AGREEMENT AND PLAN OF MERGER

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AGREEMENT AND PLAN OF MERGER

dated as of

October 5, 2009

among

AVOCENT CORPORATION,

EMERSON ELECTRIC CO.

and

GLOBE ACQUISITION CORPORATION

 

 

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) dated as of October 5, 2009, among AVOCENT CORPORATION, a Delaware corporation (the “ Company ”), EMERSON ELECTRIC CO., a Missouri corporation (“ Parent ”), and GLOBE ACQUISITION CORPORATION, a Delaware corporation and a wholly-owned subsidiary of Parent (“ Merger Subsidiary ”).

W I T N E S S E T H :

WHEREAS, the respective boards of directors of the Company, Parent and Merger Subsidiary have approved the acquisition of the Company by Parent on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, on the terms and subject to the conditions set forth herein, Parent will cause Merger Subsidiary to commence a tender offer (as it may be amended from time to time as permitted by this Agreement, the “ Offer ”) to purchase any and all of the outstanding shares of common stock, $0.001 par value, of the Company (collectively, the “ Shares ”) at a price of $25.00 per Share (the “ Offer Price ”), net to the seller in cash;

WHEREAS, following consummation of the Offer, the parties intend that Merger Subsidiary will be merged with and into the Company on the terms and subject to the conditions set forth in this Agreement; and

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE 1

D EFINITIONS

Section 1.01 . Definitions. (a) As used herein, the following terms have the following meanings:

“ Acquisition Proposal ” means, other than the transactions contemplated by this Agreement, any Third-Party offer or proposal relating to, or any Third-Party indication of interest in, (i) any acquisition or purchase, direct or indirect, of 15% or more of the consolidated assets of the Company and its Subsidiaries or 15% or more of any class of equity or voting securities of the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company and its Subsidiaries, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such Third Party beneficially owning 15% or more of any class of equity or voting securities of the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company and its Subsidiaries, (iii) a merger, consolidation, share exchange, business combination, sale of substantially all the assets, or other similar transaction involving the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company and its Subsidiaries, in any case as a result of which either (A) the stockholders of the Company immediately prior to the consummation of such transaction would hold less than 85% of each class of equity and voting securities of the Company, or (B) the Company would hold, directly or indirectly, less than 85% of the consolidated assets of the Company and its Subsidiaries or 85% of each class of equity and voting securities of any Subsidiaries of the Company whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company and its Subsidiaries, or (iv) a reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company and its Subsidiaries.

“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person.

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“ Antitrust Laws ” means statutes, rules, regulations, orders, decrees, administrative and judicial doctrines, and other laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization, lessening of competition or restraint of trade.

“ Applicable Law ” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise and whether civil, criminal or administrative), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated, applied, enforced or upheld by a Governmental Authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise.

“ Business Day ” means a day, other than Saturday, Sunday or any other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.

“ Code ” means the Internal Revenue Code of 1986.

“ Company Balance Sheet ” means the consolidated balance sheet of the Company as of December 31, 2008 and the footnotes thereto set forth in the Company 10-K.

“ Company Balance Sheet Date ” means December 31, 2008.

“ Company Disclosure Schedule ” means the disclosure schedule dated the date hereof regarding this Agreement that has been provided by the Company to Parent and Merger Subsidiary.

“ Company Material Adverse Effect ” means a material adverse effect on the business, financial condition, assets or results of operations of the Company and its Subsidiaries, taken as a whole, excluding any effect resulting from or arising out of (A) conditions and changes in the financial or securities markets or general economic or political conditions in the United States to the extent that such conditions or changes do not have a materially disproportionate effect on the Company and its Subsidiaries, taken as a whole, relative to other participants in the industry in which the Company and its Subsidiaries operate, (B) conditions and changes (including changes of Applicable Law) in or generally affecting the industry in which the Company and its Subsidiaries operate to the extent that such conditions and changes do not specifically relate to or have a materially disproportionate effect on the Company and its Subsidiaries, taken as a whole, relative to other participants in the industry in which the Company and its Subsidiaries operate, (C) acts of war, sabotage or terrorism or natural disasters involving the United States to the extent that such events do not have a materially disproportionate effect on the Company and its Subsidiaries, taken as a whole, relative to other participants in the industry in which the Company and its Subsidiaries operate, (D) the announcement or pendency of the transactions contemplated by this Agreement, (E) the Company’s failure, by itself, to meet analyst expectations, or the Company’s internal projections, of revenues, operating income, EBIT, EBITDA, net income or other financial metrics (it being understood and agreed that, subject to the other exclusions outlined in this definition, the underlying cause of any such failure may be taken into account in determining whether a Company Material Adverse Effect has or would be reasonably likely to occur), (F) actions taken by the Company with the express permission, or at the express request, of Parent, or (G) any matters expressly set forth in the Company Disclosure Schedule.

“ Delaware Law ” means any law of the State of Delaware, including the General Corporation Law of the State of Delaware, any other statutory, common or other law of the State of Delaware, and any judicial or administrative interpretations thereof.

“ Earned Performance Shares ” means any Performance Share award, or portion thereof, under which the applicable performance milestones have been achieved and which therefore remain subject to vesting solely based upon such holder’s continued service with or employment by the Company.

 

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“ Environmental Laws ” means any Applicable Laws or any agreement with any Governmental Authority or other third party relating to the environment or to pollutants, contaminants or any toxic or hazardous substance, waste or material, including the exposure of any individual to Hazardous Substances.

“ Environmental Permits ” means all permits, licenses, franchises, certificates, approvals and other similar authorizations of Governmental Authorities relating to or required by Environmental Laws and affecting or relating to the business or properties of the Company or any of its Subsidiaries.

“ ERISA ” means the Employee Retirement Income Security Act of 1974.

“ ERISA Affiliate ” of any entity means any other entity that, together with such entity, would be treated as a single employer under Section 414 of the Code.

“ GAAP ” means generally accepted accounting principles in the United States.

“ Governmental Authority ” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.

“ Hazardous Substance ” means any pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, or any substance, waste or material having any constituent elements displaying any of the foregoing characteristics, including any substance, waste or material regulated under any Environmental Law.

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

“ Information Technology ” means information technology of any type or nature including computer software and computer hardware, firmware, middleware, servers, workstations, routers, hubs, switches, databases, data communications lines and all information technology equipment, information technology networks and systems, all associated methods, systems, processes, and documentation.

