AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

Among

INTEL CORPORATION,

APC II ACQUISITION CORPORATION

and

WIND RIVER SYSTEMS, INC.

Dated as of June 4, 2009

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

Annex A- Conditions to the Offer

Disclosure Schedules and Exhibits

The registrant agrees to furnish to the Securities and Exchange Commission upon request a copy of any omitted schedule or exhibit.

 

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER , dated as of June 4, 2009 (this “ Agreement ”), among Intel Corporation, a Delaware corporation (“ Parent ”), APC II Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (“ Purchaser ”), and Wind River Systems, Inc., a Delaware corporation (the “ Company ”).

RECITALS

WHEREAS, the Boards of Directors of Parent, Purchaser and the Company have each determined that it is in the best interests of their respective stockholders for Parent to acquire the Company upon the terms and subject to the conditions set forth herein;

WHEREAS, in furtherance of such acquisition, it is proposed that Purchaser make a cash tender offer (as it may be amended from time to time, the “ Offer ”) to acquire all of the issued and outstanding shares of Common Stock, par value $0.001 per share, of the Company (“ Company Common Stock ”) (shares of Company Common Stock being hereinafter collectively referred to as “ Company Shares ”), including the associated Rights (as defined below), for $11.50 per Company Share (such amount, or any greater amount per Company Share paid pursuant to the Offer, the “ Per Share Amount ”) net to the holder thereof in cash, on the terms and subject to the conditions of this Agreement and the Offer;

WHEREAS, it is also proposed that, following the consummation of the Offer, Purchaser will merge with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent (the “ Merger ”), and each Company Share that is not tendered and accepted pursuant to the Offer will thereupon be cancelled and converted into the right to receive cash in an amount equal to the Per Share Amount, on the terms and subject to the conditions set forth herein;

WHEREAS, the Board of Directors of the Company (the “ Company Board ”) has unanimously (i) determined that the Offer is fair to, and in the best interests of, the Company’s stockholders; (ii) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Offer and the Merger; and (iii) resolved and agreed to recommend that holders of Company Shares tender their Company Shares pursuant to the Offer and (to the extent necessary) adopt this Agreement and approve the Merger;

WHEREAS, the Boards of Directors of Parent and Purchaser have each approved and declared advisable this Agreement and the Merger;

WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and inducement to Parent’s willingness to enter into this Agreement, Parent, Purchaser and certain stockholders of the Company (the “ Stockholders ”) are entering into a Tender and Support Agreement, dated as of the date hereof (the “ Stockholder Agreement ”), providing that, among other things, the Stockholders shall (i) tender their Company Shares into the Offer (the sum of all Company Shares subject to the Stockholder Agreement, the “ Subject Shares ”), and (ii) vote their Company Shares in favor of the Merger, if applicable, in each case subject to the conditions set forth therein;

 

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WHEREAS, concurrently with the execution and delivery of this Agreement, and as a material inducement to Parent’s willingness to enter into this Agreement, certain employees of the Company are executing and delivering to Parent Employment Agreements substantially in the forms hereto as Exhibit A and Exhibit B (the “ Employment Agreements ”); and

WHEREAS, concurrently with the execution and delivery of this Agreement, and as a material inducement to Parent’s willingness to enter into this Agreement, a certain employee of the Company is executing and delivering to Parent a Non-Competition Agreement substantially in the form attached hereto as Exhibit C (the “ Non-Competition Agreement ”).

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Parent, Purchaser and the Company hereby agree as follows:

 

1.	D EFINITIONS

1.1 Definitions. For purposes of this Agreement:

“ Acquisition Proposal ” means any proposal, offer or indication of interest (whether or not in writing) relating to, or that could reasonably be expected to lead to, in one transaction or a series of transactions, (i) any direct or indirect acquisition or purchase (including by any license or lease) of (A) assets (including equity securities of any Company Subsidiary) or businesses that constitute fifteen percent (15%) or more of the revenues, net income or assets of the Company or of any Company Subsidiary or (B) beneficial ownership of fifteen percent (15%) or more of any class of equity securities of the Company or of any Company Subsidiary; (ii) any purchase or sale of, or tender offer or exchange offer for, equity securities of the Company or any Company Subsidiary that, if consummated, would result in any person beneficially owning fifteen percent (15%) or more of any class of equity securities of the Company or any Company Subsidiary; or (iii) any merger, consolidation, business combination, recapitalization, liquidation, dissolution, joint venture (other than a Customer Optimization Arrangement), share exchange or similar transaction involving the Company or any of the significant Company Subsidiaries, other than the Transactions. An Acquisition Proposal includes a Superior Proposal and an Equity Consideration Acquisition Proposal.

“ Action ” means litigation, suit, claim, action, hearing, proceeding, arbitration, mediation, inquiry or investigation.

“ affiliate ” of a specified person means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person.

“ Applicable Lookback Period ” means a number of consecutive trading days immediately preceding the Qualified Expiration Date. If the Qualified Expiration Date occurs during the period beginning with the date of this Agreement and ending on (and including) the date that is 69 calendar days following the date of this Agreement, then the Applicable Lookback Period shall be the 5 consecutive trading days immediately preceding the Qualified Expiration Date. If the Qualified Expiration Date occurs during the period beginning with the date that is 70 calendar days from date of this Agreement and ending on (and including) the date that is 89

 

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calendar days from the date of this Agreement, then the Applicable Lookback Period shall be the 6 consecutive trading days immediately preceding the Qualified Expiration Date. If the Qualified Expiration Date occurs during the period beginning with the date that is 90 calendar days from date of this Agreement and ending on (and including) the date that is 109 calendar days from the date of this Agreement, then the Applicable Lookback Period shall be the 7 consecutive trading days immediately preceding the Qualified Expiration Date. If the Qualified Expiration Date occurs during the period beginning with the date that is 110 calendar days from date of this Agreement and ending on (and including) the date that is 129 calendar days from the date of this Agreement, then the Applicable Lookback Period shall be the 8 consecutive trading days immediately preceding the Qualified Expiration Date. If the Qualified Expiration Date occurs during the period beginning with the date that is 130 calendar days from date of this Agreement and ending on (and including) the date that is 149 calendar days from the date of this Agreement then the Applicable Lookback Period shall be the 9 consecutive trading days immediately preceding the Qualified Expiration Date. If the Qualified Expiration Date occurs on or after the date that is 150 calendar days following the date of this Agreement, then the Applicable Lookback Period shall be the 10 consecutive trading days immediately preceding the Qualified Expiration Date.

“ beneficial owner ” means a person who shall be deemed to be the beneficial owner of any Company Shares or other shares (i) that such person or any of its affiliates or associates (as such term is defined in Rule 12b-2 promulgated under the Exchange Act) beneficially owns, directly or indirectly; (ii) that such person or any of its affiliates or associates has, directly or indirectly, (A) the right to acquire (whether such right is exercisable immediately or subject to the passage of time or other conditions), pursuant to any Contract, arrangement or understanding or upon the exercise of conversion rights (including convertible debt), exchange rights, warrants or options, or otherwise, or (B) the right to vote pursuant to any Contract, arrangement or understanding; or (iii) that are beneficially owned, directly or indirectly, by any other persons with whom such person or any of its affiliates or associates or person with whom such person or any of its affiliates or associates has any Contract, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any such Company Shares or other shares.

“ business day ” has the meaning set forth in Rule 14d-1(g)(3) of the Exchange Act.

“ Claim ” means any and all claims, demands and causes of action.

“ Company Intellectual Property ” means any and all Intellectual Property and Intellectual Property Rights that are owned by (solely or jointly) or licensed to the Company or any Company Subsidiary (or that the Company or any Company Subsidiary claims or purports to own or have a license with respect to).

“ Company Restricted Stock ” means Company Common Stock that is unvested or is subject to repurchase option, risk of forfeiture or other condition on title or ownership under any applicable restricted stock purchase agreement or other Contract with the Company.

“ Company SAR ” means any stock appreciation right outstanding, whether or not granted under a Company Stock Option Plan, whether or not exercisable or vested.

 

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“ Company Stock Option Plans ” means any equity incentive plans of the Company, as amended, pursuant to which the Company granted Company Stock Options, Company RSUs or Company SARs, including that certain non-plan stock option dated March 21, 2007 granted to Ian Halifax.

“ Company Stock Options ” means any option to purchase shares of the Company’s Common Stock granted under the Company Stock Option Plans.

“ Consent ” means any approval, license, consent, ratification, permission, waiver or authorization.

“ Continuing Employees ” mean all employees of the Company or any Company Subsidiary who (a) are offered and accept employment, prior to the Effective Time, by Parent or any subsidiary of Parent, (b) at the Effective Time, continue their employment with the Company or any Company Subsidiary, or (c) remain or become at the Effective Time employees of the Company or, outside the U.S., at the Effective Time remain or become employees of the Company, Parent or any subsidiary as required by applicable Law.

“ Contract ” means any contract, agreement, indenture, deed of trust, license, note, bond, loan instrument, mortgage, lease, purchase or sales order, guarantee and any similar undertaking, commitment, pledge, or binding understanding or arrangement, in each case, whether written, oral, express or implied.

“ control ” (including the terms “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract or credit arrangement or otherwise.

“ Copyleft Open Source ” means Software or similar subject matter that is generally available in source code form and that is distributed under a license which, by its terms, (i) does not prohibit licensees of such Software from licensing or otherwise distributing such Software in source code form, (ii) does not prohibit licensees of such Software from making modifications thereof, (iii) does not require a royalty or other payment for the licensing or other distribution, or the modification, of such Software (other than a reasonable charge to compensate the provider for the cost of providing a copy thereof) and (iv) purports to require a licensee to make one’s modifications, derivatives and or enhancements of such licensed Software or similar subject matter available to distributees or others in designated circumstances under the terms of such copyleft open source license. Copyleft Open Source includes Software distributed under such licenses as the GNU General Public License and GNU Lesser General Public License.

