs opinion does not address any other aspect of the Merger and no opinion or view was expressed as to the relative merits of the Merger in comparison to other strategies or
transactions that might be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with or effect the Merger. BofA Merrill Lynchs opinion does not address any other
aspect of the Merger and does not constitute a recommendation to any shareholder as to how to vote or act in connection with the Merger or any related matter.
The Merger Agreement (page 45)
Conditions to Completion of the Merger (page 57)
The obligations of the parties to consummate the Merger are subject to the satisfaction or waiver on or prior to the date of closing of the
following conditions:
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the affirmative vote of a majority of the votes cast by the holders of outstanding shares of Company Common Stock entitled to vote thereon, or written consent of the holders who would have been entitled to cast the
minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting, in favor of adopting the Merger Agreement (the Company Shareholder Approval)
having been obtained (which has already been obtained); |
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the absence of any judgment issued by any governmental entity of competent jurisdiction or law or other legal prohibition preventing or prohibiting the consummation of the Merger or imposing a Burdensome Condition (as
defined in The Merger AgreementRegulatory Matters beginning on page 52); |
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the parties shall have obtained Committee on Foreign Investment in the United States (CFIUS) approval; |
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this Information Statement having been mailed to the Companys shareholders at least 20 calendar days prior to the Closing Date; |
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the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the HSR Act) and the
receipt of certain foreign antitrust approvals under or expiration or termination of any waiting periods pursuant to certain foreign antitrust and competition laws of Brazil, Canada, India and Germany; and |
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the absence of any pending proceeding commenced by a governmental entity in a United States District Court or a court in Canada seeking a judgment that challenges or seeks to enjoin the Merger under antitrust laws.
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The obligations of Parent and Merger Sub to effect the Merger are subject to satisfaction or waiver at or prior to the
consummation of the Merger of, among other things, the following additional conditions:
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the accuracy of the representations and warranties of the Company with regard to the Companys capital structure in all material respects at and as of the date of the Merger Agreement and at and as of the closing
date, except to the extent such representations and warranties expressly relate to a specified date (in which case on and as of such specified date); |
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the accuracy of the Companys representations and warranties with regard to the absence of a material adverse effect in all respects at and as of the date of the Merger Agreement and at and as of the closing date,
except to the extent such representations and warranties expressly relate to a specified date (in which case on and as of such specified date); |
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other than the representations and warranties mentioned in the bullets directly above, the accuracy of all other representations and warranties of the Company (without regard to any qualifications or exceptions
contained therein as to materiality or material adverse effect) at and as of the date of the Merger Agreement and at and as of the closing date, except to the extent such representations and warranties expressly relate to a
specified date (in which case on and as of such specified date), except as would not reasonably be expected to, individually or in the aggregate, have a material adverse effect; |
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the Company having performed in all material respects all obligations required to be performed by it under the Merger Agreement at or prior to the Closing Date; |
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the absence of a material adverse effect since the date of the Merger Agreement; and |
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the absence of the imposition of a Burdensome Condition (as defined in The Merger Agreement Regulatory Matters beginning on page 52) in connection with the parties obtaining antitrust approval.
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The obligations of the Company to effect the Merger are subject to satisfaction or waiver at or prior to the consummation
of the Merger of, among other things, the following additional conditions:
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the accuracy of the representations and warranties of Parent and Merger Sub that are qualified as to materiality as of the date of the Merger Agreement and at and as of the closing date, except that the accuracy of
representations and warranties that by their terms speak as of a specified date will be determined as of such date; |
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the accuracy of the representations and warranties of Parent and Merger Sub that are not qualified as to materiality in all material respects as of the date of the Merger Agreement and at and as of the closing date,
except that the accuracy of representations and warranties that by their terms speak as of a specified date will be determined as of such date; and |
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each of Parent and Merger Sub having performed in all material respects all obligations required to be performed by them under the Merger Agreement at or prior to the Closing Date. |
No Solicitation of Other Offers (page [])
The Merger Agreement provides that the Company, its subsidiaries and their respective directors and officers will not, and the Company will
direct is and its subsidiaries other representatives not to:
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directly or indirectly solicit, initiate or knowingly encourage the submission of any Company Takeover Proposal (as defined in The Merger Agreement No Solicitation of Other Offers beginning on page
53); |
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enter into any agreement or understanding with respect to any Company Takeover Proposal; |
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directly or indirectly participate in any discussions or negotiations regarding, or furnish to any Person any information with respect to, or take any other action to facilitate the making of any inquiry, proposal or
offer that constitutes, or would reasonably be expected to lead to, any Company Takeover Proposal; or |
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commit or agree to do any of the foregoing. |
Notwithstanding the foregoing, prior to
11:59 p.m., New York time, on May 25, 2015 (subject to extension for Parents right to renegotiate the terms of the Merger Agreement), in response to a written, bona fide Company Takeover Proposal, if our board of directors
determines that such Company Takeover Proposal constitutes or would reasonably be expected to lead to a superior proposal and that the failure to take such action would be inconsistent with its fiduciary duties under applicable law, the Company may
furnish information to, and participate in discussions and negotiations with, the party making such Company Takeover Proposal.
If
our board of directors had determined at any time prior to 11:59 p.m., New York time, on May 25, 2015 (subject to extension for Parents right to renegotiate the terms of the Merger Agreement), that the failure to take such action would be
inconsistent with its fiduciary duties under applicable law, the Company may terminate the
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Merger Agreement in order to enter into a definitive agreement regarding a superior proposal, subject to certain notice provisions and Parents right to renegotiate the terms of the Merger
Agreement such that the Company Takeover Proposal would no longer constitute a superior proposal, and subject to the Companys prior or simultaneous payment to Parent of the Company Termination Fee (as defined below).
A more detailed description of the foregoing circumstances and other circumstances under which the Company or Parent may terminate the Merger
Agreement is provided in The Merger Agreement No Solicitation of Other Offers beginning on page 53 and The Merger Agreement Superior Proposals and Intervening Events beginning on page 55.
Termination of the Merger Agreement (page 58)
The Merger Agreement may be terminated at any time prior to the consummation of the Merger by the mutual written consent of Parent, Merger Sub
and the Company.
In addition, the Merger Agreement may be terminated by either Parent or the Company:
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if the Merger is not consummated prior to October 26, 2015 (the Outside Date), subject to a six-month extension of the Outside Date if antitrust approval has not been obtained or there is litigation
pending seeking a judgment that challenges or seeks to enjoin the Merger under antitrust laws; provided, that the right to terminate the Merger Agreement will not be available to any party whose material breach of the Merger Agreement is the primary
cause of the failure of the Merger to be consummated by the Outside Date; or |
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if any governmental entity has issued a final and nonappealable judgment, or there exists any law, in each case, permanently preventing or prohibiting the Merger. |
The Merger Agreement also may be terminated by Parent if:
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our board of directors withdraws or adversely modifies in a manner adverse to Parent or Merger Sub its approvals or recommendations of the Merger or the transactions contemplated by the Merger Agreement or if our board
of directors approves or recommends a Company Takeover Proposal; or |
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there has been a breach by the Company of (i) any representation, warranty or covenant contained in the Merger Agreement that would, individually or in the aggregate, result in a failure of a condition to the
consummation of the Merger if continuing on the closing date, and (ii) such breach has not been cured (or is not capable of being cured) before the earlier of (x) the date which is thirty days after the date of delivery of such notice of
breach and (y) the Outside Date. |
The Merger Agreement also may be terminated by the Company:
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prior to 11:59 p.m., New York City time, on May 25, 2015 (subject to extension for Parents right to renegotiate the terms of the Merger Agreement), in order to enter into an agreement regarding a superior
proposal if the Company both (i) executes a definitive agreement with respect to such superior proposal substantially concurrently with the termination of the Merger Agreement and (ii) pays to Parent $161,280,000 (the Company
Termination Fee) substantially concurrently with the termination of the Merger Agreement, subject to certain notice provisions and Parents right to renegotiate the terms of the Merger Agreement such that the Company Takeover Proposal
would no longer constitute a superior proposal; or |
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if there has been a breach by Parent or Merger Sub of (i) any representation, warranty or covenant contained in the Merger Agreement (without regard to any qualifications or exceptions contained therein as to
materiality or Parent Material Adverse Effect) that had or would reasonably be expected to, individually or in the aggregate, have a material adverse effect on Parent, and (ii) such breach has not been cured before the earlier of (x) the
date which is thirty days after the date of delivery of such notice of breach and (y) the Outside Date. |
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Termination Fee (page 60)
The Company will pay Parent the Company Termination Fee if:
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the Merger Agreement is terminated by the Company, to enter into an agreement providing for a superior proposal; or |
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(i) at any time after the date of execution of the Merger Agreement and prior to such termination, a Company Takeover Proposal shall have been proposed or announced or made known to our board of directors, (ii) the
Merger Agreement is terminated by the Company or Parent because the Outside Date has been reached or by Parent because the Company has breached its representations, warranties or covenants and failed to cure such breach, and (iii) within twelve
months of such termination, the Company shall have entered into a definitive agreement with respect to or consummates any Company Takeover Proposal. |
Interests of Directors and Executive Officers in the Merger (page 27)
You should be aware that the Companys executive officers and directors have interests in the Merger that may be different from, or in
addition to, the interests of the shareholders of the Company generally. Our board of directors was aware of these interests and considered them, among other matters, in approving the Merger Agreement. These interests are described below in
The Merger Interests of Directors and Executive Officers in the Merger beginning on page 27.
United
States Federal Income Tax Consequences of the Merger (page 40)
If you are a U.S. holder (as defined in The Merger United
States Federal Income Tax Consequences of the Merger beginning on page 40), the Merger will be a taxable transaction to you for U.S. federal income tax purposes. A U.S. holder of shares of Company Common Stock receiving cash in the Merger
generally will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined before deduction of any applicable withholding taxes) and the U.S.
holders adjusted tax basis in the stock surrendered.
We urge you to consult your own tax advisor on the specific U.S. federal,
state, local and foreign tax consequences of the Merger to you.
Regulatory Matters Related to the Merger (page 42)
Under the HSR Act and the rules and regulations promulgated thereunder, the Merger may not be consummated until the expiration of a
30-calendar-day waiting period following the parties filing of their respective HSR Act notification forms or the earlier termination of that waiting period. If the Antitrust Division of the U.S. Department of Justice (DOJ) or the
Federal Trade Commission (FTC) issues a Request for Additional Information and Documentary Material (second request) prior to the expiration of the initial waiting period, the parties must observe a second 30-day waiting
period, which would begin to run only after both parties have substantially complied with the second request, unless the waiting period is terminated earlier. Each of the Company and Parent filed a notification and report form with the DOJ and FTC
on May 8, 2015 and requested early termination of the waiting period.
At any time before or after the mergers are completed, either
the DOJ, the FTC or U.S. state attorneys general could take action under the antitrust laws in opposition to the mergers, including seeking to enjoin completion of the Merger, condition completion of the Mergers upon the divestiture of assets of the
Company, Parent or their subsidiaries or impose restrictions on Parents post-merger operations.
Private parties may also seek to
take legal action under the antitrust laws under some circumstances.
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Under Law No. 12,529 of 2011 of Brazil and the rules and regulations promulgated thereunder,
the Merger may not be consummated until clearance has been received from the Conselho Administrativo de Defesa Econômica (CADE) following the parties joint filing of their merger notification. Under the Brazilian competition
rules there is a maximum waiting period of up to 240 days that can be extended by 60 additional days at the initiative of the parties, or by 90 additional days if CADE considers it necessary to conclude the analysis. Once the clearance decision has
been issued, the CADEs regulations set out a 15-day waiting period to allow for appeals from third parties or requests from the CADEs Board of Commissioners; if there are no appeals and the Commissioners remain silent, closing can occur
after such 15-day waiting period pursuant to the clearance decision. The Company and Parent filed a joint notification with the CADE in Brazil on May 11, 2015 and requested clearance of the transaction pursuant to Law No. 12,529 of 2011.
Under the Competition Act (Canada), as amended, and the rules and regulations promulgated thereunder, the Merger may not be consummated
until expiration or waiver of the applicable waiting periods, or waiver of the pre-merger notification obligation, or the issuance of an advance ruling certificate, following the parties filing of their respective merger notifications.
Following submission of the Canadian merger notification, there is an initial waiting period of 30 calendar days. The parties may close the Merger upon expiry of the initial 30-day waiting period unless, prior to the end of that period, the
Commissioner of Competition appointed under the Competition Act (Canada) (the Commissioner) issues a supplementary information request to the parties for production of documents, data and/ or responses to questions. If a
supplementary information request is issued, the waiting period is suspended until the parties comply, at which point the waiting period begins to run again and expires after 30 calendar days following compliance with the supplementary information
request. The Commissioner may terminate or waive the waiting period (including the initial waiting period) at any time by issuing an advance ruling certificate confirming that the Commissioner would not have sufficient grounds on which to apply to
the Competition Tribunal to challenge the transaction or issuing a no-action letter indicating that the Commissioner does not, at that time, intend to make an application to the Competition Tribunal to challenge the transaction.
Conversely, the Commissioner may, before he makes an application to the Competition Tribunal to challenge the transaction, apply for an injunction to prevent closing for up to an additional 30 calendar days following expiry of the waiting period
(with one possible extension of an additional 30 calendar days) to allow additional time for review or, after he makes an application to the Competition Tribunal to challenge the transaction, apply for an injunction to prevent closing for such
period of time as the Competition Tribunal considers necessary and sufficient to the meet the circumstances of the case. Each of the Company and Parent filed a notification with the Canadian Competition Bureau on May 12, 2015 and requested
expiration or waiver of the applicable waiting periods, or waiver of the pre-merger notification obligation, or the issuance of an advance ruling certificate, pursuant to the Competition Act (Canada), as amended.
Under the German Act against Restraints of Competition of 1957, and the rules and regulations promulgated thereunder, the Merger may not be
consummated until clearance has been received from the Federal Cartel Office (FCO) in Germany following the Parents filing of its merger notification. The FCO has one month from submission of the notification within which to review
the Merger. The FCO is not required to wait for the one month period to lapse and may grant clearance of the transaction at any point during this Phase I review period. In limited circumstances, the FCO can initiate a more detailed
in-depth Phase II investigation which can last up to four months after the initial notification. If the parties consent, this four month period can be extended further. If the parties offer commitments to address any competition concerns, the Phase
II investigation will automatically be extended by one month. Further delays can occur due to the stop-the-clock mechanism if the parties do not or do not completely reply to an information request from the FCO. The Parent filed a
notification with the Federal Cartel Office in Germany on May 8, 2015 and requested clearance of the transaction pursuant to the Act against Restraints of Competition of 1957, as amended.
In India, under the Competition Act, 2002 (Competition Act) and the regulations promulgated thereunder, the Merger may not be
consummated until clearance has been received from the Competition Commission of India (CCI) following the Parents filing of the merger notification. The CCI has 30 calendar days from submission of the notification to review the
Merger and form a prima facie opinion. However, minor delays may occur if the CCI issues a defect notice or seeks additional information from the parties, during which time the clock stops. If the CCI is of the view that the transaction is
likely to cause an appreciable adverse effect on competition in India, it can initiate an in-depth investigation which can last up to another 180 calendar days. In total, the CCI has to pass an order within 210 calendar days and two periods
of 30 business days each for consideration of modifications/amendments to the combination, from the date of merger notification. Upon the expiration of the 210 calendar days, and one 30 business day period for consideration of
modifications/amendments to the combination, if there is no communication from the CCI, the transaction is automatically approved.
-8-
The Parent filed a notification with the CCI on May 18, 2015 and requested clearance of the transaction pursuant to the Competition Act.
The Merger is also conditioned on the approval or clearance of the Merger by the Committee on Foreign Investment in the United States
(CFIUS). Section 721 of the Defense Production Act, as well as related Executive Orders and regulations, authorize the President or CFIUS to review transactions which could result in control of a U.S. business by a foreign person.
Under the Defense Production Act and Executive Order 13456, the Secretary of the Treasury acts through CFIUS to coordinate review of certain covered transactions that are voluntarily submitted to CFIUS or that are unilaterally reviewed by CFIUS. In
general, CFIUS review of a covered transaction occurs in an initial 30-day review period that may be extended by CFIUS for an additional 45-day investigation period. At the close of its review or investigation, CFIUS may determine that there are no
national security concerns with the transaction, may impose mitigation terms to resolve any national security concerns with the covered transaction, or may send a report to the President recommending that the transaction be suspended or prohibited,
or providing notice to the President that CFIUS cannot agree on a recommendation relative to the covered transaction. The President has 15 days under the Defense Production Act to act on the CFIUS report. The Company and Parent submitted a
pre-filing draft to CFIUS on May 12, 2015 in anticipation of filing a joint voluntary notice with CFIUS.
Payment of
Merger Consideration (page 47)
Shortly after the Effective Time, a paying agent will mail a letter of transmittal and
instructions to shareholders of the Company who hold shares of Company Common Stock represented by stock certificates. The letter of transmittal and instructions will tell you how to surrender your stock certificates in exchange for the Merger
Consideration. Holders of uncertificated shares of Company Common Stock (i.e., holders whose shares are held in book-entry form) will automatically receive the Merger Consideration as promptly as reasonably practicable after the Effective
Time without any further action required on the part of those holders.
Specific Performance (page 60)
The parties to the Merger Agreement are entitled to an injunction or injunctions to prevent breaches of the Merger Agreement and to enforce
specifically the terms and provisions of the Merger Agreement, including that the Company shall be entitled to specific performance to cause Parent to close the Merger in accordance with the Merger Agreement. The remedy of specific performance is in
addition to any other remedy entitled to the non-breaching party (except receipt of the Company Termination Fee).
Litigation Related to the Merger (page 44)
On May 5, 2015, a purported Shareholder Class Action and Derivative Complaint was filed in the Superior Court of New Jersey by
an alleged shareholder, Suresh Rachakonda, naming IGATE, SA, NA, Merger Sub and the individual members of our board of directors. The complaint alleges that the individual defendants breached their fiduciary duties in connection with the proposed
Merger and that the entity defendants aided and abetted the alleged breach of fiduciary duties. The complaint seeks, among other things, an injunction against the Merger and unspecified damages.
On May 8, 2015, legal counsel for Shiva Y. Stein, a purported shareholder in the Company, sent our board of directors a demand letter
pertaining to its proposed acquisition by Parent. The alleged shareholder demands that our board of directors terminate the Merger or seek a higher price on the alleged basis that the consideration is insufficient and our board of directors
process was deficient, and further demands that our board of directors conduct an investigation into potential wrongdoing by officers and directors in the formulation of the Merger Agreement, and further demands that our
board of directors permit Ms. Stein and other shareholders to inspect various corporate records in order to determine whether the proposed Merger is fair.
Market Price of Our Stock (page 62)
Company Common Stock is listed on the NASDAQ Stock Market (the NASDAQ) under the trading symbol IGTE. The closing sale
price of Company Common Stock on the NASDAQ on April 13, 2015, which was
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the last trading day before a press inquiry from a newspaper suggesting a potential transaction involving Capgemini and the Company, was $40.90, over which the Merger Consideration of $48.00
represents a 17% premium. On [ ], 2015, the last practicable trading day before the date of this Information Statement, the
closing price of Company Common Stock on the NASDAQ was
$[ ].
-10-
QUESTIONS AND ANSWERS ABOUT THE MERGER
The information provided in question-and-answer format below is for your convenience and is merely a summary of certain information contained
in this Information Statement. This summary may not contain all of the information that is important to you. You should read carefully the documents attached to and those referenced in this Information Statement, including the Merger Agreement
attached as Annex A, the Voting Agreement attached as Annex B and the opinion of BofA Merrill Lynch attached as Annex C.
Q. Why did I receive this
Information Statement?
A. Applicable requirements of Pennsylvania law and the federal securities laws require us to provide you with information
regarding the Shareholder Consent, as well as other information regarding the Merger. As explained more fully elsewhere in this Information Statement, because (i) our board of directors has approved the entry into the Merger Agreement and
(ii) the Merger Agreement and transactions contemplated thereby, including the Merger, have been adopted by Viscaria Limited (a company backed by funds advised by Apax Partners LLP and Apax Partners, L.P. or Apax), and Ashok Trivedi and Sunil
Wadhwani, the co-founders of the Company and co-chairmen of our board of directors (together, the Co-Chairmen), and certain of their affiliates, acting by written consent in lieu of a meeting in accordance with our articles of
incorporation and the Pennsylvania Business Corporation Law of 1988 (including any successor laws, rules, regulations, as amended or supplemented hereafter or any applicable law, rule, or regulations of the Pennsylvania Associations Code, as amended
or supplemented hereafter, the PBCL), your consent to the Merger will not be required and is not requested. Nevertheless, this Information Statement contains important information about the Merger. Please refer to the section of this
Information Statement titled The Merger Board Approval and Vote Required beginning on page 27.
Q. What is the proposed
transaction?
A. The proposed transaction is the Merger of the Company with Merger Sub, as a result of which our shareholders will receive $48.00
per share of Company Common Stock in cash, without interest, and the Company will become an indirect, wholly-owned subsidiary of Parent. Please refer to the section of this Information Statement titled The Merger beginning on page 17.
Q. Why am I not being asked to vote on the Merger?
A. Under the Merger Agreement and applicable Pennsylvania law, the Merger requires the affirmative vote of a majority of the votes cast by the holders of
outstanding shares of Company Common Stock entitled to vote thereon, or written consent of the holders who would have been entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all
shareholders entitled to vote thereon were present and voting, in favor of adopting the Merger Agreement. Shareholders that currently beneficially own, directly or indirectly, in the aggregate. 43,990,645 shares of Company Common Stock or
approximately 54% of the voting power of outstanding shares of Company Common Stock, have executed a written consent adopting the Merger Agreement and the transaction contemplated thereby, including the Merger. As a result, no other vote or consent
of our shareholders will be required or requested. We are not asking you for a proxy, and you are requested not to send us a proxy. Please refer to the section of this Information Statement titled The Merger Board Approval and
Vote Required beginning on page 27.
Q. What does our board of directors recommend?
A. Our board of directors has unanimously determined that the Merger is in the best interests of the Company and approved the entry into the Merger
Agreement. Our board of directors unanimously recommended that our shareholders adopt the Merger Agreement.
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Our purpose for engaging in the Merger is to enable our shareholders to realize the value of their investment in
us through the receipt of $48.00 per share of Company Common Stock, in cash, without interest, representing a:
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22% premium over the closing price of shares of Company Common Stock on February 19, 2015, the last trading day before our board of directors received Capgeminis initial indication of interest,
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17% premium over the closing price of shares of Company Common Stock on April 13, 2015, the last trading day a press inquiry from a newspaper suggesting a potential transaction involving Capgemini and the Company;
and |
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17%, 22.8%, 27.9%, and 47% premiums over the average trading prices of shares of Company Common Stock for the three-month, six-month, twelve-month, and two-year periods ending immediately before the date of
announcement of the Merger, respectively. |
Please refer to the section of this Information Statement titled The Merger Reasons
for the Merger beginning on page 23.
Q. What will I receive for my shares of Company Common Stock if the Merger is completed?
A. Upon completion of the Merger, each shareholder will be entitled to receive $48.00 per share in cash, without interest, except that the Merger
Consideration will not be paid for shares held by in treasury by us, or shares held by Parent or Merger Sub. Following the completion of the Merger, upon the surrender of your share certificates or, in the case of uncertificated shares,
delivery of an agents message, you will receive an amount in cash equal to the product obtained by multiplying the Merger Consideration by the number of shares represented by the certificates that you surrender or in an
agents message, without interest. For example, if you own 100 shares of Company Common Stock, you will receive $4,800 in cash in exchange for your shares of Company Common Stock. You will not own shares in the surviving corporation.
Q. What happens if I sell my shares before completion of the Merger?
A. If you transfer your shares of Company Common Stock, you will have transferred the right to receive the Merger Consideration to be received by the
shareholders of the Company in the Merger. To receive the Merger Consideration, you must hold your shares through completion of the Merger. In the event of a transfer of ownership of any shares of Company Common Stock that has not been registered in
the records of our transfer agent prior to the Effective Time, the cash consideration may be paid to a person other than the registered owner, provided specified requirements are satisfied. Please refer to the sections of this Information Statement
titled The Merger Agreement Consideration to be Received beginning on page 45 and The Merger Agreement Payment of Merger Consideration beginning on page 47.
Q. Will the Merger Consideration depend on our results of operations or the trading price of our common stock?
A. No. The value of the Merger Consideration is fixed. The Merger Agreement does not provide for any upward or downward adjustment in the consideration to
reflect any positive or negative changes in our operating results or financial condition nor any change in the trading price of the Company Common Stock. Please refer to the section of this Information Statement titled The Merger
Agreement Consideration to be Received beginning on page 45.
Q. Are there conditions to the completion of the Merger?
A. Yes. The completion of the Merger is conditioned on the satisfaction or waiver of certain conditions, including that at least 20 calendar days having
elapsed from the date this Information Statement was first mailed to our shareholders, the obtaining of shareholder approval (which has already been obtained), certain levels of accuracy of all representations and warranties of the parties, the
performance in all material respects of all covenants of the parties, no judgment, order, injunction or decree by an appropriate governmental authority being in effect that would make the Merger illegal or otherwise prevent the consummation thereof
or impose a Burdensome Condition (as defined in The Merger AgreementRegulatory Matters beginning on page 52), no pending litigation seeking to challenge or enjoin the Merger under the antitrust laws of the U.S. or Canada, the
expiration of any
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waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act), approval under or expiration or termination of any waiting periods pursuant to
certain foreign antitrust laws of Brazil, Canada, India and Germany, the receipt of CFIUS approval, and no material adverse effect on our business having occurred. Please refer to the section of this Information Statement titled The Merger
Agreement Conditions to Completion of the Merger. The completion of the Merger is not conditioned upon Capgemini obtaining financing.
Q. What vote of shareholders is required to adopt the Merger Agreement?
A. No additional shareholder vote is required for consummation of the Merger. Please refer to the answer to the question Why am I not being asked to
vote on the Merger on page 11 above.
Q. Am I entitled to appraisal rights in connection with the Merger?
A. No. You are not entitled to appraisal rights under Pennsylvania law in connection with the Merger.
Q. Can the Merger Agreement be terminated?
A. Yes. The Merger Agreement may be terminated as follows: (i) by mutual written consent, (ii) generally, by either party if the Merger is not
completed by October 26, 2015 (subject to a possible six-month extension if certain conditions are not met by such date), (iii) by either party if the Merger is prohibited by a judgment or law, (iv) by either party if the other party
breaches of any representation, warranty, covenant or agreement (subject to a cure period) in a manner that would result in the failure of the relevant closing condition being satisfied, (v) by Parent if our board of directors publicly
withdraws or adversely modifies its recommendation of the Merger or approves or recommends a competing offer to acquire us or (vi) by us if our board of directors has received a Superior Company Proposal (as defined in the Merger Agreement) and
complies with the terms and conditions related to receipt of such Superior Company Proposal outlined in the Merger Agreement. Please refer to the section of this Information Statement titled The Merger Agreement Termination of the
Merger Agreement beginning on page 58.
Q. What happens if a third party makes an offer to acquire the Company before the Merger is
completed?
A. If a third party has made an unsolicited Company Takeover Proposal to the Company prior to 11:59 p.m., New York time, on May 25,
2015, the Company could, prior to such date (subject to extension for Parents right to renegotiate the terms of the Merger Agreement), negotiate and discuss the proposal with the third party and, if such Company Takeover Proposal constitutes a
Superior Company Proposal, terminate the Merger Agreement, subject, in each case, to compliance with certain terms and conditions specified in the Merger Agreement. See The Merger Agreement Termination of the Merger Agreement
beginning on page 58.
Q. When is the Merger expected to be completed?
A. We currently expect to complete the Merger promptly after all of the conditions to the Merger have been satisfied or waived. The closing of the Merger
is currently expected to take place during the third quarter of 2015, although the Company cannot assure completion by any particular date, if at all. Following the satisfaction or waiver of the conditions contained in the Merger Agreement, a
Certificate of Merger will be filed with the Secretary of the Commonwealth of Pennsylvania under the PBCL, following which we will become an indirect, wholly-owned subsidiary of Parent. Please refer to the section of this Information Statement
titled The Merger Agreement Effective Time beginning on page 45.
Q. If the Merger is consummated, will we remain a public
company and listed on NASDAQ?
A. No. Following the consummation of the Merger, our stock will no longer be publicly traded and we will cease
making filings with the U.S. Securities and Exchange Commission (the SEC) and otherwise cease being required to comply with the rules relating to publicly held companies. We intend to and will cause the Company to delist from trading on
NASDAQ and apply for termination of registration of the Company Common Stock under the
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Exchange Act as soon after the completion of the Merger as the requirements for such delisting and termination are met. Please refer to the section of this Information Statement titled The
Merger Effect of the Merger on Listing and SEC Registration beginning on page 42.
Q. What happens if the Merger is not completed?
A. If the Merger is not completed for any reason, shareholders will not receive any payment for their shares in connection with the Merger.
Instead, the Company will remain a publicly traded company, and shares of Company Common Stock will continue to be quoted on NASDAQ.
Q. Should I send
in my stock certificates now?
A. No. After the completion of the Merger, we will send you detailed instructions for exchanging your stock
certificates for the Merger Consideration. Please do NOT return your Company Common Stock certificate(s) to the Company. Holders of uncertificated shares of Company Common Stock (i.e., holders whose shares are held in book-entry form) will
automatically receive the Merger Consideration as promptly as reasonably practicable after the Effective Time without any further action required on the part of those holders. Please refer to the section of this Information Statement titled
The Merger Agreement Payment of Merger Consideration beginning on page 47.
Q. Will I owe U.S. federal income taxes as a result
of the Merger?
A. If you are a U.S. holder (as defined in The Merger United States Federal Income Tax Consequences of the
Merger beginning on page 40), the Merger will be a taxable transaction to you for U.S. federal income tax purposes. A U.S. holder of shares of Company Common Stock receiving cash in the Merger generally will recognize capital gain or loss for
U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined before deduction of any applicable withholding taxes) and the U.S. holders adjusted tax basis in the stock
surrendered.
We urge you to consult your own tax advisor on the specific U.S. federal, state, local and foreign tax consequences of the Merger to you.
Q. Where can I find more information about the Company?
A. We file periodic reports and other information with the SEC. You may read and copy this information at the SECs public reference facilities.
Please call the SEC at 1-800-SEC-0330 for information about these facilities. This information is also available on the Internet site maintained by the SEC at http://www.sec.gov. For further information, please refer to the section of this
Information Statement titled Where You Can Find More Information beginning on page 66.
Q. Who can help answer my questions about the
Merger?
A. If you have any questions regarding the Merger after reading this Information Statement, please contact our Investor Relations
department at (510) 298-8400. If your broker holds your shares of Company Common Stock, you should call your broker for additional information.
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THE PARTIES TO THE MERGER AGREEMENT
The Company
IGATE CORPORATION
100 Somerset Corporate Blvd.
Bridgewater, NJ 08807
We are a global leader in providing integrated technology and operations-based information technology solutions. We provide solutions to clients
business challenges by leveraging our technology and process capabilities and offering productized applications and platforms that provide the necessary competitive and innovation edge to clients across industries, through a combination of speed,
agility and imagination. We believe that these three attributes will be the key guiding principles for us to navigate our way to creating greater value for all our stakeholders.
We deliver a comprehensive range of solutions and services across multiple domains and industries including healthcare, life sciences, insurance,
manufacturing, banking, financial services, business administrative services, data management services, product and engineering solutions, retail, consumer packaged goods, communications, energy, utility, media and entertainment. Our services
include application development, application maintenance, business intelligence and analytics, cloud services, engineering design services, enterprise application solutions, enterprise mobility, infrastructure management services, product and
engineering solutions embedded systems, product verification and validation, verification and validation and business process outsourcing.
We are the
first integrated technology and operations, or ITOPS, company. Through ITOPS, we enable our clients to optimize their business through a combination of process investment strategies, technology leverage, and business process outsourcing
and provisioning. Our core proposition of integrating technology and customer processes in a proprietary way has conformed to the changing customer needs and the ITOPS framework has helped us align better with the new-age business challenges of
corporations. Our ITOPS framework has helped us build solutions that address explicit client issues taking into account the market and industry context. We have also developed strong expertise in industry processes that enable us to drive more
innovation and technology capabilities to solve business challenges.
We have adopted a global delivery model for providing varied and complex IT-enabled
services to our global customers spread across multiple locations. With a global presence and world class delivery centers spanning across the Americas, EMEA and Asia-Pacific, our global delivery model combines a well-defined, single, business
management system with industry best practices, models and standards. We have tailored delivery models encompassing offshore, onsite, near-shore and blended models (onsite, near-shore, offshore) to meet the specific requirements of our clients.
In our pursuit to be a differentiated value provider to clients and better address their business imperatives, we rebranded our identity which is represented
by a new logo, and renewed vision, mission and values. Our mission is to be an organization that strives for superior and predictable financial performance through focused and innovative execution excellence delivered by a team that believes in
high performance and all through its journey, remains socially conscious.
We were founded in 1986, and we are incorporated in Pennsylvania. Our principal
executive office is located at 100 Somerset Corporate Boulevard, Bridgewater, NJ, and our telephone number is (908) 219-8050. We have operations in India, Canada, the United States of America, Belgium, Denmark, France, Finland, Italy, Germany,
Ireland, Netherlands, Sweden, Switzerland, Slovakia, Czech Republic, Luxembourg, Mexico, Hungary, Singapore, Malaysia, Japan, Australia, the United Arab Emirates, South Africa, China, Mauritius and the United Kingdom.
For further information about us visit our website at www.igate.com. The inclusion of our website address in this Information Statement is intended to be an
inactive textual reference only and not an active hyperlink to our website. The information contained in, or that can be accessed through, our website is specifically not incorporated by reference into this Information Statement and should not be
considered a part of this Information Statement.
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Parent
CAP GEMINI S.A. and CAPGEMINI NORTH AMERICA, INC.
Place de
lEtoile
11, rue de Tilsitt
75017 Paris, France
SA is one of the worlds foremost providers of consulting, technology and outsourcing services. Together with its affiliates, SA reported 2014 global
revenues of EUR 10.573 billion. Together with its clients, SA creates and delivers business and technology solutions that fit clients needs and drive the results they want. SAs principal executive offices are located at Place de
lEtoile, 11, rue de Tilsitt, 75017 Paris, France, and its telephone number is +33(0)1 47 54 50 00. SAs website is www.capgemini.com.
NA is a wholly owned direct subsidiary of SA and carries out SAs North American operations. NAs principal executive offices are located at 623
Fifth Avenue, 33rd Floor, New York, NY 10022, and its telephone number is (212) 314-8100. NAs website is www.capgemini.com.
Merger Sub
LAPORTE MERGER SUB, INC.
Place de lEtoile
11, rue de Tilsitt
75017 Paris, France
Merger Sub was formed by Parent solely for
the purpose of completing the Merger with the Company. Merger Sub is a wholly owned subsidiary of NA and has not carried on any activities to date, except for activities incidental to its incorporation and activities undertaken in connection with
the transactions contemplated by the Merger Agreement. Merger Subs principal executive offices are located at Place de lEtoile, 11, rue de Tilsitt, 75017 Paris, France.
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THE MERGER
The Merger
On
April 25, 2015, the Company entered into the Merger Agreement with Parent and Merger Sub. Upon the terms and subject to the conditions provided in the Merger Agreement, and in accordance with Pennsylvania law, at the Effective Time, Merger Sub
will merge with and into the Company, with the Company being the surviving corporation and continuing as an indirect, wholly-owned subsidiary of Parent. Under the terms of the Merger Agreement, each outstanding share of Company Common Stock will
entitle the holder thereof to receive $48.00 in cash, without interest. Because the Merger Consideration will be paid in cash, you will receive no equity interest in Parent, and after the Effective Time you will have no equity interest in the
Company.
Background of the Merger
As part of the ongoing evaluation of the Companys business, our board of directors and our senior management periodically review,
consider and assess the Companys operations, financial performance and industry conditions as they may affect our long-term strategic goals and plans, including the consideration of potential opportunities for business combinations,
acquisitions and other financial and strategic alternatives.
In November of 2014, Mr. Pierre-Yves Cros, Chief Development Officer of
Capgemini, who was known to the Company and Apax based on general industry relationships, contacted Mr. Salim Nathoo, a director of the Company and representative of Apax to advise him of Capgeminis preliminary interest in exploring an
acquisition of the Company. Following that conversation, representatives of Capgemini, including Mr. Cros, met with representatives of Apax in London to discuss Capgeminis preliminary interest. No proposals regarding a transaction
involving Capgemini and the Company were made. The parties agreed to introduce Mr. Cros and Mr. Paul Hermelin, the Chief Executive Officer of Capgemini, to Mr. Sunil Wadhwani and Mr. Ashok Trivedi, the Co-Chairmen. During
November 2014, the closing price for the Companys stock ranged from $34.52 to $38.25 per share.
On December 2, 2014, the
Co-Chairmen, Mr. Cros and Mr. Hermelin met in New York City. During this meeting, the parties discussed high-level information about their respective organizations, based on publicly available information. Representatives of Capgemini
indicated that it may be interested in exploring a possible acquisition of the Company as a way to develop business scale in North America, one of Capgeminis key strategic initiatives, but no specific terms were discussed. Following this
meeting, Mr. Cros said he would get back to the Company early in 2015 if Capgemini was still interested in exploring a possible transaction.
In late December 2014 and early January 2015, Mr. Cros and Mr. Nathoo had several telephone discussions regarding the Company, but
no proposals regarding a transaction involving Capgemini and the Company were made. In the course of these discussions, Apax shared with Mr. Cros a draft presentation containing an overview of the Company and illustrative synergies that could
result from an acquisition of the Company by Capgemini.
On January 20, 2015, during an executive session of a regularly scheduled
meeting of our board of directors, Mr. Nathoo and the Co-Chairmen discussed with our board of directors Capgeminis preliminary interest in exploring an acquisition of the Company, and discussed the various contacts with representatives of
Capgemini to that time. The board generally indicated that it would be willing to evaluate a credible offer from Capgemini if one were to emerge. At the end of the trading day on January 20, 2015, the price for the Companys stock was
$35.87 per share.
Mr. Cros again contacted Mr. Nathoo in early February 2015 to inform him that Capgemini was focused on
seriously exploring a transaction with the Company and that Capgemini would like to invite Mr. Nathoo to meet with Mr. Hermelin. On February 16, 2015, Mr. Nathoo, Mr. Cros and Mr. Hermelin met to discuss
Capgeminis interest in the Company. During this meeting, the participants discussed an overview of the Company and possible synergies in connection with the possible transaction.
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On February 20, 2015, Capgemini sent our board of directors a nonbinding letter of interest
to acquire the Company for $44.60 to $48.30 per share, subject to due diligence and other terms and conditions. The letter of interest also requested that the Company agree to exclusivity and not to solicit any proposals or participate in any
discussions with respect to an acquisition of the Company with any third party. At the end of the trading day on February 20, 2015, the price for the Companys stock was $38.98 per share.
On February 24, 2015, a meeting of our board of directors was held with representatives of the Companys counsel,
Kirkland & Ellis LLP (K&E) and Pepper Hamilton LLP (PH), present. At this meeting, the members of our board of directors discussed the terms of Capgeminis February 20, 2015 letter of interest. K&E
and PH reviewed with our board of directors their fiduciary duties under Pennsylvania law, the importance of confidentiality and possible next steps in reaction to the letter of interest from Capgemini. In addition, our board of directors discussed
the advisability of engaging a financial advisor to assist it in evaluating Capgeminis letter of interest and discussed several banks experience, qualifications and familiarity with the Company. Based on the suggestion that the Company
engage BofA Merrill Lynch, our board of directors delegated to a subgroup of board members the task of interviewing BofA Merrill Lynch. Our board of directors discussed the shareholdings of the Co-Chairmen and Apax and the alignment of interests
between the Co-Chairmen and Apax with the Companys other shareholders and concluded that our board of directors should continue to act as a whole in its evaluation of a potential acquisition. Following discussion, our board of directors
determined that Capgeminis letter of interest merited further consideration notwithstanding that the Company was not for sale, but also determined not to accept Capgeminis request for exclusivity. Accordingly, our board of directors
directed K&E and PH to propose a customary confidentiality agreement to Capgemini and directed management to prepare a standalone plan and projections to assist our board of directors in evaluating Capgeminis proposal.
On February 24, 2015, K&E provided Capgemini with a draft of a confidentiality agreement to facilitate the exchange of confidential
information. The parties negotiated the terms of the confidentiality agreement between February 24, 2015 and March 3, 2015.
On
February 25, 2015, a subgroup of our board of directors designated by the full board of directors interviewed BofA Merrill Lynch. Representatives of BofA Merrill Lynch discussed with the subgroup of our board their relevant industry experience,
expertise and familiarity with both the Company and Capgemini, including its historic relationship with the Company, Capgemini and certain other potential alternative acquirers. Following this discussion, the subgroup of our board determined that
BofA Merrill Lynch did not have any material relationships with Capgemini or such other potential alternative acquirers that would impair its ability to serve as financial advisor to our board of directors in a transaction with Capgemini or such
other alternative acquirers. The subgroup of our board further determined that they would recommend to our full board of directors that BofA Merrill Lynch be engaged as financial advisor, based on the factors discussed.
On February 27, 2015, a meeting of our board of directors was held with representatives of K&E and PH present. Following the
recommendation of the subgroup of our board, our board of directors discussed and approved the engagement of BofA Merrill Lynch as financial advisor. Our board of directors then reviewed the standalone plan and projections prepared by management and
determined to continue the review on March 1, 2015.
On March 1, 2015, a meeting of our board of directors was held with
representatives of K&E, PH and BofA Merrill Lynch present. Our board of directors continued its review of managements standalone plan and projections and approved them for use in connection with a potential transaction. Representatives of
BofA Merrill Lynch provided our board of directors with an overview of Capgemini, the terms of Capgeminis letter of interest, preliminary valuation analyses with respect to the Company and an overview of the process that our board of directors
could consider using in a possible sale transaction should our board of directors determine to pursue such a transaction. Representatives of BofA Merrill Lynch also reviewed with our board of directors Capgeminis likely ability to fund the
transaction. Representatives of BofA Merrill Lynch also discussed multiple potential alternative acquirers that had been identified by BofA Merrill Lynch, management and certain members of the board of directors, and discussed with our board of
directors the potential interest in, and perceived ability to pursue, an acquisition of the Company of these respective parties. Representatives of BofA Merrill Lynch indicated that the Companys current valuation level could pose a challenge
for many of the potential acquirers, and that they believed the parties most likely to be interested in exploring a transaction with the Company were two multinational information technology firms (which we refer to as Party A and
Party B). Our board of directors then discussed, in consultation with its financial
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advisor and legal counsel, Party A, Party B and the list of other potential acquirers and the potential interest and financial capacity of various parties and the risks and benefits of contacting
other possible acquirers, including the risk of leaks (and associated reputational damage if a transaction did not occur) and management distraction. Representatives of K&E and PH reviewed with our board of directors its fiduciary duties
applicable to its consideration of Capgeminis proposal and other strategic alternatives. Following discussion, our board of directors determined that, in light of the likelihood of various parties being interested and the risks associated with
contacting multiple potential acquirers, it would request that BofA Merrill Lynch contact Parties A and B at an appropriate time based on the level of progress with Capgemini, but that the risks of conducting a broader process outweighed the
benefits. Our board of directors then discussed next steps with regard to the proposal from Capgemini and again determined not to accept Capgeminis request for exclusivity, but to proceed with management due diligence meetings following
execution of a confidentiality agreement to obtain a more specific price from Capgemini.
On March 2, 2015, at the direction of our
board of directors, BofA Merrill Lynch informed Capgemini that our board of directors expected a revised proposal with more specificity on price and was focused on the high end of the range previously provided, and that our board of directors would
not agree to exclusivity.
Capgemini and the Company entered into a confidentiality agreement on March 3, 2015.
On March 3 and 4, 2015, the Companys chief executive officer and chief financial officer met with Mr. Hermelin and
Mr. Cros at Capgeminis offices in Paris to make presentations regarding the business of the Company. Mr. Nathoo and representatives from BofA Merrill Lynch attended these meetings, as did representatives from Lazard
Frères & Co. (Lazard), Capgeminis financial advisor. Capgeminis chief financial officer met with management on March 6, 2015 in New York City, where managements presentations were made to him.
On March 6, 2015, a meeting of our board of directors was held with representatives of K&E, PH and BofA Merrill Lynch present. BofA
Merrill Lynch provided an update on the management meetings held in Paris and noted that Capgemini expected to provide a revised proposal to acquire the Company following Capgeminis March 11, 2015 board meetings. BofA Merrill Lynch also
noted that Capgemini requested more detailed business due diligence meetings. Our board of directors decided to continue discussions and due diligence with Capgemini in order to allow them to submit a more developed offer. Our board of directors
then discussed, with advice from BofA Merrill Lynch, K&E and PH, whether to contact Parties A and B, in light of the possible risks and benefits of doing so. Following that discussion, our board of directors instructed BofA Merrill Lynch to
contact Parties A and B on the next business day to determine their interest in exploring a possible acquisition of the Company.
On
March 9, 2015, BofA Merrill Lynch contacted representatives from each of Party A and Party B as directed by our board of directors. On that date, BofA Merrill Lynch had a telephone meeting with Party A, during which Party A initially expressed
an interest in exploring a possible acquisition, but also indicated that the Companys then-current high trading price of the Companys stock would likely be challenging. On that same date, BofA Merrill Lynch had a telephone meeting with
Party B, during which Party B expressed a general strategic interest in the Company, but also indicated that the then-current high trading price of the Companys stock could pose a challenge. At the end of the trading day on March 9, 2015,
the price for the Companys stock was $44.00 per share.
On March 12, 2015, Capgemini sent our board of directors an updated
nonbinding, written letter of interest to acquire the Company for $46.00 to $48.00 per share, subject to further due diligence. The revised letter of interest continued to request that the Company agree to exclusivity with Capgemini.
On March 16, 2015, a meeting of our board of directors was held with representatives of K&E, PH and BofA Merrill Lynch present.
Representatives of BofA Merrill Lynch provided our board of directors with an update regarding the discussions that BofA Merrill Lynch had with Parties A and B on March 9, in which Parties A and B expressed some interest in exploring a possible
transaction with the Company but expressed reservations given the high trading price of the Companys stock. Representatives of BofA Merrill Lynch then discussed with our board of directors the financial terms of Capgeminis revised
proposal, including the request for exclusivity, and reviewed with our board of directors its preliminary valuation analysis of the Company. Representatives of BofA Merrill Lynch also reviewed with our board of directors other potential strategic
alternatives that the Company could explore, including remaining an independent company, a leveraged recapitalization or an acquisition of another
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company. Representatives of BofA Merrill Lynch also discussed with our board of directors that it was unlikely that a financial acquirer would have the ability to acquire the Company at a price
level similar to that proposed by Capgemini. Following discussion and consideration of these alternatives, our board of directors decided to continue discussions with Capgemini without granting exclusivity to Capgemini and to hold the requested
business due diligence meetings in Paris.
On March 17, 2015, Party B informed BofA Merrill Lynch that it did not have an interest in
exploring an acquisition of the Company because it would be unable to proceed at valuation levels consistent with the Companys then-current stock trading price.
During the week of March 23, 2015, management of the Company held additional business due diligence meetings with management of Capgemini
in Paris. Representatives of BofA Merrill Lynch, Lazard and Mr. Nathoo attended. Topics covered in these management presentations included business-unit-specific overviews, growth strategies and financial information. Following these meetings,
Capgemini made additional due diligence requests regarding the Company and continued to perform due diligence on the Company until execution of the merger agreement.
On March 30, 2015, a meeting of our board of directors was held with representatives of K&E, PH and BofA Merrill Lynch present.
Representatives of BofA Merrill Lynch updated our board of directors on the due diligence meetings during the week of March 23 as well as discussions with Parties A and B. Representatives of BofA Merrill Lynch informed our board of directors
that Party B did not wish to explore a transaction at that time, but that Party A agreed to a meeting with the Companys chief executive officer, Mr. Ashok Vermuri, which had been offered to Party A during the initial conversation on
March 9. Our board of directors agreed that continuing to explore Party As interest was advisable and directed BofA Merrill Lynch to set up a meeting between representatives of Party A and Mr. Vermuri. Our board of directors directed
K&E to prepare and send to Capgemini a draft merger agreement and established a working group of three board members (Messrs. Lindahl, McGuinn and Nathoo) with authority to oversee the preparation and negotiation of the merger agreement, subject
to the approval of the full board of directors. At the end of the trading day on March 30, 2015, the price for the Companys stock was $42.99 per share.
On April 2, 2015, K&E provided a draft merger agreement containing a tender offer acquisition construct, to our board working group.
On April 6, 2015, K&E and PH had a telephone call with the working group to review the terms of the draft merger agreement.
Later on April 6, 2015, representatives from Skadden, Arps, Slate, Meagher & Flom LLP (Skadden), Capgeminis
legal counsel in connection with the transaction, called K&E and PH to discuss the proposed transaction structure at a high level. Skadden conveyed that Capgemini strongly preferred a one-step merger structure, where the Apax, the Co-Chairmen
and certain of their affiliates would deliver a written consent adopting the merger agreement immediately after execution of the merger agreement, with no ability for the Company to terminate the merger agreement in favor of a superior acquisition
proposal. On April 7, 2015, K&E and PH had a follow-up discussion with the board working group to inform them of the conversation with Skadden on April 6. After consideration of the request made by Skadden, the working group determined
to continue to propose a tender offer construct with the ability to accept an unsolicited, superior acquisition proposal upon payment of a 2% termination fee prior to the closing of the tender offer.
On April 7-8, 2015, management of the Company met with management of Capgemini in Paris regarding business due diligence matters in order
to enable Capgemini to further refine its proposal.
On April 9, 2015, K&E sent a draft merger agreement to Skadden.
On April 13, 2015, Skadden sent K&E an issues list reflecting certain material issues Capgemini identified in the draft merger
agreement, including (i) requesting again to structure the merger agreement to provide for approval by written consent, with approvals from the Apax, the Co-Chairmen and certain of their affiliates to be delivered immediately after signing the
merger agreement, (ii) no ability for the Company to terminate the merger agreement following receipt of the written consent to accept a superior acquisition proposal and (iii) a request for a higher termination fee.
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Also on April 13, 2015, Mr. Vermuri met with a representative from senior management
from Party A at BofA Merrill Lynchs offices to discuss the Company. Mr. Vermuri provided a general update on the business of the Company. No proposals regarding a transaction involving Party A and the Company were made.
Representatives of the Company and Capgemini met in London on April 14, 2015 to discuss the draft merger agreement and the issues list
that had been sent on April 13 by Skadden. Representatives from K&E, Skadden, BofA Merrill Lynch and Lazard also participated in person and by teleconference. During these meetings, representatives of the Company and Capgemini discussed a
possible compromise with respect to Capgeminis request for shareholder approval by written consent, whereby the transaction would be approved following signing by written consent, but the Company would have a period of time following the
delivery of the written consent during which the Company could terminate the merger agreement and accept an unsolicited superior acquisition proposal upon payment of a termination fee. The parties decided to have a follow-up meeting in New York City
on April 16, 2015, to further discuss the terms of the transaction, including the merger agreement.
Later on April 14, 2015,
the board working group held a discussion with K&E and PH with respect to the issues list received from Skadden. Immediately after this discussion, a meeting of our board of directors was held with representatives of K&E, PH and BofA Merrill
Lynch present. At this meeting BofA Merrill Lynch updated our board of directors on the status of discussions with Capgemini and the meetings held in London. K&E provided our board of directors with an update on the merger agreement draft,
including the feedback received in London. BofA Merrill Lynch also informed our board of directors that representatives of Party A had met with representatives of the Company and that Party A expressed a positive view about the strategic fit between
Party A and the Company, but continued to express reservations regarding a transaction given the Companys high market value and timing considerations. Ashok Vemuri, our President and Chief Executive Officer, then informed our board of
directors that the Company had received, earlier that day, an inquiry from a newspaper suggesting a potential transaction involving Capgemini and the Company. Our board of directors determined to continue discussions with Capgemini. At the end of
the trading day on April 14, 2015, the price for the Companys stock was $41.60 per share.