“ Intellectual Property ” means intellectual property rights of any type or nature, however denominated, throughout the world, including: (i) trademarks, service marks, brand names, certification marks, trade dress, domain names and other indications of origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application, (ii) inventions and discoveries, whether patentable or not, in any jurisdiction, patents, applications for patents (including divisions, continuations, continuations in part and renewal applications), and any renewals, extensions or reissues thereof, in any jurisdiction, (iii) Trade Secrets, (iv) writings, images, content, and other expressive works, whether copyrightable or not, in any jurisdiction, and any and all copyright rights, whether registered or not, and registrations or applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof, (v) moral rights, database rights, design rights, industrial property rights, publicity rights and privacy rights and (vi) all rights to bring suit and assert claims and to receive equitable or legal remedies arising from or related to the foregoing.

“ International Plan ” means any material employment, severance or similar contract or arrangement (whether or not written) or any material plan, policy, fund, program or arrangement or contract providing for severance, insurance coverage (including any self-insured arrangements), workers’ compensation, disability benefits, supplemental unemployment benefits, vacation benefits, pension or retirement benefits or for deferred compensation, profit-sharing, bonuses, stock options, stock appreciation rights or other forms of incentive compensation or post-retirement insurance, compensation or benefits that (i) is not an Employee Plan, (ii) is entered into, maintained, administered or contributed to by the Company or any of its Affiliates, (iii) covers any

 

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employee or former employee of the Company or any of its Subsidiaries who perform services outside of the United States, and (iv) with respect to which the Company or any of its Subsidiaries has material liability.

“ Knowledge ” of the Company means the actual knowledge of the persons set forth in Section 1.01(a) of the Company Disclosure Schedule.

“ Lien ” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance or other adverse claim of any kind in respect of such property or asset. For purposes of this Agreement, a Person shall be deemed to own subject to a Lien any property or asset that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset. For purposes of this Agreement, with respect to Intellectual Property, the grant of a license under an item of Intellectual Property shall not be deemed to be a Lien against that item of Intellectual Property.

“ NASDAQ ” means the NASDAQ Stock Market.

“ 1933 Act ” means the Securities Act of 1933.

“ 1934 Act ” means the Securities Exchange Act of 1934.

“ Parent Material Adverse Effect ” means a material adverse effect on Parent’s ability to consummate the transactions contemplated by this Agreement and perform its obligations hereunder, including the payment of all consideration payable in respect of Shares tendered in the Offer and not withdrawn prior to the expiration of the Offer and all Merger Consideration and other consideration payable as a result of or in connection with the consummation of the Merger.

“ PBGC ” means the Pension Benefit Guaranty Corporation.

“ Performance Shares ” means any award, whether or not applicable performance milestones have been achieved, granted under any equity compensation plan or arrangement of the Company (i) denominated in units, and (ii) pursuant to which the holder thereof was originally entitled to, is or may become entitled to acquire one or more Shares upon the satisfaction or attainment of one or more performance milestones.

“ Person ” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“ Restricted Stock Units ” means any unit or award granted under any equity compensation plan or arrangement of the Company (i) denominated in units, and (ii) pursuant to which the holder thereof is or may become entitled to acquire one or more Shares solely upon such holder’s continued service with or employment by the Company; provided , however , that Performance Shares shall not constitute Restricted Stock Units for purposes of Section 3.07.

“ Sarbanes-Oxley Act ” means the Sarbanes-Oxley Act of 2002.

“ SEC ” means the Securities and Exchange Commission.

“ Specified Actions ” means with respect to the Company and each of its Subsidiaries, any of the following actions or events except as set forth in Section 1.01(b) of the Company Disclosure Schedule:

(i) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, except for dividends or returns of capital by any wholly-owned Subsidiaries;

 

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(ii) except as permitted by Section 7.01(d), any acquisition (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, of any assets, securities, properties, interests or businesses, other than (A) supplies and inventory in the ordinary course of business consistent with past practices, and (B) investments in commercial paper and other short term, liquid securities for cash management purposes in the ordinary course of business consistent with past practices;

(iii) any sale, lease or other transfer, or creation or incurrence of any Lien on, any of the Company’s or any of its Subsidiaries’ assets, securities, properties, interests or businesses, other than (A) sales of inventory or obsolete equipment in the ordinary course of business consistent with past practices and (B) sales of assets, securities, properties, interests or businesses with a sale price (including any related assumed indebtedness) that does not exceed $1,000,000 individually or $2,000,000 in the aggregate;

(iv) any making of any loan, advance or capital contribution to, or investment in, any other Person, except for (A) loans and advances to employees and directors for travel and business expenses in the ordinary course of business consistent with past practices, and (B) investments in commercial paper and other short term, liquid securities for cash management purposes in the ordinary course of business consistent with past practices; and

(v) except as permitted by Section 7.01(d), any creation, incurrence, assumption, sufferance to exist or otherwise becoming liable with respect to any indebtedness for borrowed money or guarantees thereof, other than (A) indebtedness under the Company’s existing credit facility as in effect on the date hereof in the ordinary course of business consistent with past practices, (B) guarantees of indebtedness and letters of credit entered into in the ordinary course of business consistent with past practices, and (C) indebtedness existing solely between the Company and its wholly-owned Subsidiaries or between such Subsidiaries.

“ Subsidiary ” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at any time directly or indirectly owned by such Person.

“ Third Party ” means any Person, including as defined in Section 13(d) of the 1934 Act, other than Parent or any of its Affiliates.

“ Trade Secrets ” means trade secrets or confidential information, and rights established by law in any jurisdiction to limit the use or disclosure thereof by any Person.

“ Unearned Performance Shares ” means any Performance Share award or portion thereof, under which the applicable performance milestones have not yet been achieved.

 

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(b) Each of the following terms is defined in the Section set forth opposite such term:

 

 

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Section 1.02 . Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits, Annexes and Schedules are to Articles, Sections, Exhibits, Annexes and Schedules of this Agreement unless otherwise specified. All Exhibits, Annexes and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit, Annex or Schedule but not otherwise defined therein shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “to the extent” shall mean the extent to which a thing exceeds another, and not simply “if” or “provided.”