“ Copyrights ” means any and all U.S. and foreign copyrights, mask works, and all other rights with respect to Works of Authorship and all registrations thereof and applications therefor (including moral and economic rights, however denominated).

“ Customer Optimization Arrangement ” means an optimization agreement or similar arrangement involving the Company or any Company Subsidiary, on the one hand, and a customer of the Company or any Company Subsidiary, on the other hand, formed for the purpose of customizing Company Products and/or such customer’s products to effectively interface with

 

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one another in the ordinary course of business but excluding any agreement involving the formation of a new entity or an investment by the Company, or any Company Subsidiary, and such customer.

“ DGCL ” means the General Corporation Law of the State of Delaware.

“ Environmental Laws ” means any Law, including common law, relating to (i) releases or threatened releases of Hazardous Substances or materials containing Hazardous Substances, (ii) the manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Substances or materials containing Hazardous Substances; (iii) pollution or protection of the indoor or outdoor environment, health or natural resources; or (iv) the European Union’s Directives on the Restriction of Hazardous Substances (RoHS), Waste Electrical and Electronic Equipment (WEEE), and similar product stewardship laws.

“ Equity Consideration Acquisition Proposal ” means any Acquisition Proposal involving proposed consideration to the Company, any Company Subsidiary or stockholders of the Company that includes equity securities or other securities convertible into equity securities of a Third Party. Any Acquisition Proposal involving such equity consideration and cash consideration shall only be an Equity Consideration Acquisition Proposal if the cash consideration per Company Share is less on a per Company Share basis (as adjusted for stock splits, recapitalizations and similar transactions) than the Per Share Amount.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with the Company or any Company Subsidiary and that, together with the Company or any Company Subsidiary, is treated as a single employer within the meaning of Section 414 of the Code or Section 4001 of ERISA.

“ Exchange Act ” means the Securities and Exchange Act of 1934, as amended.

“ Governmental Authority ” means any (i) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (ii) federal, state, local, municipal, foreign or other government; (iii) governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or entity and any court or other tribunal); or (iv) organization, entity or body or individual exercising, or entitled to exercise, any executive, legislative, judicial, administrative, arbitral, regulatory, police, military or taxing authority or power of any nature (including persons acting as arbitrators, alternative dispute resolution organizations and stock exchanges).

“ Hazardous Substances ” means (i) those substances defined in or regulated as hazardous or toxic substances, materials or wastes under the following U.S. federal statutes and their state counterparts, as each may be amended from time to time, and all regulations thereunder: the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (ii) petroleum and petroleum

 

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products, including crude oil and any fractions thereof; (iii) natural gas, synthetic gas, and any mixtures thereof; (iv) polychlorinated biphenyls, asbestos and radon; (v) any other contaminant; and (vi) any biological or chemical substance, material or waste regulated or classified as hazardous, toxic, or radioactive by any Governmental Authority pursuant to any Environmental Law.

“ Income Tax ” means any U.S. federal, state, local, or non-U.S. income tax, including any interest, penalty, or addition thereto.

“ Intellectual Property ” means any and all (i) formulae, algorithms, procedures, processes, methods, techniques, know-how, ideas, creations, inventions, discoveries, and improvements (whether patentable or unpatentable and whether or not reduced to practice); (ii) technical, engineering, manufacturing, product, marketing, servicing, financial, supplier, and other information and materials; (iii) customer, vendor, and distributor lists, contact and registration information, and correspondence; (iv) specifications, designs, models, devices, prototypes, schematics and development tools; (v) Software, websites, content, images, graphics, text, photographs, artwork, audiovisual works, sound recordings, graphs, drawings, reports, analyses, writings, designs, mask works, and other works of authorship and copyrightable subject matter (“ Works of Authorship ”); (vi) databases and other compilations and collections of data or information (“ Databases ”); (vii) trademarks, service marks, logos and design marks, trade dress, trade names, fictitious and other business names, and brand names, together with all goodwill associated with any of the foregoing (“ Trademarks ”); (viii) domain names, uniform resource locators and other names and locators associated with the Internet (“ Domain Names ”) and (ix) information and materials not generally known to the public, including trade secrets and other confidential and proprietary information (“ Trade Secrets ”).

“ Intellectual Property Rights ” means any and all rights (anywhere in the world, whether statutory, common law or otherwise) relating to, arising from, or associated with Intellectual Property, including (i) Patents; (ii) Copyrights; (iii) other rights with respect to Software, including registrations thereof and applications therefor; (iv) industrial design rights and registrations thereof and applications therefor; (v) rights with respect to Trademarks, and all registrations thereof and applications therefor; (vi) rights with respect to Domain Names, including registrations thereof and applications therefor; (vii) rights with respect to Trade Secrets, including rights to limit the use or disclosure thereof by any Person; (viii) rights with respect to Databases, including registrations thereof and applications therefor; (ix) publicity and privacy rights, including all rights with respect to use of a Person’s name, signature, likeness, image, photograph, voice, identity, personality, and biographical and personal information and materials; and (x) any rights equivalent or similar to any of the foregoing.

“ knowledge of the Company ” means the actual knowledge of each of the individuals set forth in Section 1.1 of the Disclosure Schedule, including in each case the knowledge that such person would reasonably have obtained in the reasonable conduct of his or her duties after familiarizing himself or herself with the terms and conditions of this Agreement (including Section 4) and the Disclosure Schedule.

“ Lien ” means any liens, mortgages, encumbrances, pledges, security interests, options, rights of first refusal, or other charges of any kind.

 

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“ Material Adverse Effect ” means any event, condition, circumstance, development, state of facts, change or effect, individually or in the aggregate, that is or would reasonably be expected to be materially adverse to, or has had or would reasonably be expected to have a material adverse effect on, (x) the business, condition (financial or otherwise), capitalization, assets, liabilities or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (y) the Company’s ability to timely consummate the Offer and the Merger; provided , that with respect to clause (x) above, Material Adverse Effect shall not include any events, conditions, circumstances, developments, state of facts, changes and effects to the extent arising or resulting from (i) changes in the industry in which the Company operates, (ii) changes in the general economic conditions within the U.S. or other jurisdictions in which the Company has material operations, (iii) the announcement or pendency of the transactions contemplated by this Agreement, or the performance or compliance with the terms of this Agreement or (iv) acts of God, natural disasters or calamities, including the engagement by any country in hostility (whether commenced before, on or after the date hereof, and whether or not pursuant to the declaration of a national emergency or war), (v) the occurrence of a military or terrorist attack, or (vi) any changes in Law or GAAP (or any interpretation thereof); provided , that in the case of each of clauses (i), (ii), (iv) and (v), the Company and the Company Subsidiaries are not significantly disproportionately affected thereby relative to other companies of comparable size in the same industries and geographies in which the Company operates.

“ Open Source ” means Software or similar subject matter that is generally available in source code form and that is distributed under a license which, by its terms, (i) does not prohibit licensees of such Software from licensing or otherwise distributing such Software in source code form, (ii) does not prohibit licensees of such Software from making modifications thereof, and (iii) does not require a royalty or other payment for the licensing or other distribution, or the modification, of such Software (other than a reasonable charge to compensate the provider for the cost of providing a copy thereof). Open Source Software includes Software distributed under such licenses as the GNU General Public License, GNU Lesser General Public License, New BSD License, MIT License, Common Public License and other licenses approved as open source licenses under the Open Source Definition of the Open Source Initiative.

“ Owned Company Intellectual Property ” means any and all Intellectual Property and Intellectual Property Rights that are owned by (solely or jointly) Company or any Company Subsidiary (or that Company or any Company Subsidiary claims or purports to own).

“ Owned Copyrights ” means any and all Copyrights in the Owned Company Intellectual Property.

“ Patents ” means any and all U.S. and foreign patent rights, including without limitation, all (i) patents, (ii) pending patent applications, including all provisional applications, substitutions, continuations, continuations-in-part, divisions, renewals, and all patents granted thereon, (iii) all patents-of-addition, reissues, reexaminations, confirmations, re-registrations, invalidations, and extensions or restorations by existing or future extension or restoration mechanisms, including supplementary protection certificates or the equivalent thereof, and (iv) all foreign counterparts of any of the foregoing.

 

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“ person ” means an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.

“ Qualified Expiration Date ” means an Expiration Date upon which none of the conditions or events set forth in Annex A hereto shall have occurred and be continuing.

“ Registered Company Intellectual Property ” means (i) all Patents, registered Trademarks, applications to register Trademarks, registered Copyrights, applications to register Copyrights, and Domain Names included in the Owned Company Intellectual Property that are registered, recorded, assigned but not recorded or filed by, for, or under authorization from (or in the name of) Company or any Company Subsidiary, and (ii) any other applications, registrations, recordings and filings by Company or any Company Subsidiary (or otherwise authorized by or in the name of Company or any Company Subsidiary) with respect to any Owned Company Intellectual Property.

“ Representative ” means the directors, officers, employees, agents (including financial and legal advisors) and other representatives of a person.

“ SEC ” means the Securities and Exchange Commission, or any successor thereto.

“ Software ” means all (i) computer programs and other software, including software implementations of algorithms, models, and methodologies, whether in source code, object code or other form, including libraries, subroutines and other components thereof; (ii) computerized databases and other computerized compilations and collections of data or information, including all data and information included in such databases, compilations or collections; (iii) screens, user interfaces, command structures, report formats, templates, menus, buttons and icons; (iv) descriptions, flow-charts, architectures, development tools, and other materials used to design, plan, organize and develop any of the foregoing; and (v) all documentation, including development, diagnostic, support, user and training documentation related to any of the foregoing.