In the evening on April 14,
2015, Skadden sent a revised draft merger agreement to K&E. The draft merger agreement included provisions reflecting the compromise on transaction structure which had been discussed during the London meetings on April 14, 2015.
Specifically, the draft provided for a written consent structure, whereby Apax, the Co-Chairmen and certain of their affiliates would deliver consents immediately following the execution of the merger agreement, but would also allow for a 20
calendar day post-signing period during which the Company could terminate the merger agreement to accept an unsolicited superior acquisition proposal. The draft merger agreement provided for a termination fee of 4.5% of equity value payable by the
Company upon termination to accept an unsolicited superior proposal.
On April 16, 2015, the board working group held a discussion
with K&E and PH regarding the revised merger agreement. K&E noted that Capgemini had proposed a modified consent structure which would permit the Company to terminate the merger agreement to accept an unsolicited superior acquisition
proposal for 20 calendar days post-signing upon payment of the 4.5% termination fee. Following discussion, it was the sense of the board working group that the written consent structure could be acceptable, subject to a longer period of time during
which the Company could terminate the merger agreement to accept an unsolicited superior acquisition proposal, and a lower termination fee. The board working group directed K&E to negotiate with Skadden for such a longer period of time and a
lower termination fee and directed BofA Merrill Lynch to indicate that BofA Merrill Lynch did not believe that our board of directors would agree to a transaction below the high end of Capgeminis price range.
On April 16-17, 2015, representatives from K&E, PH, Skadden, BofA Merrill Lynch, Lazard and Capgemini, as well as Mr. Nathoo,
met at Skaddens offices in New York City to negotiate the terms of the merger agreement. During these meetings, K&E requested a longer period of 30 calendar days during which the Company would be permitted to accept a superior proposal and
a lower termination fee of 3% of equity value. Capgemini indicated that a termination fee of 3% would be unacceptable. Also during these meetings, BofA Merrill Lynch reiterated at the direction of our board of directors that our board of directors
was focused on Capgemini confirming its proposal at the high end of its price range.
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On April 17, 2015, Mr. Vemuri and Mr. Hermelin met in New York City to discuss
synergies and related matters regarding the possible transaction between the Company and Capgemini.
On April 17, 2015, Party A
confirmed to BofA Merrill Lynch that it was not interested in exploring an acquisition of the Company because of the Companys high market valuation.
Also on April 17, 2015, a newspaper published reports that the Company was considering a sale, and other media sources followed with
similar reports. At the end of the trading day on April 17, 2015, the price for the Companys stock was $44.45 per share.
Also
on April 17, 2015, K&E sent a revised draft of the merger agreement to Skadden, which contained the written consent approval structure but extended the period during which the Company could terminate the merger agreement to accept a
superior acquisition proposal to 30 days (with extensions for the time required, if any, to allow for Capgeminis right to match any such proposal). The revised draft did not propose an amount for the termination fee.
On April 20 and 21, 2015, at the request of Capgemini, management of the Company met with management of Capgemini in Paris, and
representatives of K&E, Skadden, BofA Merrill Lynch and Lazard also attended in person. During these meetings, additional business due diligence sessions were held, and negotiations regarding the merger agreement (including with respect to the
termination fee, the material adverse effect definition and the construct for treatment of outstanding equity awards of the Company) continued and additional drafts of the merger agreement were shared between K&E and Skadden.
On April 22, 2015, Capgemini verbally confirmed to Mr. Nathoo that, despite certain negative findings in due diligence, Capgemini
would be prepared to offer the high end of its previous price range, $48.00 per share, if the Company accepted a termination fee of 4% of equity value. Representatives of Lazard confirmed the same to representatives of BofA Merrill Lynch.
On April 22, 2015, representatives of Apax received a telephone call from a third party, which we refer to as Party C,
expressing interest in exploring a possible acquisition of the Company, following published rumors regarding a possible sale of the Company. Party C commented that the Company was much larger than the possible M&A targets Party C had previously
been exploring, and given its own smaller size and valuation compared to the Company, it would not be able to finance an all-cash acquisition of the Company and would want to explore a part stock deal. Party C did not provide an indication of value
and no proposals regarding a transaction involving Party C and the Company were made.
On April 22, 2015, the board working group
held a discussion with K&E and PH regarding the status of the merger agreement. During this discussion, the board working group discussed Capgeminis indication that it would confirm its offer price at $48.00 per share conditioned on the
Companys accepting a 4% termination fee. The board working group confirmed that this proposal included a 30 calendar day post-signing period which the Company could terminate the merger agreement to accept an unsolicited superior acquisition
proposal and then determined that it would be prepared to support a 4% termination fee to the full board of directors under the circumstances.
On April 23, 2015, a meeting of our board of directors was held with representatives of K&E, PH and BofA Merrill Lynch present. BofA
Merrill Lynch updated our board of directors on the status of the discussions with Capgemini and noted that due diligence work had progressed substantially since the prior board meeting. BofA Merrill Lynch informed our board of directors that
Capgemini had confirmed an all cash offer price of $48.00, despite certain negative findings in due diligence, but conditioned on the merger agreement providing for a termination fee of 4% of equity value. The representatives of BofA Merrill Lynch
expressed their view that the 4% termination fee would likely not preclude a serious and financially viable potential buyer from seeking to acquire the Company. K&E updated our board of directors on the status of the merger agreement, which had
also progressed substantially since the prior board meeting with input from the board working group. Following discussion, our board of directors determined to accept the proposed 4% termination fee in exchange for the $48.00 per share offer price.
BofA Merrill Lynch also noted that Party A indicated that it was not interested in exploring an acquisition of the Company at the time, including because of the high market value of the Companys stock and timing
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considerations. Our board of directors was also informed about the unsolicited inquiry from Party C. Following discussion, including of the preliminary nature of the inquiry, the identity of
Party C and BofA Merrill Lynchs view that Party C could face challenges in financing an acquisition of the Company and that Party C has not previously consummated any acquisitions in this area, our board of directors determined that there was
a low likelihood of the inquiry leading to a a more attractive proposal, and determined that it was not worth the potential risks associated with delaying the advanced discussions with Capgemini to explore Party Cs inquiry. Representatives of
K&E and PH then reviewed the terms of the merger agreement and reviewed with our board of directors their fiduciary duties under Pennsylvania law in the context of the transaction being considered. Our board of directors also discussed the
growing trend toward the adoption of forum selection bylaws provisions to mitigate the cost and distraction of litigation brought in several forums and resolved to adopt such a bylaw provision. BofA Merrill Lynch again reviewed with our board of
directors its valuation analyses of the Company. Our board of directors instructed K&E to finalize the merger agreement with Skadden on this basis.
On April 23, 2015, additional press reports were issued about a possible acquisition of the Company. At the end of the trading day on
April 23, 2015, the price for the Companys stock was $45.90 per share.
On April 24, 2015, the board of directors of
Capgemini approved entry into the merger agreement.
On April 25, 2015, Skadden and K&E finalized the terms of the draft merger
agreement, including the termination fee and treatment of management equity awards.
On April 25, 2015, a meeting of our board of
directors was held with representatives of K&E, PH and BofA Merrill Lynch present. K&E updated our board of directors on the merger agreement, including with respect to the treatment of management equity, and BofA Merrill Lynch reviewed with
our board of directors its financial analysis of the Merger Consideration. PH reviewed again with our board of directors their fiduciary duties under Pennsylvania law. Members of our board of directors then addressed questions to representatives of
K&E, PH and BofA Merrill Lynch. BofA Merrill Lynch then rendered to our board of directors an oral opinion, confirmed by delivery of a written opinion, dated April 25, 2015, to the effect that, as of the date of the opinion and based on and
subject to various assumptions and limitations described in its opinion, the Merger Consideration to be received in the Merger by holders of the Companys common stock was fair, from a financial point of view, to such holders. Following further
discussion among the members of our board of directors, our board of directors then unanimously determined that it was advisable, fair to and in the best of interests of the Company to enter into the Merger Agreement and to consummate the
transactions contemplated thereby and approved, and authorized the execution and delivery of, the Merger Agreement in the form presented to our board of directors.
Following the meeting of our board of directors on April 25, 2015, the parties executed the Merger Agreement. The written consent of
Viscaria Limited, the Co-Chairmen and certain of their affiliates was delivered thereafter. The parties announced the transaction in a joint press release on April 27, 2015.
Reasons for the Merger
At its meeting on April 25, 2015, our board of directors unanimously (i) determined and declared that the Merger and the Merger
Agreement, together with the transactions contemplated thereby, were advisable and in the best interests of the Company, (ii) approved the execution and delivery of the Merger Agreement and any additional documents or agreements referred to in,
or contemplated or required by, the Merger Agreement or the transactions contemplated thereby, and (iii) recommended that the Companys shareholders adopt the Merger Agreement.
In making its decision, our board of directors consulted with the Companys management, as well as the Companys legal and financial
advisors, and considered the following potentially positive factors, which are not intended to be exhaustive and are not presented in any relative order of importance:
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Our board of directors considered the fact that the Merger Consideration of $48.00 per share to be received by the Companys shareholders in the Merger represented a: |
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22% premium over the closing price of shares of Company Common Stock on February 19, 2015, the last trading day before our board of directors received Capgeminis initial indication of interest;
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17% premium over the closing price of shares of Company Common Stock on April 13, 2015, the last trading day before a press inquiry from a newspaper suggesting a potential transaction involving Capgemini and the
Company; and |
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17%, 22.8%, 27.9%, and 47% premium over the average trading prices of shares of Company Common Stock for the three-month, six-month, twelve-month, and two-year periods ending immediately before the date of announcement
of the Merger, respectively. |
Our board of directors also considered the fact that the shares of Company Common Stock have
never traded at prices higher than the Merger Consideration at any time during the last ten years.
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Our board of directors considered the historical market prices and recent trading activity of Company Common Stock, and noted that, in general, Company Common Stock was trading at historically high levels in the period
preceding the announcement of the Merger. Our board of directors in particular considered that the multiples implied by the $48.00 per share all cash offer price were high relative to multiples implied by the trading prices of peer companies, and
also at a level higher than almost all precedent transactions for relevant comparable companies in deals announced since 2011. |
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Our board of directors considered information with respect to the Companys financial condition, results of operations, business and projections in light of various factors, including the Companys current and
anticipated near-term operating results. Our board of directors also considered the fact that the Company had recently outperformed its peer companies and the market generally from a stock price perspective, but that growth was projected to slow and
margins were declining, and that these trends could negatively impact the price of the shares of Company Common Stock in the future. |
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Our board of directors considered the fact that the form of consideration payable to the Companys shareholders will be cash, which will provide the Companys shareholders with certainty of value and immediate
liquidity. Our board of directors also considered the fact that all holders of shares of Company Common Stock (other than shares held as treasury stock by the Company or shares held by Capgemini or Merger Sub) will receive the same form and amount
of consideration per share of common stock in connection with the Merger and that the Co-Chairmen and Viscaria Limited will not be paid a control premium. |
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Our board of directors considered the process that the Company and its advisors had conducted prior to the execution of the Merger Agreement, which involved active assessment by our board of directors of potential
alternative acquirers and initiating contact with two selected parties that our board of directors and its advisors believed could potentially have the financial capacity and greatest strategic interest in acquiring the Company; but that these two
potential counterparties communicated that they were unwilling to explore a possible acquisition of the Company because of the Companys high market valuation. Our board of directors also considered the fact that, following the publication of
press reports on April 17, 2015 that the Company was considering a sale, no other party submitted a proposal to acquire the Company. |
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Our board of directors considered the fact that Capgemini and Merger Sub do not have a condition in the Merger Agreement related to their receipt of financing, and that Capgemini represented in the Merger Agreement to
the Company that Capgemini and Merger Sub have available, or would have available prior to the Effective Time, all funds necessary (i) for the acquisition of all shares of Company Common Stock pursuant to the Merger, (ii) to pay all fees
and expenses and make all payments in connection therewith and (iii) to perform their respective obligations under the Merger Agreement. |
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Our board of directors considered the opinion of BofA Merrill Lynch, the financial advisor to the board of directors of the Company in connection with the Merger, to the board of directors of the Company, dated
April 25, 2015, as to the fairness, from a financial point of view and as of the date of the opinion, of the Merger Consideration to be received by the holders of Company Common Stock (as more fully described under The Merger
Opinion of Financial Advisor to our Board of Directors beginning on page 31). |
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Our board of directors considered its belief that, after consulting with its financial advisor and counsel, it had, as a result of negotiations with Capgemini, obtained the highest price per share of Company Common
Stock that Capgemini is willing to pay. Our board of directors considered the fact that the terms of the Merger were the result of robust arms-length negotiations conducted over several weeks by the Company, with the knowledge and at the
direction of our board of directors, and with the assistance of experienced financial and legal advisors. |
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Our board of directors considered its belief that the Merger would be consummated, in light of, among other things, the fact that the written consent of Viscaria Limited, the Co-Chairmen and certain of their affiliates
was sufficient to adopt the Merger Agreement without the need for a meeting of shareholders and the limited conditions to the Closing, and the fact that the satisfaction of those conditions and likelihood of obtaining regulatory approval was, in the
view of our board of directors, likely to be attainable in a timely manner. |
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Our board of directors considered the potential for a prompt completion of the Merger. Our board of directors also considered the risk of losing the opportunity with Capgemini in the event of any delay.
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Our board of directors considered the terms and conditions of the Merger Agreement, including: |
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the right of the Company, for a period of 30 days following the execution of the Merger Agreement, under certain circumstances and subject to certain conditions, to consider and respond to unsolicited bona fide
third-party acquisition proposals or engage in discussions with or negotiations with any person making such acquisition proposal and to terminate the Merger Agreement to accept a superior proposal, subject to certain notice requirements and other
conditions and the requirement that the Company pay the termination fee; |
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the belief of our board of directors that the $161,280,000 termination fee, representing approximately 4.0% of the aggregate Merger Consideration as of the date of the execution of the Merger Agreement, was reasonable
in light of the circumstances and the overall terms of the Merger Agreement, and would likely not preclude a serious and financially viable potential buyer from seeking to acquire the Company; |
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the terms of the Merger Agreement providing the Company sufficient operating flexibility to conduct its business in the ordinary course until the earlier of the consummation of the Merger or the termination of the
Merger Agreement; |
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the ability of the Company to seek specific performance to prevent certain breaches of the Merger Agreement by Capgemini and Merger Sub. |
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Our board of directors considered the experience, reputation and financial capability of Capgemini and its ability to complete the Merger (including the right of the Company to obtain specific performance to require
Capgemini to perform its obligation to close the Merger). |
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Our board of directors considered that the Merger is supported by the Co-Chairmen and Viscaria Limited, whose interests are aligned with the Companys shareholders generally, and who, together with their
affiliates, controlled approximately 54% of the aggregate voting power of the shares of Company Common Stock as of April 24, 2015, as evidenced by their willingness to execute and deliver a written consent on April 25, 2015 adopting the
Merger Agreement and the transactions contemplated thereby, including the Merger. |
Our board of directors also considered
the following uncertainties, risks and potentially negative factors in its deliberations concerning the Merger, which are not intended to be exhaustive and are not presented in any relative order of importance:
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Our board of directors considered the fact that following completion of the Merger, the Company will no longer exist as an independent public company
and that, as the Merger Agreement provides for all cash |
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consideration, the Companys existing shareholders will no longer participate in the potential future growth in the Companys assets, future earnings growth, future appreciation in
value of shares of Company Common Stock or any future dividends. |
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Our board of directors considered the effect of a public announcement of the Merger on the Companys operations, stock price and employees and its ability to attract and retain key management, sales and other
personnel while the Merger is pending and the potential adverse effects on the financial results of the Company. |
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Our board of directors considered that the Merger Agreement imposes restrictions on the Companys solicitation of acquisition proposals from third parties, and requires the Company to provide Capgemini with an
opportunity to propose adjustments to the Merger Agreement prior to the Company being able to terminate the Merger Agreement and accept a superior proposal, although our board of directors believes this would likely not preclude a serious and
financially viable potential buyer from seeking to acquire the Company. |
|
|
|
Our board of directors considered the fact that Capgemini required a termination fee of $161,280,000 if the Merger Agreement is terminated under certain circumstances, including to accept a superior proposal. Our board
of directors believed that Capgeminis requirement that it receive a termination fee in such amount would likely not preclude a serious and financially viable potential buyer from seeking to acquire the Company. |
|
|
|
Our board of directors considered the fact that, as a condition to entering into the Merger Agreement, Capgemini required that the Merger Agreement include a provision permitting Capgemini to terminate the Merger
Agreement if Viscaria Limited, the Co-Chairmen and certain of their affiliates failed to execute and deliver the Written Consent within one hour following the execution of the Merger Agreement (which written consent was delivered following execution
of the Merger Agreement). |
|
|
|
Our board of directors considered that the Merger Agreement imposes restrictions on the conduct of the Companys business prior to the consummation of the Merger, requiring the Company to refrain from certain
action and to use commercially reasonable efforts to conduct its and its subsidiaries business in the ordinary course of business, which may delay or prevent the Company from undertaking business opportunities that may arise pending completion
of the Merger. |
|
|
|
Our board of directors considered the possibility that the Merger might not be consummated, including the adverse effects that a failure to consummate the Merger could have on the Companys business, the market
price for Company Common Stock and the Companys relationships with employees, including the fact that (i) the Companys directors, senior management and other employees will have expended extensive time and effort and will have
experienced significant distractions from their work during the pendency of the transaction; (ii) the Company will have incurred significant transaction costs; and (iii) the markets perception of the Companys prospects could be
adversely affected. |
|
|
|
Our board of directors considered the regulatory approvals that would be required to consummate the Merger and the prospects for receiving any such approvals. |
|
|
|
Our board of directors considered the possible effects of the pendency or consummation of the transactions contemplated by the Merger Agreement, including the potential for any suit, action or proceeding in respect of
the Merger Agreement or the transactions contemplated by the Merger Agreement, the risk of any loss or change in relationship with any customer, supplier, vendor or other business partner of such person, any actions by competitors or any other
disruption of the business of such person and any effect on the Companys stock price, operations and employees and the Companys ability to retain key employees. |
|
|
|
Our board of directors considered the potential conflict of interest created by the fact that the Companys executive officers and directors have financial interests in the Merger that may be different from or in
addition to those of other shareholders, as described in The Merger Interests of Directors and Executive Officers in the Merger beginning on page 27. |
-26-
|
|
|
Our board of directors considered the requirement that the Company reimburse Capgemini for up to $20,000,000 of its and its affiliates out-of-pocket expenses in connection with the Merger if the Merger Agreement
is terminated under certain circumstances, including the failure of Viscaria Limited, the Co-Chairmen and certain of their affiliates to deliver their written consent adopting the Merger Agreement and the transactions contemplated thereby, including
the Merger (which written consent was delivered following execution of the Merger Agreement). |
Our board of directors
concluded that the uncertainties, risks and potentially negative factors relevant to the Merger were outweighed by the potential benefits. The foregoing discussion is not exhaustive, but is intended to summarize the material information and factors
considered by our board of directors in its consideration of the Merger. Our board of directors reached the unanimous decision to recommend and approve the entry into the Merger Agreement in light of the factors described above and other factors
that each member of our board of directors believed were appropriate. In view of the variety of factors and the quality and amount of information considered, our board of directors did not find it practicable to and did not quantify or otherwise
assign relative weights to the specific factors considered in reaching their determinations. In addition, individual members of our board of directors may have given different weight to different factors. Our board of directors conducted an overall
analysis of the factors described above, including thorough discussions with, and questioning of, management of the Company, its financial advisor, and the Companys legal advisors, and considered the factors overall to be favorable to, and to
support, its determinations. It should be noted that this explanation of the reasoning of our board of directors and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in
the section entitled Forward-Looking Statements beginning on page 1.
Board Approval and Vote Required
Our board of directors has unanimously determined that the Merger is in the best interests of the Company and approved the entry into
the Merger Agreement. Our board of directors unanimously recommended that our shareholders adopt the Merger Agreement.
The adoption of
the Merger Agreement by the shareholders of the Company required the affirmative vote of a majority of the votes cast by the holders of outstanding shares of Company Common Stock entitled to vote thereon, or written consent of the holders who would
have been entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting, in favor of adopting the Merger Agreement. On
April 25, 2015, the Merger Agreement and the transactions contemplated thereby, including the Merger, were unanimously adopted by Viscaria Limited, the Co-Chairmen and certain of their affiliates, who beneficially own, in the aggregate,
43,990,645 shares of Company Common Stock or approximately 54% of the voting power of outstanding shares of Company Common Stock, acting by written consent in lieu of a meeting in accordance with our Third Amended and Restated Articles of
Incorporation and the PBCL. As a result, no further action by any shareholder of the Company is required under applicable law or the Merger Agreement (or otherwise) to adopt the Merger Agreement and the transactions contemplated thereby, including
the Merger, and the Company will not be soliciting your vote for the adoption of the Merger Agreement and will not call a shareholders meeting for purposes of voting on the adoption of the Merger Agreement.
On April 25, 2015, certain shareholders entered into the Voting Agreement, providing that such shareholders have, among other things,
agreed, if necessary, to vote the shares of their Company Common Stock in favor of the adoption of the Merger Agreement.
Interests of Directors and Executive Officers in the Merger
Members of our board of directors and executive officers have various interests in the Merger that are different from, or in addition to, our
interests and the interests of our shareholders generally. These interests may present such directors and executive officers with actual or potential conflicts of interest. Our board of directors was aware of these interests during its deliberations
on the merits of the Merger and considered them, among other matters, in approving the entry into the Merger Agreement. These interests are described below.
-27-
Equity Compensation
Treatment of Vested Company Stock Options
At the Effective Time, each vested IGATE stock option (including each vested stock option held by an executive officer) and each stock option
held by a non-employee director that is outstanding immediately prior to the completion of the merger (referred to in this Information Statement as a Vested Company Stock Option) will be canceled, with the holder of such Vested Company
Stock Option becoming entitled to receive an amount in cash, subject to any required tax withholdings, equal to the excess of the per share Merger Consideration of $48.00 minus the exercise price per share of Company Common Stock subject to such
Vested Company Stock Option.
Treatment of Unvested NEO Equity Awards
At the Effective Time, each unvested IGATE stock option, restricted share and performance share held by a named executive officer that is
outstanding immediately prior to the completion of the merger (referred to in this Information Statement as an Unvested NEO Equity Award) will be canceled and converted into the right to receive an amount in cash or in fully vested
shares of Capgemini common stock having a fair market value equal to the sum of (i) the excess of the per share Merger Consideration of $48.00 over the exercise price per share of Company Common Stock subject to each unvested stock option,
(ii) the per share Merger Consideration of $48.00 multiplied by the number of shares of Company Common Stock subject to each restricted share, and (iii) the per share Merger Consideration of $48.00 multiplied by the total number of shares
of Company Common Stock that would be delivered with respect to each performance share award based on the achievement of target performance goals (collectively referred to in this Information Statement as a NEO Converted Cash Award). The
NEO Converted Cash Award will vest and become payable, minus any required tax withholdings, with respect to one-half of the NEO Converted Cash Award as soon as practicable following the Closing Date and, subject to continued employment with
Capgemini, the surviving corporation, or affiliates of either, one-quarter on the first anniversary of the Closing Date and one-quarter on the second anniversary of the Closing Date.
Treatment of Company RSUs
At the
Effective Time, each IGATE restricted stock unit held by a non-employee director that is outstanding immediately prior to the completion of the merger (referred to in this Information Statement as a Company RSU) will be canceled with the
holder of such Company RSU becoming entitled to receive an amount in cash, subject to any required tax withholdings, equal to the product of (i) the per share Merger Consideration of $48.00 and (ii) the number of shares of Company Common
Stock subject to such Company RSU immediately prior to the completion of the Merger.
Value to Directors in Respect of IGATE Equity
The table below sets forth the number of IGATE equity awards subject to Vested Company Stock Options and Company RSUs for each director of
IGATE as of April 25, 2015, and the value that each director can expect to receive for such equity as of promptly following the Effective Time, assuming continued service through the Effective Time.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors |
|
Shares Underlying Vested Company Stock Options (#) |
|
|
Value of Vested Company Stock Options ($) |
|
|
Shares Underlying Company RSUs (#) |
|
|
Value of Company RSUs ($) |
|
|
Total ($) |
|
Roy W. Dunbar |
|
|
44,000 |
|
|
$ |
1,223,960 |
|
|
|
3,310 |
|
|
$ |
158,880 |
|
|
$ |
1,382,840 |
|
Goran Lindahl |
|
|
27,089 |
|
|
$ |
1,084,630 |
|
|
|
23,336 |
|
|
$ |
1,120,128 |
|
|
$ |
2,204,758 |
|
Martin G. McGuinn |
|
|
26,091 |
|
|
$ |
1,036,574 |
|
|
|
1,779 |
|
|
$ |
85,392 |
|
|
$ |
1,121,966 |
|
William G. Parrett |
|
|
8,407 |
|
|
$ |
121,158 |
|
|
|
4,807 |
|
|
$ |
230,736 |
|
|
$ |
351,894 |
|
Naomi O. Seligman |
|
|
4,945 |
|
|
$ |
109,852 |
|
|
|
13,322 |
|
|
$ |
639,456 |
|
|
$ |
749,308 |
|
-28-
Value to Executive Officers in Respect of IGATE Equity
The table below sets forth the number of IGATE equity awards subject to Vested Company Stock Options, NEO Converted Cash Awards, Non-NEO Stock
Option Converted Cash Awards, and Non-NEO Restricted Share Converted Cash Awards (collectively referred to in this Information Statement as a Converted Cash Award) for each executive officer of IGATE as of April 25, 2015, and the
value that each executive officer can expect to receive for such equity as of promptly following the Effective Time, assuming continued employment through the Effective Time and a qualifying termination of employment or service immediately following
the Effective Time.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officers |
|
Shares Underlying Vested Company Stock Options (#) |
|
|
Value of Vested Company Stock Options ($) |
|
|
Shares Underlying Option Converted Cash Award (#) |
|
|
Value of Stock Option Converted Cash Award ($) |
|
|
Shares Underlying Restricted Share Converted Cash Award (#) |
|
|
Value of Restricted Share Converted Cash Award ($) |
|
|
Shares Underlying NEO Performance Share Converted Cash Award (#) |
|
|
Value of NEO Performance Share Converted Cash Award ($) |
|
|
Total ($) |
|
Ashok Vemuri |
|
|
18,750 |
|
|
$ |
391,875 |
|
|
|
112,500 |
|
|
$ |
2,351,250 |
|
|
|
75,000 |
|
|
$ |
3,600,000 |
|
|
|
300,000 |
|
|
$ |
14,400,000 |
|
|
$ |
20,743,125 |
|
Sujit Sircar |
|
|
21,686 |
|
|
$ |
787,852 |
|
|
|
|
|
|
|
|
|
|
|
51,500 |
|
|
$ |
2,472,000 |
|
|
|
88,000 |
|
|
$ |
4,224,000 |
|
|
$ |
7,483,852 |
|
Srinivas Kandula |
|
|
20,000 |
|
|
$ |
726,600 |
|
|
|
|
|
|
|
|
|
|
|
46,500 |
|
|
$ |
2,232,000 |
|
|
|
88,000 |
|
|
$ |
4,224,000 |
|
|
$ |
7,182,600 |
|
Change in Control and Other Termination Benefits
Under the terms of the Merger Agreement, in the event that a named executive officer is terminated for cause, resigns with good reason or dies
following the Effective Time, the unvested portion of the NEO Converted Cash Award will vest and be paid to the named executive officer (or beneficiary, in the case of death) no later than ten days after the date of such termination or death.
For the purposes of the Merger Agreement, cause is defined as follows, unless provided otherwise in an applicable employment
agreement: (a) intentional failure to perform reasonably assigned duties; (b) dishonesty or willful misconduct in the performance of duties; (c) intentional violation of company or applicability affiliate policy; (d) involvement
in a transaction in connection with the performance of duties to the company or any of its subsidiaries which transaction is adverse to the interests of the company or any of its subsidiaries and which is engaged in for personal profit; or
(e) willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses).
For the purpose of the Merger Agreement, a holder of an IGATE equity award will have good reason to terminate employment if any of
the following occur without the holders consent (provided that the company does not fully cure the effect of such event within thirty days following its receipt of written notice of such event from the holder): (a) a material diminution
in base compensation; (b) a material diminution in the holders authority, duties or responsibilities; (c) a change of more than fifty miles in the geographic location in which the holder must perform services; or (d) any other
action or inaction that constitutes a material breach by the company of the agreement under which the holder provides services. Good reason will cease to exist for a given event on the ninetieth day following the later of its occurrence or the
holders knowledge of its occurrence, unless the holder has given the company written notice of the event prior to such date.
Named
executive officers will have good reason to terminate employment with the company upon the occurrence of a material diminution of base salary or a change of more than fifty miles in the geographic location in which he must perform services.
Notwithstanding the foregoing, on April 24, 2015, we entered into side letter agreements with each of our named executive officers providing that the consummation of the Merger and the related change in duties of each named executive officer
would not, in and of itself, constitute good reason under our Amended and Restated 2006 Stock Incentive Plan and any award agreement thereunder.
Under the terms of the Companys employment agreements with Messrs. Vemuri, Sircar, and Kandula, if the Company provides six
(6) months prior written notice of termination without cause, the terminated executive is not entitled to any severance payments or benefits. In lieu of providing prior written notice of termination without cause, the Company may
terminate the executive immediately without cause and provide cash severance equal to six (6) months gross salary, payable as salary continuation in the case of Mr. Vemuri and payable as a lump-sum in the case of Messrs. Sircar and
Kandula.
-29-
Quantification of Change in Control and Termination Payments and Benefits to IGATE Executive Officers
The table below sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for each of IGATEs
named executive officers (as identified in accordance with SEC regulations) based on the Merger and the per share Merger Consideration of $48.00.
Golden Parachute Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Cash ($)(a) |
|
|
Equity ($)(b) |
|
|
Perquisites / Benefits ($)(c) |
|
|
Total ($)(d) |
|
Ashok Vemuri |
|
$ |
650,000 |
|
|
$ |
20,351,250 |
|
|
|
|
|
|
$ |
21,001,250 |
|
Sujit Sircar |
|
$ |
136,135 |
|
|
$ |
6,696,000 |
|
|
|
|
|
|
$ |
6,709,613 |
|
Srinivas Kandula |
|
$ |
114,804 |
|
|
$ |
6,456,000 |
|
|
|
|
|
|
$ |
6,570,804 |
|
(a) |
This amount includes cash severance that each named executive officer would receive upon termination without cause. Pursuant to the employment agreement with Mr. Vemuri, the Company may terminate Mr. Vemuri
without cause: (i) by providing six (6) months advance notice; or (ii) immediately, by providing six (6) months gross salary continuation. Pursuant to the employment agreements with Messrs. Sircar and Kandula, the
Company may terminate Messrs. Sircar or Kandula without cause: (i) by providing six (6) months advance notice; or (ii) immediately, by providing a lump sum payment equal to six (6) months gross salary.
|
(b) |
This amount includes the aggregate dollar value of accelerated vesting of each named executive officers unvested restricted stock, unvested options, if any, and unvested performance-based restricted stock units
based on the per share Merger consideration price of $48.00. Half of the amount reflected in the above table will be paid at Effective Time and the remaining half of such equity awards would be converted into a restricted cash payment that would
immediately vest and be paid to the executive upon a qualifying termination of employment or service immediately following the Effective Time. |
(c) |
The named executive officers would not be entitled to any additional perquisites or benefits upon termination without cause. |
(d) |
This amount includes the aggregate dollar value of the sum of all amounts reported in the preceding columns. |
Narrative to Golden Parachute Compensation Tables
The tabular disclosure set forth above (i) assumes that each of the named executive officers is terminated without cause in connection
with the Merger under circumstances that entitled such individual to severance payments under the Merger Agreement and each named executive officers individual employment agreement, as applicable, and (ii) becomes entitled to accelerated
vesting and/or payment in respect of all Vested Company Stock Options and NEO Converted Cash Awards (based on the per share Merger Consideration of $48.00). The named executive officers would not be entitled to any additional perquisites or benefits
under these circumstances.
The Merger Agreement provides the members of our board of directors and our executive officers certain
indemnification rights following the consummation of the Merger. See The Merger Agreement Indemnification Provisions; Directors and Officers Insurance.
Closing and Effective Time
The closing of the Merger is expected to take place during the third quarter of 2015, although the Company cannot assure completion by any
particular date, if at all. Following the satisfaction or (to the extent permitted by law) waiver by the parties of customary closing conditions, including, among others, (a) the expiration or termination of waiting periods or receipt of
approvals pursuant to certain antitrust and competition laws of the United States, Brazil, Canada, India and Germany, (b) there being no applicable law, order, judgment or other legal restraint preventing or prohibiting the consummation of the
Merger or imposing a Burdensome Condition (as
-30-
defined in The Merger AgreementRegulatory Matters beginning on page 52) on the parties, (c) the receipt of CFIUS approval, (d) the absence of any pending proceeding
commenced by a governmental entity in a United States District Court or a court in Canada seeking a judgment that challenges or seeks to enjoin the Merger under antitrust laws, (e) performance by the other party in all material respects of its
obligations under the Merger Agreement and (f) subject to specified materiality standards, the accuracy of the representations and warranties of the other party. Parents and Merger Subs obligation to complete the Merger is also
subject to there not having occurred, since entry into the Merger Agreement, a material adverse effect on us, a Certificate of Merger will be filed with the Secretary of the Commonwealth of Pennsylvania under the PBCL, following which we will become
an indirect, wholly-owned subsidiary of Parent. The completion of the Merger is not conditioned upon Capgemini obtaining financing.
Opinion of Financial Advisor to our Board of Directors
The board of directors of the Company retained BofA Merrill Lynch to act as
its financial advisor in connection with the Merger. BofA Merrill Lynch is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions,
negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. The board of directors of the Company selected BofA Merrill Lynch to act as its financial
advisor in connection with the Merger on the basis of BofA Merrill Lynchs experience in transactions similar to the Merger, its reputation in the investment community and its familiarity with the Company and its business.
On April 25, 2015, at a meeting of the board of directors of the Company held to evaluate the Merger, BofA Merrill Lynch rendered to the
board of directors of the Company an oral opinion, confirmed by delivery of a written opinion, dated April 25, 2015, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in
its opinion, the Merger Consideration to be received by holders of Company Common Stock in the Merger was fair, from a financial point of view, to such holders.
The full text of BofA Merrill Lynchs written opinion to the board of directors of the Company, which describes, among other things,
the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex C to this document and is incorporated by reference herein in its entirety. The following summary of BofA Merrill
Lynchs opinion is qualified in its entirety by reference to the full text of the opinion. BofA Merrill Lynch delivered its opinion to the board of directors of the Company for the benefit and use of the board of directors of the Company (in
its capacity as such) in connection with and for purposes of its evaluation of the Merger Consideration from a financial point of view. BofA Merrill Lynchs opinion does not address any other aspect of the Merger and no opinion or view was
expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with
or effect the Merger. BofA Merrill Lynchs opinion does not address any other aspect of the Merger and does not constitute a recommendation to any shareholder as to how to vote or act in connection with the Merger or any related matter.
In connection with rendering its opinion, BofA Merrill Lynch:
|
(1) |
reviewed certain publicly available business and financial information relating to the Company; |
|
(2) |
reviewed certain internal financial and operating information with respect to the business, operations and prospects of the Company furnished to or discussed with BofA Merrill Lynch by the management of the Company,
including certain financial forecasts relating to the Company prepared by the management of the Company (such forecasts, the Company forecasts); |
|
(3) |
discussed the past and current business, operations, financial condition and prospects of the Company with members of senior management of the Company; |
|
(4) |
reviewed the trading history for the common stock of the Company and a comparison of that trading history with the trading histories of other companies BofA Merrill Lynch deemed relevant; |
-31-
|
(5) |
compared certain financial and stock market information of the Company with similar information of other companies BofA Merrill Lynch deemed relevant; |
|
(6) |
compared certain financial terms of the Merger to financial terms, to the extent publicly available, of other transactions BofA Merrill Lynch deemed relevant; |
|
(7) |
considered the results of the efforts of BofA Merrill Lynch on behalf of the board of directors of the Company to solicit, at the direction of the board of directors of the Company, indications of interest from certain
third parties with respect to a possible acquisition of the Company; |
|
(8) |
reviewed a draft, dated April 24, 2015 of the Merger Agreement (the Draft Merger Agreement); and |
|
(9) |
performed such other analyses and studies and considered such other information and factors as BofA Merrill Lynch deemed appropriate. |
In arriving at its opinion, BofA Merrill Lynch assumed and relied upon, without independent verification, the accuracy and completeness of the
financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with it and relied upon the assurances of the management of the Company that it was not aware of any facts or circumstances that would
make such information or data inaccurate or misleading in any material respect. With respect to the Company forecasts, BofA Merrill Lynch was advised by the board of directors of the Company, and assumed, that they were reasonably prepared on bases
reflecting the best currently available estimates and good faith judgments of the management of the Company as to the future financial performance of the Company. BofA Merrill Lynch did not make and was not provided with any independent evaluation
or appraisal of the assets or liabilities (contingent or otherwise) of the Company or any other entity, nor did it make any physical inspection of the properties or assets of the Company or any other entity. BofA Merrill Lynch did not evaluate the
solvency or fair value of the Company or any other entity under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Merrill Lynch assumed, at the direction of the board of directors of the Company, that the
Merger would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals,
consents, releases and waivers for the Merger, no delay, limitation, restriction or condition, including any divestiture requirements or amendments or modifications, would be imposed that would have an adverse effect on the Company or the Merger
(including the contemplated benefits thereof). BofA Merrill Lynch also assumed, at the direction of the board of directors of the Company, that the final executed Agreement would not differ in any material respect from the Draft Merger Agreement
reviewed by it.
BofA Merrill Lynch expressed no view or opinion as to any terms or other aspects or implications of the Merger (other
than the Merger Consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the Merger or any terms, aspects or implications of any other agreement, arrangement or understanding entered
into in connection with or related to the Merger or otherwise. BofA Merrill Lynchs opinion was limited to the fairness, from a financial point of view, of the Merger Consideration to be received by holders of Company Common Stock and no
opinion or view was expressed with respect to the Merger Consideration to be received by any particular holder of Company Common Stock or any consideration received in connection with the Merger by the holders of any class of securities, creditors
or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of
any party to the Merger, or class of such persons, relative to the Merger Consideration or otherwise. Furthermore, no opinion or view was expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might
be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with or effect the Merger. BofA Merrill Lynch also did not express any view or opinion with respect to, and relied,
at the direction of the board of directors of the Company, upon the assessments of representatives of the Company regarding, legal, regulatory, accounting, tax and similar matters relating to the Company and the Merger (including the contemplated
benefits thereof) as to which BofA Merrill Lynch understood that the Company obtained such advice as it deemed necessary from qualified professionals. In addition, BofA Merrill Lynch expressed no opinion or recommendation as to how any shareholder
should vote or act in connection with the Merger or any other matter.
-32-
BofA Merrill Lynchs opinion was necessarily based on financial, economic, monetary, market
and other conditions and circumstances as in effect on, and the information made available to BofA Merrill Lynch as of, the date of its opinion. It should be understood that subsequent developments may affect its opinion, and BofA Merrill Lynch does
not have any obligation to update, revise or reaffirm its opinion. The issuance of BofA Merrill Lynchs opinion was approved by BofA Merrill Lynchs Americas Fairness Opinion Review Committee.
The following represents a brief summary of the material financial analyses presented by BofA Merrill Lynch to the board of directors
of the Company in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Merrill Lynch, 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 performed by BofA Merrill Lynch. Considering the data set forth 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 the financial analyses performed by BofA Merrill Lynch.
In performing its financial analyses of the Company summarized below and in arriving at its opinion, BofA Merrill Lynch utilized the Company
forecasts. For further information regarding the Company forecasts, including the Companys estimated Adjusted EBITDA and estimated Adjusted EPS (each as defined below), see The Merger Certain Financial Projections of the
Company beginning on page 38.
Financial Analyses
Selected Publicly Traded Companies Analysis. BofA Merrill Lynch reviewed publicly available financial and stock market information for
the Company and publicly available financial and stock market information for the following seven offshore information technology services companies (the Offshore IT Services Companies) and three offshore business process outsourcing
companies (the Offshore BPO Companies and collectively with the Offshore IT Services Companies, the selected publicly traded companies):
Offshore IT Services Companies
|
|
|
Tata Consultancy Services Ltd. |
|
|
|
Cognizant Technology Solutions Corporation |
|
|
|
HCL Technologies Limited |
Offshore BPO Companies
|
|
|
ExlService Holdings, Inc. |
BofA Merrill Lynch reviewed, among other things, enterprise values
of each of the selected publicly traded companies, calculated as fully-diluted equity values based on closing stock prices on April 24, 2015, plus net debt, liquidation value of preferred stock and minority interest, as a multiple of each
companys calendar year 2015
-33-
estimated earnings before interest, taxes, depreciation and amortization, adjusted to exclude stock-based
compensation expense, non-recurring charges and other one-time items (Adjusted EBITDA), or Enterprise Value/2015E Adjusted EBITDA. BofA Merrill Lynch also reviewed per share equity values, based on closing stock prices on April 24,
2015, of the selected publicly traded companies as a multiple of each companys calendar year 2015 and 2016 estimated earnings per share, adjusted to exclude stock-based compensation expense, amortization of intangibles, non-recurring charges
and other one-time items (Adjusted EPS), or Price/2015E Adjusted EPS and Price/2016E Adjusted EPS, respectively. Estimated financial data of the selected publicly traded companies was based on publicly available research analysts
estimates. This analysis indicated high, low, mean and median multiples for Enterprise Value/2015E Adjusted EBITDA, Price/2015E Adjusted EPS and Price/2016E Adjusted EPS for the selected publicly traded companies as set forth in the table below:
Offshore IT Services Companies
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Metric |
|
High |
|
|
Low |
|
|
Mean |
|
|
Median |
|
Enterprise Value/2015E Adjusted EBITDA |
|
|
16.0x |
|
|
|
10.3x |
|
|
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12.5x |
|
|
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12.4x |
|
Price/2015E Adjusted EPS |
|
|
21.5x |
|
|
|
14.3x |
|
|
|
18.0x |
|
|
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17.7x |
|
Price/2016E Adjusted EPS |
|
|
19.1x |
|
|
|
13.3x |
|
|
|
16.0x |
|
|
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16.1x |
|
Offshore BPO Companies
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Metric |
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High |
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|
Low |
|
|
Mean |
|
|
Median |
|
Enterprise Value/2015E Adjusted EBITDA |
|
|
13.5x |
|
|
|
9.8x |
|
|
|
11.2x |
|
|
|
10.1x |
|
Price/2015E Adjusted EPS |
|
|
19.4x |
|
|
|
14.3x |
|
|
|
17.1x |
|
|
|
17.7x |
|
Price/2016E Adjusted EPS |
|
|
17.1x |
|
|
|
13.2x |
|
|
|
15.3x |
|
|
|
15.7x |
|
Based on the analysis of the selected publicly traded companies summarized above and using the Company
forecasts, BofA Merrill Lynch then applied multiples of 11.0x to 13.5x to the Companys calendar year 2015 estimated Adjusted EBITDA, multiples of 17.0x to 20.0x to the Companys calendar year 2015 estimated Adjusted EPS, and multiples of
15.0x to 18.0x to the Companys calendar year 2016 estimated Adjusted EPS. The Companys implied fully-diluted equity value based on the Adjusted EBITDA multiples analysis described above was calculated (based on information provided by
the management of the Company) by reducing the Companys implied enterprise value by the Companys net debt and minority interest as of December 31, 2014. Taking into account the number of diluted shares of Company Common Stock
outstanding as of April 22, 2015 (based on information provided by the management of the Company and calculated using the treasury stock method), this analysis indicated the following approximate implied per share equity value reference ranges
for the Company (per share values were rounded to the nearest $0.25 increment), as compared to the Merger Consideration:
|
|
|
|
|
|
|
Implied Per Share Equity Value Reference Range for The
Company |
|
Merger Consideration |
Enterprise Value/2015E
Adjusted EBITDA |
|
Price/2015E
Adjusted EPS |
|
Price/2016E
Adjusted EPS |
|
|
$34.25 43.25 |
|
$35.25 41.50 |
|
$ 36.50 44.00 |
|
$48.00 |
No company used in this analysis is identical or directly comparable to the Company. Accordingly, an
evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the
public trading or other values of the companies to which the Company was compared.
-34-
Selected Precedent Transactions Analysis. BofA Merrill Lynch reviewed, to the extent
publicly available, financial information relating to the following nineteen selected transactions involving companies in the information technology services and business process outsourcing industry, announced since September 2008:
|
|
|
|
|
Announcement Month and Year |
|
Target |
|
Acquirer |
December 2014 |
|
Xerox Corporations Information Technology Outsourcing Business |
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Atos SE |
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|
December 2014 |
|
EVRY ASA |
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Apax Partners LLP |
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November 2014 |
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Sapient Corporation |
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Publicis Groupe S.A. |
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October 2014 |
|
Sutherland Global Services, Inc. |
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TPG Capital, L.P. |
|
|
|
August 2013 |
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Hexaware Technologies Limited |
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Baring Private Equity Asia |
|
|
|
May 2013 |
|
Pactera Technology International Ltd. |
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Blackstone Group LP |
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|
|
August 2012 |
|
VanceInfo Technologies Inc. |
|
Pactera Technology International Ltd. (hiSoft Technology International Limited) |
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|
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August 2012 |
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Genpact Limited |
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Bain Capital Partners LLC |
|
|
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May 2012 |
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Logica PLC |
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CGI Group Inc. |
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|
|
March 2012 |
|
Satyam Computer Services Limited |
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Tech Mahindra Limited |
|
|
|
May 2011 |
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Intelenet Global Services Private Ltd |
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Serco Group Plc |
|
|
|
April 2011 |
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Headstrong Corporation |
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Genpact Limited |
|
|
|
January 2011 |
|
Patni Computer Systems Ltd. |
|
IGATE Corporation |
|
|
|
October 2010 |
|
Keane, Inc. |
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NTT Data Corporation |
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|
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July 2010 |
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Dimension Data Holdings Plc |
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Nippon Telegraph and Telephone Corp |
|
|
|
May 2010 |
|
Stanley Inc. |
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CGI Group Inc. |
|
|
|
September 2009 |
|
Affiliated Computer Services, Inc. |
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Xerox Corporation |
|
|
|
September 2009 |
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Perot Systems Corporation |
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Dell Inc. |
|
|
|
September 2008 |
|
AXON Group Plc |
|
HCL Technologies Limited |
BofA Merrill Lynch reviewed transaction values, calculated as the enterprise value implied for the target
company based on the consideration payable in the selected transactions, as a multiple of the target companys last 12 months Adjusted EBITDA, except that an adjustment for stock-based compensation expense was made only for those transactions
where such information was publicly available (TV/LTM Adjusted EBITDA). Financial data of the selected precedent transactions was based on publicly available information at the time of announcement of the relevant transaction. This
analysis indicated high, low, mean and median multiples for TV/LTM Adjusted EBITDA as set forth in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metric |
|
High |
|
|
Low |
|
|
Mean |
|
|
Median |
|
TV/LTM Adjusted EBITDA |
|
|
16.0x |
|
|
|
4.9x |
|
|
|
9.4x |
|
|
|
9.5x |
|
Based on the analysis of the selected transactions summarized above and using the Companys reported
financial results, BofA Merrill Lynch then applied multiples of 12.0x to 16.0x to the Companys calendar year 2014 Adjusted EBITDA. The Companys implied fully-diluted equity value was calculated (based on information provided by the
management of the Company) by reducing the Companys implied enterprise value by the Companys net debt and minority interest as of December 31, 2014. Taking into account the number of diluted shares of Company Common Stock
outstanding as of April 22, 2015 (based on information provided by the management of the Company and calculated using the treasury stock method), this analysis indicated the following approximate implied per share equity value reference ranges
for the Company (per share values were rounded to the nearest $0.25 increment), as compared to the Merger Consideration:
|
|
|
Implied Per Share Equity Value Reference Range for The Company |
|
Merger Consideration |
$33.75 - $46.75 |
|
$48.00 |
-35-
No company, business or transaction used in this analysis is identical or directly comparable to
the Company or the Merger. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics
and other factors that could affect the acquisition or other values of the companies, business segments or transactions to which the Company and the Merger were compared.
Discounted Cash Flow Analysis. BofA Merrill Lynch performed a discounted cash flow analysis of the Company using the Company forecasts
to calculate the estimated present value of the Companys projected standalone unlevered, after-tax free cash flows. The Companys projected standalone unlevered, after-tax free cash flows were calculated using the Company forecasts as
Adjusted EBITDA less stock-based compensation expense, less depreciation and amortization, less taxes, plus depreciation and amortization, less capital expenditures and less increases in net working capital. BofA Merrill Lynch calculated terminal
values for the Company by applying a range of perpetuity growth rates of 5.5% to 6.0% to the Companys projected unlevered, after-tax normalized free cash flows in the terminal year. The cash flows and terminal values were then discounted to
present value as of December 31, 2014 using discount rates ranging from 10.25% to 12.75%, which were based on an analysis of the estimated weighted average cost of capital of the Company. The Companys implied fully-diluted equity value
was calculated (based on information provided by the management of the Company) by reducing the Companys implied enterprise value by the Companys net debt and minority interest as of December 31, 2014. Taking into account the number
of diluted shares of Company Common Stock outstanding as of April 22, 2015 (based on information provided by the management of the Company and calculated using the treasury stock method), this analysis indicated the following approximate
implied per share equity value reference range for the Company (per share values were rounded to the nearest $0.25 increment), as compared to the Merger Consideration:
|
|
|
Implied Per Share Equity Value Reference Range for The Company |
|
Merger Consideration |
$32.25 - $58.75 |
|
$48.00 |
The range of discount rates and perpetuity growth rates described above implied a range of terminal value
multiples based on the Companys estimated Adjusted EBITDA in the terminal year of 8.6x to 14.5x.
Other Factors
BofA Merrill Lynch also noted certain additional factors that were not considered part of BofA Merrill Lynchs financial analyses with
respect to its opinion but were referenced for informational purposes, including, among other things, the following:
|
|
|
the historical trading prices of the Company Common Stock during the 52-week period ending on April 13, 2015, the last trading day prior to the Companys receipt of the press inquiry regarding the proposed
Merger, noting that the low and high closing prices during such period were $32.61 and $44.52, respectively; |
|
|
|
analyst price targets for the Company Common Stock in recently published, publicly available research analysts reports, noting that the low and high per share price targets ranged from $34.00 to $55.00, with a
mean of $43.10 and median of $42.50, respectively; and |
|
|
|
the premium represented by the Merger Consideration over the closing price per share of the Company Common Stock on April 24, 2015 and on the other dates described below. This analysis indicated the following:
|
-36-
|
|
|
Date |
|
Premium Implied by Merger Consideration |
Closing price on April 24, 2015, the last trading day prior to the public announcement of the Merger |
|
5% |
|
|
Closing price on February 19, 2015, the last trading day prior to the Companys receipt of Capgeminis initial indication of interest |
|
22% |
|
|
Closing price on April 13, 2015, the last trading day prior to the Companys receipt of the press inquiry regarding the proposed Merger |
|
17% |
|
|
Closing price on March 6, 2015, the high closing price during the 52-week period ending on April 13, 2015, the last trading day prior to the Companys receipt of the press inquiry regarding the proposed Merger |
|
8% |
Miscellaneous
As noted above, the discussion set forth above is a summary of the material financial analyses presented by BofA Merrill Lynch to the board of
directors of the Company in connection with its opinion and is not a comprehensive description of all analyses undertaken by BofA Merrill Lynch in connection with its opinion. The preparation of a financial opinion is a complex analytical 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 financial opinion is not readily susceptible to partial
analysis or summary description. BofA Merrill Lynch believes that its analyses summarized above must be considered as a whole. BofA Merrill Lynch further believes that selecting portions of its analyses and the factors considered or focusing on
information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Merrill Lynchs analyses and
opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.