ARTICLE 2

T HE O FFER

Section 2.01. The Offer . (a)  Provided that this Agreement shall not have been validly terminated in accordance with Section 11.01, as promptly as practicable (and in any event within 10 days) after the date hereof, Merger Subsidiary shall commence (within the meaning of Rule 14d-2 under the 1934 Act) the Offer. Merger Subsidiary’s obligation to accept for payment and pay for Shares validly tendered and not properly withdrawn

 

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pursuant to the Offer prior to the expiration date thereof (as it may be extended from time to time in accordance with the terms of this Agreement) shall be subject solely to the satisfaction or waiver (if permitted hereunder) of the conditions set forth in Annex I hereto (the “ Offer Conditions ”) and shall not be subject to the satisfaction of any other conditions. The date on which Merger Subsidiary commences the Offer is referred to as the “ Offer Commencement Date ”. Merger Subsidiary shall not (and Parent shall not permit Merger Subsidiary to) terminate or otherwise withdraw the Offer unless and until this Agreement has been validly terminated pursuant to and in accordance with Section 11.01. In the event that this Agreement is validly terminated pursuant to and in accordance with Section 11.01, Merger Subsidiary shall promptly (and in any event within one Business Day after the date of such termination) terminate and withdraw the Offer and, notwithstanding the satisfaction or waiver of any Offer Conditions, shall not accept for payment or pay for any Shares theretofore tendered in the Offer.

(b) Merger Subsidiary expressly reserves the right to waive any of the Offer Conditions and, prior to the expiration of the Offer, to make any change in the terms of or conditions to the Offer; provided that notwithstanding the foregoing, without the prior written consent of the Company, Merger Subsidiary shall not:

(i) impose conditions on Merger Subsidiary’s obligation to accept for payment and pay for Shares validly tendered and not properly withdrawn pursuant to the Offer prior to the expiration of the Offer, other than the Offer Conditions;

(ii) waive or change the Minimum Condition (as defined in Annex I);

(iii) decrease the Offer Price;

(iv) change the form of consideration to be paid in the Offer;

(v) decrease the number of Shares sought in the Offer;

(vi) extend or otherwise change the expiration date of the Offer except as otherwise provided herein; or

(vii) amend or modify any of the Offer Conditions or amend or modify any of the terms of the Offer, in either case in a manner that broadens any of the Offer Conditions, would require Merger Subsidiary to extend the Offer or is otherwise materially adverse to the holders of the Shares (in their capacity as such).

(c) Unless extended as provided in this Agreement, the Offer shall expire on the date that is twenty business days (calculated as set forth in Rule 14d-1(g)(3) under the 1934 Act) after the Offer Commencement Date. Notwithstanding the foregoing, unless this Agreement shall have been validly terminated pursuant to and in accordance with Section 11.01, Merger Subsidiary shall (and Parent shall cause Merger Subsidiary to) extend the Offer (i) for successive extension periods of reasonable duration if, at the scheduled expiration date of the Offer (as it may be extended from time to time in accordance with this Agreement), any of the Offer Conditions shall not have been satisfied or waived, until such Offer Conditions are satisfied or waived, and (ii) for any period required by any applicable rule, regulation, interpretation or position of the SEC or the staff thereof or NASDAQ or any period otherwise required by Applicable Law; provided that Merger Subsidiary shall not be required to extend the Offer beyond (x) the End Date or (y) the date that is 60 days after the date that all of the Offer Conditions (other than the Minimum Condition and those that by their nature are to be satisfied at the expiration of the Offer) have been satisfied or, to the extent permissible, have been waived by Merger Subsidiary. If all of the Offer Conditions have been satisfied or waived prior to the expiration of the Offer, and Merger Subsidiary is permitted by Applicable Law to accept for payment and pay for all Shares that have been validly tendered and not properly withdrawn pursuant to the Offer prior to the expiration of the Offer, Merger Subsidiary shall not (and Parent shall not permit Merger Subsidiary to) extend the Offer for any reason without the prior written consent of the Company. In the event that, following the expiration of the Offer and Merger

 

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Subsidiary’s acceptance for payment of all Shares validly tendered and not properly withdrawn pursuant to the Offer, Parent and Merger Subsidiary are unable to effect the Merger pursuant to the short form merger procedures set forth in Section 253 of the Delaware Law, Merger Subsidiary may, in its sole discretion, provide for a subsequent offering period (“ Subsequent Offering Period ”) in accordance with Rule 14d-11 of the 1934 Act.

(d) Subject to the terms and conditions set forth in this Agreement and to the satisfaction or waiver of the Offer Conditions, Merger Subsidiary shall, and Parent shall cause it to, accept for payment and pay for, as promptly as practicable (i) after the expiration of the Offer, all Shares validly tendered and not properly withdrawn pursuant to the Offer (the date on which and time at which Shares are first accepted for payment under the Offer, the “ Acceptance Date ”) and (ii) all Shares validly tendered in the Subsequent Offering Period, if any.

(e) As soon as practicable on the Offer Commencement Date, Parent and Merger Subsidiary shall (i) file with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer (together with all amendments and supplements thereto and including exhibits thereto, the “ Schedule TO ”) that shall include the summary term sheet required thereby and, as exhibits, the Offer to Purchase, a form of letter of transmittal, summary advertisement and other customary documents, letters and other instruments (collectively, together with any amendments or supplements thereto, the “ Offer Documents ”) and (ii) cause the Offer Documents to be disseminated to holders of Shares to the extent required by applicable federal securities laws, applicable rules or regulations of NASDAQ or any other Applicable Laws. Each of Parent and Merger Subsidiary shall cause the Schedule TO and the Offer Documents to comply in all material respects with the requirements of the 1934 Act and all other Applicable Laws. The Company shall furnish Parent and Merger Subsidiary all information concerning the Company required by the 1934 Act to be set forth in the Schedule TO and the Offer Documents. Each of Parent, Merger Subsidiary and the Company agrees promptly to correct any information provided by it for use in the Schedule TO and the Offer Documents if and to the extent that such information shall have become (or shall have become known to be) false or misleading in any material respect. In addition, if at any time prior to the expiration of the Offer, any information relating to the Offer, the Merger, Parent, Merger Subsidiary, the Company or any of their respective Affiliates is discovered by Parent, Merger Subsidiary or the Company which should be set forth in an amendment or supplement to the Schedule TO or the Offer Documents so that the Schedule TO and the Offer Documents shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, the party that discovers such information shall promptly notify the other parties, and an appropriate amendment or supplement describing such information shall be filed with the SEC. Parent and Merger Subsidiary shall cause the Schedule TO, as so corrected, amended or supplemented, to be filed with the SEC and disseminated to holders of Shares, in each case to the extent required by applicable federal securities laws, applicable rules or regulations of any stock exchange or any other Applicable Laws. The Company and its counsel shall be given a reasonable opportunity to review and comment on the Schedule TO and the Offer Documents each time before any such document is filed with the SEC, and Parent and Merger Subsidiary shall give reasonable and good faith consideration to any comments made by the Company and its counsel. Parent and Merger Subsidiary shall provide the Company and its counsel with (i) any comments or other communications, whether written or oral, that Parent, Merger Subsidiary or their counsel may receive from time to time from the SEC or its staff with respect to the Schedule TO or Offer Documents promptly after receipt of those comments or other communications and prior to responding to them, and (ii) a reasonable opportunity to participate in the response of Parent and Merger Subsidiary to those comments and to provide comments on that response (to which reasonable and good faith consideration shall be given), including by participating with Parent and Merger Subsidiary or their counsel in any discussions or meetings with the SEC.

