<PAGE>
EXHIBIT 2.01
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AGREEMENT AND PLAN OF REORGANIZATION
AMONG
SYMANTEC CORPORATION,
CARMEL ACQUISITION CORP.,
AND
VERITAS SOFTWARE CORPORATION
DECEMBER 15, 2004
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Article 1
Certain
Definitions...........................................................................
2
1.1
Definitions...................................................................................
2
1.2
Additional
Definitions........................................................................
9
Article 2
The
Merger....................................................................................
10
2.1 The
Merger....................................................................................
10
2.2
Closing.......................................................................................
10
2.3
Effects of the
Merger.........................................................................
11
2.4
Conversion of
Securities......................................................................
11
2.5
Company Restricted
Shares.....................................................................
13
2.6
Treatment of Exchangeable
Shares..............................................................
14
2.7
Exchange of
Certificates......................................................................
15
2.8 Tax
Consequences and
Withholding..............................................................
17
2.9
Further
Assurances............................................................................
17
Article 3
Representations and Warranties of the
Company.................................................
18
3.1
Organization..................................................................................
18
3.2
Capitalization of the
Company.................................................................
19
3.3
Authorization.................................................................................
21
3.4 SEC
Filings...................................................................................
22
3.5
Litigation....................................................................................
24
3.6
Compliance with
Laws..........................................................................
25
3.7
Properties....................................................................................
25
3.8
Taxes.........................................................................................
26
3.9
Intellectual
Property.........................................................................
26
3.10
Employment....................................................................................
28
3.11 Absence of
Certain
Changes....................................................................
30
3.12 Material
Contracts............................................................................
31
3.13
Environmental
Matters.........................................................................
31
3.14 Interested
Party
Transactions.................................................................
32
3.15 State
Takeover
Statutes.......................................................................
32
3.16
Brokers.......................................................................................
32
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3.17 Opinion of
Financial
Advisor..................................................................
32
3.18 Rights
Agreement..............................................................................
32
Article 4
Representations and Warranties of
Parent......................................................
33
4.1
Organization..................................................................................
33
4.2
Capitalization of Parent and Merger
Sub.......................................................
34
4.3
Authorization.................................................................................
36
4.4 SEC
Filings...................................................................................
37
4.5
Litigation....................................................................................
39
4.6
Compliance with
Laws..........................................................................
40
4.7
Properties....................................................................................
40
4.8
Taxes.........................................................................................
41
4.9
Intellectual
Property.........................................................................
41
4.10
Employment....................................................................................
43
4.11 Absence of
Certain
Changes....................................................................
45
4.12 Material
Contracts............................................................................
45
4.13
Environmental
Matters.........................................................................
46
4.14 Interested
Party
Transactions.................................................................
46
4.15 State
Takeover
Statutes.......................................................................
46
4.16
Brokers.......................................................................................
47
4.17 Opinion of
Financial
Advisor..................................................................
47
4.18 Rights
Agreement..............................................................................
47
Article 5
Covenants.....................................................................................
47
5.1
Conduct of
Business...........................................................................
47
5.2 No
Solicitation...............................................................................
52
5.3
Preparation of SEC Documents; Stockholders'
Meetings.......................................... 54
5.4
Accountant's
Letters..........................................................................
57
5.5
Access to Information;
Confidentiality........................................................
57
5.6
Reasonable Best
Efforts.......................................................................
57
5.7
Indemnification and
Insurance.................................................................
59
5.8 Fees
and
Expenses.............................................................................
60
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5.9
Public
Announcements..........................................................................
60
5.10
Listing.......................................................................................
61
5.11 Tax-Free
Reorganization
Treatment.............................................................
61
5.12 Equity
Awards and Employee
Benefits...........................................................
61
5.13 Parent
Corporate
Governance...................................................................
63
5.14 Affiliate
Legends.............................................................................
63
5.15
Notification of Certain
Matters...............................................................
63
5.16 Section 16
Matters............................................................................
63
5.17 Rights
Plans; State Takeover
Laws.............................................................
63
5.18
Reservation of Parent Common
Stock............................................................
64
5.19
Supplemental
Indenture........................................................................
64
5.20
Supplemental Trust
Agreement..................................................................
64
Article 6
Conditions to Obligations of The
Parties......................................................
64
6.1
Conditions to Each Party's Obligation to Effect the
Merger.................................... 64
6.2
Conditions to Obligations of the
Company......................................................
65
6.3
Conditions to Obligations of Parent and Merger
Sub............................................ 66
Article 7
Termination, Amendment and
Waiver.............................................................
67
7.1
Termination...................................................................................
67
7.2
Effect of
Termination.........................................................................
69
7.3
Payments......................................................................................
69
7.4
Amendment.....................................................................................
70
7.5
Extension;
Waiver.............................................................................
71
Article 8
General.......................................................................................
71
8.1
Expiration of Representations and
Warranties..................................................
71
8.2
Notices.......................................................................................
71
8.3
Interpretation................................................................................
72
8.4
Counterparts..................................................................................
72
8.5
Entire
Agreement; No Third-Party
Beneficiaries................................................
72
8.6
Governing
Law.................................................................................
73
8.7
Assignment....................................................................................
73
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8.8
Consent to
Jurisdiction.......................................................................
73
8.9
Headings......................................................................................
73
8.10
Severability..................................................................................
73
8.11 Failure or
Indulgence Not Waiver; Remedies
Cumulative......................................... 73
8.12
Waiver of
Jury
Trial..........................................................................
73
8.13 Specific
Performance..........................................................................
74
8.14 No Joint
Venture..............................................................................
74
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AGREEMENT AND PLAN OF REORGANIZATION
This
AGREEMENT AND PLAN OF REORGANIZATION (this "AGREEMENT") is made
and
entered into as of December 15, 2004 (the
"AGREEMENT DATE") by and among
Symantec Corporation, a Delaware
corporation ("PARENT"), Carmel Acquisition
Corp., a Delaware corporation and a wholly
owned subsidiary of Parent ("MERGER
SUB"), and VERITAS Software Corporation, a
Delaware corporation (the "COMPANY").
RECITALS
A. The
parties intend that, subject to the terms and conditions
hereinafter set forth, Merger Sub shall
merge with and into the Company (the
"MERGER"), with the Company to be the
surviving corporation of the Merger, on
the terms and subject to the conditions of
this Agreement and in accordance with
the General Corporation Law of the State of
Delaware ("DELAWARE LAW").
B. The
Board of Directors of the Company has approved and declared
advisable this Agreement and the Merger,
has deemed it in the best interests of
its stockholders to consummate the Merger,
and has determined to recommend to
its stockholders the adoption of this
Agreement.
C. The
Board of Directors of Parent has approved and declared
advisable
this Agreement, the issuance of shares of
Parent Common Stock (as defined in
Article 1) in connection with the Merger
(the "PARENT STOCK ISSUANCE") and
amendments to Parent's Certificate of
Incorporation to increase the number of
authorized shares of Parent Common Stock to
3,000,000,000 and authorize the
Parent Special Voting Share (as defined
below) (such increase and authorization
to be contingent upon stockholder approval
of the Parent Stock Issuance)
(collectively, the "PARENT CHARTER
AMENDMENTS"), has deemed it in the best
interests of its stockholders that the
Parent Stock Issuance and Parent Charter
Amendments be effected, and has determined
to recommend to its stockholders
approval of the Parent Stock Issuance and
Parent Charter Amendments. The Parent
Charter Amendments shall be effected
pursuant to a Certificate of Amendment to
its Certificate of Incorporation (the
"CERTIFICATE OF AMENDMENT").
D. For
United States federal income tax purposes, the Merger is
intended
to qualify as a "reorganization" pursuant
to the provisions of Section 368(a) of
the Internal Revenue Code of 1986, as
amended (the "CODE"), and the parties
intend, by executing this Agreement, to
adopt a "plan of reorganization" within
the meaning of Treasury Regulation Sections
1.368-2(g) and 1.368-3.
E. Parent,
Merger Sub and the Company desire to make certain
representations, warranties and covenants
in connection with the Merger and to
prescribe various conditions to the
Merger.
NOW,
THEREFORE, in consideration of the foregoing and the
representations,
warranties, covenants and conditions
contained herein, the parties hereby agree
as follows:
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ARTICLE 1
CERTAIN DEFINITIONS
1.1
Definitions. As used in this Agreement, the following terms shall
have
the meanings set forth below.
"AFFILIATE" means with respect to any Person, another Person
that
directly, or indirectly through one or more
intermediaries, controls, is
controlled by, or is under common control
with, such first Person, where
"control" means the possession, directly or
indirectly, of the power to direct
or cause the direction of the management
policies of a Person, whether through
the ownership of voting securities, by
contract, as trustee or executor, or
otherwise.
"ALTERNATIVE TRANSACTION" means with respect to Parent or the
Company, any of the following transactions
(other than the Merger): (A) any
acquisition or purchase from such party by
any Person or "group" (as defined
under Section 13(d) of the Exchange Act and
the rules and regulations
thereunder) of more than a 20% interest in
the total outstanding voting
securities of such party or any tender
offer or exchange offer that if
consummated would result in any Person or
"group" (as defined under Section
13(d) of the Exchange Act and the rules and
regulations thereunder) beneficially
owning securities representing 20% or more
of the total outstanding voting power
of such party or any merger, consolidation,
business combination, share exchange
or similar transaction involving such party
pursuant to which the stockholders
of such party immediately preceding such
transaction hold securities
representing less than 80% of the total
outstanding voting power of the
surviving or resulting entity of such
transaction (or parent entity of such
surviving or resulting entity); (B) any
sale, lease, exchange, transfer, license
or disposition of assets (including capital
stock or other ownership interests
in Subsidiaries) representing 20% or more
of the aggregate fair market value of
the consolidated assets of such party and
its Subsidiaries taken as a whole; or
(C) any liquidation or dissolution of such
party.
"ALTERNATIVE TRANSACTION PROPOSAL" means any offer, inquiry,
proposal or indication of interest (whether
binding or non-binding) to Parent or
the Company, or their respective
stockholders, relating to an Alternative
Transaction.
"APPLICABLE LAW" means all foreign, federal, state, local or
municipal laws, statutes, ordinances,
regulations, and rules, and all orders,
writs, injunctions, awards, judgments and
decrees of any Governmental Authority
applicable to Parent, the Company, their
respective Subsidiaries or any of their
respective assets, properties or
businesses.
"CANADIAN SUB" means TeleBackup Exchangeco Inc., a corporation
existing under the laws of the Province of
Alberta, all of the issued and
outstanding shares of which, other than
approximately 58,770 Exchangeable Shares
are, as of the Agreement Date, owned
directly or indirectly by the Company.
"CERTIFICATE OF MERGER" means a certificate of merger, in such
appropriate form as is determined by the
parties.
"CHANGE OF RECOMMENDATION" means the withholding, withdrawal,
amendment, qualification or modification of
the Board of Directors'
recommendation in favor of, in the case of
the Company, adoption of this
Agreement and, in the case of Parent,
approval of the Parent
2
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Stock Issuance and Parent Charter
Amendments, and, in the case of a tender or
exchange offer made by a third party
directly to the Company's or Parent's
stockholders, as the case may be, a
recommendation that the Company's
stockholders or Parent's stockholders, as
the case may be, accept the tender or
exchange offer.