In performing its analyses, BofA Merrill Lynch considered industry performance, general business and economic conditions and other matters,
many of which are beyond the control of the Company. The estimates of the future performance of the Company in or underlying BofA Merrill Lynchs analyses are not necessarily indicative of actual values or actual future results, which may be
significantly more or less favorable than those estimates or those suggested by BofA Merrill Lynchs analyses. These analyses were prepared solely as part of BofA Merrill Lynchs analysis of the fairness, from a financial point of view, of
the Merger Consideration and were provided to the board of directors of the Company in connection with the delivery of BofA Merrill Lynchs opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might
actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently
subject to substantial uncertainty and should not be taken to be BofA Merrill Lynchs view of the actual values of the Company.
The
type and amount of consideration payable in the Merger was determined through negotiations between the Company and Capgemini, rather than by any financial advisor, and was approved by the board of directors of the Company. The decision to enter into
the Agreement was solely that of the board of directors of the Company. As described above, BofA Merrill Lynchs opinion and analyses were only one of many factors considered by the board of directors of the Company in its evaluation of the
proposed Merger and should not be viewed as determinative of the views of the board of directors or management of the Company with respect to the Merger or the Merger Consideration.
The Company has agreed to pay BofA Merrill Lynch for its services in connection with the Merger an aggregate fee based on a percentage of the
enterprise value of the Company immediately prior to the completion of the Merger, which fee is currently estimated to be approximately $19.5 million. A portion of this fee was payable in connection with its opinion and a significant portion of
this fee is contingent upon the completion of the Merger. The Company also has agreed to reimburse BofA Merrill Lynch for certain expenses incurred in connection with BofA Merrill Lynchs engagement and to indemnify BofA Merrill Lynch, any
controlling person of BofA Merrill Lynch and each of their respective directors, officers, employees, agents and affiliates against specified liabilities, including liabilities under the federal securities laws.
BofA Merrill Lynch and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and
derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other
commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Merrill Lynch and its affiliates may invest on a principal basis or on behalf of customers or manage funds
that invest, make or hold long or short
-37-
positions, finance positions or trade or otherwise effect transactions in the equity, debt or other securities or
financial instruments (including derivatives, bank loans or other obligations) of SA, certain of its affiliates, the Company and certain of its affiliates (including Apax Partners LLP, certain of its affiliates and/or certain portfolio companies of
funds advised by Apax Partners LLP or its affiliates).
BofA Merrill Lynch and its affiliates in the past have provided, currently are
providing, and in the future may provide, investment banking, commercial banking and other financial services to the Company and certain of its affiliates, including Apax Partners LLP, certain of its affiliates and/or certain portfolio companies of
funds advised by Apax Partners LLP or its affiliates, and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as financial advisor to certain of the Companys
affiliates, including Apax Partners LLP, certain of its affiliates and/or certain portfolio companies of funds advised by Apax Partners LLP or its affiliates, in connection with certain mergers and acquisition transactions, (ii) having acted or
acting as a bookrunner, underwriter and/or global coordinator for various debt and equity offerings of certain of the Companys affiliates, including Apax Partners LLP, certain of its affiliates and/or certain portfolio companies of funds
advised by Apax Partners LLP or its affiliates, (iii) having acted as a solicitation agent for a consent solicitation of a portfolio company of funds advised by Apax Partners LLP or its affiliates, (iv) having acted or acting as an
administrative agent, collateral agent, bookrunner, arranger and/or global coordinator for, and/or as a lender under, certain term loans, letters of credit, credit and leasing facilities and other credit arrangements of certain of the Companys
affiliates, including Apax Partners LLP, certain of its affiliates and/or certain portfolio companies of funds advised by Apax Partners LLP or its affiliates (including acquisition financing), (v) having provided or providing certain
derivatives, foreign exchange and other trading services to the Company and/or certain of its affiliates, including Apax Partners LLP, certain of its affiliates and/or certain portfolio companies of funds advised by Apax Partners LLP or its
affiliates, (vi) having provided or providing certain managed investments services and products to the Company and/or certain of its affiliates, including Apax Partners LLP, certain of its affiliates and/or certain portfolio companies of funds
advised by Apax Partners LLP or its affiliates, and (vii) having provided or providing certain treasury management products and services to the Company and/or certain of its affiliates, including Apax Partners LLP, certain of its affiliates
and/or certain portfolio companies of funds advised by Apax Partners LLP or its affiliates. The aggregate amount of any revenues received from April 1, 2013 through March 31, 2015 by BofA Merrill Lynch and its affiliates (i) from the
Company and certain of its controlled affiliates for corporate, commercial and investment banking services was approximately $2 million, and (ii) from Apax Partners LLP, certain of its affiliates and certain portfolio companies of funds
advised by Apax Partners LLP or its affiliates for corporate, commercial and investment banking services was approximately $127 million.
In addition, BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide,
investment banking, commercial banking and other financial services to SA and certain of its affiliates and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as an
arranger for, and/or as a lender under, certain credit and leasing facilities and other credit arrangements of SA and/or certain of its affiliates, (ii) having provided or providing certain foreign exchange trading services to SA and/or certain
of its affiliates, (iii) having provided or providing certain managed investments services and products to SA and/or certain of its affiliates, and (iv) having provided or providing certain treasury management products and services to SA
and/or certain of its affiliates. In addition, BofA Merrill Lynch and/or certain of its affiliates have maintained, currently are maintaining, and in the future may maintain, commercial (including vendor and/or customer) relationships with SA and/or
certain of its affiliates. The aggregate amount of any revenues received from April 1, 2013 through March 31, 2015 by BofA Merrill Lynch and its affiliates from SA and certain of its affiliates for corporate, commercial and investment
banking services was approximately $7 million.
Certain Financial Projections of the Company
Summary of the Financial Projections
We do not as a matter of course publicly disclose forecasts or internal projections as to future performance, revenues, earnings, financial
condition or other results due to, among other reasons, the uncertainty of the underlying assumptions and estimates. However, in connection with our board of directors exploration of strategic alternatives, our management prepared unaudited
prospective financial information on a stand-alone, pre-merger basis in good faith and on a reasonable basis based on the best information available to our management at the time of their preparation. We are electing to provide the unaudited
prospective financial information in this Information Statement to provide our shareholders access to certain non-public unaudited prospective financial information that
-38-
was made available to Capgemini and also to BofA Merrill Lynch in connection its financial analyses and opinion.
The unaudited prospective financial information was not prepared with a view toward public disclosure and the inclusion of this information should not be regarded as an indication that we or any other recipient of this information considered, or now
considers, it to be necessarily predictive of actual future results. Neither we nor any of our affiliates assumes any responsibility for the accuracy of this information. Readers of this Information Statement are cautioned not to place undue
reliance on the unaudited prospective financial information. No one has made or makes any representation to any of our shareholders regarding the information included in the unaudited prospective financial information or our ultimate performance
compared to the information included in the unaudited prospective financial information.
There can be no assurance that the assumptions
made in preparing such information will prove accurate or that the projected results reflected therein will be realized. Neither our independent registered public accounting firm, nor any other independent accountants, have compiled, examined or
performed any procedures with respect to the unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for
the unaudited prospective financial information. Furthermore, the unaudited prospective financial information does not take into account any circumstance or event occurring after the date it was prepared or which may occur in the future, and, in
particular, does not take into account any revised prospects of our business, changes in general business, regulatory or economic conditions, competition or any other transaction or event that has occurred since the date on which such information
was prepared or which may occur in the future.
While presented with numeric specificity, the unaudited prospective financial information
reflects numerous estimates and assumptions made by our management with respect to industry performance and competition, general business, economic, market and financial conditions and matters specific to our business, all of which are difficult to
predict and many of which are beyond our control. As a result, the unaudited prospective financial information reflects numerous assumptions and estimates as to future events and there can be no assurance that these assumptions will accurately
reflect future conditions, that the unaudited prospective financial information will be realized or that actual results will not be significantly higher or lower than estimated. Since the unaudited prospective financial information covers multiple
years, such information by its nature becomes less predictive with each successive year.
We use a variety of financial measures that are
not in accordance with GAAP, including Adjusted EBITDA and Adjusted EPS, as supplemental measures to evaluate its operational performance. While we believe that these non-GAAP financial measures provide useful supplemental information, there are
limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all of the Companys competitors and may not be directly comparable to
similarly titled measures of the Companys competitors due to potential differences in the exact method of calculation.
The
following table presents a summary of the material unaudited financial projections prepared by our management. These financial projections were provided to Capgemini and used by BofA Merrill Lynch in performing certain analyses described in the
section titled The Merger Opinion of Financial Advisor to our Board of Directors beginning on page 31.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in millions, except
per share amounts) |
|
Year ended December 31, 2015 |
|
|
Year ended December 31, 2016 |
|
|
Year ended December 31, 2017 |
|
|
Year ended December 31, 2018 |
|
|
Year ended December 31, 2019 |
|
Revenue |
|
$ |
1,369 |
|
|
$ |
1,520 |
|
|
$ |
1,702 |
|
|
$ |
1,906 |
|
|
$ |
2,135 |
|
Adjusted EBITDA (1) |
|
$ |
306 |
|
|
$ |
358 |
|
|
$ |
411 |
|
|
$ |
467 |
|
|
$ |
523 |
|
Profit after tax |
|
$ |
150 |
|
|
$ |
182 |
|
|
$ |
216 |
|
|
$ |
255 |
|
|
$ |
298 |
|
Adjusted EPS (2) |
|
$ |
2.07 |
|
|
$ |
2.44 |
|
|
$ |
2.81 |
|
|
$ |
3.28 |
|
|
$ |
3.78 |
|
(1) |
We define Adjusted EBITDA as net income before interest expense, provision for income tax, and depreciation and amortization, adjusted for expenses related to stock-based compensation and merger and
reorganization. |
(2) |
We define Adjusted EPS as diluted earnings per share, adjusted for expenses (net of taxes) related to stock-based compensation, amortization of intangibles from acquisitions and merger and reorganization.
|
-39-
Important Information About the Unaudited Financial Projections
The unaudited prospective financial information summarized above includes forward-looking statements and is based on estimates and assumptions
that are inherently subject to factors such as industry performance, competition, general business, economic, regulatory, market and financial conditions, as well as changes to our business, financial condition or results of operations, including
the factors described under Forward-Looking Statements and other risk factors as discussed in Item 1A of Part I of our Annual Report. Shareholders are urged to review our most recent SEC filings for a description of risk factors
with respect to our business. See Forward-Looking Statements beginning on page 1 and Where You Can Find More Information beginning on page 66. The unaudited prospective financial information does not take into account any of
the transactions contemplated by the Merger Agreement, including the Merger, which might cause actual results to differ materially.
For
the foregoing reasons, as well as the bases and assumptions on which the unaudited prospective financial information was compiled, the inclusion of our unaudited prospective financial information in this Information Statement should not be regarded
as an indication that such information will be predictive of future results or events nor construed as financial guidance, and it should not be relied on as such or for any other purpose whatsoever.
WE HAVE NOT UPDATED AND DO NOT INTEND TO UPDATE OR OTHERWISE REVISE THE PROSPECTIVE FINANCIAL INFORMATION SET FORTH ABOVE, INCLUDING,
WITHOUT LIMITATION, TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE SUCH INFORMATION WAS PREPARED OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, INCLUDING, WITHOUT LIMITATION, CHANGES IN GENERAL ECONOMIC, REGULATORY OR INDUSTRY CONDITIONS, EVEN IN
THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE PROSPECTIVE FINANCIAL INFORMATION ARE NO LONGER APPROPRIATE.
Financing for the Merger
Parent has advised the Company that it will use a combination of cash on hand and/or proceeds of debt financing to finance the Merger. The
Merger is not contingent on the receipt of any proceeds from any debt financing.
Accounting Treatment
The Merger will be accounted for pursuant to purchase accounting in accordance with applicable accounting guidance.
United States Federal Income Tax Consequences of the Merger
The following is a general summary of the U.S. federal income tax consequences of the Merger to U.S. holders (as defined below) who receive
cash in the Merger. The discussion is for general information purposes only and does not purport to consider all aspects of U.S. federal income taxation that might be relevant to our shareholders. The discussion is based on current law which is
subject to change, possibly with retroactive effect. The discussion applies only to U.S. holders who hold our stock as a capital asset (generally property held for investment). Further, this summary does not intend to address all aspects of U.S.
federal income taxation that might be relevant to U.S. holders in light of their particular circumstances and does not apply to U.S. holders subject to special treatment under the U.S. federal income tax laws, such as dealers in securities, banks,
insurance companies, other financial institutions, mutual funds, real estate investment trusts, tax-exempt organizations, investors in pass-through entities, shareholders who hold our stock as part of a hedge, wash sale, synthetic security,
conversion transaction, or other integrated transaction, and shareholders who acquired our stock pursuant to the exercise of options or otherwise as compensation or through a tax-qualified retirement plan. In addition, this summary does not address
any tax consequences under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010 or any U.S. federal tax law other than the income tax law, or under any state, local or foreign tax law. If
shares are held by an entity treated as a partnership for U.S. federal income tax purposes, the U.S. federal income tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partner.
Partnerships that own our stock and partners in such partnerships are urged to consult their own tax advisors regarding the consequences to them of the Merger.
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For purposes of this summary, a U.S. holder is a holder of shares who is, for U.S.
federal income tax purposes:
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An individual who is a citizen or resident of the United States; |
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A corporation (or other entity taxable as a corporation) created or organized in or under the laws of the United States, any state of the United States or the District of Columbia; |
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An estate whose income is subject to U.S. federal income tax regardless of its source; or |
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A trust if (a) a U.S. court is able to exercise primary supervision over the trusts administration and one or more U.S. persons are authorized to control all substantial decisions of the trust; or (b) it
has a valid election in place to be treated as a domestic trust for U.S. federal income tax purposes. |
This discussion does
not discuss the tax consequences to any shareholder who, for U.S. federal income tax purposes, is not a U.S. holder and does not address any aspect of state, local or foreign tax laws or any U.S. federal law other than the income tax law.
The receipt of the Merger Consideration (which consists solely of cash) for our stock as a result of the Merger will be a taxable transaction
for U.S. federal income tax purposes. A U.S. holder who surrenders our stock for cash as a result of the Merger will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash
received (determined before deduction of any applicable withholding taxes) and the U.S. holders adjusted tax basis in the stock surrendered. Gain or loss will be determined separately for each block of stock (generally, shares acquired at the
same cost in a single transaction) surrendered for cash in connection with the Merger. Such gain or loss will be long-term capital gain or loss if the U.S. holders holding period for such stock is more than one year at the time of the
exchange. Long-term capital gains of individuals are eligible for reduced rates of taxation. There are limitations on the deductibility of capital losses.
Backup withholding may apply to all cash payments to which a U.S. holder is entitled pursuant to the Merger Agreement if certain requirements
are not met. In order to avoid backup withholding, a U.S. holder that does not otherwise establish an exemption should provide a taxpayer identification number (Social Security number, in the case of individuals, or employer identification number,
in the case of other U.S. holders), certify that such number is correct, and otherwise comply with the backup withholding tax rules. Each U.S. holder should complete and sign the IRS Form W-9 which will be included as part of the letter of
transmittal and return it to the paying agent, in order to provide the information and certification necessary to avoid backup withholding tax, unless an exemption applies and is established in a manner satisfactory to the paying agent.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a U.S. holder under the
backup withholding rules will be allowed as a credit against the U.S. holders U.S. federal income tax liability and may entitle the U.S. holder to a refund, provided the required information is timely furnished to the Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE ARE FOR GENERAL INFORMATION PURPOSES ONLY AND ARE NOT INTENDED TO
CONSTITUTE A COMPLETE DESCRIPTION OF ALL TAX CONSEQUENCES RELATING TO THE MERGER. BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH SHAREHOLDER SHOULD CONSULT THE SHAREHOLDERS TAX ADVISOR REGARDING THE APPLICABILITY OF THE RULES DISCUSSED
ABOVE TO THE SHAREHOLDER AND THE PARTICULAR TAX EFFECTS TO THE SHAREHOLDER OF THE MERGER, INCLUDING THE APPLICATION OF STATE, LOCAL AND FOREIGN TAX LAWS OR ANY U.S. FEDERAL TAX LAW OTHER THAN THE INCOME TAX LAW.
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Conversion of Shares; Procedures for Exchange of Common Stock
Shortly after the Effective Time, a paying agent will mail a letter of transmittal and instructions to shareholders of the Company who hold
shares of Company Common Stock represented by stock certificates. The letter of transmittal will be accompanied by instructions, which will tell you how to surrender your stock certificates in exchange for the Merger Consideration. Shareholders
should not return stock certificates before receiving the letter of transmittal.
In the event of a transfer of ownership of any shares of
Company Common Stock that has not been registered in the records of our transfer agent prior to the Effective Time, the cash consideration may be paid to a person other than the registered owner if:
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the certificate is properly endorsed or otherwise is in proper form for transfer; and |
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the person requesting such payment (a) pays any transfer or other taxes resulting from the payment to a person other than the registered holder of the certificate or (b) establishes to the satisfaction of
Parent that the tax has been paid or is not applicable. |
Holders of uncertificated shares of Company Common Stock (i.e.,
holders whose shares are held in book-entry form) will automatically receive the Merger Consideration as promptly as reasonably practicable after the Effective Time without any further action required on the part of those holders.
The Merger Consideration paid upon surrender of shares of Company Common Stock will be in full satisfaction of all rights relating to the
shares or Company Common Stock.
Effect of the Merger on Listing and SEC Registration
Following the consummation of the Merger, our stock will no longer be publicly traded and we will cease making filings with the SEC and
otherwise cease being required to comply with the rules relating to publicly held companies. We intend to and will delist from trading on NASDAQ and apply for termination of registration of the Company Common Stock under the Exchange Act as soon
after the completion of the Merger as the requirements for such delisting and termination are met.
Regulatory Matters
Related to the Merger
The completion of the Merger is conditioned on, among other things, at least 20 calendar days having elapsed
from the date this Information Statement was first mailed to our shareholders, the expiration or termination of any waiting period under the HSR Act, receipt of approval under or expiration or termination of any waiting periods pursuant to certain
foreign antitrust and competition laws of Brazil, Canada, India and Germany and the receipt of CFIUS approval.
Under the HSR Act and the
rules and regulations promulgated thereunder, the Merger may not be consummated until the expiration of a 30-calendar-day waiting period following the parties filing of their respective HSR Act notification forms or the earlier termination of
that waiting period. If the DOJ or the FTC issues a second request prior to the expiration of the initial waiting period, the parties must observe a second 30-day waiting period, which would begin to run only after both parties have substantially
complied with the second request, unless the waiting period is terminated earlier. Each of the Company and Parent filed a notification and report form with the DOJ and FTC on May 8, 2015 and requested early termination of the waiting period.
At any time before or after the mergers are completed, either the DOJ, the FTC or U.S. state attorneys general could take action under
the antitrust laws in opposition to the mergers, including seeking to enjoin completion of the Merger, condition completion of the Mergers upon the divestiture of assets of the Company, Parent or their subsidiaries or impose restrictions on
Parents post-merger operations.
Private parties may also seek to take legal action under the antitrust laws under some
circumstances.
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Under Law No. 12,529 of 2011 of Brazil and the rules and regulations promulgated thereunder,
the Merger may not be consummated until clearance has been received from the Conselho Administrativo de Defesa Econômica (CADE) following the parties joint filing of their merger notification. Under the Brazilian competition
rules there is a maximum waiting period of up to 240 days that can be extended by 60 additional days at the initiative of the parties, or by 90 additional days if CADE considers it necessary to conclude the analysis. Once the clearance decision has
been issued, the CADEs regulations set out a 15-day waiting period to allow for appeals from third parties or requests from the CADEs Board of Commissioners; if there are no appeals and the Commissioners remain silent, closing can occur
after such 15-day period pursuant to the clearance decision. The Company and Parent filed a joint notification with the CADE in Brazil on May 11, 2015 and requested clearance of the transaction pursuant to Law No. 12,529 of 2011.
Under the Competition Act (Canada), as amended, and the rules and regulations promulgated thereunder, the Merger may not be consummated until
expiration or waiver of the applicable waiting periods, or waiver of the pre-merger notification obligation, or the issuance of an advance ruling certificate, following the parties filing of their respective merger notifications. Following
submission of the Canadian merger notification, there is an initial waiting period of 30 calendar days. The parties may close the Merger upon expiry of the initial 30-day waiting period unless, prior to the end of that period, the Commissioner of
Competition appointed under the Competition Act (Canada) (the Commissioner) issues a supplementary information request to the parties for production of documents, data and/ or responses to questions. If a supplementary
information request is issued, the waiting period is suspended until the parties comply, at which point the waiting period begins to run again and expires after 30 calendar days following compliance with the supplementary information request. The
Commissioner may terminate or waive the waiting period (including the initial waiting period) at any time by issuing an advance ruling certificate confirming that the Commissioner would not have sufficient grounds on which to apply to the
Competition Tribunal to challenge the transaction or issuing a no-action letter indicating that the Commissioner does not, at that time, intend to make an application to the Competition Tribunal to challenge the transaction. Conversely,
the Commissioner may, before he makes an application to the Competition Tribunal to challenge the transaction, apply for an injunction to prevent closing for up to an additional 30 calendar days following expiry of the waiting period (with one
possible extension of an additional 30 calendar days) to allow additional time for review or, after he makes an application to the Competition Tribunal to challenge the transaction, apply for an injunction to prevent closing for such period of time
as the Competition Tribunal considers necessary and sufficient to the meet the circumstances of the case. Each of the Company and Parent filed a notification with the Canadian Competition Bureau on May 12, 2015 and requested expiration or
waiver of the applicable waiting periods, or waiver of the pre-merger notification obligation, or the issuance of an advance ruling certificate, pursuant to the Competition Act (Canada), as amended.
Under the German Act against Restraints of Competition of 1957, and the rules and regulations promulgated thereunder, the Merger may not be
consummated until clearance has been received from the Federal Cartel Office (FCO) in Germany following the Parents filing of its merger notification. The FCO has one month from submission of the notification within which to review
the Merger. The FCO is not required to wait for the one month period to lapse and may grant clearance of the transaction at any point during this Phase I review period. In limited circumstances, the FCO can initiate a more detailed
in-depth Phase II investigation which can last up to four months after the initial notification. If the parties consent, this four month period can be extended further. If the parties offer commitments to address any competition concerns, the Phase
II investigation will automatically be extended by one month. Further delays can occur due to the stop-the-clock mechanism if the parties do not or do not completely reply to an information request from the FCO. The Parent filed a
notification with the Federal Cartel Office in Germany on May 8, 2015 and requested clearance of the transaction pursuant to the Act against Restraints of Competition of 1957, as amended.
In India, under the Competition Act, 2002 (Competition Act) and the regulations promulgated thereunder, the Merger may not be
consummated until clearance has been received from the Competition Commission of India (CCI) following the Parents filing of the merger notification. The CCI has 30 calendar days from submission of the notification to review the
Merger and form a prima facie opinion. However, minor delays may occur if the CCI issues a defect notice or seeks additional information from the parties, during which time the clock stops. If the CCI is of the view that the transaction is
likely to cause an appreciable adverse effect on competition in India, it can initiate an in-depth investigation which can last up to another 180 calendar days. In total, the CCI has to pass an order within 210 calendar days and two periods
of 30 business days each for consideration of modifications/amendments to the combination, from the date of merger notification. Upon the expiration of the 210 calendar days, and one 30 business day period for consideration of
modifications/amendments to the combination, if there is no communication from the CCI, the transaction is automatically approved.
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The Parent filed a notification with the CCI on May 18, 2015 and requested clearance of the transaction pursuant to the Competition Act.
The Merger is also conditioned on the approval or clearance of the Merger by CFIUS. Section 721 of the Defense Production Act, as well as
related Executive Orders and regulations, authorize the President or CFIUS to review transactions which could result in control of a U.S. business by a foreign person. Under the Defense Production Act and Executive Order 13456, the Secretary of the
Treasury acts through CFIUS to coordinate review of certain covered transactions that are voluntarily submitted to CFIUS or that are unilaterally reviewed by CFIUS. In general, CFIUS review of a covered transaction occurs in an initial 30-day review
period that may be extended by CFIUS for an additional 45-day investigation period. At the close of its review or investigation, CFIUS may determine that there are no national security concerns with the transaction, may impose mitigation terms to
resolve any national security concerns with the covered transaction, or may send a report to the President recommending that the transaction be suspended or prohibited, or providing notice to the President that CFIUS cannot agree on a recommendation
relative to the covered transaction. The President has 15 days under the Defense Production Act to act on the CFIUS report. The Company and Parent submitted a pre-filing draft to CFIUS on May 12, 2015 in anticipation of filing a joint voluntary
notice with CFIUS.
Upon consummation of the Merger, we will also file a certificate of merger with the Secretary of the Commonwealth of
Pennsylvania.
Litigation Related to the Merger
On May 5, 2015, a purported Shareholder Class Action and Derivative Complaint was filed in the Superior Court of New Jersey by
an alleged shareholder, Suresh Rachakonda, naming IGATE, SA, NA, Merger Sub and the individual members of our board of directors. The complaint alleges that the individual defendants breached their fiduciary duties in connection with the proposed
Merger and that the entity defendants aided and abetted the alleged breach of fiduciary duties. The complaint seeks, among other things, an injunction against the Merger and unspecified damages.
On May 8, 2015, legal counsel for Shiva Y. Stein, a purported shareholder in the Company, sent our board of directors a demand letter
pertaining to its proposed acquisition by Parent. The alleged shareholder demands that our board of directors terminate the Merger or seek a higher price on the alleged basis that the consideration is insufficient and our board of directors
process was deficient, and further demands that our board of directors conduct an investigation into potential wrongdoing by officers and directors in the formulation of the Merger Agreement, and further demands that our
board of directors permit Ms. Stein and other shareholders to inspect various corporate records in order to determine whether the proposed Merger is fair.
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THE MERGER AGREEMENT
The following is a summary of the material terms of the Merger Agreement. Although we believe that this description covers the material terms
of the Merger Agreement, it may not contain all the information that is important to you and is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is included as Annex A to this Information
Statement. We urge you to carefully read the Merger Agreement in its entirety.
Explanatory Note Regarding the Merger
Agreement
You should not rely upon the representations and warranties in the Merger Agreement or the description of them in this
Information Statement as statements of factual information about any of the parties. These representations and warranties were made by the parties only for purposes of the Merger Agreement, were made solely to each other as of the date specified in
the Merger Agreement and may be subject to modification or qualification by other public and non-public disclosures made by the parties to each other in connection with the Merger Agreement. The representations and warranties were made solely for
the benefit of the other parties to the Merger Agreement and may have been designed to allocate risk between the parties to the Merger Agreement, rather than establishing matters as fact. Some of these representations and warranties may not be
accurate or complete as of any particular date because they are subject to a contractual standard of materiality that is different from that generally applicable to our public disclosures. The representations and warranties are reproduced and
summarized in this Information Statement solely to provide information regarding the contractual terms of the Merger Agreement and not to provide you with any information about any of the parties. Information about the parties can be found in
Parties to the Merger Agreement beginning on page 15 or in our public filings with the SEC, as described in Where You Can Find More Information beginning on page 66.
Effective Time of the Merger
The Merger will be consummated and become effective at the time the articles of Merger are filed with the Secretary of the Commonwealth of
Pennsylvania or at such other time as agreed to by us and Parent and specified in the articles of Merger. The closing of the Merger (the Closing) is expected to occur on the second business day after the satisfaction or (to the extent
permitted by law) waiver of the closing conditions set forth in the Merger Agreement (other than those conditions that by their nature are to be satisfied at the closing) or such other date as the parties agree upon in writing. If the conditions to
closing have not been satisfied or (to the extent permitted by law) waived on such second business day, then the Closing will take place on the first business day on which all such conditions have been satisfied or (to the extent permitted by law)
waived, or such other date as the parties agree upon in writing.
The Merger
The Merger Agreement provides for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving corporation.
Following the Merger all of our outstanding shares will be wholly owned by Parent and the separate corporate existence of Merger Sub will cease. We sometimes refer to the company existing following the Effective Time as the surviving corporation. At
the Effective Time, (i) our articles of incorporation will be amended and restated in the form attached as Exhibit B to the Merger Agreement and such articles of incorporation will be the articles of incorporation of the surviving corporation;
(ii) our bylaws will be amended and restated to be in the same form as the bylaws of Merger Sub as in effect immediately prior to the Effective Time and such bylaws will be the bylaws of the surviving corporation; and (iii) the directors
of Merger Sub immediately prior to the Effective Time will become the directors of the surviving corporation.
Consideration
to be Received
At the Effective Time, each issued and outstanding share of Company Common Stock (other than shares of Company Common
Stock owned as treasury stock by us or owned by Parent or Merger Sub immediately prior to the Effective Time) will be converted into the right to receive $48.00 in cash, without interest.
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Treatment of IGATE Equity Awards
Treatment of Vested Company Stock Options
At the Effective Time, each vested IGATE stock option (including each vested stock option held by an executive officer) and each stock option
held by a non-employee director that is outstanding immediately prior to the completion of the merger (referred to in this Information Statement as a Vested Company Stock Option) will be canceled, with the holder of such Vested Company
Stock Option becoming entitled to receive an amount in cash, subject to any required tax withholdings, equal to the excess of the per share Merger Consideration of $48.00 minus the exercise price per share of IGATE common stock subject to such
Vested Company Stock Option.
Treatment of Unvested NEO Equity Awards
At the Effective Time, each unvested IGATE stock option, restricted share and performance share held by a named executive officer that is
outstanding immediately prior to the completion of the merger (referred to in this Information Statement as an Unvested NEO Equity Award) will be canceled and converted into the right to receive an amount in cash or in fully vested
shares of Cap Gemini common stock having a fair market value equal to the sum of (i) the excess of the per share Merger Consideration of $48.00 over the exercise price per share of IGATE common stock subject to each unvested stock option,
(ii) the per share Merger Consideration of $48.00 multiplied by the number of shares of IGATE common stock subject to each restricted share, and (iii) the per share Merger Consideration of $48.00 multiplied by the total number of shares of
IGATE common stock that would be delivered with respect to each performance share award based on the achievement of target performance goals (collectively referred to in this Information Statement as a NEO Converted Cash Award). The NEO
Converted Cash Award will vest and become payable, minus any required tax withholdings, with respect to one-half of the NEO Converted Cash Award as soon as practicable following the Closing Date and, subject to continued employment with Cap Gemini,
the surviving corporation, or affiliates of either, one-quarter on the first anniversary of the Closing Date and one-quarter on the second anniversary of the Closing Date.
Treatment of Non-NEO Company Performance Share Awards
At the Effective Time, each IGATE performance share held by persons other than named executive officers (including any performance share held
by an executive officer who is not a named executive officer) that is outstanding immediately prior to the completion of the merger (referred to in this Information Statement as a Non-NEO Company Performance Share Award) will be
converted into a right to receive a performance share award with respect to that number of shares of Cap Gemini common stock, determined by multiplying (i) the target number of shares of IGATE common stock subject to each Non-NEO Company
Performance Share Award by (ii) a fraction, the numerator of which is the per share Merger Consideration of $48.00, and the denominator of which is the closing price for April 24, 2015 of shares of Cap Gemini common stock on Euronext
Paris, expressed in U.S. dollars at the dollar to euro conversion rate published by the European Central Bank at the close of business on April 24, 2015, rounded up to the nearest whole share if the resulting number yields one-half or more of a
share (such amount referred to in this Information Statement as a Non-NEO Converted Performance Share Award). Each Non-NEO Converted Performance Share Award will be subject to the same performance metrics, service conditions, and other
terms and conditions of the applicable performance share plan of Cap Gemini then in effect and will, assuming the achievement of the applicable performance metrics, vest and be payable with respect to one-quarter of the Non-NEO Converted Performance
Share Award on the first, second, third and fourth anniversaries of the Closing Date. If such a Cap Gemini performance share plan is not in effect as of the payment dates or if there is an insufficient number of shares available under such
performance share plan, the Non-NEO Converted Performance Share Award will be settled in cash on the applicable payment dates but will otherwise remain subject to the service and performance vesting conditions.
Treatment of Non-NEO Company Restricted Shares
At the Effective Time, each IGATE restricted share held by persons other than named executive officers (including any restricted share held by
an executive officer who is not a named executive officer) that is outstanding immediately prior to the completion of the merger (referred to in this Information Statement as a Non-NEO Company Restricted Share) will be canceled and
converted into the right to receive an amount in cash or in fully
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vested shares of Cap Gemini common stock having a fair market value equal to the cash amount, on the same terms and conditions as were applicable to such Non-NEO Company Restricted Share, equal
to the product of (i) the per share Merger Consideration of $48.00 and (ii) the number of shares of IGATE common stock subject to such Non-NEO Company Restricted Share (such amount referred to in this Information Statement as a
Non-NEO Converted Restricted Share Cash Award).
Treatment of Non-NEO Company Stock Options
At the Effective Time, each IGATE stock option held by persons other than named executive officers (including any stock option held by an
executive officer who is not a named executive officer) that is outstanding immediately prior to the completion of the merger (referred to in this Information Statement as a Non-NEO Company Stock Option) will be canceled and converted
into the right to receive an amount in cash or in fully vested shares of Cap Gemini common stock having a fair market value equal to the cash amount, on the same terms and conditions as were applicable to such Non-NEO Company Stock Option, equal to
(i) the per share Merger Consideration of $48.00 minus (ii) the exercise price of the Non-NEO Company Stock Option (such amount referred to in this Information Statement as a Non-NEO Stock Option Converted Cash Award).
Treatment of Company RSUs
At the
Effective Time, each IGATE restricted stock unit held by a non-employee director that is outstanding immediately prior to the completion of the merger (referred to in this Information Statement as a Company RSU) will be canceled with the
holder of such Company RSU becoming entitled to receive an amount in cash, subject to any required tax withholdings, equal to the product of (i) the per share Merger Consideration of $48.00 and (ii) the number of shares of IGATE common
stock subject to such Company RSU immediately prior to the completion of the Merger.
Payment of Merger Consideration
Prior to the Effective Time, Parent will designate a bank or trust company reasonably satisfactory to us to act as paying agent (the
Paying Agent), for the shareholders in connection with the Merger to receive in trust the funds to which shareholders will become entitled pursuant to the Merger Agreement. Immediately after the Effective Time, the Parent will, or will
cause the surviving corporation to, deposit cash in the amounts necessary for the payment of the Merger Consideration to each shareholder upon surrender of certificates representing the shares held by such shareholder. All interest earned on such
funds shall be paid to Parent.
As promptly as reasonably practicable after the Effective Time but in no event later than two business
days after the Effective Time, Parent or the surviving corporation will use its reasonable efforts to cause the Paying Agent to mail to each shareholder of record who holds a stock certificate a letter of transmittal (which includes an IRS Form W-9
or W-8) and instructions for surrendering stock certificates in exchange for Merger Consideration. The Paying Agent will pay the Merger Consideration, without interest, only after surrender of stock certificates to the Paying Agent and receipt by
the Paying Agent of a duly completed letter of transmittal and other documents as may reasonably be required by the Paying Agent.
Shareholders who hold their shares in book entry form shall not be required to deliver a certificate or a letter of transmittal to the Paying
Agent to receive the Merger Consideration. Upon receipt by the Paying Agent of an agents message in customary form, such shareholders shall be entitled to receive the Merger Consideration and the shares held in book-entry form will
be cancelled. Parent or the surviving corporation shall use its reasonable best efforts to cause the Paying Agent to pay such amounts as promptly as reasonably practical after the Effective Time, but in no event later than two business days after
the Effective Time.
At the end of the period ending twelve months after the Effective Time, any portion of the Merger Consideration which
remains unclaimed from the Paying Agent will be paid to the Parent or its designated affiliate, upon demand. Any former shareholders who have not exchanged their stock certificates for the Merger Consideration by the end of this twelve-month period
will be entitled to look only to Parent or its successor-in-interest for payment of its claim for the Merger Consideration. None of the Parent, Merger Sub, us, the surviving corporation or the Paying Agent will be liable to any former shareholders
for any amount delivered to a public official pursuant to any applicable abandoned property, escheat or similar laws.
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If your stock certificate has been lost, stolen, defaced or destroyed, you may receive the Merger
Consideration upon the making of an affidavit that your certificate has been lost, stolen, defaced or destroyed, and if required by the surviving corporation, the posting of a bond in such reasonable amount as Parent may direct, as indemnity against
any claim that may be made against it with respect to such certificate.
After the Effective Time, there will be no further transfers on
the stock transfer books of the Company.
Please do not send your stock certificates to us or any other party at this time. You will
receive instructions for surrendering your certificates with a letter of transmittal after the Effective Time.
Representations and Warranties
In the Merger Agreement, we have made certain representations and warranties to Parent and Merger Sub with respect to, among other matters:
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our corporate organization, authority and power to conduct our business, |
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our and our subsidiaries capitalization, |
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our power and authority to consummate the Merger, |
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the approval of, and recommendation to the Companys shareholders to adopt, if applicable, the Merger and the Merger Agreement by our board of directors, |
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the Company Shareholder Approval being the only required vote or written consent of the holders of shares of the Company Common Stock necessary to adopt the Merger Agreement and approve the transactions contemplated
thereby, |
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absence of conflicts with our governing documents, material contracts, judgments and laws resulting from the execution and delivery by the Company of the Merger Agreement and the consummation of the Merger and the other
transactions contemplated by the Merger Agreement, |
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absence of required approvals and authorizations of or filings with or permits from government agencies in connection with the execution, delivery and performance of the Merger Agreement, |
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accuracy of SEC filings, |
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compliance of financial statements with SEC rules and GAAP and the absence of certain undisclosed liabilities, |
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compliance by the Company with internal control requirements pursuant to the Exchange Act, |
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accuracy of the information supplied by the Company in this Information Statement, |
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absence of a Company Material Adverse Effect (as defined below) since December 31, 2014 and absence of certain other changes or events. |
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filing of tax returns, payment of taxes and certain other tax matters, |
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labor and employment matters, |
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employee benefits plans and matters relating to the Employee Retirement Income Security Act of 1974, as amended, |
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ownership of properties, |
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compliance with environmental and other laws, |
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ownership and use of intellectual property, |
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inapplicability of certain state takeover laws, |
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absence of a shareholder rights plan, |
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receipt of a fairness opinion from BofA Merrill Lynch, |
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absence of contracts binding on the Company or its subsidiaries containing covenants limiting in any material respect the Companys or its subsidiaries right to engage or compete in any line of business, and
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major customers and major vendors. |
Parent and Merger Sub have made certain representations
and warranties to us with respect to, among other matters;
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the corporate organization, authority and power to conduct business of Parent and the capitalization of Merger Sub, |
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the corporate power and authority to consummate the Merger, |
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absence of conflicts with Parents and Merger Subs governing documents, material contracts, judgments and laws resulting from the execution and delivery by Parent and Merger Sub of the Merger Agreement and
the consummation of the Merger and the other transactions contemplated thereby, |
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absence of required approvals and authorizations of or filings with or permits from government agencies in connection with the execution, delivery and performance of the Merger Agreement, |
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accuracy of information supplied by Parent or Merger Sub in this Information Statement, |
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absence of ownership of Company Common Stock by Parent, Merger Sub or their affiliates, |
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absence of contracts with directors, officers, employees or Subsidiaries of the Company, and |
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the availability of the funds to consummate the Merger. |
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Certain of the representations and warranties in the Merger Agreement are qualified by
materiality, Company Material Adverse Effect or Parent Material Adverse Effect. The Merger Agreement provides that Company Material Adverse Effect means any change, event, effect or occurrence that (i) has a
material adverse effect on the business, assets, financial condition or results of operations of the Company and the Companys subsidiaries, taken as a whole, or (ii) prevents or materially delays the consummation of the Merger and the
other Transactions or the ability of the Company to perform its obligations under this Agreement in any material respect; provided that Company Material Adverse Effect will not include any change, event, effect or occurrence that results from:
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general industry, economic, regulatory, legislative, political or market conditions, |
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changes in laws or to GAAP, |
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acts of war or acts of God, |
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the failure, in and of itself, of the Company to meet any internal or published financial projections or forecasts, |
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the announcement, pendency and consummation of any of the transactions contemplated by the Merger Agreement, |
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the compliance with the covenants contained in the Merger Agreement, |
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any action taken at Parents request or with Parents written consent, or not taken because of lack of consent from Parent after Parents receipt of written request for such consent, and
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the identity of, or any facts or circumstances relating to, Parent, Merger Sub or their respective affiliates. |
The Merger Agreement provides that Parent Material Adverse Effect means any change, effect, event or occurrence that prevents or materially
delays (a) the consummation of the Merger and the other transactions contemplated by the Merger Agreement or (b) the ability of Parent to perform its obligations under the Merger Agreement in any material respect.
The representations and warranties contained in the Merger Agreement will not survive completion of the Merger (without limiting any covenant
or agreement of the parties that by its terms contemplates performance after the Effective Time), but they form the basis of specified conditions to the obligations of the parties to complete the Merger.
Conduct of Business of the Company Prior to Consummation of the Merger
The Merger Agreement provides that, from the date of the Merger Agreement until the Effective Time or, if earlier, the termination of the
Merger Agreement, we (including our subsidiaries) must conduct our business in the ordinary course and use commercially reasonable efforts to (i) conduct our business in compliance with laws, (ii) preserve intact our present business
organization, (iii) keep available the services of our present executive officers and employees and (iv) preserve our present relationships with customers, suppliers, licensors, licensees, distributors and others having material business
dealings with us.
In addition, from the date of the Merger Agreement until the Effective Time or, if earlier, the termination of the
Merger Agreement, without Parents written consent (which consent may not be unreasonably withheld, delayed or conditioned) we will not:
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enter into any new material line of business, |
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declare, set aside or pay certain dividends on, or make any distributions in respect of capital stock (other than dividends and distributions of cash by a direct or indirect wholly owned subsidiary of the Company to its
parent (provided both are organized in the United States)), |
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split, combine, reclassify, repurchase, redeem or otherwise acquire our capital stock, |
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issue, sell or pledge or otherwise encumber any equity securities, |
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amend our articles of incorporation or bylaws, |
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acquire or agree to acquire any assets outside of the ordinary course of business, any business or any corporation, partnership of other business organization or division thereof with a purchase price in excess of
$5,000,000, individually or in the aggregate, or solicit or participate in any negotiations with respect thereto, |
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enter into any joint venture, strategic partnership or other alliance involving an equity investment, |
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make any material changes to our employee benefit plans, compensation and severance practices, or employment agreements, or enter into any employment, consulting, severance or termination agreement with any current or
former employee, director or executive officer, or take any action to accelerate any rights or benefits under any of our employee benefit plans or agreements, |
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make certain changes in accounting methods, principles or practices, |
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dispose of or encumber our material properties or assets, |
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incur, or materially modify the terms of, any indebtedness for borrowed money or guarantee indebtedness of another person or entity, other than, among other things, indebtedness incurred under certain specified
agreements and issuances of letters of credit made under certain existing credit facilities or otherwise made in the ordinary course of business, or make any loans, advances or capital contributions to, or investments in, any other person;
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make any unplanned capital expenditures that in the aggregate are in excess of $5,000,000, |
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settle or compromise any litigation or dispute or any pending or threatened litigation other than for money damages in the ordinary course of business in an amount not to exceed $1,000,000 per payment or $5,000,000 in
the aggregate, or settle or compromise any litigation relating to the Merger, |
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make or change any material tax election, or change any material method of tax accounting, settle or compromise any material tax liabilities, or enter into any closing agreement with respect to any material tax or
refund, |
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materially and adversely modify or amend certain specified contracts or enter into any contract that would have been a specified contract at the time of signing of the Merger Agreement, |
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cancel, abandon or permit to lapse our registered intellectual property rights, |
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adopt a plan to liquidate, dissolve or restructure, recapitalize or reorganize, |
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sell, lease, license or otherwise transfer or dispose of, or create or incur any material lien on our material intellectual property, except non-exclusive licenses granted to any customer, or |
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authorize, commit or agree to take any of the foregoing actions. |
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Parent and its representatives will also be provided reasonable access during the period prior to
the Effective Time to our properties, assets, books and records, contracts, permits, documents, information, directors, officers and employees.
Regulatory Matters
Each of the parties shall use its reasonable best efforts to take all actions necessary to consummate the
Merger, including
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taking all actions or non-actions, obtaining all waivers and consents from, and making all necessary registrations, declarations and filings with any Governmental Entity with respect to the Merger Agreement or the
transactions contemplated thereby, |
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defending or contesting any proceedings, whether judicial or administrative, challenging the Merger Agreement or the consummation of the transactions contemplated thereby, and |
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executing and delivering any additional instruments necessary to consummate the transactions contemplated by the Merger Agreement. |
In addition, we and our Board shall take all action necessary to ensure that no takeover statute becomes applicable to the Merger Agreement or
the transactions contemplated thereby and if any takeover statute or similar statute becomes applicable to the Merger Agreement or the transactions contemplated thereby, take all action necessary to ensure that the transactions may be consummated as
promptly as practicable and otherwise to minimize the effect of such statute or regulation on the transactions and the Merger Agreement.
The parties also agreed to take any and all steps necessary to avoid, eliminate or resolve any impediment and obtain approvals under the HSR
Act or other applicable foreign antitrust, competition or other similar laws of Brazil, Canada, India and Germany, including taking the following actions:
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the sale, license, holding separate or other disposition of assets or businesses of Parent or the Company or any of their respective subsidiaries, |
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terminating, relinquishing, modifying, or waiving existing relationships, ventures, contractual rights, obligations or other arrangements of Parent or Company or their respective subsidiaries, and |
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creating any relationships, ventures, contractual rights, obligations or other arrangements of Parent or Company or their respective subsidiaries. |
The Merger Agreement provides that we shall not be obligated to take the foregoing actions unless they are conditioned upon, or will occur
subsequent to, consummation of the transactions contemplated by the Merger Agreement. The Merger Agreement provides that Parent shall not be obligated to take the foregoing actions and we may not take the foregoing actions without consent of Parent
if they would, or would reasonably be expected to, have a material adverse effect on the business, results of operations, or financial condition of either (x) SA and its subsidiaries (but not including the Company and the Companys
subsidiaries) or (y) the Company and the Company Subsidiaries (in each case of (x) and (y), measured on a scale relative to the Company and the Company Subsidiaries, taken as a whole) (each, a Burdensome Condition).
Each of us and Parent have also agreed to take any and all steps necessary to obtain approval from CFIUS, including filing a joint voluntary
notice with CFIUS and responding to any comment from CFIUS with respect to such joint voluntary notice. Notwithstanding the foregoing, we are not required to take any remedial action unless it is conditioned upon, or will occur subsequent to, the
consummation of the Merger. Parent and its subsidiaries will not be required to, and we may not take without the prior written consent of Parent, any remedial action that would or would reasonably be expected to constitute a Burdensome Condition.
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Written Consent
Immediately after the execution of the Merger Agreement and in lieu of calling a meeting of the Companys shareholders, the Company agreed
to submit a form of irrevocable written consent to holders of at least 50.1% of the outstanding shares of Company Common Stock to adopt the Merger Agreement and the transactions contemplated thereby, including the Merger. Such written consent,
executed by Viscaria Limited, the Co-Chairmen and certain of their affiliates was delivered to Parent on April 25, 2015 following the execution of the Merger Agreement.
No Solicitation of Other Offers
We agreed to, and to cause our subsidiaries and our respective officers, directors, employees, investment bankers, attorneys, other advisors
and other representatives to, immediately cease any discussions and negotiations that may be ongoing as of the date of the Merger Agreement with any person with respect to a Company Takeover Proposal (as defined in the Merger Agreement), to request
the prompt return or destruction of confidential information furnished in the preceding six months for purposes of evaluating a possible Company Takeover Proposal, and to terminate access to any data rooms relating to a possible Company Takeover
Proposal. From the date of the Merger Agreement until the Effective Time or, if earlier, the termination of the Merger Agreement we, our subsidiaries, and our respective directors and officers may not and we will direct our representatives not to:
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directly or indirectly solicit, initiate or knowingly encourage the submission of any Company Takeover Proposal, |
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enter into any agreement or understanding with respect to any Company Takeover Proposal, |
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directly or indirectly participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate the making of any inquiry, proposal or
offer that constitutes, or would reasonably be expected to lead to, any Company Takeover Proposal, or |
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commit or agree to do any of the foregoing. |
The Merger Agreement provides that the term
Company Takeover Proposal means any inquiry, proposal or offer from any person or group (other than Parent and its subsidiaries) relating to (i) any direct or indirect acquisition, purchase or license in a single transaction or a
series of related transactions, of (A) 20% or more (based on the fair market value thereof) of the assets (including capital stock of the Company Subsidiaries) of the Company and Company Subsidiaries, taken as a whole, or (B) 20% or more
of the aggregate voting power of the capital stock of the Company or (ii) any tender offer, exchange offer, merger, consolidation, business combination, recapitalization, extraordinary dividend, liquidation, dissolution, binding share exchange
or similar transaction involving the Company that, if consummated, would result in any person or group (or the shareholders of any person) beneficially owning, directly or indirectly, 20% or more of the aggregate voting power of the capital stock of
the Company or of the surviving entity or the resulting direct or indirect parent of the Company or such surviving entity, other than, in each case, the transactions contemplated by the Merger Agreement.
The Company agreed to notify Parent orally and in writing, as promptly as practicable and in any event with 24 hours after receipt thereof,
of:
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any Company Takeover Proposal or any request for information or inquiry, proposal or offer that the Company reasonably believes could lead to or contemplates a Company Takeover Proposal and |
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the terms and conditions of such Company Takeover Proposal or inquiry, proposal or offer (including any subsequent amendments or modifications thereto) and the identity of the person making any such Company Takeover
Proposal or inquiry, proposal or offer. |
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Commencing upon the provision of any such notice, the Company and its representatives must keep
Parent informed on a reasonably prompt basis as to the status and details of any such Company Takeover Proposal or inquiry, proposal or offer (and any subsequent amendments or modifications thereto).
Company Takeover Proposals
Notwithstanding any restrictions on the Company and its representatives, if, prior to 11:59 pm New York time on May 25, 2015 (subject to
extension for Parents right to renegotiate the terms of the Merger Agreement), our board of directors receives a bona fide, unsolicited, written Company Takeover Proposal that our board of directors in good faith determines, after consultation
with its outside counsel and its financial advisor, constitutes or would reasonably be expected to lead to a Superior Company Proposal, in each case that did not result from a breach by us of the restrictions set forth above, then we may furnish
information to the person making such Superior Company Proposal pursuant to a customary confidentiality agreement not less restrictive to such person than the provisions of the confidentiality letter agreement between the Company and Capgemini,
dated March 3, 2015; provided that any material non-public information furnished to such person has previously been provided to Parent or is provided contemporaneously to Parent. Our board of directors may only take the actions described above
if it determines, in good faith, after consultation with outside counsel, that the failure to take any such action would be inconsistent with its fiduciary duties under applicable law.
The Merger Agreement provides that the term Superior Company Proposal means any written, bona fide Company Takeover
Proposal received after the date of the Merger Agreement that if consummated would result in a person or group (or the shareholders of any person) owning, directly or indirectly, (i) 50% or more of the aggregate voting power of the capital
stock of the Company or of the surviving entity or the resulting direct or indirect parent of the Company or such surviving entity or (ii) 50% or more (based on the fair market value thereof) of the assets (including capital stock of the
Company Subsidiaries) of the Company and Company Subsidiaries, taken as a whole, on terms which our board of directors determines, in good faith, after consultation with outside counsel and a financial advisor, are, if consummated, more favorable
from a financial point of view to the shareholders of the Company than the transactions contemplated by the Merger Agreement, taking into account all financial, legal, financing, regulatory and other aspects of such Company Takeover Proposal and of
the Merger Agreement (including any changes to the terms of the Merger Agreement proposed by Parent and any fees to be paid by the Company for terminating this Agreement); provided, that a Company Takeover Proposal may only be a Superior
Company Proposal if, at the time of our board of directors determination, either our board of directors has received executed commitment letters in respect of any financing required to consummate the transaction contemplated by such
Company Takeover Proposal, or if no such commitment letters have been provided, our board of directors has determined in good faith that the person making such Company Takeover Proposal is reasonably capable of financing the proposed transaction
without third party financing that is based upon the financial statements of the Company and the Company Subsidiaries.