“ subsidiary ” or “ subsidiaries ” of the Company, the Surviving Corporation, Parent or any other person means an affiliate controlled by such person, directly or indirectly, through one or more intermediaries.

“ Tax ” or “ Taxes ” means all U.S. federal, state, local, non-U.S. and other net income, gross income, gross receipts, value-added, sales, use, ad valorem, customs duties, capital stock, environmental (including taxes under Section 59A of the Code), transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, registration, severance, stamp, occupation, premium, real property, personal property, windfall profits, customs, duties, alternative or add-on minimum, estimated, or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, any penalties or additions to tax with respect thereto, whether disputed or not, including any fees or penalties imposed on a person in respect of any information Tax Return made to a Governmental Authority, and including any obligations to indemnify or otherwise assume or succeed to the Tax Liability of any other Person.

 

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“ Tax Returns ” means all returns and reports, elections, declarations, disclosures, schedules, estimates and information returns, including any schedule or attachment thereto, required to be supplied to a Governmental Authority (or any agent thereof) relating to Taxes.

“ Termination Trigger Date ” means, if the Company Board or any committee thereof shall have determined, pursuant to Section 7.5(b), to enter into a definitive agreement with respect to an Equity Consideration Acquisition Proposal in full compliance with all procedures described in Section 7.5, the first day after the fortieth (40 ^th ) business day following the commencement of the Offer (determined pursuant to Rule 14d-1(g)(3) under the Exchange Act) on which there shall not be in effect any law or interpretation or position of the SEC which requires the Offer to remain open.

“ Third Party ” means any person other than the Parent and its subsidiaries (including Purchaser) and the respective Representatives of Parent and its subsidiaries.

“ U.S. ” means United States of America.

The following terms have the meaning set forth in the Sections set forth below:

 

 

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2.	T HE O FFER

2.1 The Offer.

(a) Provided , that nothing shall have occurred that gives rise to a right of Parent to terminate the Offer or this Agreement; provided , further , that none of the conditions set forth in Sections (iii)(c) through (iii)(e) of Annex A hereto shall have occurred and be continuing as of the date that Purchaser would otherwise commence the Offer; and provided , further , that the Company has fulfilled its obligation to provide information to Parent and Purchaser on a timely basis as contemplated by Section 2.1(f), Purchaser shall commence (within the meaning of Rule 14d-2 under the Exchange Act) the Offer as promptly as reasonably practicable after the date hereof. Parent or Purchaser shall provide the Company with prior written notice if Purchaser fails to commence the Offer within 10 business days of the date of this Agreement together with a brief explanation of the reasons therefore.

(b) The obligation of Purchaser to accept for payment, purchase and pay for any Company Shares tendered pursuant to the Offer shall be subject to (x) the condition (the “ Minimum Condition ”) that at least that number of Company Shares equal to (i) fifty percent (50%) of the then outstanding Company Shares on a fully diluted basis (including all Company Shares potentially issuable upon the conversion of any convertible securities or upon the exercise of any options, warrants or rights (other than the Rights) including the Company RSUs, in each case, which are convertible or exercisable prior to the Outside Date but excluding the Subject Shares) plus (ii) the Subject Shares, shall have been validly tendered and not withdrawn prior to the expiration of the Offer and (y) the other conditions set forth in Annex A hereto. Purchaser expressly reserves the right (but shall not be obligated) at any time or from time to time, in its sole discretion, to amend or waive any such condition (other than the Minimum Condition which may not be amended or waived), to increase the price per Company Share payable in the Offer, and to make any other changes in the terms and conditions of the Offer; provided , that without the prior written consent of the Company no change may be made that decreases the price per Company Share payable in the Offer, changes the form of consideration payable in the Offer, reduces the maximum number of Company Shares sought to be purchased in the Offer, adds to the conditions to the Offer set forth in Annex A hereto, extends the Offer other than as set forth in this Section 2.1, or modifies or amends any condition to the Offer in any manner adverse to the holders of Company Shares.

(c) Subject to the terms and conditions thereof, the Offer shall remain open until midnight, New York City time, at the end of the twentieth (20 ^th ) business day beginning with (and including) the date that the Offer is commenced (determined in accordance with Rule 14d-1(g)(3) under the Exchange Act) (the “ Expiration Date ”), unless the period of time for which the Offer is open shall have been extended pursuant to, and in accordance with, the provisions of this Section 2.1(c) (in which event the term “ Expiration Date ” shall mean the latest time and date as the Offer, as so extended, may expire). Purchaser may, without the consent of the Company, extend the Offer for one or more periods beyond the scheduled expiration date if, at the scheduled expiration of the Offer, any of the conditions to Purchaser’s obligation to accept Company Shares for payment shall not be satisfied or waived, for such period of time as Purchaser reasonably determines to be necessary to permit such conditions to be satisfied or waived. In addition, Purchaser shall extend the Offer:

(i) for two successive 10 business day periods beyond the original Expiration Date if at the original Expiration Date or the Expiration Date of any extension thereof pursuant to this Section 2.1(b)(i) the Minimum Condition is not satisfied but none of the other conditions to Purchaser’s obligation to accept Company Shares for payment shall fail to be satisfied or waived by Parent or Purchaser;

 

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(ii) if, at the end of any scheduled expiration of the Offer, the conditions to the consummation of the Offer set forth in Sections (iii)(d) or (iii)(e) of Annex A hereto shall have occurred such that any of the conditions set forth in Section (iii)(d) or (iii)(e) in Annex A, as applicable, would fail to be satisfied, for such period of time as is necessary to provide the Company with a ten (10) business day period measured from the date of receipt of notice of an inaccuracy or breach to cure such inaccuracy or breach; provided that such inaccuracy or breach is reasonably capable of being cured within such time period and provided, further that Purchaser shall only be required to extend the Offer once pursuant to this Section 2.1(c)(ii);

(iii) for one or more periods beyond any scheduled expiration date for any period required by any Law, rule, regulation or interpretation of the SEC, or the staff thereof, applicable to the Offer; and

(iv) (A) for one or more periods beyond any scheduled expiration date if, at the scheduled expiration of the Offer or at the scheduled expiration of any subsequent offering periods (as provided in Rule 14d-11 under the Exchange Act), none of the conditions or events set forth in Annex A hereto (other than Sections (i) and (ii)) shall have occurred or be continuing, for such period of time necessary to permit the condition in Section (ii) of Annex A hereto to be satisfied; and (B) for one ten (10) business day period following the satisfaction of the condition set forth in Section (ii) of Annex A hereto.

Purchaser also may, without the consent of the Company, provide for one or more subsequent offering periods (as provided in Rule 14d-11 under the Exchange Act). Notwithstanding the foregoing, no extension provided for in this Section 2.1(c) shall extend the Offer beyond the Outside Date.

(d) Notwithstanding anything to the contrary in the Confidentiality Agreement or the termination of this Agreement, and without limiting, restricting or otherwise impairing the rights of Parent or Purchaser following any termination of this Agreement in accordance with its terms, Purchaser shall be permitted to continue the Offer in accordance with the terms hereof if this Agreement is terminated by the Company pursuant to Section 9.1(f). If Purchaser shall elect to continue the Offer pursuant to this Section 2.1(d) notwithstanding the termination of this Agreement by the Company pursuant to Section 9.1(f), Parent, Purchaser and the Company acknowledge and hereby agree that (i) the Company shall not amend the Rights Agreement in a manner inconsistent with Section 4.25 and (ii) the waiver by the Company Board of the applicability of the provisions of Section 203 of the DGCL to the Transactions, including the Offer and the Merger (as may be amended by Parent and Purchaser following any such termination), shall continue in full force and effect until Purchaser shall withdraw the Offer or the Offer shall have expired or terminated in accordance with the terms thereof without Purchaser (or Parent on Purchaser’s behalf) having accepted for payment any Company Shares pursuant to the Offer. If Purchaser shall elect to continue the Offer pursuant to this Section 2.1(d) and such Offer is not consummated prior to the approval by the Company stockholders of an acquisition of the Company following termination of this Agreement by the Company

 

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pursuant to Section 9.1(f), Parent agrees that it shall terminate the Offer after such approval by the Company stockholders of such acquisition, but prior to the closing of such acquisition. Notwithstanding anything to the contrary stated in Section 2.1(d), in the event that Purchaser is not permitted, or does not elect, to continue the Offer pursuant to this Section 2.1(d), Purchaser shall terminate the Offer upon termination of this Agreement.

(e) The Per Share Amount shall, subject to applicable withholding of taxes, be net to the applicable seller in cash, upon the terms and subject to the conditions of the Offer. Purchaser or Parent on Purchaser’s behalf shall pay for all Company Shares validly tendered and not withdrawn promptly following the Acceptance Date. Notwithstanding the immediately preceding sentence and subject to the applicable rules of the SEC and the terms and conditions of the Offer, Purchaser expressly reserves the right to delay payment for Company Shares in order to comply in whole or in part with applicable Laws. If payment of the Per Share Amount is to be made to a person other than the person in whose name the surrendered certificate formerly evidencing Company Shares is registered on the stock transfer books of the Company, it shall be a condition of payment that the certificate so surrendered shall be endorsed properly or otherwise be in proper form for transfer and that the person requesting such payment shall have paid all transfer and other similar taxes required by reason of the payment of the Per Share Amount to a person other than the registered holder of the certificate surrendered, or shall have established to the satisfaction of Purchaser that such taxes either have been paid or are not applicable.