"CLOSING" means the closing of the transactions to consummate
the
Merger.
"CLOSING DATE" means the business day after the satisfaction or
waiver of the conditions set forth in
Article 6 (excluding conditions that, by
their terms, are to be satisfied on the
Closing Date, but subject to the
satisfaction or waiver of such conditions),
or such other date as the parties
hereto agree in writing, but in no case
earlier than April 4, 2005 (unless
Parent agrees otherwise).
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act
of
1985, as amended.
"COMPANY COMMON STOCK" means the Common Stock, $0.001 par value
per
share, of the Company.
"COMPANY ESPPs" means the 2002 Employee Stock Purchase Plan and
2002
International Employee Stock Purchase Plan
of the Company.
"COMPANY FOREIGN PLAN" means each Company Benefit Arrangement
that
has been established or maintained, or that
is required to be maintained or
contributed to by the law or applicable
custom or rule of any jurisdiction
outside of the United States.
"COMPANY OPTION PLANS" means the 1993 Equity Incentive Plan,
1993
Directors Stock Option Plan, 2002 Directors
Stock Option Plan and 2003 Stock
Incentive Plan of the Company, kVault
Software Limited Enterprise Management
Incentive Scheme, Precise Software
Solutions Ltd. 1995 Share Option and
Incentive Plan, Precise Software Solutions
Ltd. Amended and Restated 1998 Share
Option and Incentive Plan, Precise Software
Solutions Ltd. Savant Stock Option
Plan, Design2Deploy, Inc. 2000 Stock Plan,
The Kernel Group, Inc. 1997 Incentive
Equity Plan, NuView, Inc. 1998 Stock
Option/Stock Issuance Plan, Openvision
Technologies, Inc. 1992 Stock Plan, and
Seagate Software, Inc. 1996 Stock Option
Plan.
"COMPANY OPTIONS" means options to purchase shares of Company
Common
Stock.
"COMPANY PREFERRED STOCK" means the Preferred Stock, $0.001 par
value per share, of the Company.
"COMPANY RESTRICTED SHARES" means any shares of Company Common
Stock
that are issued and outstanding that are
unvested or are subject to a repurchase
option, risk of forfeiture or other
condition providing that such shares may be
repurchased by or forfeited to the Company
under the terms of any Contract with
the Company (including without limitation
any stock option agreement, stock
option exercise agreement or restricted
stock purchase agreement).
3
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"COMPANY RESTRICTED STOCK UNIT" means the right to receive a
share
of the Company's common stock on a future
date.
"COMPANY RIGHTS" means the Company Preferred Stock purchase
rights
issued or issuable pursuant to the Company
Rights Agreement.
"COMPANY RIGHTS AGREEMENT" means the Rights Agreement dated June
16,
1999 between the Company and ChaseMellon
Shareholder Services, L.L.C.
"COMPANY SPECIAL VOTING SHARE" means the one share of Special
Voting
Stock, $1.00 par value per share, of the
Company.
"COMPANY STOCKHOLDERS" means the holders of shares of Company
Common
Stock.
"CONTRACT" means any written or oral legally binding contract,
agreement, instrument, commitment or
undertaking (including leases, licenses,
mortgages, notes, guarantees, sublicenses,
subcontracts and purchase orders).
"EFFECTIVE TIME" means the time of the filing of the Certificate
of
Merger with the Office of the Secretary of
State of the State of Delaware in
accordance with the relevant provisions of
Delaware Law (or such later time as
may be mutually agreed in writing by the
Company and Parent as the time of the
Merger and specified in the Certificate of
Merger).
"ENCUMBRANCE" means, with respect to any asset, any mortgage,
deed
of trust, lien, pledge, charge, security
interest, title retention device,
collateral assignment, adverse claim,
restriction or other encumbrance of any
kind in respect of such asset (including
any restriction on the voting of any
security, any restriction on the transfer
of any security or other asset, any
restriction on the receipt of any income
derived from any asset, any restriction
on the use of any asset and any restriction
on the possession, exercise or
transfer of any other attribute of
ownership of any asset).
"ENVIRONMENTAL LAWS" means any and all federal, state, foreign,
interstate, local or municipal laws, rules,
orders, regulations, statutes,
ordinances, codes, decisions, injunctions,
decrees, requirements of any
Governmental Authority, any and all common
law requirements, rules and bases of
liability regulating, relating to, or
imposing liability or standards of conduct
concerning pollution, Hazardous Materials
or protection of human health, safety
or the environment, as currently in effect,
including, but not limited to, the
Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C.
Section 1801 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq., the Clean Water Act,
33 U.S.C. Section 1251 et seq., the
Clean Air Act, 42 U.S.C. Section 7401 et
seq., the Toxic Substances Control Act,
15 U.S.C. Section 2601 et seq., the Federal
Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C., Section 136 et
seq., Occupational Safety and Health
Act 29 U.S.C. Section 651 et seq., the Oil
Pollution Act of 1990, 33 U.S.C.
Section 2701 et seq., and the Endangered
Species Act (16 U.S.C. Section 1531 et
seq.) as such laws have been amended or
supplemented, and the regulations
promulgated pursuant thereto, and all
analogous state or local statutes.
4
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"ENVIRONMENTAL LIABILITIES" means with respect to Parent or the
Company, any and all Liabilities of or
relating to such party or any of its
Subsidiaries (including any entity which
is, in whole or in part, a predecessor
of such party or any of such Subsidiaries),
which (A) arise under or relate to
matters covered by Environmental Laws and
(B) relate to actions occurring or
conditions existing on or prior to the
Closing Date.
"ERISA" means the Employee Retirement Income Security Act of
1974,
as amended.
"ERISA AFFILIATE" means with respect to Parent or the Company,
any
entity which is a member of: (A) a
"controlled group of corporations," as
defined in Section 414(b) of the Code; (B)
a group of entities under "common
control," as defined in Section 414(c) of
the Code; or (C) an "affiliated
service group," as defined in Section
414(m) of the Code, or treasury
regulations promulgated under Section
414(o) of the Code, any of which includes
such party.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGEABLE SHARES" means the Exchangeable Shares of Canadian
Sub.
"GAAP" means United States generally accepted accounting
principles.
"GOVERNMENTAL AUTHORITY" means any federal, state, county,
local,
municipal or foreign court or tribunal,
governmental or regulatory body,
administrative agency, commission or other
governmental authority.
"GOVERNMENTAL PERMIT" means with respect to Parent, the Company
or
any of their respective Subsidiaries, any
consent, license, permit, grant, or
other authorization of a Governmental
Authority that is required for the
operation of such entity's business or the
holding of any of its material assets
or properties.
"HAZARDOUS MATERIALS" means any materials or wastes, defined,
listed, classified or regulated as
radioactive, hazardous, toxic or otherwise
dangerous to health or the environment in
or under any Environmental Laws
including without limitation petroleum,
petroleum products, friable asbestos,
urea formaldehyde, radioactive materials
and polychlorinated biphenyls, but
excluding office and janitorial supplies
safely stored and maintained.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act
of
1976, as amended.
"IAS" means international accounting standards.
"INTELLECTUAL PROPERTY" means, collectively, all worldwide
industrial and intellectual property
rights, including rights in the following:
patents and patent applications, trademarks
and trademark applications, trade
dress rights, trade names, Internet domain
names, copyrights and copyrightable
works (including object code and source
code software), mask work and
applications therefor, franchises,
inventions, trade secrets, know-how,
proprietary business information, processes
and formulae, databases, and
proprietary technology.
5
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"KNOWLEDGE" means with respect to Parent or the Company, with
respect to any particular fact,
circumstance, event or other matter in question,
that any of the Chief Executive Officer,
Chief Financial Officer, Chief
Technical Officer, Chief Operating Officer
or Chief Legal Officer has actual
knowledge of such fact, circumstance, event
or other matter.
"LIABILITIES" means debts, liabilities and obligations, whether
accrued or fixed, absolute or contingent,
matured or unmatured, determined or
determinable, known or unknown, including
those arising under any law, action or
governmental order and those arising under
any Contract.
"MATERIAL ADVERSE EFFECT" means with respect to Parent or the
Company, any change, event, circumstance or
effect (any such item, an "EFFECT")
that is materially adverse to the business,
assets (including intangible
assets), financial condition or results of
operations of such party taken as a
whole with its Subsidiaries; provided
however, in no event shall Effects
resulting from any of the following be
taken into account in determining whether
there has been or will be, a Material
Adverse Effect on any such party: (A)
changes in general economic or market
conditions in any geographic location or
Effects affecting the industry generally in
which such party and its
Subsidiaries operates (provided that such
Effects do not affect such party and
its Subsidiaries as a whole in a materially
disproportionate manner as compared
to other similarly situated participants in
the industry in which such party and
its Subsidiaries operates); (B) changes in
the trading prices for such party's
Common Stock (provided that the underlying
causes of any such changes may
(subject to the other provisions of this
Agreement) be taken into account in
making a determination as to whether there
has been a Material Adverse Effect);
(C) changes in Applicable Law, GAAP or IAS;
(D) the execution, delivery and
performance of this Agreement or the
pendency or consummation of any transaction
contemplated hereby or the announcement
thereof; (E) failures to meet revenue or
earnings estimates (provided that the
underlying causes of any such failures may
(subject to the other provisions of this
Agreement) be taken into account in
making a determination as to whether there
has been a Material Adverse Effect);
or (F) any acts of war or terrorism.
"MERGER SUB COMMON STOCK" means the Common Stock, $0.01 par
value
per share, of Merger Sub.
"OLD VOTING, SUPPORT AND EXCHANGE TRUST AGREEMENT" means that
certain voting, support and exchange trust
agreement made as of June 1, 1999
between VERITAS Software Holding
Corporation, VERITAS Software Corporation,
Canadian Sub and the Trustee.
"PARENT COMMON STOCK" means the Common Stock, $0.01 par value
per
share, of Parent.
"PARENT ESPP" means the 1998 Employee Stock Purchase Plan of
Parent.
"PARENT FOREIGN PLAN" means each Parent Benefit Arrangement that
has
been established or maintained, or that is
required to be maintained or
contributed to by the law or applicable
custom or rule of any jurisdiction
outside of the United States.
"PARENT OPTION PLANS" means the 1988 Employee Stock Option
Plan,
1996 Equity Incentive Plan, 1999
Acquisition Plan, 2000 Directors Equity
Incentive Plan, 2001 Non-
6
<PAGE>
Qualified Equity Incentive Plan, 2002
Executive Officers' Stock Purchase Plan
and 2004 Equity Incentive Plan of Parent,
Brightmail, Inc. 1998 Stock Option
Plan, Central Point Software, Inc. Restated
1990 Stock Option Plan, Central
Point Software, Inc. 1992 Stock Option
Plan, AXENT Technologies, Inc. 1999
Incentive Stock Plan, AXENT Technologies,
Inc. 1998 Incentive Stock Plan, AXENT
Technologies, Inc. 1996 Amended and
Restated Directors' Stock Option Plan, AXENT
Technologies, Inc. 1996 Amended and
Restated Stock Option Plan, AXENT
Technologies, Inc. Amended and Restated
1991 Stock Option Plan, AXENT
Technologies, Inc. 1998 Exchange Option
Plan for Optionees of Raptor Systems,
Inc., AXENT Technologies, Inc. 1999 PassGo
Technologies Exchange Option Plan,
Internet Tools 1997 Equity Incentive Plan
assumed by AXENT Technologies, Inc.
and the AssureNet Pathways, Inc. Restated
1982 Stock Option Plan assumed by
AXENT Technologies, Inc.