Except as
expressly permitted by the Merger Agreement, our board of directors may not:
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(A) withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to Parent or Merger Sub, the recommendation by our board of directors that the shareholders adopt the Merger Agreement (the
Company Board Recommendation), or (B) approve or recommend, or propose publicly to approve or recommend, a Company Takeover Proposal (any action described in these clauses (A) or (B), an Adverse Recommendation
Change), or |
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approve or enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, option agreement, merger agreement, joint venture agreement, partnership agreement or other
agreement relating to any Company Takeover Proposal (other than a confidentiality agreement entered into in accordance with the terms of the Merger Agreement), or resolve, agree or publicly propose to take any such action. |
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Superior Proposals and Intervening Events
Notwithstanding the execution and delivery of the Shareholder Consent, at any time prior to 11:59 pm New York time on May 25, 2015
(subject to extension for Parents right to renegotiate the terms of the Merger Agreement), our board of directors may, under certain circumstances, withdraw or modify the Company Board Recommendation in response to an intervening event (as
defined below) if our board of directors determines, in good faith, after consultation with outside counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable law or terminate the Merger Agreement
if our board of directors receives a Superior Company Proposal; provided that our board of directors shall not be entitled to exercise its aforementioned rights unless it has:
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provided to Parent at least four calendar days prior written notice advising Parent that our board of directors intends to take such action and describing the reasons therefor, |
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during such four calendar day period, if requested by Parent, engaged in good faith negotiations with Parent to revise the Merger Agreement in such a manner that obviates the need for taking such action,
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following the end of such four day period, considered any revisions to the Merger Agreement offered in writing by Parent and determined in good faith, after consultation with outside counsel, that failure to effect a
Company Board Recommendation in respect to an intervening event or to terminate this Agreement to accept a Superior Company Proposal would be inconsistent with its fiduciary duties and, in the case of a termination of the Merger Agreement, that the
Superior Company Proposal continues to constitute a Superior Company Proposal, and |
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if the material terms of such Superior Company Proposal are changed, provide Parent with three calendar days prior written notice and negotiate with Parent as set forth above. |
For purposes of the Merger Agreement, an intervening event means, subject to certain exceptions, any material event, change, effect,
development, condition or occurrence that affects or would be reasonably likely to affect the business, financial condition or continuing results of operations of the Company and the Company Subsidiaries, taken as a whole, that (1) is not known
by our board of directors as of the date of the Merger Agreement or that, to the knowledge of our board of directors, was not reasonably foreseeable as of the date of the Merger Agreement and (2) does not relate to a Company Takeover Proposal.
Employee Matters
For a period of one year following the Effective Time or such shorter period as an employee remains an employee of Cap Gemini (referred to in
this Information Statement as continuing employees), Cap Gemini will provide or will cause to provide:
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each continuing employee with salary and incentive opportunities (excluding equity-based compensation) that are no less favorable in the aggregate than those provided to such continuing employee immediately prior to the
Effective Time; |
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the continuing employees with employee benefits that are no less favorable in the aggregate than those provided to such continuing employee immediately prior to the Effective Time; |
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each continuing employee with severance benefits at a level substantially as favorable as the severance benefits that were provided under an IGATE severance plan or policy immediately prior to the Effective Time.
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The continuing employees will be immediately eligible to participate, without any waiting time, in each benefit plan of Cap
Gemini, the surviving corporation and their respective affiliates (referred to in this Information Statement as the Surviving Corporation Plans) to the same extent as other similarly situated employees of Cap Gemini, the surviving
corporation and their respective affiliates.
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Following the Closing Date, Cap Gemini will or will cause the surviving corporation to assume,
honor and continue, until all obligations have been satisfied, all of IGATEs employment, severance, retention, termination and change in control plans, policies, programs, agreements and arrangements maintained by IGATE or any of its
subsidiaries, in each case, in effect at the Closing Date, including with respect to any payments, benefits or rights arising as a result of the Merger.
To the extent continuing employees become eligible to participate in any employee benefit plan maintained by Cap Gemini or any of its
respective subsidiaries following the completion of the Merger, the continuing employees service with IGATE or any of its subsidiaries prior to the completion of the Merger will be treated as service with Cap Gemini or any of its respective
subsidiaries for the purpose of determining eligibility to participate, level of benefits and vesting to the extent that it would not result in any duplication of benefits for the same period of service.
Further, Cap Gemini will use commercially reasonable efforts, or will cause the surviving company to use commercially reasonable efforts, to
waive all limitations as to preexisting conditions, exclusions, waiting periods, and actively-at-work requirements under any welfare benefit plan maintained by Cap Gemini or its subsidiaries with respect to participation and coverage requirements
applicable to such continuing employees and their eligible dependents and beneficiaries, to the extent that such limitations were waived, satisfied or did not apply to such employees or eligible dependents or beneficiaries under the corresponding
and comparable IGATE welfare benefit plan in which the continuing employees participated immediately prior to the completion of the merger and provide continuing employees and their eligible dependents and beneficiaries with credit for any
co-payments and deductibles paid prior to the completion of the merger in satisfying any analogous deductible or out-of-pocket maximum requirements for such year to the extent applicable under any welfare benefit plan in which they will be eligible
to participate.
With respect to any continuing employees based outside of the United States, Cap Geminis obligations will be
modified to the extent necessary to comply with any applicable law of the foreign countries and political subdivisions thereof in which such continuing employees are based.
Indemnification Provisions; Directors and Officers Insurance
Parent has agreed that all rights to indemnification now existing in favor of each person who on the date of the Merger Agreement or who had
been any time prior to the date of the Merger Agreement or who becomes prior to the Effective Time, a director, officer, employee or agent (including as a fiduciary with respect to an employee benefit plan) of ours, any of our subsidiaries or any of
our predecessors (each, an Indemnified Party), as provided in our articles of incorporation, bylaws, the organizational documents of any of our subsidiaries or any indemnification agreement between such Indemnified Party and us or any of
our subsidiaries that is in effect as of the date of the Merger Agreement and that has been made available to Parent, (i) will be assumed by the surviving corporation in the Merger, without further action, (ii) will survive the Merger,
(iii) will continue in full force and effect in accordance with their terms with respect to any claims against any such Indemnified Party arising out of such acts or omissions and (iv) for a period of six years following the date of the
Merger Agreement, will not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any such Indemnified Party.
In addition, Parent and the surviving corporation have agreed that, for a period of six years following the Effective Time, both will jointly
and severally, indemnify and hold harmless all of the Indemnified Parties against all losses, claims, damages, liabilities, costs, expenses, judgments and fines arising in whole or in part out of, or pertaining to (i) the fact that the
Indemnified Party is or was a director, officer, employee or agent (including as a fiduciary with respect to an employee benefit plan) of ours, any of our subsidiaries or any of their respective predecessors or (ii) the Merger Agreement or any
of the transactions contemplated thereby, whether in any case asserted or arising before or after the Effective Time.
We or Parent may
obtain tail directors and officers liability insurance policies for a period of six years from the Effective Time containing terms and conditions that are in the aggregate, no less favorable than those of our directors
and officers liability insurance policies in effect on the date of the Merger Agreement (Existing D&O Policies), provided that the aggregate cost of any such tail insurance policies shall not exceed 350% of the
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aggregate annual premium paid by us for the existing policies. Parent will maintain in effect the existing tail insurance policies for the period ending six years from the Effective
Time. In the event such tail insurance policies are not obtained, then for the period beginning upon the Effective Time and ending 6 years from the Effective Time, Parent shall maintain in effect the Existing D&O Policies in respect
of acts or omissions occurring at or prior to the Effective Time (including for acts or omissions occurring in connection with the approval of the Merger Agreement and the consummation of the transactions contemplated thereunder). Neither Parent nor
the surviving corporation will be required to pay an aggregate annual premium for such insurance policies in excess of 350% of the annual premium paid by us for the Existing D&O Policies and Parent may substitute policies of a reputable and
financially sound insurance company containing terms and conditions that are individually and in the aggregate no less favorable to the indemnified parties.
If Parent, the surviving corporation, or any of their respective successors or assigns consolidates with or merges into any other corporation
or entity and is not the continuing or surviving corporation or entity of such consolidation or merger or transfers or conveys all or a substantial portion of its properties and other assets to any individual, corporation or other entity or Parent
or any of its successors or assigns dissolves the surviving corporation, then, and in each such case, Parent shall cause proper provision to be made so that the applicable successors and assigns or transferees expressly assume the obligations
regarding indemnification of directors and officers.
Conditions to Completion of the Merger
The obligations of the parties to consummate the Merger are subject to the satisfaction or waiver on or prior to the date of closing of the
following conditions:
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the affirmative vote of a majority of the votes cast by the holders of outstanding shares of Company Common Stock entitled to vote thereon, or written consent of the holders who would have been entitled to cast the
minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting, in favor of adopting this Agreement (the Company Shareholder Approval)
having been obtained (which has already been obtained); |
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the absence of any judgment, order, injunction or decree issued by any governmental entity of competent jurisdiction or law or other legal prohibition preventing or prohibiting the consummation of the Merger or imposing
a Burdensome Condition (provided that the party seeking to assert this condition shall have complied with its obligations in respect of such judgment, order, injunction or decree under the Merger Agreement); |
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the receipt of CFIUS approval; |
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this Information Statement having been mailed to the Companys shareholders in accordance with Section 5.01 of the Merger Agreement and Section 14C of the Exchange Act at least 20 calendar days prior to
the Closing Date; |
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the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the HSR Act) and the
receipt of certain foreign antitrust approvals or expiration or termination of any waiting periods pursuant to certain foreign antitrust and competition laws; and |
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the absence of any pending proceeding commenced by a governmental entity in a United States District Court or a court in Canada seeking a judgment that challenges or seeks to enjoin the Merger under antitrust laws.
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The obligations of Parent and Merger Sub to effect the Merger are subject to satisfaction or
waiver at or prior to the consummation of the Merger of, among other things, the following additional conditions:
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the accuracy of the representations and warranties of the Company with regard to the Companys capital structure in all material respects at and as of the date of the Merger Agreement and at and as of the closing
date, except to the extent such representations and warranties expressly relate to a specified date (in which case on and as of such specified date); |
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the accuracy of the Companys representations and warranties with regard to the absence of a Company Material Adverse Effect in all respects at and as of the date of the Merger Agreement and at and as of the
closing date, except to the extent such representations and warranties expressly relate to a specified date (in which case on and as of such specified date); |
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other than the representations and warranties mentioned in the bullets directly above, the accuracy of all other representations and warranties of the Company (without regard to any qualifications or exceptions
contained therein as to materiality or Company Material Adverse Effect) at and as of the date of the Merger Agreement and at and as of the closing date, except to the extent such representations and warranties expressly
relate to a specified date (in which case on and as of such specified date), except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect; |
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the Company having performed in all material respects all obligations required to be performed by it under the Merger Agreement at or prior to the Closing Date; |
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the absence of a Company Material Adverse Effect since the date of the Merger Agreement; and |
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the expiration or termination of any waiting periods, and obtaining of approvals required to consummate the Merger, under antitrust laws and the absence of the imposition of a Burdensome Condition in connection with the
parties obtaining such antitrust approval. |
The obligations of the Company to effect the Merger are subject to satisfaction
or waiver at or prior to the consummation of the Merger of, among other things, the following additional conditions:
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the accuracy of the representations and warranties of Parent and Merger Sub that are qualified as to materiality (as so qualified) as of the date of the Merger Agreement and at and as of the closing date, except that
the accuracy of representations and warranties that by their terms speak as of a specified date will be determined as of such date; |
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the accuracy of the representations and warranties of Parent and Merger Sub that are not qualified as to materiality in all material respects as of the date of the Merger Agreement and at and as of the closing date,
except that the accuracy of representations and warranties that by their terms speak as of a specified date will be determined as of such date; and |
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each of Parent and Merger Sub having performed in all material respects all obligations required to be performed by them under the Merger Agreement at or prior to the Closing Date. |
Termination of the Merger Agreement
The Merger Agreement may be terminated at any time prior to the Effective Time, notwithstanding the Shareholder Approval, under certain
circumstances, including, but not limited to, those described below. In the event of such a termination, then, with specified exceptions, the Merger Agreement will become void with no liability on the part of any party to the Merger Agreement except
to the extent such termination results from fraud by a party or the intentional and willful material breach or failure to perform of a representation, warranty or covenant contained therein with actual knowledge that the taking of such act or
failure to take such act would cause a breach of the Merger Agreement.
Mutual Consent. The Merger Agreement may be terminated by
mutual written consent of Parent, Merger Sub, and us.
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Either Party. The Merger Agreement may be terminated by either Parent or the Company if
(a) the Merger has not been completed prior to October 26, 2015 (the Outside Date); provided, however, that the date will be extended to April 26, 2016 if all conditions to closing have been satisfied or waived other than
those conditions relating to any applicable waiting period under the HSR Act or certain other applicable foreign antitrust, competition or other similar laws of Brazil, Canada, India and Germany or the absence of litigation pending seeking a
judgment that challenges or seeks to enjoin the Merger under antitrust laws; or (b) if any judgment, injunction, order, decree, statute, law, ordinance, rule, regulation or other legal prohibition having the effect of permanently preventing or
prohibiting the Merger shall be in effect and shall have become final and non-appealable.
Parent. Parent may terminate the Merger
Agreement if (a) our board of directors withdraws or adversely modifies in a manner adverse to Parent or Merger Sub its approvals or recommendations of the Merger or the transactions contemplated by the Merger Agreement or if our board of
directors approves or recommends a Company Takeover Proposal, (b) we breach or fail to perform any of our representations, warranties or covenants contained in the Merger Agreement, which breach or failure to perform (i) would give rise to
failure of the conditions to the Closing relating to the accuracy of the representations and warranties of the Company (subject to certain materiality qualifiers) or compliance by the Company in all material respects with its obligations under the
Merger Agreement , and (ii) cannot be or has not been cured prior to the earlier of (x) 30 calendar days after the giving of written notice to us of such breach and (y) the Outside Date (provided that Parent and Merger Sub are not
then in material breach of any representation, warranty or covenant contained in the Merger Agreement), (c) if the written consent of the shareholders representing at least 50.1% of the outstanding shares of Company Common Stock had not been
delivered to Parent and the Company within one (1) hour following the time of execution of the Merger Agreement or (d) if the Company Shareholder Approval has not been obtained upon a vote taken thereon at the Companys duly convened
shareholders meeting (provided that Parent cannot terminate pursuant to this clause if the written consent of the shareholders representing at least 50.1% of the outstanding shares of Company Common Stock has been executed and delivered to the
Parent and the Company pursuant to the Merger Agreement).
The Company. We may terminate the Merger Agreement if (a) there has
been a breach by Parent or Merger Sub of any representation, warranty or covenant contained in the Merger Agreement (without regard to any qualifications or exceptions contained therein as to materiality or Parent Material Adverse Effect) that had
or would reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect, (b) such breach has not been cured before the earlier of (x) the date which is thirty days after the date of delivery of such
notice of breach and (y) the Outside Date. We may also terminate the Merger Agreement if, prior to 11:59 p.m., New York City time, on May 25, 2015 (subject to extension for Parents right to renegotiate the terms of the Merger
Agreement), in order to enter into an agreement regarding an unsolicited Superior Company Proposal if the Company (i) complies with its obligations, among other things to provide Parent with the ability to revise the terms of the Merger
Agreement, (ii) executes a definitive agreement with respect to such Superior Company Proposal substantially concurrently with the termination of the Merger Agreement and (iii) pays to Parent $161,280,000 (the Company Termination
Fee) substantially concurrently with the termination of the Merger Agreement, subject to certain notice provisions and Parents right to renegotiate the terms of the Merger Agreement such that the Company Takeover Proposal would no longer
constitute a Superior Company Proposal or (c) if the Company Shareholder Approval has not been obtained upon a vote taken thereon at the Companys duly convened shareholders meeting (provided that Parent cannot terminate pursuant to
this clause if the written consent of the shareholders representing at least 50.1% of the outstanding shares of Company Common Stock has been executed and delivered to the Parent and the Company pursuant to the Merger Agreement).
Effect of Termination
In the event of termination of the Merger Agreement by either the Company or Parent, the Merger Agreement shall forthwith become void and have
no effect, without any liability or obligation on the part of Parent or Merger Sub, on the one hand, or the Company, on the other hand (except to the extent such termination results from fraud by a party or the intentional and willful material
breach or failure to perform of a representation, warranty or covenant contained therein with actual knowledge that the taking of such act or failure to take such act would cause a breach of the Merger Agreement).
-59-
Termination Fee
The Company will pay Parent the Company Termination Fee if:
|
|
|
the Merger Agreement is terminated by the Company, to enter into an agreement pursuant to a Superior Company Proposal; |
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|
the Merger Agreement is terminated by Parent because our board of directors withdraws or adversely modifies in a manner adverse to Parent or Merger Sub its approvals or recommendations of the Merger or the transactions
contemplated by the Merger Agreement or our board of directors approves or recommends a Company Takeover Proposal; or |
|
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|
(i) at any time after the date of execution of the Merger Agreement and prior to such termination, an Company Takeover Proposal shall have been publicly proposed or announced or made known to our board of directors
(whether or not conditional and whether or not withdrawn), (ii) the Merger Agreement is terminated by the Company or Parent because the Outside Date has been reached or the Companys shareholders fail to vote for the Merger at a meeting of
the Companys shareholders or by Parent because the Company has breached its representations, warranties or covenants and failed to cure such breach or the written consent of a majority of shareholders approving the Merger was not delivered
within an hour of execution of the Merger Agreement, and (iii) within twelve months of such termination, the Company shall have entered into a definitive agreement with respect to or consummates any Company Takeover Proposal. |
Specific Performance
The parties agree that they are each entitled to an injunction or injunctions, or any other appropriate form of equitable relief, to prevent
breaches of the Merger Agreement and to enforce specifically the performance of the terms and provisions of the Merger Agreement, without proof of damages or otherwise (and each party hereby waives any requirement for the securing or posting of any
bond in connection with such remedy), this being in addition to any other remedy to which they are entitled at law or in equity. The right to specific enforcement shall include the right of the Company to cause Parent and Merger Sub to cause the
Merger and the other transactions contemplated by the Merger Agreement to be consummated on the terms and subject to the conditions set forth in the Merger Agreement. The parties further agree not to assert that a remedy of specific enforcement is
unenforceable for any reason nor to assert that a remedy of monetary damages would provide an adequate remedy.
Governing
Law
The Merger Agreement is governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania, regardless of
the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
-60-
ANCILLARY AGREEMENTS
Also on April 25, 2015, in connection with the execution of the Merger Agreement, Parent and Merger Sub entered into a voting agreement
(the Voting Agreement) with Viscaria Limited, Ashok Trivedi, Sunil Wadhwani, and the other parties thereto, who collectively beneficially own 43,990,645 shares of Company Common Stock (the Subject Shares), representing
approximately 54% of the outstanding Company Common Stock.
The holders of the Subject Shares agreed under the terms of the Voting
Agreement, at every meeting of shareholders of the Company, however called, and at every adjournment or postponement thereof, or in connection with any written consent of the shareholders of the Company, each Shareholder shall, or shall cause the
holder of record of such Shareholders Subject Shares on any applicable record date to, (i) appear at each such meeting or otherwise cause all of such Shareholders Subject Shares entitled to vote to be counted as present thereat for
purposes of calculating a quorum and (ii) vote or cause to be voted all of such Shareholders Subject Shares entitled to vote at each such meeting or give written consent or cause written consent to be given for all such Subject Shares
entitled to act by written consent (A) in favor of the adoption of the Merger Agreement and/or (B) against (x) any action or agreement that is in opposition to the Merger or that would reasonably be expected to impede, interfere with
or prevent the Merger, including, but not limited to, any reorganization involving the Company or any subsidiary of the Company, (y) any Company Takeover Proposal and any action in furtherance of any Company Takeover Proposal and (z) any
action, proposal, transaction or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of Shareholder under the Voting Agreement.
Pursuant to the Voting Agreement, the holders of the Subject Shares agreed that they will not while the Voting Agreement remains in effect,
(i) transfer or enter into any agreement to transfer any of their Subject Shares, or any right or interest therein, except for certain permitted transfers, (ii) grant a proxy or power of attorney with respect to the Subject Shares with
respect to certain matters described therein, (iii) deposit or permit the deposit of any of the Subject Shares into a voting trust or enter into a voting agreement or arrangement with respect to any of the Subject Shares with respect to certain
matters described therein or (iv) take or permit any other action that would in any way restrict, limit or interfere with the performance of the Shareholders obligations thereunder.
The Voting Agreement terminates with respect to each holder of Subject Shares on the earlier of (i) the termination of the Merger
Agreement in accordance with its terms, (ii) the consummation of the Merger, (iii) any change to the terms of the Merger without the prior written consent of such Shareholder and (iv) the mutual written consent of Parent and such
Shareholder.
The Voting Agreement is attached hereto in its entirety as Annex B.
In addition, Viscaria Limited, the Co-Chairmen and certain of their affiliates each entered into indemnification agreements and related credit
support agreements with Parent, which provide indemnification in the event certain tax claims are made against Parent or its affiliates, subject to the limitations specified in such agreements.
-61-
MARKET PRICE OF OUR STOCK
The Company Common Stock is listed on the NASDAQ under the trading symbol IGTE. The following table sets forth the range of high
and low sale prices per share of Company Common Stock on the NASDAQ for the periods indicated.
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|
Period |
|
High |
|
|
Low |
|
2013 |
|
|
|
|
|
|
|
|
First quarter |
|
$ |
19.89 |
|
|
$ |
15.92 |
|
Second quarter |
|
$ |
23.62 |
|
|
$ |
13.98 |
|
Third quarter |
|
$ |
28.86 |
|
|
$ |
16.45 |
|
Fourth quarter |
|
$ |
41.04 |
|
|
$ |
22.63 |
|
2014 |
|
|
|
|
|
|
|
|
First quarter |
|
$ |
41.41 |
|
|
$ |
28.58 |
|
Second quarter |
|
$ |
39.06 |
|
|
$ |
31.22 |
|
Third quarter |
|
$ |
42.90 |
|
|
$ |
33.81 |
|
Fourth quarter |
|
$ |
39.75 |
|
|
$ |
28.62 |
|
2015 |
|
|
|
|
|
|
|
|
First quarter |
|
$ |
45.72 |
|
|
$ |
32.23 |
|
The closing sale price of Company Common Stock on the NASDAQ on April 13, 2015, which was the last
trading day before a press inquiry from a newspaper suggesting a potential transaction involving Capgemini and the Company, was $40.90, over which the Merger Consideration of $48.00 represents a 17% premium. On
[ ], 2015, the last practicable trading day before the date of this Information Statement, the closing price of Company Common
Stock on the NASDAQ was $[ ].
We did not pay cash dividends in
2013 or 2014 and we currently do not intend to pay cash dividends.
-62-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial ownership of the Company Common Stock as of April 30,
2015, the record date for the Shareholder Consent, for: (i) each person or entity known by us to beneficially own more than 5% of the outstanding shares of Company Common Stock; (ii) each of our current directors; (iii) each named
executive officer; and (iv) all of our directors and executive officers as a group. As of April 30, 2015, there were 80,936,374 shares of Company Common Stock outstanding. Except as noted, all persons listed below have sole voting and
investment power with respect to their shares of Company Common Stock, subject to community property laws where applicable. Information with respect to beneficial ownership by 5% shareholders has been based on information filed with the SEC pursuant
to Section 13(d) or Section 13(g) of the Exchange Act.
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|
|
|
|
|
Amount and Nature of Beneficial Ownership |
|
Name of Beneficial Owner |
|
|
Shares of Common Stock |
|
|
Percent of Class |
|
5% or greater shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
Viscaria Limited (1) |
|
|
|
23,384,095 |
|
|
|
28.89 |
% |
Waddell & Reed Financial, Inc. (2) |
|
|
|
8,476,100 |
|
|
|
10.47 |
% |
Directors, Director Nominees and Named Executive Officers: |
|
|
|
|
|
|
|
|
|
|
|
|
Sunil Wadhwani (3)(4) |
|
|
|
10,247,375 |
|
|
|
12.66 |
% |
Ashok Trivedi (4)(5) |
|
|
|
10,359,175 |
|
|
|
12.80 |
% |
Göran Lindahl (6) |
|
|
|
54,336 |
|
|
|
* |
|
Ashok Vemuri (7) |
|
|
|
418,750 |
|
|
|
* |
|
Martin G. McGuinn (8) |
|
|
|
84,204 |
|
|
|
* |
|
William G. Parrett (9) |
|
|
|
10,901 |
|
|
|
* |
|
W. Roy Dunbar (10) |
|
|
|
29,630 |
|
|
|
* |
|
Naomi O Seligman (11) |
|
|
|
15,344 |
|
|
|
* |
|
Salim Nathoo |
|
|
|
0 |
|
|
|
* |
|
Sujit Sircar (12) |
|
|
|
166,828 |
|
|
|
* |
|
Srinivas Kandula (13) |
|
|
|
164,573 |
|
|
|
* |
|
All current directors and executive officers as a group (11 persons) (14) |
|
|
|
21,551,116 |
|
|
|
26.63 |
% |
|
|
|
* |
|
|
|
Less than 1% |
|
(1) |
The address of Viscaria Limited is Lemesou, 77 Elia House, P.C. 2121, Nicosia, Cyprus. Information herein is based upon a Schedule 13D/A filed on April 28, 2015 filed jointly on behalf of Viscaria Limited and
certain entities affiliated with it, including the following entities which are deemed to beneficially own more than 5% of Company Common Stock: (i) Apax Europe VII-A, L.P., (ii) Apax Europe VII-B, L.P., (iii) Apax Europe VII-1, L.P.,
(iv) Apax Europe VII GP L.P. Inc., (iv) Apax Europe VII GP Co. Limited, (vi) Apax Europe VI-A, L.P., (vii) Apax Europe VI-1, L.P., (viii) Apax Europe VI GP L.P. Inc., (ix) Apax Europe VI GP Co. Limited, (x) Apax
Guernsey (Holdco) PCC Limited, (xi) Apax US Fund, (xii) Apax US VII GP, L.P. and (xii) Apax US VII GP, Ltd. |
(2) |
Includes 5,014,300 shares (or 6.2% of the class) beneficially owned by Ivy Investment Management Company, an investment advisory subsidiary of Waddell & Reed Financial, Inc., and 3,461,800 shares (or 4.3% of
the class) beneficially owned by each of Waddell & Reed Investment Management Company, Waddell & Reed, Inc. and Waddell & Reed Financial Services, Inc. The address of Waddell & Reed Financial, Inc. is 6300 Lamar
Avenue, Overland Park, KS 66202. Information herein is based upon Schedule 13G/A filed on February 13, 2015. |
(3) |
Includes 1,087,624 shares held by two family partnerships, for which Mr. Wadhwani is a majority-in-interest general partner with sole investment power and no voting power over such shares. This also includes
682,126 shares held by a family foundation established by Mr. Wadhwani with shared investment power and sole voting power and 480,000 shares held by a charitable remainder unitrust. |
(4) |
The address of Messrs. Wadhwani and Trivedi is c/o Mastech Holdings, Inc., 1305 Cherrington Parkway, Suite 400, Moon Township, PA 15108. |
-63-
(5) |
Includes (i) 1,356,343 shares held by one family trust, for which Mr. Trivedi is a co-trustee with sole investment power and no voting power over such shares, (ii) 600,000 shares held by a charitable remainder
unitrust, and (iii) 400,000 shares held by a family foundation. |
(6) |
Includes 26,000 shares that may be acquired by Mr. Lindahl pursuant to the exercise of options. |
(7) |
Includes 18,750 shares that may be acquired by Mr. Vemuri pursuant to the exercise of options. |
(8) |
Includes 25,000 shares that may be acquired by Mr. McGuinn pursuant to the exercise of options. |
(9) |
Includes 2,020 shares that may be acquired by Mr. Parrett pursuant to the exercise of options. |
(10) |
Includes 22,000 shares that may be acquired by Mr. Dunbar pursuant to the exercise of options. |
(11) |
Includes 2,022 shares that may be acquired by Ms. Seligman pursuant to the exercise of options. |
(12) |
Includes 21,686 shares that may be acquired by Mr. Sircar pursuant to the exercise of options. |
(13) |
Includes 20,000 shares that may be acquired by Mr. Kandula pursuant to the exercise of options. |
(14) |
Includes 148,478 shares of Company Common Stock underlying options that are exercisable on or before April 30, 2015 or within 60 days after such date. |
-64-
SHAREHOLDERS SHARING AN ADDRESS
In order to reduce printing and postage costs, we have undertaken an effort to deliver only one Information Statement to multiple shareholders
sharing an address. This delivery method, called householding, will not be used, however, if we receive contrary instructions from one or more of the shareholders sharing an address. If your household has received only one Information
Statement, we will deliver promptly a separate copy of the Information Statement to any shareholder who makes an oral request or sends a written request to our Corporate Secretary by e-mail to corporatesecretary@igate.com, by telephone at
(908) 219-8050, by fax to (908) 947-7001 or by mail to Mr. Mukund Srinath, Senior Vice President Legal & Corporate Secretary, IGATE Corporation, 100 Somerset Corporate Blvd, Bridgewater, NJ 08807. You may also notify
us that you would like to receive separate copies of Information Statements in the future by contacting our Corporate Secretary.
If your
household has received multiple copies of the Information Statement, you can request the delivery of single copies in the future by contacting our Corporate Secretary.
If you own shares of Company Common Stock through a bank, broker or other nominee and receive more than one Information Statement, contact the
holder of record to eliminate duplicate mailings.
-65-
WHERE YOU CAN FIND MORE INFORMATION
The SEC maintains a website that contains reports, proxy and information statements and other information regarding us and other issuers that
file electronically with the SEC at www.sec.gov. Our Proxy Statements, Annual Reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments to those reports, are available free of charge through the
SECs website. Shareholders may also read and copy materials that we file with the SEC at the SECs Public Reference Room at 100 F Street, NE, Washington, DC 20549. Shareholders may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330.
Statements contained in this Information Statement, or in any document incorporated
by reference in this Information Statement regarding the contents of any contract or other document, are not necessarily complete, and each such statement is qualified in its entirety by reference to that contract or other document filed as an
exhibit with the SEC. The SEC allows us to incorporate by reference into this Information Statement documents we file with the SEC. This means that we can disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this Information Statement, and later information that we file with the SEC will update and supersede that information. We incorporate by reference the documents listed below and
any documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Information Statement and before the date of effectiveness of the Merger:
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on February 9, 2015; |
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|
Our Amendment No. 1 to our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2014, filed with the SEC on April 29, 2015; and |
|
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Our Current Reports on Form 8-K filed on January 23, 2015, February 5, 2015, April 27, 2015, and April 29, 2015. |
The documents incorporated by reference into this Information Statement are available from us upon request by writing to or calling our
Corporate Secretary at IGATE Corporation, 100 Somerset Corporate Blvd, Bridgewater, NJ 08807, and telephone (908) 947-7001. We will provide a copy of any and all of the information that is incorporated by reference in this Information Statement
(not including exhibits to the information unless those exhibits are specifically incorporated by reference into this Information Statement) to any person, without charge, upon written or oral request.
Parent and Merger Sub have supplied, and the Company has not independently verified, the information in this Information Statement relating to
Parent and Merger Sub.
-66-
ANNEX A
MERGER AGREEMENT
AGREEMENT AND PLAN OF MERGER
dated as of April 25, 2015,
among
CAP GEMINI S.A.,
CAPGEMINI NORTH AMERICA, INC.,
LAPORTE MERGER SUB, INC.
and
IGATE CORPORATION
TABLE OF CONTENTS
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Page |
|
ARTICLE I The Merger |
|
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2 |
|
Section 1.01 |
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The Merger |
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2 |
|
Section 1.02 |
|
Merger Closing |
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2 |
|
Section 1.03 |
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Effective Time |
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|
2 |
|
Section 1.04 |
|
Effects of Merger |
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2 |
|
Section 1.05 |
|
Articles of Incorporation and Bylaws |
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2 |
|
Section 1.06 |
|
Directors and Officers |
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3 |
|
Section 1.07 |
|
Effect on Capital Stock |
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|
3 |
|
Section 1.08 |
|
Payment of Merger Consideration |
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|
3 |
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|
ARTICLE II Representations and Warranties of the Company |
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6 |
|
Section 2.01 |
|
Organization, Standing and Power |
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7 |
|
Section 2.02 |
|
Capital Structure |
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|
7 |
|
Section 2.03 |
|
Company Subsidiaries; Equity Interests |
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8 |
|
Section 2.04 |
|
Authority; Execution and Delivery; Enforceability |
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9 |
|
Section 2.05 |
|
No Conflicts; Consents |
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10 |
|
Section 2.06 |
|
SEC Documents; Undisclosed Liabilities |
|
|
11 |
|
Section 2.07 |
|
Information Supplied |
|
|
13 |
|
Section 2.08 |
|
Absence of Certain Changes or Events |
|
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13 |
|
Section 2.09 |
|
Taxes |
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13 |
|
Section 2.10 |
|
Labor Relations |
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|
14 |
|
Section 2.11 |
|
Employee Benefits |
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|
15 |
|
Section 2.12 |
|
Title to Properties |
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17 |
|
Section 2.13 |
|
Contracts |
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18 |
|
Section 2.14 |
|
Litigation |
|
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20 |
|
Section 2.15 |
|
Compliance with Laws |
|
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20 |
|
Section 2.16 |
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Environmental Matters |
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|
21 |
|
Section 2.17 |
|
Intellectual Property |
|
|
21 |
|
Section 2.18 |
|
Insurance |
|
|
23 |
|
Section 2.19 |
|
Brokers and Other Advisors |
|
|
24 |
|
Section 2.20 |
|
Takeover Statutes; No Rights Agreement |
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|
24 |
|
Section 2.21 |
|
Opinion of Financial Advisor |
|
|
24 |
|
Section 2.22 |
|
Restrictions on Business Activities |
|
|
24 |
|
Section 2.23 |
|
Customers and Vendors |
|
|
24 |
|
|
|
ARTICLE III Representations and Warranties of Parent and Merger Sub |
|
|
25 |
|
Section 3.01 |
|
Organization, Standing and Power |
|
|
25 |
|
Section 3.02 |
|
Merger Sub |
|
|
25 |
|
Section 3.03 |
|
Authority; Execution and Delivery; Enforceability |
|
|
25 |
|
Section 3.04 |
|
No Conflicts; Consents |
|
|
25 |
|
Section 3.05 |
|
Information Supplied |
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26 |
|
Section 3.06 |
|
Brokers |
|
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26 |
|
i
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Section 3.07 |
|
Litigation |
|
|
26 |
|
Section 3.08 |
|
Ownership of Company Common Stock |
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27 |
|
Section 3.09 |
|
Certain Business Relationships |
|
|
27 |
|
Section 3.10 |
|
Available Funds |
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|
27 |
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|
|
ARTICLE IV Covenants Relating to Conduct of Business |
|
|
27 |
|
Section 4.01 |
|
Conduct of Business of the Company |
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|
27 |
|
Section 4.02 |
|
No Frustration of Conditions |
|
|
30 |
|
Section 4.03 |
|
No Solicitation |
|
|
31 |
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|
|
ARTICLE V Additional Agreements |
|
|
35 |
|
Section 5.01 |
|
Shareholder Consent; Preparation of Proxy Statement; Shareholders Meeting |
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|
35 |
|
Section 5.02 |
|
Access to Information; Confidentiality |
|
|
36 |
|
Section 5.03 |
|
Reasonable Best Efforts; Notification |
|
|
37 |
|
Section 5.04 |
|
Equity Awards |
|
|
39 |
|
Section 5.05 |
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Employee Matters |
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43 |
|
Section 5.06 |
|
Indemnification |
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45 |
|
Section 5.07 |
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Fees and Expenses |
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|
47 |
|
Section 5.08 |
|
Public Announcements |
|
|
49 |
|
Section 5.09 |
|
Transfer Taxes |
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49 |
|
Section 5.10 |
|
Shareholder Litigation |
|
|
49 |
|
Section 5.11 |
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Rule 16b-3 Matters |
|
|
50 |
|
Section 5.12 |
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Merger Sub and Surviving Corporation Compliance |
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50 |
|
Section 5.13 |
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Stock Exchange De-listing |
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50 |
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Section 5.14 |
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No Control of Other Partys Business |
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50 |
|
Section 5.15 |
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CFIUS Approval |
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50 |
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Section 5.16 |
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Notification of Certain Actions |
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51 |
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Section 5.17 |
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Repayment of Existing Indebtedness |
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51 |
|
Section 5.18 |
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Termination of Affiliate Arrangements |
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53 |
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|
ARTICLE VI Conditions Precedent to the Merger |
|
|
53 |
|
Section 6.01 |
|
Conditions to Each Partys Obligation |
|
|
53 |
|
Section 6.02 |
|
Conditions to Obligations of Parent and Sub |
|
|
54 |
|
Section 6.03 |
|
Conditions to Obligation of the Company |
|
|
55 |
|
Section 6.04 |
|
Frustration of Closing Conditions |
|
|
56 |
|
|
|
ARTICLE VII Termination, Amendment and Waiver |
|
|
56 |
|
Section 7.01 |
|
Termination |
|
|
56 |
|
Section 7.02 |
|
Effect of Termination |
|
|
57 |
|
Section 7.03 |
|
Amendment; Extension; Waiver |
|
|
57 |
|
Section 7.04 |
|
Procedure for Termination, Amendment, Extension or Waiver |
|
|
58 |
|
|
|
ARTICLE VIII General Provisions |
|
|
58 |
|
Section 8.01 |
|
Nonsurvival of Representations and Warranties |
|
|
58 |
|
Section 8.02 |
|
Notices |
|
|
58 |
|
Section 8.03 |
|
Definitions |
|
|
60 |
|
ii
|
|
|
|
|
|
|
Section 8.04 |
|
Interpretation |
|
|
63 |
|
Section 8.05 |
|
Severability |
|
|
64 |
|
Section 8.06 |
|
Counterparts |
|
|
64 |
|
Section 8.07 |
|
Entire Agreement; Third-Party Beneficiaries; No Other Representations or Warranties |
|
|
64 |
|
Section 8.08 |
|
Governing Law |
|
|
65 |
|
Section 8.09 |
|
Assignment |
|
|
65 |
|
Section 8.10 |
|
Specific Enforcement; Jurisdiction |
|
|
65 |
|
Section 8.11 |
|
Waiver of Jury Trial |
|
|
67 |
|
Section 8.12 |
|
Remedies |
|
|
67 |
|
Section 8.13 |
|
Cooperation |
|
|
67 |
|
iii
AGREEMENT AND PLAN OF MERGER dated as of April 25, 2015 (this Agreement),
among Cap Gemini S.A., a French société anonyme (SA), Capgemini North America, Inc., a Delaware corporation (NA and, together with SA, (Parent)), Laporte Merger Sub, Inc., a
Pennsylvania corporation (Merger Sub) and a wholly owned subsidiary of NA, and IGATE Corporation, a Pennsylvania corporation (the Company).
WHEREAS the respective Boards of Directors of SA, NA and Merger Sub have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, the Board of Directors of the Company has, in accordance with Sections
1721 and 2538, if applicable, of the PBCL (as defined below), unanimously (i) determined that the entry into this Agreement, and the consummation of the Merger (as defined below), on the terms and subject to the conditions set forth in this
Agreement and in accordance with the Pennsylvania Business Corporation Law of 1988 (including any successor laws, rules, regulations, as amended or supplemented hereafter or any applicable law, rule, or regulations of the Pennsylvania Associations
Code, as amended or supplemented hereafter, the PBCL), of Merger Sub with and into the Company in which the Company shall survive and become a wholly owned subsidiary of Parent (the Merger), and the other
transactions contemplated by this Agreement (collectively, the Transactions) are in the best interests of the Company and (ii) approved the execution, delivery and performance of this Agreement, and the consummation of the
Merger and the other Transactions, on the terms and subject to the conditions set forth in this Agreement;
WHEREAS the respective Boards
of Directors of SA, NA and Merger Sub have approved the Merger on the terms and subject to the conditions set forth in this Agreement;
WHEREAS as a condition and inducement to Parents willingness to enter into this Agreement, certain shareholders of the Company have
simultaneously herewith entered into an agreement (the Voting Agreement) in connection with the Merger, providing that such shareholders have, among other things, agreed to vote the shares of Company Common Stock beneficially
owned by them in favor of the adoption of this Agreement, on the terms and subject to the conditions in the Voting 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.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
The Merger
Section 1.01 The Merger. On the terms and subject to the conditions set forth in this Agreement, and in accordance with the PBCL,
Merger Sub shall be merged with and into the Company at the Effective Time. At the Effective Time, the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation (the Surviving
Corporation).
Section 1.02 Merger Closing. The closing of the Merger (the Closing) shall take
place at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022 at 10:00 a.m., New York City time, on the second business day following the satisfaction or (to the extent permitted by Law) waiver by the party or
parties entitled to the benefits thereof of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing), or at such other place, time and date as shall be agreed in writing by
the parties hereto; provided that if all the conditions set forth in Article VI have not been satisfied or (to the extent permitted by Law) waived on such second business day, then the Closing shall take place on the first business day
on which all such conditions shall have been satisfied or (to the extent permitted by Law) waived, or at such other place, time and date as shall be agreed in writing by the parties hereto. The date on which the Closing occurs is referred to in this
Agreement as the Closing Date.
Section 1.03 Effective Time. Prior to the Closing, the Company shall
prepare, and on the Closing Date, the Company shall file with the Department of State of the Commonwealth of Pennsylvania, the articles of merger or other appropriate documents (in any such case, the Articles of Merger) executed
in accordance with the provisions of the PBCL and shall make all other filings or recordings required under the PBCL to effectuate the Merger. The Merger shall become effective at such time as the Articles of Merger are duly filed with the
Department of State of the Commonwealth of Pennsylvania or at such other time as Parent and the Company shall agree and specify in the Articles of Merger (the time the Merger becomes effective being the Effective Time).
Section 1.04 Effects of Merger. The Merger shall have the effects set forth herein and in Section 1929 of the PBCL.
Section 1.05 Articles of Incorporation and Bylaws. (a) At the Effective Time, the articles of incorporation of the Company as
in effect immediately prior to the Effective Time shall be amended and restated in its entirety to be in the form attached as Exhibit B and, as so amended and restated, such articles of incorporation shall be the articles of incorporation of the
Surviving Corporation, until thereafter changed or amended as provided therein or permitted by applicable Law.
2
(b) At the Effective Time, the bylaws of the Company as in effect immediately prior to the
Effective Time shall be amended and restated in its entirety to be in the same form as the bylaws of Merger Sub as in effect immediately prior to the Effective Time and, as so amended and restated, such bylaws shall be the bylaws of the Surviving
Corporation until thereafter changed or amended as provided therein or permitted by applicable Law, except that references to the name of Merger Sub shall be replaced by the name of the Surviving Corporation.
Section 1.06 Directors and Officers. The directors of Merger Sub immediately prior to the Effective Time shall be the directors of
the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.
Section 1.07 Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the
holder of any shares of common stock, par value $0.01 per share, of the Company (the Company Common Stock), or any shares of capital stock of Merger Sub:
(a) Capital Stock of Merger Sub. Each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective
Time shall be converted into and become one fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.
(b) Cancelation of Treasury Stock and Parent-Owned Stock. Each share of Company Common Stock that is owned as treasury stock by the
Company or owned by Parent or Merger Sub immediately prior to the Effective Time shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered or deliverable in
exchange therefor.
(c) Conversion of Other Company Common Stock. Each issued and outstanding share of Company Common Stock (but
excluding shares to be cancelled and retired in accordance with Section 1.07(b)) shall be converted into the right to receive $48.00 in cash and without interest (the Merger Consideration). As of the Effective Time,
all such shares of Company Common Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of any such shares of Company Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration in accordance with Section 1.08, without interest.
Section 1.08 Payment of Merger Consideration.
(a) Paying Agent. Prior to the Effective Time, Parent shall select a bank or trust company reasonably acceptable to the Company to act
as paying agent (the Paying Agent) for the payment of the Merger Consideration to former holders of Company Common Stock. Parent shall, or shall cause the Surviving Corporation to, deposit with the Paying Agent, immediately after
the Effective Time, for the benefit of the holders of shares of Company Common Stock, cash (such cash being hereinafter referred to as the Payment Fund) in amounts necessary for the payment of Merger Consideration pursuant to
Section 1.07(c) upon surrender of Certificates in accordance
3
with Section 1.08(b) or delivery of an agents message in accordance with Section 1.08(c), it being understood that all such funds shall be invested as
directed by Parent in accordance with Section 1.08(h) and that any and all interest or other amounts earned with respect to funds made available to the Paying Agent pursuant to this Agreement shall be turned over to Parent.
(b) Payment Procedure. As promptly as reasonably practicable after the Effective Time (but in no event later than two business days
after the Effective Time), the Surviving Corporation or Parent shall use its reasonable best efforts to cause the Paying Agent to mail to each holder of record of a certificate or certificates that immediately prior to the Effective Time represented
outstanding shares of Company Common Stock (the Certificates) which were converted into the right to receive the Merger Consideration pursuant to Section 1.07 (i) a letter of transmittal (which shall include an
accompanying IRS Form W-9 or an applicable IRS Form W-8 and shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent, and shall be in such
form and have such other provisions (including customary provisions regarding delivery of an agents message with respect to Book-Entry Shares) as are customary and reasonably acceptable to the Company and Parent) and
(ii) instructions for effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon surrender of a Certificate to the Paying Agent for cancelation, together with such letter of transmittal, duly completed and
validly executed, and such other documents as may reasonably be required by the Paying Agent, the holder of such Certificate shall be entitled to receive in exchange therefor the amount of cash equal to the Merger Consideration that such holder has
the right to receive pursuant to Section 1.07, and each Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of Company Common Stock that is not registered in the transfer records of the
Company, payment may be made to a Person other than the Person in whose name the Certificate so surrendered is registered, if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the Person requesting such
payment shall pay any transfer or other Taxes required by reason of the payment to a Person other than the registered holder of such Certificate or establish to the satisfaction of Parent that such Tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 1.08, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the amount of Merger Consideration into which the shares
of Company Common Stock theretofore represented by such Certificate have been converted pursuant to Section 1.07. No interest shall be paid or accrue on the cash payable upon surrender of any Certificate.
(c) Treatment of Book-Entry Shares. No holder of record of Book-Entry Shares shall be required to deliver a Certificate or an executed
letter of transmittal to the Paying Agent to receive the Merger Consideration in respect of such Book-Entry Shares. In lieu thereof, such holder of record shall upon receipt by the Paying Agent of an agents message in customary
form (or such other evidence, if any, as the Paying Agent may reasonably request), be entitled to receive, and the Surviving Corporation or Parent shall use its reasonable best efforts to cause the Paying Agent to pay and deliver as promptly as
reasonably practicable after the Effective Time (but in no event later than two business days after the Effective Time to each such holder of record as of the Effective Time), an amount of U.S. dollars equal to the aggregate amount of Merger
Consideration to which such holder is entitled hereunder, and such Book-Entry Shares shall forthwith be canceled.
4
(d) No Further Ownership Rights in Company Common Stock. The Merger Consideration paid in
accordance with the terms of this Article I as a result of the conversion of any shares of Company Common Stock shall be deemed to have been paid in full satisfaction of all rights pertaining to such shares of Company Common Stock, subject,
however, to the Surviving Corporations obligation to pay any dividends or make any other distributions with a record date prior to the Effective Time that may have been declared or made by the Company on such shares of Company Common Stock not
in violation of the terms of this Agreement or prior to the date of this Agreement. After the Effective Time there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of shares of Company Common
Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, any Certificates are presented to the Surviving Corporation or the Paying Agent for any reason, they shall be canceled and exchanged as provided in
this Article I.
(e) Lost, Stolen or Destroyed Certificates. If any Certificate shall have been lost, stolen, defaced or
destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen, defaced or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond, in such reasonable amount
as Parent may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will pay, in exchange for such lost, stolen or destroyed Certificate, the applicable Merger Consideration to be paid
in respect of the shares of Company Common Stock formerly represented by such Certificate.
(f) Termination of Payment Fund. Any
portion of the Payment Fund that remains undistributed as of the 12-month anniversary of the Closing Date shall be delivered to Parent or its designated affiliate, upon demand, and any former holder of Company Common Stock entitled to payment of
Merger Consideration who has not theretofore complied with this Article I shall thereafter look only to Parent or its successor-in-interest for payment of its claim for Merger Consideration (subject to applicable abandoned property, escheat
and other similar Law).
(g) No Liability. None of Parent, Merger Sub, the Company, the Surviving Corporation or the Paying Agent
shall be liable to any Person in respect of any cash from the Payment Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. If any Certificate has not been surrendered prior to the date on which
the Merger Consideration in respect of such Certificate would otherwise escheat to or become the property of any Governmental Entity, any such Merger Consideration in respect of such Certificate shall, to the extent permitted by applicable Law,
immediately prior to such date become the property of the Surviving Corporation or its designated affiliate, free and clear of any claims or interest of any such holders or their successors, assigns or personal representative previously entitled
thereto, subject to the claims of any former holder of Company Common Stock entitled to payment of Merger Consideration who has not theretofore complied with this Article II.
(h) Investment of Payment Fund. The Payment Fund shall be invested by the Paying Agent in (i) short-term direct obligations of the
United States of America or (ii) short-term obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of principal and interest. Nothing contained in this Section 1.08(h)
and
5
no investment losses resulting from the investment of the Payment Fund shall diminish the rights of the
shareholders to receive the Merger Consideration. To the extent there are losses or the Payment Fund diminishes for any reason below the level required to promptly pay the Merger Consideration pursuant to Section 1.07(c), Parent shall
replace or restore the cash in the Payment Fund to ensure the prompt payment of the Merger Consideration. Any interest and other income resulting from such investments shall be the property of, and paid to, Parent or its designated affiliate.
(i) Withholding Rights. Each of the Surviving Corporation, Parent and the Paying Agent shall be entitled to deduct and withhold from the
consideration otherwise payable to any former holder of Company Common Stock pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Code and the Treasury
Regulations promulgated under the Code, or any provision of state, local or foreign Tax law; provided that Parent agrees that no non-U.S. Taxes shall be deducted and withheld from the Merger Consideration (other than any such Taxes required
to be withheld in respect of compensation payable to any present or former employee of the Company or any of the Company Subsidiaries). To the extent that amounts are so deducted and withheld, and paid over to the appropriate Governmental Entity,
such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Company Common Stock in respect of which such deduction and withholding was made.
ARTICLE II
Representations and Warranties of the Company
Except (a) as disclosed in the reports, schedules, forms, statements and other documents filed by the Company with, or furnished by the
Company to, the Securities and Exchange Commission (the SEC) during the period from January 1, 2012 to the business day prior to the date hereof (provided, that if this Agreement is executed on any day other than a
Sunday or a Monday, the period referenced in this clause (a) shall be from January 1, 2012 to the second business day prior to the date hereof) (excluding any disclosures contained under the captions Risk Factors or
Forward Looking Statements or similarly titled captions and any other disclosures contained therein that are cautionary or forward-looking in nature) (the Filed Company SEC Documents) (provided, further,
that this clause (a) shall not be applicable to Section 2.02, Section 2.04, Section 2.06(e), Section 2.06(g), Section 2.07, or Section 2.08(a)) or (b) as set forth in the letter,
dated as of the date of this Agreement, from the Company to Parent and Merger Sub (which shall be arranged in numbered and lettered sections corresponding to the numbered and lettered sections contained in this Article III, and the disclosure
in any section shall be deemed to qualify or apply to other sections in this Article III to the extent that it is reasonably apparent from the face of such disclosure that such disclosure also qualifies or applies to such other sections, the
Company Disclosure Letter), the Company represents and warrants to Parent and Merger Sub as follows:
6
Section 2.01 Organization, Standing and Power. Each of the Company and each of its
subsidiaries (the Company Subsidiaries) is duly organized or formed, as applicable, validly existing and in good standing under the laws of the jurisdiction in which it is organized (in the case of good standing, to the extent the
concept is recognized by such jurisdiction), except in the case of Company Subsidiaries where any such failure would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect. Each of the Company and the
Company Subsidiaries (a) has full power and authority necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its business as presently conducted and (b) is duly qualified or licensed to do business
in each jurisdiction where the nature of its business or its ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to have such power and authority or to be so qualified or
licensed would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect. True and complete copies of the articles of incorporation of the Company, as amended to the date of this Agreement (as so
amended, the Company Articles), and the bylaws of the Company, as amended to the date of this Agreement (as so amended, the Company Bylaws) are included in the Filed Company SEC Documents. The Company has made
available to Parent the organizational documents of each material Company Subsidiary, in each case as amended and in effect as of the date of this Agreement.