(f) As promptly as reasonably practicable on the date of commencement of the Offer, Purchaser shall file with the SEC a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, the “ Schedule TO ”) with respect to the Offer. The Schedule TO shall contain or shall incorporate by reference an offer to purchase (the “ Offer to Purchase ”) and form of the related letter of transmittal and any other ancillary documents pursuant to which the Offer will be made (the Schedule TO, the Offer to Purchase and such other documents, together with all exhibits, supplements and amendments thereto, being referred to herein collectively as the “ Offer Documents ”). Purchaser shall use its reasonable best efforts to cause the Offer Documents to be disseminated to holders of Company Shares in all material respects to the extent required by applicable federal securities laws. Parent and Purchaser shall use their respective reasonable best efforts to cause the Offer Documents to comply in all material respects with the applicable requirements of federal securities laws. Parent, Purchaser and the Company agree to correct promptly any information provided by any of them for use in the Offer Documents that shall have become false or misleading in any material respect, and Parent and Purchaser further agree to use reasonable best efforts to cause the Schedule TO, as so corrected, to be filed with the SEC, and the other Offer Documents, as so corrected, to be disseminated to holders of Company Shares, in each case in all material respects as required by applicable federal securities laws. The Company shall promptly furnish to Purchaser or Parent all information concerning the Company that is required or reasonably requested by Purchaser or Parent in connection with their obligations relating to the Offer Documents or any action contemplated by this Section 2.1(f). Parent and Purchaser shall give the Company and its counsel a reasonable opportunity to review and comment on the Schedule TO before it is filed with the SEC. In addition, Parent and Purchaser agree to (i) provide the Company and its counsel in writing with any written comments Parent, Purchaser or their counsel may receive from time to time from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments, (ii) use commercially reasonable efforts to provide a reasonably

 

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detailed description of any oral comments Parent, Purchaser or their counsel may receive from time to time from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments, and (iii) provide the Company and its counsel reasonable opportunity to review and comment on any written or oral response to such comments or any proposed amendment to the Offer Documents prior to the filing thereof with the SEC.

(g) If, between the date of this Agreement and the first date on which any particular Company Share is accepted for payment and paid for pursuant to the Offer (the “ Acceptance Date ”), the outstanding shares of Company Common Stock are changed into a different number or class of shares by means of any stock split, division or subdivision of shares, stock dividend, reverse stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or similar transaction, then the Per Share Amount applicable to such Company Share shall be appropriately adjusted.

2.2 Company Action.

(a) The Company hereby consents to and approves the Offer pursuant to the terms of this Agreement. The Company hereby further consents to the inclusion in the Offer Documents of such approval and of the determination and recommendation of the Company Board described in Section 4.4(b). The Company shall not withdraw or modify such recommendation in any manner adverse to Purchaser or Parent except as provided in Section 7.5(b). The Company represents that it has been advised by its directors and executive officers that they intend to tender all Company Shares beneficially owned by them to Purchaser pursuant to the Offer.

(b) Concurrently with the filing of the Schedule TO by Purchaser, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (together with all amendments and supplements thereto, the “ Schedule 14D-9 ”) containing, except as provided in Section 7.5(b), the recommendation of the Company Board described in Section 4.4(b). The Company shall promptly mail the Schedule 14D-9 to the holders of Company Shares together with the Offer Documents and shall use its reasonable best efforts to cause the Offer Documents to be disseminated in all material respects as required by applicable federal securities laws. The Company shall use its reasonable best efforts to cause the Schedule 14D-9 to comply in all material respects with the applicable requirements of federal securities laws. The Company, Parent and Purchaser agree to correct promptly any information provided by any of them for use in the Schedule 14D-9 that shall have become false or misleading in any material respect, and the Company further agrees to use its reasonable best efforts to cause the Schedule 14D-9, as so corrected, to be filed with the SEC and disseminated to holders of Company Shares, in each case in all material respects as required by applicable federal securities laws. Parent or Purchaser shall promptly furnish to the Company all information concerning Parent and Purchaser that is required or reasonably requested by the Company in connection with its obligations relating to the Schedule 14D-9. The Company shall give Parent, Purchaser and their counsel a reasonable opportunity to review and comment on the Schedule 14D-9 before it is filed with the SEC. In addition, the Company agrees to (i) provide Parent, Purchaser and their counsel in writing with any written comments the Company or its counsel may receive from time to time from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments, (ii) use commercially reasonable efforts to provide Parent, Purchaser and their

 

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counsel a reasonably detailed description of any oral comments the Company or its counsel may receive from time to time from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments, and (iii) provide Parent, Purchaser and their counsel reasonable opportunity to review and comment on any written or oral response to such comments or any proposed amendment to the Schedule 14D-9 prior to the filing thereof with the SEC.

(c) In connection with the Offer, the Company shall promptly furnish or cause to be furnished (including by instructing its transfer agent to promptly furnish) to Purchaser mailing labels containing the names and addresses of all record holders of Company Shares and with security position listings of Company Shares held in stock depositories, each as of a recent date, together with all other available listings and computer files containing names, addresses and security position listings of record holders and beneficial owners of Company Shares. The Company shall promptly furnish or cause to be furnished to Purchaser such additional information, including updated listings and computer files of stockholders, mailing labels and security position listings, and such other assistance in disseminating the Offer Documents to holders of Company Shares as Parent or Purchaser may reasonably request. Subject to the requirements of Law, including applicable stock exchange rules, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Offer or the Merger, Parent and Purchaser shall hold in confidence the information contained in such labels, listings and files and shall use such information only in connection with the Transactions. Notwithstanding anything to the contrary in the Confidentiality Agreement or the termination of this Agreement and without limiting, restricting or otherwise impairing the rights of Parent or Purchaser following any termination of this Agreement in accordance with its terms, if Parent and Purchaser elect to continue the Offer (as may be amended in a manner consistent with the terms hereof) notwithstanding the termination of this Agreement by the Company pursuant to Section 9.1(f), Parent and Purchaser shall be permitted to retain and use any and all such information for purposes of disseminating and otherwise communicating the Offer and the related Offer Documents to the record and beneficial holders of Company Shares.

2.3 Top-Up Option.

(a) The Company hereby grants to Parent and Purchaser an irrevocable option (the “ Top-Up Option ”) to purchase up to that number of Company Shares (the “ Top-Up Option Shares ”) equal to the lowest number of Company Shares that, when added to the number of Company Shares collectively owned by Parent or Purchaser at the time of exercise, shall constitute one Company Share more than 90% of the then outstanding Company Shares on a fully diluted basis (including all Company Shares potentially issuable upon the conversion of any convertible securities or upon the exercise of any options, warrants or rights (other than the Rights) including the Company RSUs, in each case, which are convertible or exercisable prior to the Outside Date), at a purchase price per Top-Up Option Share equal to the Per Share Amount. Notwithstanding the foregoing provisions of this Section 2.3(a), the Top-Up Option shall not be exercisable for Company Shares in excess of the number of Company Shares authorized and unissued or held in the treasury of the Company (giving effect to the Company Shares issuable pursuant to all then-outstanding Company Stock Options, RSUs and any other rights to acquire Company Shares as if such shares were outstanding).

 

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(b) Either Parent or Purchaser may, at its election, exercise the Top-Up Option at any time after the Acceptance Date and prior to the earlier of (A) the Effective Time and (B) the termination of this Agreement.

(c) If either Parent or Purchaser wishes to exercise the Top-Up Option, Parent or Purchaser, as applicable, shall send to the Company a written notice (a “ Top-Up Exercise Notice ”) specifying the place for the closing of the purchase the Top-Up Option Shares (the “ Top-Up Closing ”) and a date not earlier than one business day nor later than ten business days after the date of the Top-Up Exercise Notice for the Top-Up Closing. The Company shall, promptly after receipt of the Top-Up Exercise Notice, deliver a written notice to Parent or Purchaser confirming (i) the number of Company Shares then outstanding on a fully diluted basis, and (ii) the number of Top-Up Option Shares and the aggregate purchase price therefor.

(d) At the Top-Up Closing, subject to the terms and conditions of this Agreement, (i) the Company shall deliver to Parent or Purchaser a certificate or certificates evidencing the applicable number of Top-Up Option Shares and (ii) Parent or Purchaser shall purchase each Top-Up Option Share from the Company at the Per Share Amount. Payment of the purchase price for the Top-Up Option Shares may be made, at Parent’s or Purchaser’s option, by delivery of (A) immediately available funds by wire transfer to an account designated by the Company or (B) a promissory note, or any combination thereof. The parties shall cooperate to ensure that the issuance of the Top-Up Option Shares is accomplished consistent with all applicable legal requirements, including all federal securities laws.

(e) Upon the delivery by Parent or Purchaser to the Company of the Top-Up Exercise Notice, and the tender of the consideration described in Section 2.3(d), Parent or Purchaser, as applicable, shall be deemed to be the holder of record of the Top-Up Option Shares issuable upon that exercise, notwithstanding that certificates representing those Top-Up Option Shares shall not then be actually delivered to Parent or Purchaser or the Company shall have failed or refused to designate the account described in Section 2.3(d).

(f) Certificates evidencing Top-Up Option Shares delivered hereunder may include legends legally required by applicable securities laws. Parent and Purchaser acknowledge that the Top-Up Option Shares that Parent or Purchaser may acquire upon exercise of the Top-Up Option will not be registered under the Securities Act and will be issued in reliance upon an exemption thereunder for transactions not involving a public offering. Each of Parent and Purchaser hereby represents and warrants to the Company that it is, or will be upon the purchase of the Top-Up Option Shares, an “accredited investor”, as defined in Rule 501 of Regulation D under the Securities Act.