"PARENT OPTIONS" means options to purchase shares of Parent
Common
Stock.
"PARENT PREFERRED STOCK" means the Preferred Stock, $0.01 par
value
per share, of Parent.
"PARENT RESTRICTED STOCK UNIT" means the right to receive a share
of
Parent common stock on a future date.
"PARENT RIGHTS" means the Parent Preferred Stock purchase
rights
issued or issuable pursuant to the Parent
Rights Agreement.
"PARENT RIGHTS AGREEMENT" means the Rights Agreement dated
August
12, 1998 between Parent and BankBoston,
N.A.
"PARENT SPECIAL VOTING SHARE" means the one share of a class of
capital stock of Parent, to be issued by
Parent to, and deposited with, the
trustee under the Old Voting, Support and
Exchange Trust Agreement, and that
will entitle the holder of record thereof
to a number of votes at meetings of
holders of shares of Parent Common Stock
equal to the number of shares of Parent
Common Stock into which the Exchangeable
Shares outstanding from time to time
after the Effective Time (other than
Exchangeable Shares held by Parent, its
Subsidiaries and Affiliates) are
exchangeable, and having substantially the
rights, powers, restrictions and conditions
to be described in the Old Voting,
Support and Exchange Trust Agreement.
"PERMITTED ENCUMBRANCES" means: (A) statutory liens for taxes
or
other payments that are not yet due and
payable; (B) statutory liens to secure
obligations to landlords, lessors or
renters under leases or rental agreements;
(C) deposits or pledges made in connection
with, or to secure payment of,
workers' compensation, unemployment
insurance or similar programs mandated by
Applicable Law; (D) statutory liens in
favor of carriers, warehousemen,
mechanics and materialmen, to secure claims
for labor, materials or supplies and
other like liens; and (E) statutory
purchase money liens.
"PERSON" means any individual, corporation, company, limited
liability company, partnership, limited
liability partnership, trust, estate,
proprietorship, joint venture, association,
organization, entity or Governmental
Authority.
7
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"PROXY STATEMENT/PROSPECTUS" means the joint proxy
statement/prospectus to be filed with the
SEC as part of the Registration
Statement.
"PUBLIC SOFTWARE" means any software that is or contains, in
whole
or in part, any software that is licensed
pursuant to an "open source" licensing
agreement or similar agreement, including
without limitation software licensed
under the GNU General Public License (GPL)
or the GNU Lesser/Library GPL, the
Mozilla Public License, the Netscape Public
License, the Sun Community Source
License, the Sun Industry Standards
License, the BSD License, and the Apache
License.
"REGISTRATION STATEMENT" means the registration statement on
Form
S-4 to be filed by Parent with the SEC in
connection with the issuance of Parent
Common Stock in the Merger.
"SARBANES ACT" means the Sarbanes-Oxley Act of 2002.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SIGNIFICANT SUBSIDIARY" means with respect to Parent or the
Company, a Subsidiary that is a
"significant subsidiary" within the meaning of
Rule 1-02 of Regulation S-X promulgated by
the SEC.
"SUBSIDIARY" means with respect to Parent or the Company,
another
Person, an amount of the voting securities,
other voting ownership or voting
partnership interests of which is
sufficient to elect at least a majority of its
Board of Directors or other governing body
is (or, if there are no such voting
interests, more than 50% of the equity
interests of which are) owned directly or
indirectly by such party.
"SUPERIOR PROPOSAL" means with respect to Parent or the Company,
an
unsolicited, bona fide written Alternative
Transaction Proposal, which the Board
of Directors of such party has in good
faith determined (after consultation with
its outside legal counsel and its financial
advisor), taking into account all
legal, financial, regulatory, timing and
other aspects of the proposal and the
Person making the proposal, (A) is more
favorable, from a financial point of
view, to such party's stockholders (in
their capacities as stockholders) than
the terms of this Agreement (after giving
effect to any adjustments to the terms
of this Agreement proposed by the other
party in response to such Alternative
Transaction Proposal) and (B) is fully
financed (or reasonably capable of being
fully financed), reasonably likely to
receive all required government approvals
on a timely basis and otherwise reasonably
capable of being consummated on the
terms proposed; provided that, for purposes
of this definition of "Superior
Proposal" each reference to "20%" or "80%"
in the definition of "Alternative
Transaction" shall be deemed to be a
reference to "50%".
"TAX" (and, with correlative meaning, "TAXES") means (A) any
net
income, alternative or add-on minimum tax,
estimated, gross income, gross
receipts, sales, use, ad valorem, transfer,
franchise, profits, license,
withholding, payroll, employment, excise,
severance, stamp, occupation, premium,
property, environmental or windfall profit
tax, custom
8
<PAGE>
duty or other tax, governmental fee or
other like assessment or charge of any
kind whatsoever, together with any interest
or any penalty, addition to tax or
additional amount imposed by any
governmental entity responsible for the
imposition of any such tax (domestic or
foreign), (B) any liability for the
payment of any amounts of the type
described in clause (A) of this sentence as a
result of being a member of an affiliated,
consolidated, combined, unitary or
aggregate group for any taxable period, and
(C) any liability for the payment of
any amounts of the type described in clause
(A) or (B) of this sentence as a
result of being a transferee of or
successor to any Person or as a result of any
express or implied obligation to indemnify
any other Person for any amounts of
the type described in clause (A) or (B) of
this sentence.
"TERMINATION FEE" means $440,000,000 in immediately available
funds.
"TRUSTEE" means Computershare Trust Company of Canada, a trust
company existing under the laws of Canada,
in its capacity as trustee under the
Old Voting Support and Exchange Trust
Agreement.
"VOTING, SUPPORT AND EXCHANGE TRUST SUPPLEMENT" means an
agreement
to be made as of the Effective Time between
Parent, the Company, Canadian Sub
and the Trustee for the holders of the
Exchangeable Shares, to the extent
required by the Old Voting, Support and
Exchange Trust Agreement, providing for
the assumption by Parent of the obligations
of the Company under the Old Voting,
Support and Exchange Trust Agreement and
the other matters specified therein.
1.2 Additional Definitions. Other capitalized terms defined
elsewhere in this Agreement and not defined
in this Article 1 shall have the
meanings assigned to such terms in this
Agreement in the sections set forth
below.
<TABLE>
<CAPTION>
Term
Section
----
-------
<S>
<C>
Agreement
Preamble
Agreement Date
Preamble
Assumed Awards
5.12(b)
Assumed Company Options
2.4(d)
Certificate of Amendment
Recitals
Certificates
2.7(c)
Claim
5.7(a)
Code
Recitals
Company
Preamble
Company 401(k) Plans
5.12(e)
Company Balance Sheet
3.4(b)
Company Benefit Arrangements
3.10(d)
Company Charter Documents
3.1(b)
Company Disclosure Letter
3
Company Financial Statements
3.4(b)
Company Indemnified Parties
5.7(a)
Company IP Rights
3.9(a)
Company Material Contract
3.12(a)
Company Owned IP Rights
3.9(a)
Company SEC Documents
3.4(a)
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Term
Section
----
-------
<S>
<C>
Company Source Code
3.9(g)
Company Stockholder Approval
3.3(c)
Company Stockholders' Meeting
3.4(f)
Company Voting Debt
3.2(d)
Confidentiality Agreement
5.2(c)(1)
Continuing Employees
5.12(d)
Delaware Law
Recitals
Exchange Agent
2.7(a)
Exchange Fund
2.7(b)
Exchange Ratio
2.4(b)
Expenses
5.7(a)
Fraction Price
2.4(f)
Goldman Sachs
3.16
Initial Post-Closing Directors
5.13(a)
Lehman
4.16
Merger
Recitals
Merger Sub
Preamble
Outside Date
7.1(b)(1)
Parent
Preamble
Parent Balance Sheet
4.4(b)
Parent Benefit Arrangements
4.10(d)
Parent Benefit Plans
5.12(d)
Parent Charter Amendments
Recitals
Parent Charter Documents
4.1(b)
Parent Disclosure Letter
4
Parent Financial Statements
4.4(b)
Parent IP Rights
4.9(a)
Parent Material Contract
4.12(a)
Parent Owned IP Rights
4.9(a)
Parent SEC Documents
4.4(a)
Parent Source Code
4.9(g)
Parent Stock Issuance
Recitals
Parent Stockholder Approval
4.3(c)
Parent Stockholders' Meeting
3.4(f)
Parent Voting Debt
4.2(d)
Restraints
6.1(c)
Returns
3.8
Rule 145 Affiliates
5.14
Surviving Corporation
2.1
Use
3.9(a) and 4.9(a)
</TABLE>
ARTICLE 2
THE MERGER
2.1 The
Merger. Upon the terms and subject to the conditions of this
Agreement and the applicable provisions of
Delaware Law, at the Effective Time,
Merger Sub shall be merged
10
<PAGE>
with and into the Company and the Company
shall continue as the surviving
corporation of the Merger (the "SURVIVING
CORPORATION").
2.2
Closing. Subject to termination of this Agreement as provided
in
Article 7, the Closing shall take place at
the offices of Fenwick & West LLP,
Silicon Valley Center, 801 California
Street, Mountain View, California, on the
Closing Date. The parties hereto shall
cause the Merger to be consummated on the
Closing Date by filing the Certificate of
Merger with the Delaware Secretary of
State in accordance with Delaware Law.
2.3
Effects of the Merger. At and upon the Effective Time:
(a) the separate existence of Merger Sub shall cease and Merger
Sub
shall be merged with and into the Company,
and the Company shall be the
surviving corporation of the Merger
pursuant to the terms of this Agreement and
the Certificate of Merger;
(b) the Certificate of Incorporation of the Surviving
Corporation
shall be amended so as to read in its
entirety in the form set forth as Exhibit
A hereto, until thereafter amended as
provided by Delaware Law and such
Certificate of Incorporation;
(c) the Bylaws of the Surviving Corporation shall be amended so
as
to read in their entirety in the form set
forth as Exhibit B hereto, until
thereafter amended as provided by Delaware
Law and such Bylaws;
(d) the officers of the Company immediately prior to the
Effective
Time shall continue as the initial officers
of the Surviving Corporation
immediately after the Effective Time until
their respective successors are duly
appointed;
(e) the members of the Board of Directors of Merger Sub
immediately
prior to the Effective Time shall be
appointed as the members of the Board of
Directors of the Surviving Corporation
immediately after the Effective Time
until their respective successors are duly
elected or appointed and qualified;
and
(f) the Merger shall, from and after the Effective Time, have all
of
the effects provided by Delaware Law.