Section 2.02. Company Action . (a) The Company hereby consents to the Offer and represents that the board of directors of the Company (the “ Board of Directors ”), at a meeting duly called and held has unanimously (i) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger,

 

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are fair to and in the best interests of the Company’s stockholders, (ii) approved and adopted this Agreement and the transactions contemplated hereby, including the Offer and the Merger, in accordance with the requirements of the Delaware Law and (iii) subject to Section 7.04(b), resolved to recommend acceptance of the Offer and, and if required by Delaware Law, adoption of this Agreement by its stockholders. The Company has been advised that all of its directors and executive officers who own Shares shall tender their Shares pursuant to the Offer. The Company shall promptly furnish Parent with a list of its stockholders, mailing labels and any available listing or computer file containing the names and addresses of all record holders of Shares and lists of securities positions of Shares held in stock depositories, in each case true and correct as of the most recent practicable date, and shall provide to Parent such additional information (including updated lists of stockholders, mailing labels and lists of securities positions) (the “ Mailing Information ”) and such other assistance as Parent may reasonably request in connection with the Offer. Subject to the requirements of Applicable Laws, and except for such steps as are necessary to disseminate the Offer Documents to consummate the Offer as contemplated hereby and any other documents necessary to consummate the Merger as contemplated hereby, Parent, Merger Subsidiary and their Representatives shall keep confidential any Mailing Information provided by or on behalf of Company pursuant to this Section 2.02(a) and (prior to the Effective Time) use the Mailing Information only in connection with the Offer and the Merger as contemplated by this Agreement. In the event that this Agreement is terminated (or the Offer is terminated for any reason), Parent and Merger Subsidiary shall (and shall cause their Representatives to) promptly (and in any event within 24 hours) return to the Company, shall delete any and all electronic copies of, and shall not retain any copies or duplicates of, any and all Mailing Information theretofore made available to Parent and Merger Subsidiary pursuant to this Section 2.02(a) to facilitate the Offer or the Merger.

(b) As soon as practicable on the Offer Commencement Date, the Company shall file with the SEC and disseminate to holders of Shares, in each case as and to the extent required by applicable federal securities laws, a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the “ Schedule 14D-9 ”) that, subject to Section 7.04(b), shall reflect the recommendations of the Board of Directors referred to above. The Company shall cause the Schedule 14D-9 to comply in all material respects with the requirements of the 1934 Act and all other Applicable Laws. The Company represents that it has obtained all necessary consents to include in its entirety the fairness opinion of Morgan Stanley & Co. Incorporated, financial advisor to the Company, in the Schedule 14D-9, and the Schedule 14D-9 shall include such fairness opinion in its entirety and a description of such fairness opinion and the material financial analyses relating thereto that provides the information called for by Item 1015(b) of Regulation M-A under the 1934 Act. Parent and Merger Subsidiary shall furnish the Company all information concerning the Company required by the 1934 Act to be set forth in the Schedule 14D-9. Each of the Company, Parent and Merger Subsidiary agrees promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become (or shall have become known to be) false or misleading in any material respect. In addition, if at any time prior to the expiration of the Offer, any information relating to the Offer, the Merger, the Company, Parent, Merger Subsidiary, or any of their respective affiliates is discovered by the Company, Parent or Merger Subsidiary which should be set forth in an amendment or supplement to the Schedule 14D-9 so that the Schedule 14D-9 shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, the party that discovers such information shall promptly notify the other party, and an appropriate amendment or supplement describing such information shall be filed with the SEC. The Company shall use reasonable best efforts to cause the Schedule 14D-9, as so corrected, amended or supplemented, to be filed with the SEC and disseminated to holders of Shares, in each case to the extent required by applicable federal securities laws, applicable rules or regulations of any stock exchange or any other Applicable Laws. Unless the Board of Directors has effected an Adverse Recommendation Change in accordance with Section 7.04(b), Parent, Merger Subsidiary and their counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 each time before it is filed with the SEC, and the Company shall give reasonable and good faith consideration to any comments made by Parent, Merger Subsidiary and their counsel. Unless the Board of Directors has effected an Adverse Recommendation Change in accordance with Section 7.04(b), the Company shall provide Parent, Merger Subsidiary and their

 

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counsel with (i) any comments or other communications, whether written or oral, that 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 receipt of those comments or other communications and prior to responding thereto and (ii) a reasonable opportunity to participate in the Company’s response to those comments and to provide comments on that response (to which reasonable and good faith consideration shall be given), including by participating with the Company or its counsel in any discussions or meetings with the SEC.

Section 2.03. Directors . (a) Effective upon the Acceptance Date, subject to Section 2.03(b) and Section 2.03(c), Parent shall be entitled to designate the number of directors, rounded up to the next whole number, on the Board of Directors that equals the product of (i) the total number of directors on the Board of Directors (giving effect to the election of any additional directors pursuant to this Section) and (ii) the percentage that the number of Shares beneficially owned by Parent and/or Merger Subsidiary (including Shares accepted for payment) bears to the total number of Shares outstanding, and the Company shall cause Parent’s designees to be elected or appointed to the Board of Directors, including by increasing the number of directors, and seeking and accepting resignations of incumbent directors. At such time, the Company shall also cause individuals designated by Parent to constitute the number of members, rounded up to the next whole number, on (A) each committee of the Board of Directors and (B) as requested by Parent, each board of directors of each Subsidiary of the Company (and each committee thereof) that represents the same percentage as such individuals represent on the Board of Directors.