 

3.	T HE M ERGER

3.1 The Merger. Upon the terms and subject to the conditions set forth in Article 8, and in accordance with the DGCL, at the Effective Time Purchaser shall be merged with and into the Company. As a result of the Merger, the separate corporate existence of Purchaser shall cease and the Company shall continue as the surviving corporation of the Merger (the “ Surviving Corporation ”). Notwithstanding anything to the contrary contained in this Section 3.1, Parent may elect instead, at any time prior to the fifth business day immediately

 

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preceding the date on which the Proxy Statement (as hereinafter defined) is mailed initially to the Company’s stockholders, to merge the Company into Purchaser or another direct or indirect wholly owned subsidiary of Parent. In such event, the parties agree to execute an appropriate amendment to this Agreement in order to reflect the foregoing and to provide, as the case may be, that Purchaser or such other wholly owned subsidiary of Parent shall be the Surviving Corporation; provided , that in such event any impact on the Company or other implication of such amendment shall not be considered a breach of any Company representation, warranty or covenant under this Agreement.

3.2 Effective Time; Closing. As promptly as practicable after the satisfaction or, if permissible, waiver of the conditions set forth in Article 8, the parties hereto shall cause the Merger to be consummated by filing a certificate of merger, or certificate of ownership and merger if appropriate (in either such case, the “ Certificate of Merger ”), with the Secretary of State of the State of Delaware, in such form as is required by, and executed in accordance with, the relevant provisions of the DGCL (the date and time of such filing, or such later time as shall be agreed by Parent and the Company and specified in such filing, being the “ Effective Time ”). Prior to such filing, a closing shall be held at the offices of Morrison & Foerster LLP, 425 Market Street, San Francisco, California, or such other place as the parties shall agree, for the purpose of confirming the satisfaction or waiver, as the case may be, of the conditions set forth in Article 8.

3.3 Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of the Company and Purchaser shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Company and Purchaser shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation.

3.4 Certificate of Incorporation; By-laws.

(a) At the Effective Time, the Certificate of Incorporation of the Surviving Corporation shall be amended and restated to conform to the Certificate of Incorporation of Purchaser, as in effect immediately prior to the Effective Time, until thereafter amended as provided by law and such Certificate of Incorporation; provided , that Article I of the Certificate of Incorporation of the Surviving Corporation shall read as follows: “The name of the corporation is Wind River Systems, Inc.”

(b) Unless otherwise determined by Parent prior to the Effective Time, the By-laws of the Surviving Corporation shall be amended and restated at the Effective Time to conform to the By-laws of Purchaser as in effect immediately prior to the Effective Time, until thereafter amended as provided by Law, the Certificate of Incorporation of the Surviving Corporation and such By-laws.

3.5 Directors and Officers. The directors of Purchaser immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the Certificate of Incorporation and By-laws of the Surviving Corporation, and,

 

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except as determined by Parent or Purchaser prior to the Effective Time, the officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified or until their earlier death, resignation or removal.

3.6 Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of Purchaser, the Company or the holders of any of the following securities:

(a) Each Company Share issued and outstanding immediately prior to the Effective Time (other than any Company Shares to be canceled pursuant to Section 3.6(b) and any Dissenting Company Shares) shall be canceled and shall be converted automatically into the right to receive an amount in cash, without interest, equal to the Per Share Amount (the “ Merger Consideration ”) payable to the holder of such Company Share, upon surrender, in the manner provided in Section 3.9, of the certificate that formerly evidenced such Company Share. If, between the date of this Agreement and the Effective Time, the outstanding shares of Company Common Stock are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then the Merger Consideration shall be adjusted to the extent appropriate (taking into account any prior adjustments pursuant to Section 2.1(g)) for all purposes of this Article 3.

(b) Each Company Share held in the treasury of the Company and each Company Share owned by Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or of the Company immediately prior to the Effective Time shall be canceled and retired without any conversion thereof, and no payment or distribution shall be made and no consideration of any kind shall be delivered with respect thereto.

(c) Each share of common stock of Purchaser issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.

3.7 Employee Stock Options; Company RSUs; Company ESPP.

(a) At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Purchaser, the Company or the holders of Company Stock Options, each Company Stock Option outstanding immediately prior to the Effective Time that is held by a Continuing Employee and not described in the following sentence (a “ Continuing Option ”) will be assumed by Parent. A Company Stock Option shall not be considered a Continuing Option if the Company Stock Option is subject to the Laws of a non-U.S. jurisdiction and Parent determines the Company Stock Option may not be converted into a Continuing Option (1) under a Law of the relevant non-U.S. jurisdiction (including by reason of a failure to obtain any required regulatory consents or approvals after making reasonable commercial efforts), (2) under the policies and practices of Parent with respect to the grant of equity awards in the relevant non-U.S. jurisdiction, or (3) due to Parent’s administrative practices with respect to equity awards. Parent will notify the Company at least twenty (20) days prior to the Effective Time of the Company Stock Options that will not be Continuing Options pursuant to the previous sentence.

 

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Each Continuing Option assumed by Parent will continue to have, and be subject to the same terms and conditions of such option immediately prior to the Effective Time (as such terms and conditions have been amended in accordance with Section 7.6(d) of this Agreement), including the vesting restrictions, except for administrative changes that are not adverse to the holder of the Continuing Option or to which the holder consents and except that (i) each Continuing Option will be exercisable for a number of shares of common stock of Parent (the “ Parent Common Stock ”) equal to the product of the number of Company shares that would be issuable upon exercise of the Continuing Option outstanding immediately prior to the Effective Time multiplied by a quotient obtained by dividing (A) the Merger Consideration by (B) the average closing price of Parent Common Stock on the NASDAQ Global Select Market for the five trading days immediately preceding (but not including) the Effective Time (the “ Exchange Ratio ”), rounded down to the nearest whole number of shares of Parent Common Stock, and (ii) the per share exercise price for the Parent Common Stock issuable upon exercise of such assumed Continuing Option will be equal to the quotient determined by dividing the per share exercise price for such Continuing Option outstanding immediately prior to the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent, and (iii) all references to the “Company” in the applicable Company Stock Option Plans and the stock option agreements will be references to Parent. It is the intention of the parties that each Company Stock Option so assumed by Parent shall qualify following the Effective Time as an incentive stock option as defined in Section 422 of the Code to the extent permitted under Section 422 of the Code and to the extent such Company Stock Option qualified as an incentive stock option prior to the Effective Time.

(b) Each Company Stock Option that is not a Continuing Option (a “ Terminating Option ”) shall in each case be cancelled at the Effective Time and shall be converted automatically into the right to receive, as soon as practicable after the Effective Time, an amount in cash determined by multiplying (x) the excess, if any, of the Merger Consideration over the applicable exercise price of such option by (y) the number of Company Shares subject to such Terminating Option (after giving effect to any acceleration provided under the terms of the applicable Company Stock Option Plan under which the Company Stock Option was granted, the applicable stock option agreement, and any other Plan disclosed in Section 4.10(a) of the Disclosure Schedule as such Plan is amended in connection with this Agreement), less all applicable deductions and withholdings required by law to be withheld in respect of such payment.

(c) Effective as of the Effective Time, by virtue of the Merger and without any action on the part of the Company, Parent, Purchaser or the holders of Company RSUs, each outstanding restricted stock unit or performance share under the Company Stock Option Plans (such restricted stock units and performance shares, the “ Company RSUs ”) that is then outstanding, unvested and held by a Continuing Employee and not described in the following sentence (a “ Continuing RSU ”) will be assumed by Parent. A Company RSU shall not be considered a Continuing RSU if the Company RSU is subject to the Laws of a non-U.S. jurisdiction and Parent determines the Company RSU may not be converted into a Continuing RSU (1) under a Law of the relevant non-U.S. jurisdiction (including by reason of a failure to obtain any required regulatory consents or approvals after making reasonable commercial efforts), (2) under the policies and practices of Parent with respect to the grant of equity awards in the relevant non-U.S. jurisdiction, or (3) due to Parent’s administrative practices with respect

 

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to equity awards. Parent will notify the Company at least twenty (20) days prior to the Effective Time of the Company RSUs that will not be Continuing RSUs pursuant to the previous sentence. Each Continuing RSU assumed by Parent will continue to have and be subject to, the same terms and conditions of such Company RSU immediately prior to the Effective Time (as such terms and conditions have been amended in accordance with Section 7.6(d) of this Agreement), including the vesting restrictions, except for administrative changes that are not adverse to the holder of the Continuing RSU or to which the holder consents and except that (i) each Company RSU shall cover a number of shares of Parent Common Stock equal to the product of the number of Company Shares that would be issuable under the Company RSU immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares of Parent Company Stock and (ii) all references to the “Company” in the applicable Company Stock Option Plans and restricted stock unit agreements will be references to Parent. Each Company RSU (or any portion thereof) that vests and becomes settlable by its terms at the Effective Time will not be assumed but will instead be converted into the right to receive, in exchange for the cancellation of such Company RSU (or portion thereof), an amount in cash, without interest, equal to the Merger Consideration multiplied by the number of shares of Company Common Stock subject to such Company RSU (or settlable portion thereof) immediately prior to the Effective Time. Any such payment shall be subject to all applicable federal, state and local tax withholding requirements.

(d) By virtue of the Merger and without any action on the part of the Company, Parent, Purchaser or the holders of Company RSUs, each Company RSU that is not a Continuing RSU outstanding immediately prior to the Effective Time shall be cancelled at the Effective Time (each, a “ Terminating RSU ”). Each holder of a Terminating RSU (after giving effect to any acceleration provided under the terms of the applicable Company Stock Option Plan under which the Company RSU was granted, the applicable restricted stock unit agreement, and any other Plan disclosed in Section 4.10(a) of the Disclosure Schedule as such Plan is amended in connection with this Agreement) shall be eligible to receive at the Effective Time an amount in cash (without interest) equal to (A) the Merger Consideration multiplied by (B) the number of shares of Company Common Stock subject to each Terminating RSU, less all applicable deductions and withholdings required by Law to be withheld in respect of such payment.