2.4
Conversion of Securities. Subject to the terms and conditions of
this
Agreement, at the Effective Time, by virtue
of the Merger and without any action
on the part of Merger Sub, Company or the
holders of any of the following
securities:
(a) Conversion of Merger Sub Common Stock. Each share of Merger
Sub
Common Stock that is issued and outstanding
immediately prior to the Effective
Time shall be converted into one validly
issued, fully paid and nonassessable
share of Common Stock, $0.001 par value per
share, of the Surviving Corporation,
and the shares of the Surviving Corporation
into which the shares of Merger Sub
Common Stock are so converted shall be the
only shares of the Surviving
Corporation that are issued and outstanding
immediately after the Effective
Time. Following the Effective Time, each
certificate evidencing ownership of
shares of Merger Sub Common Stock shall
evidence ownership of such shares of the
Surviving Corporation.
11
<PAGE>
(b) Conversion of
Company Common Stock. Each share of Company Common
Stock (including each Company Restricted
Share) that is issued and outstanding
immediately prior to the Effective Time
(other than any shares of Company Common
Stock to be canceled pursuant to Section
2.4(e)), will be canceled and
extinguished and automatically converted
(subject to Section 2.4(g)) into the
right to receive 1.1242 (the "EXCHANGE
RATIO") shares of Parent Common Stock,
upon surrender of the certificate
representing such share of Company Common
Stock in the manner provided in Section
2.7. No fraction of a share of Parent
Common Stock will be issued by virtue of
the Merger, but in lieu thereof, a cash
payment shall be made pursuant to Section
2.4(f). Notwithstanding the foregoing,
Company Restricted Shares shall be subject
to the provisions of Section 2.5.
(c) Conversion of Company Special Voting Share. The Company
Special
Voting Share that is issued and outstanding
immediately prior to the Effective
Time will be canceled and extinguished and
automatically converted into the
right to receive one Parent Special Voting
Share. As of the Effective Time, such
Company Special Voting Share shall no
longer be outstanding and shall
automatically be canceled and shall cease
to exist, and the holder of a
certificate which, prior to the Effective
Time, represented such Company Special
Voting Share shall cease to have any rights
or powers with respect thereto,
except the right to receive the Parent
Special Voting Share.
(d)
Company Options and Restricted Stock Units.
(1) Assumed Company Options. Unless the terms of an agreement
evidencing a Company Option or the
provisions of a Company Option Plan
applicable to a Company Option provide
otherwise, each Company Option that is
issued and outstanding immediately prior to
the Effective Time, whether or not
then exercisable, with an exercise price
equal to or less than $49.00, will be
assumed by Parent and converted into an
option to purchase Parent Common Stock
("ASSUMED COMPANY OPTIONS"). Each Company
Option so assumed and converted will
continue to have, and be subject to, the
same terms and conditions, except that
(i) each converted Company Option shall be
exercisable (or will become
exercisable in accordance with its terms)
for that number of whole shares of
Parent Common Stock equal to the product of
the number of shares of Company
Common Stock that were issuable upon
exercise of such Company Option immediately
prior to the Effective Time multiplied by
the Exchange Ratio (rounded down to
the nearest whole share) and (ii) the per
share exercise price for the shares of
Parent Common Stock issuable upon exercise
of such converted Company Option
shall be equal to the quotient determined
by dividing the exercise price per
share of Company Common Stock at which such
Company Option was exercisable
immediately prior to the Effective Time by
the Exchange Ratio (rounded up to the
nearest whole cent). The conversion of
Company Options provided for in this
Section 2.4(d)(1) with respect to any
Company Options that are intended to be
"incentive stock options" (as defined in
Section 422 of the Code) shall be
effected in a manner consistent with
Section 424(a) of the Code and otherwise in
a manner designed to preserve incentive
stock option treatment to the extent
permitted by Applicable Law.
(2) Cancellation of Certain Company Options. Each Company
Option that is issued and outstanding
immediately prior to the Effective Time,
whether or not then exercisable, which is
not an Assumed Company Option and
which is not exercised as of immediately
prior to the Effective Time, shall be
canceled and extinguished without any
conversion or assumption thereof
immediately prior to the Effective
Time.
12
<PAGE>
(3) Consistent Treatment of Certain Company Options.
Notwithstanding the provisions of Section
2.4(d)(1) and Section 2.4(d)(2), if
certain Company Options are subject to the
express terms of a Company Option
Plan that require all Company Options
granted under such Company Option Plan to
be treated in the same manner, then all
such Company Options, whether or not
then exercisable and regardless of the
exercise price of such Company Options,
shall be assumed by Parent and converted
into an option to purchase Parent
Common Stock in accordance with the last
two sentences of Section 2.4(d)(1).
(4) Company Restricted Stock Units. Each Company Restricted
Stock Unit that is issued and outstanding
immediately prior to the Effective
Time will be assumed by Parent and
converted into a Parent Restricted Stock
Unit. Each Company Restricted Stock Unit so
assumed and converted will continue
to have, and be subject to, the same terms
and conditions, except that each
converted Company Restricted Stock Unit
shall be for that number of whole shares
of Parent Common Stock equal to the product
of the number of shares of Company
Common Stock that were subject to the
Company Restricted Stock Unit immediately
prior to the Effective Time multiplied by
the Exchange Ratio (rounded down to
the nearest whole share).
(e) Cancellation of Company-Owned and Parent-Owned Stock. Each
share
of Company Common Stock held by Company or
owned by Merger Sub, Parent or any
direct or indirect wholly-owned Subsidiary
of Parent immediately prior to the
Effective Time shall be canceled and
extinguished without any conversion
thereof.
(f) Fractional Shares. No fraction of a share of Parent Common
Stock
will be issued by virtue of the Merger or
any exchange of an Exchangeable Share
at any time after the Effective Time, but
in lieu thereof each former holder of
shares of Company Common Stock who would
otherwise be entitled to a fraction of
a share of Parent Common Stock (after
aggregating all fractional shares of
Parent Common Stock that otherwise would be
received by such holder) shall, upon
surrender of such holder's Certificate(s)
(as defined in Section 2.7(c)),
receive from Parent an amount of cash in
U.S. dollars (rounded to the nearest
whole cent), without interest, less the
amount of any withholding taxes with
respect to the shares represented by such
certificate as contemplated by Section
2.8(b), which are required to be withheld
with respect thereto, equal to the
product of (i) such fraction, multiplied by
(ii) the closing sale price of one
share of Parent Common Stock as quoted on
the Nasdaq Stock Market for the
trading day that is one trading day prior
to the Closing Date (the "FRACTION
PRICE"). In lieu of any such fractional
interests, each holder of Exchangeable
Shares exchanged pursuant to the provisions
thereof who would otherwise have
been entitled to receive a fraction of a
share of Parent Common Stock (after
taking into account all shares of Parent
Common Stock to which such holder is
entitled pursuant to Section 2.4 and the
provisions of the Exchangeable Shares)
shall be entitled to receive an amount of
cash in U.S. dollars (rounded to the
nearest whole cent), without interest,
equal to the product of such fraction
multiplied by the Fraction Price.
(g) Adjustments to Exchange Ratio. The Exchange Ratio shall be
adjusted to reflect appropriately the
effect of any stock split, reverse stock
split, stock dividend (including any
dividend or distribution of securities
convertible into Parent Common Stock or
Company Common Stock), reorganization,
recapitalization, reclassification or other
like change with respect to Parent
Common Stock or Company Common Stock
occurring on or after the Agreement Date
and prior to the Effective Time.
13
<PAGE>
2.5
Company Restricted Shares. Subject to the terms of any
agreement
entered into prior to the Agreement Date (a
correct and complete copy of which
has been disclosed and made available to
Parent), the shares of Parent Common
Stock issued upon the conversion of any
Company Restricted Shares in the Merger
will continue to be unvested and subject to
the same repurchase options, risks
of forfeiture or other conditions following
the Effective Time, and the
certificates representing such shares of
Parent Common Stock may accordingly be
marked with appropriate legends noting such
repurchase options, risks of
forfeiture or other conditions. The Company
shall take all actions that may be
necessary to ensure that, from and after
the Effective Time, Parent is entitled
to exercise any such repurchase option or
other right set forth in any Contract
governing Company Restricted Shares.
2.6
Treatment of Exchangeable Shares.
(a) Prior to the Effective Time, the Boards of Directors of each
of
the Company, Parent and Canadian Sub, or
any of their respective appropriate
committees, shall adopt appropriate
resolutions and, along with the Company,
Parent and Canadian Sub, shall take all
other actions required under the Old
Voting, Support and Exchange Trust
Agreement to ensure that following the
Effective Time, the rights of the holders
of Exchangeable Shares are
"economically equivalent" to the rights
enjoyed by such holders prior to such
time within the meaning of the Old Voting,
Support and Exchange Trust Agreement.
In this regard, and without limiting the
generality of the foregoing,
immediately following the Effective Time,
each outstanding Exchangeable Share
shall be exchangeable for such number of
shares of Parent Common Stock as is
determined by reference to the following
formula:
A x B
where:
"A" equals the Exchange Ratio, and
"B" equals 4.5,
unless further adjustment is then required
pursuant to the rights, privileges,
conditions and restrictions attaching to
the Exchangeable Shares, plus payment
of the "Dividend Amount" (as such term is
defined in such rights, privileges,
conditions and restrictions), if any.
(b) Without limiting the generality of Section 2.6(a), the
parties
agree as follows:
(1) At or before the Effective Time, the Company and Canadian
Sub (including its Board of Directors)
shall comply with their respective
obligations under the provisions attaching
to the Exchangeable Shares and the
Old Voting, Support and Exchange Trust
Agreement.
(2) At or before the Effective Time, Parent, the Company,
Canadian Sub and the Trustee shall execute
and deliver the Voting, Support and
Exchange Trust Supplement wherein the
Parent agrees to be bound by the terms and
provisions of the Old Voting, Support and
Exchange Trust Agreement, in a form
satisfactory to the Trustee, and, to
the
14
<PAGE>
satisfaction of the Trustee, preserving and
not impairing in any material
respect, any of the rights, duties, powers
and authorities of the Trustee or the
holders of Exchangeable Shares under the
Old Voting, Support and Exchange Trust
Agreement.
(3) At or before the Effective Time, Parent shall have
authorized the Parent Special Voting Share
and at the Effective Time, Parent
shall deliver to the Trustee a new
certificate evidencing the Parent Special
Voting Share, to the extent required by the
Voting, Support and Exchange Trust
Supplement.
(4) At or before the Effective Time, Parent, the Company and
Canadian Sub shall take all such actions as
may reasonably be required to:
(i) permit the continued unrestricted and free
tradability in Canada of the Exchangeable
Shares (other than restrictions on
transfers by control block holders) in
those Provinces and Territories of Canada
in which such securities were unrestricted
and freely tradable immediately prior
to the Effective Time;
(ii) ensure that the Exchangeable Shares remained listed
and posted for trading on the Toronto Stock
Exchange;
(iii) obtain all such qualifications, registrations,
approvals, orders, rulings, or consents,
make all such filings, fulfill all such
legal or regulatory requirements and take
all such other proceedings as are
necessary or are required under any
Canadian or United States federal,
provincial or state law or regulation or
pursuant to the rules and regulations
of any other regulatory authority of
competent jurisdiction, in order to ensure
that following the Effective Time, shares
of Parent Common Stock can be issued
by the Parent to holders of Exchangeable
Shares on exercise of the exchange
rights attached to such securities, and
thereafter, to ensure that such
securities will be freely tradable by such
holders in the United States (other
than restrictions on transfer by reason of
the holder being a "control person"
or an "affiliate" of the Parent); and
(iv) ensure that the shares of Parent Common Stock are
listed, quoted or posted for trading on the
Nasdaq Stock Market.