(b) Notwithstanding the foregoing terms of Section 2.03(a), at least two (2) of the members of the Board of Directors as of the date hereof who are not employees of the Company (“ Continuing Independent Directors ”) shall remain members of the Board of Directors until the Effective Time. If the number of Continuing Independent Directors is reduced below two prior to the Effective Time, the remaining Continuing Independent Director shall be entitled to designate a Person to fill such vacancy who is not a director, officer, employee or otherwise affiliated with Parent (other than as a result of such designation), the Board of Directors shall cause such designee to be appointed to the Board of Directors, and such designee shall thereupon be a Continuing Independent Director for all purposes of this Agreement. If, notwithstanding compliance with the foregoing provisions, the number of directors who are Continuing Independent Directors is reduced to zero, then the other directors on the Board of Directors shall designate and appoint to the Board of Directors two directors who are not directors, officers, employees or otherwise affiliated with Parent (other than as a result of such designation), and such designees shall thereupon be Continuing Independent Directors for all purposes of this Agreement.

(c) The Company’s obligations to appoint Parent’s designees to the Board of Directors shall be subject to Section 14(f) of the 1934 Act and Rule 14f-1 promulgated thereunder. Subject to receipt of the applicable information from Parent with respect to its designees to the Board of Directors, the Company shall promptly take all actions, and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors, as Section 14(f) and Rule 14f-1 require in order to fulfill the Company’s obligations under this Section 2.03. Parent shall supply to the Company in writing and be solely responsible for any information with respect to itself and its nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1 to be disclosed to the stockholders of the Company.

(d) Following the election or appointment of Parent’s designees pursuant to Section 2.03(a) and until the Effective Time, the approval of a majority of the Continuing Independent Directors (or, if there are two or fewer Continuing Independent Directors, all of the Continuing Independent Directors) shall be required to authorize (and such authorization shall constitute the authorization of the Board of Directors and no other action on the part of the Company, including any action by any other director of the Company, shall be required to authorize) (i) any termination of this Agreement by the Company, (ii) any amendment of this Agreement, (iii) any extension of time for performance of any obligation or action hereunder by Parent or Merger Subsidiary and (iv) any waiver of compliance with any of the terms or conditions contained herein for the benefit of the Company. The Continuing Independent Directors shall have the authority to retain independent legal counsel (which may include current counsel to the Company) and other independent

 

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advisors at the expense of the Company as determined to be appropriate by the Continuing Independent Directors and shall have the authority to institute any action for and on behalf of the Company to enforce this Agreement.

Section 2.04 . Top-Up Option. (a) Subject to Sections 2.04(b) and 2.04(c), the Company grants to Merger Subsidiary, an irrevocable option, for so long as this Agreement has not been terminated pursuant to the provisions hereof (the “ Top-Up Option ”), to purchase from the Company, up to the number of authorized and unissued Shares equal to the number of Shares that, when added to the number of Shares owned by Merger Subsidiary at the time of the exercise of the Top-Up Option, constitutes at least one Share more than 90% of the Shares that would be outstanding immediately after the issuance of all Shares to be issued upon exercise of the Top-Up Option, calculated on a fully-diluted basis or, at Parent’s election, on a primary basis at the Effective Time (such Shares to be issued upon exercise of the Top-Up Option, the “ Top-Up Shares ”).

(b) The Top-Up Option may be exercised by Merger Subsidiary in whole or in part, only once, at any time during the ten Business Day period following the Acceptance Date, or if any Subsequent Offering Period is provided, during the ten Business Day period following the expiration date of such Subsequent Offering Period, and only if Merger Subsidiary shall own as of such time less than 90% of the Shares outstanding on a fully-diluted basis; provided that notwithstanding anything in this Agreement to the contrary, the Top-Up Option shall not be exercisable to the extent that the number of Shares issuable upon exercise of the Top-Up Option would exceed the number of authorized but unissued and unreserved Shares. The aggregate purchase price payable for the Top-Up Shares being purchased by Merger Subsidiary pursuant to the Top-Up Option shall be determined by multiplying the number of such Top-Up Shares by the Offer Price, without interest. Such purchase price may be paid by Merger Subsidiary, at its election, either (A) entirely in cash or (B) by executing and delivering to the Company a promissory note having a principal amount equal to the amount of such purchase price. Any such promissory note shall bear interest at the rate of 3% per annum, shall mature on the first anniversary of the date of execution and delivery of such promissory note and may be prepaid without premium or penalty.

(c) In the event Merger Subsidiary wishes to exercise the Top-Up Option, Merger Subsidiary shall deliver to the Company a notice (the “ Top-Up Notice ”) setting forth (i) the number of Top-Up Shares that Merger Subsidiary intends to purchase pursuant to the Top-Up Option, (ii) the manner in which Merger Subsidiary intends to pay the applicable purchase price and (iii) the place and time at which the closing of the purchase of such Top-Up Shares by Merger Subsidiary is to take place. The Top-Up Notice shall also include an undertaking signed by Parent and Merger Subsidiary that, as promptly as practicable following such exercise of the Top-Up Option, Merger Subsidiary intends to (and Merger Subsidiary shall, and Parent shall cause Merger Subsidiary to, as promptly as practicable after such exercise) consummate the Merger in accordance with Section 253 of Delaware Law as contemplated by Section 3.01(b). At the closing of the purchase of the Top-Up Shares, Parent and Merger Subsidiary shall cause to be delivered to the Company the consideration required to be delivered in exchange for the Top-Up Shares, and the Company shall cause to be issued to Merger Subsidiary a certificate representing the Top-Up Shares. The parties hereto agree to use their reasonable best efforts to cause the closing of the purchase of the Top-Up Shares to occur on the same day that the Top-Up Notice is deemed received by the Company pursuant to Section 12.01, and if not so consummated on such day, as promptly thereafter as possible. The parties further agree to use their reasonable best efforts to cause the Merger to be consummated in accordance with Section 253 of Delaware Law as contemplated by Section 3.01(b) as close in time as possible to (including, to the extent possible, on the same day as) the issuance of the Top-Up Shares.

(d) Parent and Merger Subsidiary understand that the Top-Up Shares will not be registered under the 1933 Act and will be issued in reliance upon an exemption thereunder for transactions not involving a public offering. Each of Parent and Merger Subsidiary represents, warrants and agrees that the Top-Up Option is being, and the Top-Up Shares will be, acquired by Merger Subsidiary for the purpose of investment and not with a view to or for resale in connection with any distribution thereof within the meaning of the 1933 Act. Any certificates evidencing Top-Up Shares shall include any legends required by applicable securities laws.

 

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(e) Any dilutive impact on the value of the Shares as a result of the issuance of the Top-Up Shares will not be taken into account in any determination of the fair value of any dissenting Shares pursuant to Section 262 of Delaware Law as contemplated by Section 3.04.