(e) The Company hereby represents and warrants to Parent and Purchaser that it will take all actions necessary with respect to the 1993 Employee Stock Purchase Plan (the “ Company ESPP ”) so that (i) the Company ESPP shall be suspended immediately following the end of the offering period in effect as of the date hereof after all outstanding purchase rights (if any) have been exercised (the “Final Purchase”), and no offering periods or purchase periods shall be thereafter commenced and no payroll deductions or other contributions (other than payroll deductions pursuant to elections in effect as of the date hereof as to the offering period in effect as of the date hereof) shall be thereafter made or effected with respect to the Company ESPP, and (iii) notice shall be given to participants in the Company ESPP as soon as administratively practicable following the date hereof describing the suspension of the Company ESPP pursuant to this Section 3.7(e) immediately following the Final Purchase, and (iv) the Company ESPP shall terminate effective upon the Effective Time.

(f) Prior to the Acceptance Date, the Company shall provide notice (in a form reasonably satisfactory to Parent) to each holder of an outstanding award granted pursuant to any Company Stock Option Plan describing the treatment of such award in accordance with this Section 3.7.

 

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(g) Parent shall take such actions as are necessary for the assumption of Company Stock Options and Company RSUs as provided pursuant to Section 3.7, including the reservation, issuance and listing of Parent Common Stock as is necessary to effectuate the transactions contemplated by Sections 3.7(a) and 3.7(c). Parent shall prepare and file with the SEC a registration statement on Form S-8 (to the extent available) with respect to the Parent Common Stock subject to such Continuing Options and Continuing RSUs and shall use its reasonable best efforts to have such registration statement declared effective as soon as reasonably practicable, but in no event later than ten (10) business days, following the Effective Time. It is intended that the assumption of the Continuing Options assumed by Parent shall comply with Sections 409A and 424 of the Code and this Section 3.7 shall be construed consistent with such intent.

3.8 Dissenting Shares.

(a) Notwithstanding any provision of this Agreement to the contrary, Company Shares that are outstanding immediately prior to the Effective Time and that are held by stockholders who shall have not voted in favor of the Merger or consented thereto in writing and who shall have demanded properly in writing appraisal for such Company Shares in accordance with Section 262 of the DGCL (collectively, the “ Dissenting Company Shares ”) shall not be converted into or represent the right to receive the Merger Consideration. From and after the Effective Time, a holder of Dissenting Company Shares shall not have and shall not be entitled to exercise any of the voting rights or other rights of a stockholder of the Surviving Corporation. Such stockholders shall be entitled to receive payment of the appraised value of such Dissenting Company Shares held by them in accordance with the provisions of such Section 262, except that all Dissenting Company Shares held by stockholders who shall have failed to perfect or who effectively shall have withdrawn or lost their rights to appraisal of such Dissenting Company Shares under such Section 262 shall thereupon be deemed to have been converted into and to have become exchangeable for, as of the Effective Time, the right to receive the Merger Consideration, without any interest thereon, upon surrender, in the manner provided in Section 3.9, of the certificate or certificates that formerly evidenced such Dissenting Company Shares.

(b) The Company shall give Parent (i) prompt notice of any demands for appraisal received by the Company, withdrawals of such demands, and any other instruments, notices, petitions, or other communication received from stockholders or provided to stockholders by Company with respect to any Dissenting Company Shares or shares claimed to be Dissenting Company Shares, and (ii) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the DGCL. Payment of any amount payable to the holders of Dissenting Company Shares shall be the obligation of Company. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.

 

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3.9 Surrender of Company Shares; Stock Transfer Books.

(a) Prior to the Effective Time, Purchaser shall designate a bank or trust company to act as paying agent (the “ Paying Agent ”) for the payment of funds to which holders of Company Shares shall become entitled pursuant to Section 3.6(a). From time to time after the Effective Time, Parent or Purchaser shall deposit, or cause to be deposited, with the Paying Agent the aggregate amount payable pursuant to Section 3.6(a). The Paying Agent shall make payment of the funds to holders of Company Shares in accordance with this Section 3.9. Such funds shall be invested by the Paying Agent as directed by Parent or (after the Effective Time) the Surviving Corporation, and any and all interest earned on the funds shall be paid by the Paying Agent to Parent or (after the Effective Time) the Surviving Corporation. The Surviving Corporation shall bear and pay all charges and expenses, including those of Paying Agent, incurred in connection with the payment of funds to holders of Company Shares.

(b) Promptly after the Effective Time, the Surviving Corporation shall cause to be mailed to each person who was, at the Effective Time, a holder of record of Company Shares entitled to receive the Merger Consideration pursuant to Section 3.6(a) a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the certificates evidencing such Company Shares (the “ Certificates ”) shall pass, only upon proper delivery of the Certificates to the Paying Agent) and instructions for use in effecting the surrender of the Certificates pursuant to such letter of transmittal. Upon surrender to the Paying Agent of a Certificate, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be required pursuant to such instructions, the holder of such Certificate shall be entitled to receive in exchange therefor the Merger Consideration for each Company Share formerly evidenced by such Certificate, and such Certificate shall then be canceled. No interest shall accrue or be paid on the Merger Consideration payable upon the surrender of any Certificate for the benefit of the holder of such Certificate. If payment of the Merger Consideration is to be made to a person other than the person in whose name the surrendered Certificate is registered on the stock transfer books of the Company, it shall be a condition of payment that the Certificate so surrendered shall be endorsed properly or otherwise be in proper form for transfer and that the person requesting such payment shall have paid all transfer and other similar taxes required by reason of the payment of the Merger Consideration to a person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Surviving Corporation that such taxes either have been paid or are not applicable. The Merger Consideration paid upon the surrender for exchange of Certificates shall be deemed to have been paid in full satisfaction of all rights pertaining to the Company Shares theretofore represented by such Certificates.

(c) At any time following the sixth month after the Effective Time, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds which had been made available to the Paying Agent and not disbursed to holders of Company Shares (including all interest and other income received by the Paying Agent in respect of all funds made available to it), and, thereafter, such holders shall be entitled to look to the Surviving Corporation (subject to abandoned property, escheat and other similar laws) only as general creditors thereof with respect to any Merger Consideration that may be payable upon due surrender of the Certificates held by them. Notwithstanding the foregoing, neither the Surviving

 

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Corporation nor the Paying Agent shall be liable to any holder of a Company Share for any Merger Consideration delivered in respect of such Company Share to a public official pursuant to any abandoned property, escheat or other similar law.

(d) At the close of business on the day of the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of Company Shares on the records of the Company. From and after the Effective Time, the holders of Company Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Company Shares except as otherwise provided herein or by applicable law.

(e) If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such person of a bond in such reasonable amount as the Surviving Corporation may require as indemnity against claims that may be made against it with respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration payable in respect thereof, pursuant to this Agreement.

3.10 Withholding Rights. Each of Purchaser, Parent, the Surviving Corporation or the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to Article 2 or 3 of this Agreement to any holder of Company Shares such amounts as are required to be deducted and withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “ Code ”) and the treasury regulations promulgated thereunder, or any provision of state, local or foreign Tax law. To the extent that amounts are so deducted and withheld, and paid over to the appropriate Government Authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Company Shares in respect of which such deduction and withholding was made.

3.11 Additional Actions. If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that any further deeds, assignments or assurances in law or any other acts are necessary or desirable to (i) vest, perfect or confirm, of record or otherwise, in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of the Company or (ii) otherwise carry out the provisions of this Agreement, the Company and its officers and directors shall be deemed to have granted to the Surviving Corporation an irrevocable power of attorney to execute and deliver all such deeds, assignments or assurances in law and to take all acts necessary, proper or desirable to vest, perfect or confirm title to and possession of such rights, properties or assets in the Surviving Corporation and otherwise to carry out the provisions of this Agreement, and the officers and directors of the Surviving Corporation are authorized in the name of the Company or otherwise to take any and all such action.

 

4.	R EPRESENTATIONS AND W ARRANTIES OF THE C OMPANY

Except as disclosed in a document of even date herewith delivered by the Company to Parent and Purchaser prior to the execution and delivery of this Agreement and referring by

 

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section or sub-section number to the representations and warranties in this Agreement (the “ Disclosure Schedule ”) ( provided that any such disclosure shall qualify only the disclosure under the section or sub-section number referred to in the Disclosure Schedule and any other section or sub-section of the Disclosure Schedule that is explicitly cross-referenced), the Company hereby represents and warrants to Parent and Purchaser as follows:

4.1 Organization and Qualification; Company Subsidiaries.

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to own, lease and operate all of its properties and assets and to carry on its business as it is now being conducted. The Company is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except where the failure to be so duly qualified or licensed and in good standing, individually or in the aggregate, would not have a Material Adverse Effect.

(b) Section 4.1(b) of the Disclosure Schedule contains a complete and accurate list of the name, and jurisdiction of organization of each subsidiary of the Company (each a “ Company Subsidiary ”). Each Company Subsidiary is duly organized, validly existing and, to the extent applicable, in good standing under the laws of the jurisdiction of its organization and has the requisite power and authority to own, lease and operate all of its properties and assets and to carry on its business as it is now being conducted, except where the failure, individually or in the aggregate, would not have a Material Adverse Effect.

(c) The Company does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity.