Without limiting the generality of the
foregoing, such actions shall include the
confirmation of the continued
effectiveness, following the Merger, of all
existing Canadian securities regulatory
orders and rulings, or the granting of
new such orders and rulings, respecting
such unrestricted and free tradability
of the Exchangeable Shares in the
above-noted Provinces and Territories of
Canada and such unrestricted issuance of
the shares of Parent Common Stock
issuable upon exchange of the Exchangeable
Shares from time to time and the
resale of same in the United States, and
respecting the satisfaction of Canadian
Sub's Canadian securities law continuous
and timely disclosure obligations
through the filing and provision of
information relating to Parent.
(5) At or before the Effective Time, Parent shall take all
action necessary to authorize and
irrevocably reserve for issuance, free from
preemptive and other rights, out of its
authorized and unissued capital stock
that number of shares of Parent Common
Stock sufficient for issuance upon
exercise of the exchange rights attaching
to all of the
15
<PAGE>
Exchangeable Shares (other than
Exchangeable Shares held by Parent, its
Subsidiaries and Affiliates) outstanding
from time to time after the Effective
Time.
(6) At or before the Effective Time, Parent, the Company and
Canadian Sub shall take all action
necessary to provide to holders of
Exchangeable Shares, an alternative
retraction mechanism that will allow such
holders to retract their shares (thereby
requiring the Canadian Sub to redeem
same) conditional upon the completion of
the Merger.
2.7
Exchange of Certificates.
(a) Exchange Agent. Parent shall select an institution
reasonably
acceptable to the Company to act as the
exchange agent (the "EXCHANGE AGENT") in
the Merger and shall enter into an exchange
agent agreement with the Exchange
Agent reasonably satisfactory to
Company.
(b) Exchange Fund. Promptly after the Effective Time, Parent
shall
make available to the Exchange Agent for
exchange in accordance with this
Article 2, the shares of Parent Common
Stock and cash in lieu of fractional
shares (together with any dividends or
distributions with respect thereto, the
"EXCHANGE FUND") issuable pursuant to
Section 2.4(b) and Section 2.4(e) in
exchange for outstanding shares of Company
Common Stock.
(c) Exchange Procedures. Promptly after the Effective Time,
Parent
shall instruct the Exchange Agent to mail
to each holder of record of a
certificate or certificates
("CERTIFICATES") which immediately prior to the
Effective Time represented outstanding
shares of Company Common Stock whose
shares were converted into the right to
receive shares of Parent Common Stock
pursuant to Section 2.4(b), cash in lieu of
any fractional shares pursuant to
Section 2.4(f) and any dividends or other
distributions pursuant to Section
2.7(d), (i) a letter of transmittal in
customary form (that shall specify that
delivery shall be effected, and risk of
loss and title to the Certificates shall
pass, only upon proper delivery of the
Certificates to the Exchange Agent) and
(ii) instructions for use in effecting the
surrender of the Certificates in
exchange for certificates representing
shares of Parent Common Stock. Upon
surrender of Certificates for cancellation
to the Exchange Agent together with
such letter of transmittal, duly completed
and validly executed in accordance
with the instructions thereto, and such
other documents as may reasonably be
required by the Exchange Agent (including
any required Form W-9 or Form W-8),
the holders of such Certificates shall be
entitled to receive in exchange
therefor certificates representing the
number of whole shares of Parent Common
Stock (after aggregating all Certificates
surrendered by such holder) into which
such holder is entitled pursuant to Section
2.4(b) (which shall be in
uncertificated book entry form unless a
physical certificate is requested or
required by Applicable Law or regulation),
a check in the amount of U.S. dollars
in lieu of fractional shares that such
holders have the right to receive
pursuant to Section 2.4(f) and any
dividends or distributions payable pursuant
to Section 2.7(d), and the Certificates so
surrendered shall forthwith be
canceled. Until so surrendered, outstanding
Certificates will be deemed from and
after the Effective Time, for all corporate
purposes, to evidence only the right
to receive upon surrender thereof the
number of whole shares of Parent Common
Stock to which such holder is entitled
pursuant to Section 2.4(b), an amount in
cash in lieu of the issuance of any
fractional shares in accordance with Section
2.4(f) and any dividends or distributions
payable pursuant to Section 2.7(d). No
interest will be paid or accrued on any
cash payable in lieu of fractional
shares of Parent Common Stock or on any
unpaid dividends or
16
<PAGE>
distributions payable to holders of
Certificates. In the event of a transfer of
ownership of shares of Company Common Stock
that is not registered in the
transfer records of the Company, a
certificate representing the proper number of
shares of Parent Common Stock and cash
payable in lieu of fractional shares may
be issued to a transferee if the
Certificate representing such shares of Company
Common Stock is presented to the Exchange
Agent, accompanied by all documents
required to evidence and effect such
transfer and by evidence that any
applicable stock transfer taxes have been
paid.
(d) Distributions With Respect to Unexchanged Shares. No
dividends
or other distributions declared or made
after the Agreement Date with respect to
Parent Common Stock with a record date
after the Effective Time will be paid to
the holders of any unsurrendered
Certificates with respect to the shares of
Parent Common Stock represented thereby
until the holders of record of such
Certificates shall surrender such
Certificates. Subject to Applicable Law,
following surrender of any such
Certificates, the Exchange Agent shall deliver
to the record holders thereof, without
interest, (i) promptly after such
surrender, the amount of any cash payable
with respect to a fractional share of
Parent Common Stock to which such holder is
entitled pursuant to Section 2.4(f)
and the amount of dividends or other
distributions with a record date after the
Effective Time theretofore paid with
respect to the whole shares of Parent
Common Stock represented thereby, and (ii)
at the appropriate payment date, the
amount of dividends or other distributions
with a record date after the
Effective Time but prior to surrender and a
payment date occurring after
surrender, payable with respect to such
whole shares of Parent Common Stock.
(e) Lost, Stolen or Destroyed Certificates. In the event that
any
Certificates shall have been lost, stolen
or destroyed, the Exchange Agent shall
issue and pay in exchange for such lost,
stolen or destroyed Certificates, upon
the making of an affidavit of that fact by
the holder thereof, certificates
representing the shares of Parent Common
Stock into which the shares of Company
Common Stock represented by such
Certificates were converted pursuant to Section
2.4(b), cash for fractional shares, if any,
as may be required pursuant to
Section 2.4(f) and any dividends or
distributions payable pursuant to Section
2.7(d); provided, however, that Parent or
the Exchange Agent may, in its
discretion and as a condition precedent to
the issuance of such certificates
representing shares of Parent Common Stock,
cash and other distributions,
require the owner of such lost, stolen or
destroyed Certificates to deliver a
bond in such sum as it may reasonably
direct as indemnity against any claim that
may be made against Parent, the Surviving
Corporation or the Exchange Agent with
respect to the Certificates alleged to have
been lost, stolen or destroyed.
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund
which remains undistributed to the former
holders of Company Common Stock for
one year after the Effective Time shall be
delivered to Parent, upon demand, and
any such holders of Company Common Stock
who have not theretofore complied with
the provisions of this Section 2.7 shall
thereafter look only to Parent for the
shares of Parent Common Stock to which they
are entitled pursuant to Section
2.4(b), any cash in lieu of fractional
shares of Parent Common Stock to which
they are entitled pursuant to Section
2.4(f) and any dividends or other
distributions with respect to Parent Common
Stock to which they are entitled
pursuant to Section 2.7(d), in each case
without any interest thereon.
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(g) No Further Ownership Rights in Company Common Stock. All
shares
of Parent Common Stock, cash in lieu of
fractional shares of Parent Common Stock
and dividends or other distributions with
respect to Parent Common Stock issued
in accordance with the terms hereof shall
be deemed to have been issued in full
satisfaction of all rights pertaining to
such shares of Company Common Stock,
and there shall be no further registration
of transfers on the records of the
Surviving Corporation of shares of Company
Common Stock that were outstanding
immediately prior to the Effective Time. If
after the Effective Time
Certificates are presented to the Surviving
Corporation for any reason, they
shall be canceled and exchanged as provided
in this Article 2.
(h) No Liability. Notwithstanding anything to the contrary in
this
Section 2.7, neither the Exchange Agent,
Parent, the Company, the Surviving
Corporation nor any party hereto shall be
liable to a holder of shares of
Company Common Stock for any amount
properly paid to a public official pursuant
to any applicable abandoned property,
escheat or similar law.
2.8 Tax
Consequences and Withholding.
(a) Consequences. It is intended by the parties hereto that the
Merger shall constitute a "reorganization"
within the meaning of Section 368 of
the Code. The parties hereto adopt this
Agreement as a "plan of reorganization"
within the meaning of Sections 1.368-2(g)
and 1.368-3(a) of the United States
Income Tax Regulations.
(b) Withholding. Each of the Exchange Agent, Parent and the
Surviving Corporation shall be entitled to
deduct and withhold from any
consideration payable or otherwise
deliverable pursuant to this Agreement to any
former Company Stockholder such amounts as
may be required to be deducted or
withheld therefrom under the Code or under
any provision of state, local or
foreign tax law or under any other
Applicable Law. To the extent such amounts
are so deducted and withheld, such amounts
shall be treated for all purposes
under this Agreement as having been paid to
the Person in respect of whom such
deduction and withholding was made.
2.9
Further Assurances. If, at any time before or after the
Effective
Time, the Company or Parent reasonably
believes or is advised that any further
instruments, deeds, assignments or
assurances are reasonably necessary or
desirable to consummate the Merger or to
carry out the purposes and intent of
this Agreement at or after the Effective
Time, then the Company, Parent, the
Surviving Corporation and their respective
officers and directors shall execute
and deliver all such proper deeds,
assignments, instruments and assurances and
do all other things reasonably necessary or
desirable to consummate the Merger
and to carry out the purposes and intent of
this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as
set forth in the disclosure letter of the Company addressed to
Parent, dated as of the Agreement Date and
delivered to Parent concurrently with
the parties' execution of this Agreement
(the "COMPANY DISCLOSURE LETTER")
referencing a representation or warranty
herein (it being understood that the
Company Disclosure Letter shall be arranged
in sections and
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subsections corresponding to the sections
and subsections contained in this
Agreement, and the disclosures in any
section or subsection of the Company
Disclosure Letter shall qualify all of the
applicable representations and
warranties in the corresponding section or
subsection of this Article 3 and, in
addition, in all other sections or
subsections in this Article 3 to the extent
it is reasonably apparent from the text of
such disclosure that that such
disclosure is applicable to such other
sections or subsections), the Company
represents and warrants to Parent as
follows:
3.1
Organization.