Section 2.02 Capital Structure. (a) The authorized capital stock of the Company consists of 700,000,000 shares of Company
Common Stock, 1 share of Series A Preferred Stock, without par value (the Series A Preferred Stock), 480,000 shares of Series B Preferred Stock, without par value (the Series B Preferred Stock), and 19,519,999 shares of
additional Preferred Stock, without par value (together with the Series A Preferred Stock and Series B Preferred Stock, the Company Preferred Stock). At the close of business on April 22, 2015 (the Measurement
Date), (i) 81,926,476 shares of Company Common Stock were issued, of which 80,936,374 shares of Company Common Stock were outstanding and 990,102 shares of Company Common Stock were held by the Company in its treasury, (ii) no
Company Common Stock was owned by any Company Subsidiary, (iii) 1,932,355 shares of Company Common Stock were subject to outstanding Company Stock Options, with a weighted average exercise price of $25.29 per share, (iv) 1,723,200 shares
of Company Common Stock were issuable in respect of outstanding Company Performance Share Awards (assuming achievement of applicable performance goals at maximum), (v) 43,674 shares of Company Common Stock were issuable in respect of
outstanding Company RSUs, (vi) 1,370,430 shares of Company Common Stock were issuable in respect of Company Restricted Shares, (vii) 5,345,573 additional shares of Company Common Stock were reserved for issuance pursuant to the Company
Stock Plan and (viii) no shares of Company Preferred Stock were issued or outstanding. Except as set forth above, at the close of business on the Measurement Date, no shares of capital stock of the Company were issued, reserved for issuance or
outstanding. From the Measurement Date to the date of this Agreement, there have been no issuances by the Company of shares of capital stock of the Company or options, warrants, convertible or exchangeable securities, stock-based performance units
or other rights to acquire shares of capital stock of the Company or other rights that give the holder thereof any economic interest of a nature accruing to the holders of Company Common Stock, other than the issuance of Company Common Stock upon
the exercise of Company Stock Options or the settlement of Company Performance Share Awards Company RSUs or Company Restricted Shares.
7
(b) All outstanding shares of Company Common Stock are, and all such shares that may be issued
prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights.
(c) As of the date of this Agreement, 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 holders of Company Common Stock may vote (Voting Company Debt).
(d) Except as set forth above, as of the date of this Agreement, there are no options, warrants, convertible or exchangeable securities,
stock-based performance units or other rights or Contracts to which the Company is a party or by which the Company is bound (i) obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock of, or any security convertible or exchangeable for any shares of capital stock of, the Company or any Voting Company Debt, (ii) obligating the Company to issue, grant or enter into any such option, warrant, security, unit, right
or Contract or (iii) that give any person the right to receive any economic interest of a nature accruing to the holders of Company Common Stock. As of the date of this Agreement, there are no outstanding contractual obligations of the Company
to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire shares of capital stock of the Company,
except for (A) acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of Company Stock Options, (B) the
withholding of shares of Company Common Stock to satisfy Tax obligations with respect to Company Stock Options, Company Restricted Shares, Company Performance Share Awards or Company RSUs and (C) the acquisition by the Company of Company Stock
Options, Company Restricted Shares and Company Performance Share Awards and Company RSUs in connection with the forfeiture of such awards.
(e) All Company Stock Options, Company Restricted Shares, Company Performance Share Awards and Company RSUs are evidenced by written award
agreements, in each case substantially in the forms that have been made available to Parent, except that such agreements differ from such forms with respect to the number of Company Stock Options, Company Restricted Shares, Company Performance Share
Awards, Company RSUs or shares of Company Common Stock covered thereby, the exercise price (if applicable), vesting schedule and expiration date applicable thereto and other similar terms.
Section 2.03 Company Subsidiaries; Equity Interests. (a) Section 2.03(a) of the Company Disclosure Letter lists,
as of the date of this Agreement, each material Company Subsidiary and its jurisdiction of organization. All the outstanding shares of capital stock of each Company Subsidiary have been duly authorized and validly issued and are fully paid,
nonassessable and not subject to preemptive rights, and are owned by the Company, by another Company Subsidiary or by the Company and another Company Subsidiary, free and clear of all pledges, liens, charges, mortgages, encumbrances, adverse claims
and interests, or security interests of any kind or nature whatsoever (collectively, Liens), other than Permitted Liens. As of the date of this Agreement, there are no options, warrants, rights, convertible or exchangeable
securities, stock-based performance units or Contracts to
8
which any Company Subsidiary is a party or by which any Company Subsidiary is bound obligating any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock of, or any security convertible or exchangeable for any shares of capital stock of, any Company Subsidiary.
(b) Except for its interests in the Company Subsidiaries, the Company does not own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity interest in any Person.
Section 2.04 Authority; Execution
and Delivery; Enforceability. (a) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the Transactions, subject, in the case of the Merger, to
receipt of the Company Shareholder Approval, if required by applicable Law. The execution and delivery by the Company of this Agreement and the consummation by the Company of the Transactions 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 approve this Agreement or to consummate the Merger and the other Transactions to which it is a party, subject, in the case of the
Merger, to receipt of the Company Shareholder Approval, if required by applicable Law. The Company has duly executed and delivered this Agreement, and, assuming due authorization, execution and delivery by Parent and Merger Sub, this Agreement
constitutes its legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms (except insofar as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Laws of
general applicability relating to or affecting creditors rights, or by principles governing the availability of equitable remedies, whether considered in a Proceeding at law or in equity (the Bankruptcy and Equity
Exception)).
(b) The Board of Directors of the Company (the Company Board), at a meeting duly called and held
at which all directors of the Company were present duly and unanimously adopted, in accordance with Sections 1721 and 2538, if applicable, of the PBCL, resolutions (i) approving and declaring advisable this Agreement, the Merger and the other
Transactions, (ii) determining that the Merger and the other Transactions are in the best interests of the Company, (iii) proposing the Merger in accordance with Section 1922 of the PBCL by adopting a resolution approving this
Agreement as a plan of merger for the purposes of Section 1922 of the PBCL and (iv) recommending that the Companys shareholders adopt this Agreement if the Company Shareholder Approval is required by applicable Law (the
recommendation set forth in subclause (iv) of this Section 2.04(b), the Company Board Recommendation), which resolutions, as of the date of this Agreement, have not been rescinded, modified or withdrawn in any
way.
(c) Assuming the representations and warranties set forth in Section 3.08 are true and correct, (i) the only
affirmative vote or written consent of holders of any class or series of capital stock of the Company necessary to consummate the Merger is, if required by applicable Law, the affirmative vote of a majority of the votes cast by the holders of
outstanding shares of Company Common Stock entitled to vote thereon, or written consent of the majority of holders who would have been entitled to cast the minimum number of votes that would be
9
necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting, in favor of adopting this Agreement (the Company Shareholder
Approval) and (ii) the affirmative vote or written consent of the holders of any class or series of capital stock of the Company is not necessary to consummate any Transaction other than the Merger. The delivery of the Shareholder
Consent will constitute Company Shareholder Approval.
Section 2.05 No Conflicts; Consents. (a) The execution and
delivery by the Company of this Agreement do not, and the consummation of the Merger and the other Transactions and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation (including any right of repurchase or obligation to make an offer to purchase) or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of the Company or any Company Subsidiary under, any provision of (i) the Company Articles, the Company Bylaws or the comparable organizational documents of any Company Subsidiary,
(ii) any material contract, lease, license, indenture, note, bond, agreement, concession, franchise or other binding instrument (a Contract) to which the Company or any Company Subsidiary is a party or by which any of their
respective properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 2.05(b), any judgment, order, injunction or decree (Judgment) or statute, law, ordinance, rule or
regulation (Law) applicable to the Company or any Company Subsidiary or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that would not reasonably be expected
to, individually or in the aggregate, have a Company Material Adverse Effect (it being agreed that for purposes of this Section 2.05(a), clause (G) of the definition of the term Company Material Adverse Effect,
shall not be excluded in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur).
(b)
No consent, approval, license, permit, order or authorization (Consent) of, or registration, declaration or filing with, or permit from, any national, federal, state, provincial, local or other government, domestic or foreign, or
any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a Governmental Entity), is required to be obtained or made by or with respect to the
Company or any Company Subsidiary in connection with the execution, delivery and performance of this Agreement or the consummation of the Transactions, other than (i) compliance with and filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the HSR Act), (ii) the applicable requirements of antitrust, competition or other similar Laws of jurisdictions other than the United States (collectively, Foreign Antitrust
Laws), (iii) the applicable requirements of the Securities Act of 1933, as amended (including all rules and regulations promulgated thereunder, the Securities Act), and the Securities Exchange Act of 1934, as
amended (including the rules and regulations promulgated thereunder, the Exchange Act), including the filing of the Information Statement or Proxy Statement, if applicable, and applicable state securities, takeover and blue
sky laws, as may be required in connection with this Agreement, the Voting Agreement, the Merger and the other
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Transactions, (iv) the filing of the Articles of Merger with the Department of State of the Commonwealth of Pennsylvania and appropriate documents with the relevant authorities of the other
jurisdictions in which the Company is qualified to do business, (v) such filings as may be required under the rules and regulations of the NASDAQ Global Select Market (the Nasdaq) and (vi) such other items
(A) required solely by reason of the participation of Parent (as opposed to any third Person) in the Transactions or (B) that the failure of which to obtain or make would not reasonably be expected to, individually or in the aggregate,
have a Company Material Adverse Effect (it being agreed that for purposes of this Section 2.05(a), clause (G) of the definition of the term Company Material Adverse Effect, shall not be excluded in determining
whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur).
Section 2.06 SEC Documents;
Undisclosed Liabilities. (a) The Company has filed or furnished all material reports, schedules, forms, statements and other documents required to be filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act by the
Company with the SEC since January 1, 2012 (collectively, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, as such statements and reports may have been amended since the date of
their filing, the Company SEC Documents).
(b) As of their respective effective dates (in the case of Company SEC
Documents that are registration statements filed pursuant to the Securities Act) and as of their respective SEC filing dates (in the case of all other Company SEC Documents), each Company SEC Document complied as to form in all material respects
with the applicable requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Document, and except to the extent amended or superseded
by a subsequent filing with the SEC prior to the date of this Agreement, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not misleading (provided that the Company makes no representation or warranty with respect to information furnished in writing by Parent or Merger Sub specifically for
inclusion or use in any such document).
(c) The audited consolidated financial statements and the unaudited quarterly financial statements
(including, in each case, the notes thereto) of the Company included in the Company SEC Documents when filed (i) complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto,
(ii) have been prepared in all material respects in accordance with generally accepted accounting principles in the United States (GAAP) (except, in the case of unaudited quarterly statements, as permitted by Form 10-Q of the
SEC or other rules and regulations of the SEC) applied in all material respects on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and (iii) fairly present in all material respects the
consolidated 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 covered thereby (subject, in the case of unaudited quarterly
statements, to normal year-end adjustments).
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(d) Except as reflected or reserved against in the consolidated balance sheet of the Company, as
of December 31, 2014, or the notes thereto, included in the Company SEC Documents (such balance sheet and the notes thereto, the Company Balance Sheet), the Company and the Company Subsidiaries do not have any liability or
obligation of any nature (whether accrued, absolute, contingent or otherwise) other than (i) liabilities or obligations incurred in the ordinary course of business since the date of the Company Balance Sheet, (ii) liabilities or
obligations not required to be disclosed in a consolidated balance sheet of the Company or in the notes thereto prepared in accordance with GAAP and the rules and regulations of the SEC applicable thereto, (iii) liabilities or obligations
incurred in connection with the Transactions and (iv) liabilities or obligations that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.
(e) The Company has established and maintained disclosure controls and procedures and a system of internal control over financial reporting (as
such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act), as required by Rule 13a-15 under the Exchange Act. From the date of the filing of the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2014 to the date of this Agreement, the Companys auditors and the Company Board have not been advised of (i) any significant deficiencies or material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the Companys ability to record, process, summarize and report financial information or (ii) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Companys internal control over financial reporting.
(f) There are no outstanding
loans or other extensions of credit made by the Company or any Company Subsidiary to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company. The Company has not, since the enactment of the Sarbanes-Oxley
Act of 2002 (the Sarbanes-Oxley Act), taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
(g)
Since January 1, 2012, (i) the Company has, to its knowledge, complied in all material respects with the applicable listing and corporate governance rules and regulations of Nasdaq and (ii) each of the principal executive officer and
principal financial officer of the Company (or each former principal executive officer and principal financial officer of the Company, as applicable) have made all certifications required by Rule 13a-14 and 15d-14 under the Exchange Act and Sections
302 and 906 of the Sarbanes-Oxley Act and any related rules and regulations promulgated by the SEC and Nasdaq, and the statements contained in any such certifications are complete and correct.
(h) Since January 1, 2012, there has been no transaction, or series of similar transactions, agreements, arrangements or understandings,
nor is there any proposed transaction as of the date of this Agreement, or series of similar transactions, agreements, arrangements or understandings to which the Company or any Company Subsidiary 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.
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Section 2.07 Information Supplied. None of the information supplied or to be supplied
by or on behalf of the Company for inclusion or incorporation by reference in the Information Statement or Proxy Statement, as applicable, will, at the time such document is filed with the SEC, at any time it is amended or supplemented or at the
time it is first published, sent or given to the Companys shareholders, contain any untrue statement 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
are made, not misleading (provided, that the Company makes no representation or warranty with respect to information furnished in writing by Parent or Merger Sub specifically for inclusion or use in any such Company SEC Document). The
Information Statement or Proxy Statement, as applicable, will comply as to form in all material respects with the requirements of the Exchange Act, except that no representation or warranty is made by the Company with respect to statements included
or incorporated by reference therein based on information supplied by or on behalf of Parent or Merger Sub for inclusion or incorporation by reference therein.
Section 2.08 Absence of Certain Changes or Events. (a) Since the date of the Company Balance Sheet, there has not been any
Company Material Adverse Effect.
(b) From the date of the Company Balance Sheet to the date of this Agreement, each of the Company and the
Company Subsidiaries has, in all material respects, conducted and operated its business in the ordinary course of business consistent with past practice, and none of the Company or the Company Subsidiaries has taken or failed to take any action
that, had such action been taken or failed to have been taken after the date hereof, would have required Parents consent under Sections 4.01(b), 4.01(c), 4.01(e), 4.01(g), 4.01(h), 4.01(i) and 4.01(l), except in
each case for the execution and delivery of this Agreement.
Section 2.09 Taxes. (a) Each of the Company and each Company
Subsidiary has (i) timely filed, or caused to be timely filed, taking into account any extensions of time within which to file, all material Tax Returns required to have been filed and such Tax Returns are true, accurate and complete in all
material respects, and (ii) paid, or caused to be paid, all material Taxes (whether or not shown to be due on such Tax Returns) required to have been paid by it, other than Taxes that are not yet due and payable or that are being contested in
good faith in appropriate Proceedings and for which adequate reserves have been established in accordance with GAAP.
(b) Each of the
Company and each Company Subsidiary has properly withheld and paid all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any shareholder, employee, creditor, independent contractor or other third
party.
(c) Neither the Company nor any Company Subsidiary has received written notice of any audit, examination, investigation or other
proceeding from any taxing authority for a material amount of unpaid Taxes asserted against the Company or Company Subsidiary, which have not been fully paid or settled. With respect to any tax years open for audit as of the date hereof, neither the
Company nor any Company Subsidiary has granted any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any material Tax.
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(d) Neither the Company nor any Company Subsidiary is a party to or is bound by any material Tax
sharing, allocation or indemnification agreement or arrangement (other than such agreements or arrangements (i) exclusively between or among the Company and one or more wholly owned Company Subsidiaries or (ii) with third parties made in
the ordinary course of business, the primary subject matter of which is not Tax).
(e) Neither the Company nor any Company Subsidiary has
any liability for Taxes of any Person (other than the Company or any Company Subsidiary) arising from the application of Treasury Regulation Section 1.1502-6 or any analogous provision of state, local or foreign Law, or as a transferee or
successor, by Contract or otherwise.
(f) Within the past two (2) years, neither the Company nor any Company Subsidiary has been a
distributing corporation or a controlled corporation within the meaning of Section 355(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the Code) in a distribution intended to qualify for
tax-free treatment under Section 355 of the Code.
(g) Neither the Company nor any Company Subsidiary has been a party to a
transaction that constitutes a listed transaction as defined in Section 6011 of the Code and applicable Treasury Regulations thereunder (or a similar provision of state Law).
(h) For purposes of this Agreement:
(i) Tax Return means all Tax returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax return relating to Taxes required to be filed with any taxing authority.
(ii)
Taxes means all taxes, customs, tariffs, imposts, levies, duties, fees or other like assessments or charges in the nature of tax imposed by a Governmental Entity, together with all interest, penalties and additions imposed with
respect to such amounts.
Section 2.10 Labor Relations. There are no labor agreements, collective bargaining agreements, work
rules or any other labor-related agreements or arrangements (collectively, Collective Bargaining Agreements) to which the Company or any Company Subsidiary is a party or by which the Company or any Company Subsidiary is bound,
other than the sectoral Collective Bargaining Agreements imposed by Law set forth on Section 2.10 of the Company Disclosure Letter. None of the employees of the Company or any Company Subsidiary is represented by any labor union, labor
organization or works council (other than any sectoral Collective Bargaining Agreements imposed by Law) with respect to his employment by the Company or any such Company Subsidiary. Since January 1, 2012, neither the Company nor any of the
Company Subsidiaries has experienced any actual or, to the knowledge of the Company, threatened material arbitrations, grievances, labor disputes, strikes, work stoppages, slowdowns, lockouts or union organization attempts concerning any employees
of the Company or a Company Subsidiary. There is no material unfair labor practice Proceeding or other
14
Proceeding involving any current or former employee of the Company or any Company Subsidiary or relating to labor matters that is existing, pending or, to the knowledge of the Company, threatened
against the Company or any Company Subsidiary, except as is not, and would not reasonably be expected to be, individually or in the aggregate, material and adverse to the Company and the Company Subsidiaries, taken as a whole. The Company is not and
has not since January 1, 2012, been: (i) a contractor or subcontractor (as defined by Executive Order 11246), (ii) required by Law to comply with Executive Order 11246 or (iii) required by Law to maintain
an affirmative action plan. To the knowledge of the Company, no current employee of the Company or Company Subsidiary at the level of senior vice president or above intends to terminate his or her employment. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result in any breach or other violation of any Collective Bargaining Agreement, employment agreement, consulting agreement or any other labor-related agreement to which the
Company or any Company Subsidiary is a party, except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.
Section 2.11 Employee Benefits. (a) Section 2.11(a) of the Company Disclosure Letter sets forth a true and
complete list, as of the date of this Agreement, of each material Company Benefit Plan and material Company Benefit Agreement.
(b) With
respect to each material Company Benefit Plan and material Company Benefit Agreement, the Company has made available to Parent true and complete copies of (i) such Company Benefit Plan or Company Benefit Agreement, including any amendment
thereto (or, in either case, with respect to any unwritten material Company Benefit Plan or material Company Benefit Agreement, a written description thereof), (ii) each trust, insurance, annuity or other funding Contract or vehicle related
thereto, (iii) the most recent annual report on Form 5500 required to be filed with the Internal Revenue Service with respect thereto (if any), and (iv) the most recent Summary Plan description for each such Company Benefit Plan for which
such Summary Plan description is required by applicable Law.
(c) Each Company Benefit Plan and Company Benefit Agreement has been operated
and administered in accordance with its terms and is in compliance with all applicable Laws (including applicable foreign Laws), including applicable provisions of ERISA and the Code, other than failures that would not reasonably be expected to
result in a material liability to the Company or any Company Subsidiary.
(d) Each Company Benefit Plan intended to be
qualified within the meaning of Section 401(a) of the Code (or qualified or registered under any comparable provision under applicable foreign Law) has received a favorable determination letter or opinion letter as to such
qualification or registration from the Internal Revenue Service (or any comparable Governmental Entity), and there are no existing circumstances or any events that have occurred, either by reason of any action or failure to act, that would
reasonably be expected to cause the loss of any such qualification, registration or tax-exempt status, except where such loss of qualification, registration or tax-exempt status would not reasonably be expected to, individually or in the aggregate,
have a Company Material Adverse Effect.
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(e) None of the Company, any of the Company Subsidiaries or any Commonly Controlled Entity has
sponsored, maintained, contributed to or been required to maintain or contribute to, or has any actual or contingent liability under, any pension plan (as defined in Section 3(2) of ERISA) that is subject to Section 302 or
Title IV of ERISA or Section 412 of the Code, including any single employer plan, any multi-employer plan (each as defined in Section 4001 of ERISA), or a multiple employer plan as defined in
Section 413(c) of the Code or is otherwise a defined benefit plan.
(f) Neither the Company nor any Company Subsidiary has any
material liability in respect of post-retirement health, medical or life insurance benefits for retired, former or current employees of the Company or any Company Subsidiary other than for continuation coverage required under Section 4980B(f)
of the Code or any state or foreign Laws.
(g) None of the execution and delivery of this Agreement, the obtaining of the Company
Shareholder Approval, if required by applicable Law, or the consummation of the Merger or any other Transaction (alone or in conjunction with any other event, including any termination of employment on or following the Effective Time) will
(i) entitle any current or former director, officer or employee of the Company or any Company Subsidiary to any compensation or benefit, (ii) accelerate the time of payment or vesting, or increase or trigger any payment or funding, of any
compensation or benefit or trigger any other material obligation under any Company Benefit Plan or Company Benefit Agreement, (iii) result in any violation of, or default under, or limit the Companys right to amend, modify or terminate,
any Company Benefit Plan or Company Benefit Agreement or (iv) or result in payment or provision of any amount (whether in cash or property or the vesting of property) to any current or former director, officer, employee or consultant of the
Company or any of the Company Subsidiaries under any Company Benefit Plan or Company Benefit Agreement that would not be deductible by reason of Section 280G of the Code or would be subject to an excise Tax under Section 4999 of the Code.
Neither the Company nor any of the Company Subsidiaries has any indemnity obligation on or after the Effective Time for any Taxes imposed under Section 4999 or 409A of the Code.
(h) To the knowledge of the Company, there are no pending claims against the Company or any Company Subsidiary with respect to any Company
Benefit Plan or Company Benefit Arrangement, by or on behalf of any current or former employee or beneficiary covered under such Company Benefit Plan or Company Benefit Arrangement (other than routine claims for benefits) that could reasonably be
expected to result in a material liability to the Company or any Company Subsidiary.
(i) Except as would not reasonably be expected to
result in a material liability to the Company or any Company Subsidiary, each Company Benefit Plan and Company Benefit Agreement that is a nonqualified deferred compensation plan (as defined for purposes of Section 409A(d)(1) of the
Code) that is not exempt from Section 409A of the Code has (A) been maintained and operated since January 1, 2005, in good faith compliance with Section 409A of the Code and all applicable IRS guidance promulgated thereunder so
as to avoid any Tax, penalty or interest under Section 409A and, as to any such plan in existence prior to January 1, 2005, has not been materially modified (within the meaning of IRS Notice 2005-1) at any time after
October 3, 2004, and (B) since January 1, 2009, has been in documentary and operational compliance with Section 409A of the Code an all applicable IRS guidance promulgated thereunder.
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(j) For purposes of this Agreement:
(i) Commonly Controlled Entity means any Person that, together with the Company, is treated as a single
employer under Section 414 of the Code or within the meaning of Section 4001(b) of ERISA.
(ii) Company
Benefit Agreement means each employment, consulting, indemnification, severance or termination agreement or arrangement between the Company or any Company Subsidiary, on the one hand, and any current or former employee, officer or director
of the Company or any Company Subsidiary, on the other hand (but excluding any Company Benefit Plans), other than any agreement or arrangement mandated by applicable Law.
(iii) Company Benefit Plan means each employee welfare benefit plan within the meaning of
Section 3(1) of ERISA, employee pension benefit plan within the meaning of Section 3(2) of ERISA, bonus, pension, profit sharing, retirement, deferred compensation, incentive compensation, equity-based compensation, vacation, severance,
disability, death benefit, hospitalization, medical or other employee benefits plan, policy, program, arrangement or understanding, in each case sponsored, maintained or contributed to, or required to be sponsored, maintained or contributed to, by
the Company or any Company Subsidiary, in each case for the benefit of any current or former director, officer or employee of the Company or any Company Subsidiary, other than (A) any multiemployer plan (within the meaning of
Section 3(37) of the Employee Retirement Income Security Act of 1974, as amended (ERISA)) or (B) any plan, policy, program, arrangement or understanding mandated by applicable Law.
Section 2.12 Title to Properties. Except as would not reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect, the Company and the Company Subsidiaries have good and marketable title to, or valid leasehold interests in, all their respective properties and assets reflected in the Company Balance Sheet (other than properties or assets
that have been sold or disposed of, or for which a valid leasehold interest has expired and not been renewed, in the ordinary course of business), free and clear of all Liens, except (i) statutory Liens for Taxes that are not yet due and
payable or Liens for Taxes that are being contested in good faith in appropriate Proceedings and for which adequate reserves have been established in accordance with GAAP, (ii) mechanics, carriers, workmens,
warehousemens, repairmens or other like Liens arising or incurred in the ordinary course of business, (iii) Liens incurred in the ordinary course of business in connection with workers compensation, unemployment insurance and
other types of social security or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and similar obligations, (iv) zoning, building and
other
17
similar codes and regulations, (v) any conditions that would be disclosed by a current, accurate survey or physical inspection and (vi) Liens (other than Liens securing indebtedness for
borrowed money), defects or irregularities in title, easements, rights-of-way, covenants, restrictions, non-exclusive licenses granted in the ordinary course of business and other similar matters that would not reasonably be expected to,
individually or in the aggregate, materially impair the continued use and operation of the assets to which they relate as presently conducted in the business of the Company and the Company Subsidiaries (collectively, Permitted
Liens). Except as would not reasonably be expected to, individually or in the aggregate, have Company Material Adverse Effect, (a) the Company and the Company Subsidiaries have complied with the terms of all leases to which they are
parties and under which they are in occupancy (other than leases that expired and were not renewed in the ordinary course of business) that are material to the business of the Company and the Company Subsidiaries, taken as a whole, including the
lease for the Companys corporate headquarters in Bridgewater, New Jersey, all such leases are in full force and effect, and (b) to the knowledge of the Company, no material default exists under any such material lease.
Section 2.12 of the Company Disclosure Letter sets forth a true, complete and correct list of each material real property owned or leased by the Company and the Company Subsidiaries, including the owner, location, principal use, and
square footage thereof.
Section 2.13 Contracts. (a) Except for this Agreement and for the Contracts disclosed in the
Filed Company SEC Documents, Section 2.13(a) of the Company Disclosure Letter sets forth a true and complete list as of the date of this Agreement, and the Company has made available to Parent true and complete copies, of:
(i) each Contract that would be required to be filed by the Company as a material contract pursuant to
Item 601(b)(10) of Regulation S-K under the Securities Act;
(ii) each Contract to which the Company or any Company
Subsidiary is a party that (A) restricts the ability of the Company or any Company Subsidiary to compete in any business or with any Person in any geographical area, (B) requires the Company or any Company Subsidiary to conduct any
business on a most favored nations basis with any third party, or (C) provides for exclusivity or any similar requirement in favor of any third party;
(iii) each Contract under which the Company or any Company Subsidiary licenses or sublicenses or otherwise grants or receives
rights with respect to Intellectual Property from or to any third party (other than generally commercially available, off-the-shelf software programs), including license agreements, coexistence agreements, non-assertion agreements, option agreements
and escrow agreements with respect to Intellectual Property, except for non-exclusive licenses from third parties or to customers in the ordinary course of business;
(iv) each Contract to which the Company or any Company Subsidiary is a party that provides for annual payments or receipts in
excess of $5,000,000;
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(v) each Contract to which the Company or any Company Subsidiary is a party
relating to indebtedness for borrowed money, pursuant to which a Lien (other than a Permitted Lien) is granted and outstanding or any financial guaranty, in each case with respect to a principal amount in excess of $5,000,000;
(vi) each Contract that provides for the acquisition or disposition of any assets (other than acquisitions or dispositions of
assets in the ordinary course of business), businesses (whether by merger, sale of stock, sale of assets or otherwise) or capital stock or other equity interests of a third party that (A) has not yet been consummated or (B) has outstanding
any material purchase price adjustment, earn-out, indemnification, payment or similar obligations on the part of the Company or any Company Subsidiary;
(vii) each Contract pursuant to which the Company or any Company Subsidiary has continuing indemnification, guarantee,
earn-out or other contingent payment obligations (other than indemnification or performance guarantee obligations provided for in the ordinary course of business consistent with past practice), in each case that could result in payments
in excess of $1,000,000;
(viii) any Contract that obligates the Company or any Company Subsidiary to make any capital
commitment, loan or expenditure in an amount in excess of $5,000,000;
(ix) any Government Contract;
(x) each Contract, other than with respect to any partnership that is wholly owned by the Company or any wholly owned Company
Subsidiary, that relates to the formation, creation, operation, management or control of any legal partnership or any joint venture entity pursuant to which the Company has an obligation (contingent or otherwise) to make a material investment in or
material extension of credit to any Person; and
(xi) each Contract with or binding upon the Company or any of the Company
Subsidiaries or any of their respective properties or assets that is of the type that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act.
Each such Contract described in clauses (i) through (xii) above is referred to herein as a Specified Contract.
(b) As of the date of this Agreement, each of the Specified Contracts is valid, binding and enforceable (except as such enforceability may be
limited by the Bankruptcy and Equity Exception) on the Company or a Company Subsidiary, as the case may be, and, to the knowledge of the Company, each other party thereto, and is in full force and effect, except for such failures to be valid,
binding or enforceable or to be in full force and effect as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect. As of the date of this Agreement, there is no default under any Specified
Contract by the Company or any Company Subsidiary or, to the knowledge of the Company, any other party
19
thereto, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a default thereunder by the Company or any Company Subsidiary or, to the knowledge
of the Company, any other party thereto, in each case except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect. Neither the Company nor any Company Subsidiary has received in the twelve
months immediately preceding the date of this Agreement a notice from any other party under any Specified Contract of an intent to terminate, cancel or fail to renew such Specified Contract, in each case except as would not reasonably be expected
to, individually or in the aggregate, have a Company Material Adverse Effect.
Section 2.14 Litigation. There is no claim,
charge, complaint, suit, action, investigation (to the knowledge of the Company), grievance, arbitration or proceeding (each, a Proceeding) pending or, to the knowledge of the Company threatened against the Company or any Company
Subsidiary that would reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect, nor is there any Judgment outstanding against the Company or any Company Subsidiary that would reasonably be expected to,
individually or in the aggregate, have a Company Material Adverse Effect. Since January 1, 2012, neither the Company nor any Company Subsidiary has received any notice alleging any non-compliance or violations of Law from, or any notice of any
actual or pending investigations by, any Governmental Entity, that is or would reasonably be expected to be, individually or in the aggregate, material and adverse to the Company and the Company Subsidiaries, taken as a whole. Neither the Company
nor any Company Subsidiary is subject to any outstanding Legal Restraint (whether temporary, pending or permanent) that is or would reasonably be expected to be, individually or in the aggregate, material and adverse to the Company and the Company
Subsidiaries, taken as a whole.
Section 2.15 Compliance with Laws. (a) Each of the Company and the Company Subsidiaries
is and, since January 1, 2012, has been in compliance with all Laws applicable to its business or operations, including applicable Laws regarding personally identifiable information, data privacy and consumer privacy and employment and United
States immigration, except as is not, and would not reasonably be expected to be, individually or in the aggregate, material and adverse to the Company and the Company Subsidiaries, taken as a whole. Each of the Company and the Company Subsidiaries
has in effect all approvals, authorizations, certificates, registrations, licenses, exemptions, permits and Consents of Governmental Entities (collectively, Authorizations) necessary for it to conduct its business as presently
conducted, and all such Authorizations are in full force and effect, except for such Authorizations the absence of which, or the failure of which to be in full force and effect, would not reasonably be expected to, individually or in the aggregate,
have a Company Material Adverse Effect. This Section 2.15 does not relate to environmental matters, which are the subject of Section 2.16, employee benefit matters, which are the subject of Section 2.11, or Taxes,
which are the subject of Section 2.09.
(b) Except would not reasonably be expected to be, individually or in the aggregate,
material and adverse to the Company and the Company Subsidiaries, taken as a whole: (i) none of the Company or the Company Subsidiaries have, since January 1, 2010, violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended, the Anti-Kickback Act of 1986, as amended, any applicable Law enacted in connection with, or arising
20
under, the Organization for Economic Cooperation and Development Convention Against Bribery of Foreign Officials in International Business Transactions, the Prevention of Corruption Act, 1988 (of
India) and Prevention of Money Laundering Act, 2002 (of India), and any other applicable Law that relates to bribery or corruption and (ii) the Company and the Company Subsidiaries make and keep books, records, and accounts that fairly reflect
transactions and the distribution of the Companys and the Company Subsidiaries assets, and to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that transactions are taken in
accordance with managements directives and are properly recorded.
(c) Each of the Company and the Company Subsidiaries is and, since
January 1, 2014, has been in material compliance with the provisions of the Companies Act, 1956 (of India), the Foreign Exchange Management Act 1999 (of India), the Customs Act, 1962 (of India), the Foreign Trade Policy (of India) and the
Software Technology Parks of India Scheme. Each of the Company and the Company Subsidiaries maintains all material approvals and statutory records as may be required under the Companies Act, 1956 (of India), the Foreign Exchange Management Act, 1999
(of India), the Customs Act, 1962 (of India), the Foreign Trade Policy (of India) and the Software Technology Parks of India Scheme.
Section 2.16 Environmental Matters. (a) Except for matters that would not reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect, (i) each of the Company and the Company Subsidiaries is and, since January 1, 2012, has been in compliance with all Environmental Laws, (ii) each of the Company and the Company
Subsidiaries possesses and is in compliance with all Authorizations required under Environmental Laws for it to conduct its business as presently conducted and (iii) since January 1, 2012, none of the Company or the Company Subsidiaries
has received any written notice, demand, request for information, citation, summons or complaint with respect to the Company or the Company Subsidiaries (or any of their respective predecessors) that relates to or arises out of any Environmental
Law.
(b) For purposes of this Agreement, Environmental Law means any Law or Judgment promulgated by any Governmental
Entity with respect to the environment, natural resources, endangered or threatened species, human health or safety (as such related to pollutants, chemicals or any hazardous or toxic substances or waste) or any pollutant, contaminant, chemical or
toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material.
Section 2.17 Intellectual
Property. (a) As of the date of this Agreement, to the knowledge of the Company, the Company and the Company Subsidiaries own, license, sublicense or otherwise possess legally enforceable rights to use all Intellectual Property necessary to
conduct the business of the Company and the Company Subsidiaries as presently conducted, except for any such rights to Intellectual Property the absence of which would not reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect.
(b) Section 2.17(b) of the Company Disclosure Letter sets forth a true and complete list, as of the
date of this Agreement, of all Company Registered Intellectual Property.
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(c) The conduct of the business of the Company and the Company Subsidiaries as presently
conducted, does not infringe, violate or constitute a misappropriation of any valid Intellectual Property rights of any third party, except for such infringements, violations and misappropriations that would not reasonably be expected to,
individually or in the aggregate, have a Company Material Adverse Effect. Neither the Company nor any of the Company Subsidiaries has received any written claim or notice from any Person from January 1, 2012 to the date of this Agreement
alleging any such infringement, violation or misappropriation, except for any such alleged infringement, violation or misappropriation that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse
Effect.
(d) As of the date of this Agreement, to the knowledge of the Company, all of the Company Registered Intellectual Property is
subsisting, in use and valid, and has not been held invalid or unenforceable by a court of competent jurisdiction.
(e) Each of the Company
and the Company Subsidiaries has taken commercially reasonable steps to protect and maintain the confidentiality of the information of the Company and the Company Subsidiaries that is of a nature that the Company intends to keep confidential.
(f) As of the date of this Agreement, to the knowledge of the Company, no third party is infringing, violating or misappropriating any of the
Company Registered Intellectual Property, except for infringements, violations or misappropriations that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.
(g) Except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect, (i) no third
party software subject to an open source or similar license has been distributed, licensed or used by the Company or the Company Subsidiaries in a manner that requires the licensing or provision of Company Source Code to third parties;
(ii) no rights have been granted in the ordinary course of business to any Person other than the Company or the Company Subsidiaries to access or possess any Company Source Code, other than any such rights granted to (x) customers with
respect to source code included in customer deliverables or services, and (y) service providers in connection with services provided to the Company or the Company Subsidiaries, in each case subject to confidentiality obligations with respect to
such access or possession.
(h) Except as would not reasonably be expected to, individually or in the aggregate, have a Company Material
Adverse Effect, (i) the Company and the Company Subsidiaries have implemented (x) commercially reasonable measures to protect the integrity and security of their information technology systems used in connection with the operations of the
Companys and the Company Subsidiaries businesses from viruses, worms, Trojan horses, malicious or unauthorized code, time bombs, disabling programs, or similar programs that permit unauthorized access or the unauthorized
disruption, impairment, disablement or erasure of data or software and from unauthorized access and (y) commercially reasonable data backup, data storage, system redundancy and disaster avoidance and recovery procedures and (ii) to the
knowledge of the Company, there have been no material security breaches in the information technology systems used by or on behalf of the Company and the Company Subsidiaries.
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(i) The Company and each of the Company Subsidiaries own, lease or license, or have services
provided to them using, all computer systems that are necessary for the operations of their business as presently conducted. Since January 1, 2012, there has been no failure or other substandard performance of any computer systems that has
caused any disruption to the business of Company or any Company Subsidiary, other than such disruption as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.
(j) The Company is in compliance with applicable Law, as well as its own policies, relating to privacy, data protection, and the collection and
use of personal information collected, used, or held for use by the Company, and as of the date hereof no claims are pending or threatened against the Company alleging a violation of any Persons privacy or personal information, except as would
not reasonably be expected to be, individually or in the aggregate, material and adverse to the Company and the Company Subsidiaries, taken as a whole.
(k) For purposes of this Agreement:
(i) Company Registered Intellectual Property means all applications for and registrations of any patents
(including divisions, continuations, continuations-in-part and renewals), trademarks, service marks, trade names, utility models, domain names, copyrights and designs, in each case owned by or registered to the Company or any of the Company
Subsidiaries and which is material to the business of the Company and the Company Subsidiaries, taken as a whole.
(ii)
Company Source Code means source code to any material software owned or developed by or on behalf of the Company or the Company Subsidiaries.
(iii) Intellectual Property means all intellectual property rights of any kind or nature throughout the
world, including all (A) patents, trademarks, service marks, trade names, domain names, utility models, copyrights and designs, (B) applications for and registrations of such patents, trademarks, service marks, trade names, domain names,
utility models, copyrights and designs, (C) trade secrets, processes, formulae, methods, schematics, technology, know-how, computer software programs and applications (whether in source code, object code or other form), algorithms, data and
databases and (D) other tangible or intangible proprietary or confidential information and materials.
Section 2.18
Insurance. Except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect, (i) all insurance policies of the Company and the Company Subsidiaries are in full force and effect and
were in full force and effect during the periods of time such insurance policies purport to have been in effect, (ii) neither the Company nor any of the Company Subsidiaries is in breach or default under any such insurance policy (including any
such breach or default with respect to the payment of premiums or the giving of notice), (iii) no written notice of cancelation or termination has been received with respect to any such insurance policy, other than in connection with ordinary
renewals and (iv) there is no material claim by the Company or any of the Company Subsidiaries pending as of the date of this Agreement under any such insurance policy that has been denied or disputed by the insurer.
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Section 2.19 Brokers and Other Advisors. No broker, investment banker, financial
advisor or other Person, other than Merrill Lynch, Pierce, Fenner & Smith Incorporated, the fees and expenses of which will be paid by the Company, is entitled to any brokers, finders, financial advisors or other similar
fee or commission in connection with the Merger, and the other Transactions based upon arrangements made by or on behalf of the Company or any of its affiliates.
Section 2.20 Takeover Statutes; No Rights Agreement. Pursuant to the Company Articles, the Company has duly and properly opted out
of each of Subchapters E, F, G and H of Chapter 25 of the PBCL such that those Subchapters shall not apply to the Company. No other Takeover Statute, assuming the accuracy of the representations in Section 3.08, is applicable to this
Agreement, the Merger and the other Transactions. The Company is not party to a shareholder rights agreement, poison pill or similar anti-takeover agreement or plan.
Section 2.21 Opinion of Financial Advisor. The Company Board has received the opinion of Merrill Lynch, Pierce, Fenner &
Smith Incorporated to the effect that, as of the date hereof and based upon and subject to the various assumptions and limitations set forth therein, the consideration to be received by the holders of Company Common Stock in the Merger is fair from
a financial point of view, to such holders, a true and complete signed copy of which opinion will be made available to Parent for information purposes only promptly following the date of this Agreement.
Section 2.22 Restrictions on Business Activities. Other than customer Contracts entered into in the ordinary course of its
business that contain non-compete provisions with respect to the business of the customer and which do not prohibit or impair the business practice of the Company or the Company Subsidiaries in such a way as to be material and adverse to the Company
and the Company Subsidiaries, taken as a whole, neither the Company nor the Company Subsidiaries is party to or bound by any Contract containing any covenant limiting in any material respect the right of the Company or the Company Subsidiaries to
engage or compete in any line of business or to compete with any Person.
Section 2.23 Customers and Vendors.
Section 2.24(a) of the Company Disclosure Letter lists the fifteen largest customers of the Company and the Company Subsidiaries (determined on the basis of aggregate revenues recognized by the Company and the Company Subsidiaries over the four
consecutive fiscal quarter period ended March 31, 2015) (each, a Major Customer). Section 2.24(b) of the Company Disclosure Letter lists the ten largest vendors of the Company and the Company Subsidiaries (determined on
the basis of aggregate purchases made by the Company and the Company Subsidiaries over the four consecutive fiscal quarter period ended March 31, 2015) (each, a Major Vendor). The Company has not in the twelve months
immediately preceding the date of this Agreement received, as of the date of this Agreement, any notice in writing from any Major Customer or Major Vendor that such Major Customer or Major Vendor intends to terminate, or not renew, its relationship
with the Company or any Company Subsidiary, or institute any Proceedings against the Company or any Company Subsidiary.
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ARTICLE III
Representations and Warranties of Parent and Merger Sub
Parent and Merger Sub, jointly and severally, represent and warrant to the Company that:
Section 3.01 Organization, Standing and Power. SA is a société anonyme duly organized, validly existing and in good
standing under the laws of France. NA is a corporation, duly organized, validly exiting and in good standing under the law of Delaware. Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of
Pennsylvania. Each of Parent and Merger Sub has full corporate power and authority to conduct its businesses as presently conducted.
Section 3.02 Merger Sub. (a) Merger Sub was formed solely for the purpose of entering into the Transactions, and since the
date of its incorporation, Merger Sub has not carried on any business, conducted any operations or incurred any liabilities or obligations other than the execution of this Agreement, the performance of its obligations hereunder and matters ancillary
thereto.
(b) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $0.01 per share, all of which
have been validly issued, are fully paid and nonassessable and are owned by Parent free and clear of any Lien.
Section 3.03
Authority; Execution and Delivery; Enforceability. Each of Parent and Merger Sub has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the Transactions, subject, in the case of the Merger, to
the adoption of this Agreement by Parent, as sole shareholder of Merger Sub (which shall occur immediately following the execution of this Agreement). The execution and delivery by each of Parent and Merger Sub of this Agreement and the consummation
by it of the Transactions have been duly authorized by all necessary corporate action on the part of Parent and Merger Sub, subject, in the case of the Merger, to the adoption of this Agreement by Parent, as sole shareholder of Merger Sub. Neither
the approval or adoption of this Agreement nor the consummation of the Merger or the other Transactions requires any approval of the shareholders of Parent. Each of Parent and Merger Sub has duly executed and delivered this Agreement, and, assuming
due authorization, execution and delivery by the Company, this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms (subject to the Bankruptcy and Equity Exception).
Section 3.04 No Conflicts; Consents. (a) The execution and delivery by each of Parent and Merger Sub of this Agreement do
not, and the consummation of the Merger and the other Transactions and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancelation or acceleration of any obligation or to loss of a material benefit
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under, or result in the creation of any Lien upon any of the properties or assets of Parent or any of its subsidiaries under, any provision of (i) the organizational documents of Parent,
Merger Sub or any of Parents subsidiaries, (ii) any Contract to which Parent or any of its subsidiaries is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings and other matters
referred to in Section 3.04(b), any Judgment or Law applicable to Parent or any of its subsidiaries or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that would
not reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect.
(b) No Consent of, or
registration, declaration or filing with, or permit from, any Governmental Entity is required to be obtained or made by or with respect to Parent or any of its subsidiaries in connection with the execution, delivery and performance of this Agreement
or the consummation of the Transactions, other than (i) compliance with and filings under the HSR Act, (ii) compliance with and filings under the applicable requirements of Foreign Antitrust Laws, (iii) compliance with and filings
under the applicable requirements of the Exchange Act, as may be required in connection with this Agreement, the Merger and the other Transactions, (iv) the filing of the Articles of Merger with the Department of State of the Commonwealth of
Pennsylvania in accordance with the provisions of the PBCL and (v) such other items (A) required solely by reason of the participation of the Company (as opposed to any third Person) in the Transactions or (B) that the failure of
which to obtain or make would not reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect.
Section 3.05 Information Supplied. None of the information supplied or to be supplied by or on behalf of Parent or Merger Sub for
inclusion or incorporation by reference in the Information Statement or Proxy Statement, as applicable, will, at the time such document is filed with the SEC, at any time it is amended or supplemented or at the time it is first published, sent or
given to the Companys shareholders and, if applicable in the case of the Proxy Statement, at the time of the Company Shareholders Meeting, contain any untrue statement 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 are made, not misleading, except that no representation or warranty is made by Parent or Merger Sub with respect to statements included or incorporated by reference therein
based on information supplied by the Company for inclusion or incorporation by reference therein.
Section 3.06 Brokers. No
broker, investment banker, financial advisor or other Person, other than Lazard Frères & Co., the fees and expenses of which will be paid by Parent, is entitled to any brokers, finders, financial advisors or other
similar fee or commission in connection with the Merger and the other Transactions based upon arrangements made by or on behalf of Parent or any of its affiliates.
Section 3.07 Litigation. As of the date of this Agreement, there is no Proceeding pending or, to the knowledge of Parent,
threatened against Parent or any subsidiary of Parent that would reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect, nor is there any Judgment outstanding against Parent or any subsidiary of Parent
that would reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect.
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Section 3.08 Ownership of Company Common Stock. Neither Parent or Merger Sub is, nor
at any time during the last five years has either Parent or Merger Sub been, an interested shareholder of the Company as defined in Section 2553 of the PBCL. As of the date of this Agreement, none of Parent, Merger Sub or other
affiliates of Parent, owns any Company Common Stock, whether beneficially or of record.
Section 3.09 Certain Business
Relationships. Neither Parent nor any of its affiliates is a party to any Contract with any director, officer or employee of the Company or any Company Subsidiary.
Section 3.10 Available Funds. SA, NA and Merger Sub, collectively, have funds available, which are sufficient to consummate the
Merger and the other Transactions on the terms contemplated by this Agreement and, at the Effective Time, SA, NA and Merger Sub, collectively will have available all of the funds necessary for the acquisition of all shares of Company Common Stock
pursuant to the Merger, to pay all fees and expenses in connection therewith, to make payments pursuant to Section 5.04 and to perform their respective obligations under this Agreement. SA, NA and Merger Sub acknowledge and agree that
their obligations hereunder are not subject to any conditions regarding SAs, NAs, Merger Subs or any other Persons ability to obtain financing for the consummation of the Transactions.