4.2 Certificate of Incorporation and By-laws. The Company has heretofore made available to Purchaser a complete and correct copy of the Certificate of Incorporation and the By-laws or equivalent organizational documents, each as amended to date, of the Company and each material Company Subsidiary. Such Certificates of Incorporation, By-laws or equivalent organizational documents are in full force and effect. Neither the Company nor any Company Subsidiary is in violation of any of the provisions of its Certificate of Incorporation, By-laws or equivalent organizational documents.

4.3 Capitalization.

(a) The authorized capital stock of the Company consists of 325,000,000 Company Shares and 2,000,000 shares of preferred stock, par value $0.001 per share (“ Company Preferred Stock ”).

(b) As of May 31, 2009:

(i) 76,892,405 Company Shares were issued and outstanding, none of which were shares of Company Restricted Stock;

 

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(ii) 16,218,657 Company Shares were held in the treasury of the Company;

(iii) no Company Shares were held by any Company Subsidiary;

(iv) 14,652,835 Company Shares were subject to outstanding Company Stock Options, of which Company Stock Options to purchase 11,632,789 shares of Company Common Stock were exercisable;

(v) no Company Shares were subject to outstanding Company SARs;

(vi) 3,173,360 Company RSUs were outstanding;

(vii) 200,000 Company Performance Share Awards were outstanding;

(viii) 2,931,650 Company Shares were reserved for issuance under the Company ESPP; and

(ix) no shares of Company Preferred Stock were issued or outstanding.

All outstanding Company Shares are validly issued, fully paid and nonassessable and are issued free of any preemptive rights.

(c) Except for changes since May 31, 2009 resulting from the exercise of Company Stock Options or vesting of Company RSUs outstanding on such date, and except for the rights (the “ Rights ”) issued pursuant to the Amended and Restated Rights Agreement, dated as of September 29, 2006 (the “ Rights Agreement ”), between the Company and American Stock Transfer and Trust Company, as rights agent, there are no outstanding (i) options, warrants or other rights, Contracts, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company or any Company Subsidiary or obligating the Company or any Company Subsidiary to issue or sell any shares of capital stock of, or other equity interests in, the Company or any Company Subsidiary, (ii) shares of capital stock of or other voting securities or ownership interests in the Company or any Company Subsidiary, or (iii) restricted shares, restricted share units, stock appreciation rights, performance shares, contingent value rights, “phantom” stock or similar securities or rights that are derivative of or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock or other voting securities (including any bonds, debentures, notes or other indebtedness having voting rights or convertible into securities having voting rights) or ownership interests in the Company or any Company Subsidiary (the items in clauses (i), (ii) and (iii) being referred to collectively as the “ Company Securities ”). All Company Shares subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable and free of any preemptive rights. There are no voting trusts or other Contracts to which the Company or any Company Subsidiary is a party with respect to the voting of any capital stock of, or other equity interest in, the Company or any Company Subsidiary.

(d) There are no outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any Company Shares or any

 

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other Company Securities or any capital stock of any Company Subsidiary or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Company Subsidiary or any other person. Each outstanding share of capital stock of each Company Subsidiary is duly authorized, validly issued, fully paid and nonassessable and was issued free of any preemptive rights, and each such share is owned by the Company or another Company Subsidiary free and clear of all Liens or Contracts or other limitations on the Company’s or any Company Subsidiary’s voting rights.

(e) Section 4.3(e) of the Disclosure Schedule sets forth a listing of (i) all equity plans of the Company; (ii) all outstanding Company Stock Options, Company Restricted Stock, Company RSUs, and as of May 31, 2009; (iii) the date of grant and name of holder of each Company Stock Option, Company RSU and the vesting schedule; (iv) with respect to Company Stock Options, the portion of which that is vested as of May 31, 2009 and if applicable, the exercise price or repurchase price therefore, (v) the date upon which each Company Stock Option would normally be expected to expire absent termination of employment or other acceleration, and (vi) with respect to Company Stock Options, whether or not such Company Stock Option is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code. Each grant of a Company Stock Option was duly authorized no later than the date on which the grant of such Company Stock Option was by its terms to be effective (the “ Grant Date ”) by all necessary corporate action, including, as applicable, approval by the Company Board (or a duly constituted and authorized committee thereof), or a duly authorized delegate thereof, and any required stockholder approval by the necessary number of votes or written consents; each such grant was made in all material respects in accordance with the terms of the applicable Company Stock Option Plan and all other applicable Law; each such grant intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies; and the per share exercise price of each Company Stock Option was not less than the fair market value of a Company Share on the applicable Grant Date.

4.4 Authority Relative to this Agreement.

(a) The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and, subject in the case of the Merger to obtaining the Required Shareholder Vote, if required, to consummate the Transactions. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the Transactions have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the Transactions (other than, with respect to the Merger, the Required Shareholder Vote, if and to the extent required by applicable Law, and the filing and recordation of appropriate merger documents as required by the DGCL). This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Parent and Purchaser, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

 

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(b) The Company Board, at a meeting duly called and held on June 3, 2009, at which all of the directors of the Company were present, unanimously (i) determined that this Agreement and the transactions contemplated hereby, including each of the Offer and the Merger (collectively, the “ Transactions ”), are advisable, fair to, and in the best interests of the holders of Company Shares, (ii) approved and adopted this Agreement and the Transactions (such approval and adoption having been made in accordance with the DGCL), (iii) recommended that the holders of Company Shares accept the Offer and tender Company Shares pursuant to the Offer, and to the extent required by applicable Law, approve and adopt this Agreement, the Stockholder Agreement and the Transactions, (iv) adopted a resolution causing none of the Company, any of the Transactions or this Agreement or the Stockholder Agreement to be subject to any restriction set forth in any state takeover Law or similar Law that might otherwise apply, and (v) amended the Rights Agreement as contemplated herein, which actions and resolutions have not been subsequently rescinded, modified or withdrawn in any way.

4.5 No Conflict; Required Filings and Consents.

(a) The execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company will not, (i) conflict with or violate the Certificate of Incorporation or By-laws or equivalent organizational documents of the Company or any Company Subsidiary, (ii) subject to obtaining the Company Required Approvals and, in the case of the Merger, the Required Shareholder Vote, if required, conflict with or violate any U.S. or non-U.S. law (statutory, common or otherwise), including any statute, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order of a Governmental Authority (“ Law ”) applicable to the Company or any Company Subsidiary or by which any property or asset of the Company or any Company Subsidiary is bound or affected, or (iii) subject to obtaining the consents that are required to be listed in Section 4.5(a) of the Disclosure Schedule, result in any breach of or constitute a default (or an event that, with notice or lapse of time or both, would become a default or breach) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any property or asset of the Company or any Company Subsidiary pursuant to, or result in the loss of a material benefit under any Company Material Contract or material Permit to which the Company or any Company Subsidiary is a party or by which the Company or any Company Subsidiary or any property or asset of any of them is bound or affected, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences that, individually or in the aggregate, would not prevent or materially delay consummation of the Offer or the Merger and would not have a Material Adverse Effect.

(b) The execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, except (i) for (x) applicable requirements, if any, of the Exchange Act and state securities or “blue sky” laws (“ Blue Sky Laws ”), (y) the pre-merger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), and similar requirements in foreign countries regarding antitrust or competition matters, and (z) filing and recordation of appropriate merger documents as required by the DGCL (collectively, the “ Company Required Approvals ”), and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, individually or in the aggregate, would not prevent or materially delay consummation of the Offer or the Merger and would not have a Material Adverse Effect.

 

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4.6 Permits; Compliance. Each of the Company and the Company Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for each of the Company or the Company Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted (the “ Permits ”), except where the failure to have, or the suspension or cancellation of, any of the Permits, individually or in the aggregate, would not prevent or materially delay consummation of the Offer or the Merger and would not have a Material Adverse Effect. No suspension or cancellation of any of the Permits is pending or, to the knowledge of the Company, threatened, and there have occurred no defaults under, violations of, or events giving rise to a right of termination, amendment or cancellation of any such Permits (with or without notice, the lapse of time or both), except where the failure to have, or the suspension or cancellation of, any of the Permits, individually or in the aggregate, would not prevent or materially delay consummation of the Offer or the Merger and would not have a Material Adverse Effect. Neither the Company nor any Company Subsidiary is, and neither the Company nor any Company Subsidiary since February 1, 2007 has been, in conflict with, or in default, breach or violation of, (i) any Law applicable to the Company or any Company Subsidiary or by which any property or asset of the Company or any Company Subsidiary is bound or affected, or (ii) any Company Material Contract or material Permit to which the Company or any Company Subsidiary is a party or by which the Company or any Company Subsidiary or any property or asset of the Company or any Company Subsidiary is bound, except for any such conflicts, defaults, breaches or violations that, individually or in the aggregate, would not prevent or materially delay consummation of the Offer or the Merger and would not have a Material Adverse Effect. Neither the Company nor any of the Company Subsidiaries has, since February 1, 2007, received any written notice from any Governmental Authority alleging that it is not in compliance in all material respects with any Law.

4.7 SEC Filings; Financial Statements.

(a) The Company has filed all forms, reports and other documents required to be filed by it with the SEC since February 1, 2006 (such documents filed since February 1, 2006, and those filed by the Company with the SEC subsequent to the date of this Agreement, if any, including any amendments thereof, the “ SEC Reports ”). Each SEC Report (x) complied, or if filed subsequent to the date of the Agreement will comply, as to form in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the “ Securities Act ”), or the Exchange Act, as the case may be, and the Sarbanes-Oxley Act of 2002 (“ SOX ”) and the applicable rules and regulations promulgated thereunder, and (y) did not, at the time it was filed (or, if amended prior to the date hereof, as of the date of such amendment), contain, or if filed after the date hereof at the time of filing will not contain, any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No Company Subsidiary has been or is required to file any form, report or other document with the SEC.