Section 2.05 . Adjustments . If, during the period between the date of this Agreement and the Acceptance Date, the outstanding Shares shall have been changed into a different number of shares or a different class as a result of any reclassification, recapitalization, stock split or combination, exchange or readjustment of Shares, or stock dividend thereon with a record date during such period (excluding any such change that results from any exercise of options outstanding as of the date hereof to purchase Shares granted under the Company’s stock option or compensation plans or arrangements, the issuance of Shares in respect of Restricted Stock Units or Performance Shares outstanding as of the date hereof or granted in compliance with this Agreement, the purchase of Shares pursuant to the Company ESPP in compliance with this Agreement, or the exercise of the Top-Up Option to purchase the Top-Up Shares), the Offer Price shall be appropriately and equitably adjusted to reflect such change.

Section 2.06 . Withholding Rights . Notwithstanding any provision contained herein to the contrary, each of the Exchange Agent, Parent and Merger Subsidiary shall be entitled to deduct and withhold from the Offer Price otherwise payable in respect of any Shares pursuant to the Offer such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of Tax law. If the Exchange Agent, Parent or Merger Subsidiary, as the case may be, so withholds and timely remits amounts to the applicable Taxing Authority, such amounts shall be treated for all purposes of this Agreement as having been paid to such Person in respect of which the Exchange Agent, Parent or Merger Subsidiary, as the case may be, made such deduction and withholding.

ARTICLE 3

T HE M ERGER

Section 3.01. The Merger . (a) At the Effective Time, Merger Subsidiary shall be merged (the “ Merger ”) with and into the Company in accordance with Delaware Law, whereupon the separate existence of Merger Subsidiary shall cease, and the Company shall be the surviving corporation (the “ Surviving Corporation ”).

(b) If, at any time after the Acceptance Date, Parent, Merger Subsidiary and any other Subsidiary of Parent shall collectively own at least 90% of the outstanding Shares, the parties shall take all necessary and appropriate action to cause the Merger to become effective as soon as practicable without a meeting of stockholders of the Company in accordance with Section 253 of Delaware Law.

(c) Subject to the provisions of Article 10, the closing of the Merger (the “ Closing ”) shall take place in New York City at the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York, 10017 as soon as possible, but in any event no later than three Business Days after the date the conditions set forth in Article 10 have been satisfied, or at such other place, at such other time or on such other date as Parent and the Company may mutually agree.

(d) At the Closing, the Company and Merger Subsidiary shall file a certificate of merger with the Delaware Secretary of State and make all other filings or recordings required by Delaware Law in connection with the Merger. The Merger shall become effective at such time (the “ Effective Time ”) as the certificate of merger is duly filed with the Delaware Secretary of State (or at such later time as may be specified in the certificate of merger).

(e) From and after the Effective Time, the Surviving Corporation shall possess all the rights, powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the Company and Merger Subsidiary, all as provided under Delaware Law.

 

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Section 3.02. Conversion of Shares . At the Effective Time:

(a) Except as otherwise provided in Section 3.02(b), Section 3.02(c) or Section 3.04, each Share outstanding immediately prior to the Effective Time shall be converted into the right to receive the Offer Price in cash, without interest (the “ Merger Consideration ”). As of the Effective Time, all such Shares shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and shall thereafter represent only the right to receive the Merger Consideration.

(b) Each Share held by the Company as treasury stock or owned by Parent or Merger Subsidiary immediately prior to the Effective Time shall be canceled, and no payment shall be made with respect thereto.

(c) Each Share held by any Subsidiary of Parent (other than the Merger Subsidiary) immediately prior to the Effective Time shall be converted into such number of shares of stock of the Surviving Corporation such that each such Subsidiary owns the same percentage of the outstanding capital stock of the Surviving Corporation immediately following the Effective Time as such Subsidiary owned in the Company immediately prior to the Effective Time.

(d) Each share of common stock of Merger Subsidiary outstanding immediately prior to the Effective Time shall be converted into and become one share of common stock of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation (except for any such shares resulting from the conversion of Shares pursuant to Section 3.02(c)).

Section  3.03. Surrender and Payment . (a) Prior to the Effective Time, Parent shall appoint an agent (the “ Exchange Agent ”) for the purpose of exchanging for the Merger Consideration (i) certificates representing Shares (the “ Certificates ”) or (ii) uncertificated Shares (the “ Uncertificated Shares ”). Parent shall make available to the Exchange Agent, as needed, the Merger Consideration to be paid in respect of the Certificates and the Uncertificated Shares. Promptly after the Effective Time, Parent shall send, or shall cause the Exchange Agent to send, to each holder of Shares at the Effective Time a letter of transmittal and instructions (which shall specify that the delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery of the Certificates or transfer of the Uncertificated Shares to the Exchange Agent) for use in such exchange.

(b) Each holder of Shares that have been converted into the right to receive the Merger Consideration shall be entitled to receive, upon (i) surrender to the Exchange Agent of a Certificate, together with a properly completed letter of transmittal, or (ii) receipt of an “agent’s message” by the Exchange Agent (or such other evidence, if any, of transfer as the Exchange Agent may reasonably request) in the case of a book-entry transfer of Uncertificated Shares, the Merger Consideration payable for each Share represented by a Certificate or for each Uncertificated Share. Until so surrendered or transferred, as the case may be, each such Certificate or Uncertificated Share shall represent after the Effective Time for all purposes only the right to receive the Merger Consideration.

(c) If any portion of the Merger Consideration is to be paid to a Person other than the Person in whose name the surrendered Certificate or the transferred Uncertificated Share is registered, it shall be a condition to such payment that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Uncertificated Share shall be properly transferred and (ii) the Person requesting such payment shall pay to the Exchange Agent any transfer or other similar Taxes required as a result of such payment to a Person other than the registered holder of such Certificate or Uncertificated Share or establish to the satisfaction of the Exchange Agent that such Tax has been paid or is not payable.

(d) After the Effective Time, there shall be no further registration of transfers of Shares. If, after the Effective Time, Certificates or Uncertificated Shares are presented to the Surviving Corporation, they shall be canceled and exchanged for the Merger Consideration provided for, and in accordance with the procedures set forth, in this Article 3.