ARTICLE IV
Covenants
Relating to Conduct of Business
Section 4.01 Conduct of Business of the Company. Except for matters set forth in the
Company Disclosure Letter or otherwise expressly permitted or required by this Agreement or required by applicable Law or with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), from the
date of this Agreement to the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, the Company shall, and shall cause each Company Subsidiary to, conduct its business in the ordinary course, use
commercially reasonable efforts to conduct its business in compliance with all applicable Laws and, to the extent consistent therewith, use commercially reasonable efforts to (x) preserve intact its present business organization, (y) keep
available the services of its present executive officers and employees and (z) preserve its present relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it. In addition,
without limiting the generality of the foregoing, except for matters set forth on Section 4.01 of the Company Disclosure Letter (and on no other Section of the Company Disclosure Letter) or otherwise expressly permitted or required by
this Agreement or required by applicable Law, from the date of this Agreement to the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, the Company shall not, and shall not permit any Company Subsidiary
to, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(a) enter into any new material line of business;
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(b) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in
cash, stock, equity securities or property) in respect of, any of its capital stock, other than dividends and distributions of cash by a direct or indirect wholly owned subsidiary of the Company to its parent (provided such subsidiary and its parent
are each organized in the United States), (ii) 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
(iii) repurchase, redeem, offer to redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or any Company Subsidiary or options, warrants, convertible or exchangeable securities, stock-based performance
units or other rights to acquire any such shares of capital stock, except for (A) acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to
pay the exercise price of Company Stock Options, (B) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to Company Stock Options, Company Restricted Shares, Company Performance Share Awards or Company RSUs
and (C) the acquisition by the Company of Company Stock Options, Company Restricted Shares, Company Performance Share Awards or Company RSUs in connection with the forfeiture of such awards, in each case to the extent existing on the date
hereof and in accordance with their terms;
(c) issue, deliver, sell, authorize, pledge or otherwise encumber any shares of its capital
stock, or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire such shares, any Voting Company Debt or any other rights that give any person the right to receive any economic interest of
a nature accruing to the holders of Company Common Stock, other than issuances of Company Common Stock upon (A) the exercise of Company Stock Options to the extent existing on the date hereof in accordance with their present terms; or
(B) settlement of Company Performance Share Awards, Company RSUs or Company Restricted Shares, in each case in accordance with their terms;
(d) amend its articles of incorporation, bylaws or other comparable organization documents;
(e) acquire or agree to acquire, directly or indirectly, in a single transaction or a series of related transactions, whether by merging or
consolidating with, or by purchasing any equity or voting interest in or a substantial portion of the assets of, or by any other manner, any assets outside of the ordinary course of business, any business or any corporation, partnership, limited
liability company, joint venture, association or other business organization or division thereof or any other Person (other than the Company or any Company Subsidiary), if the amount of consideration paid or transferred by the Company and the
Company Subsidiaries would, individually or in the aggregate exceed $5,000,000, or solicit or participate in any negotiations with respect to any of the foregoing;
(f) enter into any binding agreement, agreement in principle, letter of intent, memorandum of understanding or similar agreement with respect
to any joint venture, strategic partnership or other alliance, in each case, involving an equity interest in any Person;
(g) except as
required pursuant to the terms of any Company Benefit Plan or Company Benefit Agreement, in each case, in effect on the date of this Agreement, (A) adopt, enter into, establish, terminate, amend or modify any Collective Bargaining Agreement,
Company Benefit Plan or Company Benefit Agreement, other than entry into, establishment,
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termination, amendment or modification of any Collective Bargaining Agreement, Company Benefit Plan or Company Benefit Agreement in the ordinary course of business and in a manner that would not
increase costs to the Company, Parent or any of their respective Affiliates by more than a de minimis amount, (B) grant to any current or former employee any increase in compensation other than any non-material increase in the ordinary course
to employees below the level of vice-president, (C) grant to any current or former employee any increase in severance or termination pay other than (1) any non-material increase in the ordinary course to employees below the level of
vice-president or (2) any increase that arises from a non-material increase in compensation permitted by (g)(B) above, (D) enter into any employment, consulting, severance or termination agreement with any current or former employee,
director or executive officer of the Company or any Company Subsidiary or (E) take any action to accelerate any rights or benefits under any Company Benefit Plan or Company Benefit Agreement;
(h) make any change in accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or
results of operations of the Company or materially revalue any of its assets, except as may be required (i) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting
Standards Board or any similar organization, or (ii) by Law, including Regulation S-X promulgated under the Securities Act;
(i) sell,
lease (as lessor), license or otherwise dispose of (including through any spin-off), or pledge, encumber or otherwise subject to any Lien (other than a Permitted Lien), any properties or assets that are material, individually or in the
aggregate, to the Company and the Company Subsidiaries, taken as a whole, except (i) sales or other dispositions of inventory and excess or obsolete properties or assets in the ordinary course of business or (ii) pursuant to Contracts made
available to Parent and in effect prior to the date of this Agreement;
(j) (i) incur or materially modify the terms of (including by
extending the maturity date thereof) any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities, options, warrants, calls or other rights to acquire any debt securities of the Company
or any Company Subsidiary, 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, in each case other than (A) indebtedness incurred under (x) the facilities agreement originally dated 22 November 2013 and amended and restated on 16 April 2014 between, amongst others, iGATE
Corporation (as parent), Pan-Asia iGATE Solutions (as borrower), ING Bank N.V. Singapore Branch (as agent and security agent) and certain other lenders (the Facilities Agreement) and (y) indebtedness incurred under the Credit
Agreement, dated May 10, 2011, among the Company, DBS Bank Ltd., other lenders party thereto, and DBS Bank Ltd., Bangalore Branch, as amended (the Revolving Facility), (B) letters of credit issued pursuant to the
Revolving Facility or otherwise issued in the ordinary course of business, (C) interest rate and foreign exchange hedging arrangements on customary commercial terms in the ordinary course of business consistent with past practice or
(D) short-term unsecured borrowings incurred in the ordinary course of business on arms-length terms and not in excess of $10,000,000 in aggregate principal amount outstanding at any one time, or (ii) make any loans, advances or capital
contributions to, or investments in, any other Person, other than to or in (A) the Company or any Company Subsidiary or (B) any acquisition not in violation of clause (e) above;
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(k) other than in accordance with the Companys capital expenditure budget made available to
Parent, make or agree to make any capital expenditure or expenditures that in the aggregate are in excess of $5,000,000;
(l) pay,
discharge, settle, compromise or satisfy (i) any pending or threatened claims, liabilities or obligations relating to a Proceeding (absolute, accrued, asserted or unasserted, contingent or otherwise), other than any such payment, discharge,
settlement, compromise or satisfaction of a claim solely for money damages in the ordinary course of business in an amount not to exceed $1,000,000 per payment, discharge, settlement, compromise or satisfaction or $5,000,000 in the aggregate for all
such payments, discharges, settlements, compromises or satisfactions, or (ii) any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated hereby;
(m) other than as required by Law, make or change any material Tax election, change any material method of Tax accounting, settle or compromise
any material Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax claim or assessment, enter into any closing agreement with respect to any material Tax or refund or amend any material
Tax Return;
(n) except as is in the ordinary course of business, enter into, or modify or amend in a manner that is adverse to the Company
in any material respect or terminate any Specified Contract or enter into any Contract that, if existing on the date of this Agreement, would have been a Specified Contract;
(o) cancel, abandon or permit to lapse any Company Registered Intellectual Property of the Company or any of the Company Subsidiaries;
(p) adopt a plan of complete or partial liquidation, dissolution or restructuring (including any material reductions in work force, lease
terminations, restructuring of contracts or similar action), recapitalization or other reorganization of the Company (other than the Merger);
(q) sell, lease, license or otherwise transfer or dispose of, or create or incur any material Lien (other than Permitted Liens) on, any
material Intellectual Property owned by the Company or any Company Subsidiary, except non-exclusive licenses granted by the Company or any Company Subsidiaries to any customer; or
(r) authorize, commit or agree to take any of the foregoing actions.
Section 4.02 No Frustration of Conditions. The Company and Parent shall not, and shall not permit any of their respective
subsidiaries to, take any action (except as otherwise permitted by Sections 4.03 or 7.01) that would, or would reasonably be expected to, result in any condition to the Merger set forth in Article VI not being satisfied.
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Section 4.03 No Solicitation. (a) The Company, the Company Subsidiaries and
their respective directors and officers shall not, and the Company shall direct its and the Company Subsidiaries other Representatives not to, (i) directly or indirectly solicit, initiate or knowingly encourage the submission of any
Company Takeover Proposal, (ii) enter into any agreement or understanding with respect to any Company Takeover Proposal, (iii) directly or indirectly participate in any discussions or negotiations regarding, or furnish to any Person any
information with respect to, or take any other action to facilitate the making of any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, any Company Takeover Proposal or (iv) commit or agree to do any of
the foregoing. The Company shall, and shall cause its Representatives to, immediately (i) cease all discussions and negotiations regarding any inquiry, proposal or offer pending on the date of this Agreement that constitutes, or would
reasonably be expected to lead to, a Company Takeover Proposal, (ii) request the prompt return or destruction of all confidential information previously furnished to any Person within the last six months for the purposes of evaluating a
possible Company Takeover Proposal and (iii) terminate access to any physical or electronic data rooms relating to a possible Company Takeover Proposal. Notwithstanding anything to the contrary contained in the foregoing or any other provision
of this Agreement, prior to (x) in the event that the Shareholder Consent is executed and delivered to Parent in accordance with Section 5.01(b), 11:59 p.m. New York time on the date that is 30 calendar days following the date of
this Agreement or (y) in the event that the Shareholder Consent is not delivered in accordance with Section 5.01(b) and this Agreement is not terminated by Parent pursuant to Section 7.01(g), the time the Company
Shareholder Approval is obtained at the Company Shareholders Meeting (the Shareholder Approval Time), in response to a written, bona fide Company Takeover Proposal that did not result from a material breach of this
Section 4.03(a) and that the Company Board determines, in good faith, after consultation with outside counsel and a financial advisor, constitutes or would reasonably be expected to lead to a Superior Company Proposal (a
Qualifying Company Takeover Proposal), the Company may (A) furnish information with respect to the Company to the Person making such Qualifying Company Takeover Proposal and its Representatives pursuant to an Acceptable
Confidentiality Agreement so long as the Company also contemporaneously provides Parent, in accordance with the terms of the Confidentiality Agreement, any material non-public information with respect to the Company furnished to such other Person
which was not previously furnished to Parent, and (B) participate in discussions or negotiations with such Person and its Representatives regarding such Qualifying Company Takeover Proposal including soliciting the making of a revised
Qualifying Company Takeover Proposal; provided, that the Company may only take the actions described in clauses (A) or (B) above, if the Company Board determines, in good faith, after consultation with outside counsel, that the
failure to take any such action would be inconsistent with its fiduciary duties under applicable Law.
(b) Neither the Company Board nor
any committee thereof shall (i) (A) withdraw or modify in a manner adverse to Parent or Merger Sub, or propose publicly to withdraw or modify in a manner adverse to Parent or Merger Sub, the Company Board Recommendation, or
(B) approve or recommend, or propose publicly to approve or recommend, any Company Takeover Proposal or resolve or agree to take any such action (any action described in this clause (i) being referred to herein as an Adverse
Recommendation Change) or (ii) approve or enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, option agreement, merger agreement, joint venture agreement, partnership agreement
or other agreement relating to any Company Takeover Proposal (other than an Acceptable Confidentiality
31
Agreement entered into in accordance with Section 4.03(a)), or resolve, agree or publicly propose to take any such action. Notwithstanding anything to contrary in the foregoing or any
other provision of this Agreement, at any time prior to (x) 11:59 p.m. New York time on the Written Consent End Date (in the event that the Shareholder Consent is executed and delivered to Parent in accordance with Section 5.01(b))
or (y) the Shareholder Approval Time (in the event that the Shareholder Consent is not delivered in accordance with Section 5.01(b) and this Agreement is not terminated by Parent pursuant to Section 7.01(g)), as
applicable, the Company Board may, subject to compliance with this Section 4.03(b):
(i) in response to an
Intervening Event, take or fail to take any of the actions specified in clause (A) of the definition of Adverse Recommendation Change (an Intervening Event Adverse Recommendation Change) if the Company Board determines, in
good faith, after consultation with outside counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable Law and
(ii) if the Company Board receives a Superior Company Proposal, terminate this Agreement pursuant to
Section 7.01(f) in accordance with Section 7.04(b);
provided that, prior to so making an Intervening Event Adverse
Recommendation Change, or so terminating this Agreement, (1) the Company Board shall have given Parent at least four calendar days prior written notice (such notice period, as it may be renewed pursuant to the terms of this proviso, the
Match Period) of its intention to take such action and a description of the reasons for taking such action (which notice, in respect of a Superior Company Proposal, shall specify the identity of the Person who made such Superior
Company Proposal and all of the material terms and conditions of such Superior Company Proposal and attach the most current version of the relevant transaction agreement), (2) the Company shall have negotiated, and shall have caused its
Representatives to negotiate in good faith, with Parent during such notice period, to the extent Parent wishes to negotiate, to enable Parent to revise the terms of this Agreement in such a manner that would eliminate the need for taking such action
(and in respect of a Superior Company Proposal, would cause such Superior Company Proposal to no longer constitute a Superior Company Proposal), (3) following the end of such notice period, the Company Board shall have considered in good faith
any revisions to this Agreement offered in writing by Parent in a manner that would form a binding contract if accepted by the Company, and shall have determined in good faith, after consultation with outside counsel, that failure to effect such
Company Intervening Event Adverse Recommendation Change or to terminate this Agreement to accept a Superior Company Proposal would be inconsistent with its fiduciary duties under applicable Law and, with respect to a Superior Company Proposal, that
such Superior Company Proposal continues to constitute a Superior Company Proposal and (4) in the event of any change to any of the material terms (including the form, amount and timing of payment of consideration) of such Superior Company
Proposal, the Company shall, in each case, deliver to Parent an additional notice consistent with that described in clause (1) of this proviso and a renewed notice period under clause (1) of this proviso shall commence (except that
the four-calendar-day notice period referred to in clause (1) of this proviso shall instead be equal to three calendar days) during which time the Company shall be required to comply with the requirements of this
Section 4.03(b) anew with respect to each such additional notice, including clauses (1) through (4) of this proviso. Regardless of whether there is an Adverse Recommendation Change, the Company Shareholders Meeting shall
be held in accordance with the terms of this Agreement unless this Agreement shall have been terminated pursuant to Article VII.
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(c) Nothing contained in this Section 4.03 or elsewhere in this Agreement shall
prohibit the Company from (i) taking and disclosing to its shareholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act (or any similar communication to shareholders), including making any
stop-look-and-listen communication to the shareholders of the Company, or (ii) making any disclosure to its shareholders if the Company Board determines, in good faith, after consultation with outside counsel, that the failure to
take such action would be inconsistent with its fiduciary duties or applicable Law; provided that this Section 4.03(c) shall not be deemed to affect whether any such action (other than a recommendation against a Company Takeover
Proposal or a stop, look and listen communication by the Company Board pursuant to Rule 14d-9 promulgated under the Exchange Act) would otherwise constitute an Adverse Recommendation Change.
(d) In addition to the requirements set forth in paragraphs (a) and (b) of this Section 4.03, the Company
shall, as promptly as practicable and in any event with 24 hours after receipt thereof, advise Parent orally and in writing of (i) any Company Takeover Proposal or any request for information or inquiry, proposal or offer that the Company
reasonably believes could lead to or contemplates a Company Takeover Proposal and (ii) the terms and conditions of such Company Takeover Proposal or inquiry, proposal or offer (including any subsequent amendments or modifications thereto) and
the identity of the Person making any such Company Takeover Proposal or inquiry, proposal or offer. Commencing upon the provision of any notice referred to above, the Company and its Representatives shall keep Parent informed on a reasonably prompt
basis as to the status and details of any such Company Takeover Proposal or inquiry, proposal or offer (and any subsequent amendments or modifications thereto).
(e) For purposes of this Agreement:
(i) Acceptable Confidentiality Agreement means a customary confidentiality agreement that contains
provisions that are no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement.
(ii) Company Takeover Proposal means any inquiry, proposal or offer from any Person or group (other than
Parent and its subsidiaries) relating to (i) any direct or indirect acquisition, purchase or license in a single transaction or a series of related transactions, of (A) 20% or more (based on the fair market value thereof) of the assets
(including capital stock of the Company Subsidiaries) of the Company and Company Subsidiaries, taken as a whole, or (B) 20% or more of the aggregate voting power of the capital stock of the Company or (ii) any tender offer, exchange offer,
merger, consolidation, business combination, recapitalization, extraordinary dividend, liquidation, dissolution, binding share exchange or similar transaction involving the Company that, if consummated, would result in any Person or group (or the
shareholders of any Person) beneficially owning, directly or indirectly, 20% or more of the aggregate voting power of the capital stock of the Company or of the surviving entity or the resulting direct or indirect parent of the Company or such
surviving entity, other than, in each case, the Transactions.
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(iii) Intervening Event means a material event, change,
effect, development, condition or occurrence that affects or would be reasonably likely to affect the business, financial condition or continuing results of operations of the Company and the Company Subsidiaries, taken as a whole, that (1) is
not known by the Company Board as of the date of this Agreement or that, to the knowledge of the Company Board, was not reasonably foreseeable as of the date of this Agreement and (2) does not relate to a Company Takeover Proposal;
provided, that in no event shall the following constitute, or be taken into account in determining the existence of an Intervening Event: (x) the fact that the Company meets or exceeds any internal or published forecasts or projections
for any period, or any changes after the date of this Agreement in the market price or trading volume of Company Common Stock, (y) the reasonably foreseeable consequences of the announcement of this Agreement or (z) any event, fact or
circumstance relating to or involving the Parent.
(iv) Superior Company Proposal means any written,
bona fide Company Takeover Proposal received after the date hereof that if consummated would result in a Person or group (or the shareholders of any Person) owning, directly or indirectly, (i) 50% or more of the aggregate voting power of
the capital stock of the Company or of the surviving entity or the resulting direct or indirect parent of the Company or such surviving entity or (ii) 50% or more (based on the fair market value thereof) of the assets (including capital stock
of the Company Subsidiaries) of the Company and Company Subsidiaries, taken as a whole, on terms which the Company Board determines, in good faith, after consultation with outside counsel and a financial advisor, are, if consummated, more favorable
from a financial point of view to the shareholders of the Company than the Transactions, taking into account all financial, legal, financing, regulatory and other aspects of such Company Takeover Proposal and of this Agreement (including any changes
to the terms of this Agreement proposed by Parent and any fees to be paid by the Company for terminating this Agreement); provided, that a Company Takeover Proposal may only be a Superior Company Proposal if, at the time of
the Company Boards determination, either the Company Board has received executed commitment letters in respect of any financing required to consummate the transaction contemplated by such Company Takeover Proposal, or if no such commitment
letters have been provided, the Company Board has determined in good faith that the Person making such Company Takeover Proposal is reasonably capable of financing the proposed transaction without third party financing that is based upon the
financial statements of the Company and the Company Subsidiaries.
Wherever the term group is used in this
Section 4.03(e)(i)-(iv), it is used as defined in Rule 13d-5 under the Exchange Act.
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ARTICLE V
Additional Agreements
Section 5.01 Shareholder Consent; Preparation of Proxy Statement; Shareholders Meeting. (a) As promptly as practicable after
the execution of this Agreement, the Company shall, with the assistance of Parent (i) in the event that the Shareholder Consent is delivered to the Company in accordance with Section 5.01(b), prepare and file with the SEC an
information statement of the type contemplated by Rule 14c-2 promulgated under the Exchange Act related to the Merger and this Agreement (as amended or supplemented from time to time, the Information Statement), or (ii) in
the event that the Shareholder Consent is not delivered to the Company in accordance with Section 5.01(b) and this Agreement is not terminated by Parent pursuant to Section 7.01(g), prepare and file with the SEC a proxy
statement (as amended or supplemented from time to time, the Proxy Statement) to be sent to the shareholders of the Company relating to the meeting of the Companys shareholders (the Company Shareholders
Meeting) to be held to consider the adoption of this Agreement. Each of Parent and the Company shall use its reasonable best efforts to have the Information Statement or Proxy Statement, as applicable, cleared by the SEC as promptly as
practicable after such filing (including by responding to comments of the SEC). Each of Parent and the Company shall furnish all information as may be reasonably requested by the other in connection with any such action and the preparation, filing
and distribution of the Information Statement or Proxy Statement, as applicable. As promptly as practicable after the Information Statement or Proxy Statement, as applicable, shall have been cleared by the SEC (or after 10 calendar days have passed
since the filing of the preliminary Information Statement or Proxy Statement, as applicable, with the SEC without notice from the SEC of its intent to review the Information Statement or the Proxy Statement), the Company shall cause the Information
Statement or Proxy Statement, as applicable, to be mailed to its shareholders and to be filed as required. Notwithstanding the foregoing, prior to filing or mailing the Information Statement or Proxy Statement, as applicable (or any amendment or
supplement thereto, as applicable) or responding to any comments of the SEC with respect thereto, the Company (i) shall provide Parent a reasonable opportunity to review and comment on such document or response and (ii) shall include in
such document or response all comments reasonably proposed by Parent. If, at any time prior to the date that is 20 calendar days after the Information Statement is first mailed to the Companys shareholders, any information relating to the
Company, Parent or any of their respective affiliates, officers or directors should be discovered by the Company or Parent which is required to be set forth in an amendment or supplement to the Information Statement or Proxy Statement, as
applicable, so that the Information Statement or Proxy Statement, as applicable, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading, the party that discovers such information shall promptly notify the other parties hereto, and an appropriate amendment or supplement describing such information shall
be filed with the SEC and, to the extent required by applicable Law, disseminated to the shareholders of the Company.
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(b) Immediately after the execution of this Agreement and in lieu of calling a meeting of the
Companys shareholders, the Company shall submit a form of irrevocable written consent attached hereto as Exhibit C to record holders of at least 50.1% of the outstanding shares of Company Common Stock (such written consent, as duly
executed and delivered by all such record holders, the Shareholder Consent). As soon as practicable upon receipt of the Shareholder Consent, the Company will provide Parent with a copy of such Shareholder Consent, certified as
true and complete by an executive officer of the Company. In connection with the Shareholder Consent, the Company shall take all actions necessary to comply, and shall comply in all respects, with the PBCL, including Section 2524 thereof, the
Company Certificate and the Company Bylaws.
(c) Immediately following the execution of this Agreement, Parent, as sole shareholder of
Merger Sub, shall adopt this Agreement.
(d) In the event that the Shareholder Consent is not delivered in accordance with
Section 5.01(b) and this Agreement is not terminated by Parent pursuant to Section 7.01(g), (i) unless the Board of Directors of the Company has made an Adverse Recommendation Change, the Company Board Recommendation
shall be included in the Proxy Statement and (ii) the Company shall duly take all lawful action to call, give notice of, convene and hold the Company Shareholders Meeting on a date as soon as reasonably practicable following the date
hereof for the purpose of obtaining the Company Shareholder Approval and, subject to any Adverse Recommendation Change that the Board of Directors of the Company may make, shall take all lawful action to solicit the adoption of this Agreement by
such shareholders.
Section 5.02 Access to Information; Confidentiality. Except if prohibited by any applicable Law, the
Company shall, and shall cause each of the Company Subsidiaries to, afford to Parent and to Parents Representatives, reasonable access during normal business hours (under the supervision of appropriate personnel and in a manner that does not
unreasonably interfere with the normal operation of the business of the Company and the Company Subsidiaries) during the period prior to the Effective Time or the termination of this Agreement to all their respective properties, assets, books and
records, Contracts, permits, documents, information, directors, officers and employees and, during such period, the Company shall, and shall cause each Company Subsidiary to, furnish, as promptly as reasonably practicable, to Parent all information
concerning its business, properties, customers and personnel as Parent may reasonably request; provided, that any such access shall be afforded and information shall be furnished at Parents expense. Notwithstanding the immediately
preceding sentence, neither the Company nor any of the Company Subsidiaries shall be required to afford access or furnish information to the extent (a) such information is subject to the terms of a confidentiality agreement with a third party,
(b) such information relates to the applicable portions of the minutes of the meetings of the Company Board (including any presentations or other materials prepared by or for the Company Board) where the Company Board discussed the Transactions
or any similar transaction involving the sale of the Company to, or combination of the Company with, any other Person, or (c) the Company determines in good faith that affording such access or furnishing such information would jeopardize the
attorney-client privilege of the Company or any of the Company Subsidiaries, or violate applicable Law; provided, that the Company will use its reasonable best efforts to obtain any required consents for the disclosure of such information and
take such other reasonable action (including entering into a joint defense agreement or similar arrangement to avoid loss of attorney-client privilege) with respect to such information as is necessary to permit disclosure to Parent. All information
exchanged pursuant to this Section 6.02 shall be subject to the confidentiality letter agreement dated March 3, 2015 between the Company and SA (the Confidentiality Agreement).
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Section 5.03 Reasonable Best Efforts; Notification. (a) Subject to
Section 5.03(c) of this Agreement, each of the parties shall 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, as promptly as practicable, the Merger and the other Transactions, including (i) the obtaining of all necessary or advisable actions or non-actions, waivers and consents
from, the making of all necessary registrations, declarations and filings with and the taking of all reasonable steps as may be necessary to avoid a Proceeding by any Governmental Entity with respect to this Agreement or the Transactions,
(ii) the defending or contesting of any Proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court
or other Governmental Entity vacated or reversed and (iii) the execution and delivery of any additional instruments necessary to consummate the Transactions and to fully carry out the purposes of this Agreement. In connection with and without
limiting the foregoing, and notwithstanding any Adverse Recommendation Change, the Company and the Company Board shall (A) take all action necessary to ensure that no Takeover Statute or similar statute or regulation is or becomes applicable to
any Transaction or this Agreement and (B) if any Takeover Statute or similar statute or regulation becomes applicable to any Transaction or this Agreement, take all action necessary to ensure that the Transactions 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 the Transactions and this Agreement.
(b) Parent and the Company shall, in consultation and cooperation with the other, file (i) with the United States Federal Trade Commission
(the FTC) and the United States Department of Justice (the DOJ) the notification and report form, if any, required under the HSR Act for the Merger or any of the other Transactions as promptly as practicable
(but in no event later than ten business days after the date of this Agreement) and (ii) all appropriate filings, notices, applications or similar documents required under any Foreign Antitrust Law as promptly as practicable (but in no event
later than ten business days after the date of this Agreement). Any such filings shall be in substantial compliance with the requirements of the HSR Act or the applicable Foreign Antitrust Laws, as the case may be. Each of Parent and the Company
shall (i) furnish to the other party such necessary information and reasonable assistance as the other party may request in connection with its preparation of any filing or submission which is necessary under the HSR Act or any Foreign
Antitrust Law, (ii) give the other party reasonable prior notice of any such filings or submissions and, to the extent reasonably practicable, of any communication with, and any inquiries or requests for additional information from, the FTC,
the DOJ and any other Governmental Entity regarding the Merger or any of the other Transactions, and permit the other party to review and discuss in advance, and consider in good faith the views of, and secure the participation of, the other party
in connection with, any such filings, submissions, communications, inquiries or requests, (iii) unless prohibited by applicable Law or by the applicable Governmental Entity, and to the extent reasonably practicable, (A) not participate in
or attend any meeting, or engage in any substantive conversation, with any Governmental Entity
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in respect of the Merger or any of the other Transactions without the other party, (B) give the other party reasonable prior notice of any such meeting or conversation, (C) in the event
one party is prohibited by applicable Law or by the applicable Governmental Entity from participating in or attending any such meeting or engaging in any such conversation, keep such party apprised with respect thereto, (D) cooperate in the
filing of any substantive memoranda, white papers, filings, correspondence or other written communications explaining or defending this Agreement, the Merger or any of the other Transactions, articulating any regulatory or competitive argument or
responding to requests or objections made by any Governmental Entity and (E) furnish the other party with copies of all filings, submissions, correspondence and communications (and memoranda setting forth the substance thereof) between it and
its affiliates and their respective Representatives, on the one hand, and any Governmental Entity or members of any Governmental Entitys staff, on the other hand, with respect to this Agreement, the Merger and the other Transactions and
(iv) comply with any inquiry or request from the FTC, the DOJ or any other Governmental Entity as promptly as reasonably practicable. Any such additional information shall be in substantial compliance with the requirements of the HSR Act or the
applicable Foreign Antitrust Law, as the case may be. Parent agrees not to extend, directly or indirectly, any waiting period under the HSR Act or any Foreign Antitrust Law or enter into any agreement with a Governmental Entity to delay or not to
consummate the Merger or any of the other Transactions, except with the prior written consent of the Company, which consent may be withheld in its sole discretion. Notwithstanding anything to the contrary herein, Parent and the Company shall have
joint control over all communications and strategy relating to obtaining all approvals, Consents, waivers, registrations, permits, Authorizations and other confirmations under the HSR Act and any Foreign Antitrust Law from any Governmental Entity or
other third party in connection with consummating the Merger and the other transactions contemplated by this Agreement or to any litigation arising therefrom under the HSR Act or any Foreign Antitrust Law; provided, however, that
Parent and the Company shall consult in advance with the other party and in good faith take the other partys views into account regarding the overall strategic direction of any such approval process, as applicable, and consult with the other
party prior to taking any material substantive positions, making dispositive motions or other material substantive filings or submissions or entering into any negotiations concerning such approvals, as applicable.
(c) Notwithstanding anything to the contrary in this Agreement, each of Parent, Merger Sub and the Company agrees to take promptly any and all
steps necessary to avoid, eliminate or resolve each and every impediment and obtain all clearances, Consents, approvals and waivers under the HSR Act or any Foreign Antitrust Law that may be required by any Governmental Entity, so as to enable the
parties to close the Transactions as promptly as practicable (and in any event no later than the Outside Date), including committing to and effecting, by consent decree, hold separate orders, trust, or otherwise, (i) the sale, license, holding
separate or other disposition of assets or businesses of Parent or the Company or any of their respective subsidiaries, (ii) terminating, relinquishing, modifying, or waiving existing relationships, ventures, contractual rights, obligations or
other arrangements of Parent or Company or their respective subsidiaries and (iii) creating any relationships, ventures, contractual rights, obligations or other arrangements of Parent or Company or their respective subsidiaries (each a
Remedial Action); provided that (x) the Company shall not be obligated to agree to, commit or effect, any Remedial Action unless such Remedial Action is conditioned upon, or will occur subsequent to, consummation of
the
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Transactions and (y) Parent and its subsidiaries shall not be required to, and the Company and the Company Subsidiaries shall not, without the prior written consent of Parent, take any
Remedial Action, or commit to take any Remedial Action, or agree to any Remedial Action, that would, or would reasonably be expected to, have a material adverse effect on the business, results of operations, or financial condition of either
(x) SA and its subsidiaries (but not including the Company and the Company Subsidiaries) or (y) the Company and the Company Subsidiaries, (in each case of (x) and (y), measured on a scale relative to the Company and the Company
Subsidiaries, taken as a whole) (a Burdensome Condition). In the event that any litigation or other administrative or judicial action or Proceeding is commenced, threatened or is foreseeable challenging any of the Transactions and
such litigation, action or Proceeding seeks, or would reasonably be expected to seek, to prevent, materially impede or materially delay the consummation of the Transactions, Parent shall use its reasonable best efforts to take any and all action,
including a Remedial Action, to avoid or resolve any such litigation, action or Proceeding and each of the Company, Parent and Merger Sub shall cooperate with each other and use its respective reasonable best efforts to contest and resist any such
litigation, action or Proceeding and to have vacated, lifted, reversed or overturned any decree, Judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts
consummation of the Transactions as promptly as practicable (and in any event no later than the Outside Date); provided, that Parent shall not be required to, and the Company shall not, without the prior written consent of Parent, take any
action under this sentence that would, or would reasonably be expected to, result in the imposition of a Burdensome Condition.
Section 5.04 Equity Awards. (a) Prior to the Effective Time, the Board of Directors of the Company (or, if appropriate, any
committee administering the Company Stock Plan) shall adopt such resolutions and take such other actions as may be required to effect the following:
(i) Cashout Company Stock Options. At the Effective Time, each Cashout Company Stock Option outstanding immediately
prior to the Effective Time shall be canceled, with the holder of such Cashout Company Stock Option becoming entitled to receive an amount in cash equal to (A) the excess, if any, of (1) the Merger Consideration minus (2) the exercise
price per share of Company Common Stock subject to such Cashout Company Stock Option, multiplied by (B) the number of shares of Company Common Stock subject to such Cashout Company Stock Option immediately prior to the Effective Time (such
amount, the Cashout Option Amount)
(ii) NEO Equity Awards. At the Effective Time, each
NEOs equity awards shall automatically be cancelled and converted into the right to receive an NEO Converted Cash Award, which NEO Converted Cash Award will, subject to the NEOs continued employment with the Parent and its Affiliates
(including the Surviving Corporation and its Subsidiaries) through the applicable vesting dates, vest and be payable with respect to one-half of the NEO Converted Cash Award as soon as practicable following the Closing Date and, thereafter,
one-quarter on each subsequent Payment Date. Notwithstanding the foregoing, in the event that an NEO incurs a Qualifying Termination or dies, in each case following the Effective Time, any theretofore unpaid portion of such holders NEO
Converted Cash Award shall vest and be paid to such holder (or beneficiary, in the case of death) no later than ten days after the date of such Qualifying Termination or death, as applicable.
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(iii) Non-NEO Equity Awards.
(1) Non-NEO Company Performance Share Awards. At the Effective Time, each Non-NEOs Company Performance Share
Awards outstanding immediately prior to the Effective Time shall be converted into a right to receive a performance share award with respect to that number of shares of Parent Common Stock, determined by multiplying the target number of shares of
Company Common Stock subject to such Non-NEO Company Performance Share Award by the Non-NEO Company Performance Share Award Exchange Ratio, rounded up the nearest whole share if the resulting number yields one-half or more of a share (a
Non-NEO Converted Performance Share Award). Each Non-NEO Converted Performance Share Award shall be subject to the performance metrics, service conditions, and other terms and conditions of the applicable performance share award
plan of Cap Gemini S.A. then in effect and shall, assuming the achievement of the applicable performance metrics, vest and be payable with respect to one-quarter of the Non-NEO Converted Performance Share Award on the first, second, third and fourth
anniversaries of the Closing Date; provided, if there is no performance share award plan in effect as of the applicable Payment Date, or if there is an insufficient number of shares available under such performance plan, the Non-NEO Converted
Performance Share Award shall be settled in cash but otherwise be subject to the same service and performance vesting conditions described above.
(2) Non-NEO Company Restricted Shares. At the Effective Time, each Non-NEOs Company Restricted Shares shall
automatically be cancelled and converted into the right to receive a Non-NEO Restricted Share Converted Cash Award, which Non-NEO Restricted Share Converted Cash Award will, subject to the Non-NEOs continued employment with the Parent and its
Affiliates (including the Surviving Corporation and its Subsidiaries) through the applicable vesting dates, vest on the same schedule as set forth in the award agreement governing the applicable Company Restricted Share. Notwithstanding the
foregoing, in the event that a Non-NEO incurs a Qualifying Termination or dies, in each case following the Effective Time, any theretofore unpaid portion of such holders Non-NEO Restricted Share Converted Cash Award shall vest and be paid to
such holder (or beneficiary, in the case of death) no later than ten days after the date of such Qualifying Termination or death, as applicable.
(3) Non-NEO Company Stock Options. At the Effective Time, each Non-NEOs Company Stock Options that are not
Cashout Company Stock Options shall automatically be cancelled and converted into the right to receive a Non-NEO Stock Option Converted Cash Award, which Non-NEO Stock Option Converted Cash Award will, subject to the Non-NEOs continued
employment with the Parent and its Affiliates (including the Surviving Corporation and its Subsidiaries) through the applicable vesting dates, vest on the same schedule as set forth in the award agreement governing the applicable Company Stock
Option. Notwithstanding the foregoing, in the event that a Non-NEO incurs a Qualifying Termination or dies, in each case following the Effective Time, any theretofore unpaid portion of such holders Non-NEO Stock Option Converted Cash Award
shall vest and be paid to such holder (or beneficiary, in the case of death) no later than ten days after the date of such Qualifying Termination or death, as applicable.
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(iv) Company RSUs. At the Effective Time, each Company RSU held by a
non-employee member of the Company Board outstanding immediately prior to the Effective Time shall be canceled, with the holder of such Company RSU becoming entitled to receive, a lump sum cash payment equal to the product of (A) the number of
shares of Company Common Stock subject to such Company RSU immediately prior to the Effective Time and (B) the Merger Consideration (such amount, the RSU Amount).
(b) For the avoidance of doubt and for purposes of clarity, (i) the portion of the NEO Converted Cash Awards attributable to Non-Cashout
Company Stock Options shall be paid prior to any portion of such individuals NEO Converted Cash Award attributable to Company Performance Share Awards and Company Restricted Shares (and, only for those NEOs who are U.S. taxpayers, to the
extent any such portion of such individuals NEO Converted Cash Award would be payable after the date on which such Non-Cashout Company Stock Option would have otherwise vested pursuant to its terms, such portion shall instead be paid on such
original vesting date) and (ii) in lieu of paying Converted Cash Awards in cash, Parent shall have the option to deliver any portion of a Converted Cash Award in fully vested shares of Parent Common Stock having a Fair Market Value equal to the
value of the corresponding Converted Cash Award that Parent so elects to not pay in cash.
(c) All amounts payable pursuant to this
Section 5.04 shall be subject to any required withholding of Taxes and shall be paid without interest.
(d) Subject to this
Section 5.04 promptly following the Closing (but in no event later than five business days following the Closing), (i) Parent shall, or shall cause the Surviving Corporation to, pay through its payroll systems the applicable Cashout Option
Amounts, and NEO Converted Cash Awards to the former holders of Company Stock Options, and Company Restricted Shares who remain employees of Parent or one of its Subsidiaries (including the Surviving Corporation) at the time of such payment and
(ii) Parent shall cause the Paying Agent to pay, in accordance with the applicable provisions of this Section 5.04, the applicable Cashout Option Amounts, NEO Converted Cash Awards, and RSU Amounts to the former holders of Company Stock
Options, Company Restricted Shares, and Company RSUs who are not eligible to be paid through the Surviving Corporations or Parents payroll systems. For the avoidance of doubt, Parent shall take all steps necessary to enable and shall
cause the Surviving Corporation to provide to the Paying Agent, immediately after the Effective Time, cash necessary to pay the applicable Cashout Option Amounts, NEO Converted Cash Awards, and RSU Amounts to the former holders of Company Stock
Options, Company Restricted Shares, and Company RSUs who are not eligible to be paid through the Surviving Corporations or Parents payroll systems (and such cash shall constitute part of the Payment Fund).
(e) For purposes of this Agreement:
(i) Cashout Company Stock Option means each Company Stock Option (i) that has vested pursuant to its
terms immediately prior to the Effective Time or (ii) that is held by a non-employee member of the Company Board.
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(ii) Cause shall have the meaning set forth on
Section 5.04(d) of the Company Disclosure Letter.
(iii) Company Performance Share Awards means all
performance share awards payable in shares of Company Common Stock subject to performance-based vesting or delivery requirements, whether granted under a Company Stock Plan or otherwise.
(iv) Company Restricted Share means any share of Company Common Stock subject to vesting or forfeiture,
whether granted under a Company Stock Plan or otherwise.
(v) Company RSU means any restricted share
unit held by a non-employee director and payable in shares of Company Common Stock or whose value is determined with reference to the value of shares of Company Common Stock, whether granted under a Company Stock Plan or otherwise.
(vi) Company Stock Option means any option to purchase Company Common Stock, whether granted under a Company
Stock Plan or otherwise.
(vii) Company Stock Plan means the Companys Amended and Restated 2006
Stock Incentive Plan.
(viii) Converted Cash Award means each NEO Converted Cash Award, each Non-NEO
Restricted Share Converted Cash Award, and each Non-NEO Stock Option Converted Cash Award.
(ix) Fair Market
Value means, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, as of any date and except as provided below: (a) the closing price of shares of Parent Common Stock on Euronext Paris
(as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the Company and the Parent) expressed in U.S. dollars at the dollar-euro conversion rate published by the European Central Bank at the
close of business on the applicable Payment Date or (b) if the Parent Common Stock is not traded, listed or otherwise reported or quoted, the Board of Directors of Parent will determine in good faith the Fair Market Value in whatever manner it
considers appropriate, taking into account, where applicable, the requirements of Section 409A of the Code.
(x)
Good Reason shall have the meaning set forth on Section 5.04(d) of the Company Disclosure Letter.
(xi) NEO means each individual whose name is set forth on Section 5.04(d)(i) of the Company Disclosure
Letter
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(xii) NEO Converted Cash Award means, with respect to each
NEO, an amount in cash equal to the sum of (1) (A) the excess, if any, of (i) the Merger Consideration minus (ii) the exercise price per share of Company Common Stock subject to such NEOs Non-Cashout Company Stock Options,
multiplied by (B) the number of shares of Company Common Stock subject to such NEOs Non-Cashout Company Stock Options immediately prior to the Effective Time, (2) (A) the Merger Consideration, multiplied by (B) the number
of shares of Company Common Stock subject to such NEOs Company Restricted Shares immediately prior to the Effective Time and (3) (A) the Merger Consideration multiplied by (B) the total number of shares of Company Common Stock
that would be delivered to such NEO with respect to such NEOs Company Performance Share Awards based on the achievement of the target performance goals applicable to such award (assuming the satisfaction of all other conditions to such
delivery).
(xiii) Non-Cashout Company Stock Option means each Company Stock Option that is not a
Cashout Company Stock Option.
(xiv) Non-NEO means each individual who is not an NEO.
(xv) Non-NEO Company Performance Share Award Exchange Ratio means, (a) the Merger Consideration divided
by (b) the closing price for April 24, 2015 of shares of Parent Common Stock on Euronext Paris (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the Company and the Parent)
expressed in U.S. dollars at the dollar-euro conversion rate published by the European Central Bank at the close of business on April 24, 2015.
(xvi) Non-NEO Restricted Share Converted Cash Award means, with respect to each Non-NEO, an amount in cash
equal to (A) the Merger Consideration, multiplied by (B) the number of shares of Company Common Stock subject to such Non-NEOs Company Restricted Shares immediately prior to the Effective Time.
(xvii) Non-NEO Stock Option Converted Cash Award means, with respect to each Non-NEO, an amount in cash
equal to (A) the excess, if any, of (i) the Merger Consideration minus (ii) the exercise price per share of Company Common Stock subject to such Non-NEOs Non-Cashout Company Stock Options, multiplied by (B) the number of
shares of Company Common Stock subject to such Non-NEOs Non-Cashout Company Stock Options immediately prior to the Effective Time.
(xviii) Parent Common Stock means shares of SA common stock.
(xix) Payment Date means each of (i) the Closing Date, (ii) the first anniversary of the Closing
Date and (iii) the second anniversary of the Closing Date.
(xx) Qualifying Termination means
termination of a holders employment (i) by the Parent, the Surviving Corporation or any of their respective Affiliates without Cause or (ii) by the holder for Good Reason.
Section 5.05 Employee Matters. (a) From and after the Effective Time and for a period of one year following the Effective
Time (the Continuation Period), Parent shall provide or cause the Surviving Corporation to provide to each individual who is employed by the Company or any Company Subsidiary immediately prior
43
to the Effective Time and who continues employment with Parent, the Surviving Corporation or any Company Subsidiary (each, a Company Employee) (i) salary and incentive
opportunities (excluding equity-based compensation) that are no less favorable in the aggregate than those provided to such Company Employee by the Company or the Company Subsidiaries immediately prior to the Effective Time and (ii) employee
benefits that are no less favorable in the aggregate than those provided to such Company Employee by the Company or the Company Subsidiaries immediately prior to the Closing Date. Without limiting the generality of the foregoing, during the
Continuation Period, Parent shall, and shall cause the Surviving Corporation to, provide any Company Employee who experiences a termination of employment under circumstances that would have entitled such Company Employee to severance benefits under
a severance plan or policy of the Company or its affiliates applicable to such Company Employee immediately prior to the Closing Date with severance benefits at a level substantially as favorable as what would have been provided under such severance
plan or policy.
(b) Following the Continuation Period, the Company Employees shall be entitled to participate in the plans of the Parent,
the Surviving Corporation or their respective affiliates (the Surviving Corporation Plans) to the same extent as other similarly situated employees of Parent, the Surviving Corporation and their respective affiliates. In addition, and
without limiting the generality of the foregoing, each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all Surviving Corporation Plans to the same extent as other similarly situated employees of
the Parent, the Surviving Corporation and their respective affiliates and to the extent coverage under any such plan replaces coverage under a comparable benefit plan in which such Company Employee participates immediately prior to the Effective
Time.
(c) Without limiting the generality of Section 5.05(a), from and after the Closing Date, Parent shall or shall cause the
Surviving Corporation to assume, honor and continue during the Continuation Period or, if later, until all obligations thereunder have been satisfied, all of the Companys employment, severance, retention, termination and change in control
plans, policies, programs, agreements and arrangements (including any change in control severance agreement or other Company Benefit Agreement between the Company and any Company Employee) maintained by the Company or any Company Subsidiaries, in
each case, as in effect at the Closing Date, including with respect to any payments, benefits or rights arising as a result of the Transactions (either alone or in combination with any other event) in accordance with their terms.
(d) With respect to all Surviving Corporation Plans, including any employee benefit plan, as defined in Section 3(3) of ERISA,
maintained by Parent or any of its respective Subsidiaries (including any vacation, paid time-off and severance plans), for the purpose of determining eligibility to participate, level of benefits and vesting, each Company Employees service
with the Company or any Company Subsidiaries (as well as service with any predecessor employer of the Company or any such Company Subsidiary, to the extent service with the predecessor employer is recognized by the Company or such Company
Subsidiary) shall be treated as service with Parent or any of their respective subsidiaries; provided that such service need not be recognized under any defined benefit pension plan or any retiree medical plan to the extent that such
recognition would result in any duplication of benefits for the same period of service.
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(e) With respect to any welfare benefit plan maintained by Parent or any of its subsidiaries in
which any Company Employee is eligible to participate after the Effective Time, Parent shall use commercially reasonable efforts to, or shall cause the Surviving Corporation to use commercially reasonable efforts to, (i) waive or cause to be
waived any limitations as to preexisting conditions and exclusions and waiting periods and actively-at-work requirements with respect to participation and coverage requirements applicable to such employees and their eligible dependents and
beneficiaries, to the extent such limitations were waived, satisfied or did not apply to such employees or eligible dependents or beneficiaries under the corresponding and comparable welfare Company Benefit Plan in which such employees participated
immediately prior to the Effective Time and (ii) provide Company Employees and their eligible dependents and beneficiaries with credit for any co-payments and deductibles paid prior to the Effective Time in satisfying any analogous deductible
or out-of-pocket maximum requirements for such year to the extent applicable under any such plan in which they will be eligible to participate.
(f) With respect to any Company Employees based outside of the United States, Parents obligations under this Section 5.05
shall be modified to the extent necessary to comply with applicable Laws of the foreign countries and political subdivisions thereof in which such Company Employees are based.
(g) The provisions of this Section 5.05 are solely for the benefit of the parties to this Agreement, and no Company Employee or any
other Person (including any beneficiary or dependent thereof) shall be a third-party beneficiary of this Agreement (except to the extent provided in Section 8.07 with respect to Section 5.06), and no provision of this
Section 5.05 shall create such rights in any such Persons in respect of any benefits that may be provided, directly or indirectly, under any Company Benefit Plan or Company Benefit Agreement or any employee program or any plan or
arrangement of Parent or any of its subsidiaries.
Section 5.06 Indemnification. (a) All rights to indemnification and
exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time (and rights to advancement of expenses) now existing in favor of any Person who is or prior to the Effective Time becomes, or has been at any time prior
to the date of this Agreement, a director, officer, employee or agent (including as a fiduciary with respect to an employee benefit plan) of the Company, any of the Company Subsidiaries or any of their respective predecessors (each, an
Indemnified Party) as provided in the Company Articles, the Company Bylaws, the organizational documents of any Company Subsidiary or any indemnification agreement between such Indemnified Party and the Company or any of the
Company Subsidiaries that is in effect as of the date of this Agreement and that has been made available to Parent (i) shall be assumed by the Surviving Corporation in the Merger, without further action, at the Effective Time, (ii) shall
survive the Merger, (iii) shall continue in full force and effect in accordance with their terms with respect to any claims against any such Indemnified Party arising out of such acts or omissions and (iv) for a period of six years
following the date of this Agreement, shall not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any such Indemnified Party. Parent shall ensure that the Surviving Corporation complies with
and honors the foregoing obligations.
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(b) Without limiting Section 5.06(a) or any rights of any Indemnified Party pursuant
to any indemnification agreement, from and after the Effective Time, in the event of any threatened or actual Proceeding, whether civil or administrative, based in whole or in part on, or arising in whole or in part out of, or pertaining to
(i) the fact that the Indemnified Party is or was a director, officer, employee or agent (including as a fiduciary with respect to an employee benefit plan) of the Company, any of the Company Subsidiaries or any of their respective predecessors
or (ii) this Agreement or any of the Transactions, whether in any case asserted or arising before or after the Effective Time, Parent and the Surviving Corporation shall, jointly and severally, indemnify and hold harmless, as and to the fullest
extent permitted by applicable Law, each such Indemnified Party against any losses, claims, damages, liabilities, costs, expenses (including reasonable attorneys fees and expenses in advance of the final disposition of any Proceeding to each
Indemnified Party to the fullest extent permitted by applicable Law upon receipt of any undertaking required by applicable Law), Judgments, fines and amounts paid in settlement of or in connection with any such threatened or actual Proceeding;
provided, that any expenses advanced to an Indemnified Party pursuant to this sentence shall be paid by Parent within 20 calendar days following receipt of a reasonably detailed request therefor, together with an undertaking by such
Indemnified Party to repay all amounts so advanced in the event it is ultimately determined by a court of competent jurisdiction that such Indemnified Party is not entitled to indemnification). None of Parent or the Surviving Corporation shall
settle, compromise or consent to the entry of any judgment in any threatened or actual Proceeding for which indemnification could be sought by an Indemnified Party hereunder, unless such settlement, compromise or consent includes an unconditional
release of such Indemnified Party from all liability arising out of such Proceeding or such Indemnified Party otherwise consents in writing to such settlement, compromise or consent. Parent and the Surviving Corporation shall cooperate with an
Indemnified Party in the defense of any matter for which such Indemnified Party could seek indemnification hereunder. Parents and the Surviving Corporations obligations under this Section 5.06(b) shall continue in full force
and effect for the period beginning upon the acceptance for payment of, and payment by Merger Sub for, any shares of Company Common Stock pursuant to the Merger and ending six years from the Effective Time; provided that all rights to
indemnification in respect of any Proceeding asserted or made within such period shall continue until the final disposition of such Proceeding.
(c) At or prior to the Effective Time, the Company or Parent (following reasonable consultation with the Company and with the Companys
assistance and cooperation) may obtain and fully pay the premium for tail directors and officers liability insurance policies in respect of acts or omissions occurring 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) for the period beginning upon the Effective Time and ending six years from the Effective Time, covering each Indemnified Party and
containing terms (including with respect to coverage and amounts) and conditions (including with respect to deductibles and exclusions) that are in the aggregate, no less favorable to any Indemnified Party than those of the Companys
directors and officers liability insurance policies in effect on the date of this Agreement (the Existing D&O Policies); provided that the aggregate cost of any such tail insurance policies shall
not exceed 350%
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of the aggregate annual premium paid by the Company for the Existing D&O Policies (which amount the Company represents and warrants is set forth in Section 5.06(b) of the Company
Disclosure Letter). If such tail insurance policies have been obtained, Parent shall cause such tail insurance policies to be maintained in full force and effect, for their full term, and cause all of its obligations
thereunder to be honored by it and the Surviving Corporation. In the event that such tail insurance policies are not obtained, then, for the period beginning upon the Effective Time and ending six years from the Effective Time, Parent
shall maintain in effect the Existing D&O Policies in respect of acts or omissions occurring 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); provided that neither Parent nor the Surviving Corporation shall be required to pay an aggregate annual premium for such insurance policies in excess of 350% of the annual premium paid by the Company for the Existing
D&O Policies; provided further that if the annual premium of such insurance coverage exceeds such amount, Parent or the Surviving Corporation shall be obligated to obtain the most advantageous policies available for an annual
premium equal to such amount; and provided further that Parent may substitute therefor policies of a reputable and financially sound insurance company containing terms (including with respect to coverage and amounts) and conditions
(including with respect to deductibles and exclusions) that are, individually and in the aggregate, no less favorable to any Indemnified Party.
(d) In the event that (i) Parent or the Surviving Corporation or any of their respective successors or assigns (A) consolidates with
or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger or (B) transfers or conveys all or a substantial portion of its properties and other assets to any Person or
(ii) Parent or any of its successors or assigns dissolves the Surviving Corporation, then, and in each such case, Parent shall cause proper provision to be made so that the applicable successors and assigns or transferees expressly assume the
obligations set forth in this Section 5.06.
(e) The obligations of Parent and the Surviving Corporation under this
Section 5.06 shall not be terminated or modified in such a manner as to adversely affect any Indemnified Party to whom this Section 5.06 applies without the consent of such affected Indemnified Party. The provisions of this
Section 5.06 are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party, his or her heirs and his or her representatives, and are in addition to, and not in substitution for, any other rights to which each
Indemnified Party is entitled, whether pursuant to Law, contract or otherwise.
(f) Parent shall pay all reasonable expenses, including
reasonable attorneys fees, that may be incurred by any Insured Party in enforcing the indemnity and other obligations provided in this Section 5.06.
Section 5.07 Fees and Expenses. (a) Except as set forth in Section 5.02, Section 5.06, this
Section 5.07 and Section 5.09, all fees and expenses incurred in connection with this Agreement, the Merger and the other Transactions shall be paid by the party incurring such fees or expenses, whether or not the Merger is
consummated.
(b) The Company shall pay to Parent a fee of $161,280,000 (the Company Termination Fee) if:
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(i) the Company terminates this Agreement pursuant to
Section 7.01(f);
(ii) Parent terminates this Agreement pursuant to Section 7.01(c); or
(iii) after the date of this Agreement, a Company Takeover Proposal is publicly proposed or announced or made known to the
Company Board (whether or not conditional and whether or not withdrawn) and thereafter this Agreement is terminated by either Parent or the Company pursuant to Section 7.01(b)(i) or Section 7.01(h) or by Parent pursuant to
Section 7.01(d) or Section 7.01(g) and (B) within twelve months after such termination the Company enters into a definite agreement to consummate, or consummates, a Company Takeover Proposal.
For purposes of this Section 5.07(b), the term Company Takeover Proposal shall have the meaning set forth in the definition of
Company Takeover Proposal contained in Section 4.03(e) except that all references to 20% shall be deemed references to 50%. Any fee due under this Section 5.07(b) shall be paid by wire transfer of same-day funds to an account
designated by Parent, (1) in the case of clause (i) above, prior to or simultaneously with such termination of this Agreement, (2) in the case of clause (ii) above, within two business days after the date of such termination of
this Agreement and (3) in the case of clause (iii) above, within two business days of the consummation of such Company Takeover Proposal. The parties hereto acknowledge and agree that in no event shall the Company be required to pay the
Company Termination Fee on more than one occasion, whether or not the Company Termination Fee may be payable under more than one provision of this Agreement at the same or at different times and the occurrence of different events.
(c) Acceptance by Parent of the fee due under Section 5.07(b)(i) shall constitute acceptance by Parent of the validity of any
termination of this Agreement under Section 7.01(f). In the event the Company Termination Fee described in this Section 5.07 is paid to Parent, such Company Termination Fee shall constitute the sole and exclusive remedy of
Parent and Merger Sub against the Company and the Company Subsidiaries and their respective current, former or future Representatives for any loss suffered as a result of the failure of the Transactions to be consummated, and upon payment of the
Company Termination Fee, none of the Company or the Company Subsidiaries or any of their respective current, former or future Representatives shall have any further liability or obligation relating to or arising out of this Agreement or the
Transactions; provided, however, that the foregoing shall not apply to any loss suffered as a result of any fraud by the Company or any Company Subsidiary, or any Willful and Material breach by the Company or any Company Subsidiary of
any of its representations, warranties, covenants or agreements set forth in this Agreement.