 

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(b)(i) Each of the consolidated financial statements contained in the SEC Reports (collectively, the “ Audited Company Financial Statements ”) (A) have been, or will be, as the case may be, prepared from and in accordance with and accurately reflect the books and records of the Company and its consolidated Company Subsidiaries in all material respects, (B) complied, or will comply, as the case may be, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (C) was, or will be, as the case may be, prepared in accordance with U.S. generally accepted accounting principles (“ GAAP ”) applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto), and (D) fairly presents, or will fairly present, as the case may be, in all material respects the consolidated financial position, results of operations and cash flows of the Company and its consolidated Company Subsidiaries as at the respective dates thereof and for the respective periods indicated therein (subject, in the case of unaudited interim statements, to normal and recurring year-end adjustments). (ii) The unaudited financial information contained in the Company’s earnings release set forth in Section 4.7(b) of the Disclosure Schedule for the quarter ended April 30, 2009 (such unaudited financial information together with the Audited Company Financial Statements, the “ Company Financial Reports ”) (A) has been prepared from and in accordance with and accurately reflect the books and records of the Company and its consolidated Company Subsidiaries in all material respects, (B) was prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except as noted therein), and (C) fairly presents, in all material respects the consolidated financial position and results of operations of the Company and its consolidated Company Subsidiaries as at the respective dates thereof and for the respective periods indicated therein (subject to normal and recurring year-end adjustments).

(c) Except as and to the extent set forth on the consolidated balance sheet of the Company and its consolidated Company Subsidiaries as at January 31, 2009, including the notes thereto (the “ 2009 Balance Sheet ”), neither the Company nor any Company Subsidiary has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), and there is no existing condition, situation or set of circumstances that could reasonably be expected to result in such a liability or obligation, except for (x) liabilities and obligations incurred in the ordinary course of business in amounts consistent with past practice since the date of the 2009 Balance Sheet that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (y) liabilities and obligations incurred in connection with the preparation and negotiation of this Agreement or as required by this Agreement. Section 4.7(c)-1 of the Disclosure Schedule sets forth a description of all indebtedness for borrowed money of the Company and the Company Subsidiaries greater than $500,000 individually or in the aggregate (other than any indebtedness owed to the Company or a Company Subsidiary). Section 4.7(c)-2 of the Disclosure Schedule lists all obligations of the Company and the Company Subsidiaries in respect of interest rate and currency obligation, swaps, hedges or similar arrangements.

(d) Each of the principal executive officer of the Company and the principal financial officer of the Company (and each former principal executive officer of the Company and each former principal financial officer of the Company, as applicable) has made all certifications required by Rule 13a-14 or 15d-14 under the Exchange Act or Sections 302 and 906 of SOX and the rules and regulations of the SEC promulgated thereunder with respect to the

 

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SEC Reports, and the statements contained in such certifications are true and correct. For purposes of this Section 4.7(d), “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in SOX. Neither the Company nor any of the Company Subsidiaries has outstanding, or has arranged any outstanding, “extensions of credit” to directors or executive officers within the meaning of Section 402 of SOX. The Company is in compliance in all material respects with SOX.

(e) Neither the Company nor any of the Company Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract or arrangement (including any contract or arrangement relating to any transaction or relationship between or among the Company and any of the Company Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand, or any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K of the SEC)), where the result, purpose or intended effect of such contract or arrangement is to avoid disclosure of any material transaction involving, or material liabilities of, the Company or any of the Company Subsidiaries in the Company’s or such Company Subsidiary’s published financial statements or other of the SEC Reports.

(f) The Company maintains a system of internal controls over financial reporting and accounting designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes, including to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets that could have a material effect on the Company’s financial statements is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(g) The Company has in place “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) that are designed to ensure that material information that is required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and made known to its principal executive officer and principal financial officer as appropriate to allow timely decisions regarding required disclosure.

(h) The Company’s management has completed an assessment of the effectiveness of the Company’s internal controls over financial reporting in compliance with the requirements of Section 404 of SOX for the fiscal year ended January 31, 2009, and such assessment concluded that such controls were effective. Since February 1, 2006, the Company has disclosed to the Company’s outside auditors and the audit committee of the Company (and made copies of such disclosures available to Parent) (A) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect in any material respect the Company’s ability to record, process, summarize and report financial data, (B) any

 

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fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting, and (C) any claim or allegation of any of the foregoing. Since February 1, 2006, the Company has not received from its independent auditors any oral or written notification of a (i) “reportable condition” or (ii) “material weakness” in the Company’s internal controls. For purposes of this Agreement, the terms “reportable condition” and “material weakness” shall have the meanings assigned to them in the Statements of Auditing Standards 60, as in effect on the date hereof.

(i) The Company has furnished Parent with copies of all comment letters received by the Company from the SEC since February 1, 2006, relating to the Company’s SEC Reports and all responses of the Company thereto. There are no outstanding unresolved issues with respect to the Company or the SEC Reports noted in comment letters or other correspondence received by the Company or its attorneys from the SEC, and there are no pending (i) formal or, to the knowledge of the Company, informal investigations of the Company by the SEC or (ii) inspection of an audit of the Company’s financial statements by the Public Company Accounting Oversight Board. Since February 1, 2006 there has been no material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in improper or illegal accounting or auditing practices or maintains improper or inadequate internal accounting controls. Since February 1, 2006, no current or former attorney representing the Company or any of the Company Subsidiaries has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Company Board or any committee thereof or to any director or executive officer of the Company.

(j) To the knowledge of the Company, no employee of the Company or any of the Company Subsidiaries has provided or is providing information to any law enforcement agency regarding the possible commission of any crime or the violation or possible violation of any applicable legal requirements of the type described in Section 806 of SOX. Neither the Company nor any of the Company Subsidiaries nor, to the knowledge of the Company, any director, officer, employee, contractor, subcontractor or agent of the Company or any such Company Subsidiary has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against an employee of the Company or any of the Company Subsidiaries in the terms and conditions of employment because of any lawful act of such employee described in Section 806 of SOX.

(k) The Company has heretofore furnished to Parent complete and correct copies of all amendments and modifications that have not been filed by the Company with the SEC to all Contracts, documents and other instruments that previously had been filed by the Company with the SEC and are currently in effect.

4.8 Absence of Certain Changes or Events. Since the date of the 2009 Balance Sheet, except as contemplated by this Agreement, the Company and the Company Subsidiaries have conducted their businesses only in the ordinary course and in a manner consistent with past practice. Since the date of the 2009 Balance Sheet (i) there has not been any event, condition, circumstance, development, change or effect, having, or that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (ii) none of the Company or any of the Company Subsidiaries has taken any action that if taken between the date hereof and the Effective Time would constitute a breach of Section 6.1.

 

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4.9 Absence of Litigation. There is (A) no litigation, suit, claim, action, hearing, proceeding, arbitration or mediation pending, or (B) to the knowledge of the Company, (x) no inquiry or investigation pending or (y) threatened against the Company or any Company Subsidiary, or any property or asset of the Company or any Company Subsidiary, that (i) (w) involves (individually or collectively with all other Actions) an amount in controversy in excess of $500,000, (x) seeks material injunctive relief, (y) seeks to impose any legal restraint on or prohibition against or limit the Surviving Corporation’s ability to operate the business of the Company and the Company Subsidiaries substantially as it was operated prior to the date of this Agreement or (z) otherwise individually or in the aggregate would be material to the Company or any Company Subsidiary, (ii) seeks to materially delay or prevent the consummation of any Transaction, or (iii) will cause or require (or purports to cause or require) Parent or any of its Affiliates to (1) grant to any Third Party any license, covenant not to sue, immunity or other right with respect to or under any of the Intellectual Property Rights owned by or licensed by or to Parent or any of its Affiliates, or (2) be obligated to pay any royalties or other amounts, or offer any discounts, to any Third Party. To the Company’s knowledge, there is no existing allegation, condition, situation or set of circumstances that would reasonably be expected to give rise to an Action of the type enumerated in the foregoing clauses (i)-(iii). Neither the Company nor any Company Subsidiary nor any property or asset of the Company or any Company Subsidiary is subject to any continuing order of, consent decree, settlement agreement or similar written agreement with, or, to the knowledge of the Company, continuing investigation by, any Governmental Authority, or any order, writ, judgment, injunction, decree, determination or award of any Governmental Authority that would prevent or materially delay consummation of the Offer or the Merger or reasonably be expected to be material to the Company or any Company Subsidiary. There are not currently pending, nor have there been since February 1, 2007, any internal investigations or inquiries conducted by the Company, the Company Board (or any committee thereof) or, to the knowledge of the Company, any third party at the request of any of the foregoing concerning any financial, accounting, tax, conflict of interest, illegal activity, fraudulent or deceptive conduct or other misfeasance or malfeasance involving the Company, any of the Company Subsidiaries or their respective officers or employees. As of the date hereof, there is no material Action that the Company or any Company Subsidiary intends to initiate.

4.10 Employee Benefit Plans.

(a) Section 4.10(a) of the Disclosure Schedule lists (i) all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)) and all bonus, stock option, stock purchase, restricted stock, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other material benefit plans, programs or arrangements, and all employment, termination, severance or other Contracts to which the Company or any ERISA Affiliate is a party (except for (i) offer letters that provide for employment that is terminable at will and without cost or liability to the Company or its Subsidiaries and (ii) employment contracts for employees hired and based in locations outside the U.S., in which case only forms of such Contracts shall be scheduled,

 

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unless such individual Contract is a Company Material Contract), with respect to which the Company or any ERISA Affiliate has or could have any