(a) Standing and Power. Each of the Company and its Subsidiaries
(i)
is a corporation or other entity duly
organized, validly existing and in good
standing (with respect to jurisdictions
which recognize such concept) under the
laws of the jurisdiction of its
incorporation or organization, (ii) has the
requisite power and authority to own, lease
and operate its properties and to
carry on its business as currently
conducted, and (iii) is duly qualified or
licensed to do business, and is in good
standing (with respect to jurisdictions
which recognize such concept), in each
jurisdiction where the character of the
properties owned, leased or operated by it
or the nature of its activities makes
such qualification or licensing necessary,
in each case except as would not,
individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect on the Company.
(b) Charter Documents. The Company has made available to Parent
or
filed with the SEC prior to the Agreement
Date: (i) a complete and correct copy
of the Certificate of Incorporation
(including any Certificates of Designation)
and Bylaws of the Company, each as amended
to date, and (ii) a complete and
correct copy of the articles or certificate
of incorporation and bylaws (or like
organizational documents), each as amended
to date, of each of its Significant
Subsidiaries (collectively with the
documents identified in the preceding clause
(i), the "COMPANY CHARTER DOCUMENTS"), and
each such instrument is in full force
and effect. Neither Company nor any of such
Subsidiaries is in violation of any
of its Company Charter Documents, except in
the case of such Significant
Subsidiaries as would not, individually or
in the aggregate, reasonably be
expected to have a Material Adverse Effect
on the Company.
(c) Subsidiaries. Schedule 3.1(c) of the Company Disclosure
Letter
sets forth a list of each Subsidiary of the
Company. All the outstanding shares
of capital stock of, or other equity or
voting interests in, each Significant
Subsidiary of the Company (i) are owned
directly or indirectly by the Company,
free and clear of all Encumbrances (except
for Permitted Encumbrances and
restrictions imposed by applicable
securities laws), (ii) are not subject to any
preemptive right or right of first refusal
created by Applicable Law, the
Company Charter Documents or any Contract
to which such Significant Subsidiary
is a party or by which it is bound, and
(iii) are duly authorized, validly
issued, fully paid and nonassessable. Other
than the Subsidiaries of the
Company, as of the Agreement Date, neither
the Company nor any of its
Subsidiaries owns any capital stock of, or
other equity or voting interests of
any nature in, or any interest convertible,
exchangeable or exercisable for,
capital stock of, or other equity or voting
interests of any nature in, any
other Person where the aggregate book value
reflected on the Company Balance
Sheet (or the cost to the Company and its
Subsidiaries with respect to
securities acquired after September 30,
2004) of all such securities issued by
any single Person exceeds $5,000,000. As of
the Agreement Date, there are no
outstanding obligations of the Company or
any of its Subsidiaries under any
Contract to which it is a party or by which
it is otherwise bound to make any
loan to, or any equity or other investment
(in the form of a capital
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contribution or otherwise) in any other
Person (other than the Company or such a
Subsidiary) in an amount in excess of
$5,000,000 in respect of any single
Person.
3.2
Capitalization of the Company.
(a) Capital Stock. The authorized capital stock of the Company
consists solely of 2,000,000,000 shares of
Company Common Stock, 10,000,000
shares of Company Preferred Stock, of which
10,000,000 shares have been
designated Series A Junior Participating
Preferred Stock and reserved for
issuance upon exercise of the Company
Rights, and one Company Special Voting
Share. As of the close of business on
December 13, 2004, (i) 423,071,486 shares
of Company Common Stock were issued and
outstanding (ii) no Company Restricted
Shares were issued and outstanding, (iii)
22,958,527 shares of Company Common
Stock were held in treasury by the Company
and its Subsidiaries, (iv) no shares
of Company Preferred Stock were issued or
outstanding, (v) one Company Special
Voting Share was issued and outstanding and
(vi) 58,770 Exchangeable Shares were
issued and outstanding. From December 13,
2004 through the Agreement Date, no
shares of Company Common Stock have been
issued by the Company or any Subsidiary
of the Company other than pursuant to the
exercise of Company Options that were
outstanding on December 13, 2004 or the
exchange of Exchangeable Shares that
were outstanding on December 13, 2004. The
Company Special Voting Share entitles
the holder thereof to vote, together with
the holders of Company Common Stock,
on all matters submitted for the vote of
the holders of Company Common Stock.
The number of votes represented by the
Company Special Voting Share is equal to
the number of outstanding Exchangeable
Shares (other than Exchangeable Shares
held by the Company, its Subsidiaries and
its Affiliates). All issued and
outstanding shares of Company Common Stock
have been duly authorized and validly
issued, are fully paid and nonassessable,
and are not subject to preemptive
rights created by Applicable Law, the
Company Charter Documents or any Contract
to which the Company is a party or by which
it is bound.
(b) Stock Options, Purchase Plans, Restricted Stock Units and
Convertible Securities. As of the close of
business on December 13, 2004, (i)
65,088,225 shares of Company Common Stock
were subject to issuance pursuant to
outstanding Company Options under the
Company Option Plans, (ii) 2,531,505
shares of Company Common Stock were subject
to issuance pursuant to outstanding
Company Options outside the Company Option
Plans, (iii) 19,543,076 shares of
Company Common Stock were reserved for
future grant and issuance under the
Company Option Plans (excluding shares
subject to issuance pursuant to
outstanding Company Options), (iv) 453,249
shares of Company Common Stock were
subject to issuance pursuant to outstanding
Company Restricted Stock Units, (v)
17,639,323 shares of Company Common Stock
were reserved for future issuance
under the Company ESPPs, (vi) 352,715
shares of Company Common Stock reserved
for future issuance with respect to
Exchangeable Shares, and (vii) the Company's
0.25% convertible subordinated debentures
due August 1, 2013 were convertible
into an aggregate of 11,273,704 shares of
Company Common Stock. All shares of
Company Common Stock 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.
There are no outstanding or authorized
stock appreciation, profit participation
(other than Company bonus plans), "phantom
stock," or other similar plans or
Contracts with respect to the Company or
any of its Subsidiaries.
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<PAGE>
(c) No Other Rights. As of the close of business on December
13,
2004, except as set forth in the preceding
subsection (b) and except for the
Company Rights issued pursuant to the
Company Rights Agreement (in respect of
which no Distribution Date (as defined in
the Company Rights Agreement) has
occurred), there were no options, warrants,
calls, rights, commitments,
conversion privileges or preemptive or
other rights or Contracts (to which the
Company or any of its Subsidiaries is a
party or by which the Company or any of
its Subsidiaries is bound) outstanding to
purchase or otherwise acquire any
Company Voting Debt, any shares of capital
stock of the Company or any of its
Subsidiaries or any securities or debt
exercisable for, convertible into or
exchangeable for capital stock of the
Company or any of its Subsidiaries, or
obligating the Company or any of its
Subsidiaries to issue, grant, extend or
enter into any such option, warrant, call,
right, commitment, conversion
privilege or preemptive or other right or
Contract. From December 13, 2004
through the Agreement Date, neither the
Company nor any its Subsidiaries has
issued or entered into any such option,
warrant, call, right, commitment,
conversion privilege or preemptive or other
right or Contract, except for
Company Rights issued pursuant to the
Company Rights Agreement upon the issuance
of Company Common Stock (in respect of
which Company Rights no Distribution Date
has occurred). The Company Charter
Documents do not provide, and neither the
Company nor any of its Significant
Subsidiaries is a party to or otherwise bound
by any Contract providing, for registration
rights, rights of first refusal in
favor of a third party, preemptive rights,
co-sale rights, antidilution rights,
redemption rights or other similar rights
or other restrictions applicable to
any outstanding securities of the Company
or its Significant Subsidiaries.
Neither the Company nor any of its
Significant Subsidiaries is a party to or
otherwise bound by any Contract (including
any voting agreement, voting trust or
proxy, other than proxies to be submitted
in connection with the Company
Stockholders' Meeting (as defined below))
regarding the voting of any
outstanding securities of the Company or
its Significant Subsidiaries. Except
for the Company Rights Agreement, neither
the Company nor any of its Significant
Subsidiaries is a party to or otherwise
bound by any rights agreement or "poison
pill" anti-takeover plan.
(d) Voting Debt. There are no issued or outstanding bonds,
debentures, notes or other evidences of
indebtedness having the right to vote on
any matters on which stockholders of the
Company may vote ("COMPANY VOTING
DEBT").
(e) Legal Compliance. All outstanding shares of Company Common
Stock, all outstanding Company Options, and
all outstanding shares of capital
stock of each Subsidiary of the Company
have been issued and granted in
compliance in all material respects with
(i) all applicable securities laws and
other Applicable Laws and (ii) all
requirements set forth in applicable
Contracts pursuant to which such securities
were issued.
(f) Ownership of Parent. To the Company's knowledge, neither
the
Company nor any of its Subsidiaries owns
any shares of capital stock of Parent
or any of its Subsidiaries.
3.3
Authorization.
(a) Power and Authority. The Company has all requisite
corporate
power and authority to enter into this
Agreement, to perform its obligations
hereunder and to consummate the
transactions contemplated hereby, subject in the
case of consummation of the Merger to
obtaining the Company Stockholder Approval
(as defined below). The execution and
delivery of this Agreement have been duly
and validly authorized by all necessary
corporate action on the
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<PAGE>
part of the Company and no other corporate
proceedings on the part of Company
are necessary to authorize the execution
and delivery of this Agreement or the
consummation of the transactions
contemplated hereby, other than the Company
Stockholder Approval.
(b) Board Approval. The Board of Directors of the Company has
(i)
determined that this Agreement and the
Merger are fair to and in the best
interests of the Company and its
stockholders and has declared this Agreement
advisable, (ii) duly approved this
Agreement, the Merger and the other
transactions contemplated hereby, which
approval has not been rescinded or
modified, (iii) resolved (subject to
Section 5.2(d)) to recommend this Agreement
to the Company Stockholders for adoption,
and (iv) directed that this Agreement
be submitted to the Company Stockholders
for consideration in accordance with
this Agreement.
(c) Stockholder Approval. The affirmative vote of the holders of
a
majority of the outstanding shares of
Company Common Stock and the Company
Special Voting Share, voting together as a
single class (the "COMPANY
STOCKHOLDER APPROVAL"), is the only vote of
the holders of any class or series
of capital stock of the Company necessary
to adopt this Agreement and consummate
the Merger and the other transactions
contemplated hereby.
(d)
Enforceability. This Agreement has been duly executed and
delivered by Company and, assuming the due
execution and delivery by Parent and
Merger Sub, constitutes the valid and
binding obligation of Company, enforceable
against Company in accordance with its
terms, subject to the effect of (i)
applicable bankruptcy, insolvency,
reorganization, moratorium or other similar
laws now or hereafter in effect relating to
rights of creditors generally and
(ii) rules of law and equity governing
specific performance, injunctive relief
and other equitable remedies.