(d) In the event that this Agreement is
terminated by either Parent or the Company pursuant to Section 7.01(h) or by Parent pursuant to Sections 7.01(g), then, in each case, the Company shall pay Parent or its designees by wire transfer of same day funds, as promptly as
possible (but in any event within two business days) following the delivery by Parent of an invoice therefor, all reasonably documented out-of-pocket fees and expenses incurred by Parent, Merger Sub and their respective affiliates in connection with
the Transactions (not to exceed $20,000,000) (the Parent Expenses). To
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the extent either Parent or the Company terminates pursuant to Section 7.01(h) or Parent terminates pursuant to Sections 7.01(d) or 7.01(g), and thereafter the Company
becomes obligated to pay Parent the Company Termination Fee pursuant to Section 5.07(b)(iii) after having paid Parent any amount in Parent Expenses pursuant to this Section 5.07(d), the Company shall be obligated to pay only
such portion of the Company Termination Fee that exceeds the amount paid by the Company to Parent in Parent Expenses pursuant to this Section 5.07(d).
(e) Parent shall indemnify and hold harmless the Company and its Subsidiaries and their respective Representatives from and against any and all
liabilities, losses, damages, claims, costs, expenses (including reasonable attorneys fees) interest, awards, judgments and penalties suffered or incurred in connection with Section 5.17, other than any of the foregoing that result
from fraud or intentional misconduct by the Company or the Company Subsidiaries. Promptly following termination of this Agreement, Parent shall reimburse the Company for all reasonable out-of-pocket costs (including reasonable attorneys fees)
incurred by the Company or its Subsidiaries in connection with Section 5.17.
Section 5.08 Public Announcements.
Parent and Merger Sub, on the one hand, and the Company, on the other hand, shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to
the Merger and the other Transactions, 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 any national or foreign securities exchange and except as contemplated, permitted or required by Section 4.03. The parties agree that the initial press release to be issued with respect to the Transactions shall be in the
form heretofore agreed to by the parties. This Section 5.08 shall not apply to any disclosure of information concerning this Agreement in connection with any dispute between the parties regarding this Agreement.
Section 5.09 Transfer Taxes. Except as provided in Section 2.08(b) of this Agreement, all stock transfer, real estate
transfer, documentary, stamp, recording and other similar Taxes (Transfer Taxes) incurred in connection with the Transactions shall be paid by either Merger Sub or the Surviving Corporation, and the Company shall cooperate with
Merger Sub and Parent in preparing, executing and filing any Tax Returns with respect to such Transfer Taxes that are filed prior to the Effective Time.
Section 5.10 Shareholder Litigation. Until the termination of this Agreement in accordance with Article VII, the Company
shall provide Parent an opportunity to participate in, but not control, the defense or settlement of (which shall include the right to review and to propose comments to all material filings or responses to be made by the Company in connection with)
any shareholder litigation against the Company and its directors relating to any Transaction, and the Company shall give reasonable and good faith consideration to any comments proposed by Parent to any material filings or responses made in
connection with such litigation. Notwithstanding anything to the contrary in this Agreement, in no event shall the Company enter into, agree to or disclose any full or partial settlement with respect to such shareholder litigation without
Parents consent, such consent not to be unreasonably withheld, delayed or conditioned; provided that Parent shall not be obligated to consent to any settlement that would result in the imposition of any equitable relief or restriction
on the business or
49
operations of the Company or any of the Company Subsidiaries or affiliates or that does not contain a full release of Parent and its affiliates. Each of Parent and the Company shall notify the
other promptly of the commencement of any such shareholder litigation of which it has received notice and keep the other party reasonably informed with respect to the status of any such shareholder litigation.
Section 5.11 Rule 16b-3 Matters. The Company shall take all reasonable steps as may be required to cause any dispositions of
Company equity securities (including derivative securities) in connection with this Agreement by each individual who is a director or officer of the Company subject to Section 16 of the Exchange Act to be exempt under Rule 16b-3 under the
Exchange Act.
Section 5.12 Merger Sub and Surviving Corporation Compliance. Parent shall cause Merger Sub or the Surviving
Corporation, as applicable, to comply with all of its respective obligations under this Agreement and Merger Sub shall not engage in any activities of any nature except as provided in or contemplated by this Agreement.
Section 5.13 Stock Exchange De-listing. The Surviving Corporation shall cause the Companys securities to be de-listed from
Nasdaq and de-registered under the Exchange Act as promptly as practicable following the Effective Time.
Section 5.14 No Control
of Other Partys Business. Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Companys or the Company Subsidiaries operations prior to the
Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and the Company Subsidiaries respective operations.
Section 5.15 CFIUS Approval. Notwithstanding anything to the contrary in this Agreement, Parent and the Company shall, and shall
cause their respective affiliates to, take any and all steps necessary to obtain CFIUS Approval, including by, promptly after the date hereof making any draft and final filings required in connection with the CFIUS Approval in accordance with the
DPA (and in any event, no later than (i) 10 business days after the date of this Agreement, or as otherwise agreed among the parties hereto or their respective advisors after consultation with CFIUS, in respect of the filing of a draft joint
voluntary notice to CFIUS and (ii) promptly after receipt of all comments to the draft joint voluntary notice from CFIUS in respect of a final joint voluntary notice to CFIUS), and providing any information requested by CFIUS or any other
agency or branch of the U.S. government in connection with the CFIUS review or investigation of the Transactions; provided that (x) the Company shall not be obligated to agree to, commit or effect, any Remedial Action unless such Remedial
Action is conditioned upon, or will occur subsequent to, consummation of the Transactions and (y) Parent and its subsidiaries shall not be required to, and the Company and the Company Subsidiaries shall not, without the prior written consent of
Parent, take any Remedial Action, or commit to take any Remedial Action, or agree to any Remedial Action contemplated in this Section 5.15 that would, or would reasonably be expected to be a Burdensome Condition.
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Section 5.16 Notification of Certain Actions.
(a) The Company shall promptly notify Parent of (i) any inaccuracy of any representation or warranty of the Company contained herein in
any material respect at any time during the term hereof and (ii) any failure of the Company (or the Company Subsidiaries) to comply with or satisfy in any material respect any covenant or agreement to be complied with or satisfied by it
hereunder, in the case of each of clauses (i) and (ii), if and only to the extent that such inaccuracy, or such failure, would reasonably be expected to cause any of the conditions to the obligations of Parent and Merger Sub to consummate the
Transactions set forth in Article VI to fail to be satisfied ; provided that the delivery of any notice pursuant to this Section 5.16 shall not affect or be deemed to modify any representation or warranty (or cure any
inaccuracy thereof) of the Company set forth in this Agreement or the conditions to the obligations of Parent and Merger Sub to consummate the transactions contemplated by this Agreement or the remedies available to the parties hereunder.
(b) Parent shall promptly notify the Company of (i) any inaccuracy of any representation or warranty of Parent contained herein in any
material respect at any time during the term hereof and (ii) any failure of Parent (or its subsidiaries) to comply with or satisfy in any material respect any covenant or agreement to be complied with or satisfied by it hereunder, in the case
of each of clauses (i) and (ii), if and only to the extent that such inaccuracy, or such failure, would reasonably be expected to cause any of the conditions to the obligations of the Company to consummate the Transactions set forth in
Article VI to fail to be satisfied; provided that the delivery of any notice pursuant to this Section 5.16 shall not affect or be deemed to modify any representation or warranty (or cure any inaccuracy thereof) of Parent
and Merger Sub set forth in this Agreement or the conditions to the obligations of the Company to consummate the Transactions or the remedies available to the parties hereunder.
Section 5.17 Repayment of Existing Indebtedness.
(a) If requested by Parent in writing, the Company shall use its commercially reasonable efforts to, and shall use its commercially reasonable
efforts to cause each of the Company Subsidiaries to, commence, as promptly as reasonably practicable after the receipt of a written request from Parent to do so, one or more tender, exchange or change of control offers for, and any related consent
solicitations with respect to, the Companys 4.75% Senior Notes due 2019 (the Company Notes) on such terms and conditions as specified and reasonably requested by Parent, including any extension or amendment that may
reasonably be requested by Parent, all in compliance with all applicable terms and conditions of the indenture governing the Company Notes (the Company Notes Indenture) and applicable Law (any such offer or consent solicitation, a
Company Notes Offer); provided that (i) Parent shall have timely provided the Company with the applicable offer to purchase, the related letter of transmittal (if applicable) and other related documents (collectively,
the Offer Documents) and (ii) the closing of the Company Notes Offer shall be conditioned on the Closing. The Company shall use its commercially reasonable efforts to, and shall use its commercially reasonable efforts to
cause the Company Subsidiaries and the Companys Representatives to, provide cooperation reasonably requested by Parent in connection with Parents efforts to effect any Company Notes Offer. Parent shall ensure that at the Effective Time,
the Surviving Corporation shall have all funds necessary to pay any consideration required to be paid in connection with any Company Notes Offer on the Closing Date.
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(b) If requested by Parent in writing, the Company shall use its commercially reasonable efforts
to, and shall use its commercially reasonable efforts to cause each of the Company Subsidiaries to, take any actions requested by Parent that are reasonably necessary or advisable for the payoff, satisfaction, discharge and/or defeasance of the
Company Notes and the Company Notes Indenture, and shall pay-off, redeem or satisfy, discharge and/or defease, as applicable, the Company Notes in accordance with and pursuant to the terms of the Company Notes Indenture (the Company Notes
Payoff), including taking any action reasonably necessary or advisable to obtain evidence therefor; provided that any such action described above shall not be required unless it can be conditioned on the occurrence of the Closing;
provided further that (i) Parent shall ensure that at the Effective Time, the Surviving Corporation shall have all funds necessary to effect the Company Notes Payoff and (ii) at the Closing, Parent, or the Company at the direction
of Parent, shall deposit, or cause to be deposited, with the appropriate trustee, agent or other recipient, funds sufficient to actually effect such payoff, redemption, satisfaction, discharge and/or defeasance. The Company shall use its
commercially reasonable efforts to, and shall use its commercially reasonable efforts to cause the Company Subsidiaries and the Company Representatives to, provide cooperation reasonably requested by Parent in connection with Parents efforts
to effect any Company Notes Payoff.
(c) In the event that the Company commences a Company Notes Offer, the Company covenants and agrees
that, promptly following any related early consent period or consent solicitation expiration date, assuming the requisite consents are received, each of the Company and the Company Subsidiaries as is necessary shall (and shall use their commercially
reasonable efforts to cause the applicable trustee or agent to) execute a supplemental indenture or amendment to the Company Notes Indenture, which shall implement the amendments described in the Offer Documents, subject to the terms and conditions
of this Agreement (including the conditions to the Company Notes Offer) and the Company Notes Indenture. The effectiveness of such supplemental indenture or amendment shall be conditioned on the occurrence of the Closing.
(d) Parent shall prepare all necessary and appropriate documentation in connection with any Company Notes Offer or Company Notes Payoff,
including the Offer Documents, as applicable and the Company shall have a reasonable opportunity to review and comment upon such documents. The parties hereto shall, and shall cause their respective Subsidiaries to, reasonably cooperate with each
other in the preparation of any Offer Documents, other appropriate documents and any amendment or supplement thereto (including as described below). The Company shall use its commercially reasonable efforts to, to the extent requested, keep Parent
reasonably informed regarding the status, results and timing of any Company Notes Offer. If, at any time prior to the completion of any Company Notes Offer, the Company or any of the Company Subsidiaries, on the one hand, or Parent or any of its
Subsidiaries, on the other hand, discovers any information that should be set forth in an amendment or supplement to the Offer Documents so that the Offer Documents shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
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to make the statements therein, in light of circumstances under which they are made, not misleading, such party that discovers such information shall promptly notify the other party, and an
appropriate amendment or supplement prepared by Parent describing such information shall be disseminated by or on behalf of the Company or its Subsidiaries to the holders of the Company Notes.
(e) In connection with any Company Notes Offer and any Company Debt Payoff, Parent may select one or more dealer managers, information agents,
depositaries and other agents, in each case as shall be reasonably acceptable to the Company, to provide assistance in connection therewith and the Company shall use its commercially reasonable efforts to, and shall use its commercially reasonable
efforts to cause the Company Subsidiaries to, enter into customary agreements with such parties so selected; provided that neither the Company nor any of the Company Subsidiaries shall be required to indemnify, defend or hold harmless, or pay
the fees or reimburse the costs and expenses of, any such party.
(f) Parent intends to repay the Bank Facilities at or promptly following
Closing. If Parent determines not to repay the Bank Facilities, the Company will (and will cause the Company Subsidiaries to) reasonably cooperate with Parent in Parents efforts to negotiate either the refinancing or the waivers required to
keep the Bank Facilities outstanding following Closing; provided that any such action described above shall not be effected unless it is conditioned on the occurrence of the Closing.
(g) All reasonable and documented out-of-pocket fees and expenses incurred by the Company and the Company Subsidiaries pursuant to this
Section 5.17 shall be reimbursed by Parent if the Closing shall not occur.
(h) Notwithstanding anything in this Agreement to
the contrary, neither the pendency or consummation of any transaction contemplated by this Section 5.17 will be a condition to Parents or Merger Subs obligations to consummate the Merger.
Section 5.18 Termination of Affiliate Arrangements. The Company shall, and shall cause each Company Subsidiary to, immediately
prior to Closing, execute and deliver such releases, termination agreements and discharges as are necessary to terminate all significant arrangements, commitments, contracts and understandings, set forth on Section 5.18 of the Company
Disclosure Letter, among the Company or any of the Company Subsidiaries, on the one hand, and any of their affiliates (other than the Company and the Company Subsidiaries), on the other hand.
ARTICLE VI
Conditions
Precedent to the Merger
Section 6.01 Conditions to Each Partys Obligation. 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)
Shareholder Approval. The Company Shareholder Approval shall have been obtained.
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(b) No Legal Restraints. No Judgment issued by any Governmental Entity of competent
jurisdiction or Law or other legal prohibition (collectively, Legal Restraints) preventing or prohibiting the consummation of the Merger or imposing a Burdensome Condition shall be in effect; provided that the party seeking
to assert this condition shall have complied with its obligations under Section 5.03 in respect of any such Legal Restraint.
(c) CFIUS Approval. The parties shall have obtained CFIUS Approval.
(d) Information Statement. If the Company Shareholder Approval is obtained by means of the Shareholder Consent, then the Information
Statement shall have been mailed to the Companys shareholders in accordance with Section 5.01 and Section 14C of the Exchange Act at least 20 calendar days prior to the Closing Date.
(e) Antitrust. Any waiting period under the HSR Act and any Foreign Antitrust Law of any jurisdiction listed on
Section 6.01(e) of the Company Disclosure Letter (the Required Jurisdictions) applicable to the consummation of the Merger shall have expired or been terminated and all Consents or approvals required to consummate the
Merger under any Foreign Antitrust Law in any Required Jurisdiction shall have been obtained.
(f) No Litigation. There shall be no
pending Proceeding commenced by a Governmental Entity in (i) a United States District Court or (ii) a court in Canada that, in each case, is seeking a Judgment that challenges or seeks to enjoin the Merger under the antitrust laws of the
U.S. or Canada, as applicable.
Section 6.02 Conditions to Obligations of Parent and Sub. The obligations of Parent and Sub to
effect the Merger are further subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:
(a)
Representations and Warranties.
(i) The representations and warranties of the Company set forth in Article
II (other than those set forth in Sections 2.02(a)-(d) and Section 2.08(a)) shall be true and correct as of the date of this Agreement and as of the Closing Date with the same effect as though made as of the Closing
Date, except to the extent such representations and warranties expressly relate to a specified date (in which case on and as of such specified date), other than for such failures to be true and correct that would not reasonably be expected to,
individually or in the aggregate, have a Company Material Adverse Effect (for purposes of determining the satisfaction of this condition, without regard to any qualifications or exceptions contained therein as to materiality or
Company Material Adverse Effect, it being agreed that with respect to any representation or warranty with respect to which effects resulting from or arising in connection with the matters set forth in clause (G) of the definition of
Company Material Adverse Effect are not excluded in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur, such effects shall similarly not be excluded for purposes of this
clause (ii)(A)), (B) the representations and
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warranties of the Company set forth in Section 2.02(a)-(d) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date with the
same effect as though made as of the Closing Date, except to the extent such representations and warranties expressly relate to a specified date (in which case on and as of such specified date), and (C) the representations and warranties of the
Company set forth in Section 2.08(a) shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date, as though made as of the Closing Date, except to the extent such representations and warranties
expressly relate to a specified date (in which case on and as of such specified date);
(ii) Parent shall have received a
certificate signed on behalf of the Company by the chief executive officer and chief financial officer of the Company to such effect.
(b)
Performance of Obligations of the Company. The Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and Parent shall have received a
certificate signed on behalf of the Company by the chief executive officer and the chief financial officer of the Company to such effect.
(c) No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred a Company Material Adverse Effect.
Parent shall have received a certificate signed on behalf of the Company by the chief executive officer and the chief financial officer of the Company to such effect.
(d) Antitrust. Any waiting period under the HSR Act and any Foreign Antitrust Law of any Required Jurisdiction applicable to the
consummation of the Merger shall have expired or been terminated and all Consents or approvals required to consummate the Merger under any Foreign Antitrust Law in any Required Jurisdiction shall have been obtained, in each case, without the
imposition of a Burdensome Condition.
Section 6.03 Conditions to Obligation of the Company. The obligation of the Company to
effect the Merger is further subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:
(a)
Representations and Warranties. The representations and warranties of Parent and Merger Sub contained herein that are qualified as to materiality shall be true and correct (as so qualified), and the representations and warranties of Parent
and Merger Sub contained herein that are not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date with the same effect as though made as of the Closing Date, except
that the accuracy of representations and warranties that by their terms speak as of a specified date will be determined as of such date. The Company shall have received a certificate signed on behalf of Parent by an authorized signatory of Parent to
such effect.
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(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 authorized signatory of
Parent to such effect.
Section 6.04 Frustration of Closing Conditions. Neither Parent nor Merger Sub may rely on the failure
of any condition set forth in Section 6.01, 6.02 or 6.03 to be satisfied if such failure was caused by the failure of Parent or Merger Sub to perform any of its obligations under this Agreement.
ARTICLE VII
Termination, Amendment and Waiver
Section 7.01 Termination. This Agreement may be terminated at any time prior to the Effective Time, whether before or after the
Company Shareholder Approval has been obtained:
(a) by mutual written consent of Parent, Merger Sub and the Company;
(b) by either Parent or the Company:
(i) if the Effective Time has not occurred on or before October 26, 2015 (the Outside Date);
provided that, if on such Outside Date all of the conditions to Closing set forth in Sections 6.01, 6.02 and 6.03 shall have been satisfied or waived other than (A) the conditions set forth in Sections
6.01(e), 6.01(f) and Section 6.02(d), (B) the conditions set forth in Section 6.01(b) (as they relate to the conditions set forth in Section 6.01(e)) and (C) those conditions that are by their
nature to be satisfied at the Closing, then the Outside Date shall be extended from October 26, 2015 to April 26, 2016 (in the case of any such extension, such date shall then be the Outside Date); provided
further that the right to terminate this Agreement pursuant to this Section 7.01(b)(i) shall not be available to any party if the failure to consummate the Merger is primarily due to a material breach of this Agreement such party;
or
(ii) if any Legal Restraint permanently preventing or prohibiting the Merger shall be in effect and shall have become
final and non-appealable; provided that the party seeking to terminate this Agreement pursuant to this clause (ii) shall have complied in all material respects with its obligations under Section 5.03 in respect of any
such Legal Restraint;
(c) by Parent, in the event an Adverse Recommendation Change has occurred;
(d) by Parent, if the Company breaches or fails to perform any of its representations, warranties or covenants contained in this Agreement,
which breach or failure to perform (i) would give rise to the failure of the conditions set forth in Section 6.02(a) and Section 6.02(b) and (ii) cannot be or has not been cured prior to the earlier of (x) 30 calendar days
after the giving of written notice to the Company of such breach and (y) the Outside Date (provided that Parent and Merger Sub are not then in material breach of any representation, warranty or covenant contained in this Agreement);
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(e) by the Company, if Parent or Merger Sub breaches or fails to perform any of its
representations, warranties or covenants contained in this Agreement (without regard to any qualifications or exceptions contained therein as to materiality or Parent Material Adverse Effect), which breach or failure to perform (i) had or would
reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect and (ii) has not been cured prior to the earlier of (x) 30 calendar days after the giving of written notice to Parent or Merger Sub of such
breach and (y) the Outside Date (provided that the Company is not then in material breach of any representation, warranty or covenant contained in this Agreement); or
(f) by the Company in accordance with Section 7.04(b).
(g) by Parent, if the Shareholder Consent, duly executed by the Persons set forth on Section 7.01 of the Company Disclosure Letter
and representing at least 50.1% of the outstanding shares of Company Common Stock, shall not have been delivered to Parent and the Company within one (1) hour following the time of execution of this Agreement; or
(h) by either Parent or the Company, if the Company Shareholder Approval has not been obtained upon a vote taken thereon at the Company
Shareholders Meeting duly convened therefor or at any adjournment or postponement thereof; provided, that neither Parent nor the Company may terminate this Agreement pursuant to this clause (h) if the Shareholder Consent has
been executed and delivered to Parent and the Company pursuant to Section 5.01(b).
Section 7.02 Effect of
Termination. In the event of termination of this Agreement by either the Company or Parent as provided in Section 7.01, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of
Parent or Merger Sub, on the one hand, or the Company, on the other hand (except to the extent that such termination results from fraud by a party or the Willful and Material Breach by a party of any representation, warranty or covenant set forth in
this Agreement, which fraud or Willful and Material Breach, and liability therefor, shall not be affected by termination of this Agreement or any payment of the Company Termination Fee pursuant to Section 5.07(b) or Parent Expenses
pursuant to Section 5.07(d)), other than provisions of Section 2.19, Section 3.06, the last sentence of Section 5.02, Section 5.07, this Section 7.02 and Article VIII,
which provisions shall survive such termination.
Section 7.03 Amendment; Extension; Waiver. (a) This Agreement may be
amended by the parties at any time before or after receipt of the Company Shareholder Approval. At any time prior to the Effective Time, the parties may (i) extend the time for the performance of any of the obligations or other acts of the
other parties, (ii) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement or (iii) waive compliance with any of the agreements or conditions
contained in this Agreement. Notwithstanding the foregoing, (A) after receipt of the Company Shareholder Approval, there shall be made no amendment, extension or waiver that by Law requires further approval by the shareholders of the Company
without the further approval of such shareholders and (B) no amendment shall be made to this Agreement after the Effective Time.
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(b) This Agreement may not be amended except by an instrument in writing signed on behalf of each
of the parties. Any agreement on the part of a party to any extension or waiver with respect to this Agreement 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.
Section 7.04 Procedure
for Termination, Amendment, Extension or Waiver. (a) A termination of this Agreement pursuant to Section 7.01 or an amendment of this Agreement or an extension or waiver with respect to this Agreement pursuant to
Section 7.03 shall, in order to be effective, require, in the case of Parent, Merger Sub or the Company, action by its Board of Directors or the duly authorized designee of its Board of Directors. Termination of this Agreement pursuant
to Section 7.01 shall not require the approval of the shareholders of the Company.
(b) The Company may terminate this
Agreement pursuant to Section 7.01(f) only if, prior to 11:59 p.m. New York City time on the Written Consent End Date or the Company Shareholder Approval Time, as applicable, (i) the Company Board has received a Superior Company
Proposal that did not primarily result from a breach of the Companys obligations under Section 4.03, (ii) the Company Board has complied with the provisions of Section 4.03, (iii) the Company has paid, or
simultaneously with the termination of this Agreement pays, the fee due under Section 5.07 that is payable if this Agreement is terminated pursuant to Section 7.01(f) and (iv) substantially concurrently with the
termination of this Agreement, the Company enters into a binding agreement in respect of the Superior Proposal.
ARTICLE VIII
General Provisions
Section 8.01 Nonsurvival of Representations and Warranties. None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective Time. This Section 8.01 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time. The
Confidentiality Agreement shall (a) survive termination of this Agreement in accordance with its terms and (b) terminate as of the Effective Time; provided, that, notwithstanding the foregoing, (x) any provisions of the
Confidentiality Agreement that conflict with this Agreement shall be superseded by this Agreement and (y) all standstill or similar provisions in the Confidentiality Agreement shall terminate and no longer have effect following the execution of
this Agreement.
Section 8.02 Notices. All notices, requests, claims, demands and other communications under this Agreement
shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery by hand, by registered or certified mail (postage prepaid, return receipt requested), or by email to the respective parties at the
following addresses (or at such other address for a party as shall be specified by like notice):
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(a) |
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if to Parent or Merger Sub, to |
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Cap Gemini S.A. |
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Place de lEtoile |
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11, rue de Tilsitt |
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75017 Paris, France |
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Attention: |
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Isabelle Roux-Chenu, Group General Counsel |
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Pierre Yves Cros, Chief Development Officer |
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Email: |
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isabelle.roux-chenu@capgemini.com |
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pierre-yves.cros@capgemini.com |
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and |
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Capgemini North America, Inc. |
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623 Fifth Avenue, 33rd Floor |
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New York, NY 10022 |
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Attention: |
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Michael Chayet, General Counsel North America |
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Robert Cowell, Director of Tax - U.S. |
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Email: |
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michael.chayet@capgemini.com |
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robert.cowell@capgemini.com |
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with a copy (which shall not constitute notice) to: |
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Skadden, Arps, Slate, Meagher & Flom LLP |
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4 Times Square |
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New York, NY 10036 |
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USA |
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Attention: |
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Howard L. Ellin |
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C. Michael Chitwood |
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Email: |
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howard.ellin@skadden.com |
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michael.chitwood@skadden.com |
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Skadden, Arps, Slate, Meagher & Flom LLP |
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68, rue du Faubourg |
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Saint-Honoré 75008 |
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France |
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Attention: |
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Armand W. Grumberg |
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Arash Attar-Rezvani |
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Email: |
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armand.grumberg@skadden.com |
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arash.attar@skadden.com |
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(b) |
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if to the Company, to |
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IGATE Corporation |
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100 Somerset Corporate Blvd., 5th floor |
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Bridgewater, NJ 08807 |
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USA |
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Attention: |
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Jeffrey Friedel, SVP Legal |
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Email: |
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Jeffrey.Friedel@igate.com |
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with a copy (which shall not constitute notice) to: |
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Kirkland & Ellis LLP |
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601 Lexington Avenue |
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New York, NY 10022 |
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USA |
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Attention: |
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Sarkis Jebejian, P.C. |
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Srinivas Kaushik |
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David Feirstein |
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Email: |
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sarkis.jebejian@kirkland.com |
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skaushik@kirkland.com |
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david.feirstein@kirkland.com |
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Pepper Hamilton LLP |
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Suite 5000, 500 Grant Street |
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Pittsburgh, PA 15219 |
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USA |
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Attention: |
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James Barnes |
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Valerie Demont |
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John Duke |
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Email: |
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barnesj@pepperlaw.com |
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demontv@pepperlaw.com |
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dukej@pepperlaw.com |
Section 8.03 Definitions. For purposes of this Agreement:
(i) 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. As used herein, control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and
policies of such entity, whether through ownership of voting securities or other interests, by contract or otherwise.
(ii)
Bank Facilities means, collectively, (1) the Facilities Agreement, (2) the Revolving Facility, (3) that certain credit facility letter dated May 27, 2012 between iGate Global Solutions Limited and Standard
Chartered Bank, (4) that certain working capital facility dated March 10, 2015 between iGate Global Solutions Ltd and JPMorgan Chase Bank, N.A. and (5) that certain trade finance facility letter dated February 26, 2015 between
iGate Global Solutions Ltd and The Hongkong and Shanghai Banking Corporation Ltd.
(iii) Book-Entry
Shares means shares of Company Common Stock not represented by certificates and held in the Direct Registration System.
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(iv) A business day means any day, other than a Saturday, a
Sunday or any day on which banks in New York, New York, or Paris, France are required or authorized by Law to be closed.
(v) CFIUS means the Committee on Foreign Investment in the United States.
(vi) CFIUS Approval means (i) a written notice issued by CFIUS that it has concluded a review or
investigation of the notification voluntarily provided pursuant to the DPA (as defined below) with respect to the Transactions and has terminated all action under the DPA or (ii) if CFIUS has sent a report to the President of the United States
requesting the Presidents decision and (x) the President has announced a decision not to take any action to suspend or prohibit the Transactions or (y) having received a report from CFIUS requesting the Presidents decision, the
President has not taken any action after 15 calendar days from the date the President received such report from CFIUS.
(vii) Company Material Adverse Effect means any change, event, effect or occurrence that (i) has a
material adverse effect on the business, assets, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) prevents or materially delays the consummation of the Merger and the other
Transactions or the ability of the Company to perform its obligations under this Agreement in any material respect; provided that none of the following shall be deemed either alone or in combination to constitute, and none of the following
shall be taken into account in determining whether there has been a Company Material Adverse Effect: any change, event, effect or occurrence that results from or arises in connection with (A) general conditions in the industries in which the
Company and the Company Subsidiaries operate, (B) general economic or regulatory, legislative or political conditions (or changes therein) or securities, credit, financial or other capital markets conditions (including changes generally in
prevailing interest rates, currency exchange rates, credit markets and price levels or trading volumes), in each case in the United States, the European Union, India or elsewhere in the world, (C) any change or prospective change in applicable
Law or GAAP (or interpretation or enforcement thereof), (D) geopolitical conditions, the outbreak or escalation of hostilities, any acts of war (whether or not declared), sabotage, terrorism or any epidemics, or any escalation or worsening of
any such acts of war (whether or not declared), sabotage or terrorism or any epidemics, (E) any hurricane, tornado, flood, volcano, earthquake or other natural or man-made disaster or any other national or international calamity or crises,
(F) the failure, in and of itself, of the Company to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics before, on or after the date of this
Agreement, or changes or prospective changes in the market price or trading volume of the Company Common Stock or the credit rating of the Company (it being understood that the underlying facts giving rise or contributing to such failure or change
may be taken into account in determining whether there has been a Company Material Adverse Effect if such facts are not otherwise excluded under this definition), (G) the announcement, pendency and consummation of any of the
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Transactions, including (x) any Proceeding in respect of this Agreement or any of the Transactions, (y) the loss of or change in relationship with any customer, supplier, vendor or
other business partner or (z) the departure of any employee or officer of the Company or any of the Company Subsidiaries, in each case, to the extent arising from such announcement, pendency and consummation, (H) the compliance with the
covenants contained in this Agreement, (I) (1) any action taken by the Company or any of the Company Subsidiaries at Parents written request or with Parents written consent or (2) the failure to take any action by the
Company or any of the Company Subsidiaries if that action is prohibited by this Agreement to the extent that Parent fails to give its consent after receipt of a written request therefor and (J) the identity of, or any facts or circumstances
relating to, Parent, Merger Sub or their respective affiliates, including the loss of or change in relationship with any customer, supplier, vendor or other business partner or the departure of any employee or officer of the Company or any of the
Company Subsidiaries, in each case, to the extent arising therefrom, except, in the case of clause (A), (B), (C), (D) or (E), to the extent that the Company and the Company Subsidiaries, taken as a whole, are materially disproportionately
affected thereby as compared with other participants in the industries in which the Company and the Company Subsidiaries operate (in which case the incremental materially disproportionate impact or impacts may be taken into account in determining
whether there has been a Company Material Adverse Effect).
(viii) Direct Registration System means the
service that provides for electronic direct registration of securities in a record holders name on the Companys transfer books and allows shares to be transferred between record holders electronically.
(ix) DPA means Section 721 of the Defense Production Act of 1950, as amended, including the
implementing regulations thereof codified at 31 C.F.R. Part 800.
(x) Government Contract means any
Contract to which the Company or any Company Subsidiary is a party, or by which any of them are bound, the ultimate contracting party of which is a Governmental Entity (including any subcontract with a prime contractor or other subcontractor who is
party to such Contract).
(xi) knowledge means (1) in the case of the Company, the actual knowledge
following reasonable inquiry, as of the date of this Agreement, of the individuals listed on Section 8.03(x)(1) of the Company Disclosure Letter and (2) in the case of Parent and Merger Sub, the actual knowledge following reasonable
inquiry, as of the date of this Agreement, of the individuals listed on Section 8.03(x)(2) of the Company Disclosure Letter.
(xii) made available means (unless otherwise specified), with respect to a particular document, item or
other piece of information, inclusion and availability in the virtual data room hosted by Merrill Corporation in connection with the Transactions on or prior to 8:00 a.m. New York time on the business day prior to the execution of this
Agreement (or, if this Agreement is executed on any day other than a Sunday or a Monday, the second business day prior to the execution of this Agreement).
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(xiii) Parent Material Adverse Effect means any change,
effect, event or occurrence that prevents or materially delays (a) the consummation of the Merger and the other Transactions or (b) the ability of Parent to perform its obligations under this Agreement in any material respect.
(xiv) A Person means any individual, firm, corporation, partnership, company, limited liability company,
estate, trust, joint venture, association, organization, Governmental Entity or other entity of any kind or nature.
(xv) A
Representative of any Person means such Persons officers, directors, employees, investment bankers, attorneys, other advisors or other representatives.
(xvi) A subsidiary of any Person means another Person, an amount of the voting securities, other voting
ownership 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.
(xvii) Takeover Statute means (a) Subchapters D, E,
F, G, H, I and J of Chapter 25 of the PBCL, and (b) any similar takeover, control share or interested shareholder business combination statutes or regulations of any other state of the United States.
(xviii) Willful and Material Breach means an intentional and willful material breach, or an intentional and
willful material failure to perform, in each case that is the consequence of an act or omission by a party with the actual knowledge that the taking of such act or failure to take such act would cause a breach of this Agreement.
(xix) Written Consent End Date means the date that is the later of (i) 30 calendar days after the date
hereof and (ii) if the Company has delivered to Parent notice of a Superior Company Proposal pursuant to Section 4.03(b) on or prior to the date that is 30 calendar days after the date hereof, then the end of the Match Period.
Section 8.04 Interpretation. The headings contained in this Agreement and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. References to this Agreement shall include the Company Disclosure Letter. All Exhibits annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any terms used in the Company Disclosure Letter, any Exhibit or any certificate or other document made or delivered pursuant hereto but not otherwise defined
therein shall have the meaning as defined in
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this Agreement. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The word will shall be construed to have the same meaning as the word shall. The words include, includes and including shall be deemed to
be followed by the phrase without limitation. The word extent in the phrase to the extent shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply if. The
word or shall not be exclusive. The phrase date of this Agreement shall be deemed to refer to April 25, 2015. All references to dollars or $ shall refer to the lawful currency of the United
States. Unless the context requires otherwise (i) any definition of or reference to any Contract, instrument or other document or any Law herein shall be construed as referring to such Contract, instrument or other document or Law as from time
to time amended, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Persons successors and assigns, (iii) the words herein, hereof and
hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof and (iv) all references herein to Articles, Sections and Exhibits shall be construed to
refer to Articles and Sections of, and Exhibits to, this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be
drafted. The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the
parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
Section 8.05 Severability. If any term or other provision of this Agreement is determined by a court of competent jurisdiction to
be invalid, illegal or incapable of being enforced by any rule or 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 in an acceptable manner to the end that
Transactions are fulfilled to the extent possible.
Section 8.06 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. Delivery of an executed counterpart of a
signature page of this Agreement by electronic image scan transmission shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 8.07 Entire Agreement; Third-Party Beneficiaries; No Other Representations or Warranties. (a) This Agreement, the
Voting Agreement and the Confidentiality Agreement (i) constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties and their affiliates, or any of them, with respect to the
subject matter of this Agreement, the Voting Agreement and the Confidentiality Agreement and (ii) except for Section 5.06, are not intended to confer upon any Person other than the parties any rights or remedies. Notwithstanding
clause (ii) of the immediately preceding sentence, following the Effective Time the provisions of Article I shall be enforceable by holders of Certificates and holders of Book-Entry Shares and the provisions of Section 5.04
shall be enforceable by holders of awards under the Company Stock Plan.
64
(b) Except for the representations and warranties contained in Article II, each of Parent
and Merger Sub acknowledges that neither the Company nor any Person on behalf of the Company makes any other express or implied representation or warranty with respect to the Company or any of the Company Subsidiaries or with respect to any other
information made available to Parent or Merger Sub in connection with the Transactions. Neither the Company nor any other Person will have or be subject to any liability or indemnification obligation to Parent, Merger Sub or any other Person
resulting from the distribution to Parent or Merger Sub, or Parents or Merger Subs use of, any projections or forecasts made available to Parent or Merger Sub in certain data rooms or management presentations in expectation
of the Transactions, unless and then only to the extent that any such information is expressly included in a representation or warranty contained in Article III.
(c) Except for the representations and warranties contained in Article III, the Company acknowledges that none of Parent, Merger Sub or
any other Person on behalf of Parent or Merger Sub makes any other express or implied representation or warranty with respect to Parent or Merger Sub or with respect to any other information made available to the Company in connection with the
Transactions.
Section 8.08 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of
the Commonwealth of Pennsylvania, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
Section 8.09 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement 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; provided that Merger Sub may assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly owned subsidiary of Parent, but no such assignment shall relieve Merger Sub of any of its obligations under this Agreement; provided further that no such
assignment shall materially impede or delay the consummation of the Transactions. Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
Section 8.10 Specific Enforcement; Jurisdiction.
(a) The parties acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached, and that monetary damages,
even if available, would not be an adequate remedy therefor. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions, or any other appropriate form of equitable relief, to prevent breaches of this Agreement and to
enforce specifically the performance of the terms and provisions of this Agreement in any court referred to in Section 8.10(b), without proof of damages or otherwise (and each party hereby waives any requirement for the securing or
posting of any bond in connection with such remedy), this being in addition to any other remedy to which they are entitled at law or in equity. The right to
65
specific enforcement shall include the right of the Company to cause Parent and Merger Sub to cause the Merger and the other Transactions to be consummated on the terms and subject to the
conditions set forth in this Agreement. The parties further agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, nor to assert that a remedy of monetary damages would
provide an adequate remedy. Each of the parties acknowledges and agrees that the right of specific enforcement is an integral part of the Transactions and without such right, none of the parties would have entered into this Agreement. If, prior to
the Outside Date, any party brings any Proceeding, in each case in accordance with Section 8.10(b), to enforce specifically the performance of the terms and provisions hereof by any other party to consummate the Transactions, and at such
time all conditions to each partys obligations to Closing are satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing or are capable of being satisfied at the Closing or those conditions that
relate to the subject matter of the Proceeding for specific performance), the Outside Date shall automatically be extended by (i) the amount of time during which such Proceeding is pending, plus five business days or (ii) such other time
period established by the court presiding over such Proceeding, as the case may be.
(b) Each of the parties hereto hereby irrevocably
submits to the exclusive jurisdiction of the United States District Court for the Eastern District of Pennsylvania (and, to the extent the United States District Court for the Eastern District of Pennsylvania does not have subject matter
jurisdiction, the jurisdiction of the courts of the Commonwealth of Pennsylvania in Philadelphia County) (the Chosen Courts), for the purpose of any Proceeding arising out of or relating to this Agreement or the actions of Parent,
Merger Sub or the Company in the negotiation, administration, performance and enforcement thereof, and each of the parties hereby irrevocably agrees that all claims with respect to such Proceeding may be heard and determined exclusively in the
Chosen Courts. Each of the parties hereto (i) consents to submit itself to the personal jurisdiction of the Chosen Courts in the event any Proceeding arises out of this Agreement, the Merger or any of the other Transactions, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such Chosen Court, (iii) irrevocably consents to the service of process in any Proceeding arising out of or relating to this
Agreement, the Merger or any of the other Transactions, on behalf of itself or its property, by U.S. registered mail, (A) in the case of the Company, to the Companys address set forth in Section 8.02, and (B), in the case of
Parent or Merger Sub, to the Process Agent in accordance with Section 8.10(c) (provided that nothing in this Section 8.10(b) shall affect the right of any party to serve legal process in any other manner permitted by
Law) and (iv) agrees that it will not bring any Proceeding relating to this Agreement, the Merger or any of the other Transactions in any court other than the Chosen Courts. The parties hereto agree that a final trial court Judgment in any such
Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the Judgment or in any other manner provided by Law; provided that nothing in the foregoing shall restrict any partys rights to seek any post-Judgment
relief regarding, or any appeal from, such final trial court Judgment.
(c) Parent and Merger Sub hereby irrevocably designate AAAgent
Services, LLC (in such capacity, the Process Agent), with an office at 125 Locust Street, Harrisburg, Pennsylvania, 17101, as its designee, appointee and agent to receive, for and on its behalf service of process in any Proceeding
arising out of or relating to this Agreement, the Merger or any of the other Transactions, and such service shall be deemed
66
complete upon delivery thereof to the Process Agent; provided that in the case of any such service upon the process agent, the party effecting such service shall also deliver a copy
thereof to each other such party in the manner provided in Section 8.02 of this Agreement. Parent shall take all such action as may be necessary to continue said appointment in full force and effect or to appoint another agent so that
Parent will at all times have an agent for service of process for the above purposes in the Commonwealth of Pennsylvania.
(d) This
Section 8.10 shall not be construed as a waiver of the parties right to seek enforcement of a decision of the Chosen Courts before any other courts, whether in the United States or abroad.
Section 8.11 Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent permitted by applicable Law, any right
it may have to a trial by jury in respect of any Proceeding arising out of this Agreement, the Merger or any other Transaction. Each party hereto (a) certifies that no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such party would not, in the event of any Proceeding, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other
things, the mutual waiver and certifications in this Section 8.11.
Section 8.12 Remedies. Except as otherwise
provided in this Agreement, the rights and remedies provided in this Agreement shall be cumulative and not exclusive of any rights or remedies provided by applicable Law, and the exercise by a party of any one remedy will not preclude the exercise
of any other remedy.
Section 8.13 Cooperation. The parties agree to provide reasonable cooperation with each other and to
execute and deliver such further documents, certificates, agreements and instruments and to take such actions as may be reasonably requested by the other parties to evidence or effect the Transactions and to carry out the intent and purposes of this
Agreement.
[remainder of page intentionally blank; signature pages follow]
67
IN WITNESS WHEREOF, SA, NA, Merger Sub and the Company have duly executed this Agreement, all as
of the date first written above.
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CAP GEMINI S.A. |
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by |
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/s/ Lanny Cohen |
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Name: Lanny Cohen |
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Title: Authorized Signatory |
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CAPGEMINI NORTH AMERICA, INC. |
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by |
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/s/ Lanny Cohen |
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Name: Lanny Cohen |
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Title: Authorized Signatory |
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LAPORTE MERGER SUB, INC. |
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by |
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/s/ Thierry Delaponte |
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Name: Thierry Delaponte |
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Title: Authorized Signatory |
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IGATE CORPORATION |
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by |
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/s/ Jeffrey M. Friedel |
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Name: Jeffrey M. Friedel |
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Title: Senior Vice President, Legal |
Exhibit A
to
Agreement and Plan of
Merger
Index of Defined Terms
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Location of |
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Defined Term |
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Definition |
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Acceptable Confidentiality Agreement |
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4.03(e)(i) |
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Adverse Recommendation Change |
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4.03(b) |
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Agreement |
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Preamble |
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Articles of Merger |
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1.03 |
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Authorizations |
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2.15(a) |
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Bankruptcy and Equity Exception |
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2.04(a) |
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Book-Entry Shares |
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8.03(ii) |
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Burdensome Condition |
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5.03(c) |
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Certificates |
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1.08(b) |
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CFIUS |
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8.03(iv) |
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CFIUS Approval |
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8.03(v) |
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Chosen Courts |
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8.10(b) |
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Closing |
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1.02 |
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Closing Date |
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1.02 |
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Commonly Controlled Entity |
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2.11(j)(i) |
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Company |
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Preamble |
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Company Articles |
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2.01 |
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Company Balance Sheet |
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2.06(d) |
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Company Benefit Agreement |
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2.11(j)(ii) |
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Company Benefit Plan |
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2.11(j)(iii) |
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Company Board |
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2.04(b) |
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Company Board Recommendation |
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2.04(b) |
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Company Bylaws |
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2.01 |
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Company Common Stock |
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1.07 |
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Company Disclosure Letter |
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II |
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Company Employee |
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5.05(a) |
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Company Material Adverse Effect |
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8.03(vi), 2.05(b), 2.05(a) |
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Company Notes |
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5.17(a) |
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Company Notes Indenture |
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5.17(a) |
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Company Notes Offer |
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5.17(a) |
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Company Notes Payoff |
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5.17(b) |
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Company Preferred Stock |
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2.02(a) |
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Company Registered Intellectual Property |
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2.17(k)(i) |
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Company SEC Documents |
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2.06(a) |
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Company Shareholder Approval |
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2.04(c) |
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Company Shareholders Meeting |
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5.01(a) |
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Company Source Code |
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2.17(k)(ii) |
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Company Subsidiaries |
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2.01 |
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Company Takeover Proposal |
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5.07(b)(iii), 4.03(e)(ii) |
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Company Termination Fee |
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5.07(b) |
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Confidentiality Agreement |
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5.02 |
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Consent |
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2.05(b) |
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Continuation Period |
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5.05(a) |
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Contract |
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2.05(a) |
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Direct Registration System |
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8.03(vii) |
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DOJ |
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5.03(b) |
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DPA |
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8.03(viii) |
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Effective Time |
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1.03 |
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Environmental Law |
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2.16(b) |
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ERISA |
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2.11(j)(iii) |
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Exchange Act |
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2.05(b) |
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Existing D&O Policies |
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5.06(c) |
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Filed Company SEC Documents |
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II |
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Foreign Antitrust Laws |
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2.05(b) |
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FTC |
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5.03(b) |
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GAAP |
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2.06(c) |
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Government Contract |
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8.03(ix) |
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Governmental Entity |
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2.05(b) |
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HSR Act |
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2.05(b) |
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Indemnified Party |
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5.06(a) |
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Information Statement |
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5.01(a) |
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Intellectual Property |
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2.17(k)(iii) |
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Intervening Event |
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4.03(e)(iii) |
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Intervening Event Adverse Recommendation Change |
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4.03(b)(i) |
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Judgment |
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2.05(a) |
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Law |
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2.05(a) |
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Legal Restraints |
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6.01(b) |
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Liens |
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2.03(a) |
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Major Customer |
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2.23 |
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Major Vendor |
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2.23 |
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Match Period |
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4.03(b)(ii) |
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Measurement Date |
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2.02(a) |
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Merger |
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Recitals |
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Merger Consideration |
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1.07(c) |
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Merger Sub |
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Preamble |
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Nasdaq |
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2.05(b) |
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Offer Documents |
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5.17(a) |
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Outside Date |
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7.01(b)(i), 7.01(b)(i) |
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Parent |
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Preamble |
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Parent Expenses |
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5.07(d) |
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Parent Material Adverse Effect |
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8.03(xii) |
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Paying Agent |
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1.08(a) |
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Payment Fund |
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1.08(a) |
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PBCL |
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Recitals |
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Permitted Liens |
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2.12 |
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ii
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Person |
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8.03(xiii) |
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Proceeding |
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2.14 |
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Process Agent |
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8.10(c) |
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Proxy Statement |
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5.01(a) |
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Qualifying Company Takeover Proposal |
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4.03(a) |
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Remedial Action |
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5.03(c) |
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Representative |
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8.03(xiv) |
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Required Jurisdictions |
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6.01(e) |
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Revolving Facility |
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4.01(j) |
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Sarbanes-Oxley Act |
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2.06(f) |
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SEC |
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II |
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Securities Act |
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2.05(b) |
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Series A Preferred Stock |
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2.02(a) |
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Series B Preferred Stock |
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2.02(a) |
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Shareholder Approval Time |
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4.03(a) |
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Shareholder Consent |
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5.01(b) |
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Specified Contract |
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2.13(a)(xii) |
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Superior Company Proposal |
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4.03(e)(iv), 4.03(e)(iv) |
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Surviving Corporation |
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1.01 |
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Takeover Statute |
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8.03(xvi) |
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Tax Return |
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2.09(h)(i) |
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Taxes |
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2.09(h)(ii) |
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Transactions |
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Recitals |
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Transfer Taxes |
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5.09 |
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Voting Agreement |
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Recitals |
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Voting Company Debt |
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2.02(c) |
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Willful and Material Breach |
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8.03(xvii) |
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Written Consent End Date |
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8.03(xviii) |
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iii
Exhibit B
to
Agreement and Plan of
Merger
Articles of Incorporation of the Surviving Corporation
iv
COMMONWEALTH OF PENNSYLVANIA
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
IGATE CORPORATION
In compliance with the requirements of the applicable provisions of 15 Pa. C.S. Section 1306 relating to the Business
Corporation Law, Act of December 21, 1988 (P.L. 1444, No. 177), as amended, the undersigned, desiring to be incorporated as a business corporation, does hereby certify that:
1. Name. The name of the Corporation is iGATE Corporation
2. Registered Office. The name of the initial Commercial Registered Office Provider is AAAgent Services, LLC, and the County of Venue
is Dauphin.
3. Statute. The Corporation is incorporated under the provisions of the Business Corporation Law of 1988, as amended.
4. Capital Stock. The aggregate number of shares of Common Stock which the Corporation shall have authority to issue is One
Hundred (100) shares each with a par value of One Cent($.01).
5. Incorporator. The name and address of the Incorporator are
as follows:
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Name |
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Address |
Alan H. Leiblich |
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c/o Blank Rome LLP One Logan Square
Philadelphia, PA 19103 |
6. Term. The term for which the Corporation is to exist is perpetual.
7. Authority of Board of Directors. The Board of Directors shall have the full authority permitted by law to fix by resolution full,
limited, multiple or fractional, or no voting rights, and such designations, preferences, qualifications, privileges, limitations, restrictions, options, conversion rights and other special or relative rights of any class or any series of any class
that may be desired.
v
8. Cumulative Voting Rights. Shareholders of the Corporation shall not have the right to
cumulate their votes for the election of Directors of the Corporation.
9. Bylaws. The Incorporator shall adopt the Bylaws on
behalf of the Corporation. All conditions, qualifications, requirements, privileges and regulations regarding the Board of Directors and the shareholders, including voting rights, shall be fixed and governed by the Bylaws of the Corporation.
10. Personal Liability of Directors; Indemnification. A director of the Corporation shall not be personally liable for monetary damages
for any action taken, or any failure to take any action, unless the director has breached or failed to perform the duties of his or her office under Subchapter B of Chapter 17 of the BCL and such breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness; provided, however, that the foregoing provision shall not eliminate or limit (i) the responsibility or liability of a director pursuant to any criminal statute or (ii) the liability of a
director for the payment of taxes pursuant to local, state or federal law. Any repeal, modification or adoption of any provision inconsistent with Article 10 shall be prospective only, and neither the repeal or modification of this provision nor the
adoption of any provision inconsistent with this provision shall adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification or the adoption of such inconsistent
provision
11. Indemnification of Directors and Officers. The Corporation shall indemnify and hold harmless, to the full extent
permitted by law, each person who was or is made a party or is threatened to be made a party to or is otherwise involved in (as a witness or otherwise) any threatened, pending or completed action, suit, or proceeding, whether civil, criminal,
administrative or investigative and whether or not by or in the right of the Corporation or otherwise (hereinafter, a proceeding), by reason of the fact that he or she, or a person of whom he or she is the heir, executor or
administrator, is or was a director or executive officer of the Corporation or predecessor of the Corporation, as applicable, or is or was serving at the request of the Corporation or predecessor of the Corporation, as applicable, as a director,
officer or trustee of another corporation or of a partnership, joint venture, trust or other enterprise (including without limitation service with respect to employee benefit plans), or where the basis of such proceeding is any alleged action or
failure to take any action by such person while acting in an official capacity as a director or executive officer of the Corporation, or predecessor of the Corporation, as applicable, or in any other capacity on behalf of the Corporation while such
person is or was serving as a director or executive officer of the Corporation, or predecessor of the Corporation, as applicable, against all expenses, liability and loss, including but not limited to attorneys fees, judgments, fines, excise
taxes or penalties and amounts paid or to be paid in settlement (whether with or without court approval), actually and reasonably incurred or paid by such person in connection therewith.