(e) Any portion of the Merger Consideration made available to the Exchange Agent pursuant to Section 3.03(a) (and any interest or other income earned thereon) that remains unclaimed by the holders of

 

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Shares six months after the Effective Time shall be returned to the Surviving Corporation, upon demand, and any such holder who has not exchanged such Shares for the Merger Consideration in accordance with this Section 3.03 prior to that time shall thereafter look only to the Surviving Corporation for payment of the Merger Consideration in respect of such Shares without any interest thereon. Notwithstanding the foregoing, Parent shall not be liable to any holder of Shares for any amount paid to a public official pursuant to applicable abandoned property, escheat or similar laws. Any amounts remaining unclaimed by holders of Shares one year after the Effective Time (or such earlier date immediately prior to such time when the amounts would otherwise escheat to or become property of any Governmental Authority) shall become, to the extent permitted by Applicable Law, the property of the Surviving Corporation free and clear of any claims or interest of any Person previously entitled thereto.

(f) Any portion of the Merger Consideration made available to the Exchange Agent pursuant to Section 3.03(a) to pay for Shares for which appraisal rights have been perfected shall be returned to Parent, upon demand.

Section 3.04. Dissenting Shares . Notwithstanding Section 3.02, Shares outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Merger or consented thereto in writing and who has demanded appraisal for such Shares in accordance with Delaware Law shall not be converted into the right to receive the Merger Consideration, unless such holder fails to perfect, withdraws or otherwise loses the right to appraisal. If, after the Effective Time, such holder fails to perfect, withdraws or loses the right to appraisal, such Shares shall be treated as if they had been converted as of the Effective Time into the right to receive the Merger Consideration. The Company shall give Parent prompt notice of any demands received by the Company for appraisal of Shares, and Parent shall have the right to direct all negotiations and proceedings with respect to such demands. Except with the prior written consent of Parent or as otherwise required by Applicable Law or a judgment, injunction or decree of a Governmental Authority of competent jurisdiction, the Company shall not make any payment with respect to, or offer to settle or settle, any such demands.

Section 3.05. Stock Options . (a) Each option to purchase Shares outstanding under any employee stock option or compensation plan or arrangement of the Company (a “ Company Stock Option ”), whether or not vested or exercisable, shall be canceled on the Acceptance Date, and the Company shall pay each holder of any such option at or promptly after the Acceptance Date for each such option an amount in cash determined by multiplying (i) the excess, if any, of the Offer Price per Share over the applicable exercise price of such option by (ii) the number of Shares such holder could have purchased (assuming full vesting of all options) had such holder exercised such option in full immediately prior to the Acceptance Date.

(b) Prior to the Acceptance Date, the Company shall (i) obtain any consents from holders of options to purchase Shares granted under the Company’s stock option or compensation plans or arrangements and (ii) take any actions or make any amendments to the terms of such stock option or compensation plans or arrangements that, in the case of either clauses (i) or (ii), are necessary to give effect to the transactions contemplated by Section 3.05(a). Notwithstanding any other provision of this Section, payment may be withheld in respect of any employee stock option until such necessary consents are obtained.

Section 3.06 . Performance Shares. The Company shall take all action necessary to cause each Performance Share (whether an Earned Performance Share or an Unearned Performance Share) outstanding under any equity or compensation plan or arrangement of the Company, whether or not vested, to be fully earned at maximum levels and fully vested and be canceled on the Acceptance Date, and the Company shall pay the holder of any such share at or promptly after the Acceptance Date an amount in cash equal to the product of the Offer Price per Share and the number of Shares represented by such share. For purposes of clarity, on and after the date of this Agreement, no Performance Share award (or portion thereof) shall lapse due to failure to achieve a performance metric relating to a performance period ending on or after the date this Agreement, and any such performance metrics will be deemed achieved at maximum levels on the Acceptance Date in accordance with and pursuant to the foregoing sentence.

 

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Section 3.07 . Restricted Stock Units . (a) Except as otherwise provided in this Section 3.07(a), the terms of each outstanding Restricted Stock Unit shall be adjusted as necessary to provide that, at the Acceptance Date, each Restricted Stock Unit outstanding immediately prior to the Acceptance Date shall be converted into a restricted stock unit (each, an “ Adjusted Unit ”) to acquire, on the same terms and conditions as were applicable under such Restricted Stock Unit immediately prior to the Acceptance Date, the number of shares of Parent common stock equal to the product of (i) the number of shares subject to such Restricted Stock Unit immediately prior to the Acceptance Date multiplied by (ii) the Exchange Ratio, with such resulting number of shares rounded down to the nearest whole share. “ Exchange Ratio ” shall mean the quotient of (i) Offer Price, divided by (ii) the closing price of a share of Parent common stock on the New York Stock Exchange on the Acceptance Date. Each Adjusted Unit held by an award holder shall fully vest upon the termination of employment of such award holder initiated by the employer other than for “Cause” (as such term is defined in Section 3.07(a) of the Company Disclosure Schedule) at any time on or following the Acceptance Date. The foregoing provision shall be in addition to, and not in replacement of, any acceleration of vesting provisions contained in any award agreement, employment agreement or other arrangement. Except as provided in this Section 3.07, each Adjusted Unit will continue to have, and be subject to, the same terms and conditions set forth in the equity compensation plan under which it was granted and the agreements evidencing the grant thereof as in effect immediately prior to the Acceptance Date. Notwithstanding the foregoing and for the avoidance of doubt, each Restricted Stock Unit held by a non-employee director of the Company, whether or not vested, shall be fully vested and cancelled on the Acceptance Date and the Company shall pay to each such holder at or promptly after the Acceptance Date an amount in cash equal to the product of the Offer Price per Share and the number of Shares represented by such Restricted Stock Unit.

(b) Parent shall take such actions as are necessary for the assumption of the Adjusted Units pursuant to this Section 3.07, including the reservation, issuance and listing of Parent common stock as is necessary to effectuate the transactions contemplated by this Section 3.07. Parent shall prepare and file with the SEC a registration statement on an appropriate form, or a post-effective amendment to a registration statement previously filed under the 1933 Act, with respect to the shares of Parent common stock subject to the Adjusted Units and, where applicable, shall have such registration statement declared effective within five (5) Business Days following the Acceptance Date and to maintain the effectiveness of such registration statement covering such Adjusted Units (and to maintain the current status of the prospectus contained therein) for so long as such Adjusted Units remain outstanding.

(c) Prior to the Acceptance Date, the Company shall take any actions with respect to equity or compensation plans or arrangements that are necessary to give effect to the transactions contemplated by this Section 3.07.

Section 3.08. Employee Stock Purchase Plan. The Company shall take all action that is necessary to (a) cause the exercise of each outstanding option under the Company’s 2000 Employee Stock Purchase Plan (the “ Company ESPP ”) no less than ten Business Days prior to the initial scheduled expiration of the Offer; (b) provide that no further purchase period or offering period shall commence under the Company ESPP following that date; and (c) immediately prior to and effective as of the Effective Time and subject to the consummation of the Merger, terminate the Company ESPP.