(e) No Consents. No consent, approval, order, authorization,
release
or waiver of, or registration, declaration
or filing with, any Governmental
Authority is necessary or required to be
made or obtained by the Company or any
of its Subsidiaries to enable the Company
to lawfully enter into, and perform
its obligations under, this Agreement or to
consummate the Merger and the other
transactions contemplated hereby, except
for (i) the filing of the Certificate
of Merger with the Secretary of State of
the State of Delaware and appropriate
documents with the relevant authorities of
other states in which Company is
qualified to do business, (ii) such filings
and notifications as may be required
to be made by the Company in connection
with the Merger under the HSR Act and
the antitrust, competition or similar laws
of any foreign jurisdiction and the
expiration or early termination of
applicable waiting periods under the HSR Act
and such foreign laws, (iii) the filing
with the SEC of the Proxy
Statement/Prospectus and such reports and
filings under the Exchange Act and the
rules and regulations thereunder as may be
required in connection with this
Agreement and the transactions contemplated
hereby, (iv) such other filings and
notifications as may be required to be made
by the Company under federal, state
or foreign securities laws or the rules and
regulations of the Nasdaq Stock
Market, (v) the Company Stockholder
Approval, and (vi) such other consents,
approvals, orders, authorizations,
releases, waivers, registrations,
declarations or filings that if not made or
obtained would not, individually or
in the aggregate, reasonably be expected to
materially affect the ability of the
Company to consummate the Merger or have a
Material Adverse Effect on the
Company.
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<PAGE>
(f) No Conflict. The execution and delivery of this Agreement by
the
Company do not, and the consummation by the
Company of the transactions
contemplated hereby and compliance by the
Company with the provisions of this
Agreement will not, conflict with, result
in any violation or breach of or
default (with or without notice or lapse of
time, or both) under, or require any
consent, waiver or approval under, (i) the
Company Charter Documents, (ii)
subject to compliance with the requirements
set forth in the preceding
subsection (e), any Applicable Law
applicable to the Company, any of its
Subsidiaries or any of their respective
assets or properties, or (iii) any
Contract or Governmental Permit to which
the Company or any of its Subsidiaries
is a party or by which the Company or any
of its Subsidiaries is bound, other
than, in the cases of clauses (ii) and
(iii), any such conflicts, violations,
breaches or defaults, or failure to obtain
consents, waivers or approvals,
which, individually or in the aggregate,
would not reasonably be expected to
materially affect the ability of the
Company to consummate the Merger or have a
Material Adverse Effect on the Company.
3.4 SEC
Filings.
(a) SEC Reports. The Company has filed with the SEC all
registration
statements, prospectuses, reports, forms,
statements, schedules, certifications
and other documents (including exhibits and
all other items incorporated by
reference) required to be filed by Company
since January 1, 2003 (all such
required registration statements,
prospectuses, reports, forms, statements,
schedules, certifications and other
documents, including those that the Company
may file subsequent to the Agreement Date,
are referred to herein as the
"COMPANY SEC DOCUMENTS"). As of their
respective dates, the Company SEC
Documents (i) were prepared in accordance
and complied in all material respects
with the requirements of the Securities
Act, the Exchange Act, the Sarbanes Act
(to the extent then applicable), and the
rules and regulations of the SEC
promulgated thereunder applicable to such
Company SEC Documents and (ii) did not
at the time they were filed (or if amended
or superseded by a filing prior to
the Agreement Date, then on the date of
such filing) 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 therein, in the
light of the circumstances under which they
were made, not misleading, except to
the extent corrected prior to the Agreement
Date by a subsequently filed Company
SEC Document. None of the Company's
Subsidiaries is required to file any forms,
reports or other documents with the
SEC.
(b) Financial Statements. Each of the consolidated financial
statements (including, in each case, any
related notes thereto) contained in the
Company SEC Documents (the "COMPANY
FINANCIAL STATEMENTS"), including each
Company SEC Document filed after the
Agreement Date until the Closing, (i)
complied, as of their respective dates of
filing with the SEC, as to form in all
material respects with the published rules
and regulations of the SEC with
respect thereto, (ii) was prepared in
accordance with GAAP (except in the case
of unaudited interim financial statements,
as may be permitted by the SEC on
Form 10-Q or Form 8-K) applied on a
consistent basis throughout the periods
involved (except as may be indicated in the
notes thereto), and (iii) fairly
presented in all material respects the
consolidated financial position of
Company and its Subsidiaries as at the
respective dates thereof and the
consolidated results of Company's and its
Subsidiaries' operations and cash
flows for the periods indicated (except
that the unaudited interim financial
statements were subject to normal and
recurring year-end and quarter-end
adjustments which were not material).
Except as reflected in the balance sheet
of the
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<PAGE>
Company dated September 30, 2004 included
in the Form 10-Q filed by the Company
with the SEC on November 5, 2004 (the
"COMPANY BALANCE SHEET") (or described in
the notes thereto), neither the Company nor
any of its Subsidiaries has any
Liabilities of any nature that would be
required to be disclosed on a
consolidated balance sheet of the Company
and its Subsidiaries prepared in
accordance with GAAP consistently applied,
except (i) Liabilities incurred since
September 30, 2004 in the ordinary course
of business consistent with past
practice, (ii) Liabilities under a Company
Material Contract (as defined in
Section 3.12 below) set forth on Schedule
3.4(b) of the Company Disclosure
Letter or under a Contract entered into to
by the Company or any of its
Subsidiaries subsequent to the Agreement
Date not in violation of Section 5.2(a)
below, (iii) Liabilities reserved against
in the Company Balance Sheet (but only
to the extent of such reserve), (iv)
Liabilities incurred in connection with
this Agreement or the transactions
contemplated hereby, and (v) Liabilities
which, individually or in the aggregate,
would not reasonably be expected to
have a Material Adverse Effect on the
Company.
(c) Sarbanes Act. Each of the principal executive officer of
the
Company and the principal financial officer
of the Company (or 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 Rule 15d-14 under the
Exchange Act or Sections 302 and 906 of the
Sarbanes Act and the rules and regulations
of the SEC promulgated thereunder
with respect to the Company SEC Documents.
For purposes of the preceding
sentence, "principal executive officer" and
"principal financial officer" shall
have the meanings given to such terms in
the Sarbanes Act.
(d) Amendments. The Company has heretofore made available to
Parent
a complete and correct copy of any
amendments or modifications effected prior to
the Agreement Date, which have not yet been
filed with the SEC but which are
required to be filed, to agreements,
documents or other instruments which
previously had been filed by the Company
with the SEC pursuant to the Securities
Act or the Exchange Act.
(e) Registration Statement. The information supplied by the
Company
for inclusion in the Registration Statement
shall not at the time the
Registration Statement is filed with the
SEC and at the time it becomes
effective under the Securities Act 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 not misleading. The
information supplied by the Company for
inclusion or incorporation by reference
in the Proxy Statement/Prospectus shall
not, on the date the Proxy
Statement/Prospectus is mailed to Company
Stockholders or Parent Stockholders,
at the time of the meeting of Company
Stockholders (the "COMPANY STOCKHOLDERS'
MEETING") to consider the Company
Stockholder Approval, at the time of the
meeting of Parent Stockholders (the "PARENT
STOCKHOLDERS' MEETING") to consider
the Parent Stockholder Approval or as of
the Effective Time, 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 false or misleading, or omit to
state any material fact necessary to
correct any statement in any earlier
communication with respect to the
solicitation of proxies for the Company
Stockholders' Meeting or the Parent
Stockholders' Meeting which has become false
or misleading. The proxy statement included
in the Proxy Statement/Prospectus
will comply as to form in all material
respects with the provisions of the
Exchange Act and the rules and regulations
thereunder. If at
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<PAGE>
any time prior to the Effective Time any
event relating to the Company or any of
its Affiliates, officers or directors
should be discovered by the Company which
is required to be set forth in an amendment
to the Registration Statement or a
supplement to the Proxy
Statement/Prospectus, the Company shall promptly inform
Parent. Notwithstanding the foregoing, the
Company makes no representation or
warranty with respect to any statements
made or incorporated by reference
therein based on information supplied by
Parent or Merger Sub that is contained
(including by incorporation by reference)
in any of the foregoing documents.
3.5
Litigation. Except as and to the extent disclosed in the Company
SEC
Documents filed prior to the Agreement Date
(including the notes to the
financial statements included therein), (a)
there is no action, suit,
arbitration, mediation, proceeding, claim
or investigation pending against the
Company or any of its Subsidiaries before
any Governmental Authority, arbitrator
or mediator, nor, to the knowledge of the
Company, has any such action, suit,
arbitration, mediation, proceeding, claim
or investigation been threatened, and
(b) there is no judgment, decree,
injunction, rule or order of any Governmental
Authority, arbitrator or mediator
outstanding against the Company or any of its
Subsidiaries, other than, in the cases of
clauses (a) and (b), any such pending
or threatened actions, suits, arbitrations,
mediations, proceedings, claims or
investigations or any such judgments,
decrees, injunctions, rules or orders,
which, individually or in the aggregate,
would not reasonably be expected to
have a Material Adverse Effect on the
Company.
3.6
Compliance with Laws.
(a) Applicable Law. Except as would not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect on the
Company, (1) the Company and each of its
Subsidiaries has complied, and is now
in compliance, with all Applicable Law, (2)
neither the Company nor any of its
Subsidiaries has received any written
notification from any Governmental
Authority asserting that the Company or any
of its Subsidiaries has failed to
comply, or is not in compliance, with
Applicable Law and to the Company's
knowledge, no investigation or review of
the Company or any of its Subsidiaries
by any Governmental Authority is pending,
and (3) to the Company's knowledge, no
such notification, investigation or review
has been threatened in writing
against the Company or any of its
Subsidiaries and no reasonable basis therefor
exists.
(b) Permits. Except as would not, individually or in the
aggregate,
reasonably be expected to have a Material
Adverse Effect on the Company, (1) the
Company and its Subsidiaries hold all
Governmental Permits and all such
Governmental Permits are valid and in full
force and effect, (2) neither the
Company nor any of its Subsidiaries has
received any written notification from
any Governmental Authority asserting that
the Company or any of its Subsidiaries
has failed to comply with or is not in
compliance with any such Governmental
Permit or regarding any actual or possible
revocation, withdrawal, suspension,
cancellation, termination or modification
of any such Governmental Permit, and
(3) to the Company's knowledge, no such
notification has been threatened in
writing against the Company or any of its
Subsidiaries and no reasonable basis
therefor exists.
3.7
Properties. Except as would not, individually or in the
aggregate,
reasonably be expected to have a Material
Adverse Effect on the Company, the
Company or one of its Subsidiaries (a) has
good and valid title to all the
properties and assets reflected in the
latest
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audited balance sheet included in the
Company SEC Documents as being owned by
the Company or one of its Subsidiaries or
acquired after the date thereof that
are material to the Company's business on a
consolidated basis (except
properties sold or otherwise disposed of
since the date thereof in the ordinary
course of business), free and clear of all
Encumbrances, except (1) Permitted
Encumbrances, (2) such imperfections or
irregularities of title, easements,
covenants, rights-of-way and other
Encumbrances as do not materially impair the
continued use of the properties or assets
subject thereto or affected thereby or
otherwise materially impair business
operations at such properties, and (3)
mortgages deeds of trust, security
interests or other encumbrances on title
related to indebtedness reflected on the
consolidated financial statements of
the Company included in the Company SEC
Documents, and (b) is the lessee of all
leasehold estates reflected in the latest
audited financial statements included
in the Company SEC Documents or acquired
after the date thereof that are
material to its business on a consolidated
basis (except for leases that have
expired by their terms since the date
thereof or been assigned, terminated or
otherwise disposed of in the ordinary
course of business consistent with past
practice) and is in possession of the
properties purported to be leased
thereunder, and each such lease is valid
without default thereunder by the
lessee or, to the Company's knowledge, the
lessor.