(b) Notwithstanding the foregoing clause (a), except as provided in Article 12 below, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.
vi
(c) Subject to the limitation set forth in the foregoing clause
(b) concerning proceedings initiated by the person seeking indemnification, the right to indemnification conferred in this Article 11 shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding (or part thereof) or in enforcing his or her rights under this Article 11 in advance of the final disposition thereof promptly after receipt by the Corporation of a request therefor stating in reasonable detail the
expenses incurred; provided, however, that to the extent required by law, the payment of such expenses incurred by a director or executive officer of the Corporation in advance of the final disposition of a proceeding shall be made only upon receipt
of an undertaking, by or on behalf of such person, to repay all amounts so advanced if and to the extent it shall ultimately be determined by a court that he or she is not entitled to be indemnified by the Corporation under this Article 11 or
otherwise.
(d) The right to indemnification and advancement of expenses provided herein shall continue as to a person who
has ceased to be a director or executive officer of the Corporation or to serve in any of the other capacities described herein, and shall inure to the benefit of the heirs, executors and administrators of such person.
(e) Notwithstanding any other provision contained herein, Articles 9 through 12 hereof shall not be amended, repealed or
otherwise modified for a period of six (6) years from the date hereof in any manner that would adversely affect any right thereunder of individuals who, at or prior to the date hereof, were directors, officers, employees or agents (including as
a fiduciary with respect to an employee benefit plan) of any predecessor corporation of the Corporation or any of its subsidiaries or any of their respective predecessors.
12. Payment of Indemnification. If a claim for indemnification under Article 11 hereof is not paid in full by the Corporation within
thirty (30) days after a written claim therefor has been received by the Corporation, the claimant may, at any time thereafter, bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part
on the merits or otherwise in establishing his or her right to indemnification or to the advancement of expenses, the claimant shall be entitled to be paid also the expense of prosecuting such claim.
13. Non-Exclusivity of Rights. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance
of a final disposition conferred in Article 11 and the right to payment of expenses conferred in Article 12 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses hereunder may be entitled
under any bylaw, agreement, vote of shareholders, vote of directors or otherwise, both as to actions in his or her official capacity and as to actions in any other capacity while holding that office, the Corporation having the express authority to
enter into such agreements or arrangements as the Board of Directors deems appropriate for the indemnification of and advancement of expenses to present or future directors and officers as well as employees, representatives or agents of the
Corporation in connection with their status with or services to or on behalf of the Corporation or any other corporation, partnership, joint venture, trust or other enterprise, including any employee benefit plan, for which such person is serving at
the request of the Corporation.
vii
IN TESTIMONY WHEREOF, the Incorporator has signed these Articles of Incorporation this
day of , 20 .
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Alan H. Lieblich, Incorporator |
viii
Exhibit C
to
Agreement and Plan of Merger
Written Consent
IGATE Corporation
Written Consent of Shareholders
In Lieu of Meeting
The undersigned (the
Shareholders), being the holders of the shares of capital stock of IGate Corporation, a Pennsylvania corporation (the Company), set forth opposite the name of each Shareholder on Schedule I hereto as of
April 24, 2015 (being the record date established by the Board of Directors of the Company (the Company Board) for approval of the matters described herein) hereby irrevocably consent in writing, pursuant to
Section 2524, Section 1924 (including any successor to such section) and Section 1766(b) of the Pennsylvania Business Corporation Law (the PBCL) and as authorized by Section 7.4 of the Third Amended and
Restated Articles of Incorporation of the Company, to the actions and adoption of the resolutions set out below by written consent in lieu of a meeting of shareholders of the Company.
RECITALS
WHEREAS, the
Company has entered into an Agreement and Plan of Merger (the Merger Agreement), dated as of April 25, 2015, 2015, by and among the Company, Cap Gemini S.A., a French societe anonyme (SA), Capgemini North America,
Inc., a Delaware corporation (NA and, together with SA, Parent), Laporte Merger Sub, Inc., a Pennsylvania corporation (Merger Sub) and a wholly owned subsidiary of NA, a copy of which has been provided to
the Shareholders and is attached hereto as Exhibit A (capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Merger Agreement);
WHEREAS, pursuant to the Merger Agreement, Merger Sub will be merged with and into the Company (the Merger), with the
Company continuing as the surviving corporation of the Merger, upon the terms and subject to the conditions set forth in the Merger Agreement;
WHEREAS, pursuant to the Merger Agreement, at the effective time of the Merger (the Effective Time), each share of common
stock, par value $0.01 per share of the Company (such shares, collectively, the Shares) issued and outstanding immediately prior to the Effective Time (other than Shares that are owned by the Company as treasury stock, or owned by
any wholly owned subsidiary of the Company, Parent or Merger Sub) will be converted into the right to receive $48.00 in cash, without interest (the Merger Consideration);
WHEREAS, the undersigned have reviewed the Merger Agreement and such other information as they believed necessary to make an informed decision
concerning their vote on the adoption of the Merger Agreement, and the undersigned have had the opportunity to consult with their own legal, tax and/or financial advisor(s) regarding the consequences to them of the Merger, the Merger Agreement and
the execution of this written consent;
WHEREAS, the Company Board has received the opinion of Merrill Lynch, Pierce, Fenner &
Smith Incorporated, dated as of the date of the Merger Agreement, to the effect that, based upon and subject to the factors and assumptions set forth therein, the consideration to be received by the holders of the Shares in the Merger is fair to
such holders from a financial point of view;
WHEREAS, the Company Board has, at a meeting duly called and held at which all directors of the
Company were present, including the disinterested directors in accordance with Section 2538 of the PBCL, if applicable, duly and unanimously adopted resolutions (i) approving and declaring advisable this Agreement, the Merger and the other
Transactions, (ii) determining that the Merger and the other Transactions are in the best interests of the Company, (iii) proposing the Merger in accordance with Section 1922 of the PBCL by adopting a resolution approving this
Agreement as a plan of merger for the purposes of Section 1922 of the PBCL and (iv) recommending that the Companys shareholders adopt this Agreement if the Company Shareholder Approval is required by applicable Law;
WHEREAS, the affirmative vote or written consent of shareholders necessary to authorize the Merger is (a) the affirmative vote in favor
of the adoption of the Merger Agreement by a majority of the votes cast by all shareholders of the Company entitled to vote thereon pursuant to Section 1924(a) (including any successor to such section) of the PBCL or (b) the written
consent of shareholders who are entitled to cast the minimum number of votes that would be necessary to authorize the Merger at a meeting in which all shareholders entitled to vote thereon were present and voting pursuant to Section 2524 and
Section 1776(b), respectively, of the PBCL (the Company Shareholder Approval);
WHEREAS, as of the date of this
written consent, the Shareholders are the record and/or beneficial owners of 43,990,645 Shares, constituting approximately 54% of the aggregate voting power of all the outstanding Shares, and the execution and delivery of this written consent will
constitute the Company Shareholder Approval; and
WHEREAS, pursuant to the Merger Agreement and in accordance with Section 1924(c)
(including any successor to such section) of the PBCL, the Company Board has the power to terminate the Merger Agreement under certain circumstances after the Company Shareholder Approval is obtained by this written consent, upon the terms and
subject to the conditions set forth in the Merger Agreement.
RESOLUTIONS
NOW, THEREFORE, BE IT RESOLVED as follows:
RESOLVED, that the Merger Agreement and the transactions contemplated thereby, including the Merger, are hereby authorized, accepted and
adopted in all respects, and that the Shareholders hereby vote all of the shares of capital stock of the Company held by such Shareholders and entitled to vote thereon in favor of the adoption of the Merger Agreement and the transactions
contemplated thereby, including the Merger; provided, however, that this written consent shall be of no further force or effect following any termination of the Merger Agreement in accordance with its terms (including, without
limitation, pursuant to Section 7.04(b) thereof).
FURTHER RESOLVED, that this written consent is coupled with an interest and is
irrevocable.
FURTHER RESOLVED, that the Shareholders hereby waive any and all notice requirements with respect
to the time and place of meeting, and consents to the transaction of all business represented by this written consent.
FURTHER RESOLVED,
that this written consent may be executed in two or more counterparts, each of which when so executed shall be an original, and all such counterparts shall together constitute one and the same instrument, and signatures to this written consent
transmitted by facsimile or PDF copy shall be deemed original signatures for all purposes, and such execution and transmission shall be considered valid, binding and effective for all purposes.
This written consent shall be filed with the minutes of the meetings of the shareholders of the Company and shall be treated for all purposes
as action taken at a meeting.
[signature pages follow]
IN WITNESS WHEREOF, the undersigned have executed this written consent as of the date first
written above.
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By: |
Title: |
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By: |
Title: |
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By: |
Title: |
SCHEDULE I
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Shareholders |
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Shares |
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Viscaria Limited |
|
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23,384,095 |
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Ashok Trivedi |
|
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8,002,832 |
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Sunil Wadhwani |
|
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7,997,625 |
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Trivedi Family Qualified Subchapter S Trust |
|
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1,356,343 |
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Wadhwani Partners No. 1 L.P. |
|
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1,027,500 |
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Sunil and Nita Wadhwani Family Foundation |
|
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682,126 |
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Ashok and Anjana Trivedi Charitable Remainder Unitrust |
|
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600,000 |
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Sunil and Nita Wadhwani Charitable Remainder Unitrust |
|
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480,000 |
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The Ashok and Anjana Trivedi Family Foundation |
|
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400,000 |
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Wadhwani Partners No. 2 L.P. |
|
|
60,124 |
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ANNEX B
VOTING AGREEMENT
VOTING
AGREEMENT (this Agreement), dated as of April 25, 2015, is by and among Cap Gemini S.A., a French société anonyme (SA), Capgemini North America, Inc., a Delaware corporation
(NA and, together with SA, Parent), Laporte Merger Sub, Inc., a Pennsylvania corporation (Merger Sub) and a wholly owned subsidiary of NA and the persons listed on Schedule I hereto
(each a Shareholder and collectively, the Shareholders)
WHEREAS, concurrently with the execution of this Agreement,
Parent, Merger Sub, and IGate Corporation, a Pennsylvania corporation (the Company), will enter into an Agreement and Plan of Merger, dated as of the date hereof, in the form attached hereto as Exhibit A and as may be
amended from time to time in accordance with its terms (the Merger Agreement), which provides for the merger of Merger Sub with and into the Company (the Merger) upon the terms and subject to the conditions set
forth in the Merger Agreement (capitalized terms used herein without definition shall have the respective meanings ascribed to such terms in the Merger Agreement);
WHEREAS, each Shareholder and its respective affiliates are, as of the date hereof, the record and/or beneficial owner (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act), which meaning will apply for all purposes of this Agreement) of the number of shares of Common Stock, par value $0.01 per share (the Company
Common Stock), of the Company set forth opposite the name of such Shareholder on Schedule I hereto (together with any shares of Company Common Stock which such Shareholder may acquire at any time in the future during the term of
this Agreement, the Shares); and
WHEREAS, as a condition to the willingness of Parent and Merger Sub to enter into the
Merger Agreement and as an inducement and in consideration therefor, each Shareholder, severally and on its own account with respect to such Shareholders Shares and not jointly with the other Shareholders, has agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein, and intending to
be legally bound hereby, the parties hereto agree as follows:
SECTION 1. Representations and Warranties of Shareholder. Each
Shareholder hereby, severally and on its own account with respect to such Shareholders Shares and not jointly with the other Shareholders, represents and warrants , to Parent and Merger Sub as follows:
(a) Such Shareholder (i) is the record and/or beneficial owner of the shares of Company Common Stock set forth opposite such
Shareholders name on Schedule I to this Agreement and (ii) except as set forth in Schedule I to this Agreement, such Shareholder does not hold or have any beneficial ownership interest in any other shares of Company Common
Stock.
(b) Such Shareholder has the legal capacity or requisite entity power and authority, as the case may be, to execute and deliver
this Agreement and to consummate the
1
transactions contemplated hereby. If such Shareholder is an entity, it is duly organized, validly existing and in good standing (to the extent such concept is applicable) under the laws of the
jurisdiction of its formation, and has taken all necessary entity action to authorize the execution, delivery and performance of this Agreement.
(c) This Agreement has been duly executed and delivered by such Shareholder and, assuming this Agreement constitutes a legally valid and
binding obligation of Parent and Merger Sub, this Agreement constitutes a legal, valid and binding obligation of such Shareholder, enforceable against such Shareholder in accordance with its terms (except insofar as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other Laws of general applicability relating to or affecting creditors rights, or by principles governing the availability of equitable remedies, whether considered in a
Proceeding at law or in equity (the Bankruptcy and Equity Exception)).
(d) Neither the execution and delivery of this
Agreement nor the consummation by such Shareholder of the transactions contemplated hereby will result in a violation of, or a default under, or conflict with, any contract, trust, commitment, agreement, understanding, arrangement or restriction of
any kind to which such Shareholder is a party or by which such Shareholder or such Shareholders assets are bound, except for any such violation, default or conflict which would not, individually or in the aggregate, prevent or materially delay
the performance by such Shareholder of any of its obligations under this Agreement. Except as contemplated by the Merger Agreement, the consummation by such Shareholder of the transactions contemplated hereby will not (i) violate any provision
of any law, order, settlement, judgment, injunction or decree applicable to such Shareholder, (ii) if such Shareholder is an entity, conflict with or violate such Shareholders organizational documents or (iii) require any consent,
approval, or notice under any law applicable to such Shareholder other than (x) as required under the Exchange Act and the rules and regulations promulgated thereunder and/or (y) where the failure to obtain such consents or approvals or to
make such notifications, would not, individually or in the aggregate, prevent or materially delay the performance by such Shareholder of any of its obligations under this Agreement.
(e) The Shares and the certificates, if any, representing the Shares owned beneficially and/or of record by such Shareholder are now, and at
all times during the term hereof will be, held by such Shareholder or by a nominee or custodian for the benefit of such Shareholder or its clients, or by its clients (or the clients of one of its affiliates), free and clear of all encumbrances,
claims, proxies, voting trusts or agreements, options, rights (other than community property interests, if any, applicable to an individual Shareholder), understandings or arrangements or any other liens or restrictions whatsoever on title,
transfer, or exercise of any rights of a shareholder in respect of such Shares (collectively, Liens), except (i) or any applicable restrictions on transfer under applicable securities laws and (ii) for encumbrances
created by this Agreement (Permitted Liens).
(f) Such Shareholder has full voting power, full power of disposition,
full power to issue instructions with respect to the matters set forth herein and full power to agree to all of the matters set forth in this Agreement, in each case, with respect to all of such Shareholders Shares and except for Permitted
Liens.
2
(g) As of the date hereof, there is no action pending or, to the knowledge of such Shareholder ,
threatened against such Shareholder at law or equity before or by any Governmental Entity that would reasonably be expected to impair or materially delay the performance by such Shareholder of such Shareholders obligations under this
Agreement.
(h) Such Shareholder has received and reviewed a substantially final draft of the Merger Agreement. Such Shareholder
understands and acknowledges that Parent and Merger Sub are entering into the Merger Agreement in reliance upon such Shareholders execution, delivery and performance of this Agreement.
(i) No broker, investment bank, financial advisor or other Person is entitled to any brokers, finders, financial advisers or
similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of such Shareholder in its capacity as such.
SECTION 2. Representations and Warranties of Parent and Merger Sub. Each of Parent and Merger Sub hereby, jointly and severally,
represents and warrants to the Shareholders as follows:
(a) Each of Parent and Merger Sub is an entity duly formed, validly existing and
in good standing under the laws of its jurisdiction of formation, and each of Parent and Merger Sub has all requisite entity power and authority to execute and deliver this Agreement and the Merger Agreement and to consummate the transactions
contemplated hereby and thereby, and has taken all necessary entity action to authorize the execution, delivery and performance of this Agreement and the Merger Agreement.
(b) This Agreement and the Merger Agreement have been duly authorized, executed and delivered by each of Parent and Merger Sub, and, assuming
such agreements constitute legally valid and binding obligations of the other parties thereto, this Agreement and the Merger Agreement constitute the legally valid and binding obligations of each of Parent and Merger Sub, enforceable against each of
them in accordance with their terms, except insofar as such enforceability may be limited by the Bankruptcy and Equity Exception, and subject to specific performance, injunctive relief and other equitable remedies.
SECTION 3. Transfer of the Shares; Other Legal Proceedings.
(a) Prior to the termination of this Agreement, except as otherwise expressly provided herein (including pursuant to this
Section 3 or Section 4) or in the Merger Agreement, each Shareholder agrees that it shall not: (i) transfer, assign, sell, gift-over, tender, hedge, pledge or otherwise dispose (whether by sale, liquidation, dissolution,
dividend or distribution) of, enter into any derivative arrangement (including any short sale) with respect to, create or suffer to exist any Liens (other than Permitted Liens) on or consent to any of the foregoing (Transfer), any
or all of such Shareholders Shares, or any right or interest therein; (ii) enter into any contract, swap, option or other agreement, arrangement or understanding with respect to any Transfer; (iii) grant any proxy, power-of-attorney
or other authorization or consent with respect to any of such Shareholders Shares with respect to any matter that is, or that is reasonably likely to be exercised in a manner, inconsistent with the provisions hereof; (iv) deposit any of
such
3
Shareholders Shares into a voting trust, or enter into a voting agreement or arrangement with respect to any of such Shares; (v) knowingly, directly or indirectly, take or cause the
taking of any other action that would restrict, limit or interfere with the performance of such Shareholders obligations hereunder or the transactions contemplated hereby, excluding any bankruptcy filing or (vi) commit to do any of the
foregoing. Any action taken in violation of the foregoing sentence shall be null and void ab initio if any involuntary Transfer of any of such Shareholders Shares shall occur (including, but not limited to, a sale by such Shareholders
trustee in any bankruptcy, or a sale to a purchaser at any creditors or court sale), the transferee (which term, as used herein, shall include any and all transferees and subsequent transferees of the initial transferee) shall take and hold
such Shares subject to all of the restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect until valid termination of this Agreement. Upon the request of Parent and at Parents expense (including
any reasonable legal fees or expenses incurred by Shareholder), each Shareholder shall surrender or cause to be surrendered to the Company any share certificates representing such Shareholders Shares for imposition of a legend referencing
these restrictions on transfer and the fact that such Shareholders Shares are subject to a voting agreement in accordance with Section 1529(f) of the PBCL.
(b) Each Shareholder agrees that it shall not become a member of a group (as that term is used in Section 13(d) of the
Exchange Act) with respect to any shares of Company Common Stock or Company Restricted Shares or any other voting securities of the Company for the purpose of opposing or competing with or knowingly taking any actions inconsistent with the
transactions contemplated by the Merger Agreement, provided, however, this Section 3(b) shall not apply if this Agreement shall have been terminated in accordance with Section 7.
(c) Notwithstanding the foregoing, each Shareholder may make (i) Transfers of Shares (A) to any Affiliate, (B) by will or by
operation of law or other Transfers to immediate family members, trusts for the benefit of such Shareholder or any immediate family member of Shareholder or other Transfers for estate planning purposes, or upon the death of such Shareholder, or
(C) in connection with bona fide gifts to charitable organizations or other gift Transfers, in which each case described in clauses (A), (B) and/or (C) above, any such transferee shall agree in writing to be bound by this Agreement
prior to the consummation of any such Transfer, and (ii) with respect to such Shareholders Company Restricted Shares (A) that vest on or prior to the Outside Date, Transfers of Shares to the Company in order to satisfy required
withholding taxes applicable upon the vesting of such Company Restricted Shares or (B) that are forfeited on or prior to the Outside Date, Transfers of Shares to the Company in connection with such forfeiture, and (iii) other Transfers of
Shares as Parent may otherwise agree in writing in its sole discretion.
(d) EACH SHAREHOLDER HEREBY IRREVOCABLY GRANTS TO AND APPOINTS
PARENT AND ANY DESIGNEE OF PARENT, AND EACH OF THEM INDIVIDUALLY, SUCH SHAREHOLDERS PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION AND RESTITUTION), FOR AND IN THE NAME, PLACE AND STEAD OF SUCH SHAREHOLDER, TO REPRESENT, VOTE AND
OTHERWISE ACT (BY VOTING AT ANY MEETING OF SHAREHOLDERS OF THE COMPANY, BY WRITTEN CONSENT IN LIEU THEREOF OR OTHERWISE) WITH
4
RESPECT TO THE VOTING SHARES OWNED OR HELD BY SUCH SHAREHOLDER SOLELY WITH RESPECT TO THE MATTERS REFERRED TO IN SECTION 4(a) HEREOF DURING THE VOTING PERIOD, TO THE SAME EXTENT AND WITH THE SAME
EFFECT AS SUCH SHAREHOLDER MIGHT OR COULD DO UNDER APPLICABLE LAW, RULES AND REGULATIONS. THE PROXY GRANTED PURSUANT TO THIS SECTION 3(d) BY EACH SHAREHOLDER IS COUPLED WITH AN INTEREST SUFFICIENT IN LAW TO SUPPORT AN IRREVOCABLE PROXY AND SHALL BE
IRREVOCABLE UNTIL THE EARLIER TO OCCUR OF (I) THE EFFECTIVE TIME AND (II) SUCH DATE AND TIME AS THIS AGREEMENT SHALL BE VALIDLY TERMINATED PURSUANT TO SECTION 7 HEREOF. EACH SHAREHOLDER WILL TAKE SUCH FURTHER ACTION AND WILL EXECUTE SUCH OTHER
INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY. EACH SHAREHOLDER HEREBY REVOKES ANY AND ALL PREVIOUS PROXIES OR POWERS OF ATTORNEY GRANTED WITH RESPECT TO ANY OF THE VOTING SHARES THAT MAY HAVE HERETOFORE BEEN APPOINTED OR
GRANTED WITH RESPECT TO THE MATTERS REFERRED TO IN SECTION 4(a) HEREOF, AND NO SUBSEQUENT PROXY (WHETHER REVOCABLE OR IRREVOCABLE) OR POWER OF ATTORNEY SHALL BE GIVEN BY SUCH SHAREHOLDER. PARENT MAY TERMINATE THIS PROXY WITH RESPECT TO ANY
SHAREHOLDER AT ANY TIME AT ITS SOLE ELECTION BY WRITTEN NOTICE PROVIDED TO SUCH SHAREHOLDER. THE PROXY GRANTED BY EACH SHAREHOLDER SHALL BE AUTOMATICALLY REVOKED UPON TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS. EACH SHAREHOLDER
AGREES THAT IMMEDIATELY AFTER EXECUTION OF THIS AGREEMENT, AN EXECUTED COPY OF THIS AGREEMENT SHALL BE FILED WITH THE SECRETARY OF THE COMPANY.
SECTION 4. Voting of Shares.
(a) Until the termination of this Agreement in accordance with its terms, at every meeting of shareholders of the Company, however called, and
at every adjournment or postponement thereof, or in connection with any written consent of the shareholders of the Company, each Shareholder shall, or shall cause the holder of record of such Shareholders Shares on any applicable record date
to, (i) appear at each such meeting or otherwise cause all of such Shareholders Shares entitled to vote to be counted as present thereat for purposes of calculating a quorum and (ii) vote or cause to be voted all of such
Shareholders Shares entitled to vote at each such meeting or give written consent or cause written consent to be given for all such Shares entitled to act by written consent (A) in favor of the adoption of the Merger Agreement and/or
(B) against (x) any action or agreement that is in opposition to the Merger or that would reasonably be expected to impede, interfere with or prevent the Merger, including, but not limited to, any reorganization involving the Company or
any Company Subsidiary, (y) any Company Takeover Proposal and any action in furtherance of any Company Takeover Proposal and (z) any action, proposal, transaction or agreement that would result in a breach of any covenant, representation
or warranty or any other obligation or agreement of Shareholder under this Agreement.
5
(b) The obligations set forth in this Section 4 shall apply to each Shareholder
unless and until the earliest to occur of the termination of this Agreement or as otherwise provided pursuant to Section 7.
(c) Each Shareholder hereby (i) waives and agrees not to exercise any rights of appraisal or rights to dissent from the Merger that
Shareholder may have, (ii) agrees not to, and will not permit any of its affiliates to, solicit proxies or become a participant in a solicitation of proxies for any Company Takeover Proposal, (iii) agrees not to assist any Person, entity
or group in taking or planning action that would compete with, restrain or otherwise serve to interfere with or inhibit Parent in connection with the Merger and (iv) agrees not to solicit, initiate, knowingly encourage or knowingly facilitate a
Shareholders vote with respect to any Company Takeover Proposal. In addition, each Shareholder hereby agrees not to commence or join in, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any
claim, derivative or otherwise, against Parent, Merger Sub, the Company or any of their respective representatives or successors (x) challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement,
(y) alleging a breach of any fiduciary duty of any Person in connection with the negotiation and entry into the Merger Agreement or (z) based on their status as shareholders of the Company relating to the negotiation, execution or delivery
of the Written Consent or the Merger Agreement or the consummation of (but not the failure to consummate) the Merger and the other transactions contemplated by the Merger Agreement, and to take all necessary steps to affirmatively waive and release
any right or claim of recovery or recovery in any settlement or judgment related to any such action reasonably requested by Parent in writing. For the avoidance of doubt, none of the Shareholders waive, release or discharge any claims relating to
the right to receive the Merger Consideration under the Merger Agreement.
(d) Subject to the proxy granted under Section 3(d) above,
each Shareholder shall retain at all times the right to vote such Shareholders Shares in such Shareholders sole discretion, and without any other limitation, on any matters other than those set forth in Section 4(a) that are at any
time or from time to time presented for consideration to the Companys shareholders generally.
(e) Notwithstanding anything in this
Agreement, in the event that a vote of the shareholders of the Company is required to effect an amendment to the Merger Agreement that (i) reduces the amount, changes the form, or imposes any material restrictions or additional conditions on
the receipt, of consideration payable in respect of each share of Company Common Stock in the Merger or (ii) is otherwise adverse to the holders of shares of Company Common Stock in such capacity, the provisions of this Agreement will not apply
with respect to the Shareholders vote of such Shareholders Shares with respect to such vote to amend the Merger Agreement.
SECTION 5. Directors and Officers. This Agreement shall apply to each Shareholder solely in such Shareholders capacity as
the beneficial owner and/or holder of record of Company Common Stock, Company Restricted Shares and/or other equity interests in the Company and not in such Shareholders capacity as a director, officer or employee of the Company or any Company
Subsidiary or in such Shareholders capacity as a trustee or fiduciary of any employee benefit plan or trust. Notwithstanding anything herein to the contrary, nothing
6
herein shall in any way restrict a director or officer of the Company in the taking of any actions (or failure to act) in his or her capacity as a director or officer of the Company, or in the
exercise of his or her fiduciary duties in his or her capacity as a director or officer of the Company, or prevent or be construed to create any obligation on the part of any director or officer of the Company from taking any action in his or her
capacity as such director or officer, and no action taken solely in any such capacity as an officer or director of the Company shall be deemed to constitute a breach of this Agreement.
SECTION 6. Further Assurances. Each party shall execute and deliver any additional documents and take such further actions as may
be reasonably necessary or desirable to carry out all of the provisions hereof, including all of the parties obligations under this Agreement.
SECTION 7. Termination.
(a) This Agreement, and all rights and obligations of the parties hereunder, shall terminate immediately and automatically with respect to a
Shareholder upon the earliest to occur of the following:
(i) the termination of the Merger Agreement in accordance with
its terms;
(ii) the Effective Time;
(iii) any change to the terms of the Transactions without the prior written consent of such Shareholder; or
(iv) the mutual written consent of Parent and such Shareholder.
(b) Upon termination of this Agreement, all obligations of the parties under this Agreement will terminate and any proxies granted hereunder
shall be deemed automatically revoked, without any liability or other obligation on the part of any party hereto to any Person in respect hereof or the transactions contemplated hereby, and no party shall have any claim against another (and no
person shall have any rights against such party), whether under contract, tort or otherwise, with respect to the subject matter hereof; provided, however, that the termination of this Agreement shall not relieve any party from
liability arising from any Willful and Material Breach (as applied to this Agreement) prior to such termination.
(c)
Section 10 shall survive the termination of this Agreement.
SECTION 8. Public Announcements. Each Shareholder
agrees that any public announcements by such Shareholder relating to the transactions contemplated by this Agreement and the Merger Agreement will solely be made in such Shareholders capacity as a director or officer of the Company, and any
such public announcement shall be governed by the terms and conditions of the Merger Agreement, subject to such Shareholders ability to comply with required disclosures relating to this Agreement under applicable securities laws. Each
Shareholder (i) consents to and authorizes the publication and disclosure by Parent and its affiliates of Shareholders identity and holding of the Shares and the nature of Shareholders commitments and obligations under this
Agreement in any announcement or disclosure required
7
by Law in connection with the Transactions or the transactions contemplated by this Agreement, and (ii) agrees promptly to give to Parent any information it may reasonably require for the
preparation of any such disclosure.
SECTION 9. Adjustments. In the event (a) of any stock split, stock dividend, merger,
reorganization, recapitalization, reclassification, combination, exchange of shares or the like of the capital stock of the Company on, of or affecting the Shares or (b) that a Shareholder shall become the beneficial and/or record owner of any
additional shares of Company Common Stock after the date of this Agreement, then the terms of this Agreement shall apply to the shares of Company Common Stock owned beneficially and/or of record by such Shareholder immediately following the
effectiveness of the events described in clause (a) or such Shareholders becoming the beneficial owner thereof as described in clause (b), as though, in either case, they were Shares hereunder. In the event that a Shareholder shall become
the beneficial owner of any other securities entitling the holder thereof to vote or give consent with respect to the matters set forth in Section 4, then the terms of Section 4 shall apply to such other securities as though
they were Shares hereunder.
SECTION 10. Miscellaneous.
(a) Notices. All notices, requests, claims, demands or other communications required or permitted under, or otherwise in connection
with, this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, sent via electronic mail (receipt confirmed) or sent by a nationally recognized 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 the Shareholder, to
the address set forth for such party on Schedule I
with a copy to (which shall not constitute notice):
Kirkland & Ellis LLP
601 Lexington Avenue
New York,
NY 10022
|
Attention: |
Sarkis Jebejian, P.C. |
|
Email: |
sarkis.jebejian@kirkland.com |
|
|
david.feirstein@kirkland.com |
8
and
Pepper Hamilton LLP
Suite
5000, 500 Grant Street
Pittsburgh, PA 15219
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Email: |
barnesj@pepperlaw.com |
If to Parent or Merger Sub, to:
Cap Gemini S.A.
Place de
lEtoile
11, rue de Tilsitt
75017 Paris, France
|
Attention: |
Isabelle Roux-Chenu, Group General Counsel |
|
|
Pierre-Yves Cros, Chief Development Officer |
|
Email: |
isabelle.roux-chenu@capgemini.com |
|
|
pierre-yves.cros@capgemini.com |
and
Capgemini North America, Inc.
623 Fifth Avenue, 33rd Floor
New York, NY 10022
|
Attention: |
Michael Chayet, General Counsel North America |
|
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Robert Cowell, Director of Tax - U.S. |
|
Email: |
michael.chayet@capgemini.com |
|
|
robert.cowell@capgemini.com |
with a copy to (which shall not constitute notice):
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York,
New York 10036
|
Attention: |
Howard L. Ellin |
|
Email: |
Howard.Ellin@skadden.com |
|
|
Michael.Chitwood@skadden.com |
and
Skadden, Arps, Slate, Meagher & Flom LLP
68, rue du Faubourg
Saint-Honoré 75008
|
Attention: |
Armand W. Grumberg |
|
Email: |
armand.grumberg@skadden.com |
9
(b) Headings. The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
(c) Counterparts. This Agreement may be executed by
PDF and in counterparts, and by the different parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
(d) Entire Agreement, No Third-Party Beneficiaries. This Agreement, together with the other documents and certificates delivered
pursuant hereto, (i) constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement and (ii) is not intended to
confer, nor shall it confer, upon any Person other than the parties hereto any rights or remedies or benefits of any nature whatsoever, other than the Company which is an express third-party beneficiary of Section 4(c) of this Agreement.
(e) Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of
Pennsylvania, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
(f)
Specific Enforcement; Jurisdiction. (i) The parties acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were
otherwise breached, and that monetary damages, even if available, would not be an adequate remedy therefor. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions, or any other appropriate form of equitable
relief, to prevent breaches of this Agreement and to enforce specifically the performance of the terms and provisions of this Agreement in any court referred to in Section 10(f)(ii), without proof of damages or otherwise (and each party hereby
waives any requirement for the securing or posting of any bond in connection with such remedy), this being in addition to any other remedy to which they are entitled at law or in equity. The parties further agree not to assert that a remedy of
specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy. Each of the parties acknowledges and agrees that the right of specific
enforcement is an integral part of the transactions contemplated by this Agreement and without such right, none of the parties would have entered into this Agreement.
(ii) Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Eastern
District of Pennsylvania (and, to the extent the United States District Court for the Eastern District of Pennsylvania does not have subject matter jurisdiction, the jurisdiction of the courts of the Commonwealth of Pennsylvania in Philadelphia
County) (the Chosen Courts), for the purpose of any Proceeding arising out of or relating to this Agreement or the actions of the parties hereto in the negotiation, administration,
10
performance and enforcement thereof, and each of the parties hereby irrevocably agrees that all claims with respect to such Proceeding may be heard and determined exclusively in the Chosen
Courts. Each of the parties hereto (1) consents to submit itself to the personal jurisdiction of the Chosen Courts in the event any Proceeding arises out of this Agreement, (2) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such Chosen Court, (3) irrevocably consents to the service of process in any Proceeding arising out of or relating to this Agreement at the address set forth in
Section 10(a) and (4) agrees that it will not bring any Proceeding relating to this Agreement in any court other than the Chosen Courts. The parties hereto agree that a final trial court judgment in any such Proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law; provided that nothing in the foregoing shall restrict any partys rights to seek any post-judgment relief regarding, or any appeal from,
such final trial court judgment.
(g) Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent permitted by
applicable Law, any right it may have to a trial by jury in respect of any Proceeding arising out of this Agreement.
(h) Assignment;
Binding Nature. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties hereto without the prior written consent
of the other parties, except that Parent and Merger Sub may assign, in their sole discretion and without the consent of any other party, any or all of their rights, interests and obligations hereunder to each other or to one or more direct or
indirect wholly-owned subsidiaries of Parent, and any such assignee may thereafter assign, in its sole discretion and without the consent of any other party, any or all of its rights, interests and obligations hereunder to one or more additional
direct or indirect wholly-owned subsidiaries of Parent, in each case to which it assigns its obligations under the Merger Agreement; provided, that no such assignment shall relieve the assigning party of any of their respective obligations under
this Agreement. Any assignment in violation of the preceding sentence shall be void. Subject to the preceding two sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective
successors and assigns. Each party hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such party would not, in the event of any Proceeding, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waiver and certifications in this Section 10(h).
(i) Severability of Provisions. 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 a mutually acceptable manner so that the
transactions contemplated by this Agreement are fulfilled to the greatest extent possible.
11
(j) Shareholder Obligation Several and Not Joint. The obligations of each Shareholder
hereunder shall be several and not joint, and no Shareholder shall be liable for any breach of the terms of this Agreement by any other Shareholder.
(k) Amendment. No amendment or modification of this Agreement shall be effective unless it shall be in writing and signed by each of
the parties hereto, and no waiver or consent hereunder shall be effective against any party unless it shall be in writing and signed by such party.
(l) Expenses. All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or
expense.
(m) No Ownership Interest. Except as otherwise specifically provided herein, nothing contained in this Agreement shall be
deemed to vest in Parent or Merger Sub any direct or indirect ownership or incidence of ownership of or with respect to any Shares. All rights, ownership and economic benefits of and relating to all of the Shares shall remain vested in and belong to
the applicable Shareholders and neither Parent nor Merger Sub shall have any authority to manage, direct, restrict, regulate, govern, or administer any of the policies or operations of the Company or exercise any power or authority to direct such
Person in the voting of any of the Shares (except as otherwise specifically provided herein) or in the performance of any Shareholders duties or responsibilities as a shareholder of the Company.
(n) Interpretation. The words hereof, herein, hereby, herewith and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, paragraph and schedule references are to the articles, sections, paragraphs and
schedules of this Agreement unless otherwise specified. 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 describing the singular number shall include the plural and vice versa, words denoting either gender shall include both genders and words denoting natural persons shall include all Persons and vice versa. The phrases the date of this
Agreement, the date hereof, of even date herewith and terms of similar import, shall be deemed to refer to the date set forth in the preamble to this Agreement. Any reference in this Agreement to a date or time shall be
deemed to be such date or time in New York City, unless otherwise specified. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or 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 Person by virtue of the authorship of any provision of this Agreement.
[Signature Pages Follow]
12
IN WITNESS WHEREOF, Parent, Merger Sub and each Shareholder listed on Schedule I hereto
have caused this Agreement to be duly executed and delivered as of the date first written above.
|
|
|
CAP GEMINI S.A. |
|
|
By: |
|
/s/ Lanny Cohen |
|
|
Name: Lanny Cohen |
|
|
Title: Authorized Signatory |
|
CAPGEMINI NORTH AMERICA, INC. |
|
|
By: |
|
/s/ Lanny Cohen |
|
|
Name: Lanny Cohen |
|
|
Title: Authorized Signatory |
|
LAPORTE MERGER SUB, INC. |
|
|
By: |
|
/s/ Thierry Delaponte |
|
|
Name: Thierry Delaponte |
|
|
Title: Authorized Signatory |
[Signature Page to
Voting Agreement]
|
|
|
VISCARIA LIMITED |
|
|
By: |
|
/s/ Vivesh Pillay |
|
|
Name: Vivesh Pillay |
|
|
Title: Director |
|
ASHOK TRIVEDI |
|
|
By: |
|
/s/ Ashok Trivedi |
|
|
Name: Ashok Trivedi |
|
SUNIL WADHWANI |
|
|
By: |
|
/s/ Sunil Wadhwani |
|
|
Name: Sunil Wadhwani |
|
THE ASHOK AND ANJANA TRIVEDI FAMILY FOUNDATION |
|
|
By: |
|
/s/ Ashok Trivedi |
|
|
Name: Ashok Trivedi |
|
|
Title: President |
|
ASHOK AND ANJANA TRIVEDI CHARITABLE REMAINDER UNITRUST |
|
|
By: |
|
/s/ Ashok Trivedi |
|
|
Name: Ashok Trivedi |
|
|
Title: Trustee |
[Signature Page to the Voting Agreement]
|
|
|
SUNIL AND NITA WADHWANI FAMILY FOUNDATION |
|
|
By: |
|
/s/ Sunil Wadhwani |
|
|
Name: Sunil Wadhwani |
|
|
Title: President |
|
SUNIL AND NITA WADHWANI CHARITABLE REMAINDER UNITRUST |
|
|
By: |
|
/s/ Nita Wadhwani |
|
|
Name: Nita Wadhwani |
|
|
Title: Trustee |
|
|
By: |
|
/s/ Sunil Wadhwani |
|
|
Name: Sunil Wadhwani |
|
|
Title: Trustee |
|
TRIVEDI FAMILY QUALIFIED SUBCHAPTER S TRUST |
|
|
By: |
|
/s/ Arun Nayar |
|
|
Name: Arun Nayar |
|
|
Title: Trustee |
|
|
By: |
|
/s/ Ashok Trivedi |
|
|
Name: Ashok Trivedi |
|
|
Title: Trustee |
[Signature Page to the Voting Agreement]
|
|
|
WADHWANI PARTNERS NO. 1 L.P. |
|
|
By: |
|
/s/ Romesh Wadhwani |
|
|
Name: Romesh Wadhwani |
|
|
Title: Trustee of Fund A f/b/o Rohan |
|
|
Wadhwani |
|
|
Created under the Trust Agreement creating the Wadhwani Family Qualified Subchapter S Trust dated June 15, 1993 |
|
|
By: |
|
/s/ Romesh Wadhwani |
|
|
Name: Romesh Wadhwani |
|
|
Title: Trustee of Fund B f/b/o Rohan |
|
|
Wadhwani |
|
|
Created under the Trust Agreement creating the Wadhwani Family Qualified Subchapter S Trust dated June 15, 1993 |
|
WADHWANI PARTNERS NO. 2 L.P. |
|
|
By: |
|
/s/ Romesh Wadhwani |
|
|
Name: Romesh Wadhwani |
|
|
Title: Trustee of The Shalina |
|
|
Wadhwani Trust created under the |
|
|
Trust Agreement dated December 20, 1991 |
|
|
By: |
|
/s/ Romesh Wadhwani |
|
|
Name: Romesh Wadhwani |
|
|
Title: Trustee of The Rohan |
|
|
Wadhwani Trust created under the |
|
|
Trust Agreement dated December 20, 1991 |
[Signature Page to the Voting Agreement]
SCHEDULE I
|
|
|
|
|
|
|
|
|
Shareholders |
|
Company Common Stock |
|
|
Restricted Shares |
|
Viscaria Limited |
|
|
23,384,095 |
|
|
|
0 |
|
Ashok Trivedi |
|
|
8,002,832 |
|
|
|
0 |
|
Sunil Wadhwani |
|
|
7,997,625 |
|
|
|
0 |
|
Trivedi Family Qualified Subchapter S Trust |
|
|
1,356,343 |
|
|
|
0 |
|
Wadhwani Partners No. 1 L.P. |
|
|
1,027,500 |
|
|
|
0 |
|
Sunil and Nita Wadhwani Family Foundation |
|
|
682,126 |
|
|
|
0 |
|
Ashok and Anjana Trivedi Charitable Remainder Unitrust |
|
|
600,000 |
|
|
|
0 |
|
Sunil and Nita Wadhwani Charitable Remainder Unitrust |
|
|
480,000 |
|
|
|
0 |
|
The Ashok and Anjana Trivedi Family Foundation |
|
|
400,000 |
|
|
|
0 |
|
Wadhwani Partners No. 2 L.P. |
|
|
60,124 |
|
|
|
0 |
|
[Schedule I to Support
Agreement]
EXHIBIT A
Form of Merger Agreement
[see Annex A]
ANNEX C
OPINION OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
|
|
|
Merrill Lynch, Pierce, Fenner & Smith Incorporated |
|
|
April 25, 2015
The Board of Directors
IGATE
Corporation
100 Somerset Corporate Blvd.
Bridgewater, NJ 08807
Members
of the Board of Directors:
We understand that IGATE Corporation (IGATE) proposes to enter into an Agreement and Plan of
Merger (the Agreement), among IGATE, Cap Gemini S.A. (Cap Gemini), CapGemini North America, Inc. (CapGemini NA) and Laporte Merger Sub, Inc., a wholly owned subsidiary of CapGemini NA (Merger Sub),
pursuant to which, among other things, Merger Sub will merge with and into IGATE (the Merger) and each outstanding share of the common stock, par value $0.01 per share, of IGATE (IGATE Common Stock) will be converted into the
right to receive $48.00 in cash (the Consideration). The terms and conditions of the Merger are more fully set forth in the Agreement.
You have requested our opinion as to the fairness, from a financial point of view, to the holders of IGATE Common Stock of the Consideration
to be received by such holders in the Merger.
In connection with this opinion, we have, among other things:
|
(1) |
reviewed certain publicly available business and financial information relating to IGATE; |
|
(2) |
reviewed certain internal financial and operating information with respect to the business, operations and prospects of IGATE furnished to or
discussed with us by the management of IGATE, including certain financial forecasts relating to IGATE prepared by the management of IGATE (such forecasts, IGATE Forecasts); |
|
(3) |
discussed the past and current business, operations, financial condition and prospects of IGATE with members of senior management of IGATE;
|
|
(4) |
reviewed the trading history for IGATE Common Stock and a comparison of that trading history with the trading histories of other companies we
deemed relevant; |
|
(5) |
compared certain financial and stock market information of IGATE with similar information of other companies we deemed relevant;
|
|
(6) |
compared certain financial terms of the Merger to financial terms, to the extent publicly available, of other transactions we deemed relevant;
|
|
(7) |
considered the results of our efforts on behalf of the Board of Directors of IGATE (the Board) to solicit, at the direction of the
Board, indications of interest from certain third parties with respect to a possible acquisition of IGATE; |
Merrill Lynch, Pierce, Fenner & Smith
Incorporated member FINRA/SIPC, is a subsidiary of Bank of America Corporation
Merrill Lynch, Pierce, Fenner and Smith Incorporated
One Bryant
Park, New York, NY 10036
1
The Board of Directors
IGATE Corporation
Page
2
|
(8) |
reviewed a draft, dated April 24, 2015 of the Agreement (the Draft Agreement); and |
|
(9) |
performed such other analyses and studies and considered such other information and factors as we deemed appropriate. |
In arriving at our opinion, we have assumed and relied upon, without independent verification, the accuracy and completeness of the financial
and other information and data publicly available or provided to or otherwise reviewed by or discussed with us and have relied upon the assurances of the management of IGATE that it is not aware of any facts or circumstances that would make such
information or data inaccurate or misleading in any material respect. With respect to the IGATE Forecasts, we have been advised by the Board, and we have assumed, that they have been reasonably prepared on bases reflecting the best currently
available estimates and good faith judgments of the management of IGATE as to the future financial performance of IGATE. We have not made or been provided with any independent evaluation or appraisal of the assets or liabilities (contingent or
otherwise) of IGATE or any other entity, nor have we made any physical inspection of the properties or assets of IGATE or any other entity. We have not evaluated the solvency or fair value of IGATE or any other entity under any state, federal or
other laws relating to bankruptcy, insolvency or similar matters. We have assumed, at the direction of the Board, that the Merger will be consummated in accordance with its terms, without waiver, modification or amendment of any material term,
condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Merger, no delay, limitation, restriction or condition, including any divestiture
requirements or amendments or modifications, will be imposed that would have an adverse effect on IGATE or the Merger (including the contemplated benefits thereof). We also have assumed, at the direction of the Board, that the final executed
Agreement will not differ in any material respect from the Draft Agreement reviewed by us.
We express no view or opinion as to any terms
or other aspects or implications of the Merger (other than the Consideration to the extent expressly specified herein), including, without limitation, the form or structure of the Merger or any terms, aspects or implications of any other agreement,
arrangement or understanding entered into in connection with or related to the Merger or otherwise. Our opinion is limited to the fairness, from a financial point of view, of the Consideration to be received by holders of IGATE Common Stock and no
opinion or view is expressed with respect to the Consideration to be received by any particular holder of IGATE Common Stock or any consideration received in connection with the Merger by the holders of any class of securities, creditors or other
constituencies of any party. In addition, no opinion or view is expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party
to the Merger, or class of such persons, relative to the Consideration or otherwise. Furthermore, no opinion or view is expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might be available to
IGATE or in which IGATE might engage or as to the underlying business decision of IGATE to proceed with or effect the Merger. We also are not expressing any view or opinion with respect to, and we have relied, at the direction of the Board, upon the
assessments of representatives of IGATE regarding, legal, regulatory, accounting, tax and similar matters relating to IGATE and the Merger (including the contemplated benefits thereof) as to which we understand that IGATE obtained such advice as it
deemed necessary from qualified professionals. In addition, we express no opinion or recommendation as to how any shareholder should vote or act in connection with the Merger or any other matter.
We have acted as financial advisor to the Board in connection with the Merger and will receive a fee for our services, a portion of which is
payable upon delivery of this opinion and a significant portion of
Merrill Lynch, Pierce, Fenner & Smith
Incorporated member FINRA/SIPC, is a subsidiary of Bank of America Corporation
Merrill Lynch, Pierce, Fenner and Smith Incorporated
One Bryant
Park, New York, NY 10036
2
The Board of Directors
IGATE Corporation
Page
3
which is contingent upon consummation of the Merger. In addition, IGATE has agreed to reimburse our expenses and indemnify us against certain liabilities arising out of our engagement.
We and our affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading,
foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and
products to a wide range of companies, governments and individuals. In the ordinary course of our businesses, we and our affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short
positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of Cap Gemini, certain of its affiliates, IGATE and certain
of its affiliates (including Apax Partners LLP (Apax), certain of its affiliates and/or certain portfolio companies of funds advised by Apax or its affiliates).
We and our affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial
banking and other financial services to IGATE and certain of its affiliates, including Apax, certain of its affiliates and/or certain portfolio companies of funds advised by Apax or its affiliates, and have received or in the future may receive
compensation for the rendering of these services, including (i) having acted or acting as financial advisor to certain of IGATEs affiliates, including Apax, certain of its affiliates and/or certain portfolio companies of funds advised by
Apax or its affiliates, in connection with certain mergers and acquisition transactions, (ii) having acted or acting as a bookrunner, underwriter and/or global coordinator for various debt and equity offerings of certain of IGATEs
affiliates, including Apax, certain of its affiliates and/or certain portfolio companies of funds advised by Apax or its affiliates, (iii) having acted as a solicitation agent for a consent solicitation of a portfolio company of funds advised
by Apax or its affiliates, (iv) having acted or acting as an administrative agent, collateral agent, bookrunner, arranger and/or global coordinator for, and/or as a lender under, certain term loans, letters of credit, credit and leasing
facilities and other credit arrangements of certain of IGATEs affiliates, including Apax, certain of its affiliates and/or certain portfolio companies of funds advised by Apax or its affiliates (including acquisition financing),
(v) having provided or providing certain derivatives, foreign exchange and other trading services to IGATE and/or certain of its affiliates, including Apax, certain of its affiliates and/or certain portfolio companies of funds advised by Apax
or its affiliates, (vi) having provided or providing certain managed investments services and products to IGATE and/or certain of its affiliates, including Apax, certain of its affiliates and/or certain portfolio companies of funds advised by
Apax or its affiliates, and (vii) having provided or providing certain treasury management products and services to IGATE and/or certain of its affiliates, including Apax, certain of its affiliates and/or certain portfolio companies of funds
advised by Apax or its affiliates.
In addition, we and our affiliates in the past have provided, currently are providing, and in the
future may provide, investment banking, commercial banking and other financial services to Cap Gemini and certain of its affiliates and have received or in the future may receive compensation for the rendering of these services, including
(i) having acted or acting as an arranger for, and/or as a lender under, certain credit and leasing facilities and other credit arrangements of Cap Gemini and/or certain of its affiliates, (ii) having provided or providing certain foreign
exchange trading services to Cap Gemini and/or certain of its affiliates, (iii) having provided or providing certain managed investments services and products to Cap Gemini and/or certain of its affiliates, and (iv) having provided or
providing certain treasury management products and services to Cap Gemini and/or certain of its affiliates. In addition, we and/or certain of our
Merrill Lynch, Pierce, Fenner & Smith
Incorporated member FINRA/SIPC, is a subsidiary of Bank of America Corporation
Merrill Lynch, Pierce, Fenner and Smith Incorporated
One Bryant
Park, New York, NY 10036
3
The Board of Directors
IGATE Corporation
Page
4
affiliates have maintained, currently are maintaining, and in the future may maintain, commercial (including vendor and/or customer) relationships with Cap Gemini and/or certain of its
affiliates.
It is understood that this letter is for the benefit and use of the Board (in its capacity as such) in connection with and
for purposes of its evaluation of the Merger.
Our opinion is necessarily based on financial, economic, monetary, market and other
conditions and circumstances as in effect on, and the information made available to us as of, the date hereof. It should be understood that subsequent developments may affect this opinion, and we do not have any obligation to update, revise, or
reaffirm this opinion. The issuance of this opinion was approved by our Americas Fairness Opinion Review Committee.
Based upon and
subject to the foregoing, including the various assumptions and limitations set forth herein, we are of the opinion on the date hereof that the Consideration to be received in the Merger by holders of IGATE Common Stock is fair, from a financial
point of view, to such holders.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Merrill Lynch, Pierce, Fenner & Smith
Incorporated member FINRA/SIPC, is a subsidiary of Bank of America Corporation
Merrill Lynch, Pierce, Fenner and Smith Incorporated
One Bryant
Park, New York, NY 10036
4
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