Section 3.09. Adjustments . If, during the period between the date of this Agreement and the Effective Time, the outstanding Shares shall have been changed into a different number of shares or a different class as a result of any reclassification, recapitalization, stock split or combination, exchange or readjustment of Shares, or stock dividend thereon with a record date during such period (excluding any such change that results from any exercise of options outstanding as of the date hereof to purchase Shares granted under the Company’s stock option or compensation plans or arrangements, the issuance of Shares in respect of Restricted Stock Units or Performance Shares outstanding as of the date hereof or granted in compliance with this Agreement, the purchase of Shares pursuant to the Company ESPP in compliance with this Agreement, or the exercise of the Top-Up Option to purchase the Top-Up Shares), the Merger Consideration and any other amounts payable pursuant to this Article 3 shall be appropriately and equitably adjusted to reflect such change.

 

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Section 3.10. Withholding Rights . Notwithstanding any provision contained herein to the contrary, each of the Exchange Agent, the Surviving Corporation and Parent shall be entitled to deduct and withhold from the Merger Consideration or any other consideration otherwise payable to any Person pursuant to this Article 3 such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of Tax law. If the Exchange Agent, the Surviving Corporation or Parent, as the case may be, so withholds and timely remits amounts to the applicable Taxing Authority, such amounts shall be treated for all purposes of this Agreement as having been paid to such Person in respect of which the Exchange Agent, the Surviving Corporation or Parent, as the case may be, made such deduction and withholding.

Section 3.11. Lost Certificates . 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 direct in conformity with the Exchange Agent’s customary market practices, as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent shall pay, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration to be paid in respect of the Shares represented by such Certificate, as contemplated by this Article 3.

ARTICLE 4

T HE S URVIVING C ORPORATION

Section 4.01. Certificate of Incorporation . The certificate of incorporation of the Company in effect at the Effective Time shall be the certificate of incorporation of the Surviving Corporation until amended in accordance with Applicable Law.

Section 4.02. Bylaws . The bylaws of the Company in effect at the Effective Time shall be the bylaws of the Surviving Corporation until amended in accordance with Applicable Law.

Section 4.03. Directors and Officers . From and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with Applicable Law, (i) the directors of Merger Subsidiary at the Effective Time shall be the directors of the Surviving Corporation and (ii) the officers of the Company at the Effective Time shall be the officers of the Surviving Corporation.

ARTICLE 5

R EPRESENTATIONS AND W ARRANTIES OF THE C OMPANY

Subject to Section 12.05, except as disclosed in (a)(i) the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2008 (the “ Company 10-K ”), (ii) the Company’s quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2009 and June 30, 2009, respectively, (iii) each of the Company’s current reports on Form 8-K filed with the SEC since the date of the filing of the Company’s quarterly report on Form 10-Q for the quarterly period ended June 30, 2009 and prior to the date hereof or (iv) the Company’s proxy statement relating to its 2009 annual meeting of stockholders (the documents referred to in the foregoing clauses (i) through (iv), collectively, the “ Company SEC Documents ”) or (b) as set forth in the Company Disclosure Schedule, the Company represents and warrants to Parent that:

Section 5.01. Corporate Existence and Power. (a) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all corporate powers and all authorizations, permits, consents, approvals and governmental licenses required to carry on its business as now conducted, except for those authorizations, permits, consents, approvals and licenses the absence of which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. 3

(b) The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so

 

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qualified would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has heretofore made available to Parent true and complete copies of the certificate of incorporation and bylaws of the Company as currently in effect.

Section  5.02. Corporate Authorization. (a) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby are within the Company’s corporate powers and, except for the approval of the Company’s stockholders in connection with the consummation of the Merger (if required by Applicable Law), have been duly authorized by all necessary corporate action on the part of the Company. The affirmative vote of the holders of a majority of the outstanding Shares (if required by Applicable Law) is the only vote of the holders of any of the Company’s capital stock necessary in connection with the consummation of the Merger (the “ Company Stockholder Approval ”). This Agreement constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).

(b) At a meeting duly called and held, the Board of Directors has (i) unanimously determined that this Agreement and the transactions contemplated hereby are fair to and in the best interests of the Company’s stockholders, (ii) unanimously approved, adopted and declared advisable this Agreement and the transactions contemplated hereby and (iii) subject to Section 7.04(b), unanimously resolved to recommend acceptance of the Offer and, if required by Delaware Law, adoption of this Agreement by the stockholders of the Company (such recommendation, the “ Company Board Recommendation ”).

Section 5.03. Governmental Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority, other than (i) the filing of a certificate of merger with respect to the Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (ii) compliance with any applicable requirements of the HSR Act and any applicable foreign Antitrust Laws , (iii) compliance with any applicable requirements of the 1933 Act, the 1934 Act and any other applicable state or federal securities laws, (iv) compliance with any applicable rules and regulations of NASDAQ and (v) any actions or filings the absence of which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or a material adverse effect on the Company’s ability to consummate the transactions contemplated by this Agreement.

Section 5.04. Non-contravention. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and shall not (i) contravene, conflict with, or result in any violation or breach of any provision of the certificate of incorporation or bylaws of the Company, (ii) assuming compliance with the matters referred to in Section 5.03, contravene, conflict with or result in a violation or breach of any provision of any Applicable Law, (iii) assuming compliance with the matters referred to in Section 5.03, require any consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Company or any of its Subsidiaries is entitled under any provision of any license, agreement or other instrument binding upon the Company or any of its Subsidiaries or any license, franchise, permit, certificate, approval or other similar authorization affecting, or relating in any way to, the assets or business of the Company and its Subsidiaries or (iv) result in the creation or imposition of any Lien on any asset of the Company or any of its Subsidiaries, with only such exceptions, in the case of each of clauses (ii) through (iv), as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or a material adverse effect on the Company’s ability to consummate the transactions contemplated by this Agreement.

Section 5.05. Capitalization. (a) The authorized capital stock of the Company consists of (i) 200,000,000 shares of common stock, par value $0.001 per share (the “ Common Stock ”), and (ii) 5,000,000 shares of

 

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preferred stock, par value $0.001 per share (the “ Preferred Stock ”). As of the close of business on October 1, 2009 (the “ Capitalization Date ”), there were outstanding 44,288,723 shares of Common Stock, no shares of Preferred Stock, Company Stock Options to purchase an aggregate of 2,655,365 Shares (of which 2,649,294 are exercisable as of s