3.8 Taxes.
The Company and each of its Subsidiaries (and any consolidated,
combined, unitary or aggregate group for
tax purposes of which the Company or
any such Subsidiary is or has been a
member), (a) has properly completed and
timely filed all material foreign, federal,
state, local and municipal tax and
information returns (collectively,
"RETURNS") required to be filed by it, (b)
has timely paid all material taxes required
to be paid by it for which payment
was due, (c) has established an adequate
accrual or reserve in accordance with
GAAP applied on a consistent basis for the
payment of all material taxes payable
in respect of the periods or portions
thereof prior to the date of the Company
Balance Sheet (which accrual or reserve as
of such date is fully reflected on
the Company Balance Sheet), and (d) has no
Liability for material taxes in
excess of the amount so paid or accruals or
reserves so established except for
taxes subsequent to the date of the Company
Balance Sheet incurred in the
ordinary course of business. All such
Returns are true, correct and complete in
all material respects. Neither the Company
nor any of its Subsidiaries has
received any written notification from the
Internal Revenue Service or any other
taxing authority regarding any material
issues that (a) are currently pending
before the Internal Revenue Service or any
other taxing agency or authority
(including any sales or use taxing
authority) regarding the Company, or (b) have
been raised by the Internal Revenue Service
or other taxing agency or authority
and not yet finally resolved. No material
tax liens are currently in effect
against any of the assets of the Company or
any of its Subsidiaries other than
liens that arise by operation of law for
taxes not yet due and payable. There is
not in effect any waiver by the Company or
any of its Subsidiaries of any
statute of limitations with respect to any
material taxes. Neither the Company
nor any of its Subsidiaries has consented
to extend to a date later than the
Agreement Date the period in which any
material tax may be assessed or collected
by any taxing agency or authority. Neither
the Company nor any of its
Subsidiaries is a party to or bound by any
material tax sharing, tax indemnity,
or tax allocation agreement nor does the
Company or any of its Subsidiaries have
any material liability or material
potential liability to another party under
any such agreement. Neither the Company nor
any of its Subsidiaries has ever
been a member of a consolidated, combined,
unitary or aggregate group of which
the Company was not the ultimate parent
corporation. Neither the Company nor any
of its Subsidiaries has constituted either
a "distributing corporation" or a
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"controlled corporation" in a distribution
of stock qualifying for tax-free
treatment under Section 355 of the Code (a)
in the two years prior to the
Agreement Date or (b) in a distribution
that could otherwise constitute part of
a "plan" or "series of related
transactions" (within the meaning of Section
355(e) of the Code) in conjunction with the
Merger. Neither the Company nor any
of its Subsidiaries has taken any action or
knows of any fact, agreement, plan
or other circumstance that would reasonably
be expected to prevent the Merger
from qualifying as a transaction described
in Section 368(a) of the Code.
3.9
Intellectual Property.
(a) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect on the Company, (1) the
Company and each of its Subsidiaries owns
or has the valid right or license to
use, and, to the extent that it does any of
the following, to develop, make,
have made, offer for sale, sell, import,
copy, modify, create derivative works
of, distribute, license to third parties
and/or dispose of (for purposes of this
Section 3.9, "USE") all Intellectual
Property as currently Used in the conduct
of the business of the Company and its
Subsidiaries (such Intellectual Property
being hereinafter collectively referred to
as the "COMPANY IP RIGHTS"), and (2)
all such Company IP Rights are owned or
licensed by the Company free of all
material liens and Encumbrances (other than
Permitted Encumbrances). As used in
this Agreement, "COMPANY-OWNED IP RIGHTS"
means Company IP Rights that are or
are purportedly owned or exclusively
licensed to the Company or any of its
Subsidiaries.
(b) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect on the Company, neither
the Company's entry into this Agreement nor
the performance of its obligations
contemplated hereby shall, in accordance
with their terms (1) cause the
forfeiture or termination of, or give rise
to a right of forfeiture or
termination of, any material Contract
governing any Company IP Right, (2)
materially impair the right of the Company
or the Surviving Corporation or any
Subsidiary of the Company to Use any
Company IP Right or portion thereof as
currently Used in the conduct of the
Company's business, or (3) cause any
royalties fees or other payments to become
payable by the Company or any of its
Subsidiaries to any third person as a
result of the Use of any Company IP Rights
by the Company or cause any existing
obligations to pay such royalties, fees or
other payments to increase (other than due
to increased sales of the Company's
products or services).
(c)
To the knowledge of the Company, and except as would not,
individually or in the aggregate,
reasonably be excepted to have a Material
Adverse Effect on the Company, the Use of
any Company IP Right as currently Used
in the conduct of its business does not
infringe on or otherwise violate the
rights of any third party. As of the
Agreement Date, there is no pending, or to
the knowledge of the Company, threatened,
claim or litigation contesting the
validity, ownership or right of the Company
or any of its Subsidiaries to
exercise any Company IP Right or which
would reasonably be expected to result in
the abandonment, cancellation or
unenforceability of such Company IP Rights, nor
to the knowledge of the Company as of the
Agreement Date, is there any
legitimate basis for any such claim. None
of the Company IP Rights is subject to
any proceeding or outstanding order,
contract or stipulation materially
restricting the Company's use of the
Company IP Rights in the aggregate. To the
knowledge of the Company, and except as
would not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect on the
Company, no third party is infringing or
otherwise
27
<PAGE>
violating any Company IP Right (other than
unlicensed end users of the Company's
commercially available software
products).
(d) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect on the Company, (1) the
Company and each of its Subsidiaries has
taken commercially reasonable steps to
protect, preserve and maintain the
proprietary and confidential rights and trade
secrets in the Company IP Rights and (2) no
current or former employee of, or
independent contractor who has worked with,
the Company or any of its
Subsidiaries has any right or interest in
any Company-Owned IP Rights.
(e) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect on Company, all
registered Company-Owned IP Rights are to
the knowledge of the Company valid,
enforceable and subsisting, and the Company
or a Subsidiary of the Company is
the record owner thereof.
(f) Schedule 3.9(f) of the Company Disclosure Letter lists, as
of
the Agreement Date, all Contracts pursuant
to which the Company or any of its
Subsidiaries grants a third party exclusive
rights under any material Company IP
Rights.
(g) To the knowledge of the Company, and except as would not,
individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect on the Company, no event has
occurred, and no circumstance or
condition exists, that would reasonably be
expected to result in the release by
the Company or any escrow agent to any
third party of any Company Source Code.
"COMPANY SOURCE CODE" means, collectively,
any human readable software source
code, or any material portion or aspect of
the software source code which
comprise part of the Company-Owned IP
Rights.
(h)
To the knowledge of the Company, Schedule 3.9(h) of the Company
Disclosure Letter lists Contracts with
government entities, pursuant to which
material computer software programs or
applications owned or co-owned by the
Company or any of its Subsidiaries were
developed or co-developed and licensed
and/or assigned to the Company.
(i) To the knowledge of the Company, the Company and its
Subsidiaries are in compliance with all
their respective obligations pursuant to
any Public Software license agreements
under which they license-in any material
Company IP Rights, except for such
non-compliance that, individually or in the
aggregate, would not reasonably be expected
to have a Material Adverse Effect on
the Company.
3.10
Employment.
(a) The Company, each of its Subsidiaries and each ERISA
Affiliate
is in compliance with all Applicable Law
and Contracts relating to each Company
Benefit Arrangement, each Company Foreign
Plan, employment, employment
practices, immigration, wages, hours, and
terms and conditions of employment,
including employee compensation matters,
except where the failure to so comply
would not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect on the Company.
28
<PAGE>
(b) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect on the Company, (1) no
union organizing effort with respect to
employees of the Company or any of its
Subsidiaries in underway and (2) there is
no labor strike, dispute, slowdown,
stoppage or lockout actually pending or, to
the knowledge of the Company,
threatened against the Company or any of
its Subsidiaries. There are no
controversies pending or, to the knowledge
of the Company, threatened, between
the Company or any Subsidiary and any of
their respective employees which have,
or would reasonably be expected to result
in, an action, suit, proceeding,
claim, arbitration or investigation before
any Governmental Authority, and which
individually or in the aggregate, would
reasonably be expected to have a
Material Adverse Effect on the Company.
(c) To the knowledge of the Company, neither the Company, its
Subsidiaries, nor any ERISA Affiliate has
at any time since the enactment of
ERISA, sponsored a "multiemployer plan" as
defined in Section 3(37) of ERISA.
Neither the Company nor any Subsidiary or
current or former ERISA Affiliate
currently maintains, sponsors, participates
in or contributes to, nor has it
ever maintained, established, sponsored,
participated in, or contributed to, any
pension plan (within the meaning of Section
3(2) of ERISA) that is subject to
Title IV of ERISA. To the knowledge of the
Company, no "accumulated funding
deficiency" (as such term is defined in
Section 302 of ERISA and Section 412 of
the Code) has occurred with respect to any
Company Benefit Arrangement that is
not subject to Title IV of ERISA.
(d) With respect to the Company, any of its Subsidiaries and
any
ERISA Affiliate, the Company has made
available to Parent (1) all employee
benefit plans within the meaning of Section
3(3) of ERISA currently contributed
to, sponsored by or maintained by the
Company or any of its Subsidiaries, (2)
each outstanding loan from the Company, any
of its Subsidiaries or an ERISA
Affiliate to an employee in excess of
$250,000, (3) all stock option, stock
purchase, phantom stock, stock appreciation
right, supplemental retirement,
severance, sabbatical, medical, dental,
vision care, disability, employee
relocation, cafeteria benefit (Section 125
of the Code), dependent care (Section
129 of the Code), life insurance or
accident insurance plans, programs or
arrangements (other than Company Foreign
Plans) currently contributed to,
sponsored by or maintained by the Company
or any of its Subsidiaries, (4) all
bonus, pension, profit sharing, savings,
retirement, deferred compensation or
incentive plans, programs or arrangements
(other than Company Foreign Plans)
currently contributed to, sponsored by or
maintained by the Company or any of
its Subsidiaries, (5) other fringe or
employee benefit plans, programs or
arrangements that apply to senior
management and that do not generally apply to
all employees that are currently
contributed to, sponsored by or maintained by
the Company or any of its Subsidiaries, and
(6) all employment or service
agreements with a current service provider
(except for offer letters providing
for at-will employment which do not provide
for severance, acceleration or
post-termination benefits except as
required by the law or applicable custom or
rule of the relevant jurisdiction outside
of the United States) where the
obligations under any such agreement are in
excess of $1,000,000 or if any such
agreement is a "material contract" (as such
term is defined in Item 601(b)(10)
of Regulation S-K promulgated by the SEC),
and (7) all change of control
agreements or severance agreements, written
or otherwise, for the benefit of, or
relating to, (x) any current director or
officer of the Company or (y) any
current employee or consultant (where the
obligations of the Company or any of
its Subsidiaries to such employee or
consultant are greater than $500,000, of
the Company or any of its Subsidiaries, in
each case in the foregoing clauses
(1)-(7) to the ext
